News, notes and trends on Alberta energy
Coal burners top the national climate change suspect list
Richer Than Ever
Oil cartel poised to reap a bonanza as demand and prices rise
Consumers have only begun to enrich the dozen states in the Organization of Petroleum Exporting Countries (OPEC), says the International Energy Agency (IEA). Astronomical future revenues are foreseen for the cartel in the latest 20-year projections by the Paris-based arm of the Organization for Economic Co-operation and Development.
Over the past 20 years, about US$6 trillion flowed from oil-importing nations to OPEC members Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. In the next two decades, the wealth transfer – the “real” cash gusher, measured in inflation-adjusted dollars – is expected to grow four-fold or more into the range of $25 to $27 trillion.
The IEA credits OPEC’s flush outlook at least as much to price increases as to production growth. In inflation-adjusted money, the agency expects oil to average $87 a barrel in 2015, $100 in 2020 and $115 in 2030. Excluding deductions to the dollar’s value to compensate for overall cost of living increases, oil is headed for $102 in 2015, $131 in 2020 and $190 in 2030.
World oil consumption is forecast to jump from the current 85 million barrels a day to 88 million in 2015 and 105 million in 2030. Coal, oil and natural gas are expected to satisfy a 77 per cent majority of growth in demand for energy of all types.
Increases in fossil fuel use and oil prices could be arrested if a strong carbon emissions reduction treaty results from negotiations that began in December at the United Nations climate change summit in Copenhagen, the IEA says. The agency calculates that if the world enforces a limit on the atmosphere’s carbon dioxide content of 450 parts per million, reduced consumption would freeze the inflation-adjusted annual average oil price at about $90 a barrel.
Second Wind
Vintage wells are able to revive on whiffs of greenhouse gas
Carbon dioxide waste can be used to create new wealth by putting new fizz into old Alberta gushers that are going flat with age, says the Alberta Research Council (ARC).
Injections of the greenhouse gas have the potential to add more than one billion barrels to production from 1940s and ’50s discoveries that laid the foundations for the province’s oil fortunes, reports Blaine Hawkins, the ARC’s enhanced recovery technical manager.
He disclosed conclusions of a study done for the Alberta Department of Energy and the Alberta Energy Research Institute to the industry at a recent meeting held by the Petroleum Technology Alliance Canada. A report will be released when the research is summed up in language suitable for politicians and the public. The study used advanced techniques such as computer simulations of possible innovations.
The inquiry covered jumbo oilfields in the Edmonton and central Alberta regions such as Redwater, Judy Creek and Swan Hills. About 90 per cent of 11.5 billion barrels that can be pumped out of the old bonanzas with current methods has been produced, leaving the former mainstays of industry revenues and provincial royalties down to their last 360 million barrels unless new technology is used.
Installations and conversions of pipelines and wells for life-extending injections of carbon dioxide can be done for reasonable costs of $6 to $12 per barrel of additional production, Hawkins disclosed.
But there is a catch, he added. The bright forecast of potential rejuvenation does not include costs of collecting carbon dioxide at emissions sources or laying new pipelines to take the greenhouse gas to the aging oilfields.
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