The production of oil has always been of great importance to the American people. Without it, the development of the industrial United States would not have been possible. Nevertheless, it’s always been an industry embroiled in conflict and controversy.
In recent years there has been a push toward exploring alternative means of accessing oil reserves. Finally, by the time?2013 came around, news outlets reported that Toronto-based MCW Energy Group developed a new method of oil extraction that would prove to be environmentally friendly and more economical than existing methods.
Essentially, this new technological process involves a paint thinner-like solvent used to separate the oil from crushed sand and rock without using water. In addition to being more efficient, the method results in reduced running costs and can produce a barrel of oil for just $38 USD, which was a stark contrast to standard practices that carried a price tag of around $75 USD.
At this point in time, MCW is turning its attention to the Green River Formation that covers parts of Utah, Wyoming, and Colorado, throughout which some 3 trillion barrels of oil are accessible using the new technology. The Asphalt Ridge in Utah is of particular interest, as the site may hold in excess of a billion barrels of oil all on its own.
MCW’s pilot plant has the capacity to produce around 250 barrels per day, but with competition building, the company is under pressure to expand its proprietary extraction practice.
The fact that the technology is proving to be commercially viable has spawned a second phase, which will involve the construction of two additional plants capable of extracting 2,500 barrels per day on a 1,100 acre property near Temple Mountain.
While this second phase is estimated to cost around $80 million, the possibility of adding a 50-year supply of oil begs the question: Will furthering a national reliance upon non-renewable energy sources, even with such efficient extraction strategies, be worth it in the medium to long term?
The EPA thinks not, and it seems the President agrees. Case in point: the Keystone XL Pipeline.
Controversy Surrounding The Keystone XL Pipeline
In 2005 the Canadian energy infrastructure company TransCanada, which operates across the North American continent, expressed its intention to connect the existing 1,353 miles of 30-inch pipe from the mainline extending from Hardisty, Alberta, to the Keystone Pipeline in Steele City, Nebraska.
It’s an idea that has been met with strong controversy and severely polarized viewpoints. On Nov. 19, 2014, the U.S. Senate voted against the passage of a bill that would allow for the Keystone XL Pipeline to proceed as planned.
Then, in early 2015, after month-long negotiations took place to discuss over 41 amendments, the GOP-led Senate reached a decision resulting in a 62-36 win in favor of approving construction.
The EPA advised the State Department in a white paper that construction of the pipeline would not be worth the environmental risk. If President Obama wanted yet another legitimate reason to veto the bill, this would certainly present an ideal opportunity.
As the Keystone XL pipeline would cross into Canada, there are concerns that the tar sands oil being transported by the network would pose a number of environmental risks.
These concerns include potential spills, and a 17-percent increase in greenhouse gas emissions (or between 1.3 and 27.4 million metric tons of carbon dioxide), in addition to a higher chance that other deposits of tar sands oil would be burned if the project were to go ahead.
A version of the bill containing those amendments imposed by the Senate will likely make its way through the House. Once the bill is approved it will go to President Obama’s desk.
Obama, who has repeatedly made his skepticism apparent and has even rejected attempts by lawmakers to force his hand on the issue in the past, is likely to veto the bill.
Will The U.S. Oil Boom Hold Out?
It isn’t difficult to understand the President’s trepidation regarding the matter as the industry faces a serious geologic restraint over the short and long term.
As prices per barrel have come down significantly in recent years, profits obtained through fracking?a method more expensive than conventional drilling?are being threatened as investors begin to hedge. Perhaps unsurprisingly, permit applications to drill oil wells also declined in Nov. 2014.
Even while oil production in the U.S. is now rivaling that of Saudi Arabia, owning to recent developments in smarter extraction technologies, it is still coming from underground reserves that are a fraction of what there are in the Middle East.
That distinction is relatively easy to forget when reports regarding domestic supply suggest that the industry is experiencing a boom of historic proportions. Now, almost 9 million barrels are being produced per day as compared to the end of 2013, when U.S. oil production capped out at just over 3 million barrels per day. There’s little question as to why; we use oil for absolutely everything:?fueling our cars,?heating our homes in the winter, fabrication processes, and everything else under the sun. With our perpetually rising population, it does seem like the industry is very much living on borrowed time.
It wasn’t until a chance discovery by Charles Canfield and Edward Doheny in the late 1800s?that efforts to produce and refine oil began in earnest in the United States. By the turn of the century, over 500 oil wells?had been established in California alone. As technology has improved, many more oilfield discoveries were made viable; these days, the profitable oil wells in California alone number in the tens of thousands.
So we’ve clearly come a long way. But while safer extraction technologies may be integral to maintaining America’s insatiable appetite for oil, ultimately they do nothing to alleviate the ever-looming threat of an all-consuming energy crisis. And for the record: the embattled Keystone XL Pipeline will do almost nothing to improve the situation. That our “new” and “improved” Congress has made its construction their number one priority is a fact that should give every American reason to be concerned.
