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Abundant, Limited Resources
This article by Spencer Jakab at the Wall Street Journal leaves me unsure of whether to laugh or rant. I agree with Jakab that the regular burning of unprofitable natural gas at some oil wells is a problem, but for different reasons. First, an introduction:
Even as more and more gas gets supercooled and shipped around the world in expensive, liquefied form, an estimated 5.1 trillion cubic feet of gas was flared world-wide in 2018, according to The World Bank—equivalent to the combined consumption of France, Germany and Belgium.
Why waste so much valuable fuel? Because it is often an unwanted byproduct of an oil well, and it isn’t worth enough to sell.
The article goes on to explain how capturing and transporting natural gas from some locations can be unprofitable, even while similar gas remains very profitable elsewhere. I appreciate that Jakab proposes finding ways to make that unsought gas profitable, rather than immediately turning to government to ban flaring.
But his concerns about a greenhouse gas effect are unwarranted, like all fears regarding global warming. The real problem is that geologic theory still posits that fossil fuels require rare conditions and millions of years to develop. Ergo, Earth has a limited supply, even if that supply is sufficient to last many generations of increasing use. If waste of irreplaceable resources can be avoided, it should be.
Much could change regarding energy production and use in the next century or two. I can’t imagine batteries requiring even rarer resources, like lithium, as a practical substitute for most power supplies now dependent on fossil fuels. But there will, of course, be further advancements in research and technology, especially when and where need is greater.
For all we know, we won’t need fossil fuels a century from now. Or we will develop more cost-efficient means of artificially producing oil and gas. But assuming that is the case would be grossly irresponsible and cruel to future generations. It’s one thing to temporarily bury resources we cannot yet efficiently recycle, like plastics (oil derivatives) and old batteries. It’s another to disintegrate resources entirely, preventing later use.
Can any Ricochet members offer insights into the challenges of preserving this natural gas or other factors in the situation? Are there already solutions that could be applied?
Published in Economics
As noted elsewhere, it depends on the how the refineries are configured. We also import a good amount of gasoline because our national network of pipelines is really a regional network and it’s less costly to ship gasoline in bulk in barges or tankers.
Which leads me to a personal hobby horse. How the EPA has screwed up the gasoline market by requiring custom blends of gasoline in nearly every major metropolitan area. Every season requires extensive down time and money to switch blends. If there are problems in Chicago, you can’t just shift supply from the East Coast. And the impact of the mandates on air quality is questionable. Nobody is ever going to change it because any politician who proposed change would be pilloried as being in favor of air pollution.
Aren’t the obscene refinery regulations and licensing something that falls entirely under the authority of the Executive branch? How much could the President change in just four years that energy companies might have the time and money to capitalize on?
A good question. I’m unsure. No doubt any action would be met with immediate condemnation from the concerned citizens of the administrative state. Plus a flood of lawyers banging on the doors of innumerable federal judges, demanding a stay of such clearly illegitimate acts.
Here in Northeast Indiana, we should have reasonably priced gasoline, as we are about equidistant from refineries in Chicago, Detroit, Cincinnati, and Cleveland. Yet we are forced by EPA to purchase the “Chicago formula.” Utter nonsense, as our smaller size and climate doesn’t require a special formula. The EPA should set 4-5 formulas for the US, something like:
I didn’t know the EPA is responsible for different mixes. I assumed that was introduced and maintained by state legislatures.
A long time ago…. The earth’s atmosphere was made up of mostly methane. Methane should be one of the most abundant chemical compounds in the earth.
There is a process where natural gas is dissolved in water then as that water freezes the molecules of methane are trapped in the crystal matrix of the ice. This called a Methane Hydrate. I think the oceans floors – particularly along the continental shelves are littered with this stuff. (as well as deep arctic permafrost and antarctic ice sheets) This is one of the fears of global warming alarmists who believe that there will be a tipping point – where these deposits of ice are melted and billions of cubic meters of natural gas are released back into the atmosphere.
If we take a complete inventory of these reserves, it would be no surprise to me if methane is found to be nearly as abundant as water.
The EPA makes the call on the blends based on smog conditions, but the states can add their own regulations, which California definitely does. I know when Texas bumped up some of its air quality regulations, including the implementation of vehicle pollution control inceptions and those annoying Stage II vapor recapture hoses in certain parts of the state (though they’re not as bad as 20 years ago), the public rebelled and the most annoying parts of those state laws fell by the wayside or were relaxed considerably.
The EPA should be consigned to the dustbin of history. Move over USSR.
I disagree. The USSR didn’t have an EPA, and look at the mess it made. However, ours has been given too much arbitrary power, and doesn’t have any incentive to take into account the value of people’s time and resources. So the status quo is not good and some due process reforms are very much in order.
As with all matters, federal authorities should only be allowed to intervene where resources cross state lines. If a river flows from Oklahoma to Texas, the federal government may regulate cooperation between the two. But it should have no say in what either state does with its own forests, lakes, or oil reserves.
The core problem of all Executive agencies is that unelected officials are authorized to declare laws by fiat. Relatively speaking, a small fraction of our “laws” are directly voted on in Congress.
What has made bureaucracies strong could also make them weak. Anything enacted without the legislature can be repealed without it. Tear it down, so we can take a look at what responsibilities truly cannot be fulfilled by local and private agencies.
Staying away from as much federal oversight as possible is something the oil companies try to do regularly, as well as taking advantage of the situation when a less regulatory administration is in place — the difference in Texas between Trump and Obama, in terms of the amount of fracking-related oil and gas drilling really isn’t that much, but if you go up to New Mexico, where 50 percent of the land if owned by the federal goverment, drilling shot up by about a third after the Trump Administration started, and ExxonMobil paid the Bass family $5 billion for land in SE New Mexico less than a month after the changeover, because they knew the new administration would offer less regulatory roadblocks.
You’re also seeing that on the other end right now — takeaway constraints and other factors have cut Texas drilling activity by about a third from late 2018, but New Mexico drilling is down only about 10 percent from its highs, because the oil companies don’t know who’s going to be president in 2021 and want to get their wells and pipelines in ASAP (yes, you could have a President Warren try to ban all fracking, but that would face a ton of court challenges. However, she could executive order limits on federal land fracking).
I believe that hypothesis has not been proved and remains highly speculative.
There’s sort of a test of that in northern Jeff Davis County, which is on the southwestern edge of the Permian Basin. Devon Energy, Cody Energy and Cabot Oil & Gas drilled some wells back in 2018 in a valley between two mountain ridges that State Highway 17 runs through. This part of the state’s GIS map shows the highway, the two ranges, and a green half-dot near a site where the highway curves is where Cody did hit on an oil well (which is shut in now, because there’s no pipelines yet to get the oil out of the valley, and Devon has a shut in gas well site to the east of there, represented by an orange circle. The blue circles are dry holes):
What makes it interesting is the mountains to the north of Highway 17 have a shale subsurface as part of the ancient Capitan Reef, and are about 225 million years older than the mountains to the south, which are made of basalt lava pillars and are part of the giant Buckhorn Caldera of the Davis Mountains, which erupted 35-40 million years ago.
Any shale — or shale oil and gas — that was laid down by dead marine life and other biological sources during the Permian Sea era was theoretically burned off by the volcanic eruptions, and that volcanic area is part of the Rio Grande Rift and pretty much runs all the way down into the northern edge of Mexico. So other than a few small spots the volcanoes missed, there should be no oil or gas to the south of that first line of mountains. If anyone ever finds some, it would be a sign to help bolster the theory of abiotic oil and gas.
If it pans out that would be wonderful.
The areas to the south, especially the hispters who have come to dominate Marfa, are freaking out over the idea of oil and gas drilling in the area — they went ballistic four years ago just over the idea of the Trans-Pecos natural gas pipeline to Mexico running through the area. Fortunately for them, outside of one corridor of the Permian Basin extending south out of Fort Stockton into the Glass Mountains, their hipster colony and the mountain areas south of Interstate 10 are mostly part of the volcanic zone. So they’re good on no fossil fuels being under their feet, and only could be in trouble if there really is abiotic oil and gas in the area.
Unless oil reservoirs refill within at least a century, abiotic origins wouldn’t matter. If oil forms over only a thousand years, rather than a million, the process is still too long to benefit human industry. Either we can make use of old wells or we can’t.
Before the current fracking boom hit, there were plans to use old, abandoned oil and gas wells in the Permian Basin for geothermal energy, because when you go down 10,000-15,000 feet, it’s pretty hot down there. The idea was to pump water into the ground, super-heat it, and bring it back up to the surface. The new-tech horizontal drilling techniques put a hold on that for a lot of wells in the actual production zones, though I suppose dry holes in marginal areas could still find re-purposing that way (though it helps if the dry hole’s actually near something that needs power generation or heating).