Michael Klare: Grappling With The Age Of 'Tough Oil'

Children playing on a oil flow station in Nigeria i i

Children play on a Nigerian oil-flow station in 2007. Nigeria, a major oil source for the United States, is riddled with ancient pipes and constant spills. That, plus the geopolitical challenges involved, is why much of Nigeria's crude is the kind of "tough oil" that author Michael Klare describes. George Osodi/AP hide caption

itoggle caption George Osodi/AP
Children playing on a oil flow station in Nigeria

Children play on a Nigerian oil-flow station in 2007. Nigeria, a major oil source for the United States, is riddled with ancient pipes and constant spills. That, plus the geopolitical challenges involved, is why much of Nigeria's crude is the kind of "tough oil" that author Michael Klare describes.

George Osodi/AP
Rising Powers, Shrinking Planet
By Michael Klare
Paperback, 352 pages
Henry Holt and Co. LLC
List price: $16
Read an Excerpt

Journalist Michael Klare says the age of "easy oil" is over.

"Easy oil would be the stuff that would be easy to get out of the Earth, in large reservoirs, close to the surface or in shallow, coastal areas, or in friendly countries that are law-abiding and nearby," he tells Fresh Air's Terry Gross. "All of that oil is now gone. We'll never see it again."

Klare has written several books about the oil industry. Blood and Oil examined America's dependence on foreign sources, and his latest, Rising Powers, Shrinking Planet, focuses on the geopolitical problems countries face if they don't find alternative energy resources.

He sees America entering a new era: one of "tough oil."

"Tough oil is deep underground, far offshore, in complex geological formations like shale rock or in the Arctic. Or in unfriendly, dangerous countries," he explains. "That's what I mean by tough oil. That's all that's left on the planet, so that, to the degree to which we remain dependent on oil, that's what we're going to have to go after."

But going after the "tough oil," Klare says, is tough in part because of the complexities of weather, geology and politics. And he warns that deep-water drilling in "tough oil" areas may well lead to more disasters like that of the Deepwater Horizon in the Gulf of Mexico.

"I think that when you engage in drilling in environmentally hazardous areas — which is the trajectory we're on — more such disasters are inevitable because we're operating in places increasingly where the geological formations are unfamiliar, unknown — and where the Earth will behave in unexpected, unforeseen ways, and we can't protect against all of these unforeseen events. So all kinds of disasters are likely to occur."

Michael Klare i i

Michael Klare is a professor of peace and world security studies at the Five Colleges. His department is located at Hampshire College. hide caption

itoggle caption
Michael Klare

Michael Klare is a professor of peace and world security studies at the Five Colleges. His department is located at Hampshire College.


Interview Highlights

On the Deepwater Horizon disaster

"We have been drilling in the Gulf of Mexico for a very long time — at least 40 years. Almost all of the wells in the Gulf of Mexico are very close to shore in shallow water — 100 feet, a few hundred feet. But virtually all of that oil close to shore has now been exhausted. So anything left in the Gulf of Mexico is going to be in very deep water, as much as a mile of water — which is what the Deepwater Horizon was drilling in — even deeper than that, and then going much further underground. So we're drilling under very difficult and hazardous conditions in many cases. The water pressures are enormous at that level. Humans can't operate down there. You have to rely on robots. And the Earth can behave in unusual and unpredictable ways."

On the danger of hurricanes

"The hurricanes produce high winds and big waves, and these can topple the oil rigs that are out there in the deep water, they can damage the facilities, and they make it impossible to operate — so you have to evacuate the crew. Now the big danger is that it will snap an underground facility — the pipes, the risers — and spill oil into the Gulf. Of course, the oil companies say there's no danger of that because of the blowout preventers and other safety devices that are supposed to shut off the flow of oil in the event of a hurricane. But we now know we can't count on those devices to shut off the flow of oil in an emergency."

Excerpt: 'Rising Powers, Shrinking Planet'

Rising Powers, Shrinking Planet
Henry Holt and Co. LLC
Rising Powers, Shrinking Planet
By Michael Klare
Paperback, 352 pages
Henry Holt and Co. LLC
List price: $16

The Struggle Intensifies

Like so much else, the global struggle over energy was profoundly affected by the economic meltdown of 2008. As banks and other financial institutions closed their doors or were absorbed by surviving rivals, consumers cut back on household spending and travel in particular, thus reducing the demand for energy. Rather than an imminent shortage of oil and other key fuels, major energy companies now anticipate a period of relative abundance as demand continues to fall and stockpiles increase around the world.

In the United States, for example, petroleum consumption fell from an average of over 20 million barrels per day throughout the first half of 2008 to 18.3 million barrels per day in the first week of October 2008. A similar decline was registered in the rest of the world. A bulletin released by the International Energy Agency (IEA) announced that it had lowered its estimate for average daily worldwide consumption in 2008 by 240,000 barrels per day and for the following year by 440,000 barrels per day. Many analysts believe that this reduction will persist for some time, taking pressure off the global energy industry. Before the onset of the economic crisis, most experts assumed that global demand would continue its steady upward drive, placing extraordinary strain on international energy firms, which have found it increasingly difficult to keep boosting production of oil, natural gas, and other basic fuels. In the new circumstances of lower demand and greater supply, the intensity of competition has necessarily abated.

It would be tempting, then, to conclude that the fierce jostling for energy described in this book has been significantly mitigated. But while the crisis has eliminated the threat of an immediate energy shortfall, it does not follow that the global struggle will be any less acute in the years to come. In fact, there is good reason to conclude the reverse: that the crisis will only intensify the struggle.

There are a number of reasons to believe that the reduction in competition will be relatively short-lived. First, the depletion of existing oil reserves continues to accelerate rapidly. Second, as a result of the financial crisis, the major energy firms appear to be scaling back their investments in costly new development projects, including alternative energies. Finally, the leading producing countries, fearful of losing their privileged status as a result of the drop in energy prices, seem determined to take steps to extend their control over valuable production and delivery assets.

For years, energy experts have been warning that the world’s biggest oil fields — many of which have been pumping crude for 30 years or more — have been substantially depleted and are on the verge of rapid decline. As indicated in chapter two, just 116 giant fields — all but four of which were discovered more than a quarter of a century ago — account for nearly 50 percent of the daily international oil output. Among those that are now — or will soon be — in decline are some of the world’s largest and most prolific, including Ghawar in Saudi Arabia, Burgan in Kuwait, and Cantarell in Mexico. As recently as 2005, when oil expert Matthew R. Simmons warned that Ghawar and other key fields were on the brink of decline, such pessimistic assessments were widely derided by industry officials, who typically claimed that the fields were still capable of robust production. But recent developments have tended to confirm the pessimist outlook: In August 2008, for example, Petroleos Mexicanos (Pemex) reported that production at Cantarell had dropped by 36 percent over the previous year — an extraordinary rate of contraction in such a short period of time. Significant declines have also been reported in large fields in the North Sea area and Russia.

In an effort to better gauge the extent of the global loss in output, the IEA in 2007 undertook a comprehensive study of the world’s top 800 producing fields. The results of this investigation — the first of its kind — are included in the agency’s World Energy Outlook 2008. Based on their analysis of data on day-by-day production, the study’s authors concluded that the natural decline rate of major existing fields is not 4 to 5 percent per year as previously thought, but an astonishing 9 percent. At this accelerated pace, existing fields will be pumping out substantially less oil every year, requiring a vast increase in output from whatever new fields are discovered simply to keep the level of global output steady, let alone satisfy any growth in international consumption.

From the Book Rising Powers, Shrinking Planet by Michael Klare. Copyright 2008 by Michael Klare. Reprinted by arrangement with Metropolitan Books, an imprint of Henry Holt and Company LLC.

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