December 09, 2010

What is the difference between A Surgical Facility being built in Canada and a Oil Sands Project being proposed in Utah?

When it comes to NAFTA a big difference and that’s the problem!

By Melvin J. Howard

Enter a small Alberta Canadian start-up company called Earth Energy Resources Inc. That wants to dig up Utah to find out if its unproven technology can produce 2000 barrels of oil a day. Excuse me does the word Peak Oil mean anything? In a day in age when even big oil companies are starting to seriously explore green technology do we need another ugly pit in the ground? I remember going to the La Brea tar pits in California the education part of the field trip was very informative but you could smell it miles away. Environmentally this is a disaster inspite of Earth Energy Resources nice sounding name. Nature has figured out some excellent ways to moderate the flow of water on its own to manage flood and drought risk and also to clean water so that the waste of one process can get all cleaned up and ready for another process. This all happens through water's interaction with the land and with the ultimate Central Banker - the Central Banker of Energy, the Sun. Humans have absolutely no control over the Energy Central Banker. All they can control is the things that store the sun's energy like plants and animals that eat plants, and also they can go find the sources of other stored solar energy in the form of old squashed dead plants and animals, called oil and coal. All these activities plus all of the human monetary-system driven development of land effect the land on earth, not the Energy Central Banker. So the land is what we focus on in considering the link between the water cycle and the money cycle that forms the basis of our economy.

The way that nature manages flood and drought risk is really through plants and soils which are, of course, the very best of friends - the soils being largely made up of decaying leaves and trees, and the plants needing the soils for food. The soils store lots of the rain as groundwater and they are kept in place by tree roots. Some of this water the trees might like for later when they get a bit thirsty, and other ground water might fall to an underground aquifer or run off slowly into a stream in the watershed.

Having lots of plants and rich soils in a watershed means that when there is lots of rain the ground will soak up lots of the excess water and this will help mitigate flood risk. When it's been a long time between rains you can rely on the groundwater in the aquifer or the groundwater gradually seeping into a nearby stream to provide a steady flow of water from earlier rains. This helps mitigate drought risk.

As for natures water cleansing functions the trees keeping the soils in place prevent excessive amounts of mud, clay, sand and salt from sliding into the stream. The soils and the little microorganisms living in them are very fond of waste products that most other living things would find rather unappetizing. Them and other little critters living in or near the stream often perform water cleaning and filtering functions that help to make the water useable for others. The trees sweat off some water through evapo-transpiration helping to cool the stream area so that all the critters that live there that have an important role in the water cycle can stay at a nice temperature to do all their work. Having such a water cycle on our planet makes a lot of sense given that gravity would otherwise drain all the water to the salty sea and sea-water is not very drinkable. This whole business of evaporation and rainfall to replenish all living things that need fresh water is quite sensible and, of course, life as we know it would not exist without an efficient water cycle. A prosperous human society cannot exist without an efficient water cycle. All these being the processes of Mother Nature they obey what we humans have interpreted to be the natural laws of physics, most especially they obey two important energy laws - the First and Second laws of Thermodynamics - that have never ever found to be violated by any process. Water obeys these natural laws. Money, being a purely human abstraction, does not.

The First Law of Thermodynamics is the Law of Conservation of Energy. This says that the amount of energy in the universe is fixed and you can’t create new energy or destroy existing energy. When it comes to the planet Earth, we get new energy to the earth from another source in the universe, called the Sun. Apart from all the energy that we have stored in and on earth and the daily dose of sunlight we have no other energy available to us. This is perhaps the primary reason humans have seen fit to develop markets - that is, to allocate this scarce resource of energy.

If the laws of Thermodynamics had just stopped there, all would be right with the world! Under the conservation of energy I could just fill my car with gas, stick a little collector in the exhaust pipe and recycle all the energy I just used and fill my car back up, since I know that energy will be conserved. I only ever have to buy one tank of gas in my life. Buy one load of electricity to heat my home for my whole life Id just recycle everything over and over. Energy companies would go bankrupt, there would be no wars in the Middle East, and the stock market would collapse because no-one could make money from selling energy.

OK there’s a catch. And that’s the very important Second Law of Thermodynamics. The ENTROPY Law. The law that sits right at the heart of the conflict between man and nature. ENTROPY is a measure of disorder in terms of the usefulness of energy. Low entropy means very useful energy. High entropy means quite useless energy cant use it for another process, its not organized enough. The Second Law of Thermodynamics says that Entropy always increases as energy is used. Therefore, once you have used all the gas in your tank, even though the driving process left the same amount of energy from the gas in the world, that energy has become pretty useless so that you cant re-use it. This law then really creates the scarcity of energy and the primary motivation for using markets to allocate it.

So how does the market deal with the Entropy Law? The answer to that would be Not at all! While it is true that the Entropy Law contributes greatly to the scarcity that gives rise to the need for markets you will not find the Entropy Law mentioned in mainstream economics textbooks. Modern money and capital markets, and contemporary economics have been built up IGNORING the most fundamental laws of nature. It is interesting to consider who runs things most efficiently - the Markets or Mother Nature? Given that the most desirable outcome of the water cycle, even from a human-centered point of view, is a stable, secure flow of clean water one would have to conclude that Mother Nature arranges the most efficient allocation of energy, for, in the natural processes there are no waste products, and solar energy is used to its maximum. Every player in the natural water cycle does some work in the water cycle and various related nutrient cycles and their waste products get used as input into some other process in these cycles. Nothing is wasted and everything fits together to form a whole cycle that has evolved over millions of years and that we are the beneficiaries of today. Nature's water cycle seems to have taken the Entropy law into consideration and then optimized energy use within this boundary condition.

Enter Man

But then we Humans come along with fears of scarcity, markets and a monetary system that ultimately depends on alteration of the land for its survival and for the survival of the markets. But most alterations to the natural landscape then disturb Mother Nature's maximally energy efficient water cycle in several common ways. These are common things that have happened all across the globe:

  • First, deforestation exposes soils and causes soils, sediment and salt to rush into the stream at the next rainfall. You end up with salty water and/or sediment that kills off lots of the plants and critters that had important roles in the water cycle such as water filtration.
  • Second, the loss of soil and vegetation, coupled with impervious surface coverage such as roads, car-parks and buildings means that water can no longer seep into the ground as is very important in mitigating flood and drought risk. The frequency of flood and drought increases.
  • Human activity in watersheds (real estate, mining, logging, intense farming and so forth) and the loss of filtering systems through the loss of vegetation and soils means more and more pollutants are entering the water sources.
  • The practice of building dams either for hydropower or for storing water in a place that doesn't have enough, and the practice of channelling water to places that don't have much, has been responsible for massive loss of aquatic life, flooding and drastic alteration to affected watersheds and local water cycles.

Then we market-oriented humans come along and say, "Now we have a water problem. Let's use some market mechanisms to fix it." In fact a lot of the market-oriented people go so far as to say - "Let's privatize the water - they think that this pure market solution will fix everything can you believe this? " And they say this perhaps forgetting that it was market forces that got us into this problem in the first place.

All this is not to say that us humans should not have markets for other things or should not alter the land. Rather it is a wake up call to build a much better world and make more efficient use of our energy. Ultimately this would mean a paradigm shift in the way land is developed so as to retain enough natural resources for million of years to come. But the ultimate question I have for my government is why would you allow a Canadian start-up company to come in and dig up the beautiful land of Utah and spoil the environment on untested technology. Then allow the government of Canada to block our efforts to build a state of the art (Green) surgical facility? Is this way NAFTA WAS SUPPOSE TO WORK giving Canada undo advantage time and time again?

By Steve Hargreaves, senior writer

NEW YORK ( -- A plan to bring the first oil sands development to the United States is drawing stiff opposition from environmentalists concerned about global warming and water use, but backers of the project insist their new process is safe.

Earth Energy Resources, a small Canadian start-up, wants to produce 2,000 barrels of oil a day using oil sands from a site in northeast Utah. Oil sands are just that - sand laced with a heavy oil known as bitumen.

The sands are plentiful in parts of the western United States and in Canada's Alberta province, the latter exporting over 1 million barrels of oil a day to America. Some estimates say there are more oil sands and other unconventional forms of oil in North America than there is light oil under the Saudi desert. But oil sands production is expensive and usually comes with high environmental costs.The sand itself is often extracted by open-pit mining, an unsightly process that can lead to ground water contamination and other environmental issues. And separating the oil from the sand requires massive amounts of heat, chemical solvents, and water, which many say makes the sands an unworthy endeavor. Water usage is what has kept the operation largely out of the dry Western states.

Earth Energy says it has a novel process that uses half the water of their Alberta cousins and an eco-friendly, citrus-based solvent.Standard oil sands production uses about 126 gallons of water for every barrel of oil.

Land has been leased and trial tests conducted. If it all works out, Earth Energy will sell the oil to a refiner in the area, which will then turn it into diesel fuel, heating oil, kerosene, or a variety of other heavy-oil products.

What the company needs now is $35 million in scale-up funding, and a challenge from environmentalists to go away.

"This process makes absolutely no sense," said John Weisheit, a former river guide who's now the conservation director for Living Rivers, the local branch of the Waterkeeper Alliance. "Utah is the second driest state in the country. Even if it took just a drop of water, there's not even that."

Earth Energy has already obtained the rights to extract ground water in Utah, but Weisheit says those permits don't take into account how climate change will affect an already dwindling water supply.

Weisheit said the amount of water in the local watershed is expected to fall by 20% over the next couple of decades. He said water levels have already dropped by more than that over the last decade.

He doesn't believe there will be enough to support oil sands development and the needs of the people and industry that already depend on water from this region.

Plus, oil sands will make global warming worse.

Because of the energy needed to separate the oil from the sand, Weisheit said this operation results in three times the carbon emissions as a conventional oil well.

"Let's get real and deal with the real problem," he said, "We're running out of oil. We don't need to eviscerate the environment to get every last drop."

Living Rivers has hired lawyers to fight the project. They lost a plea to state regulators to revoke Earth Energy's permit back in September, but are appealing that decision. The hearing is set for January. If that fails, the group is planning on going to court.

Earth Energy would like to get all this behind them before ramping up production.

The company already faces huge challenges. Analysts say raising the massive sums of money necessary to develop the economies of scale that can compete with the energy giants is the hardest part for a start-up in this space. Forget $35 million, Big Oil drops billions on a single project.

Earth Energy's new technology is unproven on a large scale and it's uncertain whether oil sands production in the Untied States will ever take off. The U.S. Energy Information Administration doesn't address it in its long-range forecast, citing the fact that no major firms have shown interest in it.

As for the environmental challenges, Earth Energy CEO Glen Snarr says they are overblown.

While oil sands may take more energy to produce, they only emit 5% to 15% more carbon than traditional oil over their entire lifecycle, according to a report from Cambridge Energy Research Associates. That's mainly because most of the emissions come from actually burning the stuff in an engine, not in the extraction process.

And global warming or not, the company clearly believes there's plenty of water in Utah to get the job done.

"We're not in this to lose money," said Snarr. "We're in this to produce oil in an environmentally sustainable manor."

Remember what I said earlier "Then we market-oriented humans come along and say, "Now we have a water problem. Let's use some market mechanisms to fix it."