Fossil fuels: Oil and Natural Gas V Filip Cernoch cemoch@jnail.muni.cz CENTER FOR ENERGY STUDIES World Energy Consumption Q-O AI 600 500 400 300 200 100 0 Nuclear ■ Hydro-Elect ■ Nat Gas Oil -Coal - Biofuels 1820 1840 1360 1380 1900 1920 1940 1960 1980 2000 Source: Our Finite World 2012 Environmental impacts • Production (exploration and production) • Transportation/storage •Processing • Consumption (combustion) CENTER FOR ENERGY STUDIES Outline of the presentation Environmental cost of consumption of fossil fuels is not static. In the course of time each new barrel of oil and cubic metre of gas is more (not less) environmentaly demanding. Concepts of Oil (Gas) Peak and ERoEI are used to approach the problem. Oil (+ natural gas) used for ilustration. CENTER FOR ENERGY STUDIES Oil (Gas) Peak • A point in time when the maximum rate of extraction is reached and only decline in production is expected. •Based on Marion King Hubbert's models (Shell, US Gelogical Survey). •Presentation in San Antonio in 1956 predicting U.S. oil peak for 1970. •Concept is being criticized for „Malthusian perspective". CENTER FOR ENERGY STUDIES Oil (gas) peak 1850 1870 1890 1910 1930 1956 1970 1990 2007 2030 2050 year CENTER FOR ■ ENERGY STUDIES! „Late peak" predictions Peak oil date Source and date of forecast Not before 2017 CERA (2008) After 2020 Havward. T„ BP (Macalister, 2010) After 2020 CERA (Jackson and Esser, 2004) 2020 or beyond 2035 IEA (2010) 2020 (for oil and gas) Shell (2011) 2025 or later Davis (2003) 2035 CERA (Jackson, 2006) Not before 2035 EIA (2010) No visible peak Mauaeri (2012) No peak but 54.2 years of global production BP (2012) 'Peak oil theories have been abandoned' Mountains Scenario 'Oil demand ...reaching a long plateau in the 2040s' Oceans Scenario (Shell, 2013) CENTER FOR ENERGY STUDIES „Early peak" predictions Peak oil date Source and date of forecast 2006-2007 Bakhtian (2004s) 2006 on Simmons (2006) After 2007 Skrebowski (2004*1 Soon after 2007 World Energv Council (20071 2009-2031 Sorrell et al. (20091 Before 2010 Goodstem (20041 Around 2010 Campbell (20051 Possibly 2010 Klare (20041 2010 Aleklett et al. (20101 After 2010 Skrebowski (20051 2006-2017 Hiro (20071 Soon after 2010 De Mareerie. C. Total S A. (Walt 20101 2008-2012 De Almeida and Silva (20091 2012-2017 Koppelaar. 2005 and Koppelaar. 2006 2008-2018 Robelius (20071 2014 Nashawi et al. (20101 2015 Shell (20081 Was Hubbert right? • Easily accessible oil and gas are being depleted •Decreasing discovery rate (fields 'too big to miss') •But predicted peak repeatedly increased and postponed. • For what reasons? CENTER FOR ENERGY STUDIES Was Hubbert right? •Economic perspective — „oil reserves are the amount of oil that is minable at today's prices using existing technology". •Increasing recovery rate - from 22% in 80s to 35% today • E&P in extreme conditions •New techniques of extraction (unconventional oil and gas) CENTER FOR ■ ENERGY STUDIES! US oil production since 1965 12.0 6.0 1965 1 968 1 971 1974 1 977 1 980 1 983 1 986 1 989 1 992 1 995 1 998 2 0 01 2 0 04 2 0 07 2 010 20Ü Data source: BP Statistical Review of World Energy 2014 © Robert Rapie CENTER FOR ENERGY STUDIES New areas of exploration - deep waters Traditional onshore drilling •Limited impacts — considerable experience, physically limited possibility of spillage •Impacts similar to mining operations in non-energy industry — land use, water and air pollution, dust, noise, transportation damages of habitats. •Long history of regulation in the EU and USA CENTER FOR ™ ENERGY STUDIES ■ New areas of exploration - deep waters Wells drilled in excess of 1000 feet as deep (first in 1975), 5000 and more (1986) as ultra-deep. Gulf of Mexico, Brazil, West Africa. Reserve billion barrels: Onshore Offshore Deepwater 213 Mote: Figures are a representative sample of tile world's major oilfields in billion of barrels, source: world Energy Outlook 2010 © OECD/Iinternational Energy Agency 2010 CENTER FOR ENERGY STUDIES Location of deepwater drilling oil fields Gutfof Msxico UK Mauritania • India # Brazil / Ivory Coast nigeria a EquatoriaI Guinea Angola % a Congo « Indonesia é 1> Deepwaier uevelopnent areas "Golden Triangle' K under af deepwater cil fields belowMOm Source: Petraleun Economist CENTER FOR ENERGY STUDIES New areas of exploration - deep waters Offshore drilling • Complicated technology increases the risk of accidents and consequent damages due to the hostile environmental conditions •Worse impacts of oil spillages (lm3 = spillage up to lkm2) •Increase in a number of off-shore installations accompanied by more stringent regulation (2010 Gulf of Mexico - Directive 2013/30/EU on safety of offshore oil and gas operations) CENTER FOR ENERGY STUDIES High profile oil spills from offshore blowouts Date of Incident Location Incident and Spillage Details (Estimated figures) Insured loss(S) 2S.1.69 -12.2.69 Santa Barbara, California 80,000-100,000 barrels Not available 3.6.79 - 23.3.80 ixtoc Well, Mexico 3.3 million barrels 22,000,000 22.4.77- 30.4.77 Ekofisk Norwegian Sector, North Sea 202,381 barrels 6,887,000 1980 Funiwa Niger Delta, Nigeria 200,000 barrels 53,554,000 2.10.80-10.10.80 Arabian Gulf 100,000 barrels 1,300,000 21.8.09-3.11.09 Timor Sea, Australia/ Indonesia 28,800 barrels of condensate oil 425,000,000 20.4.10-15.7.10 Gulf of Mexico 4.9 million barrels, plus 11 fatalities and 17 injuries 2,560,000,000 Adapted from Willis Energy Loss Database and American Petroleum Institute Analysis of US Oil Spillage 2009 CENTER FOR j ENERGY STUDIES i Transport of oi One of the biggest threats in ship transportation — accident and oil spill. Intentional accidents (terorism, piracy), unintentional (accident, collision,, running ashore, failure of the ship). Risk is significandy higher in highly frequent areas — in 1995-2005 in Turkish Straits 269 accidents. To stop VLCC or ULCC tanker 14 minutes and 3km are needed. In 70s there were 25,2 leaks annually, in 80s 9,3 leaks, in 90s 7,8 and after 2000 3,4 leaks annually. But with increasing capacity of tankers the oil spills are more severe with increasing environmental impacts. CENTER FOR ENERGY STUDIES il spills during the maritime transport of oi 35 30 1970-79: 24.5 spills per year on average 1980 89: 9.4 spills per year on average 1990-99: 7.7 spills per year on average s 2000 09: 3.2 spills per year on average 2010-15: 1.8 spills per year on average 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 Annual number of spills to U.S. waters from facilities and pipelines, 1980 - 2004 3.000 # # & & # ^ # ^