The Longterm Perils of Fracking

After the American Century

Fracking is much in the news. This new way of extracting oil and natural gas is controversial because, while it lowers energy prices and generates jobs, it has an environmental cost. If North Dakota is booming and crying out for more labor, deep beneath the surface of the state fracking is pumping chemicals into the bedrock.  No one knows with certainty how this may affect the ground water a generation from now. North Dakota is extracting oil using this method, while it is being used in Pennsylvania and New York to extract natural gas.

Regardless of where fracking is taking place, the public does not know what exactly is being injected into the ground, because industries regard this as a trade secret, and no legislation forces them to disclose what exactly they are doing to the land. However, some of these chemicals used in fracking are known, including hydrochloric acid, boric acid, sodium chloride, and ammonium chloride. Many of the chemicals are "biocides" that are intended to kill bacteria.  Others seek to change the ph of the water.

It may seem amazing, but the "Safe Drinking Water Act" has an exemption for hydraulic fracturing (or fracking). The act specifically does not control or regulate, "the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities." (See the Environmental Protection Agency.) There are rumors that some oil and gas drillers are using nano-technologies whose environmental consequences are not known.

Fracking demands large amounts of water, between two and eight million gallons for a single well. Permits have been issued for more than 80,000 wells, and these typically have pools of waste water nearby. Lawsuits in several parts of Pennsylvania and New York have established that this chemically charged waste has polluted drinking water. The contamination is necessarily a mix of chemicals injected by the drillers and substances already in the ground that were released along with the oil and gas. These also include the methane being sought; Duke University scientists found methane in many wells near fracking operations in Pennsylvania. It may be that methane is not toxic in small does, but it definitely is "an asphyxiant in enclosed spaces and an explosion and fire hazard." A methane-polluted well is unsafe as a domestic water supply.

Safe Water Drinking Act to remove a special exemption for hydraulic fracturing - See more at: http://www.dcbureau.org/201203097069/natural-resources-news-service/cuomo-and-corbett-ignore-health-concerns-from-gas-fracking.html#sthash.iZpPPkht.dpuf

Safe Water Drinking Act to remove a special exemption for hydraulic fracturing - See more at: http://www.dcbureau.org/201203097069/natural-resources-news-service/cuomo-and-corbett-ignore-health-concerns-from-gas-fracking.html#sthash.iZpPPkht.dpuf

The long-term pollution of water is an obvious danger that is being downplayed in the rush for quick profits, but there is another danger that is less discussed. Fracking has given the oil and gas energy regime a new lease on life. Just five years ago one could argue that both national security and the danger of global warming pointed to the need for a rapid conversion to alternative energies. But in 2014 US oil and gas production is soaring to the point where the government is under pressure to allow the nation to become an oil exporter again. The falling cost of natural gas is making the US highly competitive in some industries, in contrast to Europe where gas prices are noticeably higher. In the short term, this stimulates the economy, but in the longer term it encourages Americans to remain high energy consumers, embracing an unsustainable style of life.

The current American oil and gas bonanza will delay, perhaps for an entire generation, the transition away from fossil fuels to sustainable homes, vehicles, and consumption levels. Leadership in the new technologies of wind, solar, and bio-fuels may continue to slip away from the US to foreign competitors. Germany, for example, has made a major commitment to becoming more energy efficient, even as it is abandoning nuclear power. The Danes have developed one of the world's largest and best windmill industries.The Chinese are investing heavily in solar energy and have out competed the US for foreign markets.

Fracking may be good for the American economy in the short run, but in the long run it cannot be very good for the land itself. Furthermore, it misdirects economic development toward an inefficient, high-energy dead end. It will not reduce the cost of oil, because that is shaped by world demand, which is rising rapidly. It will retard transition to a sustainable energy regime, and it may well undermine US competitiveness in the growing area of alternative energy technologies.

The United States is opting for a strategy of quick profits and "pollute now, pay later."  Most of the costs will be paid by later generations.

Election 2012: Romney's Energy Program – Back to the 1970s

After the American Century

Romney and the Republicans propose a return to the 1970s energy policy. He is the spokesman for the old fossil fuel energy regime, intent on maintaining its technological momentum. He would increase the supply of gas and oil, de-fund energy savings programs, leave innovation choices to the private sector and let alternative energies fend for themselves in the marketplace. 

The Romney energy plan, “Believe in America,” (2012) does not deny global warming, as George Bush did for much of his presidency, but completely ignores it.

Who is to Blame? Making Sense of The Gulf Oil Disaster

After the American Century

I gave an interview to the New Orleans Times Picayune a few days ago. The reporter was rightly interested in the American tendency to believe that all problems have technological solutions. If oil drilling technology created an underground gusher of oil, surely some other technology ought to be able to stop it. And if the solution was not found quickly, then it must be someone's fault. Lately the media has been debating whether it is the President's fault.

Karl Rove - surely the least trustworthy man in American politics - has made the argument that the oil leak is "Obama's Katrina" -  one of the most idiotic arguments ever. But logic has never been the strong point in American politics, and perhaps not in the education of journalists either. So let us do a comparison of Katrina and the oil leak, and see how well they compare.

Katrina was a hurricane, and the last time I checked that makes it a natural phenomena, of the sort known often to hit Louisiana. The federal government had spent years making plans and building defenses to protect New Orleans against a category 4 or 5 hurricane. However, the Bush Administration cut back funds to improve the levees around New Orleans, and George W. Bush specifically appointed a political hack as chief administrator to deal with such crises. The entire world knew that Hurricane Katrina was headed for the Louisiana coast, and the failure of the local, state, and federal authorities were many, both before and during the disaster. People died because of their incompetence, not least in the evacuation of the city.

A deep-water oil drilling disaster is a man-made phenomena. Moreover, no one saw it coming on a radar screen for days beforehand, as was the case with Hurricane Katrina. The explosion, fire, and oil leak resulted from the failure of a new kind of oil drilling, and unlike a hurricane, the specific accident was not foreseeable days in advance. The permit to do this kind of drilling came from the Bush-Cheney government, and it is worth noting that both Bush and Cheney worked as executives in the oil industry before coming to Washington. 

In contrast to a hurricane which is beyond human control, oil drilling is a human activity, in this case run by British Petroleum or BP. They were responsible for building the platform, and drilling from a point that was about one mile down in the ocean. BP was present at the site before, during and after the accident and "leak", so one might think that BP and more generally the oil industry, is to blame. People died because of BP's incompetence, but no one died because of anything Obama has done in this matter. 

Moreover, the oil industry gave the federal government assurances that deep water oil wells would be safe. Perhaps they lied, perhaps they are just incompetent, but one thing is certain: the oil industry was a whole was not ready to deal with the disaster. They failed to make contingency plans. They failed, in effect, to construct the protections, the levees if you will, that were needed. The oil industry was not prepared to defend the shoreline or the fishing industry against a massive oil spill. The oil industry decided, as it usually does, to put profits first.

And speaking of profits, BP had a profit of more than $4 billion in the fourth quarter of 2009, and it made even more in the first quarter of 2010, a rather tidy $6.1. That is more than $10 billion in the last six months. Why is BP making so much money? The price of crude oil has almost doubled in the last year, but the cost of extraction has actually gone down slightly, (see CBS news). BP, which is not even the largest or most profitably oil company, could have afforded to make contingency plans. Exxon made a profit of $45 billion in 2008 and continues to rack up big profits. If such companies cared about more than the bottom line they would have jointly funded a permanent task force  that is always ready to deal with oil leaks and spills. The oil industry could have been prepared. Instead, they just kept drilling and hoped to pass on the bill, and the responsibility, to someone else.

Yet even had they prepared, and this was my point when speaking with the Times Picayune, Americans tend to think that there is a technological fix. Not all problems can be quickly solved, and not all powerful natural phenomena can be stopped. Human beings might be able to provoke a volcanic eruption, but we cannot stop one.  BP opened a hole that let the oil escape into the Gulf of Mexico. Plugging that hole is harder than drilling it in the first place. Tampering with powerful natural forces can get us in over our heads, and Americans need to understand that  smart technology may not always be immediately available to get them out of trouble.

So, blame the oil companies for not being prepared, for not investing very much of their enormous profits in accident prevention or oil leak protection. Blame the Bush-Cheney oil-friendly administration for allowing this kind of drilling in the first place, and for not assuring that the safeguards were adequate. But do not imagine that just because human beings can create a problem, we can always create a solution. As our technologies grow more powerful, the responsibility to use them carefully increases exponentially.

If you want to read more along these lines, most libraries have a copy of my Technology Matters (MIT Press, 2006).

After I wrote this blog, BP admitted that it did not have adequate technical know-how to deal with the problem they had created.

Global Warming NOT the Only Problem with Fossil Fuels

After the American Century

During the next three weeks we will hear a great deal about the problem of global warming. I do believe that global warming is taking place, that the actions of human beings contribute to it, and that it lies within our power to do somethning about it. But put aside that entire discussion for a moment, and consider what other reasons there might be to cut back on burning fossil fuels.

Not all countries produce oil, coal, and/or natural gas. Advanced industrial nations that lack supplies are not coincidentally in the forefront of finding alternatives. Germany has virtually no oil or natural gas, and its more accessible coal has already been mined. Therefore Germany finds it highly interesting to develop wind turbines and solar power, and indeed has been one of the leading countries in both sectors for years. France, in much the same energy situation, has more nuclear power than any other nation. More than 80% of its electricity comes from nuclear plants. Sweden has no oil, and it relies on nuclear power and hydroelectric dams.

In contrast, countries like the United States and Britain which have oil fields and coal mines have been far slower to develop alternative energies. One can take this argument further, and say that within the US, places without fossil fuels like New England, New York, Oregon, and Washington are far more supportive of wind and solar energy than are states with coal fields. Montana, Illinois, Wyoming, and West Virginia together supply 55% of US coal production, and they are not supporting the shift to alternatives. One finds the same resistence to change in the biggest oil producting states, Texas, Alaska, and Lousiana.

Without going into arguments about global warming, it seems obvious that the current energy regime favors fossil fuel exporting regions and in effect imposes a tax on those who import oil, gas, and coal. Half a century ago the cost of these energy sources was so low as to be almost a negligable part of the total cost of production. This is no longer so. Fuel prices, over the long term, have risen and can only continue to rise as demand increases. Already in Russia, more than 20% of the gross national product (GNP), comes from oil and gas exports; in Nigeria 35%; in Venezuela 27%; and so on for all the major oil producers.

It is always a good idea to "follow the money." Most of the world's powerful economies - the US, Germany, France, Italy, Spain, South Korea, Japan, Australia, China, and India - are all net importers of oil and gas. The United States imports almost 12 million barrels of oil every day. Japan imports a bit less than half that. China imports "only" 2.9 million barrels a day, but this figure is rocketing higher, as its citizens now buy more cars every month than consumers in the US. The major industrial nations need alternatives, and in the next two decades they will probably develop them.

There is one other argument in favor of a shift to alternative energies. Quite simply, the world's reserves of oil, coal, and gas are not infinite. Why keep paying a premium to use someone else's well, when it is drying up?

Costly Oil: The Return of Stagflation?

After the American Century

Today the European Bank is widely expected to raise interest rates. The mantra of economists remains that inflation must be controlled through higher rates. In "normal times" this seems to be the case. Raising interest rates makes money a bit more expensive, curbing consumer spending, slowly down the economy. The usual metaphor is that the economy is "overheated," like an engine pushed too hard. But "normal times" are those when the cost of raw materials remain reasonably stable, especially the cost of oil, coal, and other fuels.

Back in the 1970s the American Federal Reserve kept raising interest rates, because of inflation. But the remedy did not cure, because the cause of inflation was higher energy prices. What resulted was absurd. The interest rates went up to almost 20% to combat inflation while the economy stagnated. The pundits called this "stagflation" and we may be about to see the same thing happen again.

As of this morning, the price of oil has reached $145 a barrel. In the United States and in Europe consumers have been protesting, to no effect, because they are complaining to their national governments. But in a globalized economy, no prime minister can control the price, except by lowering gasoline taxes. This would stimulate consumption, however, and be bad for the balance of trade in an oil-importing country. Nor will raising interest rates lower the cost of oil, except marginally, by reducing economic activity.

Wise leaders - unlike George W. Bush - might respond to this new situation in the following way.

(1) Tax vehicles not by weight but according to how much oil they use, i.e. very low taxes for the most efficient vehicles and punitive taxes for those that are not.

(2) Halt road-building and invest the same money in public transit.

(3) Permit some rezoning of cities, so that population density can be increased. Deconcentration of American cities, which began in the 1920s and 1930s, has created a sprawling energy-inefficient economy, making it harder for mass transit. Rezoning might be modeled on the fine exampleof the Dutch.

(4) Give tax-incentives to energy conservation of all types, including building insulation, heat-pumps, and better architectural design.

(5) Restructure utility prices so that there is a financial reward to the companies that reduce consumer demand.

(6) Invest in alternative energy R & D and in its installation.

These are not new ideas. They are the ideas which most governments have ignored, in practice, for the last two decades.

The current high prices signal the need for a new energy regime. This is not just another economic storm that can be survived by raising interest rates.

If you want to know a bit more about the history of US energy consumption, see
David E. Nye, Consuming Power: A Social History of American Energies (MIT Press).

Bush Dusts off Reagan's Energy Script, for McCain

After the American Century

In my last Blog I recalled the rhetoric of Ronald Reagan on energy in the 1980 campaign. No sooner had I published it than the Republicans began to talk just like Reagan did at that time. Back then the oil crisis apparently made it necessary to drill for Alaskan oil. The hue and cry was that the whole energy crisis was caused by over-zealous bureaucrats cheered on by environmentalists. It worked for the Republicans then. The public preferred to hear not that the shortages were real but that the US had lots of its own oil.

So the Republicans will try to blame the Democrats for the oil shortage! Not Detroit automakers who made inefficient cars and fought every attempt to raise the mandated minimum mpg (miles per gallon) for their fleets. Not campaign donors who run the oil corporations, who are reporting obscenely large profits. Not the Saudis and OPEC! Not rising demand in Asia. NO! Blame the Democrats.

Ronald Reagan, 1980: "The truth is America has an abundance of energy. But the policies of this administration [President Carter] consistently discouraged its discovery and production."

Until yesterday, McCain opposed off-shore drilling on environmental grounds. Now he is singing from the oil corporation song book. He said yesterday: "We must take control over our own energy future and become once again the master of our fate." Where? In Houston, Texas, the oil capital of the United States. He was talking to oil executives at Bush Family Central. This is the same McCain who last week wanted everyone to believe that he cares about global warming and is much different from G W Bush.

Meanwhile, Obama - correctly - told the press that off shore oil, even if found, drilled for and extracted, would not be available for more than ten years. "Much like his gas tax gimmick that would leave consumers with pennies in savings, opening our coastlines to offshore drilling would take at least a decade to produce any oil at all, and the effect on gasoline prices would be negligible at best, since America only has 3% of the world's oil. . . .It's another example of short-term political posturing from Washington, not the long-term leadership we need to solve our dependence on oil."

Drilling for off-shore oil will not solve the current problem of higher gas prices, but it will continue the US fixation on oil, and it will make corporate Republicans billions of dollars. Interestingly, a few Republicans from tidewater states, notably California's Arnold Schwartznegger, openly rejected the joint McCain-Bush call for off-shore drilling. Oil spills are bad for tourism, destroy wildlife, and threaten fishing. Oh, and burning oil creates greenhouse gases. But please don't tell Mr. McBush, as he thinks drilling for oil that will not be available for a decade is better than using less oil immediately or leading a determined drive to find alternatives.