Think nationally, act regionally to advance potential of shale gas

Shale gas, natural gas extracted from shale using hydraulic fracturing, is found throughout much of the United States. This includes Pennsylvania, home to Carnegie Mellon University (CMU) and much of the Marcellus shale region. As a result, CMU researchers have studied shale gas and the implications of its widespread use, looking at both the potential for regional economic opportunities as part of the American Shale & Manufacturing Partnership and environmental challenges. Many visitors come to Pittsburgh from all over the world to discuss the issues surrounding shale gas use with our experts, and CMU recently hosted a regional public forum as part of the Department of Energy’s Quadrennial Energy Review (QER) that focused on natural gas transmission, storage and distribution. As directed by President Obama, this first QER will focus on developing a road map to enhance the nation’s infrastructure for transporting, transmitting and delivering energy. The QER discussion lead us to think about what actions could be taken by Congress or the administration at the national level on this important energy resource.

We believe congressional or administration initiatives should include three key strategic thrusts, including initiation and support of:

• Regional capabilities, such as those being developed in the Marcellus region that bring industry, government, environmental and community partners together to establish best practices and regionally focused research on natural gas utilization, environmental impact and human health effects to ensure that this tremendous resource is developed in an effective and safe manner;
• Supportive environments for investment, effective permitting and long-term planning of an optimal system design, and rational development of public policy that aligns the upstream (hydraulic fracturing to extract shale gas), midstream (pipelines and storage), and downstream (chemical industry, utilities, transportation) natural gas infrastructure to serve both national consumer markets and the potential for regional growth in chemical and industrial manufacturing; and
• Critical technology innovations to ensure the most energy-efficient and sustainable utilization of natural gas and to accelerate the emergence of a next-generation chemical industry.

First, the nation needs to build a national strategy for natural gas infrastructure development that recognizes the vital and uniquely regional dynamics of the shale gas revolution by investing in regional university/industry/government collaborations to ensure implementation of effective and sound best practices for natural gas drilling and production. The regionally specific nature of “gas plays” necessitates a national focus on building regionally specific models of effective best practices. The model for such an approach has been incubated in southwest Pennsylvania, where the Shale Gas Roundtable study concluded, based on the need for credible research in this controversial area, that a regional research collaborative could focus the development of natural gas resources in parallel with improved mechanisms for integrating intermittent renewable energy sources into the region’s energy portfolio.

Second, the nation needs to optimize the upstream extraction and production of gas, the midstream systems for gas distribution and processing and the downstream capabilities for transforming natural gas into high value-added chemicals. The same advances that have revolutionized telecommunications and information technology afford us the opportunity to design an integrated system of gas extraction, distribution, storage, transportation, conversion and end use for manufacturing. Congress and the administration should advance a national initiative to bring advanced optimization capabilities into state and federal planning processes and into the infrastructure design and development process.

Third, the nation needs a major natural gas research initiative on the scale of a manufacturing innovation hub, to be administered by the National Energy Technology Laboratory and located in the Marcellus shale gas region, that brings together the other national labs, industry and universities focused on ensuring that high value-added chemicals are derived from natural gas by industries and technologies developed in the U.S. As shale-based resources are identified and their development is accelerated in other regions of the world, the ability to maintain the economic advantages of the natural gas revolution will increasingly rest upon an aggressive innovation strategy that lowers the cost of converting natural gas to industrial feedstocks.

Shale gas has fundamentally changed the discussion of the nation’s energy future. Congressional and administration action — grounded in a thoughtful focus on regional infrastructure — can seize this unique opportunity to align innovation, market forces, infrastructure development and energy policy to enable an effective transition to cleaner fossil fuel and ultimately a more diversified and sustainable energy portfolio.

Stine is associate director for policy outreach at the Scott Institute for Energy Innovation and professor of the Practice, Engineering and Public Policy at Carnegie Mellon University. Gellman is co-director of the Scott Institute for Energy Innovation and Lord Professor of Chemical Engineering, Chemistry and Materials Science at Carnegie Mellon University.