Statements on Oil

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Statements on Oil
Energy Foresight Symposium Energy Forum, Bergen,
April 3, 2006.

• by
• Sven Kullander
• Chairman Energy Committee
• The Royal Swedish Academy of Sciences

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The Royal Swedish Academy of Sciences

• Awarding a number of different prizes
• Nobel Prizes in Physics and Chemistry
• Swedish State Banks Prize in Economy
• Strengthen the role of science in Society
• Three committees Energy, Health, Research Policy

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Energy Committee Members

• Sven Kullander, Professor em. High Energy
  Physics, Uppsala University (Chairman)
• Gia Destouni, Professor Technical Hydrology,
  Stockholm University
• Harry Frank, Professor Innovation Technology,
  Mälardalens högskola
• Karl Fredga, Professor em. Genetics, Uppsala
  University
• Bertil Fredholm, Professor Pharmacology,
  Karolinska Institutet
• David Gee, Professor em. Orogene Dynamics,
  Uppsala University (ex member)
• Karl Grandin, Dep. Director, Centre for Science
  History
• Peter Jagers, Professor Mathematical Statistics,
  Chalmers Institute of Technology
• Bengt Kasemo, Professor Physics, Chalmers
  Institute of Technology
• Rickard Lundin, Professor Space Physics,
  Institute for Space Physics, Kiruna
• Karl-Göran Mäler, Professor em. Economy, Beijer
  Institute for Ecological Economy
• Kerstin Niblaeus, Director General, Council of
  the European Union
• Bengt Nordén, Professor Physical Chemistry,
  Chalmers Institute of Technology

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Energy Committee Activities

• Founded in 2004
• Members from the 10 different classes of the
  Academy
• The main purpose is to evaluate and assess energy
  issues
• A number of projects have been especially
  selected
• 1. Running out of oil? Finished
• 2. Climate change and fossil fuels In
  progress
• 3. Nuclear energy In progress.
• 4. Popular book on energy (with Royal Engineering
  Academy of Sciences) In progress
• 5. Biomass potential (with the Environment
  Committee) Autumn 2006
• 6. Solar energy from Sahara 2006/2007
• 7. Fusion energy (with the Physics
  Class) Autumn 2006
• 8. Theme Electricity (with the Technical Class)
• 9. Electricitry markets and scenarios for price
  developments
• 10. Threats to energy sources
• 11. Hydropower and water in Society
• 12. Physical limitations

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From the book Petroleum Provinces of the 21th
Century. AAPG Memoir 74. (Dec. 2001)
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Energy Committees activities on oil

• During spring 2005, the Committee had two
  seminars and two hearings
• Uppsala May 23 with
• Robert L. Hirsch, Senior Energy Program Advisor
  at SAIC, Washington
• Matthew R. Simmons, President Simmons Company
  International
• Ashley Heppenstall, CEO Lundin Oil
• Stockholm May 26 with
• Leif Magne Meling, Statoil
• Knut Bjørlykke, Professor of Sedimentology and
  Petroleum Geology, Oslo
• Kjell Aleklett, Professor of Physics, Uppsala,
  President of ASPO
• Herman T. Franssen, President Int. Energy
  Associates, Inc, Washington
• The result of hearings and seminars and
  discussions in the Enegy Committee is summarized
  in Statements on Oil, 17 Oct 2005.

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From Leif Magne Melings talkat the seminar
Running out of oil - Scientific perspectives on
fossil fuels Kungl. Vetenskapsakademien, 26 May,
2005.
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1. Shortage of oil (1 barrel159 liters)

• Global demand growing by nearly 2 per year.
• Current consumption 84 million barrels per day,
  30 billion barrels per year. 54 of 65 most
  important oil-producing countries have declining
  production. Rate of new discoveries less than a
  third of present rate of consumption.

First academic conference on depletion of oil was
held in Uppsala in 2002. ASPO,the Association
for the Study of Peak Oil founded on the same
occasion..
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By 2030 China may consume the same volume of oil
as United States
But, there is probably not enough oil, now or in
the future. Leif Magne Meling
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2. Reserves of conventional oil

• A conservative estimate of oil reserves is about
  1200 billion barrels this includes 300 billion
  barrels in the deeper water, outer margins of the
  continental shelves, and in the physically
  hostile and sensitive environments of the Arctic.
  Production costs will be much higher and lead
  times much longer than they are today.

Probability for new discoveries
Global Resource Estimates from Total Petroleum
Systems, Thomas S. Ahlbrandt et al, AAPG 2005.
(ISBN 0-89181-367-5)
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Global oil situation(Figures in billion barrels
normalised to 1 Januari 1996)
Thomas S. Ahlbrandt et al, Global Resource
Estimates from Total Petroleum Systems, American
Association of Petroleum Geologists, 2005. (ISBN
0-89181-367-5).
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3. Middle Easts key role

• Only Middle East and possibly former Soviet
  Union may significantly increase production rates
  to compensate for decreasing rates in other
  countries. Saudi Arabia is a key country,
  providing 9.5 million barrels per day (11 of
  global production rate). Their proven reserves
  are 130 billion barrels and their reserves are
  said to include additionally 130 billion barrels.

L M Meling
L M Meling
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Production, first half of 2005, 20 most important
countries Bengt Söderbergh
Mbpd
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4. Unconventional oil resources

• are gas 1000, heavy oil and tar sands 800, oil
  shales 2700, billion barrels coal, from which
  liquid fuels can be produced and methane hydrates
  provide a vast potential. With the exception of
  gas, all unconventional oil is expensive to
  produce 20-40/barrel and exploitation involves
  significant environmental problems. At present, 1
  million barrels of oil per day comes from
  Canadian tar sand and 0.6 million barrels from
  Venezuelan heavy oil.

Gas lines around 2030Perspektiver for
petroleums-utviklingen i BarentshavetBarlindha
ug AS i Tromsö.
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Not yet developed gas fields
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5. Immediate action on supplies.

• Forceful measures to improve the search for and
  recovery of conventional oil as well as improving
  the production rate of unconventional oil are
  required to avoid price spikes, leading to
  instability of the world economy in the next few
  decades. Sizeable contributions from
  unconventional oil need time (some decades) to
  become really effective.

R. Hirsch report February 2005
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6. Liquid fuels and a new transport system

• Oil supply is a severe liquid fuels problem and
  less of a general energy supply problem 53 is
  consumed in the transport sector. Major programs
  are needed to develop alternatives in the
  transport sector. Until their introduction,
  demand for oil for an expanding transport sector
  will continue to rise other sectors will suffer,
  including power generation.

The world has about a decade left to take action
to avoid major economic dislocation. There are
some 500 million cars in the world, of which
almost half are in the US. Large efficiency
improvements are possible (incl. hybrids) as is
dieselization of the car, small trucks and SUV
fleet. To achieve fuel savings, both consumer
incentives and new CAFÉ standards would be
needed. (Hermann Franssen)
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7. Economic considerations

• In the long run, the price will be determined by
  the price of substitutes. Oil may be produced
  from tar sand at a price of 20-25 US a barrel,
  compared to about US 5 for Saudi oil. Liquids
  from coal could be produced for long time, costs
  exceed US 30. Continued high prices, as long
  as pressure from expanding Asian economies is
  kept.

At 40 oil, which is now commonly accepted as
the long term minimum equilibrium price, the cost
of developing unconventional oil is less
problematic.
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8. Environmental concerns

• Unconventional oil will significantly extend the
  length of the hydrocarbon era. Constraints for
  example emission controls and CO2 sequestration
  will provide major challenges for industry. The
  impact on the environment, in general, and on the
  atmosphere and climate in particular, produced by
  combustion of fossil fuels, is not considered
  here.

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9. Increased RD and international efforts

• To avoid acute economical, social and
  environmental problems worldwide, we need a
  global approach, with the widest possible
  international cooperation.
• Considerably increased resources for R D on
  alternative non-fossil energy sources, as well as
  on efficient and sustainable use of energy,
  particularly electricity, are necessary. Public
  funding is needed for long term petroleum-related
  research, since this must not be an exclusive
  task for the oil companies.
• To develop a sustainable energy system beyond
  the fossil fuel era, we need a full system
  analysis of the energy sector based on realistic
  time scales.

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Energy pyramid

• Enormous energy resources are hidden in the
  Earths interior. Oil and gas are just a small
  piece of the peak of a huge Energy pyramid.
• However, the deeper we dig, the more expensive,
  the more difficult, and the more harmful to the
  environment!

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Concluding points

• Discovery of new reserves only 1/3 of production,
  now 84 Mbp/day.
• Known reserves 900 billion barrels, 300 remain to
  be discovered?
• Middle East is a key region with more than 60
  of global reserves.
• Huge reserves of hydrocarbon can provide
  synthetic oil, but it takes time!
• Acute activities to increase reserves needed
  prospecting, RD.
• The transport sector takes 57 of oil. Decades to
  reduce dependence.
• Continued high prices due to increased demand
  from China, India etc.
• Continued use of fossil liquids imply environment
  consequences.
• System analysis of the whole energy sector
  global collaboration.