Energy

Geopolitics

Michael J.
Economides

Petroleum Production Engineering • PROF. M. J. ECONOMIDES

©2008

The Continuous Energy Crisis

of the 21st Century
9Oil almost $150, then far below $100…
headlines rule … “crisis”
9OPEC has little excess capacity “behind
the valve”, Venezuela, Nigeria, Iraq
9IEA (Nov. 2008) 9.1% decline in oil production
9China has gone berserk
9Saudi Arabia world regulator
9$60 to $200 in 12 to 18 months
Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Energy Geopolitics • PROF. M. J. ECONOMIDES

GOM Headlines Rule …No Peak Oil

1977 Alaska
8.4 Billion Barrels

2007 GOM
22-45 Billion Barrels

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 Saudi Arabian “Twilight”

Energy Geopolitics • PROF. M. J. ECONOMIDES

The Color Of Oil

NOW IN 5 LANGUAGES
Spanish
Russian

Korean
Chinese

Available at Amazon.com or from Round Oak Publishing Company (1) 281-395-4783.

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 Energy Geopolitics • PROF. M. J. ECONOMIDES

Energy Consumption per Dollar of GDP

Source: DOE/EIA, 2008, Skov, 2000, DOC/BEA 2001,

National Academy of Engineering, 1990

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Oil & Gas Remain as Primary Energy Sources
Total Energy Other Energy Wind & Solar
MBDOE MBDOE MBDOE

400 60 3.0
Growth Rate Growth Rate
1980-2003, % 2003-2030, % Wind & Solar
350
1.6 1.7 50 2.5
300 1.4
40 2.0
250
Other 1.7 Biomass,
200 30 MSW 1.5 Wind
1.5 1.2
2.7 Coal 11.1
150 2.2
1.5 20 1.0
Gas
100
2.2
5.9 Nuclear 0.8 0.5
10
50
1.0 Oil 1.5
2.2 Hydro 2.1 Solar 9.5
0 0 0.0
80 90 00 10 20 30 80 90 00 10 20 30 80 90 00 10 20 30

US Energy Consumption
140.00
Other
120.00 Hydroelectric
Heating and
Nuclear 3.4
100.00 Electric Power 2.8
Quadrillion BT

Coal
Natural Gas
80.00 8.1
Oil Transportation
Oil Products 23
60.00
23
40.00

20.00 27

13
0.00
1950 1960 1970 1980 1990 2000 2010 2020

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 National Transportation
Energy Perspective
140 Other
Conventional Hydroelectric Power
120 Nuclear Power
Coal
100
Quadrillion BTU

Natural Gas
Imported Oil
80 Oil Transportation
Oil Products
60

40
Imported Oil
20
Biofuels
0
1950 1960 1970 1980 1990 2000 2010 2020
Energy Geopolitics • PROF. M. J. ECONOMIDES

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 The New Energy Economy
Carbon
content: Increasingly:
• Wood (1800s) High • Clean
• Coal • Energy intensive
Medium
• Oil
• Technologically
• Natural Gas Low sophisticated
• Hydrogen • Distributed
(Zero)
(envisioned)

````````

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Golfing for Hydrogen

Bovine Brain Power > Mad Car Disease?

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The Ethanol Scam

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 There are no alternatives
to hydrocarbon energy
sources in the
foreseeable future

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Gwyneth Paltrow

r gy
e
En ert
E x p

Energy Geopolitics • PROF. M. J. ECONOMIDES

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 TIME, AUGUST 26, 2002

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 What Climate Change?
• Three points:
– Highly politicized…. What to do about
it? Can anything be done? At what
cost?
– Confusion (at times deliberate) between
“global warming” and man-made effects
– Preposterous: “science all in”. My offer:
$10,000 for ONE peer-reviewed paper
showing causality between CO2 and
increased temperature. None exists

Energy Geopolitics • PROF. M. J. ECONOMIDES

Energy Geopolitics • PROF. M. J. ECONOMIDES

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Energy Geopolitics • PROF. M. J. ECONOMIDES

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Energy Geopolitics • PROF. M. J. ECONOMIDES

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Petroleum Production Engineering • PROF. M. J. ECONOMIDES

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Group Income Statement
For the year ended 31 December 2005

$ million

2007 2006 2005

Total revenues 284,000 266,000 254,000

Energy Geopolitics • PROF. M. J. ECONOMIDES

Energy Geopolitics • PROF. M. J. ECONOMIDES

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Energy Geopolitics • PROF. M. J. ECONOMIDES

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Price of Oil and ExxonMobil Stock

Energy
Geopolitics
The Axis of Energy Militants

•Iran
•Venezuela
•Russia under Putin

•The quagmire that is Iraq

•China

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Energy Geopolitics • PROF. M. J. ECONOMIDES

Energy Geopolitics • PROF. M. J. ECONOMIDES

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Energy Geopolitics • PROF. M. J. ECONOMIDES

Russia under Putin

•Bright spot in oil is gone

•Re-Sovietization
•Corruption
•Total control of press
•Investment climate has
cooled down
•Production is bound
to decline

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 Energy Geopolitics • PROF. M. J. ECONOMIDES

Gazprom’s New Imperium

Energy Geopolitics • PROF. M. J. ECONOMIDES

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Energy Geopolitics • PROF. M. J. ECONOMIDES

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Energy Geopolitics • PROF. M. J. ECONOMIDES

Energy Geopolitics • PROF. M. J. ECONOMIDES

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Transparency International CPI, 2007
RANK SCORE

1 Denmark Finland New Zealand 9.4

4 Singapore Sweden 9.3

6 Iceland 9.2
. . .
. . .
. . .

20 United States 7.2

…and the Energy Militants

RANK SCORE

131 Iran 2.5

143 Indonesia Russia 2.3

147 Nigeria 2.2

162 Venezuela 2.0

179 Myanmar Somalia 1.4

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 Georgia War

Energy Geopolitics • PROF. M. J. ECONOMIDES

Can
Ch ina
Keep the Lights On?

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Will China
Break Through?

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 China Oil Consumption
• In the last decade China’s oil
consumption increased by 3.5
million barrels per day, the largest
in the world by far.

• If China were to use the same per

capita consumption, as the US, it
would require 80 million barrels
per day (more than the entire
world use.)

Energy Geopolitics • PROF. M. J. ECONOMIDES

China and Russia

• Energy will be China’s choke point
• Has become recently very assertive,
if not belligerent.
– Sudan, Nigeria
– Canada
– Venezuela

• China’s energy future passes

through Russia….
Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Russia and China

Energy Geopolitics • PROF. M. J. ECONOMIDES

Russia, China and Japan

Energy Geopolitics • PROF. M. J. ECONOMIDES

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 Another view of oil prices

Energy Geopolitics • PROF. M. J. ECONOMIDES

www.energytribune.com
Energy Geopolitics • PROF. M. J. ECONOMIDES

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