Greece’s “Hydrocsrbons deposits”. Fantasy vw Reality

GREECE’S “HYDROCARBONS DEPOSITS”: FANTASY VS REALITY

By

Leonidas Petrakis*, PhD

(* Leonidas Petrakis holds a PhD in Physical Chemistry from the University of California, Berkeley; has taught at various universities-in the US, France and Greece; was Department Chairman and Senior Scientist at Brookhaven National Laboratory; and worked in the private sector. He specialized in energy and environmental issues, and has authored, coauthored, or co-edited six books and more than one hundred and fifty scientific studies in peer-reviewed journals.)

“Hydrocarbons” for Greeks have become prohibitively expensive as heating and transportation costs rise and incomes drop. At the same time, hoped-for “hydrocarbons deposits” are touted as potential panacea for Greece’s economic woes, key to a new beginning that promises cheaper energy while exporting surplus quantities to energy-starved Europe; eliminating the country’s staggering debts; and providing a solid basis for economic growth and prosperity. They have become the mantra of pundits and columnists who seek to ascertain the true value of this national treasure or to expose foreign conspiracies that aim to usurp it. The reported discoveries off the coast of Cyprus have increased the interest in Greece’s own “hydrocarbons”, with outsiders such as the Deutsche Bank getting into the act repeating or enhancing the good news. The frenzied euphoria is breathtaking, focused on how much and how soon the “hydrocarbons” will be filling the national coffers -most optimistic estimates envisioning a trillion of euros starting within four years.

It might be useful to stand back, take a deep breath, and assess the situation. The US experience provides a realistic indication of what Greece and other poor countries are up to as they attempt to develop their “hydrocarbons”, real or hoped-for.

The US “hydrocarbons” era began in 1859 when oil wells (literally “gushers”) were drilled in Pennsylvania and later in Texas and elsewhere. Hydrocarbons were responsible to a large degree for the Twentieth Century becoming the American Century, and they continue to be of central concern as evidenced by the debates in the recent Presidential elections. Hydrocarbons took central national stage during the 1970’s following the Arab oil embargo and the Iranian Revolution. President Carter spoke of the “energy crisis” as the “moral equivalent of war”, and he even took symbolic steps to engage the public-famously appearing in his woolen sweater, advocating lower thermostat settings, and installing solar panels on the White House. President Reagan promptly removed them and also sought drastic loosening of regulations for the exploration and production of “hydrocarbons”. President Bush (the father) issued a comprehensive National Energy Policy that would finally put the country on the path of true energy independence, prosperity and security.

The reality, however, has been very different. In 1970 the US met 40 percent of her petroleum needs with imports and paid 35 cents for a gallon of gasoline, while now imports have reached 65 percent and gasoline costs ten times as much. This sobering picture from the most powerful country in the world shows the daunting challenge that confronts Greece and other poor countries. Their prospects indeed loom starkly when one considers that the US started with “gushers”, and is in possession of a powerful panoply necessary for success: extraordinary public and private technological capabilities (Greece is dismantling its modest geological research organization, IGME); and huge financial resources for investments. These of course are made for profit, and can lead to conflicts with local national interests -a point worth remembering, especially in view of the agreements the Greeks recently made as they desperately sought to secure the latest tranche from the Troika.

Greece’s liquid “hydrocarbons” were first investigated in 1860, one year after in the US, but they have had a very different trajectory. Those first explorations were in the Ionian Sea near Zakynthos, but the finds were commercially insignificant.  Since the 1960’s, efforts (apparently some not reported) have been made to locate domestic “hydrocarbons”. Over two hundred wells have been drilled, the most striking success being the Prinos field. Its production peaked in the late 1980’s, and it currently produces less than 2000 barrels per day -from expensive deep wells almost to 3000 meters- that cover less than one percent of the country’s needs.

The recent clamor for aggressive drilling is focused again on the Ionian Sea, western Continental Greece, and south of Crete, and it is based to a large extent on the existence of geologic formations (similar to Venezuela’s) that favor the trapping of fossil fuels. The mere existence of favorable formations does not guarantee the presence of deposits. Drilling is required to confirm their existence and quality. Newer techniques (reflection of seismic waves) can provide 3-dimensional maps of possible deposits and guidance where to drill. But drilling is very expensive and potentially much more dangerous as the depths of the wells increase. Cemented deep wells (up to 60 percent) develop cracks in time and leak oil. Some of the deepest parts of the Mediterranean Sea are south of Crete and in the Ionian Sea (just west of Pylos the NESTOR neutrino experiment detectors are at the bottom of the sea at 4000 meters.) It is difficult to be exuberant regarding “hydrocarbons” filling the Greek Treasury any time soon.

“Hydrocarbons” (more correctly fossil fuels since most often they are not made up only of carbon and hydrogen) have played a significant role in the industrialization and prosperity of the developed nations, and therefore the envy of the developing nations. But this has come at a very steep price.

Fossil fuels are remnants of luxuriant plant and abundant animal life that existed earlier on the Earth. During geologic time they underwent chemical and physical transformation resulting in their current forms -sometimes solids, others liquids, or gases; often of very complex chemical structures; trapped by geologic formations or intimately comingled with other minerals; near the surface or in deep off-shore formations. Their extraction, processing, transportation, and use are complex operations, ever more expensive as the sources become progressively depleted. And all these operations have consequences -just to cite the 2010 BP Deepwater Horizon disaster in the Gulf of Mexico; the Santa Barbara Channel and the Exxon Valdez spills despoiling the magnificent California and Alaska coasts; the choking photochemical smog in Athens and the other major cities around the world; and global warming, most insidious, with the alarming levels of carbon dioxide now approaching 400 parts per million (up from about 270 before the Industrial Revolution), that have brought the planet to  an “ecological cliff”.

These consequences have come about from the use of approximately one half of the total existing fossil fuels, and unfortunately all too often even with companies with great experience and expertise.

Fossil fuels remain ubiquitous, but they are finite, not inexhaustible. And discovering them does not follow that they are of commercial value. The geologist M. King Hubbert correctly predicted the year of peak oil production in the US (1970), and world production started declining in 2005. The International Energy Agency has stated that conventional oil production peaked in 2006. W. J. Cummings of Exxon-Mobil declared in 2005, “All the easy oil and gas in the world has pretty much been found. Now comes the harder work in finding and producing oil from more challenging environments.” Lord Ron Oxburgh, Chair of Shell UK (Royal Shell Dutch), has declared, “It is pretty clear that there is not much chance of finding any significant quantity of new cheap oil. Any new or unconventional oil is going to be expensive“.

The industry, however, increasingly eager for profits (Lord Oxburgh has chided some of its leaders for having their heads “almost in the sand“), hasresorted to aggressive techniques in order to draw marginal quantities or to access resources in deep waters or in tight geological formations. In hydraulic fragmentation (“fracking”) large quantities of water together with a cocktail of chemicals are injected under high pressure into the gas-containing formation thereby fragmenting it and releasing the hydrocarbons. The consequences of such approaches can be disastrous, with the chemicals polluting the water supply, and possibly triggering earthquakes in areas that were free of earthquakes prior to fracking.

These aggressive techniques potentially could wreak havoc anywhere in the world (to the environment, water supplies, biodiversity, quality of life), but they are particularly ominous for a closed system such as the Mediterranean, already burdened by other pollutants. Many countries around the basin are pursuing drilling, with Berlusconi’s Government having granted scores of licenses to eager companies, some irresponsibly seeking permission for exploring even a formation with an underwater active volcano (Empedocle, in coastal Sicily)! Given this expansion of drilling, it is a matter of when, not if, a major mishap will occur in the Mediterranean. Greece’s “heavy industry” is her tourism with crown jewels the uniquely beautiful islands, alluring coastline, and crystal clear waters ideal for recreational cruising and commercial fishing. A major mishap will have catastrophic consequences for her tourism.

Greece faces a dilemma: give in to the siren song of “hydrocarbons” for a few years of questionable profits, but risk ecologic catastrophe, in the end still in hock, with mortgaged national resources and sovereignty, ever the suppliant with hat-in-hand begging for the release of the next tranche; or opt for bold, truly innovative approaches to meet her energy needs using her own inexhaustible and free resources(sunshine and favorable winds) and, together with conservation policies, lead the way to a more sustainable prosperity and true energy independence. Germany, with distinctly less favorable climate than Greece, has already a huge installed solar capacity, and, like Sweden, is also abandoning nuclear energy (which once was touted that it would produce electricity too cheap to even bother measuring it!)

The Greek people (the majority of whom are being buffeted by policies put in place during the last few years by politicians inept at best, lying, flip-flopping, and at times outright corrupt) in order to make their decision deserve an honest and robust debate, rather than the endless repetition of the Panglossian soporifics proffered so far, which amount to no more than that notorious chant “Drill, baby, drill“!