Why Twenty-First Century Oil Will Break the Bank—and the Planet
Oil prices are now higher than they have ever been—except for a few frenzied moments before the global economic meltdown of 2008. Many immediate factors are contributing to this surge, including Iran’s threats to block oil shipping in the Persian Gulf, fears of a new Middle Eastern war and turmoil in energy-rich Nigeria. Some of these pressures could ease in the months ahead, providing temporary relief at the gas pump. But the principal cause of higher prices—a fundamental shift in the structure of the oil industry— cannot be reversed, and so oil prices are destined to remain high for a long time to come.
In energy terms, we are now entering a world whose grim nature has yet to be fully grasped. This pivotal shift has been brought about by the disappearance of relatively accessible and inexpensive petroleum—“easy oil,” in the parlance of industry analysts; in other words, the kind of oil that powered a staggering expansion of global wealth over the past 65 years and the creation of endless car-oriented suburban communities. This oil is now nearly gone.
The world still harbors large reserves of petroleum, but these are of the hard-to-reach, hard-to-refine, “tough oil” variety. From now on, every barrel we consume will be more costly to extract, more costly to refine—and more expensive at the gas pump.
Those who claim that the world remains “awash” in oil are technically correct: the planet still harbors vast reserves of petroleum. But propagandists for the oil industry usually fail to emphasize that not all oil reservoirs are alike: some are located close to the surface or near to shore, and are contained in soft, porous rock; others are located deep underground, far offshore, or trapped in unyielding rock formations. The former sites are relatively easy to exploit and yield a liquid fuel that can readily be refined into usable liquids; the latter can only be exploited through costly, environmentally hazardous techniques, and often result in a product which must be heavily processed before refining can even begin.
The simple truth of the matter is this: most of the world’s easy reserves have already been depleted—except for those in war-torn countries like Iraq. Virtually all of the oil that’s left is contained in harder-to-reach, tougher reserves. These include deep-offshore oil, Arctic oil, and shale oil, along with Canadian “oil sands”—which are not composed of oil at all, but of mud, sand, and tar-like bitumen. So-called unconventional reserves of these types can be exploited, but often at a staggering price, not just in dollars but also in damage to the environment.
In the oil business, this reality was first acknowledged by the chairman and CEO of Chevron, David O’Reilly, in a 2005 letter published in many American newspapers. “One thing is clear,” he wrote, “the era of easy oil is over.” Not only were many existing oil fields in decline, he noted, but “new energy discoveries are mainly occurring in places where resources are difficult to extract, physically, economically, and even politically.”
Further evidence for this shift was provided by the International Energy Agency (IEA) in a 2010 review of world oil prospects. In preparation for its report, the agency examined historic yields at the world’s largest producing fields—the “easy oil” on which the world still relies for the overwhelming bulk of its energy. The results were astonishing: those fields were expected to lose three-quarters of their productive capacity over the next 25 years, eliminating 52 million barrels per day from the world’s oil supplies, or about 75 percent of current world crude oil output. The implications were staggering: either find new oil to replace those 52 million barrels or the Age of Petroleum will soon draw to a close and the world economy would collapse.
Of course, as the IEA made clear back in 2010, there will be new oil, but only of the tough variety that will exact a price from us all—and from the planet, too. To grasp the implications of our growing reliance on tough oil, it’s worth taking a whirlwind tour of some of the more hair-raising and easily damaged spots on Earth. So fasten your seatbelts: first we’re heading out to sea—way, way out—to survey the “promising” new world of twenty-first-century oil.
Oil companies have been drilling in offshore areas for some time, especially in the Gulf of Mexico and the Caspian Sea. Until recently, however, such endeavors invariably took place in relatively shallow waters—a few hundred feet, at most—allowing oil companies to use conventional drills mounted on extended piers. Deepwater drilling, in depths exceeding 1,000 feet, is an entirely different matter. It requires specialized, sophisticated, and immensely costly drilling platforms that can run into the billions of dollars to produce.
The Deepwater Horizon, destroyed in the Gulf of Mexico in April 2010 as a result of a catastrophic blowout, is typical enough of this phenomenon. The vessel was built in 2001 for some $500 million, and cost around $1 million per day to staff and maintain. Partly as a result of these high costs, BP was in a hurry to finish work on its ill-fated Macondo well and move the Deepwater Horizon to another drilling location. Such financial considerations, many analysts believe, explain the haste with which the vessel’s crew sealed the well— leading to a leakage of explosive gases into the wellbore and the resulting blast. BP will now have to pay somewhere in excess of $30 billion to satisfy all the claims for the damage done by its massive oil spill.
Following the disaster, the Obama administration imposed a temporary ban on deep-offshore drilling. Barely two years later, drilling in the Gulf’s deep waters is back to pre-disaster levels. President Obama has also signed an agreement with Mexico allowing drilling in the deepest part of the Gulf, along the U.S.-Mexican maritime boundary.
Meanwhile, deepwater drilling is picking up speed elsewhere. Brazil, for example, is moving to exploit its “pre-salt” fields (so-called because they lie below a layer of shifting salt) in the waters of the Atlantic Ocean far off the coast of Rio de Janeiro. New offshore fields are similarly being developed in deep waters off Ghana, Sierra Leone and Liberia.
By 2020, says energy analyst John Westwood, such deepwater fields will supply 10 percent of the world’s oil, up from only 1 percent in 1995. But that added production will not come cheaply: most of these new fields will cost tens or hundreds of billions of dollars to develop, and will only prove profitable as long as oil continues to sell for $90 or more per barrel.
Brazil’s offshore fields, considered by some experts the most promising new oil discovery of this century, will prove especially pricey, because they lie beneath one and a half miles of water and two and a half miles of sand, rock, and salt. The world’s most advanced, costly drilling equipment—some of it still being developed—will be needed. Petrobras, the state-controlled energy firm, has already committed $53 billion to the project for 2011-2015, and most analysts believe that will be only a modest down payment on a staggering final price tag.
The Arctic is expected to provide a significant share of the world’s future oil supply. Until recently, production in the far north has been very limited. Other than in the Prudhoe Bay area of Alaska and a number of fields in Siberia, the major companies have largely shunned the region. But now, seeing few other options, they are preparing for major forays into a melting Arctic.
From any perspective, the Arctic is the last place you want to go to drill for oil. Storms are frequent, and winter temperatures plunge far below freezing. Most ordinary equipment will not operate under these conditions. Specialized (and costly) replacements are necessary. Working crews cannot live in the region for long. Most basic supplies—food, fuel, construction materials—must be brought in from thousands of miles away at phenomenal cost.
But the Arctic has its attractions: billions of barrels of untapped oil, to be exact. According to the U.S. Geological Survey (USGS), the area north of the Arctic Circle, with just 6 percent of the planet’s surface, contains an estimated 13 percent of its remaining oil (and an even larger share of its undeveloped natural gas)—numbers no other region can match.
With few other places left to go, the major energy firms are now gearing up for an energy rush to exploit the Arctic’s riches. This summer, Royal Dutch Shell is expected to begin test drilling in portions of the Beaufort and Chukchi Seas adjacent to northern Alaska. (The Obama administration must still award final operating permits for these activities, but approval is expected.) At the same time, Statoil and other firms are planning extended drilling in the Barents Sea, north of Norway.
As with all such extreme energy scenarios, increased production in the Arctic will significantly boost oil company operating costs. Shell, for example, has already spent $4 billion alone on preparations for test drilling in offshore Alaska, without producing a single barrel of oil. Full-scale development in this ecologically fragile region, fiercely opposed by environmentalists and local Native peoples, will multiply this figure many times over.
Tar Sands and Heavy Oil
Another significant share of the world’s future petroleum supply is expected to come from Canadian tar sands (also called “oil sands”) and the extra-heavy oil of Venezuela. Neither of these is oil as normally understood. Not being liquid in their natural state, they cannot be extracted by traditional drilling materials, but they do exist in great abundance. According to the USGS, Canada’s tar sands contain the equivalent of 1.7 trillion barrels of conventional (liquid) oil, while Venezuela’s heavy oil deposits are said to harbor another trillion barrels of oil equivalent—although not all of this material is considered “recoverable” with existing technology.
Those who claim that the Petroleum Age is far from over often point to these reserves as evidence that the world can still draw on immense supplies of untapped fossil fuels. And it is certainly conceivable that, with the application of advanced technologies and a total indifference to environmental consequences, these resources will indeed be harvested. But easy oil this is not.
Until now, Canada’s tar sands have been obtained through a process akin to strip mining, utilizing monster shovels to pry a mixture of sand and bitumen out of the ground. But most of the near-surface bitumen in the tar-sands-rich province of Alberta has now been exhausted, which means all future extraction will require a far more complex and costly process. Steam will have to be injected into deeper concentrations to melt the bitumen and allow its recovery by massive pumps. This requires a colossal investment of infrastructure and energy, as well as the construction of treatment facilities for all the resulting toxic wastes. According to the Canadian Energy Research Institute, the full development of Alberta’s oil sands would require a minimum investment of $218 billion over the next 25 years, not including the cost of building pipelines to the United States (such as the proposed Keystone XL) for processing in U.S. refineries.
The development of Venezuela’s heavy oil will require investment on a comparable scale. The Orinoco belt, an especially dense concentration of heavy oil adjoining the Orinoco River, is believed to contain recoverable reserves of 513 billion barrels of oil—perhaps the largest source of untapped petroleum on the planet. But converting this molasses-like form of bitumen into a useable liquid fuel far exceeds the technical capacity or financial resources of the state oil company, Petróleos de Venezuela S.A. Accordingly, it is now seeking foreign partners willing to invest the $10-$20 billion needed just to build the necessary facilities.
The Hidden Costs
Tough-oil reserves like these will provide most of the world’s new oil in the years ahead. One thing is clear: even if they can replace easy oil in our lives, the cost of everything oil-related—whether at the gas pump, in oil-based products, in fertilizers, in just about every nook and cranny of our lives—is going to rise. Get used to it. If things proceed as presently planned, we will be in hock to big oil for decades to come.
And those are only the most obvious costs in a situation in which hidden costs abound, especially to the environment. As with the Deepwater Horizon disaster, oil extraction in deep-offshore areas and other extreme geographical locations will ensure ever greater environmental risks. After all, approximately five million gallons of oil were discharged into the Gulf of Mexico, thanks to BP’s negligence, causing extensive damage to marine animals and coastal habitats.
Keep in mind that, as catastrophic as it was, it occurred in the Gulf of Mexico, where vast cleanup forces could be mobilized and the ecosystem’s natural recovery capacity was relatively robust. The Arctic and Greenland represent a different story altogether, given their distance from established recovery capabilities and the extreme vulnerability of their ecosystems. Efforts to restore such areas in the wake of massive oil spills would cost many times the $30-$40 billion BP is expected to pay for the Deepwater Horizon damage and be far less effective.
In addition to all this, many of the most promising tough-oil fields lie in Russia, the Caspian Sea basin and conflict-prone areas of Africa. To operate in these areas, oil companies will be faced not only with the predictably high costs of extraction, but also additional costs involving local systems of bribery and extortion, sabotage by guerrilla groups and the consequences of civil conflict.
And don’t forget the final cost: If all these barrels of oil and oil-like substances are truly produced from the least inviting of places on this planet, then for decades to come we will continue to massively burn fossil fuels, creating ever more greenhouse gases as if there were no tomorrow. And here’s the sad truth: if we proceed down the tough-oil path instead of investing as massively in alternative energies, we may foreclose any hope of averting the most catastrophic consequences of a hotter and more turbulent planet.
So yes, there is oil out there. But no, it won’t get cheaper, no matter how much there is. And yes, the oil companies can get it, but looked at realistically, who would want it?
Cross-posted with permission from TomDispatch.com.
Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and author of the just published The Race for What’s Left: The Global Scramble for the World’s Last Resources (Metropolitan Books). To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses his new book and what it means to rely on extreme energy, click here, or download it to your iPod here.
EcoWatch Daily Newsletter
The last Ice Age eliminated some giant mammals, like the woolly rhino. Conventional thinking initially attributed their extinction to hunting. While overhunting may have contributed, a new study pinpointed a different reason for the woolly rhinos' extinction: climate change.
The last of the woolly rhinos went extinct in Siberia nearly 14,000 years ago, just when the Earth's climate began changing from its frozen conditions to something warmer, wetter and less favorable to the large land mammal. DNA tests conducted by scientists on 14 well-preserved rhinos point to rapid warming as the culprit, CNN reported.
"Humans are well known to alter their environment and so the assumption is that if it was a large animal it would have been useful to people as food and that must have caused its demise," says Edana Lord, a graduate student at the Center for Paleogenetics in Stockholm, Sweden, and co-first author of the paper, Smithsonian Magazine reported. "But our findings highlight the role of rapid climate change in the woolly rhino's extinction."
The study, published in Current Biology, notes that the rhino population stayed fairly consistent for tens of thousands of years until 18,500 years ago. That means that people and rhinos lived together in Northern Siberia for roughly 13,000 years before rhinos went extinct, Science News reported.
The findings are an ominous harbinger for large species during the current climate crisis. As EcoWatch reported, nearly 1,000 species are expected to go extinct within the next 100 years due to their inability to adapt to a rapidly changing climate. Tigers, eagles and rhinos are especially vulnerable.
The difference between now and the phenomenon 14,000 years ago is that human activity is directly responsible for the current climate crisis.
To figure out the cause of the woolly rhinos' extinction, scientists examined DNA from different rhinos across Siberia. The tissue, bone and hair samples allowed them to deduce the population size and diversity for tens of thousands of years prior to extinction, CNN reported.
Researchers spent years exploring the Siberian permafrost to find enough samples. Then they had to look for pristine genetic material, Smithsonian Magazine reported.
It turns out the wooly rhinos actually thrived as they lived alongside humans.
"It was initially thought that humans appeared in northeastern Siberia fourteen or fifteen thousand years ago, around when the woolly rhinoceros went extinct. But recently, there have been several discoveries of much older human occupation sites, the most famous of which is around thirty thousand years old," senior author Love Dalén, a professor of evolutionary genetics at the Center for Paleogenetics, said in a press release.
"This paper shows that woolly rhino coexisted with people for millennia without any significant impact on their population," Grant Zazula, a paleontologist for Canada's Yukon territory and Simon Fraser University who was not involved in the research, told Smithsonian Magazine. "Then all of a sudden the climate changed and they went extinct."
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The environmental disaster that Mauritius is facing is starting to appear as its pristine waters turn black, its fish wash up dead, and its sea birds are unable to take flight, as they are limp under the weight of the fuel covering them. For all the damage to the centuries-old coral that surrounds the tiny island nation in the Indian Ocean, scientists are realizing that the damage could have been much worse and there are broad lessons for the shipping industry, according to Al Jazeera.
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Transitioning to renewable energy can help reduce global warming, and Jennie Stephens of Northeastern University says it can also drive social change.
For example, she says that locally owned businesses can lead the local clean energy economy and create new jobs in underserved communities.
"We really need to think about … connecting climate and energy with other issues that people wake up every day really worried about," she says, "whether it be jobs, housing, transportation, health and well-being."
To maximize that potential, she says the energy sector must have more women and people of color in positions of influence. Research shows that leadership in the solar industry, for example, is currently dominated by white men.
"I think that a more inclusive, diverse leadership is essential to be able to effectively make these connections," Stephens says. "Diversity is not just about who people are and their identity, but the ideas and the priorities and the approaches and the lens that they bring to the world."
So she says by elevating diverse voices, organizations can better connect the climate benefits of clean energy with social and economic transformation.
Reposted with permission from Yale Climate Connections.
Imported frozen food in three Chinese cities has tested positive for the new coronavirus, but public health experts say you still shouldn't worry too much about catching the virus from food or packaging.
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If weather is your mood, climate is your personality. That's an analogy some scientists use to help explain the difference between two words people often get mixed up.
Size Matters<p>Climates are a bit like woven tapestries. The big picture is important, no question. But so are all the seemingly minor details found inside the larger whole.</p><p><a href="https://research-information.bris.ac.uk/en/persons/tommaso-jucker" target="_blank">Tommaso Jucker</a> is an environmental scientist at the University of Bristol. In an email, Jucker says he'd define the term microclimate as "the suite of climatic conditions (temperature, rainfall, humidity, solar radiation) measured in localized areas, typically near the ground and at spatial scales that are directly relevant to ecological processes."</p><p>We'll talk about that last bit in a minute. But first, there's another criteria to discuss. According to some researchers, a microclimate — by definition — must differ from the larger area that surrounds it.</p><p><a href="https://www.cfc.umt.edu/research/paleoecologylab/publications/Davis_et_al_2019_Ecography.pdf" target="_blank">Forests</a> provide us with some great examples. "The climate near the ground in a tropical rainforest is dramatically different from the climate in the canopy 50 meters [164 feet] above," says University of Montana ecologist <a href="https://www.cfc.umt.edu/personnel/details.php?ID=1110" target="_blank">Solomon Dobrowski</a> in an email. "This vertical gradient among other factors allows for the staggering biodiversity we see in the tropics."</p><p>Likewise, scientists observed that a 2015 partial <a href="https://animals.howstuffworks.com/insects/bees-stopped-buzzing-during-2017-solar-eclipse.htm" target="_blank">solar eclipse</a> caused the air temperature of an Eastern European meadow to <a href="https://rmets.onlinelibrary.wiley.com/doi/full/10.1002/wea.2802" target="_blank">change more dramatically</a> than it did in a nearby forest. That's because trees provide not only shade, but their leaves also reflect solar radiation. At the same time, forests tend to reduce wind speeds.</p><p>All those factors add up. A 2019 review of 98 wooded places — spread out across five continents — found that forests are 7.2 degrees Fahrenheit (4 degrees Celsius) <a href="https://natureecoevocommunity.nature.com/posts/47363-forests-protect-animals-and-plants-against-warming" target="_blank">cooler on average</a> than the areas outside them.</p><p>Now if you hate the cold, don't worry; there's a cozy exception to the rule. According to that same study, forests are usually 1.8 degrees Fahrenheit (1 degree Celsius) warmer than the external environment during the wintertime. Pretty cool.</p>
A Bug's Life<p>When does a microclimate stop being, well, micro? In other words, is there a maximum size we should be aware of when discussing them?</p><p>Depends on who you ask. "In terms of horizontal scale, some have defined 'microclimate' as anything that is less than 100 meters [328 feet] in range," Jucker says. "I'm personally less prescriptive about this."</p><p>Instead, he says the "scale at which we want to measure [a particular] microclimate" ought to be "dictated" by the questions we're trying to answer.</p><p>"If I want to know how temperature affects the photosynthesis of a leaf, I should be measuring temperature at centimeter scale," Jucker explains. "If I want to know if and how temperature affects the habitat preference of a large, mobile mammal, it's probably more relevant to capture temperature variation across [tens to hundreds] of meters."</p><p>For instance, solitary plants have the power to generate itty-bitty microclimates. Just ask <a href="https://www.colorado.edu/geography/peter-blanken-0" target="_blank">Peter Blanken</a>, a geography professor at the University of Colorado, Boulder and the co-author of the 2016 book, "<a href="https://amzn.to/2XN6FT8" target="_blank">Microclimate and Local Climate</a>."</p>
The urban heat island effect is a good example of how microclimates work. NOAA
Microclimates on a Grand Scale<p>It's no secret that our planet is going through some rough times at the macro level. The global temperature is <a href="https://climate.nasa.gov/vital-signs/global-temperature/" target="_blank">climbing</a>; nine out of the <a href="https://www.noaa.gov/news/2019-was-2nd-hottest-year-on-record-for-earth-say-noaa-nasa" target="_blank">10 hottest years on record</a> have occurred since 2005. And by one recent estimate, roughly 1 million species around the world are <a href="https://ipbes.net/sites/default/files/2020-02/ipbes_global_assessment_report_summary_for_policymakers_en.pdf" target="_blank">facing extinction</a> due to human activities.</p><p>"One of the big questions that ecologists and environmental scientists are trying to answer right now is how will individual species and whole ecosystems respond to rapid climate change and habitat loss," says Jucker. "...To me, [microclimates are] a key component of this research — if we don't measure and understand climate at the appropriate scale, then predicting how things will change in the future becomes a lot harder."</p><p>Developers have long understood the impact small-scale climates have on our daily lives. <a href="https://science.howstuffworks.com/environmental/green-science/urban-heat-island.htm#pt0" target="_blank">Urban heat islands</a> are cities that have higher temperatures than neighboring rural areas.</p><p>Plants release vapors that can moderate local climates. But in cities, natural greenery is often scarce. To make matters worse, plenty of our roads and buildings have a bad habit of absorbing or re-emitting heat from the sun. <a href="https://www.google.com/books/edition/Microclimate_and_Local_Climate/LHUZDAAAQBAJ?hl=en&gbpv=1&bsq=urban%20heat%20island" target="_blank">Vehicle emissions</a> don't exactly help the situation.</p><p>Still, it's not like Boston or Beijing are thermal monoliths. Sometimes, the documented temperatures <a href="https://e360.yale.edu/features/can-we-turn-down-the-temperature-on-urban-heat-islands" target="_blank">within a single city</a> vary by 15 to 20 degrees Fahrenheit (8.3 to 11.1 degrees Celsius).</p><p>That's where metro parks and city trees come in. They have nice cooling effects on nearby neighborhoods. "Several cities around the world have developed programs to increase urban green spaces," says Blanken. "Tree planting programs and green roof programs, have been shown to lower surface temperatures, decrease air pollution and decrease surface water runoff (urban flash-flooding) in urban areas."</p>
An "explosive" wildfire ignited in Los Angeles county Wednesday, growing to 10,000 acres in a little less than three hours.
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By Jeff Berardelli
Note: This story was originally published on August 6, 2020
If asked to recall a hurricane, odds are you'd immediately invoke memorable names like Sandy, Katrina or Harvey. You'd probably even remember something specific about the impact of the storm. But if asked to recall a heat wave, a vague recollection that it was hot during your last summer vacation may be about as specific as you can get.
<div id="ecf36" class="rm-shortcode" data-rm-shortcode-id="c2dcc9d48a6cd61f247df1544539a783"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1290959314132361216" data-partner="rebelmouse"><div style="margin:1em 0">Naming heatwaves is a good idea—making the abstract concrete, the invisible visible. Why should hurricanes and wild… https://t.co/hDWgYb79Ob</div> — Ed Maibach (@Ed Maibach)<a href="https://twitter.com/MaibachEd/statuses/1290959314132361216">1596623660.0</a></blockquote></div>
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