Future of Fracking Not Nearly as Bright as Forecasted
Post Carbon Institute has published a report calling into question the production statistics touted by promoters of hydraulic fracturing or fracking. By calculating the production numbers on a well-by-well basis for shale gas and tight oil fields throughout the U.S., Post Carbon concludes that the future of fracking is not nearly as bright as industry cheerleaders suggest.
The report, Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom, authored by Post Carbon fellow J. David Hughes, updates an earlier report he authored for Post Carbon in 2012.
Hughes analyzed the production stats for seven tight oil basins and seven gas basins, which account for 88 percent and 89 percent of current shale gas production.
Among the key findings:
- By 2040, production rates from the Bakken Shale and Eagle Ford Shale will be less than a tenth of that projected by the Energy Department. For the top three shale gas fields—the Marcellus Shale, Eagle Ford and Bakken—production rates from these plays will be about a third of the U.S. Energy Infromation Administration (EIA) forecast.
- The three year average well decline rates for the seven shale oil basins measured for the report range from an astounding 60 percent to 91 percent. That means over those three years, the amount of oil coming out of the wells decreases by that percentage. This translates to 43 percent to 64 percent of their estimated ultimate recovery dug out during the first three years of the well's existence.
- Four of the seven shale gas basins are already in terminal decline in terms of their well productivity: the Haynesville Shale, Fayetteville Shale, Woodford Shale and Barnett Shale.
- The three year average well decline rates for the seven shale gas basins measured for the report ranges between 74 percent to 82 percent.
- The average annual decline rates in the seven shale gas basins examined equals between 23 percent and 49 percent. Translation: between one-quarter and one-half of all production in each basin must be replaced annually just to keep running at the same pace on the drilling treadmill and keep getting the same amount of gas out of the earth.
The report’s findings differ vastly from the forward-looking projections published by the EIA, a statistical sub-unit of the U.S.Department of Energy (DOE).
The findings also come just days after Houston Chronicle reporter Jennifer Dlouhy reported that in a briefing over the summer, EIA Administrator Adam Sieminski told her it was EIA’s job to “tell the industry story” about tight oil and shale gas production.
“We want to be able to tell, in a sense, the industry story,” Sieminski told Dlouhy, as reported in the Chronicle. “This is a huge success story in many ways for the companies and the nation, and having that kind of lag in such a rapidly moving area just simply isn't allowing that full story to be told.”
The independent story, though, opens up a window to tell a different tale.
“The Department of Energy’s forecasts—the ones everyone is relying on to guide our energy policy and planning—are overly optimistic based on what the actual well data are telling us,” Hughes—a geoscientist who formerly analyzed energy resources for over three decades for the Geological Survey of Canada—said in a press release about the reporting’s findings.
“By asking the right questions you soon realize that if the future of U.S. oil and natural gas production depends on resources in the country’s deep shale deposits … we are in for a big disappointment in the longer term.”
“Sweet Spots” and the “Drilling Treadmill”
According to Hughes’ number-crunching, four of the top seven shale gas fields have already peaked: the Haynesville, Barnett, Woodford and Fayetteville. But three of those are actually doing the opposite and increasing their production: the Marcellus, Eagle Ford and Bakken, though the latter two are primarily fracked oil fields.
Further, the report points to the phenomenon first discussed in the original Post Carbon report back in 2012: that of the “drilling treadmill,” or having to drill more and more wells just to keep production levels flat. The report argues that drillers hit the “sweet spots” first to maximize their production, do so for a few years until production begins to decline terminally, and then start drilling in spaces with less rich oil and gas bounties.
A case in point: Post Carbon projects the Bakken and Eagle Ford Shale basins—the two most productive oil plays—will produce 730,000 barrels of oil per day in 2040. EIA, meanwhile, says 1.04 million barrels per day of oil will be pumped from the ground at that point.
“One of the keys to the so-called ‘shale revolution’ is supposed to be technological innovation, making plays ever-more productive in the face of the steep well decline rates and the move from ‘sweet spots’ to lower quality parts of plays,” wrote Post Carbon in an introduction to the report for members of the media. “But despite years of concerted efforts, average well productivity has gone flat in all the major shale gas plays except the Marcellus.”
The Bakken and Eagle Ford serve as Exhibit A and Exhibit B of the mechanics of how the “sweet spot” phenomenon works in action.
“Field declines from the Bakken and Eagle Ford are 45% and 38% per year, respectively,” wrote Hughes in the executive summary. “This is the amount of production that must be replaced each year with more drilling in order to maintain production at current levels.”
For gas, it’s the same story, centering around “sweet spots” and the “drilling treadmill.”
EIA Guessing at Numbers and Figures?
So where do the EIA’s rosy statistics originate? Post Carbon Institute posed its own questions directly to the EIA, while also saying one has to look at the difference between proven and unproven reserves to understand EIA's data.
“Shale gas producers and the EIA report ‘proved reserves,’ a definition with legal weight describing hydrocarbon deposits recoverable with current technology under current economic conditions,” they write. “The EIA also estimates ‘unproved technically recoverable resources’ which have loose geological constraints and no implied price required for extraction, and hence are uncertain.”
Also implicit in the rosy numbers and figures is that cash will continue to be injected into capital-intensive shale gas and oil production operations.
So far, the industry and its financiers have received a blessing from the U.S.Federal Reserve: zero percent interest rates to obtain junk debt bonds to finance fracking since 2008. But with the Federal Reserve considering hiking rates, economics could change quickly on the feasibility of continued unfettered shale oil and gas extraction.
Hughes said his findings are based on “best case scenarios” and rule out external conditions that could reverse the drilling treadmill, including hiked interest rates.
“Other factors that could limit production are public pushback as a result of health and environmental concerns, and capital constraints that could result from lower oil or gas prices or higher interest rates,” he wrote. “As such factors have not been included in this analysis, the findings of this report represent a ‘best case’ scenario for market, capital, and political conditions.”
False Premises, False Promises
The Obama Administration’s climate and energy policy rides on the assumption of decades more domestic oil and gas obtained from fracking.
Indeed, the shale boom has created a revolution of sorts for corporate interests across the supply chain from the world of plastics to manufacturing to the pipeline business and far beyond, creating something akin to a “complex.”
Asher Miller, executive director for Post Carbon Institute, said the enthusiasm in what to some may seem like a nearly infinite future of shale oil and gas is a “false premise” that has manufactured “false promises.” Hughes echoed these sentiments in the report's conclusion.
“The assumption that natural gas will be cheap and abundant for the foreseeable future has prompted fuel switching from coal to gas, along with investment in new generation and gas distribution infrastructure, investment in new North American manufacturing infrastructure, and calls for exporting the shale gas bounty to higher-priced markets in Europe and Asia,” he wrote.
“Given these assumptions—and the investments being made and planned because of them—it is important to understand the long-term supply limitations of U.S.shale gas,” Hughes suggests.
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By Deborah Moore, Michael Simon and Darryl Knudsen
There's some good news amidst the grim global pandemic: At long last, the world's largest dam removal is finally happening.
A young activist for a free-flowing Salween River. A team of campaigners and lawyers from EarthRights International joined Indigenous Karen communities on the Salween in 2018 to celebrate the International Day of Actions for Rivers on March 14. This year, EarthRights joined communities living in the Eu-Wae-Tta internally displaced persons camp for a celebration in solidarity with those impacted by dam projects on the Salween River. EarthRights International<p>The dam removal project is a sign of the decline of the hydropower industry, whose fortunes have fallen as the <a href="https://www.bbc.com/news/science-environment-46098118" target="_blank" rel="noopener noreferrer">troubling</a> cost-benefit ratio of dams has become clear over the years. The rise of more cost-effective and sustainable energy sources (including wind and solar) has hastened this shift. This is exactly the type of progress envisioned by the <a href="https://www.yumpu.com/en/document/read/17023836/dams-and-development-a-new-framework-for-decision" target="_blank" rel="noopener noreferrer">World Commission on Dams</a> (WCD), a global multi-stakeholder body that was established by the World Bank and International Union for Conservation of Nature in 1998 to investigate the effectiveness and performance of large dams around the world. The WCD released a damning landmark <a href="https://www.un.org/press/en/2000/20001117.dam.pressconferencepm.doc.html" target="_blank" rel="noopener noreferrer">report</a> in November 2000 on the enormous financial, environmental and human costs and the dismal performance of large dams. The commission spent <a href="https://www.un.org/press/en/2000/20001117.dam.pressconferencepm.doc.html" target="_blank" rel="noopener noreferrer">two years</a> analyzing the outcome of the trillions of dollars invested in dams, reviewing dozens of case studies and testimonies from over a thousand communities and individuals, before producing the report.</p><p>But despite this progress, we cannot take hydropower's decline as inevitable. As governments around the world plan for a post-pandemic recovery, hydropower companies sense an opportunity. The industry is eager to recast itself as climate-friendly (<a href="https://www.ecowatch.com/how-green-is-hydropower-1919539525.html" target="_self">it's not</a>) and <a href="https://www.hydropower.org/covid-19" target="_blank">secure</a> precious stimulus funds to revive its dying industry — at the expense of people, the environment and a truly just, green recovery.</p>
Hydropower’s Troubling Record<p>The world's largest hydropower dam removal project on the Klamath River is a significant win for tribal communities. But while the Yurok and Karuk tribes <a href="https://www.karuk.us/images/docs/press/bring_salmon_home.php" target="_blank">suffered</a> terribly from the decline of the Klamath's fisheries, they were by no means alone in that experience. The environmental catastrophe that occurred along the Klamath River has been replicated all over the world since the global boom in hydropower construction <a href="https://www.nationalgeographic.com/environment/article/hydropower" target="_blank">began</a> early in the 20th century.</p><p>The rush to dam rivers has had huge consequences. After decades of rampant construction, only <a href="https://www.nationalgeographic.com/environment/2019/05/worlds-free-flowing-rivers-mapped-hydropower/" target="_blank">37 percent of the world's rivers remain free-flowing</a>, according to <a href="https://www.nature.com/articles/s41586-019-1111-9" target="_blank" rel="noopener noreferrer">one study</a>. River fragmentation has <a href="https://academic.oup.com/bioscience/article/70/4/330/5732594" target="_blank" rel="noopener noreferrer">decimated freshwater habitats and fish stocks</a>, threatening food security for millions of the world's most vulnerable people, and hastening the <a href="https://www.forbes.com/sites/jeffopperman/2020/10/13/freshwater-wildlife-continues-to-decline-but-new-energy-trendlines-suggest-we-can-bend-that-curve/?sh=f9d175a61ee4" target="_blank" rel="noopener noreferrer">decline of other myriad freshwater species</a>, including mammals, birds and reptiles.</p><p>The communities that experienced the most harm from dams — whether in Asia, Latin America or Africa — often lacked political power and access. But that didn't stop grassroots movements from organizing and growing to fight for their rights and livelihoods. The people affected by dams began raising their voices, sharing their experiences and forging alliances across borders. By the 1990s, the public <a href="https://tinyurl.com/y55lnlst" target="_blank" rel="noopener noreferrer">outcry</a> against large dams had grown so loud that it finally led to the establishment of the WCD.</p><p>What the WCD found was stunning. While large dam projects had brought some economic benefits, they had also <a href="https://www.irn.org/wcd/" target="_blank" rel="noopener noreferrer">forcibly displaced an estimated 40 to 80 million people in the 20th century alone</a>. To put that number into perspective, it is more than the current population of present-day <a href="https://data.worldbank.org/indicator/SP.POP.TOTL?locations=FR" target="_blank" rel="noopener noreferrer">France</a> or the <a href="https://data.worldbank.org/indicator/SP.POP.TOTL?locations=GB" target="_blank" rel="noopener noreferrer">United Kingdom</a>. These people lost their lands and homes to dams, and often with no compensation.</p><p>Subsequent research has compounded that finding. A paper published in <a href="https://tinyurl.com/c7uznz" target="_blank" rel="noopener noreferrer">Water Alternatives</a> revealed that globally, more than <a href="https://tinyurl.com/yxw8x7ab" target="_blank" rel="noopener noreferrer">470 million people living downstream from large dams</a> have faced significant impacts to their lives and livelihoods — much of it due to disruptions in water supply, which in turn harm the complex web of life that depends on healthy, free-flowing rivers. The WCD's findings, released in 2000, <a href="https://www.irn.org/wcd/" target="_blank" rel="noopener noreferrer">identified</a> the importance of restoring rivers, compensating communities for their losses, and finding better energy alternatives to save rivers and ecosystems.</p>
Facing a New Crisis<p>Twenty years after the WCD uncovered a crisis along the world's rivers and recommended a new development path — one that advances community-driven development and protects freshwater resources — we find ourselves in the midst of another crisis. The global pandemic has hit us hard, with surging loss of life, unemployment and instability.</p><p>But as governments work to rebuild economies and create job opportunities in the coming years, we have a choice: Double down on the failed, outdated technologies that have harmed so many, or change course and use this transformative moment to rebuild our natural systems and uplift communities.</p><p>There are many reasons to fight for a green recovery. The climate is changing even <a href="https://www.nature.com/articles/d41586-018-07586-5" target="_blank" rel="noopener noreferrer">faster</a> than expected, and some dams — especially those with reservoirs in hot climates — <a href="https://tinyurl.com/w6w29t8" target="_blank" rel="noopener noreferrer">have been found to emit more greenhouse gases than a fossil fuel power plant</a>. Other estimates have put global reservoirs' human-made greenhouse gas emissions each year on par with <a href="https://www.climatecentral.org/news/greenhouse-gases-reservoirs-fuel-climate-change-20745" target="_blank" rel="noopener noreferrer">Canada's</a> total emissions.</p><p>Meanwhile, we now understand that healthy rivers and freshwater ecosystems play a <a href="https://www.environment.gov.au/system/files/resources/b55b1fe4-7d09-47af-96c4-6cbb5f106d4f/files/wetlands-role-carbon-cycle.pdf" target="_blank" rel="noopener noreferrer">critical role in regulating and storing carbon</a>. And at a time when <a href="https://www.un.org/sustainabledevelopment/blog/2019/05/nature-decline-unprecedented-report/" target="_blank" rel="noopener noreferrer">biodiversity loss is soaring</a>, anything we can do to <a href="https://academic.oup.com/bioscience/article/70/4/330/5732594" target="_blank" rel="noopener noreferrer">restore habitat is key</a>. But with <a href="https://www.researchgate.net/publication/271996520_A_Global_Boom_in_Hydropower_dam_Construction" target="_blank" rel="noopener noreferrer">more than 3,700 major dams proposed or under construction</a> in the world (primarily in the Global South, with over <a href="https://news.mongabay.com/2020/08/more-than-500-dams-planned-inside-protected-areas-study/" target="_blank" rel="noopener noreferrer">500 of these in protected areas</a>), according to a 2014 report — and the hydropower industry <a href="https://www.hydropower.org/covid-19" target="_blank" rel="noopener noreferrer">jockeying</a> for scarce stimulus dollars — we must act urgently.</p>
Signs of Hope<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTcxMzUyMS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYxOTcyNTc3OX0.EbqBVPs2kjhrY5AqnZXOb_GX-s6pw4qyJmmeISzKA6U/img.png?width=980" id="a81d0" class="rm-shortcode" data-rm-shortcode-id="87bc79d69f72e9334a78da8e0355e6ae" data-rm-shortcode-name="rebelmouse-image" data-width="1620" data-height="1068" />
Fish catch at the Siphandone on the Mekong River, prior to the completion of the Don Sahong Dam. Pai Deetes / International Rivers<p>So what would a strong, resilient and equitable recovery look like in the 21st century? Let's consider one example in Southeast Asia.</p><p>Running through six countries, the Mekong River is the world's 12th-longest river, which is home to one of the world's most biodiverse regions, and includes the world's <a href="https://www.worldwildlife.org/places/greater-mekong#" target="_blank" rel="noopener noreferrer">largest</a> inland fishery. Around <a href="https://tinyurl.com/y6jrarjo" target="_blank" rel="noopener noreferrer">80 percent of the nearly 65 million people</a> who live in the Lower Mekong River Basin depend on the river for their livelihoods, according to the Mekong River Commission. In 1994, Thailand built the Pak Mun Dam on a Mekong tributary. <a href="https://tinyurl.com/y5ekfp4h" target="_blank" rel="noopener noreferrer">Six years later</a>, the <a href="https://tinyurl.com/yxcvs6up" target="_blank" rel="noopener noreferrer">WCD studied the dam's performance</a> and submitted its conclusions and recommendations as part of its final report in 2000. According to the WCD report, the Pak Mun Dam did not deliver the peaking energy service it was designed for, and it <a href="https://tinyurl.com/y38p3jaw" target="_blank" rel="noopener noreferrer">physically blocked a critical migration route</a> for a range of fish species that migrated annually to breeding grounds upstream in the Mun River Basin. Cut off from their customary habitat, fish stocks plummeted, and so did the livelihoods of the local people.</p><p>Neighboring Laos, instead of learning from this debacle, followed in Thailand's footsteps, <a href="https://tinyurl.com/y4eaxcq2" target="_blank" rel="noopener noreferrer">constructing two dams on the river's mainstem</a>, Xayaburi Dam, commissioned in 2019, and Don Sahong Dam, commissioned in 2020. But then a sign of hope appeared. In early 2020, just as the pandemic began to spread across the world, the <a href="https://www.theguardian.com/world/2020/mar/20/cambodia-scraps-plans-for-mekong-hydropower-dams" target="_blank" rel="noopener noreferrer">Cambodian government reconsidered its plans to build more dams on the Mekong</a>. The science was indisputable: A government-commissioned report showed that further dams would <a href="https://www.theguardian.com/environment/2018/may/16/leaked-report-warns-cambodias-biggest-dam-could-literally-kill-mekong-river" target="_blank" rel="noopener noreferrer">reduce the river's wild fisheries, threaten critically endangered Irrawaddy dolphins</a> and <a href="https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2013WR014651" target="_blank" rel="noopener noreferrer">block nutrient-rich sediment from the delta's fertile agricultural lands</a>.</p><p><a href="https://data.opendevelopmentmekong.net/dataset/4f1bb5fd-a564-4d37-878b-c288af460143/resource/5f6fe360-7a68-480d-9ba4-12d7b8b805c9/download/volume-3_solar-alternative-to-sambor-dam.pdf" target="_blank" rel="noopener noreferrer">Studies</a> show that Cambodia didn't need to seek billions of dollars in loans to build more hydropower; instead, it could pursue more cost-effective solar and wind projects that would deliver needed electricity at a fraction of the cost — and <a href="https://www.worldwildlife.org/press-releases/wwf-statement-on-cambodian-government-s-decision-to-suspend-hydropower-dam-development-on-the-mekong-river" target="_blank">without the ecological disasters to fisheries and the verdant Mekong delta</a>. And, in a stunning reversal, Cambodia listened to the science — and to the people — and <a href="https://www.theguardian.com/world/2020/mar/20/cambodia-scraps-plans-for-mekong-hydropower-dams" target="_blank">announced</a> a 10-year moratorium on mainstream dams. Cambodia is now <a href="https://www.voanews.com/east-asia-pacific/cambodia-halts-hydropower-construction-mekong-river-until-2030" target="_blank">reconsidering</a> its energy mix, recognizing that mainstream hydropower dams are too costly and undermine the economic and cultural values of its flagship river.</p>
Toward a Green Recovery<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTcxMzUwOS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MTMwMjk0M30.0LZCOEVzgtgjm2_7CwcbFfuZlrtUr80DiRYxqKGaKIg/img.jpg?width=980" id="87fe9" class="rm-shortcode" data-rm-shortcode-id="e6b9bfeb013516f6ad5033bb9e03c5ec" data-rm-shortcode-name="rebelmouse-image" data-width="2100" data-height="3086" />
Klamath River Rapids. Tupper Ansel Blake / U.S. Fish and Wildlife Service<p>Increasingly, governments, civil servants and the public at large are rethinking how we produce energy and are seeking to preserve and restore precious freshwater resources. Dam removals are increasing exponentially across <a href="https://www.americanrivers.org/wp-content/uploads/2020/02/DamsRemoved_1999-2019.pdf" target="_blank">North America</a> and <a href="https://damremoval.eu/wp-content/uploads/2019/03/DRE-policy-Report-2018-digitaal-010319.pdf" target="_blank">Europe</a>, and movements advancing <a href="https://www.rightsofrivers.org/" target="_blank">permanent river protection are growing across Latin America, Asia and Africa</a>.</p><p>We must use the COVID-19 crisis to accelerate the trend. Rather than relying on old destructive technologies and industry claims of newfound "<a href="https://www.hydrosustainability.org/news/2020/11/12/consultation-on-a-groundbreaking-global-sustainability-standard-for-hydropower" target="_blank">sustainable hydropower</a>," the world requires a new paradigm for an economic recovery that is rooted both in climate and economic justice as well as river stewardship. Since December 2020, hundreds of groups and individuals from more than 80 countries have joined the <a href="https://www.rivers4recovery.org/" target="_blank" rel="noopener noreferrer">Rivers4Recovery</a> call for a better way forward for rivers and natural places. This paradigm will protect our rivers as critical lifelines — supporting fisheries, biodiversity, water supply, food production, Indigenous peoples and diverse populations around the world — rather than damming and polluting them.</p><p>The promise of the Klamath dam removals is one of restoration — a move that finally recognizes the immense value of free-flowing rivers and the key role they play in <a href="https://f.hubspotusercontent20.net/hubfs/4783129/LPR/PDFs/Living_Planet_Report_Freshwater_Deepdive.pdf" target="_blank" rel="noopener noreferrer">nourishing both the world's biodiversity and hundreds of millions of people</a>. Healthy rivers — connected to watershed forests, floodplains, wetlands and deltas — are key partners in building resilience in the face of an accelerating climate crisis. But if we allow the hydropower industry to succeed in its <a href="https://www.world-energy.org/article/12361.html" target="_blank" rel="noopener noreferrer">cynical grab for stimulus funds</a>, we'll only perpetuate the 20th century's legacy of suffering and environmental degradation.</p><p>We must put our money where our values are. Twenty years ago, the WCD pointed the way forward to a model of development that takes humans, wildlife and the environment into account, and in 2020, we saw that vision flower along the Klamath River. It's time to bring that promise of healing and restoration to more of the world's rivers.</p><p><em>Deborah Moore is a former commissioner of the <a href="https://www.water-alternatives.org/index.php/alldoc/articles/vol3/v3issue2/79-a3-2-2/file" target="_blank" rel="noopener noreferrer" style="">World Commission on Dams</a>. Michael Simon was a member of the <a href="https://www.hydrosustainability.org/assessment-protocol" target="_blank" rel="noopener noreferrer" style="">Hydropower Sustainability Assessment Forum</a>. Darryl Knudsen is the executive director of <a href="https://www.internationalrivers.org" target="_blank" rel="noopener noreferrer" style="">International Rivers</a>.</em></p><p><em>This article first appeared on <a href="https://truthout.org/articles/damming-rivers-is-terrible-for-human-rights-ecosystems-and-food-security/" target="_blank" rel="noopener noreferrer">Truthout</a> and was produced in partnership with <a href="https://independentmediainstitute.org/earth-food-life/" target="_blank" rel="noopener noreferrer">Earth | Food | Life</a>, a project of the Independent Media Institute.</em></p>
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