In an ironic twist of fate, the Keystone XL Pipeline -- which would transport some of the heaviest, carbon-laden, and water intensive oils from Alberta, Canada to the United States -- also traverses through regions that are being plagued by rising temperatures, persistent drought conditions, and depleting aquifers. As detailed in Scientific American, the stage is being set for a climate disaster in Colorado, Nebraska, North Dakota, South Dakota, Wyoming, Montana, and Kansas similar to the Dust Bowl of the 1930s.
It has been well-documented that the western states of the U.S. are a prominent source of three unconventional oil types -- oil shale, oil sands, and shale oil. Oil shales (kerogen) are high-carbon, energy-intensive, and expensive immature oil sources. Oil sands (bitumen) are extra-heavy, coal-like, ancient oil sources. Tight shale oils are conventional lighter crudes trapped in rocks and extracted through new techniques of hydraulic fracturing and horizontal drilling.
After decades of declining production, these unconventional oils led to the U.S. experiencing its third consecutive year of oil production growth in 2011. U.S. and Canadian oil production combined are projected to increase by 3 million barrels per day (MBD) by 2016, reaching 12 MBD and surpassing the previous record of 11 MBD set in 1973. The Energy Information Administration projects that, by 2035, oil production in the U.S and Canada could soar as high as 20 MBD.
Western Lands, both in the Rocky Mountain and High Plains states, could be an increasingly active area for these oil drilling and production activities. Four plays feature prominently on public and private lands: tight oils from Niobrara play in the central Rockies, which spans Colorado, Nebraska, and Wyoming; oil sands and oil shales in the Uinta Basin from Utah into western Colorado; various oils flowing into the Rocky Mountain region from the Williston Basin tight oil, which includes the Bakken formation that stretches from the Dakotas, into Montana, and northwest into Saskatchewan; and interplay between the Williston and the agglomeration of other oil plays in the Central Rockies and up into Alberta.
By 2016, the Williston alone is projected to be pumping 1.4 MBD while the Niobara could be one-third these rates. If producers continue to unlock these and other oil resources, production growthcould accelerate even faster. In the absence of national climate policy and other sound state and regional guidance, decisionmaking by energy companies will retain its focus on profit, indifferent to carbon dioxide emissions and inhospitable climate conditions.
The climate implications of these high-carbon oils have not been fully assessed or adequately addressed. For example, in the November 2012, Environmental Impact Statement for developing oil shale and oil sand resources on Western public lands, the Bureau of Land Management concluded that, while "activities associated with oil shale and tar sands development would contribute to overall atmospheric greenhouse gas emissions, it is not possible at this time to predict either the specifics of those emissions, or how they might result in specific climate change related impacts."
In the context of optimism about North America's newfound oil potential, climate change concerns must be an important factor in policymaking. This is part of the dynamic with the Keystone XL pipeline, where there is pressure from industry for government permitting and private investment to be expedited that would risk locking in massive carbon emissions over the long term. When it comes to Western Lands' oil development, there is also discussion about delegating authority to the state-level, but, especially in a region under stress -- as is the case with this drought-afflicted region -- federal oversight for complex and far-reaching resource management remains crucial.
The fact that climate impacts are not adequately addressed as part of requisite environmental reviews underscores that the connection between oil development and climate change must be overseen at a higher level -- through a new national energy policy. The climate conditions on Western Lands should serve as a reminder that it is best to be deliberate and prudent on unconventional oil development until Americans have reflected on the larger implications of their actions, especially on public land where the government has greater control and primary responsibility.
Important choices need to be made in the area of unconventional oils in order to ensure resource exploitation on Western Lands doesn't lead to a host of regional climate impacts. Farm failures, water shortages, reduced crop yields, strained family budgets, and safety concerns on Western Lands are a harbinger of what could be ahead. Against this backdrop is it in the national interest to fast-track federal leasing on public lands, minimize policy oversight on private lands, or permit massive infrastructure investments that lock-in resource development patterns?
The array of new oils vying for market position in the United States, Canada and worldwide, offer new opportunities. They also require informed and strategic new policies to guide oil development and use. Limiting use of oils with the largest climate impact is critical. Doing so will require a full understanding of the particular characteristics of an expanding slate of oils, their emerging extraction and processing techniques, and shifting co-product yields.
Regulations will be important to standardize best practices and mandate efficient use. But effective mechanisms for pricing carbon will be required to monetize the trade-offs as to which oils to produce and which should remain in the ground, as well as how to use all oils most efficiently.
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