Unconventional Fossil Fuels: Scraping the bottom of the barrel?
‘Unconventional Fossil Fuels’, the oil sands/tar sands of Canada and the shale oil of the US are probably the largest sources of oil in the world. Until oil prices went above $60 a barrel and developing countries began asserting more control over their resources, oil sands, a bituminous mess of clay, oil and water requiring prodigious amounts of energy, water and money to upgrade were too expensive to produce.
Although the oil price has dropped back to $60 levels, it is expected to go higher again. What may be gained in ‘energy security’ pales in comparison to the disastrous environmental impacts that large-scale exploitation of unconventionals will incur. The high energy input to get the fuel to a usable state means the carbon emissions are 2.5 to 8 times higher than for conventional oil (that's before the fuel is burned in vehicles). The consequent effects on climate change, along with a host of other environmental and social impacts, are further examined a report we recently produced with WWF. [View report].
In short, exploiting unconventionals on a large scale will by itself eat up the carbon budget the planet has left to avoid dangerous climate change – and then some. Host governments and oil companies hope that Carbon & Capture and Storage (CCS) will solve the carbon problem but it may be decades before CCS can catch up with expanded production.
In the mean time, the CO2 will escape into the atmosphere. And it’s not simply an environmental issue: it’s a political and financial one that promises to hurt companies that operate improvidently. In years to come, tougher climate change regulation, costs of environmental compliance, litigation from affected communities are some of the challenges that could render unconventionals too expensive, once more. By then hundreds of billions of dollars will have been invested. So far, the companies involved have failed to answer how they will cope with these risks and costs.
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