tag:theconversation.com,2011:/global/topics/oil-exploration-15459/articlesOil exploration – The Conversation2023-09-20T22:59:46Ztag:theconversation.com,2011:article/2124142023-09-20T22:59:46Z2023-09-20T22:59:46ZA month after Ecuador’s historic vote to end oil extraction in Yasuní National Park, its lessons are as vital as ever to Canadians<iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/a-month-after-ecuadors-historic-vote-to-end-oil-extraction-in-yasuni-national-park-its-lessons-are-as-vital-as-ever-to-canadians" width="100%" height="400"></iframe>
<p>One month ago, on Aug. 20, Ecuador voted to end all oil extraction in Yasuní National Park, <a href="https://www.theguardian.com/world/2023/aug/21/ecuador-votes-to-halt-oil-drilling-in-amazonian-biodiversity-hotspot">marking a historic decision in the global effort to halt fossil fuel extraction in ecologically important regions</a>. As climate emergencies rise globally, Ecuador has set a global precedent by protecting one of <a href="https://en.unesco.org/biosphere/lac/yasuni">the most ecologically diverse areas on the planet, a UNESCO designated biosphere reserve</a>. </p>
<p>The move is set to end any current and future extractive projects in the region — protecting over <a href="https://en.unesco.org/biosphere/lac/yasuni">204 different mammals, 610 types of birds and just under 20,000 human inhabitants with 200-300 Indigenous peoples living in voluntary isolation</a>. </p>
<p>This referendum is a testament to the change possible through citizen political involvement. It should signal the world over the possibility for action against extractive corporate interests as well as the policies that support these interests. </p>
<h2>Voting for our future</h2>
<p>As we reach <a href="https://www.unep.org/climate-emergency">a critical ecological tipping point</a> across the globe, our steps to protect the planet’s remaining ecosystem can no longer wait. The Amazon rainforest remains the world’s largest forest reserve. It <a href="https://media.nature.com/original/magazine-assets/d41586-020-00508-4/d41586-020-00508-4.pdf">filters billions of tonnes of carbon dioxide</a> for the entire planet. A critical ecosystem service that provides us with the clean air that we breathe and helps stabilize our shared atmosphere on this planet. </p>
<p>The vote is set to remove any current oil projects over the next year and puts a <a href="https://www.aljazeera.com/news/2023/8/21/historic-ecuador-voters-reject-oil-drilling-in-amazon-protected-area">ban on any future oil extraction in the region indefinitely.</a> The referendum keeps an estimated US$133 billion worth of oil from the park in the ground. </p>
<p>The country’s nationwide referendum was the result of a petition from Indigenous groups and environmental activists within the wider advocacy of <a href="https://www.yasunidos.org">the Yasunidos Collective, a collection of activists advocating for the end to fossil fuel extraction in the Yasuní</a>. </p>
<p>This comes at a pivotal moment as scientists have warned that if the world’s largest rainforest continues to shrink then it will change <a href="https://media.nature.com/original/magazine-assets/d41586-020-00508-4/d41586-020-00508-4.pdf">from lush rainforest into a savanna</a>. Not only will this habitat be lost for millions of people, plants and animals but it will also signal the end of the Earth’s largest filtration system. The missing <a href="https://education.nationalgeographic.org/resource/carbon-sources-and-sinks/">carbon sink</a> and <a href="https://media.nature.com/original/magazine-assets/d41586-020-00508-4/d41586-020-00508-4.pdf">increased carbon dioxide in our atmosphere will have detrimental effects</a> that would lead to potentially even greater unknown climatic events. </p>
<h2>Lessons for Canada</h2>
<p>In Canada, the people of Ontario face an opportunity for direct democracy to protect one of our country’s largest environmental assets. The Greenbelt is more than just a green space, it is <a href="https://theconversation.com/global-biodiversity-why-the-proposed-changes-to-ontarios-greenbelt-matter-211719">a bastion of ecological services providing unseen benefits to Canadians far beyond the Toronto area</a>. </p>
<p>It is also continually under threat as the Ford government seeks to finalize an <a href="https://www.cbc.ca/news/canada/toronto/ontario-auditor-general-greenbelt-report-1.6930390">$8 billion deal for developers to build housing on 3,000 hectares</a>. This despite allegations of misconduct so serious that even <a href="https://globalnews.ca/news/9938653/doug-ford-housing-ministers-resignation-cabinet-shuffle/">the government has had no choice but to review some of the deals</a>.</p>
<p>The Ontario Greenbelt is one of the most biologically rich and diverse areas in all of Canada and an area that provides protection to many both in and near its ecosystem. It does this through <a href="https://www.greenbelt.ca/learn">absorbing carbon dioxide in the atmosphere, draining water during extreme weather events and trapping heat caused by urbanization</a>. These services protect us from climate change and, in the process, also help to prevent the worst impacts of our current global warming.</p>
<p>The story of Yasuní is an inspiration against the face of climate catastrophe. The United Nations says <a href="https://www.unep.org/facts-about-climate-emergency">the planet has reached a climate emergency</a>, noting that the climate science is undeniable and the result of human activities. </p>
<p>In Canada we have witnessed — and had to breathe in — the effects of a huge jump in the number, and severity, of wildfires. The <a href="https://cwfis.cfs.nrcan.gc.ca/report/graphs">total number of fires in 2023 exceeded Canada’s 10-year average, with an almost seven-fold jump in the total burned surface area in 2023 compared to Canada’s 10-year average</a>. </p>
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Read more:
<a href="https://theconversation.com/how-canada-can-leave-83-per-cent-of-its-oil-in-the-ground-and-build-strong-new-economies-169217">How Canada can leave 83 per cent of its oil in the ground and build strong new economies</a>
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<p>Against this backdrop it could be easy to forget that in Canada, we are lucky to house one-quarter of the entire world’s <a href="https://www.canada.ca/en/environment-climate-change/services/nature-legacy/about.html">wetlands, temperate rainforests and boreal forests; 20 per cent of its fresh water; the longest coastline in the world; and precious habitats for birds, fish and mammals</a>. This represents an ecological safeguard that, if nurtured and protected, will help provide a safe haven from increasing climate disaster. </p>
<p>That is, should we choose to begin to make the right decisions about long-term ecological wealth versus shortsighted economic prosperity. </p>
<h2>Building on this example</h2>
<p>The protection of the Yasuní reserve and the power of its people in Ecuador against a national government’s extractive agenda is a signal to citizens here in Canada. We do not have to be complacent with the status quo, or divided by party politics to find unity on important issues that face our reliance on this shared planet. </p>
<p>Direct democracy from the grassroots level can permeate to the top to mitigate climate change. The overall majority can decide whether to move forward with environmental projects that may have irreversible effects. It signifies the importance of Indigenous leaders in countering the fossil fuel industry amid environmental crisis and the power of people to change governmental policies. It is important to show how persistent resistance can make an impact.</p>
<p>To protect the planet for future generations to come, government agendas need to shift and be pushed by direct civil action. This means that protection of ecologically important areas should be seen as a key policy objective of national self-preservation. This is further reinforced by ever-growing <a href="https://www.unep.org/resources/factsheet/nature-climate-action">calls from Indigenous leaders, academics and environmental activists demanding the conservation and restoration of natural spaces</a>. </p>
<p>It is time for Canadian citizens to step up and recognize that we can make a difference in our <a href="https://iasc-commons.org/about-commons/">shared commons</a>. The importance of the precedent set in Ecuador cannot be understated. It shows that collective action can work and that we do not need to only wait for governments to do the right thing.</p><img src="https://counter.theconversation.com/content/212414/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Martina Jakubchik-Paloheimo works with Global Indigenous Development Trust, a Canadian Indigenous social enterprise and registered charity founded in 2014. As well as Inisha Nunka, an Indigenous led not-for profit founded by the Shuar peoples in Ecuador. She has previously received funding from The International Development Research Fund Canada under Grant 109418-021.</span></em></p>The decision of the people of Ecuador to halt oil extraction in the Yasuní is a trend-setting precedent of global importance and a victory that Canadians should build upon.Martina Jakubchik-Paloheimo, Ph.D. Candidate, Department of Geography and Planning, Queen's University, OntarioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1979952023-01-27T12:37:41Z2023-01-27T12:37:41ZSomaliland’s oil find could reset the regional balance: here’s how<figure><img src="https://images.theconversation.com/files/504851/original/file-20230117-24-k69nqy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"> Somaliland has been assessed as holding commercial quantities of oil and gas. EDUARDO SOTERAS/AFP via </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/women-walk-in-front-of-a-gas-station-in-the-city-of-news-photo/1235886286?phrase=somaliland%20&adppopup=true">Getty Images</a></span></figcaption></figure><p><em>The presence of oil in Somaliland has been <a href="https://www.the-star.co.ke/news/africa/2023-01-09-somaliland-announces-first-oil-discovery/">confirmed</a> by a recent exploration. The discovery has raised the stakes in Somaliland’s claim for independence from Somalia as it holds the potential for a new stream of revenue for the semi-autonomous state. But the oil exploration is deepening <a href="https://www.worldoil.com/news/2022/12/28/genel-oil-s-oil-operations-in-east-african-region-declared-illegal-by-somalia/">the rift with Somalia</a>, which claims sovereignty over the region. Michael Walls answers five key questions.</em></p>
<h2>What is Somaliland’s hydrocarbon potential?</h2>
<p>In 2020, Norwegian seismic survey company, TGS, estimated that the Somali basin as a whole likely holds <a href="https://www.petro-online.com/news/analytical-instrumentation/11/breaking-news/somalia-agrees-to-offshore-oil-plans-with-shellexxon/51729">offshore reserves of about 30 billion barrels</a>, with additional onshore reserves, although land estimates are considerably less consistent. Assessments generally include Somaliland and would place Somalia reserves <a href="https://www.worldometers.info/oil/oil-reserves-by-country/">at about the same level as Kazakhstan</a>, which would give the area the 18th or 19th largest reserve globally, as assessed in 2016. </p>
<p>Geological conditions seem to support the view that there are likely to be commercially viable deposits in the region. Whether they prove close to estimates remains unknown at this stage. </p>
<p>There is also evidence of offshore (undersea) reserves in the region, as well as onshore (beneath the land) in the Somali region of the neighbouring Ethiopia. Bordering Somalia, and located next to Oromia Regional State, the Somali Regional State (also Ogaden) is Ethiopia’s second largest federal region.</p>
<h2>Why has it taken so long to make an oil find?</h2>
<p>This find is being billed as the first discovery in Somaliland but in fact there have been several instances of oil seepage. An oil seep occurs when geological or unrelated human activity results in oil “seeping” into the ocean or onto land. In such cases, the physical appearance of oil occurs unexpectedly rather than as a result of deliberate exploration. It is unsurprisingly taken as evidence of a substantial reserve that is close to the surface, but doesn’t always indicate the presence of commercially viable quantities or accessibility.</p>
<p>Genel Energy, the UK oil exploration firm on whose concession this discovery occurred, has held rights to explore in Somaliland since 2012. So the find isn’t quite the sudden and unexpected bonus that’s been implied by some reports.</p>
<p>Progress has been slow because Somaliland’s lack of international sovereign recognition creates an uncertain context for significant investment. Somalia still claims sovereignty over Somaliland even though the region has operated as a fully if informally independent state since 1991. </p>
<p>This creates a vacuum. The Somali federal authorities cannot enter into meaningful agreements over exploration or extraction in Somaliland. Somaliland is limited by investment risk. And Somalia’s threats and <a href="https://www.theeastafrican.co.ke/tea/business/somalia-rejects-genel-energy-claim-to-oil-permits-somaliland-4070698">complaints</a> emphasise that risk.</p>
<p>This has not stopped Somaliland from entering into agreements, but it has slowed activities taking place under them.</p>
<p>In addition, there have been disputes within Somaliland over how the proceeds of hydrocarbon exploitation would be shared. </p>
<p>One of the areas with significant potential is the Nugaal Valley, which stretches across the border of eastern Somaliland into Puntland. Genel Energy was already exploring in that zone a decade ago. It <a href="https://www.africa-energy.com/news-centre/article/genel-suspends-somaliland-operations-enis-scaroni-meets-somali">withdrew</a> for a time in 2013, citing security concerns. In the same time period, Africa Oil secured rights from the Puntland administration that overlapped with those issued by Somaliland to explore in the Nugaal Valley. A 2014 UN report expressed concern that hydrocarbon exploration in the Nugaal Valley risked fuelling violent conflict. Africa Oil <a href="https://ejatlas.org/conflict/oil-exploration-within-somalias-semi-autonomous-puntland-region">ceased active operation in the area a year later</a>.</p>
<p>The most recent find is in a different area of Somaliland: Salaxley in the Maroodi Jeex region, which is less politically volatile. This makes it more likely that Genel Energy will be able to advance its work.</p>
<h2>What challenges lie ahead?</h2>
<p>The uncertainty created by a lack of international recognition makes it difficult to mobilise sufficient investment. And there is little doubt that Somalia will continue to remain hostile to both exploration and extraction. </p>
<p>Similarly, local sensitivities around the sharing of financial rewards will need to be managed with care and deep local engagement.</p>
<p>Some <a href="https://www.reuters.com/article/ozabs-africa-oil-somaliland-20111101-idAFJOE7A00AB20111101">commentaries</a> have suggested that the newly discovered oil could be abundant. But the reserves could also prove limited and may present technical challenges in extraction. It is therefore possible that extractive plans will operate at the margin of financial feasibility. </p>
<p>The latest find was the result of an <a href="https://www.share-talk.com/drilling-for-water-in-the-bahadhamal-village-sallahley-area-somalia-rig-hits-a-near-surface-oil-vein/">accidental release of oil</a> during drilling for water rather than from deliberate exploration. This may be evidence of a significant and easily accessed reserve, but seepages and strikes like this have happened in the past in Somaliland. A more extensive geo-seismic surveying will be needed before the full extent of the reserve is confirmed.</p>
<h2>What would be the political implications of oil wealth in Somaliland?</h2>
<p>I had previously studied the place of <a href="https://www.researchgate.net/publication/263593602_Somalia_Oil_and_insecurity">oil in Somalia and its breakaway states</a> . Somali society is kinship-based. Specific groups identify with particular geographic areas. This means that the political implications vary sharply depending on the location of any oil discovery. </p>
<p>Previous experience of exploration in the Nugaal Valley showed how socially and politically volatile the exercise could be. </p>
<p>The area of the latest find, around Salaxley, is likely to prove less volatile. Unlike the Nugaal Valley, Salaxley has not customarily been subject to the same inter-clan and political disputes. But there will still need to be significant negotiation over sharing of the proceeds of exploration. The government will be keen to ensure that the windfall advantages those in power. Local clan groups will be keen to ensure there is a clear benefit accruing to their communities. Other clans will equally want a say in how increased wealth benefits Somaliland as a whole. </p>
<p>Depending on how negotiations conclude, there is potential for this clan-based process to mitigate the <a href="https://resourcegovernance.org/sites/default/files/nrgi_Resource-Curse.pdf">“resource curse” effect</a>. In other words, the system of inter-group negotiation that underpins Somali society might provide some protection from the narrow economic impact of oil wealth that has been felt elsewhere. However, that is by no means certain and the process of negotiation itself has the potential to fuel violence, just as the <a href="https://unpo.org/article/16961">UN worried in 2014</a>.</p>
<p>Either way, the Somaliland economy remains tiny. Any influx of significant new wealth, even on a fairly modest scale, will create new social, economic and therefore political tensions.</p>
<h2>What are the implications for regional dynamics?</h2>
<p>The regional impact will depend on the extent of the discovery. Somalia has consistently objected to hydrocarbon exploration in Somaliland as all concessions have been granted under Somaliland legislation. It would object even more strongly to commercial extraction. </p>
<p>Ethiopia’s interest is likely to be more equivocal. Salaxley is close to the Ethiopian border, and not far from active hydrocarbon exploration concessions in Ethiopia’s Somali region. If the Somaliland reserves prove to be extensive after a technical appraisal, it would suggest that those in the adjacent Ogaden Basin are also significant. In this case Somaliland and Ethiopia would hold a mutual interest in ensuring sufficient regional security to enable extraction.</p><img src="https://counter.theconversation.com/content/197995/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Walls has in the past received funding from the UK Economic and Social Research Council (ESRC), the Foreign Commonwealth and Development Office (FCDO) and other research funders to conduct research and consultancy. All such funding has been to undertake specified and time-limited research or consultancy work through UCL. </span></em></p>Any new wealth will create new social, economic and political tensions.Michael Walls, Professor of Development Politics and Economy & DPU Director, Faculty of the Built Environment, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1731982022-12-19T13:34:59Z2022-12-19T13:34:59ZWhat are mud volcanoes?<figure><img src="https://images.theconversation.com/files/501578/original/file-20221216-13-gh4rg0.jpg?ixlib=rb-1.1.0&rect=119%2C3%2C2309%2C1493&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Engineers have tried to corral a mud volcano in Indonesia that has covered more than 1,700 acres with mud.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/this-aerial-picture-taken-10-march-2007-shows-mud-that-news-photo/73549446?phrase=Eka%20Dharma&adppopup=true">Eka Dharma/AFP via Getty Images</a></span></figcaption></figure><p>Rice farmers living in Sidoarjo Regency, Indonesia, awoke to a strange sight on May 29, 2006. The ground had <a href="http://www.hsf.humanitus.net/media/6412/HSF_Social_Impact_Report_Eng.pdf">ruptured overnight and was spewing out steam</a>.</p>
<p>In the following weeks, water, boiling-hot mud and natural gas were added to the mixture. When the eruption intensified, <a href="https://doi.org/10.1130/GSAT01702A.1">mud started to spread over the fields</a>. Alarmed residents evacuated, hoping to wait out the eruption safely.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Houses are submerged in mud, while gas billows from mud volcano in background." src="https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501645/original/file-20221216-7450-29fumn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The mud onslaught forced tens of thousands of people to relocate from their homes.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/houses-are-submerged-in-mud-as-gas-billows-from-the-mud-news-photo/169621197">Mochammad Risyal Hidayat/AFP via Getty Images</a></span>
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<p><a href="https://youtu.be/vJ0PwYamqNE">Except that it didn’t stop</a>. Weeks passed, and the spreading mud engulfed entire villages. In a frantic race against time, the Indonesian government began to build levees to contain the mud and stop the spread. When the mud overtopped these levees, they built new ones behind the first set. The government eventually succeeded in stopping the mud’s advance, but not before the flows had wiped out a dozen villages and <a href="https://news.agu.org/press-release/scientists-determine-source-of-worlds-largest-mud-eruption">forced 60,000 people to relocate</a>. </p>
<p>Why would the Earth suddenly start vomiting forth huge quantities of mud like this?</p>
<h2>Introducing mud volcanoes</h2>
<p>The Lusi structure – a contraction of Lumpur Sidoarjo, meaning “Sidoarjo mud” – is an example of a geological feature <a href="https://www.youtube.com/watch?v=t7UohP-YBc0">known as a mud volcano</a>. They form when a combination of mud, fluids and gases erupt at the Earth’s surface. The term “volcano” is borrowed from the much better known world of igneous volcanoes, where molten rock comes to the surface. <a href="https://scholar.google.com/citations?user=ZQkFbhUAAAAJ&hl=en">I’ve been studying</a> these fascinating structures on subsurface seismic data for the past five years, but nothing compares to seeing one actively erupting.</p>
<p>For mud volcanoes, in many cases the mud bubbles up to the surface rather quietly. But sometimes the eruptions are quite violent. Furthermore, most of the gas coming out of a mud volcano is methane, which is highly flammable. This gas can ignite, creating spectacular fiery eruptions.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/FjzYUdlSs5w?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Gases erupting along with mud can ignite.</span></figcaption>
</figure>
<p>Mud volcanoes are little known in North America, but much more common in other parts of the world, including not only Indonesia but also Azerbaijan, Trinidad, Italy and Japan. </p>
<p>They form when fluids and gases that have built up under pressure inside the Earth find an escape route to the surface via a network of fractures. The fluids move up these cracks, carrying mud with them, creating the mud volcano as they escape.</p>
<p>The idea is similar to a car tire containing compressed air. As long as the tire is intact, the air stays safely inside. Once the air has a pathway out, however, it begins to escape. Sometimes the air escapes as a slow leak – in other cases there is a blowout. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="aerial view of landscape with round holes filled with liquid and mud" src="https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501584/original/file-20221216-26-odcz4g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A series of mud volcanoes on the Nahlin Plateau, British Columbia.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Mud_Volcanos.jpg">Hkeyser/Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>Overpressure within the Earth builds up when underground fluids are unable to escape from beneath the weight of overlying sediments. Some of this fluid was <a href="https://doi.org/10.1306/522B49C9-1727-11D7-8645000102C1865D">trapped within the sediment</a> when it was deposited. Other fluids may <a href="https://www.researchgate.net/publication/286291175_Mud_volcano_systems">migrate in from deeper sediments</a>, while still others may be <a href="https://doi.org/10.1016/j.earscirev.2021.103746">generated in place by chemical reactions</a> in the sediments. One important type of chemical reaction generates oil and natural gas. Finally, fluids may become overpressured if they are <a href="https://doi.org/10.1038/s41598-021-02868-x">squeezed by tectonic forces during mountain building</a>. </p>
<p>Overpressures are commonly encountered during drilling for oil and gas and are typically planned for. A primary way of dealing with overpressures is to fill the wellbore with dense drilling mud, which has sufficient weight to contain the overpressures.</p>
<p>If the well is drilled with insufficient mud weight, any overpressured fluids can rush up the wellbore to explode out at the surface, leading to a spectacular blowout. Famous examples of blowouts include the 1901 <a href="https://en.wikipedia.org/wiki/Spindletop">Spindletop gusher</a> in Texas and the more recent 2010 <a href="https://doi.org/10.2118/167970-MS">Deepwater Horizon disaster</a> in the Gulf of Mexico. In those cases it was oil, not mud, that burst out of the wells. </p>
<p>In addition to being fascinating in their own right, mud volcanoes are also useful to scientists as windows into <a href="https://doi.org/10.1007/s00531-003-0326-y">conditions deep inside the Earth</a>. Mud volcanoes can involve materials from as deep as 6 miles (10 kilometers) below the Earth’s surface, so their chemistry and temperature can provide useful insights into deep-Earth processes that can’t be obtained in any other way.</p>
<p>For example, analysis of the mud erupting from Lusi has revealed that the water was <a href="https://doi.org/10.1016/j.epsl.2011.11.016">heated by an underground magma chamber</a> associated with the nearby <a href="https://volcano.si.edu/volcano.cfm?vn=263290">Arjuno-Welirang volcanic complex</a>. Every mud volcano reveals details about what’s happening underground, allowing scientists to build a more comprehensive 3D view of what’s going on inside the planet.</p>
<h2>Lusi’s mud is still erupting</h2>
<p>Today, more than 16 years after the eruption began, the Lusi structure in Indonesia continues to erupt, but at a much slower rate. Its mud <a href="https://www.scientificamerican.com/article/scientists-unearth-revealing-details-about-the-worlds-biggest-mud-volcano1">covers a total area of roughly 2.7 square miles</a> (7 square km), more than 1,300 football fields, and is contained behind a series of levees that have been built up to a height of 100 feet (30 meters). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Man kneels on cracking dry mud points thermometer at a flowing stream" src="https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501646/original/file-20221216-27-6uanrf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">An officer of the Sidoarjo Mud Prevention Agency checks the water temperature of mud near the Lusi mud volcano in 2011.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-officer-of-indonesian-agency-sidoarjo-mud-prevention-news-photo/114923592">Ulet Ifansasti/Getty Images</a></span>
</figcaption>
</figure>
<p>Almost as interesting as the efforts to stop the mud have been the legal battles aimed at assigning blame for the disaster. The initial rupture occurred about <a href="https://doi.org/10.1016/j.marpetgeo.2017.12.031">330 feet (100 meters) from an actively drilling gas exploration well</a>, leading to <a href="https://www.nytimes.com/2015/09/22/science/9-years-of-muck-mud-and-debate-in-java.html">widely publicized</a> <a href="https://doi.org/10.1038/news060828-1">accusations that the</a> <a href="https://doi.org/10.1130/GSAT01702A.1">oil company responsible for the well was at fault</a>. The operator of the well, Lapindo Brantas, countered that the eruption was natural, triggered by an earthquake that had occurred several days earlier.</p>
<p>Those who believe the <a href="https://doi.org/10.1038/ngeo2472">gas well triggered the eruption</a> argue that the well experienced a <a href="https://doi.org/10.1016/j.epsl.2008.05.029">blowout due to insufficient mud weight</a>, but that the blowout did not come all the way up the wellbore to the surface. Instead, the fluids came only partway up the wellbore before injecting sideways into fractures and erupting at the surface about one hundred meters away. As evidence, these proponents point to <a href="https://doi.org/10.1016/j.marpetgeo.2017.12.031">measurements made in the well during drilling</a>. Furthermore, they suggest the earthquake was too far away from the well to have had any effect.</p>
<p>By contrast, proponents of the earthquake trigger believe that the Lusi eruption was caused by an <a href="https://doi.org/10.1016/j.marpetgeo.2017.06.019">active hydrothermal system in the subsurface</a>, somewhat akin to Old Faithful in Yellowstone National Park. They argue that such systems have a long history of being affected by very distant earthquakes, so the argument that Lusi was too far away from the earthquake is invalid.</p>
<p>Furthermore, they suggest that a pressure test in the well conducted after the eruption started showed that the wellbore was intact, not breached by fractures and leaking fluid. Consistent with this interpretation, there is no evidence that any of the drilling mud ever came out of the Lusi eruptions. </p>
<p>In 2009, the Indonesian supreme court <a href="https://en.antaranews.com/news/82478/debate-over-lapindo-mud-disaster-continues">dismissed a lawsuit</a> charging the company with negligence. The same year, police <a href="https://www.thejakartapost.com/news/2009/08/08/police-drop-criminal-probe-lapindo-over-mudflow.html">dropped criminal investigations</a> against Lapindo Brantas and several of its employees, citing a lack of evidence. Although the lawsuits have been settled, the debate continues, with international research groups lining up on both sides of the dispute.</p>
<p><em>This article has been updated to correct the distance between the initial Lusi eruption and drilled wells.</em></p><img src="https://counter.theconversation.com/content/173198/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael R. Hudec receives funding from the Applied Geodynamics Laboratory, an oil-industry funded research consortium supported by more than 20 companies. </span></em></p>When mud, fluids and gases erupt at the Earth’s surface, they hint at what’s happening underground, allowing scientists to build a more comprehensive 3D view of what’s going on inside our planet.Michael R. Hudec, Senior Research Scientist at Bureau of Economic Geology, The University of Texas at AustinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1668602021-09-03T07:45:53Z2021-09-03T07:45:53ZNew law will make Nigeria’s petroleum industry attractive to investors<figure><img src="https://images.theconversation.com/files/418735/original/file-20210831-19-lngfxj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Nigeria has a new law to regulate its oil industry </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/oil-and-petrochemical-refinery-kaduna-nigeria-news-photo/976043700?adppopup=true">Andrew Holt/Construction Photography/Avalon/Getty Images</a></span></figcaption></figure><p><em>Nigeria’s journey to the Petroleum Industry Act started in 2000 under President Olusegun Obasanjo, who <a href="https://independent.ng/still-on-petroleum-industry-bill-pib/">inaugurated</a> an oil and gas sector reform implementation committee. The committee’s report formed the basis of the first Petroleum Industry Bill eight years later. It was <a href="https://tribuneonlineng.com/the-politics-history-of-petroleum-industry-bill/">submitted</a> to the National Assembly but not passed. Nor was it passed under the next president, Goodluck Jonathan. President Muhammadu Buhari also <a href="https://punchng.com/why-buhari-declined-assent-to-petroleum-industry-bill-enang/">declined</a> assent to it in 2018 because of some provisions. It was finally <a href="https://dailytrust.com/finally-reps-pass-petroleum-industry-bill">passed</a> by the National Assembly on 1 July 2021 and <a href="https://www.thecable.ng/breaking-buhari-signs-petroleum-industry-bill-into-law">signed</a> into law by Buhari. Omowumi Iledare explains the significance.</em></p>
<p><strong>Why is the act important?</strong></p>
<p>The main objectives of the <a href="http://www.petroleumindustrybill.com/2021/08/17/petroleum-industry-act-2021-2/?utm_source=rss&utm_medium=rss&utm_campaign=petroleum-industry-act-2021-2#.YSeobhQzbIU">Petroleum Industry Act</a> are to:</p>
<ul>
<li><p>define the relationship between the society and investors</p></li>
<li><p>determine how costs are recovered and profits shared among stakeholders</p></li>
<li><p>establish an innovative mechanism to fund petroleum host communities directly through trust funds</p></li>
<li><p>improve transparency and accountability in the oil and gas business and reduce overlapping in the roles of governance </p></li>
<li><p>create regulatory and policy institutions </p></li>
<li><p>create a conducive environment to enhance the mutual benefit of petroleum operations in Nigeria. </p></li>
</ul>
<p>The act is key to expanding the fortunes of Nigeria’s petroleum industry. It stands to remove the uncertainty that has led to a significant reduction in investment in exploration and production.</p>
<p><strong>What improvements should Nigeria expect?</strong></p>
<p>If properly implemented, the state-owned <a href="https://www.nnpcgroup.com/Pages/Home.aspx">Nigerian National Petroleum Corporation</a> will be purely commercial with the intention of maximising its return on investment. At the moment the national oil company is encumbered with having the role of an agency and less focus on making money for stakeholders. Hence it has not <a href="https://guardian.ng/news/nnpc-posts-first-profit-of-n287-billion-after-44-years-of-existence/">declared any profits</a> since inception in 1977. </p>
<p>The act also attempts to address the development of host communities. It sets out how a new fund will be created and defines precisely how it will be managed and used. This is quite unlike previous federal interventions such as the <a href="https://dawodu.com/dafin1.htm">Derivation Fund</a> and the <a href="https://www.nddc.gov.ng/">Niger Delta Development Commission</a>. All failed to make an impact on host communities.</p>
<p>The act isn’t perfect. But if implemented well, with apolitical and competent board members, it will make Nigeria’s petroleum industry as competitive and attractive to investors as its peers. </p>
<p><strong>There have been objections to two major provisions of the act. Why?</strong> </p>
<p>There has been a lot of angry debate about the provision that a <a href="https://www.thecable.ng/pib-southern-governors-reject-30-share-of-nnpc-profit-for-frontier-basins-exploration">30% share</a> of Nigerian National Petroleum Commission profit should be set aside for frontier exploration and <a href="https://thenationonlineng.net/pib-niger-delta-groups-reject-3-fund-for-host-communities/">3% contributed to trust funds</a> for host communities.</p>
<p>The fund for host communities is to mitigate the impact of oil exploration while the 30% share is for frontier exploration in the inland basins. The inland basins <a href="https://www.thecable.ng/explainer-whats-the-big-deal-about-this-frontier-basin-exploration">consist</a> of the Anambra basin, the lower, middle, and upper Benue trough, the southeastern sector of the Chad basin, the mid-Niger (Bida) basin, and the Sokoto basin. </p>
<p>It is very disappointing that people are misrepresenting these two provisions as a North versus South transfer payment. This is misinformation peddling. </p>
<p>The debate has become heated because the 3% is being compared to the 30% even though they have no bearing on one another. The two provisions are basically apples and oranges and no meaning can be derived by comparing them. Each must be evaluated on its own merit without making reference to the other. Neither is dependent on the other. </p>
<p>I agree with <a href="https://www.vanguardngr.com/2021/07/pib-niger-delta-youths-reject-3-for-host-communities/">critics</a> who argue that the 3% isn’t enough for the sustainable development of petroleum host communities. And alternative sources of funding should be identified. </p>
<p>There are plausible reasons to change this provision. </p>
<p>I also agree that the legitimacy of allocating the 30% to a liability company is debatable. Only the court can establish that, based on the law governing federation account allocation. </p>
<p>Other legitimate questions remain. </p>
<p>First, would a risk averse investor use their limited fund if confronted with unlimited expectations and wants by its stakeholder? Government is a risk averse investor. Exploration of frontier basins is a risk seeker investor’s domain. The other tiers of government have legitimate reasons to be concerned with the likelihood of dedicating a chunk of federation fund to invest in highly uncertain business ventures. Frontier exploration outcomes are classic examples of such ventures.</p>
<p>The followup question is, assuming this 30% allocation is lawful, is it beneficial or expedient enough to overcome the cost to the federation? The answer is conjectural.</p>
<p><strong>Will the price of fuel go up? What about the subsidy regime?</strong></p>
<p>The fear is real. But society will not be worse off. The price system protects consumers and sellers equitably. </p>
<p>The role of the price system is to balance supply and demand in a way that consumer and producer surpluses are optimised. It also allocates resources efficiently, if government intervention is limited. Think about this for a moment. There is no <a href="https://www.channelstv.com/2020/09/07/nigerias-increased-petrol-price-cheapest-in-west-africa-angry-reactions-unnecessary-lai-mohammed/">country in West Africa</a> with a lower price for petrol than Nigeria. In Ghana it is $1.09 per litre and in Nigeria $0.41. Nigeria is the <a href="https://statisticstimes.com/economy/countries-by-petrol-prices-and-gdp-per-capita.php">sixth cheapest</a> in the world. Even prices in Saudi Arabia, capped at <a href="https://statisticstimes.com/economy/countries-by-petrol-prices-and-gdp-per-capita.php">$0.62 per litre</a>, are higher and yet they have functioning refineries. </p>
<p>There’s another way of looking at this that invites a rethink. Is the proportion of Nigeria’s budget that is spent annually on subsidising petroleum really a transfer payment to the poor per se, or to a segment of the society trading in petroleum products?</p>
<p>Over the last 10 years, the Nigerian government <a href="https://www.bloomberg.com/news/articles/2021-03-01/nigeria-s-nnpc-won-t-increase-fuel-prices-in-march#:%7E:text=Nigerian%20spent%2010.7%20trillion%20naira,supporters%20of%20deregulation%20have%20argued.">spent</a> N10.7 trillion (US$26 billion) on fuel subsidies. It spent N750 billion (US$1.82 billion) in 2019. </p>
<p>These price controls have created significant social welfare losses – poor schools, poor road infrastructure, poor health infrastructure. Price controls of petroleum products shut out investors in the downstream and on and on over the years. The society is better off with an optimal price strategy for a scarce resource like petroleum. </p>
<p>The new act will decontrol product prices in the downstream and eliminate subsidy payment to traders. It has also disavowed a guaranteed margin to short term traders in the downstream oil and gas sector. It creates efficacy, market efficiency and inter-generational equity in the sector by optimising consumer surplus and producer surplus with minimal if not zero welfare losses.</p>
<p><strong>Shouldn’t Nigeria be preparing for a post-petroleum world?</strong> </p>
<p>To a large extent the act is in sync with that in the sense that it sets out goals for natural gas developments. Natural gas is a legitimate transition fuel and the act’s fiscals are favourable to domestic gas use. Such a framework is well disposed to developing the huge proved and natural gas reserves discovered, accidentally, while looking for liquid petroleum.</p>
<p>However, there is certainly a need for a technical committee to lay out the optimal response strategy to energy transition dynamics. Nigeria must continue to talk the energy transiting talk and I remain convinced that it must walk its talk strategically at a pace that supports its access to affordable energy goals.</p><img src="https://counter.theconversation.com/content/166860/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Omowumi Iledare is affiliated with Emmanuel Egbogah Foundation, Abuja and University of Cape Coast Oil and Gad Institute Ghana</span></em></p>Nigeria’s new petroleum law will make its petroleum industry as competitive and attractive to investors as its peers.Omowumi Iledare, Ghana National Petroleum Corporation (GNPC) Professorial Chair in Oil and Gas Economics and Management, University of Cape CoastLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1591942021-06-09T12:39:49Z2021-06-09T12:39:49ZHow Joe Biden could increase pressure on Vladimir Putin if their June 16 meeting fails to deter Russia’s ‘harmful’ behavior<figure><img src="https://images.theconversation.com/files/405196/original/file-20210608-135197-1xrw33t.jpg?ixlib=rb-1.1.0&rect=0%2C37%2C3403%2C2118&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Your move, Mr. President. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/RussiaUSBiden/edd7d9c54b1f4ba59e8d04f22e471871/photo?Query=Putin%20AND%20biden&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=121&currentItemNo=113">AP Photo/RIA Novosti, Alexei Druzhinin</a></span></figcaption></figure><p>When U.S. President Joe Biden <a href="https://www.cnn.com/2021/06/07/politics/white-house-defends-putin-summit/index.html">meets with his Russian counterpart</a> Vladimir Putin on June 16, 2021, <a href="https://www.wral.com/biden-to-meet-with-putin-over-cybersecurity-concerns/19715138/">cybersecurity is certain</a> to be a key topic of discussion. </p>
<p>The U.S. accuses Russia of meddling in American elections and launching repeated cyberattacks, which, among what it called <a href="https://www.nytimes.com/2020/07/03/world/europe/russia-bounties-putin-afghanistan.html">other “harmful” transgressions</a>, <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/15/fact-sheet-imposing-costs-for-harmful-foreign-activities-by-the-russian-government/">prompted Biden to unveil</a> financial sanctions in April. This added to <a href="https://fas.org/sgp/crs/row/IF10779.pdf">existing sanctions targeting Russia’s oil sector</a>. </p>
<p>While the White House <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/05/25/statement-by-white-house-press-secretary-jen-psaki-on-the-meeting-between-president-joe-biden-and-president-vladimir-putin-of-russia/">says it has low expectations</a> for the meeting, hoping only to “restore predictability and stability to the U.S.-Russia relationship,” Biden’s <a href="https://abcnews.go.com/Politics/us-announces-sweeping-sanctions-russia-cyber-hack-election/story?id=77089976">threat to up the pressure on Putin</a> if Russia fails to change its behavior will likely loom over their upcoming chat in Geneva. He says he told Putin in a phone call “we could have gone further” with the sanctions, “but I chose not to do so.”</p>
<p>This leaves open the question of what “further” might mean – and could it be any more effective than past sanctions at changing Putin’s behavior?</p>
<h2>Russia’s strength – and weakness</h2>
<p>Experts who research global energy, <a href="https://scholar.google.com/citations?user=dCRySjIAAAAJ&hl=en&oi=ao">as I do</a>, highlight oil and natural gas as both Russia’s strength and its Achilles’ heel. </p>
<p>Russia is richly endowed with these resources and, since the early 2000s, it has been a <a href="https://www.eia.gov/international/analysis/country/RUS">top global producer and exporter</a>. Oil and gas make up <a href="https://warsawinstitute.org/russias-economy-becoming-heavily-dependent-hydrocarbons/">more than one-third</a> of Russia’s gross domestic product, and energy exports account for about <a href="https://tradingeconomics.com/russia/exports">half of government revenue</a>.</p>
<p>At the same time, the nation’s heavy reliance on oil and gas exports has made its economy highly vulnerable to fluctuations in global energy prices and to policy decisions that might reduce reliance of imports on Russian oil or gas – a dependence <a href="https://www.eia.gov/international/analysis/country/RUS">frequently noted</a> by <a href="https://www.e-ir.info/2020/02/24/the-energy-relationship-between-russia-and-the-european-union/">analyses</a> of its <a href="https://www.jstor.org/stable/24384335">energy sector</a>. For example, <a href="https://www.eia.gov/todayinenergy/detail.php?id=33732">70% of Russia’s crude oil exports</a> and more than <a href="http://www.gazpromexport.ru/en/statistics/">75% of its gas exports</a> <a href="https://www.e-ir.info/2020/02/24/the-energy-relationship-between-russia-and-the-european-union/">go to Europe</a>. </p>
<h2>Are current sanctions too weak?</h2>
<p>The U.S. and European Union imposed many of the <a href="https://www.econstor.eu/bitstream/10419/216248/1/CESifo-Forum-2019-04-p19-22.pdf">current sanctions</a> against Russia after it invaded Ukraine in 2014. The sanctions have primarily targeted the ability of non-Russian companies and government agencies to provide financing, goods, services and technology that help Russia explore and develop new oil reserves. The gas sector was <a href="https://www.atlanticcouncil.org/wp-content/uploads/2018/03/Impact_of_Sanctions_on_Russia_s_Energy_Sector_web.pdf">left out</a> by request of the EU. </p>
<p>A <a href="https://www.atlanticcouncil.org/in-depth-research-reports/report/the-impact-of-western-sanctions-on-russia/">key focus</a> was to prevent Western international oil businesses, which possess the world’s most advanced expertise and technological skills, from partnering with state-owned Russian companies in the Arctic, offshore in deep waters and shale fields. These are the areas with the greatest potential to expand Russia’s oil discovery and production going forward. </p>
<p>Analysts have been divided in evaluating the impacts of these sanctions. Some have described their effects as weak, pointing to continued increases in oil output that suggest Russian companies <a href="https://energy.skolkovo.ru/downloads/documents/SEneC/research04-en.pdf">have adapted to the imposed restrictions</a>. Other observers, however, <a href="https://www.atlanticcouncil.org/in-depth-research-reports/report/the-impact-of-western-sanctions-on-russia/">point to the Russian economy</a> as evidence they’re working. Russian GDP fell over a third from US$2.3 trillion to $1.5 trillion in 2020, which analysts attributed to factors including a drop in oil prices and the withdrawal of international financing. </p>
<p>I would also emphasize the negative impacts of the sanctions on the oil sector itself, which is largely related to Russian oil companies’ need for foreign expertise and technology.</p>
<p>Sanctions have made it harder and costlier to maintain and increase production levels. Recent data shows that <a href="https://www2.deloitte.com/ru/en/pages/energy-and-resources/articles/2019/oil-gas-survey-russia-2019.html">oil production costs have been increasing</a>, while many of Russia’s existing oil fields are producing less than they used to. </p>
<p>While <a href="https://www.eia.gov/analysis/studies/worldshalegas/">estimates suggest</a> Russia has the world’s second-largest shale oil reserves, developing these at a significant level requires Western expertise. If sanctions remain in place, some analysts project that Russian oil output <a href="https://rogtecmagazine.com/rpi-taymyr-will-support-the-drillers">will reach a peak and begin to decline by the middle of this decade</a>. </p>
<p>In other words, the Kremlin’s aggression in Ukraine and Putin’s use of cyberattacks is putting the future of Russia’s oil sector – and thus its economy – at risk. </p>
<h2>Ways to step up the pressure</h2>
<p>But so far, this hasn’t deterred Putin, as evidenced by <a href="https://www.reuters.com/article/usa-election-cyber-int/putin-likely-directed-2020-u-s-election-meddling-u-s-intelligence-finds-idUSKBN2B82PF">Russia’s meddling in the 2020 elections</a>, the large-scale <a href="https://www.npr.org/2021/04/16/985439655/a-worst-nightmare-cyberattack-the-untold-story-of-the-solarwinds-hack">SolarWinds cyberattack</a> and <a href="https://www.csis.org/analysis/unpacking-russian-troop-buildup-along-ukraines-border">Russian troops massing on Ukraine’s border</a> in March. </p>
<p>In April, <a href="https://abcnews.go.com/Politics/us-announces-sweeping-sanctions-russia-cyber-hack-election/story?id=77089976">when Biden announced the latest sanctions he said</a>, “If Russia continues to interfere with our democracy, I’m prepared to take further actions.”</p>
<p>So what else could Biden do to deter Putin if he keeps this up?</p>
<p>One approach would be to target specific projects that contribute significantly to current or future exports of oil and gas. </p>
<p>For example, sanctions could be imposed on any non-Russian companies helping to develop new oil or gas reserves in the East Siberian region. These projects – such as the <a href="https://warsawinstitute.org/vostok-oil-rosneft-starts-works-vankor-field/">Vostok Oil project</a> – have been <a href="https://www.statista.com/statistics/305356/oil-production-in-russia-by-region/">essential to Russia’s overall increase in production</a> since 2014. Sanctioning foreign investments in such Putin-backed projects would be a significant blow to Russia’s efforts to counteract production declines in older fields. </p>
<p>Another objective for increased sanctions might be the huge oil and gas project near <a href="https://www.shell.com/about-us/major-projects/sakhalin/sakhalin-one-of-the-worlds-largest-integrated-oil-and-gas-pro.html">Sakhalin Island</a>, in Russia’s Far East. Also an important source of growing oil production, Sakhalin depends to a considerable degree on Western and Japanese investment and expertise. It is a core part of Russia’s plan to <a href="https://www.reuters.com/article/us-russia-oil-exports/as-russia-expands-pacific-pipeline-a-third-of-oil-exports-go-east-idUSKBN1XV1LB">expand oil exports to China, Japan, Korea and Taiwan</a>. </p>
<p>Regarding major natural gas projects, Biden could try to limit foreign participation in the Arctic Yamal-Gydan liquefied natural gas facility. This giant project, <a href="https://www.maritime-executive.com/article/putin-inaugurates-yamal-lngs-operations/">another of Putin’s favorites</a>, uses the Arctic Route to ship gas to China and is also part of Russia’s plan to shift hydrocarbon exports to Asia. </p>
<p>In addition, the Biden administration could expand sanctions to include any export of U.S. technology, including separate components and replacement parts, for use by a Russian oil and gas company. This would make it a lot harder for Russia to develop its shale oil and gas fields, among Russia’s largest sources for future production growth.</p>
<p>Moscow also has <a href="https://www.hydrocarbonprocessing.com/magazine/2019/march-2019/columns/europe-russian-petrochemicals-industry-on-the-verge-of-large-scale-growth">big plans to upgrade and expand</a> its petrochemical sector, <a href="https://hsfnotes.com/energy/2020/12/29/russian-petrochemical-industry-gets-the-roadmap-and-achieves-its-first-milestone/#:%7E:text=In%202019%2C%20roughly%20only%2011,a%20lot%20of%20growth%20potential.&text=The%20Russian%20petrochemicals%20industry%20is,%2C%20Rosneft%2C%20LUKOIL%20and%20Gazprom">with more than $50 billion</a> in investment necessary. Limiting or prohibiting non-Russian companies and investors from helping out would make it harder for some of these projects to get funded.</p>
<p>[<em>The Conversation’s science, health and technology editors pick their favorite stories.</em> <a href="https://theconversation.com/us/newsletters/science-editors-picks-71/?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=science-favorite">Weekly on Wednesdays</a>.]</p>
<h2>A meeting of minds?</h2>
<p>Even though existing sanctions have brought less change to Russia’s anti-Western conduct than hoped for, their impact has deeply constrained the country’s ability to grow. </p>
<p>But continued cyberattacks aimed at the U.S. – including <a href="https://www.bbc.com/news/world-us-canada-57280510">those perpetrated by independent groups</a> operating within Russia’s borders – may convince Biden that more serious sanctions are needed. </p>
<p>It’s likely that this possibility will be on both men’s minds as Biden meets Putin for the first time as president.</p><img src="https://counter.theconversation.com/content/159194/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Scott L. Montgomery does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When announcing financial penalties on Russia earlier this year, Biden hinted at the prospect of ‘further’ sanctions. An energy scholar explains what Biden may have meant.Scott L. Montgomery, Lecturer, Jackson School of International Studies, University of WashingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1489662020-10-27T18:40:31Z2020-10-27T18:40:31ZFact check US: Would Joe Biden’s energy plan really cause the loss of 10.3 million jobs in the oil and gas industry?<figure><img src="https://images.theconversation.com/files/365858/original/file-20201027-19-1o7gpi2.jpg?ixlib=rb-1.1.0&rect=0%2C9%2C1024%2C671&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fishermen on the shore by decommissioned oil rigs in Port Aransas, Texas (March 11, 2019).</span> <span class="attribution"><span class="source">Loren Elliott/AFP</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>On August 31, the <a href="https://www.donaldjtrump.com/media/yes-joe-biden-will-eliminate-fracking-jobs/">Trump campaign blog claimed</a> that Joe Biden’s <a href="https://joebiden.com/clean-energy/">clean-energy plan</a> would cause the loss of 10.3 million jobs related to the oil and gas industry – that is, <a href="https://www.bls.gov/news.release/archives/empsit_01102020.htm">6.5% of US jobs</a> in 2019. <a href="https://www.lemonde.fr/les-decodeurs/article/2018/02/12/petrole-de-schiste-comment-la-production-a-ete-decuplee-en-dix-ans-aux-etats-unis_5255531_4355770.html">While fracking</a> has helped the United States become the world’s <a href="https://www.latribune.fr/opinions/tribunes/petrole-americain-ce-que-l-on-nous-fait-croire-837645.html">leading crude-oil producer last year</a>, that figure is still exceedingly high. </p>
<p>To put it in perspective, for 10.3 million jobs to disappear, the <em>entire</em> oil and gas sector, along with all associated activity, would have to shut down. Such claims reflect the hyperbole of the 2020 presidential campaign.</p>
<h2>Where did this number come from?</h2>
<p>That figure is based on a <a href="https://www.api.org/%7E/media/Files/Policy/Jobs/Oil-and-Gas-2015-Economic-Impacts-Final-Cover-07-17-2017.pdf">2017 study</a> produced by the American Petroleum Institute (API), a <a href="https://www.sourcewatch.org/index.php/American_Petroleum_Institute">trade and lobbying association</a>. Going beyond promoting the oil and gas industry, the API has distinguished itself in recent years by funding groups and initiatives that <a href="https://www.theatlantic.com/science/archive/2020/02/oil-industry-fighting-climate-policy-states/606640/">fight efforts to address climate change</a>. In January 2021, the French energy group Total chose to <a href="https://www.ft.com/content/d18e0129-c42a-4698-aa22-8ee70fd49130">leave the API</a>, citing its opposition to US membership in the Paris climate agreement and its support for officials and groups that minimize or deny climate change.</p>
<p>The API’s study asserts that nearly 2.8 million jobs were directly linked to fossil fuels, including the many freelance workers employed in extraction. The rest are indirect and induced jobs – 5.3 million in sectors sustained by the spending of oil and gas companies (indirect) or that of their workers (induced), as well as 2.2 million generated by the capital investments of companies profiting from these activities.</p>
<p>Some states are certainly highly dependent on the oil and gas industry. In Texas, for example, almost 2 million jobs are in some way related to oil and gas (12.2% of overall employment across the state); in Oklahoma, 16.6% of all jobs are related. According to the API’s study, each job in the petrol and gas industry generates 2.7 jobs in other branches of the economy. This ratio is in line with <a href="https://www.epi.org/publication/updated-employment-multipliers-for-the-u-s-economy/">results</a> published by the Economic Policy Institute (EPI), estimating the number of additional jobs for each job in the extraction industry at 3.9 in 2019.</p>
<h2>Many jobs would remain</h2>
<p>When all was said and done, not only did Joe Biden beat Donald Trump in the 2020 presidential election, but the Democrats also won control of <a href="https://theconversation.com/bidens-job-gets-easier-after-senate-wins-in-georgia-but-dont-expect-a-progressive-revolution-152176">both the House and the Senate</a>. So does this mean that 10.3 million jobs in the US oil and gas industry will be eliminated if Biden’s energy plan becomes law? Absolutely not and for at least two reasons.</p>
<p>The API’s figures assumes the elimination of jobs that will continue to exist no matter what the US energy sector looks like in the future. Out of the 2.8 million direct jobs, more than 1 million are linked to the distribution of gas and petrol; others are linked to the manufacture of lubricants, or paving mix and asphalt blocks for roads. </p>
<p>Of course, switching to cleaner energy sources would not mark the end of roads or fuel stations; they would simply adapt to consumers’ needs – for example, offering battery-charging facilities or hydrogen fuel. Looking at the associated activities, only 6 million out of the 10.3 million jobs are specifically contingent on oil and gas production. That leaves 4.3 million jobs that will continue untouched.</p>
<h2>A net-zero emissions economy by 2050</h2>
<p>Biden’s plan does not call for a stop to the extraction of fossil fuels, nor a ban on fracking. Instead, it suggests progressively replacing them with renewable energies that will <a href="https://qz.com/1918202/the-meaning-behind-joe-bidens-job-creating-climate-plan/">generate new jobs</a>. His <a href="https://joebiden.com/clean-energy/">program</a> for a net-zero emissions economy by 2050 provides for $2,000 billion in spending, with the aim of reorienting the automobile industry’s technological strategy, increasing electricity production from clean energy, and repair ecosystems that have been damaged by resource extraction – mainly by abandoned, unplugged gas and oil wells. According to the plan, ecosystem rehabilitation alone would generate <a href="https://thebipartisanpost.com/all-articles/analyzing-joe-bidens-build-back-better-plan">250,000 direct jobs</a>.</p>
<p>Employment losses in the fossil-fuel sector must be weighed against the new jobs that would be created by the swiftly growing renewable-energy sector. The claim that 10.3 million jobs would be lost – even that 6 million would be – is thus very far off the mark. </p>
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<p><em>Fact check US is supported by <a href="https://craignewmarkphilanthropies.org/">Craig Newmark Philanthropies</a>, an American foundation fighting against disinformation.</em></p>
<p><em>This article was translated from the French by Alice Heathwood for <a href="http://www.fastforword.fr/en">Fast ForWord</a></em></p><img src="https://counter.theconversation.com/content/148966/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Les auteurs ne travaillent pas, ne conseillent pas, ne possèdent pas de parts, ne reçoivent pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'ont déclaré aucune autre affiliation que leur organisme de recherche.</span></em></p>Republicans claim that Biden’s clean-energy program would mean massive job losses in the oil-and-gas sector. The figures cited are not supported by the facts.Thérèse Rebière, Maître de conférences en économie, Conservatoire national des arts et métiers (CNAM)Isabelle Lebon, Professeur des Universités, directrice adjointe du Centre de recherche en économie et management, Université de Caen NormandieLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1037892018-10-09T13:59:36Z2018-10-09T13:59:36ZWhat Kenya can do to ensure local people benefit from its oil industry<figure><img src="https://images.theconversation.com/files/239857/original/file-20181009-72124-167dy65.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Kenya needs more skilled local workers who can be employed in the oil sector</span> <span class="attribution"><span class="source">Lydur Skulason/Flickr</span></span></figcaption></figure><p>Six years ago, Kenya <a href="https://theconversation.com/oil-discoveries-in-turkana-six-years-ago-havent-delivered-benefits-for-women-100101">discovered</a> commercially viable oil deposits in the Turkana region. The find is <a href="http://www.coastweek.com/3628-latest-news-kenya-oil-finds-improve-economy.htm">expected</a> to boost economic growth as about <a href="https://www.tullowoil.com/operations/east-africa/kenya">560 million barrels</a> of oil are expected to be recovered from the South Lokichar Basin. Commercial oil production <a href="https://www.tullowoil.com/operations/east-africa/kenya">is expected</a> in about three to four years.</p>
<p>But not all Kenyans are happy. Earlier this year, as road transfers of oil to Mombasa <a href="https://www.tullowoil.com/operations/east-africa/kenya">started</a> under the ‘early oil pilot scheme’, the operations faced <a href="https://www.the-star.co.ke/news/2018/06/27/no-oil-will-leave-turkana-without-security-and-jobs-protesters-say_c1778927">opposition</a> from local communities in Turkana. As a historically underdeveloped part of Kenya, the find was <a href="https://www.standardmedia.co.ke/business/article/2001234391/lokichar-oil-a-blessing-or-curse-for-turkana">expected</a> to bring great benefits to the Turkana people. But they have largely been excluded and are demanding jobs, business opportunities, security and a share of oil proceeds. </p>
<p>Some Kenyans and businesses <a href="https://theconversation.com/oil-discoveries-in-turkana-six-years-ago-havent-delivered-benefits-for-women-100101">have</a> gained employment or business contracts, but it’s not enough. British oil exploration company, Tullow Oil, the first to discover oil in Kenya, has <a href="https://www.tullowoil.com/operations/east-africa/kenya">a history</a> of discovering significant oil resources in East Africa. By the end of 2017, 30% of the company’s supplier spend was with <a href="https://www.tullowoil.com/Media/docs/default-source/3_investors/tullow-oil-plc-2017-annual-report.pdf?sfvrsn=2">Kenyan businesses</a>, down from 33% in 2016. The bulk goes to foreign companies. Though Tullow Oil does work with some Kenyan firms – like Kapese Transporters and Lopii Contractors – the company has <a href="https://www.tullowoil.com/Media/docs/default-source/3_investors/tullow-oil-plc-2017-annual-report.pdf?sfvrsn=2">slowed down</a> on contracting local suppliers.</p>
<p>It is crucial that Kenya figures out how to encourage <a href="https://www.lexology.com/library/detail.aspx?g=87a225c8-cb72-47d2-929c-6c8ab8324383">the participation of Kenyans</a> in the oil sector through the use of local labour, goods and services. This was the topic at a <a href="http://www.extractives-baraza.com/assets/content/PDF/epwg/Kenya-Extractives-Policy-Dialogues-2-Local-Content-Discussion-Paper.pdf">recent forum</a> hosted by the <a href="https://www.extractives-baraza.com/">Extractives Baraza</a> – an information centre for the extractives sector based at Strathmore University – in Nairobi. </p>
<p>Major constraints that prevent Kenyans – particularly communities around the oilfields – from benefiting from the oil sector include: a <a href="https://www.giz.de/de/downloads/E4D_SOGA_Brochure-Web-high_resolution.pdf">lack of</a> specialised training or technical skills, <a href="https://www.extractiveshub.org/servefile/getFile/id/4209">a lack of</a> access to credit which would increase the competitiveness of small-to-medium businesses, low quality of local goods and services and a <a href="https://www.standardmedia.co.ke/article/2000207205/no-road-no-oil-turkana-leaders-threaten">lack of modern roads and highways</a> to link the Turkana region with other parts of the country.</p>
<h2>The challenges</h2>
<p>In terms of human capital, Kenya <a href="http://www3.weforum.org/docs/WEF_Global_Human_Capital_Report_2017.pdf">ranks poorly</a> in the development of future skills (101 out of 130 countries according to the World Economic Forum) and in the use of specialised skills at work (74 of 130). </p>
<p>Tullow Oil <a href="https://www.tullowoil.com/Media/docs/default-source/3_investors/tullow-oil-plc-2017-annual-report.pdf?sfvrsn=2">cited this</a> burgeoning skills gap as the main reason for not including more locals in its workforce. This challenge is most <a href="https://theconversation.com/kenya-has-a-massive-skills-gap-how-it-can-fix-the-problem-91170">severe for technical and vocational skills </a> like welding, drilling, repair of heavy equipment and <a href="https://www.the-star.co.ke/news/2018/05/31/tullow-picks-uk-firm-for-key-oil-pipeline-job_c1765859">pipeline design</a>– all in <a href="http://www.lundinfoundation.org/education-and-skills-training">demand</a> in the oil sector. </p>
<p>But human capital isn’t the only problem. <a href="https://set.odi.org/wp-content/uploads/2016/09/Manufacturing-in-Kenya-Anzetse-Were.pdf">The low quality</a> of locally manufactured or available goods and services, compared to their high costs, has <a href="http://kam.co.ke/sme-development/">allowed</a> imported products to take over a large market share in Kenya. This could be attributed to a <a href="https://www.businessdailyafrica.com/analysis/Why-we-need-local-content-policy-now/539548-2754394-doyou4z/index.html">lack of understanding</a> as to what the oil sector needs in comparison to what is locally available. Local manufacturers also <a href="http://kam.co.ke/sme-development/">use obsolete technology</a> and there’s a low level of innovation.</p>
<p>A final, big challenge is the <a href="https://www.dentons.com/en/insights/alerts/2015/february/24/local-content-in-kenyas-oil-and-gas-industry">lack</a> of a robust legal framework to promote local participation. For instance, the <a href="http://www.kenyalaw.org/lex//actview.xql?actid=CAP.%20308">Petroleum (Exploration and Production) Act 1986</a> includes an obligation for contractors to give preference to locally available goods and services, and that Kenyan nationals be prioritised in employment and training. But the Act doesn’t provide for targets, outlining how much local representation is needed. It also doesn’t provide for monitoring or reporting. </p>
<h2>The way forward</h2>
<p>There needs to be a clear strategy to ensure <a href="http://www.extractives-baraza.com/assets/content/PDF/epwg/Kenya-Extractives-Policy-Dialogues-2-Local-Content-Discussion-Paper.pdf">local participation</a> in the oil sector. </p>
<p>To start with, the entire oil value chain must be assessed to identify which areas need to be focused on. This will reveal the size and capacity of local businesses, the capabilities of the local workforce, level of participation, and supplier landscape. </p>
<p>Skills need to be developed and there must be a requirement for investors to publicly certify that a local expert is not available before importing skills. </p>
<p>Local manufacturers must adopt modern technology and innovative solutions to produce products that align with the quality of goods and services needed in the sector.</p>
<p>Partnerships between the private sector, government (national and county) and academia are critical to bridge the knowledge gap. This will create awareness, ensure that training curricula and facilities are fit-for-purpose, and pool available skills and expertise. </p>
<p>Joint ventures between international companies and local companies are also critical for building links and transferring technology and skills. </p>
<p>Finally, the government must offer legal protection against unfair contractual arrangements, and guarantee recovery of delayed payments for local businesses. It should create a level playing field for local businesses to participate, for instance; by simplifying and fast-tracking business registration processes and ensuring equal access to project information for local businesses. Norway, for example, <a href="http://ella.practicalaction.org/wp-content/uploads/2016/07/20160526-Grupo-Faro-Local-Content-Frameworks-in-Latin-America.pdf">included</a> a requirement for oil companies to split up supply contracts into smaller parts suitable for local companies.</p>
<p><em>James Ombaki Kirwa, a Legal Researcher at Strathmore Extractives Industry Centre, contributed to this article</em></p><img src="https://counter.theconversation.com/content/103789/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Melba K. Wasunna does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A major constraint that prevents Kenyans from benefiting from the oil sector includes the lack of specialised training or technical skillsMelba K. Wasunna, Director and Lecturer, Extractives Baraza, Strathmore UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/949212018-04-13T02:38:08Z2018-04-13T02:38:08ZNew Zealand puts an end to new permits for exploration of deep-sea oil and gas reserves<figure><img src="https://images.theconversation.com/files/214489/original/file-20180412-549-1k5k00f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New Zealand's government will not grant any new permits for exploration of offshore oil and gas reserves.</span> <span class="attribution"><span class="source">from www.shutterstock.com</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The New Zealand government’s <a href="https://www.beehive.govt.nz/release/planning-future-no-new-offshore-oil-and-gas-exploration-permits">announcement</a> that it will not issue any new permits for offshore exploration for oil and gas deposits is exciting, and a step in the right direction. </p>
<p>We know that we <a href="https://theconversation.com/unburnable-carbon-why-we-need-to-leave-fossil-fuels-in-the-ground-40467">can’t afford to burn much more oil</a> if we want to meet the <a href="https://unfccc.int/process/the-paris-agreement/what-is-the-paris-agreement">Paris Agreement</a> target of keeping global temperature rise this century well below two degrees above pre-industrial levels. Almost all of the already known reserves must stay in the ground, and there is no room to go exploring for more. </p>
<p>Pursuing further reserves would only lead to stranded assets and would waste time and resources in the short term.</p>
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<a href="https://theconversation.com/why-new-zealand-should-not-explore-for-more-natural-gas-reserves-91544">Why New Zealand should not explore for more natural gas reserves</a>
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<h2>Moving away from fossil fuels</h2>
<p>New Zealand currently has 31 active permits for oil and gas exploration, and 22 of these are offshore. A program set up by the previous government <a href="https://www.nzpam.govt.nz/permits/petroleum/block-offer/">invites bids each year for new onshore and offshore exploration permits</a>. But this year it is <a href="https://www.nzpam.govt.nz/about/news/consultation-block-offer-2018-open/">restricted to the onshore Taranaki Basin</a>, on the west coast of the North Island.</p>
<p>Complementing the move to shut down the exploration of new deep-sea fossil fuel reserves, the government’s new <a href="http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12025268">transport funding plan</a> aims to reduce demand for fossil fuels by putting emphasis on public transport, cycling and walking. </p>
<p>This gets away from the outdated mantra of more roads and more cars that we have seen over the past decade and will tackle the transport sector, which has seen very <a href="http://www.mfe.govt.nz/publications/climate-change/new-zealands-greenhouse-gas-inventory-1990%E2%80%932016-snapshot">rapid growth in emissions since 1990</a>. This will help New Zealand onto a low-carbon pathway and promises a more people-focused future. </p>
<p>New Zealand is a small player in global emissions of greenhouse gases but our actions can carry <a href="https://nzhistory.govt.nz/new-zealand-becomes-nuclear-free">symbolic weight on the world stage</a>. Given our present position of 80% renewable electricity and an abundance of solar, wind, wave and tidal energy, if any country can become zero-carbon, surely New Zealand can. It can only benefit New Zealand - socially, economically and politically - to lead in this crucial race to stabilise the climate. </p>
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Read more:
<a href="https://theconversation.com/a-new-approach-to-emissions-trading-in-a-post-paris-climate-78746">A new approach to emissions trading in a post-Paris climate</a>
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<h2>Rising emissions</h2>
<p>As the government announced its ban on new offshore exploration permits, the latest <a href="http://www.mfe.govt.nz/climate-change/state-of-our-atmosphere-and-climate/new-zealands-greenhouse-gas-inventory">greenhouse gas inventory</a> was also released, showing some good news. New Zealand’s gross emissions went down slightly from 2015 to 2016. </p>
<p>But gross emissions are up nearly 20% since 1990, and net emissions (actual emissions minus the “sinks” from forestry) are <a href="http://archive.stats.govt.nz/browse_for_stats/snapshots-of-nz/nz-progress-indicators/home/environmental/greenhouse-gas-emissions.aspx">up 54% over that time</a>. The main factors that contributed to the increase were dairy intensification and increased transport and energy emissions. </p>
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<p>Even though <a href="https://emissionstracker.mfe.govt.nz/#NrAMBoEYF12TwCIByBTALo2wBM4eiQBs2AHEltEA">agriculture is still the largest source</a> of emissions overall, energy and transport are close behind. We have seen a near-doubling in carbon dioxide emissions from road transport over the past 27 years.</p>
<p>It is encouraging to see a decrease in emissions from the waste sector. Per head of population, New Zealanders throw away <a href="https://data.oecd.org/waste/municipal-waste.htm">significantly above the OECD average of rubbish</a>, a lot of which is green waste that decomposes and releases methane, another potent but short-lived greenhouse gas. </p>
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<p>While New Zealand emits a tiny fraction of the world’s greenhouse gases, on a per-capita basis we are <a href="http://www.mfe.govt.nz/publications/climate-change/new-zealands-greenhouse-gas-inventory-1990%E2%80%932016-snapshot">sixth-highest among developed countries</a>. We have as much responsibility as any country to reduce our emissions. </p>
<p>Even though emissions have risen, we are set to meet our national target for 2020 (a 5% reduction on 1990 levels) because of “carry-over” credits from the first Kyoto reporting period from 2008 to 2012. But to live up to more stringent future targets, we need a lot more action than we’ve seen over the last decade. The government plans to <a href="https://www.beehive.govt.nz/release/first-important-step-towards-zero-carbon-act">introduce zero-carbon legislation</a> that will commit New Zealand to reaching the goal of carbn neutrality by 2050. </p>
<p>This will require serious investment and commitment to renewable technologies, changes in the transport sector, changes to agriculture and land use, and ultimately changes in the way we all live our lives.</p><img src="https://counter.theconversation.com/content/94921/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Renwick receives funding from the Marsden Fund and has received funding from the Ministry for Business, Innovation and Employment. </span></em></p>New Zealand has ruled out new permits for offshore oil and gas exploration as a step towards a transition to a carbon-neutral future.James Renwick, Professor, Physical Geography (climate science), Te Herenga Waka — Victoria University of WellingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/941312018-04-06T08:55:49Z2018-04-06T08:55:49Z‘Lost’ Amazonian tribes: why the West can’t get over its obsession with El Dorado<figure><img src="https://images.theconversation.com/files/213422/original/file-20180405-189827-19hmypx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/pastaza-river-basin-aerial-shot-low-239180833?src=076sYTh2ISHnp_7QVQHuYA-1-8">Ammit Jack/Shutterstock.com</a></span></figcaption></figure><p>A number of <a href="https://wapo.st/2GaW39T?tid=ss_mail&utm_term=.a50958cfcc23">ancient settlement sites</a> were recently discovered in the Amazon’s Upper Tapajós Basin. This is no El Dorado – although you’d be forgiven for thinking so. The <a href="https://www.theguardian.com/science/2018/mar/27/lost-amazon-villages-uncovered-by-archaeologists">press coverage</a> demonstrates a fixation on the idea that the tropical New World may once have been the site of monumental societies, such as those in Egypt or Mesopotamia. The recent discoveries were heralded <a href="http://www.newsweek.com/amazon-rainforest-glyphs-research-columbus-861960">by Newsweek</a> as “rewriting” the history of the Americas before Columbus: not a modest claim. The Guardian <a href="https://www.theguardian.com/science/2018/mar/27/lost-amazon-villages-uncovered-by-archaeologists">proclaimed</a>: “Lost Amazon villages uncovered by archaeologists.”</p>
<p>Meanwhile, the National Geographic (partly responsible for the funding of the project) <a href="https://news.nationalgeographic.com/2018/03/amazon-jungle-ancient-population-satellite-computer-model/">announced</a> that the “Amazon jungle was once home to millions more than previously thought”. This is far from the idea of a pristine landscape that conservationists have been alluding to for years. As one of the Exeter researchers <a href="https://wapo.st/2GaW39T?tid=ss_mail&utm_term=.a50958cfcc23">noted</a> to the Washington Post: “It seems that it was a mosaic of cultures.”</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213412/original/file-20180405-189821-1mrqi0q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Evidence of a prehistoric settlement.</span>
<span class="attribution"><span class="source">University of Exeter</span></span>
</figcaption>
</figure>
<p>News from the Amazon has long been concerned with “lost tribes” or “uncontacted peoples”. One <a href="http://www.imdb.com/title/tt1568206/">1970 documentary</a> portrays the key element of the genre: native peoples resisting assimilation. In this century, the emphasis has shifted somewhat. Increasingly, native Amazonian peoples are portrayed not only as “lost”, but also occupying a natural realm that is in danger of being lost itself to oil exploration, mining and timber extraction.</p>
<h2>‘Lost’ Indians</h2>
<p>This was strikingly illustrated in 2008, when José Carlos dos Reis Meirelles Junior, a FUNAI official (Brazil’s national Indian agency) published dramatic and still widely reproduced <a href="http://news.bbc.co.uk/1/hi/7426794.stm">images</a> of exotically-dyed Indians trying to bring down aircraft with bows and arrows. Meirelles described the threats to such tribes and their land as “a monumental crime against the natural world”. </p>
<p>Meirelles acknowledged that efforts to forestall destructive timber exploitation were more effective if borne on the shoulders of “uncontacted” Indians, in part because the “exotic Indian” is a potent symbol to a metropolitan public. </p>
<p>Yet as noted in a <a href="https://www.theguardian.com/environment/andes-to-the-amazon/2016/mar/27/channel-4-lost-tribe-amazon">review</a> of a 2016 documentary that chronicled some of Meirelles’ efforts to draw attention to the Indians’ plight, there is a useful ambiguity in the term “uncontacted”. To the naïve observer, the term implies autonomy and isolation. But, in fact, it is a term used by FUNAI officials to identify groups that simply have no official relationship with those agents of the state empowered to act on their behalf. As Meirelles himself <a href="https://www.theguardian.com/environment/andes-to-the-amazon/2016/mar/27/channel-4-lost-tribe-amazon">said</a> when queried by The Guardian about the term: </p>
<blockquote>
<p>All the peoples described as ‘isolated’ have had some kind of contact with us. Usually violent. What they don’t have is regular contact. But they’ve been using axes, machetes and iron pots for at least 100 years.</p>
</blockquote>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/kXId0he7Qyg?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
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<p>The “lost” Indian of the present depicted as a living version of the Indian of the past (as opposed to what many regard as the composite, ersatz, mestiço derivative – that is, most Amazonians) continues to be a formidable icon of Amazonia, and is bolstered now by the notion of the discovery of a historical tropical civilisation. Journalistic accounts, after all, are still driven by a fascination with lost cities, lost tribes and the exotica of neo-tropicalism.</p>
<p>And so these findings may seem to revolutionise our understanding of the Amazon. But beyond the numbers in this particular region (the authors of the recent study estimate that between 500,000 and a million people lived in the Upper Tapajós Basin), there is really very little new here. A very substantial literature has challenged the prevailing views about the pristine character of pre-Conquest Amazonia for decades (or longer).</p>
<h2>A counterfeit paradise</h2>
<p>Ironically, in the same month that these discoveries were announced, two major contributors to the revised view of Amazonian history, <a href="https://networks.h-et.org/node/23910/discussions/1543442/obit-alfred-w-crosby">Alfred Crosby</a> and <a href="http://www.anthropology-news.org/index.php/2018/03/16/denise-pahl-schaan/">Denise Schann</a>, died. </p>
<p>They are among a very large set of scholars whose work has challenged orthodox views centred around <a href="https://doi.org/10.1525/aa.1973.75.4.02a00400">the claim</a> that Amazonia is a “counterfeit paradise” intrinsically unsuited to any but the most marginal social existence. Evidence of social complexity in <a href="https://www.exeterpress.co.uk/en/Book/874/Chiefdoms.html">chiefdoms</a> and <a href="https://uapress.arizona.edu/book/amazonian-indians-from-prehistory-to-the-present">proto-states</a>, such as is further evidenced by the recent discovery, counters these claims.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/213413/original/file-20180405-189807-1t3qe6u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Researchers exploring a discovered settlement.</span>
<span class="attribution"><span class="source">University of Exeter</span></span>
</figcaption>
</figure>
<p>But the challenge to the image of Amazonian “green hell” has considerable historical depth. Indeed, the chronicler of the first European descent of the Amazon river, Gaspar de Carvajal, reported a density of riverbank populations in 1542 that stands in striking contrast to subsequent characterisations of Amazonia as a land of isolated, small-scale, forest-dwelling hunter-gatherers. Since then, many others have, in various ways, contributed to a reconfiguration of pre-modern Amazonia that refuses to succumb to the prevailing stereotypes.</p>
<p>In fact, few historical Indian groups maintained lives anywhere near as isolated or pacific as prevailing picture postcard representations suggest. The same is true today. Indians are beleaguered by the state and resource hungry interlopers. They therefore generally maintain an existence characterised by <a href="https://www.theguardian.com/cities/2017/nov/28/guarani-indians-sao-paulo-protest">high levels of social conflict</a> (as they seek to defend territorial boundaries, for example), despair (notoriously <a href="https://www.theguardian.com/world/2013/oct/10/suicide-rates-high-brazil-tribe">high levels of suicide</a>) and <a href="https://www.timeshighereducation.com/fr/news/the-river-of-sorrows/95194.article">cultural disintegration</a>.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/OUNKEmVz3Q4?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<h2>Cliché reigning</h2>
<p>The repeated invocation of the Amazonia of myth – of lost tribes or lost cities – is easy to challenge on a factual basis, though such objections appear rather feeble in the face of the power of cliché. The clichés are far more comestible than the banality of profitable exploitation of Amazonian “cheap nature”, <a href="https://atlas.media.mit.edu/">minerals</a>, hydroelectric power, timber, and agricultural land available at minimal cost to enterprises able to extract at scale. But the typical portrayal of “lost peoples” beleaguered by capitalist industry hardly captures the long-term, implanted, and globalist character of resource exploitation in the region. </p>
<p>That the clichés prevail is not surprising. But it is disheartening that the relationship between the past and the present has been so regularly rendered opaque. We speak repeatedly of lost worlds, lost peoples, lost civilisations, as if this has occurred through some kind of natural process, rather than as a result of the persistent and systematic destruction of those societies (as well as their natural environments). </p>
<p>Being “lost”, misplaced or requiring “re-discovery” is not an intrinsic condition. Realistic assessment of what is happening in the course of Amazonian development is hardly encapsulated in postcard images and El Dorado fantasies.</p><img src="https://counter.theconversation.com/content/94131/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Nugent has received funding from the University of London; Leverhulme Trust. </span></em></p>A mythical Amazonia of lost tribes or lost cities is easy to challenge on a factual basis, but such objections appear rather feeble in the face of the power of cliché.Stephen Nugent, Emeritus Professor of Anthropology, Goldsmiths, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/915442018-02-27T06:54:58Z2018-02-27T06:54:58ZWhy New Zealand should not explore for more natural gas reserves<figure><img src="https://images.theconversation.com/files/207943/original/file-20180226-120776-1r3hubl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The New Zealand government is introducing legislation to become zero-carbon by 2050, but will consider new permits for coal mining, offshore oil drilling and fracking on a case-by-case basis.</span> <span class="attribution"><span class="source">from shutter stock.com</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p>New Zealand’s new coalition government has committed to introducing zero-carbon legislation that would set the country on a course to be <a href="http://www.labour.org.nz/climatechange">carbon neutral by 2050</a>. </p>
<p>At the same time, it is <a href="https://www.radionz.co.nz/news/political/346415/mining-permits-to-be-taken-case-by-case-ardern">not ruling out new permits</a> for coal mining, offshore oil drilling and fracking during a transition away from fossil fuels.</p>
<p>Natural gas is often touted as a “bridging fuel” to cut the use of coal for heat and power while moving towards a low-carbon economy. Also, this week’s <a href="http://www.scionresearch.com/science/bioenergy/nz-biofuels-roadmap">report by the crown research institute Scion</a> shows that New Zealand could build a renewable low-carbon transport fuels industry by switching to biofuels instead of natural gas. Developing new gas resources in New Zealand is a shortsighted strategy that could lead to stranded assets.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/2050-climate-targets-nations-are-playing-the-long-game-in-fighting-global-warming-69334">2050 climate targets: nations are playing the long game in fighting global warming</a>
</strong>
</em>
</p>
<hr>
<h2>Carbon budget</h2>
<p>Carbon dioxide (CO₂) is a long-lived greenhouse gas. Each molecule released into the atmosphere from burning fossil fuels remains there for hundreds of years. <a href="http://www.ipcc.ch/report/ar5/syr/">Analysis by the Intergovernmental Panel on Climate Change</a> shows that once we reach a total of 2,900 billion tonnes of carbon dioxide (Gt CO₂) in the atmosphere, the planet will likely exceed the internationally agreed target to keep warming below two degrees above pre-industrial levels.</p>
<p>More than 1,900 Gt CO₂ have already been emitted since the late 19th century. We are currently adding around 33 Gt CO₂ from fossil fuel combustion and 5 Gt CO₂ from deforestation every year. The atmospheric concentration of CO₂ has now surged to <a href="https://public.wmo.int/en/media/press-release/greenhouse-gas-concentrations-surge-new-record">more than 403 parts per million</a>, the highest in millions of years. The planet is already around one degree warmer than the average pre-industrial temperature.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=297&fit=crop&dpr=1 600w, https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=297&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=297&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=373&fit=crop&dpr=1 754w, https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=373&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/207970/original/file-20180227-140200-u93wht.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=373&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">This graphic shows that we have already used up around two-thirds of the total carbon budget to avoid exceeding a two-degree average temperature rise (with a 66% chance).</span>
<span class="attribution"><a class="source" href="http://www.ipcc.ch/report/graphics/index.php?t=Assessment%20Reports&r=AR5%20-%20WG1">IPCC, Working Group 1, 2013</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>The remaining <a href="http://www.globalcarbonproject.org/carbonbudget/">carbon budget</a>, with a 66% chance of staying below the two-degree target, is now at about 800 Gt CO₂. At the current business-as-usual rate of fossil fuel combustion and deforestation, the total budget will be exceeded within 20 to 25 years. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/fossil-fuel-emissions-hit-record-high-after-unexpected-growth-global-carbon-budget-2017-87248">Fossil fuel emissions hit record high after unexpected growth: Global Carbon Budget 2017</a>
</strong>
</em>
</p>
<hr>
<p>By then, we will have used up around two-fifths of the known global reserves of coal, oil and natural gas. The remaining three-fifths will need to stay in the ground. </p>
<h2>Gas as a transition fuel</h2>
<p>Natural gas is described as a “transition fuel” that cuts the use of coal. This argument, and the case for providing greater energy security, is being used to <a href="http://gisborneherald.co.nz/localnews/2580450-135/oil-and-gas-lets-stick-to">justify exploration for deep sea oil and gas</a> in New Zealand waters. </p>
<p>Displacing coal by burning conventional natural gas does <a href="https://www.db.com/cr/en/docs/Natural_Gas_LCA_Update_082511.pdf">indeed produce lower emissions</a>, while providing the same heat or electricity services. A coal-fired power station produces around 900-1100 g CO₂/kWh generated; a gas-fired plant produces around 450-500 g CO₂/kWh. By way of comparison, a geothermal plant varies with the field but can emit up to 50 g CO₂/kWh and emissions from other renewable energy plants vary widely with the circumstances but tend to be much lower.</p>
<p>However, on a life-cycle basis, any carbon dioxide reduction benefits would be partially negated by <a href="http://environmentalresearchweb.org/cws/article/news/60392">leakage of methane</a> (CH₄), the main component of natural gas. Leakage is inevitable during the extraction, distribution and use of natural gas. It is difficult to determine the level of leakage, but it is more certain that emissions from coal or gas plants are significantly higher than from a renewable energy plant of similar generation output.</p>
<p>Natural gas has the potential to extend the time before the carbon budget is used up, assuming it displaces coal that would then be left in the ground. But the use of gas cannot deliver the deep cuts in emissions that will be required to stay below two degrees. </p>
<h2>Energy security and fossil fuel subsidies</h2>
<p>Many nations, including New Zealand, aim to improve their energy security by shifting to more indigenous fossil fuel resources to reduce their dependence on imports and widely fluctuating prices. Exploring for more gas to meet local demands at contracted prices may make good political sense in the short term, but it exacerbates climate change.</p>
<p>Fossil fuel exploration, production and consumption is widely subsidised by many governments. The International Energy Agency estimated the <a href="https://www.iea.org/statistics/resources/energysubsidies/">value of consumer subsidies in 2016 was over US$260 billion</a>. </p>
<p>Conversely, <a href="https://www.newyorker.com/news/daily-comment/the-movement-to-divest-from-fossil-fuels-gains-momentum">divestment away from fossil fuel companies</a> is growing worldwide. For example, New York City is not only intending to divest US$5 billion of its holdings in fossil fuel assets, but also plans to <a href="https://www.reuters.com/article/us-usa-municipals-fossilfuels/new-york-sues-fossil-fuel-majors-plans-divestment-from-pension-funds-idUSKBN1EZ2Q2">sue the major oil companies</a> over their contribution to climate change. </p>
<h2>New Zealand’s economy without more gas</h2>
<p>In New Zealand, natural gas is used to generate electricity and heat for industries, to produce methanol (mainly for export) and other petrochemical products such as urea. It also supplies around 277,000 domestic and commercial consumers in the North Island. </p>
<p>Currently around 1,200,000 tonnes per year (t/yr) of coal are consumed in New Zealand, mainly for heat and electricity, emitting around 2.6 Mt CO₂/yr. If all existing coal plants and heating systems were converted to gas, around 1.3 Mt CO₂/yr of emissions would be avoided. This would contribute a little towards the 20 Mt CO₂-eq/yr of emissions reductions needed to meet <a href="https://www.mfe.govt.nz/climate-change/reducing-greenhouse-gas-emissions/new-zealand%E2%80%99s-post-2020-climate-change-target">New Zealand’s current 2030 target</a> under the <a href="http://www.mfe.govt.nz/climate-change/why-climate-change-matters/global-response/paris-agreement">Paris Agreement</a>. </p>
<p>However, given the Government’s target to reach net-zero emissions by mid-century, gas will ultimately need to be entirely phased out together with coal and oil products. Therefore, the overall aims for New Zealand should be to:</p>
<ul>
<li><p>use our existing reserves of natural gas wisely in order to gain maximum long-term economic benefits by maximising the return on investments already made, as well as reducing our annual CO₂ emissions by displacing coal and minimising methane leakage</p></li>
<li><p>invest significantly in research and development in sustainable energy, including low-carbon and economically viable alternatives for the current uses of existing gas supplies</p></li>
<li><p>clarify and quantify any fossil fuel producer and consumer subsidies and remove them in the near future</p></li>
<li><p>avoid the temptation to explore and develop new gas resources even if they appear to deliver short-term economic benefits; and </p></li>
<li><p>invest in renewable energy technologies, including biofuels, as long as they are produced from crop and forest residues and purpose-grown forests on marginal land, as identified in the Scion report.</p></li>
</ul><img src="https://counter.theconversation.com/content/91544/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ralph Sims does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Natural gas is touted as a “bridging fuel” to displace coal while moving to a low-carbon economy. In New Zealand, this is shortsighted and could lead to stranded assets and hold back renewables.Ralph Sims, Professor, School of Engineering and Advanced Technology, Massey UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/812942017-11-06T22:39:14Z2017-11-06T22:39:14ZEarthquakes caused by industrial activities: what are the risks and how can they be reduced?<figure><img src="https://images.theconversation.com/files/193256/original/file-20171103-1041-ze96hy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A wastewater injection well in Coyle, Oklahoma. Increases in wastewater injection at the underground can destabilise pre-existing faults, setting off earthquakes.</span> <span class="attribution"><span class="source">J. Berry Harrison III / News 9 Oklahoma</span>, <span class="license">Author provided</span></span></figcaption></figure><p>On September 3, 2016, a magnitude 5.8 earthquake struck just northwest of Pawnee, Oklahoma, causing moderate to severe damages in buildings near <a href="https://earthquake.usgs.gov/earthquakes/eventpage/us10006jxs#executive">the epicenter</a>. It was the largest ever recorded in the state.</p>
<p>The Pawnee earthquake followed the dramatic increase of seismic events in the central United States beginning in 2009, associated with the increase of underground wastewater disposal by <a href="http://science.sciencemag.org/content/341/6142/1225942">oil and gas operators</a>. This and other events in the area raised public concerns and led governmental agencies to shut down injection wells and <a href="http://advances.sciencemag.org/content/2/11/e1601542.full">establish new regulations regarding wastewater injections</a>.</p>
<p>While human-caused earthquakes have been documented for more than a century, their increasing number reported worldwide has drawn much <a href="https://pubs.geoscienceworld.org/srl/article-abstract/doi/10.1785/0220170112/519166/hiquake-the-human-induced-earthquake-database?redirectedFrom=fulltext">scientific, social and political attention</a>. Such earthquakes are related to industrial activities such as mining, construction of water dams, injection of liquids such as waste water and carbon dioxide, and extractions associated with oil and gas exploitation. </p>
<p>With the ever-increasing demand for energy and mineral supplies worldwide, the number of human-caused earthquakes is expected to <a href="https://pubs.geoscienceworld.org/srl/article-abstract/doi/10.1785/0220170112/519166/hiquake-the-human-induced-earthquake-database?redirectedFrom=fulltext">rise in the upcoming years</a>. Some of the largest and more destructive earthquakes of the past few years have been related to man-made activities, such <a href="https://link.springer.com/article/10.1007/s12665-011-1355-7">as the 2008 magnitude 7.9 Wenchuan (China) earthquake</a> and the 2015 magnitude 7.8 <a href="http://onlinelibrary.wiley.com/doi/10.1002/2015GL066616/full">Nepal earthquake</a>.</p>
<p>In most of the cases industrial activities do not induce earthquakes. But this becomes problematic when such activities are close to active faults. In this case, even small stresses underground caused by man-made activities can destabilise faults, inducing earthquakes.</p>
<h2>Faulty fluid injections</h2>
<p>Such stresses, such as fluid injections, are even capable of migrating long distances in the planetary crust, can induce earthquakes days, months or even years after the injection.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=372&fit=crop&dpr=1 600w, https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=372&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=372&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/190454/original/file-20171016-30954-1xcunom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Drilling site in the city of Basel, Switzerland.</span>
<span class="attribution"><span class="source">Keystone/Georgios Kefalas/Giorgos Michas</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The above figure shows that as fluid pressure at the top of the well Basel 1 (purple line) was increasing during injection, the induced seismicity rate also increased (bluish bars). In the bottom figure, the average squared distance of the induced earthquakes from the well is shown, which indicates the complex propagation of seismicity away from the well over time. The largest-earthquakes (magnitude greater than 3, shown with stars) occurred after the injection ended.</p>
<p>Such problems, along with the general lack of knowledge of the exact stress and faulting conditions below ground, make such earthquakes difficult to forecast or manage.</p>
<p>In Europe, where the population density is higher than the United States, public concern over man-made earthquakes is greater. In the <a href="http://www.nature.com/nature/journal/v462/n7275/full/462848a.html">well-known case of Basel, Switzerland</a>, which took place in 2006, approximately 11,500 cubic metres of water were injected at high pressure into a 5-km deep well to make the extraction of geothermal energy possible. During the injection phase, more than 10,000 earthquakes were induced, including some strong events that were felt in Basel itself. These raised public concern and anger, leading to the termination of the project and to more <a href="http://www.nature.com/nature/journal/v462/n7275/full/462848a.html">than $9 million on damage claims</a>.</p>
<h2>Nature’s work</h2>
<p>In Southern Europe, which has a higher risk of <a href="https://theconversation.com/can-we-get-better-at-predicting-earthquakes-64408">natural occurring earthquakes</a>, public tolerance on induced earthquakes due to industrial activities is even more limited. The deadly 2012 Emilia (Italy) earthquake sequence became a topic of sustained public debate and political discussion, based on the <a href="http://science.sciencemag.org/content/344/6180/141">proximity of the earthquake epicentres to an oil field</a>.</p>
<p>The Italian government established an international committee to investigate, and while no clear link between regional seismicity and oil-extraction was found, one wasn’t excluded either. Other studies concluded that the earthquakes were a <a href="http://onlinelibrary.wiley.com/doi/10.1002/2016RG000542/full">natural event</a>.</p>
<p>Another recent case is that of the Castor project, an underground offshore gas-storage facility in the Gulf of Valencia, Spain. The US$2 billion project was terminated by the Spanish government in 2014 following a burst of regional seismicity immediately <a href="https://academic.oup.com/gji/article-abstract/198/2/941/599627/The-2013-September-October-seismic-sequence?redirectedFrom=fulltext">after the initiation of gas-injection operations</a>, and the public concern that followed.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=410&fit=crop&dpr=1 600w, https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=410&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=410&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=515&fit=crop&dpr=1 754w, https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=515&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/190456/original/file-20171016-31010-1ewdpq7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=515&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">European Seismic Hazard Map.</span>
<span class="attribution"><span class="source">Giorgios Michas</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The above European Seismic Hazard Map displays the most seismically hazardous areas in Europe measured by the <a href="https://en.wikipedia.org/wiki/Peak_ground_acceleration">peak ground acceleration</a> (PGA) that may be expected during an earthquake, with a 10% probability to be reached or exceeded in 50 years. Green indicates comparatively low hazard values of PGA below 0.1g; yellow to orange show a moderate hazard, between 0.1-to-0.25g; and red identify high-hazard areas with <a href="http://www.share-eu.org/">PGA of more than 0.25</a>.</p>
<h2>The challenges ahead</h2>
<p>The previous cases illustrate some of the coming challenges to be faced with man-made earthquakes. The ability to distinguish between natural and human-induced earthquakes can be difficult or even impossible, especially in seismically active regions, while in other cases the risk associated with industrial activities is <a href="http://onlinelibrary.wiley.com/doi/10.1002/2016RG000542/abstract">significantly underestimated</a>. Such problems pose novel challenges for risk mitigation and economic growth, especially in seismically active regions such as Southern Europe.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=588&fit=crop&dpr=1 600w, https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=588&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=588&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=739&fit=crop&dpr=1 754w, https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=739&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/190457/original/file-20171016-30954-7tcizf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=739&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Map showing 50-year seismicity in Greece for moderate- and large-magnitude earthquakes and the regional blocks that have already been or will be licensed for gas and oil exploration and exploitation.</span>
<span class="attribution"><span class="source">Giorgos Michas</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The image above illustrates the drilling and extraction operations may take place near or within seismically active regions, increasing the risk of activating faults and/or accelerating the occurrence of earthquakes that would otherwise would occur naturally sometime in the future.</p>
<p>To significantly reduce such hazards, <a href="https://www.theregreview.org/2015/05/04/hamilton_risks_fracking/">regulations are required</a> that include hazard modelling as well as assessment before and during industrial activity that might perturb regional stress fields. Such regulations were recently issued in North America, including California, Oklahoma, Ohio and Texas, as well as in and Canada. In Europe, the EU has not yet issued any such regulations, but guidelines have been put forth in some countries that have experienced induced earthquakes, including the Netherlands, Switzerland, the UK, Germany, France and Italy.</p>
<p>In addition, communication campaigns that will inform the public on the economic benefits and the risks that such industrial operations may have, should also put forth. Such measures will assure the effective mitigation of the associated risk and the sustainability of the industrial project.</p>
<hr>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=121&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=121&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=121&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=152&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=152&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=152&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em>Created in 2007, the Axa Research Fund supports more than 500 projets around the world conducted by researchers from 51 countries. To find out more about the work of Georgios Michas, visit the <a href="https://www.axa-research.org/en/projects/georgios-michas">dedicated site</a>.</em></p><img src="https://counter.theconversation.com/content/81294/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Georgios Michas receives funding from the AXA Research Fund. </span></em></p>As global demand for energy and mineral supplies increases worldwide, the number of man‑made earthquakes is expected to rise. That increases the importance of understanding connection between the two.Georgios Michas, Postdoctoral Research Associate, Technological Educational Institute of CreteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/781072017-05-28T13:08:34Z2017-05-28T13:08:34ZWhy exploring for oil under Lake Kivu carries unique and huge risks<figure><img src="https://images.theconversation.com/files/170345/original/file-20170522-25041-158ulas.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Lake Kivu borders three African countries. With a surface area of 2060 km² it is almost the size of Mauritius.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p><em>Rwanda and the Democratic Republic of the Congo <a href="https://thespearnews.com/2017/04/25/rwanda-draws-drc-into-a-joint-oil-exploitation-deal-as-museveni-sells-his-oil-at-his-terms-and-price/">have signed</a> a five-year joint exploration agreement for oil under Lake Kivu. But Professor Robert Hecky warns that there are extraordinary risks. The lake has a huge amount of gas in its deep waters and could explode with devastating consequences.</em></p>
<p><strong>What’s so special about Lake Kivu?</strong></p>
<p>With a surface area of 2,370km² – almost the size of Mauritius – and a maximum depth of 480metres, Lake Kivu is one of the Great Lakes of Africa. It is <a href="http://www.greatlakesofafrica.org/lake-kivu/">the 3rd</a> deepest in Africa after Lakes Malawi and Tanganyika. All three are located in East Africa’s <a href="http://geology.com/articles/east-africa-rift.shtml">Western Rift valley</a>. Kivu lies on the border between Rwanda and the Democratic Republic of the Congo (DRC). </p>
<p>Other lakes in the western Rift Valley are rich in fish species. But not Lake Kivu. There are only 28 compared with over 400 in downstream Lake Tanganyika. Nevertheless, the lake supports an important fisheries industry – based on an introduced sardine native to Lake Tanganyika – yielding <a href="http://www.greatlakesofafrica.org/lake-kivu/">over</a> 20,000 tonnes per year.</p>
<p>The Kivu basin <a href="http://www.nature.com/news/2009/000000/full/460321a.html">is home</a> to two million people, with more than 400 inhabitants/km². This is one of the highest population densities in the area surrounding the African Great Lakes. This includes several large refugee camps near the shores of the lake. </p>
<p>Kivu is an important transport corridor for the informal economy between Rwanda and the DRC, with steady traffic in produce, fish and domestic goods. It is also a major reservoir providing water for <a href="https://ec.europa.eu/europeaid/ruzizi-hydropower-plant_en">power production</a> downstream on the Ruzizi river. </p>
<p>Although it has a mean depth of 240 metres, oxygen does not penetrate below 60 metres. This means that only bacteria grow through most of the volume of the lake while fish and other large organisms are restricted to the surface layer. </p>
<p>In common with all deep lakes, Kivu has density stratification– the densest water is found at the bottom and the least dense water at the top. Density is a function of temperature (cooler waters are more dense) and salinity (more saline waters are more dense). Unlike most other lakes, Kivu gets warm, saline inflows into the deep water which enforces a very strong density gradation from bottom to top which results in layers of <a href="http://www.lake-kivu.org/node/1">different density</a>, and results in an uncommon temperature structure with the warmest waters occurring at the deepest depths. </p>
<p>Temperatures are affected by inflowing deep springs heated by the active volcanoes which form its northern watershed. But these warm springs are also rich in volcanogenic carbon dioxide and other salts. Because of the salt inputs there is a a very strong and permanent density gradient, with the deep water in the lake trapping dissolved gases such as carbon dioxide and methane. </p>
<p>There are over 60km³ of methane <a href="http://onlinelibrary.wiley.com/doi/10.1029/2004GC000892/abstract">dissolved</a> in the deep water of the lake, and as a result they are supersaturated in methane and would degas <a href="http://www.irinnews.org/report/73738/drc-lake-kivu-%E2%80%93-time-bomb-or-source-energy">spontaneously</a> if the deep water was significantly displaced upward. A simple example is the vigorous bubbling that occurs when a shaken bottle of soda has its cap removed. </p>
<p>The cap on Lake Kivu is the density gradient which prevents water from moving upward rapidly and degassing to the atmosphere. </p>
<p>The potential for rapid degassing is real, especially in a geologically active region such as the Kivu basin. Volcanoes and earthquakes are common in the rift valley. An example of the risk is illustrated by the <a href="http://www.voanews.com/a/survivors-1986-lake-nyos-disaster-cameroon/3474673.html">1986 tragedy</a> at Lake Nyos in Cameroon which released a gas cloud as a result of a landslide. Over 1,700 people died. </p>
<p>Because of its much greater size and gas content, Kivu has <a href="http://www.nature.com/news/2010/100823/full/4661033a.html">the potential</a> for a cataclysmic gas release. </p>
<p>Its peculiar characteristics have led to the creation of a commercial scale methane gas reserve which is <a href="http://time.com/4338310/rwanda-kivuwatt-methane-lake-kivu/">now beginning</a> to be extracted to produce electricity for the Rwanda national grid. This gas extraction has the dual benefit of producing electricity but also reduces the risk of spontaneous degassing as it will release the gas from the deep water in a controlled way and gradually reduce the gas pressure over time. But currently, on-lake exploration drilling or commercial extraction of oil would add an additional risk of an uncontrolled gas release from the deep gas-rich deep water of Kivu.</p>
<p><strong>What potential energy resources does the lake hold?</strong></p>
<p>The current lake was predated by <a href="http://www.mosaicsciencemagazine.org/pdf/m13_01_82_01.pdf">ancient lakes</a> that left sediments below the modern lake that may hold oil. </p>
<p>There has been seismic exploration in Kivu – using shock waves to explore potential subsurface resources such as oil or gas. But exploratory drilling hasn’t happened. Yet.</p>
<p>Because the Kivu basin is the highest in altitude of the lakes in the Western Rift Valley, the sediment thicknesses may not be as deep and oil rich as in the Albert basin or the Lake Tanganyika basin. Nevertheless, there’s still interest as is evident in the recent Rwanda and DRC <a href="https://thespearnews.com/2017/04/25/rwanda-draws-drc-into-a-joint-oil-exploitation-deal-as-museveni-sells-his-oil-at-his-terms-and-price/">oil exploration agreement</a>. If seismic exploration identifies positive signs of oil in the sediments under the lake, then exploratory drilling is likely to follow.</p>
<p><strong>What are the main concerns about oil exploration under the lake?</strong></p>
<p>Drilling on the lake surface would be very hazardous because it could lead to rapid upwelling of deep water. If a blowout were to occur, the upwelling of oil or gas would displace the currently stable gas rich layers upward until the gas pressure exceeded the hydrostatic pressure at shallower depths allowing spontaneous degassing to occur. This could release a powerful explosion, due to gas expansion, such as happened on Nyos – but potentially much larger.</p>
<p>As elsewhere, oil extraction runs the risk of contamination. This would affect people who depend on the lake for their livelihoods. Concerns like this were highlighted at the recent <a href="http://www.inbo-news.org/inbo/agenda/article/african-great-lake-conference-4569">African Great Lakes Conference</a> in Entebbe.</p>
<p>But concerns extend beyond contamination because Kivu carries much bigger risks than other lakes. These include potential loss of human life in the surrounding catchment due to the release of carbon dioxide gases and the destruction of infrastructure by large waves due to the gas expansion. </p>
<p>Of course, oil could bring positive benefits if it is carefully done, well regulated and the economic benefits equitably distributed. </p>
<p><strong>What advice would you give any exploration teams?</strong></p>
<p>I would advise them not to do exploratory drilling on the lake itself. Shore/land based drilling would eliminate the risk of disturbing the lakes density structure. But even then care must be taken to avoid possible contamination. </p>
<p>I would encourage companies and governments to ensure that there’s good baseline data before drilling starts. But eliminating all risks won’t be possible in such a geologically active area. Insurance should be sought or bonds posted to guarantee that funds would be available if anything goes badly wrong.</p><img src="https://counter.theconversation.com/content/78107/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Hecky received funding from the MacArthur Foundation in 2012 to conduct research on the history of Lake Kivu.</span></em></p>There are large amounts of methane and carbon dioxide dissolved in the deep waters of lake Kivu - if disturbed they could cause a catastrophe.Robert Hecky, Emeritus, Biology Department and Large Lakes Observatory, University of Minnesota DuluthLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/754822017-04-03T14:14:51Z2017-04-03T14:14:51ZIs Britain’s ‘largest oil discovery in decades’ all it’s cracked up to be?<figure><img src="https://images.theconversation.com/files/163479/original/image-20170331-27273-1bdyqo8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Eddytb Foto / shutterstock</span></span></figcaption></figure><p>A large oil find has been declared 60 miles west of Shetland, off the north coast of Scotland. It’s being described as the UK’s “<a href="http://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-39406131">largest undeveloped discovery</a>”. Taken at face value, this is exciting news for an industry still reeling after the oil price collapse of the past few years (environmentalists though are <a href="https://twitter.com/AdamRamsay/status/846365034997596160">less enthusiastic</a>).</p>
<p>The discovery was made by Hurricane Energy, a specialist exploration firm, which announced that its <a href="https://www.hurricaneenergy.com/communications/news-and-press-releases/news-story?cid=773&newsid=857147">Halifax well</a> had found large amounts of oil. It said it had also successfully undertaken a production test in which oil flowed at an impressive rate. This find may even be connected with a previous discovery nearby (the <a href="https://www.hurricaneenergy.com/operations/hurricane-assets/lancaster-basement-discovery">Lancaster field</a>) and hence be part of one large accumulation of nearly a billion untapped barrels.</p>
<p>Hurricane Energy specialises in trying to extract oil from so-called <a href="https://www.hurricaneenergy.com/expertise/what-are-basement-reservoirs">fractured “basement” reservoirs</a>. While most oil, including most North Sea oil, is found within sedimentary rocks such as sandstone, these basements occur when oil gathers in the natural cracks (or fractures) between impermeable igneous rock. In this specific case, Hurricane was actively searching along the Rona Ridge – a prominent seabed feature which hosts several oil fields.</p>
<p>This is undoubtedly an encouraging result for the UK oil industry as it seeks to extend the life of a mature basin characterised by ever diminishing resources. However, it is important to underline that there are major geological hurdles still to overcome and the oil can’t yet be considered potential, probable or proven reserves, all of which have strict <a href="http://www.spe.org/industry/petroleum-resources-classification-system-definitions.php">statistical and commercial definitions</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=329&fit=crop&dpr=1 600w, https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=329&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=329&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=414&fit=crop&dpr=1 754w, https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=414&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/163647/original/image-20170403-21933-t0fu4h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=414&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">An oil tanker makes its way through the Shetland Isles.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/16633132@N04/13454544654/">Ronnie Robertson</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Although fractured reservoirs have been successful <a href="http://sp.lyellcollection.org/content/214/1/83.abstract">elsewhere in the world</a>, most notably in Vietnam and <a href="http://www.searchanddiscovery.com/pdfz/documents/2014/110203neff/ndx_neff.pdf.html">Yemen</a>, this would be a first in the UK. The rocks around Shetland are very dense, and it’s particularly hard to work out how much oil is found in the narrow, open fractures in between them. </p>
<p>Success is likely then to be dependent on the fractures, which not only need to be significant but also suitably oriented for a directional drill bit to intersect them. Fractured basements are notorious for <a href="https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0ahUKEwiN-pXerYjTAhXBSRoKHYCXBzUQFgggMAE&url=https%3A%2F%2Fwww.slb.com%2F%7E%2Fmedia%2FFiles%2Fresources%2Foilfield_review%2Fors06%2Fsum06%2Fnaturally_fract_reservoirs.pdf&usg=AFQjCNG8YZSpaVWOPuJaBZtqBYZVB21FSg&bvm=bv.151325232,d.d2s&cad=rja">fast depletion</a> on production as the fractures are drained quickly, and such fields consequently commonly have a shorter shelf life.</p>
<p>It is also worth remembering that no basement has been shown to work elsewhere in the North Sea to date. Concerns over economic viability mean the most notable discoveries at Cairngorm and at Bagpuss have yet to be developed. Hurricane will need to conduct an <a href="http://www.slb.com/services/characterization/testing/surface_testing/extended_well_tests.aspx">extended well test</a> to demonstrate sufficient flow for the field to be feasible in the long term. Also, more drilling will probably be required to ascertain whether the Halifax oil exists in one large reservoir or in several smaller accumulations. The latter is much harder to develop.</p>
<h2>Oil type</h2>
<p>The <a href="http://metro.co.uk/2017/03/28/one-billion-barrels-of-oil-uncovered-in-largest-undeveloped-discovery-in-uk-6539815/">billion barrels</a> quoted in the media is certainly an eye-watering discovery – especially now, after oil firms have been scouring the North Sea for decades. However it is unclear whether these are actual usable resources. Given what we know about this field and the typical recovery rates of oil from fractured reservoirs, actual reserves may be around 200m barrels – reasonably large but not especially so (the largest oil fields in the Gulf have tens of billions of barrels). </p>
<p>We also don’t yet know what sort of oil has been found. Oil in nearby Clair Field is particularly viscous and heavy, which meant it was left in the ground for almost 20 years until better technology and higher prices made extracting it worthwhile. If the Lancaster/Halifax oil has similar characteristics the operator will face additional challenges. </p>
<h2>A long way to go</h2>
<p>Even presupposing that the geology, oil type and drilling can lead to a successful development, it seems likely that evacuation would have to take place by hooking up the discovery with existing pipeline infrastructure or a <a href="http://www.investopedia.com/terms/f/fpso-floating-production-storage-and-offloading.asp">Floating Production Storage and Offloading</a> (FPSO) facility. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=329&fit=crop&dpr=1 600w, https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=329&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=329&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=413&fit=crop&dpr=1 754w, https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=413&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/163646/original/image-20170403-21976-1trqf1p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=413&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Oil from platforms is sent to a floating facility for storage until a tanker arrives.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/133086680@N06/23788324051/">Anderson Nova</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>However, with the infrastructure that is now in place and with the experience major operators have gained in developing their oilfields west of Shetland with few incidents, the development of another large field nearby should not prove to be a major hurdle.</p>
<p>This discovery raises various social and political questions, of course. After Brexit, is this the UK’s oil or Scotland’s, or even Shetland’s? Do people want the jobs, income and secure energy supply that comes from a thriving offshore industry, or would they instead highlight the <a href="http://www.globalcarbonproject.org/carbonbudget/">global carbon budget</a> and choose to leave that oil under the sea?</p>
<p>Who knows? What we can say, as petroleum geoscientists, is that we are excited but cautious. After all, it took more than 28 years from Clair’s initial discovery for its reserves to be confirmed.</p><img src="https://counter.theconversation.com/content/75482/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Underhill is the Chief Scientist at Heriot-Watt University. He has received research support from the oil industry, most notably Shell, which provides support for his position at HWU. He is contributing in his academic capacity and his views do not reflect those of any political party, industry association, not-for-profit group, think tank or other politically active body</span></em></p><p class="fine-print"><em><span>Patrick Corbett receives part funding as the BG International Limited Professor of Petroleum Engineering for work that he's involved in as Visiting Professor at the Federal University of Rio de Janeiro (UFRJ) in Brazil.</span></em></p>Expect millions – not billions – of barrels.John Richard Underhill, Chair of Exploration Geoscience & Chief Scientist, Heriot-Watt UniversityPatrick Corbett, Professor of Carbonate Petroleum Geoengineering, Heriot-Watt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/693152016-11-28T14:03:13Z2016-11-28T14:03:13ZFour myths about the supposed oil and gas bonanza in the Arctic<figure><img src="https://images.theconversation.com/files/147565/original/image-20161125-32026-1g42v3t.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3900%2C1938&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/bseegov/26637929585/">BSEE</a></span></figcaption></figure><p>The Arctic is experiencing an extraordinary heatwave – it’s <a href="https://www.theguardian.com/environment/2016/nov/22/extraordinarily-hot-arctic-temperatures-alarm-scientists">20C warmer than usual</a> at this time of year (just imagine London or New York having T-shirt weather in winter). So does this mean the region’s fabled energy resources will finally be exploited – will newly ice-free sections of the Artic Ocean soon be peppered with oil rigs, like a cold, remote North Sea or Gulf of Mexico?</p>
<p>Not quite. The Arctic’s offshore oil and gas is in very deep water, literally as well as figuratively, and will likely remain untapped. Many people expect a huge energy bonanza, while others are anxious about environmental destruction or international conflict over polar seas. But these views are largely based on various myths.</p>
<h2>1. Vast, easily accessible oil and gas reserves</h2>
<p>The Arctic contains <a href="http://www.offshore-mag.com/articles/print/volume-69/issue-8/ARCTIC/first-ever-release-of-usgs-offshore-arctic-resource-assessment.html">one third of the world’s entire untapped oil and gas reserves</a>, according to a 2008 estimate by the United States Geological Survey (USGS). </p>
<p>This figure is drawn from seismic surveys, however, where blasts of sound from an airgun are bounced off underground rocks in order to identify likely spots containing oil and gas. None of these reserves are proven until they are actually drilled. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=423&fit=crop&dpr=1 600w, https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=423&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=423&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=531&fit=crop&dpr=1 754w, https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=531&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/147253/original/image-20161123-19717-qrkyxl.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=531&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Geologic ‘provinces’ colour-coded by how much oil they are estimated to contain.</span>
<span class="attribution"><a class="source" href="http://pubs.usgs.gov/fs/2008/3049/fs2008-3049.pdf">USGS, 'Estimates of Undiscovered Oil and Gas North of the Arctic Circle'</a></span>
</figcaption>
</figure>
<p>In any case, most of these reserves lie offshore, typically 2km to 4km below the seabed, in variable water depths and environmental conditions. Given the very slow pace of drilling in the Arctic, it will be a very long time before the real picture is known.</p>
<h2>2. The Arctic is unspoiled</h2>
<p>Sixty degrees north of the equator, the Arctic is popularly regarded as one of Earth’s remaining unspoiled places. But this is largely based on the idea of a sparsely populated region, inhabited only by indigenous people who cohabit with the Arctic environment. It does not account for the reality of population growth and <a href="http://www.arcticinfo.eu/en/features/97-tracking-understanding-and-addressing-rapid-change-in-arctic-human-developmen">economic development</a>.</p>
<p>Unlike the Antarctic, which is uninhabited and protected by an international treaty that <a href="http://discoveringantarctica.org.uk/challenges/sustainability/mineral-resources/">prohibits mining</a>, the Arctic has always been exploited. Around 4m settlers and indigenous inhabitants now live there, spread across eight different countries. <a href="https://oaarchive.arctic-council.org/bitstream/handle/11374/1653/MM08_AHDR_FactSheet_Jan_2013.pdf?sequence=1&isAllowed=y">Population growth</a> seems to rise in line with new resource extraction projects.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/147570/original/image-20161125-32031-polpke.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Murmansk, Russia, has 300,000 residents and is the largest city north of the Arctic Circle.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/30742666@N06/4102870903/">euno</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Of course, just because the Arctic isn’t entirely pristine doesn’t mean it’s invulnerable. Oil and gas exploration and extraction could devastate the region’s fragile ecosystem as well as the livelihoods of those who rely on it. Most concerns about oil and gas activities raised by the Conservation of Arctic Flora and Fauna are not based on what we know about potential impacts but what we don’t know about the resilience of the <a href="http://www.arcticbiodiversity.is/index.php/the-report/report-for-policy-makers/key-findings">environment</a>.</p>
<h2>3. There will be an Arctic oil and gas boom</h2>
<p>Due to a growing demand for supplies and speculations <a href="http://www.economist.com/blogs/graphicdetail/2013/03/focus-0">about a peak</a> in the production of conventional oil and gas, prospects in the Arctic look more attractive. But when the USGS published its appraisal back in 2008, oil was expensive enough to justify the <a href="https://www.theguardian.com/environment/2015/aug/12/can-shell-afford-to-drill-for-oil-in-the-arctic">costs of exploration</a>. Today, historically low oil prices, <a href="https://theconversation.com/explainer-how-will-sanctions-against-russia-work-29920">sanctions against Russia</a>, and the development of shale gas in North America means that expensive Arctic drilling is less attractive.</p>
<p>Could the Arctic’s reserves be ripe for picking once oil prices rise again? Unlikely. In addition to the cost of drilling at such depths, studies have highlighted the financial and reputational risks of an <a href="http://www.greenpeace.org.uk/sites/files/gpuk/2015%252520-%252520Greenpeace%252520-%252520The%252520gaps%252520in%252520Shell's%252520Arctic%252520spill%252520response.pdf">oil spill</a>. </p>
<p>In colder temperatures, it’s likely that water and oil would freeze and become part of the ice and permafrost, lingering in the environment for far longer than oil spilled in the tropics. We still don’t know exactly <a href="http://news.nationalgeographic.com/news/energy/2014/04/140423-national-research-council-on-oil-spills-in-arctic/">what happens to oil spilled in the Arctic</a> – but no one wants to find out.</p>
<p>BP’s catastrophe in the Gulf of Mexico cost the company a whopping <a href="http://www.wsj.com/articles/bp-agrees-to-pay-18-7-billion-to-settle-deepwater-horizon-oil-spill-claims-1435842739">$18.7 billion</a>. The cost of a potential “oil Chernobyl” would be enormous.</p>
<h2>4. A race for resources</h2>
<p>Fears of land-grabbing first arose in 2007 after the media dramatised a supposed Russian <a href="http://news.bbc.co.uk/1/hi/world/europe/6927395.stm">flag-planting expedition</a> to the north polar seabed. After the USGS survey the following year revealed the region’s huge reserves, many put two and two together and worried the Arctic would host a major “race for resources”.</p>
<p>This is <a href="https://theconversation.com/shells-abandoned-well-and-the-myth-of-the-arctic-oil-land-grab-48305">unlikely</a>. Most untapped resources are already located within the offshore economic zones of nations who either claim parts of the Arctic Ocean or have claims well <a href="https://theconversation.com/the-truth-about-politics-and-cartography-mapping-claims-to-the-arctic-seabed-46043">underway</a>. Arctic countries have long declared their commitment to an “orderly settlement of any possible overlapping claims” according to the <a href="http://www.oceanlaw.org/downloads/arctic/Ilulissat_Declaration.pdf">United Nations Convention on the Law of the Sea</a> (UNCLOS), which makes land-grabbing unlikely.</p>
<h2>The Arctic really is melting</h2>
<p>This one isn’t a myth – it’s <a href="https://www.theguardian.com/environment/2016/nov/22/extraordinarily-hot-arctic-temperatures-alarm-scientists">all too real</a>. Arctic warming may sound appealing for oil and gas companies who gain longer periods of access to the ocean, but the impact of thawing sea ice and permafrost on human and natural life may be devastating and “<a href="https://www.washingtonpost.com/news/energy-environment/wp/2015/04/01/the-arctic-climate-threat-that-nobodys-even-talking-about-yet/">completely irreversible</a>”. </p>
<p>No wonder <a href="http://www.greenpeace.org/international/en/news/features/From-peaceful-action-to-dramatic-seizure-a-timeline-of-events-since-the-Arctic-Sunrise-took-action-September-18-CET/">activists</a> are protesting against energy companies who plan to drill in the region. With high moral stakes involved, and a global commitment to keep warming <a href="https://unfccc.int/resource/docs/2015/cop21/eng/l09.pdf">below 1.5°C</a>, new offshore oil and gas activities in the Arctic look unethical – and unrealistic.</p><img src="https://counter.theconversation.com/content/69315/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael John Laiho does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The region’s reserves are in very deep water and won’t be tapped into any time soon.Michael John Laiho, PhD researcher, Durham Energy Institute, Durham UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/591172016-06-03T01:02:13Z2016-06-03T01:02:13ZIs OPEC’s oil era over?<p>Just a couple months ago, <a href="http://www.thenation.com/article/did-opec-just-start-preparing-for-the-end-of-the-oil-era/">some were declaring the old oil order</a> dead after the Organization of the Petroleum Exporting Countries (OPEC) failed to agree on coordinated action at its April meeting in Doha.</p>
<p>That meeting was meant to bring about a production freeze to arrest the downward spiral of prices that began in July 2014. Instead, the Doha meeting was <a href="http://www.reuters.com/article/us-oil-meeting-draft-idUSKCN0XE02Y">over before it began</a>. Iran refused to slow production until it had regained its pre-sanctions position in the market, so Saudi Arabia canceled the freeze and continued to produce at peak levels. </p>
<p>This week, with oil <a href="http://www.wsj.com/public/page/news-oil-gold-commodities.html">trading</a> at six-month highs, <a href="http://www.bloomberg.com/news/articles/2016-06-01/saudis-said-to-seek-restoration-of-opec-unity-after-doha-failure-iowrk295?bcomANews=true">OPEC members once again had high hopes</a> to show that the organization remains relevant as they gathered in Vienna. Yet, once again, the <a href="http://www.bloomberg.com/news/articles/2016-06-02/opec-said-to-keep-status-quo-after-failing-to-agree-output-limit">meeting ended without agreement</a>, resulting in no change to the current policy of essentially unlimited production.</p>
<p>So does the verdict that OPEC is dead still stand, signaling the end of an era in which it supposedly ruthlessly controlled the price of oil? In fact, that era <a href="http://www.dundee.ac.uk/cepmlp/gateway/files.php?file=cepmlp_car17_65_711758044.pdf">barely existed</a> in the first place. The failed meetings confirm a longstanding truth: the <a href="http://www.theatlantic.com/business/archive/2009/05/is-opec-a-cartel/18420/">world’s most famous cartel</a> <a href="https://www.foreignaffairs.com/articles/persian-gulf/2015-12-03/how-opec-lost-its-bite">has never really been a cartel</a>. </p>
<p>Rather than the arbiter of global energy, OPEC is and has always been a dysfunctional, divided and discouraged organization. </p>
<p>My recent research has taken me through the <a href="http://www.e-ir.info/2016/01/19/the-oil-of-iran-past-and-present-in-perspective/">history of oil</a>, particularly the relationship between oil revenues, economic development and the geopolitical balance of power in the 1960s and 1970s. Oil’s history has been dominated by a struggle for balance, a contest between competing interests, both economic and political, and between the fundamental market forces of supply and demand. </p>
<p>OPEC has never been shielded from or been able to fully thwart these forces.</p>
<h2>Early days: divided and powerless</h2>
<p>When it was created in 1960, OPEC was meant to offer members a greater say in how their oil was produced and priced, addressing the disproportionate power wielded by private Western corporations. Its larger goal, to bring order to the chaotic world of global energy, has always been elusive. </p>
<p>OPEC was formed from frustration. In the 1950s, the <a href="https://sites.google.com/site/globaloilproduction12/1950-s-oil-production">world was awash in oil</a> as small nations in the Middle East and Latin America discovered enormous deposits, and Western oil companies sought to tap them to meet rising demand. </p>
<p>To gain access to those deposits, the major oil companies (known as the <a href="http://www.americanforeignrelations.com/O-W/Oil-The-seven-sisters.html">“Seven Sisters”</a>) signed concessionary agreements with local governments, allowing them to pump, refine, transport and market a nation’s oil in return for a royalty, typically 50 percent of profits. </p>
<p>This arrangement gave <a href="http://www.americanforeignrelations.com/O-W/Oil-Oil-and-world-power.html">the companies control over the oil</a> – they set production levels and prices – while governments simply collected a check and had little influence on anything else. </p>
<p>In February 1959, amid an oil glut, the Seven Sisters <a href="http://www.opec.org/opec_web/static_files_project/media/downloads/publications/GenInfo.pdf">decided</a> that a price correction was necessary. And so they unilaterally <a href="https://www.quandl.com/data/BP/CRUDE_OIL_PRICES-Crude-Oil-Prices-from-1861">began cutting the posted price</a>, from $2.08 to $1.80 by August 1960. (Back then, oil prices didn’t always follow market forces and were typically set by producers.) </p>
<p>The cuts meant a significant loss of revenue for the oil-producing states. In protest, the oil ministers of Iraq, Iran, Venezuela, Saudi Arabia and Kuwait <a href="https://mees.com/opec-history/1960/09/16/first-opec-meeting-held-in-baghdad">met in Baghdad</a> that September and formed <a href="http://www.opec.org/opec_web/en/about_us/24.htm">OPEC</a> to achieve a more equitable arrangement with the Sisters. </p>
<p>In reality, the oil-producing states could do little to coerce the companies into offering better terms. The Seven Sisters dominated global markets and were capable of shutting out individual producers. Oil was abundant, and nationalization seemed out of the question because the companies could successfully exclude an offending country from the market, as <a href="http://www.iranchamber.com/history/oil_nationalization/oil_nationalization.php">they did with Iran in 1951</a>.</p>
<p>In addition, the United States itself was the world’s top producer and immune from supply shocks thanks to <a href="https://knowledgeproblem.com/2013/08/28/politicized-implementation-of-u-s-oil-import-quotas-1959-1973/">import quotas.</a>. If OPEC threatened to take production offline in order to put pressure on the companies, the U.S. could increase its own to make up the difference, as it did during <a href="http://www.tandfonline.com/doi/abs/10.1080/13537121.2013.829611?journalCode=fisa20#.V1BXEfkrLX4">a partial Arab oil boycott in 1967</a>.</p>
<p>In the end, OPEC did not possess enough market share to make a meaningful impact.</p>
<h2>A new balance of power</h2>
<p>Besides being relatively impotent, OPEC couldn’t agree on a consistent policy among its members. Saudi Arabia wanted to keep production levels low and prices consistent, preserving the global economy and the political status quo. Iran and Iraq, with huge military and development budgets, wanted prices pushed as high as possible in order to maximize revenue. </p>
<p>According to scholar and oil consultant <a href="https://books.google.com/books?id=Jg80AAAAIAAJ&pg=PA266&lpg=PA266&dq=Ian+Skeet+OPEC&source=bl&ots=iu2WFOL73d&sig=-sbhad1ecMH4zM5cQRIXs8qYO-M&hl=en&sa=X&ved=0ahUKEwiIzrHAivPMAhVDwYMKHf49C7MQ6AEIOzAF#v=onepage&q=Ian%20Skeet%20OPEC&f=false">Ian Skeet</a>, an attempt to extract more favorable terms from the Sisters in 1963 was sabotaged by the shah of Iran, who sought a separate agreement. </p>
<p>During the 1960s, OPEC met, debated and released grandiose statements on their rights, yet failed to form a united front.</p>
<p>Nevertheless, significant changes were occurring at the time. <a href="https://sites.google.com/site/globaloilproduction12/1960-s-oil-production">Demand for oil</a> shot up, while production in the U.S. stagnated. The ability of the Seven Sisters to control the market was undermined by international competitors drilling new fields in North Africa, where <a href="http://www.history.com/this-day-in-history/qaddafi-leads-coup-in-libya">Libya’s Muammar Qaddafi threatened</a> to shut off supply if he didn’t get higher prices.</p>
<p>The companies were under <a href="http://www.ogj.com/articles/print/volume-103/issue-17/general-interest/the-1973-oil-embargo-its-history-motives-and-consequences.html">more and more pressure</a> to deliver satisfactory terms to the OPEC members. The price of oil, which had held steady at $1.80 a barrel for years, began ticking upwards. <a href="https://knowledgeproblem.com/2013/08/28/politicized-implementation-of-u-s-oil-import-quotas-1959-1973/">American import quotas ended</a>, leaving the U.S. more vulnerable to supply shocks as its production capacity steadily declined. </p>
<p>These conditions, while not the result of actions by OPEC, gave the organization an opportunity to influence the market and upset the balance of power. </p>
<h2>The oil price revolution</h2>
<p>This shift accelerated in the 1970s as <a href="http://acc.teachmideast.org/texts.php?module_id=4&reading_id=120&sequence=21">war broke out</a> between Israel and its Arab neighbors, creating an opportunity for OPEC to wrest control from the Western oil companies.</p>
<p>To punish the U.S. for supporting the Jewish state, Arab oil producers (<a href="http://www.ogj.com/articles/print/volume-103/issue-17/general-interest/the-1973-oil-embargo-its-history-motives-and-consequences.html">not OPEC, as popularly believed</a>) cut production and declared <a href="http://www.npr.org/sections/parallels/2013/10/15/234771573/the-1973-arab-oil-embargo-the-old-rules-no-longer-apply">an embargo</a>. Together with the war, this destabilized energy markets as demand outpaced supply.</p>
<p>Amid the fighting, OPEC met with the Seven Sisters in Geneva and demanded an increase in the posted oil price. After rejecting a small change, OPEC announced it would double the price to $5 and later doubled it again to $11.65. </p>
<p>This triggered a massive shift in economic power, what Stanford University professor <a href="http://www.amazon.com/Price-Revolution-Professor-Steven-Schneider/dp/0801827752">Steven Schneider</a> called “the greatest non-violent transfer of wealth in human history.” With the uptick in oil revenues, OPEC states spent lavishly on economic development, social programs and investments in Western industry and steadily nationalized their domestic industries, pushing out the Seven Sisters.</p>
<p>How did the balance of power seem to shift so suddenly? Among other reasons, the major oil companies could not agree among themselves on a new price and were actually tempted by the high profits that would result. In other words, OPEC had seized control of the oil market largely due to circumstances <a href="http://vm136.lib.berkeley.edu/BANC/ROHO/projects/debt/oilcrisis.html">beyond its control</a>. </p>
<h2>The oil crisis</h2>
<p>Despite its victory, OPEC had come no closer to resolving its internal divisions. This became evident when another energy crisis hit. </p>
<p>In January 1979, the shah of Iran fled amid revolution, and <a href="http://www.federalreservehistory.org/Events/DetailView/40">global oil markets panicked</a>. Prices soared, from $12.70 to over $30 by 1980. Iran’s 6 million barrels per day (bpd) disappeared, and other OPEC states eagerly seized the opportunity to sell oil at costly premiums, <a href="http://www.history.com/this-day-in-history/opec-states-raise-oil-prices">sending the price even higher</a>.</p>
<p>In the ensuing years, Saudi Arabia tried to impose <a href="http://www.theoildrum.com/node/7363">a quota system</a>, with overall production capped at 20 million bpd. Most members ignored their quotas or over-produced to gain greater revenue. </p>
<p>Meanwhile, the West worked to improve energy efficiency and invested heavily in non-OPEC oil sources, including Alaska, Canada and the North Sea. By 1985, OPEC’s market share <a href="http://www.nytimes.com/1989/12/30/business/worrying-anew-over-oil-imports.html?pagewanted=all">had fallen below 30 percent</a>. OPEC <a href="http://www.brookings.edu/%7E/media/Projects/BPEA/1986-2/1986b_bpea_gately_adelman_griffin.PDF">dropped its production quota</a> to 19 million bpd, then 17 million, to account for diminishing demand, but only the Saudis obeyed the rules, losing market share as other producers pumped above the quota level.</p>
<p>By 1986, the Saudis had had enough. Without warning, the Saudi oil minister announced that Saudi production would increase. Overnight, Saudi <a href="http://www.oilandgas360.com/oil-the-30-year-anniversary-of-the-1986-collapse/">production shot up more than 2 million bpd</a>, flooding the market and <a href="http://oilprice.com/Energy/Energy-General/Why-Todays-Oil-Bust-Pales-In-Comparison-To-The-80s.html">sending prices plunging below $10 a barrel</a>. Sick of watching other OPEC members cheat them out of profits, the Saudis chose to enforce <a href="http://ftalphaville.ft.com/2015/01/21/2095432/re-re-visiting-the-1986-oil-crash/">new discipline through an artificial market shock</a>. </p>
<p>Just as the kingdom did in 2014, this move indicated Saudi willingness to use its massive reserves to “correct” the market and push out high-cost producers, even at the cost of its OPEC allies.</p>
<h2>Feeling the pain</h2>
<p>OPEC’s fortunes have oscillated since the 1986 shock. Cooperation remained elusive. </p>
<p>A 2011 meeting, dubbed <a href="http://www.bloomberg.com/news/articles/2011-06-08/opec-members-are-unable-to-reach-consensus-on-output-quotas-el-badri-says">“the worst ever”</a> by recently-removed Saudi oil minister Ali al-Naimi, produced disagreements over production levels. Acrimony reigned as OPEC states ignored calls for economic diversification in favor of oil-fueled economic growth. </p>
<p>High prices during the early 2000s accounted for a huge boom in oil revenues for OPEC members. For <a href="http://www.cnbc.com/2015/12/03/oil-prices-and-budgetsthe-opec-countries-most-at-risk.html">Venezuela and Nigeria</a>, oil accounts for over 90 percent of all exports. Most OPEC states believed that high demand would last forever, that high prices could fund government programs and that the good times would never end.</p>
<p>Yet the good times appear to be over. OPEC has failed to control the downward spiral in prices, <a href="http://www.bbc.com/news/business-30223721">reportedly begun by Saudi Arabia</a> in November 2014 to flood the market with cheap crude to put new and old competitors – U.S. shale producers and Iran – out of business. Saudi Arabia pursued its political interests and existing market share, leaving other OPEC members to fend for themselves.</p>
<p>The <a href="http://oilprice.com/Energy/Crude-Oil/OPEC-Is-Dead-Whats-Next.html">death of OPEC</a> has been announced in some quarters, with its <a href="http://news.forexlive.com/!/the-question-on-everyones-lips-is-opec-dead-or-just-in-a-coma-20160523">long-term decline</a> seemingly assured as global energy enters a new era. </p>
<p>It is possible that Saudi Arabia may emerge from this current crisis unscathed, free to embark upon its recently announced Vision 2030 plan for an “oil-less” economy, <a href="http://www.ibtimes.com/saudi-arabias-vision-2030-economic-plan-break-its-oil-addiction-draws-cautious-praise-2359400">however dubious that plan might appear</a>. It’s possible that OPEC may succeed in concerted action in the future. But its recent failures suggest that political interest will be more likely to divide OPEC and prevent mutual self-interest from uniting its members.</p><img src="https://counter.theconversation.com/content/59117/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gregory Brew is affiliated with OilPrice.com, where he writes once per-week on current energy issues.</span></em></p>OPEC has been declared dead in recent months as the group of oil-exporters has been unable to agree on a plan to stabilize the market. But was it really ever alive in the first place?Gregory Brew, PhD Student in History, Energy and Foreign Relations, Georgetown UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/528792016-02-02T14:38:03Z2016-02-02T14:38:03ZHow Saudi Arabia’s grip on oil prices could bring Russia to its knees<p>When Saudi Arabia led an OPEC decision to end <a href="http://uk.reuters.com/article/us-opec-meeting-idUSKCN0JA0O320141128">a restraint put on oil production in November 2014</a>, it marked the beginning of a new era in oil economics. It has given us a tumbling oil price, prompted huge <a href="http://www.theguardian.com/business/2016/feb/02/bp-annual-loss-biggest-for-20-years-axes-thousands-of-jobs-deepwater">losses and job cuts at oil firms like BP</a> and might yet give us economic and political drama in the heart of Moscow. To understand why, it’s worth drilling down to the start of the whole process, and the costs of getting oil out of the ground in the first place. </p>
<p>Historically, the <a href="http://www.opec.org/opec_web/en/">OPEC cartel of oil-producing nations</a> has been able to manage oil prices because of the lack of flexibility in global supply. The whole business of setting up wells, operating pipelines and building rigs entails large and long-term investments which makes producers slow to respond to price movements. And a small cut in OPEC supply can have a significant impact on the global oil price. </p>
<p>The advent of the <a href="https://theconversation.com/shale-oil-the-boom-heard-around-the-world-19202">US shale oil boom</a> changed this dynamic. The industry has lower fixed costs but higher variable costs and is more like an industrial process than a major one-off investment. That makes it more responsive to price movements and more flexible in adjusting short-term output. </p>
<p>Overall though, shale is a relatively high cost source of oil, especially compared to Middle East production. As a result, when US shale threatened OPEC’s market share, the cartel allowed a position of global oversupply to develop. It was a simple trick: make oil prices fall to make shale unprofitable. </p>
<p>The chart below is a useful guide to how production costs stack up as production heads towards 100m barrels a day (which is <a href="https://www.iea.org/aboutus/faqs/oil/">pretty much where we are now</a>). Focus on the blue square in the bottom left, which shows onshore Middle East production costs at as little as US$10 a barrel, while US shale (the purple block) can come in at more than US$70. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=473&fit=crop&dpr=1 600w, https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=473&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=473&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=594&fit=crop&dpr=1 754w, https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=594&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/109969/original/image-20160202-32240-ais77i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=594&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.businessinsider.sg/crude-oil-cost-of-production-2014-5/#.VrCFw_mLTIU">Rystad Energy/Morgan Stanley/Business Insider</a></span>
</figcaption>
</figure>
<h2>Rigged game</h2>
<p>The plan to cripple shale oil production has certainly had a significant effect. The price of <a href="https://www.energyandcapital.com/resources/brent-vs-wti/17">benchmark Brent oil</a> has fallen from a high of US$115 a barrel in mid-2014 to a <a href="http://www.bbc.co.uk/news/business-35245133">low of US$27 in January 2016</a>. </p>
<p>However, the reaction of producers to this collapse, in particular in the shale fields of the US, hasn’t been as dramatic as you might think; business has carried on. What is evident is that supply continues to outstrip demand and, <a href="http://www.iea.org/newsroomandevents/news/2016/january/iea-releases-oil-market-report-for-january.html">according to the International Energy Agency</a>, will carry on doing so throughout 2016, putting even more pressure on the oil price. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=444&fit=crop&dpr=1 600w, https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=444&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=444&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=558&fit=crop&dpr=1 754w, https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=558&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/109796/original/image-20160201-32227-18y4tt5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=558&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Oil supply and demand projections for 2016 in millions of barrels a day.</span>
<span class="attribution"><a class="source" href="http://www.iea.org/newsroomandevents/news/2016/january/iea-releases-oil-market-report-for-january.html">IEA Oil Market Report January 2016</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>So, why haven’t US producers been laid low given that the oil price has already fallen below the cost of shale oil production? There are a number of answers. The first is that many companies managed to hedge their production when prices were higher, selling future supplies of oil at a high enough price keep profits coming in. A second is that many got bank loans to pay for investment. Loans need to be repaid, and so lower oil prices led to a need for higher output at almost any price. </p>
<p>A third, and important reason, is that the cost of US shale production has decreased thanks to efficiency gains, a focus on the most productive regions and a drive to sharply reduce costs. In some regions the cost of production has hit <a href="http://www.cnbc.com/2015/08/20/us-crude-oils-break-even-cost-how-low-can-it-go.html">as low as US$30</a> a barrel. </p>
<h2>Russia pressure</h2>
<p>Low-cost producers have troubles of their own. Oil revenues are a major plank of many countries’ budgets. Oil exports account for over 60% of export revenues, on average, for OPEC countries and account for as much as 90% of Saudi budget revenues. In Russia they account for around half of total federal budget revenues and a similar amount of total exports. Any fall in prices can lead to both fiscal and budget deficits. </p>
<p>Time for another chart then, which shows the “fiscal breakeven” oil price per barrel for a variety of producers. The key observation is that all are above US$60 per barrel, with Saudi Arabia and Russia at around US$100.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=371&fit=crop&dpr=1 600w, https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=371&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=371&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=467&fit=crop&dpr=1 754w, https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=467&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/109973/original/image-20160202-32244-12v5snb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=467&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Fiscal breakeven oil prices per barrel.</span>
<span class="attribution"><span class="source">IMF, Deutsche Bank</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Despite this apparent pressure, the gap between breakeven and actual price can be sustained – at least for a while. Both Saudi Arabia and Russia have built up significant currency reserves during the period of high prices which are <a href="http://www.bloomberg.com/news/articles/2015-10-04/saudi-foreign-reserves-drop-to-the-lowest-level-in-32-months">now being used to finance a budget deficit</a> and sustain spending.</p>
<p>Russia though is reaching the limits of its reserves (at the current rate of spending the funds allocated to deal with a low oil price will be exhausted by early 2017). Currency devaluation <a href="http://www.reuters.com/article/saudi-riyal-oil-record-idUSL8N14R2L820160107">is a blunt tool for Russia and others to consider</a>, but it too <a href="http://www.telegraph.co.uk/finance/currency/11820755/Russian-rouble-hits-new-low-as-oil-prices-plunge-further.html">can help</a> by reducing costs in dollar terms.</p>
<p>That said, a tipping point may now have been reached. The <a href="http://www.cnbc.com/2016/01/11/half-of-us-shale-drillers-may-go-bankrupt-oppenheimers-gheit.html">bankruptcy of US oil producers</a> has begun as banks begin to call in loans, new financing gets harder to find and hedging programmes expire, leaving producers fully exposed to a lower oil price. Many OPEC countries have begun to despair that no end of the current oil price slump is in sight. And perhaps most interesting of all, it appears that Russia is becoming increasingly desperate to coordinate a production cut with OPEC, in stark contrast to its previous <a href="http://www.ft.com/cms/s/0/a8030faa-c6b0-11e5-b3b1-7b2481276e45.html">reluctance to engage with the cartel</a>. </p>
<p>It may just be, then, that a US$30 oil price has brought many producers to their knees, with the resulting possibility that the majority of OPEC countries, plus Russia and the US, may all be set to reduce output in 2016 and bring the oil market back into some form of balance. Only Saudi Arabia, with the largest financial reserves (<a href="https://www.imf.org/external/np/sta/ir/IRProcessWeb/data/sau/eng/cursau.htm">about US$600 billion at the last count</a>) and an avowed strategy to maintain market share, appears firm in its resolve to maintain production and brutally test the economic robustness of its major competitors.</p><img src="https://counter.theconversation.com/content/52879/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Henderson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When you pick apart the strange economics of global energy markets, it becomes clear how the incredible power of Riyadh can take other countries to the brink.James Henderson, Senior Research Fellow, Oxford Institute for Energy Studies, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/471182015-09-07T04:07:49Z2015-09-07T04:07:49ZInterview: have oil companies learnt anything from the Niger Delta crisis?<figure><img src="https://images.theconversation.com/files/93914/original/image-20150904-14650-1cqbz2n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Africa's rural population benefits very little from the exploitation of oil and gas but often rural people bear the brunt of environmental damage resulting from oil spills.</span> <span class="attribution"><span class="source">Reuters/Tife Owolabi</span></span></figcaption></figure><p>Over the past decade, oil and gas exploration operations have multiplied across sub-Saharan Africa, often in remote areas far from political and commercial capitals. Wooed by surging prices in global markets, at least 90% of African countries now explore for <a href="http://www.economist.com/news/middle-east-and-africa/21657384-wild-ancient-and-oil-rich-turkana-shows-how-fast-continent-changing">oil and gas</a>.</p>
<p>Until recently, when oil and gas prices remained high, foreign investors were willing to accept the risk on establishing operations in areas where there was little infrastructure and, sometimes, local opposition and resistance to states’ efforts to develop resources.</p>
<p>Invariably, African governments trumpet the potential of oil and gas finds to transform economies and improve lives and livelihoods. But the economic, social and security benefits of oil and gas operations for rural populations are unclear. </p>
<p>Also, they may actually heighten local tensions. Investments in extracting resources in these areas are welcome, but they take place against a background of considerable marginalisation and violence.</p>
<p>Turkana, in northern Kenya, where oil exploration operations have mushroomed since 2012, is a prime example where relations between the state and local communities have descended into <a href="http://africanarguments.org/2014/12/02/is-kenya-facing-a-security-meltdown-by-jeremy-lind/">mistrust and conflict</a>. Turkana is Kenya’s <a href="http://www.ilo.org/surveydata/index.php/catalog/392">poorest county</a>. Until the oil finds, successive governments showed little interest in Turkana, even though insecurity was rife and poverty levels were high.</p>
<p>Many Turkana are dubious of the state’s inability or unwillingness to address chronic violent insecurity, which has been so damaging to the livelihoods of local pastoralists over time.</p>
<p>In this interview, I talk to <a href="http://www.theguardian.com/global-development/2015/apr/14/chad-oil-curse-africa-challenge-negative-impact">Celeste Hicks</a>, a former BBC journalist and author of <a href="http://www.zedbooks.co.uk/node/20807">Africa’s New Oil: Power, Pipelines and Future Fortunes</a>, on her insights into the impacts and outcomes of oil finds for Africa’s rural communities.</p>
<p><strong>What are the impacts of frontier oil exploration and extractive operations? Is there any evidence that people’s lives have transformed for the better?</strong></p>
<p>We see the impacts of oil extraction projects in neglected regions of southern Chad and eastern Niger, most notably in infrastructure. </p>
<p>In Chad, which was the subject of an <a href="http://web.worldbank.org/archive/website01210/WEB/0__CO-58.HTM">innovative project</a> supported by the World Bank to try to ensure that oil revenues would be used to fund development projects, the road leading from the Chadian capital N’Djamena to Moundou and Sarh in the south, close to the oil fields, has been completely upgraded in the last decade. Localised power generation has improved and aircraft landing strips constructed.</p>
<p>However, I believe it would be too optimistic to claim that these areas have been “transformed”. Communities remain very poor and genuine sustainable growth – that is, job creation – has not occurred.</p>
<p><strong>What are the risks of establishing new oil operations in areas that have a legacy of state neglect?</strong></p>
<p>In the worst case it could be expected that badly managed oil production in marginalised areas could lead to a <a href="http://www.bjournal.co.uk/paper/BJASS_7_2/BJASS_07_02_01.pdf">Niger Delta</a> scenario of heightened violence. </p>
<p>My research in Chad, Niger and Ghana suggests that these oil projects are creating nothing like the kind of environmental destruction, political tension and social exclusion seen in the Delta. </p>
<p>I actually came to a cautiously optimistic conclusion that a lot has been learnt from this experience. Oil companies and African governments alike are keen – at least in theory – to avoid it happening again.</p>
<p><strong>What have been the experiences of communities near the oil finds?</strong></p>
<p>In reality very little has changed for most ordinary people. In the early days, the World Bank-supported project helped to guarantee generous compensation rates for land and property acquisitions in Chad’s Doba region, and aimed for 5% of oil revenues to be ploughed back into local development as a further “compensation” for the expected disruption.</p>
<p>A number of important civil society groups, including the <a href="http://internationalbudget.org/groups/groupe-de-recherches-alternatives-et-de-monitoring-du-projet-ptrole-tchad-cameroun-gramp-tc/">Alternative Research and Monitoring Project on Oil</a> and the Catholic Church, continue to carry out research and campaigning activities on oil. But 12 years on from the start of the project, many people in Doba feel disappointed about the long-term impact of oil.</p>
<p>Many of those lucky enough to get stable jobs in the industry are well-qualified graduates from the capital. Oil companies, including the consortium which runs the Kome fields – Esso, Petronas and now the national oil company SHT after Chevron pulled out last year – tend to source very little in terms of food, fuel and services from the local market.</p>
<p><strong>There have been claims that oil can create jobs and spur local economic development, but <a href="http://www.observer.ug/business/38-business/29243-oil-will-not-create-jobs--prof-collier">some argue</a> that oil is capital intensive and doesn’t create jobs. What have you found?</strong> </p>
<p>This area of “local content” is very important for the five African countries I profiled in the book. All of them want to increase local participation, both through direct job creation in the industry and through sourcing of services such as drilling, construction and catering through local companies.</p>
<p>The lack of skills of the local workforce appears to be a serious impediment to offering more employment opportunities. It can often seem that there is an unquestioning acceptance that local people should be employed. <a href="http://www.tullowoil.com/Media/docs/default-source/3_investors/2013-tullow-uganda-country-report.pdf?sfvrsn=4">Tullow Oil in Uganda</a> – of which 88% of its 200-strong workforce is local – contends that labour restrictions can be seen as trade barriers.</p>
<p>But in some ways the debate is already moving on. In Kenya I met civil society activists who argue that the real challenge today is to protect livelihoods which already exist rather than focusing solely on job creation. In Turkana’s case this is pastoralism and fishing in the lake. This comes through a recognition that oil is a finite resource and that production may only last 20-30 years.</p>
<p><strong>How can oil operations be established and managed in a conflict-sensitive way?</strong></p>
<p>There is no one-size-fits-all answer to this question. It is essential that there should be an informed public debate about what communities and the nation want to achieve through oil production. Frameworks and laws have to be put in place to protect those whose lands and livelihoods are affected and to ensure that oil revenues can be clearly traced and put back into national development.</p>
<p>The priorities for spending towards development should be agreed nationally.</p>
<p>Transparency in a government’s dealings with an oil company is vital in order that communities can see and challenge what has been agreed. But more fundamentally, the biggest challenge in all the countries I highlighted within my book remains good governance.</p>
<p>Well-written laws need democratic accountability and political will to back them up. Unfortunately in Niger, Chad and Ghana, when challenging political circumstances occur, many laudable commitments have been reneged upon.</p>
<hr>
<p><em>Jeremy Lind is leading a study on the impacts of oil development in Turkana, Kenya.</em></p><img src="https://counter.theconversation.com/content/47118/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeremy Lind receives funding from the UK Economic and Social Research Council. </span></em></p>Oil and gas exploration could transform economies and improve lives in Africa, but this is not happening. People living in rural areas are the most excluded from the benefits.Jeremy Lind, Research Fellow, Institute of Development Studies, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/386252015-03-17T14:24:50Z2015-03-17T14:24:50ZRussia and the Arctic: crunch call on Moscow’s territory claim is fast approaching<figure><img src="https://images.theconversation.com/files/74941/original/image-20150316-9201-5mbtk1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Pole position: the resource-rich Arctic matters like never before</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/duncan/478986989/in/photolist-JjW9n-p8EfKC-pq7Y8y-6EbNvg-4zE62j-cpuaAf-96nWwt-912S2Q-4hH3Lr-4c4oeQ-pi3xd2-prXz69-pZ9wMM-q2u5gY-o4DYJ5-brtcna-bpBAw6-igXTHg-ox4Uzm-bbf1kv-aFvfUz-d1ZVa-pd2BJa-oRU4DV-kQ1Jwg-6xAhXY-p4zDu-rq2XNt-qmTMXo-pV67go-pdr6VE-bZMmah-rm3hm8-6MneV2-acMev-qhZhoT-q9Kc1E-df6iuS-aFvcKz-9iqMUa-5Nx72b-rh6rLc-pzypw4-nLUNbc-bZMwA3-qKY2H5-qJkNN3-bswzFK-o2J6YJ-it7XCC">Duncan C</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Tensions have increased a notch in the Arctic with the news that the Russians <a href="http://www.reuters.com/article/2015/03/16/us-russia-military-exercises-idUSKBN0MC0JO20150316">have started</a> a major military exercise in the region. Nearly 40,000 servicemen, 41 warships and 15 submarines will be taking part in drills to make them combat-ready – a major show of strength in an area that has long been an area of strategic interest to Russia.</p>
<p>Russia might be reshaping national borders in Europe as it reasserts its geopolitical influence, but the equivalent borders in the Arctic have never been firmly established. Historically it has proven much harder for states to assert sovereignty over the ocean than over land, even in cases where waters are ice-covered for most of the year. </p>
<p>For centuries the extent to which a nation state could control its coastal areas was based on the so-called <a href="http://www.oxfordreference.com/view/10.1093/oi/authority.20110803095546425">cannon-shot rule</a> – a three-nautical-mile limit based on the range of a cannon fired from the land. But this changed after World War II, leading to the <a href="http://www.un.org/depts/los/convention_agreements/texts/unclos/unclos_e.pdf">United Nations Law of the Sea Convention</a> (UNCLOS) in 1982. </p>
<p>Under UNCLOS, every signatory was given the right to declare territorial waters up to 12 nautical miles and an exclusive economic zone (EEZ) of up to 200 for commercial activities such as fishing and oil exploration. Signatories could also extend their sovereignty beyond the limits of this EEZ by up to an additional 150 nautical miles if they could prove that their continental shelves extended beyond 200 nautical miles from the shore.</p>
<h2>Orderly settlement</h2>
<p>It is quite common to read about a “scramble for the Arctic” in which the states concerned – Denmark, Norway, Canada, Russia and the US – race to carve up the region between themselves. In fact, this is not a very accurate description. </p>
<p>There are two dimensions to developments in the region – one legal and the other political. In legal terms, these five littoral states have sought to use UNCLOS to establish borders and assert their primacy over much of the Arctic Ocean and the seabed below (with the exception of the US, which is yet to ratify the convention). </p>
<p>Canada and Russia have also used the special provisions provided by <a href="http://www.arcticgovernance.org/unclos-article-234.4668244-142904.html">Article 234 of UNCLOS</a> – relating to the right to regulate over ice-covered waters – to strengthen their authority over emerging Arctic shipping routes (the <a href="http://www.britannica.com/EBchecked/topic/420084/Northwest-Passage">Northwest Passage</a> and the <a href="http://www.fni.no/doc&pdf/clr-norden-nsr-en.pdf">Northern Sea Route</a>). </p>
<p>In 2008 the five states issued the <a href="http://www.arcticgovernance.org/the-ilulissat-declaration.4872424.html">Ilulissat Declaration</a>, committing to the “orderly settlement of any possible overlapping claims” using the legal framework provided by the law of the sea. This has been reflected in the continental-shelf claims they have submitted to the UN over the past 15 years: <a href="http://www.un.org/press/en/2001/sea1729.doc.htm">Russia (2001)</a>, <a href="http://www.un.org/depts/los/clcs_new/submissions_files/submission_nor.htm">Norway (2006)</a>, <a href="http://www.un.org/depts/los/clcs_new/submissions_files/submission_can_70_2013.htm">Canada (2013)</a> and <a href="http://www.un.org/depts/los/clcs_new/submissions_files/submission_dnk_76_2014.htm">Denmark (2014)</a>. </p>
<p>These submissions are all claims for an extension of exclusive rights to continental shelves beyond 200 nautical miles from each land border. This leaves a small area in the central Arctic Ocean unclaimed but also <a href="http://www.ft.com/cms/s/0/b7e66b1c-8442-11e4-8cc5-00144feabdc0.html#axzz3U5a9fedE">raises issues</a> about various territories where more than one state has posted a claim (see graphic below). </p>
<p>Among the claimants, Russia <a href="http://www.asil.org/insights/volume/11/issue/27/russias-claim-arctic-and-vexing-issue-ridges-unclos">has been asked</a> by the UN to submit further scientific evidence in support of its case. This has not yet happened to the other states, but since it will take time for their claims to be assessed, this may yet change. Until the US ratifies UNCLOS, it can’t submit a claim.</p>
<p><strong>Arctic claims (click to enlarge – or <a href="https://www.dur.ac.uk/resources/ibru/resources/ibru_arctic_map_27-02-15.pdf">see original</a>)</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=231&fit=crop&dpr=1 600w, https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=231&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=231&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=291&fit=crop&dpr=1 754w, https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=291&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/75219/original/image-20150318-2487-tz3b48.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=291&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.dur.ac.uk/resources/ibru/resources/ibru_arctic_map_27-02-15.pdf">IBRU University of Durham</a></span>
</figcaption>
</figure>
<h2>Insecure borders</h2>
<p>Yet legal provisions only go so far. The question remains: what happens if the Arctic states become more assertive in the delimitation of their national borders? </p>
<p><a href="http://www.parl.gc.ca/Content/LOP/researchpublications/prb0813-e.htm#securitylandscape">Canada</a> and Denmark have made significant commitments to backing up their claims, including developing new security strategies. In 2012 <a href="http://archive.defensenews.com/article/20131008/DEFREG01/310080012/Denmark-Boosts-Resources-Arctic-Security">Denmark established</a> a specialised military command to police its Arctic territories, for instance. But over the last decade, it is Russia <a href="http://books.sipri.org/product_info?c_product_id=442">that has advanced</a> the most significant plans for building up its security forces in the region – even before its most recent exercises began. </p>
<p>In material terms, Russia currently has the most to gain from industrially developing its Arctic zone. The Russian Arctic contains significant reserves of hydrocarbons, diamonds, metals and other minerals with an <a href="http://library.fes.de/pdf-files/id/07925.pdf">estimated value</a> of more than $22.4tn (£15.2tn). The area is already a major producer of rare and precious metals and important <a href="http://archive.kremlin.ru/eng/text/speeches/2008/09/17/1945_type82912type82913_206564.shtml">oil and gas fields</a>. </p>
<p>This makes it easy to see why the Kremlin <a href="http://www.arctis-search.com/Russian+Federation+Policy+for+the+Arctic+to+2020">announced in 2008</a> that it will use the Arctic zone as a “strategic resource base” for the socio-economic development of Russia in the 21st century. In 2013 the Kremlin further observed that such development would be heavily dependent on foreign investment, technology and expertise.</p>
<p>Yet this apparent openness to international business interests has been accompanied by an intense sense of insecurity about Russia maintaining influence and authority in the region. It is wary of a Western bloc forming within the <a href="http://www.arctic-council.org/index.php/en/">Arctic Council</a> (the five littoral states plus Finland, Iceland and Sweden) and has preferred to engage the other Arctic states on a bilateral or regional basis. Russia is particularly concerned about the potential for the EU and NATO to become more active in Arctic affairs, given that all of the other Arctic states are members of one or both of these organisations.</p>
<p>Vladimir Putin has <a href="http://siberiantimes.com/other/others/news/0069-putin-stresses-russia-has-no-plans-to-militarise-the-arctic/">spoken publicly</a> about the need to keep tensions to a minimum in the Arctic, while embarking on its extensive military and security programme in the region at the same time – not least <a href="http://barentsobserver.com/en/security/2014/11/russian-arctic-command-december-1st-25-11">establishing</a> a new Arctic strategic command last December. </p>
<p>The Kremlin showed in its <a href="http://www.bbc.co.uk/news/world-europe-24170129">response to</a> the “Greenpeace 30”, who tried to seize a Russian oil platform in 2013, that it will not tolerate any threat to its economic activities in the Arctic, nor allow any precedent that might undermine its authority over what it essentially regards as its territorial waters. </p>
<h2>Future uncertainties</h2>
<p>Russia <a href="http://www.themoscowtimes.com/news/article/russia-to-apply-for-arctic-territory-with-un-in-2015/510346.html">will submit</a> a new claim for the extension of its outer continental shelf to the UN in 2015 (encompassing an area of roughly 1.2m sqkm). Already state officials in Russia <a href="http://rt.com/news/200555-ussia-arctic-shelf-un/#.VFH3jJnONEI.twitter">are positioning</a> the situation as a test of whether the international scientific community will accept Russian science. </p>
<p>A second rejection of Russian claims in the Arctic might further feed Russian concerns about being kept down and encircled by Western rivals. On the other hand, if Russia’s claim is accepted, the rest of the international community might quite rightly become concerned about how the Kremlin will exert its authority within such significantly expanded borders in the Arctic. </p>
<p>The deterioration in Russia’s relations with the West is only likely to up the stakes for the Kremlin when it comes to settling its maritime borders in the Arctic. Russia has remained engaged in the Arctic Council and has repeatedly <a href="http://www.theglobeandmail.com/news/politics/putin-understands-canadas-concerns-on-arctic-sovereignty/article18834927/">called for</a> the Arctic to remain insulated from the fallout from Ukraine. Yet in the coming years, Russia’s neighbours are likely to remain wary about how exactly the Kremlin plans to negotiate and secure its borders along its Arctic frontier. </p>
<hr>
<p><em>To read instalments from our Russia’s borders series, <a href="https://theconversation.com/search?q=russia%27s+borders">click here</a>.</em></p><img src="https://counter.theconversation.com/content/38625/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Duncan received funding from the Economic and Social Research Council from 2011-2014 for research on Arctic geopolitics. He is also an Associate Fellow of the Royal United Services Institute.</span></em></p>As the ice recedes and technology for recovering resources in extreme conditions improves, the Arctic could become the theatre for future global conflicts. Here’s the story so far.Duncan Depledge, Postdoctoral researcher, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.