During this time one year ago, the BP Deepwater Horizon well in the Gulf of Mexico was finally sealed completely, after 17-39 million gallons of oil had been spilled. I want to commemorate this occasion with an overview of some issues surrounding the oil and gas industry today. I know this sounds like a strange subject for youth, but trust me – someday, this knowledge will come in handy.
1. Oil Spills
The two largest spills in U.S. history to date are the BP Deepwater Horizon spill (2010; 4.9 million barrels) and the Exxon Valdez spill in Alaska (1984; 0.26-0.75 million barrels). But many more spills occur than only those, including four spills this year according to Wikipedia’s List of oil spills. Furthermore, in more totalitarian regimes such as China and Saudi states, the governments (which run oil operations) might not even report spills to the public or other nations.
Another problem with spills is that oil companies often fail to fully assess the risks of their projects and develop effective plans to cope with emergencies. MSNBC’s list of flaws in BP’s response plan to the spill shows the full extent of this problem – in BP’s case, at least. This poor planning is posing more and more of a risk, as traditional sources of oil become depleted and companies start drilling in more and more difficult areas, such as 18,000m deep in the Gulf of Mexico. The poor standards for companies’ emergency plans need to be improved, but so far, there has been little action by companies to improve and political legislature is still unsatisfactory.
Nevertheless, there’s always some good that comes from things, no matter how dire they seem – for example, see UCBComedy’s video below.
[youtube HtfevVB5eBk]2. The Peak Oil Theory
This theory was proposed by M. King Hubbert in 1956, when he was head geologist of Shell Oil. It’s based on the fact that oil is a non-renewable resource and that there’s a finite amount of it available to humans. Hubbert believed that oil extraction would peak in the 1970s, and that after that, production would dwindle while consumption increased, plunging the world into a global energy crisis.
Obviously, this never happened because our oil supplies are still generous. But Hubbert’s theory may not be wrong – just premature. He failed to account for unconventional sources of oil, like deepwater wells, oil shales, or the Alberta Oil Sands, because he was unaware of them. These sources can sustain us for a good while yet, but even if the year is debatable, it’s certain that oil reserves will someday be depleted. Even now, gas prices are rising uncomfortably. We need to prepare ourselves for the day when oil becomes completely unavailable.
[youtube Ulxe1ie-vEY]3. The Alberta Oil/Tar Sands
The U.S. has long been the world’s major consumer of oil (although China and India now pose a threat to that title) and initially, nearly all of that oil came from the light oil fields in the Middle East. However, since 1988, the U.S. has shifted to importing more and more of its crude from Alberta’s Oil Sands, since Canada is much closer and has a stable political regime.
Nevertheless, despite these good traits of Canadian oil, the product itself is inferior to light oil. In the Middle East, oil simply lies on the surface and is simple to retrieve, energy-wise: for each barrel of energy used to produce oil, the fields yield an incredible 30 barrels in return. In Alberta, though, oil extraction is a different story: 90 per cent of reserves in the Sands are underground and frozen nearly solid, which means that pipes must be laid underground, steam pumped in to thaw oil, and then the oil must be pumped back up. This process is both energy- and resource-intensive, but the good news is that innovation occurs at a furious pace in this field.
Because of their environmental drawbacks (mostly greenhouse gas emissions, deforestation of Alberta’s boreal forest, and threat to wildlife) and “dirty oil,” environmental groups the world over are opposed to Canada’s Oil Sands. But in 2010, this criticism was met by Ezra Levant in his book Ethical Oil (it was published before the BP disaster). Levant’s main argument is that the Sands’ crude is superior to other countries,’ because buying Canadian oil doesn’t support unethical abuses of power by other governments and businesses; it’s a similar analogy to blood diamonds vs. Canadian Polar Ice diamonds. Levant also provides extensive evidence that the Sands are not as bad as environmental organizations declare.
Overall, my personal take on the Sands mirrors Levant’s. Having spent over 30 hours on this topic for my IB Extended Essay, I think the Sands are a decent resource, that the companies are conscientious and respect the environment as much as possible, and that the oil and gas industry almost always works to improve (BP’s reaction to their spill seems to be an exception).
Conclusion
It’s hard to predict where oil will go from here. In developed nations, our dependence on it seems to be decreasing, but China and India are only getting started on their own oil addictions. Furthermore, we still don’t have any alternate sources of energy or technologies that can match oil’s abundance and energy richness. Our dependence on oil, and its superiority over other fuels, does seem to be changing, as indicated by the growing trend in manufacturing hybrids and electric cars, but it’s equally possible that the big corporations will use their clout to stop this transition and keep us hooked on oil.
Personally, my suggestion to anyone wanting to become more oil-savvy during this time is to watch and wait. We’re in the middle of an energy revolution – albeit a pretty slow one – and I say the best strategy for now is to spread your eggs out among as many baskets as possible. In the meantime, be a considerate oil consumer: check where the oil you buy comes from, look into the companies from which you buy, and try to decrease your dependence on oil as much as possible. By buying what you do, you tell companies what their customers support and oppose, and if many customers work together to do this, the companies listen. So think before you buy, and set an example.
