Where it comes from

1
Energy-
Where it comes from where it goes
Hint its all about geology and cars and
heating and...
2
Estimated World Energy Consumption
Two different estimates
Source US Dept of Energy
3
Who will be using it?
Industrialized countries use two-thirds of total
now, soon will be about equal
Source US Dept of Energy
4
Primary uses are transportation and
electricity
Petroleum products are useful because theyre
portable
which is easily distributed between fixed points
for other uses
Both these are growing fields !
5
We like our cars
...and so does everyone else
EE/FSU Eastern Europe Former Soviet Union
Source US Dept of Energy
NB Europe Industrial Asia arent projected to
grow much compare w/ other places
6
Electricity demands are projected to grow over
the next 20 years
Note the different geographic distribution
Source US Dept of Energy
7
Why does energy consumption increase?
1) Populn 2) Std of Living
Note the different geographic distribution
Source US Dept of Energy
8
Various economic scenarios
The better off people are, the more energy
were gonna need.
Source US Dept of Energy
9
All right, so theres a real need.
What are our energy sources?
NB current usage
Oil Natl Gas 3 X Coal others negligible
Yep, its oil, folks
Source US Dept of Energy
10
Oil prices are interesting...
Prices have varied by a factor of 6 over the
last 30 years.
(So why the smooth projection? )
How good is it for the year 2002?
Source US Dept of Energy
11
Didja see any evidence of positive feedback in
the oil market on the last slide?
The OPEC oil ministers have declared that they
wish to keep the price low enough that further
exploration will not be economically viable
(Negative feedback)
12
When Gulf Oil opened the first gas station back
in 1913, the price was 0.27/gallon. That
was about 3 hours work at the prevailing average
wage. Scaling into todays regime, wed be
talking about 25 30 for a gallon of gas.
13
THE REAL COST OF PETROLEUM MOTOR FUEL
One mans opinion on
Actual Cost of Oil is at Least 69 Per Barrel

• Environmental Damage
• Agricultural Losses
• Increased Health Care Expenses
• Higher Insurance Premiums

45/Barrel
U.S. Military Expenses for Protecting Middle East
Oil Supplies
9/Barrel
15/Barrel
Price of a Barrel of Oil
Source Robert Q. Riley Consulting
14
Back in 1949 a geophysicist named M. King
Hubbert, working for Shell, got interested in the
total oil supply. Using his geologic estimates
for future discoveries, he predicted production
levels amazingly accurately
Hubbert curves show production rates in b/yr
This shows 2 of Hubberts early projections
note the peak years
15
50 years experience makes Hubbert look pretty
good overall
This chart adds the effects of unconventional
production
--extends our supply a little, but doesnt
change much
Source CJ Campbell, Oil Gas Journal, March,
2000
16
Note that production curves tail off while
need curves just keep increasing!
17
Basic problem is that discovery rate is now less
than consumption
Discovery peak was in the 70s leading to
the production peak now
We now consume 4 times as much as we discover!
Source CJ Campbell, House of Commons testimony
18

Oil production lags discovery
Source CJ Campbell, House of Commons testimony
19
US oil discovery production as an example
Discovery
Prodn
Source CJ Campbell, House of Commons testimony
20
The US was the first country to have an oil
industry
The discovery peak was 1930s Production peak was
1970s For the North Sea and Alaskan
fields, its only 28 years between discovery
production peaks
This in spite of much more difficult production
distribution conditions --better technology
gained us speed
21
Global discovery peak was in the 1970s
25 - 30 years of well-funded effort by some
very smart people prospecting around the world
hasnt increased the discovery rate
22

The slowing Discovery Rate
Includes oil discovered in known reservoirs
(backdated)

• a major
• source of
• new oil for
• the past 30
• years!

Source CJ Campbell, House of Commons testimony
23
From the API
Fourth Quarter 2001 API Drilling Statistics
WASHINGTON, January 16
Estimated completions of U.S. oil wells, natural
gas wells and dry holes decreased by 8 percent in
the fourth quarter of 2001 compared with the same
period of 2000, the American Petroleum Institute
reported today. Oil well completions dropped 23
percent, and natural gas completions dropped 3
percent for the quarter compared to the same
period of 2000.
According to the 2001 Quarterly Well Completion
Report Fourth Quarter, an estimated 8,309 oil
wells, natural gas wells and dry holes were
completed in the fourth quarter. In the fourth
quarter of 2000, there were an estimated 9,038
completions. For the fourth quarter of 2001, gas
completions were down 3 percent to 5,365 oil
well completions decreased 23 percent to 1,931,
and dry holes rose 3 percent to 1,013.
Total exploratory completions were
up 26 percent in the fourth quarter and
development completions were down 11 percent
compared to the same quarter last year.
API also reported a 1 percent
increase in total footage drilled in the fourth
quarter for a total of 41,534,000 feet.
24
Contrast this with the popular image
This notion is believed by many Politicians.
--Colin Campbell
Source CJ Campbell, House of Commons testimony
25
Leading to some laughable consumer decisions
26
In Europe, where gasoline prices have been
over 5 per gallon for many years,
27
theyve taken to using cars that you put on
like a sweater
The Smart Car serves quite well for most urban
purposes
28
or even a T-shirt
(This ones in Italy must get a jillion miles
per gallon.)
29
We can do OK in this country, too
Heres an experimental car built by some students
at Berkeley that gets over 1,000 miles per gallon
Not even trying for production, of course
30
Production is another matter Some serious
players think that we could do a lot better than
we are
The 1985 Chevy Blazer got 20 mpg, the 2002 model
gets 18 Fleet averages fell from 26 to 24 in the
same interval
31
Heres a potentially useful technology
Hybrid cars are an attempt to maximize the
relative advantages of gasoline and electrical
power systems
Honda and Toyota both have production versions of
hybrid cars available in the U.S. now. The price
is 20,000, and the gas mileages are 56 48 mpg,
respectively.
32
Hubbert curves for all petroleum-like
resources that we have fashioned to date change
the picture a little
But not much
Source CJ Campbell, House of Commons testimony
33
The underlying cause is that petroleum occurrence
is a pretty rare thing
Must have the right Initial conds History
Geologic Environmt
Source CJ Campbell, House of Commons testimony
34
So, we are faced with a scenario something
like this
35
and its interesting to note just where the oil
reserves are
36
WORLD PETROLEUM RESERVES
Protecting Against Limited Supplies, Future
Monopolies, and Price Increases
Total Oil Recovered Since 1859 Total Remaining
as of 1990
Billion Barrels
37

• So it looks like, in YOUR lifetime
• you will be
• Paying a LOT more for gasoline
• Very concerned with Middle East politics
• Trying new energy technologies
• Looking for alternate sources of energy

38
with regard to alternate sources, consider these
data on energy available from non-renewable
sources
Source Total Energy (J) Uranium
1.6 E 23 Coal 1.4 E 23
Syncrude 1.4 E 22 (tar sands, shale
oil) Crude oil 1.0 E 22 Natl Gas
8.0 E 21
39

and from renewable ones
Source Energy (J/yr) Solar
4.0 E 24 Biomass 2 E 21
Hydroelectric 9.2 E 19 Geothermal 8.0 E
19 Wind energy unknown
40
Afterword Comparing energy prices for
different fuels
Fuel /Mbtu Oil
3.49 Natl Gas 4.29 Coal 1.19
How about wood, ethanol, wind, geothermal,
solar, tidal, ?