Pathfinders: Fracking – A Bridge Too Far?

[ALB]

Revealing developments going on at the moment on the world energy market. The price of oil has fallen and some oil-producing countries want the OPEC cartel to restrict production so as to put up prices. This is being opposed by Saudi Arabia which wants to keep the price low so as to discourage fracking. Here are some of the headlines (click on the bold to read the story):UK FRACKING FACES BUST AMID OPEC OIL PRICE WAR  FALLING OIL PRICE SLOWS US FRACKINGLOW OIL PRICES ARE PUTTING THE FREEZE ON FRACKING PROJECTS AROUND THE WORLDWhat this shows is the impossibility of a rational energy policy under capitalism as energy use under it reflects the relative prices of the various sources (coal, oil, gas, shale oil, etc) and changes as they vary.There's also a lesson for those who want to campaign against the use of fracking under capitalism. They should be careful what they wish for. They may get fracking slowed but not replaced by renewable sources as these are too costly at the moment but by … oil and coal.

[alanjjohnstone]

i believe i read somewhere Saudi oil production costs are as low as $10 a barrel and Texas $40 so indeed there is ample scope for the oil industry to undercut competition and they can sustain it for quite a time. Rather than Saudi over-production i have read it is also to do with US. the U.S. is producing more than 3 million barrels a day than it did several years ago. As Robert Bryce of the Manhattan Institute points out, this is like adding another Kuwait to world oil production. And it is fracking that is doing it http://www.newsmax.com/richlowry/frack-fracking-oil-gas/2014/12/08/id/611839/According to the Institute for Energy Research, "Nearly every barrel of new U.S. oil production can be attributed to the use of horizontal drilling and hydraulic fracturing technologies."…The Marcellus shale in Pennsylvania alone, he writes, has added another Iran to world natural-gas production.US domestic demand has apparently plateaued so this extra production is going on to the world market. Some say for established frackers should survive…it's those like the UK who want to be new players and enter the fracking industry who won't be able to make a return.http://www.ctvnews.ca/business/as-u-s-gas-consumption-plateaus-fuel-exports-pollute-elsewhere-1.2137411One argument being offered is that previously the worry was an oil shortage so countries were doing there utmost to invest in its production…now that there is a glut, oil has lost its leverage against environmentalists http://www.cbc.ca/news/business/oil-s-fading-clout-will-aid-climate-change-fight-in-lima-don-pittis-1.2856251But i can't see any serious challenge to oil. "the largest companies in the energy industry have concluded that policymakers are unlikely to act quickly enough to strand their current fossil fuel assets or make it unprofitable for them to continue exploring for new reserves. The oil and gas sector, in particular, is gambling on a business-as-usual model that projects out to a roughly $14 trillion investment in new reserves by 2035. This investment would correspond to a staggering amount of wasted capital should policymakers decide that these reserves cannot be burned."http://thehill.com/blogs/pundits-blog/energy-environment/226406-winning-the-war-on-fossil-fuelsIt isn't the environmentalists who should panic but the so called "petro-socialists"  of Venezuela and some African nations suck as Angola who may have to devalue currency or sell off assets acording to some commentators. The question being asked is why the Saudis haven't themselves cut back production as they have done in the past. Plenty of conspiracy theories…to screw Iran…to fuck up Russia in alliance with the US…Or as you say , to bugger the fracking industry.Another reason the environmentalist won't like it is that a fall in oil price is a boost for general economic growth. Regard coal which has seen its price halved in the past year, Australia as a major exporter better watch out (on a personal level i got extremely pissed of with Aussies boasting of their booming economy and great exchange rate..bit of sweet schadenfreude now :-)But what you highlight is the utopianism of environmentalists who think shaping the market is a solution. Just too many variables.  

[SocialistPunk]

British government chief scientist warns of unforeseen risks of fracking.http://www.theguardian.com/environment/2014/nov/28/fracking-risk-compared-to-thalidomide-and-asbestos-in-walport-reportInteresting to note what he says about what is holding back development of renewable energy sources. 

[ALB]

Actually he didn't. If you read to the bottom of the link you'll see that the Guardian was obliged to publish a retraction and a correction:

Quote:

• This response from the government’s chief scientific adviser, Mark Walport, was added on 16 December 2014:(…)“The Guardian article that linked fracking with thalidomide and asbestos is a florid example of what my report argued most strongly against. It confuses arguments about science with value propositions. It selected one sentence from one evidence paper, quoted it in part, and in doing so misrepresented both the report and indeed the evidence paper itself. This has been picked up in a careless fashion by other news channels and by social media and subjected to a hopefully brief period of amplification. In doing so, the article debased an important discussion about future energy supplies – and, at least as importantly, it devalues science journalism. I am glad however, that the Guardian has allowed me to express my own voice adjacent to the offending piece of journalism.“With regard to fracking, the hydraulic fracturing of shale to obtain natural gas and oil, I fully endorse the report of the Royal Society and the Royal Academy of Engineering. Of course methane is a fossil fuel, but as long as it is burned efficiently and fugitive emissions of methane gas are minimised, it is a less harmful fossil fuel than coal and oil, and is an important way-station on the global journey towards low carbon energy. The scientific evidence is clear that any environmental or geological risks can be managed effectively in the UK as long as operational best practices are implemented and enforced through effective regulation.”

[SocialistPunk]

Thanks for pointing it out ALB. I just scanned the article.That'll teach me to read an article properly in future.However I am of the opinion that unless a guarantee that the chemicals used will never ever find their way into the water table then it is an unacceptable risk for little return. In capitalism risks vs benefits more often than not adds profit into the calculation.  

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