The Future of Oil Roland N. Horne Energy Resources Engineering Stanford University 1 It s a Fossil-Fueled World 6% 6% 29% 35% Oil Natural Gas Coal Nuclear Hydroelectric 24% BP Statistical Review 2008 2 1
140 Crude Oil Price 120 100 $ money of the day $ 2007 US$/bbl 80 60 40 20 0 1860 1880 1900 1920 1940 1960 1980 2000 BP Statistical Review 2008 3 The Future? 1. Production and reserves. How much oil is there, and how long will it last? 2. Technology. How can we produce more of the oil in place? 3. Manpower. Who will work on these problems? 4 2
1. Production and Reserves How much do we have? How long will it last? Peak oil Business as usual 5 Peak Oil Lahererre, 2003 [http://www.oilcrisis.com/laherrere] 6 3
Peak Oil World, outside of swing producers - Saudi Arabia, Kuwait, Iran, Iraq, UAE Lahererre, 2003 [http://www.oilcrisis.com/laherrere] 7 World, excluding extra-heavy oil Peak Oil Lahererre, 2006 [http://www.oilcrisis.com/laherrere] 8 4
Billion bbl 1600 1400 1200 1000 800 600 400 200 World Proven Oil Reserves Oil and Oil Sands Alberta oil sands added OPEC restates reserves 0 1980 1985 1990 1995 2000 2005 2010 BP Statistical Review 2008 9 Technical vs. Political Reserves Lahererre, 2007 [http://www.oilcrisis.com/laherrere] 10 5
World Oil (+NGL) Production 120,000 110,000 100,000 90,000 kb/d (EIA, June 2008) IEA WEO 2006 kb/d 80,000 70,000 60,000 50,000 40,000 1970 1980 1990 2000 2010 2020 2030 Energy Information Administration, July 2008, www.eia.doe.gov/ipm/ International Energy Agency, World Energy Outlook 2006, www.iea.org 11 2007$ 100 90 80 70 60 50 40 30 20 10 0 World Oil (+NGL) Production 2007$ (BP, 2008) kb/d (EIA, June 2008) 1970 1980 1990 2000 2010 100,000 95,000 90,000 85,000 80,000 75,000 70,000 65,000 60,000 55,000 50,000 EIA and BP Statistical Review 2008 kb/d 12 6
World Oil (+NGL) Production 13 http://europe.theoildrum.com/node/2832 10 How Good Are Forecasts? Mb/d 9 8 7 6 5 US domestic oil production AEO 1985 AEO 1991 AEO 1995 AEO 2000 AEO 2002 AEO 2004 AEO 2006 AEO 2008 Actual 4 1985 1995 2005 2015 EIA: Energy Information Administration, Annual Energy Outlook, 1985-2008. http://www.eia.doe.gov 14 7
The Second Trillion USGS (2000) World Oil OPEC BP O&GJ 0 200 400 600 800 1000 1200 1400 International Energy Agency, World Energy Outlook 2004 15 USGS, U.S. Geological Survey World Petroleum Assessment 2000, http://pubs.usgs.gov/dds/dds-060/ Gb The third trillion : 2. Technology (a) Discovering the undiscovered. (b) Producing the unproductive. (c) Unconventional sources. New discoveries. Enhanced oil recovery (EOR). Oil sands and oil shale. 16 8
(a) World Oil Reserves and Resources International Energy Agency, Resources to Reserves 2005 OECD/IEA, 2005: Figure ES1, page 17, used with permission. 17 World Oil Production by Source International Energy Agency, Resources to Reserves 2005 OECD/IEA, 2005: Figure 2.1, page 41, used with permission. 18 9
Top World Oil Producers, 2006 (thousand barrels per day) 1 Saudi Arabia 10,665 2 Russia 9,677 3 United States 8,330 4 Iran 4,148 5 China 3,845 6 Mexico 3,707 7 Canada 3,288 8 United Arab Emirates 2,945 9 Venezuela 2,803 10 Norway 2,786 11 Kuwait 2,675 12 Nigeria 2,443 13 Brazil 2,166 14 Algeria 2,122 15 Iraq 2,008 Source: EIA 19 20 10
12,000 Saudi Arabia Oil Production 10,000 8,000 kb/d 6,000 4,000 2,000 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Source: EIA June 2008 International Petroleum Monthly Working Harder to Find Oil 21 22 Stuart Staniford, March 2, 2007 http://www.theoildrum.com 11
Effectiveness of Wildcat Drilling International Energy Agency, World Energy Outlook 2004 23 Effectiveness of Wildcat Drilling 24 12
Total Upstream Costs per Barrel http://www.eia.doe.gov/neic/infosheets/crudeproduction.html 25 (b) Enhanced Oil Recovery Increasing recovery factor by recovering left-behind oil. 10% of US oil production for more than 10 years. Thermal methods. CO 2 methods. Chemical methods. www.snf-oil.com 26 13
Recovery Factor http://aspofrance.viabloga.com/files/jl-igc2008-part3.pdf 27 Thermal Enhanced Oil Recovery kb/d Dr. Abdul Muin, BPMIGAS The 4th Workshop of Indonesia PPM Case Study June 13-17, 2006, Jakarta 28 http://www.ccop.or.th/ppm/document/inws4/inws4doc02a_indonesia_abdul_muin.pdf 14
CO 2 Enhanced Oil Recovery US since 1980. 80 projects. > 230,000 b/d Sequestration too. http://www.encana.com/operations/canada/weyburn/index.htm 29 ASP Enhanced Oil Recovery Alkaline Surfactant Polymer (ASP) Additional 20% of STOOIP SPE 100855 (2006) Wang Yupu, and Liu He, Daqing Oilfield Co. Ltd 30 15
(c) Oil Sands http://ostseis.anl.gov/guide/photos/index.cfm www.energy.gov.ab.ca/oilsands/pdfs 31 Oil Sands http://ostseis.anl.gov/guide/photos/index.cfm 32 16
Oil Sands http://ostseis.anl.gov/guide/photos/index.cfm 33 Oil Sands - SAGD www.opticanada.com/technology/bitumen_extraction/ 34 17
Oil Sands - SAGD http://www.longlake.ca/project/photo_gallery.asp 35 Oil Sands Gas Consumption 2004 consumption 0.7 Bcf/d (Canada 7.7 Bcf/d). Producing 142 Gb of oil would need 200 Tcf of gas (Canada total reserves = 58 Tcf). 2006 carbon emissions = 45 Mt/year. Water and environmental concerns. Söderbergh et al. (2007) US imports 8.2 Bcf/d 2006 (14% of US consumption) 30 Bcm/y = 2.9 Bcf/d = ~1 Tcf/y) IEA World Energy Outlook 2006 36 18
Oil Shale http://ostseis.anl.gov/guide/photos/index.cfm 37 Oil Shale http://www.geolsoc.org.uk/gsl/ geoscientist/features/page874.html 38 http://www.dailyreckoning.com/rpt/oilshale.html 19
Oil Shale http://ostseis.anl.gov/guide/oilshale/index.cfm 39 3. Manpower and Womanpower Who will do the work? 40 20
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SPE Membership by Age 2007 SPE Membership, Excluding Student Members Average Age of Members is 46 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Age Distribution 65+ 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 41 SPE (www.spe.org) 2007 SPE Talent & Technology 2007 42 21
There are Sufficient People But Not Distributed Schlumberger: Surviving the Skills Shortage (2006) 43 3.5 The More Distant Future Peak oil Peak gas Peak coal Peak uranium Ultimately, the fossil-fuel era will end, and the world must operate on renewable energy sources. 44 22
Futures for Graduates Develop skills in fundamentals. Foreign language skills allow mobility. Flexibility to address new problems. Petroleum engineers today will be energy engineers in the future. 45 Conclusions Easy oil has been consumed. Plenty of difficult oil still, but demand will soon surpass supply. Technologies to improve recovery require advanced skills. Shortages of professionals in many places. Excellent opportunities for young people to enter professional careers with large challenges, great responsibility and substantial rewards. 46 23
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