Oil & Gas: Why ‘Keep It In The Ground’ Is A Formula For Environmental Disaster

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The environmental lobby has mislead many well intentioned companies and intelligent individuals with the “keep it in the ground movement”.   That logic only applies to “western societies” and has sadly resulted in serious efforts to block even the cleanest Oil & Gas projects for the last decade.  The most recent tactic is to block the infrastructure required to make Oil & Gas functional; in particular pipelines are being opposed at every turn.

These next two points should clearly demonstrate that “keep it in the ground” is both naive and environmentally damaging.

1: OIL & GAS GROWTH THROUGH 2040

The fact is that the most scientificly trustworthy energy industry research body in the world, the International Energy Association (IEA), agrees with dozens of other government and industry analysts that Oil & Gas demand will continue to EXPAND through the year 2040.  2040-2050 is the magic decade when China and India will have moved most of their citizens into the middle class.

Before you start thinking, ‘but wait, that will change if we ‘go electric”, note that the IEA is expecting massive amounts of electrification in the next 20+ years and has already wrapped those expectations into their projections.  If we don’t have substantial electrification (solar, wind, electric cars,…) 2040 will not be the

Keep in mind the word EXPAND.  This means that at about 2040, the world will not have stopped using oil and gas; this means that consumption will have peaked.  After 2040, there will take between 100 to 200 years to cycle out of petroleum based products.

iea-world-energy-demand-change-2016-2040

2: SUPPLY WILL BE PRODUCED FROM THE WORST ENVIRONMENTAL OFFENDERS

If you are someone who finds the oil & gas sector abhorrent then you can think about it in terms of something terrible like child pornography.  (Surely you do not find the industry as repulsive as that but lets use it as a logic extension.)  Do you think child pornography will ‘go away’ just because it is abhorrent?

As the saying going, “Wishing, it not a plan”.  If we manage to “keep it in the ground” in Canada, the US, Norway, UK and other environmentally responsible producers, it will be supplied by the worst environmental offenders.

In 2018 those ugly oil producers are countries like Nigeria, Russia and Venezuela which have long track records of environmental and human disasters that are so constant they do not even make the news:

Constant oil spills devastate Russia: Environmentalists estimate at least 1 percent of Russia’s annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world’s largest oil producer, responsible for 13 percent of global output. Source: seattletimes.com/nation-world/constant-oil-spills-devastate-russia/

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More oil is spilled in the Niger delta EVERY YEAR, than was spilled in the Deep Water Horizon spill (North America’s worst accident): Source: Now This World

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Nigeria’s oil disasters are met by silence.  SOURCE : theguardian.com/commentisfree/2012/jan/09/nigeria-oil-disaster-silence 

The (new 2015) leak originated from the local Jusepín complex, owned by state-run oil firm Petróleos de Venezuela (PDVSA).  … just as Rodríguez had in February 2012 when 80,000 barrels‘ worth of oil spilled into the river within 20 hours. At the time, it was the worst oil slick Venezuela had seen in 74 years…. This year, researchers from the Central University of Venezuela (UCV) confirmed that the damage caused two years ago could take between another three to 10 years to repair.   Source: panampost.com/elisa-vasquez/2015/03/30/reports-state-oil-spill-in-venezuelan-river-puts-thousands-at-risk/

There are four other points you should consider in the face of “keep it in the ground” logic.

A: HUMANS ARE SHORT SIGHTED & SELF INTERESTED

The fact is that humans, especially poor humans with limited skills and resources, have proven track record of intentionally causing environmental disaster in the medium term to save their families in the short term.

  • Brazilian peasants that cut down or burn the rain forest to farm or log the wood today, only to see massive GHG increases, animal species displacement, and mudslides tomorrow.
  • Devastating pollution in the UK and Europe during the Industrial Revolution brought work and prosperity in the short run but killed many willing workers
  • India still has an active asbestos industry because asbestos is cheap and easy to work with if you don’t mind it killing you
  • The tar from western cigarettes kills millions of voluntary users because they thought cigarettes improved their lives today and tomorrow… well that is tomorrow guys problem

The petroleum industry provides critical products that are not easily substituted in large quantities.  Think about plastics, gasoline, home heating oil and jet fuel.

The point here is that if you think explaining to people that the oil industry is killing them and needs to be stopped, you are unlikely to make many converts to your position.  You are likely ‘preaching to the converted’ and wasting your effort.

B: OIL & GAS COMPANIES INNOVATE… A LOT

In addition to being quite nearsighted, humans are ingenious.  We keep inventing new ways to get the things we want and oil will be no exception:

If you want more surprises read our ’10 Things You Didn’t Know About Oil & Gas’.

We can summarize that the industry has massively reduced its carbon foot print in recent years and invented new ways of transporting their products.  From safe liquefied natural gas (LNG) during transport that will not burn, to the easy conversion of tar/oil sands into bricks that can be moved on trucks. to fracking to release old sources of gas and oil, the industry has shown time and time again that will sink billions of dollars in research to keep the it agile and moving forward.

Fort-McMurray-oil-sands-upgraderC: BILLION DOLLAR INVESTMENTS DON’T GO AWAY EASILY

The oil & gas industry has many sunk costs that they can only recover over long periods of time.  The recent Sturgeon oil sands upgrader cost about  $10 billions.

This results in Canadian, US, UK, Norway… oil & gas firms working very hard ensure environmental safety because the cost of protections are just a fraction of their total investment.  Environmental failures cause such bad press that Western oil companies are happy to do what it takes.

The best solution is to encourage (demand?) the highest standards of extraction and transportation from these companies.  They will comply as long the rules provide a level playing field for all involved.

D: JOBS JOBS JOBS

The numbers of people employed by the Oil & Gas sector are massive:

Canadian-Exports-2016Industry supports 9.8 million jobs or 5.6 percent of total U.S. employment, according to PwC. In 2012, the unconventional oil and natural gas value chain and energy-related chemicals activity together supported more than 2.1 million jobs, according to IHS – a number that’s projected to reach 3.9 million by 2025. SOURCE: what-is-fracking.com/how-many-jobs-has-the-oil-and-natural-gas-industry-created

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According to Statistics Canada’s most recent labor force survey, there were about 98,000 people (directly) employed in oil and gas extraction (in 2017 and that is after massive layoffs of about 30% due to the world oversupply problems) .  Canada’s oil and gas sector will contribute $45.6 billion in American gross state product, resulting in 406,000 jobs from goods and services supplied by United States firms to Canada.  SOURCE:  digitaljournal.com/business/oil-and-gas-industry-impacts-on-canadian-economy/article/499923 .

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Canada’s GDP is dominated by the commodities including particularly oil, gas… …Mining, quarrying, and oil and gas extraction is the third largest item at 8.2% of GDP.  Source: investorsfriend.com/canadian-gdp-canadian-imports-and-exports

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Pemex (Mexico’s state oil company) employs 130,000 Source: nesgt.com/blog/2016/12/the-oil-and-gas-industry-in-mexico-a-closer-look
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This means that there will be large numbers of well paid people in your communities that rely on the oil & gas industry for their families livelihood.  Again, if you want to have a clean environment, support your local industry and neighbors but let them know you expect serious environmental protections.  If you are just trying to ‘keep it in the ground’ in Western countries, the product will be supplied by other unscrupulous producers.  This will hurt your local economy, your neighbors and most importantly the environment.

SO ARE OIL & GAS REALLY GOING TO GO AWAY SOON?

The short answer is that oil and gas are not going to even significantly diminish in your lifetime:

IEA expects global energy needs to rise more slowly than in the past but still expand 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.

India will contribute most, almost 30%, to demand growth. India’s share of global energy use rises to 11% by 2040, though still well below its 18% share in the anticipated global population.

Southeast Asia is another rising heavyweight in global energy, with demand growing at twice the pace of China. Overall, developing countries in Asia account for two-thirds of global energy growth, with the rest coming mainly from the Middle East, Africa, and Latin America.

…Also, “the future is electrifying,” IEA said. Electricity is the rising force among worldwide end-uses of energy, making up 40% of the rise in final consumption to 2040—the same share of growth that oil took for the last 25 years.  Source: ogj.com/articles/2017/11/iea-oil-demand-on-a-rising-trajectory-by-2040.html

There are scientists like Dr. David Maenz that are working on these issues in practical terms:

You can wish the problems away but the fact is that the globe is going to produce more oil and gas so instead of saying, ‘keep it in the ground’, we need to figure out the most efficient and environmentally friendly ways to extract, transport and consume these products.

For more in this series see:

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ABOUT THE AUTHOR:

As someone that:

  • cares about the environment
  • does not think that man was put on earth to take it’s fruits without limit
  • assumes that for the next few hundred years at least this will be the planet that nearly all of us have no choice but to live on
  • drives an electric car
  • has solar panels on the house
  • is frustrated to see that global warming has become fanatical religion for many but still believes that in spite of this lack of ability to discuss the matter calmly, this crisis is most likely man made
  • believes wasting resources is a terrible thing so even if man is not causing global warming, humans should clean up anyway

you can rest assured that this article is not written on some one-sided pro-oil ideological bent.

If you want more, you might find this video interesting:

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