Fuel - Out of Fuel

Peak oil is the theoretical point in time when the maximum rate of global petroleum extraction is reached, after which production terminally declines

Some day, not too far from now, the world will run out of fossil fuels. As oil producers scramble to tap new sources, prices could surge dramatically. Then will set in the cold realisation that most of the oilfields have been overexploited and the earth has very little oil left. There’s a name for this chilling prospect—“peak oil”. And it isn’t just a doomsday prediction, it’s a practical certainty.

Peak oil is the theoretical point in time when the maximum rate of global petroleum extraction is reached, after which production faces terminal decline. No one knows when peak oil might happen, or whether the decline will be gradual or abrupt. Blame it at least in part on the murkiness surrounding oil reserves. Many so-called proven reserves may already have been severely depleted. In March, researchers at Oxford came to the conclusion that estimates of global oil reserves were exaggerated by one-third and that conventional reserves amount to just 850-900 billion barrels—not the 1.2-1.4 trillion barrels commonly projected. They also voiced concerns that official estimates have begun to include non-conventional reserves, such as the Canadian tar sands, where oil and gas are far more difficult to extract and may never be economically viable. But it pays to ignore such inconvenient possibilities.

The optimists believe that the global oil decline will only begin around 2020 or later. They say that oil production may reach a plateau, sustaining supply for as long as a century. This will provide sufficient time for heavy oil consumers to make major investments in alternatives and switch to such alternatives practically seamless. Others, who are not so sanguine, feel that peak production has already occurred or will occur shortly and the world is blithely racing towards economic disaster. What is indisputable is that the high point of world oilfield discoveries occurred as far back as in 1965. Even the International Energy Agency (IEA) believes that if no major new discoveries are made and if demand grows on a business-asusual basis, the output of conventional oil will peak around 2020.

The first oil discovered was on land, near the surface, under pressure, light and sweet (i.e. with low sulphur content). This made it simple to extract and a breeze to refine. However, growing investment in oil that is offshore, far away from major markets, in smaller fields and of inferior quality, is a sure indicator that the era of easy oil has ended. It needs even more energy and expense to extract, refine and transport oil. The April 20 explosion and subsequent collapse of an oil rig in the Gulf of Mexico dramatically demonstrated the risks of offshore extraction. The accident unleashed a major spill that now threatens not only the ecosystem but the economy of the US. This has placed on hold, President Obama’s ambitious plans to widen offshore drilling. Critics also estimate that production of oil from Canada’s controversial tar sands could emit three times more greenhouse gases than conventional oil production. And if it takes the energy of a barrel of oil to extract a barrel of oil, does extraction make sense any longer?

Hooked On Oil

Oil currently tops the energy popularity charts because of its high energy returned on energy invested (EROEI) ratio. At the start of the world’s romance with oil, each barrel spent on exploration and drilling generated a return of up to 100 barrels. However, as oil recovery gets increasingly more challenging, the EROEI has also dropped. Fossil oil meets around 43 per cent of the world’s fuel needs, with transportation, residential use, commerce and industry accounting for the bulk. Transportation—vehicles, trains, ships and aircraft—is the largest consumer with over 95 per cent of its requirements met by oil. It has no ready alternative and, therefore, will be hard-hit by dwindling supplies. The aviation industry will be the worst affected because no other energy source can readily substitute for oil in the quantities required. Alternatives such as electricity, solar power and tidal power, that might work for surface transportation just wouldn’t serve for aviation because the aircraft needs to be light and have low drag because they need fuel with a high energy content per unit volume and weight.

It would certainly help if future fuels could behave like existing jet fuel and meet the same technical specifications. Engine architecture could then continue to develop along established lines. Dropin fuels which can be mixed with traditional aviation kerosene and pumped into aircraft tanks are desired. One such is synthetic fuel or synfuel—liquid fuel obtained from coal, natural gas or biomass. For a brief period, it seemed an ideal solution to fuel aviation. However, global warming concerns have cast a shadow on synfuel because the process of turning coal into liquid (liquefaction by hydrogenation) actually produces nearly twice the carbon dioxide emissions that production of conventional fuel does. Synfuels are now opposed by many environmentalists as they are considered a huge step backward in the fight against global warming.

The Bio-Route

Any alternative jet fuel must be highly energy-dense, since an aircraft can carry only limited fuel. Ethanol, therefore, won’t do. Producing biofuel to the required energy-density cheaply and efficiently constitutes a huge technical and economic challenge. Now that the aviation industry has begun to take keen interest in biofuels, the prospects of their economic viability have considerably brightened. Some biofuels are likely to be approved for commercial use by the end of this year and the International Air Transport Association (IATA) hopes they will reach break-even point within the decade.

First-generation biofuels such as those based on sugar, corn, palm oil or soybean adversely affect food production and fresh water supply, thus attracting much criticism. Researchers are therefore turning increasingly to second-generation biofuels such as oils from jatropha and babassu. These oils are more energydense than ethanol and do not impact food supplies. However, there’s a poser—why would a farmer grow a feedstock that isn’t for food? Commercial biofuel producers, meanwhile, will be reluctant to invest in expensive production facilities until sustainable feedstock supplies are assured. Obviously, governments need to solve this conundrum and provide policy and financial incentives to both farmers and commercial producers, or else, neither will make the first move.

Most aviation industry experts agree that algal oil perhaps holds the best hope of a long-term solution. Algae can produce an oil yield up to 15 times that of other biofuel plants. It can grow in brackish water and in areas that don’t compete with food crops and has among the best energy-per-unit-area factor of any biomass feedstock. But a lot remains to be done before its exciting potential is realised. For starters, it must be decided whether algae is better grown in giant bioreactors that would be expensive, or in open ponds, which in comparison, cost practically nothing, thus bringing down production costs. And extracting the oil economically is a huge challenge. Although largescale production of algae-derived jet fuel hasn’t yet begun, the US Defence Advanced Research Project Agency (DARPA) has an algae-to-jet fuel project that will be tested this year and mass production could begin by 2013. DARPA hopes to reduce the production cost of algae triglyceride—which is converted into jet fuel—to around $1 (Rs 45) per gallon, making it commercially viable. Only a few years ago, the cost was over $100 (Rs 4,500) per gallon. However, even the most optimistic predictions are that actually deriving jet fuel from algae on an economically sustainable scale and cost is a good decade away.