Announcements‎ > ‎

Weekly update 47

posted Feb 20, 2015, 7:29 AM by Austin Milt   [ updated Feb 20, 2015, 7:29 AM ]
A combination of icy weather and deadlines fast approaching have led me to work from home this whole week, spending a record 10-12 hours every day on my fourth chapter. It's not there yet, but it's feeling awful close right now. Yesterday I think I finally made the step from "the best theoretically possible" we could do with a regulation to reduce environmental impacts from surface infrastructure to "the best practical" we could do. But I dont have results for that yet. What I do have is pretty cool, though:

This figure shows the range of costs of achieving a certain level of impact by implementing two different extreme "policies." The x's are the "uniform" policy that shows what happens when you make every developer meet a minimum level of impact at every site. The alternative is you dont develop. The "optimal" policy shows where a government that has complete control over development can choose which sites to develop and where to place infrastructure. In that case, you can optimally divvy up impacts among the sites. Notice 1) the vertical axis is a log-scale, 2) the huge difference between the uniform and optimal policies in the 80-140 impact range, and 3) the big jumps from about 100 Billion USD to about 200 Million USD in both scenarios. That last part is due to the case where some sites arent developed because they cant reach the impact threshold. As a result, society incurs the cost of lost profits from not developing those sites (the gas stays in the ground, society doesnt benefit). It's a lot cheaper to develop a site than the profits you get from extracting gas from that site.

Now, zoom into the optimal policy in that higher impact range...

This is really where the magic happens. This shows where everyone gets to develop, but you can still have big tradeoffs between reducing impacts and increasing costs. That range of costs (~35 Million USD) may seem small compared to the above figure, but it is the cost of developing tens of sites, and many tens of wells. And the difference in impacts isnt small either, though getting a meaningful definition of what 60 units of Impact is is not trivial.