The Shock of Energy Transition

By Fouad Saad

We now are witnessing the dawn of an energy era where natural gas and renewable sources are fast substituting for crude oil, once dubbed Black Gold. From now on Black Gold is only as precious as coal. This paradigm shift is sure to relegate some countries that rely mostly on the sale of primary fossil fuels to abject poverty, while knowledge based economies grope their way to prosperity. The shock of this energy transition threatens to have devastating repercussions on the Middle East and Africa.

• Language: English
• Publisher: Partridge Publishing Singapore
• Release date: Apr 6, 2016
• ISBN: 9781482864953

Fouad Saad

Fouad holds a Bachelor of Science degree in Industrial Technology from Tennessee Technological University, USA and a Master Degree in Engineering Management from The University of Technology, Sydney, in Australia. Fouad has spent the last twenty four years working for major petrochemical companies in the Gulf Cooperation Council countries with an added exposure to the Australian and Far Eastern petrochemical industrial sectors. Fouad is a frequent guest lecturer on the subject of responsible exploitation of oil and gas derivatives at several academic institutions throughout the Middle East.

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Copyright © 2016 by Fouad Saad.

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CONTENTS

Introduction

1 –   Defining Energy

1.1 Energy Efficiency:

1.2 Crude Oil:

1.2.1 Conventional Oil Reserves:

1.2.2 Heavy and Extra Heavy Oil:

1.2.3 Unconventional Oil Reserves:

1.2.4 Oil Sands Bitumen:

1.2.5 Shale Oil:

1.3 Coal:

1.3.1 Peat:

1.3.2 The Nature of Peatlands and Peat:

1.3.3 Uses of Peat:

1.3.4 Peat from a Climate Impact Point of View:

1.3.5 Lignite:

1.3.6 Uses of Lignite:

1.3.7 Formation of Lignite:

1.3.8 Sub-Bituminous Coal:

1.3.9 Properties of Sub-Bituminous coal:

1.3.10 Bituminous Coal:

1.3.11 Uses of Bituminous Coal:

1.3.12 Steam Coal:

1.3.13 Anthracite (Coal):

1.3.14 Anthracite Usage Presently:

1.3.15 Graphite (Coal):

1.3.16 Carbon Capture and Storage (CCS):

1.3.17 Limitations of CCS for Power Stations:

1.4.3 Shale Gas:

1.4.4 Hydrates:

1.5.3 Fusion Power in Nuclear Energy:

1.6 Hydro-Electric Power:

1.6.1 Streams and Rivers:

1.6.2 Marine Currents:

1.6.3 Waves:

1.6.4 Tides:

1.6.5 Osmotic Energy:

1.7 Biomass Energy:

1.8 Wind Energy:

1.9 Solar Power:

1.9.1 Solar Thermic Power (STP):

1.9.2 Photovoltaic Solar Power (PV):

1.9.3 Concentrated Thermodynamic Solar Power (CTSP):

1.10 Geothermal Energy:

1.10.1 Geothermal Economics:

2 –   Global Energy Mix: Present And Future Projections (2035)

2.1 The Somersault Factor of Energy Cost:

2.2 Energetic Feedstock Substitution in Major Economic Poles:

A. USA:

a. Biomass Power in the USA:

b. Hydroelectric Power in the USA:

c. Wind Power in the USA:

d. Solar Power in the USA:

e. Geothermal Power in the USA:

B. CHINA:

a. Wind Power in China:

b. Solar Power in China:

c. Biomass and Fuel Power in China:

d. Geothermal Power in China:

C. UNITED KINGDOM:

a. Wind Power in The United Kingdom:

b. Ocean Power in The United Kingdom:

c. Biofuels Power in The United Kingdom:

d. Solar Power in The United Kingdom:

e. Hydroelectric Power in The United Kingdom:

f. Geothermal Power in The United Kingdom:

g. Microgeneration And Community Energy Systems:

D. GERMANY:

a. Wind Power in Germany:

b. Biomass Power in Germany:

c. Solar Power in Germany:

d. Hydroelectric Power in Germany:

e. Geothermal Power in Germany:

E. FRANCE:

a. Biofuel Power in France:

b. Geothermal Power in France:

c. Hydroelectric Power in France:

d Solar Power in France:

e. Renewable Energies in The Overseas Territories of France:

F. JAPAN:

a. Solar Power in Japan:

b. Wind Power in Japan:

c. Hydroelectric Power in Japan:

d. Geothermal Power in Japan:

e. Biofuels Power in Japan:

f. Ocean Power in Japan:

G. BRAZIL:

a. Hydroelectric Power in Brazil:

i. The Itaipu Dam:

b. Solar Power in Brazil:

c. Wind Power in Brazil:

d. Ethanol Fuel in Brazil:

i. The Ethanol Crisis in Brazil in 2010:

e. Hydrogen Power in Brazil:

f. Biomass Energy in Brazil:

3 –   Tomorrow’s Car Today

i. The Electric Vehicle:

1. Plug-in electric vehicle:

2. Battery Electric Vehicle (BEV):

a. Who Tried to Abort The Electric Car?

1. Topics Addressed

2. The Suspects:

a. U.S. consumers:

b. Batteries:

c. Oil Companies:

d. Original Equipment Manufacturers (OEM):

e. U.S. Government:

f. California Air Resources Board (CARB):

g. Hydrogen Fuel Cell:

h. General Motor’s Alibi

b. The Electric Car is a Computer:

c. Benefits and Drawbacks of the Electric Car:

ii. The Compressed Natural Gas Vehicle:

a. Canada:

b. Mexico:

1. Europe:

a. Germany:

b. Ireland:

c. Italy:

2. China:

iii. The Flexible Fuel Vehicle:

a. FFV’s around the World:

1. Brazil:

iv. The Hydrogen Vehicle:

a. Skepticism over The Hydrogen Vehicle:

a. The TELP Factors:

1. Technology:

a. Crude Oil:

b. Natural Gas:

2. Economy:

a. USA:

b. China:

c. Germany:

d. United Kingdom:

e. France:

3. Legislation:

4. Politics:

a. Crude Oil:

b. Natural Gas:

i. Natural Gas Pipelines Dominated by Russia:

1. Nord Stream:

2. South Stream:

3. Altai:

ii. Natural Gas Pipelines Dominated by Western Powers:

1. TAPI (Trans-Afghanistan Pipeline):

2. Trans-Caspian Pipeline:

3. White Stream Pipeline:

iii. Rivaling Natural Gas Pipelines:

1. The Iran-Iraq-Syria Gas Pipeline:

2. The Qatar Turkey Gas Pipeline:

iv. Extent of European Dependence on Russian Natural Gas:

4 –   Prosperity Through Energy in The Middle East And Africa (MEA)

i. Energy in MEA Countries:

ii. The Incongruence of Feedstock to Power in The MEA:

iii. The Obvious Alternative Energy Sources in The MEA:

iv. Renewable versus Nuclear Power in The MEA:

a. The Case of The UAE:

b. The inspiring case of El Hierro Island:

5 –   Emancipation Through Education in The MEA

i. The Contrast Between The Energy Protection Conservation Act (EPCA) And OPEC’s Founding Charter:

ii. The Cure to The Dutch Disease:

a. Rebuilding Education:

1. Basic Manufacturing in Petrochemicals

a. Steam Cracking:

b. Catalytic Cracking:

4. Gas To Liquids Technology (GTL):

5. Polymer Science And Engineering:

6. Conversion Processes in Plastic Industries:

a. Extrusion Process:

b. Injection Molding:

c. Blow Molding:

d. Thermo-Plastics:

e. Thermosetting Plastics:

7. Software in Integrated Supply Chain Management:

b. Targeting Investments:

1. Micro-Generation in The Renewable Sector:

a. Micro-Hydro-Electric Power:

2. Investments in Infrastructure:

a. Road, Sewage, Power, Municipal Maintenance, Health, Education:

b. Revamping Existing Crude Oil Refineries & Building New Refineries:

c. Natural Gas Exploitation:

d. The Building And Expansions of Petrochemical Plants:

e. Dedicated Industrial Areas:

c. Fighting Corruption:

I wish to dedicate this book to my lovely niece Rita without whom none of my books would have been possible, and to my brother Jean who makes everything worth achieving within reach.

Fouad A.Saad, December 24th, 2015

INTRODUCTION

Energy in our lives:

Today citizens in advanced countries live longer and in better conditions than ever before thanks in part to the cumulative results of scientific research that has been honed to extract energy from the world around us, and use it wisely.

What is energy and where can it be found and at what cost? How much of it is renewable? What is the impact of energy usage on the air we breathe and what choices do we have to keep improving our living standards without jeopardizing our survival?

Over the next few pages we shall attempt to answer these questions and shed light on the changing global energetic landscape and the opportunities for economic renewal this represents for advanced countries and the near lethal threats it spells for countries whose economy is almost entirely dependent on selling fossil fuels.

We must realize that the implications of a paradigm shift in energy has geopolitical implications that might see a number of countries regress into abject poverty while others survive and prosper, the factor of salvation being whether or not their economy is diversified and knowledge based.

The Middle East and Africa is amongst the richest on earth a region in energetic resources –oil, gas, minerals, forests, water and others, including renewable primary energy sources- yet few if any countries in it have succeeded –or even tried- to address the issue of long term clean and affordable energy. While demography gallops, some states in the Middle East and Africa that have remained almost entirely dependent on the sales revenues of crude oil and gas, have their means to maintain their societies well educated and prepared to join the workforce, eroded. Where impoverished masses multiply self-destructive ideologies thrive and can be exploited to serve the schemes of powerful countries with less than benevolent intentions.

The world is at the dawn of a new era in energy that will rely considerably less on crude oil and coal, and significantly more on natural gas and renewable sources of energy. Coal remained the primary source of energy from the inception of the industrial revolution in 1750 till the commercialization of the car with an internal combustion engine (ICE), running on a petroleum derivative (gasoline), at the beginning of the twentieth century. The domination of coal as a source of energy lasted around 170 years, before petroleum started to gain ground. From the time cars were first mass produced in 1920 till the adoption of hydraulic fracturing in 2008, crude oil constituted roughly 35% to 40% of the global energetic feedstock, and nearly half to two thirds of the crude oil barrel has been used to fuel transportation.

Today, due to leaps in technology and environmental legislation, petroleum is about to cede its preponderant role as a source of energy which it has held for nearly a century to natural gas, hydraulic power, photovoltaic cell and other renewable sources of energy. To be sure fossil fuels will remain useful and needed because their derivatives serve to make indispensable products to our modern life, but the selling price of crude oil per metric ton, could very well keep going down to be comparable to the selling price of coal. This single factor is likely to cause a social and economic chasm in a good number of countries whose treasuries are mostly filled by the sales revenues of one product only: crude oil.

My ultimate goal in this book is to blaze trails for prosperity opportunities for our societies in a sustainable and responsible manner that brings together generations of educated youth with entrepreneurial initiatives to a burgeoning job market. Education is a social elevator and a guarantor of wellbeing in a world of technological upheavals with potentially devastating effects on several countries and industries, but nowhere more so than in an already beleaguered Middle East.

1

Defining Energy

Primary energy is an energy form found in nature that has not been subjected to any conversion or transformation process. It is energy contained in raw fuels, and other forms of energy received as input to a system. Primary energy can be non-renewable or renewable. The supply and use of energy have powerful economic, social and environmental impacts.

It is possible to distinguish ten forms of energy (including Energy Efficiency as a source of energy by itself, and which we will include first because we consider it the most within reach of implementation by ordinary citizens):

1.1 Energy Efficiency:

A sense of initiative and civility combined with intelligence and ingenuity constitutes in itself a valuable source of energy through the responsible design of buildings and sensible use of utilities. Energy efficiency is achieved when we are mindful and aware of plentiful and gratis renewable sources naturally bestowed upon us: sunshine and wind, to name only those renewables from which we can benefit almost effortlessly, through the informed placement of transparent skylights and windows. A vast panoply of plastic products optimally strong yet lighter than steel or even aluminum, pleasanter to the eye, optionally transparent, cheaper to transport and safer to handle are now available for architects to market to their clients. Evolving technology has placed more efficient compact fluorescent bulbs (LED, light emitting diodes) on the shelves for informed consumers to choose over other options. Such light bulbs have a longevity of service ten times longer that of oval shaped predecessors, and provide a more intense light and consume less energy than incandescent older bulbs. Benefits derived from Energy Efficiency are financial as well as environmental as they reduce the harmful imprint of social activities on the air we breathe. The International Energy Agency predicts that Energy Efficiency, which is purely an attitude in approaching human activity could save as much as one third what we pay globally in bills for electricity and transportation. Energy Efficiency couple with the continued increase in the use of renewables is already contributing to the increase in disposable income and amelioration of lifestyles of populations.

It is a sign of civility and intellectual nobility to continuously make a thriftier and more intelligent use of our resources to power our lives. Energy Efficiency means increasing our awareness and empowerment to use more constructively the resources within reach and improving in many cases the balance of payment of all fossil fuel importing countries.

1.2 Crude Oil:

Crude oil is formed when large quantities of dead organisms, usually zooplankton (plankton are organisms drifting in oceans, seas, and bodies of fresh water) and algae, are buried underneath sedimentary rock and subjected to intense heat and pressure in an anaerobic environment, shielded from oxygen. The process to transform dead organisms into oil takes literally hundreds of millions of years.

Oil plays an important role in the global energy balance, accounting for around 35% of energy consumption in 2015. This proportion has changed very little in the last quarter century (the figure was 37% in 1990), despite the fact that the total amount of energy consumed worldwide has increased by more than 50% over the same period. This trend has been driven primarily in the last decade by emerging countries.

The concept of Peak Oil has been proven wrong by technology which made it possible to extract energy (oil and, separately natural gas) from rocks (including shale) and other unconventional sources. According to World Energy Council (WEC) current global oil reserves are at 1,650 billion barrels or 1.65 trillion or giga represented by G barrels (giga is 10⁹) Gb (BP Statistical Review). Despite high levels of daily consumption that have been growing by 32 % since 1991 - from 66 Mbd (million barrels per day) in 1991 to 92 Mbd in 2015 - reserves have increased by over 60% over the same period, representing a gain of 620 Gb. Given cumulative consumption of the same order (595 Gb), this means that new discoveries and reappraisals have totaled 1,210 Gb since 1991, which is a large amount by any measure. This explains why the reserves-to-production ratio has increased from