The United States is producing more fossil fuels than ever and selling them to the rest of the world as climate change increasingly makes its presence known through heat waves, wildfires, droughts and floods.
The environmental, health and socioeconomic impacts of the energy export binge are being felt from the oil fields of West Texas to the vast ports of Asia.
( Blowout: Inside America’s Energy Gamble is a multi-part collaboration between the Center for Public Integrity, The Texas Tribune, The Associated Press and Newsy. )
As oil and gas exports surge, West Texas becomes the world’s ‘extraction colony’
MIDLAND, Texas — Drilling booms have come and gone in this oil town for nearly a century. But the frenzy gripping it now is different. Overwhelming. Drilling rigs tower over suburban backyards. There’s a housing crunch so severe that rents are up 30 percent in the last year alone. Tax-averse city officials raised fees this spring just to keep basic services afloat.
This boom is engulfing the rest of West Texas, too, extending to areas that drilling hasn’t touched before. As communities welcome the jobs and the new business, they’re struggling with an onslaught of problems that include spikes in traffic accidents and homelessness.
What’s happening is unprecedented. In December, companies in the Permian Basin — an ancient, oil-rich seabed that spans West Texas and southeastern New Mexico — were producing twice as much oil as they had four years earlier, during the last boom. Forecasters expect production to double again by 2023.
Texas Gov. Greg Abbott and others say the drilling spree is ushering in a new era of American energy independence, but American demand isn’t driving it. Foreign demand is.
In late 2015, Congress cut a deal to lift 40-year-old restrictions on the export of crude oil. That opened the floodgates. The U.S. sold 230 million more barrels of crude to other countries in the first half of this year than it did three years earlier — a surge made possible by a virtually identical spike in Permian production.
The U.S. just surpassed Russia as the world’s top oil producer. The International Energy Agency predicts that American oil — most of it from the Permian — will account for 80 percent of the growth in global supply over the next seven years. That’s bringing big profits to oil companies as well as lung-searing pollution to places where drilling has skyrocketed, while threatening to exacerbate climate change.
Hydraulic fracturing — better known as fracking — made this boom technologically possible, but exports are the reason there’s so much new drilling. U.S. refineries built for heavier varieties of oil than the Permian produces can’t handle the enormous new quantities of Texas light crude. Instead, companies are shipping it abroad and finding lucrative new markets.
“Every single molecule from here on out has to be exported,” said Cynthia Walker, a senior vice president at Houston-based Occidental Petroleum, one of the largest Permian producers.
American crude is now sold to countries from South Korea and India to Italy and Colombia. Even the oil-rich United Arab Emirates buys some. The lifting of the export restrictions “is tantamount to one of the most important things that’s ever been done for the industry,” said Tim Dove, chief executive officer of Pioneer Natural Resources, headquartered near Dallas.
But the country is not “energy independent” in the way most Americans would conceive of the idea. Nor can anyone make the promise that America, as Abbott put it in a recent tweet, “will NEVER AGAIN depend on Foreign Oil Cartels for energy.”
That’s because the U.S. is still importing oil. Substantially less than the high point in 2005, but plenty: 1.4 billion barrels in the first half of this year alone, a third of which came from the foreign oil cartel known as OPEC, whose membership includes political minefields like Saudi Arabia and Venezuela.
The country will keep buying oil from other parts of the world indefinitely even as it sells more abroad, the U.S. Energy Information Administration forecasts.
Residents with no say in these decisions are stuck with the consequences, said Coyne Gibson, who lives in a part of the Permian that saw little oil and gas activity until a few years ago. He’s among a handful of West Texans who show up at hearings to object to soaring water use and waste disposal, even though “the outcome is almost always not in our favor.”
“The bitter, cynical way to look at this is, West Texas becomes an extraction colony for the fuel resources for the rest of the world,” said Gibson, a volunteer with the Big Bend Conservation Alliance who once worked in the oil and gas industry. “Everybody’s going to go hog wild and suck the region dry of everything they can without thinking of the long-term, big picture.”
Texas regulators, long criticized for being too industry-friendly, seem wholly unprepared for what’s happening. Booms, predictably, bring air pollution, oil spills, groundwater loss and contamination. But the state isn’t tracking or policing these problems aggressively. For example, the Texas portion of the Permian — roughly the size of Georgia — has only a few air pollution monitoring stations, leaving residents largely in the dark about what’s in the air they breathe.
In return for mostly leaving the industry alone, the state receives a lot of money. Oil and gas tax revenue is up more than 50 percent this year. The boom has created high-paying jobs for some residents, too. Said James LeBas, a Texas Oil and Gas Association economist who previously worked for the state comptroller’s office: “When oil and gas is doing well, the state is doing well.”
But there are major trade-offs — and not just for locals. Scientists warn this drilling rush almost certainly will worsen climate change by increasing the world’s fossil fuel use at a fraught time. They say drastic reductions in greenhouse gases are needed to avoid intensifying climate-linked disasters already pummeling the planet.
Read more at Blowout Part 1
Photo credits: Jerod Foster and Marjorie Kamys Cotera/The Texas Tribune