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Survey: Shale Familiarity Breeds Acceptance

Tapping shale natural gas reserves -- even when accounting for the challenges of hydraulic fracturing -- is worth the risk, a majority of those polled told a recent survey. And eight out of 10 respondents said they link natural gas development with job creation and economic revival.

The survey was conducted by the Deloitte Center for Energy Solutions and released Thursday at Deloitte's annual Oil & Gas Conference in Houston. Shale gas development is looked upon more favorably in areas of the country where it is more mature, the survey found.

According to the survey, 83% of respondents said natural gas development can stimulate job growth in the United States, while 79% believe the development of gas resources can help revitalize the economies of the states and communities where shale gas is located.

More than half (56%) of respondents in areas where shale gas development is planned or under way said they believe that jobs producing gas from shale formations command a "much" or "somewhat" higher pay grade than the average in their communities. The number jumps to 62% when looking at relatively mature shale regions like those in Texas, Deloitte said.

Peter Robertson, a senior oil and gas adviser at Deloitte, said the role of gas in job creation and economic revival is only going to grow as production of shale gas ramps up. Citing a separate Deloitte research project, Robertson said "shale gas made up a small share of domestic natural gas production in 2005 but has surged since then -- and in 2010 made up 20% of what is produced domestically. By 2030, the portion could be close to 50%."

Only 19% of the respondents said they feel the risks of developing shale gas resources "somewhat" or "far" outweigh the benefits, according to the survey, while 58% believe the benefits outweigh the risks; and almost 25% said they are are unsure.

Moreover, 58% of respondents in areas where shale development is under way or planned would recommend that their family and friends lease their land to a shale gas developer. Seven out of 10 survey respondents (71%) in established shale areas such as Texas, Louisiana and Arkansas would advise family or friends to lease their land to a natural gas developer.

The survey consisted of 1,694 online interviews conducted in November with adults age 21 to 74, and examined three different audience segments: residents of areas where shale gas development is an established phenomenon, specifically Texas, Louisiana and Arkansas (537 respondents); residents of areas where shale is a newer phenomenon, specifically New York (89 respondents in New York City and 162 in western New York State) and Pennsylvania (243 respondents); and an additional 663 respondents in the United States nationally.

"The survey findings are especially interesting among the more mature shale areas where people are long accustomed to oil and gas development," said Gary Adams, vice chairman, Deloitte LLP and leader of the firm's oil and gas practice. "There, eight in 10 respondents who currently do, or ever have, leased their land to a natural gas developer (83%) would do so again," he said.

The numbers of those accepting of shale development are lower in regions where the phenomenon is newer, which indicates a higher level of discomfort with the processes and technologies involved in shale gas development.

"In Pennsylvania and New York, where people are not as used to oil and gas development, a more modest majority of respondents (52%) would advise family or friends to lease their land to a natural gas developer. Similarly, a slimmer majority of respondents who currently do, or ever have, leased their land to a natural gas developer (53%) would do so again," Adams said.

The survey also indicated that shale gas could play an increasingly important role in making America more energy independent in the opinion of some.

Respondents with at least some degree of familiarity with shale gas development view energy independence as the single most important benefit of shale -- ahead of all other benefits, including boosting the national economy, job creation, cleaner air, and boosting local economies. And 47% of national respondents believe shale is "extremely" or "very" impactful on energy independence.

In addition, survey respondents believe shale gas development could improve air quality. Six in 10 national respondents (62%) with at least some degree of familiarity with shale gas development associated the word "clean" with natural gas, making it the top association over other words such as: reliable (47%), domestic (41%), affordable (40%) and abundant (38%). Finally, 88% of all national respondents think it is at least "somewhat believable" to claim that "using natural gas resources to generate electricity can significantly reduce our carbon footprint," Deloitte said.

While the news media is seen as the primary source of information on shale (much higher than sources like word-of-mouth, non-profits, industry websites, academics and town hall meetings), it is not trusted, according to the survey findings. Seventy-three percent of respondents nationally get information about shale development from the news media, yet only 17% see the media as "extremely" or "very" trustworthy when it comes to providing unbiased coverage of the natural gas industry.

At the same time, respondents in areas where shale gas development is planned or under way indicate that oil and gas production companies need to communicate better. While 45% believe shale gas producers are "somewhat" transparent and open, 35% believe shale gas companies communicate "extremely" or "very" effectively. Only 34% see shale gas companies as "extremely" or "very" trustworthy.

"There's so much shale activity in so many parts of the country that it's important to communicate and operate effectively," said Robertson. "Everything shale gas producers do gets enormously magnified. That's why they have to get it right every time, on every well drilled. Consistently operating with excellence and communicating effectively with all impacted stakeholders are critical attributes."

The survey shows that there is faith that the shale development is currently being regulated appropriately, Deloitte said. Fifty-four percent of respondents nationally believe that regulation of shale development is "just right" or "evolving, but on the right track." About 20% think there is too much regulation and 16% think there is too little regulation. Ten percent are not sure.

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