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Fossil and Nuclear Fuels the Supply Outlook

March 2013

World Fossil and Nuclear energy supply

(Mtoe = equivalent energy units)

World Oil - Conventional

World oil production (conventional and unconventional) has not increased but has entered a plateau since about 2005. The production of conventional oil is in slight decline since about 2008. The peaking of conventional oil is now also accepted by the International Energy Agency (IEA).

Historical discovery pattern of world conventional oil fields and projection until 2040.

World oil production - forecast

World oil production

(WEO = World Energy Outlook, produced by IEA)

World oil demand according to WEO 2012.

US oil production 1935 -2030 accounting for light tight oil

US oil demand
Total US oil demand declined since 2005 at an unprecedented decline rate and has now reached a level last seen in the 1980s. Hamilton (2009) shows that high oil prices caused this demand destruction which culminated in the 2009 recession. If the present trend continues, total demand might be reduced by 50 per cent in 2030 compared with its 2005 level when it reached an all-time high.

US Oil and Gas - Unconventional

Recent increases of unconventional oil and gas production in the USA are due to a number of specific conditions, such as a highly developed oil and gas industry and infrastructure and, most important, the high oil and gas prices reached in 2006. There is a high probability that light tight oil production in the USA will peak between 2015 and 2017, followed by a steep decline. Light tight oil production will likely turn out to be a bubble, lasting only for about 10 years.

Texas shale gas

Production in the Barnett shale has peaked in the summer of 2011.
The Haynesville shale production has already peaked EAGLE Ford Shale production peaked in autumn 2011

US Shale Gas Production

US Shale gas
The shale gas boom after 2005 led to a fast rising domestic production together which in 2008 met with an economic downturn resulting in a collapse of gas prices.

It is often claimed that the crunch of gas prices was a result of the development of shale gas. This is combined with the claim that gas production from gas shales is cheaper than conventional gas production. The first part of that claim is correct, the second part is not.

Costs per well drilled are three to four times higher in 2007 than they were in 2000

Viability of shale gas

The economic viability of natural gas production depends to a high degree on the Estimated Ultimate Recovery (EUR) of natural gas per well. The gas flow of shale gas wells typically shows peak production in the first days followed by a fast decline rate in the range of 5 to 10 per cent per month.
Based on the projection that the EUR in individual shale gas wells varies between 1.19 3 Bcf, the required breakeven gas price is calculated to be between 5.06 to 8.75 USD/1000 scf.

US Gas production forecast

Based on shale gas data by Texas RRC; Other data from US-EIA

European Shale Gas?

In contrast to North America, and irrespective of environmental concerns, unconventional gas will play a negligible role in Europe. The first difference between Europe and the USA is the population density in the shale areas which in most European countries is much higher than in the USA. Secondly, more than 150 years of experience with the production of oil and gas in the USA resulted in a countrywide natural gas grid.

US shale gas vs Europe

USA has about 500,000 active gas wells 100,000 alone in Texas and a comparable number of oil wells. Germany has 494 production gas wells. In January 2013 in USA, more than 1,700 onshore rigs were active, drilling for oil and gas. In January 2013 only 80 onshore rigs were active in the whole of Europe. Though the number of active rigs may vary, the number of available rigs sets a limit. The movement of new rigs into a region is time and cost consuming and only possible when these rigs are removed from other areas.

World coal production

(Bit = bitumin; Sub = sub-bituminous)

The prospects for world coal

Like every finite fossil energy resource, global coal supply is going to peak. In many coal producing countries the peak is already history. A reasonably reliable picture of the future can be drawn. We will see some further growth in global coal production followed by a peak in the not so distant future. However, there is definitely no scope for substituting oil and gas in the long run by coal. There will be no regression to coal as the long-term primary fossil energy source. The peak of all fossil fuels is already in sight.

Nuclear energy
Today the majority of the reactors in operation are more than 25 years old. Only 10 % of the net electrical capacity is below 20 years of age. Considering the age structure of reactors today, the majority of operating reactors will be shut down permanently within the next two decades.

Age of the operational nuclear power plant fleet

Historical uranium production and projection until 2100 based on Reasonably Assured Resources

Coal and gas production will reach their respective production peaks around 2020 The decline of oil production which is expected to start soon will lead to a rising energy gap which will become too large to be filled by natural gas and/or coal Substituting oil by other fossil fuels will also not be possible The energy contribution of nuclear fuels is too low in order to have any significant influence at global level.

Neither the hype about

huge reserves in the Caspian Sea in the year 2000 (reserves could rival Saudi Arabia), nor the deep sea discoveries in the Gulf of Mexico or West of Angola, nor tar sands in Alberta (cover story of the ExxonMobil publication Oildorado in 2003), nor the rush on shale gas developments in the USA nor recent news of shale gas in Australia

can do away the fact that the era of cheap and abundant fossil fuels is coming to an end.
Rather, these new frontiers create more problems than being solutions to problems they promise to solve.

This is a good message

Climate change forces us to take action, namely reducing the consumption of fossil fuels
We must face these challenges and start in earnest to develop transition strategies towards a sustainable energy supply. The longer we try to delay that transition by pursuing dead end solutions which are aimed to prolong business as usual, the more we face the risk of falling off a cliff with severe disruptions in economy, politics and society.

World Fossil and Nuclear energy supply

(Mtoe = equivalent energy units)

About Energy Watch Group

Energy Watch Group is a non-partisan international network of scientists and parliamentarians whose work is independent of economic special interests.
Energy Watch Group was founded due to the initiative of the German parliamentarian Hans-Josef Fell and further parliamentarians from other countries. It is supported by the Ludwig-Blkow-Foundation. In this project scientists are working on studies independently of Government and company interests concerning the shortage of fossil and atomic energy resources, development scenarios for regenerative energy sources as well as strategies deriving from these for a long-term secure energy supply at affordable prices.