Post on 16-Jan-2016
SWT, DPA Luncheon, 2006
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The Future of Global Energy
Trends, Technology and Talent
Scott W. TinkerBureau of Economic Geology
Jackson School of GeosciencesThe University of Texas at Austin
DPAAAPG/GSA/SPE Regional Meeting
May, 2006
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Outline
Trends
Technology
Talent
Tomorrow
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Global Energy Consumption
U.S. Data: Annual Energy Review 1999 (EIA, 2000)World Data: International Energy Annual 1999 (EIA, 2000)
100
80
60
40
20
0
Per
cen
tag
e o
f to
tal
mar
ket
Year
1850 1900 1950 2000
H/C>4 (Natural Gas, Hydrogen, Nuclear, Emerging)
H/C<1 (Wood, Coal)
H/C~2 (Oil)
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Global Energy Consumption
Energy Information Administration
International Energy Annual 2003
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Year
% T
ota
l C
on
su
mp
tio
n
% Coal % Gas% Oil
% Hydro % Nuclear % Geothermal, Biomass, Solar & Wind
91% 86%
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Global Demand for Fossil Fuels Consumption and Efficiency
1999 Energy Use (ExaJoules)
0 20 40 60 80 100 120
Africa
C & S America
Middle East
Canada/Mexico
Japan & Australasia
Eastern Europe/FSU
Western Europe
Developing Asia
U S
Oil
Gas
Coal
Nuclear
Other
Data, 2002, IEO.
MJ/$GDPU.S. Energy Consumption
0
20
40
60
80
100
120
1845
1870
1895
1920
1945
1953
1958
1963
1968
1973
1978
1983
1988
1993
1998
Qu
ad
BT
U
Sustainable Energy
Hydroelectric
Nuclear Energy
Natural Gas
Oil Imported
Oil Produced
Coal
Wood and Waste
(Data: EIA, 2000)
Conservation
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Oil ResourcesOil Resources
Ahlbrandt et al., 2005
Con
v.
Oil
Un
con
v.
Oil
Tech-Progress
Undiscovered
Reserves
Consumed
Int Panel on Climate Change, 2000
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U.S. Oil Supply vs. Demand
0
2,000,000
4,000,000
6,000,000
8,000,000
1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004
Year
Oil
(th
ou
san
d b
bls
)
Supply
Demand
*Supply = domestic oil production & Demand = domestic oil consumption.
Data: EIA, 2005
U.S. Oil Production/Consumption
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Global OilProduction/Consumption
World Oil Supply vs. Demand
20,000,000
22,000,000
24,000,000
26,000,000
28,000,000
30,000,000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Oil
(th
ou
san
d b
bls
)
Supply
Demand
*Supply = world oil production & Demand = world oil consumption.
Data: International Energy Annual 2002 (EIA, 2005)
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M
ExxonMobil, 2005. http://www.exxonmobil.com/Corporate/Citizenship/Corp_citizenship_energy_outlook.asp
Peak OilThe Conventional Liquids
“Wedge”
35 MMBD new demand
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Oil Consumption Per CapitaBbl/Person/Year
Source of Consumption: BP Statistical Review of World Energy June 2004Source of Population: Working Alliance on Serial Publications, The Netherlands
0
5
10
15
20
25
1965 1970 1975 1980 1985 1990 1995 2000
Japan S. Korea China India
China
India
U.S.
Japan
S. Korea
If China and India each grow to 5 BY/person by 2030,that represents 48 MMBD of new demand
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Insert Picture of North Slope and 35 mbopd
Feeds into the Trans Alaska Pipeline
System, which peaked in 1988 at 2.1 mbopd and today accounts for < 1
mmbopd (and falling)
Photos by Scott Tinker
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Mitigation Option Time to Initiate Impact (+10 Yrs)
(Yrs) (MM bpd)
– Heavy Oils / Oil Sands 3 8– Vehicle Efficiency 3 2 – Gas-To-Liquids 3 2– Coal Liquids 4 5– Enhanced Oil Recovery 5 3– Shale Oil 10 2
22Modified after Hirsch et.al, 2005
Conventional Oil Mitigation
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M
ExxonMobil, 2005. http://www.exxonmobil.com/Corporate/Citizenship/Corp_citizenship_energy_outlook.asp
Peak OilThe Conventional Liquids
“Wedge”
Unconventionals
Plus EOR
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Natural Gas ResourcesNatural Gas Resources
Ahlbrandt et al., 2005
Tech-Progress
Undiscovered
Reserves
Consumed
Int Panel on Climate Change, 2000
Con
v.
Gas
Un
con
v.
Gas
Coa
l (19
TB
OE)
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Middle East
Eastern Europe/Former Soviet Union
UnitedStates
WesternEurope
AfricaAsia Pacific
WesternHemisphere
From Imam and others, Oil and Gas Journal, Aug. 16, 2004.
Natural Gas Production
0
10
20
30
40
1940
Pro
du
ctio
n (
Tcf
)
Year
1960 2000 204020201980 2060
ObservedCalculated
PRODUCTION RATE
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0
5,000
10,000
15,000
20,000
25,000
1949 1961 1973 1985 1997 2009
An
nu
al N
atu
ral G
as P
rod
ucti
on
(B
cf)
Yikes!
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Global Natural GasProduction/Consumption
World Natural Gas Supply vs. Demand
50
60
70
80
90
100
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Nat
ura
l G
as (
Tcf
)
Supply
Demand
*Supply = world natural gas production & Demand =world natural gas consumption.
Data: International Energy Annual 2002 (EIA, 2005)
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U.S. Natural Gas Supply vs. Demand
0.000
5.000
10.000
15.000
20.000
25.000
Year
Natu
ral
Gas (
Tcf)
Supply
Demand
*Supply = domestic natural gas production & Demand =domestic natural gas consumption.
Data: EIA 2005
U.S. Natural GasProduction/Consumption
U.S. Oil Supply vs. Demand
0
2,000,000
4,000,000
6,000,000
8,000,000
1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004
Year
Oil (
tho
usan
d b
bls
)
Supply
Demand
*Supply = domestic oil production & Demand = domestic oil consumption.
Data: EIA, 2005
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Natural Gas Trade in 2002
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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USGS World Petroleum Assessment 2000 (Tcf)
N. Caspian Basin(156.9) Tcf
Amu-Darya Basin(230.4 Tcf)
West Siberian Basin(1,271.8 Tcf)
Volga-Ural Region(99.2 Tcf)
Western Gulf(251.6 Tcf)
Gulf Cenozoic OCS(140.3 Tcf)
East Venezuela Basin(129.7 Tcf)
Qatar Arch (465.6 Tcf)Zagros Fold Belt (399.4 Tcf)Mesopotamian Frdp. Bsn. (298.3 Tcf)Greater Ghawar Uplift (248.6 Tcf)Rub Al Khali Basin (182.3 Tcf)
NorthwestGerman Basin
(141.7 Tcf)
Grand Erg/Ahnet Basin(114.2 Tcf)
North Sea Graben(160.6 Tcf)~3870 Tcf in Major Basins
~13,000 Tcf Total Resources
Current annual global consumption is ~90 Tcf
Does not include unconventional gas (shale, coal, tight), brines, gas
hydrates, or gasification of coal, heavy oil, tar.
Natural Gas Resource Availability
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1999 NPC Study (NPC, 1999b)Recoverable Portion of In-Place US Gas Resource (Tcf)
Reserves (1,004)
Reserve Growth (305)
Undiscovered, Unconventional
Unassessed Unconventional Reserves (400)
Geopressured Brine (Up to 24,000)
Gas Hydrate (Up to 300,000) Not Assessed by NPC
Increasing developmentcosts, technology needs,
uncertainty, and decreasing concentration
Natural Gas Resource Availability
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Cumulative Production (811)
Reserves (157)Known Reserves
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Conventional Gas
Total Natural Gas
U.S. Natural Gas
Unconventional Gas
0
5,000
10,000
15,000
20,000
25,000
1949 1955 1961 1967 1973 1979 1985 1991 1997 2003 2009 2015
An
nu
al N
atu
ral G
as P
rod
ucti
on
(B
cf)
EIA (1949-1990) and NPC (1991-2015)
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QAd3931xAfter 8/05 DOE Roundtable White
Paper
Potential Pathways
US In-place Resource
US Production Goal
1Tight Sandstones
1,000s of trillions of cubic feet of gas
Expand economically recoverable resource by 350 Tcf by 2015
2Unconventional 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
4 Deep Gas 1,000s of trillions of cubic feet of gas
By 2012 develop systems to enable economic recovery of 100 Tcf by 2020
5Coal Gasification
1,000s of trillions of cubic feet (~7Tcf/ton)
Approach annual production of > 2 TcF equivalent by 2020
6Methane Hydrates
10,000s of trillions of cubic feet of gas
Confirm safe, economical and environmentally sound at pilot scale by 2015
Natural Gas Mitigation Options
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EIA International Energy Annual 2002, International Energy Outlook 2004
Global proved oil and gas reservesRecoverable coal reserves
(oil shale and oil sands not included)
Global Reserves
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US Coal Resources
Anderson, John, and others, 2003, Oilfield Review, v. 15, no. 3, p. 10.
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U.S. Coal Consumption
0.0000
5.0000
10.0000
15.0000
20.0000
25.000018
50
1875
1900
1925
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
Co
al C
on
sum
pti
on
(Q
uad
BT
Us)
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Outline
Trends
Technology
Talent
Tomorrow
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NJ
Ma
Washington
Oregon
Nevada
California
Idaho
Montana
Wyoming
Utah
Arizona
Colorado
New Mexico
Texas
Oklahoma
Kansas
Nebraska
South Dakota
North Dakota
Illinois
Louisiana
Arkansas
Missouri
Flor
Maine
Mich
Minnesota
Iowa
Miss AlaGeorgia
Tennessee
Kentucky
S Carol
N Carolina
VirginiaWV
Wisc
IndOhio
Pennsyl
New York
VtNH
CtRI
DelawareMd
Hawaii
Alaska
Unocal
Conoco
TexacoShell
Phillips
ARCO
Marathon
Amoco
Mobil
Chevron
ExxonMobil
ARCO
Marathon
Amoco
Mobil
Chevron
Conoco
Texaco
Phillips
Unocal
Technology
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* 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
Technology R&D Investments in the Upstream Sector
($2004)
0
200
400
600
800
1,000
1,200
1,400
1977 1982 1987 1992 1997 2002
R&
D In
vest
men
t
($, m
illio
ns)
E&P Firms*
Service Companies**
Basic/Breakthrough Applied/Incremental
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TechnologyThe 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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5
Talent
AAPG Website
US Undergraduate Geosciences AGI, 2003
1.1 mil
1.7 mil
0.7 mil
Employees Large O&G Co
$10
$80
Oil Price: 2003 Dollars BP Website
US Upstream R&D 2004 Dollars CERA
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5
Learning from the Past
Supply Push Demand PullRock R&D Information TechUS: Majors US: IndependentsMedian Age ~ 30 Median Age ~ 50S&E Strong S&E Weakening
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• 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
Industry Response
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•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: well-designed, integrated research programs.
•Establish global university partnerships that are long term, research based, and two-way.
University Response
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•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.
Government Response
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•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!
Professional Society Response
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Outline
Trends
Technology
Talent
Tomorrow
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0
20
40
60
80
100
65%
16%
12%
7%
Source: PFC Energy research, based on BP’s 2005 Statistical Review of World EnergyFrom Ball (2006)
World’s Proved Oil and Natural-Gas Reserves?
Controlled by governments; notopen to Western companies
Russian reserves, held by Russian companies
Open to any oil company
Controlled by governments; limited access for Western companies
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0
0.05
0.1
0.15
0.2
0.25
0.3
Aram
co (S
audi)
NIOC (I
ran)
INOC (I
raq)
KPC (Kuwai
t)
PDV (Ven
ezuel
a)
Adnoc (U
AE)
Libya
NOC
NNPC (Nig
eria
)
Pemex
(Mex
ico)
Lukoil
(Russ
ia)
Gazpro
m (R
ussia
)
ExxonM
obil
Yukos
(Russ
ia)
Petro
China
Qatar
Sonatra
ch (A
lger
ia)
BP
Petro
bras
(Bra
zil)
Chevro
nTota
l
Global Oil Reserves(2004 %)
% IOCs
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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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TomorrowGlobal 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!
This is the greatest industry in the world, and
the most vital for the coming century.
Do well and have a blast!
Thank You!