CREATING A WIN-WIN STRATEGY
The HBS-BCG project was established to develop a shared fact base , engage the key stakeholders , and advance a shared agenda for developing America ’ s unconventional 1 gas and oil resources in a way that addresses the key objectives of all stakeholders . This win-win pathway involves 11 action steps across three pillars :
Pillar 1 : Enhancing the Economic Opportunity Unconventionals have already created major economic benefits for the US , adding more than $ 430 billion to annual GDP and supporting more than 2.7 million American jobs that pay , on average , two times the median US salary . Fully 50 % of unconventionals production jobs are middle-skills jobs , accessible to the average citizen . The US is still in the early stages of capitalizing on this economic opportunity , and current activity is concentrated in the upstream energy-production sector . With proper policies and actions by the industry and other stakeholders , this economic opportunity can further spread into downstream industries , such as petrochemicals and energy-intensive industries , and more broadly throughout the economy . To realize that potential , however , the US must address a number of key challenges :
• Action step 1 : Continuing the timely development of efficient energy infrastructure . Additional pipelines , gathering , and processing infrastructure are needed to safely and efficiently move unconventional gas and oil from producing regions to users across America .
• Action step 2 : Delivering a skilled workforce . The US will need many more trained workers with the right skills across a wide variety of occupations to fill the well-paying middle-skills jobs .
• Action step 3 : Eliminating outdated restrictions on gas and oil exports . With abundant resources , restrictions on exports created in response to the 1970s ’ energy crises are no longer needed , and exports would boost US economic and job growth while benefiting friendly nations .
Pillar 2 : Minimizing Local Environmental Impacts The development of unconventional energy resources creates significant environmental risks to water , air , land , and communities , which must be clearly acknowledged . Our research reveals that real progress is being made in managing these environmental risks at a cost that does not threaten competitiveness . In addition , mitigation technology is rapidly improving . Significant progress has also been made in improving regulatory standards in most energy-producing states , and continuous-improvement bodies have been formed to diffuse leading practices among regulators and industry stakeholders . There is no inherent trade-off between environmental protection and company profitability . With sound regulation and strong compliance , the cost of good environmental performance is modest and gives companies a level playing field on which to compete .
However , poor and uneven compliance by some operators and uneven diffusion of leading practices continue to create significant problems . Improvement is needed in four key areas :
• Action step 4 : Developing transparent and consistent environmental performance data . Transparent environmental performance data creates the foundation for monitoring compliance and stimulating innovation . State governments , industry , and NGOs 2 all have roles to play .
• Action step 5 : Setting robust regulatory standards . Better standards are needed to fill gaps , speed adoption of industryleading practices , and encourage further innovation .
• Action step 6 : Achieving universal regulatory compliance . Both industry and regulators need to strengthen regulatory enforcement and producer compliance .
• Action step 7 : Strengthening bodies driving continuous environmental improvement . Continuous-improvement organizations such as STRONGER and CSSD 3 have played an important role , but steps are needed to improve collaboration and better disseminate recommendations .
Pillar 3 : Speeding the Transition to a Cleaner-Energy , Lower-Carbon Future Over the last decade , the US has begun a major transition toward a more efficient , cleaner , and lower-carbon energy system led by the power sector . Our research finds that that transition will not only continue , but could accelerate over the next 20 – 30 years and will lead to major economic and environmental benefits . While many stakeholders still believe that unconventional energy development and America ’ s energy transition are antithetical , they are actually complementary . Natural gas is the only fuel that can cost-effectively deliver large-scale carbon emissions reductions over the next 20 years while also providing a bridge to achieving even lower low-carbon solutions over the long term .
1
The report defines unconventional gas and oil resources as shale gas and oil resources as well as tight gas and oil resources . These resources are accessed and extracted through the process of hydraulic fracturing . Unconventionals do not include other forms of oil and gas resources , such as oil sands , extra heavy oil , coal-to gas conversion , or coal bed methane .
2
Non-governmental organizations .
3
STRONGER is the State Review of Oil and Natural Gas Environmental Regulations , and CSSD is the Center for Sustainable Shale Development .
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