Game-based analysis of energy-water nexus for identifying environmental impacts during Shale gas operations under stochastic input

Environmental issues have become some of the greatest challenges encountered across the life cycle Shale gas operations, and mostly involve the management, disposal, and spill of flowback and produced (FP) waters during the process of hydraulic fracturing. This study evaluates Shale gas resources, addresses water resource management problems, and identifies the corresponding environmental implications of FP waters under uncertainty. Multiple tools, including structural optimization, process design, cost analysis, environmental assessment, and stochastic technology, are integrated into a general modeling framework based on game theory. This mathematic framework corresponds to a dominant-subordinate-interactive problem, where two major participants are identified as the downstream decision maker at the dominant level (e.g., power generation sector) and the upstream decision maker at the subordinate level (e.g., Shale gas producer). The Monte Carlo technique is used for simulating the estimated ultimate recovery (EUR) of a single well. Thereafter, the developed model is applied to a special case study of the Marcellus Shale play in Beaver County, Pennsylvania. Multiple decisions regarding gas production, processing, water management, as well as electricity generation would been examined under different probability levels. Results indicate that the changes in violation levels would lead to distinct environmental and economic performances of the supply chain. A lower probability level of the EUR value would correspond to an increased reliability on fulfilling the system demands, and then to higher economic benefits and freshwater supply; conversely, a higher probability level of the EUR value would result in lower economic benefits and lower freshwater supply, and the risk of violating the EUR value would also increase.