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Such a nice story of American derring-do! If being glib, sliding past facts and honesty, and uttering inanities to satisfy others are the keys to success, then we might be on the verge of a whole new wave of multi-zillionaires!  continue reading…

 

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This is the second half of my observations about a recent addition to the endless parade of hide-most-of-the-facts nonsense from oil industry cheerleaders. The first part is here. The subject matter is an article * published a few weeks ago by Gene Epstein, entitled “Here Comes $75 Oil” in Barron’s. This one was a gold mine of right-wing Happy Talk and tactics more routine than not: light on facts; big on hype; no context, while avoiding discussions of any consequences—potential or certain. continue reading…

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Apparently, the possibility that some innovations might be introduced, if they aren’t already in an undefined but probably—or at least likely—manner in certain instances where there could be some potentially good news provided that certain other events fall into place exactly as some are hoping for at some point, but in a good way (just not consistent with facts or reality, but why quibble), then by golly we might possibly see oil prices drop, which, coupled with the distinct possibility that certain savings could be achieved immediately after magic happens, could result in something good—perhaps. (Of course, lower oil prices would lead to lower profits and lower investment funds available and thus end a lot of exploration and production, but hey! Prices will be lower.) We won’t have anything to buy, but it will be cheaper….

That’s the essential point offered in a recent addition to the endless parade of hide-most-of-the-facts nonsense from oil industry cheerleaders, this one courtesy of an article* by Gene Epstein, entitled “Here Comes $75 Oil” in Barron’s. This one was a gold mine of right-wing Happy Talk and tactics more routine than not: light on facts; big on hype; no context, while avoiding discussions of any consequences—potential or certain.

As is usually the case with such efforts, it’s all designed to help … well, not us. What’s the point? [Quotes to follow are from that above-referenced article.]

For the first time in its 150-year history, the internal combustion engine can be run efficiently on alternative fuels from a number of sources, including natural gas. As these alternatives are increasingly introduced, global consumption of oil will slow its growth and flatten out.

The first line does have some truth to it; no dispute there. Nice set-up, but then … the fine art of cherry-picking and dancing around reality begins in earnest.

What are the “number of sources”? How efficient are they? Give the Republican Party’s general aversion to investing in research to learn more about … you know, reality, how might that all play out? How extensive has the testing been? Is the infrastructure all set? What should we do with our gas-powered vehicles? When can I turn mine in?

And about that “increasingly introduced.” When? How about a “for example”? How widespread is the introduction? How soon before a full transition takes place? What happens in the interim? Costs? Considerations? Any details left to be worked out? What if it might possibly not achieve the potential a study suggests could happen under certain circumstances?

As for the slowdown of global consumption: When? How? Where? How do we share the potential with several billion others?

Perhaps we should introduce some of these Happy Talkers to the reality of high prices. There’s a long line of other not-quite-so-Happy experts who prefer the factual side of the discussion. Look up almost anything written by Steve Andrews; Chris Nelder; Steve Kopits; Ron Patterson; Gail Tverberg; Chris Martenson; Kurt Cobb; Tom Whipple; Jeffrey Brown; Richard Heinberg, among many others (apologies for not running the long list) who point out that high prices are enabling the oil industry to produce the inferior, more costly, harder-to-extract, environmentally-questionable (I’m being kind) tar sands and tight oil now being relied upon. They also point out that even at current high prices, profit margins aren’t  justifying further expenditures. Uh-oh!

Bean-counters for the fossil fuel industry love high prices! We lowly consumers, not so much. So when real economics come into play and we peons stop coughing up as much money, prices will certainly drop. So won’t production totals. See how that math works? Facts suck!

Did I mention that the conventional supply of crude oil we’ve relied upon for more than a century continues its relentless depletion? Mr. Epstein didn’t! (Seems a few other items fell off the page, also.) Oh, and what happened to the information about the much more rapid decline rates of wells drilled in the shale formations, or the vast trillions of barrels of shale oil whose production has not yet been found commercially feasible? (Of course, to be fair, the industry has only been attempting that for about a century—the fact-based one which has one hundred years in it. But the potential is there!) So what if the environment-savaging tar sands production hasn’t yet met its own lofty potential? Best not to discuss that, actually. My bad.

But there is the natural gas side to turn to. As Mr. Epstein noted:

[S]omething resembling a global market in liquefied natural gas will likely develop.

Can’t get more specific and certain than that! (Well, you can, but that would require the introduction of facts, reality, consequences, and context. Who has time for that?)

As for helping the public to understand the realities and challenges of future energy supply so that they and their communities might actually plan for adaptation to a different reality, information (loosely-defined) such as the Barron’s article provides aren’t exactly intended to help at all.

The challenge of adaptation is all the greater—if that’s possible—because from our perspective too many people without the means/opportunities to understand what’s at stake are being fed a steady diet of half-truths, misrepresentations, irrelevancies, nonsense, and in some cases outright lies. If you come to the table without understanding or even knowing the facts, it’s a wee bit more difficult to contribute and then leave with meaningful solutions in hand. Not exactly a major revelation….

There was enough meaty nonsense in the Barron’s piece that it merits a second entry all its own. That’s the subject matter of my next post.

* If the link is unavailable, you can read it here

~ My Photo: Good Harbor Beach, MA – 09.01.10

 

* I invite you to enjoy my two new books [here and here], and to view my other work at richardturcotte.com :
 

       * Looking Left and Right

A blog examining the liberal vs. conservative conflicts in our society

 

       * Life Will Answer

Thought-provoking inquiries & observations about how (and why) Life does … and does not, work for everyone. [Inspired by my book of the same name]

 

       * The Middle Age Follies

A column offering a slightly skewed look at life for those of us on the north side of 50.

 

Looking Left and Right:
Inspiring Different Ideas,
Envisioning Better Tomorrows

Peak Oil Matters is dedicated to informing others about the significance and impact of Peak Oil—while adding observations about politics, ideology, transportation, and smart growth.

 

 

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What is that mysterious concoction being shot underground into the shale rock, and how can it not be dangerous? Fears over pollution and contamination of drinking water and the environment from fracking fluid seem to stem from a lack of  continue reading…

If you read nothing else about peak oil in these next few days, this is the one: continue reading…

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I began the first post in this series* with this observation: “Some day (soon, I hope) audiences for whom peak oil denial nonsense is intended will ask themselves: what are the reasons—and supporting evidence—for these kinds of assertions?*[Links below]

Earlier this year, I made this observation: continue reading…

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Oil plays an essential role in almost everything that touches our everyday lives. From the food we eat to the means by which we transport ourselves, our goods, and our services, to what we grow, build, have, own, need, and do, oil is almost always an important element. But the painful truth now and soon is that the ready supply of oil and gas that we almost always take for granted is on its way to becoming not-so-ready—recent production increases notwithstanding.

What happens when there’s not enough to meet all of our demands, to say nothing of those of every other nation—including the many countries seeking more growth and prosperity? What sacrifices will we be called upon to make? Which products will no longer be as readily available? Which services? Who decides? What will be decided? Who delivers that message to the designers and producers and shippers and end users? What’s their Plan B? And how will we respond when decisions are taken out of our hands? Where exactly will the dominoes tumble?

There is nothing on the horizon that will work as an adequate substitute for the efficiencies and low cost and ease of accessibility that oil has provided us. We simply do not have the means to make that happen—not the technological capabilities, not the personnel, not the industries, not the leadership … yet. Clearly, we do not have enough time to do it all with effortless ease and minimal disruptions.

Piecemeal approaches that address some small aspect of need for some short period of time in some limited geographical area for just a few consumers is in the end a monumental waste of limited resources, time, and effort. We can’t wait until we’re up to our eyeballs in Peak Oil’s impact to start figuring out what to do. We’re too close as it is. We’re going to have to be much better, much wiser, and much more focused. **

Here’s the latest contribution to my Peak Oil’s Impact series—observations and commentary on how Peak Oil’s influence will be felt in little, never-give-it-thought, day-to-day aspects of the conventional crude oil-based Life As We’ve Known It. Changes in all that we do, use, own, make, transport, etc., etc., are inevitable. A little food for thought….

For those of us in northern climes, winter’s cold and its effects must be addressed in a variety of ways. It’s not always just us and family members who require adaptation when the temperatures plummet. Ignoring basic auto maintenance can prove to be costly—and a serious inconvenience.

Science lesson: water freezes when the temperature drops below 32 degrees. You’re welcome. Internal combustion engines (i.e., your cars) require water in the cooling system to keep the engine from … bursting into flames and other annoying behaviors. (Antifreeze of course also allows for water to reach temperatures above the normal point of boiling.) But if we recall our science lesson, in winter water freezes. And that’s why we have antifreeze, and why we need to purchase a container or two and have it on hand during the winter. Antifreeze + water = no freezing of said water.

Also worth noting is that antifreeze’s usefulness is not limited to automobile engines.

According to the EPA: “Ethylene glycol is the most widely used automotive cooling-system antifreeze, although methanol, ethanol, isopropyl alcohol, and propylene glycol* are also used. In automotive windshield-washer fluids, an alcohol (e.g., methanol) is usually added to keep the mixture from freezing; it also acts as a solvent to help clean the glass. The brine used in some commercial refrigeration systems is an antifreeze mixture.”

* Antifreeze is also quite toxic, and disposal is typically regulated by state laws. The good news, as Wikipedia adds, is that propylene glycol, much less toxic than ethylene glycol, is gradually replacing the ethylene. “As confirmation of its relative non-toxicity, the FDA allows propylene glycol to be added to a large number of processed foods, including ice cream, frozen custard, and baked goods.” Yum!

As the Agency for Toxic Substances and Disease Registry helpfully informs us: “Propylene glycol is a synthetic liquid substance that absorbs water. Propylene glycol is also used to make polyester compounds, and as a base for deicing solutions. Propylene glycol is used by the chemical, food, and pharmaceutical industries as an antifreeze when leakage might lead to contact with food. The Food and Drug Administration (FDA) has classified propylene glycol as an additive that is “generally recognized as safe” for use in food. It is used to absorb extra water and maintain moisture in certain medicines, cosmetics, or food products. It is a solvent for food colors and flavors, and in the paint and plastics industries. Propylene glycol is also used to create artificial smoke or fog used in fire-fighting training and in theatrical productions. Other names for propylene glycol are 1,2-dihydroxypropane, 1,2-propanediol, methyl glycol, and trimethyl glycol. Propylene glycol is clear, colorless, slightly syrupy liquid at room temperature. It may exist in air in the vapor form, although propylene glycol must be heated or briskly shaken to produce a vapor. Propylene glycol is practically odorless and tasteless.”

If you follow Wikipedia’s links, it’s only a few clicks away from learning that the propylene glycol is derived from Propylene oxide which in turn is derived from Propene. “Propene is produced from fossil fuels—petroleum, natural gas, and, to a much lesser extent, coal. Propene is a byproduct of oil refining and natural gas processing. During oil refining, ethylene, propene, and other compounds are produced as a result of cracking larger hydrocarbon molecules to produce hydrocarbons more in demand.”

And so once again I ask the very same question I’ve asked before: When the supply of depleting conventional crude oil continues to decline, and reliance turns to the inadequate supply of inferior quality, more expensive, harder to come by unconventional sources such as the tight shale formations in the U.S. and the Canadian tar sands cheered on by certain factions of the energy and media industries, what gets prioritized in such a way that every cog of these multiple supply chains are still supplied at current levels and relative costs?

If that does happen, what gets sacrificed as a result?

How much more difficult is it going to be in the years to come to sort all of this out and develop alternative means of providing these goods and services if we’re not having the conversations now with real-life facts to guide us—before we’re having serious problems? Waiting is a strategy, but it’s usually not a very good one.

 ~ My Photo: A 1952 Packard which the owner won on a $2.00 raffle ticket

** Opening paragraphs adapted from prior posts:

http://peakoilmatters.com/2010/02/15/looking-ahead-to-peak-oil-transition-part-iv/
http://peakoilmatters.com/2010/02/07/looking-ahead-to-peak-oil-transition-part-i/
http://peakoilmatters.com/2010/12/13/thoughts-on-peak-oil-planning/
http://peakoilmatters.com/2011/02/14/peak-oil-a-new-direction-pt-5/
http://peakoilmatters.com/2010/02/25/peak-oil-infrastructure-more-to-discuss-part-ii/

 

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This is the second part of a series [first here], discussing how the same “skate past the facts and hope no one notices” strategy typically employed by most Peak Oil deniers is not-so-surprisingly used by those cheerleading for shale gas development. What triggered this is a March 2012 article written by a Chevron Corporation executive, entitled “The Truth About Natural Gas From Shale.” [Quotes are from that piece unless noted otherwise.]

His stated purpose was quite clear:

Understandably, this natural gas boom has raised some questions and concerns about how this resource is developed, including questions about the process of hydraulic fracturing and the affects, if any, on the water table. While there is much debate and rhetoric surrounding this resource, often times a simple explanation of the process is left out of the discussion. In an effort to help raise awareness of how natural gas from shale is extracted, here is a brief explanation.

Those of us concerned about our energy future believe it’s vital to provide the public with information. It’s not enough to offer vapid assurances that all is well with energy supply and production. Yes, there’s certainly been some good news in the last year or so, and we readily acknowledge that. But that’s only one part of the story. Without context, a great disservice is being extended to the public.

We certainly respect that the vast majority of citizens cannot make or do not have the time or interest or inclination to understand what’s at stake. There is an ongoing, determined effort by too many to at best muddle the issues enough to draw little or no attention from the public to the challenges we face. “Public interest” does not appear to factor into their motivations. Too few are benefiting at the expense of too many. Sound familiar? (It’s not a coincidence.)

Being prepared, understanding the issues, knowing both the positive and the negative aspects of energy supply and production affords citizens their best opportunity to either contribute meaningfully as we address and adapt to the looming problems, or to engage their leaders in more substantive dialogue in order to direct more specific actions. Not knowing there are any problems makes it a wee bit difficult to accomplish any of this. The consequences will thus only be worse. Not a good option.

If nothing else, citizens should easily appreciate that there are two sides to most stories. Too many are telling too many others only one side of the story—and facts tend not to play much of a role.

The article by the Chevron executive began with another seemingly innocent comment:

Once an area prospective for hydrocarbons has been determined, permission to drill is obtained from the landowner, a lease is signed, permits are secured, and environmental impact studies are conducted.

A recent multi-part series by Brett Redmayne-Titley [first one here] disclosed some arguably unseemly strong-arm behavior by officials “negotiating” agreements with landowners for passage and construction of the Keystone XL pipeline from Canada. Not so surprisingly, similar anecdotes are being reported by residents in the Marcellus Basin area.

A recent Huffington Post article provided a number of examples [including, to be fair, examples of industry largesse to residents], and included these two noteworthy comments [ links are included in the original article]:

[B]ecause the industry is still so new and the implications of what it does are still not completely understood, the overriding reality is that residents are making monumental decisions about their own and their neighbors’ long-term health without complete information. Because drillers themselves, as well as researchers and analysts, don’t fully know what the long-term impact of fracking will be, any resident’s decision in the here-and-now is a dice roll.

Chris Csikszentmihalyi, former director of the MIT Center for Civic Media, says that hardball sales tactics are standard practice in the fracking industry.…
Overall, Csikszentmihalyi said that reports from the Marcellus Shale are relatively positive — compared to those from places like the Barnett Shale of Texas. ‘That’s probably in part because it takes a while for things to show up,’ he says. ‘Initial relationships might seem great: You’re gonna get revenue from the well, and they’ve promised to replace topsoil. It may not become a problem for a couple years.’
His theory has some support. Jeffrey Jacquet, now an assistant professor of sociology and rural studies, recently published a paper while a graduate student at Cornell University that compared opinions of residents in a region of Pennsylvania undergoing simultaneous development of wind and natural gas.
‘People were fairly ambivalent, if not positive, before gas drilling occurred,’ said Jacquet. ‘But the more experience people had with the development, the more negative they seemed to be towards the development. Meanwhile, with wind farms, there was little change in opinion.’
In a separate survey out of Texas in 2009, researchers found that residents of a county in which massive natural gas development had just begun were far more favorable to the industry than people living in a county that had hosted intense development for over a decade.

Describing an interview conducted by James Howard Kunstler and Duncan Crary with Arthur Berman, a renowned petroleum geologist, JB Sties of Transition Voice noted this exchange:

Kunstler asks Berman to talk about the propaganda being fed to US consumers and investors on the natural gas story. Berman offers two reasons why this campaign has been so successful.
First, the fracking of shale is considered a manufacturing process; simply apply the technology and produce gas that might otherwise be left in the ground. It sounds whiz bang and like so much other technotopia, reads as convincing simply or being a technological solution.
Second, fracking proponents claim these large deposits of shale will produce for decades. The decline rates on shale gas wells were touted as nearly defying the laws of physics; meaning high production rates at first with only a very slow tapering off rate over an extended period of time.

It’s not all that difficult to appreciate how and why landowners would accept the presumed knowledge and expertise of industry representatives, given the prospects for extended periods of profitable production. It’s thus just as easy to appreciate why most would readily agree to leasing their property in exchange for receiving what was surely more money than they ever envisioned.

Doubtful that any conversations between landowners and industry reps include any mention whatsoever about the contrary evidence suggesting that the appealing production rates and time periods might not actually work out as envisioned.

Another key aspect of shale gas wells is the high rate at which their production declines. Conventional gas wells typically decline by 25% to 40% in their first year of production, whereas shale gas wells decline at much higher rates, typically between 63% and 85%.42 The initial productivity of shale gas wells can be very high. [1]

On that same note, Jonathan Verenger reminded his readers that the New York Times had published a controversial piece in 2011 “detailing what might be a potential Ponzi scheme or at the very least an industry-wide fleecing of investors in the natural gas industry.” Verenger added: “In this article, NYT printed a variety of emails from corporate insiders casting doubt on the wells in shale formations in Barnett, Marcellus, and Fayettesville. These same insiders questioned the economic viability of these wells and whether or not the total potential output was even close to what management was telling investors.” [See this].

Chris Nelder also offered similar observations in his article entitled “The murky future of U.S. shale gas”:

[T]he decline rates of shale gas wells are steep. They vary widely from play to play, but the output of shale gas wells commonly falls by 50 to 60 percent or more in the first year of production. This is why I have called it a treadmill — you have to keep drilling furiously to maintain flat output. In the U.S., the aggregate decline of natural gas production from both conventional and unconventional sources is now 32 percent per year, so 22 bcf/d of new production must be added every year to keep overall production flat, according to [David] Hughes. That’s close to the total output of U.S. shale gas, after nearly a decade of its development. It will require thousands more shale gas and tight oil wells to keep domestic gas production flat.

As I noted above: If nothing else, citizens should easily appreciate that there are two sides to most stories. Too many are telling too many others only one side of the story—and facts tend not to play much of a role.

More to come….

* My Photo: Las Vegas glitz – 08.28.07

Source:

[1] http://www.postcarbon.org/report/331901-report-will-natural-gas-fuel-america; Will Natural Gas Fuel America in the 21st Century?– May 2011 report by J. David Hughes (Post Carbon Institute); p 24

[NOTE: This is the latest installment in a new PeakOilMatters series (which started here). It’s about finding a new and better vision to get to, through, and beyond Peak Oil and its widespread impact on what we produce, how we produce, and how we live. We won’t be falling off a cliff tomorrow, and the full brunt of Peak Oil’s effects won’t be experienced all at once, either. Gas and oil do not have to disappear entirely, nor do gas prices have to rise into the stratosphere before Peak Oil’s impact is felt.
Gradually, but inexorably, changes will be in the offing, however. We need to come to a better understanding of this, and start preparing ourselves now for the lengthy transition and just as lengthy ongoing impact of Peak Oil on all of us. Many issues must of necessity be considered, and I hope to make a contribution to the public dialogue we need to have. I hope you’ll find these objectives enjoyable as well as beneficial. We have more of a voice than we think we do. Finding that voice just might be our best hope.]

~~~

(This is a continuation of last week’s post discussing a recent essay by Joel Kotkin urging more domestic fossil fuel production. The last quote of his cited in that post is repeated here:)

“Shale oil deposits in the northern Great Plains, Texas, California and Colorado could yield more oil annually by 2015 than the Gulf of Mexico. Within 10 years, these finds have the potential to reduce U.S. oil imports by more than half.”

“Gail The Actuary” recently posted a very informative piece, and actually addressed this very point, (a follow-up to her discussion in that post of claims—echoed by Kotkin—that the oil shale fields in the U.S. could produce as many as 2 million additional barrels of oil per day by 2015).  She offered several observations which seem to counter those could yields and have potentials:

“I am suspicious that quite a bit of the 2 million barrels a day of additional production by 2015 that is being forecast is not really oil. Instead, I expect it will be natural gas liquids. This currently represents about half of the ‘miscellaneous’ layer [in a chart found in her post]. Natural gas liquids (NGLs) include propane, butane, and other gasses (sic)….
“An increase in NGLs would be of lesser benefit than oil, because it is not directly substitutable for oil, and is a cheaper product. Initially, it would mostly make home heating for those using propane cheaper, but then tend to drive NGL developers out of the market. Unless NGLs can cheaply be converted to higher priced oil products (and refinery capacity can be added quickly to accomplish this), it would seem like a drop in prices would quickly put an end to the NGL ramp-up….
“US oil imports have declined about 25% in the five years since 2005. In the next ten years, I would expect oil imports to continue to decline, regardless of what we do, because the amount of oil on the world market will continue to drop, and oil importers will tend more and more to be in recession. It is not clear how much US oil imports will drop, but a 50% drop in the next 10 years would not seem all that unlikely, regardless of what we what we produce, because of oil exporting countries will tend to consume more, and more countries will shift from being exporters to importers. We are currently importing 9.4 million barrels a day, so a reduction by half by 2020 would be a reduction of 4.7 million barrels a day.” [1]

It’s all fine and well to talk about the “potential” for this or that increase in production. But if it is not placed in the real-world context of increasing demand, depleting oil fields, harder-to-find-and-produce newer resources (meaning more energy being used to produce lesser amounts of inferior quality supplies), and the often-overlooked factor that many oil-exporting nations are now keeping for their own use more of their production totals, then the “potentials” lose much of their luster. Just keeping up with depletion rates still represents a net loss in production if demand is increasing and imports are being curtailed for any or all of the reasons just cited.

And let’s also remember that all of these “new,” more expensive, energy-intensive and time-consuming efforts are taking place because there’s no place else to go. Because these enhanced efforts are more costly, energy prices have to remain high for producers to justify the time, expense, investments (financial, manpower, asset-acquisition), and efforts needed to extract these often inferior oil resources. There is a point when it is no longer economically feasible to invest in production given those limitations and challenges. Higher energy prices are generally not looked upon favorably by consumers. Producers need consumers before they make their investments. Consumers cutting back = less justification for investments, and it’s easy to figure out what happens then.

Gail also comments on the claims that there could be a two-million barrel per day increase in production from the oil shale deposits (something she states “would be a tall order”) by offering some well-reasoned considerations:

“There are several reasons why the hoped for increase might not be realized, however. These include:
“Inadequate infrastructure. One question is whether inadequate infrastructure will prove to be a roadblock to meeting ambitious production goals in five to 10 years….
“Inadequate price. What tends to happen when there isn’t adequate transportation for the oil is the selling price of the oil tends to be depressed, relative to other types….
“It is easy for operators to assume that the price differential will get better, and also that the prices of other types of oil will continue to rise. But all of these things are by no means certain. High oil prices tend to send the economy into recession, so world prices may not rise as much as hoped–they may oscillate instead, rising, then putting the economy into recession and falling again. Also the differential of North Dakota types of crude to Brent may stay low for an extended period, if infrastructure issues cannot be worked out.
“Optimism before drilling. There are many unknowns before drilling including how quickly oil production from individual wells will decline, how long wells will prove to be economic, what proportion of wells will have high production, and the level of oil and gas prices in the future. It is natural for those who are trying to get others to invest in these ventures to base their assumptions on an optimistic view of the future. If experience with shale gas in Texas is any clue, once realities start setting in, the level of drilling may decline, and overall production, after an initial run-up, may decline. If this happens, it will be very difficult to meet the ambitious goals presented….
“If overall production is to be increases by 2 million barrels a day by 2015, it will be necessary to overcome these declines, as well as add 2 million barrels a day of new production. What happens is that each year, more and more oil fields and oil wells within oil fields become non-economic. These are closed. Also, what is extracted is an oil-water mix, and the proportion of oil tends to fall over time. This means that if a given volume of oil-water mix is processed from a well, each year the well will yield less oil and more water.”

Not quite a guarantee, is it?

Mr. Kotkin then turns to natural gas, with all the by-now usual qualifiers and non-specific “statements” which one assumes should be taken as fact (bold/italic mine).

Even more promising, from the environmental standpoint, are huge natural gas finds. Discoveries in Texas, Arkansas and Pennsylvania could satisfy 100 years of use at current demand levels….
“Natural gas is already muscling out coal as the primary source for new power plants. It can also be converted into transportation fuel, particularly for buses, trucks and taxis.”

What if demand doesn’t stay the same? (Probably a damn good bet that it won’t). Then what? How does transportation fuel conversion take place? How long does it take? How expensive is the process? How efficient? How easy is it to do? How much more gas would be consumed by those converted vehicles, and thus how much less would be available for all other consumption?

And while he’s correct in stating that domestic energy production creates the “potential” (that word again) for “hundreds of thousands of jobs”, wouldn’t a national effort to devote our research efforts, skills, manpower, and resources into alternative sources of energy (which will surely outlast declining supplies of fossil fuels) offer the “potential” for just as many jobs, if not many more—given how much of our infrastructure and industrial/transportation foundation will have to change to accommodate new energy sources?

Reasonable questions all, I’d like to think, but no answers at all in Mr. Kotkin’s article.

There’s also the inconvenient reality that the U.S. is a natural gas importer. We do not produce enough of it to satisfy our needs as is. We turn to Canada as our primary benefactor, but as its demands for natural gas increase (it’s also used in significant quantities just to assist in the production of that country’s tar sands), the less natural gas there is to satisfy Canadian—and American—demand. At some point, the math is not going to work.

Facts….

Gail the Actuary conveniently offered a wealth of information in another recent post that sheds a bit more light on those magical “huge natural gas finds” Mr. Kotkin finds so appealing. (The title of the post: “Don’t count on natural gas to solve US energy problems” offers a clue or two.)

“[N]atural gas is only about one-fourth of US fossil fuel use, so it would be very difficult to ramp it up enough to meet all of these needs.
“One issue is whether a rise in shale gas will mostly offset other reductions in natural gas supply. In Annual Energy Outlook 2011, EIA forecasts that shale gas production will increase from 23% of US natural gas production in 2010 to 46% of US natural gas production by 2035, but that these increases will mostly offset decreases elsewhere. Even with this huge increase in shale gas production, the EIA only sees US natural gas production increasing by an average of 0.8% per year between 2011 and 2035, and US natural gas consumption increasing by an average of 0.6% per year per year to 2035–not enough to make a very big dent in our overall energy needs.”

Thud.

Shale gas production, which is being touted as a door-opener for increasing natural gas production, has its own set of risks and problems. Water pollution from the fracking process employed to produce the resource, earthquakes (no joke; see this), apparently rapid decline in production levels, and the fact that shale gas is not profitable at current low prices are just a few of the negatives. Not much incentive for producers there….

Gail touched on the shale gas issues in her post, suggesting for one thing that increasing the percentage of shale gas in the overall total of gas production “will mostly offset decreases elsewhere.” And natural gas’s lower prices will have less appeal as prices rise—surely an inevitability as demand and production costs increase. Then what?

As for Mr. Kotkin’s “100 years” claim, Gail offers more of those damned facts in rebuttal (citing, as she did with all of her other facts, charts and other sources of official information and statistics. Don’t you just hate that? See this article, also.)

“US current consumption is about 24 trillion cubic feet a year. If we divide the ‘U. S. Future Supply’ of 2,074.1 TCF by 24, we get 86 years, which is the source of the statement that 100 years of natural gas supply is available. But it is not at all clear how much of this is economically extractable with technology that we have now, or will be able to develop in the future. If we exclude speculative resources, we are down to 61 years, assuming no growth in natural gas consumption. If natural gas use rises, we would exhaust those resources much sooner.
‘If we exclude both Speculative Resources’ and ‘Possible Resources,’ then the number of years at current consumption falls to 29 (but much shorter, if production ramps up sharply). The shale gas portion of this is about a third of the total, or approximately 10 years, at current consumption levels.”

Thud, again.

Mr. Kotkin does acknowledge the legitimacy of environmental concerns arising from oil and gas production as they compare to the risks now quite evident to all in the wake of the disasters in Japan:

“But compared with the existential threat of nuclear radiation, even potential oil spills and damage to water supplies from fracking shale might be regarded as tolerable risks for which we have considerable experience and technology managing with enhanced regulation.”

Permit me to introduce you to the right-wing of our federal government and the big money interests which largely dictates its agenda. “Enhanced regulation?” Seriously? From this narrow-minded, shortsighted group of legislators beholden to corporate America? This same group of “leaders” who by all indications have little regard for what their own (non-wealthy) constituents are calling on them to do? I’m not sure that relying on them for “enhanced regulation” is likely going to meet with much success, although there is no question that is absolutely necessary.

“The record shows that without effective government oversight, the offshore oil and gas industry will not adequately reduce the risk of accidents, nor prepare effectively to respond in emergencies.” [2]

Credit where credit is due however. Mr. Kotkin does add:

“Republicans, too, need to give up their ‘bests’— including the notion that no policy is always the best, usually a convenient cover for the narrow interests of large energy corporations. Allowing private corporations to unilaterally determine our energy policy makes little sense. After all, most of our key competitors — China, Brazil and India — approach energy not as an ideological hobby horse but as a national priority.”

He concludes with these observations:

“The time has come for both political parties to give up their ‘best’ energy options for the good. A green economy that produces millions of new jobs is a laudable goal. But the renewable sector cannot develop rapidly without massive expenditures of scarce public dollars. To fully develop these technologies, we need lots of money and time….
“It’s time to demand that our deluded, and self-interested, political class develops an energy policy based not ideology but on how to best guarantee prosperity for future generations of Americans.”

Drilling for more oil, or pursuing questionable practices to release shale and natural gas are fraught with their own set of risks and consequences. In truth, there are no energy policies that won’t require significant compromise, sacrifice, and expense. Weighing the advantages and disadvantages, together with the benefits and rewards is no easy, quick, or guaranteed strategy. If we wait until everyone is on board we’ll be having this same conversation 500 years from now.

But to insist that our energy policy must be to keep devoting “scarce public dollars” (and scare private ones, too) to resources on a steady path of decline, guaranteeing only more difficulties and hardships down the road, is an energy policy to nowhere. There’s no doubt that we have enough fossil fuel resources to last a good number of years (given oil depletion and increasing demand, the math makes the exact date irrelevant, and I’m not a seer). But they are resources harder to come by, more costly, and well on their way to soon being insufficient to meet the many legitimate demands and needs of an over-populated world. What’s the advantage in spending “money and time” on endeavors that will lead to a gigantic energy dead-end? How much more trouble should we be looking to create for ourselves?

Our priority—our focus—must turn away from fossil fuels now, while we still have enough available to help ease us into the process of transitioning away from those very resources. That is a task of unimaginable complexity and effort. Waiting for a better day is not a choice. That day has passed. Let’s not let too many more slide by in foolish pursuits.

Sources:

[1] http://ourfiniteworld.com/2011/02/14/is-shale-oil-the-answer-to-peak-oil/; Is “shale oil” the answer to “peak oil”? by Gail Tverberg – February 14, 2011
[2] http://www.infrastructureusa.org/deep-water-the-gulf-oil-disaster-and-the-future-of-offshore-drilling/; DEEP WATER: The Gulf Oil Disaster and the Future of Offshore Drilling – January 10, 2011