The Dangers of Hydraulic Fracturing for Shale Oil, Research Paper Example

Abstract

Deposits of shale oil, currently a highly controversial topic, are fueling a new industrial boom in the United States.  The potential for natural gas extraction is enormous and the use of hydraulic fracturing or “fracking,” has made the issue a hot topic for environmentalists as well as investors.  The potential to fuel all of America’s natural gas needs for the next few decades is a tempting fruit that developers are eager to pick.  The problems with extracting the oil from shale are myriad and require the latest technology as well as freedom from environmental laws, which was given to the industry during the Bush administration.  Higher fuel prices in the future will doubtlessly spawn thousands of fracking operations worldwide.  The safety and environmental impact of these new types of wells will have to be studied further before full-scale developments in environmentally sensitive areas can be accomplished.

Key Words: Hydraulic Fracturing, fracking, fuel prices, natural gas, oil, shale, environment.

1. Introduction

A new boom in petroleum production in the United States is happening in many different states and in Canada.  Producing natural gas through a process called “hydraulic fracturing” or “fracking” involves drilling holes and injecting a liquid into these holes to fracture shale rock buried below and release the natural gas contained in these shale deposits.

There are various deposits of oil shale throughout the world including some that are of enormous size and contain billions of barrels of recoverable shale oil.  The oil contained in these vast deposits is immature, in that if it had remained buried for a few more million years, it might have become petroleum.  The oil that gets recovered from shale must be heated to a gas, cooled and collected before it can be refined.  It is more difficult and more expensive to produce than conventional liquid petroleum reserves. (Nikiforuk, 2010) With the continuing decline of petroleum reserves and higher prices for petroleum based products, developers are taking a new look at the potential for exploiting oil from shale deposits.

Fracking has been linked to problems with groundwater contamination and creating unstable ground around fracking sites that causes earthquakes.  Groundwater contamination is the collateral damage from hydraulic fracturing because of the chemicals that are introduced into the ground within the liquids used in this process.  In addition, most of the shale oil and tar sands deposits are in the Western United States and Canada, places where water is scarce.  Mining for shale oil uses and enormous amount of water and this creates additional problems for extraction.  It takes three barrels of water to extract one barrel of oil and many economists as well as environmentalists fear we may be sacrificing an even greater resource to obtain oil. (Friends of the Earth, 2011)

The dangers to groundwater contamination from fracking are evident.  Extracting natural gas from fracking involves drilling a hole to insert steel pipes for casings that are perforated within targeted areas that hold oil or gas so when the high-pressure fracturing solution is injected into the well it hits the desired spots.  The liquid is injected into the shale at 9000 pounds per square inch, faster than the rock can absorb it and eventually the pressure builds until the shale breaks open.  Once the formations have fractured, the injection process stops and the fluids used flow back to the surface.  Along with the injected fluid, proppants made of sand or ceramic beads stay behind to hold the fractures open in the targeted zones. (Earthworks, 2012)  These compounds are left behind to pollute the groundwater in the area and cause instability to the earthen crust in the surrounding area. Sometimes, methane gas can be found in well water sites in and around areas experiencing hydraulic fracturing. (Holzman, 2011)

This paper will examine the debate surrounding hydraulic fracturing examining its benefits and dangers.  The arguments for and against the expanded use of “fracking” in obtaining oil from shale deposits will be presented along with recommendations about how it should be employed to meet future energy needs.  The environmental concerns surrounding this procedure and those who stand to obtain potential economic gains will be explored.

1. Literature Review

There are myriad reports and presentations that portend to deal with the issues surrounding fracking and the environment.  Industry sponsored publications minimize the dangers and amplify the potential benefits while environmental studies debunk the industry claims and offer startling evidence of the potential for groundwater contamination and the possibilities of stimulating earthquakes.

Perhaps the most comprehensive study done on hydraulic fracturing and the related activities was in New York State, where Hazen and Sawyer (2009) published a report regarding the Marcellus Shale formation.  This study investigated the issues surrounding the use of water, the discharge of polluted water, the possible effects on the earth’s crust that could precipitate earthquakes, the amount of truck traffic necessary for construction and operations, the geology of the region and the ownership of land involved. This study anticipates every residual action from the exploration and extraction of gas and oil from shale rock in the Marcellus Shale formation.

Much of the literature surrounding fracking operations are against the process.  There are myriad concerns over water quality and the consequences of injecting chemicals into the ground under high pressure.  There are valid reports of toxic tap water that even burns in some cases.  There are claims of fault lines being agitated to the point of creating earthquakes in surrounding areas. There are issues over the residual chemicals that remain in the wells after the high pressure injection process is over.  (McGraw, 2012)

Of course the literature promulgated by the companies involved in this endeavor claim the process is safe and the technology surrounding it is sound.  TransCanada is a major player in the Keystone Pipeline Project which will open up thousands of new wells as the promise of getting the oil and gas to market is realized.  The company claims the project will create thousands of construction jobs but admits the pipeline’s maintenance will only amount to a few hundred permanent positions. (TransCanada, 2011)

There are ample resources available to describe the hydraulic fracturing process right down to the chemicals used and the amount of water required.  This technology has been around for over 60 years, but has most recently become economically viable due to the cost of petroleum.  The world’s petroleum resources are finite and it may become necessary to resort to these types of unconventional methods of extracting petroleum from wherever it can be found. The world’s oil supply is becoming more isolated and all the low-hanging fruit has already been picked.  It will be necessary to utilize all technologies for exploration and extraction that will satisfy the world’s oil needs.  (Karbuz, 2008)

A study done by Cornell University (Hargraves, 2011) contradicts the predictions for job creations that private companies involved in the Keystone Project are making.  It offers a more realistic perspective on the economic impact of the project while warning of its potential for disasters.

Fracking uses a variety of chemicals which the industry insists are safe but are also disputed by people who have experienced negative consequences near fracking sites.  Earthworks (2012) describes how the chemicals and the process used for fracking may impact human health.  They concur with opinions by Friends of the Earth (2011) that the entire project has the potential for such dire environmental impact that the marginal economic benefits do not justify the project.  These entities support the notion that the United States and the world should be moving away from the business of using fossil fuels for energy.

The environmental position against fracking is also supported by Michael Levi (2009) where he compares the economic developments with the tradeoffs necessary to support energy independence for the Western hemisphere.  Levi points out that the Canadian companies involved in the shale oil boom will probably build pipelines to the Canadian Western coast to sell their shale oil to Asian markets.  These efforts are opposed by environmental and Native Indian groups.

Perhaps the most comprehensive effort that describes the history of the Canadian shale oil fields and their development over the objections of environmental interests has been prepared by Andrew Nikiforuk (2010).  The data from his research highlights the economic potential for shale oil development but also explains the problems and consequences of extracting and moving the oil to markets.

The natural disasters of oil spills and leaks were accurately predicted back in 1999 by Stanislav Patin in his book “Environmental Impact of the Offshore Oil and Gas Industry.”  In hindsight it is easy to note Patin’s research and realize that the problems of drilling for oil and the pipelines required to move it to refineries were prevalent years ago and the proper regulations and safety restrictions should have been more vigorously applied.

III. Development and Analysis of Problems

1. Hydraulic fracturing problems

Fracking is typically accomplished by injecting a mixture of water, chemicals and proppants into the designated shale formation.  Other means are employed also and they introduce a dizzying display of chemicals and processes into the recovery of oil or gas.  Sometimes fracking is done by using gases like propane or nitrogen and pumping them into the well.  Often acidizing is done simultaneously with hydraulic fracturing.  This involves injecting acid – mainly hydrochloric acid – into the well to dissolve some of the rock formation and clean out the fissures where the gas and oil can flow more freely into the well. (Earthworks, 2012)

The Fracking Process

(Popular Mechanics, 2010: http://www.popularmechanics.com/science/energy/coal-oil-gas/top-10-myths-about-natural-gas-drilling-6386593#slide-1)

The fracturing fluids that return to the surface and can be reclaimed are called “flowback.”  These captured fluids are usually stored in open tanks at the well site prior to disposal.  Some studies have indicated that 20 to 85% of the fracking liquids used remain underground.  (Earthworks, 2012)

While this technique has been around for over 60 years, recent advances have created an eightfold increase in shale gas production over the last ten years.  According to the Energy Information Administration, gas from shale will make up about half of the natural gas produced in the United States by 2035.  One of the largest known reserves is located underneath areas of New York, Pennsylvania and West Virginia and has been estimated to be able to produce 493 trillion cubic feet of natural gas over a 50 to 100-year depletion timetable.  That’s enough natural gas to supply the United States’ natural gas needs for the next 20 years.  The controversial debate over how to utilize the Marcellus Shale reserve will determine national energy policy for the future. (McGraw, 2012)

1. The need for more gas and oil

Proponents of using shale oil do not refer to it as “tar sands,” or “dirty oil.”  To them it is referred to as oil, period.  Nikiforuk (2010) disagrees and believes the difference should be in the forefront of any debate.  “If that lazy reasoning made sense, Canadians would call every tomato ketchup and every tree lumber.” (Nikiforuk, 2010:12)

The industry is in a state of flux that encourages new investments in alternative sources of petroleum and Canadian companies are pushing for the Keystone project for economic reasons.  Canadian companies will profit enormously from this project and it will provide some jobs here in the United States during construction and for future maintenance.  Proponents also claim that the oil will be sold somewhere else if the United States doesn’t capitalize on this enormous resource.  It would be difficult for other nations to access this oil from shale since none of the Canadian pipelines currently service the United States by land and do not reach their seaports.  Indigenous and environmental groups have blocked a proposed pipeline to Canadian ports in the Pacific. (Levi, 2009)

The oil and gas industry is at the epicenter of geopolitical and economic events worldwide.  The industry is facing increasing competition from foreign, nationalized oil enterprises, hostile foreign governments, bad public perception and a growing effort in Congress to tax profits and restrict domestic drilling projects.

Oil is a messy and polluting business.  New technology to enhance fading oil fields is expensive, making discovery and extraction efforts difficult and costly.  New discoveries of smaller fields that are more remote do not adequately compensate for declining reserves in the older oil fields, making it difficult to meet an increasing worldwide demand.  Many foreign governments are restricting exploration and development efforts in the wake of higher crude oil prices.

Demand for oil and gasoline has never been higher and it is rising exponentially worldwide.  The emerging economies of India and China demand more petroleum every day and American consumers continue to waste gasoline and diesel fuel at an alarming rate.  From the ecologically disastrous Hummer to wastefully idling diesels, the United States does not use petroleum efficiently.  Until most recently, stubborn congressional resistance to higher CAFÉ standards have exacerbated the abuse of oil and gas.  Industry profits are greater when a huge volume of gasoline is sold; hence the system inherently encourages waste. (Nikiforuk, 2010)

Without government interference, the demand for petroleum will only increase as time passes until the day when this finite resource can no longer be found or economically extracted and sold.  The world now demands 86 million barrels of oil every day.  This demand is expected to increase by nearly 35% by the year 2030.  Meeting such a heavy demand will require an additional supply of over a million barrels per day each year until 2030. (Karbuz, 2008)

There are myriad problems in meeting such a staggering demand.  The inventory of good oil fields is diminishing, even though there are unexplored areas left in the world. The sizes of the recently discovered oilfields are getting smaller and new discoveries are replacing only about a quarter of global annual oil production.  About half the world’s oil production comes from 116 giant oil fields that produce more than 100,000 barrels a day.  There are about 47,500 oil fields worldwide but the majority of the huge fields are more than 50 years old.  The aggregate size of the 500 largest oil fields with over 500 million barrels of total recovery is more than 1 trillion barrels.  Most of the new discoveries are happening off shore. (Karbuz, 2008)

As more and smaller fields are being discovered, the results are offset by depletion in existing fields, which are entering a declining phase.  Better technology will mitigate the effects of this but declining quantities are inevitable.  The industry is in a hunt to find new reserves as investment capital spending between 2002 and 2006 more than doubled, but so did the development, exploration and acquisition costs.  Most reserve replacements are found near existing fields or by merging with others.  (Levi, 2009) These issues have enabled oil developers to take a harder look at the feasibility and profitability of extracting oil from shale and tar sands.

The average age of an oil-drilling rig is more than twenty years and the number of active drilling rigs has more than doubled in the past decade.  Most work constantly at or near capacity.  Personnel staff shortages in the industry are expected to exacerbate the production problems as Cambridge Energy Research Associates predict a 10-15% shortage of qualified staff by the year 2010.  (Karbuz, 2008)

Future production from unconventional resources like tar sands and oil shale is expensive, the oil quality is poor and recovery volumes are lower than conventional crude oil extraction. How much we can rely on unconventionals in global oil supply will be determined by extraction, production and transportation costs, environmental concerns, investment requirements, energy payback times, and most importantly energy returned for the amount of energy invested. (Nikiforuk, 2010)  Shale oil contains bitumen, a substance that is extremely dirty oil that emits extensive pollutants during mining and production.  As Nikiforuk puts it, “bitumen is the equivalent of scoring heroin cut with sugar, starch, powdered milk, quinine, and strychnine.” (Nikiforuk, 2010:16)

The private sector must compete with nationalized companies both from producing and consuming nations.  The nationalized companies have increased financial muscle and renewed competence and have expanded rapidly into the market, forcing many private companies to investigate more remote sources.  As a result, the private sector has had to move into more remote areas, harsher operating conditions, environmentally more sensitive areas, more complex, hard to recover and technologically difficult projects, where the expenses and risks are high, including unconventional oil sources. (Lev, 2009)  As prices have increased, many of these remote countries have restricted access to their oil.

Not only is oil difficult to find and produce, concerns over climate change and pollution will make alternative sources like shale less palatable for legislators and industry executives to embrace.  As Levi puts it: “Many important decisions in areas including unconventional oil, biofuels, natural gas, coal and nuclear power will involve complex trade-offs and force policymakers to carefully navigate the two goals.” (Levi, 2009: 3)

Oil from tar sands and shale may be necessary despite the environmental disasters that could arise from this process.  It has become too expensive and too difficult to maintain our high level of petroleum usage by depending on unstable foreign governments and industry greed alone.  If we do not convert our basic transportation means and energy sources to cleaner industries, we will exacerbate an already polluted environment and continue to be held hostage by radical regimes that control foreign oil deposits.  We can meet our petroleum energy needs by capitalizing on the vast deposits of shale oil available in North America, but only at a great price to our environment.  This is a dirty business but it yields enormous potential for petroleum reserves that are under our complete control without foreign interference.  Our nation must decide which way we wish to go for the future.

Natural gas drilling and hydraulic fracturing chemicals with 10 or more health effects:

(Earthworks, 2012: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

1. The Marcellus Shale example

The Marcellus Shale covers a massive area of 95,000 square miles in Pennsylvania, West Virginia and New York and is at the epicenter of the debate over use of fracking to obtain natural gas.  The portion of this area that involves New York State is about 18,700 square miles involving the Catskill and Delaware watersheds that furnish 90 percent of potable water to New York City.  These areas are expected to have a very high natural gas recovery potential and are targeted for fracking.  Within the watersheds themselves, 1.076 square miles are not protected by wetlands or game preserves and are eyed for development which includes opening well pads, impoundments, chemical storage vats and other components of the drilling business. (Hazen and Sawyer, 2009)

Using data from other sites, it is estimated that the extraction of the natural gas will require 3,000 to 6,000 gas wells that can be built and serviced over the next two to four decades.  Initial rates of development begin slowly at about five or ten wells per year but could increase quickly to 100 to 300 or more wells per year given favorable economic, weather and political conditions. (Hazen and Sawyer, 2009)

To extract the gas from this region, fracking will be performed in an area sensitive to the fresh water needs of the Eastern Seaboard.  To be effective, a well in the watershed zone would have to be drilled vertically to a depth of 4,000 to 6,000 feet and move horizontally a similar distance through the targeted shale rock.  The shale formation is then fractured along the lateral part of the well to increase the permeability of the formation and allow the trapped gas and oil to move into the well and be processed.  (Hazen and Sawyer, 2009)

The amount of water required is staggering.  In order to effectively fracture and extract oil from the shale rock, three to eight million gallons of water along with 80 to 300 tons of chemicals must be forced into the shale at high pressure over the course of a week or so.  About half of this solution will return to the surface as flowback containing chemicals and naturally occurring high levels of dissolved solids, hydrocarbons, heavy metals and radionuclides.  This flowback solution is not able to be cleaned using conventional waste water treatments procedures and must be disposed of using industrial treatment means or injected underground.  In the case of the Marcellus proposals, there are not enough treatment and disposal facilities to handle the anticipated quantities of polluted wastewater. (Hazen and Sawyer, 2009)

Not only will the fracking process release millions of gallons of polluted water into the ecosystem, it will require millions of gallons of fresh water to perform the extraction operations.  Transporting the petroleum products to refineries and customers poses additional problems in the form of spills and leakages.  The entire national fracking operation will jeopardize fresh water sources wherever these wells are located.

In the fracturing operation, water is trucked into the well area or local groundwater supplies will be used if practical.  If the water and wastewater must be trucked in and out, the typical drill site will need about 1,000 or more truck trips per well in the four to ten months it takes to develop a new well.  The initial well pad is an area about five acres in size and capable of servicing six or more wells.  The entire operational area requires about one square mile. (Hazen and Sawyer, 2009)

How water is used in fracking:

(Earthworks, 2012 accessed at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

New York state law mandates that all wells operating from a designated pad must be drilled within three years of the first sinking.  This means that new sites will undergo a high and continual level of industrial activity for one to three years.  This fracturing operation will probably be repeated many times over the operating life of a drilled well as gas production rates deplete.  The operating wells will discharge badly polluted brine water from the fracking sites over their operational lives.  (Hazen and Sawyer, 2009)

In addition, the high-pressure forces used to extract the stubborn oil and gases create unnatural stress upon faults and natural fissures within the earth’s crust.  This pressure may be a contributing factor to unusual earthquakes that have been occurring in areas not normally associated with fault lines or other natural causes. (Howarth, et al. 2011) These underground disturbances may contribute to the phenomena seen in the 2010 film Gasland by Josh Fox where Pennsylvania water burns right out of the tap in an area around fracking operations.

http://www.treehugger.com/culture/burning-tap-water-and-more-gasland-exposes-the-natural-gas-industry.html

1. The Keystone Pipeline controversy

One of the more controversial projects aligned with obtaining and processing shale oil from fracking is the Keystone XL Pipeline Project.  TransCanada proposes to build a 1,700 mile long pipeline from northern Alberta across the United States to Gulf Coast refineries in Texas.  The Keystone XL project has met with fierce opposition from environmental groups and others who fear that disastrous pollution events may result from this pipeline’s construction and operation.  The process of refining shale oil and tar sands emits high levels of mercury and other toxins into the air than conventional oil.  This could radically hurt the Texas areas near these refineries that already have unacceptable air quality and do not need additional pollutants in their environment.  (Nikiforuk, 2010)

In order to get at the shale oil deposits, huge areas of pristine wilderness will have to be strip mined and the forests cleared.  An area the size of Florida is targeted for clear cutting and strip mining. (Friends of the Earth, 2011) Areas downstream from these operations will be exposed to more toxic chemicals and these toxins have been connected to higher rates of cancers, renal failure, lupus and hyperthyroidism. (Nikiforuk, 2010)

In the search for more oil in this hemisphere, energy investors are betting on the proposed pipeline, which will transport oil, gleaned from Canadian tar sands to refineries in southern Texas.  Environmentalists and people in the affected pipeline zone fear the project could pollute ecosystems and poison water supplies vital to the Midwestern agricultural states through which the pipeline will pass.  Given the history of the oil business and what happened in the Gulf of Mexico in 2010, these concerns are very valid.

TransCanada proposes to build their Keystone XL pipeline over 1,700 miles from northern Alberta Canada across the United States to Gulf Coast refineries in Texas.  This project has met with fierce opposition from environmental groups and others who fear that disastrous pollution events may result from this pipeline’s construction and operation.  The process of refining shale oil and tar sands emits higher levels of mercury and other toxins into the air than conventional oil processing.  This could dramatically impact the areas near these Texas refineries that already have unacceptable air quality and do not need additional pollutants in their environment.  (Nikiforuk, 2010)

The state of Nebraska is a current battleground for the implementation of this project.  TransCanada, the company proposing to build the pipeline, obviously has sent its support for favorable legislation in Nebraska.  The company claims it is having positive conversations with Nebraska state authorities and promised to avoid the environmentally sensitive Sandhills. (TransCanada, 2011)

It is likely that this project will eventually be built.  Oil is far too important for the United States’ economic and military interests to allow this resource to go untapped or to be sold to another country.  The oil is here, it has been found and developers know how to extract it.  Someday, it will undoubtedly be produced and shipped to a refinery somewhere.  Proponents in the United States intend to see that oil reach American companies’ profits.

The project claims it will create 20,000 jobs almost immediately, with 13,000 construction jobs and 7,000 ancillary jobs building the pipe itself and related products.  TransCanada, the sponsoring company claims the project will also create 120,000 spin-off jobs in the service industry that will support the pipeline workers. However, TransCanada’s estimates refer to jobs on a yearly basis, or, if the pipeline requires 10,000 builders for two years, it means they claim 20,000 jobs.  But their estimate also includes jobs in Canada. (Hargraves, 2011)

The United States State Department, which ultimately must approve the project, predicts it will create only 5,000 direct jobs over a two-year construction period.  Even TransCanada concedes that the number of permanent jobs would only amount to a few hundred. (Hargraves, 2011)  There is no guarantee that the steel for the pipeline itself will be made in the United States.  (Cornell University, 2011) The zest for seeing the project’s approval appears to be fueled by a chance for profits rather than a desire for job creation or helping the American economy.

Oil from tar sand and shale oil both contain bitumen, a substance that is extremely dirty and emits extensive pollutants during mining and production.  It requires three barrels of water to produce each barrel of oil.  This requirement will translate into a need for using 400,000 barrels of water each day in the extraction of oil from the tar sands.  Nearly all of this polluted water is stored in massive man-made swamps called tailings basins after it is used.  These swamps become vats of toxic sludge, including awful toxins like cyanide and ammonia, which somehow usually manages to seep into nearby clean water supplies. (Friends of the Earth, 2011)

In 2010, there were over 170,000 barrels of petroleum spilled into the environment, causing over $1 billion worth of damage in the United States.  Twenty-two people were killed from explosions and spills in the United States that same year.  (Cornell University, 2011: 3)  The construction of such a massive oil pipeline should not be a decision made lightly or as part of any jobs program in the Congress.  This issue needs a careful examination and thorough debate before it is allowed to progress.

1. Recommendations for sustainable solutions

In 2005, the Bush/ Cheney Energy Bill specifically exempted natural gas drilling operations from the Safe Drinking Water Act of 1974. The new policy exempts companies from the necessary disclosure of the chemicals involved with hydraulic fracturing.  For all practical purposes, the policy removed the Environmental Protection Agency from enforcing federal laws or otherwise interfering with issues involving fracking.  This action is now commonly called the Halliburton Loophole. (Nikiforuk, 2010)  The Halliburton Loophole should be appealed immediately so that every well drilled will be subjected to vigorous inspections and environmental impact studies before they are allowed to proceed.

Studies of local area tectonic activities and geologic changes are presenting opportunities for predicting earthquakes that may be prompted by fracking.  Geologists and earth scientists studying the earth’s geology hope to not only help in finding valuable resources but also hope to identify and mitigate pollution.  Their goals are to allow resource extraction to coexist with protecting the environment.  By studying the clues left behind and not decimated by erosion or other geologic events, earth scientists and geologists are able to piece together the history of our planet and offer important clues as to what we may expect from it in the future. (Karbuz, 2008)  Every effort should be made to monitor seismic activities around fracking sites as they are drilled and when pressure is applied to the underground fissures.

The oil industry must engage in new investments regularly.  Alternative sources of petroleum are necessary to meet increasing worldwide demand and Canadian companies are pushing for the development of the Keystone project for investments in shale oil.  Canadian companies will profit handsomely from this project and it will provide some jobs here in the United States as the project is built and for future upkeep and maintenance.  Proponents also claim that the tar sands oil will be extracted and sold elsewhere if the United States doesn’t capitalize on this potential resource.  This option is not readily practical, since no current Canadian pipelines run from the tar sands oil fields to their seaports. Environmental groups and some Native American tribes have thus far curtailed the development of a pipeline to seaports on the Canadian Pacific. (Levi, 2009)

The demand for petroleum products will increase as the developing economies of India, China and Asia require more oil.  The world market for oil is global, which means oil produced is sold to international buyers.  The world currently demands over 86 million barrels of oil every day.  This worldwide demand is expected to increase by nearly 35% by the year 2030.  Meeting such a heavy demand will require an additional supply of over a million barrels per day each year until 2030. (Karbuz, 2008)

In order to meet such a dramatic increase in demand, new oil sources need to be constantly discovered and developed safely.  The number of productive oil fields is diminishing, even though there are still unexplored areas left in the world that promise potential. The sizes of recently discovered oilfields are becoming smaller and new oil field discoveries are replacing only about one-quarter of current annual oil production.  Almost half of the global supply of oil comes from 116 giant oil fields that produce more than 100,000 barrels a day.  There are about 47,500 oil fields worldwide but most of these huge oil fields are over fifty years old.  The aggregate production capability of the world’s 500 largest oil fields (those with over 500 million barrels of total recovery) is greater than 1 trillion barrels.  Most of the new field discoveries are happening off shore. (Karbuz, 2008)

Existing oil fields are being depleted while oil being replaced by smaller fields is insufficient to replace what is being used.  Declining quantities of petroleum seem to be in line for the future.  Petroleum is a finite resource and sooner or later all of it will be gone. Improvements in technology may help alleviate this impending shortage and alternative energy will help, but the immediate future requires more petroleum.  As more investment capital is presented, exploration, development and extraction costs have also risen.  Most of the replacement oil is found near existing fields and these are declining as well.  Problems like these have forced industry investors to reconsider dirtier and more difficult sources of oil. (Levi, 2009)

Production from unconventional sources like tar sands and oil shale is expensive, the oil quality is poor and recovery volumes are less than conventional crude oil extraction, but they now represent the future of oil extraction in North America. Cornell University’s (2011) study claims that the potential for runoffs and pollution incidents may actually cost jobs by hampering agricultural activities and rendering some farmlands useless.  Their study also concluded that the problems with the pipeline could divert needed public resources into spill clean-ups and responding to environmental disasters rather than helping the general public.

The future of worldwide unconventional oil supplies will be determined by extraction, production and transportation costs, environmental problems, investment needs, energy payback times, and most importantly energy returned for the amount of energy invested. (Nikiforuk, 2010)  New technology to reinforce fading oil fields is expensive, making discovery and extraction efforts difficult and costly.  New discoveries of smaller fields that are more remote do not adequately replenish the declining reserves in the older oil fields, making it hard to meet an increasing worldwide demand for oil.  Many foreign governments are restricting exploration and development efforts in the wake of higher crude oil prices.  It makes good economic sense to pursue new sources of petroleum that are closer to market and controlled by politically stable governments.

The notion that the United States should be energy independent from Middle Eastern sources is very popular.  Proponents of using tar sands oil call it “ethical oil” because it is a better option than importing oil from repressive countries like Saudi Arabia, or invading and occupying countries to claim it like in Iraq.  The problem with Canadian tar sands or shale oil is that the Extraction Company -KXL – is an international enterprise motivated by international oil profits.  Tar Sands development outreach has gleaned investment money from oil multinational corporations including a growing stake from Chinese investments.  The company will likely employ temporary labor and use steel made in India and Canada.  A good portion of this oil will be refined in Port Arthur, Texas by Saudi Aramco, the state-owned oil company of Saudi Arabia.  It is also expected that a substantial amount of the oil will be used outside the United States.  The oil companies are also pressuring Canadian authorities to allow Enbridge to build their Northern Gateway pipeline across British Columbia to the Pacific Coast for export to markets in Asia.  Thus far, fierce public opposition has stopped this project.  It would appear that energy independence is not a realistic ancillary benefit of the Keystone XL Pipeline project. (Cornell University, 2011: 3)

Oil companies in the private sector must compete with nationalized companies both from producing and consuming nations.  Nationalized companies have increased financial muscle and renewed competence and have expanded rapidly into the petroleum market, forcing many private companies to investigate more remote sources.  As a result, the private sector has had to move into more remote areas, harsher operating conditions and environmentally sensitive areas.  Private explorations are now focused on more complicated, hard to access and technologically difficult projects, where the costs and risks are high, including unconventional oil sources. (Levi, 2009)  As prices have increased, many of these remote localities have restricted access to their oil reserves.

Despite precautions, accidents happen during the various stages of oil processing in the production, refining and distribution of oil and gas.  Oil slicks are a disaster both to wildlife and to human society.  These may occur because of equipment failure, malfunctioning, aging pipelines, corrosion, vandalism or terrorism, or human errors.  Also occurring during the production activities is the release of varying solid, semisolid, liquid or gaseous wastes into the environment including drill cuttings, mud and well treatment fluids, oil and chemicals injected into pipelines to control corrosion. (Patin, 1999; Sgamma, 2012)

These hazardous wastes should be disposed of as follows:

(Earthworks, 2012 accessed at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

1. Conclusions

Extracting oil from tar sands and shale may be necessary despite the environmental disasters that could arise from the extraction and transportation operations.  It has become too expensive and too difficult to maintain our high level of petroleum usage by depending on unstable foreign governments and industry investments alone.  If we do not convert our basic transportation means and energy sources to cleaner industries, we will exacerbate an already polluted environment and continue to be held hostage by radical regimes that control foreign oil deposits.  We can meet our petroleum energy needs by capitalizing on the vast deposits of shale oil available in North America, but only at a great price to our environment.  This is a dirty business but it yields enormous potential for petroleum reserves that are under our complete control without foreign interference.

More risky extraction practices from shale oil, tar sands or offshore drilling facilities will expand as corporate greed fosters short cuts and the use of old and substandard equipment.  It is increasingly likely that some forms of renewable energy sources will replace petroleum in the near future.  It is advisable to plan for that contingency and to assume the lead in developing new energy sources to continue to provide a high standard of living for Americans.  Limiting our financial, social and environmental addiction to petroleum will not only save the environment and help to mitigate the rapidly changing climate; it will move our country toward the types of energy we will need in the future when we finally and completely run out of oil.

No industry has a more powerful lobby or a greater impact on geo-political events than the oil industry.  Regardless of political propaganda, oil is very much at the heart of problems in the Middle East, including the wars in Iraq and Afghanistan.  Both World Wars were about oil and much of American foreign policy involves exploration and extraction of overseas oil.  The public has developed a generally negative perception of “big oil.”

The Keystone XL project will be likely built because the demand is great and the political posturing and investments are already in place.  Canada is already America’s number one source of imported oil and without this pipeline, they won’t be able to increase production in the short run.  In the future, if we require a strategic need to expand production, it will still be available.  It is better to wait for alternative and cleaner energy markets to gain traction and replace some of our demand for petroleum before we undertake a massive pipeline running through the heart of the United States.  While it may mean some temporary jobs in the short run, this project has the potential to create another horrible environmental disaster from the oil industry like 2010’s Gulf of Mexico spill.  This is too high a price to pay to support an industry that is based upon a finite source of dirty energy that is ruining our planet through pollution, greed and war.  It may be finally be the right time for mankind to look elsewhere for energy.

Bibliography

Cornell University, (2011) “Pipe Dreams? Jobs gained, jobs lost by the construction of the

Keystone XL,” Global labor Institute, September, accessed online on October 7,

2012 at: http://www.ilr.cornell.edu/globallaborinstitute/research/upload/GLI_KeystoneXL_Reportpdf.pdf

Earthworks (2012) “Hydraulic Fracturing 101,” accessed online on October 6, 2012 at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101

Friends of the Earth, (2011)“Keystone XL: Pipeline for Dirty Tar Sands Oil, PDF file, accessed

online on October 7, 2012 at: http://foe.org/sites/default/files/Keystone%20XL%20fact%20sheet.pdf

Hargraves, Steve, (2011) “Keystone Pipeline: How many jobs it would really create,” CNN

Money, December 14, accessed online on October 7, 2012 at: http://money.cnn.com/2011/12/13/news/economy/keystone_pipeline_jobs/index.htm

Hazen and Sawyer, (2009) “Impact Assessment of Natural Gas Production in the New York City Water Supply Watershed: Final Impact Assessment Report, New York City Department of Environmental Protection, December 22, accessed online on October 7, 2012 at: http://www.nyc.gov/html/dep/pdf/natural_gas_drilling/12_23_2009_final_assessment_report.pdf

Holzman, David C. (2011) “Methane Found in Well Water Near Fracking Sites, Environmental Health Perspective, July 1, Vol. 119, No. 7, accessed online on October 16, 2012 at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3222989/

Howarth, Robert W.; Ingrafea, Anthony and Engelder, Terry (2011) “Natural gas: Should fracking stop?” Nature, September 14, No. 477, Pp. 271 – 275.

Karbuz, Sohbet, (2008) “The peak oil debate and oil companies,” Energy Bulletin, Observatoire

Mediterranean de l’ Energie, January 7, accessed online on October 7, 2012  at: http://www.energybulletin.net/node/38910

Levi, Michael A. (2009) “The Canadian Oil Sands: Energy Security vs. Climate Change,”

Council on Foreign Relations, Special Report No. 47. Accessed online on October 8, 2012 at: www.cfr.org/content/publications/attachments/Oil_Sands_CSR47.pdf

McGraw, Seamus (2012) “Is Fracking Safe? The Top 10 Controversial Claims About Natural Gas Drilling,” Popular Mechanics, accessed online on October 7, 2012 at: http://www.popularmechanics.com/science/energy/coal-oil-gas/top-10-myths-about-  natural-gas-drilling-6386593#slide-1

Nikiforuk, Andrew, (2010) “Tar Sands: Dirty Oil and the Future of a Continent” Revised edition, Greystone Books, Vancouver, B.C. Canada.

Patin, Stanislav, (1999) “Environmental Impact of the Offshore Oil and Gas Industry,” 1st edition, EcoMonitor Publishing, East Northport, NY, December 1.

Sgamma, Kathleen M. (2012) “Fracking: Colorado methane study not clear–cut,” Nature, March 22, No. 483, P. 407.

TransCanada, (2011) “Keystone Pipeline Project,” accessed online on October 7, 2012 at: http://www.transcanada.com/keystone.html

Appendix A

This illustration shows how hydraulic fracking is accomplished.

(Popular Mechanics, 20121 accessed at: http://www.popularmechanics.com/science/energy/coal-oil-gas/top-10-myths-about-natural-gas-drilling-6386593#slide-1)

Appendix B

Proper disposal of Fracking Agents and Chemicals.

(Earthworks, 2012 accessed at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

Appendix C

(Earthworks, 2012 accessed at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

Appendix D

How Fracking is Performed Using Water

(Earthworks, 2012 accessed at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

Appendix E

Natural gas drilling and hydraulic fracturing chemicals with 10 or more health effects

(Earthworks, 2012 at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101)

Appendix F

Burning tap water in Pennsylvania

http://www.treehugger.com/culture/burning-tap-water-and-more-gasland-exposes-the-natural-gas-industry.html

Annotated Bibliography

Cornell University, (2011) “Pipe Dreams? Jobs gained, jobs lost by the construction of the

Keystone XL,” Global labor Institute, September, accessed online on October 7,

2012 at: http://www.ilr.cornell.edu/globallaborinstitute/research/upload/GLI_KeystoneXL_Reportpdf.pdf

This pdf report portrays the potential spending and employment expectations from the Keystone Pipeline in more realistic terms.  It has a negative connotation to its overall message but the information given is very valuable.  This report contradicts many of the job claims and ancillary benefits that proponents of the pipeline and shale oil claim.

Earthworks (2012) “Hydraulic Fracturing 101,” accessed online on October 6, 2012 at: http://www.earthworksaction.org/issues/detail/hydraulic_fracturing_101

This website offers a comprehensive look at hydraulic fracturing and how it is done.  The site capsules the general information about fracking and obtaining oil from shale including the chemicals used in fracking that are believed to cause problems with human health.  The site provides a very good objective overview of hydraulic fracturing and the extraction of shale oil and gas.

Friends of the Earth, (2011) “Keystone XL: Pipeline for Dirty Tar Sands Oil,” accessed

online on October 7, 2012 at: http://www.foe.org/projects/climate-and-energy/tar-sands/keystone-xl-pipeline

This website offers additional information about extracting oil and gas from shale oil in Canada and the northern United States and moving the petroleum extractions via pipeline to refineries in Texas.  It outlines the environmental hazards and the extensive use of water to extract the dirty oil from shale rock.

Hargraves, Steve, (2011) “Keystone Pipeline: How many jobs it would really create,” CNN

Money, December 14, accessed online on October 7, 2012 at: http://money.cnn.com/2011/12/13/news/economy/keystone_pipeline_jobs/index.htm

This article gives a more realistic portrait of how many jobs would be created by building a pipeline that carries shale oil products to Texas for refining. The writer disputes proponents’ claims of job creation and relies on the Cornell University study for conclusions.  This article also has a negative connotation to it and advocates against building the pipeline due to environmental hazards and the true number of jobs that would be created by its construction and maintenance.

Hazen and Sawyer, (2009) “Impact Assessment of Natural Gas Production in the New York City Water Supply Watershed: Final Impact Assessment Report, New York City Department of Environmental Protection, December 22, accessed online on October 7, 2012 at: http://www.nyc.gov/html/dep/pdf/natural_gas_drilling/12_23_2009_final_assessment_report.pdf

This pdf report outlines in detail the proposed use of the Marcellus Shale formation in New York, Pennsylvania and West Virginia for fracking natural gas.  The report covers all aspects of the project from water use and pollution to truck traffic at the construction sites.  It tells how many wells will be required, how much petroleum potential is located there and what it would take to remove it commercially.  It addresses the New York City watershed and concerns over possible catastrophic pollution events involving fracking.

Karbuz, Sohbet, (2008) “The peak oil debate and oil companies,” Energy Bulletin, Observatoire

Mediterranean de l’ Energie, January 7, accessed online on October 7, 2012  at: http://www.energybulletin.net/node/38910

This report discusses how oil companies plan to meet the demand for energy in the future. It talks about aging oil fields and how new petroleum reserves are being found using updated technology such as fracking. He emphatically claims that we are not running out of oil and that new discoveries and technology will keep the planet fueld with petroleum-based energy for the forseeable future.  It is a good source of information regarding the amount of oil that is available and the amount that will be needed in the future.

Levi, Michael A. (2009) “The Canadian Oil Sands: Energy Security vs. Climate Change,”

Council on Foreign Relations, Special Report No. 47. Accessed online on October 8, 2012 at: ww.cfr.org/content/publications/attachments/Oil_Sands_CSR47.pdf

This pamphlet explains the tradeoffs that will be necessary to maintain energy security in the Western Hemisphere through the development of the shale oil available in Canada.  It outlines the efforts that have been made to extract and move the shale oil to seaports on the Canadian Western coast and how environmental groups and Native Indians have opposed any pipeline construction.

McGraw, Seamus (2012) “Is Fracking Safe? The Top 10 Controversial Claims About Natural Gas Drilling,” Popular Mechanics, accessed online on October 7, 2012 at: http://www.popularmechanics.com/science/energy/coal-oil-gas/top-10-myths-about-  natural-gas-drilling-6386593#slide-1

This article somewhat advocates for development of natural gas wells in the United States including a posted comment by Senator John Kerry in support of developing the Marcellus Shale formation.  It offers counterarguments by the Green party of  Pennsylvania and others and solicits public comments as well.  It is a good source to compare arguments for and against the potential of fracking.

Nikiforuk, Andrew, (2010) “Tar Sands: Dirty Oil and the Future of a Continent” Revised edition,

Greystone Books, Vancouver, B.C. Canada.

This book traces the history of interest in the Canadian shale oil deposits, which he derisively refers to as “tar sands.” It outlines the potential while keeping in mind the environmental tradeoffs necessary to extract and move the product.  It is a comprehensive source of good data regarding the potential for both economic and energy security and environmental disaster.

Patin, Stanislav, (1999) “Environmental Impact of the Offshore Oil and Gas Industry,” 1st edition, EcoMonitor Publishing, East Northport, NY, December 1.

An older book, this work shows how the concerns of the late 1990s materialized into reality today.  The book accurately predicted a major disaster in the Gulf of Mexico, as we saw in 2010.  It realistically portrays the environmental degradation that is happening as a result of offshore drilling.  Today’s headlines confirm the fears of yesterday’s environmental visionaries.

TransCanada, (2011) “Keystone Pipeline Project,” accessed online on October 7, 2012 at: http://www.transcanada.com/keystone.html

This website offers information from the perspective of a major investor and player in the development of shale oil.  TransCanada is pushing hard to secure a route for the Keystone Pipeline project because it will profit handsomely from its construction.  It is fighting the state of Nebraska for clearance to build the pipeline right through areas where the state must depend upon for clean underground water sources.