Friday, January 20, 2012

As Energy Mix Changes, Dependency on Oil Will Decrease

Oil is expected to be the slowest-growing fuel in terms of demand over the next 20 years as biofuels and other renewable energy sources take a larger role in meeting the world's additional energy needs, BP said Wednesday.

...Renewables on their own contribute more to world energy growth than oil, BP said, with the largest single fuel contribution coming from gas, which will meet about at third of the projected growth in global energy demand....Shale gas and coal bed methane will account for almost two thirds of US production by 2030 as the country looks at potential LNG exports. _Platts
BP Energy Outlook 2030

The North American shale oil bonanza will not only feed into the global LNG market, but also into the gas to liquids (GTL) market.
With North American natural gas reserves climbing to more than a century of production, developers are considering the once unthinkable alternative of converting North American natural gas to petroleum fuels and chemicals through Fischer-Tropsch synthesis. Several projects are proposed to use gas from conventional and unconventional production. From the North Slope of Alaska to the marshes of Louisiana, developers are evaluating full-scale GTL. This meeting will review the projects as well as the dynamics behind this shift. _Zeus Houston 7 March 2012
And besides GTL and LNG, other markets will grow to utilise the unconventional gas windfall. Markets for ethylene, other high value chemicals, plastics, and more, exceed $400 billion a year in the US alone. When the price spread for natural gas is so favourable, one cannot expect big chemical companies to ignore potential savings.

All of the estimates displayed above tend to significantly underestimate GTL, and probably CTL as well. Whether biomass to liquids technologies shoot upward as quickly as they could do, depends upon the economics of competing feedstocks such as methane. If breakthrough technologies are developed for harvesting methane hydrates, advanced biofuels to liquids may well either be delayed, or will be combined with both CTL and GTL in a variety of combinations -- depending upon the end product desired.

As the greedy oil dictatorships of the world (Russia, Iran, Venezuela, etc) see more substitution liquid fuels coming on to the market in greater volumes and with greater rapidity, they will discover a sudden need to reinvest in oil & gas field technologies AND the need to begin "playing nice" with international investors.



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