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W1V1-Energy Scene-V2016-Handout PDF
W1V1-Energy Scene-V2016-Handout PDF
Introduction
During this session, we will try to understand why the oil and natural gas energies are
dominant in the global energy mix today, and why they will probably remain our main
resources in the years to come.
However, there is not one single type of energy but several, that compete with, and
complement one another to satisfy our different needs.
Nutrients contained in food, were probably the first energy resources, powering human
muscles to perform the basic subsistence activities. Humans may have used the first extrasomatic energy conversion about eight hundred thousand years ago (800 000), by mastering
the control of fire.
Since then, there have been many energy revolutions. Just take a look at the last hundred
years. Coal replaced wood as a more efficient resource to power steam machines. Then oil
became the leading fuel in support of the automobile boom. After the first oil shock in 1973,
and the second one in 1979, that multiplied the price of oil by 10, natural gas and electricity
supply, increased their share in the global energy mix.
But energy systems require heavy infrastructures, therefore they require time to evolve. Due
to this inertia, the mix will not change rapidly and fossil resources will remain the dominant
fuels in the energy mix for many years ahead.
But the primary energy, the energy as found in nature, needs to be processed, and
transported before being available for end-users. From the 13 billion tons of oil equivalent of
primary energy, we get only 9 billion tons in final energy, after withdrawing transformation
and transmission losses.
Fossil resources remain dominant in the mix, because so far, they appear to be the most
economic and efficient energy sources for our main uses. Heat, that accounts for more than
half of our needs, is mainly satisfied by oil or natural gas. Transport, which is almost one
third of the global energy demand relies almost entirely on oil, while coal is the main source
for electricity, which represents 15% of the final energy consumption.
What may be coming to an end however is the easy oil. By easy oil, I mean the reserves
easy to find, easy to extract from the ground and easy to transform into ready-to-consume
products.
Since the mid-20th century, the most important oil and natural gas reserves have been
discovered in the Middle East. This region, led by Saudi Arabia, Iran, Iraq, Kuwait and the
UAE represents almost half of the worlds proven oil reserves. For natural gas, notably
thanks to Iran and Qatar, the Middle East holds 43% of the global reserves.
But for countries such as Venezuela and Canada, reserves have been recently re-assessed
and have increased dramatically. They now rank first and third for proven oil reserves.
The most recent oil discoveries have been made in unfamiliar locations. For instance in Brazil
with ultra-deep offshore pre-salt reservoirs, or in Northern America with tight-oil regions.
During the last 5 years, almost 30% of the global oil & gas discoveries have been made in
Sub-Saharan Africa. The oil price increase in the past decade and the development of new
extraction techniques have made some resources profitable to produce, changing the overall
reserves landscape.
Therefore, two thirds of the oil produced is for export. The main exporting regions are the
Middle East, the Former Soviet Union, and West Africa. The main regions relying on foreign
imports for their oil supply, are Europe, China, and the United States. Although the US, has
recently reduced its imports with the local development of unconventional production.
You can see on this map that crude oil is a genuine global commodity. It is a product so
important for the economy that very few regions are excluded from the international oil
market. But definitely, the Middle-East still remains a key area for consuming countries,
especially those in Asia.