By an OGJ correspondent
RIO DE JANEIRO, Sept. 4 -- The use of fossil fuels will likely phase out before those reserves are fully depleted, suggested a top official of Royal Dutch/Shell Group at the World Petroleum Congress in Rio de Janeiro today.
"Will the carbon age (oil and gas) terminate before depletion of reserves? It was not lack of stones that ended the Stone Age," posited Michiel J. Groeneveld, head of Shell International Exploration & Production BV's Novel Technologies, Exploratory Research unit in the Netherlands.
He described the key drivers of the future energy industry by analyzing a spectrum of strategies, mapping out various scenarios for fossil fuels, hydrogen, and renewables.
Cost considerations
From a research perspective, according to Groeneveld, prospects for more "sustainable" production of energy must consider a comparison of relative costs.
First, fossil fuels are proving to be far more abundant than previously believed, and their production costs continue to come down. At the same time, the costs of renewable energy—while still too high—are falling even more rapidly.
But Groeneveld notes two other cost considerations in the competition between fossil fuels and renewables: the cost of energy infrastructure, especially as the shift to distributed energy infrastructure favors gas pipelines; and the costs associated with emissions of greenhouse gases from fossil fuels.
The Shell researcher estimated that global reserves of conventional oil will last another 25-40 years, while gas reserves won't be depleted for another 25-50 years. But that excludes remaining coal resources as well as unconventional hydrocarbons such as oil shale and gas hydrates that could see increased use with technological advances.
"In principle, there is no constraint on how much hydrocarbons we have. The constraint is much more in how to use the hydrocarbons efficiently and in a cleaner way," he said.
"In general you see an increase in energy utilization with economic growth, but growth also depends on the country's energy efficiency. For example, the US has about half the efficiency of the European Union and Japan."
Greenhouse gas concerns
Groeneveld forecasts that "in time, we will develop less of a hydrocarbon(-based) economy to more hydrogen and more sustainable energy, including solar and wind, but there is still a long road to go."
For now, ultraclean, sulfur-free fuels are a must and the elimination or sequestration of carbon dioxed emissions—as the principal component of greenhouse gases implicated in postulated catastrophic climate change—is a new challenge for the oil industry, he noted, although the knowledge and technology are already available.
According to Groeneveld, the Shell group of companies shares the widespread concern that emissions of greenhouse gases from human activities is leading to changes in the global climate. They believe that action is required now to lay the foundation for eventually stabilizing greenhouse gas levels in the atmosphere in an equitable and an economically responsible way, he said.
Groeneveld sees the transition to a cleaner and less carbon-intensive energy system as one of the most critical issues facing society.
He described Shell competitor ExxonMobil Corp. as a "bit more cautious," on the issue in holding to a stance that proposes that the nature and causes of climate changes are still debated. But as climate change poses serious long-term risks, uncertainty is no reason for inaction, he said.
Groeneveld sees all companies addressing these issues and gave as example a zero-emission, gas-fired power plant Shell is building with Siemens AG and Westinghouse Corp. in Norway, which incorporates subsurface injection of CO2 emissions.
Hydrogen a bridge fuel?
Groeneveld sees hydrogen as a bridge fuel from fossil fuels to sustainable energy (renewables), because it is an ultraclean fuel, produces no CO2 emissions during combustion, is made from renewable energy sources as well as from fossil fuels, and is easier to store and to distribute than electricity. "The fuel cell converts hydrogen with very high efficiencies, up to 70%," he noted.
However, there is still much research taking place on how to store hydrogen more efficiently. "Without an infrastructure, it is impossible for cars to run on hydrogen. The only way forward is to run cars on classic fuels such as gasoline," he said.
Renewables outlook
During the last decade, Groeneveld pointed out that renewables constituted a small but growing share of primary energy with the consumption mix changing as follows:
-- Coal use decreased.
-- Oil and gas use climbed by 2%.
-- Hydro and nuclear power consumption rose by 3%.
-- Renewables consumption increased overall by 8%, with individual category increases broken out as wind 25%, solar photovoltaic (PV) 20%, biomass 15%, and geothermal and solar thermal 5% each.
Groeneveld forecast continued strong growth for renewables, pegging 2000-10 growth rates of 28% for solar PV, 26% wind, biomass 10%, solar thermal 7%, geothermal 8%, and biofuels 4%.
"Most people don't like biomass because it uses a lot of land, but I see biomass and biofuels as the most promising renewables when new value chains are established. For example, the use of residues from agriculture and forestry can be combined with fiber and food production waste."
These waste products can also result in chemical products, diesel components, and gasoline components, he said, adding, "Another value chain potential can be formed by solid fuels that generate electricity and hydrogen."
Groeneveld concluded, "It was not a lack of brains that ended the Stone Age, either. We did not stop using stones. We developed better alternatives, like bronze and iron, and so we need to develop renewables further and hydrogen as the bridge fuel, together with (continued use of) fossil fuels and CO2 sequestration to meet growing energy demand."
