Speaking at a recent press conference in Istanbul, International Energy Agency (IEA) Chief Economist Dr Fatih Birol said that "Alarm bells are ringing on the issue of security of global energy supplies." In his opinion, the threat to the world's supplies of oil and natural gas will reach serious proportions within the next ten years. How could it be otherwise? In ten years we will have got through about a third of the remaining world oil reserves, or more than that, since demand for it rises inexorably, when perhaps we will have nearer half left. It is not a straightforward comparison, and the word "well" is perhaps unfortunately misleading. An oil-well is not like a water-well, and how long one will continue to produce oil cannot be determined by how many times a bucket can be thrown into it, to extract its contents until it is empty. No oil-well can be tapped "to bottom", and some yield only 5% of their contents in practice, while enhanced oil-recovery methods can raise the output of some such intractable wells to 30%. The extent of extraction depends on the prevailing geology and there is some speculation that the Saudi fields have been damaged by such "forced" oil recovery, and will yield less that they would otherwise. Hence it is a matter of some guesswork exactly how much extractable oil there is, out of the one trillion barrels that are estimated to lie in the world's known oil-fields. The analogy with a water well departs further, when the quality of the oil that may be got is considered. So far, it is the "sweet" light crude oil that can be readily processed into fuel in the world's oil refineries that has been the underpinning building material for the modern globalised, and consumer-driven society that defines the West and which the developing nations aspire to. As it becomes necessary to go "further down" into the oil-wells, it is a heavier, dirtier kind of crude oil that is recovered, and which is more energy-intensive to turn into gasoline, diesel and chemical feedstocks for industry. We should bear in mind, in all discussions about oil for energy, that in reality this precious resource is not only used as a fuel, but all manufactured goods are made effectively from oil, by chemical transformations. As a comparative annual figure, in the U.K. 57 million tonnes of oil go to transportation and another 15 million tonnes as an industrial raw material. So, running out of oil is a real double whammy.
Dr Birol also stresses that security of natural gas supplies are also vulnerable, and I am sure he is right. There is more oil than gas in the known reserves worldwide, and it is thought that if the peak in oil production is around now, this will be followed by "Peak Gas" within a couple of decades, especially if gas is processed into synthetic crude oil using steam-reforming technology. It is also suggested that much of transport could be run on hydrogen. As I have stressed, hydrogen is not a fuel but an energy carrier. Since we don't have sufficient infrastructure from renewables (and may never have?) to produce enough hydrogen (by water electrolysis) to replace oil-powered transport, it would probably still be necessary to use large amounts of natural gas to make it, which still imposes pressure on the resource. Agreed, most vehicles are highly inefficient in how they burn oil (with only 14% of the energy being recovered, tank-to-wheel), and adopting "hybrid" technologies (e.g. the Prius) might reduce demand for oil to about a third of current usage: then one might argue would it not be more effective to use hybrid cars etc. and run them on natural gas directly?: therefore reducing the compounded inefficiency of turning gas to hydrogen and then hydrogen to wheel-miles in fuel cells, and also avoiding having to build the gargantuan and completely new infrastructure required to store and supply H2 on gas-station forecourts around the world. Hydrogen production actually generates CO2, and less might be emitted from burning gas directly as a transport fuel in this way than overall from using hydrogen.
In my view, coal-liquefaction in combined cycle plants which convert coal to syngas (CO + H2), then use Fischer-Tropsch technology to synthesise artificial crude oil from it and burn any excess to produce electricity, are a more attractive and realistic proposition. That way, we are neither dependent on gas nor oil. Our troubles are not over however, since there have been no such plants built anywhere in the U.K., and both oil and gas are a finite resource that the world wants and wants more of, but which will begin to run-out within a foreseeable time. Sure, the alarm bells are ringing but government seems to have its fingers stuck firmly in its ears!
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