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The Era of Xtreme Energy

Life after the age of oil.

| Tue Sep. 22, 2009 4:56 PM EDT

Xtreme Acts of Energy Recovery

Given the potentially soaring costs involved in recovering these last tough-oil reserves, it's no wonder that Canadian oil sands, also called tar sands, are the other big "play" in the oil business these days. Not oil as conventionally understood, the oil sands are a mixture of rock, sand, and bitumen (a very heavy, dense form of petroleum) that must be extracted from the ground using mining, rather than oil-drilling, techniques. They must also be extensively processed before being converted into a usable liquid fuel. Only because the big energy firms have themselves become convinced that we are running out of conventional oil of an easily accessible sort have they been tripping over each other in the race to buy up leases to mine bitumen in the Athabasca region of northern Alberta.

The mining of oil sands and their conversion into useful liquids is a costly and difficult process, and so the urge to do so tells us a great deal about our particular state of energy dependency. Deposits near the surface can be strip-mined, but those deeper underground can only be exploited by pumping in steam to separate the bitumen from the sand and then pumping the bitumen to the surface — a process that consumes vast amounts of water and energy in the form of natural gas (to heat that water into steam). Much of the water used to produce steam is collected at the site and used over again, but some is returned to the local water supply in northern Alberta, causing environmentalists to worry about the risk of large-scale contamination.

The clearing of enormous tracts of virgin forest to allow strip-mining and the consumption of valuable natural gas to extract the bitumen are other sources of concern. Nevertheless, such is the need of our civilization for petroleum products that Canadian oil sands are expected to generate 4.2 million barrels of fuel per day in 2030 — three times the amount being produced today — even as they devastate huge parts of Alberta, consume staggering amounts of natural gas, cause potentially extensive pollution, and sabotage Canada's efforts to curb its greenhouse-gas emissions.

North of Alberta lies another source of Xtreme energy: Arctic oil and gas. Once largely neglected because of the difficulty of simply surviving, no less producing energy, in the region, the Arctic is now the site of a major "oil rush" as global warming makes it easier for energy firms to operate in northern latitudes. Norway's state-owned energy company, StatoilHydro, is now running the world's first natural gas facility above the Arctic Circle, and companies from around the world are making plans to develop oil and gas fields in the Artic territories of Canada, Greenland (administered by Denmark), Russia, and the United States, where offshore drilling in northern Alaskan waters may soon be the order of the day.

It will not, however, be easy to obtain oil and natural gas from the Arctic. Even if global warming raises average temperatures and reduces the extent of the polar ice cap, winter conditions will still make oil production extremely difficult and hazardous. Fierce storms and plunging temperatures will remain common, posing great risk to any humans not hunkered down in secure facilities and making the transport of energy a major undertaking.

Given fears of dwindling oil supplies, none of this has been enough to deter energy-craving companies from plunging into the icy waters. "Despite grueling conditions, interest in oil and gas reserves in the far north is heating up," Brian Baskin reported in the Wall Street Journal. "Virtually every major producer is looking to the Arctic sea floor as the next — some say last — great resource play."

What is true of oil generally is also true of natural gas and coal: most easy-to-reach conventional deposits are quickly being depleted. What remains are largely the "unconventional" supplies.

U.S. producers of natural gas, for example, are reporting a significant increase in domestic output, producing a dramatic reduction in prices. According to the DoE, U.S. gas production is projected to increase from about 20 trillion cubic feet in 2009 to 24 trillion in 2030, a real boon for U.S. consumers, who rely to a significant degree on natural gas for home heating and electricity generation. As noted by the Energy Department however, "Unconventional natural gas is the largest contributor to the growth in U.S. natural gas production, as rising prices and improvements in drilling technology provide the economic incentives necessary for exploitation of more costly resources."

Most of the unconventional gas in the United States is currently obtained from tight-sand formations (or sandstone), but a growing percentage is acquired from shale rock through a process known as hydraulic fracturing. In this method, water is forced into the underground shale formations to crack the rock open and release the gas. Huge amounts of water are employed in the process, and environmentalists fear that some of this water, laced with pollutants, will find its ways into the nation's drinking supply. In many areas, moreover, water itself is a scarce resource, and the diversion of crucial supplies to gas extraction may diminish the amounts available for farming, habitat preservation, and human consumption. Nonetheless, production of shale gas is projected to jump from two trillion cubic feet per year in 2009 to four trillion in 2030.

Coal presents a somewhat similar picture. Although many environmentalists object to the burning of coal because it releases far more climate-altering greenhouse gases than other fossil fuels for each BTU produced, the nation's electric-power industry continues to rely on coal because it remains relatively cheap and plentiful. Yet many of the country's most productive sources of anthracite and bituminous coal — the types with the greatest energy potential — have been depleted, leaving (as with oil) less productive sources of these types, along with large deposits of less desirable, more heavily polluting sub-bituminous coal, much of it located in Wyoming.

To get at what remains of the more valuable bituminous coal in Appalachia, mining companies increasingly rely on a technique known as mountaintop removal, described by John M. Broder of the New York Times as "blasting off the tops of mountains and dumping the rubble into valleys and streams." Long opposed by environmentalists and residents of rural Kentucky and West Virginia, whose water supplies are endangered by the dumping of excess rock, dirt, and a variety of contaminants, mountaintop removal received a strong endorsement from the Bush administration, which in December 2008 approved a regulation allowing for a vast expansion of the practice. President Obama has vowed to reverse this regulation, but he favors the use of "clean coal" as part of a transitional energy strategy. It remains to be seen how far he will go in reining in the coal industry.

Xtreme Conflict

So let's be blunt: we are not (yet) entering the much-heralded Age of Renewables. That bright day will undoubtedly arrive eventually, but not until we have moved much closer to the middle of this century and potentially staggering amounts of damage has been done to this planet in a fevered search for older forms of energy.

In the meantime, the Era of Xtreme Energy will be characterized by an ever deepening reliance on the least accessible, least desirable sources of oil, coal, and natural gas. This period will surely involve an intense struggle over the environmental consequences of reliance on such unappealing sources of energy. In this way, Big Oil and Big Coal — the major energy firms — may grow even larger, while the relatively moderate fuel and energy prices of the present moment will be on the rise, especially given the high cost of extracting oil, gas, and coal from less accessible and more challenging locations.

One other thing is, unfortunately, guaranteed: the Era of Xtreme Energy will also involve intense geopolitical struggle as major energy consumers and producers like the United States, China, the European Union, Russia, India, and Japan vie with one another for control of the remaining supplies. Russia and Norway, for example, are already sparring over their maritime boundary in the Barents Sea, a promising source of natural gas in the far north, while China and Japan have tussled over a similar boundary dispute in the East China Sea, the site of another large gas field. All of the Arctic nations — Canada, Denmark, Norway, Russia, and the United States — have laid claim to large, sometimes overlapping, slices of the Arctic Ocean, generating fresh boundary disputes in these energy-rich areas.

None of these disputes has yet resulted in violent conflict, but warships and planes have been deployed on some occasions and the potential exists for future escalation as tensions rise and the perceived value of these assets grows. And while we're at it, don't forget today's energy hotspots like Nigeria, the Middle East, and the Caspian Basin. In the Xtreme era to come, they are no less likely to generate conflicts of every sort over the ever more precious supplies of more easily accessible energy.

For most of us, life in the Era of Xtreme Energy will not be easy. Energy prices will rise, environmental perils will multiply, ever more carbon dioxide will pour into the atmosphere, and the risk of conflict will grow. We possess just two options for shortening this difficult era and mitigating its impact. They are both perfectly obvious — which, unfortunately, makes them no easier to bring about: drastically speed up the development of renewable sources of energy and greatly reduce our reliance on fossil fuels by reorganizing our lives and our civilization so that we might consume less of them in everything we do.

That may sound easy enough, but tell that to governments around the world. Tell that to Big Energy. Hope for it, work for it, but in the meantime, keep your seatbelts buckled. This roller-coaster ride is about to begin.

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