|
With Global Oil Output Closing Near Peaking Stage Fear Of
continuity Of Supply Is
Real
CRUDE
oil supplies are limited that much is agreed upon. Energy demand
induding that of petroleum is also set to rise. Developing countries
like India and China are expcted to account for the bulk of fresh
demand. However going by recent trends, the supply of crude oil
doesn’t seem to be keeping pace with the demand. According to some
estimates, we have already reached or are close to the stage of
‘peaking oil’ after which the global oil production will
stagnate and then decline. This, together with the continuing high
in oil price has renewed the search for alternative to petroleum. As
of now, unconventional oil reserves like the Canadian oil sands and
bio-fuels like ethanol are in the limelight. While these sources
will satisfy a big chunk of the incremental demand for energy, they
will still be a fraction of the conventional oil production.
Reserves
of non-conventional oil are estimated to be far larger than crude
oil reserves about 6 trillion barrels three times the reserves of
conventional oil. The largest of the known heavy oil reserves are in
Venezuela and Canada. Bio-fuels like ethanol have been successful in
countries like Brazil, but they will have a limited impact in
replacing fossil fuels because of the large tracts of agricultural
land required for their production. For India right now, ethanol
seems to be the best bet.
Amongst
the renewable energy sources, the biggest success story is ethanol,
which can replace petrol. Barzil has been running a large scale
ethanol program for several years and over half of the cars in the
country are of flex fuel variety meaning they can run either on
ethanol or an ethanol-gasoline mix. The 2004 ethanol production was
almost 4 billion gallons about 94 million barrels. That’s little
more than the world’s current crude oil production. Other large
producers of ethanol include US, China and India. Ethanol holds most
promise for India given the large scale sugar cane cultivation,
India’s ethanol figures are modest compared to Brazil 460 million
gallons or 11 millions barrels. This is about 5 days of India’s
petroleum requirements. Sugar companies like Bajaj Hindusthan,
Balrampur Chini Mills and Triveni Engineering account for most of
ethanol production in India. At the current level of sugarcane
production ethanol production could be twice that figure. Ethanol
produced in India as a by-product of the sugar industry. If
sugarcane is used only for ethanol production, then at the current
levels, about 3.5 tons of ethanol can be produced for every hectare
of sugarcane cultivated. Industry sources say that either sugarcane
price needs to be lower or ethanol price needs to be higher than the
current Rs. 18.75/liter for that to be attractive.
Non-conventional
oil refers to oil reserves that are extracted using methods other
than the traditional oil wells. The best-known example is the
tarsands in the Canadian state of Alberta. The size of these
reserves is estimated at 174 billion barrels about 15% of the known
oil reserves. Oil sands are deposits of bitumen, viscous oil which doesn't
flow unless heated of diluted with lighter with
hydrocarbons. Moreover, bitumen forms only about 10-15% of the sand
the rest of it is, well, mostly sand. Processing two tons of sands
yields a barrel of oil. Oil extraction from the sands is a costly
process and cost can be high as $15/bbl. Oil prices must be high for
these reserves to be viable, but given the strength of oil prices,
that doesn’t seem to be an issue any more. The current production
from these reserves is dose to 1 million barrels/day of oil. The
production from oil sands may reach 4 million bpd by 2015. However,
even at that level, the production will be less than half of the
current oil production of Saudi Arabia.
Venezuela,
a member of the oil exporter's cartel OPEC, also has large reserves
of heavy/non-conventional oil. Venezuela has large reserves of
conventional oil about 77 billion barrels. The reserves of
unconventional oil can be as large as 270 billion barrels. Other
reserves of non-conventional oil include shale oil, which is organic
matter that wasn't fully converted to crude oil trapped in rock.
US has the largest reserves of shale oil. However, shale oil is even
more difficult to extract.
Courtsy
– Amit Bhandari (The Economic Times – 21 April 2006)
|
