IMPACTS OF NATURAL GAS ON ELECTRICITY & HOME HEATING MARKETS Restructuring Roundtable April 30, 2010 Susan Reid, Senior Attorney Director, MA Clean Energy & Climate Change Initiative (617) 850-1740 sreid@clf.org

About CLF Founded in 1966, CLF uses legal advocacy, science and economics to protect the people and environment of New England. Four program areas: Clean Energy & Climate Change Ocean Conservation Clean Water & Healthy Forests Healthy Communities & Environmental Justice Environmental consulting affiliate: CLF Ventures

The climate context: 80% below 1990 levels by 2050

Natural Gas = Key Transitional Fuel ~ 50% lower GHG emissions as compared to coal-fired generation in New England* Other pollutants too (PM, Pb, Hg, etc.) Supply-side of the equation has shifted significantly Marcellus Shale New LNG terminals (Canaport, offshore) New technologies and markets (microCHP)

But “transitional” is key: By 2050, must significantly reduce use of natural gas So, need to consider long-term picture for any major new natural gas infrastructure ✔Repowering coal plants with natural gas ? Other markets -- CNG vehicles ✖New LNG terminals w/out demonstrated need

Shale gas development

Waste pit/shale gas

Shale Gas Extraction – Environmental Impacts Release of toxic contaminants: natural (benzene, arsenic, Hg) and chemical Groundwater contamination – risks for drinking water supplies, including NYC’s Lifecycle GHG emissions/studies underway Huge volumes waste (contaminated H2O) Destruction of land, wildlife habitat Noise, community disruption

…and inadequate regulation… Exemptions/loopholes in federal environmental statutes: Clean Air Act (wells not aggregated) Clean Water Act (stormwater/extent disputed) Safe Drinking Water Act Resource Conservation and Recovery Act CERCLA (Superfund) *Pending FRAC Act would close some loopholes

Methane in water-CO

Contaminated drinking water - PA

Potential to improve shale gas environmental performance: Capture air emissions Reduce, reuse, recycle toxic substances Substitute non-toxic alternatives Closed-loop, pitless drilling Prevent leaks Well clustering, centralized operations, remote telemetry, piping systems

“Greener” approaches w/ cost savings benefits: Non-toxic fracking fluids found to be effective and less costly Closed loop drilling shown to save up to $180,000 per pit Cost savings from capture and sale of methane Reuse of drilling fluid shown to result in 50%+ drilling cost savings source: NRDC

Shale gas v. LNG Potential GHG emission reduction benefits Must consider lifecycle GHG emissions Energy security – domestic supply Environmentally responsible practices are essential in all contexts

For more information… Sue Reid, Senior Attorney Phone: 617-850-1740 Director, MA CECC Initiative Phone: 617-850-1740 E-mail: sreid@clf.org