New Oil & Gas Technologies Just Beginning to Pick Up Steam

Remarkably – and almost abruptly – it now appears that the enormous challenge of satisfying a doubling in world energy demand by 2050 will probably be met. But it won’t be through renewable energy sources like solar and wind, although the role of these renewables will indeed rise. The lion’s share of the new energy production will come instead from shale oil and shale gas, deepwater drilling, oil sands and other unconventional sources of fossil fuel.

The geopolitical impacts will be huge. Canada and the United States, Europe, India, China, Australia, and many countries in South America and Africa — few of them accustomed to energy wealth — stand to benefit tremendously.

...new technologies are providing the world and its individual countries with greater flexibility in meeting their energy needs – and significantly reducing environmental impacts.

Consider, for example, so-called GTL (gas to liquid) and CTL (coal to liquid) technologies. For a long time we have known it is possible to convert coal or natural gas to a liquid fuel that we can drop into the engines of today’s diesel-fueled automobiles. With GTL or CTL technology, we can also capture impurities like sulfur, nitrogen oxides, mercury, and soot in the production process – thereby creating a cleaner-burning fuel.

Not only have we known this, but in South Africa, Sasol Ltd. has actually been doing it – for more than 60 years. Now, at last, that technology is spreading. Sasol opened a joint venture GTL plant in Qatar in 2007, and is now planning or studying the construction of similar plants in Uzbekistan, Canada and Louisiana. And Shell began shipping product from its giant new Pearl GTL plant in Qatar just this past summer.

Meanwhile, China is planning a huge move – a $140 billion investment over five years – into a similar technology, in which coal is converted not into liquid fuels but into ammonia, methanol, and other chemical staples ordinarily derived from petroleum or natural gas. A few similar plants already exist in the United States, where more are under consideration.

Both of these new kinds of investments – GTL and coal-conversion plants – offer myriad potential benefits. The world’s passenger car fleet is expected to nearly double by 2035 to 1.7 billion; GTL and CTL could fill a substantial percentage of those tanks. Coal-to-chemicals can provide not only China but also other coal-rich countries like India and the United States with an abundant, cheap alternative source for chemicals essential to a wide range of industries. _Forbes

Mainstream analysts are just beginning to discover the massive potential of gas to liquids, coal to liquids, kerogens to liquids, biomass to liquids, and bitumens to liquids. Unfortunately, few of them have made the connection between high quality nuclear reactor process heat and abundant unconventional fuels, chemicals, fertilisers, and materials. But give them time.

Here is more on some of the underlying technologies which made the modern unconventional oil & gas avalanche possible:

Darcy’s Law, as applied to an oil well, says that the proprietor can do three things to improve the flow of his hydrocarbon treasure: (1) increase the pressure difference between the oil at the bottom of the hole relative to the surface; (2) enlarge the contact area between the sides of the well bore and the oil-bearing rock; or (3) open up the pores in the rock to channel more oil into the well (otherwise known as increasing the ‘permeability’).

...Hydraulic fracturing, or ‘fracking’ in the parlance, is now being applied to horizontal wells with greater and greater precision. Tools, techniques and digital sensing equipment provide modern day ‘shooters’ with an ability to increase the permeability of deep rocks with remarkable control and accuracy. Mating fracking with horizontal drilling and pressure-enhancing production equipment means that the industry has entered an era when human intervention can alter and optimize all three variables inscribed in Darcy’s Law. In short, tinkering one more time with a 150-year old mathematical equation is fracturing our long-held assumptions of how much crude oil and natural gas is exploitable through innovation.

Hydraulic fracturing is truly an ‘earth-shattering’ advance that has already shown its disruptive potential in North American natural gas supply and is showing similar patterns of change on the oil side too (see for example, Calgary Herald Blog Post, February 6th, 2012). If past tinkering with Darcy’s Law is any indication of future potential, the oil and gas industry is once again on a path to renewal for several decades to come. _CalgaryHerald

Darcy's law was just the beginning, in the growing comprehension of how to relieve the planet of its massive burden of hydrocarbon reserves.

The addition of virtually unlimited high quality process heat from modular gas-cooled nuclear reactors -- located at the hydrocarbon recovery site itself -- will tip the balance toward abundant unconventional fuels.

Here is an extra credit question for you: When human technology is capable of producing far more high quality unconventional hydrocarbons at prices that rival modern production of conventional hydrocarbons, what will become of Russia, Iran, Saudi Arabia, and the other kleptocratic oil dictatorships, and their politically mandated inflation of oil prices?