Now here's one we've touched on before - that matter of how on earth is the airline industry going to expand its number of flights three-fold by 2030, in the face of peak oil. What exactly are they going to put into the planes by way of fuel? We have the third runway at Heathrow Airport under discussion, and Terminal Five in actuality - but for how much longer will these ventures serve purpose?
Confirmation of the latter conundrum is now exhibited by a recent analysis to the effect that British Airways (BA not AA) are now scheduled to slash their number of flights by a half. BA has made a designed cut of the price of its transatlantic flights, which now amount to a mere £249 to fly from London to New York. Nor bad: perhaps I will make that trip to the US, as suggested over there, to promote my novel, which has just been accepted by a publisher. It is an acerbic black comedy entitled "University Shambles" based around the disintegration of the British University system, which I gladly abandoned to set up my own consulting business 5 years ago, which has done pretty well, all things considered.
"It is a bloodbath", so one airline industry senior has allegedly said, in reference to the squabble among airlines who are now vying among themselves to offer the cheapest flights. It is, of course, the price of fuel that currently is responsible for this trend and inevitably will be the determining factor in the future too. If the cost of oil persists at above $120 a barrel (and I see no alternative to this, working on the basis that its elevated price is a consequence of it being harder and more exacting to pull the stuff out of the ground, and to refine high-sulphur "sour" crude) then BA is expected to lose its profits this year. A real headache indeed, but no surprise really.
I keep hoping that peak oil is a big hoax, as some conspiracy theorists claim, probably in the addicted denial of the cataclysmic change in the Western way of life that is imminent, but increasingly the evidence is in support of a rapidly consigning "Oil Dearth Era".
Interestingly, Sir Richard Branson (Virgin Airlines, among other of his many and successful enterprises) is now endorsing an imminent $200 price tag on a barrel of oil, and this will hit his businesses too - both air and rail-borne. Sir Richard reckons this will come by 2010, and I predict it will be with us by the end of next year (2009). Virgin Atlantic's fuel bill has increased by 70% in the past year.
Related reading.
[1] "British Airways will ground part of its fleet over rising fuel cost." By Dominic O'Connell. http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3953811.ece
[2] Sir Richard Branson: $200 oil on way. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/18/cnbranson118.xml
Tuesday, May 20, 2008
Monday, May 19, 2008
Oil in Them There Hills - Sussex that is!
I attended the University of Sussex, which is located about half way between Brighton and Lewis, and on the edge of the Sussex Downs. Now, I see that desperation and oil prices have risen to the extent that companies are set to drill for oil there. In my day: 1979 - 1982 for my undergraduate degree (in Chemistry) and 1982 - 1985 for my D.Phil (that's Ph.D in all but name, but Sussex being unofficially entitled as "Balliol by the Sea" retained the Oxford tradition of thus describing its doctorates), there were no oil-rigs in Sussex, and nor, in that flush age of North Sea oil, would anyone have dreamed there could be.
However, it is now reckoned that up to 200 communities have oil reserves underneath their feet, which prospectors say could be worth "billions". 54 different companies have submitted 60 applications to the government to explore 182 oil "plots". The issue is sensitive, as many of these locations are villages and hamlets which are lovely, tranquil and "English" in the spirit of St. George's day which we are not allowed for some inexplicable reason to celebrate, although we do thoroughly acknowledge St. Patrick's Day, the Scots St. Andrew's Day and when I was a small boy in South Wales, we had a half day off from school in honour of St. David, the patron saint of Wales. Quite right too.
Interestingly, in this village of Caversham where I now live, we do celebrate St. George and on the 23rd of April (2 days after my Birthday, the 21st, which is the same as Her Majesty the Queen) many houses, pubs and local businesses sport the red-cross on the white background flag, which is our tradition in England. For its many historical culpabilities, England has much to be proud of, having produced some of the greatest scientists, engineers, inventors, writers and other artists the world has ever seen. We also stood up against fascism and abolished slavery. Sadly, we have always been rather poor at developing our talent into a commercial consequence, and it is often other countries that have put up the cash to do so, especially the US, a nation that is to be admired for its deliberateness in all enterprises.
According to one estimate, there may be 200 million barrels of oil under the south of England, which would be worth £13 billion, assuming a $128 barrel. If as expected by Goldman Sachs and in my humble opinion too, the price of oil reaches that diminishingly illusive $200 price, we are talking about a grand reserve of £20 billion. It may be a while before Northern petroleum begins its operations in Markwell Woods, but locals are already forming opposing ranks to the eyesore and disruption of civil local English woodland/village life, to this, the first onshore drilling programme in the UK.
The Woodland Trust has called the idea "an act of vandalism", and it would hardly be the first such act upon this soil, but this represents the destruction of around one hectare of ancient woodland, which is the choicest habitat for British wildlife. The Trust rates this as being equivalent to the destruction of the rainforests. It isn't, in terms of controlling CO2 emissions, but I think it would be a rather sad compromise, and yet the world including the United Kingdom is desperate for oil. To place the "find" in context, 200 million barrels of oil is about enough to fuel British transportation for about 6 months... followed by a return to those village communities we would have destroyed in the pursuit of it. Perhaps it might be better to focus on the inevitability of a return to the small community without the intermediary mayhem.
Related Reading.
"Search for black gold is sweeping the country." By Valerie Elliott. http://www.timesonline.co.uk/tol/news/environment/article3949936.ece
However, it is now reckoned that up to 200 communities have oil reserves underneath their feet, which prospectors say could be worth "billions". 54 different companies have submitted 60 applications to the government to explore 182 oil "plots". The issue is sensitive, as many of these locations are villages and hamlets which are lovely, tranquil and "English" in the spirit of St. George's day which we are not allowed for some inexplicable reason to celebrate, although we do thoroughly acknowledge St. Patrick's Day, the Scots St. Andrew's Day and when I was a small boy in South Wales, we had a half day off from school in honour of St. David, the patron saint of Wales. Quite right too.
Interestingly, in this village of Caversham where I now live, we do celebrate St. George and on the 23rd of April (2 days after my Birthday, the 21st, which is the same as Her Majesty the Queen) many houses, pubs and local businesses sport the red-cross on the white background flag, which is our tradition in England. For its many historical culpabilities, England has much to be proud of, having produced some of the greatest scientists, engineers, inventors, writers and other artists the world has ever seen. We also stood up against fascism and abolished slavery. Sadly, we have always been rather poor at developing our talent into a commercial consequence, and it is often other countries that have put up the cash to do so, especially the US, a nation that is to be admired for its deliberateness in all enterprises.
According to one estimate, there may be 200 million barrels of oil under the south of England, which would be worth £13 billion, assuming a $128 barrel. If as expected by Goldman Sachs and in my humble opinion too, the price of oil reaches that diminishingly illusive $200 price, we are talking about a grand reserve of £20 billion. It may be a while before Northern petroleum begins its operations in Markwell Woods, but locals are already forming opposing ranks to the eyesore and disruption of civil local English woodland/village life, to this, the first onshore drilling programme in the UK.
The Woodland Trust has called the idea "an act of vandalism", and it would hardly be the first such act upon this soil, but this represents the destruction of around one hectare of ancient woodland, which is the choicest habitat for British wildlife. The Trust rates this as being equivalent to the destruction of the rainforests. It isn't, in terms of controlling CO2 emissions, but I think it would be a rather sad compromise, and yet the world including the United Kingdom is desperate for oil. To place the "find" in context, 200 million barrels of oil is about enough to fuel British transportation for about 6 months... followed by a return to those village communities we would have destroyed in the pursuit of it. Perhaps it might be better to focus on the inevitability of a return to the small community without the intermediary mayhem.
Related Reading.
"Search for black gold is sweeping the country." By Valerie Elliott. http://www.timesonline.co.uk/tol/news/environment/article3949936.ece
Thursday, May 15, 2008
Oil Companies Hit by Rising Costs.
CERA, the Cambridge Energy Research Associates, has published a report showing that the costs of capital equipment, ranging from refinery parts to oil-rigs and platforms, has in some cases doubled since 2005. The escalating fuel prices and according huge profits reported by Shell and BP - a total of around $7 billion in the past year - have caused anger among drivers and haulage company proprietors, and yet it seems that some of the apparently generous returns will need to be fed-back into the business to maintain oil and fuel production and to develop new potential oil-fields. Meanwhile, in Russia lurks the spectre of lack of investment, and the oil-companies there are calling for tax-breaks which will encourage the development of the Russian oil-industry.
Major new projects are being put on-hold by their cost-burden, and this may well impact on oil-production across the world and thus on the price of oil, which is now edging toward $130 a barrel. The chairman of CERA, Daniel Yergin, is quoted as saying that production costs are a significant factor in driving-up the price of oil, and a shortage of skilled workers has resulted in rising salary costs too, all of which must be borne by the industry and hence passed-on to the consumer.
The British economy is in a pretty pickle, by the looks of things. The price of basics, particularly food and fuel increases relentlessly, and a U-turn on the 10% tax-rate has cost the government almost £3 billion. I watched an item on the news yesterday evening to the effect that the total amount of money being borrowed by the Chancellor, Mr Darling, is around 38% of the national GDP, a mere 2% shy of the 40% watershed which Mr Brown has pledged not to break.
The price of petroleum products at the "factory gate" has increased by 25% during the past 12 months and the price of fuel "at the pump" has risen by 2.7% per month. As I have commented before, it is an intriguing coincidence that in terms of the numbers, the price of a barrel of oil in $ is about the same as that of a litre of diesel in £, i.e close to $127 and £1.27, respectively.
To compound the price of fuel, there is a shortage in refinery capacity across Europe, due in part to the recent strike at the Scottish Grangemouth facility, along with a serious fire at a refinery in Finland. Goldman Sachs commented last week that we are due for a "super-spike" in the price of oil to $200 a barrel as producers become unable to maintain pace with "blistering demand" from China and the Middle East.
There is a huge contrast in the price of fuel between the UK and the US (which works out to around $8 and $4 respectively for a US gallon), and this reflects directly the tax differential imposed between the two nations. In Britain around 70% of what is paid at the pump ends up in the government's coffers in the form of fuel-duty and VAT. It is reckoned that the average British driver pays £900 a year in fuel-duty.
However, I doubt the government will reduce fuel-taxes despite the pain to motorists' pockets, since it has to get its money from taxes generally to support the economy, banks, welfare system including the NHS, and keep the country stable. Thus we can all simply expect to pay more and more for everything, leading to an eventual destabilisation of society.
Related Reading.
[1] "Petrol prices set to rise as refineries struggle." By James Kirkup. http://www.odac-info.org/node/2204
[2] "Oil companies struggle with spiralling costs." By Robin Pagnamenta.
http://business.timesonline.co.uk/tol/business/industry_sectors/
natural_resources/article3926200.ece
Major new projects are being put on-hold by their cost-burden, and this may well impact on oil-production across the world and thus on the price of oil, which is now edging toward $130 a barrel. The chairman of CERA, Daniel Yergin, is quoted as saying that production costs are a significant factor in driving-up the price of oil, and a shortage of skilled workers has resulted in rising salary costs too, all of which must be borne by the industry and hence passed-on to the consumer.
The British economy is in a pretty pickle, by the looks of things. The price of basics, particularly food and fuel increases relentlessly, and a U-turn on the 10% tax-rate has cost the government almost £3 billion. I watched an item on the news yesterday evening to the effect that the total amount of money being borrowed by the Chancellor, Mr Darling, is around 38% of the national GDP, a mere 2% shy of the 40% watershed which Mr Brown has pledged not to break.
The price of petroleum products at the "factory gate" has increased by 25% during the past 12 months and the price of fuel "at the pump" has risen by 2.7% per month. As I have commented before, it is an intriguing coincidence that in terms of the numbers, the price of a barrel of oil in $ is about the same as that of a litre of diesel in £, i.e close to $127 and £1.27, respectively.
To compound the price of fuel, there is a shortage in refinery capacity across Europe, due in part to the recent strike at the Scottish Grangemouth facility, along with a serious fire at a refinery in Finland. Goldman Sachs commented last week that we are due for a "super-spike" in the price of oil to $200 a barrel as producers become unable to maintain pace with "blistering demand" from China and the Middle East.
There is a huge contrast in the price of fuel between the UK and the US (which works out to around $8 and $4 respectively for a US gallon), and this reflects directly the tax differential imposed between the two nations. In Britain around 70% of what is paid at the pump ends up in the government's coffers in the form of fuel-duty and VAT. It is reckoned that the average British driver pays £900 a year in fuel-duty.
However, I doubt the government will reduce fuel-taxes despite the pain to motorists' pockets, since it has to get its money from taxes generally to support the economy, banks, welfare system including the NHS, and keep the country stable. Thus we can all simply expect to pay more and more for everything, leading to an eventual destabilisation of society.
Related Reading.
[1] "Petrol prices set to rise as refineries struggle." By James Kirkup. http://www.odac-info.org/node/2204
[2] "Oil companies struggle with spiralling costs." By Robin Pagnamenta.
http://business.timesonline.co.uk/tol/business/industry_sectors/
natural_resources/article3926200.ece
Tuesday, May 13, 2008
Peak Oil = End of Cheap Oil.
"Peak Oil" does not mean that oil is "running out" but that cheap, plentiful oil is. The bottom of the well is not in sight. We will be able to extract crude oil for decades, but the depletion of existing wells, the necessity to make explorations in increasingly inhospitable regions of the world, e.g. in deep-sea locations - drilling through miles of water, rock and salt - and in the Arctic, does mean that oil will be forever an expensive, and scarcer commodity. The Antarctic thus far remains sacrosanct, but resource pressure may change this particular status quo of environmental conscience.
It is claimed that making synthetic oil from coal (CTL) would be much cheaper than drilling for crude, but that axiom needs to be measured against the sheer quantity of engineering required to do the job on a petroleum-equivalent scale and other resources, including water, and probably natural gas, and the potential environmental consequences of mining and processing coal, and that coal based fuel overall results in the release of far more CO2 than does the oil-based product it is aimed to replace. In any event, it cannot be done quickly enough that one can simply be switched for another, meaning that overall production must still fall, let alone there being any excess capacity of CTL to maintain growth.
Put another way, peak oil tells us that the earth's hydrocarbon resources are precious, and the end of their production growth is nigh. What can be recovered in the future, by whatever technology, even some claims that I cannot find much detail for (not surprisingly given the significance of them if they are true) that CO2 can be reduced into hydrocarbons, cannot be done cheaply, I am sure. A recent article [1] neatly and succinctly speaks of "future flow rates" for oil, that "peak oil" = "peak flow". In accord with the Hubbert analysis, once the half-way point is reached, the "flow" or production of oil will thenceforth decline. Hubbert's peak does not tell the whole story about future oil production, but refers specifically to the kind of cheap oil the world is built upon, and probably many Hubbert curves could be drawn to describe the production/depletion of the more intractable kinds of oil e.g. from the Middle East wells beyond their peak, oil from tar-sands, from shale or from the Venezuelan Ultra-heavy oil - a specific curve for every case.
The upshot is there will be less oil to be apportioned among a growing number of consumers. A paradigm shift in consciousness about how we live our lives might reduce demand (and must), but only if harsh economics first tilts that awareness by increasing the cost of fuel, food and all else in this oil-underpinned world, so that the bulk of consumers begin to economise - or become extremely poor and have no choice but to use less.
[1] "Peak Oil: 'It's the flows, stupid!'" By Steve Andrews and Randy Udall. http://www.energybulletin.net/print.php?id=44078
It is claimed that making synthetic oil from coal (CTL) would be much cheaper than drilling for crude, but that axiom needs to be measured against the sheer quantity of engineering required to do the job on a petroleum-equivalent scale and other resources, including water, and probably natural gas, and the potential environmental consequences of mining and processing coal, and that coal based fuel overall results in the release of far more CO2 than does the oil-based product it is aimed to replace. In any event, it cannot be done quickly enough that one can simply be switched for another, meaning that overall production must still fall, let alone there being any excess capacity of CTL to maintain growth.
Put another way, peak oil tells us that the earth's hydrocarbon resources are precious, and the end of their production growth is nigh. What can be recovered in the future, by whatever technology, even some claims that I cannot find much detail for (not surprisingly given the significance of them if they are true) that CO2 can be reduced into hydrocarbons, cannot be done cheaply, I am sure. A recent article [1] neatly and succinctly speaks of "future flow rates" for oil, that "peak oil" = "peak flow". In accord with the Hubbert analysis, once the half-way point is reached, the "flow" or production of oil will thenceforth decline. Hubbert's peak does not tell the whole story about future oil production, but refers specifically to the kind of cheap oil the world is built upon, and probably many Hubbert curves could be drawn to describe the production/depletion of the more intractable kinds of oil e.g. from the Middle East wells beyond their peak, oil from tar-sands, from shale or from the Venezuelan Ultra-heavy oil - a specific curve for every case.
The upshot is there will be less oil to be apportioned among a growing number of consumers. A paradigm shift in consciousness about how we live our lives might reduce demand (and must), but only if harsh economics first tilts that awareness by increasing the cost of fuel, food and all else in this oil-underpinned world, so that the bulk of consumers begin to economise - or become extremely poor and have no choice but to use less.
[1] "Peak Oil: 'It's the flows, stupid!'" By Steve Andrews and Randy Udall. http://www.energybulletin.net/print.php?id=44078
Sunday, May 11, 2008
Coal is Dirtier than Gas.
There is much discussion currently concerning the relative merits of coal or natural gas as a fuel. It is debatable just how much extractable coal is in the earth, and there are estimates ranging from10 trillion tonnes down to around 0.5 trillion tonnes. To put this into perspective it is thought there is around 1 trillion barrels of readily extractable crude oil, or around 0.15 trillion tonnes, and a comparable amount of natural gas that will be recovered. Coal, then still looks like a good bet in terms of its quantity.
The heat of combustion of methane (which is what natural gas is mostly) is 891 kJ/mol, which amounts to 1 x 10^6 (g/tonne)/16 (g/mol) x 891 x 10^3 = 55.69 GJ/tonne. This can be compared with around 28 GJ/tonne for coal (the figure varies according to the nature of the coal, but this is a fair estimate).
When methane burns the process can be expressed as: CH4 + 2O2 --> CO2 + 2H2O
and for coal (being largely carbon) as: C + O2 --> CO2
Thus each tonne of methane yields 44/16 = 2.75 tonnes of CO2, while each tonne of coal yields 44/12 = 3.67 tonnes of CO2.
But since less heat is obtained per tonne of coal than per tonne of methane, we need to burn more coal to get the same amount of heat from it, and so a relative CO2 yield per unit of heat can be derived:
3.67/2.75 x 55.69 GJ/tonne/28 GJ/tonne = 2.65, or over two and a half times as much.
Either way, using natural gas or coal, produces a lot of CO2. For example, a typical 1 GW power plant burns 3 million tonnes of coal per year or half that amount of natural gas, and produces around 11 million or 4 million tonnes of CO2, respectively. For oil-fired stations (which exist mostly in Asia but are being phased-out and converted to coal), approximate thermal values of 42 GJ/tonne are often quoted, and there are some at 45 GJ/tonne, depending on the exact nature of the oil. For comparison, a value may be obtained for n-octane (a reasonable model for oil-based refined fuel) of 47.87 GJ/tonne.
We burn around 7 billion tonnes of "carbon" annually, which ends-up as 26 billion tonnes of CO2 - of which only about half is removed by natural processes, including photosynthesis. Thus the atmospheric concentration of the gas can only increase, unless we were to reduce fossil fuel use by around 50%.
People talk much about renewables, since they are ideally sustainable and non-polluting. i.e. They don't consume irreplaceable reserves like coal and gas and oil, or contribute to greenhouse-gas emissions, but matching the amount of them that we get through to sustain our current quality of life, by renewables is a long way off, if it can be done at all. Localised energy production, e.g. through CHP and micro-hydro generation might come some way to providing for relatively small communities, if the dearth of oil and hence transportation fuel forces civilization to take this course, but generating enough electricity to run power utilities on the scale of conventional power stations and the national grid will prove extremely challenging.
The heat of combustion of methane (which is what natural gas is mostly) is 891 kJ/mol, which amounts to 1 x 10^6 (g/tonne)/16 (g/mol) x 891 x 10^3 = 55.69 GJ/tonne. This can be compared with around 28 GJ/tonne for coal (the figure varies according to the nature of the coal, but this is a fair estimate).
When methane burns the process can be expressed as: CH4 + 2O2 --> CO2 + 2H2O
and for coal (being largely carbon) as: C + O2 --> CO2
Thus each tonne of methane yields 44/16 = 2.75 tonnes of CO2, while each tonne of coal yields 44/12 = 3.67 tonnes of CO2.
But since less heat is obtained per tonne of coal than per tonne of methane, we need to burn more coal to get the same amount of heat from it, and so a relative CO2 yield per unit of heat can be derived:
3.67/2.75 x 55.69 GJ/tonne/28 GJ/tonne = 2.65, or over two and a half times as much.
Either way, using natural gas or coal, produces a lot of CO2. For example, a typical 1 GW power plant burns 3 million tonnes of coal per year or half that amount of natural gas, and produces around 11 million or 4 million tonnes of CO2, respectively. For oil-fired stations (which exist mostly in Asia but are being phased-out and converted to coal), approximate thermal values of 42 GJ/tonne are often quoted, and there are some at 45 GJ/tonne, depending on the exact nature of the oil. For comparison, a value may be obtained for n-octane (a reasonable model for oil-based refined fuel) of 47.87 GJ/tonne.
We burn around 7 billion tonnes of "carbon" annually, which ends-up as 26 billion tonnes of CO2 - of which only about half is removed by natural processes, including photosynthesis. Thus the atmospheric concentration of the gas can only increase, unless we were to reduce fossil fuel use by around 50%.
People talk much about renewables, since they are ideally sustainable and non-polluting. i.e. They don't consume irreplaceable reserves like coal and gas and oil, or contribute to greenhouse-gas emissions, but matching the amount of them that we get through to sustain our current quality of life, by renewables is a long way off, if it can be done at all. Localised energy production, e.g. through CHP and micro-hydro generation might come some way to providing for relatively small communities, if the dearth of oil and hence transportation fuel forces civilization to take this course, but generating enough electricity to run power utilities on the scale of conventional power stations and the national grid will prove extremely challenging.
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