By Drs. Robert & Sonia Vogl
President and Vice President,
Illinois Renewable Energy Association
The recent oil discovery in west Texas which was considered headline news is hardly a discovery as the resource has been known to exist for some time and is already being exploited. The news is based on a new statistical estimate on a known oil field by the US Geological Survey and may not live up to its advanced billing.
Assuming the 20 billion barrel estimate proves accurate, Ugo Bardi suggests that potential production be viewed from the perspective of the global oil situation. Using data from Bloomberg News he reminds us that the world currently consumes 33 billion barrels of oil per year. The new 20 billion barrels would supply seven months worth of global oil demand. Consumption has exceeded new discoveries over the last decade.
Bardi reminds us that the costs of drilling and extracting the oil adds an economic perspective which, if included in the headlines would take much of the rosy glow off the estimate. Bloomberg determined the oil’s value at $900 billion; Art Berman removes the glow from that figure as he calculates that extracting the oil would result in a loss of $500 billion at current dollar value. Oil prices will have to rise dramatically in order to bring it into the marketplace.
Beyond the economic estimates of the oil‘s worth is the impact of the headlines on the public’s mind. The 20 billion barrel estimate is an impressive amount likely to remain a vivid image. Since the American public is often portrayed as not bothering to read, the refrain that there is plenty of oil if we weren’t prevented from drilling for it will remain a rallying cry. Ignored in such glowing estimates is the increasing amount of energy used in securing the oil and the increasing environmental costs in terms of air and water pollution. While environmental degradation associated with securing more oil is real oil advocates continue to condemn government regulations as unnecessary and too costly.
Another restraint not mentioned is where the water will come from to use fracking for oil. Texas has reoccurring severe droughts; water tables continue to drop as a common response to drought is to secure ground water sources. In an article addressing water issues in Texas, Samantha Fox points out that 60 percent of the state’s water needs are supplied by groundwater sources which has contributed to land subsidence and property damage. Homeowners, farmers, industries and water providers are often at odds over who gets to use how much water.
Texas has multiple groundwater districts that collect water use data used by the state to develop databases and computer models of available groundwater. While the state requires permits to secure water supplies officials are reluctant to enforce limits on water consumption. A continuing debate exists in Texas law regarding whether limits on consumption of groundwater is equivalent to a regulatory taking of private property rights.
Whether producing oil or gas, water is a serious issue. An overlooked asset of renewable energy sources is that they consume very little water.
The key question is whether the alleged bonanza will ever be worth enough to justify drilling for it.