Oil: what happens when you defer or curtail production?

The aim of this data-file is to tabulate and track technical papers into the impacts of deferring production at oil and gas fields. The impact depends on the reservoir type, but generally we expect shut-ins and deferrals during the 2020 COVID crisis will lower effective production capacity.

The Winners. Generally, super-giant Middle East carbonate reservoirs and recently completed shale wells may fare well after curtailments and deferals, with production rates coming back higher than before the shut-ins.

The Losers. Restoring production may be more challenging at highly mature, heavy and waxy fields, particularly those with high water cuts or in deep water: where shut in, these fields may never recover to previous levels, while ramping back can take several years in some past cases.

Afforesting deserts: energy economics?

We model the economics of afforesting deserts by desalinating and distributing sufficient water for trees to grow. This could increase the global land available for new forest growth by a factor of 5x.

The best case economics are achievable in the Permian, where 10% IRRs are achievable at $30/ton CO2 prices, total costs are 60% lower than current produced water disposal costs, and the CO2 savings could be sufficient to make entire upstream operations to ‘Net Zero’.

Economics are more challenging for desalinating sea-water and distributing it inland. If 50T of water are required by T of CO2 capture in forests, equivalent to adding 100mm of annual rainall, then costs may be passable. But to grow forests in the Sahara would likely require well over 300T of water per T of CO2 and the energy economics become impossible.

The data-file also contains useful workings from our recent research report, Green deserts: a final frontier for forest carbon?

Hydrogen storage: the economics?

This model captures the costs of storing hydrogen, which appear to be much higher than storing natural gas.

We estimate a $2.50/kg storage spread may be needed to earn a 10% IRR on a $500/kg storage facility, while costs could be deflated to $0.5/kg if nearby salt caverns are available and projects are large and efficient. Please download the data-file to stress test the economics.

The model hinges on costs of tanks and compressors, where costs are bounded based on technical papers and online sources. Detailed notes and input data are tabulated in backup tabs behind the model.

Pipelines: the energy economics?

This model captures the energy economics of a pipeline carrying oil or water. Specifically, we have modelled energy requirements using simple fluid mechanics, and modelled costs using past projects and technical papers, which are tabulated in the data-file.

Our conclusions show the requisite costs, energy and CO2 intensities of different pipelines (below).

You can stress test the economics directly in the model, by varying pipeline tariffs, capex costs, energy costs, CO2 prices, maintenance costs, pipeline diameter, pipeline distance, pipeline elevation, pipeline materials, fluid viscosity and compressor efficiencies.

Indutrial utilization rates: manufacturing on renewables?

Renewables will ramp up to 20% of global energy consumption by 2050, on our models for a fully decarbonized energy system. This is a vast achievement. But many commentators ask why renewables’ share is not higher. One reason is that renewables operate at low utilization rates (around 35% of installed capacity) while industrial demand requires higher utilization rates.

This data-file tabulates the utilization rates of different industries over time, based on a variety of data sources. Average US manufacturing utilization rates ran at almost 80% prior to the COVID crisis, to sustain c10% operating margins, with many commoditized industries running above 90%.

Utilization matters. A 5pp reduction in utilization rates (e.g., due to over-reliance on volatile renewables) could cut manufacuting profits by 35%. At 35% utilization, no manufacturing facility with >20% fixed costs is likel to turn a profit. This matters as manufacturing industries comprised $2.4trn of US GDP in 2019 (11% of the total) and c25% of energy consumption.

The Top 30 Private Companies for an Energy Transition

This data-file presents the ‘top 30’ private companies out of several hundred that have crossed our screens since the inception of Thunder Said Energy, looking back across all of our research.

For each company, we have used apples-to-apples criteria to score  economics, technical readiness, technical edge, decarbonization credentials and our own depth of analysis.

The data-file also contains a short, two-line description follows for each company, plus links to our wider research, which will outline each opportunity in detail.

Criticisms of Carbon Offsets and Reforestation?

The aim of this data-file is to tabulate the criticisms of carbon offsetting through nature based solutions such as reforestation.

The full database contains over 100 criticisms, summarized through quotes and paraphrasings, which we have encountered in our communications, in technical papers and in press articles.

We have collated the criticisms into ten main categories, which are ranked by year and summarized in the data-file (chart above).  We argue these challenges can be overcome and remain constructive on carbon offsets using nature based solutions.

Desalination by reverse osmosis: the economics?

35bn tons of desalinated water are produced each year, absorbing 250 TWH of energy, or 0.4% of total global energy consumption.

These numbers have already doubled since 2005 and could rise sharply in the future: water use per capita remains 50-90% lower in the emerging world than in the United States, populations are growing and aquifers depleting.

Hence, this model quantifies the energy economics of desalination via reverse osmosis, which requires 3.6kWh of energy per m3 of desalinated sea-water. A cost of $1.0/m3 is necessary for a passable IRR.

Impacts can be stress-tested from varying energy prices, CO2 prices, capex costs, opex costs and energy efficiency. Our own base case estimates are derived from past projects and technical papers.

Super-capacitors: technology leaders?

This data-file screens for the ‘top twenty’ technology leaders in super-capacitors, by assessing c2,000 Western patents filed since 2013.

Each company’s recent progress is summarized, while the full patent database is provided for further details.

Subsequent tabs in the data-file contain all our notes from technical papers into the topic, examples of SCs electric parameters, examples of their deployment and our economic calculations.

Additive manufacturing: technology leaders?

This data-file tabulates 5,500 patents into additive manufacturing (AM, a.k.a., 3D printing), in order to identify technology leaders.  Patent filings over time show a sharp acceleration, making AM one of the fastest growth areas for the energy transition.

14 companies with concentrated exposure to the theme are profiled, including their size, revenues, share of revenues from AM and 3-6 lines of notes on each company.

The full screen also shows growing AM activity from Cap Goods, aerospace, automotive and oil services companies.

Use of thermoplastic materials is also seen by narrowing in upon 130 patents from leading chemicals companies (e.g., Covestro, Solvay, SABIC, Arkema).

Examples from the patents show how AM can reduce costs by 25-90% and lead times by 10-90%.