Multi-resource analysis: A proof of concept study of natural resource tradeoffs in the Piceance Basin, Colorado, using the net resources assessment (NetRA) decision support tool

Abstract

Executive Summary The U.S. Geological Survey (USGS) is developing a multi-resource analysis (MRA) line of products to inform land-use decision makers. Specifically, MRA products will integrate scientific information, include considerations for natural resource interrelations, and quantify the effects of resource management decisions in biophysical, economic, and societal terms. As part of the establishment of the MRA, the USGS, in collaboration with the University of New Mexico, has developed the Net Resources Assessment (NetRA) decision support tool. As a proof of concept analysis, the NetRA was applied to the Piceance basin in Colorado in a hypothetical example to illustrate how resource managers could use the NetRA to consider tradeoffs of natural resources among alternative development plans and land cover patterns within a geographic region. The NetRA is a policy-relevant approach to assess the availability of multiple natural resources. It is an analytical toolset that may be used to examine the spatiotemporal relations between development of energy and mineral resources and delivery of biological natural resources. The NetRA operates at multiple map scales and contains a set of integrated, compatible submodels with specific data requirements for natural resource stocks, engineering economics, biophysical, and ecological data for ecosystem services stocks, market prices, regulations, and nonmarket values. The NetRA includes an explicit process to consider the interdependence between development and conservation, which is a crucial consideration in land-management and land-use decisions. The NetRA is used to estimate an expected net resource value (NRV). The NRV is the expected, present value, economic benefit from the extraction of a resource (for example, natural gas) minus the total cost of production, which is the aggregation of the development, production, and social costs. Social costs include private costs plus any external costs. There can be external social benefits associated with natural gas production, such as increased demand for locally produced goods and increased employment in the local area through backward and forward linkages of natural gas production. The NRV is used to compare development outcomes (scenarios) from a range of exploration and development plans for cumulative energy production. The Piceance basin application of the NetRA uses the NRV to assess the tradeoff between continuous natural gas extraction and the effects to the local populations of Odocoileus hemionus (mule deer) and aquatic species and to consumptive water uses for an area the size and resolution of a USGS energy resource assessment unit. In the proof of concept simulation, the 2.9-square-mile-area of USGS oil and gas assessment unit 50200263 (Piceance basin continuous gas unit of the Mesaverde Total Petroleum System) was gridded into 588 cells. From this area, seven clusters with potential for development and three that cannot be developed were identified; the three clusters that cannot be developed were identified as wilderness study areas, areas of critical environmental concern, and national forests. On the basis of these criteria, there are 118 cells unsuitable for development in the oil and gas assessment unit: 84 are in national forests, 23 are areas of critical environmental concern, and 11 are wilderness study areas. The remaining cells in the oil and gas assessment unit can be developed on both private and public lands. Two scenarios were considered that are distinguished as plan 1 and plan 2. Plan 1 keeps the amount of land disturbance unchanged and limits the number of development locations to 140 grid cells for the production period, which constrains the amount of the energy resources available for development; the plan requires the usage of the Bureau of Land Management (BLM) unsuitability criteria. Plan 2 also limits the number of development locations to 140 grid cells for the production period but provides a constant volume of energy production by increasing the density of well pads within the cells. The effects of plan 2 to the NRV when there are five wells per pad and five pads per square mile happen mostly in the first 5 years of development, even though the effects on the population of mule deer continue in later years. This outcome is the result of the upfront development and investment costs and the initial effect to the ecosystem services.