Energy supply-demand in 2050
Congratulations on publishing a superb article by Mssr. Baquis (OGJ, Feb. 17, p. 20). He addresses future energy supply and needs in a cogent and logical fashion with emphasis on uncertainties inherent in any long-range projection from the unpredictable nature of public perceptions and desires and of the pace of technology development itself. Importantly, he sees a sustainable energy future, rather than imminent disaster.
With regard to oil only, his assumed current annual growth rate is 2-3%, in line with IEA and EIA forecasts, but about twice last decade's actual. He projects an oil peak around 2020, and a subsequent average decline of only 1%/ year. These numbers seem more reasonable to me than a Hubbert-type projection.
Baquis' oil rates to 2050 imply future production of about 2,300 billion bbl (assuming 5% annual decline after 2050). This seems in line with his Fig. 3 showing 2,000-3,000 billion bbl. But "ultimate world conventional oil reserves estimates," the Fig. 3 definition, differs from "resources" in Fig. 4, which includes production to date (about 1,500 billion bbl).
Adding 1,500 to Baquis' projection of 2,300, yields "ultimate oil resources" of 3,800 billion bbl, somewhat higher than Fig. 3. Further clarification may be warranted, as definitions for reserves and resources are tricky and often misunderstood.
Arlie M. Skov
Santa Barbara, Calif.
Price gouging
While I agreed with the spirit of your recent editorial (OGJ, Feb. 24, 2003, p. 19), it does not help our cause to mix up basic economic facts. Please don't take offense at the following.
Your magazine said, "... sellers, ... try to sell their product at the highest obtainable prices." Not so, the rational businessman seeks to maximize profit. Sometimes that means raising the price and sometimes that means lowering the price. It depends whether the elasticity of demand is greater or less than one. A freshman economics course thoroughly covers this topic.
The editorial also said, "Only in periods of shortage can prices rise as sharply as they have done recently." A shortage is not possible in a free market. Government intervention in a marketplace is the root cause of most shortages. When external events restrict supply, consumers bid up prices and some consumers choose not to buy at the higher price. The quantity that changes hands is less and the prevailing price is higher. In economic terms, the market clears, which means, no supplier need sit on inventory and no buyer willing to pay the current price need do without the commodity. In a free market, if you don't like the price, don't buy.
Tomás A. Carroll
Chemical Engineer
Borger, Tex.
Hydrogen production
I am an Australian with interests in both the upstream and pipeline side of the oil industry and also alternative energy applications.
Could I suggest that you consider the wide open spaces of states like Nevada, Texas, Arizona, etc. and then think about "solar collectors." These can operate at high temperature and pressure producing steam for power generation and then electrolysis for Hydrogen production.
Think about it!
It would use many aspects adapted from of the oil extraction, production, refining process.
Terry Dart
Hobart, Tasmania, Australia
H2 should evolve
Thank you for a clear statement of the issues and the proper way forward for the commercialization of H2 as a transportation fuel. Your short piece (OGJ Online, Jan. 31, 2003) and (OGJ, Feb. 3, 2003, p. 76) hits all the right points and facts. I have a hard time with the talking heads at 5:30 p.m. (Chicago time) spouting off about H2 being one of the most abundant elements around. They forget to say that in its most abundant forms it has an "O" or 2 "H2"s stuck to it. You have correctly pointed out that getting the H2 loose is not a simple task nor without the expenditure of considerable energy.
The government is prepared to give away some more of our money to the auto companies and fuel cell developers. It is not the best use of the money; just look at the money spent on coal, SNG, and raising the CAFE. These companies love the money but, when the money drys up (after a few billion or so), these researchers suddenly have completed their research and the projects are put on the shelf for the next go around.
Hydrogen will come around when it makes sense and competes on its own.
Jim Barry
La Grange, Ill.
