the ene stainability dilemma: powering the ture in a …...(reference economic case) non-oecd +58%...

1

The Energy Sustainability Dilemma: Powering the F uture in a F inite World

Winnipeg, ManitobaF ebruary 17, 2010

J. David HughesGlobal Sustainability Research

Geological Survey of Canada - retired

-

Points to be covered:

- Availability and deliverability of the nonrenewable fuels (OIL , GAS, COAL , URANIUM) that are the energy-denseelixers of our modern society OIL = Transportation

- E L E CTRICITY some issues in keeping the lights on and the

- Implications of POPULATION GROWT H and ASPIRATIONSof future energy consumption

- Forecasts - where are we going and how likely is it that - H istory - where have we been

- Going forward in a F inite World

2

World Primary Energy Consumption: 1965-2008By Region By Fuel

157%

359%

123%708%968%

65%

422%83%

96%

(data from BP Statistical Review of World Energy, 2009)

196% increase in WorldConsumption 1965-2008;

2008 increase = 1.4%

Highest growth in 2008 = Middle East 5.9%; Coal 3.1%

Coal

Gas

Oil

© Hughes GSR Inc, 2009

+28%

+49%+38%

ForecastsHistory

(History: BP Statistical Review of World Energy, 2009;Forecasts: Energy Information Administration International Energy Outlook, 2009)

Projections(2008-2030)


3

Gas +39%

(data from Energy Information Administration International Energy Outlook, 2009)

Non-O E C D Countries +61%(82% of 2008 World Population)

O E C D Countries +15%(18% of 2008 World

Population)

Forecast G rowth In World Energy Consumption, 2008-2030(E I A , 2009, Reference E conomic Case)

38% increase in WorldConsumption (1.5%/year)

Oil +24%

Coal +42%

41%

49%


Tonn

es O

il Eq

uiva

lent

Per

Per

son

World Per Capita Annual Primary EnergyConsumption by Fuel 1850-2008

(data from Arnulf Grubler, 1998;BP Statistical Review of World Energy, 2009; U .S. Bureau of Census, 2009)

+765%

WOOD

OIL

COAL

GAS

Year

Renew

able11%

Non-R

enewable

89%

HYDRO


4

Perc

enta

ge o

f 200

8 Pe

r C

apita

Con

sum

ptio

n

World Population, Per Capita and Primary EnergyConsumption, 1850-2008, as a Percentage of 2008 L evels

(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2008; U .S. Bureau of Census, 2008)

8.6 times

WOOD

OIL

COAL

GAS

Year

Renew

able11%

Non-R

enewable

89%

HYDRO

Perc

enta

ge o

f 200

8 Po

pula

tion

Year

5.3 times

Perc

enta

ge o

f 200

8 To

tal C

onsu

mpt

ion

Year

Population Per Capita Consumption Total Consumption

46 times

OIL

COAL


-energy in 2008

Summary

- Forecasts suggest that 85% of a greatly expanded energy demand will continue to be provided by hydrocarbons in 2030

- Most of the balance of energy supply will be provided by large hydro and nuclear sources with thei r own environmental problems

- The Question is: IS T H IS SUSTAINABL E?

Lets look in more detail at oil, gas and coal© Hughes GSR Inc, 2009

5

ULTIMAT E BARRI ERE N ERGY IN

E QUALSE N ERGY OUT

Conventional

Unconventional

Price/TechnologicalLimit to access

Coalbed MethaneShale Oil

Tight Gas

???Gas Hydrates???

In Situ Resources

Production

DecreasingConcentration

IncreasingEffort

(Energy INVs

Energy OUT)

Tar SandsExtra-H eavy Oil

In Situ Oil and Gas Resources versus Supply

In Situ Coal GasificationCoal Liquefaction

Shale GasGas to Liquids

- The 86% of Primary Energy provided by HYDROCARBONSrepresents a daunting challenge to replace

Beware of Scale:

-L ess than 1% of Primary Energy Consumption is now provided by non-hydropower renewables

-There are no scalable alternatives to HYDROCARBONS at the RAT ES O F E N ERGY T HROUG HPUT

we enjoy at this point in time

-Unconventional hydrocarbon production is DI F F ICULT TO SCAL E

compared to the cheap hydrocarbons of yesteryear

6

1% 1925 5% 194910% 1960

20% 1970

30% 1976

40% 1981

50% 1986

60% 1991

70% 1995

80% 2000

90% 2005

50% of the O ILConsumed by the

Human RaceUsed Since 198690% of the O IL

Consumed by theHuman Race

Used Since 1960

1124 Billion barrels

Consum

ed

Start 1859

(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2009)© Hughes GSR Inc, 2009

World O il Production and Consumption 1965-2008

F.S.U .19%

Non-OPE C171%

F.S.U .164%

OPE C 12155%

Non-OPE C158%


171% increasedown 0.6% 2008

over 2007

84%

11%

5%

39%

45%

16%

157% increaseup 0.4% 2008

over 2007

PE AK2002

Production Consumption

PE AK2007


7

World Conventional O il and O il Sands* Reserves 1980-2008


OP

ECN

on-OP

EC

66%76%

22%14%

12%

10%

SaudiA rabia

I raq

I ran

Former Soviet UnionOther Non-OPE C

Former Soviet Union

Non-OPE C

OPE C 12K uwait

Other OPE C

Other North Amer icaU .S. A .

ImplicationSome of the441 Bbbls or

117% increasein reported

reserves overthe period may

be spurious

Reserves inflated by 285 Gbblsor 69% over four-year periodin 1984-1988 without major

new discoveries QUOTA WARS

(data from BP Statistical Review of World Energy, 2009)These Countries also Produced 200.6 Billion Barrels over the Period

Oil Reserve Reporting in Selected OPE C Countries, 1980-2007,Representing 86% of 2007 OPE C Reserves and 65% of World Reserves

Saudi A rabia

Venezuela

K uwait

I raq

I ran

United A rab Emirates


8

(data from BP Statistical Review of World Energy, 2009)© Hughes GSR Inc, 2009

0

10

20

30

40

50

60

1930 1950 1970 1990 2010 2030 2050

Bill

ion

Bar

rels

per

Yea

r

Year

The G rowing Gap between Production and Discoveryof Regular Conventional O il (1930-2050)

Past DiscoveryFuture DiscoveryProduction

Past discover ies have been backdated with revisions

(data from Campbell, personal communication, October, 2009)

World Discoveries Peaked in 1965

Productionhas ExceededDiscoveriessince 1984


9

WH E N?- Debatable, because of the variables,

World O il Production Peak

BUT IT IS H IG H LYLIK E LY TO H APPE N

D EPE NDS ON:

- U LT I M AT E R E C O V E R A B L E R ESE RV ES - a function of:- (total discovered and

undiscovered resources)- Technology and Price (determines economics)- Reserve Appreciation (G rowth) in known pools (through

more drilling, better technology and higher prices)

- R AT E O F C O NSU MPT I O N - a function of:- Price (controls economic growth and

encourages/discourages conservation)- Infrastructure for production- Depletion rates of producing pools

Copyright J. D . Hughes GSR Inc, 2008

Year of Peak Production and Percentage 2008 Production is below Peak

(data from B .P. Statistical Review of World Energy, 2009)

U . K .

Norway

DenmarkMexico

= OPE C Countries23 Countries Peak Since 1996

15 Countries Peak Since 2000

64% of 2008Production was from Countries Past Peak© Hughes GSR Inc, 2009

10

Combined LiquidsPeak 2008

(data from C .J.Campbell, personal communication, October, 2009)

Ultimate Recoverable=2.5 Trillion Barrels

Production 1930-2050


Peak at 84% of Ultimate Recoverable Consumed

Consensus Peak 2012Without C ERA and E IA

Consensus Peak 2015All Estimates

Highly criticized by manyAnalysts

Most Recent Estimates of the T ime of Peak World O il Production

(Data Source H irsch 2007 except for E IA;E IA estimate from E IA I E O , 2009, referencecase demand growth of 0.9%/year and USGS 2000 P50 estimate with peaking at R/P of 10 years) © Hughes GSR Inc, 2009

11

Modeled Forecasts of L iquids Production through 2030(Peak production dates indicated by Source and Star)

Campbell 2008

Uppsala (worst case) 2008Energy Watch 2008

Skrebowski 2012Energyfiles 2017

Uppsala (best case) 2018

Total 2020

Shell (worst case) 2020

Statoil 2028 OPE CE IAE XXONI E AShell(bestCase)

(data from U .K . Energy Research Centre, Annex 1 to Technical Report 7, October, 2009)

(data from U .K . Energy Research Centre, Annex 1 to Technical Report 7, October, 2009)

Global Additional Production from New Megaprojectsthrough 2016 versus G lobal O il Depletion Rate

Surplus

Deficit

12

History

(Source of data: BP Statistical Review of World Energy, 2009; Wood et al, E IA , 2000, 2003, 2004; E IA I E O , 2009)

E IA (2009) Reference CaseGrowth in Production (0.9%/year)

Forecast

E IA (2009) reference forecast to 2030

Implication

E IA forecast peak 2044(84% produced)

>25 YearsAssumptions:

Ultimate Recoverable 3 Trillion barrels

2018 50% Consumed

95% of all oil consumed on Earthhas been consumed since 1950

10 Year R/P Decline


22%14%

12%

10%Former Soviet Union

Non-OPE C

Non-O E C D +24%

O E C D -16%

OPE C +24%

Production

E I A World O il Production and Consumption Forecast 2006-2030(Reference Economic Case)

Non-O E C D +58%(82% of 2008 Population)

O E C D +2%(18% of 2008 Population)

58% 47%

Range of Peak Productionestimates of Duncan,

Laherrere, Campbell, Bakhtiari,Ivanhoe, Deffeyes and others

(data from Energy Information Administration International Energy Outlook 2009; June, 2009)

Consumption


13

Non-OPE C

OPE C-12

Non-OPE CPeak

To DateF ebruary 2007

World O il Supply January 2001 to March 2009Can Investment G et Us to 107 Million bar rels per Day?

Production Plateau

(5-Month Moving Average including data to May 2009, from Energy Information Administration, September, 2009)

WORLD PE AK TO DAT E MAY 2008


E IA 2030 Forecast

Surplus Capacity

North Amer ican O il Consumption and Movements: 1965-2008

Net Imports(65% of 2008consumption)


Peak1970

Consumption(up 69%)

Mill

ion

Bar

rels

per

Day

Consumption up 575%Consumption up 105%

Net ExportsNet Exports

Production(up 252%)

Production(up 772%)

(Down 17% since 2004)Peak 2004


Production(down 40%from Peak)

U .S.A .

14


Low Price Reference Case High Price

Canada Scenarios of O il Production to 2020 (N E B , 2009)

World Consumption from Energy Information Administration International Energy Outlook, 2009)

BitumenBitumen

Bitumen

UpgradedBitumen

UpgradedBitumen

UpgradedBitumen

4.6% of World Consumption4.0% of World Consumption

3.0% of World Consumption


Mill

ion

Bar

rels

per

Day

15

12.6% of forecast 2030 World Liquids Consumption

(data from Energy Information Administration, International Energy Outlook 2009, June, 2009)

Overall G rowth2005-2030 +288%

E I A World Unconventional L iquids Production Forecast 2006-2030(Reference E conomic Case, 2009)

Biofuels +634%


" Old

" Con

ventio

nal O il

" New

" Con

ventio

nal Oil

Heavy

Oil

Extra H

eavy

Oil

Gas to L

iquids

Tar San

ds

Coal L

iquefacti

on

Biodiese l

E than

ol

Shale O

il

Biodiese l

E than

ol

Source

Energy Profit Ratio for L iquid Hydrocarbons

Ener

gy R

etur

n on

Ener

gy I

nves

ted

H igh

Low

EnergySource

(E R O E I > 1)

EnergySink

(E R O E I < 1)

Increasing Energy Input

(biodiesel, ethanol from University of MinnesotaProceedings of National Academy of Sciences

July, 2006, and Pimentel and Patzek, 2005,Nat Resources Research (Vol. 14:1, 65-76))

Universityof Minnesota

Pimenteland Patzek

16

In P

lace

Res

ourc

es

Oil Shale Oil Sands H eavy Oil,EnhancedRecovery

Light Oil,PrimaryRecovery

Energy Profit Ratio versus In Place O il Resources(Energy Return on Energy Invested)

Energy Profit (ERO E I > 1)

Energy Sink (ERO E I < 1)

The Issue is Not Resources its Deliverability How F astCan These Resources be Converted into Supply in theF ace of Growing Demand?, and at What Cost? We are

not running out of O IL there will be oil in 100 millionyears -

the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of

money and we should take this issue very seriously"

find the equivalent of four Saudi Arabias to maintainproduction, and six Saudi Arabias if it is to keep up with

the expected increase in demand between now and 2030. It's a big challenge in terms of the geology, in terms of the investment and in

Dr. Fatih Birol, Chief Economist of the IEA, the

Independent August 3, 2009

(from http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-766585.html

17

1% 19325% 1956

10% 1965

20% 1974

30% 1981

40% 1986

50% 1991

60% 1995

70% 1999

80% 2002

90% 2006

50% of the GASConsumed by the

Human RaceUsed Since 199190% of the GAS


Used Since 1965

570 Billion barrels O

ilEquivalent C

onsumed

Start 1885

(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2009)© Hughes GSR Inc, 2009

M iddle East

FormerSoviet Union

Asia PacificAfricaEurope

S. & C . AmericaNorth Amer ica

M iddle East

FormerSoviet Union

Asia Pacific

AfricaEurope

North Amer ica

30%

35%

41%

31%

12%5%

World Gas Reserves: 1980-2008


18



World Natural Gas Production 1930-2050


Gas Peak 2045

19

Combined Oil and Gas Peak 2010


World O il and Gas Production 1930-2050


Liquids Peak 2008

Exports

Consumption

North American Gas Production and Movements: 1985-2008


Total Consumption

Imports

Production(Peak-to-Date 1973)

Canada: 107% increase inProduction 1985-2008

43%

ProductionPlateau

2002-2006


20


15%

8%

77%63%

24%

13%

C O NSU M E D

PR O V E NR ESE RV ES(9.4 years)

R ESO UR C ES(4.9 years)

PR O V E NR ESE RV ES(9.4 years)


H OPE D F O R:UNDISC O V E R E D


Marketable Natural Gas Resources According to N E B (2006)Estimates including L ifetime assuming 2005 Production Rates

Discovered ResourcesRemaining Discovered

and Undiscovered Resources(Resource estimates from National Energy Board, March, 2006, Report 2006-A , as at December 31, 2004;

2004 Proven Reserves from CAPP, 2006; 2005 Production from Statistics Canada, 2006)

21

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

Res

erve

s (T

cf)

1996 1999 2002 2005 2008Year

0

1

2

3

4

5

6

Pro

duct

ion

(Tc

f/ye

ar)

1996 1999 2002 2005 2008Year

0

2000

4000

6000

8000

10000

12000

14000

16000

Num

ber

of G

as W

ells

Dri

lled

1996 1999 2002 2005 2008Year

more and more drillingto find less and less gas

(Wells drilled from Canadian Association of Oil Well DrillingContractors, 2009; Production from Statistics Canada, 2009; Reserves from CAPP, 2009)

Wells Drilled Production Reserves

Estimate

PeakProduction

2002

PeakProduction

2002

PeakProduction

2002


(Source of data Statistics Canada, January, 2010)

G rowth

Dec

line

Peak/Plateau

Decline7.5%/year

Lowest Level since A

pril 1995


22

60% Post-2001

(National Energy Board analysis of Geoscout Data in Short Term Canadian Natural Gas Deliverability, October, 2008)

Natural Gas Production in Western Canada Sedimentary Basinby Well Vintage at Yearend 2007

(60% of Production from wells drilled in past SIX YE ARS)B

illio

n C

ubic

Fee

t per

Day

(data from Baker-Hughes, 2010; Statistics Canada, January, 2010)

Canadian Drilling Rig Count and Marketable Gas Production 2000-2009(2006 Canadian Overall Decline Rate was 21%)

Gas

Oil

Gas Peak Rig ActivityF ebruary 2006

Active Rig Count(52 Week Moving Average)

71%

M arketable Gas Production(12 Month Moving Average)

Gas Production

Gas Production F allingat 7.5%/year


23

National Energy Board Forecast for CanadianGas Deliverability 2009-2012 Reference Case

(from National Energy Board Reference Case, October, 2009)

Production Change by yearend 2008 2011:High Case = -1.6 bcfd =-12%

Reference Case = -2.7 bcfd = -17%Low Case = -3.5 bcfd = -22%


Canadian Gas Deliverability Scenarios f rom A ll SourcesNational Energy Board, July, 2009

Bill

ion

Cub

ic F

eet p

er D

ay

Peak 2001 Peak 2001

TightT ight

T ight

Conventional Conventional Conventional

Solution Solution Solution

24

Canadian Domestic Demand and Production versus U .S. Export Requirements 2006-2030

(data from Energy Information Administration Annual Energy Outlook, 2009, Reference Case; and from National Energy Board, 2007, Reference Case/Continuing Trends Scenario)

Canadian Exports

Canada Domestic Demand

Shortfall in forecastCanadian Domestic

Requirements

Shale Gas +420%

Lower 48 Conventional(including T ight Gas)

Lower 48 Offshore +42%

Alaska

U .S. Natural Gas Supply Forecast by Source 2007-2035with Canadian Export Capacity According to N E B , 2007

(data from Energy InformationAdministration Annual Energy Outlook, reference case, 2010; National Energy Board, reference case, November, 2007)

Lower 48 ProductionGrows 22% 2007-2035

8% Total Growthfrom 2007-2035

Coalbed M ethane

Lower 48 Unconventional

25

(Data from Energy Information Administration, December, 2009)

200% M

ore Wells

T H E U .S. E XPL O R AT I O N T R E A D M I L LAnnual Gas Well Count and Production by Month, 1991-2009

Wells Completed Dry Production 15% M

ore Production

DRILL ING UP200%

PRODUCTION UP15%



Growth 1.1%/Year

Recent Peak - July 2001

Katrina

U .S. Annual Dry Gas Production by Month 1991-2009Including data through O ctober 2009

Growth 0.7%/YearWith

Record Drilling

E IA 2030 Forecast

Shale Gas Growth

ALL T IM E PE AK PRODUCTION - 1973


26

(data copyright I HS Energy, Diagram prepared and copyright by E OG Resources Inc., 2006)

Natural Gas Production in the United Statesby Well Vintage at Yearend 2006

(60% of Production from wells drilled in past F OUR YE ARS)

60%F romMost

RecentF OUR

YE ARS

U .S. Drilling Rig Count and Dry Gas Production, 2000-2009(2006 U .S. Overall Decline Rate was 32%)

Gas

Oil

Rig Count 2000-2009 Production 2000-2009

Peak August 2008

Gas down 56%September 2009

(data from Baker-Hughes, 2009;Energy Information Administration, September, 2009; E IA Annual Energy Outlook, 2009)

E IA 2030 Forecast


27

Shale Gas T H E G R E AT W H I T E H OPE?

(from US Geological Survey, 2009)

Barnett Shale Gas Urban Drilling, Dallas-Fort Worth, Texas (12,110 wells to March, 2009)

28

(data from Moorman, Southwest Energy, November, 2009)

Barnett 64% of shale production (peaked Q1 2009)

Shale Gas Production 2004-mid 2009 (bcf/day)

Typical Shale Gas Decline Rate Curve(high productivity fractured reservoir)

Year 0

Year 1 -65%

Year 2 -81% Year 10 -94%

(Larry Benedetto, Howard Weil Incorporated, May, 2008)

29

U .S. Gas Price (N Y M E X) 2004-2009Versus Shale Gas B reakeven Production Cost

(Wall Street Journal Market Quotes, 2009; Navigant Consulting Inc., Bank of America, 2008)

M edian B reakeven ShaleGas Price $6.64/M cf (Bank of America)

Range of B reakeven ShaleGas Prices depending on Play

(Bank of America)


200% M

ore Wells

T H E U .S. E XPL O R AT I O N T R E A D M I L LAnnual Gas Well Count and Production by Month, 1991-2009

Wells Completed Dry Production 15% M

ore Production

DRILL ING UP200%

PRODUCTION UP15%

22,000/year -1.8%/year


30

U .S. Deficit

Lower 48 Production(assuming 1.8%/year decline and 22,000 successful wells per year)

A laska

U .S. Natural Gas Supply Forecast with 1.8% /year Decline, 2007-2035(Reference Case, Energy Information Administration, 2010)

(data from Energy Information Administration Annual Energy Outlook, 2010)

8% Total Growthfrom 2007-2035

10.2Tcf or 41% of projected dem

and

LNG Logistics- Production = $US .50-$1.00/mcf- Liquefaction = $US .80-$1.00/mcf

- Shipping = $US .50-$1.45/mcf- Receiving = $US .24-$.40/mcf- T O TA L = $US 2.04-$3.85/mcf (U .S. 2007 L N G imports priced at $US 6.32-7.17/mcf, 2008 were as high as $15.85-$38.15)

(1Reimer, F reeport LNG , 2003; E IA October, 2008)

OPERATING COSTS (F RE EPORT, T E XAS1):

31

0

0.4

0.8

1.2

1.6

2

2.4

2.8

3.2T

rilli

on c

ubic

feet

per

Yea

r

Qatar

Mala

ysia

Indon

esia

Algeria

Nigeria

Aust rali

a

T r inida

d & T

obagoEgyp

t

Oman

Brunei

UA E

Guinea

Norway US

Libya

P roduce rs

0

0.4

0.8

1.2

1.6

2

2.4

2.8

3.2

Tri

llion

cub

ic fe

et p

er Y

ear

Japa

n

Sout

h Korea

Spain

F rance

TaiwanIn

dia US

TurkeyChina

Mex

ico

Portuga

l

Be lgium

I ta

ly

United K

ingdom

Greece

Puerto

R ico

Dominica

n Rep

ublic

Argen

tina

Consume rsTotal = 7.99 Tcf

L N G Producers and Consumers in 2008


Producers Consumers


32

0

500

1000

1500

2000

2500

3000

3500

4000

4500B

illio

n C

ubic

Fee

t per

Yea

r

2000 2001 2002 2003 2004 2005 2006 2007 2008

Y ear

SurplusU A ETrinidadQuatarOmanNorwayNiger iaMalaysiaIndonesiaGuineaEgyptBruneiAustraliaAlger ia

L N G Imports and Surplus Capacity 2000-2008

(data from Energy Information Administration F ebruary, 2009)

Gulf of MexicoExcelerate Energy

Comes on Line

Lake Charles and E lba IslandExpansions Complete

83% 83% 83% 63% 52%59%

73%

Offshore Boston, F reeport TX ,Sabine LA Complete

80%

Cove Point MD ,Expansion Complete

92%

0

0.5

1

1.5

2

2.5

3

Cap

acity

Add

ition

s Tc

f/yea

r

2007 2008 2009 2010 2011 2012 2013Y ear

Engineer ing Stage 2.7Planning Stage 2.6Under Construction 4.3

World L N G L iquefaction Capacity Additions2007-2013

(data from Pennwell LNG Observer October, 2007; Platts April, 2008)

Total = 9.6 Tcf/year

Regas/Liquefaction Ratio2008 = 1.76:12013 = 3.22:1

33

" Old

" Con

ventio

nal Gas

" New

" Con

ventio

nal Gas

Importe

d LNG

Tight G

as

Coalbed

Meth

ane

Coal G

asifica

tion

Shale G

as

Gas Hyd

rates (

so far

)

Compressed

Hyd

rogen

L iquid Hyd

rogen

Source

Energy Profit Ratio for Natural Gas and A lternatives

Ener

gy R

etur

n on

Ener

gy I

nves

ted

H igh

Low

EnergySource

(E R O E I > 1)

EnergySink

(E R O E I < 1)

Increasing Energy Input

?

In P

lace

Res

ourc

es

Shale Gas Coalbed Methane Tight Gas Conventional Gas

Energy Profit Ratio versus In Place Gas Resources(Energy Return on Energy Invested)

Energy Profit (ERO E I > 1)

Energy Sink (ERO E I < 1)

As with Oil, the Issue is Not Resources its DeliverabilityGAS resources with a low ERO E I tend to produce at

much lower rates and have a vastProportion of their in place resources that will

never be recoverable (ie. Energy Sinks)

34

10% 1910

20% 1931

30% 1949

40% 1962

50% 1973

60% 1982

70% 1989

80% 1997

90% 2003

50% of the COALConsumed by the

Human RaceUsed Since 197390% of the COAL


Used Since 1910

1161 Billion barrels O

ilEquivalent C

onsumed

(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2009)

Start <1850


World Coal Production and Consumption: 1981-2008

Production Consumption

312%

-28%

-53%

83%

31%


123% increase in WorldConsumption 1965-2007;

2008 increase = 3.1%

Coal up 41% since 2002

43%

-29%

97%

293%


35

Consumption in 2007

O il40%

Gas 27%

Coal33%


Remaining Reservesby Energy Content

Coal57%

Oil23%

Gas 20%

World Hydrocarbon Consumption in 2007Versus Remaining Hydrocarbon Energy Reserves

By Energy Content

0

1000

2000

3000

4000

5000

6000

7000

8000

Exa

joul

es

NorthAme rica

S. & C .Ame rica

Europe F orme rSovietUnion

MiddleEast

Africa AsiaPac ific

Region

World Remaining Recoverable H ydrocarbon Reserves by Energy Content (2007)

CoalGasOil


36

Oil$13.40/Gj

Gas$5.71/GjExport

ThermalCoal

$2.89Gj

Mine MouthSubbituminousCoal $0.84/Gj

DomesticBituminous

Coal $1.46/Gj

Peak 1998

North Amer ican Coal Production by Energy Content and Tonnage, 1981-2008

Energy Content Tonnage


37

(from Energy Watch Group, March, 2007)

One Forecast of FutureWorld Coal Production (E W G , 2007)

Peak 2025


Peak 2030

Uppsala Forecast of G lobal Peak Coal, 2008

(from Hook, Zittel, Schindler, Aleklett, 2008)© Hughes GSR Inc, 2009

38

All Hydrocarbons Production (1950-2150) H istory and Forecast (Caltech, 2009)

History Forecast

Peak 2020

Peak 2019

(data from rutledge.caltech.edu, June, 2009)

Peak 2021


Total C O2 EmissionsCaltech (2009) compared to UN IPC C Scenarios

the 40 IPC C scenariosJean Laher rere was the first to call attention to this situation

(from rutledge.caltech.edu, June, 2009)© Hughes GSR Inc, 2009

39

Consumed and Remaining Recoverable HydrocarbonsCaltech (2009) vs IPC C


Caltech includes 174 Billion Barrels of Oil SandsIPCC includes only maximum consumption to 2100, ultimate recoverable would be higher

6.9times

8.3times

7.4times


Percentage of Hydrocarbons Remaining (1950 2150) H istory and Forecast (Caltech, 2009)

History Forecast

58% Remaining 2009

20% Remaining 2050


50% Remaining 2017

2% Remaining 2100


40

Each Windmill requires 260 tonnes of steelmade from 170 tonnes of coking coal and 300 tonnes

of iron ore, all mined and transported by hydrocarbons

Atmospher ic C O2 Concentration (1850-2150)Caltech, 2009


H istory Forecast


41

Global Annual Mean Temperature, 1850-20065-year moving average (Hadley HadC RU T3 dataset, 2008)

(data from Hadley Meteorological Centre, November, 2008)

1940-2006 = 0.4 Celsius

Pre-Industrial = 0.75 CelsiusBelow Present

90% of all hydrocarbons have been consumed since 1940and 50% since 1984


Projected Temperature Increase due to Fossil FuelEmissions (1850-2150), Caltech, 2009Scenarios (2005 2400) Caltech, 2008


2 Degrees Celsius Above Pre-Industrial Levels

Copyright J. D . Hughes GSR Inc, 2009

H istory Forecast

Peak Temperature 2064

Pre-Industrial Level

42


MarketShare

Natural Gas 88%

Coal +83%

17%

15%

41%

20%

15%

11%

43%

21%

77% Growth 2006-20306%



MarketShare

Natural Gas +22%

Coal +14%

6.0%

19.4%

48.5%

22.0%

11.2%

17.1%

43.8%

21.2%

26.5% Growth 2007-2035

5.8%

43

Forecast U .S. E lectricity Generation from Non-HydropowerRenewable Energy Sources, 2007-2035 (Reference Case, E I A , 2010)

MarketShare

4.1%

5.5%

.54%

.53%

.43%


Wood and Other Biomass +636%

Wind +530%

452% Growth 2007-2035(11.2% of Total)

2.6%

Canada Scenarios of E lectr icity G enerationby Fuel to 2020 (N E B , 2009)


Hydro +13%

+17%+16%


Terr

awat

t H

ours

Hydro +14%

+14%

Hydro +11%

44

- Higher efficiency generation with new technologies can reduce C O2 emissions by 25% given existing technologies more in future, coupled with 99+% reduction in particulates, 99% in SO x, 90% in N O x and 90% in mercury

- If we burn coal we must do so utilizing the best technologies to minimize emissions coupled with a very aggressive conservation and efficiency program.

- The most efficient current technology is ultrasupercritical combustion at 43.5% -plant.

- Demark is a world leader in ultrasupercritical plants and utilizes them in distr ict-heating applications with combined efficiencies of 65-70+% (which is better than combined-cycle gas).

Carbon Capture and StorageA Scalable Clean Coal Solution?

- Energy Waste (23-37%)UNLIK E LY

- Capital Cost (32-74% extra)

- Time-to-build - SCAL E-Complexity Lost Opportunity of Time

and Capital for investment in lower energyconsumption alternatives

45

Generation Capacity at Current Construction L evels and L evels Required to Maintain and/or Increase Nuclear Capacity by 2025

(adapted from Energy Watch Group, Paper EWG Series No. 1/2006, (2006); data from IA E A , (2006))

57 New 1GWReactors

283 New 1GWReactors

346 New 1GWReactors

482 New 1GW Reactors

- Hydrogen is an E N ERGY CARRI ER not an E N ERGY SOURC E

HYDROG E NThe Silver Bullet?

- Because of energy losses in production of hydrogen from hydrocarbons or

greenhouse gas emission and Global Warming Problem, unless hydrogen can be generated exclusively f rom renewable sources.

- Hydrogen is largely created from hydrocarbons or electr icity, each of which can be used directly without the energy conversion losses to hydrogen (conversion f rom gas loses 30% and from electr icity 28%).

- The other issues with Hydrogen storage, distr ibution, fuel cell cost and longevity - have been well documented by groups such as the National Academy of Sciences. There is no such thing as a f ree lunch.


46

0

2

4

6

8

10

12

14

0 1 2 3 4 5 6 7 8 9 10Energy Density by Volume (K Wh/litre)

Ener

gy D

ensi

ty b

y W

eigh

t (K

Wh/

kg)

GasolineDiesel

Propane

M ethanolNatural Gas@ 25M pa*

L iquid H2 @ -253C*

H2 Gas @ 25M pa*

Batter iesLead, L ithium*

M etal Hydride

Energy Density of Hydrogen in ComparisonWith Other Energy Car riers

*Includes Weight of Containment Vessel (data from Dr. Werner Zittel et al, 1996)

The Last Piece of the Energy Sustainability Puzzle:

POPULATION GROWT Hand

ASPIRATIONS O F GROWT H IN E N ERGY CONSUMPTION

IN T H E D E V E LOPING WORLD

47

7x

29x

3x

Canadian Consumption Ratio

6x

76% of World Population(5.1 Billion People)

24% of World Population(1.6 Billion People)

There is a Great Inequity in Energy Consumption WorldwidePer Capita Energy Consumption by Region

(data from Energy Information Administration International Energy Outlook 2009)© Hughes GSR Inc, 2009

China Population and Energy ConsumptionHistory and Forecasts (1990-2030)

(Data from Energy Information International Energy Outlook, 2009) © Hughes GSR Inc, 2009

H istory+16%

Forecast+9%

History+158%

Forecast+77%

History+200%

Forecast+92%

48

87%

357%


316% increaseup 10% 2008

over 2007

ProductionPrimary Energy Production and Consumption by Fuel: 1981-2008

387% increaseup 7.5% 2008

over 2007

363%

363%

Consumption

AsiaF lu

Imports 10%


2008 Consumption up 3.3%2008 Production up 1.4%1999-2008 average consumption up 7.9%/year1999-2008 average production up 1.8%/year

2007 Deficit 4.2 MMbbls/day(2008 D E F ICIT = 5.1% O F WORLD CONSUMPTION)

53% ofDemand

-2008


49

India Population and Energy ConsumptionHistory and Forecasts (1990-2030)


H istory+38%

Forecast+27%

History+65%

Forecast+42%

History+128%

Forecast+80%

2008 Consumption up 4.8%2008 Production down 0.5%1999-2008 average production up .4%/year1999-2008 average consumption up 5.1%/year

Imports

Production

2008 Imports = 2.12 MMbbls/day(2.6% O F WORLDCONSUMPTION)

-2008

73%


50

Other Non-O E C D Asia Population and Energy ConsumptionHistory and Forecasts (1990-2030)


H istory+37%

Forecast+30%

History+65%

Forecast+40%

History+126%

Forecast+82%

2008 Consumption down 0.8%2008 Production up 1.1%1999-2008 average production down .6%/year1999-2008 average consumption up 2.1%/year

Imports

Production

2008 Imports = 3.2 MMbbls/day(4.2% O F WORLDCONSUMPTION)

Other Non- -2008

55%


51

India

Per Capita Energy Consumption by Country and Region ,1990-2030 (E I A Reference Case, 2009)

(data from Energy Information Administration , International Energy Outlook, May, 2009) © Hughes GSR Inc, 2009

ForecastHistory

Total Energy Consumption by Country and Region, 1990-2030(E I A Reference Case, 2009)


ForecastHistory

52

United States

O E C D - Europe

C H IN A

History Forecast

Non-O

ECD

64%O

ECD

36%

OEC

D 4

4%

35% Growth to 2030

Annual C O2 Emissions by Country and Region 1990-2030(E I A Reference Case, 2009)


O E C D - AsiaRussia

World Population Increase 1950-2050

© Hughes GSR Inc, 2009 (U .S. Bureau of Census, 2009; H irsch, 2005; Globe and Mail September 13, 2008)

MotorVehicles

850 million

U .S.A .240 millionChina 200850 million

+20%in 2009

Motor Vehicles>5%/year

Motor Vehicles70 million newVehicles built

in 2008

53

Trends in Energy Investment for Food Production(The Hydrocarbons We Eat)

Ener

gy I

nput

per

Uni

t of

Food

Ene

rgy

Out

put 20

10

5

2

1

.5

.2

.1

Loss

Prof

it

.05

.02

Indu

stia

lized

Dev

elop

ing

(Adapted from Science, April 19, 1974)

Perc

enta

ge o

f 200

8 Pe

r C

apita

Con

sum

ptio

n


(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2008; U .S. Bureau of Census, 2008)

8.6 times

WOOD

OIL

COAL

GAS

Year

Renew

able11%

Non-R

enewable

89%

HYDRO

Perc

enta

ge o

f 200

8 Po

pula

tion

Year

5.3 times

Perc

enta

ge o

f 200

8 To

tal C

onsu

mpt

ion

Year


46 times

OIL

COAL


54

Perc

enta

ge o

f 203

0 Pe

r C

apita

Con

sum

ptio

n


(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2009; U .S. Bureau of Census, 2009); E IA International Energy Outlook, 2009)

9.5 times

WOOD

OIL

COAL

GAS

Year

Renew

able11%

Non-R

enewable

89%

HYDRO

Perc

enta

ge o

f 203

0 Po

pula

tion

Year

6.6 times

Perc

enta

ge o

f 203

0 To

tal C

onsu

mpt

ion

Year


63 times

OIL

COAL

38%


E XPON E NTIAL GROWT H can go on forever in a finite

world is either a madman or an

(Albert A . Bartlett, 2000)

55

The C limate Change dialogue for the most part excludes any consideration of resource limitations on growth, and hence leads us down some counter productive pathways, although initiatives on conservation, efficiency and renewables fortuitiously also address the energy question.

Although Canada is likely to be able to meet domestic energy requirements f rom internal resources through 2030, it will not be exempt from the economic fallout of global energy resource limitations.

Summary and Implications

Hydrocarbons represent an extremely convenient, dense form of non-renewable energy for which there are no scalable alternatives. They will be needed for the development of infrastructure for the next paradigm of more sustainable human development.

The Energy Sustainability Dilemma will be the defining issue of our time as the economic growth paradigm abuts physical limits to growth.

A sustainable energy future is not out of reach but will be hugely challenging A Manhattan Project

Thank you

Contact Coordinates:Dave Hughes

[email protected] 830-3662403 276-3056

the ene stainability dilemma: powering the ture in a …...(reference economic case) non-oecd +58%...

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