(Individual license -- watch at home or own your own with a friend.)
The rise of extreme energy, the end of economic growth, a new way forward
Narrated by Emma Thompson, this award winning documentary looks at where we are going to find our oil and gas today- to the ends of the earth. It chronicles the rise of extreme energy and finds us at a civilizational crossroads.
DOC LA Film Festival- Best Environmental Film 2016
Milan International Film Festival- Special Jury Mention 2017
Planet in Focus Film Festival (Toronto) 2016
“That’s an incredibly important milestone, in terms of the human race”. David Hughes, film subject, describes the turning point we are now facing, as evidenced by the rise of extreme energy.
A few statistics underline this point: 85% of all the energy we use is hydrocarbons, oil, gas and coal; 99% of all the labour done in society is done by fossil fuels (Tulett Prebon, Energy, Finance and the End of Growth)
Clearly this is an important resource for our global economy, but is it perhaps declining rapidly in quality?
What follows here are more in-depth explorations of the ideas presented in the film, along with research links for you to find out more.
THE FILM’S INTRODUCTION
In 2010, the International Energy Agency (IEA), in its World Energy Outlook, announced that 2006 was the global peak of conventional crude oil production. In other words, we would never produce more crude oil then we had in 2006. This seismic pronouncement, however, did not spark panic in global financial markets, as it was couched in language that made it appear as though nothing would really change. "Liquid fuels production would increase until 2030," it said, "as long as huge investments in infrastructure are made." It made no mention of where the money for these ever increasing investments would come from.
An example of the global peak of conventional crude oil production is the Ghawar field in Saudi Arabia. This is the largest oil field in the world, a field that has been feeding North American gas tanks since the 1950s. Today, the field needs to have sea water injected into it, an "enhanced recovery" method that indicates the field has not much more of its easy flowing crude oil to give to us (12 paragraphs down). The largest oilfields in the world were all discovered between 1930 and 1960, and if we make such discoveries today (such as the recent Petrobras find off the coast of Brazil) they are in remote, inaccessible and therefore hugely expensive locations.
No matter, governments and corporations tell us, we have huge amounts of "unconventional" resources available to us. Geologists like to use the metaphor of the "resource pyramid". At the top of the pyramid are free flowing conventional sources of oil and gas, such as North Sea Brent crude of today, and West Texas Intermediate crude of yesteryear. The top of the pyramid is narrow, and as such there are not a lot of these types of crude available to us. As we travel down the pyramid we have far greater resources available to us, but can these resources be extracted at a cost that is not too great — either to the economy or the environment? Are the energy returns of these new unconventional fuels great enough to fuel our society?
What are the economic implications of declining energy returns? Are the technologies being proposed really the game changers that industry is claiming them to be?
Is this the dawn of new era? Are we witnessing the rise of extreme energy?
THE ARCTIC — UNDER THE ICE AT THE ENDS OF THE EARTH
According to the United States Geological Survey (USGS), the region above the arctic circle holds 90 billion bb of oil. This represents about 3 years global oil supply only.
There are costs to wildlife and subsistence hunters that live in the area. Seismic testing for oil is damaging the marine environment.
The multinational oil giant Shell is quite familiar with the rigours of Arctic drilling. On New Year’s Eve, 2012, a tow line connecting the tow ship Aiviq to Shell’s prize drill ship the Kulluk snapped in a violent storm near Kodiak, AK. The Coast Guard stepped in to rescue the 18 souls on board, and Shell’s drilling program in the Arctic was set back as they announced withdrawal of their plans to drill in 2014. Meanwhile the Kulluk ended up in a scrapyard in Singapore. Billions of dollars spent, and not a drop of oil yet recovered from the Chuckchi Sea.
FEEDING THE BEAST
Edwin Drake struck oil in Titusville, Pennsylvania on August 27th, 1859, and the petroleum age was born. Ironically, the investors funding his project had grown impatient, and they decided to cancel the operation, sending a letter to Drake instructing him to pull up stakes and move on. He didn't receive the letter until after he had struck oil, and thus the beginning of the petroleum age was not delayed.
In our modern times, a historical event of an arguably similar magnitude has passed by with little discussion about the societal implications. It’s 2003 and American bombs are raining down on Baghdad. The price of oil begins to climb. The US Energy Administration (3rd paragraph) decides to reclassify Tar Sands Bitumen, a massive petroleum resource in Northern Alberta, as "recoverable" barrels of "oil", whereas previously they were considered unrecoverable. The sky-high price of oil now justifies huge capital investments in this backwater project, and soon all the oil majors have bought up leases in the Tar Sands. By 2006 the industry is producing 1.5 million barrels a day, and they rename the resource "oilsands" to give it the ring of something familiar to us (bitumen is a hydrocarbon cousin of oil). As Baghdad burns, Calgary booms. Is it the birth of a new energy age?
A key difference between this resource and conventional oil is the amount of energy it takes to produce it. Researcher Ben Parfitt has investigated this in detail in his report “Fracking up British Columbia”. A dam called the Site C Dam is proposed to meet burgeoning power needs in B.C. The official story is this power is needed for homes, and given the diffuse nature of the energy grid (the power can go anywhere in North America) this is likely partly true. But Parfitt claims “the drive to increase hydro power is coming from industry” — industries such as the shale gas industry which produces gas from hydraulic fracturing, an energy and water intensive process that has risen up to replace conventional gas drilling in Canada.
David Hughes, a researcher who worked with Natural Resources Canada for numerous years, states that his research shows that Canada peaked in conventional natural gas in 2006, and is now down 20% from the peak already. The only way to get large amounts of gas today is to frack. The shale gas industry projects an 8 fold increase in their power demands (Parfitt, p. 27). Where they will get the power from to do this is unclear, as Site C is only a proposal at this stage and 3 Site Cs would be needed to accomplish this desired increase.
There are many environmental issues associated with both the Site C dam and shale gas operations fed by this dam. The dam itself will flood 7,841 acres of prime farmland, leaving people like Ken and Arlene Boon, farmers, and Gwen Johanssen, mayor of Hudson’s Hope, high and dry (they will lose their land). Shale gas, for its part, requires massive amounts of water; up to 600 olympic swimming pools of water are used at some sites. Lana Lowe, lands director at Fort Nelson First Nation, found her favorite fishing spot, Two Island Lake, drawn down by 15 cms as a result of one of the world’s largest single frack jobs.
Robert Howarth from Cornell University conducted a study on the carbon intensity of fracking operations and found this to be a form of extraction that makes gas as carbon intensive as coal. This is due to “substantive methane emissions”. (Howarth, Robert and Santor, Renee and Ingraffea, Anthony. “Methane and the greenhouse gas footprint of natural gas from shale formations.” Climate Change Letters. March 13, 2011.)
Parfitt states in his report that 55% of the fracked gas now goes to the Tar Sands — “dirty gas to make dirty oil” he says. When considering the environmental and economic impact of a dam (or several eventually), and the energy required to make fracked gas and pipe it to the Tar Sands a province away, we begin to realize that we are “feeding a beast”.
THE END OF GROWTH
With all the energy inputs required to feed such a beast, we need to ask ourselves questions about the energy returns and economic implications of declining energy returns. “The footprint of oil is in 90% of all goods we consume — therefore the current narrative that energy doesn’t matter (it is considered an outlier in mainstream economics) is ridiculous.”(Heinberg, Richard: The End of Growth: Adapting to our New Economic Reality, 2011) I interviewed Richard in Napa Valley, CA.
This does not manifest itself as “running out of oil”, but rather running out of oil that’s affordable enough for our economy to bear its cost.
Charles Hall, professor of Environmental Science at the University of Syracuse, NY (interviewed in Denver, CO., October, 2013), states that conventional crude oil and gas reserves have given us energy returns that are so good that it has enabled us to not even make energy part of our conversation anymore. Hall is the founder of the concept of Energy Return on Investment (EROI) which is a measure of how much energy it takes to make energy. His research has shown that in the 1930s the energy returns were so good that one barrel of oil energy equivalent gave us a hundred barrels of oil in return — an excellent ratio that allowed for the exponential growth of our society. Today, we chug by on returns as low as 2 to 1 (in certain steaming projects in Alberta’s Tar Sands; the mining projects have better returns of 5 to 1). Hall estimates that energy returns of 15 to 1 are the minimum necessary for modern industrialized society. The following gives the ratios for the different fuels examined in this film, as well as for renewable energy sources:
Tar Sands Bitumen (the steam assisted projects, as opposed to mining — recent research from the University of Calgary shows that some the steam-assisted projects featured in the film (Wallace King portion) are actually energy negative. (Gates, I.D. and Larter, S. Energy Efficiency and Emissions Intensity of SAGD. Fuel, 115:706-713, 2014. )
Shale gas (such as the Horne River Basin) — 10 to 1 (though depletion rates of wells are very fast, up to 60% after three years).
Oil shale (i.e. kerogen, the “rock that burns”) — Unknown, but thought to be 1 to 1 or energy negative
Wind Energy — 15 to 1
What is the impact of all this economically? Many authors have written about a “net energy cliff” — the point at which the energy returns are too low to power our society and economy in its current form. This does not manifest itself as “running out of oil”, but rather running out of oil that’s affordable enough for our economy to bear its cost.
Dr. Tim Morgan, former head of global research for the risk analyzing brokerage firm Tullett-Prebon examines in his report “Perfect Storm — Energy, Finance and the End of Growth” what he calls “the headwinds” of our globalized economy. They are as follows:
Crushing debt that all industrialized countries are now bearing: economies thus become dependent on debt fueled consumption, and any reversal in debt availability is bound to unwind the largely illusory “growth” created by debt fueled consumer spending. Mistaking debt fuelled economic expansion for real growth and governments spend accordingly (p. 24). In other words, spending money we simply don’t have both at a personal and national level.
Massaging of economic data to the point where economic trends are obscured — lack of regulatory oversight to hold corporations and individuals accountable.
Fallout from the biggest debt bubble in history — 2008 global meltdown — the effects of which are still being felt today.
And of course, the most permanent and unavoidable of all: The approach of an energy returns cliff edge.
As concerns the net energy cliff, how can it be that with so many resources available to us, and energy companies and governments claiming that we have 500 years of resources available to us, how can it be that there is a problem of any kind?
Jeremy Rifkin, who was not featured in the film but could well have been, talks about the “Zero Margin Cost” society.
UTAH OIL SHALE — THE ROCK THAT BURNS
“Water, water everywhere, and not a drop to drink”
—Samuel Taylor Coleridge
David Hughes uses the analogy of the “tap vs. the tank”. The “tank” is the resource itself, which is absolutely huge. The oil shale in Colorado for example is actually three times the size of the Tar Sands of northern Alberta, which is considered the second largest deposit of petroleum in the world. The “tap” however is what that resource has to come out of — in other words how we need to deliver it to society — and the tap itself is tiny. And our economy can only bear a certain price of extraction: if the price goes too high, the economy contracts; if it stays high, the economy collapses eventually. With no alternatives available to us, no magic bullet waiting to save us, we face a forced human renaissance.
The Ute Nation, the tribe which the state of Utah gets its name from, were the first to discover the properties of oil shale. They observed when making campfires near this type of rock, that it would occasionally catch fire, and they called it “the rock that burns”. It is a form of "oil" called kerogen, a waxy substance that is a geological precursor to oil. Extracting the hydrocarbon from the rock requires mining it first and then inputting massive amounts of energy and water to refine it into something that is normally used as a low-grade bunker fuel. The energy returns have never been calculated, but they are thought to be 1:1 or perhaps even negative. It is, in short, the worst form of oil in the world.
This has not stopped companies like Enefit and Red Leaf Resources, as well as oil giants like Exxon Mobil from making huge plans to develop this resource. The Green River formation is the largest reserve of oil shale in the world, but it is unfortunately also located in the second most arid state in the US, Utah. A US government website touts the resource enthusiastically: “A moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If (my emphasis) oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of recoverable oil from the Green River Formation would last for more than 400 years.” (Source) While the government enthuses about the potential jobs, revenue and energy, it neglects to mention that the all time production record for oil shale was only 18, 400 barrels a day (Hughes, David, “Drill, Baby Drill”, 2010), a far cry from the 20 million barrels needed to meet US demand per day. Oil shale is only economically justifiable when the oil price is very high, and paradoxically, when the oil price is high it kills demand for oil, so it is hard to imagine a time that oil shale might be profitable. To this day it is still uncertain whether or not oil shale can be done profitably, and certainly not at a worldwide scale.
NUKES FOR OIL
Unconventional oil, due to the difficulty of extraction, is essentially a cannibal of other energy sources.
In an internal document marked “restricted” which I have obtained, the corporation SNC LAVALIN outlines the prospect for nuclear energy as a replacement to natural gas as a feedstock to make Tar Sands oil. Comparing it to the US push to put a man on the moon in the 1960s, it lays out a bold plan to inject massive amounts of capital investments to deploy nuclear energy in the service of making oil.
It sets as a timeline a requirement of 15 years' lead time to fully deploy nuclear power in the Tar Sands. It also describes in detail problems associated with nuclear energy. Some of these problems are well known and yet represent relatively unlikely outcomes: the risk of nuclear meltdown (which has happened only three times in history), terrorism threats, etc…. However, another key concern less well known, the use of massive amounts of water to cool the plants, puts yet another straw into already tapped rivers and lakes in Alberta. It also creates nuclear waste to add to Tar Sands waste. Furthermore, mining uranium and shipping it to the Tar Sands in order to provide it as an energy source to make oil lowers the energy returns (Nuclear = 10:1 EROI) even further, as well as putting the oilsands industry at risk of commodity price shocks from another industry: the report notes the tenfold increase in the price of uranium over a seven year period (due to scarcity of uranium). It’s not just peak oil right now — it’s peak everything. A solution to this problem would be to reconfigure the economy in order to use energy for its original intended purpose, not sacrifice declining uranium and natural gas stocks to make Tar Sands oil at a huge energy loss.
A NEW WAY FORWARD
Realizing that oil is declining in quality rapidly may lead some people to want to double down — “Drill, Baby Drill” is the familiar chorus of the ignorant. Or perhaps we should just switch to renewables. Well yes, but with wind energy at 15 to 1 it’s only just powerful enough to maintain a globalized society — if we had all the infrastructure in place. It may take up to 30 years to build a world free of fossil energy — we don’t have that kind of time. The solution exists in voluntarily shrinking our world, localizing economies and removing fossil fuel energy from food production wherever possible.
STOPPING THE MADNESS — SOLUTIONS
Albert Einstein once said that you can solve a problem using the same kind of thinking that created the problem in the first place. A new paradigm is required.
A Just Transition sees the people employed in new, profitable industries that create far more jobs and are far more democratic than the oil industry ever was.
Enter the Transition Movement. First conceived of by Rob Hopkins (whom I have interviewed for this film, though later cut) in Totnes, England. It is a movement which specifically is built around the twin threats of climate change and peak oil, and seeks ways to build resilience into localized societies. “Resllience is the new sustainability,” Richard Heinberg said in an interview I conducted with him. Resilience is defined as creating the building blocks of society locally, with small community governance, and being completely unaffected by what is happening at the national or international level. If global food stocks are cut back severely due to natural gas shortages — not a problem, we have put in place community-based permaculture systems and are feeding ourselves independently. The Transition Town idea was developed in Kinsale, Northern Ireland, in 2005 by Hopkins, a permaculture teacher. He instigated a community-designed "Energy Descent Action Plan" which set out practical steps that might be taken by Kinsale to reduce its carbon emissions and prepare for a post-cheap-oil future – in terms of creating transitions to more sustainable socio-technical systems and infrastructures. In practice this translates as “build[ing] the town's resilience, that is, its ability to withstand shocks from the outside, through being more self reliant in areas such as food, energy, health care, jobs and economics” (Transition Town Totnes, 2008). The movement’s rationale is:
“Climate change makes this carbon reduction transition essential; Peak oil makes it inevitable; Transition initiatives make it feasible, viable and attractive (as far we can tell so far...)” (Transition Towns Wiki, 2009). Moving from concept to application, Hopkins outlines the four key assumptions of the movement:
"that life with dramatically lower energy consumption is inevitable, and that it’s better to plan for it than to be taken by surprise;
"that our settlements and communities presently lack the resilience to enable them to weather the severe energy shocks that will accompany peak oil;
"that we have to act collectively, and we have to act now;
"that by unleashing the collective genius of those around us to creatively and proactively plan our energy descent, we can build ways of living that are more connected, more enriching and that recognize the biological limits of our planet."
Thus, Transition is an empowering way forward for building the new society we will have no choice but to build in short order.
A really useful movement/idea that has come out of this dying fossil fuel age is the idea of a Just Transition. Simply put, if we are to intentionally collapse an entire oil and gas industry because of the dangers to humanity, then we need to be accountable to the human assets of these industries. A Just Transition sees the people employed in new, profitable industries that create far more jobs and are far more democratic than the oil industry ever was.
Naomi Klein, featured in this film, cites research from the CCPA that states that a given amount of capital investment in renewable energy will create 7 times more jobs than the fossil fuel industry.
A really coherent policy document addressing all the challenges, one which has attracted a great deal of controversy in Canada, is the Leap Manifesto.
Similar to this are the ideas of Degrowth. Wikipedia defines it as follows:
Degrowth (in French: décroissance, in Spanish: decrecimiento, in Italian: decrescita, in Catalan: decreixement), is a political, economic, and social movement based on ecological economics, anti-consumerist and anti-capitalist ideas. It is also considered an essential economic strategy responding to the limits-to-growth dilemma (see The Path to Degrowth in Overdeveloped Countries and Post growth). Degrowth thinkers and activists advocate for the downscaling of production and consumption — the contraction of economies — arguing that overconsumption lies at the root of long term environmental issues and social inequalities. Key to the concept of degrowth is that reducing consumption does not require individual martyring or a decrease in well-being. Rather, "degrowthists" aim to maximize happiness and well-being through non-consumptive means — sharing work, consuming less, while devoting more time to art, music, family, culture and community.
In her film Life After Growth (2010), Degrowth theorist and filmmaker Claudia Medina speaks to the ideas of this movement. Her short film is an excellent exploration into the Degrowth world.
To grow or not to grow — that is the question. Though it’s not much of a question since growth comes from fossil fuels and they are too poor quality to allow us to grow any more.
So… where do we go from here?