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Tag: shale gas

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In recent months, Gail Tverberg in particular, along with Steven Kopits and Ron Patterson, have examined both the financial and production continue reading…

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An observation worth noting … and pondering, from David Hughes: continue reading…

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This is the seventh and final part of a series [ links below ], 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.

As is the case in other areas of our business, our ability to operate depends on public confidence in our operations. This trust can only be earned through open, honest and timely dialogue with surrounding communities and operating at a high standard.
Natural gas from shale can provide the U.S. with reliable, affordable, cleaner and responsibly produced energy – but we must have a supportive policy framework to encourage this development. Doing so will help enhance the country’s energy security, strengthen local and state economies, and fuel job growth.

Nice sentiments, to be sure, and undoubtedly well-intentioned. If the shale gas production envisioned by Chevron and its peers could be realized as they describe, benefits would surely accrue to us all. But facts can screw up even the best of intentions.

How much gas is there, really?
There is deep uncertainty about the amount of natural gas in the ground and what it will ultimately cost to extract it. Despite this, drillers typically operate on unwavering optimism that borders on hubris: The common refrain about oil and gas men (they are indeed almost always men) is that they are ‘often wrong but never doubting.’
After attacking anyone who questioned the irrational exuberance surrounding shale gas, these oil and gas men have had to reckon with several new batches of data — first from the U.S. Geological Survey and then from the Energy Information Administration (EIA) —  that offer a more sober picture of this resource. Countless market analysts and news venues … [citing multiple sources – my comment] have also started corroborating doubts about the industry’s prospects and its early optimism.
The source of the industry’s tank-half-full optimism isn’t baseless: No one can deny that there is a helluva lot of gas in this country. But there isn’t nearly as much as the industry and federal regulators initially predicted — despite the fact that President Obama and others continue to cite overly optimistic figures. It’s also patently obvious that drillers have miscalculated how much of this gas can be extracted without going bankrupt. [1] [ links/other references and sources are in the original article ]

[T]he shale gas industry was motivated to hype production prospects in order to attract large amounts of needed investment capital; it did this by drilling the best sites first and extrapolating initial robust results to apply to more problematic prospective regions. The energy policy establishment, desperate to identify a new energy source to support future economic growth, accepted the industry’s hype uncritically….The stuff seemed too good to be true—and indeed it was.
The biggest losers in this misguided rush to anoint shale gas as America’s energy savior are members of the public, who need sound energy policy based on realistic expectations for future supply, as well as sound assessments of economic and environmental costs. [2]

Part 6 of this series [ link below] highlighted several economic consequences to local and state economies which continue to get too little attention (road and infrastructure damage, increased demands for social and municipal services on already overburdened providers, etc.), and which never seem to find their way into the exuberant pronouncements by the fossil fuel industries.

Tara Lohan described some of the lesser known, infrequently-considered risks now being assumed by residents who’ve committed their properties to drilling:

Homeowners may also stand to lose. The Huffington Post reported, ‘Nationwide Mutual Insurance Co. has become the first major insurance company to say it won’t cover damage related to a gas drilling process that blasts chemical-laden water deep into the ground.’ The company released a memo that said:
After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage.
While the fracking industry promises to create jobs, those like Tish O’Dell, co-founder of the Cleveland-area group Mothers Against Drilling in Our Neighborhoods, wonder about what jobs will be lost from impacts to farming, tourism and dairies. She told Midwest Energy News, ‘If you were going to do a really serious study you would look at these things,’ she said. ‘If water is contaminated and fish die, what are the fishermen going to do? If you have parks where people go for peace and quiet, what happens when you turn it into an industrial landscape? If you have an organic dairy and the soil is polluted, what does that mean? These are all valid questions.’ [3] [ links/other references and sources are in the original article]

Kurt Cobb also enlightened us about a related and potentially quite drastic financial burden likewise assumed by homeowners:

One fact ought to tell you all you need to know about the risks faced by homeowners signing leases for natural gas drilling on their property: Wells Fargo & Company, both the largest home mortgage lender in the United States and a major lender to the country’s second largest producer of natural gas, Chesapeake Energy Corp., refuses to make home loans for properties encumbered with natural gas drilling leases.
This salient fact comes from an article (PDF) written for the New York State Bar Association Journal by attorney Elisabeth N. Radow. Written in the form of an even-tempered legal brief, Radow relates one astounding finding after another. Perhaps most relevant to homeowners who either have signed drilling leases or who may be asked to sign them in the future is this: ‘Signing a gas lease without lender consent is likely to constitute a mortgage default.’ You read that right. Default. [4] [ links/other references and sources are in the original article]

These last two observations sum it up much better than I could:

[S]cientific studies are not the only indications that something is deeply wrong with the IEA’s assessment of prospects for shale gas production and accompanying economic prosperity. Indeed, Business Insider reports that far from being profitable, the shale gas industry is facing huge financial hurdles. ‘The economics of fracking are horrid,’ observes US financial journalist Wolf Richter. ‘Production falls off a cliff from day one and continues for a year or so until it levels out at about 10 per cent of initial production.’ The result is that ‘drilling is destroying capital at an astonishing rate, and drillers are left with a mountain of debt just when decline rates are starting to wreak their havoc. To keep the decline rates from mucking up income statements, companies had to drill more and more, with new wells making up for the declining production of old wells. Alas, the scheme hit a wall, namely reality.’ [5] [ links/other references and sources are in the original article]

‘It looks like we’re finally kind of coming to the end of that story. All of the reasons companies had for continuing to drill [gas] wells are beginning to come off.’ [Comment by Adam Sieminski, Administrator of the U.S. EIA.]

Facts … and reality. Perhaps we should give them greater consideration going forward?

* My Photo: a wild turkey in Gloucester, MA – 06.02.12

[ links to the first six posts of this series]:

http://peakoilmatters.com/2013/01/31/peak-oil-natural-gas-truth-v-the-truth-pt-1/
http://peakoilmatters.com/2013/02/07/peak-oil-natural-gas-truth-v-the-truth-pt-2/
http://peakoilmatters.com/2013/02/15/peak-oil-natural-gas-truth-v-the-truth-pt-3/
http://peakoilmatters.com/2013/02/21/peak-oil-natural-gas-truth-v-the-truth-pt-4/
http://peakoilmatters.com/2013/02/28/peak-oil-natural-gas-truth-v-the-truth-pt-5/
http://peakoilmatters.com/2013/03/07/peak-oil-natural-gas-truth-v-the-truth-pt-6/

Sources:

[1] http://grist.org/natural-gas/natural-born-drillers-why-shale-gas-wont-end-our-energy-woes/; Natural born drillers: Why shale gas won’t end our energy woes, by Sharon Kelly – 03.09.12
[2] 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 2
[3] http://www.salon.com/2013/01/11/5_reasons_natural_gas_wont_save_us/; 5 reasons natural gas won’t save us – 01.11.13
[4] http://resourceinsights.blogspot.com/2012/05/how-fracking-mess-is-about-to-make.html; How the fracking mess is about to make the mortgage mess worse – 05.20.12
[5] http://truth-out.org/opinion/item/13629-age-of-cheap-oil-abundance-a-myth; Rosy Forecast of Cheap Oil Abundance, Economic Boom a Myth, by Dr. Nafeez Mosaddeq Ahmed – 12.31.12

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This is the sixth part of a series [ links below], 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.

Once again making the fracking process start to finish sound like not much more than a walk in the park, the Chevron official then said:

Once a well is completed, a pipeline is built to take the natural gas to market to be used for electricity generation, home heating and other energy needs.  We then work with the landowner to remediate the drill site and restore the land with minimal impact to its original contours.
After the well site has been remediated, the remaining footprint of a producing natural gas well is typically less than one acre. It includes a well head, a gas processing unit and one or two water tanks. Natural gas wells that produce from shale rock are typically expected to have a long production life spanning many years.

If only if were that simple….

Fracking is not limited to shale gas production. It is also being used extensively to produce “tight” oil from shale formations. In fact, its relative success is largely responsible for the recent upticks in U.S. production totals. The process itself is not significantly different, and thus the same issues and concerns experienced in other areas of the country (primarily in the Bakken formation whose principal drilling locations are in North Dakota and Montana) apply here.

Evelyn Nieves and Nicholas Kusnetz in particular (here and here) offered wonderful overviews of what residents in North Dakota have been dealing with since fracking became a prime industry there. The titles of those two articles each offer a glimpse of the storylines: “The North Dakota Oil Fracking Boom Creates Clash of Money and Devastation” and “North Dakota’s Oil Boom Brings Damage Along With Prosperity.”

The stories they shared are strikingly similar to accounts regarding residents in the Marcellus formation here in eastern portions of the U.S. I’ve previously mentioned Ms. Nieves’ piece, and found one description particularly telling, so much so that I’ll repeat it here:

No one imagined tanker trucks barreling up and down Main Street, back-to-back like freight trains, seven days and nights a week. No one predicted construction zones that grind traffic to a halt as far as the eye can see, the deafening clatter of semis, the dust kicked up by 10,000 vehicles pulverizing the two-lane road every day or the smell and taste of diesel. No one anticipated the accidents, two or more a week on Main Street and all over the rutted reservation roads, costing lives and shattering families.
In fact, Fort Berthold, home of the Mandan, Hidatsa and Arikara Nation, or Three Affiliated Tribes, did not reckon on a lot when North Dakota invited the energy industry to Drill Baby Drill. No one knew that energy companies in search of housing for their workers would buy private property and evict some of the reservation’s poorest residents from their homes. No one planned on police and fire calls multiplying. No one guessed that on a reservation of nearly one million acres, all the deer would disappear

Tara Lohan introduced a description of several truck accidents with accompanying fracking fluid leaks by observing this:

One of the main complaints you’ll get from people living near fracking operations is truck traffic, whether it’s North Dakota or Pennsylvania or any other gasland state. People have seen their rural roads and quality of life decimated by thousands of daily truck trips. They worry about diesel emissions, relentless dust on dirt roads, accidents and spills — and they have every reason to be concerned. Here’s a little sampling of what people in West Virginia experienced last weekend.

In another article I cited in a prior post of this series, Roberta Brandes Gratz shared this:

A recent visit to Bradford and Susquehanna Counties in northeastern Pennsylvania, currently a prime drilling target, revealed very troubling impacts that have received little attention so far. On scenic farm roads that never before bordered anything but farms — not even a gas station — industrial sites are sprouting left and right, representing the different segments of the gas production process — compressors, storage tanks, staging sites, maintenance operations and more.
Consider for example the situation in and near the towns of Wyalusing and Montrose. Both are small, historic towns, not quite fitting the description of ‘sleepy’ but, then again, not home to intense activity either. The library in Montrose is packed daily with gas company researchers poring over land deeds. The small hotel in Wyalusing is mostly filled with gas workers or deal makers. The coffee shop conversation on this short, storybook Main Street is filled with complaints about endless midnight truck traffic and news of residents trying to sell or move.
The road between these towns is a bucolic, windy, two-lane farm road. About midway is a staging area for trucks each carrying 50,000 lbs of sand. I observed roughly 30 trucks waiting to deliver to a nearby drill site under construction. The truckers report that each load had been trucked 80 miles from Wellesville, N.Y. One driver noted, that this typical site — a drill pad with six well holes — takes 480 million pounds of sand! At 50,000 pounds per truck driven 80 miles one-way — you do the math. Then calculate diesel fuel burned, exhaust released, road wear caused for that 80 mile trip for one pad of six wells. How could this be defined as clean energy? That doesn’t even begin to touch the controversy of the impact on global warming of the leaked methane during the drilling process.

And then there’s this:

A surge in hydraulic fracturing to get gas and oil trapped in rock means drillers need to haul hundreds of truckloads of sand, water and equipment for a single well. Drilling that added jobs and tax revenue for many states also has increased traffic on roads too flimsy to handle the 80,000-pound (36,300 kilogram) trucks that serve well sites.
The resulting road damage will cost tens of millions of dollars to fix and is catching officials from Pennsylvania to Texas off guard. Measures to ensure that roads are repaired don’t capture the full cost of damage, potentially leaving taxpayers with the bill, according to Lynne Irwin, director of Cornell University’s local roads program in Ithaca, New York. [1]

And a few other minor inconveniences. Earthquakes, for one, as Joe Romm explained. There are some other not-so-obvious consequences, also.

In addition to the environmental impacts of oil and gas production, including dangerous air and water contamination and destruction of wildlife habitat, NRDC is concerned about other impacts to communities that have been documented, such as increased crime, infrastructure burdens that require massive repair, and the growing demand for social and municipal services. Another serious impact is a large increase in the need for health care services. Communities with oil and gas development can see increased emergency room visits in particular, from traffic and occupational accidents. [2] [ links in the original article.]

(Ms. Mall has also written about the influx of hundreds of new children into school systems, with all the challenges associated, and how public safety officials are likewise inundated with significantly greater demands.)

And as for “long production life spanning many years” comment? Not quite. I’ll discuss that in Part 7.

* My Photo: Manhattan skyline – 09.05.09

[ links to the first five posts of this series]:

http://peakoilmatters.com/2013/01/31/peak-oil-natural-gas-truth-v-the-truth-pt-1/
http://peakoilmatters.com/2013/02/07/peak-oil-natural-gas-truth-v-the-truth-pt-2/
http://peakoilmatters.com/2013/02/15/peak-oil-natural-gas-truth-v-the-truth-pt-3/
http://peakoilmatters.com/2013/02/21/peak-oil-natural-gas-truth-v-the-truth-pt-4/
http://peakoilmatters.com/2013/02/28/peak-oil-natural-gas-truth-v-the-truth-pt-5/

Sources:

[1] http://www.bloomberg.com/news/2012-05-15/taxpayers-pay-as-fracking-trucks-overwhelm-rural-cow-paths-1-.html; Taxpayers Pay as Fracking Trucks Overwhelm Rural Cow Paths by Jim Efstathiou Jr. – 05.15.12
[2] http://switchboard.nrdc.org/blogs/amall/oil_and_gas_industry_takes_a_t.html; Oil and gas industry takes a toll on local health care providers by Amy Mall – 12.28.12

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This is the fifth part of a series [ links below], 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.

A topic of particularly contentious dispute concerns the chemicals used in hydraulic fracturing.

To his credit, the Chevron executive was very clear in stating that he supports the disclosure of the chemicals used in fracking. He also wanted to downplay their significance, stating that the process includes “less than 1 percent chemical additives.”

The problem, however, is that his personal support of disclosure is not shared by most in the industry, and certainly not by the companies doing the fracking. This suggests more than a casual problem, unless undisclosed and unknown chemicals being pumped into and on your property (and a distinct possibility of radioactive waste) are not a concern of yours. Some are troubled by this, however. Imagine!

Frack fluid that is injected into the wells contains a toxic soup of hundreds of chemicals, including carcinogens and volatile organic compounds like benzene, toluene, ethylbenzene and xylene. Companies aren’t required to disclose what chemicals they’re using either — so it makes it difficult to test for leaks and spills, and for people to be treated for health problems that may arise from exposure.
Oh yeah, and fracking is exempt from the Safe Drinking Water Act — thanks Dick Cheney! [1]

By now you likely know that most states (and the federal government) don’t require companies that frack oil and gas wells to disclose the multitude of chemicals in the toxic slurry that gets pumped underground. This is problematic for so many reasons, and here is just the latest. Ben Elgin, Benjamin Haas and Phil Kuntz reported for Bloomberg that, ‘A subsidiary of Nabors Industries Ltd. (NBR) pumped a mixture of chemicals identified only as ‘EXP- F0173-11’ into a half-dozen oil wells in rural Karnes County, Texas, in July.’
The problem?
‘Few people outside Nabors, the largest onshore drilling contractor by revenue, know exactly what’s in that blend. This much is clear: One ingredient, an unidentified solvent, can cause damage to the kidney and liver, according to safety information about the product that Michigan state regulators have on file. [2] [ links in the original quote]

What is clear is that the production of shale gas involves extraordinary environmental impacts compared with conventional gas drilling. these include …:
Contamination of surface water, and potentially drinking water, through improper disposal of toxic produced drilling fluids containing salts, radioactive elements, and other toxins. Toxic produced drilling fluids, which amount to 15% to 80% of the 2 million to 8 million gallons of water injected during hydraulic fracturing for each well, are disposed of through either reinjection, surface disposal and treatment at wastewater treatment facilities, or, less commonly, recycling. Recycling involves distilling purified water from the drilling waste, which still leaves a residue of toxins and is very energy intensive. The surface disposal of toxic drilling fluids and the fluids’ potential to contaminate drinking water with radionuclides and other contaminants has recently been documented by the New York Times. Indeed, efforts by shale gas producers to remain exempt from the Safe Drinking Water Act are surely
counterproductive and counterintuitive if the production of shale gas is really as benign as the industry contends. [3] [footnotes are included in the original quote]

That last comment alone speaks volumes about the “safety” of hydraulic fracturing. Claims that disclosures would reveal “trade secrets” or otherwise “proprietary” information and practices may be protected under law, but what of the citizens exposed to potential hazards? Shouldn’t their well-being carry a bit more weight than sketchy business concerns? [Hard to believe that disclosing chemicals used will open the floodgates to new competition, given the tens of millions of dollars required just to drill a few wells.]

A new analysis by the Natural Resources Defense Council shows that the majority of states where fracking occurs have no disclosure laws at all, and that those that do are woefully behind when it comes to revealing behind-the-scenes details of their operations. While the Obama administration has put some new rules in place, many decisions about what drillers are allowed to hide are left to the states; Interior Secretary Ken Salazar complained to Reuters that state-level regulation is ‘not good enough for me, because states are at very different levels — some have zero; some have decent rules.’
That’s a problem, study author Amy Mall said, because unlike coal plants and other large-scale energy operations, fracked natural gas wells are often in close proximity to houses, schools, or other high-traffic areas.
At stake is a trove of information: exact ingredients of the chemical cocktail used to frack a particular site, when and where drillers plan to frack, how toxic wastewater is to be dealt with, and many more basic details, all of which could be useful to local politicians and residents concerned about health impacts, groundwater and air pollution, and seismic activity associated with fracking.
‘The state laws on the books aren’t anywhere near where they need to be for the public to have information to protect their communities,’ Mall said. [4] [ links in the original quote]

This is a good thing? This is what we’re doing in order to maintain fossil fuels supplies? Might be a great time to consider some different options … and a lot more sharing of facts.

Back next week with more.

* My Photo: Good Harbor Beach, MA – 07.05.10

[ links to the first four posts of this series]:

http://peakoilmatters.com/2013/01/31/peak-oil-natural-gas-truth-v-the-truth-pt-1/
http://peakoilmatters.com/2013/02/07/peak-oil-natural-gas-truth-v-the-truth-pt-2/
http://peakoilmatters.com/2013/02/15/peak-oil-natural-gas-truth-v-the-truth-pt-3/
http://peakoilmatters.com/2013/02/21/peak-oil-natural-gas-truth-v-the-truth-pt-4/

Sources:

[1] http://www.salon.com/2013/01/11/5_reasons_natural_gas_wont_save_us/; 5 reasons natural gas won’t save us by Tara Lohan – 01.11.13
[2] http://www.alternet.org/fracking/4-scary-new-finds-about-fracking-week; 4 Scary New Finds About Fracking This Week by Tara Lohan – 12.06.12
[3] 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 27
[4] http://grist.org/climate-energy/the-secrets-drillers-can-hide-about-the-fracking-in-your-backyard/; The secrets drillers can hide about the fracking in your backyard by Tim McDonnell – 08.01.12

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This is the fourth part of a series [here, here, and 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.

I’ll continue with more of the explanations of how fracking takes place, using the author’s version first:

Because the gas is trapped in dense shale rock, we use the process of hydraulic fracturing to allow the gas to be extracted more easily. In hydraulic fracturing, a fluid comprised of more than 99 percent water and sand and less than 1 percent chemical additives is pumped down the well at a high pressure for a short period of time, usually a few hours. This creates a network of cracks in the shale rock that allows trapped natural gas to flow to the well. The sand helps keep the fractures open and gas flowing.  This is not a new practice.  It has been safely used since the 1940s in more than 1 million wells in the United States.  After the shale rock has been fractured, some of the hydraulic fracturing fluid is returned to the surface through the well pipe, treated and either recycled or disposed of in regulator-approved underground water injection wells.

Seems fairly peaceful, doesn’t it? An apparently insignificant amount of innocent “chemical additives,” good old American sand and water, a “short period of time,” some “regulator-approved” treatment of fluid, and presto: natural gas!

How about a few more details? Some elaboration, perhaps?

To extract the gas, companies use a combination of directional drilling and hydraulic fracturing, also called ‘fracking.’ They drill down vertically until they hit the shale layer. Then the bit moves horizontally to follow the bed of gas-bearing rock. A ‘perforation gun’ is fed through the bored hole, which uses small projectiles to puncture holes in the casing that lines the well. Millions of gallons of chemically treated water and sand are then injected under high pressure to fracture the shale and release the gas for pumping to the surface. [1]

Abram Lustgarten wrote a fascinating (disturbing) assessment of the chemical additives side of industrial waste disposal—including fracking—which I would highly recommend. There’s a hint in the title: “Injection Wells: The Poison Beneath Us.”

There are other considerations and concerns which not-surprisingly did not find their way into the Chevron executive’s explanation. Water usage is one. Of course, if a community and/or its citizens don’t need water for anything, then that would not be a problem.

Fracking is water intensive. It can take anywhere from 2 million to 13 million gallons of water to frack a single well and more water is needed to drill the well. Additionally wells are often fracked multiple times, some times as many as 18 times. Where does all that water come from? The Pacific Institute reports:
Water for hydraulic fracturing is typically withdrawn from one location or watershed over several days. Additionally, in some cases, the water is taken from ‘remote, often environmentally sensitive headwater areas’ (Beauduy 2011, 34), where even small withdrawals can have a significant impact on the flow regime. As a result, while fracking may account for a small fraction of a state’s or even a basin’s water supply, there can be more severe local impacts.
Additionally, much of the water injected underground is either not recovered or is unfit for further use once it is returned to the surface, usually requiring disposal in an underground injection well. This water use represents a ‘consumptive’ use if it is not available for subsequent use within the basin from which it was extracted. In some cases, water is treated and reused for subsequent fracking jobs, although this is still fairly uncommon, and no national estimate on the prevalence of this practice is available.
Already states like Texas and Pennsylvania have run into conflicts with fracking due to water shortages. And things are likely to get worse, as the Pacific Institute states, ‘In many basins, the application of fracking is still in its infancy and continued development could dramatically increase future water requirements and further intensify conflicts with other uses.’

As for the Chevron official’s assertion that fracking “has been safely used since the 1940s,” Anthony Ingraffea, a Cornell University engineer, offers a bit more information:

So the practice of pumping small volumes (1,000 to 10,000 gallons) of toxic fluid into vertical wells (2,400 feet) using about 600 horsepower of pressure is indeed 60 years old.
But that’s not what is happening in Pennsylvania, Texas or northern British Columbia today. Now industry injects millions of gallons of water into wellbores two miles deep that then angle or deviate horizontally another kilometre underground. They then break up the rock with up to 40,000 units of horsepower onsite and at pressures so extreme that the practice triggers small earthquakes….
Only in the last two decades have four different technologies made it possible to fracture deep shale rock formations one to two kilometres underground. They include directional drilling (wells that go down a kilometre and then extend horizontally for another kilometre): the use of millions of litres of fracturing fluids including sand, water and toxic chemicals; slick water (the use of gels and high fluid volumes at 100 barrels a minute) and multi-well pad and cluster drilling (the drilling of six to nine wells from one industrial platform).
‘All four of these technologies had to come together to allow shale gas fracturing,’ says Ingraffea.
The first horizontal shale gas well was drilled in 1991; the first slick water fracture took place in 1996; and the use of cluster drilling from one pad didn’t happen until 2007….
Expertise is also limited. Of 75 oil and gas firms that recently invaded Pennsylvania to develop the Marcellus shale play, only a half dozen had any experience combining all four technologies.
So the industry claim that hydraulic fracturing is a proven 60-year-old technology is just that: a provocative myth containing a pebble of truth….
As such current shale gas fracturing is an ongoing science experiment with few if any controls. Moreover research on its impacts remains scanty at best. [2]

So add this assessment by Arthur Berman, who has studied shale gas production quite extensively:

[O]nly a stunning 10-15% of the total area in which thousands of wells have been drilled turned out to be economically viable business ventures [3]

and consider this:

Wells typically range between $2 million and $10 million (or more), each one’s cost depending on location, depth, the number of hydraulic fracturing stages required, and other technical considerations [4]

combined with facts disclosed in David Hughes’ study:

Despite doubling this rate to more than 20,000 wells annually, gas production hit a post-peak summit in 2001 and began to decline. In the run-up to the Great Recession, gas drilling more than tripled from 1990s levels to 33,000 wells per year in the 2006–2008 time frame before falling back below the 20,000 level. This burst of drilling served to grow production modestly to near the 1973 peak, albeit at more than four times the 1973 drilling rate. This ‘exploration treadmill’ indicates the United States will need on the order of 30,000 or more successful gas wells per year to increase production going forward, which is triple the 1990s levels. [5]

the conclusion is fairly simple: there are some issues! A handful of simple little wells being drilled in faraway places at nominal costs with great success … not exactly. And did I mention leaking? Andrew Nikiforuk offered some information, in addition to what Abram Lustgarten’s study revealed (see above).

Back next week with more.

* My Photo: Peter Island, British Virgin Islands – 11.30.06

Sources:

[1] http://www.csmonitor.com/USA/2012/0422/With-all-this-natural-gas-who-needs-oil; With all this natural gas, who needs oil? by Alexandra Marks – 04.22.12
[2] http://thetyee.ca/News/2013/01/07/Shale-Gas-Realities/; Shale Gas: Myth and Realities by Andrew Nikiforuk – 01.07.13
[3] http://citiwire.net/columns/the-hydrofracking-impact/; The Hydrofracking Impact by Roberta Brandes Gratz – 01.21.12

[4], [5] 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); pp 24 and 18-19, respectively

 

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This is the third part of a series [here and 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.

So let’s continue….

A seemingly ho-hum series of initial steps taken is our introduction to “the process:”

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. Then seismic data is gathered to determine the best location to place the well in the shale that lies deep underground.
Once determined, a well site is constructed.  From the well site, we are able to drill multiple wells from a single site to minimize land use.  A drilling rig is then used to drill thousands of feet below the earth’s surface.  In the Marcellus Basin, wells are typically around 8,000 feet deep – nearly 7,000 feet below the water table.  The rig then drills horizontally, roughly 2,000 to 6,000 feet outward into the layer of shale rock.  Many companies use several layers of steel casing and cement to form a continuous barrier between the well and the surrounding formations.

Sounds simple enough. No fuss, no bother, no contentious discussions … just a kind-hearted corporation easing into mostly rural communities and going about its business in such a way that it seems no one even notices they’re there! And so thoughtful, too, “drill[ing] multiple wells from a single site to minimize land use.”

Here’s a slightly more detailed description from the Energy Information Agency:

Hydraulic fracturing (commonly called ‘fracking’ or ‘fracing’) is a technique in which water, chemicals, and sand are pumped into the well to unlock the hydrocarbons trapped in shale formations by opening cracks (fractures) in the rock and allowing natural gas to flow from the shale into the well. When used in conjunction with horizontal drilling, hydraulic fracturing enables gas producers to extract shale gas economically. Without these techniques, natural gas does not flow to the well rapidly, and commercial quantities cannot be produced from shale. [1]

Duly noted, and at first glance, certainly understandable from a business standpoint. But let’s pause for a moment for another view of “the process.” Two months before “The Truth….” was published, Roberta Brandes Gratz offered a different perspective on this very same effort:

Hydrofracking involves injecting clean water, sand and an undisclosed combination of chemicals into the shale to free the gas from vast lateral reserves that are then brought to the surface. Each well site — known as as a pad — contains multiple wells on three to four acres of compacted gravel. The sites are spaced maybe 40 acres apart and connected by pipelines crisscrossing the land.

Ms. Gratz also managed to find space in her article to add these observations:

In the case of gas, the grid connection is a more complex piping system, indeed one so vast that it is difficult at this point to fully comprehend how many pipelines and multiple compressors will be required as wells proliferate, or how many farms, wetlands, woodlands and mountain tops they will cross. Gas makes windmills look benign in the impact on the land.
‘To connect to the larger, interstate pipelines’ companies are moving forward ‘on what is expected to be thousands of miles of smaller pipelines,’ Marc Levy of the Associated Press wrote in August. And that doesn’t include’ a possible network of water pipelines called for to avoid the current endless truck trips required to deliver water.
Pipelines require wide cleared swaths through forests, mountain tops, farm fields and wetlands.

By carefully spacing her words, Ms. Gratz also found room in her article to offer these facts:

Gas needs to be compressed at multiple points along a route to flow through a pipeline.  Compressor stations are required at close intervals. Compressors clean the gas of impurities before it is piped into peoples’ homes down the line. The noise from these compressors can be deafening.

In a prior article, Ms. Gratz offered this:

A recent visit to Bradford and Susquehanna Counties in northeastern Pennsylvania, currently a prime drilling target, revealed very troubling impacts that have received little attention so far. On scenic farm roads that never before bordered anything but farms — not even a gas station — industrial sites are sprouting left and right, representing the different segments of the gas production process — compressors, storage tanks, staging sites, maintenance operations and more.
Consider for example the situation in and near the towns of Wyalusing and Montrose. Both are small, historic towns, not quite fitting the description of ‘sleepy’ but, then again, not home to intense activity either. The library in Montrose is packed daily with gas company researchers poring over land deeds. The small hotel in Wyalusing is mostly filled with gas workers or deal makers. The coffee shop conversation on this short, storybook Main Street is filled with complaints about endless midnight truck traffic and news of residents trying to sell or move.
The road between these towns is a bucolic, windy, two-lane farm road. About midway is a staging area for trucks each carrying 50,000 lbs of sand. I observed roughly 30 trucks waiting to deliver to a nearby drill site under construction. The truckers report that each load had been trucked 80 miles from Wellesville, N.Y. One driver noted, that this typical site — a drill pad with six well holes — takes 480 million pounds of sand! At 50,000 pounds per truck driven 80 miles one-way — you do the math. Then calculate diesel fuel burned, exhaust released, road wear caused for that 80 mile trip for one pad of six wells. How could this be defined as clean energy? That doesn’t even begin to touch the controversy of the impact on global warming of the leaked methane during the drilling process.

[The Vargson family also has an interesting experience regarding “the process.]

While “The Truth….” version is certainly the one most residents would vote for, the unfortunate fact-based reality is that the rural inhabitants where most of these pads are found must deal with the realities described above. Good thing it’s them and not us, Right?

I wonder why none of those pesky little facts found their way into “The Truth…?”

And we’re just starting….

* My Photo: Provincetown, MA – 08.20.04

Source:

[1] http://www.eia.gov/energy_in_brief/article/about_shale_gas.cfm; What is shale gas and why is it important? – Last Updated: December 5, 2012

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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

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I rarely write about natural gas, mostly because I like to think I’m smart enough to know how much I don’t know, and thus opt out of adding my two cents’ worth to topics with which I have at best marginal familiarity. But there’s no denying its significance.

It’s home-grown, plentiful, and touted as the best way to wean the US off Mideast oil. But there are limits to how far the US can tilt toward a natural gas economy….
Natural gas already plays a major role in the American economy. It’s the primary way more than half of Americans heat their homes and cook their food. It’s also used to generate one-third of the nation’s electricity and is a major component in the chemical and manufacturing industries. Almost daily, its footprint is expanding because of the sudden surfeit of supply and low prices. [1]

In the course of doing some research, I came across a March 2012 article posted at the Energy Collective website. It was written by a Chevron Corporation executive, and seemed all but identical to the carefully manicured arguments offered by those who deny the facts about Peak Oil. Same playbook, no doubt. [Quotes are from this article unless noted otherwise.]

In light of what I do know about shale gas production in the last year or so, I thought it would be helpful to discuss the author’s exuberant assessments about shale gas (“a game-changer”), his near-complete disregard for any unpleasant realities which might rain even a little on his happy parade, and point out where we wind up by allowing these repeated efforts at denying facts, offering at best disingenuous arguments, or in the worst cases, making stuff up to serve as “information” to the public.

If nothing else, citizens should easily appreciate that there are two sides to most stories. Facts (I hope) still matter. The storyline follows the same pattern as do most writings disputing Peak Oil (and climate change, along with too many observations from the Right about President Obama, for that matter. I’m currently running another series on that topic, which began here). It’s not hard to follow the common themes and “strategies” employed.

The primary question remains unchanged: Why do they do this?

In this particular instance, there’s more than a bit of irony in the title: “The Truth About Natural Gas From Shale.” Seems that a fair amount of “truth” went missing in this benign account of “myths associated with this resource and its method of extraction” and the author’s determination to explain “how the process actually works to help demystify it.” It’s a slick way of bypassing those messy facts, too.

The usual parameters offered by all who rely on unconventional resources as the answer to Peak Oil are duly noted here as well. Once again, “more jobs and government revenues” are promised, and is a comment undoubtedly true. I’m still waiting for these deniers to also mention in passing that alternative energy development also provides a healthy share of “more jobs and government revenues.”

So too do we find the careful suggestions that “[n]atural gas from dense shale rock formations … could become a significant new global energy source [my bold/italic].” Doubtful that most casual readers pause for even a moment at such qualifiers to ask appropriate follow-ups. (I offered some thoughts on the “could become’s” more than a year ago.)

Let’s dive in….

According to the Energy Information Administration (EIA), the U.S. has over 2500 trillion cubic feet (Tcf) of recoverable natural gas resources – 33% of which is natural gas from shale.  In just one decade, natural gas from shale has grown to around 25% of U.S. gas production and it will nearly double by 2035.  This is significant as it will continue to provide the United States with reliable, affordable energy and present economic benefits to regions of the country such as Pennsylvania, Ohio and Michigan.

A couple of comments for starters. The “2500 trillion cubic feet” statistic is more than a decade old. One should assume an oil industry executive would know that. One should also assume that information widely reported two full months before the author’s article was published indicated that the U.S. Department of Energy cut its estimate of the Marcellus reserves (the area of shale gas reserves running primarily through Pennsylvania, West Virginia, Ohio, and New York, and the subject matter of this article) from 410 trillion cubic feet of natural gas to 141 trillion cubic feet. Not a small adjustment….

Six months later, Richard Heinberg noted this about-face by The New York Times and one of its principal advocates of the “no energy worries” argument:

‘. . . the gas rush has . . . been a money loser so far for many of the gas exploration companies and their tens of thousands of investors.’ Krauss and Lipton go on to quote Rex Tillerson, CEO of ExxonMobil: ‘We are all losing our shirts today. . . . We’re making no money. It’s all in the red.’ It seems gas producers drilled too many wells too quickly, causing gas prices to fall below the actual cost of production.

And there’s this [ links/other references and sources are in the original article by Sharon Kelly at Grist, from which this quote is taken]:

The oil and gas industry doesn’t like to discuss is how hard it is to find the best places to drill for shale gas. Starting about a decade ago, drillers began offering investors some lofty rhetoric about the productivity of shale wells. They argued that they could pump this stuff in a “manufacturing model” whereby they could drop a well anywhere in a drilling zone (called a “shale play”) and it would be equally productive….
It is now clear that not all areas of shale play perform the same. Investors, small companies, and some landowners who expected sky-high royalties have been disappointed — even in the heart of drilling country….
Many drillers wind up in a tough spot because the contracts they signed with landowners require them to drill wells quickly — if they don’t, they lose their leasing rights. Many of these companies are deeply in debt; in fact, some of them are so leveraged that they’re raising eyebrows among federal and state regulators, who question whether companies broke the law by possibly providing inflated estimates to investors for the amount of gas that they could profitably bring to market.

In a terrific, thoroughly-researched 2011 report by J. David Hughes entitled “Will Natural Gas Fuel America in the 21st Century?”, Hughes pointed this out:

[T]he shale gas industry was motivated to hype production prospects in order to attract large amounts of needed investment capital; it did this by drilling the best sites first and extrapolating initial robust results to apply to more problematic prospective regions. The energy policy establishment, desperate to identify a new energy source to support future economic growth, accepted the industry’s hype uncritically. This in turn led Wall Street Journal, Time Magazine, 60 Minutes, and many other media outlets to proclaim that shale gas would transform the energy world.

Just a few facts, missing from the Chevron executive’s piece, which suggests a more-than-slightly different take on the promise of shale gas. Funny what even a little bit of evidence/reality can do to the no-energy-worries Happy Talk.

My point is not to call attention to the author’s motivations. What’s of much greater significance is that everyday citizens—having neither the time, nor interest, nor expertise, nor knowledge about the details of fossil fuel supply and production—need to understand that fact-free assurances have a downside.

Facts have an annoying habit of demonstrating that.

Just getting started on this.

* My Photo: Le Meridien Cancun Resort & Spa – 02.08.05

Sources:

[1] http://www.csmonitor.com/USA/2012/0422/With-all-this-natural-gas-who-needs-oil; With all this natural gas, who needs oil? by Alexandra Marks – 04.22.12

[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