Oil and natural gas Peak Oil and ERoEl V Filip Černoch cerno ch@m ail .muni, cz CENTER FOR ENERGY STUDIES World total primary energy supply by fue (1971-2015) 16 000 Coal2 Hydro 1_I_I_I_I_I_I_I_I_I_I_I_I_I_I_I_I_I_I_I_I_L Oil Natura gas BioFuels and waste 2015 Nuclear Other1 Note: Peat and oil shale aggregated with coal. CENTER FOR ENERGY STUDIES World total primary energy supply by fue 1973 HnAnli*iflw*sle 6 101 Mtoe 2015 IS 647 Mtoe Note: Peat and oil shale aggregated with coal. CENTER FOR ENERGY STUDIES Peak Oil • 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 (1903-1989) 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 Peak Oil concept 1850 1870 1890 1910 1930 1956 1970 1990 2007 2030 2050 year CENTER FOR ENERGY STUDIES Early peak" predictions Peak oil date Source and date of forecast 2006-2007 Bakhtiari f2004^ 2006 on Simmons (2006) After 2007 Skrebowski f2004^ Soon after 2007 World Enerp-v Council f2007^ 2009-2031 Sorrell et al. f2009^ Before 2010 Goodstein f2004^ Around 2010 Campbell f2005N) Possibly 2010 Klare f2004^ 2010 Aleklett et al. f2010^ After 2010 Skrebowski (2005) 2006-2017 Hiro f2007^ Soon after 2010 De Margerie. C. Total S.A. (Walt. 2010^ 2008-2012 De Almeida and Silva f2009^ 2012-2017 Koppelaar. 20 and Koppelaar. 2006 2008-2018 Robelius f2007^ 2014 Nashawi et al. f2010^ 2015 Shell f2008^ „Late peak" predictions Peak oil date Not before 2017 After 2020 After 2020 2020 or beyond 2035 2020 (for oil and gas) 2025 or later 2035 Not before 2035 No visible peak No peak but 54.2 years of global production Teak oil theories have been abandoned' 'Oil demand ... reaching a long plateau in the 2040s' Source and date of forecast CERA (2008) Hayward, T., BP (Macalister. 2010) CERA (Jackson and Esser. 2004) TEA (2010) Shell (2011) Davis (2003) CERA (Jackson. 2006) EIA (2010) Maugeri (2012) BP (2012) Mountains Scenario Oceans Scenario (Shell. 2013) Was Hubbert right? •Easily accessible oil and gas deposits are being depleted. •Decreasing discovery rate (fields 'too big to miss'). •But predicted peak repeatedly increased and postponed. • How to explain this contradiction? 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" (proven, probable and possible reserves). • E&P in extreme conditions. •New techniques of extraction (unconventional oil and gas). •Increasing recovery rate - from 22% in 80s to 35% today. 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 2 001 2 004 2 007 2010 20Ü Data source: BP Statistical Review of World Energy 2014 © Robert Rapie 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 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 Offshore drilling • Complicated technology and hostile environment increase the risk of accidents and their impact. • Oil spillages in the water (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 IxtocWell, 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 ENERGY STUDIES Transport of oi • One of the biggest threats in ship transportation — oil spill. Intentional (terorism, piracy) and unintentional (accident, collision,, running ashore, failure of the ship) accidents. • 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 III 1980 89: 9.4 spills per year on average 1990-99: 7.7 spills year on average 2000 09: 3.2 spills per year on average 2010-19: 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 # # & & # ^ # ^ ction Steam injected into the reservoir Steam and Heated oil groundwater and water are' heat the pumped to the viscous chI surface Producing techniques - open pit mining • Open pit (ex-situ) mining (max 70m) (oil sand-bitumen, also shale oil). • Excavation, when sand is cooped out by power shovels, carried away, then hot water is used to separate bitumen from the sand. Then it is refined. • 8-10 barrels of water/1 barrel of oil, 40 - 70% could be recycled. About 2 (but up to 4) tons of material/1 barrel of oil. • l,5x more GHG then in case of conventional crude oil. • http: / / www.youtube.com/watch?v=YkwoRivPl 7 A CENTER FOR ENERGY STUDIES Mining shovels dig into sand and load it into trucks. Trucks take oil sands to crushers, where it is prepared for extraction. Hot water is added to ttie oil sands and tfien transported via hyclrotransport to trie extraction plant. Bitumen is extracted from the oil sands in the separaiion vessels. The tailings - consisting of sand, clay, water and a small amount of residual oil - are pumped lo Ihe settling basin, where trie water is recycled and reused in the process, Bitumen is sent to refineries across North America to make products including gasoline, jet fuel and plastics, Shale gas Natural gas (= clean fuel) trapped within shale formations. Fracking — combination of horizontal drilling and hydraulic fracturing. High consumption of water, 0,5-2% of injected liquid represents added chemicals. One well - 280 000 hi of water. 2-4 hectares/1 drilling pad (= up to 30 wells), 3-6km between pads. Transport — one well/700-2000 trucks (during installation one car every 4 minutes). Methane leackages, earthquakes. https: / / www.youtube.com/watch?v=Ag9GUogWEaO CENTER FOR ENERGY STUDIES Peak Oil theory disproved? = Peak oil might by postponed. = Technology and strict regulation could limit accidents. = New sources of oil and natural gas consumes more environmental services (water, land etc.) = And their low ERoEI requires even more intense production. = Still physical limits of production = Demand Peak Oil? CENTER FOR ENERGY STUDIES Peak Oil theory disproved? North American tight oil production (January 2005-February 2014) million barrels per day 4.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CENTER FOR | ENERGY STUDIES i Peak Oil theory disproved? Movement of World ON Prices $/bbl (real 2010 dollars, monthly average) 160 CENTER FOR ENERGY STUDIES ERoEl •Energy returned on energy invested — ratio of the amount of usable energy delivered from a particular energy resource to the amount of energy used to obtain that energy resource. •Less then one — energy sink, net energy loss. CENTER FOR ENERGY STUDIES ERoEl Standard ERoEI — divides the energy output for a project (region, country) by the sum of the direct and indirect energy used to generate that output. Point of use ERoEI — includes additionally the costs associated with refining and transporting the fuel Extended ERoEI — considers the energy required not only to get but also to use a unit of energy Societal ERoEI — all gains from fuels and all costs of obtaining these fuels. CENTER FOR ENERGY STUDIES ERoEl lOOMJ EROI Hit EROU< EROIpou Oil RWming and Byproduct* oi Iranspurt of Oil to Point oi Infrastructure for Transport I I I I I Oil Remaining as Consumer Rt*xlv Furl CENTER FOR ENERGY STUDIES EROEI of different sources of energy Oil in the beginning of oil business 100 Oil in Texas around 1930 60 Oil in the Middle East 30 Other oil 10-35 Natural gas 20 High quality coal 10-20 Low quality coal 4-10 Water power plants 10-40 Wind power plants 5-10 Shale oil 5 PV power plants 2-5 Nuclear energy 4-5 Oil sands max. 3 Shale oil max. 1,5 Biofuels (in Europe) 0,9-4 CENTER FOR ENERGY STUDIES 601 45.1 Global Oil and Gas EROI Values and Trends (1990-2010) • Global oil aid gas {Gagnon el al. 2009) — Global oil aid gas trend- O Of 30:1 ID 15:1 1S89 2000 2010 CENTER FOR ENERGY STUDIES Future of fossil fuels? Environmental cost of consumption of fossil fuels is not static. Production needs to grow faster than consumption due to the ERoEI + each new barrel of oil and cubic metre of gas is more (not less) environmentaly demanding. CENTER FOR ENERGY STUDIES Sources • Hall et all (2014): EROI of different fuels and the implications for society. Energy Policy vol 64 • Lacalle, D.(2011): Peak Oil Defenders 'Most Overlooked Mythe: EROEI • Lloyd's (2011): Drilling in Extreme Environments: Challenges and Implications for the Energy Insurance Industry • Hook, M., Tang, X.(2013): Depletion of fossil fuels and anthropogenic climate change — a review. Energy Policy Vol. 52. • ITOPF: Oil Tanker Spill Statistics 2015 • Canada's Oil Sands web pages. • The Encyclopedia of Earth (2012): Oil spills in U.S. coastal waters: background, governance and issues for C (\\~\ (Y'fY^c CENTER FOR ^Uii&iC3 ENERGY STUDIES