Preface to the Romanian edition of Snake Oil

NOTE: Images in this archived article have been removed.

But there is a problem: if we look beyond mere claims and promises, and examine the actual data on environmental impacts and on oil and gas production potential, the shale revolution in America is revealed to be a costly, destructive project whose benefits are short-lived. In Snake Oil, I offer evidence to back up that assessment. Even more has emerged since the book was first published in the US.

 

In July 2013, the Los Angeles Times published an investigative report by Neela Banerjee based on Environmental Protection Agency internal documents, showing that the EPA had systematically ignored evidence of environmental harms from fracking, choosing not to publicize or act on data collected by its own staff. Evidently the Obama administration finds temporarily rising oil and gas production figures so enthralling that it is willing to ignore the long-term costs to water and air quality, and to the health of humans, livestock, and wildlife.

 

Meanwhile former Mobil Oil VP Louis W. Allstadt, who spent his career running oil production operations and company mergers, now speaks on behalf of anti-fracking resistance groups, pointing to studies revealing that compromised casings (and resulting instances of water contamination) are far more common than the industry claims.

 

As a result of these kinds of revelations, citizen-led groups are continuing to form across the country to oppose fracking, and the oil and gas industry is increasingly on the defensive. Wayne County, Pennsylvania activists are currently celebrating the cancellation of 1500 drilling leases covering 100,000 acres of land. New York State’s moratorium on fracking remains in effect, despite massive industry efforts to end it. Meanwhile four cities in Colorado have voted to ban fracking altogether.

 

New evidence also underscores the production limits of shale gas and oil. Recently Shell’s US office announced a $2 billion write-down on its liquids-rich shale assets in North America. The company was simply acknowledging the unprofitability of leases in non-core regions, purchased back when shale plays were being advertised as “manufacturing operations” in which companies could successfully sink a drill bit virtually anywhere.

 

Europe’s desire to get in on the fracking game is understandable, given the hype still emanating from America. Europe struggles under energy prices significantly higher than those in the US, and there is a widespread perception that the region has an even bleaker future: its options include importing more fuel from Russia, relying more on expensive liquefied natural gas (LNG), or burning more coal (most of which would also have to be imported). European economists and politicians who desire to maintain business-as-usual economic growth while pursuing energy independence seem to have no choice but to pin their hopes on fracking.

 

Geology dictates that most of the oil and gas that will be produced by horizontal drilling and hydrofracturing on the Continent will come from central and eastern Europe. Donald Tusk, the Polish prime minister, has issued a strong statement supporting fracking operations by foreign energy firms, while Ukraine has signed agreements with Shell and Chevron for large-scale natural gas exploration. ExxonMobil and Austria’s OMV are negotiating agreements for exploration in the Black Sea. In 2010, Chevron bought access to nearly two million acres of Romanian land in the northern Vaslui and southern Dobrogea regions with the intent to start fracking for shale gas in 2013.

 

However, Europe’s geology is not as favorable for oil and gas production from shale rocks as it is in the US, and the technological infrastructure is not as well developed. Also, the industry faces even more citizen backlash over environmental concerns: in the US, land owners control subsurface mineral rights, and therefore benefit financially from fracking; in Europe, national governments own subsurface rights, and land owners are left unrewarded as they bear the human cost of noise, fumes, truck traffic, bad air, and bad water.

 

In October 2013 the EU tightened its regulations on fracking. According to the rules approved, shale gas projects will need audits based on “the direct and indirect significant effects” on human health, species and their habitats, land, water and climate. Meanwhile, in that same month, several hundred angry farmers from the village of Pungesti in Vaslui county in Romania formed a human chain to stall Chevron bulldozers on their way to clear land in order to build drilling pads for fracking. The government came to Chevron’s defense, deploying riot police.

 

It is of course impossible to know exactly how fracking will evolve in the European context. However, the most likely scenario goes something like this: The next few years will see increasingly heated controversy and conflict as drillers push for access to favorable sites, and as citizens push back. Initial drilling in the very best available locations will yield some expensive-to-produce oil and gas in limited quantities, but production will decline rapidly unless operators can turn both a profit and gain access to many thousands more drilling locations. In the best case (for the producers), the oil and gas that is extracted will be sufficient to provide a small, temporary boost to the European economy, but even then it will not be enough to change the European or global energy equation very substantially, or for very long. Meanwhile, wherever the technology is deployed the usual problems with air and water quality, human health, and the health of livestock and wildlife are almost certain to follow. Citizens need to continually remind policy makers of these essential facts, as fossil fuel companies tend only to point to the (largely unrealistic) promise of jobs and tax revenues from fracking.

 

In Romania, hydrofracturing for shale gas needs to overcome four formidable challenges. One is the environmental costs and risks of the practice—which is predicatably based on the US experience with this technology. The second is geology: Romania is as earthquake-prone as California. Memories are still vivid of two major tremblors that devastated Bucharest and some smaller cities in 1940 and 1977. While the underground injection of toxic wastewater has not yet triggered a Big One in the USA, there is a rich record of earthquakes at the level of Magnitude of 3 to 5, which would be enough to damage poorly constructed buildings in Romanian villages and cities.

 

The third challenge has to do with local laws. With fragmented land ownership and 30% of its population living off their subsistence and semi-subsistence farms, Romania is certainly not Colorado or Texas. The Romanian media claims that Chevron has leased some 6.300 square kilometres in Moldova and 2.700 in Dobrogea, but such claims cannot be verified since the leasing contracts are secret. In the village of Pungesti, Chevron needed the agreement of three landowners to drill just a test well for shale gas—but two owners have already backed out from the deal and the one who stayed is the pro-fracking village mayor.

 

The fourth and final reason Romania is a poor prospect for the fracking “revolution” is economic. Romania is a major conventional gas producer in Europe and is overall a net energy exporter. Why take so much risk with fracking when the country is not desperate for energy?

 

We must reject the assertion that fracking is Europe’s (and Romania’s) best hope for maintaining a business-as-usual energy economy. In fact, sooner or later, all the world’s nations face the reality of declining fossil fuels, declining energy availability, and a contracting economy.

 

Rather than attempt to stave off this inevitable future by extracting and burning ever-more expensive and ever-more environmentally ruinous fossil fuels, we must begin now to build a functioning post-growth, renewable energy economy that supports people and protects nature. In this context, Romania’s most valuable asset might not be its gas but its soil (the Chernozem, the most fertile topsoil in the world), along with its huge and undepleted acquifers, its mineral waters, its biodiversity, and its rich cultural heritage.

 

It is in nature and culture—not efforts to preserve and extend a fundamentally unsustainable fossil fuel-based economy—that we will find our best and most realistic hopes for a humane and survivable future.

 

Richard Heinberg

Santa Rosa, California

November 15, 2013