The brand new ‘Golden Age Of Oil’ That Wasn’t
Final winter, fossil-gas fanatics began trumpeting the dawn of a brand new “golden age of oil” that will kick-begin the American financial system, generate tens of millions of recent jobs, and free this nation from its dependence on imported petroleum. Ed Morse, head commodities analyst at Citibank, was typical. Within the Wall Avenue Journal he crowed, “The United States has become the quickest-rising oil and gasoline producer on this planet, and is likely to remain so for the remainder of this decade and into the 2020s.”
Once this surge in U.S. power production was linked to a predicted boom in power from Canada’s tar sands reserves, the outcomes seemed apparent and uncontestable. “North America,” he announced, “is becoming the brand new Center East.” Many other analysts have elaborated similarly on this rosy scenario, which now gives the foundation for Mitt Romney’s plan to attain “energy independence” by 2020.
By using spectacular new applied sciences — notably deepwater drilling and hydraulic fracturing (or hydro-fracking) — power firms had been stated to be on the verge of unlocking huge new shops of oil in Alaska, the Gulf of Mexico, and shale formations throughout the United States. “A ‘Great Revival’ in U.S. oil manufacturing is taking shape — a serious break from the close to forty-yr development of falling output,” James Burkhard of IHS Cambridge Vitality Analysis Associates (CERA) informed the Senate Committee on Vitality and Pure Assets in January 2012.
Increased output was additionally predicted elsewhere in the Western Hemisphere, especially Canada and Brazil. “The outline of a brand new world oil map is emerging, and it’s centered not on the Middle East however on the Western Hemisphere,” Daniel Yergin, chairman of CERA, wrote in the Washington Put up. “The new energy axis runs from Alberta, Canada, down via North Dakota and South Texas… to enormous offshore oil deposits discovered near Brazil.”
It turns out, nevertheless, that the future may prove way more recalcitrant than these prophets of an American power cornucopia imagine. To succeed in their ambitious targets, energy companies will have to overcome extreme geological and environmental obstacles — and recent developments counsel that they’re going to have a tricky time doing so.
Consider this: while many analysts and pundits joined in the premature celebration of the new “golden age,” few emphasized that it will rest virtually entirely on the exploitation of “unconventional” petroleum resources — shale oil, oil shale, Arctic oil, deep offshore oil, and tar sands (bitumen). As for standard oil (petroleum substances that emerge from the ground in liquid type and may be extracted utilizing acquainted, standardized know-how), nobody doubts that it’ll continue its historic decline in North America.
The “unconventional” oil that’s to liberate the U.S. and its neighbors from the unreliable producers of the Middle East entails substances too hard or viscous to be extracted utilizing normal know-how or embedded in forbidding places that require extremely specialised tools for extraction. Think of it as “tough oil.”
Shale oil, for example, is oil trapped in shale rock. It will probably solely be liberated through the applying of concentrated drive in a process often known as hydraulic fracturing that requires thousands and thousands of gallons of chemically laced water per “frack,” plus the next disposal of vast quantities of toxic wastewater as soon as the fracking has been completed. Oil shale, or kerogen, is a primitive form of petroleum that have to be melted to be helpful, a process that itself consumes vast quantities of vitality. Tar sands (or “oil sands,” as the business prefers to name them) must be gouged from the earth using open-pit mining know-how or pumped up after first being melted in place by underground steam jets, then handled with various chemicals. Solely then can the fabric be transported to refineries through, for instance, the extremely controversial Keystone XL pipeline. Similarly, deepwater and Arctic drilling requires the deployment of specialized multimillion-dollar rigs along with enormously expensive backup security programs beneath the most dangerous of circumstances.
All these processes have a minimum of one factor in widespread: each pushes the envelope of what is technically possible in extracting oil (or pure gasoline) from geologically and geographically forbidding environments. They’re all, that’s, versions of “extreme power.” To supply them, energy firms should drill in extreme temperatures or extreme weather, or use excessive pressures, or operate beneath extreme danger — or some combination of all of those. In every, accidents, mishaps, and setbacks are guaranteed to be more frequent and their consequences extra severe than in typical drilling operations. The apocalyptic poster baby for these processes already played out in 2010 with BP’s Deepwater Horizon catastrophe in the Gulf of Mexico, and this summer season we saw intimations of how it should happen again as a variety of main unconventional drilling initiatives — all promising that “golden age” — ran into severe bother.
Maybe the most notable instance of this was Shell Oil’s pricey failure to commence test drilling within the Alaskan Arctic. After investing $4.5 billion and years of preparation, Shell was poised to drill five test wells this summer season within the Beaufort and Chukchi Seas off Alaska’s northern and northwestern coasts. Nevertheless, on September 17th, a series of accidents and mishaps pressured the company to announce that it might suspend operations till next summer — the only time when those waters are largely freed from pack ice and so it is safer to drill.
Shell’s problems began early and picked up tempo as the summer season wore on. On September 10th, its Noble Discoverer drill ship was compelled to abandon operations on the Burger Prospect, about 70 miles offshore in the Chukchi Sea, when floating sea ice threatened the security of the ship. A extra critical setback occurred later within the month when a containment dome designed to cowl any leak that developed at an undersea properly malfunctioned throughout assessments in Puget Sound in Washington State. As Clifford Krauss noted in the new York Times, “Shell’s inability to manage its containment tools in calm waters under predictable take a look at conditions urged that the corporate wouldn’t be capable of effectively cease a sudden leak in treacherous Arctic waters, where powerful ice floes and gusty winds would complicate any spill response.”
Shell’s effort was additionally impeded by persistent opposition from environmentalists and native teams. They’ve repeatedly brought go well with to block its operations on the grounds that Arctic drilling will threaten the survival of marine life important to native livelihoods and tradition. Solely after promising to take immensely expensive protective measures and profitable the assist of the Obama administration — fearful of appearing to block “job creation” or “energy independence” during a presidential marketing campaign — did the company acquire the required permits to proceed. But some lawsuits stay in play and, with this latest delay, Shell’s opponents may have added time and ammunition.
Officials from Shell insist that the company will overcome all these hurdles and be able to drill next summer season. However many observers view its expertise as a deterrent to future drilling in the Arctic. “As lengthy as Shell has not been able to indicate that they can get the permits and begin to drill, we’re a bit skeptical about shifting ahead,” stated Tim Dodson of Norway’s Statoil. That company additionally owns licenses for drilling in the Chukchi Sea, but has now decided to postpone operations till 2015 on the earliest.
Another unexpected impediment to the arrival of energy’s subsequent “golden age” in North America emerged even more unexpectedly from this summer’s record-breaking drought, which nonetheless has eighty% of U.S. agricultural land in its grip. The power angle on all this was, nonetheless, a surprise.
Any increase in U.S. hydrocarbon output will require larger extraction of oil and gas from shale rock, which might solely be achieved through hydro-fracking. More fracking, in turn, means extra water consumption. With the planet warming thanks to climate change, such intensive droughts are expected to intensify in lots of areas, which means rising agricultural demand for less water, together with potentially in prime fracking locations like the Bakken formation of North Dakota, the Eagle Ford area of West Texas, and the Marcellus formation in Pennsylvania.
The drought’s impression on hydro-fracking turned strikingly evident when, in June and July, wells and streams began drying up in lots of drought-stricken areas and drillers instantly found themselves competing with exhausting-pressed meals-producers for whatever water was obtainable. “The amount of water wanted for drilling is a double whammy,” Chris Faulkner, the president and chief govt officer of Breitling Oil & Gas, instructed Oil & Gasoline Journal in July. “We’re getting pushback from farmers, and my concern is that it’s going to get worse.” In July, in actual fact, the scenario turned so dire in Pennsylvania that the Susquehanna River Basin Commission suspended permits for water withdrawals from the Susquehanna River and its brent crude oil price forecast today tributaries, forcing some drillers to suspend operations.
If this year’s “endless summer” of unrelenting drought had been just a fluke, and we might anticipate considerable water in the future, the golden age state of affairs might still be viable. However most climate scientists suggest that severe drought is prone to change into the “new normal” in many elements of the United States, placing the fracking boom very a lot into question. “Bakken and Eagle Ford are our big keys to energy independence,” Faulkner famous. “Without water, drilling shale fuel and oil wells will not be potential. A continuing drought could cause our home production to decline and derail our highway to energy independence in a hurry.”
And then there are those Canadian tar sands. Turning them into “oil” additionally requires huge amounts of water, and climate-change-related shortages of that very important commodity are also possible in Alberta, Canada, their heartland. As well as, tar sands production releases much more greenhouse gasoline emissions than standard oil manufacturing, which has sparked its own fiercely determined opposition in Canada, the United States, and Europe.
Within the U.S. opposition to tar sands has until now largely focused on the construction of the Keystone XL pipeline, a $7 billion, 2,000-mile conduit that may carry diluted tar sands oil brent crude oil price forecast today from Hardisty, Alberta, to refineries on the U.S. Gulf Coast, hundreds of miles away. Elements of the Keystone system are already in place. If accomplished, the pipeline is designed to hold 1.1 million barrels a day of unrefined liquid across the United States.
Keystone XL opponents cost that the undertaking will contribute to the acceleration of local weather change. It also exposes essential underground water supplies within the Midwest to severe risk of contamination by the extremely corrosive tar-sands fluid (and pipeline leaks are commonplace). Citing the closeness of its proposed route to the essential Ogallala Aquifer, President Obama denied permission for its construction last January. (As a result of it will cross a world boundary, the president will get to make the call.) He is, however, anticipated to grant post-election approval to a new, less aquifer-threatening route; Mitt Romney has vowed to present it his approval on his first day in workplace.
Even if Keystone XL were in place, the golden age of Canada’s tar sands won’t be in sight — not with out yet extra pipelines because the bitumen producers face mounting opposition to their extreme operations. As a result of fierce resistance to Keystone XL, led in massive part by TomDispatch contributor Invoice McKibben, — the public has turn out to be much more conscious of the perils of tar sands manufacturing. Resistance to it, for example, could stymie plans to deliver tar sands oil to Portland, Maine (for transshipment by ship to refineries elsewhere), via an present pipeline that runs from Montreal by Vermont and New Hampshire to the Maine coast. Environmentalists in New England are already gearing up to oppose the plan.
If the U.S. proves too robust a nut to crack, Alberta has a backup plan: building of the Northern Gateway, a proposed pipeline via British Columbia for the export of tar sands oil to Asia. However, it, too, is operating into bother. Environmentalists and native communities in that province are implacably opposed and have threatened civil disobedience to forestall its development (with main protests already set for October 22nd outside the Parliament Constructing in Victoria).
Sending tar sands oil throughout the Atlantic is prone to have its own set of issues. The European Union is contemplating adopting rules that will label it a dirtier form of power, subjecting it to various penalties when imported into the European Union. All of this is, in flip, has compelled Albertan authorities to contemplate powerful new environmental laws that would make it tougher and costly to extract bitumen, potentially dampening the enthusiasm of investors and so diminishing the longer term output of tar sands.
In a way, whereas the goals of the boosters of those new forms of vitality might thrill journalists and pundits, their reality may very well be expressed this manner: excessive power = extreme strategies = excessive disasters = extreme opposition.
There are already many indications that the new “golden age” of North American oil is unlikely to materialize as publicized, including an unusually speedy decline in oil output at current shale oil drilling operations in Montana. (Although Montana is not a serious producer, the decline there is significant as a result of it is occurring in a part of the Bakken discipline, extensively thought-about a major supply of new oil.) As for the rest of the Western Hemisphere, there’s little room for optimism there both when it comes to the “promise” of excessive vitality. Usually, for instance, a Brazilian court docket has ordered Chevron to cease manufacturing at its multibillion-dollar Frade area in the Campos basin of Brazil’s deep and harmful Atlantic waters because of repeated oil leaks. Doubts have meanwhile arisen over the ability of Petrobras, Brazil’s state-managed oil firm, to develop the immensely difficult Atlantic “pre-salt” fields on its own.
While output from unconventional oil operations within the U.S. and Canada is probably going to point out some development within the years ahead, there isn’t a “golden age” on the horizon, solely numerous sorts of probably disastrous situations. These like Mitt Romney who declare that the United States can obtain energy “independence” by 2020 or another near-term date are solely fooling themselves, and maybe some components of the American public. They could certainly make use of such claims to achieve assist for the rollback of what environmental protections exist towards the exploitation of excessive energy, however the United States will remain dependent on Middle Jap and African oil for the foreseeable future.
After all, were such a publicized golden age to come about, we would be burning vast quantities of the dirtiest power on the planet with actually disastrous consequences. The reality is that this: there is just one potential golden age for U.S. (or any other sort of) energy and it would be primarily based on a major push to provide breakthroughs in climate-pleasant renewables, particularly wind, solar, geothermal, wave, and tidal power.
In any other case the one “golden” sight round is more likely to be the sun on an ever hotter, ever dirtier, ever more extreme planet.
Michael T. Klare is a professor of peace and world security research at Hampshire Faculty, a TomDispatch regular, and the author, most lately, of The Race for What’s Left. A film primarily based on considered one of his earlier books, Blood and Oil, can be ordered at http://www.bloodandoilmovie.com. Klare’s other books and articles are described at his webpage. You can observe Klare’s work on Facebook.