The Future of Oil Roland N. Horne Energy Resources Engineering Stanford University 1 It’s a Fossil-Fueled World 6% 6% 35% Oil Natural Gas Coal 29% Nuclear Hydroelectric 24% 2 BP Statistical Review 2008 1 Crude Oil Price 140 120 $ money of the day $ 2007 100 80 60 US$/bbl 40 20 0 1860 1880 1900 1920 1940 1960 1980 2000 3 BP Statistical Review 2008 The Future? 1. Production and reserves. How much oil is there, and how long will it last? 2. Technology. How can we produce more of the oil in place? 3. Manpower. Who will work on these problems? 4 2 1. Production and Reserves • How much do we have? • How long will it last? • Peak oil • Business as usual 5 Peak Oil 6 Lahererre, 2003 [http://www.oilcrisis.com/laherrere] 3 Peak Oil World, outside of swing producers - Saudi Arabia, Kuwait, Iran, Iraq, UAE 7 Lahererre, 2003 [http://www.oilcrisis.com/laherrere] Peak Oil World, excluding extra-heavy oil 8 Lahererre, 2006 [http://www.oilcrisis.com/laherrere] 4 World Proven Oil Reserves 1600 1400 Oil and Oil Sands 1200 1000 800 Alberta oil sands added Billion bbl Billion 600 OPEC restates reserves 400 200 0 1980 1985 1990 1995 2000 2005 2010 9 BP Statistical Review 2008 Technical vs. Political Reserves 10 Lahererre, 2007 [http://www.oilcrisis.com/laherrere] 5 World Oil (+NGL) Production 120,000 kb/d (EIA, June 2008) 110,000 IEA WEO 2006 100,000 90,000 80,000 kb/d 70,000 60,000 50,000 40,000 1970 1980 1990 2000 2010 2020 2030 Energy Information Administration, July 2008, www.eia.doe.gov/ipm/ 11 International Energy Agency, World Energy Outlook 2006, www.iea.org World Oil (+NGL) Production 100 100,000 90 2007$ (BP, 2008) 95,000 kb/d (EIA, June 2008) 80 90,000 70 85,000 60 80,000 50 75,000 kb/d 2007$ 40 70,000 30 65,000 20 60,000 10 55,000 0 50,000 1970 1980 1990 2000 2010 EIA and BP Statistical Review 2008 12 6 World Oil (+NGL) Production 13 http://europe.theoildrum.com/node/2832 How Good Are Forecasts? 10 9 AEO 1985 US domestic oil production AEO 1991 8 AEO 1995 AEO 2000 7 AEO 2002 Mb/d AEO 2004 6 AEO 2006 AEO 2008 Actual 5 4 1985 1995 2005 2015 14 EIA: Energy Information Administration, Annual Energy Outlook, 1985- 2008. http://www.eia.doe.gov 7 The Second Trillion USGS (2000) World Oil OPEC BP O&GJ 0 200 400 600 800 1000 1200 1400 Gb International Energy Agency, World Energy Outlook 2004 15 USGS, U.S. Geological Survey World Petroleum Assessment 2000, http://pubs.usgs.gov/dds/dds-060/ 2. Technology • The “third trillion”: – (a) Discovering the undiscovered. – (b) Producing the unproductive. – (c) Unconventional sources. • New discoveries. • Enhanced oil recovery (EOR). • Oil sands and oil shale. 16 8 (a) World Oil Reserves and Resources International Energy Agency, Resources to Reserves 2005 17 © OECD/IEA, 2005: Figure ES1, page 17, used with permission. World Oil Production by Source International Energy Agency, Resources to Reserves 2005 18 © OECD/IEA, 2005: Figure 2.1, page 41, used with permission. 9 Top World Oil Producers, 2006 (thousand barrels per day) 1 Saudi Arabia 10,665 2 Russia 9,677 3 United States 8,330 4 Iran 4,148 5 China 3,845 6 Mexico 3,707 7 Canada 3,288 8 United Arab Emirates 2,945 9 Venezuela 2,803 10 Norway 2,786 11 Kuwait 2,675 12 Nigeria 2,443 13 Brazil 2,166 14 Algeria 2,122 15 Iraq 2,008 19 Source: EIA 20 10 12,000 Saudi Arabia Oil Production 10,000 8,000 kb/d 6,000 4,000 2,000 0 1970 1972 1974 1976 1978 1980 Source:1982 EIA June 2008 Intern 1984 Working Harder to Find Oil1986 1988 1990 1992 1994 1996 ational Petroleum Monthly 1998 2000 2002 2004 2006 21 Stuart Staniford, March 2, 2007 http://www.theoildrum.com 22 11 Effectiveness of Wildcat Drilling 23 International Energy Agency, World Energy Outlook 2004 Effectiveness of Wildcat Drilling 24 12 Total Upstream Costs per Barrel 25 http://www.eia.doe.gov/neic/infosheets/crudeproduction.html (b) Enhanced Oil Recovery • Increasing recovery factor by recovering left-behind oil. • 10% of US oil production for more than 10 years. – Thermal methods. –CO2 methods. – Chemical methods. 26 www.snf-oil.com 13 Recovery Factor 27 http://aspofrance.viabloga.com/files/JL-IGC2008-part3.pdf Thermal Enhanced Oil Recovery Dr. Abdul Muin, BPMIGAS The 4th Workshop of Indonesia PPM Case Study kb/d June 13-17, 2006, Jakarta 28 http://www.ccop.or.th/ppm/document/INWS4/INWS4DOC02a_Indonesia_Abdul_Muin.pdf 14 CO2 Enhanced Oil Recovery • US since 1980. • 80 projects. • > 230,000 b/d • Sequestration too. 29 http://www.encana.com/operations/canada/weyburn/index.htm ASP Enhanced Oil Recovery Alkaline Surfactant Polymer (ASP) Î Additional 20% of STOOIP 30 SPE 100855 (2006) Wang Yupu, and Liu He, Daqing Oilfield Co. Ltd 15 (c) Oil Sands http://ostseis.anl.gov/guide/photos/index.cfm 31 www.energy.gov.ab.ca/OilSands/pdfs Oil Sands http://ostseis.anl.gov/guide/photos/index.cfm 32 16 Oil Sands http://ostseis.anl.gov/guide/photos/index.cfm 33 Oil Sands - SAGD 34 www.opticanada.com/technology/bitumen_extraction/ 17 Oil Sands - SAGD http://www.longlake.ca/project/photo_gallery.asp 35 Oil Sands – Gas Consumption • 2004 consumption 0.7 Bcf/d (Canada 7.7 Bcf/d). • Producing 142 Gb of oil would need 200 Tcf of gas (Canada total reserves = 58 Tcf). • 2006 carbon emissions = 45 Mt/year. • Water and environmental concerns. Söderbergh et al. (2007) US imports 8.2 Bcf/d 2006 30 Bcm/y = 2.9 Bcf/d (14% of US consumption) = ~1 Tcf/y) IEA World Energy Outlook 2006 36 18 Oil Shale http://ostseis.anl.gov/guide/photos/index.cfm 37 Oil Shale http://www.geolsoc.org.uk/gsl/ geoscientist/features/page874.html 38 http://www.dailyreckoning.com/rpt/OilShale.html 19 Oil Shale 39 http://ostseis.anl.gov/guide/oilshale/index.cfm 3. Manpower and Womanpower • Who will do the work? 40 20 SPE Membership by Age 2007 SPE Membership, Excluding Student Members Average Age of Members is 46 100% 90% 65+ 80% 60-64 70% 55-59 50-54 60% 45-49 50% 40-44 40% 35-39 30% 30-34 20% 25-29 10% 20-24 0% 0 3 98 99 01 02 04 06 07 1997 19 19 200 20 20 200 20 2005 20 20 SPE (www.spe.org) 200741 Age Distribution 42 SPE Talent & Technology 2007 21 There are Sufficient People – But Not Distributed 43 Schlumberger: Surviving the Skills Shortage (2006) 3.5 The More Distant Future • Peak oil • Peak gas • Peak coal • Peak uranium • Ultimately, the fossil-fuel era will end, and the world must operate on renewable energy sources. 44 22 Futures for Graduates • Develop skills in fundamentals. • Foreign language skills allow mobility. • Flexibility to address new problems. • Petroleum engineers today will be energy engineers in the future. 45 Conclusions • “Easy” oil has been consumed. • Plenty of “difficult” oil still, but demand will soon surpass supply. • Technologies to improve recovery require advanced skills. • Shortages of professionals in many places. • Excellent opportunities for young people to enter professional careers with large challenges, great responsibility and substantial rewards. 46 23 47 24.