Saturday, September 21, 2013

Snake Oil: How Fracking's Promise of Plenty Imperils Our Future

Book Review: Snake Oil: How Fracking’s Promise of Plenty Imperils Our Future by Richard Heinberg (Post Carbon Institute 2013 – Kindle Edition)

This is a decent book for the most part but perhaps misleading and definitely biased in some parts. It is not a balanced view of the debate about fracking as the title makes clear. He makes a good case for the current so-called “abundant” supply of cheap gas and oil in the U.S. from shale, being a temporary abundance – though perhaps not as temporary as he sees it IMO. The current glut is temporary especially with continued demand, continued worldwide overall depletion of oil and gas resources, and economic focus on growth. Current oil and gas reserves are defined in terms of total resource-in-place, technically recoverable reserves, and economically recoverable reserves. Technically recoverable reserves increase with better technologies for extracting them. Economically recoverable reserves increase with higher oil and gas prices. Both can increase with decreasing costs of extraction through various efficiencies which is something that has definitely occurred but is not highlighted in this book. The author is a geologist working on behalf of the Post-Carbon Institute and shows that he is quite knowledgeable of the oil and gas industry which is typically not the case with the myriad journalists and activists who write many widely read articles about it.

Heinberg divides the debate into teams. Team one is the “Cornucopians” – those who say we have abundant cheap energy supplies. This includes the oil and gas industry, its PR and bankers, the US Energy Information Administration (EIA), and the International Energy Agency (IEA). Team 2 consists of “an informal association of retired and independent petroleum geologists and energy analysts. He calls his team the “Peakists.” As he shows, previous to the shale gas and tight oil revolutions, the Peakists were winning as the rate of supply increase dropped and oil and gas prices climbed. He thinks that these high oil prices are what spurned the economic crises of 2008 though others see that as one of many factors. High oil and gas prices provided an incentive for drillers to experiment with new extraction techniques involving horizontal drilling and high-volume hydraulic fracturing. The tapping of shale gas resulted in a glut of supply in a few short years. Accompanying this glut is cheaper gas, much cheaper gas. Some estimates indicate that the avg. American household is saving about $1200 per year or more due to the shale gas revolution – something not mentioned in the book. Cheap gas also resulted in utility companies switching from burning coal to burning gas in their power plants which also resulted in lowering CO2 emissions from the US. Promotion of natural gas as a less expensive and cleaner burning transportation fuel also began.

Tight oil (really shale oil but called tight oil so as not to confuse it with another potential resource called oil shale) was also discovered in North Dakota and Texas in the Bakken and Eagle Ford formations. Oil production had been dwindling in the US since 1970 but has increased drastically in the last few years. The author notes that peak oil and the subsequent decline of the finite resource is obviously immanent at some point but when – which means when do we start preparing for it in earnest – is the question. Even the EIA concedes that oil production will begin declining again before the end of the decade. The author thinks that it will then decline much faster than the models predict. That remains to be seen. Heinberg thinks that the current oil and gas successes will be short-lived and that their long-term significance has been overstated. I think that depends who made the statement. If as the EIA suggests, that oil production will begin to decline before the end of the decade, then that is probably not an overstatement. The statement that we have 100 years or more of cheap gas, as some have suggested, is probably a significant overstatement. The author makes no bones about the fact that with this book he intends to arm the anti-fracking activists with his knowledge for their arsenal in their relentless war against the oil and gas industry. Such statements openly state the clear bias of the author.

While he correctly defines the inevitability of peak oil and decline of fossil fuels, the need to reduce greenhouse gas emissions, and the dire necessity to develop non-renewable energy and reduce usage, he blames the lack of action on these ‘declarations of abundance’ as well as corporate selfishness – overly so in my opinion. He correctly concludes that there are two reasons to reduce reliance on fossil fuels: environmental – the need to reduce ghg emissions and pollution and economic – the impending scarcity and cost increases of fossil fuels. While it may well be true that Exxon-Mobil has in the past funded climate-denial and anti-peak oil groups, most everyone including them now see such denials as increasingly without base. The biggest question is WHEN. When will fossil fuels become economically unrecoverable? When will climate tipping points be breached? When will we need to put forth every effort for energy conservation and non-renewable energy development? The unfortunate problem here is that there will be disagreements on the answers and that will likely delay needed action. However, markets will also drive things.

Currently abundant cheap gas supply may give some false hope as far as how long-term that will be, but it also gives us a chance to do some serious work in the next decade or two on climate, on pollution, and on establishment of renewables. There seem to be two camps among environmentalists: those who see natural gas as a “bridge fuel”, an opportunity, and those who reject that notion. The author clearly rejects it. He gives a mere 5 to 7 years of growth in shale gas and tight oil. Most in the industry would strongly refute that since companies are now drilling fewer wells for less money to get similar amounts of hydrocarbons as efficiencies improve, costs go down, and technology improves. While it is true there is a limit to such improvements and that the “sweet spots” will be drilled first, it seems his numbers are a bit off, perhaps way off. The author suggests that renewable projects are being hampered and rejected due to cheap oil and gas and this may well be true. I agree that is a façade we need to see through. Wind and solar projects need to be ramped up. Smart grids, distributed power hubs, and infrastructure for renewable power supply needs to increase now. Obama’s “all of the above” strategy is probably OK for the moment but for better or worse, investment is needed for clean energy ASAP, even though it will initially be an economic loss and would need to continue being subsidized, especially compared to increasing usage of currently available fossil fuels. While I agree with the author that there is over-hype and that may be dangerous, I think that most people can see through the hype, including many oil and gas industry executives. The author’s use of the derogatory terms employed by activists: shills, minions, hacks, and deniers – is basically conflict rhetoric that I think does more harm than good. The same can perhaps be said for terms used to describe activists though much less so , ie. “tree-huggers” , antis, and fractivists.

Basically, as the author notes, our industrial society is obviously very dependent on oil, especially as the main transportation fuel. Also obvious is that oil production will stop when it is no longer profitable. Many oil-producing countries, including the U.S. have surpassed peak oil a few decades ago. World peak oil is close at hand if not passed. The world oil production plateau that began in 2005 is probably the beginning of peak oil. Extractable oil depends on the price and the costs to extract so it is questionable how much time we have to wean our economies off of oil. There is no doubt we need to do it – ideally the sooner the better but that would cost. That does not mean we shouldn’t produce the oil we have now, that is rather inevitable. New discoveries help but the rate of new discoveries has not been increasing and it does appear that oil production is peaking. These days, the author notes, five barrels of oil are being consumed for every barrel produced. Some analysts think that oil reserves have been overstated by up to a third. Global annual decline has been in the range of 4-5% in recent years. New supply has kept up with decline for the last seven years but in order to keep up, both drilling and capital expenditure have increased. The author notes that the commencement of global oil decline will be dictated by geology, technology, politics, and the economy. He makes the pertinent note that EIA estimates include “refinery gains” which means that after oil is refined the volume increases as the denser crude oil is refined into less dense products of greater overall volume. Energy loss occurs in refinement. This can skew the numbers to make it seem like more oil is being produced domestically than really is. The IEA definition of oil also includes natural gas liquids (NGLs) which are less dense. Such NGLs can be liquefied at lower pressure and higher temperature than methane and are often sold in liquefied form, NGLs are only about 60% as energy dense as oil and are often used for other purposes such as a base for plastics – yet they are included in IEA oil supplies – which can be a bit misleading. Even more misleading is lumping biofuels and ethanol as oil since they often take nearly as much energy to produce as they provide. When oil begins to decline the price will go up which will increase demand in producing countries such as Saudi Arabia which will reduce net exports (which has happened since 2005). Such a scenario could potentially lead to political turmoil. Older industrialized nations (U.S., Japan, Europe) have been reducing oil demand due to improved fuel efficiency, poor economy, and less driving. Some analysts estimate that these nations will be shut out of the world export market as soon as 2025 since newer industrialized countries (China, India) will theoretically be able to afford to pay higher prices in the future as their economies still grow.

One of the key ideas introduced in this book (in 2 forms) is EROEI, which stands for energy return on energy invested. In the early glory days of the oil industry a barrel of oil worth of energy invested yielded a hundred barrels of oil = 100:1. According to a chart given comparing benefits of various EROEI numbers, the incremental benefits to society from 10:1 to 100+:1 are small but those from 1:1 (the point at which as much energy is needed to make an equivalent amount) to 10:1 are large. In other words when decreasing below 10:1 the EROEI requires more energy, people, money, and other resources to make the same amount of energy as before. This is known as the “energy cliff”. Currently, according to the author, energy sources like oil have an EROEI of ~10-25:1, tar sands 5:1, biofuels 1.7:1, and ethanol; 1.3:1 – so conventional oil is still quite economic compared to other sources. He mentions White’s Law, a concept in human ecology, which states that “the level of economic development possible in any society is determined by the amount of net energy available per capita.”  The author contends that EROEI is continually eating away at our economy in spite of new reserves and technological and efficiency improvements. There are some technological improvements that can temporarily slow it. He mentions improvements like pad drilling and rig mobility in the Eagle Ford shale play. More recently than this publication, even further improvements have been made so it is uncertain how fast EROEI is dropping or even if it is dropping at all at the moment. Certainly, it will resume dropping at some point. Again, the big question is when such tipping points will occur. The author things that EROEI is vastly underreported and veiled by pronouncements of a continued American oil and gas production boom. The second form is simply EROI – energy return on investment – since there are capital and environmental investments as well as energy investment.

From 2002 to 2011 the price of oil doubled twice and subsequently gasoline prices increased by a lesser, but roughly similar amount. From economic models it is estimated that a barrel of oil is energy-equivalent to 23,000 hours of human labor! The author thinks that oil decline will precipitate an historical era of economic contraction. The primary implication of peak oil is an end to economic growth. The idea that money, in the form of GDP, empowers the economy is not technically correct. It is energy, particularly cheap energy that empowers a growth economy. Future adjustments will include less mobility, redesigned cities, transportation and food systems, more efficient use of energy, and new sources of energy. A new economic paradigm without growth as the goal and more emphasis on natural resource conservation will be required.

The next section includes a history of hydraulic fracturing from 19th century techniques of “shooting” wells with explosives to initial hydraulic fracturing tests in the 1940’s to widespread use of “fracking” from the 1970’s onward to the high-volume hydraulic fracturing combined with horizontal drilling in shale formations pioneered by George Mitchell and Mitchell Energy in the early 1990’s Barnett Shale Play to the higher-volume hydraulic fracturing/horizontal drilling of today. The process involves breaking rock through hydraulic pressure, pumping sand into the cracks to hold them open, with gelled water (typically with food-grade agar) to better carry the sand into the cracks. Other chemical components include biocides to keep bacteria from destroying the qualities of the water, corrosion inhibitors to keep the pipe from being affected, and surfactants (soaps) to affect the desired surface tension of the water. One of the latest efficiency and technological improvements has been pad drilling (drilling multiple wells from a single pad). The author goes through the whole scenario of the steps of drilling an oil and gas well from geological surveys to leasing to permitting to building location to drilling the well to fracking the well to installing production equipment and producing the well. He suggests that oil and gas companies are not profiting at current gas prices – but that is simply untrue according to the investment presentations of many companies. The profit is down due to the current glut and prices so many companies have shifted to oil which is more profitable. Some of the oil-producing companies are the best performers in the stock market as well. The numbers given, at least in the Marcellus Play, show that profits are quite good in several areas of the play, especially those with accompanying NGLs.

Next, the author goes through the history of each shale play as it developed beginning with the Barnett Shale in the Fort Worth Basin of Texas which began in earnest in 1999. The Fayetteville Shale in Arkansas began in 2002. The Haynesville in Louisiana and Texas began in 2008. The most prolific shale gas field is the Marcellus in Pennsylvania, West Virginia, New York, Ohio, and potentially Maryland. It began in 2004 but not in earnest till about 2007 or 2008. It now produces more gas than any other field or area in the U.S. The author’s production numbers for these fields is a little outdated. He does mention that both the gas and oil fields have brought a large amount of gas and oil to market in a relatively short time – actually significantly more than his production numbers indicate. For instance, the author gives current Marcellus shale gas production at 5 BCF per day. The latest EIA number fro Marcellus gas is 9.3 BCF per day – nearly double – and that is with significantly reduced drilling and completion numbers due to low gas prices. The Utica Shale in Ohio and PA is mentioned as well. It is a newer play with abundant gas but the most economic part of the play is where NGLs are high in a narrow band of a half dozen or so counties in Ohio. The Eagle Ford oil (and associated gas and NGLs) play is the most economic oil play at present. The Bakken oil play in North Dakota is also still booming with its life possibly extended by improved completion design. Newer plays not mentioned with potentially excellent reserves include the Permian Basin Leonard and Wolfcamp plays, the Tuscaloosa Marine Shale, and others. The author is correct that overall U.S. shale gas production has leveled off at about 28 BCF/day (now about 29 BCF/day). This is due to price, storage field capacity, and pipeline capacity.

The author suggests that shale gas and tight oil was overhyped deliberately as a motive to attract investment capital. That is likely true to a point as it is a very common situation in business. He cites Aubrey McClendon, co-founder and former CEO of Chesapeake Energy, who is a rather controversial figure once called “America’s most reckless billionaire.” Another promoter is the analyst Daniel Yergin. T. Boone Pickens is another. Each has suggested we have over a hundred years of domestic affordable natural gas. McClendon and Pickens led efforts to convert vehicles to run on natural gas – which is currently a good investment with low natural gas prices. The author does not mention that many drilling rigs, frack pumps, semis, truck fleets, etc. now do run on natural gas and fueling infrastructure continues to improve for over-the-road travel. Large diesel users such as trains and ships are also being converted. While it is a slow process – the move to lighter hydrocarbons does decrease emissions as well as fuel costs – both significantly at present. That benefit may shrink as natural gas prices climb. The author suggests that initial reserve estimates for shale gas and tight oil focused more on reserves-in-place rather than technically recoverable, or the most important – economically recoverable – reserves. Both technically and economically recoverable reserves change due to various factors which are hard to predict so the question of “when” appears again. Much of the import of this book suggests that tipping points regarding economically recoverable reserves will occur sooner rather than later. I do not think he makes a good case for that. His number of 5-7 years seems way off to me. I would think 15-20 is a better estimate, particularly with what I know of geology, newer plays, potential for cost reduction, and variables affecting commodity prices. The author criticizes a 2012 report by Leonardo Maugeri – Oil: The Next Revolution. Maugeri is a senior manager at the Italian oil firm Eni and a senior fellow at Harvard. He described a scenario where U.S oil production would rival that of Saudi Arabia (~10 million barrels per day) by the end of the decade. This scenario has been debunked as the author thinks he confused “depletion rate” with “decline rate”. The author uses a graph called the “resource pyramid” to show that unconventional resources are the “bottom of the barrel” as they produce hydrocarbons from source rocks. Even so, some of these plays are very productive and economic even in today’s low gas price and moderate oil price environments. While the best reserves are usually produced first at less cost, there are surges in economic success due to technology (ie. horizontal drilling and high-volume hydraulic fracturing) that can rival previous successes.

The author sets out to prove that boom and bust cycles in oil and gas production are always unforeseen. Most people in the oil and gas industry are keenly aware of the often temporary nature of booms. Even so, there are better estimation techniques now than in the past and fields are developed more methodically to optimize recovery efficiencies. Some of the shale plays are so big in areal extent that it is difficult to drill very many wells in a short time. The author harps on the high decline rates of shale wells. He notes Arthur Berman’s analyses of early shale plays such as the Barnett and Haynesville, where there were high decline rates, expensive wells, and less reserves than in some of the more prolific plays like the Marcellus. The Barnett continues to be drilled in oil and liquids rich areas but the Haynesville is considered borderline economic to drill at present. That could change with a modest rise in gas prices. The author also cites his colleague at the Post-Carbon Institute, David Hughes’s work – Drill Baby Drill – and energy analyst Bill Power’s recent book – Cold, Hungry, and in the Dark: Exploding the Natural Gas Supply Myth. While the author concedes that shale gas production has been impressive:

“Natural gas production in the United States is now higher than at any point in history, and shale gas currently makes up 40% of America’s natural gas production. Considering how quickly this new technology has been deployed, this is an impressive achievement.”

He notes that just six plays make up 88% of production and that each play has its own ‘resource pyramid’ where the sweet spots are drilled first. What he doesn’t mention is that an unconventional resource play (ie. shale gas) is different than a conventional play in that there are no “dry holes” and that the difference between sweet spots and lesser areas is often not so great, especially for plays like the Marcellus which has shown excellent production over a wide geographical area. Hughes analysis disputes that shale gas wells will produce for 40 years as curves estimate but he does not take into account that plays such as the Marcellus have considerable amounts of desorbed gas that releases slowly due to pressure drawdown. That is one reason why many Devonian shale wells in the Appalachian basin have produced at moderate rates for over 100 years. Wells are also worked over, re-fracked, drilled and tested in different intervals in the same wellbore, etc. Most operators of wells now include along with initial rates, 30-day rates, and 12 month rates. In many cases the 12 month rates are showing lower decline rates than Hughes analysis suggests where he says 80-95% decline rates in 36 months are typical. Some of the earliest wells in the plays – those that have a longer production history – utilized drilling, targeting, and frack designs that have been drastically improved so they may not be typical of wells drilled in the past year or two. They also had shorter lateral lengths which is a direct measurement of access of gas-bearing rock. Lateral lengths have doubled and tripled from the first few years in the plays. Other techniques such as secondary recover of oil through CO2 injection, down-spacing of wells, zipper fracks of multiple wells, and shorter distance between frack stages could improve recovery factors of the plays. There have also been constraints on getting wells to production such as pipeline availability and capacity which have slowed production. So based on these data – his decline rates are probably not typical. None of this is mentioned in the book. The authors call the rush to replace declining shale gas production a “tread mill to hell” but this remains to be seen. In the last few years gas drilling has been cut to less than half of what it was and production is still increasing. Some of this is due to delays in completing wells for production but much of it is also due to increased production from longer laterals, better frac design, and better placement of wells and target zones. The author notes that since 1990 the avg. well productivity has declined 38% but this is misleading and has nothing to do with shale gas which really began coming in earnest about 4 or 5 years ago. Avg. production per well from 1990-2008 is probably far less than that from 2008 through 2013.

The author notes decline rates in the Bakken and Eagle Ford. He suggests that Eagle Ford wells decline to “stripper well” status of 15 barrels a day in less than 3 years. I have seen other analyses that show it will take 10 years or more and that the modest production will continue up to 30 years. The author and Hughes suggest that oil independence for the U.S. will not be achieved – and I would definitely agree – through shale tight oil, of which 80% now comes from the Bakken and Eagle Ford. The Monterey Shale of California is touted as another large resource but the geology may be problematic and so far it has not been successfully tapped.

Also questioned is whether the shale resources of the rest of the world can be successfully developed. Progress has been slow, guarded, and wrought with difficulties such as protest so far. Estimates of reserves in places like Poland and China are debatable. Potential plays in China are deeper and have higher clay content which inhibits fracturing. Infrastructure and availability of service companies is sparse. Environmental opposition is greater and is not mitigated like in the U.S. where property owners own mineral rights and can bypass opposition. The author suggests that property owners making money will gladly look away from environmental damage. This may be the case in rare circumstances but I do not think it is the norm.  

The author and Hughes give examples where the EIA and the IEA have overestimated future production to suggest that they have also overestimated future production from shale plays. They do not suggest that this is deliberate.

“Fracking gives our current energy system a brief, fragile reprieve. New extraction technology cannot return us to the bygone era of cheap energy and easy economic growth. The best it can do is buy us a few years of relative economic stability in which to develop alternative energy resources and build low-energy transport and food systems.”

I agree with that statement. I just give it a few more years than the author does.

Next, the author delves into the potential environmental problems associated with oil and gas extraction, some of those which are particular to high-volume hydraulic fracturing. There is potential for groundwater contamination when drilling through an aquifer, especially through increased gas migration from a gas-bearing formation near the potable water zone. This is mainly isolated to certain areas. Fracking uses large amounts of water. This is generally not a concern in most parts of the country but is a problem in the west and southwest U.S. where water tables have already dropped via drought and agricultural usage. Another problem is storing and disposing of frack wastewater, often tainted with radioactive shale particles and some frack chemicals. Most of this is reused. Some is disposed of in underground injection wells. The so-called toxic water is less toxic than the saltwater and hydrocarbons already there. The industry has been moving away from open pits for some time though they are still used for temporary containment. These may affect wildlife but that has been debatable. Fracking wastewater should not be disposed of in municipal waste-water plants. The oil and gas industry is fond of pointing out that there is no known case of water contamination from hydraulic fracturing. There was a possible case near Pavilion, Wyoming but so far it has been inconclusive. The EPA is still working on standards for disposal of frackwater. Early in the Marcellus play there was disposal into rivers through municipal wastewater systems which proved to be a bad idea. That practice was stopped in early 2011. Increases in salts such as bromides were recorded in some rivers but it had not been conclusively proven that the frack wastewater was the source. Building of well pads may have led to small increases in – total suspended solids (TSS). Better well cementing techniques have resulted in less gas migration – the most common, but overall rare, form of water contamination. The author does make the important statement that as more wells are drilled to keep up with demand and well declines – there will be more chance for accidents, spills, and contamination. For this reason we should support strict fluid containment strategies and regulations. Casing leaks from very old wells could become a problem in the distant future as well as wells get old and cement shrinks. This would mostly mean slight increases in already occurring methane in water wells in certain areas. The author (and many activists) think that nondisclosure agreements in contamination lawsuits are proof that cases of contamination are not being reported but the companies being sued cite the potential for greater publicity problems. Often they do not admit guilt but do settle damages in order to make the problem go away – whether there was real contamination or not. Most of the flammable water tap stories have either been fabricated or were existing conditions. I have personally met several local residents in northeast Pennsylvania who said there were flaming water taps long before oil and gas drilling came to the area. The water there contains methane. While there have been some recent studies that have shown that areas near drilling have shown increases in water well methane there are other possibilities as well such as recent flooding. It should be noted that gas migration due to drilling through an aquifer would occur in any well drilled through the gas bearing formation, including water wells that were drilled too deep. It is not unique at all to newer drilling techniques and has nothing at all to do with hydraulic fracturing.

Another potential environmental issue with much confusion is leaking methane. This issue was brought up in very-well debunked paper by scientists at Cornell University who also happen to be anti-fracking activists – Robert Howarth and Anthony Ingrafea. Howarth’s study estimated methane leakage at a very high rate – just enough to suggest that methane leakage cancelled out any benefits of gas extraction and burning over coal burning. Even other scientists at Cornell have debunked this study which made serious errors concerning how gas is handled at well sites. After this report the EPA issue standards requiring so-called “green completions” and most companies implemented them long before the deadlines which have yet to occur. Other studies, including recent large ones with direct measurements show that methane leakage is in line – or more likely less – than that determined in studies by the EPA, MIT, NETL, and others, which were far less than Howarth’s and show very clearly the large ghg advantages of gas over coal. An NOAA study over gas fields in Colorado came up with numbers that seem to be vastly overstated as the amount of gas they suggest is not even plausible as that much leakage (and loss of sellable product) would be readily apparent. There are still some issues with air sampling methods and in the NOAA case, the nearness of other sources such as a major highway. The most recent and largest direct study by University and Texas and the Environmental Defense Fund shows that methane leakage has been vastly overstated. Even so, Joe Romm of Climate Progress has suggested that they just missed the “super-emitters”. Leaks are routinely searched for by those in the industry and even small leaks can be detected. So-called super emitters could easily be detected and repaired with benefits of selling the lost gas. Such a scenario is probably BS. The author strongly agrees with Howarth, the NOAA, and his colleague David Hughes that fugitive methane emissions make gas worse than coal for climate change. This is a key issue and the evidence as well as scientific consensus is stacked against them. It is good that this is being debated since it will lead to better attending to leak detection and repairing. But if this issue is resolved there can be no doubt about that natural gas has a lower carbon footprint than coal, not to mention all the other pollutants form coal.

The author notes increased ground-level ozone around wastewater ponds. I am unfamiliar with this as I have not seen anything about it in the pro or anti media. Dr. Theo Coburn’s study of endocrine disruptors near hydrocarbon wells has also been widely criticized. Such studies should of course continue to get to the truth of the matter but nothing has been proven harmful or safe. I agree that excessive flaring of gas in North Dakota due to lack of pipeline infrastructure needs to be discontinued. This is harmful and not necessary. There are companies now such as Continental Petroleum and others who practice “flareless completions” and such should be mandatory.

Anecdotal stories of human and animal sickness abound near drill sites. They increased dramatically with publicity which is likely no accident. Personally, I think it is the Placebo Effect. So-called “Wind Turbine Syndrome” may possibly be another version of it. The Placebo Effect is very real and exemplifies the mind-body connection to health, whether towards healing or illness. None of these anecdotes have been proven. There are health professionals and toxicologists that favor both views, real or placebo. Some point out that many of the symptoms are very common and can be attributed to many causes. There is no documented higher level of illness among oil and gas workers anywhere that I know of so to me that is rather telling.

Land issues include disturbance. Truck traffic was a big problem but has been significantly reduced through better water and wastewater management practices. Locations are constructed and reclaimed to state standards which have been improving. Frack sand mines in Wisconsin and Minnesota have been touted as further damage to the environment. The biggest problem there is probably silica dust and the states are working to improve regulations. 

The author talks about jobs and economic improvement of communities, suggesting that the gains are temporary and destructive in the long run. He cites Bradford County, Pennsylvania as an example. Since I have worked in this county since 2006 I have an idea about what is going on there. I have talked to many people there and most people seem positive about the industry even though it has had some down-turning in the past year or two. The author compares it to poverty-stricken coal areas of West Virginia, a bad analogy in my opinion. He cites road damage problems in Texas. While that may be a problem there I have seen roads improve quite a bit in Pennsylvania.

The author thinks that the gas industry is doing everything possible to drive up the price of gas to increase profit. While there are profit motives, doing that would erode their credibility. He gives planned LNG exports as an example which can be sold at a much higher price to India, Japan, and other countries. Such exports will probably not be in large amounts as indicated. The gas industry can make good profits at slightly higher prices and will keep demand at home on gas with lower rather than higher prices. Fuel-switching to dirtier coal would occur at a certain price. So I would say that the gas industry would prefer trends where they could make a decent profit at a steady pace without disruptions rather than a larger profit in the near-term with greater uncertainties in the long-term.

Heinberg is one of those that see shale gas as another bubble, over-hyped by investors. While there may be some truth to a rush for easily obtainable investment capital it was also the land rush that required drilling wells in a short-time. This is still the case as companies drill to hold leases. The author cites former Wall Street analyst Deborah Rogers’ contention that the gas glut was purposely orchestrated. This is extremely unlikely. Companies were defining, exploring, and finding ways to produce more gas and oil from these various new plays with new technologies which was simply more expensive in the beginning. Techniques were worked out for a few years or more and then efficiencies and results got much better.   

The author cites the unlikelihood of economically tapping resources such as methane hydrates and oil shales (more properly kerogen or not fully cooked oil which requires energy to finish). Tar sands require high oil prices and low gas prices (since gas is used for heat in their extraction) in order to be economic. They also have a higher carbon footprint than conventional and tight oil.

Falling EROEI for hydrocarbons means that their extraction will consume a larger and larger chunk of GDP. The author concludes that there is a battle between geology and technology and that geology will win. I agree, but again the question is when.

EROEI is improving for renewables and descreasing for fossil fuels but renewables have a long way to go. Intermittent supply problems, blackouts, and brownouts (which damage electronic devices) are common with unsupported renewable grids. Germany, Denmark, and Portugal have implemented renewable power en masse. Texas actually produces 30% of its power from wind – on some days. Still, renewable growth has not even kept up with growth in electricity demand. Non-fossil fuel transportation solutions are all problematic. Electric cars are the best scenario at present. Optimists like Mark Jacobson at Stanford think we can power the world with renewables in 20-40 years without economic sacrifice. Others suggest vast expenses and engineering problems. The author writes off nuclear power as both too risky and too expensive.

The author gives several possible scenarios based on changing oil, gas, and coal prices, and economic downturns – none of which are good. I do agree that shit will hit the fan soon enough but again I give it a few more years. He is not the only one watching and reacting to these trends. I agree with him that we have an “energy-economy-climate conundrum.” I also agree with his bottom line: that we must reduce our dependency on fossil fuels ASAP. Weaning off of the most polluting one first, coal, seems to be already occurring as the EPA sets rules for new and existing power plants. The whole process will take time and I believe that shale gas especially can be helpful. I think it can be a bridge fuel, especially helpful to the climate, if the process is well-played. 

Although I disagree with a lot of the details in this book I do agree with the bottom line stated above (we must reduce our dependency on fossil fuels ASAP) and that is what really matters. There will be challenges in the future and they will revolve around energy, economy, environment, and climate.      


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