MEGAPROJECTS FOR MEGAWATTS
The challenges of keeping Arthurista powered up For all the recent trials Arthurista has gone through, one aspect of government policy seems to be scarcely discussed in the public forum, yet vitally important in keeping the Arthuristan economy growing in a sustainable manner in the coming decades – an elephant in the room in the form of energy.
Most Arthuristans, of course, are anxious to see a decrease in the nation’s carbon emissions and a smooth transition to clean, renewable alternatives. In a sense, Arthurista has begun to develop renewable energy since the 1970s, when efforts to develop hydroelectric power in the mountainous interior started in earnest. This culminated in the Rorkeshire Dam which was completed in 1985, capable of generating 98.6 terawatt-hours per year. Complementing them are windfarms which have begun to spring up in the highlands.
The day in which Arthurista’s energy needs can be totally met by renewables, however, lay at some distance in the future. The urgent question remains – how do we keep the country powered up in the interim?
Peak oilThe roots of the current predicament lay just off the south coast of the country. When the Great Channel Field, shared roughly halfway each by Arthurista and Ulthrannia, was discovered in the 60s, it was regarded as a gift from the gods. While Arthurista never became a mighty petro-power, there was enough oil and gas production to make the nation self-sufficient in energy – a major booster that helped to redress the balance of trade following the 1980s-depression. At its peak in 1999, production on the Arthuristan side amounted to nearly 398 million barrels over the course of the year. By then, however, nearly half the known reserves were exploited, and production decreased steadily to 220 million barrels in 2007, the year Arthurista began to once again import oil in decades. Gas production is anticipated to peak soon and thereafter follow the same declining trend. Since then, increasing purchases from POPE exporters – mainly Anthor, Talibastain and the UAS, have been used to fill the gap. For the current cross-party consensus on delivering steady growth, smoothing out economic cycles and, most importantly, minimising the risk from external shocks, this state of affairs is not optimal. Furthermore, for many policy planners, the spectre of global peak oil hangs like a razor sharp Sword of Damocles. It is hard to do precise estimations, naturally – data for reserves remaining is a closely-guarded secret for most producers. Having seen one peak happen, however, it is not hard to imagine it magnified to a world-wide problem.
Enhanced extraction“Unconventional sources” of hydrocarbons feature heavily in current Arthuristan plans. They are centred in two areas in the central highlands – the Denning Shale and the Bulwarkshire Tar Sand. Together, they represent total of some 175,000 million barrels in place per the current ‘guestimate’. It goes without saying that ‘resources’ are not ‘reserves’, and ‘reserves’ are not ‘supplies’ – geologists are still trying to assess how much of that oil is extractable using current technology, and how much of that extraction is economically viable at given price levels – both major unknowns when dealing with such unconventional sources. In any case, both fields have a variety of unique challenges which must be overcome before they can be exploited in scale.
The Denning Shale, a Late-Cretaceous sedimentary rock formation in the eponymous county, contains large deposit of oil and gas –bearing shale. Moreover, the oil that it produces is ‘light, sweet crude’, easy to pipe and refine. Production, however, is a highly difficult exercise, necessitating the use of hydraulic fracturing (better known as ‘fracking’) and horizontal drilling, processes whose environmental impact, especially the emission of toxins which pollute nearby water sources, are well known. Moreover, where in a conventional field a well may last for decades before enhanced extraction techniques are needed, a well in the shales has an average shelf life of three years before it becomes unviable. The coalition of oil and gas producers which have grown up in recent years to exploit the Denning Shale plans to develop new wells in rapid succession, sweeping across the region as older wells are run down – a rather expensive proposition unless world oil prices are high enough, and highly damaging environmentally.
However much bad press the Denning Shale has received, it does not compare to the mountain of hate mail that Bulwarkshire Petroleum must have accrued. There are plenty of drawbacks to exploiting tar sand (or ‘oil sand’, as it is marketed by BP) – as the name suggests, the extracted product is extra heavy crude, just a step above the bitumen used to pave roads, a viscous, tar-like liquid difficult to pipe and expensive to refine. Moreover, it takes a substantial amount of energy to bake it out of the sand itself. A new nuclear power plant in central Bulwarkshire is envisaged to be completed in mid-2016 and, when it is finally operational, production costs are anticipated to decrease substantially. In the meantime, however, the whole operation relies on the county’s gas-fired power plants, a costly operation. Unlike the Denning Shale, actually extracting the tar sand is absurdly simple by comparison: garden variety open air strip mining is all that it takes - after one introduce kilometres of virgin rainforests to bulldozers, of course.
Cultivating dieselFor oil and gas companies, shale and tar sand represent ‘high risk, high reward’ ventures. Exploiting the immense reserves which may be available requires significant investment and accepting high levels of sunk costs. Other companies, most notably Greenleaf Energy, have decided to take an entirely different approach.
Alleghania is the breadbasket of Arthurista. With the domestic agricultural sector running down in the mid-60s, a huge quantity of foodstuffs is imported from across the sea. Recently, this began to include large consignments of rapeseed, which is distilled and processed into biodiesel in the huge refineries being built in a number of coastal cities.
“We’re doing the high-value added processes domestically, you see?” Greenleaf’s CEO Charlene Stockport said in an interview earlier this month, “we’ll be creating a large number of jobs in these areas. Given the degree the government has helped us to become established, not least the amount amount invested by the Sovereign Wealth Fund, it was the least that we could do to repay the nation’s generosity. Biodiesel is a significant growth sector and we’re anticipating a significant expansion of our operations over the next few years. Our shares have done tremendously well ever since our IPO two years ago. Unfortunately, so has the price of rapeseed, from the speculative pressure exerted by commodity traders around the world. In the future, we hope to explore options to expand up the supply chain, perhaps by forming joint enterprises with Alleghanian growers. This should help to insulate us from external price shocks.”
Counting the costsBillions of pounds of taxpayer money have been sunk into subsidising these projects over the years. Whether they will ultimately pay off in the long run is still too early to tell, although most analysts are optimistic. The environmental costs have been equally monumental – every dam inundates kilometres of river valley, every open air tar sand mine means thousands of acres of highland cloud forests destroyed. Most worrying for the majority of the population, however, is the extensive use of eminent domain by the government to requisition land held by Tribal Arthuristans in the interior. While many welcomed their newfound affluence and migrated to find new opportunities in the coastal cities, others were less enthusiastic about the new projects.
“This is our home, our birthright, the land on which our ancesters once walked and in which they were buried, the land given to us by the gods,” so said an anonymous spokesperson from the Tribal terrorist group, the Army of Taranis, “do not expect us to lay supine and powerless while you demolish what is ours.” In 1982, in retaliation to the use of eminent domain to relocate two Tribal towns in the wake of the Rorkeshire Dam project, the AoT assassinated Harry Wheeler, Secretary of State for Energy, with a carbomb in central Loweport, killing 16 bystanders along with him. In 2008, an attempt to attack the Bulwarkshire Tar Sand mines was foiled at the last minute by the CSS. More moderate attempts to protest the use of eminent domain in the interior has found much sympathy even among the urban coastal population – the Tribal Land Rights March of 2007 was attended by HH Princess Elbareth herself, for instance. As more of the nation’s interior is developed in a bid to stay ahead of peak hydrocarbons, these tensions are very likely to be an ever-present thorn in the government’s side.