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Getting Real About Future Energy Dr. Marc Durandeau, Oil & Gas Consultant Scottish Oil Club, Edinburgh, 7 December 2017

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Page 1: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Getting Real About Future Energy

Dr. Marc Durandeau, Oil & Gas Consultant

Scottish Oil Club, Edinburgh, 7 December 2017

Page 2: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Introduction• “World energy consumption increases from 549 quadrillion Btu in 2012 to 629

quadrillion Btu in 2020 and then to 815 quadrillion Btu in 2040, a 48% increase (1.4%/year). Non-OECD Asia (including China and India) account for more than half of the increase.”

• World delivered energy consumption Split per sector:2012 2040

➢ Industrials: 54% 53%➢ Transports 25% 26%➢ Buildings 20% 21%

• “With current policies and regulations, worldwide energy-related carbon dioxide emissions rise from about 32 billion metric tons in 2012 to 36 billion metric tons in 2020 and then to 43 billion metric tons in 2040, a 34% increase.”

• “Renewable energy is the world’s fastest-growing energy source, increasing by 2.6%/year; nuclear energy grows by 2.3%/year, from 4% of the global total in 2012 to 6% in 2040.”

(Source EIA, International Energy Outlook 2016)

Page 3: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Introduction

world energy consumption

quadrillion Btu

Non-OECD Asia accounts for 55% of the world increase in energy use

OECD=Organization for Economic Co-Operation & Development

Page 4: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Solar Power

• Solar Photovoltaic:– During the last decade, large MW Solar Power plants using Photovoltaic panels (PV)

were implemented in China, US, Middle-east with a substantial cost reduction ( more than 30%) and are now competitive with others energy resources (Coal, Fuel, gas, Nuclear energy).

– This success was mainly due to innovation, development of new material, Economic of scale and Learning-by-doing.

• Concentrated Solar Power (CSP):– Their implementation are following the same success trend but allow also to store

the energy and restitute the energy during the night

• Thermal Solar Energy:

– Steam is generated with this system and can be coupled with turbine to generate electricity

• Solar energy Is however highly dependent of the geolocation

Page 5: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves
Page 6: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Wind Power

• Onshore wind Farms:– During the last decades, many wind farms were implemented all over the world in appropriate

windy locations and in particular in North Europe. Fabrication and implementation costs were also substantially reduced ( more than 30%) and could be competitive with others energy resources (Coal, Fuel, Gas, Nuclear energy) when placed at the right location.

– This success was mainly due to innovative design, use of new material, Scale Economy and Learning-by doing.

– New wind farm implementation are however affected by the acceptance of the population

• Offshore wind Plants:

– Due to the Offshore industry experience, their implementation is expected to be faster and their cost competitive with other energies. The two first project bides in UK lead to a price of 65€/MWh compared to more than 105€/MWh for a nuclear plant.

• Wind energy is also highly dependent of the geolocation

Page 7: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Future Energy Mix• The composition of the energy mix per country in Europe is dependent of available

internal resources and access to external resources but also of political decision which will guide the trends for a certain time.

• Fossil energy is not popular among European Politicians (France, UK, Germany, Scotland?,…) although fossil energy was a development vector for their economy during the past decades.

• Exploration of Shale gas is almost banned and development of new Oil & Gas resources will be stopped shortly in some countries. This will impact the local oil & Gas industry in a short term and affect their knowhow worldwide.

• Processes however exist with additional cost to decarboxylate the fossil energy and take care of Carbon footprint, Climate warming as well as environment impact.

• Politicians should set the standards and leave the experts/researchers find new solutions to met the goals and positively innovate.

Page 8: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Future Energy Mix

• It is highly understandable that using gasoline in a combustion car engine is not optimal for carbon footprint but at the same time, if electrical car engine is used, we should think how to produce centralized electrical power on a clean manner and to manufacture environmental free batteries.

• Renewable energies alone could not support the world energy demand growth.

• It is also very important to put in place politics/incentives to favor the reduction of the energy demand and reduce the current increasing trend of the entropy of the planet:

➢ In the Industrial processes

➢ In the housings

➢ In transports

Page 9: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Renewable net electricity generation in 2040 renewable net electricity generation by selected country and country grouping, 2040

billion kilowatthours

Page 10: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

World Net Electricity generation

world net electricity generation by source

trillion kilowatthours

Page 11: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

World nuclear capacity growthWorld installed nuclear capacity by region

gigawatts

Page 12: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

World Primary Energy Mix by Source

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 13: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Oil & Gas Energies in the Energy Mix

• To day fossil energy represent almost 75% of the worldwide energy mix (28% for Coal, 28% for Oil & 18% for Gas)

• At the horizon of 2050, current best estimate indicates that fossil energy will still represent more than 50% of the World Energy consumption with the corresponding split:

➢ Coal ~ 10%

➢ Oil ~ 17%

➢ Gas ~ 25%

• Renewable energies (Hydroelectric, Biomass, Solar Thermal & PV, Wind and Geothermal energies) will represent only 44% of the worldwide energy consumption at 2050 horizon.

Page 14: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

World OIL Demand By Sector

2050 2040 2030 2020 2010 2000 1990 1980

0

60

Energy sector

own use

Power stations

Non-Energy

Other

Manufacturing

Buildings

Transport

180

120

Sector

WORLD OIL DEMAND BY SECTOR

Units: EJ/yr

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 15: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

World Gas Demand by Sector

2050 2040 2030 2020 2010 2000 1990 1980

0

50

Energy sector

own use

Power Station

Non-Energy

Other

Manufacturing

Buildings

Transport

200

150

100

Sector

WORLD GAS DEMAND BY SECTOR Units: EJ/yr

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 16: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

How to get there: Crude oil Production

2050 2040 2030 2020 2010 2000 1990 1980

60

40

20

0

Unconventional

Onshore

Offshore

Conventional Onshore

80

Field

CRUDE OIL PRODUCTION BY FIELD TYPE

Units: Mbpd

100

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 17: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Additional Conventional Onshore Oil Capacity

2050 2045 2040 2035 2030 2025 2020 2015

0

0.5

OECD Pacific S. E. Asia

Indian Subcont. China

N.E. Eurasia M.E. & N. Africa

Sub-Shrn Africa Europe Lat. America N. America

1.0

1.5

Region

WORLD CONVENTIONAL ONSHORE OIL PRODUCTION CAPACITY ADDITIONS BY REGION

Units: Mbpd/yr

2.0

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 18: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves
Page 19: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Unconventional Onshore Oil Production By Region

2050 2040 2030 2020 2010 2000 1990 1980

5

0

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe Lat. America N. America

20

15

10

Region

UNCONVENTIONAL ONSHORE OIL PRODUCTION BY REGION

Units: Mbpd

25

(DNV-GL: Energy Transition Outlook 2017 )

Page 20: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Offshore Oil Production by Region

2050 2040 2030 2020 2010 2000 1990 1980

5

0

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe Lat. America N. America

25

20

15

10

Region

OFFSHORE OIL PRODUCTION BY REGION

Units: Mbpd

30

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 21: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Additional Offshore Oil Production Capacity

2050 2045 2040 2035 2030 2025 2020 2015

0

0.5

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe

Lat. America N. America

1.0

1.5

Region

WORLD OFFSHORE OIL PRODUCTION CAPACITY ADDITIONS BY REGION

Units: Mbpd/yr

2.0

(DNV-GL: Energy Transition Outlook 2017 )

Page 22: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Gas Production By Field Type

3000

2000

1000

0

1980 1990 2000 2010 2020 2030 2040 2050

Unconventional

Onshore

Offshore

Conventional Onshore

4000

Field

GAS PRODUCTION BY FIELD TYPE

Units: Gm³/yr

5000

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 23: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Conventional Onshore Gas Production By Region

2050 2040 2030 2020 2010 2000 1990 1980

500

0

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe

Lat. America N. America

2000

1500

1000

Region

CONVENTIONAL ONSHORE GAS PRODUCTION BY REGION

Units: Gm³/yr

2500

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 24: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Unconventional Onshore Gas Production by Region

300

0

1980 1990 2000 2010 2020 2030 2040 2050

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe

Lat. America N. America

1200

900

600

Region

UNCONVENTIONAL ONSHORE GAS PRODUCTION BY REGION

Units: Gm³/yr

1500

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 25: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Offshore Gas Production By Region

300

0

1980 1990 2000 2010 2020 2030 2040 2050

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe

Lat. America N. America

1200

900

600

Region

OFFSHORE GAS PRODUCTION BY REGION

Units: Gm³/yr

1500

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 26: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

World Offshore Gas Production Capacity Additions

2015 2020 2025 2030 2035 2040 2045 2050

OECD Pacific S. E. Asia

Indian Subcont. China N.E. Eurasia

M.E. & N. Africa Sub-Shrn Africa

Europe

Lat. America N. America

Region

WORLD OFFSHORE GAS PRODUCTION CAPACITY ADDITIONS BY REGION

Units: Gm³/yr

80

70

60

50

40

30

20

10

0

23.9 Mtoe = 1ej = 278 TWh(DNV-GL: Energy Transition Outlook 2017 )

Page 27: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Challenges for the Oil and Gas Industry

• Adapt their organization to new Energy Mix:➢ Optimize at short term the Refining plants to the new products demand which

may require some co-operation with National Oil Compagnies

➢ Incorporate Renewable Energies projects in their activities to become an « Energy Company » and remain a strong actor in the new Energy Mix

• Innovate in the implementation of new project to optimize the use of the current discovered Resources and convert them in Reserves➢ Reduce the reserves consumption (currently ~10%) in the production Process

by using renewable energies when feasible.

➢ Innovate in the development scheme of the Fields by optimizing not only the short term economical parameters but also the reserves (longer plateau, earlyEOR projects, etc..)

Page 28: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Challenges for the Oil and Gas Industry

• Invest more in Exploration by innovating in new exploration concept althoughExploration is highly mature & then more risky

• Extra heavy oil resources were not really considered in the Oil forecasts due to extraction complexity and geopolitical issues. To day, Steam is heavily used to produce such type of oil. More cost effective processes could be implementedbut need to be first implemented at pilot scale before moving to full scale.

• Innovation should still be the main driver in this industry and should be basedon:

➢ Internal ManPower expertise associated to a large & efficient worldwideexpertise network

➢ International Research facilities

➢ Adapted research budget linked with the target Company objectives

Page 29: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Area: 23 000 m2 on 5 levelsLaboratories: 36 labs on 8000 m2 Opening date: 15th December 2016Building Cost: US$90 MLab Equipment: about US$80 M

ADNOC RESEARCH & INNOVATION CENTER

Page 30: Getting Real About Future Energy - · PDF file23.9 Mtoe = 1ej = 278 TWh ... Mbpd 100 23.9 Mtoe = 1ej = 278 TWh ... of the current discovered Resources and convert them in Reserves

Thank You