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Peak Oil: “Show-Stoppers” – Peak Oil Matters

Peak Oil: “Show-Stoppers” – Peak Oil Matters.

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Freshly fracked wells sent U.S. oil production soaring 39 percent since 2011. That’s the steepest climb in history, and if production continues apace, the U.S. would become the world’s biggest source of oil by 2015, according to the U.S. Energy Information  Administration.

Rapid well declines threaten to spoil that promise. The average flow from a shale gas well drops by about 50 percent to 75 percent in the first year, and up to 78 percent for oil, said Pete Stark, senior research director at IHS Inc.
‘The decline rate is a potential show stopper after a while,’ said Stark, a geologist with almost six decades in the oil patch. ‘You just can’t keep up with it.’ [1]

That’s an interesting comment, given that the company Mr. Stark works for is more commonly known for its sunny optimism about our future fossil fuel supply.

FRACKING ISN’T FREE OR EASY

The reality is that rapid decline rates are a common feature of fracked wells. Drilling faster, more, and at higher costs just to keep pace with current production is not exactly a winning strategy. Higher costs for them are supported by the higher costs we pay. At some point, consumers balk, and when they do, there goes a lot of investable funds for more production. Then what?

The article from which that quote was sourced describes some of the admittedly-fascinating overview of the artificial intelligence systems now being considered—and it some cases already deployed—to improve the drill results from fracking (the hydraulic fracturing of shale in order to facilitate the flow of “tight” oil trapped in those rocks.) The article notes that “four out of every 10 clusters of fractures in an average horizontal well are duds.” Given that each well can cost millions of dollars, much more than wells drilled in conventional crude oil fields, that can be a problem.

AN UNSPOKEN CHALLENGE OR TWO

The use of fiber-optics and 3D seismic imaging are among the technological advances now being used to aid scientists “scientists see and hear what’s going on two miles underground.”

An executive of Schlumberger Ltd is quoted in this same article announcing that the combination of their own scientists’ expertise with the “U-ROC” software program “has led to an almost 30 percent increase in production in some wells in the Eagle Ford [TX].”

An official from another petroleum company that after collaborating with Halliburton and using a “science-based approach,” his company’s “shares doubled in the five months after” a conference call with investors.

If that’s not enough good news, by last summer the company enjoyed its “best-ever results” in the shale formations of western Texas’ Permian Basis, “and that it was‘among the best’ among its competitors at that location. The improvements were attributed in part, as a spokesman noted, to the company’s “own internal efforts to pump more time and money into the science of drilling and production.”

A LOOK AT THE UNSPOKEN

Improved performance is improved performance. But for those of us interested in how depleting and finite fossil fuel resources—with a healthy concern that technology and economics will continue to make extraction and production feasible to begin with—will keep up with demand in the years ahead, the doubling of a company’s shares, “an almost 30 percent increase in production in some wells,” being “among the best,” and pumping “more time and money into the science of drilling and production” suggests that all is not well in Oil Production Land.

That’s precisely what those of us concerned about peak oil continue to stress to listeners and readers.

It’s probably safe to assume that none of those efforts or the technologies employed are inexpensive. It’s also a certainty that whatever costs are associated with developing, testing, supplying, and using those impressive advances get passed on to consumers.

The impressive technologies now in play, with their higher costs, to locate and produce a product harder-to-come-by and not of the same quality as the conventional crude oil we’ve used to power our civilization for more than a century all point to the fact that we clearly can no longer rely on Business As Usual in oil production itself and fossil fuel usage by all of us.

Taking a bit of a detour in the headlong pursuit of ever more expensive technologies in order to plan for what happens in years to come when that resource just doesn’t do what we all need it to do; or devote more resources to the alternatives which will be needed when it makes little sense to continue the fossil fuel chase; or even provide more information to the public now so that they can get into the game doesn’t seem all that unreasonable, does it?

~ My Photo: Corona del Mar, CA – 02.16.18

World energy use threatens water | The Japan Times

World energy use threatens water | The Japan Times.

Water and sand are mixed and pumped into a well during a fracking simulation at the Marcellus Shale formation in Camptown, Pennsylvania. | BLOOMBERG

Crisis brewing across most of globe: U.N.

World energy use threatens water

REUTERS

OSLO – Rising demand for energy, from biofuels to shale gas, is a threat to freshwater supplies, according to a United Nations report released Friday.

The report urged energy companies to do more to limit their use of water in everything from cooling coal-fired power plants to irrigation for crops grown to produce biofuels.

“Demand for energy and freshwater will increase significantly in the coming decades,” U.N. agencies said in the World Water Development Report. “This increase will present big challenges and strain resources in nearly all regions.”

By 2030, the world will need 40 percent more water and 50 percent more energy than now, the report said. Water is under pressure from factors such as a rising population, pollution and droughts, floods and heat waves linked to global warming.

Around the world, about 770 million of the world’s 7 billion people now lack access to safe drinking water, it said. And the energy sector accounts for about 15 percent of water withdrawals from sources such as rivers, lakes and aquifers.

“This interdependence calls for vastly improved cooperation” between water and energy, said UNESCO head Irina Bokova.

The report lamented the water sector’s lack of influence compared to what it called the “great political clout” of energy. March 22 is World Water Day in the U.N. calendar.

All energy production uses water, often as a coolant, it said. The least amount of water is used in wind and solar power, while heavy users include hydraulic fracking to produce shale gas or the extraction of oil from tar sands.

The report said that hydropower dams are sometimes built with little thought for other water users, and it urged caution about biofuels, partly because of water use required for irrigation.

World energy use threatens water | The Japan Times

World energy use threatens water | The Japan Times.

Water and sand are mixed and pumped into a well during a fracking simulation at the Marcellus Shale formation in Camptown, Pennsylvania. | BLOOMBERG

Crisis brewing across most of globe: U.N.

World energy use threatens water

REUTERS

OSLO – Rising demand for energy, from biofuels to shale gas, is a threat to freshwater supplies, according to a United Nations report released Friday.

The report urged energy companies to do more to limit their use of water in everything from cooling coal-fired power plants to irrigation for crops grown to produce biofuels.

“Demand for energy and freshwater will increase significantly in the coming decades,” U.N. agencies said in the World Water Development Report. “This increase will present big challenges and strain resources in nearly all regions.”

By 2030, the world will need 40 percent more water and 50 percent more energy than now, the report said. Water is under pressure from factors such as a rising population, pollution and droughts, floods and heat waves linked to global warming.

Around the world, about 770 million of the world’s 7 billion people now lack access to safe drinking water, it said. And the energy sector accounts for about 15 percent of water withdrawals from sources such as rivers, lakes and aquifers.

“This interdependence calls for vastly improved cooperation” between water and energy, said UNESCO head Irina Bokova.

The report lamented the water sector’s lack of influence compared to what it called the “great political clout” of energy. March 22 is World Water Day in the U.N. calendar.

All energy production uses water, often as a coolant, it said. The least amount of water is used in wind and solar power, while heavy users include hydraulic fracking to produce shale gas or the extraction of oil from tar sands.

The report said that hydropower dams are sometimes built with little thought for other water users, and it urged caution about biofuels, partly because of water use required for irrigation.

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.
SOURCES:
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

 

'Full Disclosure' of Frack Chemicals Urged by Energy Department Advisors – Bloomberg

‘Full Disclosure’ of Frack Chemicals Urged by Energy Department Advisors – Bloomberg.

By Alan Kovski  Mar 7, 2014 11:43 AM ET

Photographer: Ty Wright/Bloomberg

Threaded drilling pipes are stacked at a hydraulic fracturing site in Washington…Read More

Bloomberg BNA – An Energy Department advisory board recommended “full disclosure of all known constituents” in fluids used for hydraulic fracturing, according to a draft report released March 6.

The “Task Force Report on FracFocus 2.0” from the Secretary of Energy Advisory Board (SEAB) said state and federal regulators should adopt standards for companies making trade secret claims for fracking fluid ingredients and establish a compliance process and challenge mechanism.

The draft report praised the FracFocus website as a good registry for public disclosure of the chemical additives in hydraulic fracturing fluids. “It has accomplished a good deal and shows the capacity to make improvements at modest additional cost,” the report said.

But a large portion of the FracFocus reports on hydraulic fracturing of oil and gas wells claim at least one trade secret exemption, the report said. It said there should be “few, if any exceptions” to full disclosure.

The report also recommended expanding what is reported beyond the chemical additives in the fluids.

Fracking fluids are mostly water and sand, and the water can have chemical constituents of its own, especially if it’s recycled water containing traces of minerals and residues of previously used fracking fluids. Disclosure of the constituents of the water, not just the additives, would be appropriate if the data were available, the report said.

Secrets Protection Suggested

To avoid divulging trade secrets, companies could report additive chemicals separately from the commercial products containing the chemicals, the report said.

“A list of chemicals that includes the contributions from all the constituents added makes it extremely difficult to reverse engineer to determine which chemicals and in what proportions these chemicals are present in a particular additive or product with specific trade name,” the report said.

The report summarized its disclosure recommendations as no trade secret disclaimers unless documented and attested, as done in Wyoming or Arkansas—and the fewer the better; complete lists of chemicals reported by their quantities and Chemical Abstracts Service registry numbers; and complete lists of products reported without linking to the list of chemicals.

Many companies provide such information to the FracFocus website voluntarily. As of Nov. 1, reporting of chemicals on FracFocus was mandatory in 14 states, including Colorado and Texas, according to the report. The Interior Department is considering whether to make reporting on the site mandatory for companies drilling on federal lands.

States often require full disclosure to regulators, firefighters, medical personnel or other “first responders” when requested, while the public gets a lesser degree of disclosure, with trade secrets withheld.

Upgraded Website Examined

The utility of FracFocus has been much discussed, with critics typically saying it fails to disclose enough information. It was improved in June to a “2.0” version to make it easier to use.

In November, Energy Secretary Ernest Moniz charged the SEAB to establish a task force to review FracFocus 2.0. The Energy Department doesn’t have regulatory authority over oil and gas drilling, but its recommendations can carry weight with other federal regulators and states.

The new report serves as a follow-up to a 2011 SEAB report on ways to increase environmental protection and safety in shale gas drilling and production .

The task force report said its recommendations were endorsed by the SEAB. The report was labeled a final draft for public comment, but the SEAB gave no indication of when a public announcement would be coming and a comment mechanism would be established. The report was dated Feb. 24.

The report contained a variety of proposals for technical improvements in the website that would enhance its functionality for anyone seeking data. The report also recommended procedural or policy improvements.

Data Quality Control Sought

FracFocus should examine the entire data entry workflow and structure, looking for opportunities to simplify data structure and steps for data entry to reduce the probability of errors, the report said.

FracFocus 2. 0 has introduced basic error checking that alerts users if an entered Chemical Abstracts Service number is in the proper format but not whether the CAS number matches the chemical name or even if the CAS number is in use.

While FracFocus doesn’t assert authority to reject operator entries, the automatic validation system should be expanded and improved, the report said.

When FracFocus discovers an error in a company submission, the website operators should inform the company and indicate on the website that the submitted data are in some doubt. Such a notice on the website would inform regulators and the public that there is an issue and serve as an incentive to the company to revise the submission, the report said.

Funding Changes Urged

The Ground Water Protection Council and the Interstate Oil and Gas Compact Commission, two organizations formed by state regulators, operate the FracFocus website.

The annual budget for FracFocus, less than $1 million, is covered by an Energy Department grant, occasional contributions from a state and from two oil and gas industry associations. The report by the task force said the importance of FracFocus justifies a stable source of funding.

A combination of Energy Department support and a use fee “will comfortably provide for FracFocus,” the report said. The task force recommended that the Energy Department establish a stable multiyear budget for FracFocus employing one or both of those mechanisms.

The Energy Department may want to make more use of the website itself. The report said discussions are under way between FracFocus and the department’s Energy Information Administration to include FracFocus as an element of EIA’s contemplated National Oil and Gas Information Gateway.

Visit 
www.bloomberg.com/sustainability for the latest from Bloomberg News about energy, natural resources and global business.

‘Full Disclosure’ of Frack Chemicals Urged by Energy Department Advisors – Bloomberg

‘Full Disclosure’ of Frack Chemicals Urged by Energy Department Advisors – Bloomberg.

By Alan Kovski  Mar 7, 2014 11:43 AM ET

Photographer: Ty Wright/Bloomberg

Threaded drilling pipes are stacked at a hydraulic fracturing site in Washington…Read More

Bloomberg BNA – An Energy Department advisory board recommended “full disclosure of all known constituents” in fluids used for hydraulic fracturing, according to a draft report released March 6.

The “Task Force Report on FracFocus 2.0” from the Secretary of Energy Advisory Board (SEAB) said state and federal regulators should adopt standards for companies making trade secret claims for fracking fluid ingredients and establish a compliance process and challenge mechanism.

The draft report praised the FracFocus website as a good registry for public disclosure of the chemical additives in hydraulic fracturing fluids. “It has accomplished a good deal and shows the capacity to make improvements at modest additional cost,” the report said.

But a large portion of the FracFocus reports on hydraulic fracturing of oil and gas wells claim at least one trade secret exemption, the report said. It said there should be “few, if any exceptions” to full disclosure.

The report also recommended expanding what is reported beyond the chemical additives in the fluids.

Fracking fluids are mostly water and sand, and the water can have chemical constituents of its own, especially if it’s recycled water containing traces of minerals and residues of previously used fracking fluids. Disclosure of the constituents of the water, not just the additives, would be appropriate if the data were available, the report said.

Secrets Protection Suggested

To avoid divulging trade secrets, companies could report additive chemicals separately from the commercial products containing the chemicals, the report said.

“A list of chemicals that includes the contributions from all the constituents added makes it extremely difficult to reverse engineer to determine which chemicals and in what proportions these chemicals are present in a particular additive or product with specific trade name,” the report said.

The report summarized its disclosure recommendations as no trade secret disclaimers unless documented and attested, as done in Wyoming or Arkansas—and the fewer the better; complete lists of chemicals reported by their quantities and Chemical Abstracts Service registry numbers; and complete lists of products reported without linking to the list of chemicals.

Many companies provide such information to the FracFocus website voluntarily. As of Nov. 1, reporting of chemicals on FracFocus was mandatory in 14 states, including Colorado and Texas, according to the report. The Interior Department is considering whether to make reporting on the site mandatory for companies drilling on federal lands.

States often require full disclosure to regulators, firefighters, medical personnel or other “first responders” when requested, while the public gets a lesser degree of disclosure, with trade secrets withheld.

Upgraded Website Examined

The utility of FracFocus has been much discussed, with critics typically saying it fails to disclose enough information. It was improved in June to a “2.0” version to make it easier to use.

In November, Energy Secretary Ernest Moniz charged the SEAB to establish a task force to review FracFocus 2.0. The Energy Department doesn’t have regulatory authority over oil and gas drilling, but its recommendations can carry weight with other federal regulators and states.

The new report serves as a follow-up to a 2011 SEAB report on ways to increase environmental protection and safety in shale gas drilling and production .

The task force report said its recommendations were endorsed by the SEAB. The report was labeled a final draft for public comment, but the SEAB gave no indication of when a public announcement would be coming and a comment mechanism would be established. The report was dated Feb. 24.

The report contained a variety of proposals for technical improvements in the website that would enhance its functionality for anyone seeking data. The report also recommended procedural or policy improvements.

Data Quality Control Sought

FracFocus should examine the entire data entry workflow and structure, looking for opportunities to simplify data structure and steps for data entry to reduce the probability of errors, the report said.

FracFocus 2. 0 has introduced basic error checking that alerts users if an entered Chemical Abstracts Service number is in the proper format but not whether the CAS number matches the chemical name or even if the CAS number is in use.

While FracFocus doesn’t assert authority to reject operator entries, the automatic validation system should be expanded and improved, the report said.

When FracFocus discovers an error in a company submission, the website operators should inform the company and indicate on the website that the submitted data are in some doubt. Such a notice on the website would inform regulators and the public that there is an issue and serve as an incentive to the company to revise the submission, the report said.

Funding Changes Urged

The Ground Water Protection Council and the Interstate Oil and Gas Compact Commission, two organizations formed by state regulators, operate the FracFocus website.

The annual budget for FracFocus, less than $1 million, is covered by an Energy Department grant, occasional contributions from a state and from two oil and gas industry associations. The report by the task force said the importance of FracFocus justifies a stable source of funding.

A combination of Energy Department support and a use fee “will comfortably provide for FracFocus,” the report said. The task force recommended that the Energy Department establish a stable multiyear budget for FracFocus employing one or both of those mechanisms.

The Energy Department may want to make more use of the website itself. The report said discussions are under way between FracFocus and the department’s Energy Information Administration to include FracFocus as an element of EIA’s contemplated National Oil and Gas Information Gateway.

Visit 
www.bloomberg.com/sustainability for the latest from Bloomberg News about energy, natural resources and global business.

How Much Energy are We Flushing Down the Drain? | Energy Economics Exchange

How Much Energy are We Flushing Down the Drain? | Energy Economics Exchange.

California is in the middle of a drought. In the Bay Area, that has meant day after day of glorious, uncharacteristically sunny winter weather. But, I am haunted by media images of dry creek beds and by my own mental images of driving by the Rim Fire near Yosemite last summer. Who knows what this summer will bring.

The drumbeat of media coverage on the drought had led me to think harder about the water-energy nexus. At a high level, that phrase encapsulates two profound facts: energy production is extremely water intensive and water provision is extremely energy intensive. (At this point, we can’t really say “water production,” but as we add more desalination capacity, production becomes more apt.)

I’ll focus on the second of those two facts, but this article on the water used for fracking relates to the first.

Providing Water to Homes, Businesses and Farms Requires A LOT of Energy

The energy intensity of water delivery hit home to me several years ago when my husband, who works for an electricity generator, spent the day at a California Public Utilities Commission workshop on low-flow toilets. Why would an electric generator care about toilets?! It turns out that pumping, conveying, heating, and treating water are all highly energy intensive.

An Energy Efficient Toilet?

An Energy Efficient Toilet?

In fact, several years ago, the California Energy Commission calculated that 19 percent of the state’s electricity and nearly 30 percent of its natural gas consumption went to moving, heating and treating water.

I’ve delved into these calculations, and not all of the energy attributed to water is in my view actually driven by decisions that we would normally think of as water-usage choices. For instance, the calculations include things like heating water for sterilization in food processing. I can imagine a sterilization technique that didn’t use water but still used energy, and sterilization is ultimately driven by decisions about processed food consumption.

A recent paper from the University of Texas similarly calculates the share of U.S. energy related to water. The authors distinguish between “Direct Steam Uses,” which includes things like sterilization and “Direct Water Services,” which are driven by what I think of as water-based decisions. The authors estimates that the two categories together account for 13 percent of the nation’s energy and Direct Water Services account for 8.5 percent of the nation’s energy.

The energy cost of H2O also depends on where you live. Californians use more energy-intensive water because we use more groundwater and less surface water, and we move it over longer distances. My water provider, East Bay Municipal Utilities District, charges an, “Elevation Surcharge,” which they describe as, “based on the energy costs of pumping water to higher elevations.” For households in the hills above 600 feet, the surcharge adds more than $1 per hundred cubic feet to a base price of roughly $2.50 per hundred cubic feet. Not all utilities have this adder.

Solutions?

As an energy economist, I hear a lot about positive  – in the sense of reinforcing – feedback loops that could result from climate change. Rising temperatures, for example, will require more electricity to power air conditioners, and, right now, electricity production is the country’s main source of greenhouse gas emissions. A drier California climate might be an example of a negative feedback: more droughts will force us to rationalize the ways we use water—and save energy, in the process.

But, how do we rationalize our water use? We should start by rationalizing water pricing. I know this might sound like the knee-jerk economist answer, but the water world has many examples that violate simple Econ-101 principles. In a nutshell, water is a scarce resource, and we treat it as though the basic input were free. In Los Angeles, for instance, the Department of Water and Power subsidizes houses on bigger lots by giving them more cheap water. Water usage in the agriculture sector, which accounts for 80% of California’s total water consumption, is a whole mess in and of itself, symbolized in my mind by the rice paddies in the Central Valley.

Rice Paddies in the Central Valley

The water economist, David Zetland, has made scarcity pricing for water his battle cry and has written a book on Living with Water Scarcity. As Timothy Egan in the New York Timeshas said, we cannot “out-engineer a fevered planet.” But, we can move towards rational pricing policies that help us make better decisions about our planet’s scarce resources.

About Catherine Wolfram

Catherine Wolfram is the Cora Jane Flood Professor of Business Administration at the Haas School of Business, Co-Director of the Energy Institute at Haas, and a Faculty Director of The E2e Project. Her research analyzes the impact of environmental regulation on energy markets and the effects of electricity industry privatization and restructuring around the world. She is currently implementing several randomized control trials to evaluate energy efficiency programs.

Ukraine overthrows Yanukovych amid US/Russia power struggle over natural gas – National Environment | Examiner.com

Ukraine overthrows Yanukovych amid US/Russia power struggle over natural gas – National Environment | Examiner.com.

See also

February 22, 2014

The popular uprising in Ukraine has resulted in ex-President Yanukovych fleeing the capitol on Saturday, apparently retreating to the safety of Kharkiv, a city in Russia-friendly Eastern Ukraine. While it’s extremely historically significant that a popular uprising has overthrown a Russia-backed government, the events also illustrate a global power struggle centering on natural gas supplies, hydraulic fracturing, and Europe’s reliance on Russia for natural gas.

Ukraine is not only a key linkage point between Europe and Russia, the country also has significant shale deposits from which shale gas can be extracted through fracking (a.k.a. hydraulic fracturing). Coincidentally, the two regions of shale deposits, centered around Lviv in western Ukraine and Kharkiv in the east, happen to be key cities in Yanukovych’s overthrow. Lviv freed itself from rule by the central government months ago. Further, the platoon of police officers who “defected” on Friday, joining the protesters, were from Lviv. Kharkiv is the city to which Yanukovych has fled, and which was the scene of an assembly of regional political bosses who have voted to reject actions by the Parliament.

The crisis in Ukraine began a few years ago when Russia cut off gas supplies to Europe because Ukraine had raised trans-shipment fees. Ukraine houses several natural gas pipelines that have historically linked Russia and Europe, and through which Russia supplies Europe with most of its natural gas. Since then, Russia has begun work on two pipelines, Nordstream and South Stream, which are meant to bypass the pipelines going through Ukraine, letting Russia directly sell natural gas to Europe.

At the same time the US State Department set up a program, the Unconventional Gas Technical Engagement Program, whose purpose is to export hydraulic fracturing technology to countries all around the world. One focus of the program is also to help Europe free itself from dependency on Russian natural gas. The pattern followed by the UGTEP is to start by educating governments about the benefits, downplaying hazards, while assessing regulatory requirements in each country. An example is a USAID document, UKRAINE SHALE GAS: ENVIRONMENTAL AND REGULATORY ASSESSMENT, assessing the possibility of exploiting shale gas deposits in Ukraine. The document was meant to prepare the Ukranian government to exploit their shale gas deposits, or specifically:

  1. Help the government of Ukraine to develop an environmentally sound framework for pursuing shale gas development
  2. Develop more refined environmental reviews for shale gas development
  3. Develop improved regulatory approaches
  4. Assist in the development of more transparent and efficient contract tendering

Therefore, the US Government’s goal is to develop shale gas in Ukraine using Hydraulic Fracturing. The task is very expensive, well beyond Ukraine’s financial capabilities, leading the country to seek financial aid from either the European Union or Russia. In January 2013, Ukraine signed a deal with Royal Dutch Shell allowing that company to begin exploratory work ahead of fracking operations, and in November 2013 Ukraine signed a similar deal with Chevron. Meaning that Western powers were making progress in Ukraine, until the country performed an about-face and embraced Russia.

The crisis began when Ukraine chose to partner with Russia rather than the EU. That pitted the West (US and EU) against Russia in a battle for dominance over Ukraine.

The protesters in the street were angered by that turn of events, preferring to partner with the EU rather than Russia. Now that the protesters have succeeded in removing Yanukovych from power, the door is open to Western powers reasserting the control necessary for Western oil companies to go about the job of Fracking Ukraine. Unless the country dissolves into a civil war.

Fracking in Water-Stressed Zones Increases Risks to Communities – and Energy Producers – News Watch

Fracking in Water-Stressed Zones Increases Risks to Communities – and Energy Producers – News Watch.

Posted by Sandra Postel of National Geographic’s Freshwater Initiative in Water Currents onFebruary 6, 2014

Nearly half of the wells hydraulically fractured (indicated by black dots) in the United States are located in areas of high or extremely high water stress (shown in red and dark red).  Graphic courtesy of Ceres.

Nearly half of the wells hydraulically fractured (indicated by black dots) in the United States are located in areas of high or extremely high water stress (shown in red and dark red). Graphic courtesy of Ceres

Even as concerns arise about the threats hydraulic fracturing poses to water quality and human health, a new study released yesterday finds that the water demands of the “fracking” process are adding considerably to localized water depletion, especially in parts of Texas, Colorado, and California.

Nearly half of the fracking wells in operation since 2011 are located in regions with high or extremely high water stress, according to the report by Ceres, a non-profit organization that works with investors and businesses to promote more sustainable practices.

Competition for water between cities, farms, and industries is already tight in those water-stressed areas, posing risks of supply disruptions during times of drought.  Rivers and wetlands often suffer from insufficient flows in such areas, and depletion of groundwater is common.

While agriculture is by far the biggest consumer of water in the western states, “fracking is the latest party to come to the table,” said Monika Freyman, author of the report and senior manager in Ceres’s water program, during a teleconference.  In some ways it’s “the straw that’s breaking the camel’s back.”

Hydraulic fracturing is the process of blasting water mixed with sand and chemicals deep underground at high pressure so as to fracture shale rock and release the oil and gas it holds.  Combined with the technique of horizontal drilling, it has made previously inaccessible fossil fuel reserves economical to tap, and fracking operations have spread rapidly across the country and in many parts of the world.

Each hydraulically fracked well can use 2-8 million gallons of water, with 4-5 million gallons per well being fairly common.

To perform its analysis, Ceres overlaid data on the number and location of fracking wells from the FracFocus database (obtained via PacWest Consulting Partners’ FracDB) onto maps of water stress prepared by the World Resources Institute, a Washington, D.C.-based research organization.

In addition to finding that nearly half of the 39,294 fracking wells analyzed were situated in high or extremely high water-stressed areas, Ceres found that more than 55 percent were in regions experiencing drought and more than 36 percent were in zones where groundwater is being depleted, including west Texas and California’s Central Valley, where depletion will intensify this year due to the record-breaking drought.

Even if the water used by fracking operators is a small percentage of a state’s total water use, it can account for a very high share in particular counties.

In Colorado, for example, 89 percent of the water used for fracking in the state’s two major shale energy plays is concentrated in just two counties, and both are categorized as extremely water-stressed – Garfield County, where fracking’s water use totaled 1.9 billion gallons in 2012, and Weld County, where it totaled 1.3 billion gallons.

Colorado and Texas counties with high water stress and high water use for fracking.  Graphic courtesy of Ceres.

Colorado and Texas counties with high water stress and high water use for fracking. Graphic courtesy of Ceres.

By 2015, Colorado’s statewide water demand for fracking is expected to double to 6 billion gallons, according to the report.

In drought-plagued Texas, which the report calls “ground zero” for water supply risks due to the rapid expansion of shale energy production in recent years, several counties with intensive fracking operations have declared water emergencies.

The Permian Basin shale play in west Texas overlaps parts of the Ogallala Aquifer, which has been undergoing steady depletion for decades, largely due to the water demands of irrigated farming.

These findings present some big challenges for both the water-stressed counties where fracking is expanding, and for the companies doing the fracking.  As competition for water intensifies, the risk of shortages – especially in drought-prone regions – increases.  The potential for supply shortfalls poses operational risks to the energy producers as well as risks of rationing and other emergency measures to the wider community.

The Ceres report comes none too soon.  With hydraulic fracturing expanding rapidly, the water risks posed by these rising demands will only increase.

Among the actions Ceres calls for is fuller disclosure by shale-energy companies as to how much water they use and from which sources, the development of plans (in conjunction with other stakeholders) to protect local water sources and watersheds, and more concerted efforts to reduce water use through investments in water efficiency and recycling.

The fracking train has long ago left the station, but the institution of enforceable procedures and practices to ensure the protection of water supplies has lagged badly behind.

Until that’s remedied, the public is right to take action to slow the train down.

Sandra Postel is director of the Global Water Policy Project, Freshwater Fellow of the National Geographic Society, and author of several books and numerous articles on global water issues.  She is co-creator of Change the Course, the national freshwater conservation and restoration campaign being piloted in the Colorado River Basin.

US shale under fire over thirst for water  |  Peak Oil News and Message Boards

US shale under fire over thirst for water  |  Peak Oil News and Message Boards.

Water shortages have put the US oil and gas industry on a “collision course” with other users because of the large volumes needed for hydraulic fracturing, a group of leading investors has warned.

Almost 40 per cent of the oil and gas wells drilled since 2011 are in areas of “extremely high” water stress, according to Ceres, a network of investors that works on environmental and social issues. It highlights Texas, the heart of the US oil boom, and companies including Chesapeake Energy, EOG Resources, ExxonMobil and Anadarko Petroleum as the heaviest users of water.

Hydraulic fracturing, or fracking, is essential for extracting oil and gas from the shale formations that have been responsible for the US boom of the past decade, and it requires large volumes of water: typically 2m gallons or more per well. The water is mixed with sand and chemicals and pumped underground at high pressure to open up cracks in the rock so the oil and gas will flow more freely. The water that flows back out again is often poured away into separate disposal wells.

Water shortages can create tensions with local communities and force companies into expensive solutions such as bringing the water to the wells by truck.

Monika Freyman of Ceres said water was a risk that was often overlooked. “People don’t worry about it until it’s gone,” she said. “If you are an investor in a company that is in a water-stressed area, you have to ask questions about how it is managing their water risks.”

Shareholders including the employee pension funds of New York city and state said this week they would file resolutions for the annual meetings of companies including Exxon, Chevron, EOG and Pioneer Natural Resources, calling for more detailed disclosure of their environmental impact, including water use.

Ceres identified Anadarko, Encana, Pioneer and Apache as the companies with the greatest exposure to water risk, meaning the greatest volume of water use in areas with extremely high stress. In those areas, 80 per cent or more of the available water has been committed for other users including homes, farms and businesses.

Exxon said XTO, its shale oil and gas subsidiary, “works with local authorities to ensure there is adequate supply.” It added that coal needed ten times as much water as gas produced through fracking for an equivalent energy content, and corn-based ethanol needing up to 1,000 times as much water.

Anadarko said it was “on the leading edge” of efforts to manage and conserve water, including recycling it wherever possible, and drawing on a range of sources such as municipal effluent and produced water from oil and gas wells. It is also working with environmental groups and others to develop best practices for water use.

Fracking accounts for a relatively small proportion of US water demand: less than 1 per cent even in Texas, according to a University of Texas study, compared to 56 per cent for irrigation. However, in some areas with the greatest oil and gas activity, such as the Eagle Ford shale of south Texas, it can be much more significant.

The potential problem in Texas is exacerbated by the protracted drought that has affected the state and the growth in its population caused by the strength of its economy.

Jean-Philippe Nicot of the University of Texas said the state’s farmers were using less water for irrigation and shifting to crops that could cope with drier conditions. “More and more water is needed for urban centres, and fracking is part of the picture,” he said.

“All the Texas aquifers are heavily taxed right now.”

Wood Mackenzie, the consultancy, argued in a report last year that the industry would need to address the issue to be able to develop shale oil and gas production around the world, with many of the most promising reserves in China, Africa and the Middle East in areas of water scarcity.

Jim Matheson of Oasys Water, a company that develops water treatment technology, predicted an “inexorable but slow” movement towards recycling.

“We’re very early in the evolution, but the future is one in which we’re going to have to figure out how to clean and reuse the same water resources,” he said.

FT

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