Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future (18 page)

3. Roberto Cesare Callarotti, “Energy Return on Energy Invested (EROI) for the Electrical Heating of Methane Hydrate Reservoirs,”
Sustainability
3, no. 11, (November 7, 2011): 2105–2114. doi: 10.3390/su3112105.

4. Cutler J. Cleveland and Peter A. O’Connor, “Energy Return on Investment (EROI) of Oil Shale,”
Sustainability
3, no. 11 (November 22, 2011): 2307–2322, doi: 10.3390/su3112307.

5. Charles Hall, “Unconventional Oil: Tar Sands and Shale Oil—EROI on the Web, Part 3 of 6,”
The Oil Drum
(blog), posted by Nate Hagens, April 15, 2008, http://www.theoildrum.com/node/3839.

6. Jacob Chamberlain, “Deeper Than Deepwater: Shell Plans World’s Riskiest Offshore Well,”
Common Dreams
(website), May 9, 2013, http://www.commondreams.org/headline/2013/05/09-2.

7. Hughes, “Drill, Baby, Drill,” 129.

8. Bryan Walsh, “A Rig Accident Off Alaska Shows the Dangers of Extreme Energy,”
Time
, January 2, 2013, http://science.time.com/2013/01/02/a-rig-accident-off-alaska-shows-the-dangers-of-extreme-energy/#ixzz2SuGACsh6. Stephanie Joyce, “Shell Tallies Cost of Kulluk Grounding,”
Alaska Public Media
(website), February 1, 2013, http://www.alaskapublic.org/2013/02/01/shell-tallies-cost-of-kulluk-grounding/.

9. See, for example, “Improving Efficiency in Upstream Oil Sands Production,” ExxonMobil, http://www.exxonmobil.com/Corporate/energy_production_oilsands.aspx. John Kemp, “Column—Bakken Output May Be Boosted by Closer Oil Wells: Kemp,”
Reuters
, May 8, 2013, http://in.reuters.com/article/2013/05/08/column-kemp-us-oilwells-idINL6N0DP2LW20130508.

10. Francie Diep, “Solar Panels Now Make More Electricity Than They Use,”
Popular Science
, April 3, 2013, http://www.popsci.com/science/article/2013-04/solar-panels-now-make-more-electricity-they-use.

11. Doug Hansen and Charles Hall, eds. “New Studies in EROI (Energy Return on Investment),” special issue,
Sustainability
(2011), http://www.mdpi.com/journal/sustainability/special_issues/New _Studies_EROI.

12. Jessica Lambert et al., “EROI of Global Energy Resources,” (State University of New York, College of Environmental Science and Forestry, November 2012), http://www.roboticscaucus.org/ENERGY POLICYCMTEMTGS/Nov2012AGENDA/documents/DFID _Report1_2012_11_04-2.pdf.

13. Charles A. S. Hall, “Editorial: Synthesis to Special Issue on New Studies in EROI (Energy Return on Investment),”
Sustainability
3, no. 12 (December 14, 2011): 2496–2499, doi:10.3390/su3122496. Andrew McKay has proposed a new unit he calls “Petroleum Production per Unit of Effort,” or PPUE, which reflects drilling rates, drilling depths, and cost of production. World PPUE improved between 1980 and 2000 but has declined dramatically since 2000. http://www.resilience.org/stories/2013-05-28/drilling-faster-just-to-stay-still-a-proposal-to-use-production-per-unit-effort-ppue-as-an-indicator-of-peak-oil.

14. Andrew Lees, “In Search of Energy,” in
The Gathering Storm
, ed. Patrick Young (Derivatives Vision Publishing, 2010).

15. “Engine Trouble: A Rise in Energy Costs Will Hit Productivity,”
Economist
, October 21, 2010, http://www.economist.com/node/17314626?subjectid= 2512631&story_id=17314626.

16. Tim Morgan, “Perfect Storm: Energy, Finance, and the End of Growth,”
Tullett Prebon
(blog), January 2013, 77, ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf.

17. Bryan Sell, David Murphy, and Charles A. S. Hall, “Energy Return on Energy Invested for Tight Gas Wells in the Appalachian Basin, United States of America,”
Sustainability
3, no. 10 (October 20, 2011), doi: 10.3390/su3101986. Caveats are from private communications with one of the study’s authors.

18. Hughes, “Drill, Baby, Drill,” 75.

19. For further discussion of this point, citing failures to improve efficiency in tar sands operations, see Andrew Nikiforuk, “Difficult Truths about ‘Difficult Oil.’” http://www.resilience.org/stories/2013-05-23/difficult-truths-about-difficult-oil.

20. The EROEI for tight oil production in the Bakken play is under investigation; a report by Egan Waggoner on the subject is in preparation.

21. Morgan, “Perfect Storm,” 3.

22. Improvement in EROEI can be inferred from falling prices for new solar and wind installed capacity (private communication with Charles Hall). However, some renewable energy technologies achieve higher EROEI by relying on materials such as rare earth minerals that have an increasing energy cost over time due to depletion of the more accessible deposits. Also, as the best locations for wind turbines, tidal, and geothermal power are utilized, further expansion requires the use of less favorable locations, resulting in lower EROEI.

23. “Renewable Electricity Futures Study,” National Renewable Energy Laboratory, last updated May 13, 2013, http://www.nrel.gov/analysis/re_futures/. One early reader of this chapter commented: “You don’t necessarily need the same amount of energy to achieve the same functionality post-fossil fuels. For example, in our plug-in vehicles we drive on about one-fifth of the energy used by a typical gas car to achieve the same result of moving people down the road. Plus we make that renewable energy by PV on our own rooftop for one-eighth the cost of gasoline. So you could say we only have one-fifth the energy available to us and paint a negative picture of having 80% less energy available, but we’re achieving the same motive result as a fossil fuel powered tool.”

24. Benedikt Römer et al., “The Role of Smart Metering and Decentralized Electricity Storage for Smart Grids: The Importance of Positive Externalities,”
Energy Policy
50 (November 2012): 486–495, http://www.sciencedirect.com/science/article/pii/S0301421512006416. Jan von Appen, “Time in the Sun: The Challenge of High PV Penetration in the German Electric Grid,”
IEEE Power and Energy
11, no. 2 (March 2013): 55–64, doi: 10.1109/MPE.2012.2234407. For a more optimistic perspective on the potential of microgrids to enable higher levels of renewable energy, see Chris Nelder, “Microgrids: A Utility’s Best Friend or Worst Enemy?” http://www.resilience.org/stories/2013-05-24/microgrids-a-utility-s-best-friend-or-worst-enemy.

25. http://www.iea.org/topics/renewables/.

26. David Manners, “Massive Consolidation in Solar,”
Electronics Weekly
, January 14, 2013, http://www.electronicsweekly.com/news/business/massive-consolidation-in-solar-2013-01/.

27. Andrew Herndon, “Biofuel Pioneer Forsakes Renewables to Make Gas-Fed Fuels,”
Bloomberg.com
, May 1, 2013, http://www.bloomberg.com/news/2013-04-30/biofuel-pioneer-forsakes-renewables-to-make-gas-fed-fuels.html.

28. Louis Bergeron, “The World Can Be Powered by Alternative Energy, Using Today’s Technology, in 20–40 Years, Says Stanford Researcher Mark Z. Jacobson,”
Stanford Report
, January 26, 2011, http://news.stanford.edu/news/2011/january/jacobson-world-energy-012611.html. Amory Lovins, “A 40-year Plan for Energy,” TED talk (March 2012) http://www.ted.com/talks/amory_lovins_a_50_year_plan _for_energy.html.

29. Ted Trainer, “Renewable Energy Cannot Sustain a Consumer Society,” (Dordrecht, The Netherlands: Springer, 2010). For a moderate and realistic take on the capabilities and limits of renewable energy, see David McKay,
Sustainable Energy—Without the Hot Air (
blog), http://www.withouthotair.com/.

30. Prices could fall absent a full-fledged global recession, if energy efficiency in transport vehicles increases significantly (we are already seeing modest gains) and vehicle miles traveled decrease significantly in regions experiencing very low economic growth.

31. Gail Tverberg, “Low Oil Prices Lead to Economic Peak Oil,”
Our Finite World
(blog), April 21, 2013, http://ourfiniteworld.com/2013/04/21/low-oil-prices-lead-to-economic-peak-oil/.

32. Richard Heinberg,
Blackout: Coal, Climate and the Last Energy Crisis
(British Columbia, Canada: New Society Publishers, 2009). Tadeusz Patzek and Gregory Croft, “A Global Coal Production Forecast with Multi-Hubbert Cycle Analysis,”
Energy
35, no. 8 (August, 2010): 3109–3122, http://www.sciencedirect.com/science/article/pii/S0360544 210000617.

33. “The Dream that Failed,”
Economist
, March 10, 2012, http://www.economist.com/node/21549936.

34. Gail Tverberg, “How Resource Limits Lead to Financial Collapse,”
Our Finite World
(blog), March 29, 2013, http://ourfiniteworld.com/2013/03/29/how-resource-limits-lead-to-financial-collapse/.

35. This, by the way, would not solve serious ecological problems such as resource depletion, topsoil loss, species extinctions, and water scarcity. I’m focusing here only on our energy-economic-climate conundrum.

Abbreviations

Btu—
British thermal unit

EIA—
Energy Information Administration

EPA—
Environmental Protection Agency

EROEI—
energy return on energy invested

EROI
—
energy return on investment

GDP—
gross domestic product

IEA—
International Energy Agency

LNG—
liquefied natural gas

mb/d—
million barrels per day

mcf—
thousand cubic feet

NGLs—
natural gas liquids

NOAA—
National Oceanic and Atmospheric Administration

PR—
public relations

tcf—
trillion cubic feet

USGS
—
United States Geological Survey

Glossary

crude oil—
As used herein, conventional crude oil not including natural gas liquids, biofuels, or refinery gains.

horizontal well—
A well typically started vertically, which is curved to horizontal at depth to follow a particular rock stratum or reservoir.

hydraulic fracturing (“fracking”)—
The process of inducing fractures in reservoir rocks through the injection of water and other fluids, chemicals, and solids under very high pressure.

multi-stage hydraulic-fracturing—
Each individual hydraulic fracturing treatment is a “stage” localized to a portion of the well. There may be as many as 30 individual hydraulic fracturing stages in some wells.

oil shale—
Organic-rich rock that contains kerogen, a precursor of oil; not to be confused with shale oil. Depending on organic content, it can sometimes be burned directly with a calorific value equivalent to a very low-grade coal. Can be “cooked” in situ at high temperatures for several years to produce oil or can be retorted in surface operations to produce petroleum liquids.

petroleum liquids (also, “liquids”)—
All petroleum-like liquids used as liquid fuels, including crude oil, lease condensates, natural gas liquids, refinery gains, and biofuels.

play—
A prospective area for the production of oil, gas, or both. Usually a relatively small contiguous geographic area focused on an individual reservoir.

reserve—
A deposit of oil, gas, or coal that can be recovered profitably within existing economic conditions using existing technologies. Has legal implications in terms of company valuations for the Securities and Exchange Commission.

shale gas—
Gas contained in shale with very low permeabilities in the micro- to nano-darcy range. Typically produced using horizontal wells with multi-stage hydraulic fracture treatments.

shale oil—
See
tight oil
.

stripper well—
An oil or gas well that is nearing the end of its economically useful life. In the United States, a “stripper” gas well is defined by the Interstate Oil and Gas Compact Commission as one that produces 60,000 cubic feet (1,700 m3) or less of gas per day at its maximum flow rate. Oil wells are generally classified as stripper wells when they produce 10 barrels per day or less for any 12-month period.

tight oil—
Also referred to as shale oil. Oil contained in shale and associated clastic and carbonate rocks with very low permeabilities in the micro- to nano-darcy range. Typically produced using horizontal wells with multi-stage hydraulic fracture treatments.

type decline curve—
The average production declines for all wells in a given area or play from the first month on production. For shale plays in this study, the type decline curves considered the average of the first four to five years of production.

undiscovered technically recoverable resource—
Resources inferred to exist using probabilistic methods extrapolated from available exploration data and discovery histories. Usually designated with confidence levels. For example, P90 indicates a 90% chance of having a least the stated resource volume whereas a P10 estimate has only a 10% chance.

Further Acknowledgments

The Merry Band of Editors sponsored the production of this book, reviewed early drafts, and provided critical feedback. Many thanks to each of these dedicated folks for their support and their input!

Sherine Adeli

Kristin Adkins

Chatral A’dzé

Franky Aelbrecht

Will Alexander

Mark Allcock

Nick Allen

Per O. Andersson

Tommy Andreasen

Bob Armantrout

Victoria Armigo

Martin Astrand

Matt Austin

Robin Baena

Bill Ballou

Marilyn Bardet

Brad Bardwell

Vidura Barrios

Kathleen Basman

Nancy Bell

Craig Benjamin

Edwin Benson

Michael Benson

Mark Berger

Desmond Berghofer

Howard B. Bernstein

John Berton

Andy Bevan

Karam Bhogal

Glenn Bier

David Binar

Cindy Blackshear

Jeff Blackshear

Mark Bloore

Christof Bojanowski

Darrel Bostow

Rob Branch-Dasch

Moshe Braner

Peter Brezny

Carolyn Bridge

Tod Edwin Brilliant

Paul Bristow

Michael Brock

Ray Broggini

Richard Brook

Cal Broomhead

Karen Brown

Marilyn Brown

Michael Brownlee

Hank Brummer

Andy Buckingham

Grant George Buffett

LeeAnne Burton

Ruth Busch

Roberto Campanaro

Anna M. Campbell

Bill Campbell

Frank Campbell

Dolly Carlisle

Ann Carranza

Nicholas Carter

Kate Case

Tim Castle

Gary Charbonneau

Leslie Christian

Lars Christiansen

David Christopher

Anthony Christy

Clifton P. Chute

Peter Clare

Barbara Clark

Doug Close

Gary Coates

Michael J. Coe

Craig K. Comstock

Debbie Cook

Sonia Corbett

Robin Curtis

Tim Cuthbertson

Carolina Dahlberg

Bob Daniel

Mariquita de Boissiere

John de Jardin

Deborah Deal-Blackwell

Earl Dean

Dwain Deets

E. D. Dennis

Nancy Deren

Silvia Di Blasio

Jed Diamond

Leo DiDomenico

Angel Dobrow

Ollie Downward

Daniel du Toit

Kendall Dunnigan

John Duvall

Paul Eagle

Chris Eames

Janet M. Eaton

C. Peter Eckrich

Brett Eisenlohr

Emerging Technology Corporation

Colin Endean

Kay Engler

Thomas Everth

Piero Falotti

Thomas Fellows

Tom Ferris

Ed Fields

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Linda Fiolich

Robert Fischer

Gloria Flora

W. R. Flynn

Peter Follett

Peter Foster-Bunch

James Freund

Isaias Galvez

Richard Geray

Jon Gething

Paul F. Getty

George Girod

Jenny Goldie

Jeff Goldman

Robert Goldschmidt

Patricia Goldsmith

Daphne Golliher

Fred G. Gregory

Steve Hackenberg

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Caroline Hancock

Phil Hardy

Karey Harrison

Tian Harter

M’Lynn Hartwell

Kirsten Hasberg

Guy Haslam

Matthew Havens

Paul Hawley

John T. Heinen

Edward Hejtmanek

Toby Hemenway

Douglas Hendren

Warren Hendricks

Brad Herrlinger

Sara Hess

Yashi Hoffman

John Hoffmann

Scott Honn

Richard Hookway

John Howe

Bob Hutchinson

George Hylkema

Don Hynes

Judith Iam

David Iandiorio

Fred E. Irwin

M. Jackson

Veronica Jacobi

Franke James

Piere Jason

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Andy Johnson

Joyelle Jolie

Maurice Jones

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Carol Kennedy

Deirdre Kent

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Erv Klaas

William M. Klassen

Herb Kline

Nancy Klock

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Lisi Krall

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Cajup Lalinca

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Oberg Lyle

Robert Magill

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Alex Malcolm

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Anna Manzo

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Trisha Marlow

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Keith Maw

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Fred McColly

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Kim Mundell

Michael Mussotter

Aaron Naparstek

Eva Naylor

Adam Nealis

Peter Neils

Gerardus Neve

Alfred Nye, Jr.

Michael O’Hara

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Clarice Ondrack

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Ann Pacey

Miroslaw Pacocha

Erin Pammenter

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Roger Peck

Luca Ferrari Pedraglio

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James Peterson

Mark Petry

Bonnie Petty

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Stanislas Pique

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Ann Rogers

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Ruth White

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Andrew Willner

Donna Wilson

Nancy Lee Wood

Marion Yaglinski

Monowaruz Zaman

Sander Zegveld

Miriam Zolin