Monday, May 10, 2010

Demand for oil make risks of drilling necessary
McClatchy News Service

WASHINGTON -- To meet the world's boundless thirst for oil, drillers are searching in the sand and mud of remote western Canada, the tough shale rock of North Dakota and more than a mile under the seas off the southern U.S. coast, where a drilling accident has sent hundreds of thousands of gallons of crude spewing into the Gulf of Mexico.

Why are we going nearly to the ends of the earth and the bottom of the seas for oil?

The answer, say many experts, is that we're consuming as much oil as we ever have but the era of ``easy oil'' is in our rearview mirror and receding fast.

Production from onshore oilfields in the U.S. has been declining since the 1970s, and near-shore production along the Gulf of Mexico peaked more than a decade ago. Many of the richest remaining conventional deposits are in places that are politically unstable, such as Iraq and Nigeria, or hostile to Western oil companies, such as Sudan, Venezuela and the Middle East.

While Americans remain tethered to a petro-driven economy, and surging demand from China and other emerging markets is driving up global demand, the quest for new sources requires more money and technological wizardry than ever before. As anyone tracking the massive Gulf spill can attest, it brings greater risks as well.

``No one goes and tries to drill in a mile of water if they can think of somewhere easier to do it,'' said Chris Skrebowski, a former strategist for British Petroleum who now runs a London consultancy that studies oil depletion.

``The easy stuff that you have access to . . . is already spoken for. All that's left is the frontiers, which are necessarily more technically challenging.''

The 21st century search for oil is testing the limits of science and the environment. It also presents the Obama administration and Congress with a policy problem to which there's no easy solution.

Weaning the U.S. off oil has never been politically convenient, and it's even less so with the nation slowly climbing out of a deep recession. The most promising approaches include sharply higher gasoline taxes and mileage standards and increased use of nuclear power, wind, solar energy or geothermal power -- all of which have their own drawbacks.

Pushing ahead with unconventional drilling in the wake of a major spill could seem risky, but putting the brakes on exploration would worsen what analysts warn is an impending oil price crunch as world demand increases and production slows.

Other major new horizons include the claylike tar sands of northern Alberta, in Canada, and in dense shale rock formations scattered across the U.S. Tapping each of these sources is freighted with costs and complications that would have been unthinkable in the oil industry a decade ago.

Large shale formations such as Bakken in North Dakota and Barnett in Texas are thought to contain the light sweet crude that's highly prized by oil companies. However, environmental groups have questioned whether the technique used to release the oil from the rock -- deploying a mix of water, sand and chemicals to create cracks in the shale -- could contaminate groundwater sources.

Extracting oil from the Canadian sands, meanwhile, requires chopping down vast swaths of forest, steam-heating the earth to release the crude, and then refining it -- a process that scientists say produces three to five times the greenhouse-gas emissions of conventional oil refining.

However, many say the economic forces driving unconventional oil production are too strong. The Obama administration has said BP is responsible for the spill and will pay for the cleanup. Tighter safety standards on offshore drilling are likely to follow.

Except none of this will force Americans to use less oil.

``If you want to drill less, you have to significantly decrease your demand for the stuff,'' Maass said. ``Patting ourselves on the back for fining BP, increasing safety standards, making more areas off-limits to drilling -- it doesn't get at the fundamental problem . . . which is our high consumption of oil.''

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