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Systematically Incorporating Environmental Objectives into Shale Gas

May 3, 2019 - Department of Electrical Engineering, Pontificia Universidad Católica de Chile, Av. Vicuna. Mackenna 4860, Santiago, Chile. d. First St...
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Energy and the Environment

Systematically incorporating environmental objectives into shale gas pipeline development: A binary integer, multi-objective spatial optimization model Kailin Kroetz, Jhih-Shyang Shih, Juha V. Siikamäki, Vladimir Marianov, Alan J. Krupnick, and Ziyan Chu Environ. Sci. Technol., Just Accepted Manuscript • DOI: 10.1021/acs.est.9b01583 • Publication Date (Web): 03 May 2019 Downloaded from http://pubs.acs.org on May 22, 2019

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Environmental Science & Technology

Systematically incorporating environmental objectives into shale gas pipeline development: A binary integer, multi-objective spatial optimization model

Kailin Kroetza,*, Jhih-Shyang Shiha, Juha V. Siikamäkib, Vladimir Marianovc, Alan Krupnicka, and Ziyan Chud

*Corresponding author. Email: [email protected]. a Resources for the Future, 1616 P St. NW, Washington, DC 20036 b International Union for Conservation of Nature, 1630 Connecticut Ave. NW, Suite 300, Washington, DC 20009 c Department of Electrical Engineering, Pontificia Universidad Católica de Chile, Av. Vicuna Mackenna 4860, Santiago, Chile d First Street Foundation, Brooklyn, NY 11201

Keywords: Binary integer programming, multi-objective, spatial optimization, shale gas, pipeline, systematic conservation planning

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Abstract

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Shale gas pipeline development can have negative environmental impacts, including adverse effects on species and ecosystems through habitat degradation and loss. From a societal perspective, pipeline development planning processes should account for such externalities. We develop a multi-objective binary integer-programming model, called the Multi Objective Pipeline Siting (MOPS) model, to incorporate habitat externalities into pipeline development and to estimate the tradeoffs between pipeline development costs and habitat impacts. We demonstrate the utility of the model using an application from Bradford and Susquehanna counties in northeastern Pennsylvania. We find that significant habitat impacts could be avoided for relatively low cost, but that avoiding additional habitat impacts becomes gradually and increasingly costly. For example, 10 percent of the habitat impacts can be avoided at less than a two percent pipeline cost increase relative to a configuration that ignores habitat impacts. MOPS or a similar model could be integrated into the pipeline siting and permitting process, so oil and gas companies, communities, and states can identify cost-effective options for habitat conservation near shale gas development.

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1. Introduction Advances in drilling technologies have led to a boom in oil and gas development in the

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United States. This growth has provided a number of benefits, including lower energy prices,

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displaced coal in electricity production (and related health and climate policy benefits1, 2), and

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increased energy independence. However, shale gas extraction requires intense development (if

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possibly less intense than conventional well development), including the construction of well

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pads, gathering pipelines, larger inter- and intra-state pipelines, compressor stations, and roads to

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transport materials. These infrastructure needs can lead to tradeoffs between shale gas

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development and environmental impacts.3

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Environmental impacts of shale gas development depend on the ecosystem in which

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development is occurring. They also depend on the distribution of pipelines, wellpads, and wells

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within the ecosystem. Documented impacts include ecosystem disruptions, habitat loss, core

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forest loss, and forest fragmentation.4-10 These impacts are associated with a decline in forest

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biodiversity, at both local and regional scales.11 Moreover, forest biodiversity is critical for the

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stable provision of ecosystem services, including natural resource availability and carbon

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sequestration.12 Natural gas development can also adversely affects surface water systems by

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reducing streamflow and introducing chemical and sediment runoff.13 Reduced streamflow may

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inhibit wetland productivity, and pipelines pose a risk of rupture. Approximately half the global

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wetland area has already been lost, and thus ecosystem services provided by wetlands (e.g. flood

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abatement, water quality benefits, and carbon sequestration) are highly valued and threatened by

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irreversible damage.14

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Recent gas development in Pennsylvania and West Virginia intersects with forested areas, which has spurred a significant body of literature focused on how development has 3 ACS Paragon Plus Environment

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contributed to core forest loss.6-9 Studies within and outside of Pennsylvania have found that

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shale gas pipeline infrastructure development is a primary contributor to rural land-use change

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and forest fragmentation. For example, Abrahams, Griffin and Matthews 5 found gathering lines

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account for 94 percent of incremental fragmentation of core forest in Bradford County,

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Pennsylvania. Langlois, Drohan and Brittingham 4 determined core forest decreased by 4 percent

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in Lycoming County, Pennsylvania due to shale development, with pipelines and roads

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responsible for around 80 percent of that loss. Focusing on seven counties in the Barnett shale in

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Texas, Jordaan, et al. 15 found 74 percent of total land use change was related to midstream

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infrastructure (mainly, pipelines).

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Despite frequent calls for assessment of habitat externalities and for incorporating them

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into systematic shale gas development planning across larger spatial scales (see e.g. Drohan,

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Brittingham, Bishop and Yoder 6, Northrup and Wittemyer 16, Mauter, et al. 17, Middleton and

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Brandt 18), the availability of research on how to integrate these concepts into models that can be

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used for policy-making is limited. Studies focusing on larger spatial scales, such as the state- or

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county-level, have mainly focused on retrospective analyses characterizing past land-use change

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related to shale development or pipelines, or have projected future impacts based on status quo

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policies and technologies 4, 6-9, 19. Only one study we are aware of, Abrahams, Griffin and

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Matthews 5, conducts an analysis of a counterfactual shale gas development plan at the county-

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scale or larger. The Abrahams, Griffin and Matthews 5 model assesses forest impacts under two

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pre-determined policies: requiring pipelines to follow roads and reducing well pad density.

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To our knowledge, ours is the first quantitative model to systematically enumerate

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tradeoffs between habitat impacts and pipeline siting costs on a large spatial scale. Other recent

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studies have incorporated environmental externalities into modeling shale gas supply chains 20-22, 4 ACS Paragon Plus Environment

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but these studies do not model pipeline siting. Doing so requires a quantitative approach to

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optimizing pipeline configuration under economic and environmental objectives, including

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evaluating tradeoffs. Here, we address this gap in the literature by developing a multi-objective

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binary integer-programming model, the Multi Objective Pipeline Siting (MOPS) model, which

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incorporates habitat considerations into pipeline development and estimates the tradeoffs

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between pipeline development costs and habitat impacts. The model takes well locations as

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fixed, and then solves for the least-cost pipeline configuration, given constraints on habitat

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impacts and the requirement that each well be connected to a larger intra- or inter-state pipeline

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via gathering lines. The model formulation is novel in that it accounts for pipeline connectivity,

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flow direction, and allows merging of upstream pipelines.

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To demonstrate an application of MOPS to pipeline siting and permitting processes, we

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apply it using data from Bradford and Susquehanna counties in northeastern Pennsylvania. We

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find that large amounts of habitat impacts could be avoided for a relatively low cost, but that

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avoiding additional habitat impacts becomes gradually and increasingly costly. For example, 10

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percent of habitat impacts can be avoided at less than a two percent cost increase over the

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privately optimal pipeline configuration.

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2. Methods

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Below we discuss the optimization model and our methods for applying it to a case study.

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2.1 Optimization Model While most pipeline design models focus on cost and construction details 23, 24, the MOPS

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model is designed to calculate the tradeoff between pipeline development costs and

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environmental outcomes. The optimization problem minimizes a weighted combination of cost 5 ACS Paragon Plus Environment

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and habitat impacts of building a pipeline network. We treat these two objectives as

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incommensurable, as is often the case in multi-objective optimizations. Each component is

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assigned a weight such that the weights add up to one and varying the weight on each term

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allows us to develop a tradeoff curve between cost and habitat impacts. An equivalent

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representation is a function minimizing habitat impact subject to a cost constraint. Under this

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formulation a non-binding cost constraint is equivalent to a weight of zero on cost and positive

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weight on habitat impacts; a cost constraint equal to the cost of a solution associated with the

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minimum cost pipeline configuration is equivalent to a weight of zero on the habitat term. An

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alternative approach would be to minimize social costs, which consist of private costs and the

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external damage to habitat. The challenging nature of valuation of habitat favors starting with a

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weighting/tradeoff approach.

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We measure habitat impacts relative to the cost of pipeline construction using MOPS to

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derive a tradeoff curve for the marginal cost of avoiding habitat impacts, in terms of the cost of

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pipeline configuration. There are two endpoints, or corner solutions, that arise from the

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weighting scheme: full weight on pipeline construction costs (minimum cost solution that

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disregards habitat impacts) and full weight on habitat impacts (minimum impact solution that

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disregards pipeline construction costs).

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The model is formulated such that shale gas is collected from all origin wells through

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gathering pipelines, which then connect to compression stations on the transmission pipeline. A

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conceptual diagram of the problem and two extreme solutions (minimum cost and minimum

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impact, respectively) are presented in Figure 1; a full mathematical formulation of the problem is

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available in the Supporting Information (SI).

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The basis of the optimization model is the representation of a continuous landscape as a

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grid, allowing pipeline placement to be modeled as a binary integer program. Integer

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programming has been used to solve pipeline siting models before (see e.g. Brimberg, et al. 25),

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and in our case allows for inclusion of both pipeline siting constraints as well as habitat impacts,

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while still being able to solve the problem. The centroid of each grid cell is a node in the integer

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programming problem. Within the grid we specifically identify two set of nodes: (1) origins, in

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this case wells, and (2) destinations, in this case all nodes through which transmission lines pass.

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Binary variables are used to represent whether a pipeline is present on the path connecting the

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nodes of two adjacent grid cells (called an arc). Attributes can be associated with an arc, for

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example, cost, distance, population exposure, habitat area, and types of land use. The objective

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function of the integer program is the weighted sum of: (1) cost of pipeline construction for each

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arc where a pipeline is present; and (2) the area of forest and wetland along the arc where

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pipeline is present (with area along the arc being a proxy for habitat impact).

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Figure 1: Conceptual Model

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By formulating the gathering pipeline layout design as a multiple origins (wells) and

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multiple destinations (transmission pipeline connectors) (MOMD) problem, we are able to draw

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from the solution algorithm for other MOMD network analysis problems, such as logistics

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planning in optimizing package delivery subject to shipping cost26 to solve the problem. The

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MOMD problem resembles the well-known minimum Steiner tree problem 27. The Steiner tree

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problem in graphs can be seen as a generalization of two other famous combinatorial

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optimization problems: the (non-negative) shortest path problem and the minimum spanning tree

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problem. If a Steiner tree problem in graphs contains exactly two terminals, it reduces to finding

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a shortest path. If, on the other hand, all vertices are terminals, the Steiner tree problem in graphs

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is equivalent to the minimum spanning tree.

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Conventional network analysis models focused on connecting sources and destinations

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would require all the sources and destinations in the final layout. However, for the gathering

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the optimal layout. Therefore, the optimization model must determine how many and which

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connectors should be in the optimal layout. To allow such flexibility, we augment the network by

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adding a pseudo (destination) node which connects all the transmission pipeline connectors and

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treats connectors as intermediate nodes. We also assign zero value to all the attributes for the

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arcs between transmission line connectors and pseudo destination nodes. This approach provides

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the flexibility for the optimal pipeline layout to include or exclude potential transmission

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connectors. We solve the model using a commercial mixed integer programming solver,

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specifically the CPLEX solver in GAMS (GAMS Development Corporation 2018).

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To validate the model, we compare the observed configuration of pipelines to the

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modeled optimal configuration without accounting for habitat impact. To empirically measure fit

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we calculate, for each grid cell, whether there is a model pipeline, an observed pipeline, or both.

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Recognize, however, that gathering line siting may, to an unknown extent, already account for

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the avoidance of habitat impacts in the process of meeting stakeholder concerns that arise during

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the siting process. Thus, any validation of the model by comparing model results to existing

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pipeline locations may be of limited utility.

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2.2 Estimation of Tradeoffs in Bradford and Susquehanna, PA

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We apply the model to data from Bradford and Susquehanna counties in northeastern

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Pennsylvania. We choose northeastern Pennsylvania because there has been considerable shale

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gas pipeline construction over the past decade. Additionally, the counties were selected for study

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based on data availability, pipeline characteristics, and environmental characteristics. We use

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two datasets in the study: pipeline location data from Rextag, current as of 2016, and 2001 land

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cover data from the National Land Cover Database (NLCD). We use the 2001 NLCD land cover

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data to match the land cover in the region at the beginning of the pipeline construction boom in 9 ACS Paragon Plus Environment

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the region. We searched within Pennsylvania for a study area with a pipeline network relatively

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dense within the area and relatively disconnected to nearby areas, to reduce the impact of edge-

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effects on our results (i.e. modeled pipeline design being influenced by a pipeline network

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outside the study area).

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The region, as shown in pink in Figure 2, includes 117 wells across an area of about 364

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square kilometers. The existing gathering (brown) pipeline and transmission (black) pipeline are

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based on 2016 production well data from the Pennsylvania Department of Environmental

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Protection and pipeline data from Hart Energy Mapping & Data Services (Figure 2). There are

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eight connectors for connecting gathering and transmission pipelines. Within the study area,

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approximately 53 percent of land cover is forest or wetlands, which we identify as previously

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undeveloped habitat, and is the focus of our modeling effort. Of this previously undeveloped

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habitat area, 95 percent is forest and 5 percent is wetland.

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Figure 2.

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(a) MOPS cost minimizing solution. The pipeline configuration represents optimal pipeline placement to minimize pipeline construction costs, with no limit on the quantity of previously undeveloped habitat traversed. Pennsylvania state and county spatial data are from the US Census Bureau. Pipeline and well spatial data are from Rextag. Maps were generated using ArcGIS 10.3 (ESRI, Redlands, CA, USA: http://www.esri.com/software/arcgis).

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(b) MOPS habitat impact reduction versus minimum cost solutions. Red translucent coloring is used to represent the pipeline in the cost minimization solution; the grey pipeline configuration represents pipeline placement in the solution with full weight on wetland and forest habitat. Pennsylvania state and county data from the US Census Bureau and land cover is derived from the 2001 NLCD. Maps were generated using ArcGIS 10.3 (ESRI, Redlands, CA, USA: http://www.esri.com/software/arcgis).

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To apply the model to this region we represent the area as a set of nodes and arcs. There

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is a tradeoff between computational burden and incorporation of heterogeneity of the land cover.

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We find that using 1,010 evenly-spaced grid cells across the study area, each about 600 meters

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by 600 meters, provides adequate treatment of landscape heterogeneity while remaining

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computationally feasible to solve. We assume that a pipeline, if constructed, will go through and

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connect the center of a grid cell.

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For each potential connection (arc), we calculate several attributes including distance, forest and wetland area, slope of pipeline connection, and the length of any water crossings. We 11 ACS Paragon Plus Environment

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include the latter two elements because, although data is not easily accessible, literature has

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claimed that the cost of materials and construction of shale gas pipelines increases if pipelines go

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through difficult terrain such as sloped land (see e.g. Marcoulaki, et al. 28) or over/under river

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channels (see e.g. Marcoulaki, Tsoutsias and Papazoglou, 28 Oil and Gas Journal, 29 Racicot, et al.

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30).

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the grid cells the arc connects. If the slope is greater than a pre-specified number, we assume

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construction along this arc would be cost-prohibitive and constrain the arc to be an infeasible

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connection. Given that we only measure the difference in slope between nodes and not the

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maximum slope at any point along the connection route, the measured slope of the arc may

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underestimate the maximum slope.

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We define the slope of an arc to be the difference in elevation between the two centroids of

We also account for water crossings in our model. Through correspondence with multiple

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shale gas industry contacts we established “ballpark” estimates of the increased cost of routing

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shale gas gathering pipelines across water crosings as a function of three main categories of

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crossing width: small (less than 10 feet), medium (10-100 feet), and large (greater than 100 feet).

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For small crossings we assume a cost increase of 10 percent for the arc (which is around 600

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meters or .4 miles), for medium crossings we assume an increase of 20 percent, and for large an

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increase of 150 percent.

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We follow previous models and use distance as a proxy for private pipeline infrastructure

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cost to the developer (see e.g. Abrahams, Griffin and Matthews 5). Following Lade and Rudik 31

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we assume that gathering lines are 4 inches in diameter. Then, using an estimate of the cost per

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inch-mile from the Interstate National Gas Association of America 32, and the PPI to convert the

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estimate to $2016, we estimate the cost per mile of gathering line as $105,936 ($2016).

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Forest and wetland area affected is used to approximate the habitat impact as an

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environmental externality. Coverage is calculated as the average percentage of the area of the

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two connected grid cells covered by forest or wetland. There are no protected areas in our

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selected study area, so, as an important simplification, we treat all forest and wetland areas with

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equal weight.

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3. Results

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3.1 Model Validation

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We first estimate and validate the model by running it with the objective of minimizing

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the total pipeline construction cost and compare the optimal pipeline network from the model

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results with the existing pipeline network. Figure 2a shows the cost minimizing pipeline network

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in red and existing gathering pipeline network in brown for our preferred model specification. In

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evaluating model performance, we focus on the extent to which the placement of pipelines by the

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model overlaps with the observed pipeline configuration. To quantify the overlap, we calculate

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the total number of grid cells where the model places a pipeline and then calculate the number of

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these grid cells that also contain an existing pipeline within a one-cell radius of the model

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pipeline. We view this as a rough estimate of model fit, as it abstracts from important pipeline

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properties such as direction (we do not have data on pipeline direction) and influence of the

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pipeline network outside of the study area on study-area pipeline siting. Note that we do not

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measure whether the existing pipeline matches the model pipeline. As evident in Figure 2, some

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existing pipelines do not connect to a well. We use a snapshot of pipeline placement, and

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therefore do not have information on wells that are expected to be drilled in the future.

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Furthermore, it is possible that some pipeline placement is to facilitate network robustness. We

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leave the dynamics of pipeline and well siting for future work. 13 ACS Paragon Plus Environment

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Our preferred model avoids steeply sloped land, specifically any connections with an

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estimated slope greater than 20 percent, assigns a higher cost to cells that require water

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crossings, and places a pipeline in the same grid cell as existing pipeline for 94 percent of model-

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pipeline grid cells. By and large, the model replicates actual pipeline development. However, in

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some regions, especially in the northwest region and particularly around the edge of the modeled

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area, the actual and modeled pipeline network differ from each other. This indicates that factors

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in addition to the shortest path (cost), slope, and water crossings determine the pipeline layout.

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For example, topography, soils, connections needed to pipelines outside the study area, pipeline

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and well ownerships, and even habitat concerns may factor into the observed layout. The

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reasonable possibility that habitat concerns factored into the pipeline layout, albeit not with the

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use of a model such as ours, reduces the accuracy of our validation approach. But with the high

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fit statistic for the layout minimizing private costs, and with a variety of factors omitted from our

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model that affect such costs, it is likely habitat concerns had little influence. See the SI for

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detailed statistics on slope characteristics of grid cells with pipelines.

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3.2 Model Results

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We bound the model results by two cases: the previously described cost minimization

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solution and a second case where all wells must be connected, but the area of previously

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undeveloped habitat traversed is minimized. The second bounding case is solved by putting a

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weight of zero on the pipeline cost term and a weight of one on habitat value in the objective

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function.

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In Figures 2a and b we contrast results of the scenario that places a full weight on habitat

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impact with the cost minimization solution previously described. In Figure 2b, the green color

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represents forest and wetland land cover. The red line represents the least cost pipeline layout, 14 ACS Paragon Plus Environment

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while the grey lines represents the optimal pipeline layout with a full weight on habitat impact.

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As is evident from the figure, the grey optimal pipeline layout of this scenario avoids many areas

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covered by forest and wetland.

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In addition to exploring the two bounding cases, we develop a trade-off curve depicting

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the relationship between pipeline cost and habitat impacts as we vary the weights in the model’s

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objective function. The weights are associated with the decision makers’ preference over the two

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objectives. To develop the curve, we run our multi-objective optimization model using different

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sets of weights on pipeline cost and area of forest and wetland lost and report the model output as

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points in Figure 3. Specifically, we report (x,y) pairs where the x-coordinate is the avoided

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habitat impact relative to the habitat impact in the cost minimizing solution and the y-coordinate

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is the cost per acre of habitat impact avoided, calculated as the change in pipeline construction

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costs (proxied by pipeline distance) relative to the cost-minimization case divided by the acres of

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habitat impacted.

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Figure 3. Per-acre cost of avoided forest and wetland impact

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We interpolate between points to develop a curve representing the marginal pipeline cost

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of avoiding an additional acre of habitat impact using Matlab’s Piecewise Cubic Hermite

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Interpolating Polynomial (PCHIP). The slope of the curve is relatively flat for low quantities of

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avoided habitat impact, but increases sharply with more avoided habitat. This suggests that

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relatively large amounts of habitat impact can be avoided for relatively low cost, but that

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avoiding additional units of habitat impact become costlier the more habitat is avoided. For

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example, 10 percent of the habitat impact can be avoided at less than 2 percent increase in costs

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over the privately optimal pipeline configuration. Exploring the relationship between costs and

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habitat impact for additional habitat avoidance – further to the right on the curve – we find that

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approximately 20 percent of habitat impact can be avoided for about a 11 percent increase in

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cost. Avoiding additional habitat impacts becomes gradually and increasingly costly.

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4. Discussion Since the beginning of the boom in the mid-2000s, shale gas production has quickly

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become the main source of natural gas production in the US. Shale accounted for 60 percent of

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total US gas production in 2017 and resulted in the US becoming a net exporter of natural gas in

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2017 for the first time in at least sixty years. Furthermore, US shale gas production is expected to

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nearly double by 2040 33, 34. This development has been accompanied by a large increase in

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pipeline construction, with over 0.4 million miles of gathering, transmission, and distribution

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natural gas pipelines added to the US network, totaling 2.2 million miles in 2015 35. Of those

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added pipelines and associated natural gas infrastructure, gathering pipelines, which bring

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produced natural gas from the wellhead to midstream infrastructure, are responsible for nearly 80

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percent of total land use over the entire life cycle of natural gas-fired electricity 15.

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Our results contribute to growing research showing that state regulations and policies

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have not led to efficient land use and that energy development could occur with fewer

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environmental impacts at relatively low cost 36-38. Klaiber, Gopalakrishnan and Hasan 36 used

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satellite land cover data to find that policies encouraging consolidation on well pads in

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Pennsylvania would have conserved almost 113,000 acres over a nine-year period. Abrahams,

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Griffin and Matthews 5 find that requiring pipelines to follow existing roads in forested areas

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would prevent additional fragmentation at a cost of $0.005 to $0.02 per Mcf of natural gas. Milt,

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Gagnolet and Armsworth 37, using 20 case study sites, found that conservation-oriented policies

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could reduce surface impacts from gathering pipelines and access roads without excessively

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altering current industry practices.

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Our work augments studies assessing alternative policies and/or more comprehensive or systematic planning that have thus far generally focused on small spatial scales. For example, 17 ACS Paragon Plus Environment

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Milt, Gagnolet and Armsworth 38 and Milt and Armsworth 39 assess the costs and benefits of

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planning to reduce habitat impacts of pipelines but only within leaseholds. Our model allows for

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quantification of tradeoffs between shale gas pipeline development costs and habitat, a particular

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contribution to policymaking aimed at coordinating shale gas development across spatial scales.

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Although a number of studies call for such tradeoffs to be estimated, this paper is the first to do

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so, particularly on a large a spatial scale 6, 16, 17.

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The tradeoff curve could be used in conjunction with ecosystem service values to guide

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policy-making, aiding in the selection of optimal habitat impact avoidance. Specifically, given a

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value of mitigating forest and wetland impact, the value could be compared with the cost (the y-

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axis in Figure 3) to determine the optimal and additional expenditure on pipeline construction to

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avoid disturbing habitat. The cost of avoiding habitat impact ranges between roughly $2,000 and

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$14,000 ha-1 (Figure 3), which corresponds to $100-$700 ha-1 year-1 when annualized (5 percent

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discount rate, perpetuity). As long as the economic benefits of avoiding habitat impact exceed its

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costs, from a societal perspective, investing in habitat protection is economically desirable.

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Depending on the source, the literature includes estimates of ecosystem service values for forests

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and wetlands that fall within or go beyond or below the above cost range (see e.g. Petrolia, et al.

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40,

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habitat area varies depending on the location and type of habitat (see e.g. de Groot, et al. 42, who

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screened 300 case studies on the value of ecosystem services, many of them in tropical and

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temperate forests). Accordingly, further work is needed to locally determine the magnitude of

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benefits from avoided habitat impacts on average and to account for the heterogeneity of habitat

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vulnerability and protection value across space.

Jenkins, et al. 41). This is intuitive, as the value of ecosystem services supported by specific

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Our results also expand the literature related to mitigation of shale gas impacts more

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broadly. For example, a growing body of work examines the potential gains from mitigating

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water-related shale development impacts by using more systematic, forward-looking planning

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and by planning across space. There have been both qualitative and quantitative studies

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examining environmental and health benefits, as well as private costs from more systematic

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planning of shale development to minimize water impacts. Rahm and Riha 43 assess several

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water management policy options and argue in favor of regional impact analysis to ensure the

339

most efficient use of water resources. Bartholomew and Mauter 44 study several well pads to

340

assess the tradeoffs between water management strategy costs (e.g. acquisition, transportation,

341

storage, and treatment) and the benefits of minimizing impacts on human and environmental

342

health. Gao and You 45 developed a model that covers the life cycle of electricity generated from

343

shale gas, consisting of a number stages including freshwater acquisition, shale well drilling,

344

hydraulic fracturing and completion, shale gas production, wastewater management, shale gas

345

processing, electricity generation, transportation, and storage. Shih, et al. 46 developed a multi-

346

objective programming model for shale gas water and wastewater management that incorporates

347

the objectives of four types of decision makers: oil and gas well developers and operators,

348

centralized wastewater treatment facility planners and operators, environmental regulators, and

349

social planners.

350

Our main finding -- that there are gains from coordination of land use changes across

351

larger spatial scales -- arises in many contexts in the systematic conservation literature focused

352

on incorporating biodiversity and cost attributes into the planning process 47-49, and further work

353

could be done to better understand conservation outcomes and integrate with the systematic

354

conservation planning literature. Potential extensions to representation of habitat include

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355

consideration of habitat fragmentation (e.g. Saunders, et al. 50), size of reserves relative to

356

species habitat needs (e.g. Marianov, et al. 51), and complementarity of the sites left undisturbed

357

(see e.g. Margules and Pressey 52). In the extreme, connectivity in the form of habitat corridors

358

could be considered using model elements similar to those used in the model now to ensure

359

pipeline connectivity (see e.g. Conrad, et al. 53).

360

Although the model developed in this paper captures essential elements necessary to

361

identify the tradeoff curve, additional work could be done to develop a more realistic

362

representation of both pipeline cost and placement and habitat impacts. Potential modifications

363

to the pipeline model include allowing for diagonal connections across grid squares, inclusion of

364

flow constraints, and extension of the geographic reach. Other extensions include considering

365

ownership of wells and pipelines, allowing for estimation of gains for coordination between

366

firms, and building in constraints and/or cost modifications to allow for pipelines following an

367

existing transportation network. Habitat values may also be heterogeneous across space and

368

therefore the ecosystem service valuation methods previously discussed could be applied to

369

develop arc-specific values. Additionally, there may be uncertainty over one or more inputs

370

and/or the future. Although our model is deterministic, conducting multiple runs varying

371

uncertain inputs could be used to gain insight into sensitivity of the model results to these inputs.

372

Well siting is now a given in the model, and although it would add significant

373

complexity, well siting could be made endogenous to the model. Including well siting could be

374

more realistic in some settings as shale gas drilling methods do have the potential to mitigate

375

surface environmental impacts. New drilling technologies allow more production from a smaller

376

area of land than would conventional development, as well as flexibility in well and pipeline

377

siting decisions. Companies generally drill four to six wells (potentially up to several dozen) and 20 ACS Paragon Plus Environment

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378

have also increased the lateral length of these wells by thousands of feet, with this efficiency

379

having increased over time throughout the shale development boom 54.

380

In conclusion, incorporation of habitat impacts associated with both well and pipeline

381

siting encourages more efficient land use in shale gas development. MOPS or a similar model

382

could be integrated into the pipeline siting and permitting process, so oil and gas companies,

383

communities, and states can identify cost-effective options for habitat conservation near shale

384

gas development.

385 386 387 388

5. Supporting Information

389 390 391 392 393 394 395 396 397

6. Acknowledgements

Key attributes of the MOPS model, model definition and problem statement, formulation of a solution to the multi-objective constrained optimization, information on study site slopes and water crossings

The authors gratefully acknowledge the support of the Alfred P. Sloan Foundation and the Stephen D. Bechtel Foundation, Jr. Foundation for RFF’s work on a range of issues related to shale gas development, including this research. Marianov acknowledges support from the Complex Engineering Systems Institute through grant CONICYT PIA FB0816 and grant FONDECYT 1160025. The authors thank Paul Armsworth, Michael Griffin, and Jan Mares for helpful insight and feedback and Matthew Ashenfarb, Jessica Blakely, Isabel Echarte, and Justine Huetteman for research assistance. The authors also thank anonymous shale gas industry stakeholders for sharing their insights into pipeline construction cost determinants.

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