by Martin Empson
Socialist Review, May 2012
Oil has been in the news recently, not least because the first few months of 2012 saw some of the highest ever prices for crude. The threat of war on Iran, instability in oil-rich Nigeria and the ongoing economic crisis combined to push prices above $125 a barrel. This is below the record of $147 set in July 2008, but the weakness of the pound and euro means that, in reality, the price is much worse for European consumers.
This short-term peak in prices has roots in these immediate events. But there is a longer-term trend pushing up oil prices. For almost a century the industry has been expanding on the enormous profits that can be made from readily accessible oil. Now this “easy” oil is running out and increasingly the multinationals have to turn to harder to access “extreme energy.”
There is still debate about whether we have reached peak oil – the point when the maximum rate of production of oil is reached. Some studies suggest we have passed it, others say that it is just around the corner. Once that peak passes, more and more effort has to be put in to extract oil. In other words, it becomes more expensive.
As a result, even if the economic crisis passes, oil prices will continue to rise as demand outstrips supply. In order to keep the fuel flowing, oil companies have to exploit resources of gas and oil that were not previously economically viable, or could not be touched because they were in environmentally sensitive areas.
Politicians around the globe have proved sensitive to the needs of the oil industry and there is likely to be increased pressure on them to allow drilling and mining in previously forbidden areas.
Of course, this is not new. As part of its attempts to reduce its reliance on foreign oil, the US has been allowing oil companies to access new sources of hydrocarbons for several decades. An attempt by George W Bush in the mid-2000s to allow drilling in the Arctic National Wildlife Refuge in Alaska was blocked by Congress. But other expansions did go ahead.
This did not stop when the oil-president was replaced by Obama. A few weeks before the Deepwater Horizon disaster, Obama gave the go ahead for oil and gas drilling at new offshore sites in the Gulf of Mexico, Alaska and areas of the Atlantic.
The Deepwater Horizon disaster sums up the difficulties of relying on extreme energy. Before the explosion, which killed 11 workers and released five million barrels of crude oil into the sea, the rig was drilling some of the most remote oil ever accessed.
Operating in water a mile deep, Deepwater Horizon was drilling two and a half miles below the seabed. The technical complications associated with drilling like this made solving the leak extremely difficult. The ecological consequences have been horrific.
It is enormously energy intensive to access oil like this. In the past, traditional oil rigs might have had a return of something like 100 times the energy put in – in short you burn a barrel of oil to get 100 back. With rigs like Deepwater Horizon, the return is something like four to one.
Canada’s Tar Sands represent extreme energy in all its appalling reality. An area the size of England has been deforested while indigenous peoples have seen their communities poisoned. Enormous quantities of natural gas are burnt to provide the energy to get the oil from the sand, producing five times as much greenhouse gas as conventional forms.
While little of the tar sands oil reaches Britain, some of the funding for it comes from the Royal Bank of Scotland, which reaps large profits from the destruction of Alberta.
Another form of extreme energy that has reached the UK is hydraulic fracturing or “fracking”. This is a method of getting at shale gas – natural gas that is trapped deep in the ground in tiny spaces in rocks. Conventional drills cannot get at this, so instead very high pressure fluids are pumped into the rock, fracturing it and releasing the gas. What exactly is in the fluid is a trade secret, though the cocktail of chemicals has caused contamination of ground water at sites in the US.
As you can see on YouTube, some residents have found their tap water becomes flammable following fracking in the vicinity of their homes. The first test drilling in Lancashire was suspended recently when it produced two minor earthquakes.
The problem with getting all this fuel from the ground is that we already have so much that when it is burnt, it will cause catastrophic climate change. Extracting more hydrocarbons can only accelerate that process.
Here in the UK campaigners have been organising in the locations where companies want to get fracking. A recent conference in Manchester brought together many groups with the direct action organisation Frack-Off. The result was a national anti-fracking network.
One of the interesting things about the conference was the way that campaigners had made the jump from opposing fracking “in their backyard” to making the links to environmental and economic questions. But it is not enough to say, “Leave the oil in the ground” – we have to find real alternatives and the campaign for “One Million Climate Jobs” fits well in this context.
Extreme energy sources raise fundamental questions about the economic system we live in. The fight against extreme energy is also a fight against the very soul of an irrational system.