Power Trip: From Oil Wells to Solar Cells – Our Ride to the Renewable Future. Amanda Little
seismologists to unscramble the salt layer’s distortions. Still, the maps were largely inscrutable. “Reading these maps is like looking through a wall of thick glass brick,” as one geologist told me, “and trying to count the eyelashes of a person on the other side.”
The maps also can’t predict how hard it will be to extract the crude. You might think of oil as situated in big pools under layers of rock. But it’s actually embedded in the rock, like water in a sponge. “When you drive the drill down you’re going into porous rock that can be either kind of squishy or kind of rigid,” Siegele explained. Squishy is better, but as rocks age in deeper terrain, they typically become tighter—meaning less productive. You also confront more debris that can clog the well shaft: in other words, instead of sucking up the oil in one big swig like a soft milkshake, it’s as though chunks of ice and strawberry get stuck in the straw. That’s why, when I visited the Cajun, teams of geologists were standing by to analyze the rocks and mud that got pulled up by the junk basket, hoping to gather a better understanding of the conditions deep below.
Temperature and pressure also pose risks to drilling activities, so engineers must vigilantly scan the computer readouts that monitor these conditions as machinery travels down through the sediment, crossing geological layers that range from hard bedrock to sand to empty voids. The rapid pressure changes between these layers routinely disturb equipment. At the well bottom, there is enough pressure to implode a human head—or more pertinently, to crack iron casings. And the closer you get to the earth’s core, the hotter the rocks become. At 20,000 feet below seabed, the oil is hot enough to boil an egg. At 30,000 feet, the oil can reach over 400 degrees Fahrenheit, hot enough to cook off into natural gas or carbon dioxide. Meanwhile, the water at the bottom of the deep sea is at near freezing temperatures, creating a dangerous contrast as the oil is pulled up.
Any one of these factors—loop currents, faulty drill placement, electrical glitches, rock porosity, pressure and temperature changes—could delay operations for days, weeks, even months. At more than half a million dollars a day, the operating costs add up on deep-sea rigs like the Cajun. Hurricanes, too, pose an ominous threat. In 2005, the year of Katrina, Chevron had to carry out seven emergency evacuations. BP’s legendary Gulf of Mexico platform Thunder Horse suffered a $250 million blow when a hurricane tore a tiny hole in its hull that eventually sank half the rig, requiring a stem-to-stern reconstruction.
FINAL FRONTIER
Given the challenges that plague ultradeep drilling, it’s sobering to think that this frontier holds the oil industry’s best hope for finding new petroleum reserves. “The odds are incredibly low that we’re going to hit some fabulous new discovery on land,” Matthew Simmons, a leading investor and industry analyst, told me. “Everybody’s looking to the deep sea for big new finds.” To an outsider, it was at once impressive and baffling to watch engineers burrow 5 miles into the earth for oil. “It has all the audacity and technological complexity of launching a space shuttle,” as Simmons put it. I found the enterprise doggedly ambitious, but also seemingly desperate—like an addict forcing a syringe into the earth’s innermost veins.
Siegele himself admitted that “there’s no guarantee that the rewards in this field will outweigh the risks.” After my visit, in fact, an even greater snag than the one I’d witnessed occurred on the Tahiti field’s production platform: an incorrectly soldered mooring would cause a year-long setback that cost Chevron over a hundred million dollars, by a conservative estimate. But the sunken treasure was worth it: the company proceeded with repairs despite the high cost and began to pump oil from that platform by mid-2009.
One question persisted in my mind: if an energy company is going to throw a billion dollars into something untested and possibly doomed to failure, wouldn’t it make more sense to invest in the inexhaustible, greener technologies that will likely replace fossil fuels? None of the Chevron employees I spoke with seemed concerned that their industry may be fast approaching obsolescence. “Do you heat your home? Do you fly on planes? Do you drive a car?” Siegele challenged me. “What do you think makes that heat and moves those jets?”
Siegele was right. Even as innovators have been producing breakthroughs in clean cars, green buildings, and renewable energy and efficiency, the Department of Energy projects that American oil demand will hold steady—not decline—in the decades ahead. American oil demand on the whole has been holding steady in recent years, not declining. And even if America were to slash its oil consumption, industrial growth in China and India is pushing global petroleum demand ever higher. The New York Times has reported that the global demand for energy could triple by midcentury. “So long as people need oil,” Siegele told me, “we’ll find a way to supply it.” In other words, the oil industry will go to whatever lengths (literally and otherwise) it must to get oil so long as consumer demand persists and the oil is there for the taking.
But how much oil is there for the taking, and how long will supplies last? It depends on who you ask. The moment when the global economy reaches “peak oil” will be the most significant tipping point of the twenty-first century—the point in time when the world’s oil producers can no longer increase their supply, and the industry enters “terminal decline.” Though “peak oil” is a confusing term, it can be pictured simply as the peak or high point on a graph of production over time. It doesn’t mean that we’ve run out. It means that the world’s oil fields will be producing less and less each year. After this peak, the falling-off of oil supplies will in turn bear directly on the basic demand-supply curve of Economics 101: when supply declines and demand stays steady (or rises), prices will rise. A mere 4 percent shortfall in oil production, for instance, could lead to a 177 percent increase in the price of oil.
It’s true that oil could stay cheap if demand dropped faster than supply. We saw that happen recently, as the economy slumped in 2008. Industrial activity slowed, curbing the flow of fuel into commercial trucks, bulldozers, cargo trains, buses, airplanes, and ships. For this and other reasons, demand for oil plunged, causing crude prices to fall from an all-time high of $147 per barrel in July 2008 to $40 per barrel in November 2008. Over the long term, however, demand will inevitably outstrip supply as the global population continues to expand and industrial growth trends upward in the developing world.
Peak oil happened long ago within most industrialized countries, including the United States. Our domestic oil production peaked in 1970 after decades of meteoric growth. That’s why America—the world’s biggest oil producer for most of the twentieth century—now contributes less than 10 percent of the global supply, and imports roughly two thirds of its petroleum from overseas. The question remains: when will our suppliers hit their peaks?
No one can predict with total certainty the geological limits of the petroleum era. Just look at the range of opinions among top experts. One of the world’s leading oil industry analysts, Daniel Yergin, who was awarded a Pulitzer for his book The Prize: The Epic Quest for Oil, Money and Power, told me that oil supplies “may reach a plateau…perhaps in two to three decades.” Meanwhile, former industry executives and geologists such as T. Boone Pickens and Kenneth Deffeyes insist the peak has already occurred, and supplies will only continue to decline from here on out. How can these savvy insiders disagree by thirty years? In part, because the data on global reserves are largely unknown: as much as 90 percent of the world’s oil is owned by government-run or privately held oil companies, and they tend to keep as closely guarded secrets information about the size of their reserves. Estimating the total volume of the world’s remaining oil involves a great deal of guesswork.
Siegele and his engineers are hardly worried about the long-term threat of oil supply shortages. Technological breakthroughs have, decade after decade, revived the perpetually doomed oil industry: petroleum reserves often seemed too remote or too expensive to exploit over the last century, yet engineers invariably managed to come up with better, cheaper drilling tools. “Predicting peak oil,” Siegele told me, “is almost like predicting peak technology”—an exercise that to him seems inherently small-minded, even absurd.
Siegele’s comment reminded me of something the fictional oil baron J.R. Ewing said on the TV show Dallas. (I confess I watched six seasons of the series back-to-back,