Oil and gas - still indispensable

08/23/2010


When it comes to meeting growing energy demand, oil and gas will continue to dominate tomorrow's energy mix. However, the era of easy production is over. The oil and gas of tomorrow will come from deposits that are increasingly complex to work, and will also have to meet ever more stringent environmental constraints.

Oil and Gas Will Dominate Tomorrow's Energy Mix 

In 2005, oil production met 35% of global energy demand. By 2030, this percentage will fall to 30 %. The reason for this is not the increasing scarcity of resources; but increasing extraction difficulties due to the natural decline in production in current conventional oil fields, the scarcity of major discoveries, and increased constraints (in particular technological constraints) in accessing new reserves.

Oil production capacity is expected to level off at 95 million barrels per day by 2020. However, for some uses-especially transportation and petrochemicals- oil is hard to repalace.

In 2030, the share of oil in the global energy mix will be 30%.

Natural gas is expected to account for about 22% of the global energy mix by 2030, compared to 21% in 2005; and supply is expected to meet demand (mainly in electricity production).

Gas is an interesting option for electricity production because it pollutes less and emits fewer greenhouse gases than coal and petroleum products. It is also suitable for alternating with intermittent energy sources such as wind or solar energy.

Conventional gas deposits close to points of consumption were the first to be worked. Production in these sites is now being gradually replaced, either by:

   • Unconventional gas, which is more complicated to extract

or by

  • Importing conventional gas produced far from points of consumption and delivered via pipeline or tanker (in the form of liquefied natural gas).

Oil reserves will run out within the next 40 years.

False. Estimates vary between:

   • A little over 1 trillion barrels of oil, according to ASPO (Association for the Study of Peak Oil)

   • Over 2 trillion barrels (average value), according to USGS (United States Geological Survey)

And these are only existing and potential conventional oil reserves.

Unconventional Resources

The era of easy oil is over. The most easily accessible and workable deposits supplied the oil markets of the 20th century. Now, this resource has to be tracked down in environments that were considered unworkable up to a few years ago. This includes:

  •  Reservoirs buried deep underground, at depths of over 4000 meters
  
   • Deposits hidden in deep waters (deep offshore)

   • Deposits formed in hard-to-access mountainous areas

   • Oil traps hidden under Arctic ice

   • Heavy oil trapped in the frozen soils of Canada

As with oil deposits, the first gas deposits to be developed were those that were easiest to work. Now we need to look at the following:

   • Highly acidic gas, both economically and environmentally inaccessible until recently 

   • Ultra compact shale gas deposits

   • Reservoirs buried deep underground, at depths of over 4000 meters

Working these extreme deposits will allow us to meet increasing demand for primary energy and is therefore essential. Industry leaders are mobilizing all their expertise to meet these technological challenges safely and with minimal environmental impact.