ENERGY: SUPPLY AND DEMAND

Dr. Ron Lembke

US Energy “Sankey” Diagram

Hot, Flat, and Crowded

Hot: Climate Change Flat: Technology and

Bandwidth Crowded: More people,

who want to live like us

THE DEMAND FOR ENERGY

International Energy Outlook, 2011, US Energy Information Admistration, eia.gov

EIA Demand Scenarios

http://www.eia.gov/conf_pdfs/Monday/Sweetnam_eia.pdf

THE SUPPLY OF ENERGY

Hubbert’s Peak

• M. King Hubbert, “Nuclear Energy and the Fossil Fuels” (Drilling and Production Practices, American Petroleum Institute, Washington, DC, 1956),

Causality or Correlation?

When is the Peak? 2004 data

Different Scenarios

http://www.eia.gov/tools/faqs/faq.cfm?id=38&t=6

Fracking

EPA: 2-4 million gallons per well = 200 to 400 tanker trucks of water

Where Does it Come From?

Where does our oil come from?

US Oil Imports, US EIA

Canada; 24.2%

Mexico; 12.2%

Saudi Arabia; 10.5%

Venezuela; 9.5%

Nigeria; 9.8%

Algeria; 4.9%

Russia; 6.0%

Colombia; 3.6%

Iraq; 4.0%

Angola; 3.8%

Virgin Is-lands; 2.5%

Brazil; 2.6% Ecuador; 1.9% UK; 2.5% Kuwait; 2.0%

Proven Oil Reserves, CIA Factbook ~2009

Sa

ud

i A

rab

ia

Ca

na

da

Ira

n

Ira

q

Ku

wa

it

Un

ite

d A

ra..

.

Ve

ne

zue

la

Ru

ssia

Lib

ya

Nig

eri

a

Ka

zakh

sta

n

Qa

tar

Ch

ina

Un

ite

d S

t...

0

50,000,000,000

100,000,000,000

150,000,000,000

200,000,000,000

250,000,000,000

300,000,000,000

Oil Reserves, Billions of barrels

Data, US EIA, 1/29/2015

Reserves, Production, years left

Data: EIA, 1/29/2015

Strip mine for bitumen, a sandy oil solid Liquefy with steam and caustic

soda NaOH Slurry is pumped, 2 tons of sand for 1 barrel (1/8

ton) of oil 90% recovery with centrifuges 17% more GHG than regular oil

production Phases 3 & 4: “Keystone XL”

Phase 4 goes over Ogallala Aquifer Drinking water for 2m people $20b agriculture

830,000 barrels per day Crosses earthquake zones

Tar Sands

1. June, 20102. Feb, 2011

Keystone XL

36” diameter 910mm up to 830,000 barrels per

day Phase III – 700,000 bpd

US production 12,500,000 barrels per day

Tar Sands

Photo: Forbes

4b barrels

410T cu.ft

15b barrels

32T cu.ft

3,000 b barrels?

Government Accountability Office and private industry Seems to be consensus that there is that much oil there

1 trillion barrels total human consumption so far GAO: Commercial development at least 15-20years

away May require huge amounts of water

They may get one barrel of water with every barrel of oil Traditional fracking won’t do it

Oil tightly bound to the rock – heat to FIVE THOUSAND DEGREES

“In situ”: send a heater down below Cost $65 per barrel

Green river formation 3,000 BILLION Barrels?!?

The Price of energy

Gas Prices 1990-2012

1990

1991

1993

1994

1995

1996

1998

1999

2000

2001

2003

2004

2005

2006

2008

2009

2010

2011

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Data: http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_w.htm

Price of Liquids

Liquid Price ounces $/gallon $/cupWine $20 25.4 100.79$ 6.3 Coffee $1.90 12 20.27$ 1.3 Coors Light $0.75 12 8.00$ 0.5 Big Gulp $1.75 32 7.00$ 0.4 milk $3.50 128 3.50$ 0.2 Gasoline $4.50 128 4.50$ 0.3 Light Sweet Crude $100 5,376 2.38$ 0.1

The Price of Fuel

http://www.eia.gov/petroleum/gasdiesel/

EIA Predicted Price of Crude Oil, 2011

Death Valley, April 2012

NV Electricity Prices

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

0

5

10

15

20

25

30

1989-2009 prices

LR on 20yrs Data

LR on 10yrs Data

Cen

ts /

kw

h

R2 = 0.907

R2 = 0.938

Elect. Price Data: EIA, 20y Rsq=0.91, 10y Rsq=0.94

US Coal Reserves

http://www.eia.gov/energyexplained/index.cfm?page=coal_reserves

http://www.eia.gov/energyexplained/index.cfm?page=coal_reserves

Pinion Pine Power Plant DOE Clean Coal

Air-blown Integrated Gasification Combined Cycle

$335.9m, half DOE, half SPP New gasification method New desulfurization method

Carbon Capture & Sequestration Porous rock formations Small scale tests Expensive – lose 30% of electricity

gained So make more electricity – It’s CARBON

FREE! There are other pollutants

What if it gets out? Natural gas stays safely underground

Solar Resources

Feb-

01

Sep-

01

Apr-0

2

Nov-0

2

Jun-

03

Jan-

04

Aug-

04

Mar

-05

Oct-0

5

May

-06

Dec-0

6

Jul-0

7

Feb-

08

Sep-

08

Apr-0

9

Nov-0

9

Jun-

10

Jan-

11

Aug-

11

Mar

-12

Oct-1

2

May

-13

Dec-1

30

2

4

6

8

10

12

14

16

18

20

Residential Electricity Cents/kwh

Nevada California

Geothermal Resources

Wind Resources

Renewables’ Share growing

US Energy Sources

Summary

Demand for energy is going to increase significantly Growing populations Rising standards of living

Supply of energy not increasing as fast Global oil supplies are finite Peak oil is likely coming in next 40 years Alternative energy sources

,

Feb 2, 1962 ad in Life magazine Humble merged with Standard to become Exxon