“You have raw emotion deep under your surface. Frack it!” – The Simpsons
From the movie Sad Max®: Beyond Soy Latte™.
Energy rules our world. Advanced civilization depends entirely on the availability of inexpensive energy, and wars have been fought for energy, and lost because of the lack of energy. Every task you or I do during a day is made easier by the availability of that energy. Every task. Even something as simple as a hike in the woods is made easier due the hiking shoes I wear that incorporate polymers and plastics and artificial fabrics made possible through cheap energy and more specifically: cheap fossil fuels. Cheap energy gives us fresh strawberries in winter, and baby oil for sunbathers in summer.
Even though the oil changes are more fun, I imagine the upkeep is more expensive than a Buick®.
I’d even make the case that when energy is cheap, freedom flourishes. Why have a slave? It’s much cheaper to have a gas powered weed trimmer. Slavery is immoral, but cheap energy removes that pesky incentive. Why have serfs? You have to feed them, which is a big drawback. If the Russian Emperor had used tractors instead, he might have lived long enough to be on Dancing with the Czars®.
Cheap energy is freedom.
One of the biggest recurring questions that has popped up (again and again) during my lifetime has been the impending end of the Age of Oil. If you say “impending end of the Age of Oil” in a really deep, booming baritone like Brian Blessed it sounds even cooler. The first time the impending end of the Age of Oil reached mass public consciousness was in the 1970’s, and for good reason. Texas had passed its peak in oil production in 1973, it was thought that every year after would see the production decline.
True Life Snippet From Stately Wilder Manor: Whenever I agree with The Mrs. by saying, “Indeed” she says, “Now say it like Brian Blessed.” And she’s serious. She won’t let me say the word “Indeed” without impersonating Brian Blessed.
How crazy were we for oil in the 1970s? When oil was found in Alaska on the North Slope, several major oil companies put together a four-foot wide (16 meters) pipeline that brought oil 800 miles (6 kilometers) from the Arctic sea down to the Gulf of Alaska. At the time, the project was one of the most ambitious construction projects in United States history, and cost the equivalent of $34 billion 2019 dollars, or about what Elon Musk spends on weed and hair implants in a year. It was expensive, and even in the 1970’s the lawyers and environmental groups had their knives out. In 1970, they were all NIMBY – Not In My Back Yard. In 2020? They’ve gone BANANA: Build Absolutely Nothing Anywhere Near Anyone.
Nothing as grand or great as the Alaska Pipeline will ever be built again in the United States.
After the Alaska Pipeline oil started flowing and the United States sweet-talked the Saudis into making oil cheaper than a date with Miley Cyrus, oil concerns continued – with oil companies looking for oil in ever more remote locations, including the a mile under the sea, couch cushions, and the faces of teenage boys. Billions were invested in both conventional oil (think about a Texas oil derrick) or unconventional (think about the oil platform used by a James Bond villain as a secret hideout). Exxon© even spent millions trying to learn how to mine shale, crush it, and cook it so that it could be turned into Happy Motoring™ gasoline, but gave up.
These concerns disappeared in 1999 when it became obvious that if you wanted a barrel of oil, in the future all you would have to do is order one on the Internet via Hotmail® after you looked it up on AltaVista™. At that point The Economist© had a woefully stupid cover proclaiming that oil would be cheap from here on out since it was trading as low as $15 a barrel at that point, even though oil doubled in cost over the year. In 2008, crude oil would hit its (so far) all-time high in 2019 dollars of $173.
On a positive note, with her skin Meg Ryan could now do commercials for Jack Links® beef jerky.
The thought in 2008 was that we were certain to have hit impending end of the Age of Oil (indeed!). How certain? George W. Bush, an oilman president from Texas, was in favor of creating incentives to add ethanol to gasoline, despite the anguished cries of people who would rather have consumed the alcohol directly. Ethanol plants appeared throughout the corn belt of the United States, turning seed, sunlight, fertilizer, and diesel fuel into food. Which was turned into fuel. Farmers loved this.
This led to yet more investment in energy alternatives – schemes to turn natural gas into ammonia for fuel, yet deeper wells into the ocean, fracking, turning coal into liquid fuels, turning “switch grass” into fuel, and any other silly idea that would could come up. People even touted the coming “hydrogen economy” because they forgot that hydrogen had to be made using some other form of energy. The world was needing an energy savior.
Or, could he be the foretold Anti-Cat?
A Funny Thing Happened On The Way To The Apocalypse
Of course in 2008, the trend was clear: impending end of the Age of Oil (indeed!) was upon us. But one of the unlikely saviors had turned out to be real.
In 2012 if you would have asked me, I would have told you that fracking was just a great way to turn money into wasted fuel – it took almost as much fuel to make fracked oil as you got out of it – not a good investment. In 2015, I would have told you the same thing – the fracking companies were losing money like there was no tomorrow – if you had to invest more energy (think Btu or kilowatts) into getting oil out of the ground than it was worth in energy terms, you were just sinking yourself faster by using that kind of energy – it’s like burning your blankets to keep your bedroom warm in winter.
I was putting together my notes for a Big Energy Post in October of 2018, and had even written the first few paragraphs (okay, 500 words or so) when my research was showing something different. I skipped the Big Energy Post and moved on to another topic, since it was clear to me that my preconceived notion that fracking was a waste of energy might be wrong. My research was showing something other than fracking was a waste of energy. It was showing that fracked oil might actually be . . . worth it?
It turns out that when anyone first starts doing anything, they suck at it. And unless it’s me practicing singing, I have learned that if I practice, I’ll get better. There’s even a curve that describes this – it’s called an “S-Curve” or logistics curve or learning curve. When you first start walking, you suck. When you first start driving, you suck. When you first start, well, anything you’re awful at it. Over time you get better, and the more you practice, the more competition there is? The better you get.
If you have hundreds of people practicing something with billions of dollars on the line? They get better. Quickly.
And that’s the story of fracking oil in the United States. Water usage in fracking is down. Chemical usage in fracking is down. Drilling costs, energy expended, and labor per barrel are down. After practicing thousands of times on thousands of wells, companies have figured out how to frack a well to maximize crude oil production and minimize cost (and energy) put into it. One metric I saw showed that fracked oil was now competitive (with a profit) compared with the cheapest oil on the planet – oil from Saudi Arabia. Companies have gotten so good at fracking that natural gas in the United States is essentially free.
I guess I’m not a fan.
Fracked oil is on a trajectory to be competitive with the lowest cost oil produced conventionally any place in the world. And fracked oil has some other advantages – it’s “lighter” than conventional crude – that means it contains more gasoline and diesel, and less of the “heavier” stuff that is harder to turn into gasoline and diesel – think asphalt.
The United States is the largest crude oil producer in the world. I never thought I’d type that sentence and it represent a real fact, but in 2019, it does. The United States is, as promised by every president starting with Nixon, actually, really and for trues, energy independent.
[Edit – Chart added after Lathechuck’s comment]
Was it alternative energy, like windmills? No. Was it the communist fever dreams of The Teen Girl Congress Squad®? No.
Is it “sustainable”? Kinda. It is for a while. There are an estimated (as of 2019) 1.7 trillion barrels of recoverable shale oil in the world, 293,000,000,000 of them are in the United States. At 20,000,000 barrels a day in just the United States, using just United States resources, that’s forty years that we have from 2020 – until 2060 – to find an alternative, like, oh, nuclear. And don’t believe me – here’s an actual clean energy evangelist who finally did that math and discovered . . . windmills are worse than natural gas as far as carbon emissions.
We still face headwinds – economic, exponential growth, two billion people that would love to hop the border to the United States, and communists that want to tear the place down. But oil? Oil isn’t the place to look for an apocalypse, at least this week.
And, trust me, if I hear a whiff that any of the above is wrong, I’ll pop it right back up on this blog as soon as I can confirm.
So, at least for today, Happy Motoring©. We have maybe forty years to fix this, so let’s not waste it. This has obvious foreign policy implications we’ll discuss in future posts. Upside? Why do we care about the Middle East anymore?