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1
The Energy Sustainability Dilemma:
Powering the Future in a Finite World
Cornell University
Ithaca, New York
May 2, 2012
J. David Hughes
Global Sustainability Research Inc.
Geological Survey of Canada - retired
- The “ENERGY SUSTAINABILITY DILEMMA” defined:
Points to be covered:
- Availability and deliverability of the nonrenewable fuels (OIL,
GAS, COAL, URANIUM) that are the energy-dense
elixers of our modern society
- ELECTRICITY – some issues in keeping the lights on
- Implications of POPULATION GROWTH and ASPIRATIONS
of future energy consumption
- Forecasts - where are we going and how likely is it that
we’ll get there
- History - where have we been
- Going forward in an Energy Constrained World
2
0
1000
2000
3000
4000
5000
6000
7000
-10000 -9000 -8000 -7000 -6000 -5000 -4000 -3000 -2000 -1000 0 1000 2000
Mil
lion
s of
Peo
ple
Year
10000 BC
3 Million
3500 BC
10 Million
150 BC
200 Million
1810
1 Billion
1925
2 Billion
1957
3 Billion
1975
4 Billion
1987
5 Billion
2011 7 Billion
The Phenomenal Reproductive Success of the Human Race
10000 BC – 2011 AD
(data as cited from U.S. Bureau of Census from various authors ) © Hughes GSR Inc, 2011
(data from Arnulf Grubler, 1998;
BP Statistical Review of World Energy, 2010; U.S. Bureau of Census, 2010)
0
2000
4000
6000
8000
10000
12000
1500 1600 1700 1800 1900 2000
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
0
1000
2000
3000
4000
5000
6000
7000
1500 1600 1700 1800 1900 2000
Mil
lio
ns
of
Peo
ple
Year
OIL
GAS
COAL
Population
Energy Consumption
Population versus Energy Consumption, 1500-2010
COAL OIL
GAS
© Hughes GSR Inc, 2011
3
0
2000
4000
6000
8000
10000
12000
1965 1975 1985 1995 2005
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
Asia Pacific Africa Middle East Former Soviet Union Europe S. & Cent. America North America
0
2000
4000
6000
8000
10000
12000
1965 1975 1985 1995 2005
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
Hydro Nuclear Coal Gas Oil
World Primary Energy Consumption: 1965-2010
By Region By Fuel
163%
381%
149% 753%
53%
414% 72%
87%
(data from BP Statistical Review of World Energy, 2011)
218% increase in World
Consumption 1965-2010;
2010 increase = 5.6%
Highest growth in 2010 = Asia Pacific 8.5%; Coal 7.6%
Coal
Gas
Oil
© Hughes GSR Inc, 2011
Fo
ssil Fu
els 84%
renewables
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
1850 1870 1890 1910 1930 1950 1970 1990 2010
Year
Nuclear Gas Oil Coal Hydro Wood
To
nn
es O
il E
qu
iva
len
t P
er P
erso
n
(data from Arnulf Grubler, 1998;
BP Statistical Review of World Energy, 2011; U.S. Bureau of Census, 2011) © Hughes GSR Inc, 2011
World Per Capita Annual Primary Energy
Consumption by Fuel 1850-2010
OIL
HYDRO
COAL
WOOD
GAS
89
% N
on
-Ren
ewa
ble
+794%
4
0
10
20
30
40
50
60
70
80
90
100
1850 1890 1930 1970 2010
% o
f 2
01
0 P
op
ula
tion
Year
World Population, Per Capita and Total Energy
Consumption, 1850-2010, as a Percentage of 2010 Levels
Population
(data from Arnulf Grubler, 1998;
BP Statistical Review of World Energy, 2011; U.S. Bureau of Census, 2011) © Hughes GSR Inc, 2011
0
10
20
30
40
50
60
70
80
90
100
1850 1890 1930 1970 2010
% o
f 2
01
0 P
er C
ap
ita C
on
sum
pti
on
Year
Nuclear Gas Oil Coal Hydro Wood
0
10
20
30
40
50
60
70
80
90
100
1850 1890 1930 1970 2010
% o
f 2
01
0 T
ota
l C
on
sum
pti
on
Year
Nuclear Gas Oil Coal Hydro Wood
Per Capita Consumption Total Consumption
5.5 times 8.9 times 49 times
89
% N
on
-Ren
ewab
le
WOOD HYDRO
COAL
OIL
GAS
COAL
OIL
0
10
20
30
40
50
60
70
80
90
100
1850 1870 1890 1910 1930 1950 1970 1990 2010
Year
Gas
Oil
Coal
Cu
mu
lati
ve
% C
on
sum
ed
sin
ce 1
850
(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
Cumulative Consumption of Fossil Fuels Since 1850
through Yearend 2010
OIL
COAL
90% of Fossil
Fuels have been
consumed
Since 1937
50% of Fossil
Fuels have been
consumed
Since 1985
30
08
Billio
n b
arrels
Oil E
qu
ivalen
t
5
0
100
200
300
400
500
600
700
800
2010 2015 2020 2025 2030 2035
Qu
ad
rill
ion
BT
U
Year
By Economic Development
0
100
200
300
400
500
600
700
800
2010 2015 2020 2025 2030 2035
Qu
ad
rill
ion
BT
U
Year
By Fuel
Fo
ssil Fu
els 79
%
Gas +48%
(data from Energy Information Administration International Energy Outlook, 2011)
Non-OECD Countries +73% (82% of 2009 World Population)
OECD Countries +17% (18% of 2010 World
Population)
Forecast Growth In World Energy Consumption, 2010-2035
(EIA, 2011, Reference Economic Case)
47% increase in World
Consumption (1.6%/year)
Oil +27%
Coal +45%
37%
47%
© Hughes GSR Inc, 2011
84%
0
20
40
60
80
100
120
140
160
180
1850 1870 1890 1910 1930 1950 1970 1990 2010 2030
Year
Gas
Oil
Coal
Cu
mu
lati
ve
% C
on
sum
ed
sin
ce 1
850
(data from Arnulf Grubler, 1998;
BP Statistical Review of World Energy, 2011; EIA IEO 2011 Reference case projection) © Hughes GSR Inc, 2011
Projected Consumption of Fossil Fuels Through 2035 as a
Percentage of Yearend 2010 Cumulative Consumption
OIL
COAL
CONSUMED
to Date
3008 Billion
Barrels Oil
Equivalent
NEEDED
75% more or an
Additional 2269
Billion Barrels Oil
Equivalent to Cover
Next 25 years
52
77
Billio
n b
arrels
Oil E
qu
ivalen
t
6
ULTIMATE BARRIER
ENERGY IN
EQUALS
ENERGY OUT
Conventional
Unconventional
Price/Technological
Limit to access
Coalbed Methane Shale Oil
Tight Gas
???Gas Hydrates???
In Situ Resources
>90% of World’s
Production
Decreasing
Concentration
Increasing
Effort (Energy IN
Vs
Energy OUT)
Tar Sands
Extra-Heavy Oil
In Situ Oil and Gas Resources versus Supply
In Situ Coal Gasification
Coal Liquefaction
Shale Gas
Gas to Liquids
Oil Shale
- The 84% of Primary Energy provided by Hydrocarbons is
A LOT
Beware of Scale:
-Less than 2% of Primary Energy Consumption is now
provided by non-hydropower renewables
-There are no scalable alternatives to hydrocarbons at the
RATES OF ENERGY THROUGHPUT we enjoy at this point in time
-Unconventional hydrocarbon production is
DIFFICULT TO SCALE compared to the cheap hydrocarbons of yesteryear
7
Oil
34%
Gas
24%
Coal
30% Nuclear
5%
Hydro
6%
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1995 2000 2005 2010
Per
cen
t of
Tota
l C
on
sum
pti
on
Year
Biomass-electric
Wind
Solar
Geothermal
Wind
Geothermal
(data from BP Statistical Review of World Energy, 2011)
Global Primary Energy Consumption by Source in 2010
A Comparison to Total Non-Hydro Renewable* Energy
Renewable Energy by Source
159 MTOE
© Hughes GSR Inc, 2011
Total Energy by Source
12002 MTOE
*excluding biomass burned for non-electric uses
Renewables
1.32%
(includes
Biofuels 0.5%)
Biomass
Solar
- Hydrocarbons provided 84% of the world’s primary
energy in 2010
Summary
- Forecasts suggest that 79% of a greatly expanded energy
demand will continue to be provided by hydrocarbons in
2035
- Most of the balance of energy supply will be provided by
large hydro and nuclear – sources with their own
environmental problems
- The Question is: IS THIS SUSTAINABLE?
…… Lets look in more detail at oil, gas and coal
© Hughes GSR Inc, 2009
8
0
10
20
30
40
50
60
70
80
90
100
1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Cu
mu
lati
ve
Con
sum
pti
on
as
Per
cen
tag
e
of
Tota
l C
on
sum
ed
Year
Cumulative OIL Consumption by the Human Race as a
Percentage of Total Consumption through Yearend 2010
1% 1925 5% 1950
10% 1960
20% 1970
30% 1976
40% 1982
50% 1988
60% 1993
70% 1998
80% 2002
90% 2006
50% of the OIL Consumed by the
Human Race
Used Since 1988 90% of the OIL Consumed by the
Human Race
Used Since 1960
11
86
Billio
n b
arrels
Con
sum
ed
Start 1859
(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
0
10
20
30
40
50
60
70
80
90
1965 1975 1985 1995 2005
Mil
lion
Barr
els
per
Day
Year
OPEC 12
Former Soviet Union
Non-OPEC
0
10
20
30
40
50
60
70
80
90
1965 1975 1985 1995 2005
Mil
lion
Barr
els
per
Day
Year
OPEC 12
Former Soviet Union
Non-OPEC
World Oil Production* and Consumption 1965-2010
Non-OPEC
182%
F.S.U.
178%
OPEC 12
147%
Non-OPEC
163%
(data from BP Statistical Review of World Energy, 2011)
85%
10%
5%
42%
42%
16%
158% increase
Up 2.2% 2010
over 2009
PEAK
2002
Production Consumption
© Hughes GSR Inc, 2011
* Production excludes biofuels
184% increase
Up 3.1% 2010
over 2009
9
70
80
90
100
110
120
130
2006 2011 2016 2021 2026 2031
Mil
lio
n B
arr
els
per
Da
y
Year
World Oil Consumption Forecasts, 2006-2035,
Energy Information Administration, 2011
EIA High Oil Price Case EIA Reference Economic Case EIA Low Oil Price Case
+31%
+43%
+32%
(Projections from Energy Information Administration International Energy Outlook, 2011)
Projections
(2008-2035)
© Hughes GSR Inc, 2011
70
80
90
100
110
120
130
2006 2011 2016 2021 2026 2031
Mil
lio
n B
arr
els
per
Da
y
Year
World Oil Consumption Forecasts, 2006-2035,
Energy Information Administration, 2011,
International Energy Agency, 2010 EIA High Oil Price Case EIA Reference Economic Case EIA Low Oil Price Case IEA Current Policy Scenario IEA New Policy Scenario IEA 450 Scenario
+31%
+43%
+32%
(Projections from Energy Information Administration International
Energy Outlook, 2011; and International Energy Agency World Energy Outlook, 2010)
Projections
(2008-2035)
© Hughes GSR Inc, 2011
+24%
+15%
-6%
The IEA’s WEO 2011 indicates $8.5 Trillion
needed in upstream oil investment through 2035
for its New Policy Scenario
10
0
20
40
60
80
100
120
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Mil
lion
Barre
ls p
er
Da
y
Year (5-Month Moving Average
including data to December 2011, from Energy Information Administration, April, 2012) © Hughes GSR Inc, 2012
World Oil Supply – January 2001 to October 2011
Can Investment* Get Us to 112 Million barrels per Day?
Non-OPEC
OPEC-12 Production Plateau
Surplus Capacity
EIA 2035 Reference Forecast
*IEA WEO 2011 indicates $8.5 Trillion
needed in upstream oil investment through 2035
0
200
400
600
800
1000
1200
1400
1980 1985 1990 1995 2000 2005 2010
Bil
lion
Barr
els
Year © Hughes GSR Inc, 2011
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1980 1985 1990 1995 2000 2005 2010
Per
cen
tag
e of
Rem
ain
ing
Oil
Res
erves
Year
World Conventional Oil and Oil Sands* Reserves 1980-2010
(data from BP Statistical Review of World Energy, 2011)
OP
EC
N
on
-OP
EC
64%
77%
24%
14%
12%
9%
Saudi
Arabia
Iraq
Iran
Former Soviet Union
Other Non-OPEC
Former Soviet Union
Non-OPEC
OPEC 12 Kuwait
Other OPEC
U.S.A.
* Includes Oil Sands Reserves “Under Development”
11
0
100
200
300
400
500
600
700
800
900
1980 1985 1990 1995 2000 2005 2010
Bil
lio
n B
arr
els
Year
Implication
Some of the
553 Bbbls or
148% increase
in reported
reserves over
the period may
be spurious
Reserves inflated by 285 Gbbls
over 1984-1988 without major
new discoveries QUOTA WARS
(data from BP Statistical Review of World Energy, 2011)
These Countries also Produced 228 Billion Barrels over the Period
Oil Reserve Reporting in Selected OPEC Countries, 1980-2010,
(87% of 2010 OPEC Reserves and 67% of World Reserves)
Saudi Arabia
Venezuela
Kuwait
Iraq
Iran
United Arab Emirates
© Hughes GSR Inc, 2011
(96 billion barrels
produced 1980-2010)
(19 billion barrels
produced 1980-2010)
(20 billion barrels
produced 1980-2010)
(26 billion barrels
produced 1980-2010)
(38 billion barrels
produced 1980-2010)
(Recent peak 2005)
(29 billion barrels
produced 1980-2010)
(Peak 1979)
0
10
20
30
40
50
60
70
80
90
OPEC Non-OPEC F.S.U. Total World
Yea
rs o
f P
rod
uct
ion
at
Cu
rren
t R
ate
s
Region
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(data from BP Statistical Review of World Energy, 2011)
* Includes Oil Sands Reserves “Under Development”
© Hughes GSR Inc, 2011
World Oil Reserve Lifespan in Years
Including Possibly Spurious post-1984 OPEC Reserves
12
0
10
20
30
40
50
60
1930 1950 1970 1990 2010 2030 2050
Bil
lion
Barr
els
per
Yea
r
Year
The Growing Gap between Production and Discovery
of Regular Conventional Oil (1930-2050)
Past Discovery
Future Discovery
Production
Past discoveries have been backdated with revisions
to reflect “Reserve Growth” (data from Campbell, personal communication, October, 2009)
World Discoveries Peaked in 1965
Production
has Exceeded
Discoveries
since 1984
© Hughes GSR Inc, 2009
WHEN?
- Debatable, because of the variables,
World Oil Production Peak
BUT IT IS HIGHLY
LIKELY TO HAPPEN DEPENDS ON:
- ULTIMATE RECOVERABLE RESERVES - a function of:
- Mother Nature’s Endowment (total discovered and
undiscovered resources)
- Technology and Price (determines economics)
- Reserve Appreciation (Growth) in known pools (through
more drilling, better technology and higher prices)
- RATE OF CONSUMPTION - 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
13
-80
-70
-60
-50
-40
-30
-20
-10
0
US
1970
Ven
ezu
ela
1970
Oth
er M
idd
le E
ast
1970
Lib
ya 1
970
Ku
wait
1972
Iran
1974
Rom
an
ia 1
977
Ind
on
esi
a 1
977
Trin
idad
& T
ob
ago 1
978
Iraq
1979
Bru
nei 1979
Tu
nis
ia 1
980
Peru
1982
Oth
er A
fric
a 1
985
Oth
er E
urop
e &
Eu
rasi
a 1
986
Ru
ssia
n F
ed
era
tion
19
87
Egyp
t 1993
Sy
ria
19
95
Gab
on
1996
Mala
ysi
a 1
997
Argen
tin
a 1
998
Un
ited
Kin
gd
om
1999
Uzb
ek
ista
n 1
999
Au
strali
a 2
000
Norw
ay 2
001
Om
an
2001
Yem
en
2002
Oth
er S
. &
C. A
meric
a 2
003
Mexic
o 2
004
Den
mark
2004
Vie
tnam
2004
Ita
ly 2
00
5
Sau
di
Arab
ia 2
005
Alg
eria
2005
Ch
ad
2005
Gu
inea 2
005
Nig
eria
2005
Ecu
ad
or 2
006
UA
E 2
006
An
gola
2008
Oth
er A
-P 2
008
Per
cen
tag
e B
elow
Pea
k P
rod
uct
ion
Country
Year of Peak Production and Percentage 2010 Production is below Peak
(data from B.P. Statistical Review of World Energy, 2011)
U.K.
Norway
Denmark Mexico
= OPEC Countries 25 Countries Peak Since 1993
18 Countries Peak Since 2000
79% of 2010
Production was from
Countries Past Peak © Hughes GSR Inc, 2011
U.S.
0
5
10
15
20
25
30
35
1930 1950 1970 1990 2010 2030 2050
Bil
lio
n b
arr
els
per
y
ear
Year
Natural Gas Liquids Peak 2030
Polar Oil Peak 2030
Deep Water Oil Peak 2016
Heavy/Bitumen Oil Peak 2030
Regular Oil Peak 2005
Combined Liquids
Peak 2008
(excluding biofuels)
(data from C.J.Campbell, personal communication, October, 2009)
Ultimate Recoverable
=2.5 Trillion Barrels
Campbell’s (2009) Base Case History and Forecast of
World Oil Production 1930-2050
© Hughes GSR Inc, 2011
Cheap Oil Expensive Oil
14
Global Liquids Production 1990-2035,
IEA 2010 World Energy Outlook – New Policies Scenario
(source: International Energy Agency World Energy Outlook, 2010) © Hughes GSR Inc, 2011
Natural Gas Liquids
Crude Oil - Currently Producing
Crude Oil - Yet to Find
Crude Oil Production Peaks in 2006
and Plateaus through 2035
Mil
lio
n B
arr
els
per
Da
y
0
20
40
60
80
100
120
1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Mil
lon
Ba
rrel
s p
er D
ay
Year
OPEC 2008
EIA 2011 reference
Exxon 2009
IEA 2010 New Policy
Statoil 2006
Total 2008
Shell Blueprints 2008
Shell Scramble 2008
Energyfiles 2008
Uppsala Best Case 2007
Uppsala Worst Case 2007
Campbell 2009
Skrebowski 2008
Energy Watch 2007
BP Historical Production
Modeled Forecasts of Liquids Production through 2030
(Peak production dates indicated by Source and Star)
Campbell 2008
Uppsala (worst case) 2008
Energy Watch 2008
Skrebowski 2012
Energyfiles 2017
Uppsala (best case) 2018
Total 2020
Shell (worst case) 2020
Statoil 2028 OPEC
EIA EXXON
IEA
SHELL
(Best
Case)
(data from U.K. Energy Research Centre,
Annex 1 to Technical Report 7, October, 2009; EIA, 2010; IEA, 2010) © Hughes GSR Inc, 2011
15
0
1
2
3
4
5
6
7
8
2008 2009 2010 2011 2012 2013 2014 2015 2016
Mil
lio
n B
arr
els
per
Da
y
Year
Megaproject additions
Depletion@5%
(data from U.K. Energy Research Centre, Annex 1 to Technical Report 7, October, 2009)
Global Additional Production from New Megaprojects
through 2016 versus Global Oil Depletion Rate
Surplus
Deficit
0
20
40
60
80
100
120
2007 2012 2017 2022 2027 2032
Mil
lio
n B
arr
els
per
Da
y
Year
0
20
40
60
80
100
120
2007 2012 2017 2022 2027 2032
Mil
lio
n B
arr
els
per
Da
y
Year
Non-OECD +32%
OECD -14%
OPEC +34%
Production
EIA World Oil Production and Consumption Forecast 2007-2035
(Reference Economic Case, EIA, 2011)
Non-OECD +70%
(82% of 2010 Population)
OECD +2%
(18% of 2010 Population)
58% 45%
(data from Energy Information Administration International Energy Outlook, 2011)
Consumption
© Hughes GSR Inc, 2011
Range of many
Peak Oil estimates
16
0
5
10
15
20
1965 1975 1985 1995 2005
Year
0
1
2
3
4
1965 1975 1985 1995 2005
Year
Mexico
0
1
2
3
4
1965 1975 1985 1995 2005
Year
Canada
North American Oil Consumption and Movements: 1965-2010
Net Imports (58% of 2010
consumption)
(data from BP Statistical Review of World Energy, 2011)
Peak
1970
Consumption (up 66%)
Mil
lio
n B
arr
els
per
Da
y
Consumption up 573% Consumption up 105%
Net Exports
Net Exports
Production (up 263%)
Production (up 717%)
(Down 23% since 2004)
Peak 2004
© Hughes GSR Inc, 2011
Production (down 29%
from Peak)
U.S.A.
Canada
23.6%
Saudi Arabia
11.2%
Nigeria
10.3% Venezuela
9.9%
Mexico
8.6%
Russia
6.3%
Algeria
5.2%
Iraq
4.3%
Angola
4.0%
Colombia
3.1%
Virgin
Islands
2.5% United Kingdom
2.4% Kuwait
2.0%
Brazil
1.5% Ecuador
1.4%
Norway
0.9%
Congo
0.7% Trinidad and
Tobago
0.7%
Libya
0.7%
Equatorial Guinea
0.6%
US Oil Imports from Top 20 Countries in 2010
Top 20 provided 9.8 MMbbls/day in 2010
(data from EIA, 2011) Red = OPEC; Green = Non-OPEC
OPEC = 49%
17
0
5
10
15
20
25
30
35
40
45
50
U.S.A. Canada Mexico North America
Yea
rs o
f P
rod
uct
ion
at
Cu
rren
t R
ate
s
North America Oil Reserve Lifetime
in Years Including Oil Sands* 1990-2010
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(data from BP Statistical Review of World Energy, 2011) * Includes Oil Sands Reserves “Under Development”
© Hughes GSR Inc, 2011
0
2
4
6
8
10
12
14
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
Mil
lio
n B
arr
els
per
Da
y
Year
Shale Oil Gas-to-Liquids Coal-to-Liquids Ultra-Heavy Oil Oil Sands/Bitumen Biofuels
11.7% of forecast 2035 World Liquids Consumption
(data from Energy Information Administration, International Energy Outlook 2011)
Overall Growth +275%
World Unconventional Liquids Production Forecast
2007-2035 (EIA Reference Economic Case, 2011)
Biofuels +292%
© Hughes GSR Inc, 2011
18
Source
Energy Profit Ratio for Liquid Hydrocarbons
© Hughes GSR Inc, 2012
?
En
ergy R
etu
rn o
n
En
ergy I
nves
ted
High
Low
Energy
Source
(EROEI > 1)
Energy
Sink
(EROEI < 1)
Increasing Energy Input
(biodiesel, ethanol from University of Minnesota
Proceedings of National Academy of Sciences
July, 2006, and Pimentel and Patzek, 2005,
Nat Resources Research (Vol. 14:1, 65-76))
University
of Minnesota
Pimentel
and Patzek
In P
lace
Res
ou
rces
Oil Shale Oil Sands Heavy Oil,
Enhanced
Recovery
Light Oil,
Primary
Recovery
Energy Profit Ratio versus In Place Oil Resources
(Energy Return on Energy Invested)
Energy Profit (EROEI > 1)
Energy Sink (EROEI < 1)
The Issue is Not Resources – its Deliverability – How Fast
Can These Resources be Converted into Supply in the
Face of Growing Demand?, and at What Cost? We are
not running out of OIL – there will be oil in 100 million
years - it just won’t be recoverable at an Energy Profit
© Hughes GSR Inc, 2011
19
“Even if demand remained steady, the world would have to
find the equivalent of four Saudi Arabias to maintain
production, 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 terms of the geopolitics ”
Dr. Fatih Birol, Chief Economist of the IEA, the
OECD’s Energy Watchdog as quoted in the
Independent August 3, 2009
(from http://www.independent.co.uk/news/
science/warning-oil-supplies-are-running-out-fast-766585.html © Hughes GSR Inc, 2011
0
10
20
30
40
50
60
70
80
90
100
1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Cu
mu
lati
ve
Con
sum
pti
on
as
Per
cen
tag
e
of
Tota
l C
on
sum
ed
Year
Cumulative GAS Consumption by the Human Race as a
Percentage of Total Consumption through Yearend 2010
1% 1933 5% 1957
10% 1966
20% 1975
30% 1982
40% 1988
50% 1992
60% 1997
70% 2001
80% 2004
90% 2007
50% of the GAS Consumed by the
Human Race
Used Since 1992 90% of the GAS Consumed by the
Human Race
Used Since 1966
611
Billio
n b
arrels O
il
Eq
uiv
alen
t Con
sum
ed
Start 1885
(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
20
0
20
40
60
80
100
120
1970 1980 1990 2000 2010
Tri
llio
n C
ub
ic F
eet
per
Yea
r
Year
Asia Pacific Africa Middle East Former Soviet Union Europe S. & Cent. America North America
0
20
40
60
80
100
120
1970 1980 1990 2000 2010
Tri
llio
n C
ub
ic F
eet
per
Yea
r
Year
Asia Pacific Africa Middle East Former Soviet Union Europe S. & Cent. America North America
World Gas Production and Consumption 1965-2010
715%
3780%
2038%
230%
31%
3038%
2213%
323%
177% 791%
25%
(data from BP Statistical Review of World Energy, 2011)
221% increase
up 7.4% 2010
over 2009
392%
219% increase
up 7.3% 2010
over 2009
Production Consumption
© Hughes GSR Inc, 2011
80
100
120
140
160
180
200
2006 2011 2016 2021 2026 2031
Tri
llio
n C
ub
ic F
eet
per
Yea
r
Year
World Gas Consumption Forecasts, 2006-2035,
Energy Information Administration, 2011
EIA High Oil Price Case EIA Reference Economic Case EIA Low Oil Price Case
+38%
+63%
+52%
(Projections from Energy Information Administration International Energy Outlook, 2011)
Projections
(2008-2035)
© Hughes GSR Inc, 2011
21
0
1000
2000
3000
4000
5000
6000
7000
1980 1985 1990 1995 2000 2005 2010
Tri
llio
n C
ub
ic F
eet
Year
Middle East
Former
Soviet Union
Asia Pacific
Africa Europe
North America 0
10
20
30
40
50
60
70
80
90
100
1980 1985 1990 1995 2000 2005 2010
Per
cen
tag
e o
f R
ema
inin
g R
eser
ves
Year
Middle East
Former
Soviet Union
Asia Pacific
Africa
Europe
North America
30%
35%
41%
31%
12% 5%
World Gas Reserves: 1980-2010
(data from BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
0
20
40
60
80
100
120
140
North America Europe Rest of World Total World
Yea
rs o
f P
rod
uct
ion
at
Cu
rren
t R
ate
s
World Natural Gas Reserve to Production
Ratio in Years 1990-2010
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(data from BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
22
0
5
10
15
20
25
30
1930 1950 1970 1990 2010 2030 2050
Bil
lio
n b
arr
els
Oil
Eq
uiv
ale
nt
per
yea
r
Year
Unconventional Gas
Conventional Gas
(data from C.J.Campbell, personal communication, October, 2009)
Campbell’s (2009) Base Case History and Forecast of
World Natural Gas Production 1930-2050
© Hughes GSR Inc, 2009
Gas Peak 2045
(data copyright IHS Energy, Diagram prepared and copyright by EOG Resources Inc., 2006)
Natural Gas Production in the United States
by Well Vintage at Yearend 2006
(60% of Production from wells drilled in past FOUR YEARS)
60% From
Most
Recent
FOUR
YEARS
23
100
110
120
130
140
150
160
170
180
190
250,000
300,000
350,000
400,000
450,000
500,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Av
era
ge G
as W
ell Pro
du
ctivity
(Mcf/d
ay
) N
um
ber
of
Pro
du
cin
g G
as
Wel
ls
Year
Number of wells
Average Productivity
(data from EIA, 2011)
Number of Operating Gas Wells in the U.S.
versus Average Productivity
© Hughes GSR Inc, 2011
Shale Gas – North American Prospects
(from National Energy Board, 2009)
24
U.S. Potential Gas Committee 2011 Resource Estimates
(from “Potential Supply of Natural Gas
in the United States”, 2011, U.S. Potential Gas Committee) © Hughes GSR Inc, 2009
0
5
10
15
20
25
30
2009 2014 2019 2024 2029 2034
Tri
llio
n C
ub
ic F
eet
per
Yea
r
Year
Shale Gas +365%
Lower 48 Conventional
(including Tight Gas) -25%
Lower 48 Offshore +2%
U.S. Natural Gas Supply Forecast by Source 2009-2035
(Reference Case, EIA, 2012)
(data from Energy Information Administration Annual Energy Outlook, 2012)
Lower 48 Production
Grows 37% 2009-2035
20% Total Supply Growth
from 2009-2035
Coalbed Methane -8%
Lower 48 Unconventional
Lower 48 Onshore Associated -24%
© Hughes GSR Inc, 2012
US becomes net exporter 2021
25
0
2
4
6
8
10
12
14
16
2008 2013 2018 2023 2028 2033
Tri
llio
n C
ub
ic F
eet
per
Yea
r
Year
Shale gas forecast 2009
Shale gas forecast 2010
Shale gas forecast 2011
Shale gas forecast 2012
EIA projections of U.S. Shale Gas Production, 2009-2012
(data from Energy Information Administration
Annual Energy Outlook, 2009, 2010, 2011 and 2012 reference case projections)
49% of production
© Hughes GSR Inc, 2012
16%
26%
45%
26
0
2
4
6
8
10
12
14
16
18
20
2003 2004 2005 2006 2007 2008 2009 2010 2011
Ga
s P
rod
uct
ion
(b
illi
on
cu
bic
fee
t p
er d
ay
)
Year
Niobrara
Mississipian
Permian
Bakken
Eagleford
Granite Wash
Woodford
Marcellus
Fayetteville
Haynesville
Barnett
(data from Art Berman, HPDI, 2012)
Shale Gas Production by Play (2003 - June, 2011)
© Hughes GSR Inc, 2012
Barnett
Haynesville
30% of U.S. Production
0
5
10
15
20
25
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
An
nu
al D
ry G
as P
rod
uctio
n (trillio
n cu
bic feet) A
nn
ua
l N
um
ber
of
Su
cces
sfu
l G
as
Wel
ls D
rill
ed
Year
Number of wells
Dry Gas Production
Drilling triples from 1990’s levels
© Hughes GSR Inc, 2012
Natural Gas Production versus Annual
Drilling Rates, 1990-2011
Production up 4.6% from 1973, 15.8% from 2001
(data from EIA, 2012; includes production and drilling up until October, 2011)
27
0
500
1000
1500
2000
2500
3000
3500
4000
0
50
100
150
200
250
300
350
400
450
500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Nu
mb
er of P
rod
ucin
g W
ells Th
ou
san
d B
arr
els
per
Day
Year
Production Number of wells
Bakken Shale Oil Production and
Number of Producing Wells, 2000-2011
(data from State of North Dakota https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf) © Hughes GSR Inc, 2012
28
0
1
2
3
4
5
6
7
8
0
5,000
10,000
15,000
20,000
25,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Cru
de O
il Pro
du
ction
(Millio
n b
arrels p
er da
y)
An
nu
al
Nu
mb
er o
f S
ucc
essf
ul
Oil
Wel
ls D
rill
ed
Year
Number of wells
Crude Oil Production
Production down 42% from 1971 peak;
up 13% from 2008 low
(data from EIA, 2012; includes production and drilling up until October, 2011) © Hughes GSR Inc, 2012
Crude Oil Production versus Annual
Drilling Rates, 1990-2011
Drilling Doubles from 1990’s levels
Shale Gas Fracturing Job, Barnett Shale, Texas
29
57
Example: Dallas/Fort Worth Airport Property,
Barnett Shale Play
• 53 pads on 18,076 acres,30 square miles • Each red dot is a pad • Each red line is a well • Almost complete coverage • Patchwork, mostly ideal units • One developer
(Thanks to Anthony R. Ingraffea, 2012)
The Optimism on Shale Gas
- There is so much natural gas that there is enough available,
according to one researcher, "to displace half of the coal burning
power plants [in the United States] by 2020” (Pickens Plan, 2012)
- “We have the domestic natural gas necessary to fuel our trucks and
fleet vehicles…” (Pickens Plan, 2012)
- Studies from prestigious energy research firms and universities have
affirmed that the dream of clean, abundant, home grown energy is now
reality, with the help of shale gas. (ANGA, 2012).
- “I believe U.S. natural gas producers can increase supplies by 5% per
year for at least the next decade and that assumes there is no more
access to public lands and waters than there is today.” (Testimony to
Congress, Aubrey McClendon, July 30, 2008). [63% compounded]
30
0
5
10
15
20
25
30
2009 2013 2017 2021 2025 2029 2033
Qu
ad
rill
ion
Btu
Year
U.S. Natural Gas Consumption by Sector
2009-2035 (Reference Case, EIA, 2012)
Electricity +30%
(data from Energy Information Administration Annual Energy Outlook, 2012)
Market
Share
Commercial +14%
Industrial +14%
30%
33%
14%
21%
32%
13%
18%
16% Growth 2009-2035
34%
© Hughes GSR Inc, 2012
Residential -3%
CNG
Pipeline Fuel +11%
“Shale plays are marginally commercial at best.”
Arthur Berman on Shale Gas
(ASPO meeting in Washington DC, October, 2010)
(from Art Berman’s ASPO-USA presentation in October 2010)
“The plays have consistently contracted to a core area that
represents 10-20% of the resource that was initially claimed.
The manufacturing model has failed.”
“Reserves have been greatly over-stated and 80% of booked
reserves are undeveloped.”
“These are not low-cost plays: the marginal cost of
production for most companies is $7.50/Mcf based on SEC
10-K filings over the past 5 years.”
31
Shale Plays inevitably contract to core
areas with higher productivity and the “rest”
(from Art Berman’s ASPO-USA presentation in October 2010)
50% Recovered 75% Recovered
90% Recovered
Theoretical Production Profiles
for Major Shale Gas Plays (MMcf/day)
(data from Moorman, Southwest Energy, November, 2009)
32
0
5
10
15
20
25
30
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
An
nu
al D
ry G
as P
rod
uctio
n (trillio
n cu
bic fee
t) An
nu
al
Nu
mb
er o
f S
ucc
essf
ul
Ga
s W
ells
Dri
lled
Year
Actual Wells Drilled
EIA Forecast of Wells Drilled
Wells required for EIA production forecast
Actual Production
EIA Forecast of Production
Production given EIA drilling forecast
Wells required to meet EIA production forecast
Likely Production with EIA drilling forecast
The EIA’s forecast of low drilling rates and high production
are likely wishful thinking
© Hughes GSR Inc, 2011 (data from EIA, 2011)
0
5
10
15
20
25
30
0
2
4
6
8
10
12
14
16
18
20
1995 1999 2003 2007 2011 2015 2019 2023 2027 2031 2035
An
nu
al G
as P
rod
uctio
n (T
rillion
cub
ic feet)
Ga
s P
rice
($
US
/mcf
)
Year
Russian Gas Price Indonesia LNG Gas Price in Japan U.S. Henry Hub Gas Price EIA Forecast U.S. Gas Price ($2010) Actual U.S. Gas Production EIA Forecast U.S. Gas Production
(data from International Monetary Fund 2012; EIA AEO 2012)
EIA projections of Gas Price and Production Compared
to History, 1995-2035
© Hughes GSR Inc, 2012
33
Methane Contamination within 1000 metres of Active
Wells in Pennsylvania, Osburn et al. 2011, Duke University
0
0.5
1
1.5
2
2.5
3
3.5
Perc
en
tag
e o
f L
ifeti
me P
rod
ucti
on
Source
Distribution
Transmission and Storage
Processing
Extraction
NETL (Skone, 2011) Methane Emissions by Gas Source
adjusted to match average emissions of the 2009 EPA inventory
© Hughes GSR Inc, 2012
34
0
1
2
3
4
5
6
7
8
9
Per
cen
tag
e o
f T
ota
l P
rod
uct
ion
Estimated Ultimate Recovery (billion cubic feet)
% of total production vented
according to NETL
% of total production vented
adjusted to match EPA 2009
inventory
Lo
w e
stim
ate
Hig
h e
stim
ate
0
0.5
1
1.5
2
2.5
3
3.5
4
25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105
Po
un
ds
of
CO
2 e
qu
iva
len
t p
er k
Wh
Global Warming Potential (GWP) of Methane (times CO2)
Existing U.S. Coal Fleet
Existing U.S. Gas Fleet fuelled by shale gas
Best-in-class Coal Technology
Best-in-class Gas Technology fuelled by shale gas
IPCC 2007 Shindell et al. 2009
100 year GWP
Shindell et al. 2009
20 year GWP
IPCC 2007
20 year GWP
Global Warming Potential of Shale Gas versus Coal
Given various 20- and 100-year estimates of Methane Potency
Compared to CO2 on an Electricity Basis (Mean methane emissions)
© Hughes GSR Inc, 2012
35
Source
Energy Profit Ratio for Natural Gas and Alternatives
En
erg
y R
etu
rn o
n
En
ergy I
nves
ted
High
Low
Energy
Source
(EROEI > 1)
Energy
Sink
(EROEI < 1)
Increasing Energy Input
?
0
10
20
30
40
50
60
70
80
90
100
1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Cu
mu
lati
ve
Con
sum
pti
on
as
Per
cen
tag
e
of
Tota
l C
on
sum
ed
Year
Cumulative COAL Consumption by the Human Race as a
Percentage of Total Consumption through Yearend 2010
10% 1911
20% 1933
30% 1951
40% 1964
50% 1975
60% 1984
70% 1992
80% 1999
90% 2006
50% of the COAL Consumed by the
Human Race
Used Since 1975 90% of the COAL Consumed by the
Human Race
Used Since 1911
12
11
Billio
n b
arrels O
il
Eq
uiv
alen
t Con
sum
ed
(data from Arnulf Grubler, 1998; BP Statistical Review of World Energy, 2011)
Start <1850
© Hughes GSR Inc, 2011
36
0
500
1000
1500
2000
2500
3000
3500
4000
1981 1986 1991 1996 2001 2006
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
Asia Pacific Africa Middle East Former Soviet Union Europe S. & Cent. America North America
0
500
1000
1500
2000
2500
3000
3500
4000
1981 1986 1991 1996 2001 2006
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
-48%
World Coal Production and Consumption: 1981-2010
Production Consumption
408%
-30%
-57%
123%
21%
(data from BP Statistical Review of World Energy, 2011)
95% increase in World
Consumption 1981-2010
Coal production up 44% since 2002
31%
-35%
74%
363%
© Hughes GSR Inc, 2011
80
100
120
140
160
180
200
220
240
260
280
2006 2011 2016 2021 2026 2031
Qu
ad
rill
ion
Btu
per
Yea
r
Year
World Coal Consumption Forecasts 2006-2035,
Energy Information Administration, 2011
EIA High Oil Price Case EIA Reference Economic Case EIA Low Oil Price Case
+26%
+82%
+50%
(Projections from Energy Information Administration International Energy Outlook, 2011)
Projections
(2008-2035)
© Hughes GSR Inc, 2011
37
(from Energy Watch Group, March, 2007)
One Forecast of Future
World Coal Production (EWG, 2007)
Peak 2025
© Hughes GSR Inc, 2009
Peak 2030
Uppsala Forecast of Global Peak Coal, 2008
(from Hook, Zittel, Schindler, Aleklett, 2008) © Hughes GSR Inc, 2009
38
0
1
2
3
4
5
6
7
8
9
1850 1870 1890 1910 1930 1950 1970 1990 2010 2030 2050 2070 2090 2110 2130 2150
Bil
lio
n T
on
nes
per
Yea
r
Year
China FSU Rest of World South Africa Germany Australia India USA
China
USA
FSU
India
Australia
Peak Coal Production Forecast using Hubbert Linearization
1850 – 2150 (Newcastle University, 2009)
(data courtesy of S.H.Mohr and G.M.Evans “Forecasting Coal Production Until 2100”, 2009) © Hughes GSR Inc, 2009
World Peaks in 2034
if 1144 billion tonnes
recoverable World Peaks in 2010
if 700 billion tonnes
recoverable
0
2
4
6
8
10
12
1950 1970 1990 2010 2030 2050 2070 2090 2110 2130 2150
Bil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
per
Yea
r
Year
All hydrocarbons
Oil and Gas
Coal
All Hydrocarbons Production (1950-2150)
History and Forecast (Caltech, 2010)
History Forecast
Peak 2020
Peak 2019
(data from rutledge.caltech.edu, June, 2009; peak coal from caltech November, 2010)
Peak 2022
© Hughes GSR Inc, 2011
39
0
10
20
30
40
50
60
70
80
90
100
1950 1970 1990 2010 2030 2050 2070 2090 2110 2130 2150
Per
cen
t o
f U
ltim
ate
Rec
ov
era
ble
Rem
ain
ing
Year
All hydrocarbons
Oil and Gas
Coal
Percentage of Hydrocarbons Remaining (1950 – 2150)
History and Forecast (Caltech, 2010)
History Forecast
58% Remaining 2009
20% Remaining 2050
(data from rutledge.caltech.edu, June, 2009)
50% Remaining 2017
2% Remaining 2100
© Hughes GSR Inc, 2011
Each Windmill requires 260 tonnes of steel
made from 170 tonnes of coking coal and 300 tonnes
of iron ore, all mined and transported by hydrocarbons
40
Cumulative CO2 Emissions Caltech (2010) compared to UN IPCC Scenarios
• Caltech’s production constrained projection has lower emissions than any of the 40 IPCC scenarios
• Jean Laherrere was the first to call attention to this situation
(from rutledge.caltech.edu, November, 2010) © Hughes GSR Inc, 2011
Caltech
forecast
Projection for next IPCC
report without climate policy
0
1000
2000
3000
4000
5000
Caltech IPCC
Bil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Source
Coal
Oil and Gas
Consumed
Consumed and Remaining Recoverable Hydrocarbons
Caltech (2009) vs IPCC
(data from rutledge.caltech.edu, June, 2009)
Caltech includes 174 Billion Barrels of Oil Sands
IPCC includes only maximum consumption to 2100, ultimate recoverable would be higher
6.9
times
8.3
times
7.4
times
© Hughes GSR Inc, 2009
41
250
300
350
400
450
500
1850 1870 1890 1910 1930 1950 1970 1990 2010 2030 2050 2070 2090 2110 2130 2150
Atm
osp
her
ic C
O2 C
on
cen
tra
tio
n (
pp
mv
)
Year
Upper 90% confidence limit
Lower 90% confidence limit
Best Estimate
Atmospheric CO2 Concentration (1850-2150)
Caltech, 2010
(data from rutledge.caltech.edu, January, 2011)
Hansen’s Danger Threshold
Hansen’s New Threshold
History Forecast
© Hughes GSR Inc, 2011
Peak CO2 2062 @ 449 ppmv
-2
-1
0
1
2
3
4
0
10
20
30
40
50
60
70
80
90
100
1850 1870 1890 1910 1930 1950 1970 1990 2010
Tem
pera
ture V
aria
tion
Co
mp
ared
to
Pre
-Ind
ustria
l Lev
els (Deg
rees C
elsius)
Cu
mu
lati
ve
Co
nsu
mp
tio
n o
f
Fo
ssil
Fu
els
(%)
Year
Cumulative consumption of Fossil Fuels (%)
Average Temperature
Upper 95% Confidence in Temperature
Lower 95% Confidence in Temperature
© Hughes GSR Inc, 2012
(Temperature data from Hadley Meteorological Centre;
fossil fuel consumption from BP , 2011, and Arnulf Grubler, 1998)
Cumulative Consumption of Fossil Fuels versus Annual
Global Temperature, 1850-2011
Pre-Industrial Temperature
Climate Danger Threshold
42
0
5000
10000
15000
20000
25000
1990 1995 2000 2005 2010
Ter
aw
att
Ho
urs
Year
World
Asia Pacific Africa Middle East Former Soviet Union Europe S. & C. America North America
0
1000
2000
3000
4000
5000
6000
1990 1995 2000 2005 2010
Ter
aw
att
Ho
urs
Year
North America
Mexico
Canada
US
Generation of Electricity: 1990-2010
(data from BP Statistical Review of World Energy, 2011)
238%
-13%
33%
118%
38%
36%
32%
80% increase in Consumption
up 5.9% 2010 over 2009
38% increase in Consumption
up 3.7% 2010 over 2009
© Hughes GSR Inc, 2011
0
5000
10000
15000
20000
25000
30000
35000
2008 2012 2016 2020 2024 2028 2032
Ter
aw
att
hou
rs
Year
Forecast World Net Electricity Generation by Region
2008-2035 (reference case, EIA, 2011)
OECD Other Non-OECD India China
(data from Energy Information Administration International Energy Outlook, 2011)
OECD +36%
Other
Non-OECD +93%
China +198%
World 84% total
increase
2008-2035
53%
40%
© Hughes GSR Inc, 2011
43
0
5000
10000
15000
20000
25000
30000
35000
40000
2008 2012 2016 2020 2024 2028 2032
Ter
aw
att
Ho
urs
Year
Forecast World Electricity Generation by
Fuel 2008-2035 (Reference Case, EIA, 2011)
Non-hydro renewables
Hydro
Nuclear
Coal
Gas
Oil
(data from Energy Information Administration International Energy Outlook, 2011)
Market
Share
Natural Gas 101%
Coal +67%
16%
14%
40%
22%
16%
14%
39%
24%
84% Growth 2008-2035
7%
© Hughes GSR Inc, 2011
0
500
1000
1500
2000
2500
3000
2008 2012 2016 2020 2024 2028 2032
Ter
aw
att
Ho
urs
Year
Solar Geothermal Wind All other renewables
(data from Energy Information Administration International Energy Outlook, 2011)
Market
Share
Biomass and all other renewables 199%
Wind 596%
2.8%
7.4%
383% Growth 2008-2035
© Hughes GSR Inc, 2011
World Non-Hydro Renewable Electricity Generation
2008-2035 (EIA Reference Case, 2011)
(4.2%)
(2.2%)
44
0
1000
2000
3000
4000
5000
6000
2009 2013 2017 2021 2025 2029 2033
Ter
aw
att
Hou
rs
Year
Forecast U.S. Electricity Generation by Fuel
2009-2035 (Reference Case, EIA, 2012)
(data from Energy Information Administration Annual Energy Outlook, 2012)
Market
Share
Natural Gas +49%
Coal +11%
7%
20%
44%
23%
9%
18%
39%
27%
27.9% Growth 2009-2035
6%
© Hughes GSR Inc, 2012
0
50
100
150
200
250
300
350
400
450
500
2009 2013 2017 2021 2025 2029 2033
Ter
aw
att
Ho
urs
Year
Solar Geothermal Wind Biomass and other renewables
(data from Energy Information Administration Annual Energy Outlook, 2012)
Market
Share
Biomass and all other renewables +261%
Wind +156%
3.7%
9.4%
226% Growth 2009-2035
© Hughes GSR Inc, 2012
U.S. Non-Hydro Renewable Electricity Generation
2009-2035 (EIA Reference Case, 2012)
(3.8%)
(3.9%)
45
0
5000
10000
15000
20000
25000 M
egaw
att
s
Year
Total U.S. Wind Generation Nameplate Capacity
1975-2008
(data from Energy Information Administration, 2010) © Hughes GSR Inc, 2010
0
2
4
6
8
10
12
14
16
18
Ter
aw
att
-Hou
rs p
er M
on
th
Month
Actual Generation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Per
cen
tage
of
Cap
aci
ty U
sed
Actual Generation
Averaged 31% (Capacity Factor)
Actual Wind Generation in the U.S. Compared
to Nameplate Capacity, 2007-2008
(data from Energy Information Administration, 2010) © Hughes GSR Inc, 2010
Capacity Unavailable
Due to Intemittency
Capacity Unavailable
Due to Intemittency
Theoretical Maximum
69%
46
Generation Capacity at Current Construction Levels and Levels
Required to Maintain and/or Increase Nuclear Capacity by 2025
WHAT ABOUT “NUCLEAR”?
(adapted from Energy Watch Group, Paper EWG Series No. 1/2006, (2006); data from IAEA, (2006))
57 New 1GW
Reactors
283 New 1GW
Reactors
346 New 1GW
Reactors
482 New 1GW Reactors
The Last Piece of the Energy
Sustainability Puzzle:
POPULATION GROWTH
and
ASPIRATIONS OF GROWTH IN
ENERGY CONSUMPTION
IN THE DEVELOPING WORLD
47
0
1
2
3
4
5
6
7
8
9
10 22% of World Population
(1.5 Billion People)
78% of World Population
(5.4 Billion People)
OECD four times
Non-OECD
18% of population
Country/Region
(B.P. Statistical Review of World Energy, 2011; U.S. Census Bureau, 2011) © Hughes GSR Inc, 2011
20
10
To
nn
es O
il E
qu
iva
len
t P
er C
ap
ita
Non-OECD
82% of population
x1
x4.2
x17 x49
x2.1
There is a Great Inequity in Energy Consumption Worldwide Per Capita Energy Consumption by Country and Region, 2010
0
5
10
15
20
25
30
35
40
34% of World
Population
(2.4 Billion People)
66% of World
Population
(4.6 Billion People)
OECD five times
Non-OECD
18% of population
There is a Great Inequity in Energy Consumption Worldwide Per Capita OIL Consumption by Country and Region, 2010
Country/Region (B.P. Statistical Review of World Energy, 2011; U.S. Census Bureau, 2011) © Hughes GSR Inc, 2011
20
10
Ba
rrel
s o
f O
IL P
er C
ap
ita
Non-OECD
82% of population
x1
x5
x9 x22 x96
48
0
500
1000
1500
2000
2500
1981 1986 1991 1996 2001 2006
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
Hydro Nuclear Coal Gas Oil
0
500
1000
1500
2000
2500
1981 1986 1991 1996 2001 2006
Mil
lio
n T
on
nes
Oil
Eq
uiv
ale
nt
Year
Hydro Nuclear Coal Gas Oil
Oil 101%
Coal 479%
(data from BP Statistical Review of World Energy, 2011)
418% increase
up 9.5% 2010
over 2009
Production
CHINA: The World’s Number 1 Consumer of Energy
Primary Energy Production and Consumption by Fuel: 1981-2010
491% increase
up 11.2% 2010
over 2009
Oil 428%
Coal 467%
Consumption
Imports 7%
© Hughes GSR Inc, 2011
71
%
-5
-4
-3
-2
-1
0
1
1980 1984 1988 1992 1996 2000 2004 2008
Mil
lio
n B
arr
els
per
Da
y
Year
Surplus
Deficit
55% of
Demand
CHINA’s Oil Production Surplus and Deficit 1980-2010
(data from BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
2010 Imports
5 million barrels per day
5.7% OF WORLD CONSUMPTION
49
0
0.5
1
1.5
2
2.5
3
3.5
1980 1985 1990 1995 2000 2005 2010
Mil
lio
n B
arr
els
per
Da
y
Year
Imports
Production
2010 Imports
2.5 million barrels per day
2.9% OF WORLD CONSUMPTION
INDIA’s Oil Production and Imports 1980-2010
75%
(data from BP Statistical Review of World Energy, 2011) © Hughes GSR Inc, 2011
0
2
4
6
8
10
12
1985 1995 2005 2015 2025 2035
Ton
nes
Oil
Eq
uiv
ale
nt
Per
Cap
ita
Year
Canada
U.S.A.
OECD
China World Average
India Non-OECD
Per Capita Annual Energy Consumption
History and Forecasts (1985-2035)
(history from BP Statistical Review of World Energy,
2011; forecast from EIA International Energy Outlook reference case, 2011; population from U.S. Bureau of Census)
History Forecast
© Hughes GSR Inc, 2011
50
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
1985 1995 2005 2015 2025 2035
Mil
lion
Ton
nes
Oil
Eq
uiv
ale
nt
Year
Canada
U.S.A.
China
India
Total Annual Energy Consumption
History and Forecasts (1985-2035)
(history from BP Statistical Review
of World Energy, 2011; forecast from EIA International Energy Outlook reference case, 2011)
History Forecast
© Hughes GSR Inc, 2011
0
5
10
15
20
25
1985 1995 2005 2015 2025 2035
Ton
nes
of
CO
2 E
mis
sion
s P
er C
ap
ita
Year
Canada
U.S.A.
OECD
China World Average
India Non-OECD
Per Capita Annual CO2 Emissions
History and Forecasts (1985-2035)
(history from BP Statistical Review of World Energy,
2011; forecast from EIA International Energy Outlook reference case, 2011; population from U.S. Bureau of Census)
History Forecast
© Hughes GSR Inc, 2011
51
0
2000
4000
6000
8000
10000
12000
14000
16000
1985 1995 2005 2015 2025 2035
Mil
lion
Ton
nes
of
CO
2 E
mis
sion
s
Year
Canada
U.S.A.
China
India
Total Annual CO2 Emissions
History and Forecasts (1985-2035)
(history from BP Statistical Review
of World Energy, 2011; forecast from EIA International Energy Outlook reference case, 2011)
History Forecast
© Hughes GSR Inc, 2011
0
10
20
30
40
50
60
70
80
90
1950 1970 1990 2010 2030 2050
Net
Po
pu
lati
on
In
cre
ase
per
Yea
r (m
illi
on
s)
Year
Net Increase per Year
0
0.5
1
1.5
2
2.5
1950 1970 1990 2010 2030 2050
Gro
wth
Ra
te (
%/Y
ear)
Year
Percentage Increase
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1950 1970 1990 2010 2030 2050
Po
pu
lati
on
(m
illi
on
s)
Year
Population
World Population Increase 1950-2050
© Hughes GSR Inc, 2011 (U.S. Bureau of Census, 2009; US Cars http://www.bts.gov/; World Cars www.plunkettresearch.com
Motor
Vehicles
1 billion
U.S.A.
256 million
China
2009
70 million
+20%
in 2010
Motor Vehicles >5%/year
Motor Vehicles
62 million new
Cars and Light
Trucks built
in 2009
52
Trends in Energy Investment for Food Production
(The Hydrocarbons We Eat)
En
erg
y I
np
ut
per
Un
it o
f F
oo
d E
nerg
y O
utp
ut 20
10
5
2
1
.5
.2
.1
Lo
ss
Pro
fit
.05
.02
Ind
ust
iali
zed
D
evel
op
ing
(Adapted from Science, April 19, 1974) © Hughes GSR Inc, 2011
0
20
40
60
80
100
120
140
160
0
50
100
150
200
250
Oil P
rice ($U
S/b
arrel)
Food
Pri
ce I
nd
ex
Year
Food Price Index
Oil Price (Brent)
Food Commodity Price Index vs Oil Price
© Hughes GSR Inc, 2012 (International Monetary Fund, 2012)
53
0
10
20
30
40
50
60
70
80
90
100
1850 1880 1910 1940 1970 2000 2030
Nuclear
Gas
Oil
Coal Hydro
Wood
0
10
20
30
40
50
60
70
80
90
100
1850 1880 1910 1940 1970 2000 2030
0
10
20
30
40
50
60
70
80
90
100
1850 1880 1910 1940 1970 2000 2030
Nuclear
Gas
Oil
Coal
Hydro Wood
Per
cen
tag
e of
20
35
Per
Cap
ita C
on
sum
pti
on
World Population, Per Capita and Primary Energy
Consumption, 1850-2035, as a Percentage of 2035 Levels
(data from Arnulf Grubler, 1998; BP Statistical Review of World
Energy, 2010; U.S. Bureau of Census, 2010); EIA IEO, Reference Case, 2010)
9.6 times
WOOD
OIL
COAL
GAS
Year
Ren
ew
ab
le
11%
N
on
-Ren
ew
ab
le
89
%
HYDRO
Per
cen
tag
e of
20
35
Pop
ula
tion
Year
6.8 times
Per
cen
tag
e of
20
35
Tota
l C
on
sum
pti
on
Year
Population Per Capita Consumption Total Consumption
65 times
OIL
COAL
47%
© Hughes GSR Inc, 2011
“Anyone who believes EXPONENTIAL
GROWTH can go on forever in a finite
world is either a madman or an
economist”
(Economist Kenneth Boulding, early ’70’s)
“The term
‘SUSTAINABLE GROWTH’
is an Oxymoron”
(Albert A. Bartlett, 2000)
54
• The Climate 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.
• In an era of constrained energy the correlation of economic growth with energy supply and price will set the stage for economic and geopolitical volatility and intense competition for energy resources.
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.
• Achieving a sustainable energy system is likely to 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 – the U.S. and Canada have no real energy strategy – this must be a high priority for the future.
Thank you
250 830-3662
403 276-3056