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86025_6

86025_6. Determinants 2: Supply. World Energy Supply (in Gtoe). World Primary Energy Substitution. Drivers of Change in Energy Supply. Geology: No historical evidence for scarcity (yet). (Unfounded) historical “myths”: UK fuelwood, US whale oil

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86025_6

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  1. 86025_6 Determinants 2: Supply Arnulf Grubler

  2. World Energy Supply (in Gtoe) Arnulf Grubler

  3. World Primary Energy Substitution Arnulf Grubler

  4. Drivers of Change in Energy Supply • Geology: No historical evidence for scarcity (yet). (Unfounded) historical “myths”:UK fuelwood, US whale oil • Economics: New supply even with higher prices (coal, oil, electricity), substantial subsequent cost declines with market growth • Policy: Mixed blessings of “supply push” (nuclear, coal-mining subsidies) • Technology: Paramount importance of end-use innovations: Steam engines, automobiles, electric motors, lights,…. • Quality matters: efficiency, electrification, decarbonization Arnulf Grubler

  5. Whale Catch and Whale Oil Prices Introduction of kerosene refiningand kerosene lamps Whale oil price US$2003/gal Source: Sperm catch: P. Best, 2002, IWC SC/56/IA5; Prices: U. Bardi, 2004, based on Starbuck, 1878. Whales caught per year Arnulf Grubler

  6. Price of Oil and Coal 1870-1915Source: Group Planning SHELL, 1994. Arnulf Grubler

  7. US - Crude Oil Prices Arnulf Grubler

  8. Capacity Cost of Troll Field (North Sea)Source: Group Planning SHELL, 1994. High prices beget high costs; low prices beget low costs (M. Adelmann) Arnulf Grubler

  9. World - Carbon Intensity of Primary Energy Carbon intensity of: 35 30 wood = 29.9 25 coal = 25.8 gC/MJ oil = 20.1 20 gas = 15.3 15 10 1850 1900 1950 2000 Arnulf Grubler

  10. H:C Ratios 0.5 – 1 : 1 0.5-1.0: 1

  11. Recurring Perception of Scarcity “…the data at hand in regard to the gas still available underground … make it probable that the annual output will never be very much more than it was during the period 1916 - 1920.” R.S. McBride and E.G. Sievers (USGS), Mineral Resources of the United States, 1921, p.340. US gas production: 22 Mtoe in 1920 100 Mtoe in 1995 Arnulf Grubler

  12. Recoverable Conventional Oil Reserves and Cumulative Production/Consumption Nakicenovic et al., 1998; BGR, 1998. Arnulf Grubler

  13. Resource Classification: The McKelvey Box Arnulf Grubler

  14. Estimates of “ultimately recoverable” Conventional Oil(UR = past production + reserves + future discoveries + field growth) 600 1840 884 950 21 500 34 56 45 20 66 48 400 62 68 19 60 63 41 49 69 32 11 40 33 70 54 57 18 53 67 38 14 29 Gtoe 300 59 12 39 35a 28 52 10 23 55 27 30 43 64 51 58 26 16 35 31 65 24 13 44 22 47 37 61 50 6 46 42 200 9 5 25 15 8 17 7 4 36 100 3 1 2 0 1990 2000 1980 1950 1960 1940 1970 Source: BGR, 1998. Arnulf Grubler

  15. Conventional Oil: Estimates of “ultimately recoverable” Reserves GtoeGtoe 1 1942 Pratt, Weeks, Stabinger 82 35a 1977 Hubert 272 2 1946 Duce 55 36 1978 WEC 127-950(350) 3 1946 Poqe 76 37 1978 Nehring 231-313 4 1948 Weeks (Esso) 183 38 1979 Halbouty (Moody) - 10.WPC 304 5 1949 Levorsen 205 39 1979 Meyerhoff 300 6 1949 Weeks 138 40 1979 Roorda 330 7 1953 Mac Naughton 136 41 1980 WEC 354 8 1956 Hubbert (Shell/USA) 171 42 1985 Masters et al. - 11. WPC 213-369 (246) 9 1958 Weeks (Esso) 205 43 1981 Colitti (Agip) 283 10 1959 Weeks (Esso) 273 44 1982 Exxon 245-408 11 1965 Hendricks (USGS) 338 45 1983 Odell and Rosing 408 12 1967 Ryman (Esso) 285 46 1984 Masters et al. 1987 - 12. WPC 217-308 (239) 13 1968 Shell 246 47 1987 Keller (Chevron) 236 14 1968 Weeks (Esso) 300 48 1988 Deutsche BP 400 15 1969 Hubbert 184-268 (235) 49 1988 BGR 350 16 1970 Moody (Mobil) 246 50 1989 Campbell 224 17 1971 Warman (BP) 164-273 (218) 51 1989 Masters et al. 1991 - 13. WPC 270-371 (295) 18 1971 Weeks (Esso) 312 52 1989 Bookout 272 19 1971 US National Petroleum Council 364 53 1991 Montardet and Alazard 1992 318 20 1972 Linden 402 54 1991 Tedeschi 340 21 1972 Weeks (Esso) 498 55 1992 Masters et al. 1994 - 14. WPC 285-382 (309) 22 1972 Moody, Emerick (Mobil 246-259 (253) 56 1993 Townes 408 23 1972 Richard 266 57 1993 BGR 1995 313 24 1972 Warman (BP) 245 58 1994 Laherrere 245 25 1973 WEC (USGS) 184-1840 59 1994 Petroconsultants 291 26 1973 Wim Vermeer (Shell) 263 60 1994 Guttiereres 374 26a 1973 Warman (BP) 261 61 1994 Campbell 1995 224 27 1973 Moody & Esser (Mobil) - 9. WPC 277 62 1994 Edwards 1997 386 28 1974 Hubbert (USGS) 272 63 1995 Mackenzie 1996 354 29 1975 Halbouty 1979 - 10. WPC 304 64 1995 Mabro 1996 245 30 1975 Adams and Kirby (BP) 273 65 1996 Campbell 1997 245 31 1975 Exxon 265 66 1996 Odell 1998 (Bezug auf Shell) 400 32 1975 Grossling (USGS) 354-884 67 1996 Shell 325 33 1975 BGR 336 68 1996 Schollnberger 1998 370* 34 1975 Odell 486-576 69 1997 Hiller 1997 350 35 1976 Klemme (Weeks) 259 70 1997 BGR 1998 341 * including heavy oil (78 Gtoe) Arnulf Grubler Source: BGR, 1998.

  16. USGS Estimates of “ultimately recoverable Reserves” in 1987 and 2002 Data(Source: Masters, 1987; BP, 2002) 1987 USGS estimates Arnulf Grubler

  17. Density of Exploratory Drilling per (potentially petroleum bearing) Sedimentary Area Source: Grossling, 1976. Arnulf Grubler

  18. Arnulf Grubler Source: B. Grossling, 1976. Update courtesy of Jeff Possick, Yale FES 802, 2004

  19. Recoverable Conventional Gas Reserves and Cumulative Production/Consumption Nakicenovic et al., 1998; BGR, 1998. Arnulf Grubler

  20. Natural Gas Use in China Arnulf Grubler

  21. Ateshgyakh Temple(18th century)in Surakhany(15 km from Baku). Arnulf Grubler

  22. Unconventional Gas Resources of the USProduction (=Reserves) already today! Arnulf Grubler

  23. Global Hydrocarbon Reserves and Resources in ZJ (1021J) reserves/resources dominated by coal largest occurrence:gas hydrates Source: Nakicenovic et al., 1996; Nakicenovic, Grübler and McDonald, 1998; WEC, 1998; Masters et al., 1994; Rogner et al., 2000 Arnulf Grubler

  24. Methane Hydrates (Clathrates) Arnulf Grubler

  25. Global Hydrocarbon Reserves and Resourcesin GtC (109 tC) IPCC: “discernible influence on climate system”current atmosphere: 760 GtC (+150 Gt since 1800) Largest occurrence of hydrocarbons: methane hydrates

  26. Fossil Era on Geological Time Scale (Question is only if it lasts 200 or 2000 years!) Source: Scientific American, 1971. Arnulf Grubler

  27. Hubbert Oil Production Curve 60 250 x 10 9 80 percent (64 yrs) bbls 50 80 percent (58 yrs) 40 Q =2100 x 10 bbls 9 Production rate (109 bbls/yr) 30 Q = 1350 x 10 bbls 9 20 382 x 10 bbls 9 10 180 x 10 bbls 9 784 x 10 bbls 9 0 1900 1925 1950 1975 2000 2025 2050 2075 2100 Source: Hubbert 1956, and 1971.Predicted correctly peak in US oil production ~1970 Arnulf Grubler

  28. Hubbert Curve “Modeling”Source: J. Laherre, 1997 Assumed saturation level ofcumulative production:ultimately recoverable reserves First derivative: imputedannual production, under symmetry condition Arnulf Grubler

  29. Why Hubbert Curves(and “Depletion Mid-Points”) are Wrong • Ex ante postulation of asymptote (“ultimately recoverable” reserves), a to-date unknown quantity • Only considers “conventional” reserves, while unconventional are already produced today(tight gas, tar sands, etc.) • No conditional forecasts as a function of prices and technology • Symmetry condition of first derivative of logistic function at odds with basic economics (no symmetrical production “bell curve” with discountingand oil industry ROI conditions >10-20%) • Aggregation over different petroleum provinces of different degrees of maturity cannot yield a global aggregate symmetrical “production curve” (violation of functional aggregation theorem) Arnulf Grubler

  30. Something Wrong with Theory? • Historical success rate in US oil/gas drilling: No better than with random drilling • Depletion of fields postponed: Refill from below: Jean Whelan=“state of art” • Deep gas hypothesis: Tommy Gold=highly controversial • Gas tracers (C-14): Abiogenic gas=Yes, but minor curiosity? • Gas hydrates: How to explain quantities and occurrence (e.g. in deep sea bottom)? • Methane abundance in extraterrestrial environments: Relevance for planet Earth? Arnulf Grubler

  31. Why is Uranus’ (or Neptune’s) Atmosphere Blue?(Methane=Natural Gas) Arnulf Grubler

  32. Renewable Energy Resource Base in EJ (1018 J) per year n.e. Not estimated a. The electricity part of current use is converted to primary energy with a factor of 0.385 (subst.equivalent). Source: WEA, 2000. Arnulf Grubler

  33. Biomass: Net Primary Productivity Arnulf Grubler

  34. 2 Scenarios of Global Bio-energySupply Potentials and Use (excl. dedicated energy crops) Source: IIASA GGI, 2006

  35. Bioenergy Supply 2000-2100 B1 Scenario(Price <6$/GJ) Source: IIASA GGI, 2006 Comparison: at 60 $/bbl, crude oil = ~10$/GJ

  36. Remember... Arnulf Grubler

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