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Coaling Down

There is a lot of news bouncing around, even if you ignore conoravirus stuff. The Trump administration has been ditching environmental regulations right and left of late, and their love of coal has been stated time and again. Thus the news that coal is now trailing renewables in supplying electricity is rather stunning. Under a government seemingly dedicated towards bring coal back from the dead and pushing fantasies like “windmills cause cancer,” this is a remarkable chart:

Energy Information Agency short-term energy outlook, May 2020.

Renewables are crossing the 20% line and, having passed coal, appear set to continue to exceed coal as an energy source going forward. Given the fixed costs associated with coal-fired power plants, it is quite possible that the COVID-19 economic stresses might just put a lot of those coal plants out of business for good.

Even more amazing is this chart:

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Fracking Crossroads

It’s been awhile since we visited fracking.  As a reminder, fracking is injecting high pressure fluids into rock to break open fractures for oil and/or gas to migrate into the well; however, the term has been converted in popular culture to more or less be synonymous with oil and gas development in general. This misappropriation has largely been because of renewed oil and gas development fueled by the application of horizontal drilling into “tight” source rocks that have to be fracked to produce petroleum. (“Tight” formations are usually the source rock of petroleum but lack the porosity for the fluids or gas to migrate into a traditional reservoir; these are usually shales). You could just as well call it “horizontal drilling” as “fracking” and remain exactly as accurate.

GG has argued that fracking (senso stricto) itself isn’t nearly the problem; most of the complaints really come from having industrial activities (with associated noise and air pollution) near residential areas along with occasional failures of the packing of the well that can release drilling fluids or produced water into shallow aquifers. The other hazard that developed is the huge increase in produced fluids (the foul waters that accompany oil and gas development) that are usually disposed in injection wells, which has led in some places to pretty considerable increases in earthquakes, most notably in Oklahoma.

But as more and more operations are active, we’re seeing more incidents of the rarer side effects of fracking itself, in this case earthquakes generated by fracking activities. The most recent case is in England, where the sole fracking operation in the country now is at a standstill after producing a M2.9 earthquake.  Although it isn’t entirely clear whether there is a separate injection well in this system, it does seem from the reports online that this was caused directly by fracking. Following fracking induced events in Canada, Ohio, and Oklahoma, it seems that this worry can’t be entirely anticipated but can be managed by being ready to stop. In England, though, this might mean the end of attempts to use fracking to develop tight oil and gas in that country.

In the U.S., several Democratic candidates have called for an end to fracking, generally with little clarity of what exactly that might mean.  For instance, Elizabeth Warren tweeted out that she would “ban fracking- everywhere” on her first day in office (um, no, not a power the president has).  However, fracking is not mentioned at all on her rather meaty website, suggesting that her program might be a bit more nuanced than her tweet, but the rationale for at least some of the candidates is to end oil and gas development as a means of addressing climate change, which is a more scientifically literate reason for opposing all new development.

But one should be careful in these matters.  While we certainly need to leave a lot of carbon in the ground (barring a major success in CO2 scrubbing from the atmosphere), one would want to make sure that, say, banning fracking in areas where the technique is well developed not lead to new conventional development in fields presently untouched.

The British experience, though, is suggesting that exporting the U.S.’s success in tight oil and gas development might not go as smoothly as many in industry had hoped. Whether that is a good or bad thing depends on your perspective.

Reaping Restraint

GG has written a few times about the state of oil and gas regulations here in Colorado. A lot of that is now changing as Senate Bill 181 has passed the Colorado Legislature and heading for the governor’s desk, where it is expected to be signed.

As is typical these days, the public debate was overheated.  Claims that passing this legislation would end petroleum development and cripple the Colorado economy were broadcast in commercials, while some advocates felt that the bill didn’t go far enough and were upset when amendments loosened some of the language of the original bill. Others felt that this was overturning the voters’ rejection of proposition 112 last fall (e.g., comments here). Votes in the legislature were along party lines.

So is this the death knell of oil and gas in Colorado? Best to see what passed rather than rely on public pronouncements. So let’s look at what is in here.

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Does Madame Pele Like Geothermal Energy?

Hawaii lore is full of stories about trying to get lava flows to stop.  The US Army Air Corps tried bombing flows, Princess Ruth was credited in 1881 with saving Hilo from a flow, the Mauna Loa observatory high on the volcano comes with levees built to deflect lava flows. Perhaps another chapter was written within the devastating eruption of 2018….

GG had the good fortune to visit Hawaii recently and of course had to check out the flows from the 2018 eruption.  One spot visited was near the Puna Geothermal Venture (PGV), a geothermal energy plant run by global geothermal company Ormat Technologies that supplied about 25% of the Big Island’s electricity before being shut down as the 2018 eruption intensified. There were a few surprises.

First, though, what is remarkable is that there is a plant to discuss at all.  The location of the plant was chosen for proximity to magma–indeed, one of the wells drilled actually tapped magma directly (not ideal for geothermal work). When the fissure system of the Lower Puna eruption began in May of 2018, the plant (placed on a 1955 flow adjacent to the cinder cone of Puu Honuaula) began capping wells and draining the fluid used in the closed-system geothermal heat exchangers. Initially it probably seemed as though this would prove unnecessary as the initial long flows starting on 19 May from the eruption headed south, away from the plant.

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Those flows went south to the ocean, but late on May 25th flows began descending the north side of the East Rift Zone, emanating from fissure 8 and heading toward the geothermal plant. It seemed quite possible that the plant would be obliterated as lava encroached on the plant’s land. Soon thereafter a warehouse with a drilling rig and a substation were lost to the advancing lava; three of the production wells were covered.

But on May 29th the flows shifted to the north, cutting the access roads to the geothermal plant but bypassing the main facilities of the plant. With the main lava flow channel becoming well established on that north side, the plant looked like it might survive.

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The main plant at Puna Geothermal Venture caught between the original fissure system (at bottom) and the main lava flow channel (at top). Blue Hawaiian Helicopter’s June 2, 2018 photo via the Honolulu Star Advertiser.

If you drive down to  Lava Trees State Park and go past the turn a few hundred feet, you find the western corner of PGV’s land, from where you might think the plant doomed.  Lava more that 60 feet thick lays across the roads that used to access the plant. Indeed, the top of the lava levees is about the same elevation as the main plant itself.

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View down the Pahoa-Pohoiki Road at western edge of PGV land, 3/29/19.

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View southwest from the same spot up the lava channel to the spatter cone of fissure 8, the main source of lava in the 2019 eruption. Note the downed power lines .

And yet, when all seemed to be said and done, although more than half the land of the Puna Geothermal Venture was under new lava, the main plant had survived. However, estimates in the media suggested it would be years before the plant could be reopened; indeed, it seemed possible that local opposition might shut the plant down permanently.

So GG was a bit surprised to first see ATVs and pickups going up and down over the flow and then hear from a local who stations himself near the road closures that the plant was about to fire up its generators again shortly–in latest March or April 2019, only a few months after molten rock blocked access to the plant.  Indeed, those ATVs and pickups were traversing the initial access road that was cut in December 2018, well before the usual six month waiting period for cutting roads across new flows. And checking the local news, indeed it seemed that the geothermal plant was going to be back in operation sooner rather than later with the bonus that the water temperatures are now hotter than before; instead of 2-3 years as originally feared, the plant’s operators plan to produce electricity within 16 months of the end of the eruption.

When the geothermal plant west down, the island was forced to restart older diesel generators to cover for the power loss.  The state is committed to renewable energy, so retreating to diesel was rather embarrassing, which generally strengthened the hands of alternative energy project advocates. But virtually all renewables generate their share of opposition; GG encountered flyers opposing a new wood-chip (biofuel) plant that touted solar and wind energy, but placement of wind turbines and solar farms have met opposition in some of those places. The geothermal plant, too, has faced opposition ranging from religious objections to the plant’s failure to control emissions of hydrogen sulfide from time to time. If there is to be power, somebody’s ox gets gored, it seems.

The 2018 eruption was close to the worst case scenario for PGV with active fissures of the East Rift Zone emerging only a few hundred meters from the plant. The choice of the elevated land near the old cinder cones was crucial in allowing the plant to survive, but certainly it was possible that Madame Pele could have opened the rift a bit to the north, swallowing up the power plant. So just maybe she approves of this use of her fires.

Forced Pooling note

Just a quick pointer to a real rarity–an op-ed on oil and gas development that seems firmly based on fact.  The Boulder Daily Camera weighed in on the rather ridiculous forced pooling laws in Colorado (the next time some oil and gas advocate claims that Colorado is the strictest state in the country for development, remind them about Colorado’s forced pooling laws, which are the nation’s loosest). As a quick reminder, forced pooling means that your minerals can be developed against your wishes; GG discussed this at somewhat greater length awhile back.  In some states it takes 50% or more of the rights holders to trigger this.  In Colorado, it is a single rights holder. In some areas, oil companies have canvased neighborhoods looking for one resident willing to sign over development rights, which would unlock the whole area.

A Peek At Risks

High Country News has a pretty in-depth article online about a couple specific oil/gas fires and explosions in Colorado and just how severe these can be; it includes audio clips from firefighter communications and is built on interviews with workers and firefighters involved. While one event (the exploded Firestone house) got considerable media attention, the other was dismissed as a small, well-controlled fire that injured an employee. See if you agree after reading how it all went down. It is an indictment of the contention of the industry that they are “good neighbors” as the industry is unquestionably a dangerous one for its workers and arguably a significant risk for its neighbors.

Does this potentially influence Colorado voters? We shall see as the politics of industry rights vs. community safety take center stage.

Reap or Sow?

Well, election season is upon us and as sometimes happens, frustration with legislative gridlock has produced initiatives that probably are less than ideal solutions to problems.

Here in Colorado the issue is oil and gas development. Generous forced pooling rules, state control of drilling permits, and limitations on the ability of surface rights holders to prevent drilling have frustrated suburban dwellers who object to the various nuisances and impacts of a booming oil and gas industry. Attempts to limit development in town laws have been struck down by courts, and attempts to pass legislation have also failed. Compounding the insult has been the explosion of a house in Firestone because of a feeder line from a well that wasn’t properly shut off. So opponents have gone to the ballot box with an initiative that would force new oil and gas wells to be a half mile from any occupied dwelling or vulnerable areas like reservoirs and rivers and streams.  There is no opportunity for a surface rights owner to waive the setback, but this would be a statutory change and not a constitutional change.

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The New Land Race

Occasionally stories are written about the conflict between suburbs in Colorado and the oil and gas industry.  What often eludes reporters, especially those from outside the area, is that the battle lines are not static but moving, and that acts to reinforce rather than temper the conflict.

Here’s the deal. One of the hotter oil and gas plays in the U.S. is the Watternberg field, a northeast trending belt of Denver Basin rocks cooked enough to yield both oil and gas. This field stretches from Boulder to the northeast, encompassing rapidly growing communities like Erie and Longmont and on out into the plains near Greeley. When first exploited in the twentieth century, the region was rural; Erie, for instance, was a shrinking coal mining town at that time with a population under 5% of its current population. Oil and gas wells were pretty widely placed but widespread.

What has happened this century has been to put a modern twist on an old conflict.  In the very early days of oil development, forests of oil derricks could be found in cities like Long Beach and Dallas. At that time there was no question that you’d drill for oil wherever it was. But today?

The state of Colorado regulates where operators can drill for oil and gas, but local communities regulate where you can build buildings. Since 2013, oil and gas wells have to be 500′ from an occupied building. Seeing development covering large areas in the southwestern Wattenberg field, companies have wanted to move quickly to drill before available lands are off limits.  This has led to a flurry of permit requests in these rapidly growing areas. Ironically, the efforts residents have made to preserve open space now boomerang as open space lands often offer locations where drilling is feasible; even when the government holds the mineral rights, Colorado pooling laws mean that a single mineral rights holder can force drilling in an area, and once that is approved, surface rights’ owners can not prevent drilling.

There is pressure on the other side, too. Surface land owners in these growing communities want to take advantage of the red-hot housing market in the region; construction is largely limited in the region by the availability of construction workers. Right now many communities allow new buildings to be placed much closer to existing wells–150 feet in the case of Firestone, where a house blew up awhile back. Some communities are considering larger setbacks, though this is typically expressed as an attempt to expand on the state’s rules on where new wells can be sunk rather than a limit on new construction. Nevertheless, developers and landowners don’t want to be caught having to leave open land because of an abundance of wells.

The result is an intense competition along the I-25 corridor north of Denver. You can find drill rigs seemingly a few feet from new houses in Erie, for instance, as the wells are being drilled as the houses are being constructed. As with any such race, the best solutions fall by the wayside. Given the need to move away from fossil fuels, leaving the oil and gas under the southwestern part of the field makes a lot of sense, both for locals and the global environment. Shifting to an emphasis on developing the rural, northeastern part of the field would seem a better outcome for all save the mineral rights holders in the southwestern part of the field.  And the reality is that for most of those folks, those rights are found money–until recently there wasn’t much value to those rights. [Congress never intended for mineral rights to go to homesteaders and the like, but that is another story].

Instead the only legal out is to buy your way out, which is what the city of Longmont decided to do. Or cover everything with houses, which seems to be some other cities’ approach….

People’s Power

For those of us concerned about increasing CO2 values in the atmosphere (yes, we are about to crash 410 ppm), the recent decision of the Trump administration to back out of the Paris accord is disheartening. But it is worth looking at what has been going on for awhile to see that there is progress, much of which owes less to government action than to the power of the marketplace.

Let’s start with a recent milestone: 10% of electricity produced in the US in March was from wind + solar energy. That’s produced, not capacity.  Now wind in particular is seasonal, so we’ll drop back down from that high, but compare that to the high from 2007, ten years ago, when it was only 1%.

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U.S. Energy Administration, June 2017 “Today in Energy”

This is excluding other non-CO2 sources of electrical power, such as nuclear energy, hydropower, and geothermal.  Of the 97.4 quadrillion BTUs (or peta-BTUS, or PBTUs; equal to 2850 GWh) of primary energy consumed in 2016 (so not just electricity), 18.5 (or just a hair under 20%) came from all carbon-neutral sources of energy.

Going a decade back on primary energy consumed reveals some interesting changes–and lack of change.  Total energy consumption was actually higher at 99.4 PBTUs, but carbon neutral was only 14.9 PBTUs (nearly all nuclear, biomass and hydroelectric, in decreasing order). One of the great accomplishments that goes unnoticed is that GDP in the US in constant 2009 dollars went from $14.5 trillion in Q1 2006 to $16.9 trillion in Q1 2017: a 17% increase while energy consumption overall dropped by 2%. That is huge, because if energy tracked GDP, the increase in renewables would have not even filled in the hole in increased consumption of energy. U.S. energy consumption has been flat or gently declining since 2000.

GDPperBTU

May 2017 Monthly Energy Review, US Energy Information Administration

Of course you might say that the low-hanging fruit is picked, and there is reason to think that.  Hydropower isn’t going anywhere forward in a big way, and decreased flow in important hydropower rivers like the Colorado bodes ill for the future. Nuclear remains stalled, and the impending retirement of a number of plants suggests the share of power from this source will decline. But there are optimistic trends, too.

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The Great Colorado Oil Blowup

Well, it was the well. In Firestone, Colorado, a house exploded because a cut gas line that should have been abandoned but was still connected leaked gas into the soil five feet from the house.  The odorless gas seeped into the basement of the house and was ignited. This determination is almost certain to ignite another, thankfully figurative, firestorm.

Leaving aside the inevitable lawsuits over that explosion, what does this mean and what should it mean for oil and gas development?

Let’s start with the easy part: what it should mean. Oil companies need to be responsible for the safety of their facilities (that includes being legally liable). New construction near existing oil and gas facilities needs to be aware of oil and gas infrastructure, including these flow lines. Government should enforce inspections of existing oil and gas infrastructure and assure the proper sealing and plugging of wells and flow lines being abandoned. Ideally, government should sponsor means of detecting unusual levels of hydrocarbons leaking at well sites and employ them as a means of recognizing trouble spots (CIRES and NOAA have been working on such tools).

Frankly, if GG lived near a well, he’d be trying to find out about the feeder lines and the history of the well. And quite possibly monitoring gas levels in the basement.

The good news is that the state has ordered oil and gas companies to pressure-test all lines within 1000′ of occupied buildings and to make sure abandoned lines are properly marked and capped. It is unlikely that industry will protest.

Unfortunately, that probably won’t be enough to prevent some future tragedy unless something else changes.

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