Oil - Final Thoughts

To summarise this focus section on oil I am just going to do a quick recap of the information I have looked at and make draw some conclusions about what part oil will play in supplying energy over the next few decades.

Opportunities for oil production 

• Increasing population growth and wealth means that the demand for energy is continuing to grow. Data from Allianz predicts that the global population will reach 9 billion by 2050. Furthermore, research by Stanford University predicts that global energy demand will continue to rise from 80 billion barrels of oil in 2020 to 100 billion barrels of oil in 2050 (Changing the World's Energy Systems, Stanford, 2012).  
• Developments in drilling technology allow oil companies to explore previously inaccessible reservoirs of oil. This includes deepwater locations such as in Asia and Arctic environments (Oil Developments, 2013 Summary). In addition, advancement in ground imaging are also really vital in locating previously unknown deposits (CGG, Seismic Overview). 

Threats to oil production

• Growth of other energy industries such as coal and development of new energy industries such as hydraulic fracking and renewables have increased competition for oil producers. A lot of research suggests that for many locations, outside of the OPEC countries, peak oil production occurred between 2000 and 2005. This is mainly because the price of an oil barrel tripled from $35 to over $100 making it less competitive (Kerr, Science, 2013).
• Increasing regulation of oil production also increases the price per barrel, further reducing the competitiveness of oil. Disasters such as the DeepWater Horizon and increasing public awareness of the threat to the environment in areas such as the Arctic mean that governments are looking to invest in other energy sources where possible (Huber, Economic Geography 2013). Emphasis on the "where possible"!

Conclusions...

Oil will continue to play a significant part in our energy supply over the next century, despite growing adverse public opinion and enthronement impacts. Improvements in drilling and seismic imaging will allow companies to tap previously inaccessible resources and governments will continue to support oil companies while the price remains competitive. I agree with the wealth of data that suggests that we have already reached peak oil production and that the increasing cost per barrel will be the sole determining factor in the demise of oil production.

Oil and climate change

The International Panel on Climate Change (IPCC) has the responsibility of collecting information on climate change and presenting it to policy makers. This has a big impact on energy policy, particularly relating to the use of fossil fuels and release of greenhouse gases. The 5th IPCC report was recently published and it makes some bold statements about carbon dioxide and global warming. At the very start of the report it states that:

"Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia." 

IPCC, Summary For Policy Makers, 2013, page 2

The report then goes onto make statements about the drivers of climate change stating that "The largest contribution to total radiative forcing is caused by the increase in the atmospheric concentration of CO2 since 1750" (IPCC, page 11). In addition to this it says that it is "extremely likely that human influence has been the dominant cause of the observed warming" (IPCC, page 15). This is largely based on research into climate forcing, research from Hohne et al 2011 demonstrated that the observed global warming could not have been produced by natural climate forcing: it requires the additional anthropogenic CO2 to produced observed changes. This is supported by many other research groups such as the Tyndall Centre and the Met Office. Finally the report goes on to warn policy makers about the effects on carrying on with business as usual. 

"Continued emissions of greenhouse gases will cause further warming and changes in all components of the climate system. Limiting climate change will require substantial and sustained reductions of greenhouse gas emissions."

IPCC, Summary For Policy Makers 2013, page 17

The recommendations from the IPCC, which represents many climate change research groups, is that is we want to reduce the rate of global warming: we have to reduce carbon emissions. Research into the impacts of global tipping points suggests that changing atmospheric composition is a major driver of biodiversity and ecosystem change, even if the impact is gradual rather than abrupt change (Brook et al 2013, Trends in Ecology and Evolution). Therefore, to reduce the impact on biodiversity, climate change and ecosystems we should reduce CO2 emissions. In 2010 32% of global energy supply came from oil, even though this has reduced from 1973 where 45% came from oil, it is still a hugely substantial figure (IEA, Energy Statistics, 2012). So despite extremely convincing evidence about the impact of CO2 emission from oil, it could be several decades before we see a significant reduction in global oil production.   

Oil vs. Petroleum and Arctic Follow-Up

In this focus section on oil I have been using oil and petroleum pretty much interchangeability. I thought it might be good to just clarify the definitions of them (source US Energy Information Administration).

Crude Oil: a mixture of hydrocarbons that exist as a liquid in natural underground reservoirs and remain as a liquid when brought to the surface.

Petroleum products: produced from the processing of crude oil in petroleum refineries and the extraction of liquid hydrocarbons from natural gas.

Petroleum: a broad category that includes crude oil and petroleum products.

After the section on Arctic Oil I did a few days ago, I wanted to do a quick update on the subject. As countries get ready to stake their claims on the Arctic as the glacier retreats what will the impact be on the natural environment? Research by Smith and Stevenson 2012 suggests that by 2040, ships maybe able to cross the Arctic directly: hugely reducing shipping costs for companies. This diagram shows the change in shipping for Open Water ships (blue line) and Polar Clash ships (red line). The later are better able to deal with pack ice therefore can cross closer the Arctic.

Smith and Stevenson 2006, PNAS
Shipping routes for hypothetical ships across the Arctic Ocean. Note that this shows 'medium-low' radiative forcing (RCP 4.5) The scenario for RCP 8.5 allows even easier access for shipping through the Arctic. 

So which ever scenario you take, shipping through the Arctic is going to become more commercially viable for a lot of countries along with the access to natural resources. Untapped resources are estimated to be about 10% to the global amount of oil and gas (USGS, 2012). I think I would be feeling sad if I was this seal.

Image courtesy of seppo.net

Introducing the star of the show: Oil

Over the last few weeks I have done focus sections about fracking and nuclear power, I am now going to focus on petroleum. To get us started a few facts about the state of play in 2012.

The World of Petroleum in 2012 - Summarised from the US International Energy Statistics Website

Production

• Total world production was 89,000 barrels per day
• The biggest oil producting region is the Middle East: supplying 27,000 barrels a day.
• The two biggest oil producing countries are the USA and Saudi Arabia (both producing around 11,000 barrels a day.
• For comparison, the UK produced about 1000 barrels per day in 2012, 90% of this is from offshore deposits

Consumption

• The Asia and Oceania region consumes the most oil: 28,000 barrels a day. 
• USA is the biggest single consumer of oil: 18,000 barrels a day. This is more than South America and Africa combined.
• Oil consumption between 2007-2012 has plateaued or decreased in North America, South American, Europe, Eurasia and Africa.
• Oil consumption in the Middle East and Asia and Oceania has significantly (by more than 20%) increased in the last five years between 2007-2012. 

Imports vs. Exports

• Asia and Oceania are by far the biggest importers of oil (more than three times any other region) 
• Asia and Oceania have had the biggest growth in amount of imports in the last five years 
• Asia and Oceania are the biggest exporters of oil in 2012. Starting to see a pattern here...

Well you'll be pleased to hear I am done bombarding you with facts! There probably isn't anything too surprising here, it is just helpful to put some numbers on things so that when reports talk about 'thousands of barrels a day' etc we have an understanding of what this compares to. Over the next week or two I will look into the global petroleum market and its a future. 

A quick Google of 'oil' is likely to spring up some images from the Popeye cartoon of his one true love: Olive Oil. I am definitely going to need a spinach fix to help with the research on this topic! Fond memories...

Courtesy of popeye.com