Oil Contents. Core Text: Boyle, Everett Ramage 2003 Energy Systems and Sustainability Oxford Univerity Press

Transcription

1 OIL 1

2 Oil Contents Where Does Oil Come From Geology and Geography History of Oil Use Current Oil Use Energy and Non Energy uses Oil Fractions Alternative Sources of Oil Oil / Gas as Secondary Fuel Non-Conventional Sources Peak Oil Theory Oil Price Trend Core Text: Boyle, Everett Ramage 2003 Energy Systems and Sustainability Oxford Univerity Press 2

3 Geology and Geography Petroleum (Rock-Oil) decomposition of aquatic plants and animals 100 s millions of years ago under mud and silt. Containment in Reservoir Rock: Anticline / Fault Trap / Salt Dome Anticline showing reservoir caught in a fold under a layer of impermeable rock. Source Wikipedia: _Trap_%28Anticlinal%29.svg acessed 5 Nov

4 World Oil Production by Region World Oil Production By Region 2000 Other 31% Former Soviet Union 11% North and Central America 19% Middle East 39% North and Central America Middle East Former Soviet Union Other Data Source: Boyle, Everett Ramage 2003 Energy Systems and Sustainability Oxford Univerity Press 4

5 History of Oil Use Prior to 19 Century: Small scale exploitation Mid 19 th Century Petroleum used for illumination (Oil Lamps) Pennsylvania 1859: First Modern Oil Well. Beginning of 20 th Century: Internal combustion engine for transport cause an explosive rise in demand for petroleum The Oil Century. Oil becomes the worlds foremost energy source and is also a vital ingredient in production of many chemicals. End of 20 th Century to present day: Concerns about dwindling stocks and environmental impact of oil combustion drive search for alternatives. Future:? 5

6 Why is Oil so Special? Cheap and Readily Available Convenience and Ease of use Clean to burn (for the user if not for the environment) Ease of distribution/storage/portability. Why is oil so important in transport? Energy Density. (Aside one of the main stumbling blocks for electrical vehicles comes from trying to match the energy density of oil) Many types of fuel (Heavy Fuel oil to Light Kerosene) As a raw material for production of plastics lubricants and other petrochemicals. Source: Boyle, Everett Ramage 2003 Energy Systems and Sustainability Oxford Univerity Press 6

7 Where is Oil used? UK Demand for Oil Products 2000 Oil Specific Demand 18% Petroleum Products used for energy 82% Source: Boyle, Everett Ramage 2003 Energy Systems and Sustainability Oxford Univerity Press Oil Specific Demand includes Petrochemical feedstock, White Spirit, Lubricants and refinery fuel (6.4%). 7

8 A Closer look at selected applications (UK Demand for Oil Products) Product 1967 Demand 2000 Demand Industrial Fuel Oil 30.6 Million Tonnes (39%) 3.3 Million Tonnes (4.3%) Transport Fuel 19 Million Tonnes(25%) 47 Million Tonnes (62%) Source: Boyle, Everett Ramage 2003 Energy Systems and Sustainability Oxford Univerity Press 8

9 Oil Fraction and Distillation Crude oil is separated into fractions by fractional distillation. The fractionating column is cooler at the top than at the bottom because the fractions at the top have lower boiling points than the fractions at the bottom. The heavier fractions that emerge from the bottom of the fractionating column are often broken up (cracked) to make more useful products. All of the fractions are subsequently routed to other refining units for further processing. Source for image and text: Wikipedia: accessed 05 November

10 Typical Uses of Oil Fractions Fraction Gases (Methane/Ethane/Propane/Butane) Gasoline Kerosene Diesel Oil (DERV) Fuel Oil Lubricating Oil /Waxes/ Birumen/ Petrocoke Typical Use LPG, Petrochemicals Transport Petrol Engines Aviation Fuel / Lamps Stoves Transport (Diesel Engines) Power Stations, May be Cracked further into other products Various uses 10

11 Alternative Sources of Oil Oil as a Secondary fuel Oil may be derived from Natural Gas (Methane-Methanol-Gasoline) New Zealand in 1980s derived 10% of their requirements this way. Oil May be Derived from coal. Fischer-Tropsch Process. South Africa Sasol Plants 80,000 barrels a day capacity. Cost Estimate 46/barrel Bio-diesel (renewable Source) 11

12 Alternative Sources of Oil (Cont) Non Conventional Sources Oil Shale Kerogen (waxy solid) Widely Distributed World Largest Reserve: Green River USA High Capital Cost / Waste Disposal difficulty Tar Sands Alhabasca Alberta 400,000 barrels / day at 10/barrel Significant deposits in Russia Heavy Oil Will not flow to earth under natural reservoir pressure Inject steam to force it to surface Large Stocks in Orinoco Basin Easier to exploit that shale or tar Current Production around 400,000 Barrels / day High Sulphur Content noxious emissions - Environmental Concerns 12

13 Oil Prices Common Benchmark Indicators: Brent Crude: (North Sea Oil) Dubai Crude (Middle East) West Texas Intermediate (USA) Opec Reference Basket (Weighted Average of OPEC prices Sample Crude Oil Prices March 2000 ($/Barrel) 22 Feb 08 ($/Barrel) 28 Feb 12 ($/Barrel) Brent Blend Dubai Fateh United States OpecAverage World Average Source: US Energy Information Administration 13

14 Oil Price Trend 14

15 Oil Price Trend Source: WTGR Economics: accessed 5/Nov 2007 For a more authorative souce look at EIA 15

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17 Global Oil Demand Global Oil Demand (US Energy Information Administration) mbpd Other Non-OECD Former U.S.S.R. China Other OECD United States Q1 2009Q2 2009Q3 2009Q4 2009Q5 2010Q1 2010Q2 Source US Energy Information AdministrationWorld Oil Balance accessed 4 th November

18 Peak Oil Theory Source Wikipedia: accessed on 6/Nov/

19 Hubbert s Peak Oil Theory In a famous 1956 paper projecting future US oil production versus time Hubbert predicted that peak US oil production would occur in early 1970s and would then diminish as oil reserves ran out. Hubbert s projections for US oil were broadly accurate and in 1977 he extended his method to cover global oil supply, predicting the peak to happen in Changing demand patterns and new discoveries proved this date to be pessimistic but the fact remains that oil reserves will one day be exhausted. Many commentators have made new projections. A significant body of opinion suggests that peak oil is now or may even have passed. One would expect sustained rising prices to follow peak oil. Do oil price trends show this? Is it too early to tell? Traditional economics suggests that rising prices will result in increased supply. Is this view incompatible with the peak oil hypothesis or can they be reconciled? Explain your answer with respect to supply and demand curves. 19