A Cubic Mile of Oil
Realities and Options for Averting the Global Energy Crisis
Ripudaman Malhotra, Ph.D.
SRI International
Menlo Park, CA 94025
Junior Statesman Symposium on Energy
August 5, 2009
Outline
Meeting global energy demand requires innovation
• Importance of energy in our lives
• A framework to discuss our energy
problem – a cubic mile of oil (CMO)
– Current status
– Future projections
• Options for increasing energy supply
or decreasing demand
• Bridging the gap through cycles of
innovation
A huge problem but an equally huge opportunity
Energy: Essential for Our Living
Wanted: cheap, clean, and plentiful energy
• We use it for:
– Growing our food
– Building comfortable homes
– Transportation
– Communication
– Entertainment
• Adequate energy required to:
– Remove the scourge of poverty
– Provide clean water, food, clothing, shelter
– Reduce and prevent diseases
– Protect the environment
– Mitigate global warming and climate change
– Reduce the threat of terrorism
A Cubic Mile of Oil (CMO)
A new framework
A Veritable Tower of Babel
Must make discussion of energy accessible and understandable
• Different units for different sources
– Gallons or barrels for oil
– Tons or BTUs for coal
– SCFs for natural gas
– kWh for electrical energy
• Lack of uniform units
– Presents a serious impediment to
meaningful discussion
– Creates confusion: millions, billions,
trillions, quadrillions!!!
A Cubic Mile of Oil - CMO
Understandable unit: mental image
CMO is a unit of energy coined by SRI’s Hew Crane while waiting in the
1970s gas lines. His realization: annual global oil consumption was
then approaching one cubic mile!
mile
Statue of Liberty
mi l
e
6
Visualizing a Cubic Mile
1 cubic mile = 1,000 sports arenas
CMO: Cubic Mile of Oil Equivalent
Unit appropriate for global energy flows
• 1 CMO 1.1 trillion gallons of oil
26 Billion (109) bbl oil
• 1 CMO current annual worldwide oil
consumption
• 1 CMO is equivalent to:
– 153 Quadrillion (1015) Btu (Quads)
– 6.4 Billion (109) tons of hard coal
– 15.3 Trillion (1012) kWh electricity
(At 10,000 Btu/kWh; not 3412 Btu/kWh)
1 Btu the energy from a
burning match
8 hours of cardio 1kWh 0.1 gal of oil
Annual Global Energy Consumption
We are living off our inheritance – how long will it last?
Income
Inherited
Total 3.0
CMO/yr
*2006 Data
Regional Energy Consumption
Affluence, not population per se, drives energy use
North America
Central/South
America
Europe
Russian Group
Asia/Pacific
Mid-East/North Africa
Sub-Saharan Africa
Additional 1.48 CMO
Additional 0.68 CMO
Projected Energy Demand by 2050
We will need several additional CMOs/yr
Recent energy growth rate: 2.5%/yr
Annual GDP growth rate:
World: 5.5%
China: 11%
India: 9%
2.6%
Σ
270 CMO
1.8%
214 CMO
0.8%
163 CMO
Variable profile, IPCC
179 CMO
From 3.0 CMO/yr we are moving to 9.0 CMO/yr
Our Inheritance
Don’t oil reserves run out in 40 years?
Reserves Depend on Technology and Price
Additional resources become viable at higher prices
13
Nuclear Power
An option we cannot ignore
• Opportunity
– Established scalable technology
– Low footprint
– Ample reserves
• Risks
– Fears
• Radiation Exposure
• Explosions
– Political Challenges
• Nuclear proliferation
• Terrorism
– Technical
• Long-term storage
– Cost (in part fed by fears)
• Nuclear fusion, if realized, would ameliorate these risks
1 CMO = 1 nuclear power plant a week for 50 years
Our Income Options
The Sun Offers 23,000 CMO/yr
And we are looking for just a few CMO per year, but…
Questions to Consider
• Does the source have CMO-scale potential to supply energy?
• What infrastructure is required for large-scale CMO use?
– Is it plug-and-play?
– New pipelines and transmission structure?
• What is its environmental footprint?
– Energy return on fossil energy invested?
– Competing land use issues?
– Biodiversity, habitat destruction?
• Can it compete with oil at $50/bbl, the cost of producing deep oil?
– If not today, in the foreseeable future?
Competition for green energy comes from cheap
fossil sources, not other green sources
17
Direct Solar
Storage systems are needed
• Cost
– PV about 35 cents/kWh
– Concentrating Solar Power competitively priced
• Intermittency
– Reduces availability to 20%
– Need > 4 times the installed capacity
• Location
– Solar homes and offices (PV): close to use,
but not enough
– Utility scale systems: remote from
population centers
– Electricity transmission
limited to < 1000 km
1 CMO = 250,000 roof-top systems a day for 50 years
Biomass
The only renewable that produces storable fuel
• Lots of hope and hype
• Global potential: 0.5 to 2 CMO
• May not reduce greenhouse gases
– Some options release more greenhouse
gases than direct use of fossil fuels
• Can disrupt food supply and result in
undesirable land-use practices
1 CMO = 85 times current world production of soybeans
Wind Power
Runs up against NIMBY
• Pluses
– Huge potential: several CMO per year
– Relatively low cost
• Minuses
– Intermittent: 25-30% availability; needs gas backup and/or storage
– Dilute: 8-10 MW/sq. mile
– Whose land? Habitat?
– Often remote from energy consuming centers
1 CMO = 1200 turbines a week for 50 years
Producing 1 CMO/year from Various Sources
Enormous task requiring trillions of dollars
• Hydro
– 18 GW with 50% availability
– 200 dams – 1 every quarter for 50 years
• Nuclear
– 900 MW with 90% av.
– 2500 plants -- 1 a week for 50 years
• Solar CSP
– 900 MW with 25% av.
– 7,700 solar parks – 3 a week for 50 years
• Windmills
– 1.65 MW with 35% av.
– 3 million – 1200 a week for 50 years
• Solar Roofs
– 2.1 kW with 20% av.
– 4.2 Billion – 250,000 roofs a day for 50 years
Current solutions are inadequate and pushing them could do more harm
Managing Demand
Efficiency and Conservation
Low-hanging fruit
• Efficiency: Using less energy to do what we do
– Easiest and most economical path
– Does not go all the way
– Historically, we end up increasing total
consumption!
• Conservation: Avoid what we need not do
– Tough to change lifestyles
– Switch to high-density urban living and mass
transit anyone? Vegetarian diet?
– Can have a substantial impact
1 CMO 100 billion CFLs!
Changes in Global Energy Mix Have Occurred Before
Transitions take scores of years
Why So Long to Get to Scale?
Many roadblocks along the way
• Expansion slowed by
– Inertia of the incumbent system
(sheer size)
– Market acceptability (cost)
– Resource limitation
– Infrastructure requirement
– Lack of trained personnel
– NIMBY, BANANA, and NOPE
• More rapid penetration possible
when aided by
– Strategic importance to military
– High-value products for niche markets
25
Conclusion
Innovation is the only way to solve our future energy needs
• Our planning cycle needs to
– Last for 40 years not four
– Transcend the prevailing price of oil
– Reducing demand from 9 to 6 CMO will be a major international
effort requiring new technologies
• We need a family of innovations
– Short term: efficiency, conservation, CSP, nuclear, public
education
– Intermediate term: Unconventional hydrocarbons, new engines,
biofuels, electrify transportation
– Long term: Thin-film PV, nuclear fusion,???
• “AND” is the operative conjunction
– To make an impact, we need all
technology options and more
– Nuclear AND solar AND wind AND…
26
Plant a Tree
Urgent because we are late
The great French marshal Lyautey once asked his gardener to plant a
tree. The gardener objected that the tree was slow growing and would
not reach maturity for 100 years. The marshal replied, “In that case,
there is no time to lose; plant it this afternoon!”
Thank you!
Additional slides
29
We Must Balance the Three E’s
Imperative to balance conflicting requirements
30
Visualizing a Cubic Mile
1 cubic mile = Manhattan under 150 feet of oil
Production and Consumption of Energy by Region
Asia Pacific and North America produce more energy than
the Middle East Region
Global Fossil Reserves and Resources in CMO
We have plenty of fossil fuels if…
Oil
46
Gas
Reserves
42
66
94
Additional
Additional
Resource
Resource
Additional
Additional
Resource
Resource
Unconventional
Unconventional
400
5,000
Tar sands, oil shales
Coal
Gas hydrates
120
Reserves
Reserves
1500
Additional
Resource
1 CMO = 2 coal-fired power plants a week for 50 years
Even with Exponential Growth…
• Current combined green energy
is about 0.005 CMO
• To get to 5 CMO, we require
a 1000-fold increase
• That’s about ten doublings
• With a doubling time of 4 years
(or 18%/yr), sustained growth of
over forty years is needed
It takes decades to effect significant change
34
Projected Energy Demand by 2050
Need additional energy on the order of several CMO/yr
We need global understanding,
participation, and financing to
meet our energy demands
Hydro plus nuclear today
Pickens’ Plan: Let’s Take a Closer Look
Not so easy
• Aims to reduce US oil imports: $700B
• By installing enough wind power to displace
gas-generated electricity, which is 20%
of US electricity
• The mismatch
– Electricity from natural gas:
– Net petroleum imports:
0.053 CMO
0.17 CMO
• Requires 117,000 3-MW turbines
over ca. 30,000 square miles
• Gas needed for backup turbines cuts into savings
• Reduction of petroleum imports require using the “freed” gas for
transportation: 100 million Honda GX NGV
At best, a part of the solution with huge costs
25 X 25 Alliances
Focusing on what can be done
US Annual Energy
Requirements in 2025
Gap Analysis
Electricity
48 Trillion kWh
Current Renewables
3.5 Trillion kWh
Renewables needed for 25%
21.5 Trillion kWh
(0.13 CMO in 15 years)
Liquid Fuels
7.3 billion barrels
Current Renewables
0.15 billion barrels
Renewable liquid fuels
needed
1.7 billion barrels
(0.06 CMO in 15years)
37
Energy and Economic Growth
Correlation but not a destiny
38
A bubble behind increased efficiency?
39
Residential and Commercial Buildings
Low-cost options abound
• Consumes about 51% of primary energy
– 39% in operations: HVAC, lighting, appliances
– 12% in materials: steel, concrete, glass, sheetrock
• Energy saving practices can pay off
– Better insulation, efficient lighting, efficient heating
• Smart grid
– Allows for added savings and increased use of wind and solar sources
• Green construction materials
Commercial Residential
40
The Cost Challenge
Meeting the Chindia Price
• Opportunity in developed countries
– Over $500 billion in renovations in the US
– Impact of adopting green practices is ~0.1
CMO/yr
• Bigger opportunity in developing nations
– New construction equivalent to the entire US is
projected for China/India over the next 10 years
– Several trillion dollars
• Potential impact of adopting green practices
– Ca. 2 CMO/yr
– Cost of using green materials in construction
is prohibitive
CHINDIA
Major innovations needed to produce cost effective solutions
41
Cycles of Innovation
• Focus on customer need
• Clear and compelling value proposition
• Beach-head product
• Iterate
Projected Energy Demand by 2050
We will need several additional CMOs/yr
Recent energy growth rate:
2.5%/yr
Annual GDP growth rate:
World: 5.5%
China: 11%
India: 9%
2.6%
Σ
270 CMO
1.8%
214 CMO
0.8%
163 CMO
Variable profile, IPCC
179 CMO
From 3.0 CMO/yr we are moving to 9.0 CMO/yr