1. Framing Sustainability Questions for Marcellus Shale Development Diana Stares Washington & Jefferson College Center for Energy Policy & Mgmt.

2. Success of Natural Resource Development Depends on Context Much natural resource development has occurred in Boom & Bust cycles Has often resulted in long term negative impacts upon communities Provides framework for evaluating sustainability Consider environmental, public health, social and economic impacts

3. Environmental Experience in Boom & Bust Scenario Many B&B experiences have occurred with little or no regulation External costs never addressed Communities often left with scarred landscape, contaminated air & water, industrial infrastructure left behind Impairs new economic development Unhealthy environment

4. Environmental Issues in Marcellus Shale Development Impacts of Development Large surface water withdrawals Long-term effects of hydraulic fracturing Water & soil impacts from fluids & materials handling on surface Air emissions Habitat impacts Impacts of NG Usage Use as a transportation fuel, instead of diesel and gasoline Use for power generation, displacing coal Can change our environmental/carbon footprint

5. Public Health Experience in Boom & Bust Scenario Poor health outcomes often plague residents of Boom & Bust communities Exposed to air and water contamination Unhealthy lifestyles Limited access to health care facilities

6. Public Health Issues in Marcellus Shale Development Exposure to contaminants in air and water Effects of stress (experienced by residents exposed to noise, disruption, feelings of helplessness) Mental health impacts Lack of adequate health care facilities in certain locations

7. Social Experiences in Boom & Bust Scenario Pressures from absorbing large numbers of new workers into a community: – Housing shortages – Increased demand for social services – Increased demand for health care services – Overcrowding in schools

8. Other Social Issues Infrastructure – damage to existing infrastructure and tendency to build additional, often unneeded and financially unsupportable, infrastructure in response to new residents – homes, roads, shopping malls

9. Social Issues in Marcellus Shale Development Housing shortages Increased demand for social services Increased demand for health care services Damage to existing roads Wealth inequalities – which can be expressed in conflicts between residents who support the development and those who oppose it.

10. Economic Issues in B & B Scenario Crowding-Out Effect – pulls human & physical capital from other industries; restricts economic diversity Influx of Outside Skilled Labor – creates economic leakages and benefits go elsewhere Localized Inflation – increased demand for goods and services makes them too expensive for long-term residents (e.g. housing) Infrastructural Overshoots – homes, roads, shopping malls built that are not later needed and cannot be financially supported

11. Economic Issues in Marcellus Shale Development Measurable economic benefits generated: – Employment – Wealth generation – Generation of public funds, including Act 13 Fees Other potential economic benefits – Decrease in petroleum imports – Growth in manufacturing base

12. Economic Challenges Assuring economic benefits inure to benefit of communities/PA: – Local/state residents get jobs – Money is spent in communities/PA Assuring external costs are addressed Fully balancing costs & benefits Promoting economic diversification

13. Issues to Achieving Sustainability 1. How to assure communities achieve sustainability during and after natural resource development? 2. How to get the economics right? 3. How to use the development as a bridge to a comprehensive energy policy?

14. Community Sustainability Avoid long term infrastructure commitments Protect community health and environment Assure residents are trained for employment Use public funds designated to address impacts effectively Evaluate whether communities are best situated to address impacts Diversify economy

15. Economic Sustainability Assure economic benefits that are generated flow to PA Assure external costs are addressed during development Allocate appropriate portion of public funds to diversify and expand economy