On May 8th the Obama Administration released the third U.S. National Climate Assessment (NCA), a massive 800-plus page report that represents the most up to date and comprehensive look at climate change and its subsequent impacts across the United States and its critical economic sectors. The central assertions remain unchanged from reports past; climate change is real and human-driven processes are rapidly accelerating this change. The urgency with which the authors write is more pronounced however, and speaks to a lack of progress in both climate-related legislation and actual mitigation efforts. The dialogue thus shifts to what we can do now instead of tomorrow as the consequences become increasingly more present.
Following the release of the report, President Obama, speaking to a crowd in a California Wal-Mart, summarized its findings and derided climate deniers who are “wasting everybody’s time on a settled debate.” Scientific substance aside, political momentum has been slow to build in the midst of a North American energy renaissance. Accessible shale gas together with Canadian oil sands has pushed back our post-carbon future, and to be fair the immeasurable geopolitical gains offer a reasonable counter to any argument against. However, sensible action must be taken now to ensure fossil fuels are responsibly sourced and the climate impact is minimized. Assuming a continued congressional stalemate, the first meaningful steps fall to the slow-moving and equally stubborn energy industry.
As detailed in the report increasing temperatures and water scarcity pose the greatest challenges to the energy sector and the nation’s energy security in general. Let’s take a brief look at these climate responses and evaluate their impact on energy systems and production.
In the United States and globally temperatures are rising dramatically; the 10 warmest years on record have all occurred in the last 15 years. As a result, the frequency and intensity of droughts, wildfires, and floods are on the rise, which together with other climate and weather disasters cost the American economy more than $100 billion in 2012. With longer and hotter summers electricity demand for cooling is mounting. The opposite is also true – shorter winters require less energy for heating – but weighted for population, net energy use is projected to increase and net energy expenditures for cooling and heating look to jump between 10% (lower emissions scenario) and 22% (higher emissions scenario) by the end of the century. This statistic in and of itself is not necessarily alarming, but it does bring into question the reliability the nation’s aging electrical grid. Cooling is almost entirely dependent on the grid as opposed to heating, which draws from electricity, natural gas, and heating oil among other sources. To date, weak state and federal regulatory frameworks have slowed grid modernization with repercussions totaling in the billions. The Galvin Energy Initiative estimates potential smart grid savings of up to $50 billion per year in reduced power disturbance costs in addition to nearly $20 billion per year by 2020 in general efficiency savings. The Electric Power Research Institute estimates that a national smart grid could cost between $337-$476 billion over a period of 20 years with predicted savings of $1-$2 trillion over that same period.
Water remains the driving force behind nearly every significant economic sector as well as life on Earth for that matter. Increasing pressure on supply looks to become a world-defining problem with or without extreme climate change impacts. Nationally, per capita water use has actually declined since 1980 thanks to efficiency measures and appropriate pricing strategies. However, socioeconomic conditions as well as regional climate changes over the next half-century will impact demand tremendously; the NCA projects a rise in demand of up to 50% over 2005 levels in the Southwest and Great Plains. The U.S. Drought Monitor has already classified these regions as in severe to exceptional droughts – classifications that connote long-term impacts on agricultural lands and hydrological systems. Moreover, decreased soil moisture, groundwater levels, snowpack, and precipitation pose significant threats to the way we use water.
The energy sector dominates water use in the U.S; unlike municipal use, water consumption for energy production has been increasing. Upstream, onshore oil production requires approximately eight barrels of water for every barrel of oil brought to the surface. Further from the source, energy, in all its forms, is responsible for 27% of total water consumption outside the agricultural sector. Water use is often highlighted when discussing the shale gas revolution and the now widespread use of hydraulic fracturing, but often unfairly so or out of context. Hydraulic fracturing, or fracking, actually uses less water than most conventional energy sources. Shale gas production consumes between 0.6 and 1.8 gallons per MMBtu compared with 1-8 gal/MMBtu for coal and 1-62 gal/MMBtu for onshore oil production. Biofuels like corn-based ethanol consume on average a staggering 1,000 gal/MMBtu. Fracking is not entirely guilt-free however, and still presents unique water and land use problems.
The water-use profile for fracking tends to differ from more conventional wells; fracking jobs require large volumes of water upfront and for each subsequent fracking treatment, instead of spread out over the life span of the well. This places incredible pressure on local water systems, many of which are already thinly stretched between municipal and agricultural uses. Where fracking actually occurs only compounds matters. In fact, in the US and Canada more than 55 percent of fracked wells in 2011-2013 were completed in drought stricken areas. Moreover, 36 percent of wells were drilled in areas with significant groundwater depletion. The water stress is greatest in Texas, California, and Colorado – where a majority of the nation’s fracking occurs. With fracking-related water use expected to double in some regions water sourcing and management becomes an even more critical issue not only for oil and gas companies, but also municipalities and even individuals.
Mitigating climate change impacts will not be cheap; clean energy infrastructure, smart grids, and an increased share of renewables in the energy mix will require significant upfront capital costs – costs consumers have been unwilling to bear in the past. Simply put, money today is worth more than money tomorrow. The equation becomes more difficult when dealing with abstract potential savings, both monetary and environmental. The recent climate assessment attacks this prevailing idea and attempts to move climate change issues to the present, where they realistically belong. The fact is onshore wind and solar photovoltaics are competitive now, without incentives. A great deal of positive work has already been accomplished and greenhouse gas emissions are at a 20-year low. The Obama administration has pledged greater federal leadership, but compliance and trendsetting begins with oil and gas producers and utilities providers. As such, the energy industry is in a privileged position to lead by example.