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MARCELLUS SHALE AND HYDRAULIC FRACTURING Drew P. Cobbs Maryland Petroleum Council November, 2013

MARCELLUS SHALE AND HYDRAULIC FRACTURING Drew P. Cobbs Maryland Petroleum Council November, 2013. Marcellus Shale in Maryland. Marcellus Shale Formation. Shale Gas Offsets Declines in Other U.S. Natural Gas Production Sources. Nuclear &. Tons per year per. Biomass (Wood). Coal.

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MARCELLUS SHALE AND HYDRAULIC FRACTURING Drew P. Cobbs Maryland Petroleum Council November, 2013

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  1. MARCELLUS SHALE ANDHYDRAULIC FRACTURINGDrew P. CobbsMaryland Petroleum CouncilNovember, 2013

  2. Marcellus Shale in Maryland Marcellus Shale Formation

  3. Shale Gas Offsets Declines in Other U.S. Natural Gas Production Sources

  4. Nuclear & Tons per year per Biomass (Wood) Coal Natural Gas thousand households Renewables Carbon Monoxide (CO) 51 5.8 1.5 0.0 Carbon Dioxide (CO2) Low 9,362 3,558 0.0 Nitrogen Oxides (NOx) 28 3.4 0.3 0.0 Particulate Matter 2.7 0.9 0.0 0.0 Volatile Organic 5.6 0.2 0.0 0.0 Compounds (VOC) Sulfur Dioxide (SO2) 2.8 5.0 0.2 0.0 Mercury 0.0 0.0001 0.0000001 0.0 Natural gas generates cleaner power. Middle emissions Most emissions Least emissions Natural gas is clean burning Source: R.W. Beck

  5. “The Potential Economic & Fiscal Impacts of Natural Gas Production in Western Maryland,” • study issued 3/1/12 for the Maryland Petroleum Council finds that: • Approximately 365 wells would be operating over that period and, according to the Marcellus Shale Education and Training Center, it requires approximately 420 individuals across 150 occupations to bring a single Marcellus well online. • In 2025 – the peak year of drilling activity – 1,814 Marylanders will enjoy employment opportunities related to well drilling and maintenance, royalty payments and expanded state and local government spending. • Western Maryland could produce $300 million annually in natural gas output in constant $2011 by the year 2025. • The State of Maryland would collect $214 million in revenue over the course of developing the Marcellus Shale play. • Garrett County would collect approximately $162 million and Allegany County $65 million in revenue. • Roughly $441 million in 2011 constant dollars of total positive fiscal impact would be experienced over the course of the Western Maryland Marcellus Shale development.

  6. Landowner Benefits • Signing Bonuses • Lease Payments • Royalties

  7. Adequate natural gas supply at competitive prices helps grow the U.S. economy U.S. Industrial Demand for Natural Gas • Lower gas prices have helped U.S. industry • Chemical and fertilizer facilities are seeing increased utilization with lower gas prices • Energy-intensive industry can be more competitive in the global market • Additional potential demand from natural gas vehicles Source: Wood Mackenzie

  8. Proper well construction provides groundwater protection

  9. Horizontal Drilling = Lower Impact 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org

  10. Timeline of a Well • SITE & WELL • CONSTRUCTION • 2-3 months • EXPLORATION • 3-5 years • PLANNING • 12 – 18 months HYDRAULIC FRACTURING 3 – 5 DAYS PRODUCTION 30 + Years 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org

  11. Managing Risks Effectively Records of the Pennsylvania Department of Environmental Protection show that from 2008 to 2010,the typical Marcellus shale gas well generated: $14,000 in mainly reversible environmental impacts $4 million in economic benefits http://www.manhattan-institute.org/pdf/eper_09.pdf 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org

  12. State laws are carefully tailored for unique local concerns. • Geology • Hydrology • Property Rights • Water Laws • Communities 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org

  13. WHAT THEY’VE SAID ABOUT HYDRAULIC FRACTURING Former Environmental Protection Agency (EPA) Administrator: THERE IS NO “PROVEN CASE WHERE THE FRACKING PROCESS ITSELF HAS AFFECTED WATER.” --- Lisa Jackson +++ Environmental Protection Agency (EPA) Administrator: “I AM NOT AWARE OF ANY DEFINITIVE DETERMINATIONS THAT WOULD CONTRADICT THOSE STATEMENTS [BY LISA JACKSON, REFERENCED ABOVE].” --- Gina McCarthy +++ Former Secretary of the Interior: [HYDRAULIC FRACTURING] IS CREATING AN ENERGY REVOLUTION IN THE UNITED STATES ALONE … I WOULD SAY TO EVERYBODY THAT HYDRAULIC FRACTURING IS SAFE” --- Ken Salazar +++

  14. WHAT THEY’VE SAID ABOUT HYDRAULIC FRACTURING Secretary of Energy: “TO MY KNOWLEDGE, I STILL HAVE NOT SEEN ANY EVIDENCE OF FRACKING, PER SE, CONTAMINATING GROUNDWATER.” --- Ernest Moniz +++ Former U.S. Secretary of Energy: “DRILLING FOR SHALE GAS CAN BE DONE SAFELY, AND AT LEAST ONE PROMINENT STUDY ABOUT THE RISKS IS NOT CREDIBLE … THIS IS SOMETHING YOU CAN DO IN A SAFE WAY.” --- Steven Chu +++ Former Secretary of State and New York Senator:Regarding an EIA report that stated the U.S. is on track to surpass Russia in domestic oil and gas production by the end of 2013. “WHAT THAT MEANS FOR VIABLE MANUFACTURING AND INDUSTRIALIZATION IN THIS COUNTRY IS ENORMOUS.” --- Hillary Clinton

  15. The Shale Gas End Game ENVIRONMENTAL IMPACTS Smaller production footprints. Lower lifecycle emissions for electricity generation Lower lifecycle water use for electricity generation. ECONOMY U.S. energy security. Domestic jobs. Revitalize chemical and manufacturing sector Cheaper natural gas for consumers. 1220 L Street, NW • Washington, DC 20005-4070 • www.api.org

  16. For more information visit www.api.org www.strongerinc.org www.fracfocus.org www.energyfromshale.org To Learn More: Drilling Video http://www.youtube.com/watch?v=AYQcSz27Xp8&feature=relmfu Fracturing Video http://www.youtube.com/watch?v=7ned5L04o8w thank you

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