Why The Frackers' Language "Overhaul" Is Doomed To Fail

Top: Fracking well despoiling water and emitting volatile organic chemicals in a Colo. town. Bottom: Students get ready for global climate strike

Today, as the global  climate strike revs up, it is well to consider the not insignificant role of fracking.  True, fracked shale oil is still a minor part of fossil fuel consumption but it has an outsized impact on the environment and public health. We've known this since the excellent two-part documentary ("Gasland")  by Josh Fox.  See e.g.

http://brane-space.blogspot.com/2013/07/gasland-ii-fracking-is-worse-than-you.html

Less well known is that fracking - apart from wasting precious ground water reserves and contaminating the environment with fine particulates e.g.

• A New Pollutant Category Appears ( PM_2,5) And L...

has been a bottomless money pit for investors.  This is  given it takes more energy to generate a quantity of fracked shale oil than the extracted amount delivers.  Thus, the June article in The Wall Street Journal's Business and Finance Section (' Frackers Scrounge For Cash As Wall Street Shuts Spigot'', p. B1, June 7) didn't really astonish or surprise me.. Especially on reading:

"The companies behind the U.S. fracking boom are turning to asset sales, drilling partnerships and other alternative financing to supplement their cash flow. These forms of funding often come with higher interest rates or other downsides  - such as giving outside investors a hefty share of future oil and gas profits."

And further (p. B2):

"Producers have been forced to get creative about financing because Wall Street began shutting off the cash spigot  last year after frackers routinely failed to turn a profit over the last decade."

Worse, only a tenth of large shale companies saw a positive cash flow in the first quarter of 2019.   This according to a Rystad  Energy analysis of 40  drillers.  To sustain  or increase their production these companies had to keep drilling new wells, as opposed to seeing greater production from each existing well .

The piece also noted some companies had become so desperate for cash to jump start new wells that they turned to junk bonds.  The central question emerged:  Why have the frackers - who seemed to be all over the place -- failed to turn a profit over a decade? 

I explained this in earlier posts in terms of the lower energy returned on energy invested (EROEI) say compared with the light  crude oil of the past, non-shale based. I also pointed out the difference in EROEI translated into some bad economics given the lower energy content of shale oil (kerogen) meant the frackers would always be in "catch up" mode so struggling in an energy (and hence economic)  hole.  A less efficient energy source means you have to extract more of it, and at ever higher costs given the innate diminishing returns. (According to the Federal Reserve Bank of Dallas in a report issued as recently as May 31::"The average breakeven price of oil has fallen 4 percent (or $2 per barrel) over the past year, to $50 per barrel, according to the latest Dallas Fed Energy Survey." )

The entire issue of sinking oil shale fortunes pivots on the breakeven price: that amount which the recovered oil needs to earn to have made its extraction worthwhile  If that per barrel amount tends to be below what the market offers, a loss occurs and over years the losses pile up. In many cases, as seen in recent years there is the added factor of an oil glut from over production.  In this case one has an excess supply and so oil prices tend to plummet creating a bigger financial hole for an already marginal operation.

The issue first surfaced some six years ago in Richard Heinberg's book, Snake Oil: How Fracking's False Promise Imperils Our Future', ( p.115).   Therein we learned from a report by a London -based brokerage firm,  Tullett Prebon:

 "Our calculated EROEIs both for 1990 (40:1) and for 2010 (17:1) are reasonably close to the numbers cited for those years by Andrew Lees. For 2020, our projected EROEI of 11.5 to 1 is not as catastrophic as 5: 1 but would nevertheless mean that the share of GDP absorbed by energy costs would have escalated to 9.6% from about 6.7% today. Our projections further suggest energy costs would absorb as much as 15% of GDP (at an EROEI of 7.7 to 1)  by 2030."

Now we flash forward to a WSJ Business & Finance piece from Sept. 10  (p. B1):  'Fracking Lingo Gets An Overhaul' where we learn that:   "Frackers are changing how they talk and how they drill to show they can live within their means."   The problem is that  changing the language doesn't really address the core problem: The low EROEI of shale oil which makes it a fundamentally inefficient mode of oil extraction and use.  But what language overhauls are we talking about?  Some examples from the piece:

1) "Where once top shale executives promised to 'ramp up/ production, these days they are more likely to assure investors they can deliver 'free cash flow'."


According to the article this is "the trendiest term in the industry right now".  It has become synonymous with the promise "not to spend beyond their income and to then generate profits which can be returned to investors."

So, in other words, the execs are promising to lowball the costs of their fracking operations because they can't deliver the fracked oil at the price needed for investors to make a buck.. So the interpretation seems to be forget "production growth" and instead look to "discipline" - meaning the frackers will cut more corners to try to ensure costs of extracting the stuff are within bounds.  But this is impossible if the shale oil itself is of such low grade in terms of EROEI.  After all (ibid.)

"Many of  the companies have yet to show they can deliver consistent returns or live within their means as oil prices hover below $60 a barrel"

Again, WHY is this? Well, it's because it costs MORE to extract a barrel of shale oil than $60 a barrel. So  at that price it's a breakeven world and  below that price it's a LOSS.  If companies have YET to show they can live within their means then they never will unless oil prices spike much much higher.  The EROEI of shale is simply too low compared to light sweet crude to support its consistent profitable production.  Hence, no surprise that "shale stocks have hit historic lows with many companies all but cut off from capital markets and many filing for bankruptcy protection."

In other words, the classic losing operation, or "batting on a losing wicket" in Bajan parlance

2) The frackers promised investors they would "downspace" the wells , i.e. move them more closely. In this case, the frackers claimed "they could boost production by placing wells in closer proximity".  

However, .they  found "doing so meant the wells produced less as they draw down the same resources".  

 Quick to parse the lingo, the industry called it the "Parent-child well problem"   but I call it the "not enough shale energy to go around" problem."  Obviously if two wells are placed closer together and the extracted oil from the combo is less than expected it means there wasn't enough there to supply 2 wells to begin with.   Or to put it another way: the energy returned from the two wells is still too low to make a profit because the oil extraction process itself is too inefficient to support the cost. Because the shale itself (kerogen) is too unprofitable.

Supporting this thesis is the revelation (ibid.) that:  "as financing dries up many companies are retreating to the sweetest spots in the best basins and shutting down drilling elsewhere."  Again, why is that being done?  It's because the frackers - with so little capital to work with on account of the oil price being too low, e..g.  to make it profitable -  have to go to the most productive basins to even break even.  Hell, and "even stalwart fields where the shale boom began, including North Dakota's Bakken, are declining in popularity with drillers."  Why?   Because it takes more energy and effort to snag the few barrels left than the barrels are worth!  The amount of energy processing for kerogen, given its cost, is simply too much for the quality of energy resulting.

  As  Richard Heinberg explains (op. cit.,  p. 110):

"Kerogen is not oil. It is better thought of as an oil precursor that was insufficiently cooked by geologic processes. If we want to turn it into oil, we have to finish the process nature started: that involves heating the kerogen to a high temperature for a long time. And that in turn takes energy- lots of it, whether supplied by hydroelectricity, nuclear power plants, natural gas, or the kerogen itself. "

Oil shale fracking is a symptom of diminishing quality supplies of oil, that of high EROEI (energy returned on energy invested) not oil abundance. Anyone with half a brain would know that, which is why Heinberg  refers to it as "snake oil". It simply can't deliver the energy solution promised and in fact its continued use will result in ever lower quotas of useful energy- at ever higher cost.

While we're on the topic of fossil fuel production and global climate issues, let's bear in mind the Dems are not all pure as driven snow in regard to fossil fuel impacts, campaign cash flows etc.. (At least they seem to be better  in comparison to the climate change denying Reeps.)  On Wednesday, the 103-member New Democrat Coalition saw its Pac BP, ExxonMobil and the Edison Electric Institute all max out on donations to this year –then  outline a series of incremental and “pro-market” steps to curb carbon emissions.

 A suite of legislation unveiled on Wednesday would do many great things, like investing in clean energy research and development via ARPA-E and limiting emissions of methane, a potent greenhouse gas. It is not, however, a plan for fulfilling the challenge laid out by the IPCC, leaving the door open to define coal as a potential source of “clean energy” in pursuit of a “technology-neutral, market-oriented standard for electric energy generation” and providing a financial incentive for fossil fuel companies to capture carbon dioxide and funnel it back into pumping out more fossil fuels.

Sadly. Greta Thunberg’s right. And establishment Democrats pushing doomed strategies and policies are denying climate reality nearly as much as Republicans.

Those who want to access all 340 pages of the 'Climate Deception Dossiers' can go here:

www.ucsusa.org/decadesofdeception

See also:

Environmental Policy | Social Justice and Activism

It’s Time to Strike for the Climate

And:

https://www.youtube.com/watch?v=uGlDSFrLX4A


And:

Energy Policy | Environmental Policy

The Climate Crisis Means the Wrong People Are Running the World

And:

Energy Policy | Environmental Policy

We Have a Decision to Make. Change the System or Face Climate Catastrophe.

Trump: The 'Hannibal Lecter' Of Climate With His Coal E.O.

"Ah, for some nice roast planet, pickled Dems and ....fahvah beans!"

Let us admit right now that about the worst fuel that can be used on this planet is coal. As Bill Nye ('the Science Guy') explained last night on 'The Last Word', it is the stuff of ancient plants that existed millions of years ago. And not just in any era, but a very high CO2 era. Hence, burning coal releases the long sequestered CO2 within it, tipping our planet further toward the runaway greenhouse effect.

Let's also understand that coal mining jobs are decreasing and this is as a result of primarily automation. Coal companies have already cut mining jobs by nearly  two thirds since 1985 - because of factors like automation, as well as the fact that fracking produces a bigger 'bang for the fuel' buck for energy companies.  But don't tell Donald Trump that. Each day it seems this turkey occupying the highest office in the land knows less and less about less and less.

If not why would this odious gasbag issue yet another "executive order" this time to increase coal production, mesmerized by the "clean coal" oxymoron. Which makes about as much sense as "benign VX nerve agent" ... or "President Trump". 

But let's not mince words here, Trump launched an all-out assault on Barack Obama’s climate change legacy on Tuesday with a sweeping executive order that undermines the U.S. commitment to the Paris agreement. The worst aspect? This travesty took place at a ceremony at the Environmental Protection Agency in Washington, where BLOTUS FECES signed an order to trigger a review of the clean power plan, Obama’s flagship policy.

No surprise this move was swiftly condemned by environmentalists and climate scientists as a “dangerous” and “embarrassing” attempt to turn back the clock that would do little to revive the U.S. coal industry while threatening cooperation with major polluters such as China and India. In a speech noted for its stupidity and ignorance before he signed the order, Trump promised “a new era in American energy and production and job creation”.

He actually said: “The action I’m taking today will eliminate federal overreach, restore economic freedom and allow our workers and companies to thrive and compete on a level playing field for the first time in a long time. I’m not just talking eight years.”

Trump promised the measures would be “bringing back our jobs, bringing back our dreams and making America wealthy again”.

Don't believe it, not now or ever! Those jobs aren't coming back no matter what this glorified baboon says. The entire energy dynamic no longer supports coal miners. And no amount of Trump wishing it so or tweeting like a drunken canary will make it so. Even if this buffoon thinks of himself as a canary in a clean coal mine.

Adding insult to felonious injury Trump also pledged a future of “clean coal”, and dismissed “the so-called clean power plan” as “a crushing attack on American industry”. The executive order also lifted a moratorium on the sale of new coal leases on federal land, removes “job killing restrictions” on energy production, and returns power to state level. Of course, with no federal oversight most energy generating states will just go hog wild and try to expand fracking, for example, wherever they can. I expect now that Colorado will probably open fracking wells in or near Rocky Mountain National Park.

All of this amount to a recipe for ensuring this planet is uninhabitable for a future generation, say by 2100. Because if the equivalent of 400,000 Hiroshima scale bombs are now being unleashed every year in the atmosphere -  comparable to the watts per square meter excess CO2 input from man-made global warming, then Trump's E.O will ensure it hits 500,000 bombs per year equivalent within 8 years.

While the fictional "Hannibal the Cannibal" butchered and ate 36 odd humans over his vile career (usually served with a fine Chianti and fava beans), the EPA estimates that 3,600 more will die each year if Trump's new climate insanity gets implemented.

And yes this nation's wealthy days, at least for the general population, are over. I've gone over the reasons until blue in the face in numerous posts but basically it's because the energy efficiency of our current fuels - that determined by EROEI or energy returned on energy invested- is much less than previously. If you want to talk of a "Peak oil" era we can.

At the heart of these considerations is the concept of net energy (cf. Weisz, in Physics Today, July, 2004, p. 51). Weisz posed this in terms of a concise equation:

Q (net) = Q (PR) – [Q (op)  + E/T]

In effect, for break-even oil one would find Q(net) = 0

For the last 700 billion barrels:    Q(net) = negative quantity =  - Q

Since the rate of energy production (Q (PR) must be debited by the energy consumed for its operation Q(op), and the energy E invested during its “lifetime” T. Thus its Q(PR) will be small in relation to the bracketed quantity.  In a similar vein, Richard Heinberg has used the quantity EROEI or ‘Energy returned on energy invested’ which for oil reached a high of 30 (ratio) in the 70s and is still the highest of all energy sources at around 22.   Thus, the problem in a nutshell is not “running out of oil’ per se but running out of CHEAP oil.

Right now, to fix ideas, we are very nearly at this Q(net) = 0 level with shale oil - which is why once its price falls to much lower than $50 /bl. it makes little economic sense to take it out of the ground. Compared to light sweet crude it is effectively garbage fuel. Bottom line, we need not run out of the stuff before the world economy runs into problems of untold, unspeakable proportions!

Alas, fracking shale oil - drilling into shale rock to get kerogen, or alternatively, natural gas, is in fact evidence of grabbing BREAK EVEN oil NOT high EROEI oil!  It is a sign of defeat and desperation.  not success - just like deep sea drilling for oil.

As Richard Heinberg explains (p. 110) it in his book: 'Snake Oil - How Fracking's False Promise Imperils Our Future':

"No evidence suggests that the technology of fracking has actually raised the EROEI for natural gas production. It temporarily lowered prices but only by glutting the market."

Get that? Adding it to the total world pool of higher quality oil merely "glutted the market". This is also what's dragging your 401k down right now, though yeah, you will catch kind of a break at the pump. Let's also grasp that this crap oil isn't even used here in the U.S. it's shipped off to places like China - where it fouls their skies and creates health havoc along with the CO2 and SO2 from factories and autos.

Given all of this which transpired yesterday, as Austan Goolsbee pointed out to Lawrence O'Donnell last night, what planet is Trump living on? How can he take a sledge hammer to Obama's climate legacy on the one hand and then expect to find comity and work with Dems on the other? Only a nut, a fruitcake who's 52 cards short of a full deck would fail to process the inherent cognitive dissonance.

Thus we have the latest evidence 'the Donald'  belongs in a face mask like Hannibal Lecter. Especially after Trump declared  some babble the past two days about "working with Democrats" including on infrastructure.   No Dem I know in his right mind would want to work with this orange-haired psycho ape, first because he can't even parse the most basic aspects of legislation and how to pass it. And second, well, because everything he touches turns to shit. Look at his foolish health plan and his claim to repeal Obamacare. If anything the win with health care will embolden Dems to further opposition of this maniac, which is the correct political call.

Sadly too many of his numb nut supporters bought into his con, just like the delusional coal miners did yesterday at his dog and pony show.

After Trump's latest load of fake bravado and posturing,  Michael Bloomberg, the former mayor of New York, offered the best take:

“No matter what any elected official says, rescinding commonsense climate change regulations and popular public health protections will not revive the coal industry or put thousands of miners back to work. Market forces, including consumer preferences and technological advancement, are the primary reason for the surge in cleaner forms of energy. In fact, even without the clean power plan, we are likely to hit its emissions targets ahead of schedule – because consumers, cities and businesses will continue leading on public health and climate change even when Washington won’t.”

He is correct up to a point. Unfortunately, the CO2 already accumulated in the atmosphere over the past 100 years will continue wreaking its havoc as the rising CO2 concentrations disclose.  The best we can do now  is at least try to ensure the planet is 50 percent livable -while making plans to adapt to what we can in the other 50 percent.

See also:

http://www.salon.com/2017/03/29/donald-trumps-grotesque-new-grand-bargain-did-he-learn-nothing-from-the-obama-years/

Colorado Citizens Shafted Under State Supreme Court Fracking Decision

Those of us who've criticized fracking in Colorado always suspected its Supreme Court operated under a Neoliberal hegemony and now that suspicion has been confirmed. On Monday the state's high court blocked a push by Front Range cities to limit oil and gas development near people, ruling state power to promote industry trumps local bans, which the court deemed "invalid and unenforceable."

The court rejected Fort Collins' five-year moratorium on fracking within the city limits. Justices concluded that measure "operationally conflicts" with state law and therefore, under well-established principles, is pre-empted by state rules that allow some drilling in neighborhoods. They also rejected Longmont's 2012 ban on fracking and disposal of fracking waste in the city because it "materially impedes" state power.

It is a god-awful, profits over citizens decision redefining Colorado's landscape for producing fossil fuels — one that's ignited passions on both sides at a time of intensifying political controversy. It also means Colorado citizens will now have to fight the battle on the basis of  pushing referenda onto state ballots for the November election. That means getting thousands of signatures for one or more petitions to formally express the will of the people. (As one Denver Post letter writer put in today: "Get busy, Colorado. This one needs to be put on the November ballot!")

Colorado now has more than 50,000 active wells and 45,000 inactive but all marring the landscape including with fracking waste pits that often leak their effluent into the soil. The people, the citizens of the state, evidently have little leeway in deciding how or where these wells will encroach on their neighborhoods. Supposedly, we have to just suck it up under some perverse, skewed law that goes by the moniker "split estate". That means you may own your home and the land-property around it but the state owns any and every thing underneath, say minerals (gold?), or oil, natural gas pockets, reserves So they can drill for it and too bad if your kid develops rashes all over her body, or gets severe breathing problems.

So while companies want to be able to increase production,  residents are reviving ballot campaigns to amend the constitution or give locals more power to regulate hydraulic fracturing, or fracking, the industry's method of rocketing sand, millions of gallons of water and chemicals deep underground to accelerate extraction of oil and gas.

And how has the industry received the news? Colorado Petroleum Council director Tracee Bentley said:

"The oil and gas industry is thrilled! This very well could mean that anti-oil and gas forces bring forth ballot initiatives. Oil and gas is ready to stand up for Colorado consumers and for Colorado's place in the American energy renaissance."

Of course, "energy renaissance" is PR delivered with a large dollop of  unadulterated bullshit. This crap - mainly kerogen -  is among the most debased form of carbon-based energy around, maybe a grade or two up from coal. It's already been responsible for disastrous spills, pollution of homes and communities, and train explosions associated with transporting this volatile crud. It really deserves to remain in the ground and as author Richard Heinberg pointed out in his book 'Snake Oil: How Fracking's False Promise Of Plenty Imperils Our Future', its economic benefit only erodes over time.

Indeed, we beheld the frackers had to halt most of their activities across the nation because the price of oil had fallen to such low levels, like around $30 a barrel, it was no longer profitable to extract the stuff, process it, store it and transport it.  So if that's the case, anyone with any sense would see the economic benefits are already marginal. Yet the state insists on dredging this shit up to the detriment of its people. It echoes actor Mark Ruffalo's complaint on a Real Time show back in February that "governments don't give a shit about their people". So true.

Neolib gov John Hickenlooper has also been no help. He has repeatedly stated that while local authorities do have "some power" - mainly to guide land use (i.e. indicate where they'd like the frack wells to be set up - closer to a church or a school), they "cannot get in the way of state regulators in dealing with oil and gas." In other words if those regulators give their A-ok, then fuck the people! Well, I and many others say "Fuck Hick!"

Making my point for me,  Hickenlooper said in a prepared statement to the press. (D. Post, May 2, p. 1A)

"We appreciate the Supreme Court's guidance on balancing private property rights and local government jurisdiction of oil and gas operations in Colorado,"

Which is total hogswill given that there was absolutely no effort to "balance" local gov't rights and power- grabbing by the state under the false rubric of "private property rights". No surprise then that the notion that people lack power to keep industrial activity out of their neighborhoods still rankles. As one 18 year old girl, Ariana Strout-  indignant about drilling in her neighborhood - put it in a Denver Post (May 2, p. 1A) article:

"I feel strongly about fracking. A city can't control its own fracking? That upsets me! A city should have the power to control what goes on within its city limits!"

And indeed it does, including whether and where porno shops and MJ stores can be set up, or where chemical industries are located. But with fracking, evidently anything goes under the bastardized meme it's "contributing to the economy".

One measure already making headway for the November ballot is "Initiative 40" which would allow local governments to define or limit the rights and powers of any kinds of businesses within their boundaries. It is essentially an extension of existing state laws as their pertain to marijuana retail shops and porn stores. Thus, under Amendment 64 any community can totally ban MJ retail outlets as per any valid council decision. By the same token, under separate state laws all porn shops - i.e. selling sex toys, books, videos etc, - can be prevented from being set up within a mile of a school and in some rural cases not at all.

Hence, the precedent for local control already exists in a number of spheres, just not with fracking - which one could argue is at least as deleterious in its effects as the two examples cited.

Of course, all the Neoliberal oriented businesses in the state are behind the court's decision using a faulty, biased form of logic. According to Rich Coolidge - a spokesman for 'Vital for Colorado' and quoted in today's Denver Post (p. 7A):

"Whatever city councils don't like they will be able to kick out of a city".

Yeah, Rich, but see - they are ALREADY doing that as per the above cited examples! So where's your beef? If city councils can already do it for a subset of businesses they can surely do it for others which they regard as inimical to their communities' welfare.

Of course, the Neolib pests and parasites are already setting up to fight, oppose any initiatives that seek to limit their ability to frack at will, and poison air, soil and water wherever the fuck they want. They have already set up a front group called - if you can believe it - "Protect Colorado".

Their stated aims (ibid.) could have been reproduced from a template right out of the hands of Josef Gobbles: "to ensure the public knows the important role the oil and gas industry plays in the state"

But to refuse to publish any of the negative effects, including diseases, that emanate from this disgusting industry.

Whatever, now we know the fight is on and the citizens of Colorado will not rest until they exercise their rights for self-protection, no matter what it takes. If the state won't protect them, they will have to do it themselves.

"Death Knell" For Peak Oil? Not So Fast!

It is easy to understand why some folks, including the nattering nabobs of the mainstream media, might somehow mistake the current glut of oil for evidence that Peak Oil is fiction or never existed at all. This would be a tragic error but as we see in today's Denver Post editorial ('The Death Knell for Peak Oil', p. 19A) it is definitely being made.

The Post's editor gushes that the "world is now awash in oil"- with Iran set to add its millions of barrels next, and in effect:

"It's as if the whole world were conspiring to bury the tattered remains of the 'peak oil' thesis so popular a few years ago."

Nowhere in his misplaced screed, not in one single paragraph, does this genius tie the consistently low economic growth rates in the advanced nations to the reduction of oil's efficiency. This is a result of having used up all the best quality oil and now going for the 'leftovers'.  As I pointed out to wifey this a.m.: "The moron doesn't even realize the shale oil we're pulling out of the ground is the next thing to garbage, which in fact proves the peak oil primary contention."

Yet the Post editor, blinded by BS, actually praises the fracked crap - devastating Colorado's landscape, air and water, btw -  as he merrily goes on:

"Little did the peak oil theorists - who insisted the planet was running out of oil- realize the shale oil revolution in the U.S. - already under way-was about to push domestic production to unforeseen heights"

First, peak oil "theorists" - like Richard Heinberg ('The Party's Over') never said the world was "running out of oil".  What they said is that the planet is running out of the highly efficient, high grade cheap oil (light sweet crude in particular) that is capable of driving the intense energy demands of industrial societies - from glass factories to military hardware and jet planes. Obviously, this point is too subtle for the editor at the Post to seemingly grasp. But let's try again to break it down for him - and others.

The planet was originally endowed with ~ 3,000 billion barrels of oil  – of which we’ve consumed one third and another one sixth of relatively cheap oil remains. Afterwards (say by 2030) there will reside another third of “break-even” oil (costs as much to access as it delivers), after which one -sixth of very expensive oil remains (costs much more to reach it than it delivers in energy).  At the heart of these considerations is the net energy eqn. (cf. Weisz, in Physics Today, July, 2004, p. 51)

Q (net) = Q (PR) – [Q (op)  + E/T]

In effect, for break-even oil one would find Q(net) = 0

For the last 700 billion barrels:    Q(net) = negative quantity =  - Q

Since the rate of energy production (Q (PR) must be debited by the energy consumed for its operation Q(op), and the energy E invested during its “lifetime” T. Thus its Q(PR) will be small in relation to the bracketed quantity.  In a similar vein, Richard Heinberg uses the quantity EROEI or ‘Energy returned on energy invested’ which for oil reached a high of 30 (ratio) in the 70s and is still the highest of all energy sources at around 22.   Thus, the problem in a nutshell is not “running out of oil’ per se but running out of CHEAP oil.

Right now, to fix ideas, we are very nearly at this Q(net) = 0 level with shale oil - which is why once its price falls to much lower than $50 /bl. it makes little economic sense to take it out of the ground. Compared to light sweet crude it is effectively garbage fuel. Bottom line, we need not run out of the stuff before the world economy runs into problems of untold, unspeakable proportions! We already have ample economic indicators showing the signs.

Alas, fracking shale oil - drilling into shale rock to get kerogen, or alternatively, natural gas, is in fact evidence of grabbing BREAK EVEN oil NOT high EROEI oil!  It is a sign of defeat and desperation.  not success - just like deep sea drilling for oil.

As Richard Heinberg explains (p. 110) it in his book, 'Snake Oil: How Fracking's False Promise Imperils Our Future':

"No evidence suggests that the technology of fracking has actually raised the EROEI for natural gas production. It temporarily lowered prices but only by glutting the market."

Get that? Adding it to the total world pool of higher quality oil merely "glutted the market". This is also what's dragging your 401k down right now, though yeah, you will catch kind of a break at the pump. Let's also grasp that this crap oil isn't even used here in the U.S. it's shipped off to places like China - where it fouls their skies and creates health havoc along with the CO2 and SO2 from factories and autos.

Also (ibid.) :

"A  study of the EROEI for electrical heating of methane hydrate deposits between 1000 and 1500 meters deep yielded ratios from 2:1 up to 5:1, depending on the source of the electricity"

Regarding the promises for kerogen or oil shale, he writes: 

"Kerogen is not oil. It is better thought of as an oil precursor that was insufficiently cooked by geologic processes. If we want to turn it into oil, we have to finish the process nature started: that involves heating the kerogen to a high temperature for a long time. And that in turn takes energy- lots of it, whether supplied by hydroelectricity, nuclear power plants, natural gas, or the kerogen itself. 

Therefore the EROEI in processing oil shale is bound to be pitifully low. According to the best study to date, by Cutler Cleveland and Peter O'Connor, the EROEI for oil shale production would be about 2:1. That tells us that oil from kerogen will be far more expensive than regular crude oil."

In other words, conflating oil shale (kerogen) with actual light crude oil of high EROEI is like mixing up cow turds with cow's (calves') liver.  One can be eaten, the other can't - and for the oil - one requires additional energy inputs to put to use, the other only refining.

These are crucial points to process, but the Post editor never does as he goes on to cavil about "peak oil handwringing".   The guy would be better served having studied the issue in more depth before putting out an editorial. In particular, that Heinberg's numbers and projections are reinforced by sound sources such as the London-based brokerage firm Tullet Prebon, whose Strategic Insight report declares:

"Our calculated EROEIs both for 1990 (40:1) and for 2010 (17:1) are reasonably close to the numbers cited for those years by Andrew Lees. For 2020, our projected EROEI of 11.5 to 1 is not as catastrophic as 5: 1 but would nevertheless mean that the share of GDP absorbed by energy costs would have escalated to 9.6% from about 6.7% today. Our projections further suggest energy costs would absorb as much as 15% of GDP (at an EROEI of 7.7 to 1)  by 2030."

The Report goes on to note that the "diminishing dismal energy returns" (and again one needs to separate Q(PR)   from Q(net))  means that "the economy we have known for two centuries will cease to become viable at some point."

We are already seeing the initial signs in the entrenched low growth (barely 2 percent)  confounding the nation's politicos and economists who - up to now - haven't tied this to the degraded oil slopping around the world..  

Stop and think - and read - before you buy into the bullshit that cheap oil prices (or an "oil glut") mean Peak Oil is or was a myth. And should you disbelieve it, then take note of this forecast from yours truly: as high quality, efficient oil becomes ever scarcer, look for returns on investments to sink ever lower and the world economy to 'bottom out' with growth barely 1 percent per year. Look also for common goods including food to become ever more expensive since oil is the fuel needed to produce it, as well as transport it. Not to mention the water resources consumed as well.

Oh, and look for your energy bill - relatively low now - to go through the freaking ceiling when shale is exposed for the snake oil it is..

Who Could Ask For More? Frackers Are Shutting Themselves Down!

Thirty billion dollars in losses so far this year and still counting...... Many frack wells now have to have their pumps pulled (as loans come due) and workers sent home. For the environmentally conscious and aware citizen, especially those who've been battling the oil frackers for the past five years or so, it's about like a dream come true. Despite all the efforts to shut the frackers down or limit them, it now appears the frackers are shutting themselves down - without the rest of us lifting a pinky finger.

How did this happen? You could say it occurred out of pure greed, a lack of foresight, or both. Though oil experts kept warning about an oil glut and price collapse, none of the American frack- happy companies were taking it seriously.  As the Wall Street Journal put it (' As Rout Deepens, Oil Producers Keep on Pumping', Aug. 21, p. A1):

"When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short lived. Instead the price of crude has plunged by almost 60 % from its 2014 peak  - and suddenly looks likely to stay low for years and months to come."

The effect has been to drive prices for oil in the U.S. down to near the EROEI threshold, from $70 a barrel late last year to just above $40 a barrel now. As I've written about before, this latter price is ten to twelve dollars below the price level at which it is worthwhile to take the stuff out of the ground. Given all the extra ancillary equipment needed to extract kerogen, plus the fact it is the most unfinished form of oil, the costs are too great and hence the operations too costly for the product.

No surprise then that frack operations are being shut down across the country including 50 percent of them in the Marcellus Shale in Pennsylvania, and others from North Dakota to Texas. More than 170,000 workers have already been laid off and likely more to come according to WSJ reports.

The problem? Everyone appears to be "locked into pumping as much oil as possible" (ibid.) to the detriment of all.  As the Journal notes (ibid.) even the Saudis have increased their production in the face of falling prices. Analysts say this is "a preemptive effort to keep competitors like Iraq from stealing consumers in Asia."

The result has been "an energy version of trench warfare, with producers all trying to gain an inch of market share no matter the cost."

The Journal acknowledges the obvious, that "while it might make sense for producing countries to cut back and ease the glut there is no political will or business rationale to do so."

But let's make it clear there is certainly a sound environmental reason to do so, namely that of leaving the stuff in the ground so as not to exceed the two most critical limits of carbon burning: 565 gT and 2795 gT. We're already zooming past the first and will likely exceed it by 2050 - assuring at least a 4C hotter world (The 2C has already been acknowledged as being lowballed).

The other calamity would transpire if we burned up the planet's current existing reservoir of fossil fuels, including regular crude oil, kerogen and coal. If that happens, we will enter the maw of the runaway greenhouse effect, and what people see playing out now with monster fires in the West will be commonplace across the country - with temperatures to go with it, and lasting for months and possibly years - not just weeks.

Let's hope that this financial crisis in the frack industry - because of their own refusal to logically respond to a market glut - causes them to reconsider their toxic trade and also realize (as Richard Heinberg has portrayed it), fracking really is "snake oil" that has nothing to offer us in terms of energy advantage for the future - or now.

Have Humans Really Never Had It "So Good"?

A current meme making the rounds - especially amongst academics- is that modern day humans have "never had it so good". While they may be getting ground under by the one percenters and corporations, and many can barely make ends meet - never mind- they can still get to Walmart for a new DVD, video game or whatever.

One part of this meme is that humans are too attuned to "look for trouble" rather than be grateful and appreciate what they've got. Why are they bellyaching, for example, about Confederate flags no longer being sold at Walmart when  - compared to a Middle Ages serf - they are basically living like Kings with their own home ("castle") and even enough money to buy HDTVs, guns and even swimming pools?

One strong advocate for this put on the happy face and be thankful for what you have is Dr. Steve Mason in his Integra (June, p. 21) article, 'A Happy Face'.  But before we get to Steve let's deal with another powerful meme related to it, promoted by another Steve named Pinker. This is that compared to past eras human violence has decreased qualitatively and quantitatively. Pinker frames it as a "decline of evil".

 If indeed the aggregate indices and totality of human-instigated evil have declined,  it means nearly all the apocryphal tales of religious books and literature are wrong or at least exaggerated. It means in addition, that the entire meme of Eschatological Messianism is defunct and debunked. The latter, of course, refers to the period of glorious dominion presumed to follow the last period of world history, after Armageddon, when the "Antichrist" ( the ultimate Evil-doer) is due to briefly reign, followed by a Second Coming of Christ. This is all according to evangelical-fundamentalist Christians in the U.S.

Countering the Armageddon bafflegab is the strong evidence that violence in toto appears to have declined around the world relative to other eras. If this is valid, and not merely a statistical quirk, it means at least one element of human evil is in decline. These propositions, or their derivatives, are implicit in Stephen Pinker's recent book, The Better Angels of Our Nature: Why Violence Has Declined. I am deliberately associating violence with manifest human evil as at least a proxy indicator of its extent. Pinker's arguments are essentially based on two propositions that he sets out to prove:

1) The past was far more beastly and vicious than presumed to be, and

2) The present is vastly more peaceful, contrary to appearances.


 In a way these propositions are fairly sound. For example, in the immediate past rationalism was virtually non-existent and when rationalists did emerge, they were rapidly eliminated. Not only their minds, but bodies too, as well as property and often any offspring. Most of this was done via the Inquisition which lasted for nearly seven hundred years. Though they’d never admit it in a million years, the Vatican and Roman Catholic Church actually harbored one of the most malignant forms of human evil, in that same Inquisition.

 In his excellent monograph The Inquisition of the Middle Ages, Henry Charles Lea, in his chapter Subjection of the State  notes how papal bulls and direct threats were used to subvert and co-opt all state, civil authorities. This was to render them useless to oppose the will of the Inquisition. One such bull issued by Pope Innocent IV on May 15, 1252, is described as[1]: a carefully considered and elaborate law...to establish machinery for systematic persecution as an integral part of the social edifice in every city and every state

Each ruler or magistrate thereby became the extension of the Church itself, and could apply bans, imprisonment, property confiscation or outright punishment to those deemed heretics and do it in the name of the Holy Inquisition. In this way, a civil metastasis of the physical evil embodied in the Inquisition could be spread far and wide.

 Ad extirpanda ensured that the vicious violence perpetrated under the guise of protecting dogmatic or doctrinal purity was applied to a vastly larger population than it otherwise might have been. Because of its violent extent, especially in relation to seizure of property, it's estimated that by the middle -1300s half the population of then western civilization had been subjected to it, an unheard of proportion.

 By comparison, the most recent outbreak of  mega-magnitude violence was World War II in which some 73 million are estimated to have been slain, either in direct combat, or in brutal purges and  mass exterminations such as the Nazis perpetrated in their concentration camps, including at Mauthausen, Treblinka and Auschwitz. Even so, 73 million dead would not even comprise 10% of then populated western civilization, say ca. 1944-45. Meanwhile, the proportion butchered or with property seized by the Vatican’s Inquisition represented a far greater proportion than 10% of the then human population.

Thus, although modern era evil and violence appears more extensive and vile, it really isn't. It's a trick of our perception and historical selection bias. Pinker himself argues that "murder rates in England peaked in 1300 and in New England in the late 17th century. Afterwards, both fell dramatically."

 Pinker also accurately notes that in the modern era (from late 19th century through today) wars rather than tribal - religious wars or crimes, accounted for the lion's share of violence, and hence evil. But even given greater numbers killed in such conflicts, this form of mega-violence has been in marked decline for the past two decades. And while we may see genocides in these conflicts, such as in Rwanda in 1994, they pale beside the disproportionate genocides conducted by ancient Israelite Tribalists. These were all.in the name of Yahweh, i.e. against the Canaanites, if Genesis is to be believed. Indeed, if those accounts are true, it means some 500 -1000 times more humans were wiped out (as a proportion of then population), never mind the justification for it.

In this sense, Pinker's excellent graphs tell a lot of the story. For example, as expected. World Wars I and II show highly peaked points, then there's a bumpy but consistent trailing off following World War II. In terms of statistical frequency, the twentieth century naturally stands out for the sheer scale of the destruction of human life, including via atomic bombs, gas chambers and other devices.

However, when one normalizes the graphs to the actual populations present in the key eras, one finds that the past was actually far more vicious as well as the violent deaths - including being carved open by an Inquisitor with entrails removed and fed to the fires - much more common than the vile acts in 20th century or even the present (including mass shootings, terror attacks and beheadings). Is dying by Zyklon B in a Nazi gas chamber worse than an inquisitor using his knife and pliers to extract your intestines while you're awake and cook them in front of you? I'm not sure I even want to go there. But the fact is, by proportion of the respective populations, many more humans were dispatched in the latter mode than the former.

 Pinker also expatiates on the neuro-plasticity of the human brain and its ability to change in response to experience. He implies from this that people are less likely to resort to violence in their daily lives than their forbears, and that other behavioral changes and strategies work better. Of course, this assumes all factors are equal and they may not be. For example, verbal violence using computers (say on social network sites) now often takes the place of physical violence. However, the consequences can be just as terrible with the victims taking their own lives. Is this a retrenchment of evil? I would argue, no, only casting the evil in a different guise.

 Then again, there’s no assurance any current epoch for relatively less evil will continue. As a case in point there is the catastrophic approach of Peak Oil. Indeed, one issue of MONEY magazine actually warned[2] that “global oil supplies are near or past their peak, while demand for energy product shows no signs of abating”.

 Even before the MONEY article appeared, warnings have been repeatedly sounded though one wonders how many have paid attention. For example, Peter Tertzakian[3] has used a somewhat different term – the break point- to describe an analogous phenomenon for which oil prices continue to rise as more efficient forms of oil (e.g. light sweet crude) continue to go down, forcing deep sea drilling, access to tar sands oil and oil shale fracking.

T. Boone Pickens, one of the most famous oilmen and the ultimate pragmatist, has asserted that[4]:  “We’re now at the point where demand for oil is 87 billion barrels a day, while only 85 billion can be produced.”  This is acknowledging Peak Oil by any other name. The Financial Times article further noted that the world’s premier energy monitor was “preparing a sharp downward revision of its oil supply forecasts”[5]. The full formal report pointed to “global oil supplies plateauing even as demand continues.”

 The article also noted[6] that a growing number of people in the industry “are endorsing a version of the ‘peak oil’ theory: that oil production will plateau in coming years, as suppliers fail to replace depleted fields with enough fresh ones to boost overall output.”

The drastic consequences of energy supply and infrastructure  collapse in the face of exponentiating demand have been well described. The data show a disturbing gap by 2009 of nearly 2.1% between the total energy actually produced from around the world, and that consumed[7]. Much of this can be traced to the inability of fossil fuel production to keep up with population growth and energy demand[8]. Many experts, indeed, are convinced Peak Oil occurred in 2005.

 Why the concern? Because we will face perhaps the most intensive external agent driving masses toward human evil in our history. Many may not buy this so we perhaps need to delve deeper and one can cite Richard Heinberg[9] who has laid the case out in crystal clarity by using the primary quantifier of EROEI or energy return on energy invested.

Oil in the U.S. used to have an EROEI as high as 18 fifty years ago[10]. It only took one barrel of oil to extract eighteen barrels of oil. This was such a fantastic ratio that oil was practically free energy. But the latest data show this fallen to around 9 is still falling[11], a sure sign we are in energy trouble, since the minimum EROEI required for the basic functions of an industrial society is in the 5-9 range[12].

 More critical is the food component of oil that's hardly mentioned except by the inner circle cognoscenti. To be blunt, oil = food given that it provides the primary bulk of fertilizer to support the green revolution  or what's left of it. Take away the oil fertilizers, not to mention the petrol to run farm machinery, and famine follows on a mass, global multi -billions level scale.

In his essay Thoughts on Long-Term Energy Supplies: Scientists and the Silent Lie, physicist Albert Bartlett pinpoints the failure to name human population growth as a major cause of our energy and resource problems[13].  Bartlett avers that scientists display a general reticence to speak out on this issue which stems from the fact that it is politically incorrect to argue for stabilization of population, at least in the U.S.

To put the numbers in more stark relief, Bartlett, in a follow-up extended letter in Physics Today[14], noted that in the 1970s there were about 2.2 liters per person per day of oil. Of this, one could estimate that just over half or nearly 1.3 liters went to food production, processing, preparation or distribution. This was in a world with nearly 2.7 billion fewer people! Today, we are down to a production level of barely 1.6 liters per person per day while the consumption level approaches 4 liters per person per day. After Peak Oil, the latter will continue to increase, while the former will diminish by about 2-3 percent per year.

 It doesn’t take a math genius to ascertain that this is a recipe for catastrophic crash of the human population![15]


Obviously, if the food supply is inadequate, we can expect violence will become commonplace as each person fights for whatever energy resources are available.  The gist of it is that as the oil to support our energy-intense civilization ebbs, it will become harder to obtain water, affordable food as well as other amenities now deemed basic for living a civilized life. Power availability, say merely to stay cool in a scorching greenhouse world, will be scarce. Since power is also needed to preserve foodstuffs, and run furnaces or air conditioning the catastrophe isn’t difficult to decipher.

  When the old energy order finally breaks down, with power grids kaput because of excessive demand during global warming heat spells, and food in too short supply, it will literally be every man for himself. In such a brutish world, it’s difficult to imagine brain neuroplasticity saving the day or spontaneously encouraging any better angels of our nature. The available useful energy will be too low to do such! More than likely, as the final food stores vanish, most of that brain neuroplasticity will be needed to mount defenses against marauding gangs, anarchists, cannibals and assorted other two-legged predators.

One must conclude then that given the cumulative harrowing facts and statistics, Pinker’s concept of diminishing evil being permanent or sustained is more a pipedream than a credible aspect for modern  human affairs. The most generous take for Pinker’s thesis is that he managed to capture a fraction of a cycle of human history within which violence did retreat from earlier epochs. However, he didn’t factor  in the energy parameters far enough into the future to see that ultimately human civilization, predicated on moral order can't be sustained without resources.

Steve Mason (op. cit.) portrays more modern concerns in the realm of inflated worries. He insists he's "not some Pollyanna nitwit bent on banning the death penalty and passing the chicken soup" but he does then appear to dismiss global warming as any real or abiding concern by naming it explicitly  after writing "human beings perceive as threats the silliest things".  Well, hate to break it to him, but global warming is not about some tiny little elevation of one's discomfort zone, it's about real, life threatening upheaval, e.g.

http://brane-space.blogspot.com/2015/06/separating-real-threats-to-human.html

Hence, people's concerns about this threat are not simply misplaced, or inflated, and one can argue such concern drives activism and practical response.

It is thus well to "ease the minds of the masses" as he proclaims his objective to be,  but not to have them blinded to real threats, or dismissing them as idle ones.  Mason also jumps a bit too rapidly into the claim that "famines and plagues are a thing of the past". Not really! They are only in hiatus. When our population exceeds the critical threshold that the narrow margin for resource support  provides, we will again see plagues and massive famines. It is as certain as the Sun rising tomorrow morning.

Mason's take on the "pesticide threat" is also dismissive, despite  the fact there's now good evidence that the death of one third of all honeybee colonies can plausibly be traced to a form of pesticide from a family called neonicotinoids—“neonics” for short—developed a decade or so ago to replace organophosphates and carbamates, which are also highly toxic but dissipate far more quickly. In case anyone forgot, the humble honeybee is responsible for the pollination of nearly half our food crops.

Mason writes: "I suppose the American Cancer Society can supply figures to support significant  increases in cancer deaths" - but he shouldn't expect that given the ACS is part of the problem!  See e.g.  http://brane-space.blogspot.com/2012/02/cancer-industial-complex-biggest.html

As noted therein, citing research from Breast Cancer Action:

"The Cancer industry consists of corporations, organizations, and agencies that diminish or mask the extent of the cancer problem, fail to protect our health or divert attention away from finding the causes of breast cancer...this includes drug companies that, in addition to profiting from cancer treatment drugs, also produce toxic chemicals that may be contributing to the high rates of cancer in this country and increasing rates throughout the world. It also includes the polluting industries that continue to release substances we know or suspect are dangerous to our health, and the public relations firms and public agencies who protect these polluters.

The Cancer industry includes organizations like the ACS that downplay the risk of cancer from pesticides and other environmental factors and which have historically refused to take a stand on environmental regulation".

Mason does aver:

"I'm not saying that we're out of the woods for good, that a stray comet's not headed our way, but for the time being at least, why not relax and enjoy?" 

Well, because too many parameters for  species survival criticality don't allow it!  Hence, one must resist the temptation to dismiss pessimistic emotions as pathological.  This is a point also reinforced by Barbara Ehrenreich in her book: 'Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America', Her book is worth it just to see the skewering of Stephen Covey's "Who Moved My Cheese?" crap in Chapter 4 and doing pretty much the same with Martin Seligman's "Authentic Happiness" poppycock in Chapter 6.

Seligman tries to make us believe that pessimism can have only adverse effects on one's thinking - but in fact, as Chris Hedges shows ('Empire of Illusion') pessimism can be a useful ally and antidote to the manifestly unreal and BS culture we inhabit - where most citizens' brains have already been colonized by "smiley face" bunkum and PR piffle. (Explaining why too many no longer know their own history.)  This leaves them more likely to be relentlessly exploited by capitalist elites and political predators: purchasing crap goods and services from the first, and buying empty promises from the second.  None of which is consequence free.

In my book, 'Atheism: A Beginner's Handbook' I tried to explain in the last chapter why Americans were almost universally distrustful of atheists (ranking them below Islamic terrorists and homosexuals in terms of respect).  I wrote that:

"Two factors drive this: 1) a brain architecture that favors an optimism dynamic and “hope” even when reality testifies to the contrary, and 2) a pernicious culture of “positivity” that reinforces this brain defect, recently highlighted by Barbara Ehrenreich."

Ehrenreich noted that American mass culture is saturated by a saccharine “cult of positivity,” with children brainwashed from an early age that they can do anything, and adults brainwashed to believe if they just work hard and long enough they’ll become super millionaires like Donald Trump. That no one has slain the insipid “Horatio Alger” myth up to now is really a testament to America’s  individualist hubris and false optimism.

 

 

The takeaway from all this is there is a decent literature in support of not fleeing from pessimism, negative thought or even from mild depression at the state of the planet (especially the extent to which we're trashing it). As one respondent to a Science News piece put it: "These emotions can be just another source of information".   (Science News, Dece. 14, 2013, p. 30).

Thus, I SHOULD  rationally evince pessimism if I learn about the CIA and its insidious tortures and what it has done to the reputation of our country  - even rendering us hypocritical when we squawk to  North Korea or China about human rights. If we don't practice them uniformly ourselves how do we have a moral leg to stand on? We don't. And that IS depressing!
 

Those who shut such emotions out are consciously limiting key sources of information and internal response - and perhaps putting themselves in the same place of too many hopeful Jews just after Hitler came to power in Germany. As one Holocaust survivor put it in one of the presentations in The Holocaust Testaments: "It was the pessimists who left the country early. It was the optimists who stayed and got sent to the camps."

---

[1] Lea,,op. cit. 33.

[2] MONEY magazine (December, 2011) 'Making A Bet on Scarcity',   70.

[3] Tertzakian, A Thousand Barrels A Second, 246-47.

[4] Pickens,: The Financial Times. May 21, 2010,  A1.

[5] Ibid.

[6] Op. cit.  A12.

[7] The World Almanac and Book of Facts: 2013, 142.

[8] See the site: www.dieoff.org which has a wealth of information, statistics for Peak Oil indiciators.

[9] Heinberg: The Party’s Over: Oil, War and the Fate of Industrial Societies.

[10] Inman: Scientific American, (308), 59.

[11] Op. cit., 60.(chart)

[12] Op. cit., 61.(inset information)

[13] Bartlett: Physics Today,: 2004 (July) , 53.

[14] Bartlett: Physics Today.  2004  (November), ,18.

[15] At the heart of these considerations is the net energy eqn. (cf. Physics Today, Weisz, July 2004, p. 51):  Q (net) = Q (PR) – [Q (op) + E/T].  In effect, for break-even oil one would find Q(net) = 0  Thus, there is no net gain in energy given the quantity that must be used to obtain it. For the last 700 billion barrels, of hard to obtain oil (which we are fast approaching): Q(net) = negative quantity = -Q.  Since the rate of energy production (Q (PR) must be debited by the energy consumed for its operation Q(op), and the energy E invested during its “lifetime” T.  Thus its Q(PR) will be small in relation to the bracketed quantity. Thus, the problem in a nutshell is not “running out of oil’ but running out of cheap, accessible oil.  Bottom line, we need not run out of the stuff before the world economy runs into problems of untold, unspeakable proportions!