No matter where you stand on energy production, it's difficult to disagree that as world energy demand continues to soar with growing population and the rise of the third world, continuing to find viable sources of oil is, for better or for worse, as important to our modern society in the short term, as finding viable alternatives is in the longer one. But any notion that technologies like hydro-fracking and tar sand are an easy, painless solution to a highly complex problem are short-sighted to say the least. As folks in Arkansas recently realized, oil pipelines can be messy business and there are some challenges unique to tar sand oil that up the ante.
The ruptured pipeline that spilled some 12,000 barrels of Canadian tar sand oil in Mayflower, Arkansas on March 29 brought renewed attention to the environmental dangers that would be associated with the Keystone XL pipeline proposal that supporters hope will carry the same sort of oil from Alberta, Canada, to Texas. While ExxonMobil's Pegasus pipeline has run beneath central Arkansas for more than six decades, it increased its capacity by 50 percent in 2009, allowing it to carry up to 90,000 barrels per day along a course that runs from Illinois to Texas.
But while the spill in Arkansas is the first to happen since most Americans began hearing the term "tar sands oil" during the debate over the proposed Keystone XL pipeline, folks in Michigan are much more familiar with the dangers of this very different oil type. Three years ago, that's where the largest tar sand oil spill in U.S. history took place when a rupture caused a six-foot break on a pipeline crossing a creek that ran into the Kalamazoo River. Just under 900,000 gallons of oil spilled into the river, but not your ordinary crude. Tar sand oil is processed into something called diluted bitumen, referred to as dillbit, which unlike crude, doesn't float in large slicks on top of the water. Rather, dillbit separates, leaving heavier oil to sink to toward the bottom, making cleanup a much more difficult and some say impossible proposition.
Tar sand oil also has to be heated to higher temperatures to flow, while also requiring increased pressure, both of which can make ruptures more likely. None of that even gets into the production process, which is dirtier, requires more energy and has a higher carbon footprint than traditional crude processing. So while many proponents are painting a rosy picture of a new American energy boom and days of cheap gas and oil independence, such a view clearly lacks perspective. At the end of the day, tar sand oil is dirtier to produce, more dangerous to transport and infinitely harder to deal with in a spill. That being said, it's the skyrocketing price of oil, combined with declines in many of the more traditional sources of more easily accessed crude that has brought many of these technologies into vogue.
What most consumers fail to understand is that many of the "new" sources of oil were simply not cost effective to recover when oil was trading in the $30 a barrel range. But with increased demand and rampant speculation keeping prices sky-high, energy sources that were once off the table, have become profitable. However, any notion that exploiting more of these sources will bring back the days of cheap prices at the pump is misguided. First, oil, no matter where it comes from, is sold on world markets and the increase in production from new sources is unlikely to even keep pace with surging global demands as countries like India and China continue to develop at a rapid pace. Also, if prices were to fall, many of the current oil sites would again become unprofitable, sapping supply and putting upward pressure on prices. In other words, the days of cheap gas are over.
Still, it is unrealistic to think that we are going to transition toward other energy sources without needing to recover a whole lot more oil. Even if we transition our entire automobile fleet into alternatives, a long-term proposition at best, we will still need plenty of oil for everything from large-scale transportation needs (aviation, military, etc.) to plastics and pharmaceuticals. But considering how far we are from getting off of oil, we should be very wary of adopting policies that encourage recovering every bit of every kind as quickly as possible.
Before we accept all of the risks of going big on sources like tar sand and shale, just so that we can pay less to fill inefficient vehicles with gasoline, it would be prudent to explore ways that we can have an equal impact on markets by continuing to fight growing demand, rather than just focusing on the supply side of the equation as most politicos seem poised to do, if only because that is what their paymasters in the energy sector are asking for. Energy companies, like any industry, are always going to go toward the flow of the dollars, but public policy needs to take a broader perspective. We've made some good progress on fleet MPG and CAFE standards, but still have a lot of room to capture progress on that front. As our experience with tar sand oil is quickly teaching us, we'd be wise to direct more effort toward that arena before jumping down the dirty oil rabbit hole.
Dennis Maley's column appears every Thursday and Sunday in The Bradenton Times. He can be reached at email@example.com. Click here to visit his column archive. Click here to go to his bio page. You can also follow Dennis on Facebook.