Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future (16 page)

Altogether, fossil fuel prices appear to be on the verge of increased volatility: we will likely see more frequent and severe booms and busts within the oil, gas, and coal sectors. At the same time, accounting properly for energy costs in energy production, we will probably see less net energy delivered to society. And fossil energy will be generally less affordable. The overall EROI of society—the energy return on
all
investments in energy production, including financial as well as energy investments—will fall.

We have not discussed nuclear power thus far, and readers who see nuclear as a major future energy source will have found this frustrating. However, I generally agree with the analysis of
the
Economist
magazine, which recently published a special report calling nuclear power “The Dream that Failed.”
33
Nuclear is just too expensive and risky. It was a technology that seemed to make sense in an earlier era of high fossil energy returns from minor investments, when enormous research, development, and construction costs for fission power could easily be shouldered. Today it is far more difficult to divert capital away from other energy projects. Even though nuclear electricity is inexpensive once power plants are built, the initial investments—several billion dollars per project, with inevitable cost overruns and the requirement for government loan guarantees and insurance subsidies—are now just too high a barrier. Currently, the industry is expanding in only a few nations, principally China—a country that gets most of its energy from cheap, high EROEI coal.

The only regions relatively immune to the economic whipsaw of fossil fuel dependency will be those reliant on renewable energy. But new investments in renewables, as we saw in the previous section, have slowed due to the systemic anemia of the Western economies and the false expectation of cheap and abundant natural gas for decades to come. The trend to ease back on renewable energy incentives cannot be allowed to continue. The world may have a fairly brief window of time in which major investments in renewable energy are feasible. Beyond that point, the volatility of fossil fuel prices and declining overall societal EROI may drain the vitality of economies to the point that financing major new projects will become ever more difficult. This is perhaps the most important reason that the conventional wisdom of a new golden era of oil and gas abundance must be countered.

In the worst case, societies may enter an ongoing maintenance crisis, seeking merely to keep basic services available as energy and capital contract in a self-reinforcing feedback loop.
34
The better-case scenario would start with major immediate investments in renewable energy. How it would unfold from there requires considerable speculation. Society would almost certainly need to adapt to economic stasis or contraction as a result of declining mobility and EROEI. It would also need to rebuild transport and food systems to use less overall energy and different energy sources. In the best-case scenario, we will tomorrow discover a new, abundant, cheap, high-EROEI energy source with no carbon emissions.
35
Betting on that highly unlikely event seems foolish; in all likelihood, we will have to settle for solar and wind. But we won’t have even those if we don’t start building panels and turbines at a ferocious pace.

A Mirage Distracts Us from Hydrocarbon Rehab

I have devoted a portion of this chapter to countering assertions in Charles Mann’s
Atlantic
article not because he deserves scorn. Mann is no fossil fuel industry shill; he is a respected historian and the author of several excellent books (including
1491: New Revelations of the Americas Before Columbus
). He doesn’t exaggerate the world’s hydrocarbon prospects because he wants us to burn all that oil, gas, and methane hydrate. Quite the contrary; he is deeply concerned about climate change. The full subtitle to his article is “New technology and a little-known energy source suggest that fossil fuels may not be finite. This would be a miracle—and a nightmare.” I chose Mann as a foil because he epitomizes the general failure of America’s intellectual class to comprehend and communicate the complexity of our energy-economy-climate situation. It is an understandable failure, but it may be a fateful one.

Perhaps the most concise way to convey this complexity is by way of two equally true statements:

• Hydrocarbons are so abundant that, if we burn a substantial portion of them, we risk a climate catastrophe beyond imagining.
  
• There aren’t enough economically accessible, high-quality hydrocarbons to maintain world economic growth for much longer.
  

Here is a public relations nightmare: how to convey these seemingly contradictory messages to people without confusing the bejesus out of them. How can concepts like “energy return on energy invested” be explained to an audience that barely understands what energy is? How can millions of half-somnolent television addicts be guided in understanding “fugitive methane emissions,” “energy density,” and a dozen other essential terms and concepts? Where are the cover stories in chattering-class magazines, the hour-long NPR interviews, the TV newsmagazine in-depth investigative reports, and the congressional inquiries that explore the true intricacy and peril of our energy-economy-climate conundrum? Don’t hold your breath waiting for them. It all just takes too long to explain. A PR consultant might advise organizations discussing energy issues to stick with an easy message: “We are running out of oil,” or “We are
not
running out of oil.” Take your pick and make your case.

Reality is more complicated.

Fortunately, there is one element of simplicity in all this complexity, at least in terms of communication—and that is
what we must do
: as a global society, we must reduce our dependency on fossil fuels as quickly as possible. It is the only realistic answer both to climate change and our economic vulnerability to declining fossil fuel resource quality and EROEI. This is literally humanity’s project of the century, probably the most important in all of history. It is an enormous challenge, but it is not optional. Either we break the addiction, or we suffer the consequences—which would impact not only ourselves, but future generations as well.

Yet, the mistaken notion that new technology can free up all the oil and gas we could ever possibly want stops us in our tracks. Suddenly we are faced with a (false) binary choice: jobs and economic growth on one hand, climate protection on the other.

People need jobs and businesses need growth. If plentiful fossil fuels can provide jobs and growth (we tend to believe they can because they have a track record, and we already have the infrastructure to use those fuels), then can’t we somehow find a way to eat our cake, yet have it too? “Let’s think about this for a while longer before making any rash decisions,” the masses murmur in unison. In this context, “a while” could mean a decade or longer. By that time, it will be far too late to begin a successful energy transition.

The choice is rigged. The promise of
economic
fossil energy abundance is a mirage. Like a thirsty desert castaway, we chase that mirage even though it lures us to our doom. Dazzled by the prospects of a hundred years of cheap natural gas or oil independence, we embrace an energy policy of “all of the above” that is hardly distinguishable from having no energy policy at all. With every passing year the fossil fuel industry consumes a larger portion of global GDP, reducing society’s ability to fund an energy transition. And every year the environmental costs of continued fossil fuel reliance compound.

Everything depends upon our recognizing the mirage for what it is, and getting on with the project of the century.

Notes

INTRODUCTION

1. International Energy Agency,
World Energy Outlook 2000
, www.worldenergyoutlook.org/media/weowebsite/2008-1994/weo2000.pdf
.

2. See, for example, my own book: Richard Heinberg,
The Party’s Over: Oil, War and the Fate of Industrial Societies
(Gabriola Island, BC: New Society Publishers, 2003).

3. See, for example, Julian Darley,
High Noon for Natural Gas: The New Energy Crisis
(White River Junction, VT: Chelsea Green Publishing Company, 2004).

4. George Monbiot, “We Were Wrong on Peak Oil. There’s Enough to Fry Us All,”
Guardian
, July 2, 2012, http://www.guardian.co.uk/commentisfree/2012/jul/02/peak-oil-we-we-wrong.

5. Energy Information Administration,
Annual Energy Outlook 2013 Early Release
, Table 14, (December 5, 2012).

CHAPTER 1

1. Nick Owen, Oliver Inderwildi, and David King, “The Status of Conventional World Oil Reserves—Hype or Cause for Concern?”
Energy Policy
38, no. 8 (August 2010): 4743–4749, doi: 10.1016/j.enpol.2010.02.026.

2. International Energy Agency,
World Energy Outlook 2008
; see also http://www.postpeakliving.com/files/shared/Hook-GOF_decline _Article.pdf.

3. Matt Mushalik, “Shrinking Crude Oil Exports a Tough Game for Oil Importers,”
Crude Oil Peak
(blog), February 4, 2013, http://crudeoilpeak.info/shrinking-crude-oil-exports-a-tough-game-for-oil-importers. Mushalik references JODI Oil World Database data up to November 2012.

4. “Why Is US Oil Consumption Lower? Better Gas Mileage?”
The Oil Drum
(website), last modified February 6, 2013, http://www.theoildrum.com/node/9811.

5. “Annual Vehicle-Miles Traveled in the United States and Year-over-Year Changes, 1971-2012,”
The Geography of Transport Systems
(website), http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/vehiclemilesusa.html.

6. Jeffrey Brown, “The Export Capacity Index (ECI): A New Metric For Predicting Future Supplies of Global Net Oil Exports,” ASPO-USA (website), February 18, 2013, http://aspousa.org/2013/02/commentary-the-export-capacity-index/.

7. Megan C. Guilford et al., “A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production,”
Sustainability
2011, 3, 1866–1887, doi:10.3390/su3101866.

8. “White’s Law,”
Wikipedia
, last modified July 25, 2012, http://en.wikipedia.org/wiki/White%27s_law.

9. Gail Tverberg, “How Resource Limits Lead to Financial Collapse,”
Our Finite World
(blog), March 29, 2013, http://ourfiniteworld.com/2013/03/29/how-resource-limits-lead-to-financial-collapse/.

10. Robert Gordon, “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” The National Bureau of Economic Research, NBER Working Paper No. 18315, August, 2012, http://www.nber.org/papers/w18315.

11. Gail Tverberg, “How High Oil Prices Lead to Recession,”
Our Finite World
(blog), January 24, 2013, http://ourfiniteworld.com/2013/01/24/how-high-oil-prices-lead-to-recession/.

CHAPTER 2

1. Peter A. Dea, President & CEO of Cirque Resources, (speaking at the ASPO-USA annual conference, Denver, CO, October 10, 2009).

2. “Interview with Boone Pickens,”
JobVetka
(website), last modified March 12, 2012, http://jobvetka.blogspot.com/2012/03/interview-with-boone-pickens.html.

3. “Natural Gas: Fueling America’s Future,” Chesapeake Energy (website), accessed May 10, 2013, http://www.chk.com/naturalgas/pages/fueling-americas-future.aspx.

4. Stephen Lacey, “After USGS Analysis, EIA Cuts Estimates of Marcellus Shale Gas Reserves by 80%,”
ThinkProgress
(blog), August 26, 2011, http://thinkprogress.org/climate/2011/08/26/305467/usgs-marcellus-shale-gas-estimates-overestimated-by-80/?mobile=nc.

5. Leigh Price, “Origins and Characteristics of the Basin-Centered Continuous-Reservoir Unconventional Oil-Resource Base of the Bakken Source System, Williston Basin” (paper presented to the Energy and Environmental Research Center (EERC)), http://www.undeerc.org/News-Publications/Leigh-Price-Paper/pdf/TextVersion.pdf.

6. Fred F. Meissner and Richard B. Banks, “Computer Simulation of Hydrocarbon Generation, Migration, and Accumulation Under Hydrodynamic Conditions—Examples from the Williston and San Juan Basins, USA” (oral presentation, AAPG International Conference and Exhibition, Bali, Indonesia, October 15–18, 2000), http://www.searchanddiscovery.com/documents/2005/banks/. Jack Flannery and Jeff Kraus, “Integrated Analysis of the Bakken Petroleum System, U.S. Williston Basin” (poster presentation, AAPG Annual Convention, Houston, TX, April 10–12, 2006), http://www.searchanddiscovery.com/documents/2006/06035flannery/.

7. “USGS Releases New Oil and Gas Assessment for Bakken and Three Forks Formations,” US Department of the Interior, April 30, 2013, http://www.doi.gov/news/pressreleases/usgs-releases-new-oil-and-gas-assessment-for-bakken-and-three-forks-formations.cfm.

8. Leonardo Maugeri, “Oil: The Next Revolution,” Geopolitics of Energy Project, Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University, June 2012, http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf.

9. David Strahan, “Oil Glut Forecaster Maugeri Admits Duff Maths,”
David Strahan: Energy Writer
(blog), July 30, 2012, http://www.davidstrahan.com/blog/?p=1570.

10. Frederick Kempe, “America’s Geopolitical Gusher,”
Thinking Global
(blog),
Reuters
, November 26, 2012, http://blogs.reuters.com/thinking-global/2012/11/26/americas-geopolitical-gusher/.

11. Angel Gonzales, “Making Sense of the U.S. Oil Boom,”
Wall Street Journal
, September 13, 2012, http://online.wsj.com/article/SB10000872396390444301704577631820865343432.html.

CHAPTER 3

1. Loren Steffy, “Shale or Sham? A Skeptic Speaks Out,”
Houston Chronicle
, November 12, 2009, http://www.chron.com/business/steffy/article/Shale-or-sham-A-skeptic-speaks-out-1748427.php.

2. Bill Powers, “US Shale Gas Won’t Last Ten Years: Bill Powers,” interview by Peter Byrne,
The Energy Report
(website), November 8, 2012, http://www.theenergyreport.com/pub/na/14705.

3. J. David Hughes, “Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance?”
Post Carbon Institute
(website), February 2013, http://www.postcarbon.org/drill-baby-drill/.

4. “Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance?” abstract,
Post Carbon Institute
(website), accessed May 10, 2013, http://www.postcarbon.org/drill-baby-drill/.

5. Rune Likvern, “Is Shale Oil Production from Bakken Headed for a Run with ‘The Red Queen’?”
The Oil Drum
(blog), September 25, 2012, http://www.theoildrum.com/node/9506.

6. “Number of Producing Gas Wells,” US Energy Information Administration (website), accessed April 30, 2013, http://www.eia.gov/dnav/ng/ng_prod_wells_s1_a.htm.

7. Energy Information Administration,
Annual Energy Outlook 2012
.

8. Hughes, “Drill, Baby, Drill,” 50.

9. Rafael Sandrea, “Evaluating Production Potential of Mature US Oil, Gas Shale Plays,”
Oil & Gas Journal
, December 3, 2012, www.ogj.com/articles/print/vol-110/issue-12/exploration-development/evaluating-production-potential-of-mature-us-oil.html.

10. Rune Likvern, “Is the Typical NDIC Bakken Tight Oil Well a Sales Pitch?,”
The Oil Drum
(blog), April 29, 2013, http://www.theoildrum.com/node/9954.

11. Jaci Conrad Pearson, “It Takes Oil Money to Make Oil Money,”
Black Hills Pioneer
, September 19, 2012, http://www.bhpioneer.com/local_news/article_7bd871d0-0274-11e2-8011-001a4bcf887a.html.

12. Ashley Eady, “Oil Industry Insiders Divided Over Longevity, Feasibility of Shale Play,”
Lubbock Avalanche–Journal
, February 2, 2013, http://lubbockonline.com/business/2013-02-02/oil-industry-insiders-divided-over-longevity-feasability-shale-play?v=135987 3091#.UTDmLBmRrEM.

13. Hughes, “Drill, Baby, Drill,” 95.

14. Hughes, “Drill, Baby, Drill,” 99.

15. Hughes, “Drill, Baby, Drill,” 106.

16. Alison Vekshin, “California’s Fracking Bonanza May Fall Short of Promise,”
Bloomberg.com
, April 9, 2013, http://www.bloomberg.com/news/2013-04-10/california-s-fracking-bonanza-may-fall-short-of-promise.html.

17. Wael Mahdi, “Saudi Arabia’s Shale Plans May Be Slowed by Lack of Water,”
Bloomberg.com
, March 12, 2013, http://www.bloomberg.com/news/2013-03-12/saudi-arabia-s-shale-plans-may-be-slowed-by-lack-of-water.html.

18. Jeff Tollefson, “China Slow to Tap Shale-Gas Bonanza,”
Nature
494, no. 7437 (February 20, 2013): 294, doi: 10.1038/49429.

19. Hughes, “Drill, Baby, Drill,” 28.

20. US Energy Information Administration, “Annual Energy Outlook Retrospective Review: Evaluation of 2012 and Prior Reference Case Projections,” March 2013, http://www.eia.gov/forecasts/aeo/retrospective/pdf/retrospective.pdf.

21. Terry Macalister, “Key Oil Figures Were Distorted by US Pressure, Says Whistleblower,”
Guardian
, November 9, 2009, http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency.

22. Andrew Nikiforuk, “Why Energy Experts Get Things Wrong So Often,”
The
Tyee
(website), March 20, 2013, http://thetyee.ca/News/2013/03/20/Energy-Experts/.

23. Raymond T. Pierrehumbert, “The Myth of ‘Saudi America’,”
Slate.com
, February 6, 2013, http://www.slate.com/articles/health_and _science/science/2013/02/u_s_shale_oil_are_we_headed_to_a _new_era_of_oil_abundance.single.html.

24. John Westwood, “Energy Business Prospects,” (lecture, SNS 2012, Norwich, England, March 1, 2012). See slide 8 of Westwood’s presentation at http://www.slideshare.net/DouglasWestwood/sns2012-1-mar-2012-jw-slideshare.

CHAPTER 4

1. Felicity Barringer, “Hydrofracking Could Strain Western Water Resources, Study Finds,”
New York Times
, May 2, 2013, http://www. nytimes.com/2013/05/02/science/earth/hydrofracking-could-strain-western-water-resources-study-finds.html.

2. Sandra Postel, “As Oil and Gas Drilling Competes for Water, One New Mexico County Says No,”
National Geographic
, May 3, 2013, http://newswatch.nationalgeographic.com/2013/05/02/as-oil-and-gas-drilling-competes-for-water-one-new-mexico-county-says-no/.

3. Ian Urbina, “Regulation Lax as Gas Wells’ Tainted Water Hits Rivers,”
New York Times
, February 26, 2011, http://www.nytimes.com/2011/02/27/us/27gas.html. “Report: Fracking’s ‘Radioactive Wastewater’ Discharged into Drinking Water Supplies,”
Environmental Leader
(website), March 1, 2011, http://www.environmentalleader.com/2011/03/01/report-frackings-radioactive-wastewater-discharged-into-drinking-water-supplies/. Abby Zimet, “Fracking Debris Ten Times Too Radioactive for Hazardous Waste Landfill,”
Common Dreams
(blog), April 25, 2013, http://www.commondreams.org/further/2013/04/25-2.

4. Ian Urbina, “Regulation Lax as Gas Wells’ Tainted Water Hits Rivers,”
New York Times
, February 26, 2011, http://www.nytimes.com/2011/02/27/us/27gas.html. Urbina references EPA documents (2011) obtained by the
New York Times
.

5. Sheila M. Olmstead et al., “Shale Gas Development Impacts on Surface Water Quality in Pennsylvania,” Proceedings of the National Academy of Sciences, March 11, 2013, doi:10.1073/pnas.1213871110.

6. Brett Walton, “Study: Shale Gas Fracking Taints Rivers in Pennsylvania,”
Circle of Blue
(website), March 21, 2013, http://www.circleofblue.org/waternews/2013/world/study-shows-how-shale-gas-development-taints-rivers-in-pennsylvania/.

7. Anthony R. Ingraffea, “Fluid Migration Mechanisms Due to Faulty Well Design and/or Construction: An Overview and Recent Experiences in the Pennsylvania Marcellus Play,”
Physicians, Scientists and Engineers for Healthy Energy
(website), October 2012, 8–9. http://www.damascuscitizensforsustainability.org/wp-content/uploads/2012/11/PSECementFailureCausesRateAnalysisIngraffea.pdf.

8. Maurice B. Dusseault, Malcolm N. Gray, and Pawel A. Nawrocki, “Why Oilwells Leak: Cement Behavior and Long-Term Consequences,” (paper presented at the SPE International Oil and Gas Conference and Exhibition, Beijing, China, November 7–10, 2000) www.scribd.com/doc/65704543/Casing-Leaks.

9. Diane Ryder, “Report on Bainbridge Well Problem Released,”
News–Herald,
September 11, 2008, http://www.news-herald.com/articles/2008/09/11/news/doc48c8944d2a537622194837.txt.

10. Stephen G. Osborn et al., “Methane Contamination of Drinking Water Accompanying Gas-well Drilling and Hydraulic Fracturing,”
Proceedings of the National Academy of Sciences
108, no. 20 (May 17, 2011), doi: 10.1073.

11. Deborah Solomon and Russell Gold, “EPA Ties Fracking, Pollution,”
Wall Street Journal
, December 9, 2011, http://online.wsj.com/article/SB10001424052970203501304577086472373346232.html.

12. Ellen Cantarow, “The Downwinders: Fracking Ourselves to Death in Pennsylvania,”
TomDispatch.com
(blog), May 2, 2013, http://www.commondreams.org/view/2013/05/02-3.

13. Joe Spease, Chairman, Kansas Sierra Club Fracking Committee,
Testimony on Risks of Hydraulic Fracturing
, (testimony, Kansas Legislature), January 31, 2012, http://www.kslegislature.org/li_2012/b2011_12/committees/misc/ctte_h_engy_utls_1_20120131_04 _other.pdf.

14. Peter Lehner, “Fracking’s Dark Side Gets Darker: The Problem of Methane Waste,”
Natural Resources Defense Council Staff Blog
, October 15, 2012, http://switchboard.nrdc.org/blogs/plehner/frackings_dark _side_gets_darke.html.