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Survive Peak Oil: Fracking: Reserves, Production Rates, and Net Energy

Survive Peak Oil: Fracking: Reserves, Production Rates, and Net Energy.

A lively discussion in the past few years has involved the fracturing (“fracking”) of rock using large quantities of water, sand, and chemicals to extract both oil and gas. There’s no question that fracking can cause astonishing environmental damage to drinking-water supplies and in other ways, which is why it has been subject to moratoriums, restrictions, and bans in about a dozen countries so far. But in the midst of the controversy, what gets overlooked is another trouble of global proportions: the fact that the global boom in fracking will ultimately do very little to prevent the decline in fossil fuels.
The numbers involved, with regard to these recent “miracles,” don’t come anywhere near the much larger numbers for annual oil and gas consumption to which we were accustomed long before fracking became popular: about 30 billion barrels of oil a year, and about 3 trillion cubic meters of natural gas.
The disinformation industry has advanced in leaps and bounds since the Cold War days. Hence Obama’s statement in his third State of the Union address (January 29, 2012): “We have a supply of natural gas that can last America nearly 100 years. . . .” In today’s journalism, many “press releases,” particularly about “unconventional oil,” are just thinly disguised advertising, designed to lure gullible investors into supporting projects that will have large expenses but small profits.
Let’s start with a few definitions, if only rough-and-ready ones. “Conventional oil” is the cheap, free-flowing, easy-to-to reach oil, the liquid that was refined to produce all gasoline until a decade or two ago. “Unconventional oil,” on the other hand, is all the other stuff related to conventional oil but less desirable for most purposes, either because of its inherent properties or because of its difficulty of access: heavy oil, tight oil (“shale oil,” an ambiguous term), kerogen, tar-sands oil, natural-gas-liquids, and so on.
Why the great interest in unconventional oil these days? For no other reason than that we’re beginning to run out of conventional oil. The expression “scraping the bottom of the barrel” is a fairly good description of the struggle for unconventional oil. As a young student once said to me: “If we’re doing things like fracking, it just shows how little is left of all this stuff, and how desperate we are to get at it.”
Then we must distinguish between “resources” and “reserves” — a very important distinction, if not an easy one. Again speaking in rough-and-ready terms, the resources of any material — oil, coal, copper, whatever — are the grand total of whatever is under the surface of the Earth (or on it, for that matter). The “reserves” (roughly equivalent to the “ultimate recoverable”), on the other hand, are the small fraction of those resources that can be got at within any reasonable limits, either technological or financial. The United States Geological Service actually breaks resources and reserves down into about 20 sub-categories, but most definitions are less elaborate. Without wishing to downplay the importance of the distinction between resources and reserves, it should be noted that humans can’t really tunnel under the entire 150 million square kilometers of the Earth’s surface in order to verify the quantities, so a certain amount of guesswork is inevitable.
The consensus is that global production of conventional oil was somewhere around the year 2010, and that it is now beginning its decline. A mixed bag of unconventional fuels is keeping the total on a slight rise, or more like what is called a “bumpy plateau,” but at some point that plateau will become a downward slope.
According to BP’s 2013 report, for the past few years the annual production of conventional oil remained nearly flat at about 30 billion barrels, or about 80 million barrels per day. The reportshows the total of annual global oil production increasing slightly now, though, because unconventional oil has increased, although it constitutes less than 10% of the total. In other words, the decline in conventional oil and the rise in unconventional oil roughly cancel each other out, therefore doing very little to prevent the basic horizontality of the “bumpy plateau.”
Specifically, the total oil supply (both conventional and unconventional) increased by about 9% annually between 1930 and 2001, whereas between 2002 and 2012 the annual increase was only about 1%.
Of the 54 oil-producing countries, about 40 are past their peaks of production. The US peaked in 1970, and although production is now increasing again it is still at only about two-thirds of its peak rate. For that matter, in some respects the term “peak oil” by itself is a red herring: per capita, the peak date of global oil production was 1979, when there were 5.5 barrels of oil per person annually, as opposed to only 4.4 in 2012.
Besides the environmental problems and the financial burdens, there are three basic limitations to the use of unconventional oil:
— The global reserves are low, and there will therefore be an early peak of production. In fact all sources of oil and gas, conventional and unconventional, will peak sometime before 2020.
— The rate of production (rate of energy supply) is very low, and any technology to improve it substantially is unlikely to be discovered — in contrast to the 30 billion barrels per year of conventional oil production. The tar sands, for example, have not even yielded enough oil annually to meet 2% of the world’s oil requirements.
— There is low net energy (“energy return on energy invested,” EROEI), partly because of losses due to conversion of that material to a more-usable form — e.g., the material taken from tar sands is not of much use until converted to liquid.
A few American organizations, such as the Energy Information Administration, take advantage of weak definitions to produce more-optimistic figures for unconventional-oil production. These organizations obtain their numbers by dividing a rather generous estimate of reserves by the current rate of consumption. At the same time, low rates of production and low net energy are ignored. The result is some cheerful but unrealistic upward curves.
US shale oil (now called “tight oil,” because the famous Bakken formation is actually dolomite) now constitutes 20% of US oil production, and is expected to grow impressively, but it will reach a peak in 2017, before swiftly declining. Individual tight-oil plays are themselves characterized by very high decline rates.
As mentioned earlier, the second major target of fracking is natural gas. Largely because of fracking (mostly in the US), global gas production rose from 2,524 billion cubic meters in 2002 to 3,370 billion cubic meters in 2012, an average annual increase of 3%. As with shale oil, individual shale-gas plays are themselves characterized by high decline rates. Global gas production will peak around 2020.
In the US itself, gas production rose from 536 billion cubic meters in 2002 to 681 billion cubic meters in 2012, an average annual increase of 2.5%. Unconventional gas production (coal-bed methane, tight gas, and shale gas) has been higher than conventional gas production. Overall US gas production has been flat since 2011, though, with only shale gas production rising. The result will be a peak of all US gas, conventional and otherwise, in about 2020, like global gas. The very high decline rates of shale gas wells in the US results in costs of about $42 billion per year, yet the value of shale gas produced in 2012 was only $32.5 billion — a losing proposition.
Other types of fossil fuels have even less to offer: tar-sands oil, natural gas plant liquids, kerogen, coal- bed methane, gas hydrates, Arctic oil and gas. The same is true of technologies such as coal- and gas-to-liquids, in-situ coal gasification, and deepwater oil and gas production.
What about forms of alternative energy other than fossil fuels? The favorite is still solar power, but it has no practicality on a large scale. There is a great deal of solar energy reaching the Earth, but it is too diffuse to be of much value. To meet the world’s present energy needs with solar power, we would need an array (or an equivalent number of smaller ones) at least the size of France. Its production and maintenance would require vast quantities of fossil fuels, metals, and other materials — a self-defeating process. In addition, photovoltaics require scarce metals (somewhat misleadingly called rare-earth elements) such as iridium and gallium, which simply do not exist in sufficient quantities. For these and other reasons, solar power is only about 0.2% of the world’s energy supply, and cannot be made to increase to any significant extent.
Fracking must go into the same pile as every other miracle-energy-of-the-month: solar power, wind power, hydrogen fusion, bio-fuels, geothermal power, and so on. The common statement, “We must invest in a broad range of technologies,” sounds very lofty and patrician, but it’s missing the hard facts. Adding one bad idea to nine other bad ideas, if each of them has very low or even negative net energy, just means ten bad ideas, not ten good ones. We must start living a simpler life, and we must do it with a much smaller number of people. We can do that consciously or unconsciously, we can do that painfully or pleasantly, but one way or another it will be done.
BP. (2013). Global statistical review of world energy. Retrieved fromhttp://www.bp.com/statisticalreview
Heinberg, R. (2013). Snake oil: How fracking’s false promise of plenty imperils our future. Santa Rosa, California: Post Carbon Institute.
Hughes, J. D. (2013, Feb.) Drill, baby, drill; Can unconventional fuels usher in a new era of energy abundance? Executive Summary. Post Carbon Institute. Retrieved fromhttp://www.postcarbon.org/reports/DBD-report-FINAL.pdf
Klare, M.T. (2012).The race for what’s left: The scramble for the world’s last resources. New York: Picador.
Laherrère, J. H. (2013, July 16). World oil and gas production forecasts up to 2100. The Oil Drum. Retrieved from www.theoildrum.com/node/10009



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