Resources for a sustainable future

6/10/2010 Guardian The most direct path to America’s newest big oil and gas fields is U.S. Highway 12,two lanes of blacktop that unfold from Grays Harbor in Washington State and head east across the top of the country to Detroit.

 Syncrude Oil Sands, Mine and Refinery, the world’s largest oil sand operation
producing crude oil at Fort McMurray, Alberta, Canada, October 20, 2001.
Photograph: Greg Smith/Corbis The 2,500-mile route has quickly become an essential supply line for the energy
industry. With astonishing speed, U.S. oil companies, Canadian pipeline
builders, and investors from all over the globe are spending huge sums in an
economically promising and ecologically risky race to open the next era of
hydrocarbon development. As domestic U.S. pools of conventional oil and gas
dwindle, energy companies are increasingly turning to “unconventional” fossil
fuel reserves contained in the carbon rich-sands and deep shales of Canada, the
Great Plains, and the Rocky Mountain West.
Colorado, Utah, and Wyoming hold oil shale reserves estimated to contain 1.2
trillion to 1.8 trillion barrels of oil, according to the U.S. Department of
Energy, half of which the department says is recoverable. Eastern Utah alone
holds tar sands oil reserves estimated at 12 billion to 19 billion barrels. The
tar sands region of northern Alberta, Canada contains recoverable oil reserves
conservatively estimated at 175 billion barrels, and with new technology could
reach 400 billion barrels. Deep gas-bearing shales of the Great Plains, Rocky
Mountain West, Great Lakes, Northeast, and Gulf Coast contain countless
trillions of feet of natural gas. If current projections turn out to be
accurate, there would be enough oil and gas to power the United States for at
least another century.
But even as one of the largest energy booms in history has erupted along a great
arc of the continent, the consequences are prompting civic discontent, lawsuits,
and political battles in state capitals. The boom is producing fresh scars on
the land and new threats to scarce water supplies. Government studies show that
exploiting unconventional fossil-fuel reserves generates more C02 emissions than
drilling for conventional oil and gas and uses three to five times more water.
“It’s a pact with the devil,” says Randy Udall, a consulting energy analyst from
Colorado. “The tar sands and shale oil and shale gas require a lot of water. It
sets up a collision course for the West.”
In communities from Wyoming to Texas, thousands of trucks now rumble down rural
roads, carrying the huge amounts of water — 2 million to 4 million gallons per
well — needed to free oil and natural gas from shales by blasting them with
high-pressure fluids. In places such as North Dakota, which receives modest
amounts of rainfall, local residents and conservationists worry that the energy
boom will deplete aquifers.
And the explosion in development of these unconventional fossil fuels raises a
troubling question at the national level: At a time when the country should be
embracing a renewable energy revolution, it is hurtling in the opposite
direction, developing on a massive scale sources of energy that cause
considerably more environmental harm than conventional oil and gas drilling.
Highway 12 is a crucial supply route for this burgeoning industry, with fossil
fuel companies using the road to reach a good portion of the West’s new oil and
gas domain that lies to the north and south of the highway. The companies
transport equipment 900 miles north to Alberta, Canada, where they are spending
$15 billion annually to develop the region’s tar sands, now the single largest
source of oil imports to the U.S. and the fastest-growing source of CO2
emissions in Canada, according to the Pembina Institute, a Canadian
environmental think tank.
In North Dakota — which has become the fourth-largest oil-producing state in the
country, with an estimated 100 million barrels being pulled out of deep shales
this year and where 1,000 wells will be drilled in 2010 — Highway 12 crosses the
$5 billion, 2,151-mile Keystone Pipeline. It is the centerpiece of a $31 billion
network of major transport lines either planned or under construction to carry
oil from the middle part of the continent to refineries in Texas, Oklahoma, and
Illinois that are being modernized and expanded at a cost of more than $20
billion. In all, according to company reports and state economic development
offices, the oil industry is spending nearly $100 billion annually in the U.S.
to perpetuate the fossil fuel era.
Oil industry executives say their investments are consistent with the national
goal of producing more energy to increase security. Oil companies are also
profiting handsomely from the exploitation of these unconventional sources of
oil and natural gas. The stakes became clear earlier this year, when ExxonMobil
paid $41 billion to buy XTO Energy, a major player in unconventional fuels
production, especially natural gas.
Last year, in a much-disputed draft environmental impact statement that
summarized the need for the new Keystone-XL pipeline — which will transport oil
from Alberta’s tar sands to U.S. refineries — the U.S. Department of State
tacitly backed the new energy boom. “The increasing demand for crude oil in the
U.S. cannot be entirely met by efforts to conserve use of refined petroleum
products or the increased use of renewable energy,” the department said. “As
crude oil demand increases, the overall domestic supplies of crude oil are
declining.” The department’s analysts added that without the pipeline and the
new supplies of oil it would carry, the country “would remain dependent upon
unstable foreign oil supplies from the Mideast, Africa, Mexico, and South
America.”
One of the flashpoints is occurring in northern Idaho and eastern Montana, where
oil companies want to use Highway 12 to dispatch the largest convoy of oversized
trucks ever assembled to Alberta’s tar sands and elsewhere. The trucks, nearly
as long as football fields and so wide they cover both lanes of the highway,
haul refining and processing equipment that weighs hundreds of tons and is as
tall as a mansion.
ConocoPhilips was granted a road permit in Idaho last month to haul four
Korean-built oversized oil-processing units from Lewiston, Idaho, where they
were offloaded from Columbia River barges, to the company’s expanding refinery
in Billings, Montana. Earlier this month, Idaho Second District Judge John
Bradbury revoked the permit, asserting that the state did not adequately assess
the hazards of the shipment, particularly the consequences of an accident
involving one of the immense processing units blocking the highway. Local
officials in Montana are considering similar legal action.
The court judgment in Idaho, which is set for an appeal on Oct. 1, could have
significant ramifications for ExxonMobil Canada, which wants to make 207
oversize hauls next year along Highway 12. Exxon’s trucks will carry even larger
Korean-built units to be assembled into a new tar sands oil processing plant in
Alberta. The company says it must use Highway 12 because the loads are too big
to fit under bridges along interstate highways or rail lines.
Despite opposition, the oil and gas industry is undeterred. The Bakken Shale
that lies 10,000 feet beneath a 200,000 square mile expanse of North Dakota,
Montana, and Saskatchewan is said by the U.S. Geological Survey to contain more
than 4 billion barrels of oil and trillions of cubic feet of natural gas. Oil
industry geologists say there is much more than that in the Bakken, and in a
second oil-rich shale reserve, the Three Forks, that lies below it.
Spurred by the Bakken riches, energy companies are now spending tens of millions
of dollars to lease mineral rights in Wyoming and Colorado and are drilling
exploratory wells in the Niobrara Shale, which sprawls beneath both states.
“It just almost boggles the mind,” Lynn Helms, director of the North Dakota
Department of Mineral Resources, told a veterans group in Minot on Sept. 2. “It
is not like the traditional oil and gas play.”
A 2006 study by the Department of Energy that looked at rising energy demand and
diminishing freshwater supplies found that the collision between the two was
occurring most violently in the fastest-growing parts of the country that also
happened to have the scarcest water resources — California, the Southwest, the
Rocky Mountain states, and the Upper Great Plains.
It takes four to six gallons of water to produce one barrel of tar sands oil,
which is four times more water than it takes to produce oil from conventional
reserves, according to a 2009 study by Argonne National Laboratory.
Moreover, producing tar sands oil, according to the Natural Resources Defense
Council, generates as much as three times as many greenhouse gases per barrel as
conventional oil production.
Extracting unconventional fossil fuel reserves like the Bakken formation uses a
lot of water because getting to the oil and natural gas requires rupturing the
deep shale to create open spaces and crevices through which the oil and gas can
flow. The pulverizing process, called hydraulic fracturing or “fracking,”
involves sinking drill bits two miles deep and then turning them to move
horizontally through the shale. An armada of tank trucks hauls several million
gallons of water to each well site, where pumps shoot it down the well at such
super high pressure — 8,000 pounds per square inch — that the rock splits.
The practice is risky. Earlier this month, an oil well undergoing fracking near
Kildeer, N.D. ruptured. The blowout leaked 100,000 gallons of fracturing fluid
and crude oil before being plugged two days later.
Fracking has caused contamination of surface and groundwater in other states and
harmed drinking water in some communities, according to a number of reports from
local environmental organizations.
Earlier this year, a supervisor with the North Dakota Game and Fish Department
formally opposed a farmer’s plan to sell a third of the water in eight-foot-deep
Trenton Lake to a Texas energy developer. “Trenton Lake just doesn’t have the
depth and capacity without seriously impacting the lake,” said the supervisor,
Fred Ryckman. “The oil industry can find water elsewhere.”
Almost 150 oil and gas drilling rigs are operating in North Dakota this month,
nearly tying a state record, and more than all but two other states, Texas and
Pennsylvania. The oil and gas rush has been an economic boon to North Dakota,
with more than 7,000 laborers migrating into the state; North Dakota’s
unemployment rate has dropped to 3.6 percent, the nation’s lowest. The energy
boom has also filled state coffers. When North Dakota’s budget cycle ended in
June, state Budget Director Pam Sharp proudly reported an $800 million surplus.
Clearly, most North Dakota officials are not worrying — yet — about the
environmental consequences.
• Keith Schneider is senior editor of Circle of Blue, which is reporting on the
next era of hydrocarbon development in its Choke Point: U.S. project. He is a
former national correspondent and regular contributor to the New York
  Times.
Go to: http://www.guardian.co.uk/environment/2010/oct/01/north-america-oil-sands-shales