Category:Energy Horizons
From Eurêka
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Energy Horizons
Oil Shocks
Oil shock history Oil shocks in 1973-74, 1980, and 1990-91, stemmed from specific interruptions of energy supplies from the Middle East due, respectively, to an Arab-Israeli war, the Iranian revolution, and Iraq's invasion of Kuwait. Once peace was restored, a post-revolutionary order established, or the invader expelled, vital Middle Eastern energy supplies returned to normal.
- Oil shock impacts Earlier oil shocks led non-OPEC nations to accelerate oil exploration and extraction to increase supplies. Their collective reserves, however, represent but a third of OPEC's 75% of the global total. By the turn of the 21st century, these countries had pumped so much crude oil that their collective output went into an irreversible decline.
- Irreversible decline Non-OPEC countries as Britain, Brunei, Denmark, Mexico, Norway, Oman, Trinidad, and Yemen have gone into decline.
- US decline Oil output in the US has declined from 8.27 million barrels per day (bpd) to 6.88 million bpd, 1997-2007.
Fourth oil shock (Oil shock 2007-08 ) Unlike in the previous oil shocks, the price spurt was caused mainly by global demand for energy outstripping available supply. There is no short-term prospect that supply will match demand. For a commodity like petroleum that underwrites and permeates every aspect of modern life -- from fuel to fertilizers, paints to plastics, resins to rubber -- "balance" requires a 5% safety factor on the supply side. However, spare capacity in the oil industry is less than 2% in 2008, down from more than 6% in 2002. As a result, the price of oil responds instantly to negative news of any sort: a threat against Iran by an Israeli cabinet minister, a fire on a Norwegian offshore drilling rig, or an attack on an oil facility by armed rebels in Nigeria.
“Blood of the Earth, The Battle for the World's Vanishing Oil Resources” By Dilip Hiro who considers why the present oil shock cannot be compared to the three shocks that preceded it and then explores just where the planet is likely to look in the medium term for energy (and global warming) relief.
Tar sands solution Exploitation of the tar sands of Canada -- expected to cover the global shortfall -- only helped to raise that country's output from 3.04 million bpd in 2005 to 3.31 million bpd in 2007, a mere 10% in two years.
Spiraling costs In the 1990s, overflowing supplies and cheap oil had led to an overall decline in oil exploration as well as under-investment in refineries. These two factors constitute a major hurdle to hiking the supply of petroleum products in the near future.
Deep-water oil New hydrocarbon fields are increasingly found in deep-water regions that are arduous to exploit. The paucity of the specialized equipment needed to extract oil from such new reserves has created a bottleneck in future offshore production. The world's current fleet of specialized drill ships is booked until 2013. The price of building such a vessel has taken a five-fold jump to $500 million in 2007. The cost of crucial materials -- such as steel for rigs and pipelines -- has risen sharply. So, too, have salaries for skilled manpower in the industry. In 2002, it cost $150,000 a day to hire a deep-water rig, jumping to $600,000 in 2008.
Conservation Future
Japanese conservation In Japan, the government and private companies have stayed on course since the First Oil Shock. Despite the doubling of Japan's gross domestic product during the 1970s and 1980s, its annual overall levels of energy consumption have remained unchanged. In 2008, Japan used only half as much energy for every dollar's worth of economic activity as the European Union or the US. In addition, national and local authorities have continually enforced strict energy-conservation standards for new buildings. Japan has made significant progress when it comes to renewable sources of energy. By 2006, for instance, it was responsible for producing almost half of total global solar power, well ahead of the US, even though it was an American, Russell Ohl, who invented the silicon solar cell, the building block of solar photovoltaic panels, which convert sunshine into electricity.
Conservation Failure
US conservation failure During the presidency of Ronald Reagan, when oil prices fell sharply, energy efficiency and conservation policies went with them, as did the idea of developing renewable sources of energy. This was dramatized when Reagan ordered the removal of that solar panel from the White House.
US business failure In the private sector, utilities promptly slashed by half their investments in energy efficiency. President George H.W. Bush, an oil man, followed Reagan's lead. And his son, George W. (along Vice President Dick Cheney, former chief executive of energy services giant Halliburton) did nothing to wean Americans away from their much talked about "addiction to oil."
==Replacing Internal Combustion Engine Hybrid car concept Toyota introduced the hybrid car in 1995, combining batteries with the internal combustion engine, and began mass producing them some time later.
Hydrogen-powered car Honda set up an assembly line for producing a hydrogen-powered car, the FCX Clarity, June 2008. This model can travel 280 miles on a tank of liquid hydrogen. But it will go into mass production only after there is an infrastructure of liquefied hydrogen stations in place in Japan and in California, which will take time. So far there are only 13 hydrogen stations, funded by the government, in the Tokyo area. Meanwhile, aware of the enormous cost of its product, it is initially planning to lease the FXC Clarity to drivers for $600 a month.
Hydrogen hybrid car Mazda came up with a hybrid car using hydrogen cells as well as an internal combustion engine.
Nuclear Solution
Nuclear France Nuclear stations now provide 79% of France's electricity and have, so far, been accident-proof. That country's leading nuclear company, Areva, expects to sell 100 power stations, fueled by third-generation Evolutionary Pressure Water Reactors (EPWR), worldwide by 2030.
Nuclear Finland Areva also heads a consortium that is building the first nuclear power station in Europe in more than a decade -- in Finland. On nuclear waste management and safety, the Finnish nuclear authority Posiva seems to have found a workable solution. After twelve years of public debate, it has allowed the construction of a $3.5 billion nuclear plant equipped with an EPWR reactor, on an offshore island. Once this station is commissioned, nuclear-fueled electricity will rise from 27% to 37% of the total on the Finnish national grid.
Nuclear safety Designed to last 60 years, twice the average life of a nuclear power plant today. If its control rods should fail, triggering a core meltdown, a special basin of concrete will be there to hold the debris, thus theoretically preventing the release of radioactive material. The nuclear waste will then be set in cast iron, encased in copper, and dropped down a borehole, half a kilometer deep, which would, in turn, be saturated with bentonite, a kind of clay. According to Posiva's metallurgists, under such conditions the copper barrier should last a million years.
Coal Solution
Hybrid technology Involving de-carbonizing natural gas or coal already exists. integrated gasification combined cycle (IGCC) In a coal-fired facility, coal is broken up, extracting the hydrogen and leaving behind the carbon. Next the hydrogen is burned, emitting heat that drives the electricity-generating turbines, while carbon, in the form of liquefied CO2, is stored underground or under the seabed.
Price problem at the moment, an IGCC station needs one-fifth more coal as fuel than a conventional plant just to produce the energy needed to power the carbon-capturing mechanism. The price of the electric power thus generated would be a third to a half higher than that from dirty coal. On the other hand, according to the United Nations' Intergovernmental Panel on Climate Change (IPCC), the CO2 capture and storage (CCS) system could someday provide up to 55% of the emissions reduction needed to avoid the worst effects of global warming. In June 2008, the G8 energy ministers, meeting in Japan, called for the launch of 20 large-scale CCS projects globally by 2010.
- British CCS project British government invited four leading European companies to submit tenders for such a project in the UK, June 2008.
