This document is from MarcellusDrilling.com and discusses trends in U.S. energy production and use. It notes that the U.S. set gas production records in 2011 and is now the world's largest gas producer, with shale gas making up 37% of supply. It also discusses increases in renewable energy like wind and solar and decreasing use of oil and coal. The document outlines criticisms of natural gas drilling but argues that gas and renewables will continue growing to replace coal and oil in the coming decades.

1. http://MarcellusDrilling.com
1

2. Jim Willis
Editor, MDN
http://MarcellusDrilling.com
2

4.  There Are No Perfect Energy Choices
 All Energy Choices Have Strengths &
Weaknesses
 Fairly Stated Criticism of An Energy
Source Is Typically Accurate
4

5.  Gas Production in 2011 Set Record
 U.S. World’s Number 1 Gas Producer
 Shale Gas About 37% of total U.S. Gas Supply
 U.S. Oil Production Increasing For First Time in 35
Years – Over 6 Million Barrels Per Day
 U.S. Oil Imports Decline From 60% in 2005 to 42%
Today
5

6.  Oil 34%
 Natural Gas 26%
 Coal 19%
 Renewables 11%
 Nuclear 10%
6

7. Coal Gas Nuclear Wind Solar
2000 52% 16% 20% 0 0
2011 42% 26% 20% 3% 0.2%
2012 36% 29% 20% 4% 0.4%
 Renewable Energy of all Types (Hydro,
Biomass) Provided About 11% of U.S.
Electricity Supply in 2011
 Coal Fell to 34% in March 2012
7

8.  Wind Has Doubled Since 2008: 25,000
MW to 50,000 MW
 Iowa - 20% of Electricity From Wind
 Texas – 7% of Electricity From Wind
8

9.  Wind Power Costs Cut 65% Since 2003
 Wind Generation Now Costs 5 Cents Per
Kwh
 Global Wind Installations About 240,000
MW
9

10.  U.S. Solar Has Increased 700% Since 2008
 500 MW to 4,000 MW
 Solar Costs Cut From $10 Per Watt to About
$2.75 Per Watt for Large Projects
 Rooftop Solar in $3 to $4 Per Watt Range
10

11.  Global Solar Market Was About 28,000
MW in 2011
 $90 Billion Dollar Industry
 Total Installed Solar Globally About
70,000 MW
11

12.  Oil Use Back to 1999 Levels
 Gasoline Use Back to 2001 Levels
 Total Energy Use at 2000 Levels
 New Cars Sold in February 2012 18%
More Fuel Efficient Than in October 2007
12

13.  Oil Had Been Above $100 For Sustained
Period
 Oil Consumption Globally at Record Level
 U.S. Oil to Gas Price Ratio at Record
Levels: 35 to 1
13

14.  Natural Gas Prices at $1.80 to $2.75 per
Thousand Cubic Feet from January to June
2012
 Natural Gas Prices at $4.20 for Thousand Cubic
Feet in April 2011
 July 2008 Price of $13/mcf
 30% of U.S. Electricity Gas Fired in March 2012
14

15.  Strategic Objective Should Be:
 Produce the Gas and Protect the Environment
 Natural Gas Development Must Be Strongly
Regulated and Reasonably Taxed
 Natural Gas Production Cannot Be Done with
Zero Impact on Environment
15

16.  Approximately 400,000 Oil & Gas Wells Drilled
in Pennsylvania’s History
 First Exploratory Shale Gas Wells Drilled in 2005
 Pennsylvania Now Produces 5-3 bcf/day or
About 2 Trillion Cubic Feet/Year
 Pennsylvania Now Ranks In Gas Production &
Produces About 10% of U.S. Gas
16

17. 1. Impact on Water from Drilling /Wastewater
- Streams
- Private water wells
- Withdrawals
2. Operational Problems/Accidents
- Spills
- Leaks
- Fires – Response time
- Blow outs – Response time
- 50 plus emergency responses
17

18. 3. Truck Traffic Impact & Safety
- Congestion
- Road damage
- Unsafe trucks
4. Gas Migration
5. Public Lands: State Forests & Parks
18

19. 6. Staffing of Oil and Gas Program
- Number of employees
- Location
7. Air Impacts
- Nox
- HAPs
19

20. 8. Seismic Impacts from Deep Well
Injections
- Arkansas
- Ohio
9. Disclosure of Chemicals
20

21.  Review & Strengthen All Rules
 5 Regulatory Packages Enacted
1. Water Withdrawal Plan: August 2008
2. Waste Water Disposal/TDS Rule: August 2010
3. New, Strong Drilling Standards: January 2011
4. 150 Feet Mandatory Buffer from All Development for
22,000 Miles of High Quality Steams: November 2010
5. Raise Permit Fee to Drill From $100 to an Average of
More than $3,000
21

22.  Staffing
 88 Positions in Oil Gas Program as of
September 2008
 Raised Fee When Applying For a Permit from
$100 to as much as $10,000 for Deep Wells
 Doubled Staff to 202 by January 2011
22

23.  Enforcement of Rules
 1,200 Violations Issued During 2010
 1,100 Violations Issued During 2011
 Companies Pay for Clean Up of Spills, Leaks,
Gas Migration
23

24. 24

25.  Water Impacts From Gas Drilling Exist &
Include Methane Migration to About 50 to 100
Private Water Wells
 But Water Impacts of Gas Drilling Are Less
Than:
 Oil Production
 Coal Production
 Biofuels
 Large Hydro
25

26.  Gas Drilling Is not in Top 5 Impacts of
Water in Pennsylvania
 Acid Mine Drainage
 Raw Sewage Discharges
 Nitrogen & Phosphorus from Agriculture &
Other lands
 Sediment From Construction Areas
 Spills, Leaks, Accidents From Underground
Takes, Transportation of Materials
26

27. Four Remaining Environmental Issues
 Air Emissions
 Smog
 Methane Leakage
 Gas Migration
 Seismicity Associate With Injection of
Wastewater in Deep Caverns
27

28.  There are 6
 Prof. Howarth, Cornell University, Most
Publicized & Controversial
 Finding: “Coal is as Dirty as Gas on Carbon
Emissions”
 No Claim that Coal is as Dirty as Gas on
Mercury, Soot, Other Pollutants
28

29. 1. NETL – April 2011
2. Carnegie Mellon University – August 2011
3. Worldwatch Institute – August 2011
4. University of Maryland – October 2011
5. Cornell University – November 2011
All Papers are at www.johnhanger.blogsport.com
29

30.  100,000 Megawatts of U.S. Coal-Fired
Power Plants Are 40 Years Old or Older
 EPA States Pollution – From Chiefly Old
Coal-Fired Power Plants Cause 34,000
Premature Deaths Per Year
 Likely Coal Retirements In Next 10 Years
Are 48,000 to 100,000 MW
30

31.  36% Coal
 30% Gas
 20% Nuclear
 13% Renewables
 1% Petroleum
31

32.  0% Coal
 55% Gas
 15% Nuclear
 30% Renewables
32

33.  THERE ARE NO PERFECT ENERGY
CHOICES
 SAYING NO TO GAS MEANS SAYING YES
TO MORE OIL & COAL FOR THE NEXT 20
YEARS
 GAS AND RENEWABLES WILL GROW
RAPIDLY IN THE NEXT 20 YEARS
33

34. Ask John Your Question
John’s email:
jhanger@eckertseamans.com
John’s blog:
www.johnhanger.blogspot.com
http://MarcellusDrilling.com
34

35. THANK YOU! For attending
(1) To receive a free copy of the PowerPoint slides:
Send an email to: hanger@marcellusdrilling.com
(2) To watch this presentation again
(and to read the most comprehensive Marcellus drilling news every weekday)
Subscribe to Marcellus Drilling News:
http://MarcellusDrilling.com/join-us
Just $5.95 per month!
35