THE WATER-ENERGY-FOOD NEXUS of PRODUCTION from SHALE OIL, SHALE GAS and OIL SANDS Lorenzo Rosa
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Academic year 2015/2016 THE WATER-ENERGY-FOOD NEXUS OF PRODUCTION FROM SHALE OIL, SHALE GAS AND OIL SANDS By Lorenzo Rosa Supervisor: Maria Cristina Rulli Co-supervisor: Paolo D’Odorico Co-supervisor: Kyle Frankel Davis September 2016 Abstract Unconventional fossil fuel resources have recently emerged as new important energy sources and they are expected to play a fundamental role in meeting energy demand in the near future. We consider global shale oil, shale gas and oil sands assessing consequences on the Water-Energy-Food security Nexus. Shale resources are globally abundant and widespread. Extraction of shale oil and natural gas is performed through hydraulic fracturing, a water intensive process that is not free from environmental and social impacts. It is unclear to what extent and where the development of shale resources could compete with water and food security. Here we consider the global distribution of known shale deposits suitable for oil and gas production and evaluate the impacts on water resources for food production and other human and environmental uses in the same region. We find that 39% of world’s high quality shale deposits is located in areas affected by water stress and 7% is situated in regions where irrigation is expected to meet the growing food demand. In these regions shale oil and gas production would likely threaten water and food security. These results highlight the need for adequate policies to avert social, economic, and ecological consequences of shale resource extraction. Oil sands deposits account for a third of globally proven oil reserves, extend over large natural areas, and have extraction methods requiring large volumes of freshwater. Little work has been done to quantify some of the environmental impacts of oil sands operations. Here we examine forest loss and water use for the world’s major oil sands deposits. We calculate rates of water use and forest loss both in Canadian deposits where oil sand extraction is already taking place and in other major deposits worldwide accounting for ≈93% of global oil sand reserves. We estimated that their full exploitation could result in 3 -1 2 -1 1.31 km yr of freshwater, 8700 km of forest loss, and 383 Mtonne CO2eq yr in greenhouse emissions. The expected escalation in oil sands extraction thus portends extensive environmental impacts. While unconventional fossil fuels extraction have multiple environmental impacts, there have however been substantial economic benefits that bring to an ever-evolving technological innovation, which is lowering environmental impacts. Furthermore, energy security of some countries has been strengthen. Thus there are clear and ongoing tradeoffs between economic development, energy, and the environment. Lorenzo Rosa Department of Civil and Environmental Engineering, Politecnico di Milano, Milan I-20133 Italy Prof. Maria Cristina Rulli, Thesis Supervisor Department of Civil and Environmental Engineering, Politecnico di Milano, Milan I-20133 Italy Prof. Paolo D’Odorico, Thesis Co-Supervisor Department of Environmental Sciences, University of Virginia, Charlottesville, VA 22904 Dr. Kyle Frankel Davis, Thesis Co-Supervisor Department of Environmental Sciences, University of Virginia, Charlottesville, VA 22904 Acknowledgements First of all, I would like to thank my thesis committee, Prof. Maria Cristina Rulli (chair), Prof. Paolo D’Odorico, Dr. Kyle Frankel Davis. They have provided me a tremendous challenge and support, and each has been an outstanding mentor. I would like to thank my parents, Manuela and Marco, for all the support and for all the opportunities that have given during these years of study. I would like to thanks my brother, Andrea, for being a great mate in all these years. I would like to thank all my Italian friends and all the amazing people that I met in the past few years in Stockholm and Charlottesville. A great thanks to Matteo and Marco. I would like to thank Madagascar Oil for providing information about Madagascar oil sand concession areas and Chris W. Baynard (Baynard Geospatial Consulting: http://www.baynard-geospatial.com) for sharing the shapefile of Orinoco Heavy Oil Belt in Venezuela. CONTENTS INTRODUCTION ......................................................................................................................................... 5 WATER-ENERGY-FOOD NEXUS .................................................................................................................. 9 DEFINITIONS ........................................................................................................................................ 11 PART 1: SHALE GAS AND SHALE OIL ........................................................................................................ 13 HISTORY ............................................................................................................................................... 17 EXTRACTION ............................................................................................................................................ 17 EXPLORATION/PLANNING ................................................................................................................... 18 DIRECTIONAL DRILLING ....................................................................................................................... 18 HYDRAULIC FRACTURING .................................................................................................................... 20 PRODUCTION ...................................................................................................................................... 21 METHODS ................................................................................................................................................ 24 SHALE DEPOSITS IN WATER STRESSED REGIONS .................................................................................... 28 SHALE DEPOSITS OVER IRRIGATED AREAS .............................................................................................. 31 WATER FOR FRACKING OR WATER FOR IRRIGATION? ........................................................................... 40 BALANCING ENERGY AND FOOD SECURITY ............................................................................................ 41 REFERENCES ............................................................................................................................................ 43 PART 2: OIL SANDS .................................................................................................................................. 52 CANADA................................................................................................................................................... 55 RECOVERING THE OIL .......................................................................................................................... 57 UPGRADING ........................................................................................................................................ 69 OIL SANDS IN THE WORLD .................................................................................................................. 71 METHODS ................................................................................................................................................ 77 ENVIRONMENTAL IMPACTS OF OIL SANDS PRODUCTION ..................................................................... 84 TRADEOFFS BETWEEN ECONOMY, ENERGY, AND THE ENVIRONMENT ................................................. 95 REFERENCES ............................................................................................................................................ 99 CONCLUSIONS ....................................................................................................................................... 105 DISCUSSION ........................................................................................................................................... 109 INTRODUCTION In recent years oil and gas corporations have shown a rising interest in unconventional fossil fuels, likely in response to the increasing global energy demand (U.S. EIA, 2013; Exxon Mobil, 2016), its predominant reliance of fossil fuels (U.S. EIA, 2013; Exxon Mobil, 2016; British Petroleum, 2016), scarcity of conventional fossil fuel resources (Gordon, 2012), and technological innovations that have substantially reduced extraction and processing costs (Speight, 2013). Unconventional fossil fuels are hydrocarbons found in deposits that cannot be tapped with standard production methods (i.e., based the extraction of hydrocarbons that naturally flow into production wells) (Rogner, 2007) but require more complex and advanced technology (Chew, 2014). These fossil fuels exist both as oil (oil sands, tight/shale oil, deep-sea oil, heavy and extra-heavy crude oil) and natural gas (tight/shale gas, coal bed gas and gas hydrates) (Rogner, 2007). Reliance on unconventional fossil fuels is dramatically transforming the exploration and production industries (Gordon, 2012). While the global oil demand is projected to rise by about 20% from 2014 to 2040 (Exxon Mobil, 2016), it is expected that within the same time period the contribution of unconventional oil will increase from 25% to about 40% (Exxon Mobil, 2016). By 2040, 10% of world oil production will come from oil sand deposits (U.S. EIA, 2013; Exxon Mobil, 2016), which are bigger by an order of magnitude than conventional