Trends in Oil Supply and Demand, the Potential for Peaking of Conventional Oil Production, and Possible Mitigation Options A Summary Report of the Workshop (2006) / Chapter Skim
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Appendix C: Individually Authored Summaries of Presentations
Appendix C: Individually Authored Summaries of Presentations
Pages 29-47
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From page 29... ...
In light of this fact, it should be no surprise that the possibility that world oil production will soon reach a peak and then inexorably decline is a subject of great interest and intense debate. The "pessimists," a somewhat pejorative label given to those who are convinced that the oil peak is imminent and that its consequences will be dire, assert that world oil supply is chiefly determined by the geology of oil resources.
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From page 30... ...
Other optimists note that the world's resources of unconventional oil (heavy oils, oil sands, shale oil, and even coal) are vast in comparison to conventional oil and gas, and point out that the heavy oil of Venezuela and the oil sands of Canada are already being economically developed.
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From page 31... ...
Reserve growth added three times the volume of reserves added by new field discoveries during the 1996 to 2003 period. During that period, 26 percent of the estimated mean oil reserve growth and 52 percent of the estimated mean natural gas volume reserve growth were realized.
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From page 32... ...
Both groups have what seem to them to be good reasons to keep this data confidential, but the information available to outsiders suggests that we may be significantly overestimating remaining reserves. Many independent estimates of future world oil demand have been made.
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From page 33... ...
In the past several years, "unconventional oil reserves" have also been added to the world's proven reserve base, which raised global proven reserves by another 200 billion bbls, although these unconventional oil resources are extremely energy intensive to produce and never come out of the ground at rates more than a fraction of the volume of oil a highly pressured reservoir can deliver. I am convinced that Saudi Arabia is either nearing its peak oil output, or could even have passed its old peak supply record, set in 1980-1981.
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From page 34... ...
The wrong way to resolve this issue is to wait until historical data make it clear that we have passed peak oil since it is so obvious that global oil production is in decline. If the world chooses what I described as the rearview mirror approach to the peak oil debate, we lose the chance to properly organize an intelligent response to how the world copes in a post-peak oil environment.
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From page 35... ...
THE OUTLOOK FOR ENERGY -- A VIEW TO 2030 Scott Nauman, Manager, Energy and Economics, Corporate Planning Department, ExxonMobil Corporation This presentation highlights ExxonMobil's global energy outlook, with an assessment of supply and demand through 2030. This outlook underscores the connection between economic growth and energy consumption, and the importance of meeting key energy supply and demand challenges to improve economic prosperity around the world.
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From page 36... ...
Fifty years ago the world was consuming 4 billion bbl of oil per year, and the average discovery rate (the rate of finding undiscovered oil fields) was around 30 billion bbl per year.
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From page 37... ...
Assuming long-term global economic growth at 3-3.5 percent per year, most longterm energy demand projections show global oil consumption rising from about 84 million bbl/day in 2005 to 120 million bbl/day by 2025, and most of the demand growth is projected for the developing countries. To achieve 120 million bbl/day of oil production by 2025 and assuming a modest depletion rate in producing fields of 3-5 percent annually, some 98 million bbl/day of oil production in 2025, must come from other than current proved reserves, i.e., from new discoveries or extensions of producing fields.
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From page 38... ...
have increased over time, with advancing technology, enhanced recovery, and new reservoir development. For example, according to an established industry source, reserve growth from improved recovery alone in existing fields amounted to 175 billion bbl in 1995-2003; combined with new discoveries of 138 billion bbl, total reserve growth was therefore well above the cumulative production of 236 billion bbl for that period.
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From page 39... ...
enhanced recovery of conventional oil, and (3) substitute liquid fuels from heavy oil/oil sands, coal, and remote natural gas.
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From page 40... ...
While all would agree on the inevitability that a maximum of both conventional oil production and ultimate recovery exists, the views on both the timing of the onset of the maximum and its magnitude are at significant variance. I suggest that several key dimensions shape the debate and the major differences in positions being taken: · The size of the total conventional oil "endowment"; · The role played by reserve additions and the potential for substantial increases in recovery factors; · The scale of the opportunity for and effectiveness of major additions from frontier exploration; · The growth capacity in OPEC production and the state of the reserves underpinning production; · The scale and timing of significant additions from unconventional feedstock, such as GTL, oil sands, shale oil, coal, and biofuels; · The timing, scale, and feasibility of the massive investment capital calls required; and · The role that will be played by significant technological advances, as outlined in my presentation.
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From page 41... ...
· One of the most significant wild cards is the size and timing of fuel production from unconventional resource conversion. While not directly addressing the issue of the peaking of conventional oil production, the role of synthetics could be critical in responding to the rising demand for fuel.
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From page 42... ...
However, the pace of heavy oil development faces a number of challenges, which include: · Light oil production is more profitable for companies with diversified portfolios; · Applicability of today's technology beyond the "best" reservoirs is unknown; · Industry is currently experiencing capital, people, and equipment constraints; · The political situation in Venezuela is uncertain; and · Price volatility discourages sustained investment over the longer term. CANADIAN OIL SANDS: DEVELOPMENT AND FUTURE OUTLOOK Eddy Isaacs, Managing Director, Alberta Energy Research Institute It is estimated that there are 8 to 9 trillion bbl of heavy oil and bitumen in place worldwide, of which potentially 900 billion bbl of oil are commercially exploitable with today's technology.
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From page 43... ...
Despite these challenges, several factors have made investments in oil sands very attractive given world oil prices above about $US 25 per bbl WTI (West Texas Intermediate crude oil)
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From page 44... ...
The cost of production of clean liquid fuels from coal is estimated to be in the range of $30-$50/bbl COE depending on coal type, plant location, and actual capital cost. Therefore, continued high world oil prices above $50/bbl would make CTL an economically viable option in the United States and worldwide.
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From page 45... ...
It will be limited to the largest gas resources where economy of scale benefits are available and will likely be utilized as part of an overall energy diversification strategy. · Synthesis gas-based technologies, which utilize coal, residual oil, or biomass feedstocks, will extend the potential capacity for liquids production via the GTL technology platform.
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From page 46... ...
Liquid fuels from oil sands, heavy oil, and GTL are likely to increase to about 10 percent of petroleum-based supplies over the next 25 years. Biomass-based fuels will probably add another 5 or so percent.
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From page 47... ...
Delays in realizing such on-the-road fuel consumption improvements would make future petroleum demand significantly higher. Due to constraints on the rate of buildup of new production capacity, low-emission diesels and hybrids will have only modest fleet improvement potential before about 2025.
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