Call it unconventional oil, tight oil, shale oil, continuous oil, you name it, but the end result is the same: the bottom of the barrel. Recent technological developments are changing the oil extraction industry dramatically and opening up oil reserves to economically viable extraction. Unequivocally, this new development will have repercussions for the environment and the development of renewable energy and a sustainable energy economy.

Hydraulic fracturing of a shale. Source: Environmental Protection Agency

Unconventional oil sources are created by the same processes as conventional oil—that is, through the combination of organic material, heat, and pressure. The main difference between the two is their ability to move underground. Conventional oil migrates upward due to its buoyancy. This oil moves through pathways in the underground rock in its fluid state and becomes trapped between impermeable layers of rock.

Unconventional oil, meanwhile, is formed in sealed spaces of rock and is not able to move up; it therefore remains in the source rock, trapped in unconnected pores. The development of new technologies such as hydraulic fracturing(or “fracking”), which is used to break up the porous rock in order to connect these micropores, is making the extraction of unconventional oil technologically possible and economically viable.

To put such advances into perspective, the amount of recoverable oil from the Bakken Reserve in the U.S. states of North Dakota and Montana increased 25-fold (an additional 3 to 4.3 billion barrels of oil) from the 1995 estimate, becoming the largest oil accumulation in the lower 48 states and accounting for 7 percent of the total U.S. onshore oil production. Other technically accessible shale oil resources in the United States include the Eagle Ford formation in South Texas and the Avalon and Bone Springs formations in southeast New Mexico and West Texas.

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Bakken, fracking, Fuel Quality Directive, greenhouse gas emissions, hydraulic fracturing, life-cycle analysis, Low Carbon Fuel Standards, shale oil, tight oil, Unconventional oil

A chart showing just how much oil sands (tar sands) have contributed to Canada's total oil reserves estimates (Source: BP Statistical Review of World Energy 2007).

All oil is not created equal – or, at least, all oil is not produced with equal environmental impacts, according to estimates proposed last week by the European Commission. The proposal, now under consultation amongst European Union (EU) member states, would add new definitions of the greenhouse gas (GHG) footprints for oil from tar sands and shale oil to the EU’s 2009 Fuel Quality Directive (2009/30/EC) and would present a tough barrier to the import of tar sands oil into European markets on the basis of its high life-cycle GHG emissions. The Fuel Quality Directive (FQD) mandates a 6 percent reduction in the average carbon intensity of fuels supplied to the EU (to about 79 grams carbon dioxide-equivalent per megajoule, or g CO2e/MJ) by 2020. It also establishes a mechanism in Article 8 requiring fuel suppliers to report the life-cycle GHG emissions of the fuels they supply and reduce them from 2011 onwards. With its recently proposed value of 107 g CO2e/MJ, oil from tar sands would be high above the target recommended under the FQD.

Tar sands, the colloquial name for highly viscous deposits of oil and bitumen, are expected to become a major source of global oil supplies over the next few decades. The largest known deposits in the world, thought to hold 170 billion barrels of oil reserves and as much as 2 trillion barrels of oil in place, are concentrated in and around the Canadian province of Alberta. Compared to conventional oil deposits, tar sands require production techniques that are more expensive and are associated with greater environmental impacts, particularly in terms of GHG emissions. Shallow deposits are typically accessed using strip-mining techniques, while deeper deposits are generally accessed using in situ techniques whereby steam is injected into the reservoir to heat the bitumen until its viscosity decreases sufficiently to allow it to flow out of the reservoir.

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carbon dioxide, European Union, IEA, life-cycle analysis, low-carbon, natural gas, oil sands

In recent months, several sources have called natural gas’s greenhouse gas (GHG) emissions reductions potential over coal into question. Because the GHG benefit of a coal-to-natural gas shift in the power sector is a critical assumption in our common conclusion that natural gas can facilitate a reduction in power sector GHG emissions, the Worldwatch Institute and Deutsche Bank Climate Change Advisors are embarking on a joint study to assess the currently available emissions data, develop a rigorous and transparent life cycle assessment of electricity generated from gas and coal, and identify data gaps that must be prioritized in further research.

Why is it commonly held that electricity generated from natural gas is 50-60 percent cleaner than coal, and why is this belief being challenged?

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coal, Deutsche Bank Climate Change Advisors, electricity, EPA, fuel-switching, greenhouse gas emissions, life-cycle analysis, methane leakage, natural gas, power sector