Introduction
Since the middle of the last decade, well before the worldwide run-up in fuel prices during 2008, it has been widely believed that we are entering a new era of scarcity in carbon-based fuels such as oil and natural gas. Such concerns are not new, having first become prevalent in the 1970s. However, a rather quiet revolution is taking place on both fronts, leading to a new era of abundance that may prove as problematic as scarcity.
U.S. production
The United States, long an international symbol of profligate energy consumption, with a thirsty appetite for imported oil and gas, is, according to a Feb 2012 Bloomberg News report, on track to achieve energy self-sufficiency by 2020. U.S. crude oil production has increased 25% since 2008, and may rise another 10% in 2012. U.S. natural gas production is rising even faster; reflecting this new-found surplus, the wellhead price of U.S. natural gas has dropped by half since peaking in 2008.
At the same time, the efficiency of U.S. vehicles has steadily increased, and more increases are in store in the wake of the 2011 gasoline efficiency standards passed by the U.S. Congress, which mandates an average of at least 49.6 miles per gallon for cars and light trucks by 2025 (standards that however commendable are still lower than those mandated in Europe by 2025, and are typically based on out-of-date fleet data). All of these trends are heading the U.S. to energy independence, or even to being a net exporter of energy in five to ten years. New York Times columnist Thomas Friedman suggests that the U.S. might join OPEC.
[Added 5 Jul 2012] An even more interesting U.S. statistic is that drivers are driving less, on average. This is due in part to the current recession, but, according to a Scientific American article, it may also be due to cultural factors.]
Other nations
Canada’s unique Athabasca tar sands represent another part of the evolving energy picture. The sands are now a huge source of oil, once both technologically inaccessible and then uneconomic. Estimates of total extractable reserves are now on the scale of global petrol reserves using fracking-like techniques (see “Fracking” below). TransCanada’s Keystone pipeline proposal has become a hot-button 2012 U.S. election issue, especially in the states through which it would/will run. The perceived environmental cost of exploiting the tar sands and of fracking also threatens to roil Canadian federal politics.
Australia is also in the midst of a major expansion in energy exports, mostly with its expanding coal reserves but increasingly with off-shore gas as well. The dollar value of its coal exports increased by one third from 2006 to 2010 and continues to accelerate. In 2008, Australia’s top coal export destinations were Japan (47%), Korea (15%), the EU (10%), Taiwan (10%) and India (10%). Australia’s environmental and energy politics are engaged in a complicated dance, with a carbon tax to be introduced on July 1, 2012.
Russia, Brazil, India and China, often referred to as the BRIC nations, will play a key role in the future. China has significantly expanded its own production, and plans to further boost its coal production, to 4.1 billion tones per year, by 2015. Likewise, Brazil’s development of its massive new off-shore oil and gas fields may well dwarf its impressive ethanol production. While Russia’s pernicious control of European oil and gas supplies is lessened, it has its own huge resources to further exploit (and little other in the way of reliable non-military exports). India faces a significant energy challenge, because of its current reliance on imported fossil fuels, but solar energy has great potential there.
At the same time, the recent re-entry of Iraq as a major oil producer for the first time in several decades has had a significant role in depressing world oil prices. Iraq is already producing as much as Iran, and optimistic estimates suggest Iraq’s output may triple in the next decade. Even a more realistic doubling will significantly change the OPEC picture.
In a far cry from predictions of natural gas shortages just a few years ago, proven reserves listed in the CIA World Factbook now total some 200 trillion cubic meters worldwide, with the largest reserves in Russia, Iran, Qatar, Saudia Arabia, the U.S. and Turkmenistan. Even these estimates will likely have to be revised upward, given recent discoveries in Turkmenistan, Mozambique, and sizable sources off the coast of Israel, among others. That said, proven resource estimation is a decidedly tricky matter, even when performed by third parties with no dog in the fight.
[Added 4 Jul 2012] In another surprising development, it now appears that Israel may become a major energy resource, both for natural gas and oil shale. Israeli officials have just signed an agreement with Canada for exploration and development.
[Added 5 Jul 2012] Even more remarkable is the fact that coal production and resources continue to increase. In 2011 global coal production increased by 440 million tones, an increase in 6%.
Fracking
One of the most significant game changers has been the expansion of “hydraulic fracturing,” more commonly known as “fracking.” This scheme employs a highly pressurized fluid to propagate fractures in rock layers and thus release petroleum and/or natural gas for extraction. The expansion of fracking is a major factor in the recent rise of U.S. natural gas production, and the scheme is now rapidly being deployed worldwide.
U.K. ministers initially gave the green light to fracking. However, in May they backtracked on this plan, in part from reports of mini-earthquakes resulting from the procedure (but at 1.5 and 2.3 on the Richter scale, is it good science reporting to call them earthquakes ?). The French parliament voted on June 1, 2012 to outright ban the technique, the first nation to do so. Given their nuclear-power infrastructure, they have a quite different energy perspective.
In June 2012, the New York Times editorialized that energy companies worldwide who develop natural gas resources, using fracking or otherwise, would do well to follow the “Golden Rules for a Golden Age of Gas” recently proposed by the Paris-based International Energy Agency: (a) measure and disclose operational data, and engage with local communities; (b) watch where you drill, choosing sites to minimize potential impacts on local community; and (c) isolate wells and prevent leaks, by following strict rules on design and construction.
[Added 15 Jun 2012] Along this line, the Toronto Globe and Mail has reported that a “monster” natural gas field has been found just south of the 60th parallel in British Columbia, with reserves that could satisfy all Canadian needs for at least a decade. As with other recent North American discoveries, this field was found by fracking.
[Added 16 Jun 2012] A Scientific American article points out that numerous conventional techniques for oil and gas extraction can also cause small earthquakes.
The continuing need for green energy
These developments are a decidedly mixed blessing. On the one hand, they allay fears that the world is on the verge of a potentially serious and divisive international battle over declining energy stocks. But on the other hand, plentiful carbon-based fuel and falling world energy prices are the last things the world society needs in efforts to convince the public on the continuing need to develop truly green energy sources such as solar and wind power.
In the U.S., skepticism of anthropogenic (human-induced) global warming, or even the fact of global warming, remains strong and, paradoxically, appears to be increasing. In a March 2012 Gallup Poll, only 52% of Americans agree that the effects of global warming are now evident, down from 61% in 2009. A 2011 poll showed that Canadians have roughly the same views as Americans. Similarly, skepticism of global warming is on the rise in Great Britain.
Meanwhile, the scientific case for anthropogenic global warming is more compelling than ever. The latest temperature data released by NASA continues to show average worldwide temperatures significantly above long-term normals, with 2011 one of the 10 warmest years on record. A June 2012 Nature Climate Change article concludes that observed changes in ocean temperatures can only be explained by anthropogenic causes. The latest summary report from the Intergovernmental Panel on Climate change (IPCC) delicately emphasizes that “effective risk management” involves a “portfolio of actions to reduce and transfer risk.”
Conclusion
It is clear to us that these new energy resources are going to be developed and used — the genie is not going to be put back into the bottle at this point. The question is how to manage these resources for optimal usage in the short term, while at the same time ensuring that long-term environmental risks (which are routinely underestimated by the energy industry and overestimated by environmental activists) are properly managed and accounted for.
The best way to handle such matters is through appropriate government regulation — yes, the type of regulation that the political right ridicules but which is essential in the real world. Indeed, the current polarization of the political debate on such matters, particularly when scientific knowledge is disparaged, must be ended, and a reasonable middle ground must be established.
All of this underscores the continuing difficulties faced worldwide in a world that more than ever before relies on scientifically informed public policy, but which is plagued with widespread scientific ignorance and rampant innumeracy as well. It is serious enough, as noted in a previous Math Drudge blog, that this educational deficit threatens the future prosperity of numerous first-world economies. But in the case of climate change, this educational deficit threatens the very existence of our species.
[Added 1 Apr 2013: A Washington Post report describes how the drop in U.S. natural gas prices is prompting some European industrial operations to relocate to the U.S.]
[A version of this article appeared in The Conversation.]