(This was Volcanocafe’s 2016 April-fool story. The section at the end explains how the story was designed)
Park to be renamed Yellowstone National Resource
ExxonMobil to use Yellowstone for geothermal energy
It was announced this morning that ExxonMobil, the largest US oil company, has bought Yellowstone National Park. The price has not been revealed but is believed to be around 3.5 billion dollars. For this, the company gets a 99-year leasehold on the entire park, including all mineral rights. The deal was brokered by T. Boone Pickens, and involves funding from his hedge fund Boone Pickens Capital Management.
The park will be renamed from Yellowstone National Park to Yellowstone National Resource.
A spokesman for Exxon stated:
”ExxonMobil is already highly active in the area of renewable energy and this acquisition shows our commitment to a carbon-neutral future.
”Yellowstone National Resource is uniquely suited to geothermal energy generation. The heat covers a large area and is very close to the surface allowing energy generation at a very low cost per kWh.”
The US government has previously sold leases for 12 national parks to oil and gas companies for exploration and drilling, including Big Cypress National Park (Fl) and Aztec Ruins National Monument (NM). (One lease on an area of the Lewis and Clark National Forest was canceled earlier this year.) It was known that further requests were being considered and that Yellowstone was included on the list. However, this is the first time that an energy company is given full control of a national park.
Sources point out that Exxon, through its subsidiary XTO energy, owns a large part of the nearby Bakken oil field. This is the major shale oil field in the US, situated in North Dakota, about 300 miles from Yellowstone. Exxon has stated that it wants to double production there over the next 5 years. It has recently bought acreage from Henbury, another operator at Bakken, and is expected to put in a bid to buy Hess Corporation.
Whiting Petroleum, the largest producer in the Bakken field, had also expressed interest in Yellowstone but are believed to have been put off by the price set by the US government.
Exxon’s immediate reason for buying Yellowstone was not stated in the announcement. Sources at the BBC state that the electricity generated at Yellowstone will be used in the shale oil production at Bakken, in order to bring the cost of oil production there to below 30 dollar per barrel. This will allow Bakken to remain profitable at the current oil price.
Barrack Obama has put out a statement welcoming the acquisition, which was made possible by executive decision. He said that this would create a northern powerhouse stretching from Idaho to the Dakotas. Donald Trump tweeted his full support, saying that this would make the US great again and would unlock a remote and unproductive park. He proposes to sell all national parks.
Boone Pickens, when questioned on the deal on CNBC, said ”BP Capital Management is a major investor in energy infrastructure. This deal was too good to miss. We are expecting a return in excess of 20% on our investment in Yellowstone National Resource”.
Environmental groups have reacted with dismay. A legal challenge is being prepared, which will argue that mineral rights do not cover water and hydrothermal energy. Legal experts think this challenge will not succeed, pointing out that energy resources such as oil and gas are considered minerals under US law.
A test drill was done in October 2015, at the Porcelain Geyser Basin, while the Basin was temporarily closed to the public. The photo at the top was taken at that time. Porcelain Geyser Basin was chosen because it is the hottest of the geyser basins. The test used the type of equipment already operating in Iceland, and was fully successful.
Yellowstone will close to the public from June 2, 2016. Drilling rigs will be put up during June at all the major geysers. They will tap into the hot water reservoirs below the geyser, and use this to generate electricity through a so-called dry steam power plant. Because the water already comes out as steam, it can directly drive a turbine without the need for more expensive flash tanks or heat exchangers. The hot water is replenished through the natural circulation of the water. The geysers will no longer operate, as this would waste the geothermal heat and endanger the rigs. One of the conditions of sale is that Old Faithful will be allowed to operate once a day, with pay-for-view available via a webcam.
Prof. Robert Houston, from the Department of Geology and Geophysics at the University of Wyoming, has told Reuters that ExxonMobil also plans deeper drilling, to extract heat directly from the massive magma chambers. This is probably safe: there is only a small risk that the reduced pressure in the magma chamber would cause decompression melt of the chamber ceiling. According to Prof Houston’s models, there is no more than a 2% chance this would trigger a major eruption at Yellowstone.
When this was put to the ExxonMobil spokesman, he said that the Department of Commerce had deemed this risk to be acceptable. He also mentioned Exxon’s excellent safety record in oil production and transport, and said that the same rigid safety standards would be used at Yellowstone National Resource.
Share prices have responded strongly to the news. Halliburton is up 0.8% on rumours that it will provide and operate the rigs. Exxon Mobil Corporation is down 1%: investors are worried that it may have overpaid. Hess oil is up 3.3%, with investors speculating that there will be a bidding war for the company. Various Alaskan oil companies are down 1-2%. Investors have dismissed the suggestion that The Walt Disney Company may buy Yosemite National Park: its share price is almost unchanged.
This April-1 story was designed to appear implausible to the extreme, while in fact almost everything in it has a basis in fact.
Some history: geothermal drilling into the geysers was done in 1927, at Old Faithful. This was done for science: see this report. There has been some scientific drilling more recently, for strain measurements, obviously avoiding the hot springs. No one has proposed using the geysers for geothermal energy: I made that part up. However, it is based on technology which is actually used in Iceland.
A proposal to open up Yellowstone for commercial exploitation (phrased in a oblique manner) was made in 2014 by a politician running for governor. The link was kindly provided in one of the comments above. Comments attributed to various politicians and organisations are in most cases loosely based on actual statements, although taken completely out of context.
ExxonMobil has never proposed for exploration inside the park, to the best of my knowledge. It is involved in work around the park and the company was held responsible for an oil leak into the Yellowstone river in 2011. It has cleaned up the damage (at a high cost) and fixed the pipeline problem, but the mention of their excellent safety record in oil transport is an indirect reference to that accident. There are leases and future plans for areas bordering the park. A Canadian company has asked for permission for exploratory drilling for gold and minerals along the Yellowstone river north of the park. http://thinkprogress.org/climate/2014/07/16/3460799/drilling-yellowstone/ . South of the park (but not too close) there was at one time a plan for large scale gas drilling: see http://wilderness.org/blog/drilling-greater-yellowstone-massive-outcry-erupts-over-well-pads-wildlife-areas
Prof Houston does exist but none of the statements attributed to him have any basis in reality.
Share price movements mentioned in the post were correct as of this morning, but the explanations given here are entirely fictitious.
To drill into a magma chamber to reduce the pressure has been proposed in reality, although without considering whether this might make an eruption more rather than less likely. A risk of 2% of a disaster would be unacceptable in issues of health and safety. However, here it is attributed to the Department of Commerce: the financial and business world takes a different view to what risk level is acceptable. Just ask Lehman Brothers – or their financial oversight.
So I took the different aspects, all based on reality, and extrapolated them. I considered the push for private ownership over the state (the ‘smaller state’); the mining riches of the area, tempting to any company, and the way a company would justify mining the park. That put geothermal (‘green’) energy on the radar.
I am grateful to the various people who helped put the story together. Lughduniense artfully composed the photo at the top. GeoLurking helped getting the politics correct. Any errors are entirely due to me. And if you did see a level of truth in the story, we have something in common. In all of its seemingly implausibility, this is in fact a scarily possible future.
/Albert, 1 April 2016