This started out as a short post, just to make sure you were paying attention. I have written a couple of times here about both Fracking and the shale oil/shale gas plays being touted as our energy future. The meme we as a society have seemed to buy into is that there’s no shortage of these materials and we can keep doing what we do in this country–building suburban sprawl and using our cars to get everywhere. I had hoped that with 60 million people impacted by the Hurricane Sandy superstorm, there might at least be a nod toward getting off that whole carbon-burning thing. You know, global warming and all. But a significant minority of business interests (and their favorite politicians) have been able to muddy the waters in that debate saying that the fact that there are only 24 peer-reviewed climatology papers arguing that global warming isn’t happening vs. 13,000+papers saying it IS happening means this isn’t settled science.
It’s at times like this that one looks at the business leaders, i.e., the business leaders who don’t have a dog in this fight. I know that sounds crazy, but the insurance industry has already voted on climate change here in NY. Beginning several years ago (around the time of hurricane Katrina), a number of insurance companies stopped writing homeowners’ policies in NY and Long Island. Their concern is financial, not political, but it shakes out to the same thing–if in fact we have climate change bringing stronger storms ashore, New York City and Long Island are especially vulnerable. And paying out huge settlements in the wake of such a storm could easily bankrupt most insurers.
But I digress. Let’s talk about oil SUPPLY. Business Week just reported that a project to build a pipeline to carry shale oil from North Dakota down to Oklahoma has been cancelled. It wasn’t cancelled because of environmental opposition, protests or technical problems. It was cancelled because it wouldn’t pay off:
Tulsa-based Oneok Partners LP announced Tuesday that the Bakken Crude Express Pipeline won’t be built.
Oneok says the outlook for crude oil supply is robust but it could not get enough producers to promise long-term use of the 1,300-mile pipeline.
Now remember, the Bakken shale oil play is being touted as America’s Saudi Arabia, with the potential to produce hundreds of billions of barrels of oil at a time when the world’s two biggest fields, Cantarell in Mexico and Ghawar in Saudi Arabia, are both thought to be in decline. So the cancellation of this particular pipeline indicates that either a) the Bakken field isn’t as promising as the headlines say, or b) the issues of getting oil out of shale are difficult enough that the pros don’t think they can prospect it for very long.
As my friend in the Occupy Movement have already pointed out, there are plenty of reasons to oppose fracking and the building of natural gas pipelines into NYC. But the fracking and shale oil extraction will stop when the money-men decide it’s not an investment that will pay off. Happy Tuesday.