World Oil & Gas Consumption

AL FATEH UNIVERSITY FAULTY OF ENGINEERING PETROLEUM ENGINEERING DEPARTMENT

Prepared By HAMED ABD AL SALAM

SULAYMAN AL BARUNI

Supervised By Dr.RAHUMA.M.KHULUD SPRING 2009

Contents  Introduction.  History of global oil & gas Consumption.  Oil & gas Consumption by Region.  Current main gas & oil Consumer.  Consumption of Libya.  Predating future oil & gas Consumption.  The Factors & Problems that Cause Increase in Consumption in the Coming Decades.  What about Libya?  The Solutions to the Delay in Increasing in Consumption.

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Introduction

E

nergy is one of the most fundamental parts of our universe. We use energy to do work. Energy lights our cities, Energy powers our trains, planes, Energy warms our homes, cooks

our food, Energy powers machinery in factories, Energy from the sun gives us light during the day. It helps plants grow, everything we do is connected to energy in one form or another. Energy comes in different forms heat (thermal), light (radiant), Mechanical, electrical, chemical, and nuclear energy. Energy is measured in a couple of different ways. One of the basic measuring blocks is called a Btu (Btu- the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit) and Btu is a British thermal unit is usually used to describe the energy content of fuels. There are two types of energy (potential) energy and (kinetic) energy.

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Source of Energy WIND GEOTHERMAL

RENEWABLE

HYDROPOWER BIOMASS

SOURCE OF ENERGY

SOLAR PETROLEUM

NONRENEWABLE

NATURAL GAS COAL

NUCLEAR

1)Renewable Energy Wind Energy Wind is simple air in motion , Through the use of wind turbines mounted on a tower at 100 feet, wind power is captured and converted into useful form, such as electricity. This technology or wind turbine can be used as stand-alone applications for water pumping or communications. It can be also connected to the power grid or combined with solar energy systems. A plant with numerous wind turbines is required for large scale demands of energy.

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Geothermal Energy Geothermal energy is energy generated from heat stored in the earth, or the collection of absorbed heat derived from underground. like Volcanic energy cannot be harnessed (controlled and collected), but in a few places heat from the earth,

Hydropower Energy The energy from moving water ,hydropower energy of the renewable energy sources that generate electricity, hydropower is the most often used. Mechanical energy is derived by directing, harnessing, or channeling moving water. The amount of available energy in moving water is determined by its flow or fall, Swiftly flowing water in a big river, like the Columbia River along the border between Oregon and Washington, carries a great deal of energy in its flow. or water descending rapidly from a very high point, like Niagara Falls in New York. Biomass Energy Biomass is organic material made from plants and animals, Biomass contains stored energy from the sun. Plants absorb the sun's energy in a process called photosynthesis, Biomass is a renewable energy source because we can always grow more trees and crops, and waste will always exist. Some

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examples of biomass fuels are wood, crops, manure, and some garbage.

Solar Energy The sun has produced energy for billions of years. Solar energy is the solar radiation that reaches the earth ,Solar energy can be converted directly or indirectly into other forms of energy, such as heat and electricity . The sun is the main source for most renewable energy forms. Solar Energy incorporated the use of photovoltaic (solar cell) technologies. It can be used directly as heating and cooling system, as lighting device, as electricity generator or in a variety of other industrial purposes.

2)Nonrenewable Energy Petroleum Energy Oil was formed from the remains of animals and plants that lived millions of years ago in a marine (water) environment before the dinosaurs. Over the years, the remains were covered by layers of mud. Heat and pressure from these layers helped the remains turn into what we today call crude oil .

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The word "petroleum" means "rock oil" or "oil from the Earth and it’s Nonrenewable energy , Today petroleum is the most important Energy in the World.

Natural Gas Energy Millions of years ago, the remains of plants and animals decayed and built up in thick layers. This decayed matter from plants and animals is called organic material -- it was once alive. Over time, the mud and soil changed to rock, covered the organic material and trapped it beneath the rock. Pressure and heat changed some of this organic material into coal, some into oil (petroleum), and some into natural gas . Natural gas is Nonrenewable energy & it's the second source of energy in the world.

Coal Energy Coal is a combustible black or brownish-black sedimentary rock composed mostly of carbon and hydrocarbons. It is the most abundant fossil fuel produced in the United States. Coal is a nonrenewable energy source because it takes millions of years to create ,Coal is one of the largest worldwide sources of carbon dioxide emissions. Gross carbon dioxide emissions from coal usage are slightly more than those from SULAYMAN & HAMED

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petroleum and about double the amount from natural gas. Coal is extracted from the ground by mining, either underground or in open pits.

Nuclear Energy Nuclear energy is energy in the nucleus (core) of an atom. Atoms are tiny particles that make up every object in the universe. There is enormous energy in the bonds that hold atoms together. It can be released from atoms in two ways: nuclear fusion and nuclear fission. In nuclear fusion, energy is released when atoms are combined or fused together to form a larger atom. This is how the sun produces energy. In nuclear fission, atoms are split apart to form smaller atoms, releasing energy. Nuclear power plants use nuclear fission to produce electricity. OIL

GAS

COAL

RENEWABLE

NUCLEAR

50

Energy Use %

40 30 20 10 0 1980

1990

2003

2010

2020

2030

Years

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Consumption

T

he use of goods and services, materials and energy, by humans. other using up of goods and services having an exchangeable value , Consumption is described as utilizing a service or product until its economic value is exhausted. It can also be described as aggregate expenditure on personal consumption that manifests itself on buying of goods and services Expense required is sourced from either savings income or even from borrowed funds. Consumption denotes that portion of disposable income that is not saved by an individual.

Oil & Gas Consumption Oil and Natural gas are the most important source for energy in the world. Petroleum constitutes 39% of global energy consumption whereas gas constituents 23% of energy consumption and the cause is its widespread availability and its ease of transportation and cheapness as it is a raw material for other industries. Oil and Gas are not consumed in its original in their format but are in fact are converted into substances at refineries.

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Oil and Gas are consumed as follows 1. Residential & Commercial

I. II. III.

Lighting Heating & Cooling Electricity

2. Industry

I.

Petroleum refining

II.

Steel manufacturing

III.

Aluminum manufacturing

IV.

Paper manufacturing

V. VI.

Chemical manufacturing Cement manufacturing

3. Transportation

I. II.

Commercial transportations

III.

Trucks

IV.

Trains

V. VI.

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The automobiles

Airplanes Mass transit

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History of Global Oil & Gas Consumption

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The most important events that affected on the average global consumption is The Petroleum Crisis )1973-1975( During the October 1973 war the Arab Oil Producing countries placed an embargo on oil supply to America and most of the European countries and some other countries such as South Africa and Rhodesia. This embargo caused a shortage of oil and gas globally which led these countries to follow policies to reduce consumption and close factories and limit individual consumption of petroleum which led to a decline in the average global consumption of oil and gas by 1.5% and this continued until the year 1975. The Iraqi - Iranian War )1980-1988( The First Gulf War was between the armed forces of Iraq and Iran and lasted from September 1980 until August of 1988 and this war was one of the longest traditional wars of the twentieth century. In the year 1981 the oil tankers war began which was targeting the oil tankers and other ships of the two countries. The goal was to cut off supplies to the two fighting armies and it was only the ships owned by the two countries but was extended to supporting countries such as Kuwait and Saudi Arabia. In spite of an effort by the gulf countries to increase production, the

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prices of Petroleum began to rise which led to a negative result in consumption causing a decline. The World Economic recession of (1980 -1986) The World Economic recession which led to a decline in demand for petroleum from 64.3 million barrels a day (1979) to 58 million barrels a day in the year 1983 with an average decline of 3.6% a year and the cause was the success of energy “guidance” implemented by the industrial powers after the crisis of 1983 and also the undertaking by these countries of operating its nuclear power stations which led to an acute decline of consumption of oil and gas. The world recession 2008 until the present The big recession since the beginning of 2008 and the collapse of the banks with a loss of 3 trillion US dollars this resulted from the real estate problems and the effort by governments to refinance the banks to cure the problem. As a result of the global problem the decline in demand of energy and this by an effort of all vital sectors to reduce its spending and also the closing of many factories in the world which led to a noticeable decline in oil and gas consumption and the decline of consumption effected prices of petroleum reducing the price to 40$ a barrel after it had reached its highest level of US$ 147

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Oil Consumption By Region

REGIONS

RESERVE

PRODUCTION

CONSUMPTION

B BBL

MBBL/DAY

MBBL/DAY

Total North America

69

14670

25024

Total S. & Cent. America

111

7121

5493

Total Europe & Eurasia

143

19147

20100

Total Middle East

755

27029

6203

Total Africa

117

11077

3955

Total Asia Pacific

41

8489

25944

TOTAL WORLD

1237

87533

86716

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W

e notice a decline in the consumption of Petroleum in Africa which is caused by the rise in the level of poverty and also to the great number of political and ethnic conflicts inside the continent and this is also true in South America because of its dependence on energy sources instead of petroleum the most important being coal. South America is the continent that uses coal the most. Only North America, Europe and Eurasia we note a large increase in the use of Petroleum if it is compared to the population and this was caused because of the higher standard of living of the population and prosperity of the nations economically and industrially and also non guidance of consumption as is the situation in the nations in south Asia. In these countries despite the presence of guidance in the consumption of energy and because of the increase in the number of the population so that more than two thirds of the planet population inhabit south Asia and the rapid economic growth of these countries has made it the region which consumes more petroleum than any area in the world.

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Gas Consumption By Region

REGIONS

RESERVE

PRODUCTION

T FT

B FT /DAY

B FT3/DAY

Total North America Total S. & Cent. America Total Europe & Eurasia Total Middle East Total Africa Total Asia Pacific TOTAL WORLD

281.6 272.8 2097.8 2585.3 514.9 510.6 6263.3

76.4 14.8 106.0 35.0 18.7 38.5 289.7

77.5 13.0 116.3 29.0 8.1 43.3 287.2

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3

3

CONSUMPTION

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T

he world today consumes 287 billion cubic feet of gas that is less than the consumption of petroleum in the world. This is caused because the export value of gas is less than Petroleum and for that reason the producer countries often burn off the surplus gas or re-injecting it into the reservoir to increase the production of Petroleum. Also we note its difficulty of transportation and storage and its need for special equipment.

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Current Oil & Gas Consumers The United States is the biggest consumer of Oil and Gas in the world such that it consumes more than 25% of global consumption of petroleum and 23% of global consumption of Gas. The United others 45% States and China and Japan and India and Russia and Iran are the biggest users of energy in the world and these countries utilize more than 58% of Global Energy. Germany 3%

USA 26%

China 10% Japan India 8% 5% Russia 3%

The following table clarifies the most important consumer of petroleum and until the end of 2008 . CONTRARY USA China Japan India Russian Federation Germany South Korea Canada Brazil Saudi Arabia Others Total world

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M BBL/DAY 22546 8671 6937 4336 2601 2598 2371 2303 2192 2188 29968 86716

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The following table clarifies the most important consumers of gas and until the end of 2008. Country USA Russian Federation Iran Canada United Kingdom Japan Germany Italy Saudi Arabia China other Total world

B FT3/Day 66 45.9 11.1 9.3 9.2 9 8 7.5 7.4 6.5 107.3 287.2

USA 23%

other 48%

Russia 16%

UK 3% Japan 3%

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Iran 4% Canada 3%

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Consumption of Libya ibya’s consumption of petroleum is 313 M BBL of oil Per day which makes 51st globally and 7th in the Arab nation from the standpoint of consumption. It is a large number in comparison with the population of Libya which is estimated at six million. That is 20.1 barrels per capita per year ,This makes Libya the biggest consumer of Petroleum per capita in Africa.

L

As far as its consumption of Natural gas it amounts to 1.4 billion cubic feet of natural gas per day which makes it 118 th in the world and 8th in the Arab Nation. The consumption of gas in Libya is still little compared with consumption of oil. This all goes back basically to the fact that Libya has not began the production of gas as a basic source of energy and it still depends on petroleum essentially which is the opposite to the rest of the Arab Nation and Europe. This is because the low export prices of natural gas and the high level of poverty in the Arab nation. This makes gas a cheap source of energy compared to Petroleum.

A Table showing the consumption of Oil and Gas in Libya until 2008 LIBYA PRODUCTION CONSUMPTION EXPORT

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OIL

GAS

M BBL/DAY

B FT3/DAY

1747.73 313.14 1434.6

2.7 1.4 1.3

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Predicting of Oil & Gas Consumption The global consumption of Petroleum will increase 5% during the first quarter of the 21st century until it reaches 1.2 billion barrels per day by the beginning gin the year 2025 and the global consumption of natural gas will increase by 57% compared to the present which will lead a big deficit in the quantities available and the continued rise in the prices thinks to what energy companies will fail to meet the increasing demand. Oil Consumption M Bbl/Day

92000 91000 90000 89000 88000 87000 86000

OIL CONSUMPTION

85000 2008 2011 2014 2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 Years

Gas Consumption B CuFt/Day

1800 1600 1400 1200 1000 800 600 400 200

GAS CONSUMPTION

0 2008 2011 2014 2017 2020 2023 2026 2029 2032 2035 2038 2041 2044

Years

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The Factors that Cause Increase in Consumption in the Coming Decades

1Increase in Global Population The planet population increased from 2.5 billion in 1950 till it reached 6.8 billion for the year 2008 and this was accompanied by the migration of most of the planets population to the cities and an increase in world trade and an increase in individual income and an increase in the individual’s consumption of energy. The planet population will each more than 7 billion by the year 2012 and it will reached 9 billion by the year 2050 which will mean an increase in Energy consumption.

2Rapid Economic Growth in the developing nations The rapid economic growth of the developing nations especially India China and Brazil amounts to an important factor increasing the consumption of oil and gas. The consumption of petroleum in the developing nations will increase by 96% by the year 2025 while the consumption of natural gas by 13% and the consumption of Petroleum will increase by 156% in China and India by 152% and the cause of that because of the effort at nationalization of energy resources very rapidly and because if the social and economic progress and it should be remembered by 2015 China will have the largest economy in the world. Its consumption will be greater than the United States of America.

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While India will become the second largest consumer of oil and gas in 2025.

3Wars and Political Crises Wars and Political Crises do not last for a long time so their effect on consumption will not last for weeks or months. Since the Iraq Iranian war in the year 1980 which lasted for8 years until the year 1988. The world has not held a war which effected consumption. If the United States launches a war on Iran, this war will have a great effect on Global consumption of oil and gas as opposed to all previous wars. This is caused because Iran can close the Hormuz strait which are the only passage way that carries gulf crude and to a reduction to Iran production of oil and Gas. Iran is China’s most important supplies which is the works second largest consumer. Thus we note that China reduced to vote in the Security Council whenever America a tries to impose any punishment on Iran.

4The Economic Crises The Economic Crises and global downturns have an effect of the consumption of energy and the cause being the psychological state of the consumer, when the consume feels that there is an economic problem or rising price it will reduce consumption by a great deal because of the reduction by all vital sectors of its expenses and the closing of a great deal of factories throughout the world all of which will lead to a noticeable reduction in oil and gas. The economic crises SULAYMAN & HAMED

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will quickly affect the levels of consumption generally. This was clear in the economic crisis of the late eighties s in the last century. The world went through a period of economic downturn. Also the financial problem though which the world is going through which we have already dealt with earlier in the report.

5Natural Catastrophes The climatic situation in the world and the change that has taken place has contributed to the increase in the consumption of oil and gas. The Katrina tornado an others and earthquakes and natural disasters have are all possible causes at any time which may lead to an increase in the average consumption of petroleum globally, so that with the end of the spring season and the beginning of the summers season activities tropical storms to threaten offshore petroleum rigs in the gulf of Mexico and on the eastern seacoast of the United States Atlantic Ocean which may have an effect on the prices of Oil and Petroleum and thereby its consumption.

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The Problems that Face the World when Consumption Increases in the Future

T

he latest discoveries of petroleum that are large were in the sixties in the North Sea and on the Alaska slope and West Siberia and since then there has been a decline in the new petroleum discoveries. But more important that was larger in the end of the sixties. At the end of the sixties 500 new oil fields were discovered and in the seventies more than 700 new fields were discovered. In the eighties the number equaled 856 new fields and in the nineties 510 new oil fields During the present decade however only 165 new fields were discovered all smaller than previous discoveries, After both Indonesia and Britain changed from producer countries to consumer the reserves of the producer countries will decline, if production continues such as Norway after 9 years and Mexico after 10 years and Brazil after 15years.

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F

rom another standpoint the planetary storage of energy and the new discoveries cannot be expected to meet the increasing global demand for petroleum.

If a state such as Saudi Arabia is capable of increasing daily production from 1 to 12 or 15 million barrels per day then the other producers of Petroleum such as Iran, Iraq, Kuwait, Nigeria, Russia, and Venezuela are expected to maintain with difficulty on their present production. This will mean a shortage in supply and an increase in prices. For this reason most of the great countries are depending more on natural gas that is being used to a larger decree in a large number of industries because its reserve has not been exploited yet and it discoveries continue to increase.

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What about Libya? Libya produces approximately 1.7 million barrels of oil par day during this year after it was decided that production will increase to 2 million barrels a day however because of the international crisis and the decision of OPEC to reduce production the Libyan plan to increase production of 3 million barrels a day by the year 2012 has been postponed.

But as far as gas then Libya will increase production of gas from 2.7 billion cubic feet to more than 3.8 billion cubic feet with the start of the year 2014 and 2015 such that Libya becomes a major gas producer.

In the framework’s of Libya plan to increase its production capacity in Oil and Gas So that Libya began a new policy of contracting through the tender sessions such that it offered areas are candidates for oil and gas production in all the rich sedimentary basins of Libya in four sessions in which international oil companies competed from all the continents. As a result of this sessions there emerged new discoveries of oil and gas finds.

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The following table clarifies the most important of these discoveries: DATE OF DISCOVERY 29/4/2008 5/5/2008

VERENEX ENERGY RWA

PLACE OF DISCOVERY Ghadames Basin Sirte Basin

TYPE OF DISCOVERY Oil & Gas Oil

7/10/2008 15/12/2008 23/12/2008

SIRTE ARABIAN GULF AMERADA HESS

Sirte Basin Murzuq Basin Marine Zone

Oil & Gas Oil Oil

15/1/2009 09/4/2009 13/4/2009

WOODSIDE ENERGY REPSOL SONATRACH

Ghadames Basin Territorial Waters Ghadames Basin

Oil & Gas Oil Oil & Gas

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DISCOVERING COMPANY

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E

xperts agree that Libya even if its oil reserve it will still be difficult for it increase its oil production beyond the limit of 3 to 3.5 million barrels a day, The following figure shows the increase in consumption even while production falls.

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The Solutions to the Delay in Increasing in Consumption

1New Petroleum discoveries In spite in the decline in new discoveries there may be stores of petroleum is still possible for example on the Libyan side. There is still 35% of the Libyan Land not explored and there are still non explored areas on the continent of Africa; because of the instability of some African countries caused by Political and ethnic conflicts. A Map showing unexplored countries in the Africa

2Guided Use of Energy The problems of energy can be delayed by guiding its use, and that by decreasing the annual increase in oil and gas production but this means a decline in rapid economic growth in the world which is rejected by the advance and industrialized economies.

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3The Transfer to the Gas The world today is transferring to the gas because the gas is cleaner source for energy and also because of the great unexplored reserves until now and gas will become the most important source of energy in the year 2045. Large New gas reserves were found in Libya in the year 2006 by the Arabian Gulf Oil Company. Also Iran has modernized and developed its gas fields and Qatar built the largest gas liquefaction plant in the world.

4Using Alternative Energy There are a large number of sources of energy in the world which need development some of them renewable energy sources such as Oil and gas which are non renewable. Libya must move to other sources of energy example solar Energy.

5 Development of Fields The development of the oil fields is the most important solution with an increase in the global reserves such that most of the planet soil is unconventional and needs special techniques of enhanced recovery. And to use these methods the price of the barrel of oil must reach to 120 to 145 USD so that extraction is economic.

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Unconventional oil Tar sands, also referred to as oil sands or bituminous sands, are a combination of clay, sand, water, and bitumen. Oil which will not flow toward producing wells under normal conditions, making it difficult and expensive to produce. Tar sands deposits are found in over 70 countries throughout the world, but three quarters of the world's reserves are in two countries, Venezuela and Canada. While all conventional reserves-proven, unproven, and already pumped-amount at upper estimates to 1.2 trillion barrels, it's thought that another 3.5 trillion barrels can be extracted from unconventional sources.

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Appendix DECIMAL SYSTEM

NUMBER OF ZEROS 3 6 9 12

DECIMAL thousand million billion trillion

SYMBOL M MM B T

UNITS

UNITS Reserve Production Consumption

OIL BBL BBL/Day BBL/Day

GAS FT3 FT3/Day FT3/Day

DEFINITIONS Asia-Pacific

APAC is the area generally regarded as encompassing littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). Eurasia

Eurasia is the continents Europe and Asia combined. so for example, Russia is in both Asia and Europe so you could just say it’s in Eurasia. Extra-Heavy oil Natural bitumen

Also known as "oil sands," bitumen shares the attributes of heavy oil but is even more dense and viscous. Natural bitumen has a viscosity greater than 10,000 cP.

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Reference  BP Statistical Review of World Energy/June 2008.  World Oil and Gas Review 2005/PAOLO SCARONI/ENI  Technical paper intermediate energy info book.  World oil consumption per capita/GOOGLE EARTH.  Key Economic & Monetary Indicators/NOC  Is world oil production about to peak?/Randy Udall/Steve Andrews  World Political Affecting on oil price/DR.A.A.URAET/ Petroleum Seminar/AL FATEH UNIVERSITY/ 2007  World Oil Reserves And Production/M. BELKHIER / E. ARARA- Petroleum Seminar/AL FATEH UNIVERSITY/2008 WEB SITES

www.noclibya.com.ly

www.nationmaster.com

www.theoildrum.com

www.guardian.co.uk/

www.iecenergy.com

www.eia.doe.gov

www.bp.com

news.bbc.co.uk

planb.org/resources/beyondoil

www.hart-isee.com

www.energyandcapital.com

mwhodges.home.att.net

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