The Next Era of Hydrocarbon Development: Well Underway and Dirtier Than the First
The most direct path to the nation’s newest big oil and gas fields is U.S. Highway12, two lanes of black top that unfolds from Grays Harbor in Washington State and heads east across the top of the country to Detroit.
The 2,500-mile route, parts of which were used by Lewis and Clark to open the American frontier, has quickly become an essential supply line for the energy industry. With astonishing speed and influence, American oil companies, Canadian pipeline builders, and investors from all over the globe are spending huge sums in an economically promising and exceedingly ecologically risky race to open the next era of hydrocarbon development. They are steadily replacing the dwindling “conventional” pools of oil and gas with “unconventional” fossil fuel reserves contained in the carbon rich sands and deep shales of Canada, the Great Plains, and the Rocky Mountain West.
Colorado, Utah and Wyoming hold oil shale reserves estimated to contain 1.2 trillion to 1.8 trillion barrels of oil, according to the Energy Department, half of which the department insists is recoverable. Eastern Utah alone holds tar sands oil reserves estimated at 12 billion to 19 billion barrels. The tar sands region of northern Alberta, Canada contains recoverable oil reserves conservatively estimated at 175 billion barrels and with new technology could reach 400 billion barrels. Deep gas-bearing shales of the Great Plains, Rocky Mountain West, Great Lakes, Northeast and Gulf Coast contain millions of trillions of feet of natural gas. If these projections turn out to be accurate, there would be enough oil and gas to power the United States for at least another century.
Big, Big Energy Boom
The explosion in development of unconventional fossil fuel reserves raises an insistent issue for the nation. At a time when the country invested roughly $100 billion in 2009 to claw its way onto a renewable energy path, its richest and most politically powerful industry is hurtling in the opposite direction, developing on a massive scale sources of energy that cause considerably more environmental harm – including pouring more climate-changing gases into the atmosphere -- than conventional oil and gas drilling. The logical economic and political endpoint for the oil and gas industry, one that should invite invite panic among environmental activists, is to elect more conservatives to the House and Senate, close off federal funding for clean energy, and produce enough unconventional oil and gas to perpetuate the fossil fuel economy for decades.
That, in essence, is what’s occurring along Highway 12. Oil companies use Highway 12 to reach a good portion of the new oil and gas domain. They transport equipment 900 miles north to Alberta, Canada, where they are spending $15 billion annually to develop the region’s tar sands, the single largest source of oil imports to the U.S.
Midway across North Dakota, now the fourth largest oil producing state in the country – 100 million barrels this year -- and where 1,000 wells will be drilled in 2010, Highway 12 crosses the $5 billion 2,151-mile Keystone Pipeline. It is the centerpiece of a $31 billion network of major transport lines either planned or under construction to carry oil from the middle part of the continent to refineries in Texas, Oklahoma, and Illinois that are being modernized and expanded at a cost of more than $20 billion. Several more of those refinery expansion projects lie on the highway’s eastern end in the Great Lakes and upper Midwest. In all, according to company reports and state economic development offices, the oil industry is spending nearly $100 billion annually to perpetuate the fossil fuel era.
What About Climate and Clean Energy
But even as one of the largest energy booms in history has erupted along a great arc of the continent that reaches from northern Alberta to the Texas Gulf Coast, the consequences are prompting civic discontent, lawsuits, and political battles in state capitols. The boom also is producing fresh scars on the land, new threats to scarce reserves of fresh water, and portentous questions about the effect of the boom on increasing emissions of climate-changing gases.
Oil industry executives say their investments are consistent with the national goal of producing more energy to increase security. Oil companies are also profiting handsomely from the exploitation of these unconventional sources of oil and natural gas. The stakes became clear earlier this year, when ExxonMobil paid $41 billion to buy XTO Energy, a major player in unconventional fuels production, especially natural gas.
Last year, in a much-disputed draft environmental impact statement that summarized the need for a new Keystone XL pipeline to transport oil from unconventional reserves to American heartland refineries, the State Department tacitly backed the big oil boom. “The increasing demand for crude oil in the U.S. cannot be entirely met by efforts to conserve use of refined petroleum products or the increased use of renewable energy,” said the State Department. “As crude oil demand increases, the overall domestic supplies of crude oil are declining.” The department’s analysts added that without the pipeline and the new supplies of oil it would carry, the country “would remain dependent upon unstable foreign oil supplies from the Mideast, Africa, Mexico, and South America.”
Environmental leaders, particularly those in the Northwest, view the boom along Highway 12 much differently. “’Concerned’ would be putting it mildly,” said K.C. Golden, the policy director at Climate Solutions, a climate and energy research and advocacy group in Olympia, Washington. “I'm pretty sure this is not what Lewis and Clark had in mind when they opened doors to the West.”
Road to Oil and Gas
One of the flashpoints is occurring in northern Idaho and eastern Montana, where oil companies want to use Highway 12 to dispatch the largest convoy of oversized trucks ever assembled. The trucks, nearly as long as football fields and so wide they cover both lanes of the highway, haul refining and processing equipment that weigh hundreds of tons and are as tall as a mansion.
Conoco Philips was granted a road permit Idaho last month to haul four Korean-built oversized processing units from Lewiston, Idaho, where they were offloaded from Columbia River barges, to the company’s expanding refinery in Billings, Montana. Earlier this month, Idaho Second District Judge John Bradbury revoked the permits, asserting that the state did not adequately assess the hazards of the shipment, particularly to citizens if an accident involving one of the immense processing units blocked the highway. Local officials in Montana are considering similar legal action.
The court judgment in Idaho, which is set for an appeal today in the Idaho Supreme Court, could have significant ramifications for ExxonMobil Canada, which wants to make 207 oversize hauls next year along US 12. Exxon’s truck will haul even larger Korean-built units to be assembled into a new tar sands oil processing plant in Alberta. Using Interstates or railroads is not an option, says the company, because the loads are too big to fit under bridges.
Many climate advocates see an opportunity to block the ExxonMobil convoy and slow the development of the Canadian tar sands, the fastest growing source of C02 emissions in Canada, according to the Pembina Institute, a respected Canadian environmental think tank. “My primary concern, of course, is the intended use of the equipment,” said Golden. “The idea that we would parade these weapons of mass climatic destruction through the main arteries of a region that fancies itself a proving ground for sustainable prosperity is more than a little galling.”
The oil and gas industry is undeterred. The Bakken Shale that lies 10,000 feet beneath a 200,000 square mile expanse of North Dakota, Montana, and Sasketchewan is said by the USGS to contain over 4 billion barrels of oil, and trillions of cubic feet of natural gas. Oil industry geologists say there is much more than that in the Bakken, and in a second oil-rich shale reserve, the Three Forks, that lies below it.
Oil wells in the Bakken Shale are capable of producing 4,000 barrels a day or more, according to state figures. Spurred by the Bakken riches, energy companies are spending tens of millions of dollar to lease mineral rights in Wyoming and Colorado and are drilling exploratory wells in the Niobrara Shale, which geologists say share many of the same oil-bearing characteristics.
"It just almost boggles the mind,” Lynn Helms, the director of North Dakota Department of Mineral Resources, told a veterans group in Minot on September 2. “It is not like the traditional oil and gas play.”
The energy boom, though, is alarming environmental groups because government studies show the unconventional reserves are tearing at the land, generate more C02 emissions, and use three to five times more water to produce oil or natural gas than conventional reserves. “It’s a pact with the devil,” said Randy Udall, a consulting energy analyst from Colorado. “The tar sands and shale oil and shale gas require a lot of water. It sets up a collision course for the West.”
Water-Energy Choke Point
A 2006 study by the Department of Energy that looked at rising energy demand and diminishing freshwater supplies found that the collision between the two was occurring most violently in the fastest growing places that also happened to have the scarcest water resources – California, the Southwest, the Rocky Mountain states, and the Southeast.
It takes four to six barrels of water to produce one barrel of tar sands oil, which is four times more water than it takes to produce oil from conventional reserves, according to a 2009 study by Argonne National Laboratory. Much of the water to produce oil from Canadian tar sands comes from the Athabasca River, which runs through the northern Alberta mining district. In 2008, according to Energy Alberta, tar sands mines used 184.3 million cubic meters of water — 48.7 billion gallons.
Just 10 percent is returned to the river, which a number of independent studies say is visibly depleted and rapidly deteriorating. The balance is poured into toxic tailing ponds as big as lakes, containing more than 1 trillion gallons of waste water combined and so polluted that at least 1,600 ducks that inadvertently landed in them have died, drowned by the tarry water.
Moreover, producing tar sands oil, according to the Natural Resources Defense Council, emits 40 percent more greenhouse gases than oil produced from conventional reserves.
Producing oil and gas from the Bakken formation also uses a lot of water because
getting to the oil and natural gas requires rupturing the deep shale to open spaces and crevices through which the oil and gas can flow. The pulverizing process, called hydraulic fracturing or “fracking,” involves sinking drill bits two miles deep then turning them to move horizontally through the shale. An armada of tank trucks haul 2 million to 4 million gallons of water to each well site where pumps shoot it down the well at such super high pressure – 8,000 pounds per square inch – that the rock splits.
The practice is dangerous. Just a day before Helms’ appearance in Minot, an oil well undergoing fracking near Kildeer ruptured. The blowout leaked 100,000 gallons of fracturing fluid and crude oil before being plugged two days later.
Fracking has caused contamination of surface and groundwater in other states, as well, and harmed drinking water in some communities, according to a number of reports from local environmental organizations. The EPA is readying a report on the hazards of fracking, due next year.
Earlier this year, the volumes of water needed to frack the Bakken Shale also generated concern among state fisheries and wildlife officials in North Dakota. In February, a supervisor with the North Dakota Game and Fish Department formally opposed a farmer’s plan to sell a third of the water in eight-foot-deep Trenton Lake to a Texas energy developer. “Trenton Lake just doesn’t have the depth and capacity without seriously impacting the lake,” said the supervisor, Fred Ryckman. “The oil industry can find water elsewhere.”
Almost 150 oil and gas drilling rigs are operating in North Dakota this month, nearly tying a state record, and more than all but two other states. Some of more than 7,000 laborers from other states that migrated to North Dakota’s oil and gas fields used Hghway 12 to get there. The state unemployment rate has dropped to 3.6 percent – the nation’s lowest. And when North Dakota’s budget cycle ended in June, Budget Director Pam Sharp reported an $800 million surplus.
In short, not too many in North Dakota’s state government are really worrying – yet -- about the water supply.
-- Keith Schneider
Keith Schneider, a journalist and producer, is senior editor of Circle of Blue and a contributor to the New York Times, Yale e360, and other news desks. He reports on energy, water, climate, and agriculture from the United States and around the world, and writes the ModeShift blog -- http://modeshift.org/. In 2012 his work on the global Choke Point project attracted the attention of the ...
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