SWT, DPA Luncheon, 2006
DPA
AAPG/GSA/SPE Regional Meeting
May, 2006
The Future of Global Energy
Trends, Technology and Talent
Scott W. Tinker
Bureau of Economic Geology
Jackson School of Geosciences
The University of Texas at Austin
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Outline
Trends
Technology
Talent
Tomorrow
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Global Energy Consumption
100
Percentage of total market
80
60
H/C<1
(Wood, Coal)
H/C~2
40
(Oil)
H/C>4
20
0
1850
(Natural Gas,
Hydrogen, Nuclear,
Emerging)
1900
U.S. Data: Annual Energy Review 1999 (EIA, 2000)
World Data: International Energy Annual 1999 (EIA, 2000)
1950
Year
2000
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Global Energy Consumption
% Coal
% Hydro
% Oil
% Nuclear
% Gas
% Geothermal, Biomass, Solar & Wind
50%
% Total Consumption
45%
40%
35%
30%
91%
86%
25%
20%
15%
10%
5%
0%
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Year
Energy Information Administration
International Energy Annual 2003
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Global Demand for Fossil Fuels
Consumption and Efficiency
1999 Energy Use (ExaJoules)
US
Developing Asia
MJ/$GDP
U.S. Energy Consumption
Western Europe
Coal
Oil
120
Eastern Europe/FSU
Conservation
Japan & Australasia
100
Sustainable Energy
Hydroelectric
Quad BTU
Canada/Mexico
Nuclear Energy Other
80
Middle East
Natural Gas
60
C & S America
Oil Imported
40
Oil Produced
20
Gas
Nuclear
Africa
0
20
40
60
80
100
Coal
120
Wood and Waste
0
Data, 2002, IEO.
(Data: EIA, 2000)
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Tech-Progress
Undiscovered
Reserves
Conv. Oil
Consumed
Unconv. Oil
Oil Resources
SWT, DPA Luncheon, 2006
Ahlbrandt et al., 2005
Int Panel on Climate Change, 2000
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U.S. Oil
SWT, DPA Luncheon, 2006
Production/Consumption
U.S. Oil Supply vs. Demand
*Supply = domestic oil production & Demand = domestic oil consumption.
Oil (thousand bbls)
8,000,000
6,000,000
4,000,000
2,000,000
Supply
Demand
0
1954
1959 1964
1969 1974
1979 1984 1989
Year
1994 1999
2004
Data: EIA, 2005
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Global Oil
Production/Consumption
World Oil Supply vs. Demand
*Supply = world oil production & Demand = world oil consumption.
30,000,000
Oil (thousand bbls)
28,000,000
26,000,000
24,000,000
22,000,000
Supply
Demand
20,000,000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Data: International Energy Annual 2002 (EIA, 2005)
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M
Peak Oil
The Conventional Liquids
“Wedge”
35 MMBD
new demand
ExxonMobil, 2005. http://www.exxonmobil.com/Corporate/Citizenship/Corp_citizenship_energy_outlook.asp
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Oil Consumption Per Capita
Bbl/Person/Year
U.S.
25
20
S. Korea
Japan
15
10 and India each grow to 5 BY/person by 2030,
If China
that represents 48 MMBD of new demand
5
China
0
1965
India
1970
1975
Japan
1980
1985
S. Korea
Source of Consumption: BP Statistical Review of World Energy June 2004
Source of Population: Working Alliance on Serial Publications, The Netherlands
1990
China
1995
2000
India
-4
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Feeds into the
Trans
Alaska
Pipeline
Insert Picture
of North
Slope and 35System,
mbopd
which peaked in 1988 at 2.1
mbopd and today accounts
for < 1 mmbopd
(and falling)
Photos by Scott Tinker
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Conventional Oil Mitigation
Mitigation Option
Time to Initiate Impact (+10 Yrs)
(Yrs)
– Heavy Oils / Oil Sands
– Vehicle Efficiency
– Gas-To-Liquids
– Coal Liquids
– Enhanced Oil Recovery
– Shale Oil
Modified after Hirsch et.al, 2005
3
3
3
4
5
10
(MM bpd)
8
2
2
5
3
2
22
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M
Peak Oil
The Conventional Liquids
“Wedge”
ExxonMobil, 2005. http://www.exxonmobil.com/Corporate/Citizenship/Corp_citizenship_energy_outlook.asp
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Unconv. Gas
Natural Gas Resources
Coal (19 TBOE)
SWT, DPA Luncheon, 2006
Tech-Progress
Reserves
Consumed
Ahlbrandt et al., 2005
Conv. Gas
Undiscovered
Int Panel on Climate Change, 2000
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Natural Gas Production
Annual Natural Gas Production (Bcf)
40
PRODUCTION RATE
Observed
Calculated
25,000
20,000
Eastern Europe/
Yikes!
Former Soviet Union
30
Production (Tcf)
SWT, DPA Luncheon, 2006
20
15,000
10,000
Middle East
5,000
United
States
0
Western
1949
1961 1973 1985 1997 2009
Hemisphere
10
Asia Pacific
Africa
Western
Europe
0
1940
1960
1980
From Imam and others, Oil and Gas Journal, Aug. 16, 2004.
2000
Year
2020
2040
2060
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Global Natural Gas
Production/Consumption
World Natural Gas Supply vs. Demand
*Supply = world natural gas production & Demand =world natural gas consumption.
100
Natural Gas (Tcf)
90
80
70
60
Supply
Demand
50
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Data: International Energy Annual 2002 (EIA, 2005)
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U.S. Natural Gas
SWT, DPA Luncheon, 2006
Production/Consumption
U.S. Natural Gas Supply vs. Demand
*Supply = domestic natural gas production & Demand =domestic natural gas consumption.
25.000
Natural Gas (Tcf)
20.000
15.000
10.000
U.S. Oil Supply vs. Demand
*Supply = domestic oil production & Demand = domestic oil consumption.
8,000,000
Supply
Demand
6,000,000
0.000
4,000,000
19
49
19
52
19
55
19
58
19
61
19
64
19
67
19
70
19
73
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
20
00
20
03
Oil (thousand bbls)
5.000
Year
2,000,000
Data: EIA 2005
Supply
Demand
0
1954
1959
1964
1969
1974
1979
Year
1984
1989
1994
1999
2004
Data: EIA, 2005
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Natural Gas Trade in 2002
SWT, DPA Luncheon, 2006
Modified from BP Statistical Review of World Energy 2003: June 2003, London, England, BP,
in Oilfield Review: Autumn 2003, Schlumberger, p.6.
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Natural Gas
SWT, DPA Luncheon, 2006
Resource Availability
North Sea Graben
(160.6 Tcf)
Volga-Ural Region
(99.2 Tcf)
West Siberian Basin
(1,271.8 Tcf)
N. Caspian Basin
(156.9) Tcf
~3870 Tcf in Major Basins
~13,000 Tcf Total Resources
Western Gulf
(251.6 Tcf)
Northwest
German Basin
(141.7 Tcf)
Amu-Darya Basin
(230.4 Tcf)
Current annual global consumption is ~90
Tcf
Gulf Cenozoic OCS
(140.3 Tcf)
Grand Erg/
Ahnet Basin
(114.2 Tcf)
East Venezuela Basin
(129.7 Tcf)
Qatar Arch (465.6 Tcf)
Does not include unconventional
gas
Zagros Fold Belt (399.4 Tcf)
Mesopotamian Frdp. Bsn. (298.3 Tcf)
(shale, coal, tight), brines,
gas
hydrates,
or
Greater Ghawar
Uplift
(248.6 Tcf)
Rub Al Khali Basin (182.3 Tcf)
gasification of coal, heavy oil, tar.
USGS World Petroleum Assessment 2000 (Tcf)
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Natural Gas
Resource Availability
1999 NPC Study (NPC, 1999b)
Recoverable Portion of In-Place US Gas Resource (Tcf)
Cumulative Production (811)
Reserves (157)
Reserve Growth (305)
Undiscovered, Unconventional
Reserves (1,004)
Unassessed Unconventional Reserves (400)
Known Reserves
Increasing development
costs, technology needs,
uncertainty, and
decreasing concentration
Geopressured Brine (Up to 24,000)
Gas Hydrate (Up to 300,000)
Not Assessed by NPC
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U.S. Natural Gas
Annual Natural Gas Production (Bcf)
Total Natural Gas
Conventional Gas
Unconventional Gas
25,000
20,000
15,000
10,000
5,000
0
1949
1955
1961
1967
1973
1979
1985
1991
1997
2003
2009
2015
EIA (1949-1990) and NPC (1991-2015)
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Natural Gas Mitigation Options
Potential
Pathways
US
In-place Resource
US
Production Goal
1
Tight
Sandstones
1,000s of trillions of
cubic feet of gas
Expand economically
recoverable resource by 350
Tcf by 2015
2
Unconventional
Gas: Shale, Coal
1,000s of trillions of
cubic feet
Approach annual production
of >7 TcF by 2015
3
LNG
1,000s of trillions of
cubic feet
Annual production of > 4 TcF
by 2020
Deep Gas
1,000s of trillions of
cubic feet of gas
By 2012 develop systems to
enable economic recovery of
100 Tcf by 2020
Coal Gasification
1,000s of trillions of
cubic feet (~7Tcf/ton)
Approach annual production
of > 2 TcF equivalent by
2020
10,000s of trillions of
cubic feet of gas
Confirm safe, economical
and environmentally sound
at pilot scale by 2015
4
5
Methane
6
Hydrates
After 8/05 DOE Roundtable White Paper
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Global Reserves
SWT, DPA Luncheon, 2006
Global proved oil and gas reserves
Recoverable coal reserves
(oil shale and oil sands not included)
EIA International Energy Annual 2002, International Energy Outlook 2004
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US Coal Resources
SWT, DPA Luncheon, 2006
Anderson, John, and others, 2003, Oilfield Review, v. 15, no. 3, p. 10.
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25.0000
20.0000
15.0000
10.0000
5.0000
2004
1999
1994
1989
1984
1979
1974
1969
1964
1959
1954
1949
1925
1900
1875
0.0000
1850
Coal Consumption (Quad BTUs)
U.S. Coal Consumption
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Outline
Trends
Technology
Talent
Tomorrow
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Technology
Washington
Montana
North Dakota
Maine
Minnesota
Vt
Oregon
Idaho
South Dakota
Mich
Wyoming
Utah
California
Pennsyl
Iowa
Nebraska
UnocalNevada
Ohio
Illinois
Colorado
WV
Kansas
Missouri
Tennessee
Amoco
Oklahoma Arkansas
ARCO
Texas
Mobil
Texaco
Shell
Alaska
Miss
Louisiana
RI
NJ
Delaware
Virginia
Kentucky
Phillips
Arizona
New Mexico
Md
Ind
Marathon
Conoco
Chevron
NH
Ma
New York
Ct
Wisc
N Carolina
S Carol
Ala
Georgia
Flor
ExxonMobil
Hawaii
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Technology
R&D Investments in the Upstream Sector ($2004)
1,400
Basic/Breakthrough
Applied/Incremental
1,200
($, millions)
R&D Investment
1,000
800
600
400
E&P Firms*
200
Service Companies**
0
1977
1982
1987
1992
1997
2002
* US E&P firms and the US R&D investments of international E&P firms; source Department of Energy, EIA, CERA analysis.
** Traditional Oil Field Service companies (Baker Hughes, Halliburton, Schlumberger, Smith, Weatherford); source, company annual reports, CERA analysis.
Source: Cambridge Energy Research Associates, 2005
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Technology
The trend towards unconventional oil
and natural gas production will drive
The Rock Revival
•Rheology and rock mechanics
•Fracture modeling and simulation
•Diagenetic and rock quality
modeling
•Petroleum system modeling
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Technology
•Logging Through Casing
•Seismic Imaging: 4C and 9C
•Surface/Subsurface Area: 1/2500
•Subsurface Combustion
•Seafloor Operations
•Real Time Sensors: Nanotech
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Outline
Trends
Technology
Talent
Tomorrow
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Talent
$80
1.7 mil
1.1 mil
$10
0.7 mil
5
US Undergraduate Geosciences AGI, 2003
Employees Large O&G Co AAPG Website
US Upstream R&D 2004 Dollars CERA
Oil Price: 2003 Dollars BP Website
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Learning from the Past
Supply
Rock
US:
S&E
Median
Majors
Strong
R&D
Push
Age ~ 30
US:
Information
Median
S&E
Independents
Demand
Weakening
AgeTech
~Pull
50
5
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Industry Response
• Determine the real demand for talent
• Act for the long term in terms of talent
investment (and try to ignore the Wall
Street reaction!)
• Invest in universities in good and bad
times. Universities are the seed crop.
• Do not expect quarterly bottom line impact
• Require performance measures
• Develop university partnerships outside of
the standard faculty/student models
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University Response
• Do not overreact to industry talent demands
(learn from the 1970s)
• Create tougher (not easier) enrollment and
retention standards; focus on quality not
quantity. One talented person is worth 10
warm bodies.
• Break out of the discipline silos: welldesigned, integrated research programs.
• Establish global university partnerships that
are long term, research based, and twoway.
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Government Response
• Invest in longer-term, higher-risk
research.
• Support programs that drive
commercialization.
• Adapt US policies to fit a global industry.
Energy independence is a sound bite.
Structure for global interdependence.
• Work to bring respect and allure back to
science and engineering.
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Professional Society
Response
• Get professional help to develop a
coordinated, accurate, and interesting
global message about energy.
• The story is international, and includes
universities, government and industry.
• Find a credible storyteller, because
there is a great story to tell!
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Outline
Trends
Technology
Talent
Tomorrow
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World’s Proved Oil and Natural-Gas Reserves?
100
80
65%
Controlled by governments; not
open to Western companies
16%
Russian reserves, held by
Russian companies
12%
Controlled by governments; limited
access for Western companies
60
40
20
0
7%
Open to any oil company
Source: PFC Energy research, based on BP’s 2005 Statistical Review of World Energy
From Ball (2006)
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Global Oil Reserves
(2004 %)
0.3
0.25
0.2
% 0.15
0.1
IOCs
0.05
0
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Follow the Molecules
• IOCs will focus on unconventional
resources
• Liquids: shale oil, heavy oil, tar
sands, coal liquefaction, and
beyond
• Gases: coalbed methane, shale
gas, tight gas, hydrates, coal
gasification, and beyond
• Technology and Talent needed!
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Tomorrow
SWT, DPA Luncheon, 2006
Global energy demand, combined with limited
conventional energy choices and political
instability in key regions, will keep the price
of fossil fuels moderate to high, and volatile
Liquid fuels production will flatten over the
next 30 years and incremental growth will
come from unconventional forms
Natural gas reserve adds will be largely
unconventional, LNG lanes will open, coal
gasification will accelerate.
Natural gas prices will detach from oil and
compete with coal in electricity markets
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Tomorrow
Rocks will make a revival
Great advances in subsurface
measurement and drilling will continue
Fossil fuel emissions limits, based on
global warming concerns, will be put into
place (p.s. let them hear from you!)
Universities, industry, governments and
professional societies must coordinate a
energy message
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This is the greatest industry
in the world, and the most
vital for the coming century.
Do well and have a blast!
Thank You!
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