ESP Optimisation Opportunities?

This data-file calculates the financial and carbon costs of running electric submersible pumps (ESPs) at oilfields, as a function of half-a-dozen input variables. This matters with ESPs fitted on 15-20% of the world’s c1M oil wells.

Opportunities to optimise: CO2 intensities can be lowered 25% by switching diesel-powered ESPs to natural gas, and theoretically by 100% by switching to renewables. Associated kg/boe and cost savings are tabulated in the data-file.

Leading Majors and new technology companies are also pioneering means to improve ESP efficiency. We tabulate our top examples in the data-file. Initiatives from Aramco and Equinor screen as most impressive.

Global Flaring Intensity by Country

This data-file tabulates global flaring intensity in 16 countries of interest: in absolute terms (bcm per year), per barrel of oil production (mcf/bbl) and as a contribution to CO2 emissions (kg/boe).

Flaring intensity has reduced by c20% in the past quarter-century, from 0.25mcf/bbl and 12.5kg of CO2/bbl in the early 1990s to 0.2mcf/bbl and 10kg/bbl today. However, total flaring nevertheless increased by c13% in absolute terms, accounting for 350MTpa of global CO2 emissions. This is 1/6th of total oil industry CO2.

Industry leaders, with the lowest flaring include Saudi Arabia and the US. Laggards include West Africa, North Africa, Iran/Iraq and Venezuela (which has shown the worst deterioration in the database, since the late 1990s).

LNG’s positive role in reducing flaring stands out from the data. LNG exports were 94% correlated with Nigeria’s flaring reduction since NLNG started up in 1999. Angola has also reduced flaring by 80% since 1998, with Angola LNG “starting up” in 2013. Finally, Equatorial Guinea now has 80% lower flaring than its neighbor, Gabon, since starting up EGLNG in 2007.

Breakdown of global CO2 emissions

This data-file breaks down global CO2 emissions into 35 distinct categories, based on prior publications, our own models and calculations.

The long tail illustrates the complexity of decarbonisation. The largest single component of global emissions is passenger vehicles, but this comprises just c14% of the total CO2e.

A further 30 line-items all account for at least 1% of the world’s total emissions including electricity, heating, cement, metals, plastics, food, fertilizers, paper, manufacturing, livestock, agriculture, military, oil refining, fossil fuel production and landfill.

 

Investing for an Energy Transition

What is the best way for investors to drive decarbonisation? We argue a new ‘venturing’ model is needed, to incubate better technologies. CO2 budgets can also be stretched furthest by re-allocating to gas, lower-carbon oil and lower-carbon industry. But divestment is a grave mistake.

Production profiles: renewables vs oil and gas?

Wind, solar, oil and gas are all capable of supplying comparable energy at comparable prices: 5c/kWh wind and solar is economically competitive with c$50 oil and $6/mcf gas, over a 30-year project-cycle.

But production profiles matter. Oil and gas assets generate 2-3x more energy than renewables in early years; and 50-80% less energy in later years. So dollars invested in oil and gas go 2-3x further in the short-run. To meet the same initial demand from renewables, one must currently spend 2-3x more.

Further renewables deflation of c50-70% is required before the world can truly “re-allocate” capital from fossil fuels to renewables without causing near-term shortages. In the mean time, it is necessary to attract adequate capital for both resource types.

This short data-file underpins the chart and considerations discussed above.

Biofuel technologies: an overview?

This data-file provides an overview of the 2.6Mbpd global biofuels industry, across its seven main components: corn ethanol, sugarcane ethanol, vegetable oils, palm oil, waste oils (renewable diesel), cellulosic biomass and algal biofuels.

For each biofuel technology, we describe the production process, advantages and drawbacks; plus we quantify  the market size, typical costs, CO2 intensities and yields per acre.

While biofuels can be lower carbon than fossil fuels, they are not zero-carbon, hence continued progress is needed to improve both their economics and their process-efficiencies.

Distribution Costs: Ships, Trucks, Trains and Delivery Vans?

This data-file breaks down the financial and carbon costs associated with a typical US consumer’s purchasing habits. It covers container-ships, trucks, rail freight, cars and last-mile delivery vans; based on the ton-miles associated with each vehicle and its fuel economy.

We estimate the distribution chain for the typical US consumer costs 1.5bbls of fuel, 600kg of CO2 and $1,000 per annum.

The costs will increase 20-40% in the next decade, as the share of online retail doubles to c20%. New technologies are needed in last-mile delivery.

Please download the model to for a full breakdown of the data, and its sensitivity to oil prices, consumption patterns, international trade and exciting new delivery technologies.

At the cutting edge of EOR?

This data-file summarises 120 patents into Enhanced Oil Recovery, filed by the leading Oil Majors in 2018. Based on the data, we identify the “top five companies” and what they are doing at the cutting edge of EOR.

We find clear leaders for water-flooding both carbonate and sandstone reservoirs. At mature fields, we think these operators may be able to derive >10pp higher recovery factors; and by extension, lower decline rates, higher cash flows and higher margins.

As more of the world’s oilfields age, having an “edge” in EOR technology will make particular Oil Majors more desirable operators and partners, to avoid the higher costs and CO2 intensities of developing new fields to replace them.

 

2050 oil markets: opportunities in peak demand?

Seven technology themes can save 45Mbpd of long-term oil demand. They make the difference between 2050 oil consumption surpassing 130Mbpd and our own forecasts: for a plateau in the 2020s, then a gradual descent to 87Mbpd in 2050. This is still an enormous market, equivalent to 1,000 bbls of oil consumed per second. Opportunities abound in the transition: to deliver our seven themes, improve mobility, switch oil to gas, reconfigure refineries and ensure that the world’s remaining oil needs are supplied as cleanly and efficiently as possible.

Long-Run Oil Demand Model

This Excel model calculates long-run oil demand to 2050, end-use by end-use, year-by-year, region-by-region; across the US, the OECD and the non-OECD. Underlying workings are shown in seven subsequent tabs.

The model runs off 25 input variables, such as GDP growth, electric vehicle penetration and oil-to-gas switching. You can flex these input assumptions, in order to run your own scenarios.

Our scenario foresees a plateau at c103Mbpd in the 2020s, followed by a gradual decline to below 90Mbpd in 2050. This reflects 7 major technology themes, which we assess in depth, in our recent deep-dive report.

Without delivering these technology themes, demand would most likely keep growing to 130Mbpd by 2050, due to global population growth and greater economic development in the emerging world.