1 Energy Sources and Energy Supply 1.1 Introduction The major sources of energy have been, and continue to be, the various fossil fuels of which the major component of the group are (i) natural gas, (ii) crude oil, and (iii) coal with tar sand bitumen and oil shale available in considerable quantities for use on an as-needed basis. However, the Earth contains a finite supply of fossil fuels – although there are questions about the real amounts of these fossil fuels remaining. The best current estimates for the longevity of each fossil fuel is estimated from the reserves/production ratio (BP, 2019) which gives an indication (in years) of how long each fossil fuel will last at the current rates of production. Thus, estimates vary from at least 50 years of crude oil at current rates of consumption to 300 years of coal at current rates of consumption with natural gas varying between the two extremes. In addition, the amounts of natural gas and crude oil located in tight sandstone formations and in shale formations has added a recent but exciting twist to the amount of these fossil fuels remaining. Peak energy theory proponents are inclined to discount the tight formations and shale formation as a mere aberration (or a hiccup) in the depletion of these resources while opponents of the peak energy theory take the opposite view and consider tight formations and shale formations as prolonging the longevity of natural gas and crude oil by a substantial time period. In addition, some areas of the Earth are still relatively unexplored or have been poorly analyzed and (using crude oil as the example) knowledge of in-ground resources increases dramatically as an oil reservoir is exploited. Energy sources have been used since the beginning of recorded history and the fossil fuel resources will continue to be recognized as major sources of energy for at least the foreseeable future (Crane et al., 2010; World Energy Council, 2008; Gudmestad et al., 2010; Speight, 2011a, 2011b, Khoshnaw, 2013; Speight, 2014a; BP, 2019). Fossil fuels are those fuels, namely natural gas, crude oil (including heavy crude oil), extra heavy crude oil, tar sand bitumen, coal, and oil shale produced by the decay of plant remains over geological time represent an unrealized potential, with liquid fuels from crude oil being only a fraction of those that could ultimately be produced from heavy oil and tar sand bitumen (Speight, 1990, 1997, 2011a; 2013d, 2013e, 2014). In fact, at the present time, the majority of the energy consumed worldwide is produced from the fossil fuels (crude oil: approximately 38 to 40%, coal: approximately 31 to 35%, natural gas: approximately 20 to 25%) with the remainder of the energy requirements to come from nuclear and hydroelectric sources. As a result, fossil fuels (in varying amounts depending upon the source of information) are projected to be the major sources of energy for the next 50 years (Crane et al., 2010; World Energy Council, 2008; Gudmestad et al., 2010; Speight, 2011a, 2011b, Khoshnaw, 2013; BP, 2014; Speight, 2014; BP, 2019). Fuels from fossil fuels (especially the crude oil-based fuels) are well-established products that have served industry and domestic consumers for more than 100 years and for the foreseeable future various fuels will still be largely based on hydrocarbon fuels derived from crude oil. Although the theory of peak oil is questionable, there is no doubt that crude oil, once considered inexhaustible, is being depleted at a measurable rate. The supposition by peak oil proponents is that supplies of crude oil are approaching a precipice in which fuels that are currently available may, within a foreseeable short time frame, be no longer available. While such a scenario is considered to be unlikely (Speight and Islam, 2016), the need to consider alternate technologies to produce liquid fuels that could mitigate the forthcoming effects of the shortage of transportation fuels is necessary and cannot be ignored. The best current estimates for the longevity of each fossil fuel is estimated from the reserves/production ratio (BP, 2019) which gives an indication (in years) of how long each fossil fuel will last at the current rates of production. Alternate fuels produced from a source other than crude oil are making some headway into the fuel demand. For example, diesel from plant sources (biodiesel) is similar in performance to diesel from crude oil and has the added advantage of a higher cetane rating than crude oil-derived diesel. However, the production of liquid fuels from sources other than crude oil has a checkered history. The on-again-off-again efforts that are the result of the inability of the political decision-makers to formulate meaningful policies has caused the production of non-conventional fuels to move slowly, if at all (Yergin, 1991; Bower, 2009; Wihbey, 2009; Speight, 2011a, 2011b, Yergin, 2011; Speight, 2014a). This is due in no small part to the price fluctuations of crude oil and the common fuel products (i.e., gasoline and diesel fuel) and the lack of planning and associated foresight by various levels of government. It must be realized that for decades the price of crude oil produced in the crude oil-exporting nations has always been maintained at a level that was sufficiently low to discourage the establishment of a domestic synthetic fuels industry in many of the crude oil-consuming countries (Speight, 2011a). However, in spite of additional supplies of crude oil and natural gas coming from tight formations and shale formation, the time will come when the lack of preparedness for the production of non-conventional fuels may set many a national government on its heels. It is not a matter of “if the lack of preparedness come to fruition” but “when will the lack of preparedness come to fruition?” In the near term, the ability of conventional fuel sources and technologies to support the global demand for energy will depend on how efficiently the energy sector can match available energy resources (Figure 1.1) with the end user and how efficiently and cost effectively the energy can be delivered. These factors are directly related to the continuing evolution of a truly global energy market. In the long term, a sustainable energy future cannot be created by treating energy as an independent topic (Zatzman, 2012). Rather, the role of the energy and the interrelationship of the energy market with other markets and the various aspects of market infrastructure demand further attention and consideration. Greater energy efficiency will depend on the developing the ability of the world market to integrate energy resources within a common structure (Gudmestad et al., 2010; Speight, 2011b; Khoshnaw, 2013). World petro-politics are now in place (Bentley, 2002; Speight, 2011a) for the establishment of a synthetic fuels (including a biofuels) industry and, without being unduly dismissive of such efforts, it is up to various levels of government not only to promote the establishment of such an industry but to lead the way recognizing that it is not only a matter of supply and demand but of the available and variable technology. Unfortunately, although there may be sufficient crude oil remaining to maintain the Crude Oil Age (or the Petroleum Age, that is, the age in which the developed countries of the world operate) for another 50 years (Speight, 2011a, 2011b), the time to prepare is now. The world is not yet on the precipice of energy deficiency (as many alarmists claim) but it is necessary that the politicians in the various levels of (national) governments of oil-consuming nations look beyond the next election with an eye to the future. It should also be the focus of the proponents of biofuels production and use to ensure that sufficient feedstocks are available to successfully operate a biofuels refinery thereby contributing alternate fuels to the gradual (but not drastic) reduction of crude oil-based fuels (Speight, 2008; Giampietro and Mayumi, 2009; Speight, 2011a, 2011b). However, it is time for procrastination to cease, since delay will not help in getting beyond the depletion of crude oil and natural gas resources, and various levels of government must start being serious in terms of looking to the future for other sources of energy to supplement and even replace the current source of hydrocarbon fuels.
Figure 1.1 Types of energy resources. In addition, and in keeping with the preferential use of lighter crude oil as well as maturation effect in the reservoir, crude oil available currently to the refinery is somewhat different in composition and properties from those available approximately 50 years ago (Parkash,
