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Wednesday, July 8, 2015
- With oil prices on the rise again and geopolitical upheaval in some major oil producing regions, many countries are turning to new and often environmentally damaging sources of oil, including oil sands, deepwater offshore oil, and heavy oil.
Political pressure in the United States due to continuing economic difficulties and high oil prices have led to a renewed push for offshore oil drilling in the Gulf of Mexico and Alaska. This expansion, which includes increased deepwater oil drilling, comes despite ongoing investigations, lawsuits, and regulatory reforms following the April 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico.
Due to declining output from existing offshore oil reserves, deepwater oil drilling is expected to contribute an increasing share of global oil production, despite demonstrated human and ecological risks.
Controversy over development of another environmentally damaging oil source – Canadian oil sand reserves – erupted last year, with environmental groups leading protests in opposition to the proposed Keystone XL pipeline that would bring oil sands from Alberta to Texas refineries on the Gulf Coast.
Concerns over possible contamination of vital groundwater resources in the Ogallala aquifer and disruption of the ecologically sensitive Sandhills region of Nebraska led the Obama administration to reject the pipeline route originally proposed by TransCanada, but the State Department is currently reviewing a revised route.
A revised pipeline route, however, fails to address key environmental concerns of oil sands development, including the climate impacts of tapping this energy-intensive oil source, the high water requirements for oil sands development, the risks of oil spills along the pipeline, and landscape alteration and toxic waste streams from oil sands mining.
Another oil source in development that raises major climate and ecological concerns is heavy oil in Venezuela’s Orinoco belt, which nearly doubles that country’s large oil reserve.
Although countries such as the United States and Canada are taking major environmental risks to expand oil production, OPEC (Organization of the Petroleum Exporting Countries) production growth outpaced non-OPEC increases, driven largely by major production expansion in Saudi Arabia in 2011.
The Middle East remains the world’s largest oil exporting region, capturing a growing share of the global market. Despite major efforts by the United States to boost oil exports, the country still accounted for a relatively minor portion of global exports last year.
These oil production expansion efforts came despite slowed growth in global oil consumption, driven by declining consumption in the industrialized world including the United States and European Union – partly a result of rising oil prices.
Meanwhile, oil consumption increased rapidly in China and the former Soviet Union. The oil consumption gap between industrialised and developing countries is narrowing, with non-OECD (Organisation for Economic Co-operation and Development) countries accounting for nearly half of global oil consumption last year.
Oil made up a third of global primary energy consumption last year—still the largest share of any energy source. This share continues to fall, however, as coal and natural gas production outpace oil production growth.
Worldwide, energy production from renewable sources such as wind and solar continues to grow faster than from fossil fuels, contributing to a growing share of final energy consumption. However, efforts to expand fossil fuel extraction from potentially ecologically damaging resources in many industrialised countries – including oil sands development and shale gas production – signals a lack of political will to accelerate the much-needed transition to a global renewable energy economy.
Industrialised countries like the United States and Canada should be leading the way to a low-carbon, renewable energy future, rather than investing resources in deepwater offshore oil and oil sand exploitation.
While the decline in OECD oil consumption is promising, a much more rapid shift to renewable energy sources is needed to avert catastrophic climate change and the damaging ecological and human health effects of a continued fossil fuel-based economy.
*Shakuntala Makhijani is a Research Associate on the Worldwatch Institute Climate and Energy team.