Accepting the Things We Cannot Change: Part 1, Consumption Contained

John Pearson

Researching and writing on unconventional energy sources and, in particular, the ‘tar sands’ of Alberta, Canada presents facts (both questionable and accepted) which shock and appall. However, upon consideration of the phenomenon in the broader contexts in which it undeniably resides, those of energy security, geopolitics and development to name but a few, a degree of realism about such projects is necessitated.

The abandonment of two of the most high profile examples of ‘extreme energy,’ the tar sands, and fracking in the USA and UK, is unlikely. Human reliance on hydrocarbons is undeniable and as conventional reserves dwindle, the incentive to extract unconventional sources rises correspondingly. Denying or failing to recognize our inextricable connection to them for the foreseeable future is at best remiss and, at worst, arguably dangerous. Progress towards alternatives continues to be made, but expecting developments to come to fruition and disconnect us from our reliance upon hydrocarbons entirely would be to ignore reality. Recognition is required that unconventional oil and gas extraction is inescapable in the short term. Regulation should therefore be directed at impacts of the use of hydrocarbons fuels which can be addressed in the relatively near future and may contribute towards their abandonment altogether.

Environmental issues suggested as arising from both the tar sands and fracking operations can be divided into two broad categories. These are the consumption of input resources to extract unconventional hydrocarbons and contamination that it is suggested extraction processes result in. This division of the impacts is used to highlight the distinction not only between them, but also the regulatory approaches they necessitate.

This blog post, the first of two, will consider the idiosyncrasies of the management of consumption based impacts. The second will assess the particular problems presented by consumption based impacts and why regulation should be focused upon the concerns they raise.

Commonly held concerns with regard to resource usage in the extraction of gas by fracking and in the tar sands are centred upon water. Vast amounts of water are utilised both to extract raw materials from the earth and in the post-extraction refinement of tar sands. Estimates of the water consumed in tar sands production range from two to five barrels for each barrel of synthetic oil produced. This seemingly ridiculous ratio few can justify prima facie. Similarly to fracture rock formations and release natural gas, copious amounts of water and chemicals are used to expand pre-existing faults. Crucially, water consumption is scientifically capable of considerable reduction and companies invest heavily into researching recycling and the use of alternatives.

In the tar sands and fracking industries, substantial incentives promote increased water recycling and reduced use generally. Extractors strive to regulate usage and thus costs, and tar sands extractors are forced to go through licensed water withdrawals. Authorities perpetually lower consumption by reducing the volume licensed for removal from natural water bodies progressively over time and also if the quota allocated is not exhausted within the license period. Companies must ‘use it or lose it,’ adding to the impetus to control waste and usage.

Firms are thus incentivised to reduce potentially damaging consumption by licensing criteria which exploits existing economic motivations. Water extraction, transport and licensing costs are all prohibitive, and controlled in part by regulators. Thus the system exploits market forces influencing firms to promote environmentally mindful practice, making the decision to act in a responsible manner ‘good business sense.’

Consumption based impacts can also be measured with incredible accuracy by regulators and extractors. Thus the prescription of targets by internal and external regulators is simplified, as is the progressive reduction in these targets towards minimum values achievable. The relative accuracy of these measurements allows for flexible regulations allowing variation for each extractor, method and location. Such specific ascription of targets facilitates continuing reductions across all sites, and at greater speed where applicable.

Continual consumption reductions when coupled with market forces consistently driving competition to lower expenditure promotes alternate approaches to lowering consumption of costly resources. Financial incentives remain one of the most potent methods to ensure compliance or action on the part of private commercial actors and consistent reductions in water consumption by the tar sands industry reflect this reality. This is evidenced by the development of differing fracturing fluids and silicon particulates to maintain fractures allowing continued and reduced cost extraction in the fracking industry. Similarly research into methods to increase water recycling in the extraction of tar sands continues apace and has promoted cooperation between extractors across the industry.

pearson waterlevelmonitor

Knowledge of the adverse consequences of extraction is also necessary to formulate effective regulation. Consumption has immediate and quantifiable effects, ascertained by the monitoring of withdrawal volumes. Any impacts can therefore be attributed, largely incontrovertibly, to particular actions. Although long lasting, they become apparent within a short timeframe. For example, the effects of withdrawals of large volumes from natural bodies are often apparent, within a seasonal cycle. Information regarding the site of withdrawal, the nature of the ecosystem in which it is situated and thus potential impacts again facilitate the production of specific regulatory actions.

Similarly where water is taken from ‘artificial’ sources, such as pipelines or reservoirs, withdrawals can be monitored and relevant charges applied according to both market rates and the potential impacts on supply or environmental features thus attributing costs to that extractor. In both instances, the management of consumption and its impacts is possible, and already occurring.

The consumption of any resource to provide a product, such as natural gas and synthetic crude oil, bears inherent costs, such as regulatory charges, equipment, transportation, or simply the resource’s purchase price. Thus there are constant pressures to reduce costs and remain competitive. This results in reduced consumption and greater efficiency.  Coupled with a desire to at least appear environmentally minded in operations, this forms a relatively effective and self–perpetuating method of reducing consumption and its impacts.

Whilst this does not account for rises in output or demand, as reductions might be outweighed by increased extraction, meaning net consumption would rise, progress is being made at a greater rate than were these factors not present.

The existence of regulations demanding reduction in consumption and shared financial incentives have proved effective thus far. Whilst activism on this issue is not ineffective or without its place, it should be directed to areas where there is less inherent incentive for industry to act in the manner sought. The free market has been one of the most effective means of promoting actions on the part of companies, and extreme energy projects are no exception. However, whilst such realities can be exploited in relation to consumption based impacts, the same success of these methods in combatting contamination impacts is not achievable. The second post on this topic will highlight the specific challenges of such impacts and the reason it is they rather than consumption by extreme energy sourcing with which we should be concerned.

***The unabridged version of this piece (both parts) is hosted by the Extreme Energy Project***

John Pearson (@johnrpearson) is an Associate Lecturer at Lancaster University and Part-Time Lecturer and Bangor University in North Wales. He researches in human rights law and environmental law at international, regional and domestic levels. He has written on the use of human rights to protect environmental features of particular cultural significance and this is the focus of his doctoral thesis and research with a particular focus on the tar sands of Alberta, Canada and on regulatory reactions to the use of extreme sources of energy.

You can find out more about John’s research at http://www.lancaster.ac.uk/fass/law/profiles/john-pearson

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