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Below is an excellent story in the NYT laying out the fundamental arguments why fossil fuels are here for the long term. As the final paragraph concludes:

“The fossil fuel age will be extended for decades. Unconventional oil and gas are at the beginning of a technological cycle that can last 60 years. They are really in their infancy.”

As any public relations practitioner who works in the sustainability space knows, there is an enormous amount of heated argument about Peak Oil and Fuel Security on the internet. And a similar amount about the need to promote alternative fuels as fossil fuels dwindle. Most is opinion; some fact. This article by Clifford Krauss is a foundation piece arguing one side of the debate: the case for a future based on fossil fuels. At the end of the article is a critical point made on the politics of fuel security.

 

New Technologies Redraw the World’s Energy Picture

Published: October 25, 2011

GOLDA MEIR, the former prime minister of Israel, used to tell a joke about how Moses must have made a wrong turn in the desert: “He dragged us 40 years through the desert to bring us to the one place in the Middle East where there was no oil.’ ”

As it turns out, Moses may have had it right all along. In the last couple of years, vast amounts of natural gas have been found deep under Israel’s Mediterranean waters, and studies have begun to test the feasibility of extracting synthetic oil from a large kerogen-rich rock field southwest of Jerusalem.

Israel’s swing of fate is just one of many big energy surprises developing as a new generation of unconventional fossil fuels take hold. From the high Arctic waters north of Norway to a shale field in Argentine Patagonia, from the oil sands of western Canada to deepwater oil prospects off the shores of Angola, giant new oil and gas fields are being mined, steamed and drilled with new technologies. Some of the reserves have been known to exist for decades but were inaccessible either economically or technologically.

Put together, these fuels should bring hundreds of billions of barrels of recoverable reserves to market in coming decades and shift geopolitical and economic calculations around the world. The new drilling boom is expected to diversify global sources away from the Middle East, just as the growth in consumption of fuels shifts from the United States and Europe to China, India and the rest of the developing world.

“Use whatever hackneyed phrase you want, like tectonic shift or game-changer,” said Edward L. Morse, global head of commodity research at Citigroup. “These sources will dramatically change the energy supply outlook, and there is little debate about that.”

This striking shift in energy started in the 1990s with the first deepwater wells in the Gulf of Mexico and Brazil, but it has taken off in the last decade as a result of declining conventional fields, climbing energy prices and swift technological change.

The United States may now have the means to reduce its half century of dependence on the Middle East. China and India may have the means to fuel the development of their growing middle classes. Japan and much of Europe may have the chance to reduce dependence on nuclear power. And, at least theoretically, poor African countries might be able to lift themselves out of poverty.

For consumers around the world, the new fuels should moderate future price increases.

But giving new life to fossil fuels is a devil’s bargain, probably making solutions to climate change, and the development of renewable energy, even more difficult. “Not only are you extending the fossil fuels era,” said Daniel Lashof, director of the climate program at the Natural Resources Defense Council, “but you are moving into fossil fuels that are dirtier and release more carbon pollution in the process of extracting and using them.”

James Burkhard, a managing director of the energy consulting firm IHS Cera, said that competition between fossil fuels and renewable energy development was driven by the price of oil and gas as well as by government policy.

“The unconventional boom will guarantee that the competition is strong for years to come,” Mr. Burkhard said. “If oil costs $200 a barrel, that would provide more headroom forelectric vehicles. But if oil is at $90, alternative, renewable energy will need to compete better on an economic basis.”

Read more in the NYT….

The article concludes with a succinct argument about why governments place a priority on fuel security (locally we can include the protracted dispute over the oil reserves in the Timor Sea):

Power Balances

While many countries stand to benefit from the new energy resources, the United States may have the most to gain.

Before the 1960s, American companies dominated Persian Gulf and North Africa oil resources and made lasting alliances with autocratic governments. By the 1970s, as the United States’ oil production peaked and OPEC and national oil companies took command of the world’s oil, the United States had to accept almost hostage status. Now the tables are turning.

“There is the potential to really rebalance strategic power in the world,” said David L. Goldwyn, former State Department coordinator for international energy affairs. “If we are able to manage significant incremental supply from Canada, from onshore U.S., from Brazil and friendly countries in West Africa, then we can significantly ameliorate the risk of a supply disruption in the Middle East or from other countries that might use oil as a weapon.”

While more energy sources could be a stabilizing factor, competition over the new fields could produce tensions. Already, in the South China Sea, China has warned India’s state oil company not to drill in waters it claims. Turkey recently warned Cyprus against drilling for natural gas without reaching an agreement with Turkish Cypriots over royalties. The political twists and turns are bound to be many. The devil’s bargain looks like a necessity for the United States, China and many other countries, as the continued extraction and use of fossil fuels will come with some environmental degradation. According to the most recent estimates of the Energy Department, world energy demand is going to increase by 50 percent by 2035, largely because of increased consumption in China, India and the rest of the developing world.

Renewable energy will rise as a percentage of energy used, to 15 percent from 10 percent, but that will not provide for the growing demand.

“The fossil fuel age will be extended for decades,” said Ivan Sandrea, president of the Energy Intelligence Group, a research publisher. “Unconventional oil and gas are at the beginning of a technological cycle that can last 60 years. They are really in their infancy.”

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