Global Energy Trend and the World Crude Oil Production Forecast
30th April 2008 Gento MOGI
Socio-Strategic Engineering Lab Donated chair of Socio-Strategic Investment Lab Department of Technology Management for Innovation (TMI) Graduate School of Engineering The University of Tokyo
Outline
Energy consumption and environment
Global energy demand forecast Carbon cycle
About reserves
Oil, natural gas, coal
Oil production forecast
Peak oil and decreasing rate of oil production The role of Middle East
The reality of substitutes
Global energy demand and environmental constraints
Everlasting bullish outlook from the demand side
Global energy consumption (2006)
30.6 Bbbl/y→83.72 Mb/d 1bbl=42gal≒159l 4.17 Bt/y→11.42 Mt/d 1ton≒7.33bbl Coal： 3.09 Btoe/y (toe=ton oil equivalent) Natural gas: 2.57 Btoe/y Hydro： 0.688 Btoe/y (with 38% efficiency) Nuclear： 0.636 Btoe/y (with 38% efficiency) Total： 11.15 Btoe/y (=15.7MMW, real 11.14MMW)
http://www.bp.com/
Oil：
ca. 2.2Mbbl on board
4.17Bt = 300,000t tanker×13,900
Malacca max
Nissei Maru 484,276t
VLCC or ULCC?
over 320,000t
Jahre Viking 564,939t
Jahre Viking and Saudi Glory 276,000t
Energy flow (US 2000)
98.5QBTU/y (1QBTU=1015BTU=23.5Mtoe) (Lawrence Livermore National Laboratory)
World energy demand forecast (EIA)
Forecast by source (EIA2007)
+1.4%/y
+2.2%/y +1.9%/y +1.9%/y +1.4%/y
Relative CO2 emission per energy
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% coal residuum crude oil oil product kerosine gasoline LPG LNG
Global annual carbon flow and stock
Climate change
（ CO2 vs. temp.）
Mauna Loa (Hawaii, USA) 400 350 300 CO2 (ppm) 250 200 150 100 50 0
74 976 978 980 982 984 986 988 990 992 994 996 998 000 002 1 2 1 1 19 1 2 1 1 1 1 1 1 1 1
1tC=3.664tCO2 750GtC=2,748GtCO2 6GtC=22.0GtCO2
Year
About reserves
Oil, Natural gas, Coal
Oil
Reserves is like a stock in a factory
Cumulative Production
Economic Marginally Economic Subeconomic IDENTIFIED RESOURCES Demonstrated
Measured Indicated
UNDISCOVERED RESOURCES
Probability Range Hypothetical Speculative
Inferred Inferred Reserves Inferred Marginal Reserves Inferred Subeconomic Resources
Reserves
Marginal Reserves Demonstrated Subeconomic Resources
Other Occurences
Includes nonconventional and low-grade materials
Distribution of proved reserves (2006)
World: 1208.2Bbbl, ME: 61.5%
Transition of proved reserves
61.5% (2006)
9.7% (2006)
12.0% (2006)
Proved reserves by countries (2006)
World: 1208.2Bbbl, OPEC: 74.9%
Production by countries (2006)
World: 81.66Mb/d, OPEC: 41.9%
World R/P and R/P by area
Estimated reserves by UT
Proved reserves + reserve growth + undiscovered reserves (2005): 1,737.9Bbbl
Middle East: 732.8Bbbl US lower48: 107.3Bbbl Others: 897.7Bbbl
Production (2006): 29.6Bbbl Future possible production/Production: 58.7
Consumption by countries (2006)
World: 83.72Mb/d, Europe & FSU: 24.9%, Asia Pacific: 29.5%
24.1%
9.0% 6.0%
Natural gas
Natural gas reserves
Proved reserves (2006): 6,405Tcf
=181.5Tm3=1,134.4Bboe=163.35Btoe
Production (2006): 101.18Tcf
=2.87Tm3=17.9Bboe=277.2Bcf/d=7.76Bm3/d
Units, heat conversion 1cf=0.028m3=1,030BTU=259.6kcal 1,000m3=35300cf=6.25boe 1$/MMBTU Gas=5.76$/bbl Oil=0.036$/m3 Gas
925Bboe 145.5Tm3
Reserve growth
651.4Bboe 102.5Tm3
(Proved reserve + reserve growth + undiscovered reserves) ＝(1,130+651.4+925.0)Bboe ＝2,706.4Bboe Accumulated production: ca. 500Bboe
Proved reserves by countries (2006)
World: 181.46Tm3, 1,134.1Bboe, ME: 40.5%, OPEC: 46.9%
Proved reserves by area (2006)
Transition of proved reserves
3.8% (2006) 40.5% (2006) 4.4% (2006) 7.8% (2006)
8.2% (2006)
35.3% (2006)
Production by countries (2006)
World: 49.06Mboe/d, ME: 11.7%, OPEC: 15.5%
World R/P and R/P by area
Consumption by countries (2006)
World: 48.82Mboe/d, Europe & FSU: 40.1%, Asia Pacific: 15.3%
22.0%
15.1%
LNG production (7.37% of NG=152.96Mt)
Egypt started two trains in 2005 Norway, Equatorial Guinea and Peru plan to construct LNG production plant SakhalinⅡ will start 9.6 Mt/y production in 2008? Qatari production increase up to 77Mt/y by 2010 from recent 25Mt/y
LNG consumption (Japan: 59.32Mt)
India started import in 2004, UK in 2005 Import facilities construction started in China, Canada, Mexico. Germany, Poland, Croatia, Chile are planning Chinese import will increase to 20.9～ 25.9Mt/y in 2010, from recent 1Mt/y US LNG import will reach 2.5TcF (52.5Mt) in 2010, exceeding natural gas import from Canada by pipeline
Coal
Coal reserves
Proved reserves (2006): 909.1Bt
909.1Bt=3.27Tboe Anthracite, Bituminous: 478.77Bt Sub-bituminous, Lignite: 430.29Bt
Consumption (2006): 6.195Bt
6.195Bt=22.32Bboe
R/P: 146.7
Proved reserves by area (2006)
Oil production forecast
Supply side views
Peak oil
The point when oil production permanently start decreasing due to resources constraints
application of Hubbert curve (C. Campbell et. al.) accumulation of individual oil field production profiles (UT in cooperation with Wood Mckenzie)
what King M. Hubbert really wanted to say in human historical time scale・・・
Oil & gas production forecast by Campbell
Forecast by accumulation of individual oil field production
Estimate production profiles according to area and size of the field
Except Middle East and US lower 48 Three size categories in each area Modeling production profile for each category
Production period, plateau production, reduction rate etc.
Modeling production profiles
PP according to field size (ex. Central and South America)
14%
Annual production rate to URR
12%
>=300MMbbl
30MMbbl<=, <300MMbbl
<30MMbbl
10%
8%
6%
4%
2%
0% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 年
Number and size of undiscovered fields
Assume a fractal distribution as an ultimate field size distribution
100,000
Accumulated number of larger fields 累積油田数
Feasible size limit
10,000
Undiscovered fields
1,000
100
10
1 1 10 100 1,000 10,000 100,000 可採埋蔵量 (百万bbl) Minimum field URR (MMbbl)
Forecast of oil production
Accumulate
Production from known fields
→according to corresponding production profile
Production from undiscovered fields
→estimate number and size of annual discovery in each area by discovery function →estimate production by corresponding production profile
Depends on exploration expenditure
Substantial uncertainty in oil production forecast
Production strategy of Middle East
Assumed scenarios
Case 1: ME adjusts production to keep the global production constant at year 2005 level (world constant) Case 2: ME adjusts production so that global production increase at 1.3%/year to meet the demand forecast (world growing) Case 3: ME keeps constant production level of year 2005 (ME constant) In all cases; start reducing production when R/P becomes 25 years to keep it constant at the level
Oil production forecast by UT
Exploration expenditure: increasing at 2%/year
hundred million bbl/year
Reduction rate
Is the oil production already peaked out?
The reality of substitutes
The overwhelming power of 4.2Bt
Liquid fuel substitutes
Non-conventional oil
Oil/tar sands, oil shale, ultra heavy oil
GTL (Gas to Liquid)
Fischer-Tropsch process
CTL (Coal to Liquid)
Direct process (NEDOL), indirect process (Sasol)
Bio Ethanol and ETBE Bio Diesel
(Ethyl Tertiary-Butyl Ether)
ETBE: ethanol + isobutene
Equivalent energy to compensate 2%
1.05 million 1,500kw wind mills in 175,000km2
Initial investment of 3T$
Solar cell for ca. 9,000km2, @230kWh/m2y 59Mha of Brazilian sugar cane field (recent 5Mha) 296 of 1,000MW, 80% utilized nuclear power station
Initial investment of 0.8T$
Potential candidates
Conservation Coal (except CTL) Natural gas (except GTL) Biomass (cellulosic) Non-conventional oil and gas
According to EIA, liquid fuel production from GTL, CTL, Biomass, ultra heavy oil, oil sands will reach ca. 10Mb/d