April 2011

Currently

Global climate change never ceases to generate controversy and debate. Satellite data shows average global temperatures have increased over most of the last 3 decades. The generally accepted values reported within the scientific community is an average global increase of 1 degree C over the last 125 years. Is this long-term warming trend due to natural causes, man-made causes, or both? This month’s speaker, Terry Donze, will share his conclusions from years of climate study at our monthly technical luncheon, Wednesday, April 20th. It promises to be a lively presentation you won’t want to miss.

If you enjoyed Roger Young’s talk last month on extracting lithology, porosity, and fluid information from seismic data, but wanted to linger, or review his marvelous data slides a little longer, your wish has been granted. This month’s technical article publishes Roger’s entire presentation set. And don’t forget, if you want to see or print the material in color, then access the Bulletin online at our website, www.ccgeo.org.

Recently

I hope you were able to attend the Dinah Bowman – Deep Sea Coring Expedition social event held at the Corpus Christi Art Center March 24th. This event, showcasing Dinah’s expedition artwork, so intrigued the Art Center curators that they asked her to include it in their month-long Festival of the Arts. Many thanks to Dennis Taylor for organizing the event, Dinah for sharing her art and adventures, and our sponsors, Core Lab, SEI, and Schlumberger, for providing financing.

Continuing education chairman Mike Saenz scored a real coup when he brought us a 1- day, salt-tectonics short course March 30th taught by world renowned salt researcher and educator, Mark Rowan. Mike found a way to offer the course at a substantial discount to the industry standard. I hope you were able to take advantage of this valuable, and convenient opportunity. Thanks go to the BEG for subsidizing the course cost, and to our local sponsors, Jackie Hale and the Wilson Plaza, Dennis Moore of Baker Atlas, and Zorro Petroleum.

Commentary

Energy Reality in America, final entry.

Over the course of this Energy Reality in America series I have highlighted many energy forms in terms of raw resource abundance and output capacity. I have attempted to show the level to which each could, hypothetically, take over as our nation’s primary source of energy. Many of you have probably noted that, for the most part, I have not included a discussion of the economics of each fuel source. You might wonder the worth of describing an energy resource when its market value is not considered. That’s a fair question. I didn’t leave the market side out of the discussion by error, however. It was deliberate for a couple of reasons. First, many of the United State’s energy sources are treated like commodities, and therefore subject to the whims of a (sometimes) volatile commodity trading market. Prices change daily, sometimes dramatically (for instance oil over the last month, or the previous 18 months for that matter), and often as much for political reasons as for true supply and demand fundamentals. Consequently, including an economic framework in my evaluation would have limited the conclusions to a snapshot in time.

Which leads to the second, more compelling reason I haven’t included an economic model in this energy discussion: regardless the price we pay, modern America requires a tremendous amount of raw energy to support our modern lifestyle (16 – 17 billion BOE/yr during the last decade1). If this composite total energy level isn’t reached, something will have to go. Energy is not a luxury item we can choose to do without when prices go up. I’m not implying economics don’t matter. Quite the contrary, they are critical. Energy costs are probably the most basic and impactful element within any nation’s economy. But energy markets are extremely complex and variable, made even moreso by ever changing regulations, government fees and subsidies, and political instability. However, the bottom line remains: regardless what the trading markets are doing, our nation will need 45 million BOE in one form or another each and every day if we are to continue living as we do.

Now, I do believe there is a lot of waste and inefficiency in that composite energy total. Efficiency improvements and conservation measures available right now could, and I’m just guessing here, reduce total energy consumed by perhaps as much as 15%. That would mean we still need to produce and/or import a total of 14 billion BOE/yr. Which domestic resources can provide that energy? Are we going to continue to send a huge portion of our national capital overseas by importing 30% (currently) or more of the total energy we need?

Every Presidential administration since I reached voting age, including the latest, has promoted energy independence or “energy security” in some form. Those goals generally refer to more domestically produced energy and less imported. If that is truly our national objective (and I think it should be), then we need to be realistic about our domestic energy resources. As a nation we need to choose wisely which domestic energy resources receive substantial capital outlays. That decision, in my opinion, should be driven primarily (but not necessarily entirely) by the marketplace. Relative abundance of a resource is (or should be) factored into the market condition. With that in mind, the energy choices I’ve highlighted in the preceding months have attempted to determine each one’s relative domestic abundance, now and in the future. Among those I’ve reported on, and even those I didn’t, it’s clear that some domestic energy resources have the potential to supply a large share of the national load, while others will remain minor contributors.

Among the latter, wind and solar energy are limited by low power output relative to the unit space required. There just isn’t enough available land surface in the U.S., with suitable wind and sun conditions to supply more than a fraction of our total energy need.2 These industries need technological advancements that substantially increase electricity output per unit while simultaneously reducing capital costs.

Hydrothermal energy (deep, hot, geopressured water wells) can never achieve the number of wells necessary to supply more than a fraction of our energy demand for the simple reason that drilling a deep, highly overpressured well for the purpose of powering a hybrid power plant is uneconomic. It can only work serendipitously using someone else’s “sunk” money dry hole3.

Ethanol, particularly from corn, is generally a net energy loser. The best results are about break-even, but depending on soil, weather, and corn type, it frequently takes more energy to produce the ethanol than is received from it4. So corn ethanol doesn’t make sense even before market value is considered. Other bio fuels, such as vegetable oil, wood, and agricultural wastes may be cost competitive in certain local areas, and they are certainly welcome in those energy markets. But they can never produce a national volume to supply but a small fraction of our energy needs.

Hydrogen and its related fuel cell technologies are wonderfully clean energy types, but like ethanol, are currently net energy losers. Despite being the most abundant element in the universe, hydrogen does not exist naturally in its elemental state, at least not on Earth. It must be extracted from larger molecules, like water or natural gas. Extracting hydrogen from natural gas (steam reforming process) is a bit of a circular method for gathering energy in that it is only 80 % efficient, gives off the same volume of greenhouse gases (compared to burning the natural gas directly), and still requires natural gas to be produced in the first place5. Another extraction process, electrolysis of water to separate hydrogen from oxygen, requires anywhere from 40 to 100% more energy than is produced by the recovered hydrogen gas6.

Hydroelectric power does have the potential to supply a significantly larger portion of our energy needs, even potentially all of our electricity demand7, and at competitive costs, IF we are willing to build hundreds to thousands more dams. I don’t think, however, that is a realistic or wise proposition for obvious reasons.

Oil, while still abundant globally, is on the downward side of peak production in this country, 8 with long-term demand still growing. As you recall from my first Energy Reality installment we only produce 33% of our consumed oil, which represents only 13% of our total energy budget. Opening up areas currently off-limits for exploration can help, but even with new discoveries, we will, in all likelihood, not eliminate the need to import oil.

Which leaves only 3 readily available, domestic sources of energy that have the potential to satisfy the bulk of our energy thirst: natural gas, coal, and nuclear. Regarding the first, I am, of course, biased, but I think it’s clear that with a resource base (estimate of ultimate recovery of known and yet-to-be discovered reserves) of around 15,000 Tcf in the U.S.9 (enough to hypothetically provide our total energy needs for 169 years), its proven advantages regarding emissions among fossil fuels, and its flexibility as a combustible fuel, natural gas should be a main focus of our energy plan. Additionally, a concerted, national, research effort into commercially capturing methane hydrates from the GOM seafloor could also have a huge impact on our energy security.

Regarding coal, I believe a serious effort should be put into in-situ coal gasification (essentially an evolution of coalbed methane production techniques). Being able to economically extract methane from coal in place would allow us to use our most abundant domestic energy resource in a less impactful manner. If we don’t invest in this research now, the day will come when out of sheer desperation we will mine and burn coal in shocking quantities that dwarf today’s consumption.

And finally nuclear. Despite the frightening consequences of a tragedy such as that unfolding in Japan’s Fukushima Dai-ichi nuclear power plant, nuclear energy fits the criteria of abundant raw material, high output per unit area10, economic viability, and produces no emissions to boot. I think we need to be more open minded about breeder reactors, and spent fuel reprocessing. Also, we need to commit more research into the subject of safe nuclear waste disposal (we were so close at Yucca Mountain) AND plant operations, especially involving contingency plans during natural and man-made disasters.

Lastly, for the long-term future we should be willing to invest research dollars into “22nd ” century energy sources, preparing for that day when fossil fuels are no longer abundant enough to be economically viable. An example of one such possibility is fusion energy, which has showed promise in the lab, but is a long, long way from practicality. One of our illustrious speakers, astronaut Dr. Harrison (Jack) Schmitt, told us of his idea to mine isotopic helium from the Moon to use in fusion reactions on Earth11. If perfected, the beauty of this concept is it uses nonradioactive fuel, generates electricity directly through the release of protons thereby creating the potential for high conversion efficiency, emits no air or water pollution, and produces only minor low-level radioactive waste 12. Other fusion design ideas utilizing deuterium/tritium reactions have been proposed; we need to fund research into all these areas for our own future security.

This, in my humble opinion, would be the best use of federal money spent on energy independence efforts. Cap and trade regulations, or repeal of oil and gas tax incentives put in place to offset risk, don’t help, and in fact reduce energy independence. On the other hand, improvements in domestic energy viability (or ‘sustainability’, to use the latest buzzword) helps ALL Americans.

Focusing on, and improving the effectiveness of the resources we have in abundance now, while at the same time researching the power sources of the future, will enable us to once again achieve the energy independence we seek.

Next month: What does it all mean?

Rick Paige
CCGS President, 2010-11

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1 CCGS Bulletin, President’s Letter, Nov. 2010
2 CCGS Bulletin, President’s Letter, Dec. 2010
3 CCGS Bulletin, President’s Letter, Jan. 2011
4 www.wikipedia.com; search “ethanol fuel energy balance” for a summary of recently published articles.
5 www.wikipedia.com
6 Ibid
7 Salvador, Amos; Energy: A Historical Perspective and 21st Century Forecast, AAPG Studies in Geology #54, 2005.
8 See any discussion of the Hubbert Peak. A particularly good one, if you can find it, is Silence. The Sound of the Coming Energy Crisis, by Warren L. Seal, , 2003.
9 USGS as reported in Salvador, Amos, Ibid.
10 CCGS Bulletins, President’s Letter, Jan 2011, Feb 2011
11 CCGS Technical Luncheon, May 2009
12 Schmitt, Harrison H., Return to the Moon: Exploration, Enterprise, and Energy in the Human Settlement of Space, Copernicus Books, 2006.

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