Post Carbon Institute

Industry-Stacked Energy Department Committee: Shale Running Dry, Let's Exploit the Arctic

A report assembled by an industry-centric US Department of Energy committee recommends the nation start exploiting the Arctic due to oil and gas shale basins running dry. 

In the just-submitted report, first obtained by the Associated Press, the DOE's National Petroleum Council — many members of which are oil and gas industry executives — concludes that oil and gas obtained via hydraulic fracturing (“fracking”) will not last beyond the next decade or so, thus the time is ripe to raid the fragile Arctic to feed our fossil fuel addiction. 

The NPC just launched a website and executive summary of the report: Arctic Potential: Realizing the Promise of U.S. Oil and Gas Resources.

Confirming the thesis presented by the Post Carbon Institute in its two reports, “Drill Baby, Drill” and “Drilling Deeper,” the National Petroleum Council believes the shale boom does not have much more than a decade remaining.

The NPC report appears to largely gloss over the role of further fossil fuel dependence on climate change, or the potentially catastrophic consequences of an oil spill in the Arctic.

The first mention of climate change appears to refer to “concern about the future of the culture of the Arctic peoples and the environment in the face of changing climate and increased human activity,” but doesn't mention the role of fossil fuels in driving those changes. Instead, the report immediately pivots to focus on “increasing interest in the Arctic for tourist potential, and reductions in summer ice provide an increasing opportunity for marine traffic.”

ExxonMobil CEO Rex Tillerson, a National Petroleum Council member, chimed in on the study in an interview with the Associated Press.  

“There will come a time when all the resources that are supplying the world's economies today are going to go in decline,” remarked Tillerson. “This is will [sic] be what's needed next. If we start today it'll take 20, 30, 40 years for those to come on.”

The National Petroleum Council also deployed the energy poverty argument, utilized most recently by coal giant Peabody Energy in its “Advanced Energy For Life” public relations campaign, to make its case for Arctic drilling as a replacement for fracking.

“But global demand for oil, which affects prices of gasoline, diesel and other fuels everywhere, is expected to rise steadily in the coming decades — even as alternative energy use blossoms — because hundreds of millions of people are rising from poverty in developing regions and buying more cars, shipping more goods, and flying in airplanes more often,” reads the report. “In order to meet that demand and keep prices from soaring, new sources of oil must be developed, the council argues.”

Global Shale Fail: Oil Majors Leaving Fracking Fields Across Europe, Asia

With some analysts predicting the global price of oil to see another drop, many oil majors have deployed their parachutes and jumped from the hydraulic fracturing (“fracking”) projects rapidly nose-diving across the world.

As The Wall Street Journal recently reported, the unconvetional shale oil and gas boom is still predominantly U.S.-centric, likely to remain so for years to come.

“Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC have packed up nearly all of their hydraulic fracturing wildcatting in Europe, Russia and China,” wrote The Wall Street Journal.

“Chevron halted its last European fracking operations in February when it pulled out of Romania. Shell said it is cutting world-wide shale spending by 30% in places including Turkey, Ukraine and Argentina. Exxon has pulled out of Poland and Hungary, and its German fracking operations are on hold.” 

Though the fracking boom has taken off in the U.S. like no other place on Earth, the U.S. actually possesses less than 10 percent of the world’s estimated shale reserves, according to The Journal.

Despite this resource allotment discrepency, the U.S. Energy Information Administration (EIA) recently revealed that only four countries in the world have produced fracked oil or gas at a commercial-scale: the United States, Canada, China and Argentina.

Global Shale Fail
Image Credit: U.S. Energy Information Administration

Citizens Take Monitoring Into Own Hands as Eagle Ford Shale Boom Continues Undaunted

Flare stack

Hugh Fitzsimons lll, a buffalo rancher on the outskirts of Carrizo Springs, Texas, cautiously watches the fracking industry’s accelerating expansion. His 13,000-acre ranch is atop the southwestern part of the oil-rich Eagle Ford Shale, which stretches from Leon County in northeast Texas to Laredo, along the Mexican border.

During the last two years Fitzsimons has watched the fracking boom transform a rural locale into an industry hub. Desolate dirt roads are now packed with truck traffic, and commercial development to service the growing industry has sprung up along state highways, creating air and noise pollution.

Hugh A. Fitzsimons III

Hugh A. Fitzsimons lll on a dirt road near his ranch in the Eagle Ford Shale. ©2014 Julie Dermansky for Oceans 8 Films

Though Fitzsimons stands to profit from oil extraction, he has not turned a blind eye to the industry’s damaging effects on the environment. He wants to make sure the expanding industry acts responsibly and is doing his part to ensure that happens, a tall order since a state-sponsored report estimates the number of wells could grow from 8,000 to 32,000 by 2018 and industry polices itself for the most part.

Texas Regulators Sidestep Connection Between Fracking Industry and Earthquakes

XTO wastewater disposal plant

New rules for Texas injection wastewater well operators offer no relief to people impacted by more than 30 earthquakes that hit Azle, Reno and Springtown almost a year ago. Many buildings in the three small cities, 50 miles west of Dallas, Texas, suffered broken windows, cracked walls, damaged plumbing and foundations. 

Seismic activity is not something the region is known for. It was only after deep injection disposal wells used to house fracking's toxic wastewater went into operation that the earthquakes started. There are several injection wells in the area — three of which some suspect to be the cause of the quakes due to their proximity to impacted neighborhoods and the volume of disposal operations. 


Crack in an Azle, Texas, residence that opened after an earthquake. ©2014 Julie Dermansky 

“Injection raises the underground pressure and can effectively lubricate fault lines, weakening them and causing earthquakes, according to the U.S Geological Survey,” reports McClatchy Washington Bureau

The Texas Railroad Commission, the agency that regulates the oil and gas industry, was met with public outcry after the first earthquake swarm. The commissioners acted fast (by the agency’s standards), coming up with new rules to address the situation released on Oct. 28.  

The new rules require oil and gas companies to check local seismic data from the U.S. Geological Survey before opening a new waste disposal well. They also give the agency the power to change, suspend or revoke an injection operator’s permit if the commission determines the well is contributing to seismic activity.

Marcellus Shale Fracking Rush Brings Worries of Boom-Bust Cycle

Across the U.S., the shale gas industry's arrival has been marked by wariness, not only of the environmental impacts associated with fracking, but also due to the oil and gas industry's long history of flashy booms followed by devestating busts.

In towns across the state, the lingering effects of past economic downturns – the flight of manufacturing, the 2008 financial collapse, the slow erosion of the auto and steel industries – have left communities eager for jobs, but also experienced with job loss.

Nowhere better illustrates the potential for a shale rush to heal old economic wounds, or communities' vulnerability to new ones, than Cameron County, Pennsylvania. At the eastern edges of the rust belt, Cameron County has been hit hard by the decline of the American auto industry.

Hopes for a shale renassiance are running up against some difficult realities. A report released Monday by the Post-Carbon Institute, titled “Drilling Deeper: A Reality Check on US Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” concludes that the Marcellus shale is unlikely to fully live up to government forecasts, and that natural gas prices will have to rise to keep drilling going across the state. The vast majority of the Marcellus shale is not the same high quality as the areas where drillers are currently focusing most of their efforts, referred to in the industry as “sweet spots,” making the gas there more expensive to produce.

The report also finds that shale gas production in the Marcellus is expected to reach it's peak in 2018 or 2019 – meaning that within five years, production will begin dropping. “These projections are optimistic in that they assume the capital will be available for the drilling treadmill that must be maintained to keep production up,” the report says. “This is not a sure thing as drilling in the poorer quality parts of the play will require higher gas prices to make it economic.”

DeSmogCAST Episode 1 Drilling Down: Fracking, Lobbying and the U.S. Midterm Elections

This week DeSmog is launching its inaugural episode of DeSmogCAST, a weekly newscast featuring our writers, experts and invited guests. Each week we’ll discuss breaking stories and engage in analysis of politics, energy and environment issues in the U.S., Canada and around the world.

In this episode, hosted by DeSmog contributor Farron Cousins, our team discusses Steve Horn’s recent story on the new Post Carbon Institute report that calls into question the viability of forecasts for oil and gas production via fracking.

A Horn explains, “if you look at this report it second guesses a lot of the estimates put out by the Energy Information Agency in the States.”

There’s a concept called the drilling treadmill in industry: you have to drill more and more just to maintain productivity. Which means all the things we know about, water contamination, climate change impact, on a county by county basis across the U.S. those happen all over the place just so industry can maintain flat levels of production.”

It’s a story of false premises,” Horn adds.

U.S. Energy Policies Based on Inflated Fracking Predictions: Post Carbon Institute Report

Economic predictions about the fracking industry's potential growth have for the most part gone unquestioned — until now.

A new report from the Post Carbon Institute exposes highly inflated forecasts and concludes that the amount of oil that can be tapped by hydraulic fracturing cannot be maintained at the levels assumed beyond 2020.

The report, “Drilling Deeper: A Reality Check on US Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” says inflated forecasts from the Energy Information Administration have fostered a lack of urgency to transition to renewable energy. The report also looks at the oil industry's increased pressure to relax restrictions on fracking and change oil and gas export rules.  

The Department of Energy’s forecasts — the ones everyone is relying on to guide our energy policy and planning — are overly optimistic based on what the actual well data are telling us,” says David Hughes, a geoscientist and author of the Post Carbon Institute report.

The report shatters the government’s estimate of the potential productivity of America’s shale regions. Four out of seven of the top shale regions have peaked and are now in a decline, the report says. Another three will peak in production before the government’s forecast predicts. In decline already are the Barnett, Haynesville, Fayetteville and Woodford Shales.
  

Source: Post Carbon Institute 

Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers

Post Carbon Institute has published a report and multiple related resources calling into question the production statistics touted by promoters of hydraulic fracturing (“fracking”)

By calculating the production numbers on a well-by-well basis for shale gas and tight oil fields throughout the U.S., Post Carbon concludes that the future of fracking is not nearly as bright as industry cheerleaders suggest. The report, “Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” authored by Post Carbon fellow J. David Hughes, updates an earlier report he authored for Post Carbon in 2012.

Hughes analyzed the production stats for seven tight oil basins and seven gas basins, which account for 88-percent and 89-percent of current shale gas production.

Among the key findings: 

-By 2040, production rates from the Bakken Shale and Eagle Ford Shale will be less than a tenth of that projected by the Energy Department. For the top three shale gas fields — the Marcellus Shale, Eagle Ford and Bakken — production rates from these plays will be about a third of the EIA forecast.

-The three year average well decline rates for the seven shale oil basins measured for the report range from an astounding 60-percent to 91-percent. That means over those three years, the amount of oil coming out of the wells decreases by that percentage. This translates to 43-percent to 64-percent of their estimated ultimate recovery dug out during the first three years of the well's existence.

-Four of the seven shale gas basins are already in terminal decline in terms of their well productivity: the Haynesville Shale, Fayetteville Shale, Woodford Shale and Barnett Shale.

-The three year average well decline rates for the seven shale gas basins measured for the report ranges between 74-percent to 82-percent. 

-The average annual decline rates in the seven shale gas basins examined equals between 23-percent and 49-percent. Translation: between one-quarter and one-half of all production in each basin must be replaced annually just to keep running at the same pace on the drilling treadmill and keep getting the same amount of gas out of the earth.

Supporters of Fracking Ban Face New Wave of McCarthyism in Denton, Texas

Banning fracking in Denton, Texas

In Denton, Texas, a college town north of Dallas that sits atop the Barnett Shale formation, the fight over a referendum banning fracking within city limits is in the final stretch.

The local ballot initiative has global implications, with the energy sector watching closely.

The turmoil in Denton reflects a growing national debate between those concerned with health and quality of life issues, and others who claim the fracking industry is America’s answer to economic growth and energy independence.

Revealed: Former Energy in Depth Spokesman John Krohn Now at U.S. EIA Promoting Fracking

For those familiar with U.S. Energy Information Administration's (EIA) work, objectivity and commitment to fact based on statistics come to mind. Yet as Mark Twain once put it, “There are three kinds of lies: lies, damned lies, and statistics.”

That's where John Krohn comes into play. A former spokesman for the gas industry front group Energy in Depth (EID), Krohn now works on the Core Team for EIA's “Today in Energy!“ 

Krohn has been at EIA since at least January 2014, when his name first appeared on the EIA website. On his Twitter account, he describes himself as an EIA communications manager.

As DeSmog revealed in February 2011, Energy In Depth was launched with a heavy injection of funding from oil and gas industry goliaths such as BP, Halliburton, Chevron, Shell and XTO Energy (now owned by ExxonMobil).

With its public relations efforts conducted by FTI Consulting, EID now serves as a key pro-industry front group promoting unfettered hydraulic fracturing (“fracking”) to the U.S. public.

Krohn follows in the footsteps through the government-industry revolving door of the man President Barack Obama named to head the U.S. Department of Energy (DOE) for his second term, former Massachusetts Institute of Technology “frackademic,” Ernest Moniz. DOE is the parent agency for EIA

Further, EIA Administrator Adam Sieminski, another second-term appointee of President Obama, also passed through the same revolving door as Krohn and Moniz in his pathway to heading EIA. He formerly worked in the world of oil and gas finance. 

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