WastedEnergy

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Archive for October, 2010

Highway to Hell

Posted by wastedenergy on October 31, 2010

Welcome to Fort Chipwyan, Alberta.  If you’re looking to cash in on Canada’s “oil” boom, here is where you want to be. 

Whether we’re talking about building, grading, and widening highways to accommodate McMansion-sized trucks and whole factories being hauled to the site, or the tar sand itself being transported and processed by those vehicles and equpiment, shoveling asphalt is the only game in town.  You don’t have to drive a tar sand truck or work in an upgrading plant, but whether you work laying down airstrips or milling steel for new pipelines, there’s many a bucktoothed buck to be made in selling your soul to Syncrude.  99% of the universe here is composed of dark energy. 

It’s a pretty good deal for everyone involved, unless of course you happen to be one of the few remaining quaint folk who prefer to live off the fruits of the land rather than profiting off fuel shipped in from the underworld.  Thin strips of land separate the tar sands operations and the vast pits of waste sludge they produce from the Athabasca river and its headwaters, the essence of life for countless generations of farming and fishing communities.  Crops, livestock, fish, and people now die bearing mysterious markings and tumors never before seen by the First Nation elders of these communities.  Government officials and university professors living off the oil dole from boomtowns named after the original people to inhabit this countryside dismiss their concerns over the water’s toxicity as just so much “folklore” and hogwash.  Perhaps a healthy environment is something citizens of Earth should be prepared to give up in the name of progress, as the lands once known for their bounty are covered over in pavement and plastic.

We now travel a few hundred miles west, where something strange is afoot in a remote corner of British Columbia.  The zombie invasion, we shall soon see, is no longer limited to Alberta and the Gulf of Mexico, and the infestation has begun to feed on anything it can find that hasn’t already been chewed up by mountain pine beetles:

Look a little bit closer, and some familiar patterns begin to take shape:

What we are looking at in these photos is, of course, the signature “circuit board” pattern of fracking, the process now used to unlock much of the energy used to keep spinning the wheels of the oil machines over in Alberta.  North American natural gas, the primary fuel used to boil tar out of the ground and upgrade it to synthetic crude oil throughout an ever-increasing share of Canada’s middle provinces, has already peaked and has been in decline for the past decade.  And the tar sands are always hungry for more gas.  Look a little bit closer, and the thoroughness of the change that is happening becomes clear.  Some of the last remaining wild lakes and rivers in the whole continent now sit adjacent to massive industrial operations, where a single careless spill or feckless operator has the potential to poison vast and formerly unspoiled ecosystems for generations to come.  These remote waters are now being tapped.

You’re probably saying to yourself: wait a second.  Isn’t natural gas supposed to be abundant in North America?  It’s touted as an “alternative” fuel, even though it already makes up a quarter of the continent’s energy mix.  But supposedly we’re sitting on a veritable bonanza of cheap methane, much of it in the form of shale gas, tight gas sandstone, coalbed methane, and such “unconventional” gas sources, right?  And all of it is going to cost $3.50 per thousand cubic feet to develop and bring to market, so cheap we can afford to put off living sustainably for as long as anyone alive today cares…no?

The media echo chamber continues to recite the conventional wisdom that technological breakthroughs are responsible for the oversupply of gas that has depressed prices this season.  Meanwhile, the gas producers themselves have begun to sing a different tune and are now liquidating their assets to those able to bail out the industry, as revenues at such low prices are unable to keep up with the costs of production.  The trend over the past several months has been increasing consolidation of smaller, independent gas-drillers into large multinational corporations with diverse portfolios and a wider range of hedging options.  The likes of Exxon-Mobil and the China National Offshore Oil Company are the kind of names you see coming up in the news about shale gas today, but it’s not because they think the gas is going to come for cheap.  It’s because these are the companies that have the cash flows and deep pockets to hold onto undeveloped land and poor-performing wells while the price of natural gas recovers from years of continuous new drilling subsidized by swindled shareholders and high costs hidden by arcane accounting procedures. In the meantime, the executives of these companies continue to talk up their gas plays in an effort to convince the public and the market to continue to support gas development off which they have no intention of making a profit anytime soon, at least not until the gas markets witness another one of the price surges we have started to see over the past decade.

Meanwhile, as more and more fracks per well are used, the energy and water intensity of the process expands: the amount of energy consumed by trucks hauling fluid and equipment to and from drilling and disposal sites, and the energy needed to process and transport the produced fluids and gas skyrockets along with the water consumed to drill each new well.  As gas from wells fracked dozens of times in British Columbia flows eastward to the Alberta tar sands, more oil is needed to produce more of this “natural” gas, which in turn is needed to produce more oil.

 

As the circle formed by such a tail-chasing operation continually expands and a surplus of energy production disappears, less energy, and hence less wealth, becomes available to the rest of society, until finally the profit of fossil energy completely disappears and energy production itself becomes impossible to sustain.  By the time we catch on to what is happening, will there be anything left to keep us cruising down our own highways?

What we are talking about is not new technology, of course – just look at how the industry likes to bring up the “50,000 wells that have been successfully fracked without incident over the last fifty years.”  What we really mean is the application of old technology, formerly used to squeeze the last bits of juice out of dying wells, as the now-mainstream means of acquiring onshore oil and gas in the United States and Canada.  The process mimics what is happening in the tar sands, as the toxic byproducts of an energy- and water-intensive process claim a growing share of ecosystems and the communities that depend on them.  What we have now begun to do is multiple-frack the countryside in all corners of the continent to free up the last few little pockets of energy, in a vain attempt to stave off the ever-dwindling gap between what the rest of the world can afford to export and what we can afford to consume.  In other words, it is the classic story of peak oil and gas: newer, more expensive technology and methods used to access and process ever-smaller and more remote resources of continually lower quality.  If it can’t go on indefinitely, it won’t.

Whatever the noise of the market says from day to day, the signal only points in one direction.

Creepy…Happy Halloween

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