The Next Oil Frontier

By Keith Kloor | May 24, 2011 8:49 am

Like a monster in a horror movie, oil might prove tough to kill off. This front-page story in today’s WSJ ought to give climate concerned folk the shudders. Because it’s behind a pay wall, I’m going to quote extensively from the piece, including this set-up:

The Arabian Peninsula has fueled the global economy with oil for five decades. How long it can continue to do so hinges on projects like one unfolding here in the desert sands along the Saudi Arabia-Kuwait border.

Saudi Arabia became the world’s top oil producer by tapping its vast reserves of easy-to-drill, high-quality light oil. But as demand for energy grows and fields of “easy oil” around the world start to dry up, the Saudis are turning to a much tougher source: the billions of barrels of heavy oil trapped beneath the desert.

Heavy oil, which can be as thick as molasses, is harder to get out of the ground than light oil and costs more to refine into gasoline. Nevertheless, Saudi Arabia and Kuwait have embarked on an ambitious  experiment to coax it out of the Wafra oil field, located in a sparsely populated expanse of desert shared by the two nations.

That the Saudis are even considering such a project shows how difficult and costly it is becoming to slake the world’s thirst for oil. It also suggests that even the Saudis may not be able to boost production quickly in the future if demand rises unexpectedly. Neither issue bodes well for the return of cheap oil over the long term.

Here’s the potential sequel to ‘easy oil’:

The U.S. Geological Survey estimates there are some three trillion barrels of heavy oil in the world, about 100 years of global consumption at current levels. The catch: Only a fraction of it–about 400 billion barrels–can be recovered using existing technology. New techniques like the ones being tried in Wafra could unlock more.

“When people talk about how we’re ‘running out of oil,’ they’re not counting the heavy oil,” says Amy Myers Jaffe, who runs the Energy Forum at Rice University’s Baker Institute for Public Policy in Houston. “There a huge amount of resource there…It’s just a question of developing the technology.”

The whole article, which is lengthy and well worth reading, is a straight business/energy story. Not a mention of the climate implications.

Should there have been at least a nominal nod to climate change concerns, given the potential conseqences of this new oil frontier?

CATEGORIZED UNDER: climate change, Energy, heavy oil
  • cagw_skeptic99

    Climate change concerns are primarily of interest to those who make their living doing climate research, a relatively small group of non-involved people who advocate for them, and the left side of the main stream media (most of the msm).

    People and businesses who earn a living in the private sector have long since figured out that CO2 mitigation is just tilting at windmills. CO2 may or may not really matter, and there is little actual evidence that it does. Those who believe in computer model projections have placed their faith in projections that have repeatedly projected trends that are not happening, but that doesn’t seem to matter to the faithful.

    The ability to have jobs, pay the mortgage, educate the children, heat and cool homes and businesses depends on the supply of inexpensive energy. After decades of massive subsidies and enforced usage, what is called renewable energy is an expensive and generally worthless sinkhole for public funds.

    There is no mention of climate concerns because they are not relevant. Until the climate actually experiences undesirable warming consequences that matter to policy makers, it will continue to be irrelevant.

    Most of what was forecast ten or twenty years ago has been conveniently forgotten by the faithful. Sea level rise is not accelerating and has been flat or actually decreasing for a few years, for example. Snow didn’t become rare in England. Some people remember the outlandish projections made by the same people who continue to make them today.

  • Gaythia

    @1  What about corporate sinkholes that snarf valuable public monies and  tax dollars and make things more expensive for the rest of us?  Where are massive public subsidies really going?

    My list includes:

    Tax breaks for large oil corporations.

    Public funded roads that are demolished with real sinkholes made by heavy trucks, but no money for railroads or public transit  Or, toll roads where the toll now goes to private investors in Portugal (Denver, e470 to the airport, which was built with public highway authority bonds and now costs $7.50 from my house).

    New developments with homes that are poorly insulated and not built or oriented with windows passive solar heating or large overhangs for cooling or roof space for solar collectors.  Developments that are supplied with cheap in the short term furnaces and appliances that are energy hogs. (My house, for example).

    Big box stores built with tax subsidies (often by setting neighboring communities off in competition with one another), but no money to revitalize existing small business retail shops.  If built in a flood plain public subsidies for insurance can pay again.

    Vouchers that give somebody else’s kid public funds for a route into a private, even religious school while public schools face cutbacks (Douglas County, CO).

    Climate concerns are relevant the way all usages of the public commons for short term private gain are of concern.  Adult humans have brains capable of reasoning out long term consequences.  We can use our knowledge and analytical abilities to make wise decisions regarding how to invest our resources, our communities resources, and Earth’s resources to create a better future.

    In my opinion, believing that: “Until the climate actually experiences undesirable warming consequences that matter to policy makers, it will continue to be irrelevant.“  is as silly as not worrying about where your next meal is coming from.  The time to think and plan is well before it is too late.



     

  • harrywr2

    Should there have been at least a nominal nod to climate change concerns?
    Why? Petroleum products are already taxed extremely heavily in much of the world. In Europe the cost of the oil is just 25% of the pump price.




     

  • BBD

    Should there have been at least a nominal nod to climate change concerns, given the potential conseqences of this new oil frontier?

    Yes. But reportage of the climate impact of oil (and coal, and gas) must include balancing analysis of the fundamental problems with renewables.
    Eg:
    http://bravenewclimate.com/2011/05/09/renewables-are-not-sufficient-p1/
    http://bravenewclimate.com/2011/05/12/renewables-are-not-sufficient-p2/
    The distortion of energy policy by the renewables industry via its keenly-honed lobby is extremely dangerous. Perhaps the unfolding policy disaster here in the UK will serve as a salutary lesson to the US.
    There is little else positive that I can see coming from it.

  • Jeff Norris

    @Gaythia
    First I agree the Tax Code and subsidies need a critical review. Can you point me to the legislation that says only big oil companies get a certain tax break or are you suggesting that legislation should have a needs test in order to qualify for government subsidy?  Would you bar big oil from getting a tax break or money for investing in alternative fuels? The toll road you mentioned is owned and run by a quasi government group of local governments that is paying private investors building the road.
     http://www.e-470.com/        
    Fitch Ratings defines them as this
    The E-470 Public Highway Authority, which is a subdivision of the
    State of Colorado as authorized by the public highway authority law,
    was established in 1988, and its members include the counties of
    Adams, Arapahoe, and Douglas; the cities of Aurora, Brighton,
    Thornton, and Commerce City; and the Town of Parker. The 47-mile E-470
    toll road forms the eastern portion of the Denver region’s beltway.

    The question then is how governments should pay for projects if they don’t have the money.  Why weren’t the residence of Pueblo or Grand Junction willing to pay higher Taxes in order to keep the cost of your airport commute down?
    Big boxes subsides are a little trickier.  It normal comes down to this.  The city sees that a significant portion of its residence leave the city in order to purchase items there by losing sales tax revenue.  They then take the gamble of “If we Build it they will Stay”.  They also hope that even residence of the surrounding community will now come to the city to purchase items and those subsidies big boxes will encourage the building of non subsidized retailers too.
    Subsides work in reverse when times are good also.  When a developer or business wants into a market the cities often have them pay for nearby road work, utility upgrades, parks, and schools.  I knew a city manager who could point out all sorts of improvements in our city paid for by developers and new businesses in town with pride.

    Vouchers are interesting, would you be willing to let people opt out of funding or get a tax credit to offset the cost?
    Would you be willing to pay a higher toll on the e470 if the money went to schools?   Douglas County is a part of the highway authority after all.

  • cagw_skeptic99

    @Gaythia ‘In my opinion, believing that: “Until the climate actually experiences undesirable warming consequences that matter to policy makers, it will continue to be irrelevant.“  is as silly as not worrying about where your next meal is coming from.’

    There is difference between observing current behavior of policy makers and believing that it should be that way.  The believers in the catastrophic part of AGW seem to act like they think it is important for individuals, communities, and countries to sacrifice their standard of living to ‘save the world from CO2′ when simple math based observations make it clear that these sacrifices will not make even the slightest measurable difference in the climate.

    The Chinese, Indian, etc. increases in CO2 emissions will dwarf all the likely sacrifices by the believers.  The amount of CO2 emitted will far exceed the goals set based on the current crop of computer models.  Either it will or it won’t make a difference to have more CO2, and either it will benefit or be harmful to various regions of the world, or not.

    The sacrifices made by the world’s poor in their food cost and food supply choices are not subject to  future confirmation of climate modeling computer programs.  Their negative results from diversion of food into alcohol fuel is obvious for all to see.  The extra money it costs to heat homes in England and most of Europe due to CAGW based CO2 taxes and regulations is plainly obvious for all to see.  The fact that these sacrifices never have and very likely never will make the slightest measurable difference in the climate is also plainly obvious to anyone with a calculator.  If an increase in CO2 really will ‘force’ undesirable climate warming, then that is what will happen because the decision makers in the countries that matter have made it clear that they prefer growth over poverty and sacrifice.

    Likely most of the readers would make the same decisions if they lived in countries where large numbers of people were trying to transition from subsistence living to modern conveniences like electricity, heat that doesn’t come from dung or wood fires, clean water, modern medicine, etc.

  • Gaythia

    @5 In my opinion, the problems with our tax code and government subsidies is that they frequently operate as a system of crony capitalism and not one operated for the common good.

    School taxes, for example, are not supposed to work out on a per child basis.   Public educational institutions are to raise the educational level of the entire community, from which all benefit, whether they have a child or not.

    The Colorado e470 highway is, as I see it a case in point, one that is a poster child for government/private partnerships gone awry.

    The straightforward mechanism would have been for the State of Colorado to either raise taxes to build the road directly or to issue bonds and been paid back directly from toll revenue. Alternatively, the state could have, by better planning at the older airport, avoided the need to build a new one in what was when it was started, “out in the middle of nowhere”.  Or, the state could have accelerated the construction of the Fastback train mass transit system.

    The E-470 Public Highway Authority  is described as a  private entity by the Colorado Department of transportation See: http://www.coloradodot.info/travel/tolling/e-470-public-highway-authority.url. The Authority operates the toll road with a lease agreement with a group of Portuguese and Brazilian companies. Charges are extremely high, about 31 cents per mile and with fines  can bring the toll for one late payment up to $537.  There are numerous complaints about late payment charges because fees for intermittent users depend on cameras capturing the back license plate and sending a bill.  (regular users can buy a pass).  The local governments involved have agreed not to build roads (or maintain high speed limits on rural roads) that compete with the toll road.  This has the effect of both stiffing rational development and clogging roads with both local traffic and those of us who are zig-zagging through on our way to the airport.  I think that the counties involved have inadvertently volunteered for third world nation status.

    All and all this seems a great system only for those who benefit financially and live far, far away, say, in Brazil or Portugal.
    @6 I think that a distinction can be drawn between “standard of living” and actually quality of life.  While not all of the transitions will be easy ones, I think that in the long run things can work out well for most of us. I can be even happier here in Colorado with less bluegrass watered with purified tapwater and more passive solar gain and solar collectors. 

    Women in many developing nations would be happier with less time spent hunched over sooty cookers.  People everywhere would prefer not to live in highly polluted cities.  I agree that the diversion of food into ethanol fuel is very negative, but I certainly do not see how this can be attributed to global warming.

    Just as many developing nations have leapfrogged right over telephone wiring in favor of cell phones and satellite services, many will be able to have electricity with solar panels and not extensive wiring, waste treatment without the water demands of flush toilets and sewers and so forth.

    I don’t think that growth has to be growth at any price and I do not believe that the choice is between growth and poverty and sacrifice.  Electricity, clean water, modern medicine and other desirable aspects of modern life do not have to come from exactly replicating the structures of  currently developed nations.

  • kdk33

    Electricity, clean water, modern medicine and other desirable aspects of modern life…

    Require readily available, low cost energy.  The cheaper the energy, the more of these desirable aspects we have.  More expensive energy means less. 

  • cagw_skeptic99

    #7 “many will be able to have electricity with solar panels and not extensive wiring, waste treatment without the water demands of flush toilets and sewers and so forth.”

    So when the cost of a $500 solar panel and $50 storage battery gets down to where a family making maybe $1-2 a day, and spending that all on subsistence, can afford to have one shipped in.  they will enjoy the benefits of renewable energy.  Or maybe the whole village will chip in and they can afford to charge one cell phone.

    It may be, as many CAGW believers seem to think, that renewable energy will be cost competitive with fossil fuel someday.  In the mean time, your answer is that they should just do without because you believe that their coal or natural gas fired power plant will cause undesirable global warming?

    I believe that the people who need and want the better life today, and their kids, and probably their grand kids will all be dead of old age before your renewable energy delivers anything they can afford.  I also believe that the ‘science’ behind catastrophic global warming predictions would have been discarded long ago if it were not for the billions of dollars that is flowing to the believer’s community.  Your belief may differ.

  • Gaythia

    @ 8 Define “desirable aspects” of modern life, in a context of cheap energy from, say, coal, with a local mining and power plant, or natural gas, with local fracking.  It helps, of course, to isolate yourself from those negative consequences.
    Even without considering global warming challenges, its not necessarily true that the more energy used, the merrier you are.

  • Gaythia

    @9  Many people in developing nations can’t really afford continual purchases of conventional energy, like fuel, but can collectivize to support one time renewable energy investments or to purchase improved cookers which reduced fuel requirements.

    Cell phone rental and charging stations are growth microfinance industries in some areas.

    And for shear inventiveness in the face of adversity that puts the rest of us to shame, I recommend reading:
    The Boy who Harnessed the Wind, by William Kamkwanmba.

    “After starving for five months on his family’s small farm (in Malawi), the corn harvest slowly brings Kamkwamba back to life. Witnessing his family’s struggle, Kamkwamba’s supercharged curiosity leads him to pursue the improbable dream of using “electric wind”(they have no word for windmills) to harness energy for the farm. Kamkwamba’s efforts were of course derided; salvaging a motley collection of materials, from his father’s broken bike to his mother’s clothes line, he was often greeted to the tune of “Ah, look, the madman has come with his garbage.” This exquisite tale strips life down to its barest essentials, and once there finds reason for hopes and dreams,”  Publishers Weekly review, from Amazon.

  • Gaythia

    “Or maybe the whole village will chip in and they can afford to charge one cell phone.”
    YES!
    http://news.bbc.co.uk/2/hi/programmes/click_online/4706437.stm
    “Some 97% of Tanzanians say they can access a mobile phone, and what is just as interesting, as in many African countries, is how those phones are being used.”
    “Call centres have sprung up all over Tanzania. Most people do not actually own phones, so this is how many people communicate.”
    “The digital divide that we thought was really very big between Africa and the rest of us in the Western world is really diminishing, and it’s the mobile phones doing it, not the PC.”

  • Ian

    Gaythia says (# 10)
    Even without considering global warming challenges, its not necessarily true that the more energy used, the merrier you are.

    I agree, however from my experiences in Malawi I’m pretty certain most Malawians would jump up and down in ecstacy at having regular access to just one light globe.

    (#6)
    Electricity, clean water, modern medicine and other desirable aspects of modern life do not have to come from exactly replicating the structures of  currently developed nations.

    Agree once again, however western thought on what may be the preferable actions for those in the ‘developing’ world to take in these regards is often quite far removed from the lived experiences of those most directly affected by poverty, inspiring stories about harnessing wind notwithstanding.   

  • Gaythia

    @13  “from my experiences in Malawi”  makes it sound as if you might have some interesting perspectives on energy, western thought and the developing world?
     

  • Jeff Norris

    Gaythia

    This site gives a history of Highway 470.  http://www.mesalek.com/colo/denvers470.html#e470his

    The take away quote is at the bottom

    The whole process of planning transportation in the metro area is a very convoluted, bizarre, Byzantine process. Between the municipalities, counties, DRCOG, the federal government, the environmentalists, the regional Air Quality Council, and then on top of that the State Highway Department and RTD, everybody and their dog participates and can virtually stop a project or influence it or whatever.

    After reading this article I suspect the airport was the same way/

    http://www.nytimes.com/1989/02/09/us/denver-airport-plan-runs-into-trouble.html?pagewanted=3&src=pm

    Avoiding the cheap shot, would you have felt better if the project banned non US owned companies from benefiting from this or any public project in Colorado?  The non compete sucks, but do you think that investors would have required a bigger return and therefore higher toll rates without it.

    You reference to Zantel is kind of ironic.  80% of it is owned by  Emirates Telecommunications Corporation (in the top 10 of telecoms) which is in turn controlled by the UAE.  Big oil is everywhere.  Of course the UAE is doing all of this at very little profit because they are the paragon of virtue.

    http://www1.american.edu/carmel/jp2450a/2.htm

    I guess my overall point is that who decides how development progresses and who pays.  In CO the voters did but you are unhappy with the decision, would you feel more comfortable if it was a group of tribal elders or perhaps a College of Cardinals?  If the citizens refuse to pay for this development should the government merely take what is needed?  Finally since “Public educational institutions are to raise the educational level of the entire community, from which all benefit, whether they have a child or not.”  Then can’t the community allow and support alternatives as long as education levels are raised? 

  • Ian

    #14

    Don’t think they’re particularly interesting or original. I’m slowly learning not to hold onto my beliefs too tightly and, whenever I remember, attempt to walk in another person’s shoes before engaging in erudite commentary.
    best wishes, ian

  • Gaythia

    @15 I think that a more open, democratic, public process would have created different results, starting, as your second link shows, with the airport itself.  Meanwhile I will continue to get to the airport, when necessary, by various road meanders.  If e-470 were not built, these roads might be slightly more congested, but, given the low level of usage of e-470,  I don’t think by all that much.  Plus, without the tollway blocking things off, the remaining streets could be extended in a better grid pattern that would potentially be an improvement for traffic flow.  Maybe if we were clever, we would be buying up land even further out to profit from the  the next iteration.   Although if the oil monster is killed (as Keith promotes above), maybe this will be moot.  One thing you can’t do with solar panels is run airlines.
    I believe that public education should be public and accessible to all.

  • Jeff Norris


    Gaythia
    Your intentions are noble and I sincerely admire your passion.  The good news is I believe the non compete had a 15 year term so you might see some road work on your commute in the near future.  My wife’s friend is a commercial real estate agent in Colorado Springs he thinks by 2025,  land values within the 300 square miles surrounding Denver International Airport, will  increase by 300% or more.  If only I could get him to make that a guarantee.   
    “Buy when there’s blood in the streets, even if the blood is your own.
                                                                                                    Baron Rothschild
    Son, stocks may rise and fall, utilities and transportation systems may collapse. People are no damn good, but they will always need land and they’ll pay through the nose to get it!”
                                                                    Lex Luthor’s  Father

  • http://ourchangingclimate.wordpress.com Bart Verheggen

    To answer your last question:

    “Should there have been at least a nominal nod to climate change concerns, given the potential conseqences of this new oil frontier?”

    That would be a loud and clear YES (without the nominal). It is imperative that not all carbon that is in the ground will be burnt, if we are to grant future generations a type of life and type of planet similar to ours.

  • http://skepticalscience.com grypo
  • http://skepticalscience.com grypo

    oops wrong thread!

  • http://collide-a-scape.com Keith Kloor

    Charlie Petit over at the Science Journalism Tracker has a relevant post on the WSJ story, and a related NYT piece.

  • Ed Forbes

    LoL….

    So where is the “peak oil” crash we have been hearing about for the 40 years.

    heavy oil and shale gas !! Drill baby Drill !!

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Collide-a-Scape

Collide-a-Scape is a wide-ranging blog forum that explores issues at the nexus of science, culture and society.

About Keith Kloor

Keith Kloor is a NYC-based journalist, a senior editor at Cosmos magazine, and adjunct professor of journalism at New York University. His work has appeared in Slate, Science, Discover, and the Washington Post magazine, among other outlets. From 2000 to 2008, he was a senior editor at Audubon Magazine. In 2008-2009, he was a Fellow at the University of Colorado’s Center for Environmental Journalism, in Boulder, where he studied how a changing environment (including climate change) influenced prehistoric societies in the U.S. Southwest. He covers a wide range of topics, from conservation biology and biotechnology to urban planning and archaeology.

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