There is a broad, global focus today on energy
as an economic, geopolitical and strategic resource.
In addition, there is an intense interest in
the environmental consequences of energy consumption, as well as a steady push
toward adoption of energy conservation technologies and practices.
Advanced oil and gas production technologies, including
3D seismic, ultra-deep ocean rigs, hydraulic fracturing and directional
drilling, have fostered exceptional new levels of oil and gas discovery and
production around the world.
In fact,
the application of new technologies has dramatically upset the former balance
of power in the energy industry, making North American production much more
important while lessening the influence of OPEC.
In recent years, a flood of production
released by these technologies has led to a stunning drop in market prices for
crude oil and natural gas, much to the financial detriment of the very
companies that funded and enabled these technological breakthroughs.
In addition, there is a greater focus than ever
before on the potential impact of energy production and consumption on public
health, air quality, water quality and other environmental impacts.
A large number of nations have stated very
ambitious goals to reduce consumption of fossil fuels.
Worldwide, investment in the development and
implementation of cleaner or renewable energy sources is a major priority for
many governments and industries.
This
emphasis varies widely from nation to nation, ranging from cleaner
READ MORE
There is a broad, global focus today on energy
as an economic, geopolitical and strategic resource. In addition, there is an intense interest in
the environmental consequences of energy consumption, as well as a steady push
toward adoption of energy conservation technologies and practices.
Advanced oil and gas production technologies, including
3D seismic, ultra-deep ocean rigs, hydraulic fracturing and directional
drilling, have fostered exceptional new levels of oil and gas discovery and
production around the world. In fact,
the application of new technologies has dramatically upset the former balance
of power in the energy industry, making North American production much more
important while lessening the influence of OPEC. In recent years, a flood of production
released by these technologies has led to a stunning drop in market prices for
crude oil and natural gas, much to the financial detriment of the very
companies that funded and enabled these technological breakthroughs.
In addition, there is a greater focus than ever
before on the potential impact of energy production and consumption on public
health, air quality, water quality and other environmental impacts. A large number of nations have stated very
ambitious goals to reduce consumption of fossil fuels. Worldwide, investment in the development and
implementation of cleaner or renewable energy sources is a major priority for
many governments and industries. This
emphasis varies widely from nation to nation, ranging from cleaner ways to burn
the world’s immense stores of coal; to the construction of advanced-technology
nuclear generating plants that are exponentially safer than older models; to
the use of renewable technologies based on solar, wind and wave power.
With the exception of hydroelectric power,
renewable energy sources were initially much more expensive as an electricity
resource than fossil fuel-based generation (primarily coal and natural
gas). This meant that they required
significant government subsidies, loan guarantees or incentives in order to
encourage investment. Today, however,
onshore wind power as well as solar power have become dramatically more
efficient. In some instances, solar has
become reasonably competitive on price.
It remains to be seen whether or not governments will cut back
significantly on their costly subsidies and incentives for renewables.
The largest emerging nations are investing
heavily in alternative energy sources, while continuing to use massive
quantities of fossil fuels. China
continues to face a serious environmental challenge due to the immense amount
of coal it burns. India is likewise
remains dependent on electric generation from coal. Brazil, in contrast, continues to be a leader
in the low-cost production and use of ethanol as a transportation fuel, while
it is slowly developing some of the world’s most important offshore oil and gas
fields. It is also a world leader in
hydroelectric power.
Today’s relatively low market prices for oil
and natural gas have caused oil companies, large and small, to strive for lower
exploration and operating costs, while accelerating the adoption of efficient
new techniques and technologies.
The world’s energy supply will remain abundant
for the foreseeable future. Better
science, technology and engineering are being applied to exploration,
production, conservation and distribution alike, with stunning success. At the same time, total energy usage in
mature economies is on a path of decline or slow growth. For example, analysts at BP estimate that
annual American consumption of primary energy sources (such as coal, natural
gas and crude oil) declined by more than 3% from 2007 to 2017. In the booming economy of China, however, the
same measure increased by 46%, while the increase was 67% in India, over the
same time period.
Emerging economies will continue to burn huge
amounts of coal and other fossil fuels while total energy usage continues to
soar. This is where the growth in
consumption, along with related emissions and pollution, is largely unavoidable
for the near future: in rapidly rising
economies that are adopting modern industrialization, transportation (including
tens of millions of new automobiles yearly), business services and housing,
along with the energy consumption that such development demands.
A looming question is whether America and major
nations in Europe will ever resume significant construction of nuclear
generation plants. The fact that several
nuclear plants were damaged by a massive tsunami at Fukushima, Japan in early
2011 makes significant new development of nuclear sites even more controversial. Meanwhile, advanced-generation nuclear
technologies have the potential to provide much greater operating efficiencies
with vastly increased safety over the plants constructed in earlier years, and
the nations of China, India, Saudi Arabia and the UAE are likely to move ahead
with massive nuclear plant construction plans that are already in place. Nonetheless, on a global basis, construction
cost overruns continue to plague the nuclear plant sector.
Global Energy Numbers:
Oil:
According to the latest data available from analysts at energy giant BP,
the world produced 94.7 million barrels of oil daily in 2018, up 2.3% from the
previous year (these are the latest available numbers). This includes unconventional petroleum output
from such sources as oil sands, as well as natural gas liquids. However, it does not include alternative
sources such as oil from biomass and coal derivatives. Proven reserves worldwide totaled 1,729.7
trillion barrels at the end of 2018, up 0.1% from the previous year.
Natural Gas: According to BP, global production of natural
gas was 3,867.9 billion cubic meters in 2018, up 4.9% from the previous
year. Proven reserves totaled 196.9
trillion cubic meters, enough to last several decades at today’s consumption
rates. Massive discoveries of natural
gas in shale formations in the U.S. and elsewhere have largely altered the gas
industry while leading to great reductions in market prices for gas over the
past several years. Likewise, vast
investments in LNG (liquefied natural gas) infrastructure are enabling
international shipment of gas from production areas, such as Qatar and offshore
Australia, to major markets in China, Europe and elsewhere.
Coal:
Analysts at BP estimate that global production of coal was 3,853.1
million tons of oil equivalents in 2018, up 2.5% from the previous year. The largest emerging nations are hooked on
coal, with China accounting for about one-half of global consumption. As of 2018, global coal reserves were massive
at 1,054, 782 million tons, or enough to last about 250 years at today’s
consumption rates.
America’s
Energy Numbers:
According to the U.S. Energy Information
Administration, natural gas production in the U.S. increased by 9.9%, to 37,009
billion cubic feet in 2018, the latest year available.
The Department of Energy estimates American oil
production was 10,990 thousand barrels per day during 2018, up dramatically
from 9,352 thousand barrels per day in 2017.
(These numbers do not include natural gas liquids.) A long-term trend of rising domestic
production has led to dramatic cuts in America's oil imports, as well as a
growing level of oil exports from the U.S.
Consultants at Rystad Energy estimated in 2018 that the U.S. ranks first
in total reserves of oil, at 310 billion barrels, surpassing 246 billion in
Saudi Arabia. (Rystad bases reserves on “existing fields, contingent resources
and prospective resources.”
America’s natural gas industry has been growing
very quickly, and new production has ensued, thanks largely to wells in
shale. Thus, the total production
picture of both oil and gas has improved dramatically, and look even better
when natural gas liquids, or oil that is stripped from natural gas during
processing, are included.
Meanwhile, the sources of America’s oil imports
have changed as well. Thanks to booming
output in areas outside of the Persian Gulf, including Canada and the West
Coast of Africa, America’s reliance on OPEC and Middle Eastern nations for oil
has plummeted. As of 2018, America
received less than 29% of its oil imports from all OPEC members, down from 70%
in 1977.
Only 135 refineries existed in America as of
early 2018, down by more than 50% from 1980.
However, these remaining refineries have invested heavily in additional
capacity to the extent that their total, combined refining output has grown,
despite the fall in the number of refineries.
America’s substantial new oil and gas production, combined with the
expansion of existing refiners, made the U.S. a net exporter of refined
petroleum products, starting in 2011, the first time since 1949.
Total American consumption of energy of all
types was 106.55 quadrillion BTUs in 2018.
In terms of BTUs consumed per year per capita, American energy use is in
a slow, long-term decline. This is
remarkable when you consider that the number of automobiles and aircraft per
capita has grown dramatically, along with the percentage of homes and buildings
that are air conditioned, and tremendous increases in the number of appliances,
computers and entertainment devices per person.
Thanks to immense leaps in engineering, technology and conservation,
energy efficiency has grown to the extent that the energy consumption of an
average American declined from a peak in 2000 of 351 million BTUs yearly, to
only 309 million in 2018.
According to the U.S. Department of Energy,
electric generation in America as of 2018 used the following ratio of
fuels: coal 27.4%; nuclear 19.3%;
natural gas 35.4%; hydroelectric 7.9%; and non-hydro renewables such wind and
solar, 11.4%.
Consumers and businesses alike are increasingly
willing to invest more in the initial cost of green buildings, high-efficiency
appliances and energy-saving transportation equipment, with the promise of
lower energy costs for daily operation.
The automobile industry has responded with lighter, much more
fuel-efficient vehicles. Even pickup
trucks, which remain extremely popular with American drivers, use much less
fuel than they did in the recent past.