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Energy Solutions for All Promoting Cooperation, Innovation and Investment www.20wpc.com Official Host Official Venue Qatar National Convention Centre 79739_Fuel For Life.ai 10/28/09 4:32:29 PM "# $ %% ! World Petroleum Council Guide to Energy Fuel for Life — Contents The big picture 1.1 Youth: crafting the future of the industry 4 1.2 The cutting edge 5 1.3 Think globally 12 Transportation 2.1 The car of the future 20 Supply and markets 3.1 Oil prices: not too high, not too low 28 3.2 Natural gas prices and the link to oil 32 3.3 Peak oil: not yet 36 3.4 OPEC, the IEA and prices 38 A sustainable future 4.1 Copenhagen: what to expect 40 4.2 Cutting emissions: the big challenge 43 4.3 Water — a precious resource 47 Technology: pushing boundaries 5.1 Biggest games console in the world 49 5.2 Offshore marvels 53 Nasa image courtesy Goes Project Science Office 5.3 Deep thinking 64 5.4 Producing clever 68 5.5 Go with the flow — or cause the flow yourself 74 5.6 Invasion of the algae-heads 79 Understanding oil and gas 6.1 Exploration and production: explained 82 6.2 Refining and petrochemicals: explained 87 6.3 Carbon capture: explained 94 6.4 Climate change: explained 102 6.5 Natural gas: explained 104 6.6 Cap-and-trade: explained 111 6.7 Biofuels: explained 114 6.8 Grow your own (oil, that is) 118 Printed by SC (Sang Choy) International, Singapore. www.sc-international.com.sg 2 – www.world-petroleum.org 1.1 — The big picture with industry leaders to discuss the question Youth: crafting of “Does the industry need an image make- over?” They are leading the way in conjunc- the future of tion with other organisations and companies to address those issues, which are crucial to the next generation. the industry Our 1st WPC Youth Forum was held in China in October 2004, with over 500 he number of young people joining the young delegates focusing on “Youth and Tindustry or graduating in related areas Innovation – the Future of the Petroleum has been steadily decreasing. Therefore, Industry”. It played an important role in im- the petroleum industry is now on the edge plementing WPC’s strategy to attract more of a demographic cliff, with an ageing young people to WPC activities and the pe- workforce retiring shortly, and not enough troleum industry. young people finding the industry attrac- We have now prepared the 2nd WPC tive enough to join. Youth Forum, which is taking place in Paris This growing skills gap may impede the from the 18-20 November 2009. Under the industry’s very ability to operate, especially theme of “Energise Your Future” our young with respect to major exploration and pro- people have put together an innovative ap- duction projects. This challenge is particu- proach to the challenges and opportunities larly significant in the context of the world’s facing the oil and gas industry in the future. rapidly growing demands for energy and We need to move forward to engage young calls for greater adherence to responsible people in our industry and I call on everyone social and environmental practices. in the petroleum sector to give their full sup- port to this endeavour and to mobilise their students and young professionals in order Young people are the ones who to energise all our future! V will inherit the petroleum industry, and should be involved in crafting its future In response to this challenge, the World Petroleum Council formed its youth pol- icy, creating a Youth Committee in 2006, to bring a higher profile to the issue and form an alliance with young people them- selves in order to find possible solutions to our challenges. We feel that it is important that young people are at the forefront of re- solving this issue as they are the ones who will inherit this industry, and should be involved in crafting its future. The Youth Committee prepared a pro- gramme of activities for young people at the 19th World Petroleum Congress in Madrid Dr Randy Gossen, President of the last year, including a special round table World Petroleum Council 4 – www.world-petroleum.org 1.2 — The big picture and so on). But it’s also about creativity, lat- The cutting edge eral thinking, ideas. A decade ago, explorers in Brazil’s off- Energy provides heat, light, shore went through a few lean years. Too power and mobility. We, our few successful wells were being drilled. economies and our way of life And the discoveries that were made were depend on it mostly too small to make development commercially feasible, given the high costs ythagoras, Galileo, Newton, Darwin, of operating in Brazil’s deep Atlantic waters PPasteur and Koch, Marie Curie, Einstein, and of producing the viscous, low-qual- and Crick and Watson had at least one thing ity crude that was generally being found. in common: they weren’t constrained by or- Brazil was a disappointment and some thodox thinking. companies started to write it off. You might argue that the idea of the lone But the doubts didn’t last. Since 2007, scientific genius, whose leap of imagina- Petrobras and other companies have made tion redefines the way we see the world, a series of world-class discoveries that have is a function of the way we teach history: turned Brazil into one of the world’s most it’s easier to tell stories about people and dramatise single moments than to appre- We thought we were running out ciate all the minute events and processes of oil, when actually we were that led up to a great discovery. running out of ideas It’s probably a bit of both. From a platform of scientific knowledge accumulated over centuries, a few people with the capacity coveted exploration plays. In the words of to see the world differently have catalysed a former exploration and production chief of progress with moments of brilliant insight. state-controlled oil company Petrobras: “We Successful oil exploration is about tech- thought we were running out of oil, when ac- nology, data and science (and politics, geo- tually we were running out of ideas.” politics, economics and environmental law It’s easy to take the oil industry’s technology and infrastructure for granted. What we generally see is a fluid being pumped into the tank of our car — so the costs and technology involved in oil production are generally under-appreciated. We don’t see the vast distribution network — the pipelines, ships, lorries and trains that deliver oil to consum- ers worldwide at a rate of 150,000 litres a second. Or the platforms — staggering feats of engineering (see p53) — that produce oil from under the sea. Or the sophisticated technology that is needed to identify oil and gas deposits in the first place and bring the hydrocarbons safely and reliably to the surface. Given all that, it seems amazing that oil Waves? Wind? Currents? Icebergs? costs less by volume than, say, lemonade. No problem, says 1.2 million tonne If all that’s generally taken for granted, so Hibernia platform is what oil does for us. But oil is the common 5 – www.energy-future.com 1.2 — The big picture Courtesy of Baker Hughes Incorporated Can’t do … … Can do denominator in much of what we do: some- identified by seismic studies — and specu- where along the line, it’s been involved in late about whether they might contain oil. the production of the book you’re reading to Once wells have been drilled — ver- the computer at home to the car in the drive- tically or horizontally — and steered re- way to the asphalt that coats the road out- motely into carefully targeted spots deep side. As well as gasoline, diesel and jet fuel, inside the Earth, rock samples can be re- the oil industry is responsible for many of trieved for analysis. And sensors can be the products that define modern life — from placed down the hole to gather more in- heating and electricity generation, to the formation, using a wide range of measure- plastics that go into products ranging from ments — electrical resistivity, radiation, ul- medical equipment to children’s toys. trasound and others. Fibre-optic cables Without people finding and producing oil, transmit the data to the surface where su- life as we know it wouldn’t exist. per-computers can analyse them, provid- Oil exploration starts with three questions: ing answers to the second question — how is there oil and gas? How much? And is it much oil and gas is down there? economically producible? Think about how robust that downhole hardware needs to be. The closer you get A picture of the subsurface to the centre of the earth, the hotter it gets Energy companies start to answer the first and the less like a lab; 5,000 metres under- question by building a picture of the subsur- ground, temperatures can easily hit 250°C face. Seismic data enable geophysicists to and pressures 1,800 bar. Try putting your visualise what’s kilometres below the sur- laptop in the oven. face, layer by layer. Sophisticated compu- The answer to the third question — what’s ter-modelling software and phenomenal economically producible? — is largely a fac- computing power — we’re talking 200 ter- tor of technology, which is why energy com- aflops and 2,000 terabytes of data storage panies invest so heavily in research and de- — can process that information into detailed velopment.

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