U.S. Oil Boom: What it means for prices, the future, and the environment

If you watch the news or read the paper, you’ve probably heard the good news: the United States is in the midst of an oil boom! Supply is higher than was anticipated even just a few years ago, imports are decreasing, exports are increasing, and we should be seeing better prices at the pump for the foreseeable future. This all sounds great, and it might be, but what are the broader implications?

For a good overview of the increase in U.S. oil production recently, see this article. A quick summary: oil production has exploded recently in the U.S.; the U.S. has reached the goal President Obama laid out in 2011 to decrease imports by one-third by 2025 in just 3 years. Texas is now producing more crude oil than Iran, twice as much as it was producing just 2 years ago, according to the EIA (Energy Information Administration). Where is the oil coming from, and what are the consequences of its production?

Most of the oil boom can be attributed to the growth of two major technologies, usually used together: horizontal drilling and hydraulic fracturing. You’ve likely heard of “hydrofracking” with regards to natural gas, but it can also be used to extract oil from tight shale formations. Oil reservoirs underground are less like an underground lake and more like an oil-soaked rock. In high quality oil reserves, the pressure from the natural gas in the reservoir sitting on top of the oil (or the air, water, or gas pumped into the ground by the drillers) is sufficient to push the oil to the surface. In shale formations, the pores holding the oil are smaller and hold the oil “tighter”, making it more difficult to extract. Hydraulic fracturing is used to crack open the shale formations to allow the oil to flow more easily out of the formation and to the surface through the drilling pipes. As the Bloomberg article mentions, this is done using high-pressure water flows, and sometimes explosives. Traditional wells for gas and oil are vertical, but technology now allows for horizontal drilling. This means that for each drilling rig, the oil companies are able to drill vertically and then horizontally from there, allowing them to drill a larger surface area and extract more oil per drill rig than with a simple vertical well. Used in conjunction with hydraulic fracturing, this technology has allowed previously unproductive or uneconomical fields to be produced.

There are some benefits to this oil boom. It does allow us to decrease imports and, as the article mentions, have some more leverage with sanctions in the Middle East since we are slightly less dependent upon them. Theoretically, this production boom is also creating jobs in the oil industry and helping the local economies around the newly producing oil fields, but the evidence is shaky on whether the long-term benefits are really there. Hopefully, we will continue to see relatively low gas prices and perhaps lower prices for other products dependent on oil for their production, including food.

But at what cost are we obtaining this oil? First, there is the environmental cost. Oil drilling of any kind is risky in terms of potential environmental damage, and hydraulic fracturing is considered to be one of the riskier practices. However, as we were reminded this week by the water crisis in West Virginia, all fossil fuels have a large environmental cost. Which ones do we decide are too much? Second, there are high economic and energetic costs. The technology is expensive and drilling unconventional sources is almost always more expensive with less return. David Ricardo described the “Best First Principle” in terms of development of agricultural land, stating that the highest quality land (that which produces the greatest yield) would be put into production first, followed by lower and lower quality land over time as more land was required. This principle can also be applied to oil production. The easily-obtained, low energy and monetary cost oil (think Spindletop, with oil essentially shooting out of the ground) was produced first and now we are required to go after lower quality oil, with its higher energetic and monetary costs. Although the initial surge in production has allowed gas prices to remain low, production in hydraulically fractured wells tends to drop off quickly. Additional fracking is required to continue production, but the production of the well will continue to taper off as time goes on. We’re experiencing the boom now, but we should look ahead to how we will handle the bust. Think about it the next time you’re filling up your car with the “cheap” gas.

Exploring Myths and Misconceptions in Energy

I recently finished reading my new favorite energy and energy policy book, “Energy Myths and Realities: Bringing Science to the Energy Policy Debate” by Dr. Vaclav Smil. While I highly recommend that anyone interested in energy policy or the science of our energy systems invest in the book, I’d like to offer a sneak peek into the debunked myths that Dr. Smil addresses. He begins with myths that have somehow persisted through the decades (or centuries). The first myth is that electric cars will be the transportation method of the future. Dr. Smil reminds us that electricity is not free or, in most cases, clean. The majority of electricity comes from fossil fuel power plants, mostly coal and natural gas. As concerns about mountain top removal, hydraulic fracturing, and carbon emissions come up in the mainstream news, it’s easy to forget that those sources of energy power our electronic devices, lights, appliances, and so on. Adding our cars to that pressure would hugely increase the demand for electricity, resulting in the need to build many more power plants (or, more ideally, renewable generation), new transmission lines, and stations that are capable of recharging vehicles. Electricity generation and transmission are also highly inefficient, resulting in losses of electricity at the plant and in the lines. While renewable energy generation is expected to increase significantly over the next few decades, Dr. Smil argues that it is unrealistic to think that this will be enough to power a fleet of electric cars. However, he finds hope in the increased fuel efficiency standards in gasoline and diesel engines, both those realized at this time and the potential for greater increases under tighter standards.
Dr. Smil then turns his attention to more recently in-the-news “myths”, or more accurately, over-hyped technologies or principles, including peak oil, carbon sequestration, biofuels from plants, wind power, and the pace of energy transitions. His main point in this section is that it is very easy to be either overly pessimistic about the energy situation we face or, perhaps more disconcertingly, to be overly optimistic about both new technologies and energy sources and the rate at which they can be implemented. For example, corn ethanol policy is meant to help farmers by providing a market for their crop, to reduce our energy dependence on other nations, and to reduce carbon emissions. However, it is debatable whether any of those goals have been even slightly achieved. Additionally, the resource is limited in how much can be produced and how much can be demanded. Currently, about 10% of the gasoline you pump into your vehicle is ethanol and the EPA is hesitant to raise that to 15%, so the industry has hit a “blend wall” wherein the market is saturated with product unless the gasoline consumption of the U.S. increases. On the other hand, Smil points out that if we tried to replace all of the gasoline used in U.S. with corn ethanol, more arable land would be required to produce the corn required than actually exists in the United States.
In a similar manner with the other energy myths, misconceptions, and overexcitements, Dr. Smil uses both the extensive body of literature on various energy sources and some simple arithmetic to provide sound evidence and advice to his audience, from concerned citizens to policymakers.

Eco-Friendlier Holiday Shopping

I was going to write a post on how to have an eco-friendly Thanksgiving this year, but a quick Google search showed that this has been done many times over. So instead, with Black Friday and the holiday shopping season quickly approaching, here are some ways to reduce your environmental impact while gift-giving.

1. Skip the mall. Although Destiny USA in Syracuse has achieved gold level LEED certification, this addresses only some components of sustainability, including recycling programs, building materials, energy efficiency, and water use. Malls take up huge areas of land, creating large areas of impermeable surfaces and destroying wildlife habitats and corridors. Impermeable surface areas, including both the building itself and the parking lots, prevent rain from infiltrating into the soil and causes runoff of both the water and any contaminants it carries into the sewer system or nearby water bodies (in the case of Destiny, Onondaga Lake). Malls also consume large amounts of energy for lighting and cooling, as well as the indirect energy consumed by the cars bringing shoppers from around the city and beyond. Many of the goods sold in the mall have traveled from around the world to reach the shelves.

2. Buy from local craftsmen and women. Buying from local producers keeps money in the local economy and reduces the energy consumed in transporting goods. Additionally, local producers may use local materials, further reducing the embodied energy (all of the energy used in producing and transporting the goods) in the goods.

3. Buy gifts that are made to last. Planned obsolescence means that an item is meant to last for a limited number of years and is meant to keep demand for that item up over time as people will need to replace it. This is why appliances made more recently tend to not last as long as appliances made twenty or more years ago. This results both in increased consumption and increased wastes in landfills. Even if the items are recycled, energy is required to make the materials usable again.

4. Consider an environmental gift for the people in your life who are difficult to shop for. The Nature Conservancy sells carbon offsets, clean water offsets (to fund water projects in developing countries), hummingbird habitat, and wild area protection in east Africa, Australia, Brazil, Costa Rica, the US, and coral reefs. Heifer International allows you to buy an animal for a family in a developing country, help fund the start up of a small business, or provide stoves for a village (among other gifts).

 

Happy Thanksgiving and happy shopping!

Sustainability: Higher Education’s Responsibility

This past weekend I attended a conference on campus sustainability at Pace University put on by the Environmental Consortium of Colleges and Universities. The conference was titled “Sustain What? Preparing Our Students by Greening Our Campuses” and while there was a huge amount of information on sustainability projects at various campuses, the underlying theme of the weekend was the importance of higher education in the sustainability movement.
On one level, campuses are uniquely positioned in their communities to serve as role models of sustainability. Thanks to large endowments and government and privately funded grants, they are often able to invest in renewable energy projects, sustainable construction of new buildings, sustainable food systems including composting projects, and other efficiency projects that the general population is often unaware of or unable to afford. Colleges and universities can implement relatively new technologies, educating the community and providing business to new companies.
However, higher education has a greater responsibility within the movement towards sustainability than simply incorporating efficiency into new building design and urging people to turn out the lights. The language of sustainability, argued some at the conference, should be incorporated into all classes offered by a university. I attended a break-out session directed towards faculty that led to a discussion of this issue. Coming from SUNY ESF, where all (or almost all) of our courses and programs are directed towards the environment and sustainability, it was interesting to see the perspective of faculty from other campuses, including predominantly conservative campuses.
The faculty members in the session discussed the lack of basic knowledge that their students had about the environment, including the connection between food production and climate change, and the history of environmental disasters including Love Canal and Bhopal. They also discussed the existence of environmental science/studies programs at their campuses, but the isolation of these programs from the rest of the schools. We came to a few conclusions about the role of higher education in our session (and the conference as a whole):
– Incorporation of sustainability concepts into classes other than those in environmental science/studies programs is not only possible, but necessary to making students more well-rounded as they enter a world facing ecological crises.
– If students learn about sustainability within their field of study, they are likely to take those concepts into their future jobs. Ideally, this would mean the next generation of bankers, businessmen and women, scientists of all stripes, educators, and so on will view the world through the lens of the need for sustainability.
– And most importantly, if higher education is not involved in sustainability, it is not performing its role as higher education.

Food Miles: Should We Believe the Hype?

Locavores love to talk about the number 1500. It’s cited as a reason to eat seasonally, to eat locally, and to support local farmers and farmers’ markets. It is the supposed number of miles that food travels to get to its consumer. This number has been used in reference to different kinds of food in different parts of the country and has essentially become gospel truth to members of the local food movement. However, the number comes from a single study published in 2001 out of Iowa State University’s Leopold Center for Sustainable Agriculture. Due to data limitations and a narrow research question, the study uses publicly available terminal market data on the distance 33 types of fruit and vegetables traveled to reach a produce market in Chicago. This data is also limited in that it shows the state in which the produce was grown, but not where in that state. The researchers were required to use the geographical center of the state as a proxy. The argument against using this statistic has been well developed by James McWilliams in his book Just Food (1) (a fantastic read challenging a few of the prominent assumptions made about the food system) and Jane Black in a Slate article (2).

 
So, if 1500 miles isn’t an accurate statistic, how do we determine the true energy cost of our food system? And how do we implement policy to make that food system, on which we are completely dependent, more resilient to volatile energy markets and potentially decreasing fossil fuel supplies? It turns out that transportation of food from production to consumer is a relatively small piece of the energy cost pie (about 14% of the total fossil fuel energy input to the food system, according to a University of Michigan report (3)). A significantly larger chunk of the energy use is in the household for storage and preparation of food (31.7%, ibid.). Production represents 21.4%, processing 16.4%, packaging 6.6%, food retail 3.7%, and commercial food service 6.6% (ibid.). So focusing only on reducing the number of miles our food travels may help reduce the energy and carbon footprint of that food, but there are larger fish to fry, so to speak.
Importantly, food traveling fewer miles is not necessarily more energy efficient. Food traveling by rail, ship, or large tractor-trailer likely requires less energy on a per-unit food basis than food transported by an inefficient farm truck to a market. Additionally, trying to grow tomatoes in the off-season in northern New York would require a huge amount of energy in the form of grow lamps, heated greenhouses, and interior irrigation. However, they can be grown with much fewer energy inputs in areas of the world experiencing their growing season while we are not. Without the globalization of our food system, we could not eat tomatoes in December (or May, or October, for that matter).

 
Additionally, farmers’ markets are not always the havens for locavores that they claim to be. Many markets, including the Syracuse Regional Market, allow “out of state” vendors to set up at the market. These vendors purchase produce produce, sometimes locally but primarily from wholesale markets out of state, and resell it at the markets. They blend in with the local farmers, sometimes owning vans labeled with a farm name (despite the fact that they do not own or work at a farm), and pass off their produce as local. It’s more obvious when they have lemons and kiwi for sale that have obviously not been grown in New York, but sometimes it can be difficult for a consumer to make an informed decision.
My point is not that we should not be making an effort to reduce energy consumption in the food system, or that eating locally isn’t worthwhile. There are many reasons to eat locally, including nutritional benefits derived from fresh, minimally processed foods, the support of local businesses that provide jobs, and the connection to the land and people that feed you. However, as far as policy is concerned, we should be thinking about the larger system. The increase in energy consumption in the processing industry has been large over the past few decades, as Americans have increasingly relied on processed and convenience foods. Encouraging the consumption of minimally processed, minimally packaged food (which is also arguably healthier) by focusing subsidies on fresh produce rather than corn (a prominent ingredient in a wide variety of processed foods) could help reduce this energy sink. Additionally, over 30% of the energy is used in the household for storage and cooking. More efficient appliances, rated through Energy Star and supported by a buyback program (a sort of “cash for clunkers” for refrigerators and stoves), could help reduce this enormous portion of the energy costs of the food system.

 
On a personal level, as noted by the authors of the University of Michigan report, we can reduce our own food energy/carbon footprint by reducing the amount of meat in our diet. Animals are highly inefficient at converting grains to meat, and it is much more energy efficient to consume the grains directly. Organic foods may also reduce the energy costs of production because they are grown without synthetic fertilizers and pesticides, which require large inputs of energy in manufacturing (ibid.). The University of Michigan report also notes that while refrigerators have become substantially more efficient over time, they have also become larger, negating the efficiency gains. Buying smaller amounts of food at more regular intervals and relying less on frozen convenience meals may allow us to reduce our refrigeration needs.
There’s a great deal we can do to reduce our energy demands in the food sector, we just need the proper information to make informed choices. Maybe in the future food will be labeled with a carbon or energy footprint label to allow us to make those decisions fully-informed, but until then we should use the data available and common sense to inform our policy and our personal choices.

 

(1) McWilliams, J.E. 2009. Just Food. New York: Little, Brown, and Company.
(2) Jane Black “What’s in a Number? : How the press got the idea that food travels 1500 miles from farm to plate”
(3) University of Michigan “U.S. Food System”