Kjell Aleklett: Fracking is not for Europeans (part II)

In this second part of the interview with Kjell Aleklett, the Uppsala professor does not see any advantages for the Europeans to get into fracking, and he talks about his frustration with companies and politicians for not taking his warnings seriously. To his mind this ignorance is harbouring a danger for democracy.

Kjell Aleklett (c) Gleamlight / Philippe Molitor
How do you see the Europeans’ hesitation to jump on the fracking wagon?

They are right. Take for instance the Barnett shale where fracking started in Texas. They produce about 5 billion cubic feet (1.4 billion cubic metres) of gas per day. Therefore they need 18,400 wells. As a comparison, Poland’s needs would be 1.6 billion cubic feet (464 million cubic metres) per day. And to cover that, Poland needs 5,000 wells. After that they have to drill another 1,000 wells per year to keep the production stable. I do not think that the people will benefit from that. The difference between the landowners in the US and Europe is that the US landowners are profiting from the shale production, in average between 15 and 25 percent of the production revenue. Another winner is the big service companies. To drill a well costs between 6 and 8 million dollars (4.43 to 5.9 million euro). Poland needs to drill about 5,000 wells, and the cost in Europe is higher than in the US. Furthermore, in Eagle Ford there is no pipeline system between the wells. The oil is stored on site and is collected by about 15,000 trucks every second day to take it to a centre. You can have this sort of operation in a place where no people are living, but not in the centre of Poland. Just imagine, in Europe you find the best shale conditions in the Paris basin which has the size of the Barnett field and you would have to drill about 18,000 wells. I do not know whether the Parisians would like that. Why should we say yes to something which we can only have for five to ten years?

Over the last decade, you have continuously warned the world about its ignorance of not realising the danger ahead of reduced oil supply. Are you disillusioned by the lack of response?

A lot. It is very hard to discuss something which will happen in ten years from now. Remember, in 2002 Colin Campbell and I wrote the first paper about peak oil, disregarding fracking, which was not on the agenda yet. We said at that time oil production will peak between 2010 and 2013 at a level of 85 mb/d. The reaction was, you are crazy. They argued that the global economy cannot handle this low production.

According to the knowledge I have, in China peak oil is on the political agenda
They were right, the economy was unable to deal with it and we were right with our prediction. We can make predictions ten years ahead. But people, companies and politicians are not interested in what is going to happen in ten years’ time. As a result of this we face a problem. Decisions which must be taken now because they are important for the future do not fit into a democracy, because you have to take decisions that people do not like and politicians who take these decisions do not get re-elected. Unfortunately, there are countries like China, where governments do not have to think about getting re-elected. They have a totally different policy and know what they are doing. According to the knowledge I have, in China peak oil is on the political agenda.

You mentioned it already yourself, that the peak oil theory is not unchallenged. Recently, the World Energy Council’s Secretary General Christoph Frei stated that in the foreseeable future there would not be any such oil deficit.

Of course he will say so. In January, the European Union released a report about the future energy scenario. They looked at the possibilities for 2030. They said that oil production in 2030 should be 120 mb/d. That is absolutely impossible. This is a document which should guide Europe into the future. The only place to store this document is in the waste bin. It is absolute rubbish.

Who provides the EU Commission with this sort of data?

They have their own research group, but I do not want to call that research.

Another critical voice about peak oil comes from BP’s CEO Bob Dudley. When presenting the Energy Outlook he said: “The picture in terms of resources in the ground is a good one. The theory of peak oil seems to have – well – peaked.” Are you too pessimistic?

The fact is, when you look back what BP said some years ago, their production numbers compared to now were absolutely crazy. I agree that peak oil is delayed; because of fracking we will not see an immediate downturn. If you remove the fracking, the ethanol and the natural gas liquids, that fact remains, oil production has peaked. Many things we said in 2002 are accepted now, even by the IEA. But still, they are too optimistic.

The EU report says something about the high oil production in 2030 having to do with a dramatic increase in the recovery factor due to new technology.

I am kind of suspicious that the people who have done this forecast are economists, and economists do not know very much about engineering
But looking at the US, which is very active in this field, the enhancement of the oil production due to new technology is not more than ten percent. Globally, the enhanced oil recovery is around 2 mb/d and an increase by ten percent would give an extra 5 mb/d. There might be the possibility of a further production increase to make the slope less steep, but that means big investments. Countries like Saudi Arabia are already counting on this potential in their prognosis, so there will not be the extra oil that the EU is hoping for. I am kind of suspicious that the people who have done this forecast are economists, and economists do not know very much about engineering.

Who should wake up?

The reality is that the duration of the fracking period in the US, which started in 2008, is highly uncertain. The gas fields, for instance Haynesville, have peaked and are declining, like Barnett. There is only one gas field which shows an increased production, and that is Marcellus, Pennsylvania – New York. But, there you have a much more dense population and there you see the strongest protests against fracking. The picture that fracking will support the US gas production for hundreds of years is absolutely wrong, that cannot happen. The same goes for oil. Now, since we have more data from the wells drilled, we can make some estimates. Oil production from fracking will peak before the year 2020. Regarding gas, much depends on the development of the Marcellus shale. We really do not know where this will end. The US could be self-supporting with gas. The problem is the price. The price must be above 4 dollars (2.95 euro) per 1,000 cubic feet (29 cubic metres). If that is not the case, they will not get the money back. That is cheap compared with Europe, but for the US they need 5 or 6 dollars (3.7 to 4.43 euro) to secure a stable production. For the US to export larger volumes of gas, that will not happen. I think the US will use much more natural gas in the country, for instance to produce electricity, in order to replace coal.

Again, where should the initiative come from for a change?

I am very pessimistic when it comes to politicians. This is a question in which you do not get the general public interested. But it should, because the price for energy in Europe is too high to push the economy forward. Just to remind you: the price for natural gas and gasoline in the US is just one third compared of that in Europe. There is another point with fracking. It creates jobs, about 160,000 in Texas alone, and some sort of boom like the gold rush in California.

So no one is listening to your wake-up call?

No, because they do not like to think ten years ahead. I used to say politicians are good for two things: to promise that tomorrow will be much better than today and that they will take care of a crisis when it happens. But they are very bad at preparing for changes in the future. ten years ago I was an optimist, because the future needs were so obvious. But nobody wants to listen.
Europe has a disadvantage. It does not produce much oil and natural gas. Europe has to solve a problem: To get the economy to grow despite high energy prices, and to find jobs for the young generation. Are those problems not solved, the economic future of Europe looks grim.

The first part of this interview was published 20 February 2014.