Green - Global Energy

8/6/2019 Green - Global Energy

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Global Energy - The Next Decade and Beyond* By

Arthur R. Green1 Search and Discovery Article #70013 (2005)

Posted February 3, 2005

*2004-05 AAPG Distinguished Lecture Funded by the AAPG Foundation through the J. Ben Carsey Endowment

1Chief Geoscientist, ExxonMobil Exploration Company, Houston, TX, Retired; current address: Gig Harbor, WA ([email protected]

).

Conclusions Fa ctors driving

glob a l energy

F igure 1

D iscontinuities inenergy

F igures 2-10

E ight ph a ses of

petroleum industry

R oots of petroleum

industry

P ost World W a r II F igures 11-16

Post

Emb

argo: 1973

- 1980 F igures 17-22

R ecent: 1995 - 2001 F igures 23-27

T he "NewE conomy"

Corpor a te

consolid a tion S cience &technology

C onclusions M oving into the Next Phase of World Energy

Modern civilization, a growing population and globalization will become increasingly more dependent on access tolarge volumes of oil, gas, coal, industrial materials and water at reasonable costs.Oil and gas supplies ~65% of the worlds energy (80 mb/d and 220 bcf/d gas; by the end of the decade it will be 90mb/d and 280 bcf/d of gas). Renewable energy, excluding hydroelectric and nuclear, represent about 2% of production worldwide.The geography and geopolitical setting of both production and consumption of oil and gas and petroleum based products is evolving toward fundamental change.The peaking of conventional oil and gas production is sure to happen, and while the timing is uncertain, there aresigns of change on the horizon. Enhanced oil recovery efforts and developing heavy oil and tar deposits will stretchsupply.Increased gas production will become more important and the required transport and facilities infrastructure willrequire huge up front investment.


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F igures 28-44

S ediment a ry b a sin

systems

F igures 45-47

F rom science tobusiness ventures

F igures 48-53

K nowledge

F igures 54-57

T he F uture to 2025 F igures 58-61

World re a lities Worlds oil & g a s

endowment E nergy

consumption

O il F igures 62-72

E r a of g a s

F igures 73-78

U nconvention a lresources "Beyond

P etroleum" F igures 79-90

A n energy scen a rio

F igure 91

Energy & our

environmentF igure 92

E nergy, n a tions &

m a nkinds futureF igures 93-96

R e a lities & opinions

of a geoscientist

F igure 97

R eferences

The modern energy industry has experienced many discontinuities and has evolved to meet the challenges. The nextstage of the energy business will be its greatest challenge as corporations try to meet the never ending demand for new sources of oil and gas as old fields are depleted.These changes in the global energy balance have the potential for geopolitical (Nations) environmental, economicand security disruptions worldwide.Recognizing and facing energy realities, learning from history and developing an integrated plan is critical for anindustry that requires lead times of 10-15 years. Such a plan must include international relations - trade, global,economics, massive up front investment, innovative science and applied technology (Industry - Academic -Government).I am optimistic about our energy future and the leadership that will be furnished by science and creative technology ina world without walls. The plans and operations must be conducted within the context of the environment of our beautiful planet and its wealth of creatures large and small.

Factors Driving Global Energy (Figure 1)

Energy Dynamics, Opportunities, and C hallenges Speed, Volatility, Performance, Ethics, Networking, Wisdom

Figure 1. Factors driving global energy.

Global Geopolitical and Economic Environment Representative GovernmentsGlobal Economy and RelationsTrade - Regulations - BlocksSecurity - War - Terrorism


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glob a l energy

F igure 1

D iscontinuities inenergy

F igures 2-10

E ight ph a ses of petroleum industry

R oots of petroleum

industry


P ost E mb a rgo: 1973

- 1980 F igures 17-22

R ecent: 1995 - 2001 F igures 23-27

T he "NewE conomy"

Corpor a te

consolid a tion S cience &technology

F igures 28-44

S ediment a ry b a sin

systems

F igures 45-47


F igures 48-53

K nowledge

F igures 54-57

T he F uture to 2025 F igures 58-61

World re a lities Worlds oil & g a s

endowment E nergy

consumption

O il F igures 62-72

E r a of g a s

F igures 73-78

U nconvention a l

Energy Consumption and World Banking and Investment

Business Operations Energy Discovery and ProductionTrade - TransportRefining to ProductsJob CreationGross Domestic Product - GDPCompany Vitality - Research and Investment

Science and Technology KnowledgeInnovation - CreativityInformation Systems - digital

People - Human Technology Education - SkillsPopulation DemographicsProsperity vs. Poverty

Emotional MaturityWorld Peace and a Sustainable Environment

Discontinuities in Energy: Past, Present, and Future An Historical Perspective of Dealing with C hange


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resources "BeyondP etroleum"

F igures 79-90 A n energy scen a rio

F igure 91 E nergy & our environment

F igure 92 E nergy, n a tions &m a nkinds future

F igures 93-96 R e a lities & opinionsof a geoscientist F igure 97 R eferences


glob a l energy F igure 1 D iscontinuities inenergy

F igures 2-10 E ight ph a ses of petroleum industry R oots of petroleumindustry


Figures 2-10

Figure 2. Petroleum industry time line, showing the eight phases of the petroleum industry.

Figure 3. Early references to petroleum (from Bilkadi, 1995).

Figure 4. Oil Creek - Pennsylvania, 1865. George Bissell, father of the oil industry, was a New York lawyer, who arranged for the initial financing to explore the Oil Creek area for oil, from which a highquality illuminant could be distilled.

Figure 5. Old Baku: Bibi-Heybat oil fields in the South of Baku, circa 1910s (picture courtesy of the StateArchives of Azerbaijan Republic - Photo and Cinema Department).

Figure 6. Global Exploration: Field parties, Brunton compass, as a significant mapping tool, and 1924geologic map of Northern Peru (ExxonMobil archives).

Figure 7. Montage of geologists conducting field work, well-site workers, and log analyst.

Figure 8. Lake Maracaibo, Venezuela, with facilities in the early part of its production history.

Figure 9. Mud volcano, Azerbaijan, where commercial production was established around 1870 andwhere Baku was the largest oil field in the world around the turn of the 20th century.


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P ost E mb a rgo: 1973- 1980 F igures 17-22 R ecent: 1995 - 2001

F igures 23-27 T he "NewE conomy" Corpor a teconsolid a tion S cience &technology

F igures 28-44 S ediment a ry b a sinsystems

F igures 45-47 F rom science tobusiness ventures

F igures 48-53 K nowledge

F igures 54-57 T he F uture to 2025

F igures 58-61 World re a lities Worlds oil & g a sendowment E nergyconsumption

Oil F igures 62-72

E r a of g a s F igures 73-78

U nconvention a lresources "BeyondP etroleum"





Figure 10. Normandy beach, D-Day, 1944, with tremendous requirements for petroleum products.

Return to top.

The Eight Phases of the Petroleum Industry (Figure 2)

Roots of the Petroleum Industry (Figures 3, 4, 5, and6) Years of Discovery (Figures 7, 8, 9, and10)

Post World War II

(Figures 11, 12, 13, 14, 15, and16)

Figures 11-16

Figure 11. Factors driving post World War II global energy.

Figure 12. Oil for a world at peace (fromOil for Victory , 1946).

Figure 13. Theodore Link, legendary petroleum geologist, also AAPG President 1955 -56, demonstrating the application in the field of basic tools.


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Conclusions Fa ctors drivingglob a l energy

F igure 1 D iscontinuities inenergy

F igures 2-10 E ight ph a ses of

petroleum industry R oots of petroleumindustry


P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001

F igures 23-27 T he "NewE conomy" Corpor a teconsolid a tion

S cience &technology




Figure 14. Creole Field, Coast of Louisiana (from Wasson, 1948).

Figure 15. The marine challenge, as illustrated by the environmental conditions encountered duringoffshore exploration and production.

Figure 16. Plot of oil price, oil demand and discovered volumes, with and gas demand and discoveredvolumes (in billions of oil-equivalent barrels / US dollars--relative numbers, from 1900 to 2020).

Global Geopolitical & Economic Environment Surge in DemandUS becomes Net Importer Winds of NationalizationGeopolitical RestructuringState of Israel Formed and Colonies FallMarshall PlanCold War 1947 - Korean War 1950 - 1953Stock Market (DOW) Reaches 500 Milestone in 1956Population Inflection

Business Operations Aggressive Global Search and DiscoveryOn-site Geologic and Engineering Investigations


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F igures 54-57 T he F uture to 2025 F igures 58-61 World re a lities Worlds oil & g a sendowment E nergyconsumption

O il F igures 62-72






F igures 93-96 R e a lities & opinionsof a geoscientist F igure 97

R eferences

Reestablishing Global Reach Limited to "The Western World"Increasing Flow of Oil & Gas and Refined ProductsARAMCO RestructuredCompanies Reorganized

Science - Technology - Knowledge (Data - Information - Knowledge - Wisdom)

Revolutionary Advancements from War Years - High Octane Fuel, Butyl. Rubber, LubricantsDirect and Indirect Impact of TechnologyTechnical Leadership in Academia, Government and IndustryCorporate Research Centers - Upstream and Downstream Enlarged1st Offshore DrillingScouting - Global Information

Human Technology "Experienced" Staff Inventive "can do" AttitudeGlobal MaturityTravel and Communication Advances

Training - Schools and Mentoring

Post Embargo / 1973 - 1980 (Figures 17, 18, 19, 20, 21, and22)


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- 1980 F igures 17-22 R ecent: 1995 - 2001



F igures 45-47

F rom science tobusiness ventures F igures 48-53

K nowledge F igures 54-57

T he F uture to 2025 F igures 58-61 World re a lities Worlds oil & g a sendowment E nergyconsumption

O il F igures 62-72 E r a of g a s F igures 73-78



F igure 91

Figure 17. Factors driving global energy in post embargo (1973-1980).

Figure 18. The self-organizing earth machine (Source: Harvard).

Figure 19. Dynamics of planet earth (after Kellogg, 1999; Morse, 2001).

Figure 20. Mediterranean earth tomography (from Bijwaard, Spakman, and Engdahl, 1998).

Figure 21. Eustatic Cycle Chart #1Phanerozoic (ExxonMobil Research)

Figure 22. Sequence Stratigraphy A. In depth. B. In time. LSF=Lowstand fan, LSW=Lowstand wedge,HS=Highstand systems tract, TR=Transgressive systems tract, MW / SMW=Shelf margin wedge,CS=Condensed section. (P. R. Vail / Exxon Research Production Company.) (After Vail, 1987.)

Return to top.

Global Geopolitical and Economic Environment


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E nergy & our

environmentF igure 92

E nergy, n a tions &m a nkinds future







P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001

F igures 23-27 T he "New

Nationalizations - Embargos (1973)OPEC becomes a Major ForceIntense Cold War - Vietnam War Ends 1975Oil Prices Increased 4xGasoline ShortagesInflation Increased SharplyIran Hostage Crisis (1974) Nixon Resigns (1974)Stock Market Plunges (1974/75) Stagflation - GDP Dropped

Business Operations Major Discoveries and Production come on line New Global Offices Established by Industry

Oil & Gas Operations in USSR SurgeS.E. Asian Businesses Rise Nationalization of oil properties

Science - Technology - Knowledge Dynamic Earth Model - Applied (Regional) Projects

Research Centers merged (Carter- Humble)Seismic Reflection, Stratigraphy and Attributes, 3-DSeismic Data ProcessingSequence StratigraphyMicro - Paleo Develops Rapidly


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E conomy" Corpor a teconsolid a tion S cience &technology




F igures 54-57 T

heF

uture to 2025 F igures 58-61 World re a lities Worlds oil & g a sendowment E nergyconsumption

O il F igures 62-72


U nconvention a lresources "BeyondP etroleum" F igures 79-90 A n energy scen a rio




Gravity and MagneticsSatellite ImageryDrilling begins move to Deep Water Refining AdvancementsComputers - Micro Chips

Human Technology Staff Increases in Size and ExperienceExtensive School System Develops at Research Lab.Travel and Communication SurgeIntegrated Regional Projects

Six M ajor Factors in Energy Planning Only One Energy Event was Arguably a Real CrisesA Turning Point:THE 1973 OIL E M BARGO.

Some of What happened in the U.S. (from Robert L. Hirsch, Senior Energy Program Advisor, SAIC -- February,2004) ([email protected]).

y Oil prices increased ~ 4.5 x (Saudi crude)y Gasoline rationed (even / odd days)y Gasoline lines and spot shortagesy GDP dropped two years in a row (recession)


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Conclusions Fa ctors drivingglob a l energy F igure 1 D iscontinuities inenergy



P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001 F igures 23-27 T he "NewE conomy" Corpor a teconsolid a tion S cience &technology





F igures 58-61 World re a lities Worlds oil & g a sendowment E nergy

y Interest rates spiked dramatically upwardy Inflation increased sharplyThere was a huge wealth transfer to OPEC

U.S. Actions Resulting From the 1973 Oil Embargo (from Robert L. Hirsch, Senior Energy Program Advisor,SAIC -- February, 2004) ([email protected])

y Price controls enactedy CAF implementedy Higher efficiency mandated in a variety of sectorsy National speed limit (55 mpg) enactedy Domestic oil & gas exploration & production spiked upwardy Federal energy R & D dramatically increasedy A major effort in synthetic fuels initiatedy Windfall profit taxes leviedy U.S. government reorganized to form ERDA, FEA & FERCy IEA formedy Strategic Petroleum Reserve establishedy Formulation of a coherent national energy policy initiatedy Foreign policy adjusted to new realities

Recent: 1995-2001 ( Figure 23) Figures 23-27


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E ight ph a ses of



P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001

F igures 23-27 T he "NewE conomy" Corpor a teconsolid a tion

S cience &technology






O il F igures 62-72



F igures 79-90 A n energy scen a rio F igure 91

E nergy & our environment


F igures 93-96 R e a lities & opinions

Balkans - Bombing (1999)Oklahoma City Bombing 1995World Trade Center and Pentagon Struck (2001)Sanctions on Iran, Iraq, Libya

Business Operations Major Corporations Develop from MergersOffshore West Africa BloomsCaspian Sea North and South Niger Delta and Equatorial GuineaIndonesia and SakhalinRussian Industry AdvancesMiddle East Production Evolves /

Tensions rise

Science - Technology - Knowledge Micro Chips and PCs Advance - Efficiency Surge3-D Seismic and Attribute AnalysisVisualization

Communications - Cell Phones and Broad BandSatellites - GPS, ICONOS, Interferometry, GeostatSmart MaterialsRobotics Nano Technology Micro Machines


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of a geoscientist F igure 97 R eferences


globa

l energy F igure 1 D iscontinuities inenergy



P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001 F igures 23-27

T he "NewE conomy" Corpor a teconsolid a tion S cience &technology

F igures 28-44 S ediment a ry b a sin

Human Genome MappedMedical Advances - Genes and Stem CellsCloningFuel Cells - Photo Voltaics and Combination Cars AdvanceClimate Science Advances

Human Technology Integrated Geoscience EmergesTeam ProjectsStaff MaturesHiring and Training Continue

The "New Economy" (Figure 24) "How do we know when irrational exuberance has unduly escalated asset values, which then become subject tounexpected and prolonged contractions as they have in Japan over the past decade?"Alan Greenspan, December 5,1995 speech."Why did corporate governance check and balances that served us reasonably well in the past break down? . . Aninfectious greed seemed to grip much of our business community. . ."Alan Greenspan, July16, 2002 speech.

C orporate C onsolidation (Figures25, 26, and27)

Science and Technology

(Figures28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, and44)

Figures 28-44


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systems F igures 45-47 F rom science to

business ventures F igures 48-53

K nowledge F igures 54-57

T he F uture to 2025 F igures 58-61 World re a lities Worlds oil & g a sendowment E nergyconsumption

O il

F igures 62-72 E r a of g a s F igures 73-78






Figure 28. Montage of features illustrative of new technologies on background of an image of much of the Eastern Hemisphere.

Figure 29. World gravity map (David Sandwell, SCRIPPS Institute; ExxonMobil ExplorationCompany, 2000).

Figure 30. The gravity domain: westernmost Europe and North Atlantic.

Figure 31. GPS - Micro-plate escape motion: Southeastern Europe Middle East, and North Africa (R.E.Reilinger, Department of Earth, Atmospheric, and Planetary Sciences, Massachusetts Institute of Technology, Cambridge Massachusetts).

Figure 32. Differential SAR Interferometry: Hector Mine earthquake, October 16, 1999 (NASA / JPL).With radar data alone, at least three data sets are required for surface change detection. With continuousdata collection as planned for LightSAR, time series of surface change can be monitored.

Figure 33. Image of part of Washington, D.C., showing Washington Monument in lower left (Copyright by Space Imaging, L.P. & www.davekroger.com).

Figure 34. Walking in the subsurface world.

Figure 35. 3-D seismic reflection imagery (courtesy of Veritas).


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P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001

F igures 23-27 T he "NewE conomy" Corpor a te

consolida

tion S cience &technology






O il F igures 62-72


U nconvention a l

Figure 36. Examples of seismic attribute technology.

Figure 37. Deep water drilling.

Figure 38. Inside view of a deep water drilling rig.

Figure 39. Drilling ship, as part of high arctic exploration.

Figure 40. Borehole tool for tests in the subsurface high pressure, high temperature "atmosphere."

Figure 41. Geosteering: a way to steer the well geologically.

Figure 42. Interactive digital data systems: the global Schlumberger Omnes network (Euan Baird,Chairman and CEO Schlumberger, World Energy, 1999).

Figure 43. Biomarkers: Environmental indicators and key to understanding source rocks, the core of the petroleum system.


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resources "BeyondP etroleum"









Figure 44. Exploration process: The HC systems model--diagrammatic cross-section illustrating thestages from source, maturation, migration, to entrapment.

R eturn to top.

Sedimentary Basin Systems: M odels in Our M inds (Figures45, 46, and47)

Figures 45-47

Figure 45. Systems within systems: diagrammatic cross-section.

Figure 46. Diagrammatic cross-section illustrating the roles of sources, primary - 2nd, 3rd, 4th migration,trap, seal (T&B), maturation, and preservation, with salt in the petroleum system.

Figure 47. Detection of surface-expressed fault and seepage.

The mental model of sedimentary basins envisioned here is that basins are complex, non-linear, self-organizing,dynamic natural systems. They are thrown in and out of thermodynamic and pressure equilibrium and experience both positive and negative feedback as they attempt to maintain equilibrium throughout their unique evolution.The fluids (oil-gas-water) are the most unstable and mobile parameters of sedimentary basin systems and are themajor agents in self organization on the maintenance of equilibrium.


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- 1980 F igures 17-22 R ecent: 1995 - 2001













Petroleum exploration is the science and art of envisioning multiphase fluid and rock interactions envisioned throughtime in a high pressure and temperature environment of the subsurface atmosphere.

A Forgiving Influence: Salt in the Petroleum System (open-closed-chaos systems) (Figures45and 46)Salt and Shale Diapirs: C atalytic - Self Organizing Systems

Non-linear, Self-organizing Dynamic Systems Creates a "Subsurface Atmosphere."y Redistributes heat (conductive halite) and pressurey

Fluids (gas-oil-water) move to equilibrate the system.y Mobile sediments move with fluids.y Alters basin chemistry NaCl) - Density flows

Molds the Shape of the Ocean Bottomy Withdrawal and fault subsidencey Forms itinerate basins - collects sands

Creates Trapsy Forms structures - anticline and down-to-basin faultsy Creates unconformitiesy Turtles

Creates Migration Pathwaysy Moves perpendicular to sedimentary layersy Breaks sealsy Shale sheath conduitsy Focus fluid flow

A Clue to Basin Dynamics and Compaction History

Direct and Indirect Oil and Gas Detection (Figure 47)


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P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001





From Science to Business Ventures - M anaging the Unknowable (Figures48, 49, 50, 51, 52, and53)

Figures 48-53

Figure 48. Integrated basin analysis, resource assessment, and business operations: Diagram illustratingthe various disciplines/subjects that provide the technology, its tools, and scientific skills required toanalyze basins, their hydrocarbon systems, resulting in numerical assessment so that wise action may betaken.

Figure 49. Parts of a petroleum system(enlargement of that part of Figure 48), listing the requisites.

Figure 50. Hydrocarbon parameters of sedimentary basins and decisions under uncertainty - managing theunknowable: Example: Offshore Brazil.

Figure 51. Merging science - business ventures - human technology(enlargement of that part of Figure48) that illustrates the factors utilized in determining risk vs. reward (after N.G. DeAth, 1997).

Figure 52. Enlargement of the upper half of the diagram in Figure 51-- Business Maturity and ProjectEconomics (after N.G. DeAth, 1997).

Figure 53. Enlargement of lower half of the diagram in Figure 51-- Production Engineering andOperational Environment (after N.G. DeAth, 1997).

Return to top.


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F igures 54-57 T

heF

uture to 2025 F igures 58-61 World re a lities Worlds oil & g a sendowment E nergyconsumption

O il F igures 62-72






Knowledge - Forever a Student (Figure 54) Figure 54. Group of geoscientists at AAPG International Conference, Istanbul, Turkey, 2003 (left). Someof those geoscientists studying data presented at the conference (right).

The power of knowledge - the sustainable resource - geology of AsiaLearning in Istanbul

y In the non-linear, free energy market environment of 2004 and beyond, science and technology must be thefoundation of decision-making.y Learning is at the heart of our ability to adapt to changing energy environments.y We must all be teachers, students, and mentors at the same time in a world without walls.

People (Figures55 and56)

Figure 55. The human factor.

Figure 56. Win/win human relations.

Success (Figure 57)

Figure 57. Marimba-1 (Angola) - Ocean Valent 1998 (ExxonMobil).


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P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001 F igures 23-27 T he "NewE conomy" Corpor a teconsolid a tion S cience &technology









F igure 91

The Future to 2025 ( Figure 58) Figures 58-61

Figure 58. Factors driving global energy, to 2025.

Figure 59. World population and energy consumption (Thomas S. Ahlbrandt, USGS).

Figure 60. World energy consumption, GDP, 1970-2025. World energy consumption (upper left)(Sources: History: Energy Information Administration (EIA), 2003A. Projections: EIA, 2003B). B.World gross domestic product by selected countries and regions (32 - 67 trillion dollars, from 2001 to2025). (Sources: Global Insight, Inc., World Economic Outlook, Vol. 1, Lexington, MA, Third Quarter 2003; EIA, 2003B; EIA, 2003C). (US Department of Energy, 2003;www.eia.doe.gov/oiaf/ieo/index.html).

Figure 61. Global energy market mix: For 2000 and 2030 (left). Trends in world primary energy demand(right). (Source: International Energy Agency, 2002) (IPIECA, 2004).

Global Political and Economic Environment Increasing degree of volatility and discontinuities - Afghanistan and IraqIncreasing demand for crude, natural gas, and petroleum productsThe world of declining petroleum resourcesIntense competition for quality propertiesPressure on earnings growth - keeping costs - volumes up


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E nergy & our environment







P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001

F igures 23-27 T he "New

Geopolitical awareness -NGOs environmental, and "Evil Doers"Corporate reputation -performancePublic relations and safetyEmbrace change -MAKE THE FUTURE

Business Operations Performance and profitabilityWorld basins continue to mature

Shifting center of growth for producing properties Natural gas becomes a major player in the energy mix (LNG / GTL)Increasingly complex high risk geologic opportunitiesIncreased development of static petroleum resourcesBusiness and scientific relationshipsPartner of choice

High operational performanceSound safety and environmental performanceScientific and technical leadershipEthics and global maturityDoing the right thing right

Science - Technology - Knowledge

Genetic basin analysisComplexity science - fundamental knowledge - fractals /patternsAdvanced subsurface fluid models - (Atmosphere) at all scalesRobust research - upstream and downstreamInterferometry


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E conomy" Corpor a teconsolid a tion S cience &technology






O il F igures 62-72






Earth tomography Non-seismic geophysics Nano-Technology - Micro MachinesMilitary research - satellite gravity - smart materialsClimate scienceAdvanced data and information systems

Human Technology

A learning organizationAdaptive self-organizing system - leadershipPeople network - Multi-cultural and evolving demographicsCongruency, integration, and communicationInnovation and creativity by all

Return to top.

World realities - Globalization, Advancing Technology, National Security The confluence of change at the turn of the century has created a dynamic environment of opportunities, discontinuities,and challenges

y Changing geopolitical climate - new markets and technologies drive economics.y Globalization creating an inter-connected world - geographies and virtual. Incomplete globalization debated (?).

Shifts in employment and production capabilities. Trading blocks developing.y Mergers, buy-outs and consolidation occurring - backing oil and gas, defense, pharmaceuticals, biotechnology

and high tech companies, antitrust suits common and regulations becoming global.y Volatile military operations worldwide - terrorist organizations evolving, religious unrest and separatist

movements active. NGOs militant environmentalists and animal rights groups, etc. Nation building in


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consumption O il

F igures 62-72 E r a of g a s F igures 73-78








F igures 2-10

"Next Big Thing"The peak-oil debate is getting more polarized and more rancorous - and especially noteworthy, more politicized."So, heres an immodest prediction: The peak-oil debate will be the Next Big Thing. The story with legs. Theoverarching them that will resonate throughout the oil and gas industry for decades to come. It will be propelledforward in the public consciousness not only by serious debate within the industry itself but also on the politicalhustings and antioil forces who cant seem to pry Americans out of their sport utility vehicles even as war rages in theMiddle East and Chicken Little lies sacrificed on the Kyoto altar."Iraq and Saudi Arabia will figure largely in that debate. So will Russia and the Caspian. And Orinoco oil and

Athabasca tar sands. And reserves accounting transparency."And alternate energy viability."That last one once looked like it had legs too, circa 1979-1985. So youll see more coverage of alternate energy in OGJin the years ahead. . . ."

Energy C onsumption (Figures59, 60, and61)

Oil (Figures 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, and72)

Figures 62-72

Figure 62. EIA - World conventional oil production scenarios. Note: US volumes were added to theUSGS foreign volumes to obtain world totals. (Source: EIA). (Williams, 2003).

Figure 63. World demand vs. production(US Department of Energy, 2003;www.eia.doe.gov/oiaf/ieo/index.html).


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E ight ph a ses of petroleum industry R oots of petroleumindustry


P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001







O il F igures 62-72



Figures 79-90 A n energy scen a rio



F igures 93-96 R e a lities & opinions

Figure 64. Trends in finding and developing costs, three-year moving averages, 1979-1981 to 1997-1999(IEA, EIA, 2001).

Figure 65. Historical development of the IEA crude oil import price (cif) (IEA, EIA, 2001)

Figure 66. Total sediment fill. The habitat of petroleum and stratabound minerals (Bernard C. South,1999).

Figure 67. Published estimates of world oil ultimate recovery (D.L. Greene, Oak Ridge NationalLaboratory, J. L. Hopson, Jia Li, The University of Tennessee, Knoxville; Prepared by the Oak Ridge National Laboratory, Oak Ridge, Tennessee, July 23, 2002).Figure 68. Conventional oil endowment of the world. World petroleum assessment 2000 (Ahlbrandt et al.,2001).

Figure 69. Proven conventional oil reserves, in billions of barrels, according to continent or region(Fortune, November, 2001).

Figure 70. Production and remaining reserves in largest UK fields (Read, 2002).

Figure 71. Production and remaining reserves in largest Norwegian fields (Read, 2002).

Figure 72. World oil production capacity by region and country, reference case, 1990-2025 (80-124million barrels oil per day). (Sources: History: EIA, Energy Markets and Contingency InformationDivision. Projections: EIA, 2003B; US Geological Survey, 2000). (US Department of Energy, 2003;www.eia.doe.gov/oiaf/ieo/index.html).


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of a geoscientist F igure 97 R eferences





P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001 F igures 23-27

T he "NewE conomy" Corpor a teconsolid a tion S cience &technology

F igures 28-44 S ediment a ry b a sin

Return to top.

In Figure 62, Peak Ranges are 46 years (2021 to 2067) or 91 years (2021 to 2112); 900 billion barrels moves peak 10years from 2047 to 2047. The table and chart do not include price feedback, political and geographic accessibility,geopolitical conditions or infrastructure.

Supplying oil and gas demand will require planning, technical skills and major up-front investment and risk (Figure63).

The Era of Gas (Figures73, 74, 75, 76, 77, and78) Figures 73-78

Figure 73. Conventional natural gas endowment of the world. World petroleum assessment 2000.(Ahlbrandt et al., 2001).

Figure 74. World natural gas consumption by region, reference case, 1990-2025. (Sources: History: EIA,2003A.. Projections: EIA, 2003B). (US Department of Energy. 2003;www.eia.doe.gov/oiaf/ieo/index.html).

Figure 75. World natural gas consumption, 1970-2025. (Sources: History: EIA, 2003A.. Projections: EIA,2003B). (US Department of Energy. 2003; www.eia.doe.gov/oiaf/ieo/index.html).

Figure 76. Advanced gas conversion for the 21st century (AGC-21).


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systems F igures 45-47











Figure 77. Recoverable oil and gas resources (after M. Ray Thomasson, 2000).

Figure 78. Unconventional hydrocarbon resources: obstacles to commercialization (after Bill Drennan /Art Green, April 10, 2002).

Unconventional Resources "Beyond Petroleum"

Figures 79-90 Figure 79. World recoverable coal reserves (US Department of Energy, 2003; www.eia.doe.gov/oiaf/ieo/index.html).

Figure 80. Coal resources of the worldWestern Hemisphere (Source: World Coal).

Figure 81. Coal resources of the worldEastern Hemisphere (Source: World Coal).

Figure 82. World Coal Consumption, 1970-2025. In billion short tons (left); coal share of world energyand consumption by section, 2001 and 2025 (right). (US Department of Energy; 2003;www.eia.doe.gov/oiaf/ieo/index.html).


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P ost E mb a rgo: 1973- 1980

F igures 17-22 R ecent: 1995 - 2001







O il F igures 62-72


U nconvention a l

Figure 83. World consumption of hydroelectricity and other renewable energy sources, 1970-2025 ((USDepartment of Energy, 2003; www.eia.doe.gov/oiaf/ieo/index.html).

Figure 84, Gas driven electric power generator (Paul Bautista, Gas Technology Institute (Gas ResearchInstitute), Chicago).

Figure 85. Nuclear power: nuclear shares of national electricity generation, 2001 (left); operating nuclear power plants worldwide as of February, 2003 (center), and nuclear power reactors under construction asof January, 2003 (right). (US Department of Energy, 2003; www.eia.doe.gov/oiaf/ieo/index.html).Figure 86. Windmill farm (Fortune, November, 2001)

Figure 87. The sun (Courtesy NASA/TRACE).

Figure 88. Dynamics of Planet Earth (Kellogg et al., 1999; Morse, 2001) (reprint of Figure 19).

Figure 89. Projected annual renewable water supply per person by river basin, 2025 (after Johnston et al.,2001) (World Resources Institute, Washington, D.C.).


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resources "BeyondP etroleum" F igures 79-90 A n energy scen a rio








Figure 90. Hybrid vehicles - fuel cells - combustion vehicles and hydrogen (Fortune, November, 2001).

C oal (Figures79, 80, 81, and82) Hydroelectricity (Figures83 and84)

Nuclear Energy (Figure85)Wind Energy (Figure86)Solar Energy (Figure87)

The diameter of the sun is 864,000 miles. Hydrogen and helium compose 95% of it. Energy is generated bythermonuclear fusion that converts hydrogen to helium. Solar flairs hurl radiation and particles into space. The plasmatemperature is about 1million degrees. Bright region "sun spots" have higher density of coronal gas than dark regions.

Geothermal Energy ( Figure 88) Renewable Water Supply ( Figure 89) Efficiency and C onversation ( Figure 90)

An Energy Scenario (Figure 91)

Figure 91. Energy consumption and mix, 1860-2060, along with population growth.

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Figures 93-96

Figure 93. Energy, GDP, affluence, and life style: World gross domestic product in three economicgrowth cases, 1970-2025; (upper left), world energy consumption in three economic growth cases, 1970-2025 (lower left), GDP growth and energy closely linked 1970-2020 (right). (Sources: History: EIA,2003A. Projections: EIA, 2003B).

Figure 94. 1999 Industrial physics forum standard of living (A.R. Green and Vincent McKelvey, LateDirector, USGS).

Figure 95. USGS 2000 oil endowment (graduated green color) of assessed provinces superimposed on"Earth by Night" image (Thomas S. Ahlbrandt, USGS).

Figure 96. USGS 2000 oil endowment (graduated red color) of assessed provinces superimposed on"Earth by Night" image (Thomas S. Ahlbrandt, USGS).

Realities and Opinions of a Geoscientist

Oil and gas supplies 65% of the worlds energy:80 million bbls per day and 220 billion cfg per dayBy 2010, 90 million bbls per day and 280 bcf per dayCritical chemicals, lubes and refined products

Unconventional resources will increasingly be exploited - tar, heavy oil, tight gas, etc.Subsurface geologic knowledgeInnovative production and refining methods


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Renewable energy, excluding hydroelectric plants and nuclear represent about 2% of energy production worldwide.

Prospective geographic areas with large new oil and gas potential are becoming difficult to find, and viable contractualagreements are a challenge.

By 2020 much of the oil and gas feeding the global economy will come from fields not yet online - the center of gravityfor oil and gas production is shifting.

The world power structure is self-organizing, breaking into a spectrum off political, social and religious entities, and NGOs.

y The EU in Brussels is becoming a controlling influence in international business and regulations.y The large the world economy, the more powerful its smallest members John Naisbitt, Megatrends).

Geoscience, concepts, tools, and technology are developing at an accelerated pace.

Advancements in drilling and logging capabilities and breakthroughs in fuel and chemical research will be needed tomeet the worlds growing energy needs.We are just on the edge of understanding the fundamental complex earth processes that operate within the Earthssubsurface realm.Massive streams of information and new technology have never been more abundant - and yet to transform them intoglobal, economic and social gain, requires the intellect, passion, and genius of the individual human mind working inconcert with sophisticated cross-discipline international teams.

Human knowledge and experience - by 2015, 50% of the geoscientists and petroleum engineers conduction our exploration and production operations have not yet graduated from university.The peaking of conventional oil and gas production is sure to happen, and while the timing is uncertain, there are signsof change on the horizon. Energy related projects are long term - ten to fifteen years leas time needed. Short termoversupply in the period leading up to peak production may result in complacency and inaction.Meeting our energy needs in a world without walls is an essential prerequisite for a global transition to a more affluent


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work population, the growth of freedom and a sustainable environment for our beautiful blue planet.

Who is responsible for developing a workable energy program for the future? If not us - who is?

Figure 97. The earth.

References** **Other references are given with the text and figure captions.

Ahlbrandt, T.S., and World Energy Assessment Team, 2001, World Petroleum Assessment 2000: Compiled Power Point Slides: U.S.Geological Survey Open-File Report 99-50-Z, 112 p. (http://greenwood.cr.usgs.gov/energy/WorldEnergy/OF99-50Z/)

Bijwaard, H., W. Spakman, and E.R. Engdahl, 1998, Closing the gap between regional and global travel time tomography: Journal GeophysicalResearch, B, Solid Earth and Planets, v. 103, no. 12, p. 30 ,055-30,078.

Bilkadi, Zayn, 1995, Aramco World, January/February, 1995. DeAth, N., 1997, Oil companies exploration strategies in the 21st century: Bulletin of the Geological Society of Malaysia, no. 41, p. 5-11.

Energy Information Administration (EIA), 2003A, International Energy Annual 2001, DOE/EIA-0219 (2001), Washington, D.C., February,2003.

Energy Information Administration (EIA), 2003B, System for the analysis of global energy markets. International Petroleum Industry Environmental Conservation Association (IPIECA), Climate Change Working Group, 2004, Energy,

development, and climate change: considerations in Asia and Latin America: Oil & Gas Journal, v. 102.5 (February 2), p. 18 -26.International Energy Agency, 2002, World Agency Outlook, 2002.

Johnston, Nels, Carmen Revenga, and Jaime Echeverria., 2001, Managing water for people and nature: Science, v. 292, 11 May, p. 1071-1072.Kellogg, Louise H., H. B. Hager, and R.D. van der Hilst, 1999, Compositional stratification in the deep mantle: Science , v. 283, no. 5409, p.

1881-1884. Morse, S.A., 2001, Porous sediments at the top of earths core?: Science, v. 291, March 16, 2001. Oil for Victory, McGraw-Hill Book Co., Inc., 1946. Poruban, Steven, 2001, Oil and gas industry continues to grapple: Oil & Gas Journal, v. 99.29 (September 24), p. 22-28.


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Read, Roger, 2002, North Sea evolution to track Gulf of Mexico Model: Oil & Gas Journal, v. 100.34 (August 26), p. 40 -44.

Vail, P.R., 1987, Seismic stratigraphy interpretation using sequence stratigraphy: part I: Seismic stratigraphy interpretatio n procedure,in Atlasof seismic stratigraphy, v. 1, AAPG Studies in Geology 27, p. 1-10.U.S. Department of Energy, 2003, International energy outlook, May, 2003. Wasson, Theron, 1948, Creole Field, Gulf of Mexico, Coast of Louisiana,in Structure of typical American oil fields, v. III, AAPG, p. 281 -298. Williams, Bob, 2003, Debate over peak-oil issue boiling over, with major implications for industry, society: Oil & Gas Journal, v. 101.27 (July

14), p. 18-29. Williams, Bob, 2004, Next big thing: peak oil: Oil & Gas Journal, v. 102.15 (July 19), p. 15. Return to top.

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