A protective boom is seen as oil from the Deepwater Horizon spill recedes back into the Gulf of Mexico after washing into a drainage canal in Waveland, Mississippi, on July 7, 2010. Reuters/Lee Celano
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Last winter, fossil-fuel enthusiasts began trumpeting the dawn of a new “golden age of oil” that would kick-start the American economy, generate millions of new jobs, and free this country from its dependence on imported petroleum. Ed Morse, head commodities analyst at Citibank, was typical. In The Wall Street Journal he crowed, “The United States has become the fastest-growing oil and gas producer in the world, and is likely to remain so for the rest of this decade and into the 2020s.”
Once this surge in US energy production was linked to a predicted boom in energy from Canada’s tar sands reserves, the results seemed obvious and uncontestable. “North America,” he announced, “is becoming the new Middle East.” Many other analysts have elaborated similarly on this rosy scenario, which now provides the foundation for Mitt Romney’s plan to achieve “energy independence” by 2020.
By employing impressive new technologies—notably deepwater drilling and hydraulic fracturing (or hydro-fracking)—energy companies were said to be on the verge of unlocking vast new stores of oil in Alaska, the Gulf of Mexico and shale formations across the United States. “A ‘Great Revival’ in US oil production is taking shape—a major break from the near 40-year trend of falling output,” James Burkhard of IHS Cambridge Energy Research Associates (CERA) told the Senate Committee on Energy and Natural Resources in January 2012.
Increased output was also predicted elsewhere in the Western Hemisphere, especially Canada and Brazil. “The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere,” Daniel Yergin, chairman of CERA, wrote in The Washington Post. “The new energy axis runs from Alberta, Canada, down through North Dakota and South Texas…to huge offshore oil deposits found near Brazil.”
It turns out, however, that the future may prove far more recalcitrant than these prophets of an American energy cornucopia imagine. To reach their ambitious targets, energy firms will have to overcome severe geological and environmental barriers—and recent developments suggest that they are going to have a tough time doing so.
Consider this: while many analysts and pundits joined in the premature celebration of the new “golden age,” few emphasized that it would rest almost entirely on the exploitation of “unconventional” petroleum resources—shale oil, oil shale, Arctic oil, deep offshore oil and tar sands (bitumen). As for conventional oil (petroleum substances that emerge from the ground in liquid form and can be extracted using familiar, standardized technology), no one doubts that it will continue its historic decline in North America.