Oil drilling technology leaps, clean energy lags

By Jonathan Fahey

Associated Press

Published: Thursday, May 2 2013 11:44 a.m. MDT

This Wednesday, July 27, 2011, photo, shows the computer screens and other monitors used by the drilling operator to drill into the Marcellus shale at a Range Resources well site in Washington, Pa. Technology created an energy revolution over the past decade, but Old Energy is winning. Oil companies big and small have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away.

Keith Srakocic, Associated Press

NEW YORK — Technology created an energy revolution over the past decade — just not the one we expected.

By now, cars were supposed to be running on fuel made from plant waste or algae — or powered by hydrogen or cheap batteries that burned nothing at all. Electricity would be generated with solar panels and wind turbines. When the sun didn't shine or the wind didn't blow, power would flow out of batteries the size of tractor-trailers.

Fossil fuels? They were going to be expensive and scarce, relics of an earlier, dirtier age.

But in the race to conquer energy technology, Old Energy is winning.

Oil companies big and small have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away. New imaging technologies let drillers find oil and gas trapped miles underground and undersea. Oil rigs "walk" from one drill site to the next. And engineers in Houston use remote-controlled equipment to drill for gas in Pennsylvania.

The result is an abundance that has put the United States on track to become the world's largest producer of oil and gas in a few years. And the gushers aren't limited to Texas, North Dakota and the deep waters of the Gulf of Mexico. Overseas, enormous reserves have been found in East and West Africa, Australia, South America and the Mediterranean.

"Suddenly, out of nowhere, the world seems to be awash in hydrocarbons," says Michael Greenstone, an environmental economics professor at the Massachusetts Institute of Technology.

The consequences are enormous. A looming energy crisis has turned into a boom. These additional fossil fuels are intensifying the threat to the earth's climate. And for renewable energy sources, the sunny forecast of last decade has turned overcast.

This is the story of how technological advances drove a revolution no one in the energy industry expected. One that is just beginning.

EXPLORING ENERGY FRONTIERS

The new century brought deep concerns the world's oil reserves were increasingly concentrated in the Middle East — and beginning to run out. Energy prices rose to record highs. Climate scientists showed that reliance on fossil fuels was causing troubling changes to the environment.

"The general belief was that the end of the oil era was at hand," says Daniel Yergin, an energy historian and author of "The Quest: Energy, Security and the Remaking of the Modern World."

As a result, Wall Street, Silicon Valley and governments were pouring money into new companies developing alternative forms of energy that promised to supply the world's needs without polluting.

Even oil and gas companies got in the game. BP had adopted the slogan "beyond petroleum" in 2000 and threw millions into its solar division. Shell partnered with another company to fire up a plant to convert agricultural waste into ethanol.

So strong was the lure of alternative energy that veterans of the oil patch began fleeing for startups.

In 23 years at Shell, David Aldous helped develop projections that showed a booming world population and rising energy demand. He also saw how hard it was for big oil companies to find enough oil every year to replace all they sold. He left Shell to join Range Fuels, a company that promised to turn wood chips into ethanol, in 2008.

"I felt we needed faster innovation," he says.

THE RACE FOR NEW TECHNOLOGY

But while the national focus was on alternatives, the oil and gas industry was innovating too. New technology allowed drillers to do two crucial things: find more places where oil and gas is hidden and bring it to the surface economically.

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