Quantcast

Why We Can't Frack Ourselves Out of an Energy Crisis

Business

By Alex Kirby

A British businessman will tell world leaders meeting in Switzerland today that it is dangerous to argue that fracking for shale oil and gas can help to avert a global energy crisis.

Jeremy Leggett, a former Greenpeace staff member who founded a successful solar energy company, has been invited to the annual World Economic Forum (WEF) meeting this week in Davos. The theme of the meeting is "The Reshaping of the World: Consequences for Society, Politics and Business."

Leggett told the Climate News Network: "The WEF likes to deal in big ideas, and last year one of its ideas was to argue that the world can frack its way to prosperity. There are large numbers of would-be frackers in Davos.

Solarcentury founder is telling the World Economic Forum that fracking is not the answer to avoiding an energy crisis. Photo credit: Irekia/Flickr

"I'm a squeaky wheel within the system. I'm in Davos to put the counter-arguments to big energy, and I'll tell them: 'You're in grave danger of repeating the mistakes of the financial services industry in pushing a hyped narrative.' This refers to the way in which banking leaders had "their particular comforting narrative catastrophically wrong, until the proof came along in the shape of the financial crash."

Leggett founded Solarcentury, the UK’s fastest-growing solar electric company since 2000. He also established the charity SolarAid which aims to eradicate the kerosene lamp from Africa by 2020, and chairs the Carbon Tracker Initiative. His book, Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis was published in 2005, and his latest, The Energy of Nations: Risk Blindness and the Road to Renaissance, in 2013.

'Sunset industry'

Leggett says the conventional oil industry is facing an imminent crisis, because existing crude oil reserves are declining fast, it is having to find the money for soaring capital expenditure, and the amount of oil available for export is falling.

"Big Oil is still extremely powerful and well-capitalized", he says, "but it is fast approaching sunset. The profitability of the big international groups—like Exxon, Shell and BP—is a real worry for investors, and they've been largely locked out of the easy oil controlled by national companies—just look at BP and Russia.

"Gas? Unless the price goes up, the whole U.S. shale gas industry is in danger of becoming a bubble, even a Ponzi scheme. All but one of the biggest production regions have peaked already, and losses are piling up. This is an industry that's in grave danger of committing financial suicide."

A linked message that Leggett will deliver is that there is a growing danger of a carbon bubble building up in the capital markets. He says investors who think governments may agree stringent and strictly-enforced limits on greenhouse gas emissions might decide their investments in oil and gas are at risk of becoming worthless.

Crunch next year?

There is little sign yet that such limits are likely any time soon. But Leggett says that is to miss the point: "You don't have to wait until agreement is close, or even probable. You have to believe only that there's a realistic chance of policymaking which means assets might be stranded."

He will also tell his audience "to take out insurance on the risk of an oil crisis, by accelerating the very things we need to deal with climate change". Chief among these, he says, is the need to channel funds withdrawn from oil, gas, and coal into clean energy instead—though he acknowledges that, as a renewable energy entrepreneur himself, he may be accused of self-interest.

Leggett fears a world oil crisis could occur as early as 2015. And when it comes, it will certainly mean "ruinously high prices," for a start. But it will mean something more, he says. Last December he worked with a U.S. national security expert, Lt. Col. Daniel Davis, to organize the Transatlantic Energy Security Dialogue. Leggett has a regard for the views of people like Davis.

"The military are better than your average politician or consultant to big energy at spotting systemic risk," he says.

Leggett says military think-tanks have tended to side with those who distrust "the cornucopian narrative" of the oil industry. One 2008 study, by the German Army, says: "Psychological barriers cause indisputable facts to be blanked out and lead to almost instinctively refusing to look into this difficult subject in detail. Peak oil, however, is unavoidable."

Visit EcoWatch’s RENEWABLES page for more related news on this topic.

EcoWatch Daily Newsletter

A dead sea lion on the beach at Border Field State Park, near the international border wall between San Diego, California and Tijuana, Mexico. Sherry Smith / iStock / Getty Images

While Trump's border wall has yet to be completed, the threat it poses to pollinators is already felt, according to the National Butterfly Center in Mission, Texas, as reported by Transmission & Distribution World.

Read More Show Less
People crossing the Brooklyn Bridge on July 20, 2017 in New York City sought to shield themselves from the sun as the temperature reached 93 degrees. Drew Angerer / Getty Images

by Jordan Davidson

Taking action to stop the mercury from rising is a matter of life and death in the U.S., according to a new study published in the journal Science Advances.

Read More Show Less
Sponsored
Salmon fry before being released just outside San Francisco Bay. Jim Wilson / The New York Times / Redux

By Alisa Opar

For Chinook salmon, the urge to return home and spawn isn't just strong — it's imperative. And for the first time in more than 65 years, at least 23 fish that migrated as juveniles from California's San Joaquin River and into the Pacific Ocean have heeded that call and returned as adults during the annual spring run.

Read More Show Less
AnnaPustynnikova / iStock / Getty Images

By Kerri-Ann Jennings, MS, RD

Shiitake mushrooms are one of the most popular mushrooms worldwide.

Read More Show Less
Protesters hold a banner and a placard while blocking off the road during a protest against Air pollution in London. Ryan Ashcroft / SOPA Images / LightRocket / Getty Images

By Jessica Corbett

Dozens of students, parents, teachers and professionals joined a Friday protest organized by Extinction Rebellion that temporarily stalled morning rush-hour traffic in London's southeasten borough of Lewisham to push politicians to more boldly address dangerous air pollution across the city.

Read More Show Less
Sponsored

Jose A. Bernat Bacete / Moment / Getty Images

By Bridget Shirvell

On a farm in upstate New York, a cheese brand is turning millions of pounds of food scraps into electricity needed to power its on-site businesses. Founded by eight families, each with their own dairy farms, Craigs Creamery doesn't just produce various types of cheddar, mozzarella, Swiss and Muenster cheeses, sold in chunks, slices, shreds and snack bars; they're also committed to becoming a zero-waste operation.

Read More Show Less
Coal ash has contaminated the Vermilion River in Illinois. Eco-Justice Collaborative / CC BY-SA 2.0

By Jessica A. Knoblauch

Summers in the Midwest are great for outdoor activities like growing your garden or cooling off in one of the area's many lakes and streams. But some waters aren't as clean as they should be.

That's in part because coal companies have long buried toxic waste known as coal ash near many of the Midwest's iconic waterways, including Lake Michigan. Though coal ash dumps can leak harmful chemicals like arsenic and cadmium into nearby waters, regulators have done little to address these toxic sites. As a result, the Midwest is now littered with coal ash dumps, with Illinois containing the most leaking sites in the country.

Read More Show Less

picture-alliance / AP Photo / NOAA Pacific Islands Fisheries Science Center

The Group of 20 major economies agreed a deal to reduce marine pollution at a meeting of their environment ministers on Sunday in Karuizawa, Japan.

Read More Show Less