Sunday, November 20, 2011

What's the Greenest Revolution We Can Hope For?

President Obama made waves about green jobs during the 2008 campaign and in his subsequent stimulus bill, while Sarah Palin and the Republicans shouted “Drill baby drill!” But the larger story in American energy over the past few years didn’t involve federal spending or exposing protected wilderness areas to new drilling. Rather, America’s energy equation shifted due to technological innovation and market pressures that encouraged oil companies to bring vast quantities of North American fossil fuels to market.

The oil and gas industries are currently tackling projects that weren't formally technologically feasible or economically viable, with mixed results. Oil and natural gas become cheaper when supply increases, but each adventurous new well and mine increases pollution, expands the potential for catastrophic failure, and deepens global dependence on fossil fuels.

It's difficult to nail down how much oil and gas remain underground, but fairly easy to say that most new deposits aren't as easily exploited as the fields that once boomed in Texas, California, and the Middle East. Increasingly, oil-rich countries have pushed out international oil companies in favor of nationalized monopolies that can better trap the profit to finance government spending (Saudi Arabia) and/or personal enrichment (Qaddafi's Libya).

The expulsion of major oil companies (Exxon Mobil, Royal Dutch Shell, Chevron, and BP) from many of the fattest fields didn’t drive them into bankruptcy, but it did force consolidation (mergers) within the industry and a turn to experimental techniques that open hard-to-reach deposits. This industry wants to survive without the pain and second-guessing that comes with a radical shift in practice. Until markets and/or politics force traditional energy corporations away from the black devils they know and towards less-familiar solar, wind, or geothermal technologies, our fundamental dependence on fossil fuels is unlikely to change. Indeed, it will only get dirtier, riskier, and more expensive.

The most infamous method in this new bag of tricks is hydraulic fracturing, commonly known as fracking. By blasting mixtures of water, sediment, and chemicals into rock formations, drillers can fracture those rocks to release natural gas that’s trapped within. Unfortunately, fracking wells sometimes fail to contain the toxic mix of chemicals and methane that they produce. Additionally, each well requires massive amounts of water and energy to initiate the flow of natural gas, and gas development leaves a heavy footprint on communities that it enters. Concerns about water quality, habitat destruction, and human health all weigh against promised industry jobs and potentially substantial new tax revenues when fracking comes to town.

International oil companies are scraping the bottom of the accessible oil barrel, and now have to drill deeper and go farther afield in pursuit of extractable oil. The 2010 explosion and unprecedented oil
Canadian tar sands development
spill at BP’s Deep Water Horizon platform highlighted the riskier environments in which modern drillers operate. Shell’s push into Arctic off-shore drilling is part of the next wave of oil exploration in dangerous conditions where international energy giants wouldn’t go if they had better options (that fit their self perception and expertise). Even relatively stable operations like the Athabasca tar sands oil in Canada pose higher environmental and financial costs than cleaner and higher-quality deposits. Oil and gas companies push these frontiers because high energy demand gives them the profit margin to innovate and the incentive to take a second look at less-than-ideal sources.

On the other end of the energy industry spectrum, solar and wind generating capacity has been growing by leaps and bounds over the past decade. China’s substantial subsidies for the production of solar panels have helped to drive prices down 40% in 2010 alone. That same year, 17 gigawatts of solar power were installed around the world, roughly equal to 17 large nuclear power plants. Still, solar power doesn’t yet beat coal- or natural gas-based electricity on price, and renewables remain a tiny fraction of global generating capacity. Accounting for pollution and greenhouse gas externalities would narrow the price gap.

There’s debate over whether solar will continue to experience the dramatic price declines that some have compared to the Moore’s law of computer processing power, but trends seem to point towards cheaper solar. As Brad Plumer notes on the Washington Post’s Wonkblog, “The International Energy Agency projects that solar could provide more than half of the world’s energy needs by 2060 if costs fell to $100 per megawatt hour — around 50 cents per watt installed. (At the moment, solar panels are gunning for the $1-per-watt threshold.)”

Solar and wind installations still require resources and energy as they are produced and installed, but conservationist critics must remember the impacts posed by the alternatives. NIMBYism (not in my backyard) bumps up against almost all development, but solar and wind impose far fewer externalities on their surroundings than fossil fuel infrastructure.

Unfortunately, solar and wind aren’t yet the silver bullet for our energy needs, due in large part to one technological hurdle--low-cost, adaptable electricity storage. Clouds sometimes blot out the sun and winds don't blow constantly. Without a medium--batteries, hydrogen, or hydraulics--to store electricity from renewables when it's plentiful and dispense it on command, renewable energies will remain the icing on a largely fossil fuel cake. Today, most clean-power installations require back-up from natural gas, nuclear, or coal plants to even out gaps between supply and demand.

Apart from renewables, many commentators and industry observers embrace fracked natural gas as a clean, cheaper solution to our energy security and pollution problems. It’s true that natural gas burns cleaner than coal, can be translated into vehicular transportation, and keeps some American energy dollars from reaching antagonistic petro-regimes. Like it or not, natural gas will play an increasing role in our future energy mix. Still, most shale gas boosters treat their new favorite fuel with kid gloves, blaming reports of environmental damage and human suffering on “a few sloppy,” “rogue” companies.

Each dollar pumped into shale gas development, each mile of pipeline laid, and each gallon of water injected thousands of feet underground represents a lost opportunity to invest in a cleaner and more sustainable future. These activities create jobs and Americanize our energy supply, but so do renewables, with far less collateral damage.

As long as climate change and other externalities aren’t incorporated into the decisions of individuals and businesses, our wealth will be allocated and our future written based on incomplete information. Once communities and countries force markets to accurately price the health and environmental consequences of new drilling, alternatives including renewables and nuclear energy will become more competitive.

This isn’t a call to ban oil and gas exploration in the United States; that would be counterproductive. Unless demand for fossil fuel-based energy declines, the supply will be found, whether domestically or overseas. NIMBYism and a love for the land we see each day are powerful reasons to compel strict safety and pollution controls for domestic resource extraction. That passion is misplaced, however, when it exiles drilling to countries that lack the expertise, resources, and political will to demand responsible behavior from international corporations.

The Third World counterpart to the Deep Water Horizon can be found along Nigeria’s coast, where
international oil companies have extracted oil worth billions of dollars over half a century with little
"The Ogoni people say their land has been devastated
by pollution from the oil industry"(BBC)

regard for the environmental and human catastrophe that they’ve created. This August, a UN report estimated cleanup costs for the Ogoniland region of Nigeria at more than $1 billion and that the process would take 25-30 years to complete. In such a context, petro dollars destroy the balance and health of a society and its institutions, corrupting politicians, public health, and the natural world on a scale unimaginable in modern America. Ignoring pollution that takes place out of sight is not an effective or ethical response to our energy dilemma.

Where does this leave our energy future? Fossil fuels will remain a substantial part of our energy portfolio for decades to come even as renewables become progressively cheaper through technological progress. Talk of escaping from unclean energy is not yet realistic, but incorporating present-day externalities into the market’s calculus will go a long way to shifting the world’s focus towards low-emission technologies. Already, most countries recognize, to varying degrees, the costs created by industrial pollution, and set limits driven by their citizens.

We’re still in the early phases of a painful yet liberating transition from fundamentally limited resources that darken our skies and our opportunities. The rate of that change and our condition at its conclusion depends on our courage to address the greatest man-made threat to life as we know it since atoms split over Hiroshima. Unlike climate change, nuclear arms have always been an exclusive responsibility, wielded by the few. Paying the full price of industrial pollution and reducing our environmental footprint requires sacrifice, engagement, and change from us all.