The World in 2050: Four Forces Shaping Civilization's Northern Future (26 page)

The Third Wave

The Third Wave of human expansion in the Northern Rim thus stems from our relentless search for fossil hydrocarbons. It began in the 1960s with major discoveries in Alaska, Canada, and the West Siberian Lowland and shows no signs of abating. World interest in the Arctic, in particular, is fueled either by environmental concern for its threatened ecosystems, or excitement over perceived new bonanzas in oil and gas.

The newest frontier is the Arctic seabed. The previous chapter discussed the geopolitical commotion this dawning realization has spawned, and the critical importance of the United Nations Convention on the Law of the Sea (UNCLOS). A 2008 auction offered by the U.S. Minerals Management Service sold a whopping $2.8 billion worth of Arctic offshore leases; the Canadian government similarly won record-breaking bids for leases in the Beaufort Sea.
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In 2009 a first comprehensive assessment of the Arctic Ocean’s oil and gas potential was published in
Science
by the U.S. Geological Survey, and the associated data files were released to the public.
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This assessment, which is still incomplete and ongoing, suggests that nearly a third of the world’s undiscovered natural gas and 13% of its undiscovered oil lies north of the Arctic Circle (see maps pp. viii-xi). All that in a place covering barely 4% of the globe.

Two huge winners are revealed by the USGS data: northern Alaska for oil, and Russia for natural gas. Of forty-nine geological provinces analyzed so far, these two places tower above all others. The Alaska Platform, covering the North Slope and extending a roughly similar area offshore, is thought to hold between 15 and 45 billion barrels of oil with a best guess of about 28 billion. This number approaches the proved reserves of Nigeria and is about one-fourth those of Iraq. Russia’s South Kara Sea alone is thought to hold between 200 and 1,400 trillion cubic feet of natural gas, with a best guess of 607 trillion. That number, if correct, is more than twice the proved reserves of the United States and Canada combined.

There are other promising geological provinces besides these two. For oil, they are Canada’s Mackenzie Delta, the north Barents Sea, the West Siberian Lowland, and three provinces off the east and west coasts of northern Greenland. For natural gas they are the south Barents Sea, the Alaska Platform, and the north Barents Sea.
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If recent offshore lease sales are any indication, many or all of these places will experience increasing levels of interest, exploration, and investment in the coming decades. But will drilling platforms and thousands of new offshore wells mushroom in these Arctic waters by 2050?

Possibly, but don’t bet on it. Offshore energy development is more likely to grow cautiously and incrementally. Even in ice-free oceans—which the Arctic Ocean most certainly is not—offshore drilling is complicated and expensive. Northern environments are environmentally delicate, so they demand above-normal protections. Existing ports and other maritime facilities, as discussed in Chapter 5, are scarce. Ice-resistant platforms and other new technologies still need to be invented. Outside of the Alaska Platform, the vast share of hydrocarbon in the Arctic is not oil but natural gas, which is harder to capture and transport. Oil can be simply pumped from the ground and poured into a tanker. Natural gas needs either pipelines or an expensive LNG or gas-to-liquids facility—essentially a refinery—to liquefy it. Even by 2050 these are formidable obstacles in a place that is environmentally sensitive, remote, and still inaccessible for much of the year.

Something Old Is New Again

What
is
assured over the next forty years is intensification of oil and gas exploitation in and around the places they already exist today. Offshore, these include the giant Shtokman and other gas fields of the Barents Sea, and Sakhalin Island in the Russian Far East. On land—despite some added engineering complications from thawing permafrost—they include West Siberia, the North Slope of Alaska, the Mackenzie Delta, and Alberta. Norway’s gas and oil activities are mostly offshore, but by 2050 large areas of north-central Russia, Alaska, and Canada will look quite different than they do today.

Russia in particular will continue to aggressively develop her Siberian gas fields. When I cornered Alexei Varlomov, deputy minister for the government agency overseeing all natural resources of the Russian Federation, he told me, “The most important factor is the needs of industry,” and that absolutely nothing should get in the way of energy exploration.
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His view is understandable, given the prominence of his country as a world energy supplier. Russia produced 3.6 billion barrels of oil in 2008, second only to Saudi Arabia.
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It produced 603 billion cubic meters of natural gas—and held 43.3
trillion
more in proved reserves, both second to none in the world.

Two out of every three barrels of this oil and 85% of this gas comes from West Siberia. However, as is the case with all oil provinces, the size distribution of its petroleum fields is log-normal and the region’s oil production has entered decline.
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Russian production peaked in 1987-88. Samotlar, one of the largest oil fields in the world, peaked at 3.4 million barrels per day in 1980. It has since dropped over 90%, producing just 300,000 barrels per day from its approximately five thousand wells.
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The region’s three major gas fields have also peaked, and their production is expected to fall 75% by 2030.
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There will always be more pockets to be found, but as discussed in Chapter 3, like any other hydrocarbon province on Earth they are growing exponentially smaller and thus less economical to develop.

West Siberian exploration is therefore shifting away from the middle reaches of the Ob’ River—where most of the basin’s crude oil is found—to the immense concentrations of natural gas found farther north. The largest known natural gas reserves on Earth are found in approximately sixty to one hundred fields in this area. Just offshore is the South Kara Sea, now thought to hold perhaps 1,400 trillion cubic feet more. The Yamal Peninsula, stuffed with natural gas, condensate, and oil, lies at the heart of this bonanza and will doubtless be developed.

While less glamorous than the prospect of proliferating offshore platforms in the Arctic Ocean, 2050 will likely see a great degassing of the Yamal Peninsula, feeding thousands of miles of pipeline heading west to Europe and east to China. It is unclear whether a port can be built on its shallow west coast, or that environmental damages will be avoided, but pipelines will spread across the Yamal. Already, at least two are planned and the first one has just broken ground.
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Pay Dirt

Even from several miles away, through the fogged window of the little airplane and a dreary splatter of rain, I could see the heavy curtain of smoke and glowing spots of orange flame. It was Tolkien’s Mordor brought to life, the soil ripped away to expose pitted blackness beneath. Giant trucks dug away at the spoils like orcs. Near the fuming smokestacks were yellow mountains of pressed sulfur blocks, waste excrement from the transformation of low-grade bitumen into synthetic, crude oil. It was a depressing and evil-looking landscape, at least to anyone who finds boreal wetlands and green pine forest attractive.

It was northern Alberta, not Noril’sk. Beneath me sprawled the open sores of the Athabasca Tar Sands, economic engine of Fort McMurray and almost one-half of the Canadian oil industry. Though they are more commonly called “oil sands,” what they hold is nothing like conventional oil. The pure, light, sweet crude pumped with ease from Saudi oil fields is a dream compared to this stuff. It is tarlike
bitumen,
a low-grade, sulfur-rich, hydrogen-poor hydrocarbon that has soaked into vast expanses of Alberta sandstone.

Extracting liquid oils from this mess is an extraordinarily invasive, consumptive, and environmentally damaging process. At present, the most common way to do it is strip mining, with about two tons of tar sand needed to obtain a single barrel of oil. Gigantic trucks and shovels scrape the stuff off the surface. Then it is crushed and dumped onto conveyor belts heading to swirling tubs of water. The resulting slurry is piped to an extraction facility, where it is churned in a heated witches’ brew of steam, water, and caustic soda. This splits the bitumen from the sand and clay, which sink to the bottom. The bitumen floats off to an “upgrader” (a sort of refinery) to remove sulfur and add hydrogen (from natural gas), creating synthetic crude oil. The waste liquid and dirt are sent to tailings ponds; the yellow blocks of sulfur are simply stacked up.
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Tar sands are an environmentalist’s nightmare. The extraction process gobbles enormous quantities of energy and water. Migratory birds land in the tailings ponds and die.
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Sulfur dioxide, nitrogen oxides, and particulates are released into the air alongside up to three times more greenhouse gas than released by conventional oil drilling. Depending on the technology used, it takes 2-4 cubic meters of water, and 125-214 cubic meters of natural gas, to produce a single cubic meter of synthetic oil.

The water is pumped from groundwater or diverted from the Athabasca River, reducing inflow to the Peace-Athabasca Delta, a UNESCO World Heritage Site and Ramsar wetland, about 150 kilometers downstream.
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Most mines will operate for about forty years and excavate about a hundred square kilometers of land. No tailings ponds have ever been fully reclaimed, and putting the overburden back afterward mitigates the damage but does not really restore the original ecosystem. Since 1967, when the first mining began, only one square kilometer has been certifiably restored and returned to the public.
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These and other problems have environmental organizations yowling against any further increase in tar sands production.

They face a difficult battle. Short of being outlawed, it’s hard to imagine how the growth of this industry will ever stop. The oil reserves the tar sands contain are estimated at an astonishing 175 billion barrels which, if correct and recoverable, is the second-largest oil endowment on Earth after Saudi Arabia (estimated at 264 billion barrels). That means Alberta holds more oil than Iraq (115 billion barrels), Kuwait (102 billion), Venezuela (99 billion), Russia (79 billion), or Norway (7.5 billion). The cost to produce it has dropped from thirty-five dollars per barrel in 1980 to twenty dollars per barrel in recent years, making even fifty-dollars-per-barrel oil prices very profitable.
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Huge new supplies of natural gas, needed for energy and hydrogen, will come online with construction of the Mackenzie Gas Project, a long-anticipated 1,220-kilometer pipeline that will carry Arctic gas from the Mackenzie Delta area to the tar sands and other North American markets.
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History tells us that Canada’s adherence to international climate-change treaties crumbles before market forces like these: The tar sands are the biggest reason why Canada not only failed to meet her pledged reduction in carbon dioxide emissions under the Kyoto Protocol (to -6% below 1990 levels), but actually
grew
them +27% instead.
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So far, about 530 square kilometers have been strip-mined, an area not much greater than the city of Edmonton. But tar sands underlie a staggering
140,000
square kilometers of Alberta, nearly one-fourth of the province and about the size of Bangladesh. Of this large area, about 20%—sixty more Edmontons—are shallow enough for strip mining. The rest can be exploited using underground extraction, which involves injecting 450°F pressurized steam underground for several years to heat the ground, eventually fluidizing the tar enough to pump some of it out.
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This type of underground extraction has the potential to spread across nearly all of northern Alberta. If it does, new pipelines, roads, and towns must follow.

This future springs not simply from my fertile imagination but from cold, hard cash. Those 175 billion barrels of grubby bitumen lie right next door to the world’s largest and friendliest customer, whose other suppliers have either entered decline or soon will. Energy companies are no fools. By early 2009 the government of Canada had already leased more than seventy-nine thousand square kilometers in tar sands contracts. Future production is anticipated to rise from 1.3 million barrels per day today, to 3.5 million by 2018, to
6 million barrels
per day by 2040.
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If that black torrent of tar becomes reality, its flow will be nearly ten times greater than the amount of conventional oil flowing south from Alaska’s North Slope today.

America is ready and waiting.

The visual image of Canadian oil flowing from north to south is exactly the right one to hold in mind. Under the North American Free Trade Agreement (NAFTA), it passes over U.S. borders unencumbered by tariff. And compared to the world’s other geopolitical relationships, America and Canada remain two countries in a happy marriage.

Their embrace far transcends the energy industry. It is just one part of a bigger cross-border dependency that has long existed, thanks to friendly borders and the geographic proximity of their neighboring population cores, as described earlier. But this lovers’ gaze has not always been so transfixed. Throughout much of the twentieth century, Canada was focused more on domestic integration than the cross-border sort.

A serious schism was fractious Québec, the French-Canadian province with a long history of separatist movements and terrorism. A wave of bombings by terrorist cells of the
Front de Libération du Québec
culminated in 1970 with the kidnapping of two government officials, one of whom—Minister of Labor Pierre Laporte—was found strangled and dumped in the trunk of a car. The 1970s also marked the emergence of aboriginal rights movements and rising economic and political power in Canada’s energy-rich western provinces. Debate was raging over a national bilingualism policy. During this period of history most Canadians were focused on bridging their country’s internal cultural divisions, not furthering its integration with the United States.