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
Full IOC access NOC reserves (no equity access)

Today
NOC reserves (equity access) Full IOC access Reserves held by Russian companies

12% 7%

8%

1%
SOVIET reserves

14%

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

100,000

150,000

200,000

250,000

300,000

350,000

50,000

MMBOE

Aramco (Saudi) NIOC (Iran) INOC (Iraq) QP (Qatar) Gazprom (Russia) KPC (Kuwait) PDV (Venezuela) Adnoc (Abu Dhabi) NNPC (Nigeria) Sonatrach (Algeria) Libya NOC CNPC (China) Petronas (Malaysia) Exxon Mobil Rosneft (Russia) BP Turkmengas Lukoil Pemex (Mexico) Shell Chevron Petrobras ConocoPhillips Total Surgutneftegas

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

Top Top 25 25 Reserves Reserves

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

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

Energy Geopolitics PROF. M. J. ECONOMIDES

Energy Geopolitics PROF. M. J. ECONOMIDES

Oil & Gas Remain as Primary Energy Sources

Total Energy
MBDOE

Other Energy
MBDOE

Wind & Solar

MBDOE

400 350 300 250

Other 1.7
Growth Rate 1980-2003, % Growth Rate 2003-2030, %

60
Wind & Solar

3.0

1.6

1.7 1.4

50

2.5

40
Biomass, MSW 1.5 1.2

2.0

200
2.7

30
Coal 2.2 Gas

1.5

Wind 11.1

150 100 50 0 80 90

1.5 2.2

20
5.9 Nuclear 0.8

1.0

10
1.0 Oil 1.5

0.5
Solar 9.5

0
00 10 20 30

2.2

Hydro

2.1

0.0 30 80 90 00

80

90

00

10

20

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

140 120
Quadrillion BTU
Other Conventional Hydroelectric Power Nuclear Power Coal Natural Gas Imported Oil Oil Transportation Oil Products

100 80 60 40 20 0

Imported Oil Biofuels

1960 1970 1980 1990 2000 2010 2020

1950

Energy Geopolitics PROF. M. J. ECONOMIDES

The New Energy Economy

Carbon content: Increasingly: Clean Energy intensive Technologically sophisticated Distributed

Wood (1800s) Coal Oil Natural Gas Hydrogen

(envisioned)

High Medium Low (Zero)

````````

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