Petroleum Production Engineering PROF. M. J.

ECONOMIDES

Energy
Geopolitics
Michael J.
Economides

2009

Petroleum Production Engineering PROF. M. J. ECONOMIDES

The Continuous Energy Crisis

of the 21st Century

Oil almost $150, then fell to below $40
headlines rule crisis

OPEC has little excess capacity behind
the valve, Venezuela, Nigeria, Iraq

IEA (Nov. 2008) 9.1% decline in oil production

China still grows in economy and energy

Saudi Arabia world regulator

Less than $40 to $100 by end 2009
Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Natural Gas

International demand destruction is
larger than was anticipated

Because of LNG developments in Qatar,
Egypt and Sakhalin 2, there could be 10
Bcf/d excess supply. Considerable
impact on gas prices in Europe and the
United States Cheniere LNG

$4 gas for two to three years?
Devastating impact on US shale gas
Energy Geopolitics PROF. M. J. ECONOMIDES

Oil Demand and Price

Abu Ghraib
Yukos
Faja
Energy Geopolitics PROF. M. J. ECONOMIDES

World
World Oil
Oil and
and Gas
Gas Reserves
Reserves
Drift
Drift Toward
Toward Constrained
Constrained IOC
IOC Access
Access
1960s

Today

Full IOC
access

NOC reserves
(equity access)

NOC reserves
(no equity access)

Full IOC
access

1%
SOVIET
reserves

14%

12%

Reserves held by
Russian
companies

8%

7%

85%
73%

NOC reserves
(no equity access)
IOC = International oil company
NOC = National oil company

Only 7% of the worlds reserves are fully accessible by IOCs

Source: PFC Energy, Oil & Gas Journal, BP Statistical Review 2008
Note: Excludes unconventional crude oil and bitumen reserves
7

0
Surgutneftegas

Total

ConocoPhillips

Petrobras

Chevron

Shell

Pemex
(Mexico)

300,000

Lukoil

Turkmengas

BP

Rosneft
(Russia)

Exxon Mobil

Petronas
(Malaysia)

CNPC (China)

Libya NOC

Sonatrach
(Algeria)

350,000

NNPC (Nigeria)

MMBOE

PDV
(Venezuela)
Adnoc (Abu
Dhabi)

KPC (Kuwait)

Gazprom
(Russia)

QP (Qatar)

INOC (Iraq)

NIOC (Iran)

Aramco (Saudi)

Top
Top 25
25 Reserves
Reserves

Oil,
Oil, NGL
NGL and
and Natural
Natural Gas
Gas
Top
Top 25
25 Reserves
Reserves

Oil,
Oil, NGL
NGL and
and Natural
Natural Gas
Gas

Majors

250,000

200,000

150,000

100,000

50,000

Source: Energy Intelligence Group, Ranking the Worlds Oil Companies 2008
8

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Oil & Gas Remain as Primary Energy Sources

Total Energy

Other Energy

Wind & Solar

MBDOE

MBDOE

MBDOE

60

3.0

400
350

Growth Rate
1980-2003, %

Growth Rate
2003-2030, %

1.6

1.7

300

Wind & Solar

50

2.5

40

2.0

1.4

250

Biomass,
MSW

1.7

Other

200

30
2.7

150

1.5

100

1.5

Coal
2.2
Gas

1.0

20

10
1.0

Oil

0
90

00

10

5.9

Nuclear

0.8

2.2

Hydro

2.1

0.5

1.5

0
80

Wind
11.1

2.2

50

1.5

1.2

20

30

80

90

00

10

20

Solar 9.5

0.0
30

80

90

00

10

20

30

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

What Congress and the

President need is a Calculator
Cardinal mine in Kentucky (35th-largest in
the U.S., producing about 15,350 tons of
coal per day, 66,000 barrels of oil equivalent
All solar panels and wind mills
76,000 barrels of oil equivalent

The US total energy use

47,400,000 barrels of oil equivalent
Solar and wind 0.2 to 0.4%
(Robert Bryce, 2009)
Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Let me make a prediction

First do not choke on the
daringness
By the end of Pres. Obamas first
term
The US will use more oil
It will import a larger
percentage
Energy Geopolitics PROF. M. J. ECONOMIDES

National Transportation
Energy Perspective
140

Quadrillion BTU

120
100
80

Other
Conventional Hydroelectric Power
Nuclear Power
Coal
Natural Gas
Imported Oil
Oil Transportation
Oil Products

60
40

Imported Oil
Biofuels

20
0
1950

1960

1970

1980

1990

2000

Energy Geopolitics PROF. M. J. ECONOMIDES

2010

2020

The New Energy Economy

Carbon
content:

Wood (1800s)
Coal
Oil
Natural Gas
Hydrogen
(envisioned)

High

Increasingly:
Clean

Medium

Energy intensive

Low

Technologically
sophisticated

(Zero)

Distributed

````````

Energy Geopolitics PROF. M. J. ECONOMIDES

Golfing for Hydrogen

Bovine Brain Power > Mad Car Disease?

The Ethanol Scam

Energy Geopolitics PROF. M. J. ECONOMIDES

Wind Power Exposed: Expensive,

Unreliable and Wont Save Natural Gas

UK Ofgem: wind grossly distorting the market

29.7% of cost for 1.3% of electric supply
Load factor: 27.4%. Gas demand goes up
Energy Geopolitics PROF. M. J. ECONOMIDES

There are no alternatives

to hydrocarbon energy
sources in the
foreseeable future

Energy Geopolitics PROF. M. J. ECONOMIDES

Gwyneth Paltrow

y
g
r
e
n
t
E
r
e
p
x
E
Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

TIME, AUGUST 26, 2002

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy
Geopolitics
The Axis of Energy Militants

Iran
Venezuela
Russia under Putin
The quagmire that is Iraq
China

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Russia under Putin

Bright spot in oil is gone
Re-Sovietization
Corruption
Total control of press
Investment climate has
cooled down
Production is bound
to decline

Energy Geopolitics PROF. M. J. ECONOMIDES

Gazproms New Imperium

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Can

Keep the Lights On?

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy:

Chinas Choke Point

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

From Stratfor, 2009

Energy Geopolitics PROF. M. J. ECONOMIDES

China and Russia

Energy will be Chinas choke point
Has become recently very assertive,
if not belligerent.
Sudan, Nigeria
Canada
Argentina, Venezuela

Chinas energy future passes

through Russia.
Energy Geopolitics PROF. M. J. ECONOMIDES

Russia and China

Energy Geopolitics PROF. M. J. ECONOMIDES

Russia, China and Japan

Energy Geopolitics PROF. M. J. ECONOMIDES

China will probably lead

Energy Geopolitics PROF. M. J. ECONOMIDES