Towards A New Energy Future: Oil and Gas To Grow Even With Clean Renewable Energy Sources

By Mallika Naguran

Singapore, 17 November 2009. Have we reached the oil peak? Is there a finite amount of fossil fuel energy on the planet, and so, are companies like Shell rushing ahead to replace traditional oil and gas with alternative sources of energy production? What is the future of energy? These were among the questions raised at the Shell – Energy Studies Institute Energy Dialogue today during the 2009 Singapore International Energy Week.

The response will come as a surprise to those who were hoping to see the last of grease. According to Dr Hooman Peimani: Consumption ain't helping.Dr Hooman Peimani, Head, Energy Security of the Energy Studies Institute (ESI) based in Singapore, the situation looks bleak (if you are looking at a glass that’s half empty). Dr Peimani believes that oil will remain as the main source of energy to fuel the world’s hunger for energy. “A new phenomenon is the discovery of new oil and gas reserves and the extraction of previously inaccessible resources.”

He said that the previous erroneous predictions made in the 1980s about the world reaching the oil peak was based on information available at that point in time. Today, with new information available, more fields are being discovered, even in places like non-oil producing countries like Cambodia and Israel. In Cambodia, there can be 400-700 million barrels of recoverable oil and in Israel, offshore gas fields of the size of 5.7 cubic feet. No wonder Shell has sales volume of two million barrels of oil per day with businesses buzzing in 80 countries.

Going further and deeper with the help of technology has made it possible to extract liquid gold from Perdido deep sea oilfield in the Gulf of Mexico at a depth of two and half kilometers.

Dr Sergio Kapusta: Get closer.At the helm of technology and innovations was Dr Sergio Kapusta, a material chief scientist with Shell. An oil field is not a lake or pool of oily liquid below the ground, but rock, he says and as such it is matter of getting to the core better than before. Traditionally in oil drilling, only 30% of oil is extracted, leaving behind nearly two thirds of inaccessible oil. Today this is no longer the case. “The world will not run out of molecules, it’ll just be harder to get to them,” he said.

New methods of extraction include using skinnier pumps to reach well into the deep without breaking or collapsing, flexible pipe (plastic wrapped with metal for uber deep exploration) and even nanotechnology to “spy” on rock components.

Why The Low Uptake of Renewables?

The ESI predicts that the generation of global energy from dirty coal will increase by 3% in 2007 to 29% in 2030 while gas would remain the same at 21%. For oil, there will be a dip of 4% from 2007 to 30% in 2050, and the contribution of biomass to the energy diversification would be a paltry 1 % to make it to a total of 2%.

There are reasons for the nature of things to remain status quo, said Dr Peimani. “Practically there is no pressure for the reduction of fossil fuel energy consumption because of its availability,” he said. He added that the environment is not yet a major factor “to effect change in consumption pattern” that will coerce oil producers recalculate their moves.

Political leaders arriving at binding commitments through new policy and regulations at December’s Climate Change Conference in Copenhagen will be crucial to effect a change. This was reiterated by Dr Michael Quah, principal fellow with ESI. “Businesses operating within the right policy and prices will make a natural transition (towards cleaner energy sources).”

Dr Michael Quah: More efficiency, now!

Dr Quah stressed the importance of the role of efficiency and conservation towards significantly reducing the harmful effects of energy use. The US for example makes up just 5% of the world population, but consumes 25% of world energy produced. So the focus on savings and recovery will be crucial. According to him, 20% of waste heat recovered in 2007 was far greater than all renewable energy output equivalent.

He also said that technology is “absolutely necessary but totally insufficient”, pointing at a paradigm shift needed.  Systems to systems integration is required to help in the transition of fossil fuel energy sources (high energy density) to renewable energy (low energy density), involving change in infrastructure, mechanics that are potentially huge and expensive. Because of the enormity of this task, this “physics of energy density” needs regional cooperation for security and sustainability.

This systems to systems thinking will take place within the near term, or the next ten years, along with managing carbon emissions in fossil fuel development and conservation. The next 50 years will still see fossil fuels still very much at large, but there will be regional cooperation on nuclear technology and transition to “low energy density” sources.

The age of renewables will be in the long term, said Dr Quah, beyond 50 years from now. Now that's a long time before we get to see the end of grease.