SC213SLATEOURENERGYFUTUREWeekTwoFossilFuelsSC213板岩我们能源的未来两周的化石燃料

SC213SLATE:OURENERGYFUTURE

WeekTwo:FossilFuelsJohnBushOctober14,2005SOMEQUESTIONSDoeshumanityfaceanenergycrisis? NO!Thenwhatisthenatureofthe“crisis〞?1)TheavailabilityofenergyinaformthatisconsistentwithsustainingthecurrentAmericanlifestyle(whichhasbecomethedesiredlifestyleoftheWorld)appearstoberapidlydiminishing.2)ThecontinuanceandspreadoftheAmericanlifestylearguablywillmaketheEarthaveryuncertainandunpleasantplacetolive.WHATDOIMEANBY“THEAMERICANLIFESTYLE〞?Dispersedlocationofhousing,work&servicesPrimacyofindividualizedpersonaltransportRelativelylowcost,flexibledistributionofgoodsandservicesProductiveagricultureachievedwithhighenergyinputandlowlabor.Adequate,reliableaccesstolowcostutilities:water,fuel,communication,electricityTHEOIL&GASSHOCKWeAmericanswillhavetodealwithacrisisbroughtonbythedecreasingavailabilitytousofparticularformsoffossilfuels.Atfirstwemayrespondtotheshockaswedidtothe1973“OilShock〞THE1973OILSHOCK:CONSEQUENCES&RESPONSESInflation:rapidriseincostsofheating/cooling,transportation,food,materials,services…..Panicbuyinginresponsetowildswingsinavailability/costofoilandgasEmphasisonbehaviorresultinginefficientuseofoilandgas:reductionofenergyinputperunitofGDPEnormousbuild-upofenergyr&danddemonstrationprogramsAlteringofbehaviortodecreaseconsumptionofgoodsandservices,especiallythosewithhighdependenceonoilandgas…leadingtostagflationoreconomicdepression?THEOIL&GASSHOCK:NEARTERMPOLICYOBJECTIVES?Secureaccesstoprovenoil&gasreservesSecuredeliverysystemsforcrudeoil&gasEnhancedomesticinfrastructureforprocessingoil&gasStimulatethedevelopmentofdomesticoil&gasImplementthemeanstocushioneconomicdislocationsresultingfromswingsintheavailability/costofoil&gasStimulatethedevelopmentandimplementationoftechnologiesthatresultinefficientuseofoil&gasEncouragetheuseofcoal-generatedelectricityinapplicationsnowdependentonoil&gas,subjecttoacarbondioxideconstraintEncouragerd&etocreateacceptablealternativestooil&gas

EnergyResearchForcomparison,theEuropeanUnioniscompletinga$1billionprogramonrenewableenergytoendin2006,andexpectsdoublethatafterwardsto2021.In2005,theUSwillspend$1billion,butmostlyatnationallabs(DOENationalRenewableEnergyLaboratoryinColorado),butuniversityfundingis“bleak〞.StanfordhasaGlobalClimateandEnergyProject(GCEP)of$225millionovertenyearsfromindustry.FossilFuelFutureSummaryOil,NaturalGas,ShaleOil,andCoalproduceCO2.Carbonsequestrationrequiresanextra30%ofpowerandneedsresearch.FutureGen$1billionresearchplant.OilisneededfortransportationfuelTooexpensiveforelectricitygenerationTotalworldreserveofoilisalargequestion,usespoliticallymotivatedestimatesofindividualcountriesandindustrysecretsReserves:About50yearswithgrowthinuse2/3isintheMiddleEastCoalmaylast100yearswithgrowthinusage,butonly70yearsifpartlyconvertedtoreplaceoilCurrentrateofuseoffossilfuelswillincreaseworldwideTHEOIL&GASSHOCK:NEARTERMPOLICYOBJECTIVES?Secureaccesstoprovenoil&gasreservesSecuredeliverysystemsforcrudeoil&gasEnhancedomesticinfrastructureforprocessingoil&gasStimulatethedevelopmentofdomesticoil&gasImplementthemeanstocushioneconomicdislocationsresultingfromswingsintheavailability/costofoil&gasStimulatethedevelopmentandimplementationoftechnologiesthatresultinefficientuseofoil&gasEncouragetheuseofcoal-generatedelectricityinapplicationsnowdependentonoil&gas,subjecttoacarbondioxideconstraintEncouragerd&etocreateacceptablealternativestooil&gas

DIALOGIftheseobjectivesaremetwhatwillitmeanfortheoil&gascrisis?

Americawillhaveabridgeintoapost- oil&gasera(POGE).Howlongdowehave?WhatwillprovidetheenergyneededtomaintaintheAmericanlifestyleinthePOGE?

ThatiswhatourSlatewilltryto answer.DIALOG(CONTINUED)Iftheseobjectivesaremetwhatwillitmeanfortheglobalclimate?

Therateofcarbondioxideadditionwillbe decreasedbuttheWorldwillbeirrevocably committedtosomeconsequencesofglobal warming. Theseverityoftheconsequenceswilldependon whathappenselsewhereintheWorld.WhatifweconcludethatinthetimeframeofthePOGEbridgeadequatereplacementsforoil&gascannotbeestablished?

ThentheAmericanlifestylecannotbemaintained andwewillhavetothinktheunthinkable.FOSSILFUELSPetroleumTerrestrialNaturalGasCoalBitumen(“TarSands〞)Kerogen(“OilShale〞)SeabedMethane(MethaneHydrate)WHYOIL&GAS?Huge,industrialscalequantitiesoccurAccessiblewithproventechnologyReasonablecostReliablesupplyRelativelycleanburningRelativelylowercarbondioxideproductionWehavebuiltahugeinfrastructurethatisdependentonoilandgasWHYNOTOIL&GAS?EconomistsarguethattherewillalwaysbeplentyofoilandgasifwearewillingtopayforitGeologistsarguethatthereisafiniteglobalresourceofthe“good〞kindofoil&gasthathasmadetheAmericanlifestylepossibleAtissue:whenwilltheproductionpeaksofthe“good〞kindofoilandthe“good〞kindofnaturalgasbereached?AREWERUNNINGOUTOFOIL?Historicallyobservationsaboutoilsupplieshavenotbeenveryreliable1855:“Hurrybeforethiswonderfulproductisdepleted〞1874:“TheUShasenoughpetroleumtokeepitskerosenelampsburningforonlyfouryears〞1979:“TheUSwillexhaustitsownpetroleumreservesinabout10years〞2005:“Worldoildiscoveriespeakedinthe1960s.Youcan’tpumpwhatyouhaven’tfound.Wherewillthatadditionaloilproductioncomefromandatwhatprice?〞WorldOilGrowthandDecline-Pessimistic2TrillionBarrelsTotalRecoverableOptimistic3TrillionBarrelsTotalRecoverable:USGeologicalSurveyPeakingofWorldOilProduction

HirschReport:Feb.2005THECRITICALQUESTIONSHowlongdoesAmericahaveuntilthe“good〞fossilfuelbecomestooscarceandcostlytosupportthe“AmericanLifestyle〞?HowmuchcarbondioxidefromthecombustionoffossilfuelcantheEarthaccommodateuntiltheconsequencesforthe“AmericanLifestyle〞becomeintolerable?SOMEPOSSIBLEVIEWPOINTSOilAtorpastthepeakofworldproductionGoodforanother30-50yearsTherewillalwaysbeplentyGasNon-domesticsourcesaretooriskyGoodforanother50-75yearsbutthepeakwillcomesoonerTherewillalwaysbeplentyGlobalWarmingItistoolatetostopit—thingswillonlygetworsewithmorefossilfuelcombustionRestrictingfuturecarbondioxideemissionscankeeptheEarthlivableGlobalwarmingisamythoritisinfactbeneficialSOMEPOSSIBLEELEMENTSOFPOLICYIExtendtheavailabilityofoilandgasaslongaspossibleLocatemoredepositsofoilandgasApplyimprovedmanagementpracticeandtechnologyforoilandgasrecovery,transportandprocessingConvertcoal,bitumen,kerogen,andbiomasstooilandgasequivalentsDevelopandapplycarbondioxidesequestrationEmphasizeefficiencyinconversionanduse,especiallyintransportation,overandabovethecost-inducedefficiencyimprovementsSOMEPOSSIBLEELEMENTSOFPOLICYIISubstituteelectricityforfossilfuelswhereverthatisfeasible*FromnaturalgasFromcoalFromnuclearfissionFromnuclearfusionFromrenewables:wind,hydro,solar,geothermal,tidal,biomass…Applyespeciallytotransportation*“Feasible〞combinestheideasoftechnicalfeasibilitywitheconomic,political,andenvironmentalacceptabilitySOMEPOSSIBLEELEMENTSOFPOLICYIII

Substitutehydrogenforfossilfuelusewhereverfeasible*FromnaturalgasFromcoalFromnuclearfissionFromnuclearfusionFromrenewablesApplyespeciallytotransportationTWO“EXTREME〞VIEWPOINTS“Super-optimist〞 -Alwayswillbeenoughoilandgas -Globalwarmingisnoproblem“Super-pessimist〞PastthepeakforoilandimportinggasistooriskyItisalreadytoolate;thingswillonlygetworsePOLICYRESPONSESSuper-optimistLocatemoreoilandgasManagetheseresourceswellEconomicswilltakecareoftherestSuper-pessimistDevelopandapplycarbonsequestrationEmphasizesuper-economicefficiencyShifttoelectricityderivedfromcoal,nuclearfission,andrenewables,andapplytotransportation“MOSTREASONABLEVIEWPOINT〞Oil:weareatorpastthepeakofworldproduction.Gas:Wearegoodforanother50-75years,butthepeakwillcomesoonerGlobalWarming:Restrictingcarbondioxideemissionscankeeptheearthlivable.POLICYRESPONSESLocatemoredepositsofoilandgasApplyimprovedmanagementspracticesforoilandgasrecovery,transportandprocessingConvertcoal,bitumen,andkerogentooilandorgasDevelopandapplycarbondioxidesequestrationEmphasizesuper-economicefficiencySubstituteelectricityforfossilfuelswhereveritisfeasibleusingcoal,nuclearfission,andrenewablesSubstituteelectricityforfossilfuelsintransportationFOSSILFUELSPetroleumTerrestrialNaturalGas

Coal

Bitumen(“TarSands〞)Kerogen(“OilShale〞)????????SeabedMethane?????????????????????TOPICALORGANIZATIONLocatingoilandgasManagementandtechnologyforrecoveryofoilandgas(includingmethanehydrates)CoalforelectricitygenerationCarbondioxidesequestrationConversionofnaturalgastoliquidfuelConversionofcoaltoliquidandgaseousfuelConversionofbitumentoliquidfuelConversionofkerogentoliquidfuelLOCATINGOILANDGASHowmuchistherelefttofind?WorldOil:USGS3000bblUSOil:USGS32bblUSGas:55TCFbelow15,000ft,460TCFintightformationsWhereisitlikelytobe?Middle/FarEast;ArcticOcean;DeepCont.ShelvesArcticWildlifePreserve;California/FloridaCoasts;NationalForestsWhatarethenegatives?ThreattowildlifeVisual/chemicalpollutionWhataresometechnologypossibilities?Refined3Dand4DseismicanalysisDeepdrillingtechnologyMiniaturedrillingtechnologyRECOVERYOFOILANDGASEnhancedOilRecoveryPrimaryRecovery10%SecondaryRecovery20-40%TertiaryRecovery30-60%US700,000bls/daySteam/CarbonDioxideinjectionGasInjectionChemicalinjectionStripperWells393,000wellsproduce15%ofUSoilProducelotsofcontaminatedbrine:300:1MethaneHydratesContinentalshelf/ArcticpermafrostUS2,000-200,000TCFPotentially40-400yearsofUSconsumptionGENERATIONOFELECTRICITYFROMCOALUShasenoughcoalfor80-120yearsAbouthalfofUSelectricitycomesfromcoalUShasasubstantialinfrastructureinplaceCoalorGas?1999-2003Gasfired-134,000MW;Coal-fired500MwCurrently115coal-firedplantsunderconstructionNegativesofcoaltoelectricityCoalgeneratestwiceasmuchcarbondioxideperunitofenergyasnaturalgasAirpollutantsAesthetics/watercontaminationCost/reliabilityofelectricaltransmissionsystemReliabilityoftransportofcoal

USCoalLifetimeECONOMICSOFGENERATIONFuelCosts—CoalisalotcheaperthangasperenergyunitBreak-evenifgas$3.50-4.00/Mbtu(2002$)In2002gaswas$2.50/MbtuCapitalCostsGas-firedCC$550-700/kw;OC$350-550/kwCoal-firedFB$1100-$1300/kw;IGCC$1300-$1600/kwIGCCwithCarbonDioxideCaptureEasternCoal;629MW$1.2B$1900/kw($900/kwin2002?)AEP/GE/BechtelGoal:astandardizedplantdesignCARBONDIOXIDESEQUESTRATIONElementsoftechnologyhavealreadybeendemonstratedbutnotintegrated:capture-transport-disposalSeveralprojectsunderwayFutureGen$1Bover10yrs.StatoilinNorthSeabedBPScotland350MWplannedBPAlgeriaItaddscostsofenergyandcapitaltoIGCCCaptureadds2.5to4cents/kwhUndergroundstorageadds1to5cents/kwhCARBONDIOXIDESEQUESTRATIONThereseemstobestoragecapacityUNIPCCcapacityfor80yearsworthofcurrentcarbondioxideemissionsEstimate99%likelihoodthatwillstayinplacefor100yearsIsithazardous?SomewilderideaOceansequestrationStimulationofterrestrialuptakeGeneticmanipulationofplantlifeCONVERSIONOFNATURALGASTOLIQUIDFUEL(GTL)Asolutiontothe“strandedgas〞problemAnalternativetoLNGshipmentProcessReformmethanetosyngas(7projects)UseFischer-TropschtomakesyncrudeRefinetoultra-cleanburningdieselfuelProjectsTulsaOkla.DOEDemo70bl/day$38MQatarExxon/Chevron/Shell750,000bl/day$20BOman/MalaysiaPossibilityforAlaska?Estimatedproductioncosts$14/boeCONVERSIONOFCOALTOLIQUID&GASEOUSFUELGasificationisthefirststepConv