Fossil Fuels
What are the Issues?
Fossil fuel supplies are, and will continue to be a vital part of the energy portfolio. To develop future supplies, we will need to access known and newly discovered areas, use techniques that recover more resources from the ground, and expand the production of unconventional fossil fuels. Given challenges associated with the geopolitics of accessing areas for development, the timing and levels of necessary investment, the technology needed for unconventional development, the growing pressure for carbon emissions stabilization, and the need for delivery infrastructure, there is a range of projections on how much oil and natural gas the industry will be able to supply in 2030.
What are the Challenges?
In order to increase fossil fuel access, production and processing, we will need to address risks and challenges in terms of technology, economics and the environment. As part of an energy diversification strategy, industries, governments and other stakeholders will need to work together to: advance technology that will produce supplies from unconventional sources, gain secure access to new discoveries, and develop carbon capture and sequestration techniques.
What are the Solutions?
Finding Additional Reserves
There are a number of ways in which the supply of and yields from coal, oil and natural gas can be increased. The first and most obvious is simply finding additional reserves, whether this is in areas of known potential or in those yet-to-be discovered. Coal reserves worldwide are plentiful and are estimated to last approximately 150 years at current consumption levels. Current studies indicate that there are large, in-place volumes of oil and natural gas. There is uncertainty about the level at which the oil resource base will be able to supply growing oil demand – estimates place production of oil in 2030 in the wide range of 80 to 120 million barrels per day.
Although many parts of the world have been explored for fossil fuels deposits, there remain areas that have not been fully evaluated that might contain significant levels of reserves, such as ultra deepwater regions and the arctic. Furthermore, it is probable that technological advances will create the opportunity to allow for recovery in circumstances where this has previously been difficult or impossible. Not all new discoveries can be developed: in some promising areas, there may be political or environmental reasons that preclude access and development.
Enhancing Recovery Rates
Another means to increasing production of fossil fuels is through enhancing the yield of current fields and reserves – getting more out of existing resources. Through enhanced recovery processes, such as the injection of CO2 or steam into oil reservoirs, more fossil fuels can be extracted. Due to advances in technology, the recovery rate in many oil fields has improved; there is room to further boost the amount of oil that is recovered from existing resources with the support of technological advances.
Natural Gas
Because of its high efficiency and relatively low carbon content, natural gas is a very popular option for generating electric power. Natural gas power plants can be built close to cities, which require pipeline infrastructure to natural gas sources and a connection to a city’s power infrastructure. Natural gas is a key fuel source for electricity and heat production as well as for industrial sectors; globally, assuming historic price differentials between oil, gas, and coal, growth in natural gas use is expected to increase the most amongst fossil fuels, with 60% growth projected for 2030.
Unconventional Fossil Fuels
One way to increase fossil fuel supplies as conventional supplies become more expensive and difficult to recover is to increase the development of unconventional fossil fuels such as oil sands, shale gas, and coalbed methane. For instance, in 2005, the IEA estimated that about 2 trillion barrels of recoverable oil sands/bitumen existed, while the 2008 Energy Outlook projects oil sand production to reach 4 million barrels per day by 2030.
Due to the high costs associated with developing these fuel sources, commercial development has been limited until recent years. Sustained increases in oil and gas prices enhance the economic viability of these opportunities. However, there are substantial environmental and social challenges associated with developing many of these resources. Environmentally and socially responsible development of these resources may be one solution for meeting growing demand.
Improving the Carbon Profile of Energy Production: Carbon Capture and Storage
Coal combustion is the single largest source of carbon emissions from energy use. In terms of improving the environmental impacts of fossil fuels and thus increasing the scope for their continued exploitation, a very promising technology for use in coal-fired energy facilities is carbon capture and storage (CCS). There are a number of options for storing carbon dioxide, with injection into natural sinks and geological formations being further along in terms of research, technical feasibility, and practical demonstration than either disposal in oceans or the fixation of CO2 in order to transform it into solid bicarbonate. Underground injection of CO2 is being done today in the oil and gas industry as a way of increasing reservoir yields, and the storage of CO2 in geological formations would be technically similar in some respects. (Learn more about CCS)
Carbon capture and storage is critical to the future development of fossil fuel supplies as it will allow for the sustainable use not only of the world’s most prevalent energy resource (coal), but also for oil and natural gas which produce CO2 during extraction and processing. Currently, there is not a legal and regulatory framework in place to govern carbon storage. The lack of legal certainty is a deterrent to potential investors who may develop large scale CO2 storage projects.