Britain still has large reserves of iron and coal…and yet…
The State will not die easily..
Of course the new extractive technologies and the reserves, if proven and economically viable, are good news.
But before we start going along with Dr Pangloss’s breathless invocations of “game-changer” this and “revolution” that, we should bear in mind a few things:
1. These reserve numbers have a great deal of uncertainty attached to them. Not all of them are proven.
Maybe they will all pan out; maybe not. It was only last month that Exxon announced that Poland’s reserves, which breathless cheerleaders had announced would keep Poland free of GazPutin’s energy blackmail, were actually only ONE-TENTH of what had originally been surmised.
2. Mead as usual does not know how to do basic data analysis. His high estimate of 600,000 jobs – even if it does come to pass – is at best a minor dent in a total labor market of 133,088,000.
This high estimate would not even amount to one half of one percent of total employment. While great news – hip hip hooray, Booyah! and all that – this is not even close to being a “game-changer,” let alone a “major factor in propelling the United States to the next (and still unknown) stage of development — towards the next incarnation of the American Dream.”
For example, just to take one of the top of my head, the last century’s advances in tural electrification, combined with massive new power generation entities such as the Tennessee Valley Authority and the Hoover Dam, were indeed “game-changers” that brought on “the next incarnation of the American Dream.”
Fracing will not come close to the impact of the above transformation.
Again, to be clear: it is nice to have – Booyah! – but it’s not going to do much more than give a boost to chemical manufacturers’ stocks ($OMN => Buy) and increase employment in a few states.
Mr Mead’s rather excitable emotions are once more getting the better of his judgment.
“That spirit of innovation and the culture that supports it are the true sources of American wealth.”
I’m glad you mentioned this, so often we hear from other jealous cultures that the reason for America being the sole super power is all the natural resources we have. But, this isn’t true, look at the success of the imitative Japanese culture which despite the destruction of WWII, was looking to overtake the US by the late 1980’s only 40 years later. If it wasn’t for the adoption of the flawed European Welfare State Socialist model, they might very well have surpassed the US even though they have few natural resources beyond their culture. It was foolish of them to imitate the Europeans, when they should have imitated the Culture that kicked their ass in WWII; I guess they were too proud to admit the truth to themselves.
The fact is American Culture is mankind’s bleeding edge culture, and if it wasn’t fracking it would have been Thorium Nuclear Reactors, or doing something with the subsurface oil shale (50 to 100 meters down, 2 Trillion barrels of reserves) that needs to be retorted to get the super sweet Kerogen oil out, or perhaps some cost effective way to mine the unbelievable amounts of methane hydrate ice on the ocean floors, or something else I can’t think of. Only the bleeding edge American Culture has spawned a TEA Party movement, supported by a large percentage of the citizenry. Socialism and the Blue Model are in decline in the US, and the Democrats and Obama have probably seen the peak of leftist power for decades to come.
“America’s job in the 211st century looks like handling its new set of opportunities wisely and well.”
“The energy revolution isn’t a magic wand that can make all America’s wishes come true, but it is a powerful wind in the sails of both America’s domestic economy and its international goals.”
WRM, essay encompasses a lot; major implication is that domestic energy development/revolution augurs sustainable employment and buttressing of international system premised on Anglo-American liberal capitalism. Yet, time horizon and clarity vis-a-vis geographical economic renwewing require further elaboration (perhaps in subsequent energy essays). More definitely needs to be brought forth on new energy boom WRM given implied potential for rearranging social contours.
@Thibaud There is a book you should read called “Language, Proof, and Logic.” It was required of all philosphy majors at Berkeley when I taught there. Of course, if you studied Mathematics much of the concepts would be second nature, but I found it useful for those in the quantitative sciences to form one’s ideas about the physical world into prose.
This is good news, no doubt about that. But can cheap and abundant energy by itself restore average Americans’ standard of living? Wages will continue to be determined by supply and demand, modified by whatever redistributive fiscal policies we decide to pursue. There are still billions of desperately poor people in the world and thousands of billionaires who don’t want to share the gains to be made by doing business with them. Wage subsidies financed by a graduated tax on consumption is one way to go. Accepting the natural distribution of income that occurs in a free market economy is another. Old fashioned protectionism is a third.
Maybe we should call that a graduated tax on personal expenditures (defined as income minus savings).
GET for GATT would be a good slogan.
Get rid of the corporate income tax, the capital gains tax, the tax on unearned income, even the estate tax: the only thing that counts is personal consumption.
Again, GET for GATT!
GET stands for “graduated expenditure tax.” GATT stands for free trade in the new global economy.
In my poor, deluded mind that’s the only way to go.
Modern societies float on a sea of reasonably priced, easily available, and secure energy supplies. We have been held hostage by the Middle Eastern oil sheikdoms since the fifties. We have exported too much money to them by importing so much oil. Money that could have been used to create even more wealth and jobs here in the U.S.
What many don’t seem to grasp is that 600,000 well-paying new jobs in the oil industry will in turn create at least 5-8 times as many more new jobs. Those new jobs servicing the oil industry workers will also spawn more jobs. It is a formula for putting many more people to work. The increased prosperity and employment will lead to new confidence. People will be willing to invest and take risks again. The $2 trillion in money market funds/treasuries that is sitting on the sidelines will be put to work, which willl create more jobs. Such things are the life blood of growth in our economy.
The major problem is that the Greens with their Agenda 21 will fight tooth and nail to prevent this from happening. We voters must elect pro-growth, pro-fossil fuel, pro-business representatives to make the energy revolution happen.
2011 oil imports = $332 billion dollars
2011 federal deficit = $1300 billion dollars.
At best this is a temporary reprieve which would make it easier to deal with our various fiscal problems…. if we were even slightly serious about dealing with them.
MORE panglossian palaver from a blog with serious deficiencies in appreciation of both earth science and engineering.
What Thibaud said above. The US will enjoy an upswing in production of oil and gas, for five years at most.
Then? Back to the salt mines……
Oh, and serious water pollution problems shot through all the midwest and NE, through the Marcellus Shale footprint.
Negative impacts on water quality HERE: http://resourceinsights.blogspot.com.au/2012/06/pincushion-america-irretrievable-legacy.html
‘Delta’ in oil production HERE: http://gregor.us/oil/rebounding-us-oil-production-the-historical-view/
My question is a more practical one at this point. Leaving aside for the moment whether this essay is a little too optimistic, which party is better poised to lead us through this new energy revolution?
I have always been a moderate Republican. Obama seems stuck in the old blue model but I am not all that excited about a Romney presidency.
I agree with Thibaud #2 that the exuberance appears optimistic, on various accounts, geological, economic, and environmental – the last being the elephant in the loving room.
Additionally, the supply of human foolishness is inexhaustible.
It is not for nothing that America says “In God We Trust.”
Our energy imports are >$450B/yr vs a GDP of $15T/yr (via Google search). Full independence implies recapturing nearly all of that but, even a sizeable fraction would be an incredible boon.
Economies are circulatory systems. The closer to home (US) its spent the more likely it will be re-spent on other domestic products/services magnifying its effect vs. spending on imports.
Nice to have. Not a game-changer or a “revolution.”
This will buy us some more time for the transition to renewables.
@thibaud et al – I think Professor Mead’s enthusiasm is not so much about specific numbers of jobs or barrels of oil, it’s about trends and perceptions. Activity attracts more activity; it’s like a gravitational pull.
Also, the perception that we’re hostage to Middle East oil has been a major factor in the public’s acceptance of our foreign policy – what happens when that perception changes? “Game changer” doesn’t necessarily mean “springboard to a higher level of human existence” but it does mean the rules of the game have changed.
I see a number of comments here that warn of environmental hazards from fracking.
If one of you could explain to me how water trapped a mile or more beneath the surface, and impossible to get to without millions of dollars worth of high tech drilling equipment, said water already being saturated by toxic hydrocarbon compounds (think water that has been sitting in an oil spill for 100 million years), is somehow going to become more polluted and somehow move up through a mile of rock and contaminate aquifers, when it hasn’t done so for 100 million years, I would like to hear it. From maps that I have seen oil shale formations sit under a large percentage of America and have never contaminated any of the aquifers before, why should it happen now? Is this hydrocarbon saturated water somehow going to sneak past the greedy oil producers that are going to so much trouble to suck it out of the ground because they want to separate all that valuable toxic hydrocarbon out of the water?
I am so sick of these brainless Environmentalists that are constantly screaming that the sky is falling, when even the shallowest examination of the facts proves that it is impossible for the sky to fall.
Eurydice – seems doubtful that the Saudis will cease being the swing producer in our time.
Perhaps I’m wrong, but so long as that’s the case, the middle east and its oil supplies will remain a central preoccupation of US foreign policy.
Hi Mike. Excellent point on our fiscal problems and the lack of political will to address our long standing entitlement situation. But I believe you are underestimating the importance of our growing energy reserves.
Just the Green River formation alone contains 3 trillion barrels of oil according to the USGS, which also estimates the recovery rate to be one-half. Recovery estimates range from 25% (consensus low at current technology) to 60% (RAND) . The midpoint range of extraction would yield more oil than all the world’s proven reserves combined. Obviously, this will allow the US to become independent of foreign oil but it will also lower the overall price of energy for the whole planet. Oil is fungible and prices are determined in a global market.
Off the top of my head, some of the positive secondary effects:
1) US is currently a net exporter of natural gas (which will increase immensely) and coal, coupled with oil we should be a leading net exporter of energy. For most the 2000s our trade deficit was roughly equal to the amount we imported in oil. Currently our trillion dollar annual deficits are being funded mostly by FED purchases, as Asia’s dollar holdings have been fairly constant and US Savings Rate is too low. Revenue from energy exports will allows us to reverse the damage from our fiscal and monitory policies (Quantitative easing) while preserving the value of our currency.
2) Exporting oil to our allies (namely Europe, Japan, South Korea) will allow them to diversify their energy supplies. This will lesson the importance of the middle east (Europe receives 90% of its oil from there) and weaken Russia’s ability to use the Natural Gas weapon during the cold European winters.
3) Stemming from point 2, Macroeconomic shocks from oil spikes should be weaker in magnitude.
4) Mexico’s Cantarell field is dying. By the end of this decade the exhaustion of Mexico’s proven reserves and increased domestict consumption. Mexico become a net importer instead of an exporter. Contrary to popular belief, US does not get its oil from the Middle East. 80% of our imports are from Mexico and Latina America (Venenzuela mainly), Canada, and Nigeria. Our reserves should allow us to replace Mexico’s declining oil as well as sell oil to Mexico. I believe selling oil at a discounted rate will become necessary to help grow Mexico’s economy and stem unwanted immigration.
There are other very important benefits from oil but there is not enough room in the comments.
What is very interesting is that while America’s oil imports are declining steadily, China’s imports are skyrocketing. China already imports more than half its oil and that figure is only going to go up. US can safely let the Chinese deal with the middle eastern oily mess a few years from now.
@thibaud #20 – Agreed about the Saudis, but it’s more about the angle of that preoccupation. So far, the subconscious sense the public has had about our Middle East policy is “we need their oil or we’ll freeze to death in the dark”. It’s like the old Cold War rhetoric – everything we did could be explained by “If we don’t, the Russians will eat us.” So, what happens if that perception changes to “our allies need their oil or they’ll freeze to death in the dark”? A very bad thing, but doesn’t contain the same sense of urgency.
It’s true that we get most of our imported oil from Mexico, Venezuela, and Canada. However, the OPEC members, led primarily by the Saudis, have been controlling/fixing the price of oil since the 70s. When we became a big importer of oil we became a victim of the fixers. Should the U.S., Canada, Brazil, and Israel all stay out of the cartel, it would lessen their ability to fix prices and, hopefully, provide a market where price is not manipulated. That said, every new barrel of oil we produce keeps dollars here in the U.S. for investment and wealth creation. 600,000 good paying jobs also pump more money into the tax system, helping to cut the deficit.
The economics of oil are very favorable to the Federal government. When oil companies lease Federal lands they pay renewable lease rentals that are pure profit for the government. Every barrel of oil produced from government lands provides a 5% royalty payment to the government. When oil is refined into gasoline, the Feds get a tax on every gallon sold. More pure profit. Total up those returns where the government takes no risk and it is plain to see that encouraging oil and gas production is a win, win proposition. The governmment collects a lot of taxes along the way while taking no risk, and our society gets the energy it needs to grow and thrive.
The American domestic economy without the energy trade payment deficit that came in the 1970’s, perhaps with even a surplus, will be on a economic growth trend line close to that of the 1960’s.
There are enough implications in that for hundreds of blog posts.
For the time being, the energy of the future is fossil fuel and the U.S. should be a large beneficiary. A discussion of related themes here: New Sierra Club Natural Gas Policy Benefits Enemies of the United States http://blog.allenmitchum.com/2012/06/new-sierra-club-natural-gas-policy-to.html
A number of statements I think get in the way here:
“But the first great wave of oil discoveries did not turn America into a corrupt petrostate when the oil discoveries of the late 19th and early 20th centuries made the US the world’s greatest producer of fossil fuels. One important reason that still holds true today is that the US economy was so diversified and so high tech (by the standards of the day) that the oil tsunami was only one part of a much larger story of innovation and development.”
Actually, oil became increasingly central once the railroads were finished in the 1880s. Most Americans were rural until 1920 and the oil industry began by supplying safe and reliable kerosene to a rural market.
The Model T car shifted the oil industry to gasoline but did so to provide transport to a rural nation with unpaved roads. The autos of this era were very simple machines that were easy to mass produce with semi-skilled labor (manufacturing today is very different). Oil was the key to the industries interrelated by the car.
The difference with petrostates is that the U.S. oil industry then was privately owned. In 1911 the Supreme Court broke it up, which did a great deal to unleash refining innovation in the years that followed.
“Innovation remains a big part of the American energy picture. The United States has very large reserves of these new fuels, but we are not alone on the planet in having this wealth. But America is getting to the energy revolution early because our oil companies and drillers were ahead of other people in developing the technologies that can bring the new resources on line.”
There has been no innovation in oil refining since the 1970s, though, and gas recovery through fracking was invented in the 1940s. It wasn’t really economical until recently, when demand from Asia seems to have made it so. Whether shale energy will continue to prosper if Asia moves into recession, or just slows down, is the question. If done properly, energy from fracking could still be valuable for geopolitical reasons, but the economic benefits will depend on sustained demand.
“That spirit of innovation and the culture that supports it are the true sources of American wealth. That is how we found oil in the first place and built our first energy economy; it is what enables us to benefit from these additional reserves — and it is what will get us on to the next thing when the new energy sources begin to run dry.”
Agreed, but remember that the American market enjoyed ferocous government protection from imports through its most innovative period, c. 1870s-1920s. There is still a need today to prove the most efficient balance of private activity and the public role.
The innovations we need in the long run now are technologies that can operate with more efficient use of fossil fuels, not just more of them, until we can shift to new sources of energy.
“If one of you could explain to me how water trapped a mile or more beneath the surface, and impossible to get to without millions of dollars worth of high tech drilling equipment, said water already being saturated by toxic hydrocarbon compounds (think water that has been sitting in an oil spill for 100 million years), is somehow going to become more polluted and somehow move up through a mile of rock and contaminate aquifers, when it hasn’t done so for 100 million years, I would like to hear it.”
The problem is the integrity of the surface wellhead and lining. If fracking is done carefully, with secure and properly-lined wellheads, and if the wastewater is also removed, there should be no damage to aquifers near the surface. If the engineering is poorly done, then there will be a risk of contamination at the surface. Right now some companies are doing it right and others need to improve.
Contrary to what Thibaud says, Mead isn’t excited about 600,000 jobs. That’s just the icing on the cake. He’s excited about what all real Americans, as opposed to envirotraitors, are excited about: the fact that we’ll be able to buy our own oil, and sell it abroad, instead of buying oil from the Saudis.
And Thibaud’s claim that the U.S. will run out of oil and the Saudis will continue to be the main producers indefinitely is ludicrous. With more oil reserves in the U.S., even if we run out of oil quickly the Saudis will run out more quickly. Either we’ll have a massive increase in U.S. influence at the expense of the Arab nations, or both will decline. You won’t have the greater oil nation running out while the lesser oil nation keeps going. Duh.
Do not underestimate the zeal of the Left for hindering access to energy supplies from any source. Energy abundance is a massive threat to the progressive agenda and they will do everything in their power to stop it.
Be careful all the new jobs don’t go to cheaper and yoinger foreign workers instead of Americans.
why is USA importing Chinese to build our bridges?
Secret Video-Immigration Lawyers teach companies how to steal jobs from USA workers
They Took Our Jobs – Immigration Stories You Are Not Supposed to Hear H-1B H-2B Visas
Jon Stewart is THE MAN on lying to America about immigration!
Millions of illegals will now get free healthcare.
You are totally correct. I do want to elaborate a bit on the price mechanism of OPEC. If politics does not get in the way, our energy reserves should allow us to immensely reduce the power of OPEC. Saudi Arabia currently has 20% of the world’s known reserves. However, their is conjecture amongst those in the financial markets the Saudi’s are not in as good of shape as they let on. For the past few years announced “surges” never materialized. No one but the Saudi’s can verify their actual reserve as they have refused to release any data on their oil industry since 1982. With North and South America bringing on new supplies, we are closer to the day when OPEC is nothing more than a paper tiger.
Seems that Liquid Fluoride Thorium Reactor technology (LFTR) has not penetrated the media analyst class. I can’t think of any greater game changer for nuclear power generation than this. Simply astounding. See Youtube “LFTR”
I’m sure it’s harder than this, but it seems like methane fracking is finding gas just about everywhere — Europe, Asia, probably Africa. If energy production was as widespread as food production, economic growth and reduced risk related to unstable regimes ought to follow.
Its going to be most enjoyable to hear all you nay sayers about 10 years from now claiming it was simply inevitable that we became number one in oil exports in such a short period of time.It will come and only a brick headed federal government can stop it.BTW Walter, would you stop [vulgar reference removed] on Ayn Rand.Its not nice to defame the dead.She made very good point about leaders and parasites and all the rest was just prose to make her points.
Mr. Mead’s conclusions all depend on a colossal misunderstanding of oil industry terminology. He confuses shale oil with oil shale. It’s an understandable confusion, but it invalidates his whole piece.
Oil shale is neither shale nor contains oil. It is organic marlstone impregnated with kerogen, a waxy hydrocarbon that requires considerable energy and processing to be made into oil. While the U.S. Geological Survey believes America has perhaps 3 trillion barrels of kerogen in the ground, the U.S. Energy Information Administration believes about 750 million of the will be accessible. But because of the difficulty of extracting and processing this very low-grade resource, as of today there is no commercial production of oil from so-called oil shale. A resource is what’s in the ground, not necessarily what you can get out economically. A reserve is what you can get out of the ground with current technology from known fields at today’s prices. By that definition our reserve of oil stored as kerogen in the country’s oil shale deposits is exactly zero.
The EIA’s last projection in its 2008 Energy Outlook was that oil production from oil shale would likely only reach 140,000 barrels per day by 2030. That’s barely a drop in the bucket when you consider that it currently projects U.S. consumption to be 15 million barrels per day in that year. This hardly constitutes an energy bonanza.
Now shale oil is something completely different and is actually properly called tight oil. Tight oil is what drillers are pumping out of fracked fields in North Dakota and elsewhere. The EIA estimates that the total technically recoverable reserves (not necessarily economically recoverable) of tight oil in the United States are 24 billion barrels. That’s about 3 years of U.S. supply or 288 days of world supply since oil is really a world market and this supply will be available to the world market if the price is right.
Mead also performs sleight-of-hand starting out talking about oil and eliding right into numbers relating to liquid fuels without telling you that those liquid fuels include a lot of stuff that isn’t oil and that can’t be substituted for oil except in very narrow and limited circumstances.
You cannot take seriously his conclusions since he doesn’t even have his terminology right and he misunderstands the nature of the resources he is discussing.
“analysts talk of the US turning into the world’s new Saudi Arabia by 2020”
Andrew Sullivan wuz right! Down with the Christianists and their Mormonian running dogs!
“The ‘special providence’ that observers have from time to time discerned in America’s progress through history doesn’t seem to be quite finished with us yet.”
Precisely! The apparent new energy abundance is arriving just in time for us to tax it to implement a state-run health care system!
Kurt Cobb #36, thanks for pointing out the difference! I found the whole article improbably optimistic but didn’t know where was the mistake.
Build nuclear plants now.
Do some solar, now.
MINE FOR COAL. Now..
It will be wonderful to be able to produce all of that Black Gold, but the Eco-weenies will never allow the additional refinery capability to be built to process it.
I’m here in Ohio. Guess what obama outsourced Chrysler to Fiat an Italian company. Why does obama keep talking about a man Mitt who created thousands over thousands of Jobs and made companies more efficient and competitive. Obama, big gov’t has never been efficient nor competitive if it was it wouldn’t employee affirmative action hiring based on sex and skin color instead of brain power. All we got from obama is 14.1% real unemployment and $50,000 of debt on every man, woman, and child in America. You know how bad obama screwed up America in just 3 years give him another 4 and America will be a third world country. Wake up America, Obama [does not live up to this reader’s expectations].
“…The ‘special providence’ that observers have from time to time discerned in America…”
Who was it that said that “God protects drunks, children, and the United States of America”?
#36, Kurt Cobb,
Professor Mead may not have the terminology quite right, as you point out. You are correct that there is a difference between oil shale (the extensive Green River Formation in Utah, Colorado, and Wyoming) and tight formations, which are sometimes shale but also can be tight sandstone or limestone. The Greebn River has vast amounts of oil that are not quite ready for prime time. Twenty years from now they probably will be. That said, there are many tight oil formations other than the Bakken Shale. And they are extensive. The even better news is that we have many normal oil reservoirs that have been put off limits by the Green agenda. ANWR, the Alaskan Naval Petroleum Reserve, the Santa Barbara Channel, the Destin Dome (eastern Gulf of Mexico), and many as yet untested structures and formations off the East and West coasts. What we are finding now is that we can drill in areas that were not possible wenty years ago. Our geophysics technology for finding subsurface structure and oil traps is far better than just a few years ago. There is still a lot of regular oil to be found that doesn’t require fracking. If those areas that are now off limits (mostly Federal lands) are opened to exploration the future looks even rosier.
“Just when the entire punditocracy, it sometimes seemed, had bought into the “American decline” meme, Europe collapsed and huge energy reserves were discovered underneath the United States.”
The post WW2 European economy has always been economically towed by the US economy, enabling European countries to build and maintain generous social welfare systems.
When the increasingly debt debilitated US economy suffered a downturn in 2008, Europe could no longer sustain the former state of its social welfare systems.
But, a return of a robust US, mainly consumer economy, will also spur a revival of Europe’s social welfare largess and fiscal stability.
2. Mead as usual does not know how to do basic data analysis.
For someone who has such little respect for Mead’s writing, you seem to spend an awful lot of your time reading his work and posting condescendingly critical responses to it. I would think a person with your formidable scope of knowledge and analytical abilities would have his own blogs and publications, rather than devoting himself to being someone else’s private troll.
Kurt Cobb: Are you aware of Shell Oil’s Mahogany Research Project in the Green River Basin? They’ve pioneered the technology to extract kerogen and pull the sword from the stone–so to speak.
Shell engineers sunk heaters into the ground to raise it’s temperature and it bubbles up like magic. By using a freezewall beneath the field they prevent groundwater contamination. And they claim they can do this for about 40 dollars a barrel. Even less ($25) with economies of scale.
Unfortunately, Obama opposes shale oil development but he’s won’t be around for long, in my view. Not past Jan 2013.
Still, America’s oil shale could contribute 3 million barrels per day by 2030 if we start now to pursue this resource with a sense of dispatch.
The Rand Corp had a study on it a few years back and the biggest issues are water and environmental opposition. The technology is here to exploit it. The only real barriers are political. And a couple of permits for new nuclear plants in the area wouldn’t hurt since it is energy intensive to get out of the ground.
And all we have to do is get rid of the thibauds at the EPA.
Which if these claims strikes you as more Panglossian:
1) 600,000 jobs from developing previously unrecoverable hydrocarbons
2) 80,000 new jobs and 85,000 new additions to SS disability last month and the claim of a “good start.”
Frankly, I’ll take Meade’s best of all possible worlds over yours.
Your comment of using frac’ing to bridge to renewables would be funny if it weren’t so painfully wrong. Just to electrify the US vehicle fleet would require more than doubling and dedicating the world’s output of rare earths for the next twenty years. The world isn’t even producing enough today to meet existing demand. Electrical generation simply adds insult to injury. You can accuse Meade of irrational exuberance but that statement alone shows me that you don’t understand the economic and engineering realities of energy today and for decades to come.
p.s. Let’s not forget that we do still use Leibniz’ notation, so that even though I loved Candide, well, some of Voltaire’s sarcasm clearly missed the mark.
Tight oil’s nice to have. I’m glad we have lots of it. It will lower our energy bills for a decade or so. If I can time my investments right (should I buy $DVN now, or wait?), I’ll make some money off of it. Booyah!
Re the poster who calls himself Bob Jones – are you really a graduate? – one of the things that makes the American religious mind so peculiar is this disconnect between the properly tragic Christian view of life – this Vale of Tears, the vanity of human desires, “we owe God a debt” and all that – and this very American emphasis on ephemeral profit opportunities that allow us to waive the flag and chant, along with cheerleaders like Mr Mead, USA! USA! USA!
Perhaps that’s to be expected from adherents of a religious denomination that names its “universities” after hucksters propounding “young earth creationism”:
But a properly, shall we say, _conservative_ view of this would be to take the rather exuberant (mis)reading of the oil reserve numbers with a canister of salt, and make preparations for the inevitable shift to renewables.
#45 -Victor: “For someone who has such little respect for Mead’s writing…”
Not true. I have tremendous respect for Mr Mead’s balanced, fact-based, usually wise writings that appear in what he derides as the “mainstream media” outlets. That’s what attracted me and many others to this blog.
But there’s another Mead, one that’s suppressed in polite “MSM” company but in full flower on this blog, and in this very post: tendentious, half-cocked, sneering.
More of the former and less of the latter would be a huge benefit to the debate.
I’m hoping against hope that these ripostes might encourage the better angels of Mead’s nature, yielding more of the judicious, well-researched, thoughtful opinions that we see occasionally here and elsewhere.
Gee, this all reminds me of Jimmy Carter and US energy independence from perfecting oil production from oil shales… Jimmy Carter signed the Energy Security Act in 1979, (he created DOE in 1977) and the DOE then oversaw $88 million in taxpayer investment, including Colony Shale Oil Project.
Damn Reagan killed that project in favor of making the US dependent on imports.
Jimmy Carter was right to put the future of US energy in oil shale production.
I think Chrystia Freeland nails it:
> … hard to reach, and extraction will
> have a rougher impact on the environment.
She says it like it’s a bad thing!
If there is one thing that animates modern American conservatism, it’s the idea that pollution and environmental destruction are good for you since liberals decry these things.
The casual throw-away that “environment” is an issue to be dealt with later makes the economic, social, and security challenges and threats due to the environmental impacts of unbridled pursuit of ever-lower EROEI fossil fuels not even a passing thought in this discussion when these should be paramount in any systems-of-systems analysis of the cost/benefit analysis of this “bonanza”.
As with Kurt Cobb’s comment above, quick comment that this article could easily mislead — as there are various types of ‘hydrocarbon’ molecules in the ground and the author seems to throw together in the same breath relatively easy to access hydrocarbon with very difficult to access molecules.
As to environment impacts …
Fracking is demanding ever-increasing water resources — a stark thing to consider when 2012 is already in the top 10 US droughts on record and the analysis suggests it will get worse. Oil Shale is even worse.
And so on until we should discuss the elephant in the room — global warming. In the suggested scenario, of an ever-happier embrace of a hydrocarbon future, what is the author’s prospectus for the U.S. path forward in an ever-warming world?
Here’s hoping to the absence of shenanigans à la Enron and derivatives markets that would ruin the potential opportunities. How I hope future engineering students will turn to mechanical & petroleum engineering, and not quant finance.
Great to see a sane, reasonable discussion about our energy future. The environmental movement presents powerful cartoons that sway the minds of millions of innocent kids in school and dopey sheeple in general, but innovation, when allowed to prosper, is always five steps ahead of ignorance. For now and for the foreseeable future, fossil fuel will be the answer, and apparently there is plenty of it. Alarmists continue to say “it can’t last forever.” Which is true, but then some other energy solution will develop, on its own timeline, probably in the nuclear fusion area or quite possibly with some new technology we’ve never even dreamed of yet. Looking ahead to the energy and “emissions” problems of the 21st century, I always tell people that at the start of the 20th century the biggest emissions problem on the planet was methane from all the horse[droppings].
LLeone asks if I am aware of Shell’s in-situ process for processing kerogen through electrical heating. I am and perhaps he/she does not know that whole thing is on hold and one of the big problems is securing water rights.
In addition, Shell admits that the Energy Return on Energy Invested (EROEI) would be no more than 3 or 4 to one. Keep in mind that the EROEI for the U.S. economy is about 40 to 1. Energy researcher Charlie Hall, who invented the idea of EROEI analysis, (though he called it more simply Energy Return on Investment), believes modern industrial society won’t be able to function with a total EROEI under 5. That shows just how energy-intensive such unconventional resources of oil will be to process and why they may never really help us much.
The water rights issue also shows how water is becoming a major constraint to energy development, particularly in the drought-parched western United States. The development of unconventional oil resources is actually a multi-dimensional challenge that is poorly understood by Mead and by most people.
Jimmy J. implies that I don’t know about other deposits of tight oil in the United State beyond Bakken. But the 24 billion barrels of technically recoverable tight oil reserves number is the number provided by the U.S. Energy Information Administration for the all tight oil in the United States. So, yes I am fully aware of the other deposits.
As for the future of conventional crude, Jimmy J. is correct that many areas are off limits to drilling because they are public land. If he really believed that conventional oil supplies (the kind the flow in liquid form out of the ground) were that abundant in the United States, then he would simply be urging oil companies to purchase and drill many more leases on PRIVATE land. But the resources under America’s vast PRIVATE lands have been almost fully exploited since the beginning of the oil age in 1859. That’s why the big deposits of oil that are left are on off-limits PUBLIC land. That’s what’s left.
One other thing that Jimmy J. and optimists like him always fail to mention: depletion. Existing fields are depleting at an alarming rate. Worldwide the number is between 4 and 5 percent per year. That means we have to create 4 to 5 percent new production capacity for oil each year JUST TO STAY EVEN. And that’s all we’ve been doing since 2005 worldwide as crude plus lease condensate which is the definition of oil has been flat according to the U.S. Energy Information Administration.
I have no illusions about the oil remaining on public lands in the United States. Eventually, the oil situation worldwide will become so serious that the U.S. government will buckle to the oil companies and open all those currently closed areas to drilling.
But it won’t be enough to make the U.S. oil independent because depletion never sleeps and will continuously erode our oil production capacity. In fact, the EIA projects in its 2012 Annual Energy Outlook that the rate of U.S. oil production will rise gradually through 2020 to 6.7 million barrel per day (primarily because of new tight oil production) and the begin another decline in earnest. That’s not even close to energy independence since U.S. consumption is expected to remain around 15 million barrels per day of crude and refined products through 2030.
The agency just isn’t buying the hype from the oil industry whose only interest is to open public lands to drilling. The energy independence meme is a great one for getting people on board. But it is a deception!
Thank you, Kurt Cobb, for introducing some much-needed sobriety and expertise into this discussion.
It’s amusing to see the thibauds and Kurt Cobbs of this world desperately laagering their egos.
Peak oilers and the demented ecodoomers who travel with them just don’t know when to stop digging. It doesn’t matter how many times reality proves them wrong; they just dust themselves off and insist they were more right than ever. They can forever cite reports they assimilated five years ago to bring them back to that happy time when anyone actually believed a word they said.
That they can’t see the irony in their continued obsession with Energy Returned on Energy Invested strongly suggests that there’ll be no peak in self-delusion.
Fergal – do you have an argument to make, something that combines evidence and logic? As opposed to embarrassing and off-target taunts?
Tight oil’s nice to have. But the claims made on its behalf here – “game-changer,” “revolution” etc – are overblown.
We will have more oil that Saudi Arabia…actually, we have more now. There is no shortage. We have enough to last a thousand years without any more drilling or the employment of extraction magic.
Buy a bottle of Bayer, 200 count Aspirin Tablets and poke you finger through the foil…you’ll see the inside of a half empty container which equates to TWICE as much oil consumed for shipping to market as necessary. How about Lays 1 lb bags of Potato Chips…that half empty bag will hold 5 POUNDS of raw potatoes.
Some more …
Manufaturer packed prescription meds..
Round cans of vegetables shipped in space measured by the cubic foot
Add 20% water in those cans that we all throw down the drain
Bottled water…the favorite beverage of all self described “greenies”
My point…we waste more oil than we consume and all we really need to do is tax the hell out of any producer that ships air and water. They’re doing it to run up the cost base so they can increase margins but in the meantime, they are jeapordizing our future as a world power.
The three W’s will ultimately bring the USA down War,Welfare and Waste. So we found a trillion barrels of oil if we don;t wake up and smell the roses all we have done is bought 10 or 20 years of profligacy but with the addition of 70 Million new bodies each year the pain will be all the more intense and widespread
Let me also remind you that our food productiion is extremely energy consumptive and that it takes MORE energy to produce foodstuffs than the food gives us SO AGAIN with the ddition of 70 MILLLION new bodies each year lets us not count our chickens before they are hatched
There is no energy revolution. Reserves are not the same as what is technically recoverable, and that’s not the same as what’s eventually extracted, and that’s not the same as the extraction rate.
At best, all oil and gas resources in North America will add only 6 mb/d to production for the next two decades. But global demand has to rise by 2 mb/d every year to maintain economic growth.
Worse, when conventional production starts dropping and non-conventional production cannot make up for the loss….
Unfortunately, the comments on this board simply show how innumerate Americans have become. Yes, oil is limited. Yes, you can increase production – temporarily, and YES, YES, YES, energy return matters and is, in fact, the real problem. There is no such thing as perpetual motion or perpetual oil. We can drill, drill, drill to our heart’s content, and we will. The problem is the same and the amount of energetically and economically profitable oil is extremely limited. A teacup of oil in a cubic yard of impermeable rock 5 miles down can’t be made useful, no matter how many such teacups exist.
A guy at work is on a small town water board. The board recently sought bids from companies that use small cameras to scope the water lines and look for leaks. The company from Missoula, MT, where the enviro-left hold sway and prevent most logging, mining, and drilling, only wanted $18,000 to travel 300 miles and do the job. The company from much closer Billings, MT, where spillover business from the nearby Bakken formation is creating a boom, wanted North of $40,000 for the same job.
An electrician where I work followed his wife up to Northwestern Montana. The best job he could find up there paid only $9.50 an hour. He is now back here making around $30 working for a mining company.
The brave new world that the ecodoomers want for us will not be very hospitable to those of us who work for a living.
Re. the 600k fracing job growth best case, the BLS expects that by 2020, this country will add more jobs in each of three health care job categories ALONE than are envisaged in the entire, wildly optimistic case for fracing jobs growth:
– registered nurses (712,000 new jobs)
– health aides (706,000)
– personal care aides (607,000).
Even if you use API’s 3x multiplier, you still get up to less than ONE-TENTH of the total jobs growth of 20 million, the biggest category of which (nearly 6 million) will be healthcare and home assistance/social services.
The U.S. energy revolution is a real thing, but the article’s characterization of the vast U.S. oil reserves is inaccurate. What you’ve heard a lot about in the media is “shale oil”…that’s what all the fracking business is about, it’s definitely unlocked new reserves of oil and natural gas that will change the U.S. role in world energy supplies. However, the GAO report discussed at the beginning of the article is about “oil shale,” which is NOT the same thing (although often confused). We’ve known about the vast supplies of oil shale in Colorado for literally decades; the problem is (and always has been) how to get at this resource in a cost-effective way. Oil shale is not extracted through horizontal drilling or fracking, like shale oil (and shale gas) is. Instead, oil shale requires an intense amount of heat, and industry hasn’t found a way to perform this process in an economical way.
Ha, skimming through the comments here, I see a couple of folks have beat me to the punch on the “oil shale” vs. “shale oil” distinction.
The current atmospheric CO2 budget for a 2 degree Celsius temperature rise is about 600 gigatonnes.
It would be much more sensible to draw out the extractable fossil fuel over a much longer period of time, and focus upon controlling CO2 emissions to keep the temperature rising beyond the 2 degree point.
Incidentally, the globe is warming, beyond doubt.
The author doesn’t seem to understand EROEI (energy return on energy invested)–net energy. All of the unconventional sources of fossil fuels he mentions have very low net energy. Many energy experts think that the net energy for these fossil fuels is so low that, without extensive government subsidies and tax breaks, these energy deposits are unprofitable to extract. They definitely can’t fuel economic growth, for that to work these sources would have to have a net energy of at least 15:1. Solar energy has the same problem, but at least it won’t wreak havoc with the climate.