The fuel that powers the engine of any economy — be it developed, emerging or third world — is energy. It puts in motion the engines of growth, bringing in its wake prosperity and the proverbial rising tide that lifts all boats. Though deep-sea oil exploration is a well-developed science, profitable extraction of oil is not. It is still a developing technology, with innovations being introduced regularly under pressure from a market that seems to have insatiable appetite for oil. And the fear that oil will one day run out has been a persistent one ever since it was first brought out of the earth in rural Pennsylvania in the 1800s. Necessity, as they say, is the mother of inventions. This fear has fuelled many technological innovations.

Peaking truth

In the 1950s, M King Hubbert, a geoscientist with Shell Oil — who categorised oil exploration as earth sciences — proposed a concept called peak oil. Simply put, peak oil was a mathematical theory that modelled the rates of oil production to predict, right down to the year, when oil production would peak before beginning a terminal decline. He, for instance, predicted accurately that peak oil for the US would hit between 1965 and 1970. In so doing, Hubbert also injected a heavy dose of Malthusian-ism into oil exploration and production. Given the mathematical certitude, predictions of all sorts for world peak oil started to appear, with economists of all stripes and analysts of all checks predicting the rise of oil prices worldwide. This belief was reinforced with the oil embargoes enforced by the nations of West Asia in the aftermath of the Yom Kippur war in 1973.

Ode to technology

Though the theory has been shown to be largely true — some analysts claim that oil production worldwide is declining, with one barrel of oil drilled for every four barrels that are consumed. Peak oil is based on a number of assumptions that also serve to discredit it. For instance, the theory considers only those fields where extraction is commercially feasible. As technology has progressed, fields earlier thought commercially unviable have been brought into production. As well a number of new fields have been discovered. This has pushed the date of reckoning further back — from the early 90s to 2005, then 2007 and now, finally sometime into mid-2030s.

The gradual postponement of the oil industry’s day-of-reckoning has largely to do with the areas of oil exploration and production that have borne witness to some astounding innovations and feats of engineering. This has increased the total global reserves from one trillion to 2.5 to three trillion barrels and counting. Some of the more promising technology, such as deep sea drilling, shale gas and oil exploration and extraction of oil from tar sands has upended the traditional equations in the energy consumer-producer relationship. This has major ramifications in areas stretching from energy security and economics to geopolitics.

Shale to the fore

Shale is a type of sedimentary rock rich in organic matter. Deposits of shale often contain kerogen, a set of organic compounds from which petroleum (oil and natural gas) can be extracted through a series of chemical processes. Extraction of oil from shale had been the standard way of extracting oil for centuries, with British patents granted for extraction of oil in this way going back as far as the 16th century. Oil from shale came to an abrupt end when liquid oil started gushing from wells in the continental United States. Rising demand for petroleum products and significant deposits of oil and natural gas in shale has led oil companies the world over, from the US to India, to start investing in technologies to make possible its extraction. So much so, that shale gas is slated to form a major portion of the natural gas produced in the US. In India too, companies such as Reliance, Reliance Natural Resources and ONGC are preparing to invest in shale gas exploration in a big way, with large deposits found in the Cambay Basin in Gujarat, the Gondwana Basin in Central India and the Assam-Arakan basin in eastern India.

Bitumen advantage

Archaeological evidence suggests that bitumen has been in use for centuries, in ancient civilisations such as Mesopotamia and the Indus Valley, for cementing roads and waterproofing seafaring vessels. Technically, bitumen is a highly viscous form of petroleum. Rising prices of oil in the international market have made bitumen an unlikely, yet promising, source. So much so that even within this most conventional of energy sources, extraction of petroleum from bitumen is termed as unconventional oil.

Canada and Venezuela are especially well endowed with large reserves of oil sands. Located beneath boreal forests, the Canadian deposits are the world’s most extensive and are supposed to contain a potential 170 billion barrels of oil, larger than the total reserves of Saudi Arabia.

Drill a fortune

Drilling platforms or drill ships are quite literally mobile oil rigs that position themselves over an oil deposit and drill through thousands of feet of seafloor under hundreds of feet of water to get at the oil. Everything about these systems — from design to propulsion to drilling mechanisms and safety features — are cutting edge and designed to operate in some of the harshest environments known to man. One of the main problems when drilling at sea is that the “floor” is constantly shifting from underneath the platform, which itself is buffeted by strong tides and the occasional hurricane. Dropping anchor in the middle of the ocean is also not an option since these platforms regularly “dock” over more than 500 feet of water. Engineers solved this problem by employing thrusters at the four corners of the platform. These thrusters keep firing in accordance with a GPS signal and adjust the position of the platform such that it is never more than six inches from its intended position, thus preventing damage to the drilling pipes.

A riser is the term used for the pipe that connects the oil rig to the ocean floor. The piping is sometimes more than a mile long and is often made of special materials to help it withstand the massive pressures it will be subjected to at depths of more than 5,000 feet. The riser has shafts running down it, with the drill-bit (the part that does the actual drilling) in the centre and the two shafts on either side used to pump in a coolant known as drilling mud. This drilling mud also picks up the detritus and takes it back to the surface. The oil and the gas are usually found at depths of about 30,000 feet below the sea floor.

Considering 5,000 feet of water and 30,000 feet of sea floor bearing down on oil reservoir, it translates to an enormous amount of pressure. Naturally, when the drill bit penetrates the reservoir, this oil (containing dissolved natural gas at such high pressures) will tend to erupt out of the riser pipe. Usually, scientists and other workers have a good idea of how high the pressure will be. In case they underestimate it, a device called the “blowout preventer” is placed on the sea floor as a casing, where the riser meets the sea floor. In case oil pressure becomes too high, blowout preventer cuts off the riser. This oil, should the pressure be manageable, is siphoned off to the shore using underwater pipelines.

Danger zones

These technologies, however, only extend the status quo of oil as the prime mover of the economy and prevents the shift from non-renewable to renewable sources of energy. The complex systems engineered for the purpose of extracting oil are innovative but still largely experimental, something that technicians have still not mastered. Disasters are extremely likely to happen given the low margins for error. As with any other complex system, there are multiple points of failure and even the slightest laxity in design choice or personnel selection can have disastrous consequences. The explosion and eventual sinking (due to a failed blowout preventer) of the rig Deepwater Horizon, owned by BP, resulted in a massive oil spill off the southeastern coast of the US, an event whose effects will be felt by the surrounding communities for decades. A fire on the platform of Bombay High in 2005 resulted in the loss of 11 personnel.

A recent study by the EPA (Environment Protection Agency) has implicated the process of hydraulic fracking — that help extract oil from shale — for the presence of chemicals in the water. Once oil and natural gas are detected in a shale formation, large amounts of water, chemicals and sand are pumped in to the formation. Pipes are drilled almost 10,000 feet into the ground and then across in a horizontal direction to get to the reservoir. The chemicals and water (upto a million gallons), causes the shale rock to crack. The sand holds these fissures open, allowing the gas to escape and flow up to the surface. The high pressure of the water and the use of chemicals have been known to contaminate the ground water supply. TV reports in Gujarat recently showed ground water bubbling from the ground in places where pumps earlier used to run dry. It was later found that the villages where these phenomena occurred were found to be close to some of ONGCs shale gas deposits.

The strip-mining of prime eco-systems that needs to be carried out in order to mine the sands for bitumen is not the only criticism levied at this method. It is said the claims that the number of barrels of oil produced is greater than the number of barrels of oil required to produce are because of creative accounting. The highly viscous nature of the oil within the sands presents unique challenges to extraction of the oil itself, challenges that must be met with compounds that are often toxic and release a large quantity of pollutants into the atmosphere.

Money matters

Such high precision technology and zero tolerance for error do not come cheap. The cost associated with extracting oil from such deposits is still prohibitively high and becomes feasible only when the international price of oil rises to stratospheric heights. Each of these rigs cost almost $100 million and hundreds of thousands of dollars more to operate on a daily basis. The day prices of crude oil start to climb down, the economic viability of such projects will also be increasingly brought into question.

Though the technology involved in such processes is innovative and “hyper-cool” from an engineering perspective, the challenges in tapping non-renewable sources of energy such as solar and wind hold out the promise of even greater rewards to those who tap it successfully.

(The author is an engineer involved in developing technologies such as speech recognition and text to speech systems for Indian languages.)