Among the big energy stories of 2013, “peak oil” -- the once-popular notion that worldwide oil production would soon reach a maximum level and begin an irreversible decline -- was thoroughly discredited. The explosive development of shale oil and other unconventional fuels in the United States helped put it in its grave.
As the year went on, the eulogies came in fast and furious. “Today, it is probably safe to say we have slayed ‘peak oil’ once and for all, thanks to the combination of new shale oil and gas production techniques,” declared Rob Wile, an energy and economics reporter for Business Insider. Similar comments from energy experts were commonplace, prompting an R.I.P. headline at Time.com announcing, “Peak Oil is Dead.”
Not so fast, though. The present round of eulogies brings to mind Mark Twain’s famous line: “The reports of my death have been greatly exaggerated.” Before obits for peak oil theory pile up too high, let's take a careful look at these assertions. Fortunately, the International Energy Agency (IEA), the Paris-based research arm of the major industrialized powers, recently did just that -- and the results were unexpected. While not exactly reinstalling peak oil on its throne, it did make clear that much of the talk of a perpetual gusher of American shale oil isgreatly exaggerated. The exploitation of those shale reserves may delay the onset of peak oil for a year or so, the agency’s experts noted, but the long-term picture “has not changed much with the arrival of [shale oil].”
In the wake of the most powerful “super typhoon” ever recorded pummelling the Philippines, killing thousands in a single province, and just weeks after the northern Chinese city of Harbin suffered a devastating “airpocalypse,” suffocating the city with coal-plant pollution, government leaders beware! Although individual events like these cannot be attributed with absolute certainty to increased fossil fuel use and climate change, they are the type of disasters that, scientists tell us, will become a pervasive part of life on a planet being transformed by the massive consumption of carbon-based fuels. If, as is now the case, governments across the planet back an extension of the carbon age and ever increasing reliance on “unconventional” fossil fuels like tar sands and shale gas, we should all expect trouble. In fact, we should expect mass upheavals leading to a green energy revolution.
None of us can predict the future, but when it comes to a mass rebellion against the perpetrators of global destruction, we can see a glimmer of the coming upheaval in events of the present moment. Take a look and you will see that the assorted environmental protests that have long bedeviled politicians are gaining in strength and support. With an awareness of climate change growing and as intensifying floods, fires, droughts, and storms become an inescapable feature of daily life across the planet, more people are joining environmental groups and engaging in increasingly bold protest actions. Sooner or later, government leaders are likely to face multiple eruptions of mass public anger and may, in the end, be forced to make radical adjustments in energy policy or risk being swept aside.
In fact, it is possible to imagine such a green energy revolution erupting in one part of the world and spreading like wildfire to others. Because climate change is going to inflict increasingly severe harm on human populations, the impulse to rebel is only likely to gain in strength across the planet. While circumstances may vary, the ultimate goal of these uprisings will be to terminate the reign of fossil fuels while emphasizing investment in and reliance upon renewable forms of energy. And a success in any one location is bound to invite imitation in others.
When it comes to energy and economics in the climate-change era, nothing is what it seems. Most of us believe (or want to believe) that the second carbon era, the Age of Oil, will soon be superseded by the Age of Renewables, just as oil had long since superseded the Age of Coal. President Obama offered exactly this vision in a much-praised June address on climate change. True, fossil fuels will be needed a little bit longer, he indicated, but soon enough they will be overtaken by renewable forms of energy.
Many other experts share this view, assuring us that increased reliance on “clean” natural gas combined with expanded investments in wind and solar power will permit a smooth transition to a green energy future in which humanity will no longer be pouring carbon dioxide and other greenhouse gases into the atmosphere. All this sounds promising indeed. There is only one fly in the ointment: It is not, in fact, the path we are presently headed down. The energy industry is not investing in any significant way in renewables. Instead, it is pouring its historic profits into new fossil-fuel projects, mainly involving the exploitation of what are called “unconventional” oil and gas reserves.
The result is indisputable: Humanity is not entering a period that will be dominated by renewables. Instead, it is pioneering the third great carbon era, the Age of Unconventional Oil and Gas.
Presidential decisions often turn out to be far less significant than imagined, but every now and then what a president decides actually determines how the world turns. Such is the case with the Keystone XL pipeline, which, if built, is slated to bring some of the “dirtiest,” carbon-rich oil on the planet from Alberta, Canada, to refineries on the U.S. Gulf Coast. In the near future, President Obama is expected to give its construction a definitive thumbs up or thumbs down, and the decision he makes could prove far more important than anyone imagines. It could determine the fate of the Canadian tar-sands industry and, with it, the future well-being of the planet. If that sounds overly dramatic, let me explain.
Sometimes, what starts out as a minor skirmish can wind up determining the outcome of a war -- and that seems to be the case when it comes to the mounting battle over the Keystone XL pipeline. If given the go-ahead by President Obama, it will daily carry more than 700,000 barrels of tar-sands oil to those Gulf Coast refineries, providing a desperately needed boost to the Canadian energy industry. If Obama says no, the Canadians (and their American backers) will encounter possibly insuperable difficulties in exporting their heavy crude oil, discouraging further investment and putting the industry’s future in doubt.
The battle over Keystone XL was initially joined in the summer of 2011, when environmental writer and climate activist Bill McKibben and 350.org, which he helped found, organized a series of non-violent anti-pipeline protests in front of the White House to highlight the links between tar-sands production and the accelerating pace of climate change. At the same time, farmers and politicians in Nebraska, through which the pipeline is set to pass, expressed grave concern about its threat to that state’s crucial aquifers. After all, tar-sands crude is highly corrosive, and leaks are a notable risk.
In mid-January 2012, in response to those concerns, other worries about the pipeline, and perhaps a looming presidential campaign season, Obama postponed a decision on completing the controversial project. (He, not Congress, has the final say, since it will cross an international boundary.) Now, he must decide on a suggested new route that will, supposedly, take Keystone XL around those aquifers and so reduce the threat to Nebraska’s water supplies.
Ever since the president postponed the decision on whether to proceed, powerful forces in the energy industry and government have been mobilizing to press ever harder for its approval. Its supporters argue vociferously that the pipeline will bring jobs to America and enhance the nation’s “energy security” by lessening its reliance on Middle Eastern oil suppliers. Their true aim, however, is far simpler: to save the tar-sands industry (and many billions of dollars in U.S. investments) from possible disaster.
Just how critical the fight over Keystone has become in the eyes of the industry is suggested by a recent pro-pipeline editorial in the trade publication Oil & Gas Journal:
Controversy over the Keystone XL project leaves no room for compromise. Fundamental views about the future of energy are in conflict. Approval of the project would acknowledge the rich potential of the next generation of fossil energy and encourage its development. Rejection would foreclose much of that potential in deference to an energy utopia few Americans support when they learn how much it costs.
Opponents of Keystone XL, who are planning a mass demonstration at the White House on Feb. 17, have also come to view the pipeline battle in epic terms. “Alberta’s tar sands are the continent’s biggest carbon bomb,” McKibben wrote at TomDispatch. “If you could burn all the oil in those tar sands, you’d run the atmosphere’s concentration of carbon dioxide from its current 390 parts per million (enough to cause the climate havoc we’re currently seeing) to nearly 600 parts per million, which would mean if not hell, then at least a world with a similar temperature.” Halting Keystone would not by itself prevent those high concentrations, he argued, but would impede the production of tar sands, stop that “carbon bomb” from further heating the atmosphere, and create space for a transition to renewables. “Stopping Keystone will buy time,” he says, “and hopefully that time will be used for the planet to come to its senses around climate change.”
Last winter, fossil-fuel enthusiasts began trumpeting the dawn of a new “golden age of oil” that would kick-start the American economy, generate millions of new jobs, and free this country from its dependence on imported petroleum. Ed Morse, head commodities analyst at Citibank, was typical. In the Wall Street Journal he crowed, “The United States has become the fastest-growing oil and gas producer in the world, and is likely to remain so for the rest of this decade and into the 2020s.”
Once this surge in U.S. energy production was linked to a predicted boom in energy from Canada’s tar-sands reserves, the results seemed obvious and uncontestable. “North America,” he announced, “is becoming the new Middle East.” Many other analysts have elaborated similarly on this rosy scenario, which now provides the foundation for Mitt Romney’s plan to achieve “energy independence” by 2020.
By employing impressive new technologies -- notably deepwater drilling and hydraulic fracturing (or fracking) -- energy companies were said to be on the verge of unlocking vast new stores of oil in Alaska, the Gulf of Mexico, and shale formations across the United States. “A ‘Great Revival’ in U.S. oil production is taking shape -- a major break from the near 40-year trend of falling output,” James Burkhard of IHS Cambridge Energy Research Associates (CERA) told the Senate Committee on Energy and Natural Resources [PDF] in January 2012.
Increased output was also predicted elsewhere in the Western Hemisphere, especially Canada and Brazil. “The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere,” Daniel Yergin, chair of CERA, wrote in the Washington Post. “The new energy axis runs from Alberta, Canada, down through North Dakota and South Texas ... to huge offshore oil deposits found near Brazil.”
It turns out, however, that the future may prove far more recalcitrant than these prophets of an American energy cornucopia imagine. To reach their ambitious targets, energy firms will have to overcome severe geological and environmental barriers -- and recent developments suggest that they are going to have a tough time doing so.
The Great Drought of 2012 has yet to come to an end, but we already know that its consequences will be severe. With more than one-half of America’s counties designated as drought disaster areas, the 2012 harvest of corn, soybeans, and other food staples is guaranteed to fall far short of predictions. This, in turn, will boost food prices domestically and abroad, causing increased misery for farmers and low-income Americans and far greater hardship for poor people in countries that rely on imported U.S. grains.
This, however, is just the beginning of the likely consequences: If history is any guide, rising food prices of this sort will also lead to widespread social unrest and violent conflict.
Food -- affordable food -- is essential to human survival and well-being. Take that away, and people become anxious, desperate, and angry. In the United States, food represents only about 13 percent of the average household budget, a relatively small share, so a boost in food prices in 2013 will probably not prove overly taxing for most middle- and upper-income families. It could, however, produce considerable hardship for poor and unemployed Americans with limited resources. “You are talking about a real bite out of family budgets,” commented Ernie Gross, an agricultural economist at Omaha’s Creighton University. This could add to the discontent already evident in depressed and high-unemployment areas, perhaps prompting an intensified backlash against incumbent politicians and other forms of dissent and unrest.
It is in the international arena, however, that the Great Drought is likely to have its most devastating effects. Because so many nations depend on grain imports from the U.S. to supplement their own harvests, and because intense drought and floods are damaging crops elsewhere as well, food supplies are expected to shrink and prices to rise across the planet. “What happens to the U.S. supply has immense impact around the world,” says Robert Thompson, a food expert at the Chicago Council on Global Affairs. As the crops most affected by the drought, corn and soybeans, disappear from world markets, he noted, the price of all grains, including wheat, is likely to soar, causing immense hardship to those who already have trouble affording enough food to feed their families.
This essay was originally published on TomDispatch and is republished here with Tom’s kind permission. America and Oil. It's like bacon and eggs, Batman and Robin. As the old song lyric went, you can't have one without the other. Once upon a time, it was also a surefire formula for national greatness and global preeminence. Now, it's a guarantee of a trip to hell in a handbasket. The Chinese know it. Does Washington? America's rise to economic and military supremacy was fueled in no small measure by its control over the world's supply of oil. Oil powered the country's first …
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