The Fracking Bubble Exposed

Gasoline prices are hovering around 160 Yen per litre which is very high, and potentially "bad for the economy" except things aren't that simple. As readers of Kurashi know, we are in an era of post-peak oil where globally, we will never be able to return to the hey-days of cheap hydrocarbons easily pumped out of huge oil fields. And when energy gets too expensive, societies and countries enter into recession, which leads to lower demand for energy, so prices may again fall. Chaos is a mild term as this cycle continues to hurt consumers and local communities.

Enter fracking, or hydraulic fracturing, a complicated process that has become increasingly popular in the United States over the past 5-10 years. Basically, deep drill holes are bored, then turned horizontally. Massive amounts of water, sand and chemicals are introduced to "fracture" the rock and get hydrocarbons (gas, oil, whatever) back up to the surface. These need to be transported by pipeline or truck. It is an expensive process that only makes sense when energy prices are very high.

But, as the new book Snake Oil by Richard Heinberg explains, fracking doesn't make any sense at all. It is an environmental nightmare, and it is extremely short-sighted. Most fields (called "plays") that can be fracked lay under towns or farms, and landowners are basically lulled into believing in this unsustainable production method, in spite of the knowledge about its risks and drawbacks. Who is behind the misinformation? Heinberg convincingly dissects the relationship between fracking and Wall Street, showing that shale is the latest financial bubble being blown by the big investment banks.

What's worse is the continued effects this will have on our global climate. Pretending that we can continue to drive cars as usual and depend on oil-consuming industries (steel, aluminum, concrete) will "fry the kids" as coming generations will suffer. Heinberg mentions food production as one area that is under immense pressure as the climate becomes more volatile. Everyone in areas in Japan with 40 C this summer will agree. If anything, we should use the short time we have, Heinberg points out, to invest in renewables like solar and wind, before it is too late. If this sounds bleak, well, it is unless we wake up from the "Drill, Baby, Drill" mentality.

For Japan, there is not much hope in domestic fracking anyway. Some test drilling has been done in Akita prefecture by Japex, according to The Japan Times. But the "reserves" are tiny: For all of Akita, shale oil reserves are projected at 100 million barrels (That is only 10% of Japan's annual oil consumption, the article states, without commenting on what a drop in the bucket this entails). Compare to the large Bakken play in North America, which is estimated to contain 167 billion barrels of oil. Be that as it may, Japan has a lot of work ahead to be better prepared for a future without cheap energy, instead of falling for another gigantic investment scam. More about Japex and their plans here. US oil giant and controversial polluter Halliburton is also involved, according to Energy and Capital.

Blogger Ten Thousand Things cited Texas Sharon, a website run by rural Texans negatively impacted by fracking:

We get the impacts, Japan gets the gas: Japan buys into shale gas boom:

This explains why so many Japanese news stations have been in the Eagle Ford Shale recently. Most of the stations did not want to learn about impacts or talk to people who are suffering. They wanted happy stories for happy Japanese people who will happily cook their noodles and warm their buns using Texas gas. Only one group is interested in the impacts.

On Friday, while Texans were too busy being happy about the weekend, Obama approved another permit to export our domestic fracked gas...

This contract is for 20 years to export up to 1.4 billion cubic feet per day. Two of Japan’s largest utilities have contracts to buy LNG from the Texas facility for 20 years.

A massive infrastructure buildout and, with the rapid decline rates of fracked shale gas wells, lots more drilling will be required to meet the demands of this contract.

Texans get the impacts to air, water and land, Japan gets the gas, the Fracking Mafia gets the profit.

Image of the book cover from publisher Post Carbon Institute

Hat tip to Pandabonium for the gift of the book!


I read recently (though unfortunately cannot remember the source) that Abe agreed to join the TPP talks in return for a large share of the LNG acquired by fracking.

If this is true, then even TPP is connected to the woes at Fukushima.
Pandabonium said…
You are most welcome, Martin. As usual, the benefits (profits) go to the corporations and bankers, while the costs - to the climate, water, flora and fauna, and human health are socialized.

Why is socialism a dirty word when referring to helping people, but sacrosanct when applied to financial entities?

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