The unconventional (oil) non-solution

First, we know that tight oil production, like that in the Bakken Formation of North Dakota, is a treadmill. The constant drumbeat of highly-placed editorials about incipient U.S. energy independence is strictly political fodder, with no sound basis in data. Yes, in theory, it’s possible that we could double the output from the Canadian tar sands and the deepwater Gulf of Mexico, quintuple the number of wells that have been sunk in the Bakken so far, and pull off some biofuel miracles. But local resistance to that drilling program will be fierce in some areas, and its cost will eventually prove prohibitive. And it won’t end there; to maintain that level of output, we’ll have to keep drilling like hell, with increasing risks to the environment and public tranquility.

In reality, despite the technological achievements that have enabled production from these difficult resources, the world is losing the race against the depletion of mature conventional oil fields. And the pace of that depletion is accelerating: it’s now an estimated 5 to 6 percent per year for OPEC, and 8 to 9 percent for non-OPEC. Unconventional oil cannot compensate for a drag of that magnitude for very long…

Our Take:
The drum beat for energy independence is real, and it’s important–self reliance in key areas like energy and food production keep America’s economy strong and her borders secure.

That said, we agree with “Peak Oil” author Chris Nelder that fracking alone can’t deliver energy independence as some folks who want to dismantle RFS argue.

We also don’t see the outcome as a “biofuels miracle.” Steadfast adherence to RFSII and further support for alternative fuels will lead to amazing advances in farm-based energy. Steel is going in the ground at this very moment–the construction of the first half-dozen cellulose-based ethanol plants across the country, we learned at the recent Fuel Ethanol Workshop in Minneapolis.

To keep the powerhouse ethanol industry going strong, and maintain the strength in commodities markets that results from it, RFS should not only be maintained, but growth in both grain-based and bio-based fuels should be indexed to growth of yield the corn and other crops demonstrate year-in and year-out. Because ethanol production also yields high quality animal feed, and because the ethanol industry is so important to the strength of crop production, the growth of grain ethanol is essential to growing the capacity to feed the world. We won’t see 300 bushel per acre corn without a strong and growing grain ethanol industry.

Imagine a future gallon of fuel with no fossil component–only ethanol, isobutanol, or other bio-based energy sources. It’s going to happen, and it’s no miracle. It’s the hard work and determination of farmers and ethanol makers that’s going to make this a reality.

This can be done while preserving environment–strong commodity prices and rural energy production generates some of the wealth that allows the set-aside of marginal and sensitive lands for the “environmental and wildlife habitat services” they provide.

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