Climate Change is the Big Issue
Fossil fuel prospects are promoted by narrow-minded and irresponsible developers
Essay by S. Tom Bond, Retired Chemist & Resident Farmer, Lewis County, WV
What are the prospects for oil and gas? We are subject to an overload of happy talk about the subject with little reality to counter it. It is jobs, jobs, jobs to a hungry working class, in spite of the fact hydrocarbons are the most capital intensive and low labor route to energy. There are three times as many workers in the solar industry in the US as there are working in coal mines. Better work, too.
Natural gas for electrical generation is said to reduce pollution, in spite of the fact it continues to use the atmosphere as a dump. Nearly 5.4 billion metric tons of carbon dioxide are emitted by the U.S. presently each year.
Very little money has been made by the development of fracking, as horizontal drilling and high pressure crushing of shale formations is called. Over $74 billion has been lost in bankruptcy of oil fracking companies, according to Haynes and Boon a law firm that specializes in bankruptcy, and many other companies and support companies are in precarious condition. The method is an expensive way to get hydrocarbons with a breakeven of about $50 a barrel for oil, and a similar high cost for natural gas. Vaunted “improvements in technology” mean more from each well, which covers more ground, not decreased cost per unit of production.
The U. S. prohibited exporting oil forty years ago, due to exhausting original reserves, but began to export again in the summer of 2014. Nevertheless, 9.45 million barrels a day is imported and 4.74 million is exported, much of it having passed through refineries to make end products leaving a net import of 4.71 billion, mostly crude oil. The fact is the “good stuff,” the easily obtainable oil in sandstone and cracked limestone, is waning rapidly. That kind of deposit is still available in other parts of the world, which the U. S. either controls with difficulty, such as Saudi Arabia, or actively seeks to prevent production, such as Venezuela or Russia. Look up “world oil reserves” and “world natural gas reserves.” The truth is shocking.
U. S. production is about 9.4 million barrels a day. So we import roughly the same amount of oil, then export roughly half of that, much of it in refined form. “Energy independence” is not likely as a result of fracking. This is what Anthony Ingraffea, Ph.D., P.E. and Dwight C. Baum Professor of Engineering Emeritus and Weiss Presidential Teaching Fellow at Cornell University, had to say about the recent announcement of a new field in Texas, “OK, here we go again: another “BIG” find. Read the fine print under those HUGE numbers. 20 billion barrels of oil = a 3 year supply for the US at current consumption rate. 16 trillion cubic feet of gas = 9 month supply for the US at current consumption rate. A few more finds like this and we could be fossil-fuel set for life, or at least a decade or so…”
The greatest issue now faced by civilization is dumping carbon dioxide into the atmosphere in almost unbelievable quantities. Other drawbacks are also connected with the same processes.
There are powerful incursions against the earth’s living systems, in the form of surface damage such as result from stripping coal, fracking for oil and gas, with it’s attendant roads, pipelines and water diversion onto areas where the vegetation is not able to resist additional fast flows. A well pad with approach roads requires 10 to as much as 20 acres rocked with several inches of stone. The attendant pipeline requires eight to ten acres and stays cleared for the life time of the well pad and takes 70 years to regrow to forest under ideal conditions beyond that.
Another issue is the virtual theft of property from the stewards of the earth by archaic laws made in a time when it was not possible to foresee the demand for land services rising to meet the needs of so many billions of people as we can now see on earth a few decades down the road. When the wealth is accumulated to few people it goes for yachts, million dollar weddings, multiple mansions, and other non-productive life style accouterments.
Renewables sometimes get a bad rap. They don’t account for a large part of the energy yet. However they are on an exponential increase, more and more rapidly as the base increases. And they did account for half the new electrical generation capacity, worldwide, last year.
There are complaints about subsidies for hydrocarbon companies. One of these is the depletion allowance, worth perhaps $1 billion a year. In U. S. tax law this is an allowance claimable by anyone with an economic interest in a mineral deposit. One of the two methods of claiming the allowance makes it possible to write off more than the whole capital cost of the asset. Without getting into the details, others include: Master Limited Partnerships, a kind of business arrangement; royalty reduction payment on federal lands; intangible drilling costs worth $3.5 billion and the domestic manufacturing production subsidy.
In addition they are allowed to keep money in tax havens offshore, deduct “transportation costs” and other expenses from royalty owners, and various other subterfuges to avoid payment of the 12.5% royalty minimum allowed by law in West Virginia. In Pennsylvania, they pay no extraction tax and leave the public to pay for road damage and landowners to pay for water loss, sickness and property value reduction. In short, oil and gas are hugely subsidized. And coal is not far behind.
Competition in the form of renewables is coming on in an ever rising curve. The efficiency of solar is increasing. Big chains like Walmart, FedEx, IKEA, and General Motors are using it. In fact this use has increased by 183% in the last year. In a few years Kansas will be generating more electricity by wind power than it uses. Some 38 states have commercial installations. Technology is in the developing stage, and if you read general scientific literature, you find improvement of solar continues constantly. Originally, only one wavelength could be changed by solar to energy conversion, now three can be.
We must stop the increasing incursions against the natural world, which are caused by pursuit of energy requiring vast tracts of land and dumping carbon dioxide and methane as always, which affects the atmosphere.
The greatest thing the oil & gas companies have in their favor is political inertia. They have custom, a favorable body of established law, and surplus cash to push their interest against what is known by science and in the interest of society. Exxon determined the road for the whole industry, when they acted against the public interest, when they were in the forefront of discovery. So what will it be? Disaster or needed change? The next several decades will be very interesting indeed!
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