Energy Blowout

May 9, 2010:

The BP oil rig Deepwater Horizon in the Gulf of Mexico is bringing home to Americans the risks of exploiting energy sources in difficult environments. This requires technical expertise and expenditure of energy to obtain energy. Techniques and technology employed on the Deepwater Horizon were state of the art. The cause of the fire, which killed 11 workers, is still in the speculative stage. Why the shut off valve below the rig failed to work automatically is not known. Multiple alarms and shut off systems on the rig itself were never activated. A system to activate shut off remote from the rig was never installed; they are required almost everywhere except off U.S. shores.

Oil is still flowing on May 9. Satellite images suggest that the discharge each day is higher than 5000 barrels a day in press reports. At 20000 barrels a day, in about 10 days this blowout would equal the total discharge from the Exxon Valdez, portending the most damaging oil spill ever. (NOAA estimate — needs confirmation.) Re-jiggering the 100 ton cap may staunch the flow soon, but it’s no sure bet. Never been done at this depth before. The water is a mile deep; the well goes down three miles. Re-drilling to shut off flow pressure 18000 feet down is possible, but positioning a another rig and actually doing this will take months. Naturally, this is causing a re-think of plans for future off-shore drilling.

On a broader front, a recent article on Global Post points up the enormity of our 21st century energy challenge, and why Compression thinking is vital. Only about 2% of global oil reserves are on U.S. soil. The Canadian tar sands ballyhoo 1.7 billion barrels of reserves, more than all other proven reserves in the world. The hitch is that they are hard to recover. Just developing the “easy stuff” will yield about 5 million barrels a day by 2020, or about a fourth of present U.S. oil consumption.

However, U.S. will not get all of it. Canada will take some, of course, but the world-wide race to snap up petroleum sources has been going on for years, and it’s getting intense. In January, the Canadian government approved sale of 60% of Athabaska Oil Sands Corporation to PetroChina.  Athabaska Oil Sands is only one of many companies operating in the sands, so the Chinese diversion will not take it all. However, Chinese petroleum consumption is about a third that of the U.S., and growing rapidly. The stage for clash is set.

All this presumes that we must keep burning this huge volume of petroleum. Curtailing fuel use among consumers whose lifestyles have come to be based on it is like taking candy from spoiled brats — and not just American ones. Expect tantrums.

Start digging into this on your own. Any big numbers are impressive, so look at the proportions between them. A place to start is the Energy Information Administration.  A little digging shows what’s likely from alternative fuels, etc. Watch out for energy yield quotes in recovery and refining operations. They usually cover only a portion of the total process.

Total global petroleum consumption has been hanging in at around 86 million barrels a day. Run that out against the 1.3 billion barrels of global reserves and we’d be “out” by 2051. Of course, this linear projection won’t work out, and oil investors’ puffery blows a few million barrels into a big deal. Compared with the average person’s wealth, it is. Compared with total consumption, million dollar deals are piddling.

But back to the Global Post. Electricity is basic to improving quality of life for everyone. The article cites three sources projecting growth of electricity to 1-2 billion under-served people within the next two decades. At least a billion now have no electricity at all; others have access to very little; and population is expected to grow. With business-as-usual scenarios, energy demand will very little in old industrial economies, but explode from an electrification surge in regions now blacked out. For example, China is building generating capacity rapidly, locking in sources of fuel energy anywhere they can be found. How long can this continue? Then what?

The Chinese are gambling on sustaining rapid physical growth to keep Chinese social unrest in check. Energy shortages in the old industrial economies are apt to cause social unrest too. For all of us, new thinking has to emerge sooner rather than later.

Compression Thinking begins to reframe the problem. How we frame problems now glared out in many of the first news reports on Deepwater Horizon. How much would it cost? Who would pay? Which companies were involved? Were their stock prices dropping? Those who expected to be monetarily affected were contacting law firms to sue everyone involved. Maybe it will slowly sink in that, regardless of what is spent, no amount of money can fix this. Nature has to fix it on its own, in its own time. All we can do is help nature a little bit.

Could your business serve customers at least as well using less than half of present energy? If so, how?

Doc Hall

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