Beyond The Gas Pump Energy From Oil & Gas Ron Hinn Society of Petroleum Engineers NEED Educators Workshop November 14, 2007 Anaheim, CA
Energy Daily A Front & Center Topic USA Today Wednesday, Nov. 14 Pg. 5A CA Oil Spill kills hundreds of birds Pg. 8A Oil Spill Cleanup in Russia Business Oil Prices Drop, But Gasoline Rises Hotel Bed Linens Energy Conservation
Our Energy Future Significant Issues of Interest/Importance Enhancing The World s Standard of Living Fueling The World s Economic Growth Alternative Fuels / Sources & Economics Environmental Impact Issues Consumption Improving Energy Efficiency Geo politics
Commodities Price & Value Commodity Savy?? NYMEX Closing Prices 11/13/07 West Texas Intermediate Crude ($/bbl) Natural Gas ($/Mcf Mcf) Oil = $91.07/bbl Gas = $7.94/mcf Volumes 1 Barrel = 42 gallons = 672 cups 1 Mcf = 1000 Std. Cubic Feet @ Standard Temp (60F), Pressure (1atm) Just for fun! Grande Latte @ $3.50 (est. = 2 cups) 1 Barrel Latte = 672/2 *$3.50 = $1176 1 Barrel of WTI = $91.97, 1 cup of WTI = $0.14 Energy contained in 1 cup of crude oil? Assume avg. Car Mileage 25 mpg... Equivalent of 1.6 miles/cup
Chemical Composition of Hydrocarbons Crude Oil 84 87% 87% 11 14% 14% 0.06 2% 0.1 2% 0.1 2% Carbon Hydrogen Sulfur Nitrogen Oxygen Natural Gas 65 80% 1 25% 0 0.2% 0.2% 1 15% 15% 0%
Petroleum Products A Barrel of Crude Oil Provides: One Barrel = 42 gallons Gasoline 19.5 gallons Fuel Oil 9.2 gallons Jet Fuel 4.1 gallons Asphalt 2.3 gallons Kerosene 0.2 gallons Lubricants 0.5 gallons Petrochemicals, other products 6.2 gallons American Petroleum Institute, 1999
Historical Oil Prices 2006 $ Real Oil Prices* Source:BP
Historical Energy Use by Type of Fuel (%) % Of Total Usage 70 60 50 40 30 20 10 Wood Coal Oil & Gas Nuclear Hydro Other 0 1850 1900 1950 2000 SPE 77506 World Energy Beyond 2050, Arlie Skov
Supply & Demand Airline tickets Stocks Real Estate I Phone In a free market commodity prices are driven by the balance between supply and demand For hydrocarbon fuels (oil and gas) the price equation is becoming evermore dominated by supply related challenges.
World Energy Consumption BP Statistical Review of World Energy June 2006
Oil Consumption BP Statistical Review of World Energy June 2007
Major oil trade movements BP Statistical Review of World Energy June 2007
Why High Oil Prices? Driven by: OPEC behaviour post 1999 Strong demand growth 2004 Low spare capacity Geopolitics Energy as a financial commodity 3 World Oil Consumption Growth 6 OPEC Spare Capacity Mb/d 2.5 2 1.5 ROW FSU China Million b/d 4 2 1 0.5 0 2001 2002 2003 2004 2005 Est 0 1995 1998 2001 2004 Source:BP
OPEC Production Saudi Arabia Iran UAE Kuwait DEC 2005 Production Nigeria Venezuela SPARE CAPACITY Libya Algeria Indonesia Qatar MILLIONS OF BARRELS PER DAY 1 2 3 4 5 6 7 8 9 10 Note: Figures exclude Iraq Source: International Energy Agency
Demand Challenge One Example Fuel Economy Overall fuel economy for cars and light trucks peaked at 22.1 mpg in 1987. Fell to 20.8 mpg in 2004. Avg. weight of vehicles has increased from 3200 lbs. to 4066 lbs. Federal tax on gasoline = 18.4 cents/gallon State tax varies (New York 60.8 to Alaska 26.4) About 70% of new vehicles purchased in US have 6 cylinders + 89% of vehicles in Europe have 4 cylinders or less (average fuel economy is 35 mpg) Wall Street Journal Fuel Economy Back in The Saddle
Proved oil reserves at end 2006 BP Statistical Review of World Energy June 2007
Proved Natural Gas Reserves BP Statistical Review of World Energy June 2007
Proved Coal Reserves 2006 BP Statistical Review of World Energy June 2007
A Sampling of What s Cool About Oil & Gas Technology (eg( eg.. Deepwater Jack) Co2/N2 Flooding Increasing Recovery Meeting the world s needs Supplies Efficiency Environment Career Opportunities
What Lies Beneath!
3 D Reservoir Mapping A 3 d geological cross section of the Stevens reservoir at the Elk Hills field in California. The model delineates the subsurface structure, which traps the oil and gas deposits, and the producing wells penetrating the reservoir.
Gas Injection For Enhanced Recovery Nitrogen Injection 1. A cryogenic air separation unit converts air into highly pure nitrogen. 2. Compressed nitrogen is injected into the reservoir via injection wells. 3. The injected nitrogen forces the natural gas and oil toward producing wells. 4. Production wells pump oil, natural gas, water and the injected nitrogen to the surface. 5. The oil and other liquids are separated from the produced natural gas, metered and transported for sale. 6. Nitrogen is separated from the natural gas and reinjected into the reservoir. The natural gas is metered and sold. A 3 d geological cross section at Oxy s Elk Hills field in California. The model delineates the subsurface structure, which traps the oil and gas deposits, and the producing wells penetrating the reservoir. Nitrogen Oil Natural Gas