Will fracking realign the world?

Pundits foresee an altered world order brought on by fracked gas and oil. Dinyar Godrej thinks the changes could play out quite differently to the most common predictions.

Coal seam gas site near Casion in New South Wales, Australia. Lock the Gate Alliance under a Creative Commons Licence

The vision of a cornucopia of gas and oil pouring out into an energy-hungry world is too sweet to resist. Even if behind it lies the environmentally destructive practice of horizontal hydraulic fracturing or fracking. But the dream of energy security is alluring and has the capacity to change political realities – at least if one goes by the rosy pontification of many Western commentators.

The narrative usually goes like this. Fracking is delivering – look at the fossil-fuel plenty unleashed in the US. So if the areas of the rest of the world where frackable resources are thought to be lurking follow suit, the balance of power of nations changes for the better.

Hey presto, the US moves towards energy independence, which means it can play it cool but cordial with autocratic nasties like Saudi Arabia instead of cosying up to them. Who knows, maybe the monarchies in the Gulf might even witness democratic transformations as a result?

The US’s sanctions against that axis-of-evil player Iran become painless, now delinked from energy needs. Maybe it will even chill, ever so slightly, on its policing of the sensitive zones of the world – you know, where the oil is usually located.

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The sneer on Russia’s face will be turned upside down as Qatar becomes a major supplier of gas to Europe. Why? Because gas abundance in the US from fracking has halted its imports from Qatar, therefore making it seek buyers elsewhere. European democracies breathe a civilized sigh of relief at the prospect of being able to loosen the grip of the Russian bear.

Why, they could be fracking up the stuff themselves if only the environmental activists would get out of the way. (We’ll ignore for the moment that Qatar is an absolute monarchy.)

We could all learn to get along with dear China as now there will be enough fuel to go around and so pesky accusations of China’s cornering of resources can fall silent. Instead its productivity can be lauded. And with a resource of frackable natural gas that is possibly the largest in the world, China too could meet its own energy needs. (In the meantime it has been allowed to invest billions in US fracking endeavours.)

A golden age of win-win-win arrives where the democratic West, under the wings of the benign American eagle, can finally loosen its links with despots and truly lead the world.

Goody!

Fracking it up

What such contented crystal ball gazing reveals is that commentators who would have denied that wars have been fought over securing supplies of oil (rather than the professed purpose of spreading democracy) quite happily admit that energy requirements are the driving force of global power. At least that is out in the open.

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But whether this vision of fracking’s influence on geopolitics will come true is far from certain.

Let’s inspect the reality on the ground of the world’s number one fracking nation, the US. It comes in several versions.

One version is the politically winning mantra of ‘energy independence’. In his State of the Union address President Obama declared: ‘After years of talking about it, we are finally poised to control our own energy future.’ A huge claim but admittedly more restrained than those made by industry leaders. Take this 2010 statement by Aubrey McClendon, then CEO of Chesapeake Energy: ‘In the last few years we have discovered the equivalent of two Saudi Arabias of oil in the form of natural gas in the United States. Not one, but two.’

The areas being fracked right now in the US are the ones which held the most promise; there is no guarantee these levels of extraction can be maintained

Then it’s worth looking at another version. While it is true that natural gas production in the US is at an historic high, with fracking responsible for 40 per cent, the future may not be as abundant. For one, all estimates of shale gas resources are unproven. Industry figures talk them up to build public confidence and lure investment and then point to current levels of production as proof. However, the areas being fracked right now in the US are the ones which held the most promise; there is no guarantee these levels of extraction can be maintained. So while some industry figures confidently say a century’s worth of natural gas is there for the taking, the US Energy Information Administration (which has had a tendency to inflate its estimates) thinks it’s more like 24 years, whereas independent analysts think the peak has already been reached and there is 10 years’ worth left.1

Where oil production is concerned, here is climate change commentator Ben Adler’s analysis: ‘According to the EIA, in 2012 we produced 11.1 million barrels of oil per day, while consuming 18.5 million barrels. In other words, we were a net importer of 7.4 million barrels per day, accounting for 40 per cent of our total consumption. While that’s the lowest percentage since 1991, it actually paints an unduly rosy picture. Fifty-seven per cent of that oil we “produced” last year was not actually extracted in the US; it was just refined here after being imported. That means the gap between what we drill and what we burn is even greater than the production numbers suggest. We can never drill our way to energy independence.’

And what of the future? Fracking looks unlikely to change things for long. The ‘technically recoverable unproved resources’ for the US are estimated at between 23 and 34.6 billion barrels which, based on the consumption figure cited above, represents just a couple of years – if all of it could be recovered.1 So it looks like Saudi Arabia is going to be a special friend for a while yet.

A short-term scenario

For me the most telling comment is by Gregory Zuckerman who wrote an admiring appraisal of the new billionaire movers and shakers in the industry in his recently published book The Frackers. ‘There is a lot of discrepancy and disagreement about the shale wells that are key to it all because their production falls out very quickly. Some sceptics say nah, we are never going to kind of get energy independence. I kind of agree. I think energy independence is a little overstated… I don’t know, frankly, how long it’s going to last, maybe… five years or 10 years, but for that period it’ll be very healthy for us.’ This gives some insight into how short-term the scenario of fracking-aided fossil-fuel plenty really is, because Zuckerman is one of fracking’s supporters.

In the mainstream chorus of consensus about fracking’s influence on geopolitics, there is little comment on much greater shifts, nay ructions, which lie in store.

While focusing so single-mindedly on fossil fuels we are losing our window of opportunity to develop renewables to the stage where they can truly meet our energy needs

While focusing so single-mindedly on fossil fuels we are losing our window of opportunity to develop renewables to the stage where they can truly meet our energy needs (and do so more equitably). Our industrial economies are built on one major premise – the availability of easily extracted and affordable fossil fuel. The moment we start encountering difficulties on that front – ie when extraction begins costing too much energy or fuel prices begin to rise uncontrollably – then the economy will undergo the kind of juddering shock that will make the recent financial crisis look like a child’s tantrum. According to Tim Morgan of the London based money-brokering firm Tullet Prebon: ‘The economy, as we have known it for more than two centuries, will cease to be viable at some point within the next 10 or so years unless, of course, some way is found to reverse the trend [of rising energy costs]’.1 To pin all hopes on fracked fuels and not lay the foundations for an alternative energy future is madness.

The even greater madness is to put the urgency of doing something about climate change on the back burner (in a manner of speaking) just because fracking may offer a few more years’ worth of fossil fuel. Already the club of ‘developed’ nations is being blasted for reneging on its promises to cut carbon emissions, promises which were much too weak to be effective in the first place. When climate change ratchets up, it will really rip up the geopolitical landscape.

Dinyar Godrej is a New Internationalist co-editor.

This article is a web-only extra to our December edition on Fracking (NI 468). Read and download the Frack Files the myths, the science, the history, the empty promises, the facts - all in this handy primer.



