One hard truth: The era of cheap oil is over. Even the recent glut of US oil and gas was driven by high prices, which gave industry the incentive to use expensive, risky drilling technology.
The latest presidential campaign may be remembered more for what wasn’t said than for what was, especially when it comes to the pivotal issue of energy. We heard assertions that America has a century’s worth of cheap natural gas, that domestic drilling will soon free us of the need to import oil, and that the president of the United States is responsible for high gasoline prices – all exaggerations at best. We didn’t hear the hard truth about our nation’s energy conundrum.
Here’s an inconvenient fact: The recent glut of US oil and natural gas production was driven not by new discoveries or technologies, but by high prices. In the years 2005-08, as conventional oil and gas supplies dwindled, prices for these fuels soared. High prices then provided an incentive for the industry to use expensive, risky technology to drill problematic reservoirs. Companies bought up mineral rights and drilled thousands of wells. High per-well decline rates and high production costs were hidden behind a torrent of new gas, new oil, and old-fashioned hype.
Facts have consequences. It’s thrilling to trumpet robust oil and gas production numbers, but not so cheery to look honestly at our current energy system. There was no straight talk this election year about what growing reliance on unconventional fossil fuels really means: the need for enormous amounts of water for fracking, the high climate impacts from fugitive methane, the threats to groundwater from bad well casings or leaking containment ponds, and the inevitable social disruption to communities in the oil patch, roiled by boom-and-bust economic cycles. Low-quality shale reservoirs require not only fast and furious rates of drilling, but also creative financing – which Wall Street has been happy to supply, in the process inflating yet another bubble.
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As for gasoline prices, aside from temporary gestures like opening the Strategic Petroleum Reserve, there’s almost nothing a president can do since gas prices mostly track the global price of crude oil. As demand escalates from a surging global human population, and as the oil industry goes after tougher-to-access resources (remember the Deepwater Horizon disaster?), costs of production can only rise.
The reality is that America faces profound energy challenges. The “Beverly Hillbillies” era of cheap oil is over. The energy world portrayed in the debates – one in which coal is “clean” and oil and gas companies will lead the US to a new era of energy abundance if unleashed or properly regulated – is an illusion carefully crafted by fossil fuel industry PR professionals and political consultants. The real world is hurtling toward an energy-economy-environment crisis for which no one is being prepared.
Both candidates studiously avoided mention of climate change – which nearly all climate scientists say is tied to our current energy regime. Climate impacts are showing up faster than forecast in even the most “alarmist” scenarios published just a few years ago. Weather anomalies are increasing in frequency and severity –exactly as climate models predict, only faster (think hurricane Sandy). The northern polar ice cap is disappearing before our eyes. Yet the candidates offered no strategy for avoiding or adapting to a chaotically changing climate.
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On some issues, this election offers a clear choice. On energy, differences amount to little more than nuance. Neither side gives voters a sense of the scale of the problem. Neither clarifies the inevitable economic and environmental trade-offs that come with any energy policy. Renewable energy sources have drawbacks too – both economic (intermittency in supply entails a need for investment in storage and transmission) and ecological (covering sensitive desert areas with solar panels destroys habitat).
Neither candidate wants to inform Americans that we need to get used to living with less energy, or that we must adapt to being less mobile. Neither Mr. Obama nor Mr. Romney is willing to help the national conversation evolve from “How can we grow energy production?” toward “How can we shrink our appetites to fit what we can afford and what nature can sustainably supply?”
Pro-growth boosterism may be the lifeblood of politics, but the candidates’ failure to discuss these hard problems serves the electorate poorly at a time when sensible public policies could begin remaking the energy economy as if nature, people, and the future actually mattered.
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The energy-economy-environment conundrum will require action one way or another. It would go much better if we talked honestly before crisis narrows our options.
By. Richard Heinberg and Tom Butler
