Gas Well Deliquification Workshop Denver, Colorado February, 2009 Energy, Economy and Policy: A Glimpse at the 21 st Century Scott W. Tinker Bureau of Economic Geology Jackson School of Geosciences The University of Texas at Austin
What a difference a year makes
Concepts I. Energy is the Engine of Modern Economies II. Energy Transitions take Time III. A Glimpse at 21 st Century Policy
Global Energy Use Energy Use (Quadrillion Btu) Asia & Oceania United States Europe Eurasia Central & South America Middle East Canada & Mexico 87% Fossil Fuels Coal Oil Gas Nuclear All Other Africa 0 20 40 60 80 100 120 140 160 Quadrillion Btu 1 Quad ~ 1 Exajoule ~ 1 Tcf ~ 170 mmbo (~ 33 GWY) Data: EIA, October 2007
Energy-Economy Economy Cycles Global oil demand pulls on supply Weak dollar (interest rates, debt, war, trade deficit) Speculators hedge; buy oil to protect against weak dollar Weak dollar, tight D/S drive, and speculation drive the dollarbased price of oil up High price dampens energy demand Mortgage and credit crisis and global interdependent reactions slam global markets Demand dampening, excess production capacity, weak economy drive oil price down Oil production cut by OPEC Lower oil prices prop up economy Global oil demand pulls on supply
US Economy and Oil Price 10.00 Oil Price $ of the day $ 2007 90 80 GDP Growth (% points at annual rates) 8.00 6.00 4.00 2.00 0.00 Nixon Ford Carter Reagan Bush Clinton W Bush 1970 1975 1980 1985 1990 1995 2000 2005 70 60 50 40 30 20 Oil Domestic Wellhead Price ($) -2.00 10-4.00 Year 0 Data: EIA February 2007 and US department of Commerce
Energy Underpins Economies 1980-2004 ~3 billion people After: Koonin, 2008
Concepts I. Energy is the Engine of Modern Economies II. Energy Transitions take Time III. A Glimpse at 21 st Century Policy
Tinker, 2008 Global Energy Consumption 100 Percentage of total market 80 60 40 20 H/C<1 (Wood, Coal) H/C~2 (Oil) H/C>4 (Natural Gas, Nuclear, All others) 0 1850 1900 1950 2000 U.S. Data: Annual Energy Review 1999 (EIA, 2000) World Data: International Energy Annual 1999 (EIA, 2000) Year QAc9841c
Global Energy Demand Source: National Petroleum Council, 2007
% Total Consumption Global Energy Consumption (quads) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Historical Data: EIA October 2007 Coal Natural Gas Hydroelectric Demand Forecast 91% 87% 80% Fossil Fuels Tinker Forecast Petroleum Biomass, Geothermal, Solar & Wind 1.25% annual demand growth Nuclear 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 ~255Q ~415Q ~495Q Fossil Fuels 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Global Oil Reserves & Production Global Annual Production (mbo) 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 1,400.00 $100.00 1,200.00 $90.00 $80.00 1,000.00 $70.00 800.00 $60.00 $50.00 600.00 $40.00 400.00 $30.00 $20.00 200.00 $10.00 0.00 $0.00 Global Oil Price Reserves ($2007) (bbo) 40 35 30 25 20 15 R/P World Oil Production (Thousand Barrels) Oil Price Average in $/bbl Inflation Adjusted 2007 World Oil Reserves (Billion Barrels) Source: 1980-2007 Energy Information Administration As of January 2008 (www.eia.doe.gov/pub/international/iealf/crudeoilreserves.xls ), 1950-1980 OPEC (http://www.opec.org/library/)
Oil Forecast Global Energy Consumption (quads) 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Tinker Forecast 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 93 84 75 65 56 47 37 28 19 9 Energy Consumption (mmbod) Source: National Petroleum NPC, Council, 2007 2007
U.S. Natural Gas Production U.S. Natural Annual Gas Natural Production Gas Production (Bcf) (TCF) 10 9 8 7 6 5 4 3 2 1 25,000 20,000 15,000 10,000 5,000 Total Natural Gas Conventional Gas Difference Tight Gas Coalbed Methane Gas Shales 0 1990 1995 2000 2005 2010 2015 2020 2025 Year Unconventionals 0 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 Year Conventionals: EIA (1949-1990) and NPC (1991-2015) Unconventionals: 1970-1988 data from GRI, 1999. Updated data from 1989-2005 is from EIA, 2007
Global Energy Consumption (~TcF) 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 32,560 TcF Resources: ~ 200 years at 150 TcF year Source: SPE Paper 68755, National Petroleum Council, 2007 Natural Gas Forecast Tinker Forecast 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Natural Gas (Tcf) 110 100 90 80 70 60 50 Supply Demand Global Production Natural Gas 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Data: EIA, October 2007 R/P (yrs) 70 60
Coal Forecast Global Energy Consumption (quads) 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 R/P Tinker Forecast 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: National Petroleum Council, 2007
Renewables Forecast Global Energy Consumption (quads) 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Tinker Forecast 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 >40Q! Historical Data: EIA October 2007
Renewables Forecast ~5 MW Nameplate ~25% Efficiency Global Energy Consumption (quads) 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 ~ 100 MW Nameplate ~ 25 MW Actual Tinker Forecast 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 >40Q! Historical Data: EIA October 2007
Renewables Forecast We need > 40 Q Global Energy Consumption (quads) 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 II. Energy Transitions Take Time (and engineering) 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Concepts I. Energy is the Engine of Modern Economies II. Energy Transitions take Time III. A Glimpse at 21 st Century Policy
Energy Independence should not be confused with Energy Security Wise Policy will Focus on Energy Security
Energy End Use Electricity Hydro Uranium Transportation Imports Conventional Oil Coal U.S. Data Natural Gas Biomass Data: EIA 2007 Heat
Parameters for Energy Security Available Affordable Reliable Clean
Global Policy for Energy Security Increased Efficiency Diversify the global energy portfolio Improved energy Infrastructure Carbon Price that is transparent, economy-wide, global Strengthen global Energy Trade Dialog between Developed and Developing Nations Balance global Workforce Demographics Policy that engages Energy, Economy and Environment Build Global Bridges for Energy Security
Three Global Bridges Energy, Economy, Environment Developed and Developing Nations Industry, Government, Academe
Electricity s s Role 100 Electricity will play an ever greater role in the energy end use mix. 45Q Annual Use (Quads) 10 1 Total U. S. Energy Energy used to produce electricity 0.1 1800 1855 1910 1965 2020 After Huber and Mills, 2005. Data: EIA, Annual Review, 2003. US Census Bureau, Historical Statistics of the US Colonial Ties to 1970
Global Carbon Emissions Annual Anthropogenic CO2 (mmt) 12,000 10,000 8,000 6,000 4,000 2,000 1980 1983 1986 1989 1992 1995 1998 2001 2004 NA Africa Cent & SA Asia & Oceania Europe ME Eurasia Data: EIA 2007
+$ BEG s Gulf Coast Carbon Center EOR Stacked Sinks -$ Sequestration
Cost of Carbon $20-$40 per tonne Mitigate and Adapt! Source: Koonin, 2008
Efficiency Electricity Options Fuel, lighting, electronics, insulation Challenge: Rebound effect Natural Gas Coal Abundant, reliable, price volatility, and cleaner Challenges: Global deliverability (LNG) and Access Abundant, reliable, cheap and dirty Challenge: Sequestration (IGCC w/ccs), financing, public perception Nuclear Abundant, reliable, moderate price and cleaner Challenges: Waste disposal, security, public perception Alternatives Cleaner, less reliable and more expensive Challenge: Capacity impacts cost and reliability
Efficiency Electricity Options Fuel, lighting, electronics, insulation Challenge: Rebound effect Natural Gas Abundant, reliable, price volatility, and cleaner Challenges: Global deliverability (LNG) and Access Coal Abundant, reliable, cheap and dirty Challenge: Sequestration (IGCC w/ccs), financing, public perception Nuclear Abundant, reliable, moderate price and cleaner Challenges: Waste disposal, security, public perception Alternatives A Grand Challenge Electricity Storage and Transmission Cleaner, less reliable and more expensive Challenge: Capacity impacts cost and reliability
Bridge Energy, Economy, Environment A healthy economy requires energy and provides capacity to invest in the environment Fossil fuels are the foundation of today s economy and the bridge to an alternate energy future Electricity demand is growing The cost to reduce carbon is high and everyone must participate, or it likely will not happen Alternate energies require time, money and technology to achieve commercial scale
Bridge Developed and Developing Nations For major economies, industrialization brings 21 st century technological understanding and social responsibilities Developed and developing nations are interdependent As developing nations grow, we must guard 407Q against nationalism and instead seek global solutions
Bridge Industry, Government, Academe Complex global issues pose technological and social challenges requiring an integrated approach Each sector has different time scales for decision making, and are motivated by different opportunities Science, policy and commercialization are critical partners for the future Global Opportunities Abound!
Summary Concepts I. Energy is the engine of modern economies fossil fuels provide 87% of today s s energy II. Energy transitions take time fossil fuels are the stable bridge to an alternate energy future pace is limited by cost and infrastructure scale electricity is growing as an end use energy III. 21 st Century Policy Builds Global Bridges