Welcome to the age of diminishing returns

Thursday, January 3, 2013

What future for petroleum?

This is a translation from Italian of a post by Marco Pagani on the blog "Ecoalfabeta" based on a comment by Antonio Turiel on the recent IEA report on the future of petroleum and fossil hydrocarbons. 

by Marco Pagani

The IEA forecast for the future of petroleum are not only too optimistic, but also wrong because they are based on summing volumes of fuels which have different output and energy costs of extraction. Here you find the correct analysis, much less reassuring

What will be the future of oil? Antonio Turiel recently published a very interesting post on his blog, The Oil Crash. Turiel's post is very long and detailed, let me try here to summarize it to make it more easily understandable.


The figure above shows the IEA's predictions, where it is hoped to arrive to nearly 100 million barrels per day in  2035 (1). These predictions, however, are totally wrong for two reasons:
  1. Non-conventional fuels (liquefied natural gas, bitumen, shales, etc,) have a gross energy content per unit volume that is approximately 70% of conventional crude oil and, for this reason must be counted in terms of "equivalent barrels" .(2)
  2. We need to consider the "net energy" that can be obtained from a given amount of fuel, because every fuel has an energy cost of production that must be subtracted from the total (3) che va sottratto dal risultato finale.
The result of these corrections are is shown in the figure below. As you see, the difference is not small, even though the plotted data are based on the same initial data.


However, the IEA forecast is very optimistic also for other reasons, mainly because the decline in production will be more marked than assumed (-5%/year instead of -3%), the wells to be developed will be usable at 50% and those to be discovered are probably assumed to be four times what would be a realistic evaluation. The same is true for non conventional oil.

According to Turiel, therefore, a more realistic future scenario is the following:



What to say? From 100 million barrels, we arrive to about 40; if we make preparations for this future, perhaps we'll be able to face it, but if we keep the rosy colored glasses of IEA, we might well be running towards catastrophe.

Notes

(1) The IEA predictions include also refinery gains, which are not shown here because, as Turiel notes, these gains are obtained at the expense of energy obtained from natural gas.

(2) the ton equivalent of petroleum (tep) represents a mass of fuel containing an energy of 42 GJ. A barrel-equivalent equals 0.146 tep

(3) EROEI (Energy Returned On Energy Invested) is the ratio  x=Et/Ei (hence Ei=Et/x) between the total energy produced and the energy spent in input. The net energy (En) is therefore the fraction of energy that can be obtained from the resource En = Et-Ei and En= Et - Et/x = Et (1-1/x) = Et y, with y is the yield.


The values of x and of y =1-1/x used by  Turiel are:

                                     x                                y
Crude oil 20 0,95
To be developed 5 0,80
To be discovered 3 0,67
LNG 5 0,80
Non conventional oil 2 0,50
Shale Oil 2 0,50



12 comments:

  1. Ugo,

    if Antonio Turiel is right, this means an almost certain global economic crisis starting from 2015 (economic, not financial, which is far worse). There is simply no time to adapt, especially when many emerging countries are struggling to grow their economy and therefore demand more oil.

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    1. 2015 marks the end of peak oil, which was our final period to transition away from an unsustainable infinite growth fantasy, to a 'reason based' economy with any real chance of success. 2015 will be the beginning of the energy decline, and it will be much harder to do anything then, even if we decided to, which is unlikely given the corrupt science free fantasy world politicians and zombie prole alike live in. one obvious thing governments should be doing right now to extend the peak oil period of grace is remove private cars from the road and force the lazy and ignorant majority born without conscience to learn to live without their ugly motorized sexual / status display pieces. about half the oil extracted is wasted on their unnecessary private journeys. not letting the ignorant denialist masses waste precious oil on cars would give us many more years to adapt, as well as being a large part of the transition away from the oil dependent fantasy economy. unfortunately, even though the private car is the greatest disastrous millstone round our necks, it is sacred addiction to every prole, and any talk against it is a taboo vote loser.

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  2. This is a very clear and easy to understand post and a very good summary explanation of the peak oil situation both for peak oil experts and for non-experts. I plan to forward it to a number of my friends who are interested in the topic but don't know all that much about it.

    The way I read the last chart (albeit a bit roughly) is that in 2010 the world was "producing" (that is, it was extracting...since oil and gas and etc. are taken out of the ground, they are NOT "produced" in the correct or normal sense of the word) about 65 million barrels of oil equivalent per day.

    And if all of Antonio Turiel's assumptions (nicely summarized by Marco Pagani) are correct it looks like it will be producing about 62 by 2015. So very roughly the same amount as today, although already less. But the really big drop comes between 2015 and 2025 by which time the total of the various types of fuels shown on the graphs will be only 48 mboe's, i.e. about 77% of the 2015 amount and about 74% of today's amount. (again very roughly and just trying to read the values off the graphs).

    And if one assumes (again very approximately) that world GDP has a fairly direct relationship to amount of total energy (from various sources) which is available and is consumed, (although the energy intensity of GDP varies over time and also for different types of economies) this would require either a roughly 25% drop in world GDP, OR, that the shortfall in oil and gas of the various kinds shown in the graphs be compensated by other energy sources.

    And the next simple question to ask is: Which ones? Can renewables be ramped up at the necessary speed to make up the shortfall? Or will the world turn to coal? Or will world GDP simply drop or crash?

    I am not sure to what extent my above reasoning is fully correct or not but I have a feeling that it is at least directionally correct. So not much to look forward to over the next dozen years or so on the peak oil front. And of course probably even less to look forward to on the climate change front. (and about as much to smile about on the so called fiscal cliff, debt, and general economic and financial situation front as well)

    And so Happy New Year everyone !

    But luckily the mainstream media is here to save us all with its non stop stream (more prolific than a Saudi oil well in its heyday) and flow of fairy tales, delusions, illusions, deceptions, and assorted "feel-good" stories.
    All we have to do is believe it all until such time of course as we get smacked in the face (or knocked unconscious) by reality.


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  3. Very interesting. How would you compare this projection (both in likely accuracy and methodology) with Tad Patzek's multi cycle Hubbert model?

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    1. The multicycle model is useful to describe specific situations in which more than one peak occurs. The very interesting graph of Patzek shows that unconventional oil will add only a small contribution to US production, for the low EROEI of this fuel, like in Turiel work.
      Patzek analysis is focused on US and gives us a more accurate scenary of the next decades. Turiel's purpose was instead to criticize IEA simplicistic assumption of summing up all volumes without taking into account net energy content.

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  4. I don't understand the third graph, it shows present production below 65 Mboe/d. Just crude plus condensate should be above that. But agree with the general idea of finding a common accounting ground for fossil liquids.

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    1. EROEI (Energy Returned On Energy Invested) is the ratio x=Et/Ei (hence Ei=Et/x) between the total energy produced and the energy spent in input. The net energy (En) is therefore the fraction of energy that can be obtained from the resource En = Et-Ei and En= Et - Et/x = Et (1-1/x) = Et y, with y is the yield.

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    2. Very informative. What has that to do with my question?

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    3. It explains how the correction in the graph was made

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    4. Luis, in the first graph you see plotted the oil production by volume, in the third one by "net energy" Since we are interested in oil mainly as an energy source, the "net energy" indicator should be used instead of volume.

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    5. Ok, now I understand, but the yy axis label is incorrect then, it is still showing volume, instead of net energy.

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