In crisis –

Energy, the basis of civilisation

Population +6billion Doubles every 30 years

POPULATION – IS THERE NO END?

Relationship between Energy & Income

FERTILTY V WEALTH

THE NECESSITIES OF LIFE – WHAT WOULD LIFE BE LIKE WITHOUT CHEAP EASY TO USE ENERGY?

Energy Need RequirementSHELTER HIGHWARMTH HIGHFOOD HIGHWATER LOWWASTE DISPOSAL MODERATE

Coal production peaked in Britain in 1913Oil started to replace coal in 1930- a liquid easier to use than a solid. GDP tied to energy use!

World daily oil production –millions of barrels /day – Have we hit the peak or is it yet to come?

Peak Oil concept- oil is a finite resource – sooner or latersupplies will dwindle and demand will not be met or alternatives will replace oil.

FT 15 Sep 2011

Colin Campbell shows the peak of oil production has passed.Others are not so sure! BUT GAS IS STILL TO PEAK

Pric

e $/

bbl

$100

$50

$10

1950-592000-09

Light green oil price – money of the dayDark green reference 2010

Oil price 1861 - 2010

Today oil price $125

Why does Peak Oil matter?

Short answer –•when demand threatens to exceed supply the price goes up• and a world recession follows until demand drops.•With hardships for the many all round the world

The Italian and Greek protests - just the beginning of more widespread unrest?Without cheap energy can we afford our present life style!

International Energy Agency –World Energy Supply Forecast until 2030Note fossil fuels predominate- over 75% in 2030

Solving the crisis?

1. Explore for and produce more oil and gas2. Produce more from existing fields3. Recruit bright young people to add brain

power to finding and extracting the maximum amounts of oil and gas.

4. Speed up the development of alternatives

5. Change the way we live

Can we achieve forecast?

1. Explore for and produce more oil and gas

2000m

500m

Water depth

West Africa- deep waterMany big oil fields

Tullow and partners are spending about $1million every daydrilling deepwater wells offshore West Africa with rigs like this

The Arctic6% of the globe with potential for400 B bbls more oil, about 1/3 of existing reservesProblems – ice,ownership of territory, production systems

Global warming is a reality- These young ladies are sitting on the North Pole(Photo Courtesy DMcInroy)

Shale Gas – The Fuel of the future?

2. Produce more from existing fields

Use 4D – Repeat 3D surveys to find where oil is left in reservoir

Maximise oil recovery

Maximise oil recovery

Draugen Field Norway –courtesy Schlumberger

Use miscible flood to recover over 15% more oil

Tertiary Recovery in Texas.Reservoir is flooded with CO2 and 17% more oil recovered

3. Recruit bright young people

Youth and brilliance plus age and experience is a winning formulato find more oil and gas

Cutting from Financial Times 29 September 2011

Y

Cambridge Oxford Aberdeen Imperial0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OtherFinanceIndustryAcademia

Destination of Post Graduates from certain Universities in UK

4. Speed up the development of alternatives

Y

Cutting from the Financial Times 29 Sep 2011

Change the way we live – isthere any hope?

Newt Gingrich said avoid smaller cars because gun racks could not be fitted in them

Conclusions• The crisis is now. It is not the banks fault. We have run out of cheap energy.• We must produce more fossil fuels

particularly oil to give time to develop cheap alternatives

• We need more bright young people to work at discovering and producing oil and gas in difficult places

• Or accept a lower standard of living and change the way we live. This may not happen without a revolution.