Hello, we're in Energy 101, I'm Dr. Sam Shelton at Georgia Tech and this is
the, looking at, section that looks at energy sources.
We saw that the energy that we use in society comes from various sources.
we talk about coal where 20% of energy comes from, we talk about natural gas
that supplies 26% of our energy, and today we're going to talk about oil which
supplies 36% of energy. It's the biggest single source for the
energy that we use in our society, and We'll see that that's linked to
transportation. Nuclear provides 9% as the nuclear power
plants that produce electricity. Biomass is, there's ethanol as well as,
Bio-mass waste from things like pulp in paper mills, that burn it to help supply
the steam and electricity to them. hydro-power, the dams that we generate
electricity from is about 3%. Wind is about 1.2 %.
Geothermal's a quater percant and solar is about a tenth of percent, so that's
where all the energy comes from. Just a quick review and today we're going
to talk about the biggest one, oil, 36%. So where does the oil go? What sectors
consume That oil. Well, as I already mentioned,
transportation is the dominant one. manufacturing uses 23% of it and that we
don't generally burn the oil in manufacturing to make things that we want
to buy. We are generally using the molecule, for
instance to making plastics and making chemicals.
So manufacturing is the number 2 [UNKNOWN]utilizer of oil.
Residential is about 3% and that's, that's essentially space heating in the
northeast. Where, they, have no natural gas
pipelines down the street, and they have to use oil or maybe propane and, they,
it's cost them significantly more money than natural gas.
Would, if they had natural gas pipeline down the street, but they have no
alternative to get natural gas in that area.
And electric heat pumps are a problem because they don't have a duct system
with air conditioning. That's the whole technical detail here,
as we'll get into later. Commercial sector buildings, 1.6 percent.
And then electricity is a half a percent. Don't miss that electricity.
The electricity is an important point. And that only half a percent of oil is
used by electricity. So that will have an important
implication here as we go through that we'll see.
Oil was first, not first, but basically the massive discovery of oil was in the
spindle top area in Texas in 1901. We actually started using oil with advent
of the invention of the internal combustion engine in the automobile in
the mid to late. 1800s, but, we didn't really start,
drilling and getting oil from beneath the ground in deep wells until 1901, and
there's a, a, a shot taken in 1901, of that well down in Spinnelcock, Texas.
Just like the other hydrocarbons; coal, natural gas, you burn it, we don't need
to dwell on this. You notice the chemical formula's a
little bit more complex. You don't need to learn this or memorize
it or anything. But it's a little different in that it's
got an unknown called n. C, oil is generally designated by C and
H2n plus 2. n can be 1, 2, 3, 4.
n is an integer. Depending on the length of the molecule
and the heaviness of the oil. So just you can reacted with oxygen but
you need two n oxygen molecules to react with the carbon and hydrogen that comes
with oil and it goes to nco2. Molecules and n + 1 water molecules.
So again, oxygen is reacted with carbon and, and hydrogen, to produce CO2 and
water, in the same way that natural gas and coal is.
So of course coal has no hydrogen. But, in the process, it, it reduces heat,
and the reason for that, is that chemical energy In the molecules on the right hand
side of that equation, the CO2, and H20 is less than the chemical energy in the
hydro-carbon molecule and the oxygen. So we're decreasing the checmical energy
content and converting it into what we call thermal energy or heat, and that's
what combustion is all about. That conversion process, from, from
chemical to Heat. Oil consumption.
So how much do we use? And what's the trend.
Well here it shows it from the 1900s. Then when the spindle top was first
drilled and came in. And oil.
And Texas, by the way, has been the largest producer of oil in any state in
the union ever since. And still today by a significant margin.
But it increased, and it dramatically increased in the 60s and 70s.
You notice it topped out in the late 70s. You might think back on why that might
have been the case. There were two reasons.
Number one, number one we had the embargo, oil embargo, and so that scared
the heck out of everybody, and everybody that could quickly get off oil and
convert to something else, and use something else did so, just for stability
and reliability. But the other reason is, is electric
power, you noticed that only half of a percent of oil is used for electric
power, that was a much higher percentage in 1970, much higher percentage.
so we burned a lot of oil in power plants to produce electricity in the early
1970's building up. But then oil became so expensive, when
oil increased from about Two dollars a barrel to approximately ten dollars a
barrel in the 70s. That's a five fold increase.
That's higher than probably you, if you stop and think about it that, that you've
ever seen. Five fold increase so it was a dramatic
impact on our country and anybody that could get off oil got off oil.
It was the first implementation of, of, car mileage standards, by E, E.P.A., the
government, and to force, higher fuel efficiency, which, has been continually
going up. It, it was stable for About 20 or 30
years, from 80, 1980 to 2010, essentially.
but, now it's, it's scheduled to go up to around 50 miles per gallon, from the 28
or 30 or so, in year 2025. So There are lots of reasons why the oil
consumption declined, and then it started increasing again once we got off the easy
oil to get off of: electric power plants and other uses that made the cost of oil
too expensive with the dramatic increase for reliability reasons.
You see it's been flat since 2007-2008. That obviously has everything to do with
the recession. Again, we saw earlier that when the
economy drops, the gross domestic, gross domestic product and a recession comes,
then you have a decrease in energy consumption and oil is one of those The
other thing is that you can get hit. So, and now we're starting to move up
again as the recession, we're coming out of the recession as you can see from 2009
or so. That data is through 2011, by the way.
So, that, that's our consumption side. So, where is that oil coming from.
We've got to get it from somewhere. Where's the oil coming from? Well, here's
showing what we're, our production, US oil production, and this has got some
interesting aspects to it. We could spend a long time on this,
slide. But, let's just look at the, the major
features. Again, this comes from, it starts at year
1900. And we're talking about millions of
barrels per day, by the way, on the vertical scale, as we did on the previous
slide. we see that's millions of barrels per day
on the vertical scale. 2, 4, 6, 8, 10, 12, 14, 16 million
barrels per day. And here, same way.
So, from 1900 to 2011, also. So, this is our US oil production.
The yellow area is our lower 48, 48 state oil production.
And the purple is our Alaska production. You notice that the Alaska production
came in a a little bit in the mid 70s and really boomed with the North Slope
Discovery in the 80s. And development off that, that built the
Alaska pipeline, get that oil down to the US and, and it's maxed out in mid 80's to
late 80's and has been declining, as every oil field does.
When you drill a well the production declines at about 4% per year so.
Your maximum production is going to be the first year that it's in production,
and then it's capability to produce oil or extract oil declines every year.
So you have to keep running in order to stand still, because we have to find
enough new oil coming out of new wells that we drill in order to make up for the
declining production in the existing wells.
The major feature that you might find surprising here.
Is that oil production in this country peaked in 1970, peaked in 1970.
what was the price of oil in 1970? It was $2 a barrel, $2 a barrel in 1970 oil
production peaked and we have never reached that peak again.
In the mid 80's we came closest to it but Because of the north slope Alaskan oil
production coming down the Alaska pipeline.
But it, it declined then up until about 2008 when it started climbing again and
that's been pri, primarily North Dakota. And this is all U.S.
produced oil. So we have had an increase, as we've had
some in the past. It's not a nice smooth curve.
It's continued to decline since 1970. But we're seeing a bump up at this point.
So where's the rest coming from? Because that does not meet our consumption.
The red area shows the difference between our production and our consumption.
The red area is obviously then our imports.
That is the oil that we're importing. We're currently importing about 60% of
our crude oil. 60%.
You hear lots of different numbers, but in crude oil, we're, we're importing
about 60% of our oil. Give or take a few percent.
this is data right out of the EIA, as I've noted there.
that's the Energy Information Agency, part of DOE, and it was formed in the
late 70s to keep up with oil and energy facts in general.
And there's a good, reliable sources for energy data.
So that red area has generally been increasing but it's hard to tell on the
scale about what the trend has been. But let's, so let's look at the next
slide that shows just the oil imports. You notice again, the oil imports peaked
in the late 70's. just about the time we had the oil
embargo, and the sharp price increase. to about, oil worth, we were importing
about 6 million barrels per day. And then, with the price quadrupling.
And then, and, The availability With, with the
interruption of the supply from the Middle East, it dropped the imports down
to close to 3 million barrels a day, so it cut it in half.
But that is as I already mentioned, that was because we started using less oil,
but we didn't and, and we primarily took care of the drop in the use by decreasing
the imports which would be naturally the case.
And it's, it's been climbing since. it declined again in 2007.
primarily again with the drop in recession, because our demand went down
and our increased production. So that's, that's our trend on oil
imports from 1900 to 2011. So where is the oil going? Again the oil
is going to 72% of it is going to transportation, 23% to manufacturing 2,
3% for residential, but then the key number is a half a percent for
electricity. So the conclusions from all of this is
the US is dependent of, on, on imported oil.
You just can't get away from it. When you're importing 60% of your oil
that you used, you are dependent on imported oil and all the implications for
that. but the other thing that way if you look
back against the information that we. Talked about in coal and gas.
We essentially if supply and produce all of the coal that we use and all of the
gas that we use, the only exception is the gas, natural gas in which we get 15%
of the gas or 14% of our gas from Canada. So we are essentially energy independent
on coal and gas but we are not energy independent on oil.
So there's a big distinction. All energy is not created equal.
You can't just go around throwing a piece, chunk of coal in your gas tank in
you car and drive your car on a chunk of coal.
And running on natural gas has lots of problems and issues and costs and
economics also. So what, what that means is coal and gas
is the electric power fuel resource. and, again, reinforces the fact that we
do not get any of our electricity from oil or any significant, amount, that
being about 0.5% or for some unique reasons that, probably is not going to
change any time soon. So that's the, where our oil is coming
from and how we're using it and we'll talk about pricing, energy pricing next
time. Talking about why it is that Europe pays
8 or $9 a gallon for. For gasoline, and we only pay, only, pay
$3.50 to $4. What's the pricing issue here, and how is
the price of oil determined for us and other countries in the world? Thank you.