| Dear Sustainability Watch Reader,
I am pleased to provide you with your weekly Sustainability Watch newsletter. This week's topic is "Peak Oil."
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Peak Oil and Natural Gas
Within the United States, new gas drilling sites are being established to access natural gas located within shale deep below the earth's surface. Formerly identified as too costly to access, the gas can now be harvested utilizing hydrofracturing, or "fracking," technologies. These technologies have dramatically changed the US energy industry. Additionally, the sudden access to natural gas has alleviated the concern over peak oil, and the lack of energy resources in general.
Even though fracking seems to be an end to the concerns over energy sources, the debate concerning the safety of these methods has begun to pick up speed. The air and water pollution caused by fracking practices have caused discussions about cancer and several other health concerns, not to mention the concerns over earthquakes and an overall shift in the Earth's water table.
President Obama has promised by year end to issue a new set of Federal Regulations that will ensure safe, environmentally friendly practices to be used nationwide. In the mean time, the International Energy Association has released a document entitled "Golden Rules for a Golden Age of Gas" to better educate countries of the best and safest practices when pursuing the extraction of natural gas.
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Executive Summary
A ready supply of low cost oil has fueled economic growth for generations. But because oil is a nonrenewable resource, its supply is finite. Many experts agree that the production of conventional oil resources will reach a peak sometime before 2040, then enter a state of permanent decline. As global oil production slows, the ramifications may be severe. Individuals and societies, as well as businesses, will be forced to adjust to a new reality in which oil is scarce and expensive.
Unconventional sources of oil, including oil sands and oil shale, are abundant, particularly in the United States. In Texas, North Dakota and now Colorado, new oil drills are springing up where the oil, located deep within shale, was formerly considered inaccessible. Thanks to new hydrofracturing technologies, this oil is poised for removal and consumption - in the place of alternative fuel sources.
Regardless, optimists believe that market forces will drive innovation in extraction and processing technologies so as to blunt the effects of declining supplies of conventional oil. They also argue that rising oil prices will encourage development of renewable energy resources, making a global energy shortage even less likely. Pessimists are convinced that neither extraction technology nor renewable energy resources can be developed and made commercially viable in time to offset major shocks to the transportation and agriculture sectors. They envision a future characterized by famine, resource wars and declining civilization.
While no one knows when the production of conventional oil resources will peak and what the consequences will be, it makes sense for businesses to focus on reducing energy usage as a way to lower costs, strengthen competitiveness and enhance sustainability.
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