SC 213 SLATE: OUR ENERGY
FUTURE
Week Two: Fossil Fuels
John Bush
October 14, 2005
SOME QUESTIONS
• Does humanity face an energy crisis?
NO!
• Then what is the nature of the “crisis”?
1)The availability of energy in a form that is
consistent with sustaining the current American
lifestyle (which has become the desired lifestyle
of the World) appears to be rapidly diminishing.
2) The continuance and spread of the American
lifestyle arguably will make the Earth a very
uncertain and unpleasant place to live.
WHAT DO I MEAN BY “THE
AMERICAN LIFESTYLE”?
• Dispersed location of housing, work & services
• Primacy of individualized personal transport
• Relatively low cost, flexible distribution of goods
and services
• Productive agriculture achieved with high energy
input and low labor.
• Adequate, reliable access to low cost utilities:
water, fuel, communication, electricity
THE OIL & GAS SHOCK
We Americans will have to deal with a
crisis brought on by the decreasing
availability to us of particular forms of
fossil fuels.
At first we may respond to the shock
as we did to the 1973 “Oil Shock”
THE 1973 OIL SHOCK:
CONSEQUENCES & RESPONSES
• Inflation: rapid rise in costs of heating/cooling,
transportation, food, materials, services…..
• Panic buying in response to wild swings in
availability/cost of oil and gas
• Emphasis on behavior resulting in efficient use
of oil and gas: reduction of energy input per
unit of GDP
• Enormous build-up of energy r&d and
demonstration programs
• Altering of behavior to decrease consumption of
goods and services, especially those with high
dependence on oil and gas… leading to
stagflation or economic depression?
THE OIL & GAS SHOCK: NEAR
TERM POLICY OBJECTIVES?
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•
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•
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Secure access to proven oil & gas reserves
Secure delivery systems for crude oil & gas
Enhance domestic infrastructure for processing oil & gas
Stimulate the development of domestic oil & gas
Implement the means to cushion economic dislocations
resulting from swings in the availability/cost of oil & gas
• Stimulate the development and implementation of
technologies that result in efficient use of oil & gas
• Encourage the use of coal-generated electricity in
applications now dependent on oil & gas, subject to a
carbon dioxide constraint
• Encourage rd&e to create acceptable alternatives to oil &
gas
Energy Research
• For comparison, the European Union is
completing a $1 billion program on renewable
energy to end in 2006, and expects double that
afterwards to 2010.
• In 2005, the US will spend $1 billion, but mostly
at national labs (DOE National Renewable
Energy Laboratory in Colorado), but university
funding is “bleak”.
• Stanford has a Global Climate and Energy
Project (GCEP) of $225 million over ten years
from industry.
Fossil Fuel Future Summary
• Oil, Natural Gas, Shale Oil, and Coal produce CO2.
– Carbon sequestration requires an extra 30% of power and needs
research. FutureGen $1 billion research plant.
• Oil is needed for transportation fuel
– Too expensive for electricity generation
– Total world reserve of oil is a large question, uses politically
motivated estimates of individual countries and industry secrets
– Reserves: About 50 years with growth in use
– 2/3 is in the Middle East
• Coal may last 100 years with growth in usage, but only
70 years if partly converted to replace oil
• Current rate of use of fossil fuels will increase worldwide
THE OIL & GAS SHOCK: NEAR
TERM POLICY OBJECTIVES?
•
•
•
•
•
Secure access to proven oil & gas reserves
Secure delivery systems for crude oil & gas
Enhance domestic infrastructure for processing oil & gas
Stimulate the development of domestic oil & gas
Implement the means to cushion economic dislocations
resulting from swings in the availability/cost of oil & gas
• Stimulate the development and implementation of
technologies that result in efficient use of oil & gas
• Encourage the use of coal-generated electricity in
applications now dependent on oil & gas, subject to a
carbon dioxide constraint
• Encourage rd&e to create acceptable alternatives to oil &
gas
DIALOG
• If these objectives are met what will it mean for
the oil & gas crisis?
America will have a bridge into a postoil & gas era (POGE).
• How long do we have?
• What will provide the energy needed to maintain
the American lifestyle in the POGE?
That is what our Slate will try to
answer.
DIALOG (CONTINUED)
• If these objectives are met what will it mean for the
global climate?
The rate of carbon dioxide addition will be
decreased but the World will be irrevocably
committed to some consequences of global
warming.
The severity of the consequences will depend on
what happens elsewhere in the World.
• What if we conclude that in the time frame of the POGE
bridge adequate replacements for oil & gas cannot be
established?
Then the American lifestyle cannot be maintained
and we will have to think the unthinkable.
FOSSIL FUELS
•
•
•
•
•
•
Petroleum
Terrestrial Natural Gas
Coal
Bitumen (“Tar Sands”)
Kerogen (“Oil Shale”)
Seabed Methane (Methane Hydrate)
WHY OIL & GAS?
•
•
•
•
•
•
•
Huge, industrial scale quantities occur
Accessible with proven technology
Reasonable cost
Reliable supply
Relatively clean burning
Relatively lower carbon dioxide production
We have built a huge infrastructure that is
dependent on oil and gas
WHY NOT OIL & GAS?
• Economists argue that there will always be
plenty of oil and gas if we are willing to pay for it
• Geologists argue that there is a finite global
resource of the “good” kind of oil & gas that has
made the American lifestyle possible
• At issue: when will the production peaks of the
“good” kind of oil and the “good” kind of natural
gas be reached?
ARE WE RUNNING OUT OF OIL?
Historically observations about oil supplies have not
been very reliable
• 1855: “Hurry before this wonderful product is depleted”
• 1874: “The US has enough petroleum to keep its
kerosene lamps burning for only four years”
• 1979: “The US will exhaust its own petroleum reserves in
about 10 years”
• 2005:“World oil discoveries peaked in the 1960s. You
can’t pump what you haven’t found. Where will that
additional oil production come from and at what price?”
World Oil Growth and Decline - Pessimistic
2 Trillion Barrels Total Recoverable
Optimistic 3Trillion Barrels Total
Recoverable: US Geological Survey
Peaking of World Oil Production
Hirsch Report: Feb. 2005
THE CRITICAL QUESTIONS
• How long does America have until the “good”
fossil fuel becomes too scarce and costly to
support the “American Lifestyle”?
• How much carbon dioxide from the combustion
of fossil fuel can the Earth accommodate until
the consequences for the “American Lifestyle”
become intolerable?
SOME POSSIBLE VIEWPOINTS
• Oil
– At or past the peak of world production
– Good for another 30 -50 years
– There will always be plenty
• Gas
– Non-domestic sources are too risky
– Good for another 50-75 years but the peak will come sooner
– There will always be plenty
• Global Warming
– It is too late to stop it—things will only get worse with more fossil
fuel combustion
– Restricting future carbon dioxide emissions can keep the Earth
livable
– Global warming is a myth or it is in fact beneficial
SOME POSSIBLE ELEMENTS OF
POLICY I
Extend the availability of oil and gas as long as
possible
• Locate more deposits of oil and gas
• Apply improved management practice and technology
for oil and gas recovery, transport and processing
• Convert coal, bitumen, kerogen, and biomass to oil and
gas equivalents
• Develop and apply carbon dioxide sequestration
• Emphasize efficiency in conversion and use, especially
in transportation, over and above the cost-induced
efficiency improvements
SOME POSSIBLE ELEMENTS OF
POLICY II
Substitute electricity for fossil fuels wherever
that is feasible*
•
•
•
•
•
From natural gas
From coal
From nuclear fission
From nuclear fusion
From renewables: wind, hydro, solar, geothermal, tidal,
biomass…
• Apply especially to transportation
* “Feasible” combines the ideas of technical feasibility with
economic, political, and environmental acceptability
SOME POSSIBLE ELEMENTS OF
POLICY III
•
•
•
•
•
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Substitute hydrogen for fossil fuel use
wherever feasible*
From natural gas
From coal
From nuclear fission
From nuclear fusion
From renewables
Apply especially to transportation
TWO “EXTREME” VIEWPOINTS
• “Super-optimist”
-Always will be enough oil and gas
-Global warming is no problem
• “Super-pessimist”
– Past the peak for oil and importing gas is too
risky
– It is already too late; things will only get worse
POLICY RESPONSES
• Super-optimist
– Locate more oil and gas
– Manage these resources well
– Economics will take care of the rest
• Super-pessimist
– Develop and apply carbon sequestration
– Emphasize super-economic efficiency
– Shift to electricity derived from coal, nuclear fission,
and renewables, and apply to transportation
“MOST REASONABLE VIEWPOINT”
• Oil: we are at or past the peak of world
production.
• Gas : We are good for another 50-75
years, but the peak will come sooner
• Global Warming: Restricting carbon
dioxide emissions can keep the earth
livable.
POLICY RESPONSES
• Locate more deposits of oil and gas
• Apply improved managements practices for oil and gas
recovery, transport and processing
• Convert coal, bitumen, and kerogen to oil and or gas
• Develop and apply carbon dioxide sequestration
• Emphasize super-economic efficiency
• Substitute electricity for fossil fuels wherever it is feasible
using coal, nuclear fission, and renewables
• Substitute electricity for fossil fuels in transportation
FOSSIL FUELS
Petroleum
Terrestrial Natural Gas
Coal
Bitumen (“Tar Sands”)
Kerogen (“Oil Shale”)????????
Seabed Methane ?????????????????????
TOPICAL ORGANIZATION
• Locating oil and gas
• Management and technology for recovery of oil
and gas (including methane hydrates)
• Coal for electricity generation
• Carbon dioxide sequestration
• Conversion of natural gas to liquid fuel
• Conversion of coal to liquid and gaseous fuel
• Conversion of bitumen to liquid fuel
• Conversion of kerogen to liquid fuel
LOCATING OIL AND GAS
• How much is there left to find?
– World Oil: USGS 3000 bbl
– US Oil: USGS 32 bbl
– US Gas: 55 TCF below 15,000 ft, 460 TCF in tight formations
• Where is it likely to be?
– Middle/Far East; Arctic Ocean; Deep Cont. Shelves
– Arctic Wildlife Preserve; California/Florida Coasts; National
Forests
• What are the negatives?
– Threat to wildlife
– Visual/chemical pollution
• What are some technology possibilities?
– Refined 3D and 4D seismic analysis
– Deep drilling technology
– Miniature drilling technology
RECOVERY OF OIL AND GAS
• Enhanced Oil Recovery
– Primary Recovery 10%
– Secondary Recovery 20-40%
– Tertiary Recovery 30-60% US 700,000 bls/day
• Steam/Carbon Dioxide injection
• Gas Injection
• Chemical injection
• Stripper Wells
– 393,000 wells produce 15% of US oil
– Produce lots of contaminated brine: 300:1
• Methane Hydrates
– Continental shelf/Arctic permafrost
– US 2,000-200,000 TCF
– Potentially 40-400 years of US consumption
GENERATION OF ELECTRICITY
FROM COAL
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•
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US has enough coal for 80-120 years
About half of US electricity comes from coal
US has a substantial infrastructure in place
Coal or Gas?
– 1999-2003 Gas fired-134,000 MW; Coal-fired 500 Mw
– Currently 115 coal-fired plants under construction
• Negatives of coal to electricity
– Coal generates twice as much carbon dioxide per unit of energy as
natural gas
– Air pollutants
– Aesthetics/water contamination
– Cost/reliability of electrical transmission system
– Reliability of transport of coal
US Coal Lifetime
ECONOMICS OF GENERATION
• Fuel Costs—Coal is a lot cheaper than gas per
energy unit
– Break-even if gas $3.50-4.00/Mbtu (2002 $)
– In 2002 gas was $ 2.50/Mbtu
• Capital Costs
– Gas-fired CC $550-700/kw; OC $350-550/kw
– Coal-fired FB $1100 -$1300/kw; IGCC $1300$1600/kw
• IGCC with Carbon Dioxide Capture
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Eastern Coal; 629 MW
$1.2 B $1900/kw ($900/kw in 2002?)
AEP/GE/Bechtel
Goal: a standardized plant design
CARBON DIOXIDE SEQUESTRATION
• Elements of technology have already been
demonstrated but not integrated: capturetransport-disposal
• Several projects underway
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FutureGen $1B over 10 yrs.
Statoil in North Sea bed
BP Scotland 350 MW planned
BP Algeria
• It adds costs of energy and capital to IGCC
– Capture adds 2.5 to 4 cents/kwh
– Underground storage adds 1 to 5 cents/kwh
CARBON DIOXIDE SEQUESTRATION
• There seems to be storage capacity
– UN IPCC capacity for 80 years worth of current
carbon dioxide emissions
– Estimate 99% likelihood that will stay in place for 100
years
• Is it hazardous?
• Some wilder idea
– Ocean sequestration
– Stimulation of terrestrial uptake
– Genetic manipulation of plant life
CONVERSION OF NATURAL GAS TO
LIQUID FUEL (GTL)
• A solution to the “stranded gas” problem
• An alternative to LNG shipment
• Process
– Reform methane to syngas (7 projects)
– Use Fischer-Tropsch to make syncrude
– Refine to ultra-clean burning diesel fuel
• Projects
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Tulsa Okla. DOE Demo 70 bl/day $38 M
Qatar Exxon/Chevron/Shell 750,000 bl/day $20 B
Oman /Malaysia
Possibility for Alaska?
• Estimated production costs $14 /boe
CONVERSION OF COAL TO LIQUID &
GASEOUS FUEL
• Gasification is the first step
• Convert to methane: DOE failed demonstration
• Convert to diesel
– Convert syngas to syncrude and refine
– Nazi Germany/ South Africa
– Economics may favor over gtl
• Convert to methanol: Air Products and
Chemicals
CONVERSION OF BITUMEN TO
LIQUID FUEL
• “Tar Sands”: Canada and Venezuela
• Athabasca tar sands
– 178 Bboe in place
– Bitumen does not flow spontaneously
– Heavy oil does not move well in pipelines
• Problems
– Where does the energy come from to process the bitumen?
– What happens to the landscape?
• Projects: $80 B underway
• Future for nuclear energy?
– Total 500 MW HTR?
– Atomic Energy of Canada?
• Industry forecasts
– Cost to produce $13-18/boe (2002); $22-25 /boe (2005)
– Production 1.0 Mboe/day (2004); 2.7 Mboe/day (2015)
CONVERSION OF KEROGEN TO
LIQUID FUEL
• “Oil Shale”
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Immature source rock
One ton of shale gives one boe
Gold mining is profitable at about $12 of gold/ton
Enormous deposits in the Green River Formation: Utah,
Wyoming, Colorado
• Process alternatives
– Retorting
– In-situ extraction
• Problems
– What to do with the spent shale from retorting
– Where to get the process water
– How to make a profit
WHAT SHOULD WE EMPHASIZE?
• Locating oil and gas
• Management and technology for recovery of oil
and gas (including methane hydrates)
• Coal for electricity generation
• Carbon dioxide sequestration
• Conversion of natural gas to liquid fuel
• Conversion of coal to liquid and gaseous fuel
• Conversion of bitumen to liquid fuel
• Conversion of kerogen to liquid fuel