A Cubic Mile of OilRealities and Options for Averting the Global Energy Crisis

Ripudaman Malhotra, Ph.D.SRI InternationalMenlo Park

Energy Challenge: Tough Choices AheadTime to reframe the debate about energy supply

• Current practices of energy production and consumption are unsustainable• Energy use is central to our way of life, and the consequences of not

meeting future energy demands are dire• Tension between protecting the environment and social justice• A comprehensive energy policy must acknowledge the magnitude of

the problem

How Much Energy Do We Use?A good question to ask, but we confront a tower of Babel

• Different units for different sources– Gallons or barrels for oil– Tons or BTUs for coal– SCFs for natural gas– kWh for electrical energy

• Lack of uniform units – Presents a serious impediment to

meaningful discussion– Creates confusion: millions, billions,

trillions, quadrillions!!!

A Cubic Mile of Oil – CMOUnderstandable unit: mental image

CMO is a unit of energy coined by SRI’s Hew Crane in the 1970s while waiting in line to buy gasoline. His realization: annual global oil consumption was then approaching one cubic mile!

mile

mile

mile

Statue of Liberty

Annual Global Energy Consumption, 2006 We are living off our inheritance – how long will it last?

Total 3.14 CMO

Oil; 1.01

Coal; 0.80

Natural Gas; 0.67

Nuclear; 0.14

Hydroelectric; 0.15

Biomass; 0.30

Other renewables, 0.02

Changes in energy pattern: 2006 to 2012

• Overall energy use increased 13% over the 6 years– There was a marked decline in 2009 and 2010 following the economic crisis, but it

rebounded in 2011.– Net increase by 0.41 cmo 3.55 cmo➟

• Wind and Solar increased 250%– Installed capacity for wind increased almost four-fold: 74 GW 284 GW ➟– Installed capacity for PV solar: 6.9 GW 10.0 GW➟– Total energy from renewables: 0.02 cmo 0.05 cmo ➟

• Most of the energy increase came from fossil sources– Coal: 0.17 cmo– Natural gas: 0.11 cmo– Oil: 0.07 cmo

• Global CO2 emissions from energy use: 30.3 Gt 34.5 Gt➟

– US CO2 emissions from energy use declined by 0.8 Gt

Annual Global Energy Consumption, 2012 Pattern essentially unchanged

Total 3.55 CMO

Oil; 1.08

Coal; 0.97

Natural Gas; 0.78

Nuclear; 0.12

Hydroelectric; 0.18

Biomass; 0.32

Wind and PV, 0.05

It takes Energy Use to get up on UN HDI scale

0 200 400 600 800 1000 1200 1400 1600 1800 20000.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Per Capita Energy Consumption (Gallons OIl/year)

UN

Hum

an D

evel

opm

ent I

ndex

Mozambique

Uruguay

India

Malaysia

Zimbabwe

South Africa

Hong Kong France

Norway

Saudi ArabiaRussian Federation

Turkmenistan

What Drives Energy Consumption?Standard of living, not population alone, drives energy use

0 1000 2000 3000 4000 5000 6000 70000

200

400

600

800

1000

1200

1400

1600

1800

2000

Population (Millions)

Per

Capi

ta A

nnua

l Ene

rgy

Cons

umpti

on (G

O)

Cent

ral/S

outh

Am

erica

(0.1

5)

Russ

ian

Grou

p (0

.26)

Asia/Pacific (0.94)

Euro

pe (0

.51)

Mid

-Eas

t/No

rth

Afric

a (0

.15)

Nort

h Am

erica

(0.7

2)

Sub-Saharan Africa (0.06)

Additional 1.48 CMO

Additional 0.68 CMO

Global Average

1990 2000 2010 2020 2030 2040 2050 20600.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Year

En

erg

y D

em

an

d:

CM

O

2.6%

1.8%

0.8%

Projected Energy Demand by 2050Energy needed to support the world’s 5.5% GDP growth rate

3.5 CMO/yr today9.0 CMO/yr in 2050?

270 CMO

214 CMO

163 CMO

179 CMO

Σ

Variable profile

Reserves Depend on Technology and PriceAdditional resources become viable at higher prices

Their continued use increases atmospheric CO2 levelsThey will be needed while we switch to other sources

How Much Oil, Gas, and Coal Do We Have Left?We have plenty of fossil fuels, but mostly in unconventional sources

46 42

120Reserves

94AdditionalResource

66AdditionalResource

400Unconventional

Tar sands, oil shales

5,000UnconventionalGas hydrates

1500Additional Resource

Reserves

Oil Gas Coal

Coal-to-Liquids• Uncertainty in supply of petroleum drives the

need to develop alternate liquid fuels• Established technology

– Used by countries during war time (Japan, Germany) or economic boycott (South Africa)

– Sasol in South Africa produces coal-derived liquids commercially with a total capacity of over 150,000 bpd. It has plans for building several other facilities in China and India

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• Conventional CTL production increases the environmental burden; each barrel of JP-8– Produces about 680 kg CO2

– Consumes more than 235 kg of water •CTL plants have not been built because of unfavorable economics

– Capital cost estimates range from $70,000 to $125,000/daily barrel

DARPA Challenge, 2008

• Devise a CTL process for JP8 that meets the following criteria– Process scalable to 100,000 bbl/day– Production cost of JP8 less than $3.00/gallon– No CO2 emissions during process– Water consumption less than 235 kg/barrel– Capital cost less than $15,000/daily barrel

• Assume availability of CO2-free electricity

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Disclaimer

The views and conclusions contained in this document are those of the authors and should not be interpreted as representing the official policies, either expressly or implied, of the Defense Advanced Research Projects Agency or the U.S. Government.

Approved for Public Release, Distribution Unlimited

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SRI approach to Achieving the DARPA targets

• Co-gasify coal and methane (hydrogen from CH4 avoids water consumption)• Process intensification (all C to JP-8) further reduces capital cost• Adjust ratio to produce CO + 2H2, ideal for methanol• Use efficient COTS technology for methanol to JP-8

CH4 Water

Gasifier Cleanup MethanolReactor

PropyleneReactor

DieselReactor

Recycle gasesCoal

Slag

Mercury

Sulfur

NH3

Projected Cost Estimate• Total Capex: $32,000 pdb; contributes $0.21/gal to production cost • Production cost: $2.81/gal

(PRB coal $14/ton; Nat Gas $4.80/MBtu; Electricity: $100/MWh)

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Represents a way to store green electricity as tra

nportation fuel

Sensitivity of Production Cost

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Unconventional Resources: Shale Gas and Shale Oil

• Since 2005, shale gas and shale oil output in the US has increased markedly• US Resource estimates

– Technically recoverable shale gas: 482 tcf (3.1 cmo)– Technically recoverable shale oil: 33.2 billion barrels (1.2 cmo)

• Increased use of shale gas has helped the US reduce reduce CO2 emissions– Reduction not just due to economic recession– Lower price of natural gas has spurred switch of electricity production from coal

to gas, thereby reducing US CO2 emissions by 250 million tonnes

Oil shale is not shale oil!

• Oil shale is the sedimentary rock with the precursor to oil, kerogen

• Requires heating to liberate the oil– Retorting the mined rock– Underground heating

• Commercial production only in Estonia, China, and Brazil• Global resource is huge; exceeds 2.8 trillion barrels of oil (>100 cmo);

US resource estimate ≈ 2.0 trillion barrels (75 cmo)

Comparable to Saudi Arabia’s 260 billion barrels of oil reserves

The Surge? Comparing Production and Consumption of Oil US and Saudi Arabia

1998 2000 2002 2004 2006 2008 2010 2012 20140

5000

10000

15000

20000

25000

US Consumption US Production Saudi Arabia Consumption Saudi Arabia Production

Year

Thou

sand

Bar

rels

per

day

US Energy Independence?

1998 2000 2002 2004 2006 2008 2010 2012 20140.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

US Production US Consumption Deficit

Year

Tota

l Pri

mar

y En

ergy

(CM

O)

Plant a TreeUrgent because we are late

The great French marshal Lyautey once asked his gardener to plant a tree. The gardener objected that the tree was slow growing and would not reach maturity for 100 years. The marshal replied, “In that case, there is no time to lose; plant it this afternoon!”