1. Morgantown, WV – August 8, 2011 Timothy R Carr Department of Geology & Geography West Virginia University Gas Shale in the Appalachian Basin Technical and Societal Challenges and Opportunities

2. Morgantown, WV – August 8, 2011 Out on the Edge - My Observations Worked in Energy Industry Pro-Energy Energy is the Basis of ALL Civilization Students Employed in Energy Industry Pro-Bono No Support or Guidance From Anyone!

3. Morgantown, WV – August 8, 2011 Shale-Gas in the Appalachian Basin  Extremely Large Resource  1.6 TCF in 2002  500-1,300 Tcf, today  Large Area – 16-32 Million Acres in the Core Area  Adjacent to the Market  Challenges  Terrain  Infrastructure  Public Perception-Tension / Regulations  History  1821, Fredonia, New York  2003 Well - Range Resources  Approximately 6,933 Wells Pennsylvania - 4,168 West Virginia – 2,744 New York – 21 Wells Located in downtown Fredonia, the boulder proudly displays the site of the first commercial gas well in the US, dedicated in 1925 on the 100th anniversary by the Daughters of the American Revolution. Picture source - http://www.fredonia.edu/shaleinstitute/facts.asp

4. Morgantown, WV – August 8, 2011 North America Shale Gas Basins

5. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2005 100 Wells & Locations Range Resources

6. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2006 465 Wells & Locations

7. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2007 1,105 Wells & Locations

8. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2008 1,947 Wells & Locations

9. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2009 4,073 Wells & Locations

10. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2010 4,583 Wells & Locations

11. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2011 6,912 Wells & Locations Through July

12. Morgantown, WV – August 8, 2011 West Virginia – Marcellus Permits West Virginia Division Environmental Protection - February 9, 2011 Horizontal Well Average Length – 5,313 Longest Length – 12,959 Fracture Stages Average – 6-7 Maximum – 22 Horizontal Well Average Length – 5,313 Longest Length – 12,959 Fracture Stages Average – 6-7 Maximum – 22

13. Morgantown, WV – August 8, 2011 Marcellus Wells Through 2011 3,697 Horizontal Wells & Locations

14. Morgantown, WV – August 8, 2011 Organic-Rich Marcellus Deposited at Edge of Onondaga Shelf Low detrital input High Productivity Low Removal/Degradation Relatively Shallow Depths The areas of high organic content are identified by their relation to the underlying structure at the time of deposition and not by the gross unit thickness of the shale Local thick areas located in Onondaga thins Marcellus Shale (Boyce, 2010; Yanni, 2010)

15. Morgantown, WV – August 8, 2011 Pennsylvania Marcellus Production Source – Pennsylvania Department of Environmental Protection

16. Morgantown, WV – August 8, 2011 Marcellus Production Rates January-June 2010

17. Morgantown, WV – August 8, 2011 Impact on West Virginia Direct Industrial Sector Employment Source: Workforce West Virginia, http://www.workforcewv.org/LMI/cntyform2.cfm?SelectCnty=West%20Virginia Industrial Sector Average Wage $1,296/week Avg. WV $725/wk Last Five Years - 2,000+ Jobs WV 6,686 Decrease

18. Morgantown, WV – August 8, 2011 Impact on West Virginia Severance Tax

19. Morgantown, WV – August 8, 2011 Paradox of the General Public Demand Abundant & Inexpensive Energy Welcome Economic Benefits Distrusts the Intrusion of the Industry Fearful of Issues Perceived to Accompany Development

20. Morgantown, WV – August 8, 2011 Meeting Societal Challenges Natural Gas Development Societal Well-Being Economic Well-Being Individual Well-Being Environmental Well-Being Transparent Communication with All Stakeholders Informational & Educational Programs Engage in Partnerships

21. Morgantown, WV – August 8, 2011 Shale-Gas in West Virginia  Increased Production – Increased Consumption  500 Bcf/year to 5,000 Bcf/year Approximately 20% of US Consumption  Heavy Drilling Activity Will Persist for a Decade  Infrastructure Demands Roads, Housing, Pipelines, Downstream Activities  Tension with the Public Will Decrease  Economic Activity Will Increase  Tax Revenue Will Accelerate Severance $60 million in 2010 to $240 million in 2020 Property Taxes – Wells, Transportation, Processing Example - Johnson Co., Texas $0 in 1998 to ~$64.5 million in 2008 $16.5 Million County, $12.4 Million Cities, $35.6 Million Schools  Induced Taxes Will Accelerate  Wells Will Persist for 50+ years, but will Production will Decrease.

22. Morgantown, WV – August 8, 2011 Timothy R CarrTimothy R Carr Department of Geology & GeographyDepartment of Geology & Geography 304.293.9660304.293.9660 tim.carr@mail.wvu.edutim.carr@mail.wvu.edu