Oil shale, tar sand development limits economic growth, depletes water resources

The Peak Oil era model of economic growth is circular in function and most likely has developed as a way to sustain the global economy’s dependence on oil until the last drop is pumped out of the Earth.

The peak era models looks something like this: Increasing GDP and oil demand, new low EROI energy sources, high oil price and high oil supply, stalled or declining economy, lower oil demand, lower oil prices, back to the beginning of the cycle.
EROI, insidious feedbacks, and the end of economic growth

EROI stands for ‘energy return on investment’. It is a concept that quantifies the amount of energy needed to process varying energy sources into usable fuels.  For example, the EROI for conventional oil is around 20:1; for tar sands it is around 5:1.  This means it takes one barrel of oil to produce roughly 5 barrels of tar sands oil.

A highly volatile oil market is attractive to oil marketeers; it is a way to produce giant short-term profits.  Savvy investors were able to profit on the oil market’s drop from $150/bbl to $30/bbl in 2008, and they have also profited quite handsomely on its rise back to $100+/bbl.  It is a becoming a virtual natural cycle that is quickening in its circularity, creating greater instability to the global economy as a whole [like a wobbling toy top].

How do Canadian oil sands and the recent announcement of the development of Utah’s tar sands play into this cycle?

As conventional sources of oil become depleted, the price of oil rises.  As a result of higher oil prices, lower EROI sources like oilsands/tarsands become more attractive to investors.  In this scenario though, the general global economy cannot maintain growth for long when oil prices reach the $120+ level; this is according to many major investment firms.
Is $120 oil the global tipping point?

So, in their essence, oilsands/tarsands can only function in a very narrow window of $100-120 per barrel oil; after that, the economy recedes and oilsand/tarsand investors flee the scene waiting for the next cycle to begin an uptick.  All the while, oil marketeers short the descent and long the rise; it’s an endless cycle that simply further pollutes the air we breathe and depletes the water we drink.

Oilsands/tarsands use an incredible amount of water to produce.  It takes 4-6 barrels of water to produce one barrel of oil from oilsands/tarsands.  In the already water-strained western U.S., producing oil from tarsands and oil shales in Utah, Colorado, and Wyoming requires the use of water that cities in Nevada, Arizona, and California depend on for other basic needs.  Pushing forward with tar sand development in the western U.S. would most likely result in fierce battles between States fighting over water rights; the economy in turn would suffer because water availability is as essential to business development as is oil.

Water scarcity and western oil shales

Tar sands pose major water use challenges

There are several processes used to get oilsands/tarsands out of the ground.  In essence, oil sands can either be mined on the surface and shipped to a processing plant where the oil is ‘washed’ from the sand; or they can be extracted using steam injected into the oil sand deposit causing the oil to liquify where it is collected and pumped to the surface.

Similarly, oil shale can be mined ex-situ or in-situ, meaning that it is mined and transported to a facility located away from the mining operation [ex-situ] or it is processed on site [in-situ].  When it is processed onsite, the formation where the oil shale is located is heated to roughly 850-900 degrees Fahrenheit causing the oil to bleed from the rocks, requiring large amounts of water to cool equipment [in-situ].  When the oil shale is mined, the rocks are then transported to a processing facility where they are either processed further or burned directly [ex-situ].

Oil sands processing

Oil shale processing

With conventional oil running out, it is no wonder that the oil industry is looking for what comes next in their field.  Oilsand deposits are estimated to be 3.6 trillion barrels and oil shale deposits are estimated at 3.3 trillion barrels.

With lifecycle analyses becoming more and more mainstream, oil shale and oilsand/tarsand development will become more costly over time, meaning their window of profitability will shrink.  Can the global economy function with $150/bbl oil?  $200/bbl oil?  Where is all of the water necessary to process the 7 trillion barrels of oil shale and oilsand/tarsand oil going to come from? If we use wester water resources for energy production, where will we get water needed for agricultural irrigation?  At what point will carbon be regulated, and what effect will this have on the energy intensive unconventional oil processing industry?

There are a lot of questions that need to be answered, which has resulted in the U.S. government halting tarsand development in the western U.S. pending further review.  If building the Keystone XL pipeline to import Canadian oilsand oil is meeting stiff resistance, what kind of oppostion will littering some of America’s best National Parks, National Forests, and wilderness areas in Utah, Colorado, and Wyoming stir up?

Examiner.com