Defining the Shale Gas Life Cycle: A Framework for Identifying and Mitigating Environmental Impacts

Sarah Parsons — Thu, 06 Dec 2012 14:53:32 -0500

Executive Summary

Life cycle assessments of shale gas activities differ in their findings. Among the various studies, researchers estimate different greenhouse gas emissions, rates of water use, and rates of wastewater production.

Some of the variation in findings is due to the parameters of each study, particularly the life cycle boundary. The life cycle boundary determines which life cycle stages—and which processes attributable to those stages—are included in the assessment. For example, a life cycle boundary for shale gas often includes stages for exploration, drilling, fracturing, well production, processing, and combustion. Attributable processes further define the activities in those stages. However, some assessments omit stages—such as exploration, processing, or combustion—or do not delineate between stages and processes at all. The variations make it difficult to compare assessments and begin a constructive dialogue on strategies that reduce impacts.

This working paper proposes a life cycle boundary for shale gas spanning exploration to well closure/site remediation and from natural gas production to use. It follows the boundary setting guidance given in the Greenhouse Gas Protocol Product Life Cycle Accounting and Reporting Standard, which builds and expands on the ISO 14044 standard for life cycle assessment. In addition, WRI compares its life cycle boundary to those in 16 assessments of the environmental impacts of shale gas production. The findings illustrate significant variations in the scope of such studies, which complicate shale gas discussions. WRI will seek feedback on its life cycle boundary and apply it in a forthcoming working paper that summarizes the findings of previous assessments on the greenhouse gas emissions of shale gas production; estimates the implications on emissions from the Environmental Protection Agency’s revised Greenhouse Gas Reporting Rule; and highlights the potential for additional methane abatement from natural gas systems in the United States.

Testimony: China's Prospects for Shale Gas and Implications for the U.S.

Maggie Barron — Thu, 26 Jan 2012 09:51:49 -0500

Testimony Of Sarah M. Forbes
Senior Associate, Climate and Energy Program
World Resources Institute

HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION

CHINA’S GLOBAL QUEST FOR RESOURCES AND IMPLICATIONS FOR THE UNITED STATES; CHINA’S PROSPECTS FOR SHALE GAS AND IMPLICATIONS FOR THE U.S.

Introduction

Good morning and thank you for the opportunity to contribute to the deliberations of this Commission. My name is Sarah Forbes, and I am a Senior Associate for the Climate and Energy Program at the World Resources Institute. I am also manager of the World Resources Institute’s Shale Gas Initiative.

I am delighted to speak with you today about China’s prospects for shale gas and the implications for the United States. The United States and China share an interest in the domestic and international development of shale gas resources. In this testimony I will describe the state of China’s shale gas industry as well as the governmental policies that will drive its future development in China. I will discuss the implications of U.S.-China business-to-business partnerships as well as government-to-government cooperation―including the risks and opportunities such cooperation could yield. I will also describe how shale gas development in China and the United States changes the global dynamics of energy security. In conclusion, I will provide recommendations for future actions Congress and this Commission can take. In the interest of time, I have limited the scope of my testimony to a discussion of the implications of shale gas development in China on the U.S. and China.

Considering the speed with which shale gas has shifted the U.S. energy outlook1, this is an important moment to consider the implications of the development of China’s shale gas resources. Development of shale gas in China will shift future global energy dynamics. How it is done will affect the environment and global climate picture. As I describe in this testimony, shale gas can help improve international energy security by providing an abundant domestic energy resource and reducing the need for natural gas imports. What role it plays in addressing climate change will depend in large part on the degree to which shale gas displaces inefficient coal plants and supplements continued improvements in energy efficiency and renewable energy.

As I start, I would like to emphasize the following key points, which I will describe in detail in the sections that follow.

1. Current state and future direction of China’s shale gas industry: The shale gas industry in China is in early development, but the topic has already garnered significant interest from the national government. The Chinese government is implementing new policies that support the future development of China’s gas industry broadly, as well as supporting shale gas research. State-owned and provincial-owned enterprises are conducting exploration and pilot demonstrations on shale gas in China. Through its state-owned enterprises, China2 is also investing in shale gas development in the United States.

2. U.S.-China cooperation on shale gas: The global oil and gas industry operates joint ventures (JVs) to sustain growth and defuse financial risk. The emerging international shale gas industry will rely on the same tactics, particularly given the current state of the global economy. In recent years, major investments or partnerships between U.S. and Chinese companies in the shale gas sector have been used to the near-term economic benefit of both countries and provide potential for U.S. companies to benefit domestically and abroad.

3. Impacts on the energy situation in China: Shale gas development in China will reduce natural gas imports, thus improving China’s energy security. Because total natural gas demand will continue to far outstrip all domestic production for the foreseeable future, any natural gas from shale in China is expected to be consumed domestically. From an environmental perspective, the more China can develop energy alternatives to imported oil and domestic coal, the less pressure it exerts on global energy markets and the global environment. China’s domestic use of its own natural gas resources would be unlikely to have an effect on net U.S. energy imports, as the U.S. is projected to domestically produce sufficient quantities of natural gas to meet its own demand for at least the next 25 years.

Throughout my testimony, I will also emphasize a fourth point that cross-cuts these three themes.

4. Ensuring responsible operations and creating a “level playing field”: Shale gas development should proceed in China (or any country) with environmentally and socially responsible operations which are (1) enforced by appropriate laws, regulations, and standards, (2) realized through implementation of international best practices, and (3) based on an understanding of the real risks and benefits of responsible deployment (both to industry and the public). Such approaches drive demand for U.S. products and ensure a “level playing field” between companies operating in the United States and those in China. More importantly, they help ensure that any negative environmental impacts associated with shale gas development in the United States are not repeated elsewhere.

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WRI Publications Feed: Shale Gas

Defining the Shale Gas Life Cycle: A Framework for Identifying and Mitigating Environmental Impacts

Executive Summary

Testimony: China's Prospects for Shale Gas and Implications for the U.S.

Introduction