The new millennium is characterized by major global changes, some already in motion and others that will be required to adjust to them. Energy supply is the centerpiece of major changes in motion.
Offshore crude oil output now accounts for almost one-third of the world’s production. In fact offshore is the only growing segment of the industry. It is without doubt the new oil & gas frontier.
Over the last 15 years through 2008, US consumption of natural gas has been essentially flat, oscillating around 60-63 bcfd, while production has slowly increased from 53-59 bcfd. The future outlook, however, indicates demand is expected to climb as much as 50% by 2020, mainly due to a policy switch-over to natural gas for electricity power generation and for NGVs.
Global crude oil production has remained flat from the 1980s to the present. What has happened?
The outlook for the US is a strong growing dependence on natural gas. Electricity generation is now fueled by 18 bcfd of natural gas, a usage that could double by 2020. Ultimate reserves have doubled to 2 quadrillion cubic feet in the last 25 years, thanks to tax incentives to stimulate the development of unconventionals. However, we are well past the half-life of the reserves so increases in demand will progressively have to come from overseas sources via LNG carriers which now account for one-fifth of net gas imports of 10 bcfd.
Natural gas is the world’s fastest growing fossil energy source contributing almost 50 million barrels a day of equivalent oil. The issue is, can natural gas reserves meet this growing demand?
Rafael Sandrea, Ph.D. graduated cum laude in petroleum engineering from the University of Tulsa and received his Ph.D. from Penn State University. He headed the petroleum engineering department at the Universidad de Oriente in Venezuela and later was the Ford Foundation Professor in the Graduate School of petroleum engineering at the Universidad Nacional of Mexico.
Today Dr. Sandrea is President of IPC Petroleum Consultants, Inc.
For more of Dr Rafael Sandrea’s work on global oil and gas resources see: “An In-Depth View of Future World Oil & Gas Supply - A Quantitative Model” which is available online through PennEnergy.
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