From Bureau of Economic Geology, The
University of Texas at Austin (www.beg.utexas.edu).
Illinois State Geological Survey, Centennial Celebration, Champaign, Illinois, February 10, 2006
The Global Energy Future: Think Unconventionally
One can hardly pick up a newspaper or turn on the radio or TV without hearing a story about energy—$60 oil and $12 natural gas; oil “peaking”; storms knock out refineries, rigs, and pipelines; OPEC won't be able to meet global demand for oil; Congress passes “energy bill”—and the list goes on. From this morass of data and information, perhaps a few trends can be pulled that might provide guidelines for the future of energy activity in the United States.
For well over a century there has been a predictable global consumption transition away from coal, to oil, to natural gas and other energy fuels. Within these trends lie several interesting clues to help decipher the energy consumption and, perhaps more importantly, production picture. Coal production is on the rise, although its end-use consumption will be in liquefied and gasified forms. Conventional oil production is—or will soon be—declining, but unconventional oil production—oil shale, heavy oil, tar, coal liquefaction, enhanced oil recovery (EOR)—is variably economic at today's prices so that the economic disaster of “peak oil” may already have been adjusted for in today's oil prices. Na tural gas reserves are significant, but they require global shipping lanes to open up so that natural gas will behave as a global commodity. Unconventional natural gas will be found in many places not associated with oil-coal gas, shale gas, tight gas, hydrates, coal gasification—which down the road will serve to detach natural gas price from oil price. And through it all, energy demand will most likely increase as the world industrializes and population grows, taking advantage, we hope, of conservation and efficiency measures that are known today.
These trends provide the global roadmap that the U.S. producer will use to navigate the next several decades—decades likely to be good ones for the producers of fossil energy.