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The United States of Energy (Part 1)

Editor — Tue, 29 Dec 2020 13:43:36 +0000

Unless you’ve been living under a rock or in a cave for the past year you’ve probably heard that U.S. oil and gas production is going strong. In fact, it’s going like gangbusters. According to reports, U.S. oil output was the highest in November in 25 years at 8 million barrels per day. As a result, the price of gasoline has dropped by 49 cents/gallon. At this rate, the U.S. could shortly end up being one of the top oil producing countries in the world. In fact, it has been reported that a Saudi prince wrote a letter to the Saudi oil minister warning him that the surging U.S. oil production is a threat to the Saudi economy. For someone who distinctly remembers people riding their bikes to work in the late ’70s, I never thought I’d hear something like that.

A similar boom is going on with natural gas produced through fracking, and the U.S has become the largest producer of natural gas in the world. According to the Energy Information Administration website, the U.S. produced almost 30 million cubic feet of natural gas in 2012.

This new found energy production is having impacts elsewhere too. Oil and gas employment has increased 40 percent over the last 5 years.

Fracking also has created a huge demand for sand (a key ingredient in the fracking process). As noted in the Wall Street Journal, energy companies are expected to use 56 billion pounds of sand this year and it takes approximately 25 railcars of sand to frack one well.

The increased production and use of natural gas also appears to have had a positive environmental impact. By some accounts, C02 emissions in the U.S. have dropped 12% due to the switch from coal to natural gas.

Amidst all of this positive news, taxpayers, scientists and regulators are keeping a watchful eye on these industries due to health, safety and environmental concerns. In Oklahoma (a state with an average of 50 tremors per year) there have been 2,600 earthquakes in 2013 and the increase coincides with rise in fracking. The cause? Scientists suspect it’s due to the pressures created when fracking wastewater is injected deep underground. Other issues such as groundwater withdrawal and contamination also have been raised.

As with many aspects of our increasingly complex lives, as the U.S. enjoys the fruits of these energy resources, society will have to make hard policy decisions relating to the management of these risks and benefits.

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The United States of Energy (Part 2): Concerns in Michigan and the Great Lakes

Editor — Tue, 29 Dec 2020 13:38:45 +0000

In a prior post we highlighted the recent energy boom in the U.S. Like elsewhere, the increased attention to energy production has been felt here in Michigan but on a smaller scale. Earlier in 2013, Encana (a Canadian company) announced that it was considering developing at least 500 new wells in the state. Current economics, however, create some doubt as to whether gas production in Michigan will increase more than current levels.

Michigan residents are paying close attention to gas and pipeline transport issues in the region because of our water resources.

What is the main issue in Michigan? Two words – groundwater withdrawal. Many Michigan rivers and streams are fed by groundwater. With fracking pads using up to 20 million gallons of water, the concern is fracking near waterbodies will result in reducing water levels to a point that fishing and boating will be adversely impacted. Recently, because of local opposition to oil and gas leases along the “Holy Waters” section of the AuSable River, the DNR designated those leases as non-production leases. In addition, the sensitivity of this issue for Michigan residents has prompted the MDEQ to re-evaluate its fracking rules.

Michigan residents are also concerned about oil transport through the Great Lakes region. Companies like Enbridge are building or expanding pipelines in Michigan to handle the increased production of oil elsewhere. There are also plans to build an oil shipping port in Superior Wisconsin so that up to 35,000 barrels (about 1.4 million gallons) of oil from Alberta’s tar sands can be shipped to refineries around the Great Lakes.

As many recall, in 2010 one of Enbridge’s oil pipelines near Marshall, Michigan ruptured spilling over one million gallons (about 24,000 barrels) of diluted bitumen (“dilbit”) oil into the Kalamazoo River – a spill that Enbridge is still cleaning up. While Michigan residents understand the need for oil, they are not interested in a repeat of the Enbridge spill – especially one that would involve one of the Great Lakes.

Although water is abundant around the Great Lakes, it is used by many for recreational purposes in addition to industrial/commercial uses. As a result, there is significant interest and demands for it to be managed so that it can be enjoyed by the greatest number of people.

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