AASHE ANNUAL CONFERENCE LOS ANGELES, CA OCTOBER 15, 2012 MARK HEUER, PHD, SUSQUEHANNA UNIVERSITY ZUI...

AASHE ANNUAL CONFERENCELOS ANGELES, CA

OCTOBER 15, 2012

MARK HEUER, PHD, SUSQUEHANNA UNIVERSITY

ZUI CHIH LEE, PHD, SUSQUEHANNA UNIVERSITY

EXPLORING STAKEHOLDER CONNECTEDNESS: THE SUSQUEHANNA

RIVER AND MARCELLUS SHALE HYDRAULIC FRACTURING

KEY RESEARCH QUESTION

• What degree of stakeholder connectedness exists currently among stakeholders in the private, government, and nonprofit sectors in the Susquehanna River Valley?

• To what extent will stakeholder connectedness among the sectors change as Marcellus Shale “fracking” in the Susquehanna River Basin increases?

U.S. SHALE DEVELOPMENT, INCLUDING MARCELLUS

WHY FOCUS ON THE SUSQUEHANNA RIVER AND MARCELLUS SHALE?

• The Marcellus Shale is about to become the most productive natural gas shale field in the U.S., according to data from the U.S. Energy Information Agency (Associated Press, 8/6/2012).

• In July 2012, the combined output from Pennsylvania and WVA wells was about 7.4 billion cubic feet per day, more than doubling the YOY output and accounting for more than 25 percent of U.S. shale gas output (Associated Press, 8/6/2012).

WHY FOCUS ON THE SUSQUEHANNA RIVER AND

MARCELLUS SHALE?

• Marcellus production is likely to continue its growth trajectory until 2015 or 2016, when the Northeast runs out of ways to use its gas. The growth trajectory could continue, however, if the federal government approves exports (Puko, 2012) [or increases exports further!].


• While the U.S. EIA has reduced estimates of Marcellus reserves from 410 to 141 trillion cubic feet, the US Geological Survey (USGS) has estimated the Utica Shale, which lies beneath the Marcellus, to have 38 trillion cubic feet of undiscovered, recoverable natural gas (Associated Press, 10/7/12).


• Given this rapid development of Marcellus Shale gas, American Rivers, a nonprofit environmental organization, identified the Susquehanna River as “America’s Most Endangered River” in 2011.


• The threat of contamination, as part of the hydraulic fracturing or “fracking” process to extract natural gas, was the primary factor influencing the “most endangered” status.

• According to American Rivers, the “fracking” process converts massive amounts of water into toxic wastewater. The wastewater cannot be recycled into the Susquehanna River, unlike many other uses for water withdrawals.


MARCELLUS SHALE?• The Susquehanna River ecosystem has

encountered two previous epochs of governance conflict involving private acquisition of wealth versus social and environmental cost.

• In the 19th century, forests along the Susquehanna River were clear cut, with the river providing log transport. The river later fell victim to soil erosion due to the absence of trees.


MARCELLUS SHALE?• Subsequently, coal mining became a dominant

industry in Pennsylvania, from which long-abandoned mines continue draining acid into the streams and rivers of the basin.

• The Pennsylvania Department of Environmental Protection estimates the cost of acid mine drainage clean-up at $15 billion (Susquehanna River Basin Commission 2010 Report, 2010).


• Thus, the economic opportunities posed by Marcellus Shale as the largest shale gas source in the U.S. has, as a backdrop, two previous epochs of private gain leading to social and environmental cost, resulting in taxpayers getting stuck with the tab.

• Thus, to many citizens and groups in the Susquehanna River Valley, the growing presence of natural gas “fracking” has led to a growing, organized public activism.

DEVELOPING THE STAKEHOLDER INVENTORY

• Given the sudden development of Marcellus Shale and the environmental, social, and economic turbulence engendered by it, there is a significant gap in identifying and understanding current stakeholder relationships in the Susquehanna River basin.

• Therefore, this study involves an inventory of Susquehanna River basin stakeholders by surveying attitudes toward Marcellus Shale drilling.

RESEARCH METHODOLOGY

• Interviewed 12 stakeholders from the private, nonprofit, and government sectors. Utilized an interview format to identify organizational focus on “fracking” and the nature of relationships with other sectors in the Susquehanna River basin.

• The interviews revealed complex, intertwined stakeholder relationships relating to “fracking” and the Susquehanna River.

• As a result, a survey instrument became necessary to establish a baseline on stakeholder attitudes.


• Utilized a community discussion guide from Public Issues Forums of Centre County (PA) entitled, “The Marcellus Shale: What Does It Mean for Us?”

• The Public Issues Forums are designed to encourage people to consider different perspectives and to wrestle with trade-offs and consequences inherent with each approach. A goal is to discover areas of common ground for moving forward.

• The intent of the survey and the research is to understand the degree of stakeholder connectedness possible.


• Utilized 4 sections: economic opportunity for all, protect health and safety, preserve our communities, and achieve energy security.

• Developed 34 questions and included a demographics section.

• Pretested the survey with a PA wood products trade association.


• Survey administered on-line using Survey Monkey• Received 188 responses• Over 50% of respondents live and/or work

within 5 miles of the Susquehanna River ecosystem• Identified organizations to contact through

scanning local newspapers and websites, attending local conferences, studying available research, contacting local and regional organizations, and WOM.


• Due to complex interactions among stakeholders and the current formative stage of Marcellus shale development, selected a three sector approach for stakeholder grouping: private, nonprofit, and government.

• The three-sector approach builds on significant previous research in the stakeholder environmental management field from respected researchers (Waddock, 1988; Westley & Vredenburg, 1991; Starik, 1995; Googin & Rochlin, 2000; Selsky & Parker, 2005).

DEMOGRAPHICS

I am currently employed in:

1. nonprofit 2. government3. private

Fre %

55 29.6

23 12.4

63 33.9

DEMOGRAPHICS

If use of the Susquehanna River ecosystem were to be limited, it would affect me how? (check all that apply)

1. financially2. quality of life (recreation)

3. existentially (access to water)

13.4

48.8

37.8

DEMOGRAPHICS

• Based on current usage, the Susquehanna River ecosystem will be available to future generations in a condition similar to today.

1. True2. False3. Uncertain

Fre %Y 42 22.6

N 43 23.1

U 60 32.3

Miss 41 22.0

SURVEY QUESTIONS AND RESULTS# Economic Opportunity

Question Description (n=186, missing =45)

1: Nonprofit 2: Government 3: Private (select 1 to 5, with 5 as the highest

priority)

1 2 3 Overall

1

Streamlining government regulations and oversight in order to expedite natural gas development and enablePennsylvania to be competitive with other gas-producing states.

2.47(1.50)

2.43(1.41)

3.08(1.52)

2.74(1.52)

2

Providing incentives to develop and expand local businesses that support the gas industry (e.g., hotels, restaurants, financial services).

2.75(1.17)

2.52(.95)

2.67(1.21)

2.67(1.15)

3

Expanding education and training in gas-related occupations to enable local residents to take advantage of the new jobs created.

3.74(1.14)

3.87(.76)

3.54(1.24)

3.67(1.13)

4

Creating longer-term economic benefit by taxing gas production and earmarking it specifically for rebuilding local infrastructure adversely affected by the gas production.

4.22(1.07)

3.91(1.31)

3.90(1.30)

4.03(1.22)

5

Recognizing that good stewardship means the gas industry funds local communities in the way the communities want, to improve the quality of life.

4.13(.90)

3.78(1.38)

3.83(1.26)

3.94(1.16)

SURVEY QUESTIONS AND RESULTS# Health and Safety

Question Description (n=186, missing =45)1: Nonprofit 2: Government 3: Private(select 1 to 5, with 5 as the highest

priority)

1 2 3 Overall

1

Slowing down or halting new development while we learn more from existing Marcellus wells capable of impacting the Susquehanna River ecosystem.

3.41(1.57)

3.39(1.53)

3.29(1.52)

3.35(1.56)

2

Regularly educating/informing stakeholders of the general public of the safeguards already implemented in gas production, which protect the Susquehanna River ecosystem.

3.89(1.01)

3.35(1.03)

3.81(1.14)

3.76(1.08)

3

Regularly monitoring and testing the treated wastewater for the chemicals used in gas production to ensure those chemicals are not released into the Susquehanna River ecosystem.

4.76(.47)

4.43(.73)

4.54(.80)

4.61(0.68)

4Requiring gas companies to filter out the chemicals use during gas production and properly dispose of them.

4.69(.64)

4.61(.59)

4.25(1.09)

4.48(.88)

5

Creating county councils to coordinate efforts, share and review data, and recommend improvements to preserve the Susquehanna River ecosystem.

4.13(.90)

3.78(1.38)

3.83(1.26)

3.94(1.16)

6

Ensuring emergency response preparedness, including training of first responders, wherever drilling occurs in or near the Susquehanna River ecosystem.

4.15(.87)

4.05(.84)

4.13(.92)

4.12(.89)

7

Ensuring a transparent process for monitoring, investigating, and treating cases of environmental contamination in or near the Susquehanna River ecosystem.

4.65(.59)

4.18(.96)

4.29(.91)

4.41(.83)

SURVEY QUESTIONS AND RESULTSCommunity


1: Nonprofit 2: Government 3: Private

(select 1 to 5, with 5 as the highest priority)

1 2 3 Overall

Finding equitable ways to specifically tax industry and landowners who benefit from local gas drilling to pay for specific needs identified by the local government.

3.62(1.34)

3.48(1.04)

3.40(1.43)

3.50(1.33)

Helping local governments strengthen their capacity to plan for, and respond to, Marcellus shale development in the Susquehanna River ecosystem.

4.09(.82)

3.96(.83)

3.87(1.03)

3.97(.92)

Requiring gas industry human resources management and local community groups to regularly meet to address the gas employees’ and local residents’ needs to improve the quality of life during gas production.

3.59(.96)

3.22(.99)

3.24(1.06)

3.67(1.13)

Requiring gas companies to leave the site as good as, or better than, they found it (water quality, runoff, wildlife habitat, forest and farmland quality).

4.76(.51)

4.65(.65)

4.60(.71)

4.67(.63)

SURVEY QUESTIONS AND RESULTS# Energy Security


1: Nonprofit 2: Government 3: Private(1 to 5, with 5 being the highest

priority)

1 2 3 Overall

1

Directing federal and state government investment to track the development of renewable energy sources.

3.6(1.23)

3.43(1.04)

3.27(1.18)

3.43(1.18)

2

Subsidizing the access of gas-producing communities to locally produced gas.

2.69(1.09)

2.74(1.32)

2.76(1.23)

2.73(1.19)

3Prohibiting the export of U.S. natural gas to other countries.

2.58(1.37)

2.65(1.53)

3.08(1.54)

2.82(1.48)

4

Mandating local, state, and federal governments to require energy conservation measures in all government-operated buildings.

3.57(1.21)

3.70(1.11)

3.44(1.23)

4.03(1.22)

5

Government funding of peer review Life Cycle Analysis of different energy sources to include educating/informing the general public of the results, in order to make known the true costs of energy resources on health, economy, and natural environment, especially the Susquehanna River ecosystem.

3.58(1.23)

3.35(1.15)

3.46(1.38)

3.49(1.28)

PSYCHOMETRIC PROPERTIES - 1

Construct/IndicatorStandardiz

edFactor

Loading

ConstructReliability

(Cronbach’s α)

Composite Factor

Reliability (CFR)

Average Varianceextracted

values(AVE)

Economic Opportunity (EO)

EO1EO2EO3EO4EO5

0.490.830.690.740.66

0.30 0.82 0.43

Health & Safety (HS)

HS1HS2HS3HS4HS5HS6HS7

0.570.300.650.650.580.990.55

0.76 0.82 0.23

Community (CM)

CM1CM2CM3CM4

0.690.590.650.34

0.65 0.66 0.34

Energy Security (ES)

ES1ES2ES3ES4ES5

0.500.250.390.730.67

0.56 0.64 0.22

PSYCHOMETRIC PROPERTIES - 2

• Reliability and Internal Consistency

• Convergent validity

Cronbach’ α Composite Factor Reliability (CR)

0.30-0.76 0.64-0.82

Hair et al., 1998

Factor Loading Composite Factor Reliability (CR)

Average Variance Extracted (AVE)

0.25-0.99 0.64-0.82 0.22-0.43

Bagozzi & Yi, 1988; Fornell & Larcker, 1981; Hair et al., 1998

DESCRIPTIVE STATISTICS AND PEARSON CORRELATIONS COEFFICIENTS

Model VariableMean

Std.Dev

Correlations (n=185)

1 2 3 4

1. Economic Opportunity (EO) 3.36 0.68 (0.65)

2. Health & Safety (HS) 3.62 1.36 -.027 (0.48)

3. Community (CM) 3.36 1.51 .019 0.77** (0.58)

4. Energy Security (ES) 2.69 1.40 -.056 0.68** 0.78** (0.47)

Note: *, if p<0.05; **, if p<0.01. The bold diagonal values are the square root of the average variance extracted for each construct.

SURVEY FINDINGS ON CROSS-SECTOR RELATIONSHIPS

• The following cross-tabulations compare the Private, Government, and Nonprofit ratings on the questions with the highest differences in means in two of the four categories, as follows:

• Streamlining government regulations to expedite natural gas development.• Prohibiting the export of U.S. natural gas to

other countries.

KEY CROSS TABULATIONS


• As indicated on the following slide, the three sectors ranked similarly in terms of selecting true, false, or uncertain to the question:

“Based on current usage, the Susquehanna River ecosystem will be available to future generations in a condition similar to today.”


• However, the future generation question, when cross-tabulated with the two previous survey questions produced much larger mean differences than the same questions matched with the sectors, as shown in the previous group of cross-tabulations.

KEY CROSS TABULATIONS

EVALUATING SECTOR RATINGS

• Proximity Issue:• 63.5% of respondents live 5 miles or less from the

Susquehanna River• 50.5% of respondents visit the waterways of the

Susquehanna at least once monthly

Therefore, respondents may respond similarly to survey questions due to common experience and constant exposure to the Susquehanna River.

EVALUATING FUTURE GENERATION IMPACT

• Interview input: “fracking” occurred suddenly in a rural region unaccustomed to large industrial start ups.

• As a result, past “pro” vs. “con” adversarial relationships regarding jobs vs. the environment filled the void.

• Response to future generation issue: “true, false, or uncertain” is a proxy for “pro”, “con” or “neither” in past jobs vs. the environment positions on issues.

ALTERNATIVE EXPLANATION: LANDOWNERSHIP

• Kelsey, Metcalf & Salcedo (2012):

“the decision to develop Marcellus shale is largely in the hands of current owners of larger parcels of land who decide whether to lease for drilling, and in gas companies who then decide where among the leased parcels to actually drill.”

The authors examined the ownership of the land within eleven Pennsylvania counties with Marcellus shale development activity for land ownership patterns. The study included 9 of the top 10 Marcellus counties in Pennsylvania.


• The authors examined the ownership of the land within eleven Pennsylvania counties with Marcellus shale development activity, and the implications of that land ownership pattern for who has a ‘voice’ in decisions over the activity and for the distribution of lease and royalty dollars.


• Conclusion: Ownership of the land in the Pennsylvania counties with the most Marcellus drilling activity is concentrated in a relatively small share of residents, and in owners from outside the county.

• A majority of lease and royalty income from Marcellus shale development goes to a relatively small share of the resident population, with much of the remainder going to the public sector or non-resident landowners.

KEY CONSIDERATIONS FOR FURTHER STUDY

• 10.2% of the respondents to this exploratory study are landowners. Therefore, given the greater ‘voice’ of landowners, the stakeholder inventory should include greater landowner participation in the future.

KEY CONSIDERATIONS FOR FURTHER STUDY

• How malleable are stakeholder attitudes regarding the sustainability of the Susquehanna River ecosystem for future generations?

• Stakeholder connectedness will be influenced heavily by the extent to which further Marcellus shale development changes stakeholder attitudes (true, false, or uncertain)?

AASHE ANNUAL CONFERENCE LOS ANGELES, CA OCTOBER 15, 2012 MARK HEUER, PHD, SUSQUEHANNA UNIVERSITY ZUI...

Documents

Transcript of AASHE ANNUAL CONFERENCE LOS ANGELES, CA OCTOBER 15, 2012 MARK HEUER, PHD, SUSQUEHANNA UNIVERSITY ZUI...