fossil resources - fossil fuel market presentation
TRANSCRIPT
Riccardo Pagotto, Carlotta Ragazzo
Fossil Resources: past, present and future
The marketing evolution of the Fossil
Fuels: Golden Age and Crisis
Outline ! The Golden Age
! The Hubbert prediction
! The Peak Oil
! The End of the Cheap Oil
Fossil Fuels: The Golden Age
! Rapid growth after first drill (Pennsylvania, 1859)
! Oil discoveries era (1859 - 1960)
! The rarest oil fields: Giants (grater than 0.5 billion barrels)
Source: peakoil.com
The Oil Monopoly
! Control of the oil production and prince among the earliest companies in order to make a consistent profit.
! Standard Oil Company: strongly believed that monopolies were far better than competition
Oil discoveries and extraction
! Discoveries of giant fields have been extremely rare: about 70% of world supply comes from fields discoveries before 1970s.
! The world started to use more oil than the real supply in 1980s.
! Gap between discovery and production has became wider
Source : Peak Oil, Economic Growth, and Wildlife Conserva<on. J. Edward Gates, Brian Czech, David L. Trauger (2014)
Oil discoveries (Gb/yr of oil equivalent)
1
Discovery and annual oil production in France.
2
Peak oil: The Hubbert Peak Theory
The Hubbert curve used to to predict the rate of production from an oil-producing region containing many individual wells.
Source : Peak Oil, Economic Growth, and Wildlife Conserva<on. J. Edward Gates, Brian Czech, David L. Trauger (2014)
Hubbert projection
Source : Peak Oil, Economic Growth, and Wildlife Conserva<on. J. Edward Gates, Brian Czech, David L. Trauger (2014)
US field production of crude oil from 1859 to 2011 shows a peak around 1970, as predicted by Dr. M. King Hubbert.
What Do We Know About “Peak Oil” Today? Peak Oil = point of maximum producMon
source: seekingalpha.com
Saudi Arabia is a strongest player in oil producMon
Production of primary energy from different resources (Gtoe)
The avg consume/person = 25 barrels of oil/day The avg worldwide = 25 bbl/yr or cubic mile of oil (CMO) ! CMO ≅ 6-‐9/yr Replacing: 32*1000 MW nuclear power plant or 36k*3MW wind farm
Global consumption of oil per capita
1 -‐ Fossil fuels have no apparent subsMtutes
Source : The First Half of the Age of Oil. Charles A. S. Hall and Carlos A. Ramírez-‐Pascualli (2013)
2 -‐ “Energy Slaves”
peakoilbarrel.com
The addition of unconventional sources of oil (heavy, deep-water, polar, natural gas liquids (NGL)) had little effect on the peak in worldwide oil production.
Oil Reserves and Peak Oil
Source : Peak Oil, Economic Growth, and Wildlife Conserva<on. J. Edward Gates, Brian Czech, David L. Trauger (2014) ;
2 - World Energy Consumption
1 – The ASPO model
1 - China’s Energy Production by Fuel Type (1980-2015)
3 - Total energy consumption in China by type (2011)
2 - Total energy consumption in India (2011)
Source: U.S. Energy Informa<on Administra<on
The Emerging Economies
source: Paul Chefurka (2011)
Source : The First Half of the Age of Oil. Charles A. S. Hall and Carlos A. Ramírez-‐Pascualli (2013)
The end of the Cheap Oil (Scientific American: C. Campbell, J. Laherrère; 1998)
1
Oil prince since 1860.
2 Source : Paul Chefurka (2011)
Oil prices changes in response to:
1. weaker (or stronger) oil demand; 2. strong OPEC supply; 3. new discoveries (US unconventional); 4. geopolitical conflicts; 5. technology improvments
Pictures’ source : The First Half of the Age of Oil. Charles A. S. Hall and Carlos A. Ramírez-‐Pascualli (2013) EROI source : What is the Minimum EROI that a Sustainable Society Must Have? Charles A. S. Hall , Stephen Balogh and David J. R. Murphy (2009)
• Declining EROI will take a huge economic toll in the future
• Traits of the fossil fuels: 1. Sufficient energy density; 2. Transportability; 3. Relatively low environmental impact 4. Per net unit delivered to society; 5. Relative high EROI
EROI: Energy Return On Investment 1
2
• Sustainable production should be at least to the EROI ratio = 1.05:1
Perspective on the Economy and Price of Oil
Source: www.eia.gov
• Price BRENT ≅ $60/bbl; WTI ≅ $50/bbl (03/17/2015) source eia;
• Global Gross Production (GDP): growth projection for 2015 remained relative stable;
• Continued increases in global oil consumption could bring oil markets closer into balance in the second half of 2015
Historical crude oil front month futures price
Conclusion ! The “end of cheap oil” is not only a potential
disaster but also a great opportunity for developing a better source of energy.
! Reducing the amount of the net fuel society needs through efficiency improvements or lifestyle changes.
! If the real price of the oil relative to other goods and services increases, and the economy stays at the same size, some other components of the economy are diverted to pay for that oil.
Source : The First Half of the Age of Oil. Charles A. S. Hall and Carlos A. Ramírez-‐Pascualli (2013); What is the Minimum EROI that a Sustainable Society Must Have? Charles A. S. Hall , Stephen Balogh and David J. R. Murphy (2009); Peak Oil, Economic Growth, and Wildlife Conserva<on. J. Edward Gates, Brian Czech, David L. Trauger (2014)