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The Myth of “Saudi America”

Raymond T. Pierrehumbert, Slate Magazine
Like swallows returning to San Juan Capistrano, every December some 20,000 geoscientists flock to San Francisco for the fall meeting of the American Geophysical Union. Slate readers have already heard about a presentation with a particularly eye-catching title, but for me some of the most thought-provoking news came in a prestigious all-Union session with the rather dry heading “Fossil Fuel Production, Economic Growth, and Climate Change.” (Search for it here.) This session dealt, in a hard-headed, geological, show-me-the-numbers way, with the claim that we are at the brink of a new era of oil and natural gas abundance.

The popularity of the abundance narrative waxes and wanes, and its current ascendance comes primarily on the heels of a report by Leonardo Maugeri, a former oil-industry chief and currently a fellow at Harvard’s Belfer Center. When his cornucopian fantasy came out, I smelled a rat (or at least a not-too-deeply buried fish). But the International Energy Agency jumped on the bandwagon with breathless, and equally fishy, forecasts of the coming “Saudi America.” Most of the media swallowed the story hook, line, and sinker, with even the usually sober Economist rising to the bait.

So what’s wrong with this story? Maugeri’s problems begin but don’t end with an arithmetic blunder so dumb (he compounded a percentage decline incorrectly) it would make even Steve Levitt blush. The geeky geological stuff discussed at the AGU session is more interesting and ultimately more damning. The geological considerations expose a number of common threads of faulty reasoning that pervade the current crop of starry-eyed projections of endless oil abundance…

What would it take to ramp up production to such high levels? Technological developments have made it possible to tap into tight oil, but these are not the same kinds of technological developments that have given us ever more powerful computers and cellphones at ever declining prices. Oil production technology is giving us ever more expensive oil with ever diminishing returns for the ever increasing effort that needs to be invested…
(6 February 2013)

Colorado Communities Take On Fight Against Energy Land Leases

Jack Healy, Bloomberg
PAONIA, Colo. — For a glimpse into the complications of President Obama’s “all of the above” energy policy, follow a curling mountain road through the aspens and into central Colorado’s North Fork Valley, where billboards promote “gently grown” fruits and farmers sell fresh milk and raw honey from pay-what-you-can donation boxes.

A packed meeting about oil and gas drilling last month in Paonia, Colo. More Photos » Here, amid dozens of organic farms, orchards and ranches, the federal government is opening up thousands of acres of public land for oil and gas drilling, part of its largest energy lease sale in Colorado since Mr. Obama took office…

Coloradans in solidly red cities west of here are the ones who have written letters to the government supporting the lease sale, saying it will bring jobs and tax revenues. In Paonia, where political lines are more evenly split, residents have come out overwhelmingly against the idea of drilling, saying it threatens a new economy rooted in tourism, wineries and organic peaches…
(2 February 2013)

Romania reverses course on shale gas

In a widely expected U-turn, Romanian authorities yesterday (31 January) gave the American energy giant Chevron the certificates it needed to start exploring for shale gas in the eastern part of the country.

The Romanian authorities reversed their decision from last April to suspend Chevron from gas exploration activities.

The decision takes place nine months after protests in southeast Romania, in particular in the town of Vama Veche, where shale gas exploration is due to take place…
(1 February 2013)

German environment minister: ‘we want to limit fracking’

Reuters via The Guardian
Germany’s environment minister said on Monday he did not want to make it easy for companies to "frack" for shale gas and could not see the practice happening in his country in the "forseeable future".

Pending rules for the drilling techniques would likely be tightened, said Peter Altmaier, a conservative politician in chancellor Angela Merkel’s government.

"The message is we want to limit fracking, we don’t want to facilitate it," he told Deutschlandfunk radio. "And anyway I don’t see in the foreseeable future that fracking will be employed anywhere within Germany."…
(11 February 2013)

Shale oil is no threat to oil producers

Saadallah Al Fathi, Gulf news
While there is no doubt about the potential of shale and tight oil resources in the US specifically and the rest of the world to a lesser extent, it is felt that the potential has been overstated in the media to the extent that some reporters are really not interested in the facts as much as their interest in the hype.

The increase in US production in the last few years has driven some reporters and even analysts to go out of their way in tendering numbers and expectations that have no bearing on realities…

As far as oil is concerned, shale oil at best will not be sufficient to make the US independent from imports. The Energy Information Administration (EIA), the research arm of the US Department of Energy, said in its Annual Energy Outlook 2013 early release that US oil import dependency fell from 60 per cent in 2005 to 45 per cent in 2011 and is forecast to reach 37 per cent in 2035. We have to remember that the sharp fall since 2005 is not entirely due to rising production but due to a sharp decline in demand in the aftermath of the financial and economic crises of 2008. The EIA clearly states that net oil imports were 8.82 million barrels a day (mbd) in 2012 and are likely to be 7.52 mbd in 2035…
(10 February 2013)
— The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.

Shale gas distracts EU “action heroes” from saving the climate

David Cronin, New Europe
Has environmentalism replaced patriotism as the last refuge of the scoundrel?

I’m not referring here to those bona fide greens whose commitment to saving the earth is demonstrated both by their personal lifestyles and their activism. Rather, I’m calling out politicians and institutions that claim to be defending the earth, when they are really conniving in its destruction, as abject hypocrites.

Last month, two Canadian ministers – Cal Dallas and Diana McQueen – undertook a tour of Europe, where they distributed fliers bragging of how the Ottawa government is “showing global leadership in the fight against climate change”. As a new study by Friends of the Earth suggests, the evidence to support this boast is a little threadbare, considering that Canada withdrew from the Kyoto protocol -the main international agreement on climate change – in 2011 and appears determined to extract and export highly polluting tar sands oil.

Our “hero” also used his encounter with Arnie – in Vienna – to state that “sustainability is now deeply engrained in all our policies”.

That must have been news to Günter Oettinger, the man Barroso appointed as the Union’s energy commissioner. When the then European Community introduced a law providing for freedom of information on the environment back in 1990, it implicitly recognised that sustainability requires transparency. Yet Oettinger continues to peddle dodgy ideas, without being totally upfront about who put them in his head…
(10 February 2013)

Tech Talk – Future Bakken Production and Hydrofracking

Heading Out, The OIl Drum
Before there were refrigerators folks kept drinks cool by putting them into clay jars that had been soaked in water. The evaporation of the water from the clay cooled the container and its contents, which today includes wine bottles. On the other hand, for many years artisans have taken clay in a slightly different form, shaped it and baked it and provided the teacups which keep the liquid inside until we drink it.

Two different forms of the same basic geological material, with two different behaviors and uses. Why bring this up? Well, there is a growing series of articles which continue to laud the volumes of oil and natural gas that the world can expect from the artificial fracturing of the layers of shale in which these hydrocarbons have been trapped for the past few million years. It has been suggested that there is no difference between this “unconventional” oil and the “conventional” oil that has been produced over the past century to power the global economy. And yet, despite the scientific detail which some of these critics discuss other issues, they seem unable to grasp the relatively simple geologic and temporal facts that make the reserves in such locations as the Marcellus Shale of Pennsylvania and the Bakken of North Dakota both unconventional and temporally transient. Let me therefore try again to explain why, despite the fact that the oil itself may be relatively similar, the recovery and economics of that oil are quite different from those economics involved in extracting conventional deposits.

But before getting to that, let’s first look at the current situation in North Dakota, using the information from the Department of Mineral Resources (DMR). According to the January Director’s Cut the rig count in the state has varied from 188 in October, through 186 in November, and 184 in December, to 181 at the time of the report. Why is this number important? Well, as I will explain in more detail later, the decline rate of an individual well in the region is very high, and thus the industry has to continue to drill wells at a rapid rate, just to replace the decline. (This is the “Red Queen” scenario that Rune Likvern has explained so well.) The DMR recognize this by showing the effect of several different scenarios as the number of rigs changes…
(11 February 2013)