Easy Come, Easy Go..

Easy Come, Easy Go.

Easy Come, Easy Go, or: The Incredible Disappearing 140 Tcf of Canadian Gas.

I posted an article "The Future of (Natural) Gas from the Western Canada Sedimentary Basin?" a few months ago, suggesting that the numbers suggested for Western Canadian gas in the NRCan report "Canadian Natural Gas Review of 2004 & Outlook to 2020" were exceedingly optimistic, basing that conclusion on both National Energy Board Scenarios and actual events.  I did not expect that the next NRCan report in the series would reflect this view, but it has since come out, and its contents prompted me to look further back in the series and then to look at how other official and unofficial assessments were changing.

Reserves and Resources

2004 RR

Reserves and resources from the "Review of 2004" report.  Click for full-sized image.

2005 RR

Reserves and resources from the "Review of 2005" report.  Click for full-sized image.

Comparison of the WCSB(Western Canada Sedimentary Basin) pie charts in these two diagrams shows that 142 Tcf of "Contingent Reserves" have suddenly vanished.  This brings the amounts allegedly still there much more in line with other estimates (National Energy Board's and mine) in my earlier article.  I was curious to see what had been suggested in earlier reports.

Prior to the 2002 review, only the established reserves were reported, but since then figures have been given for other categories of resource (all in Tcf, 1012 cubic feet).

Produced to Date
Proved Reserves
Contingent Reserves
Undiscovered Conventional
Undiscovered Unconventional





The main points of interest are the explicit splitting of Undiscovered into Conventional and Unconventional parts in the 2005 report, and the abrupt appearance and disappearance of the "Contingent Reserves".  They were only "there" for two years.

Government agencies are generally the last to acknowledge a problem.  The most recent NRCan report is quite remarkable in that it includes many of the warning signals one usually reads about elsewhere:

Despite record drilling in 2005, North American production was down 2% for the year and Canada’s reserves-to-production ratio remains relatively flat at 9.3 years of production.
(page iii)
Throughout the 1990’s, WCSB natural gas production enjoyed a period of positive growth with limited additional wells. For example, from 1992 to 1998, production increased 4.4 Bcf/d with relatively flat drilling levels. However, since 2000, an increasing number of wells are required to increase production marginally. For example, in 2005, over 18,000 wells were drilled and production increased 0.1 Bcf/d.
(page 12)
Sable Island natural gas production appears to have peaked in 2001 at 190 Bcf.
(page 13)
In 2005, Sable production declined 5% from 2004 levels to 139 Bcf. It is expected that the addition of compression to producing wells in 2007 will temporarily increase production.
(page 13)
More than half of the estimated conventional resource base has already been produced from both the WCSB and the US Lower 48.
(page 18)

The disappearance of the 142 Tcf of Contingent Reserves passes without comment except for this:

Contingent resources are known to exist, but are not marketable on account of their remoteness or lack of means to bring the gas to market. Therefore, the WCSB does not have any contingent resources.

The lack of comment is perhaps appropriate, since the appearance of the 122 Tcf two years earlier also went without remark.  Given, though, that this much gas would be worth something like $1,000,000,000,000 at current prices, either event would surely be expected to have some economic consequences.

The Canadian Gas Association recently produced a report on the Canadian gas supply.  One cannot accuse the CGA of being as even-handed as NRCan.  The report is determinedly upbeat:

Canada's total remaining natural gas resources are estimated at 375 to 530 trillion cubic feet (tcf).  This is equivalent  to about 55 to 80 times current production and 110 to 155 times domestic consumption.

The lower end of this range is reasonably consistent with the NRCan total for all areas.  Maybe they found the disappearing 140 Tcf somewhere for the upper figure.

This pales into utter insignificance when compared with estimates of what might be there:

According to PTAC there is more than 4000 tcf of combined unconventional gas in place in Canada, with the upside ranging closer to 30000 tcf.

PTAC is Petroleum Technology Alliance Canada.  Their report on unconventional gas may be obtained here (big PDF).

The CGA does admit to a slight problem:

While natural gas resources are abundant, North America is experiencing a tight supply/demand balance.  With North American production moving towards more remote and unconventional sources, all else being equal, overseas gas supplies will become more competitive.

Predictions of Future Production

Other sources, including Alberta's Energy Utilities Board do not give as rosy an impression of the Canadian gas situation:

High levels of drilling for gas in recent years have prevented a sharp decline in Alberta’s production and reserves but lower prices since the spring of 2006, followed by a drop in drilling, have prompted the EUB to forecast a 2.2% decline in production this year.
In its supply outlook to 2016, the EUB expects Alberta’s gas production will decline by an average of 2.5% a year even though CBM production is expected to rise to some 593 bcf a year by 2016. New pools being found are smaller, show lower initial production rates and steeper decline curves.
A recent Ziff Energy Group study predicts that total Canadian gas production will fall by just over 20% in the forecast period to 2015 to 13.1 bcf per day from about 16.6 bcf a day in 2006.

There’s no quick-fix solution to the many challenges facing western Canada’s natural gas producers and the current negative economic conditions plaguing the sector are likely to worsen before financial metrics improve, Ziff Energy Group Vice-President of gas services Bill Gwozd said recently. “Operating costs have spiraled up. It’s tough to get people to do the actual projects. The big challenge the producers are facing is the new drilling, new product coming onstream. They’re looking at $9 (per mcf) in rolled-in costs,” Gwozd said while addressing a forum at the Calgary Petroleum Club.

This hardly squares with the abundance described by the Canadian Gas Association.  Coal Bed Methane production is included in the EUB's projections, and is not expected to provide anywhere near enough gas to stem the decline.

The National Energy Board produces many reports on Canadian natural gas.  The last short-term gas deliverabilty report came out in October 2006, but an update was issued in May 2007, to reflect reduced drilling activity in 2006 and 2007.  Here is the diagram that shows the predicted outlook for Canadian gas deliverability with three different drilling scenarios:

gas deliverability

This shows a major event - the Canadian natural gas supply peaked in 2006.  The production predicted in last year's report (grey line) was not attained because there was reduced drilling.  The solid orange line is now considered the "most likely scenario" or "reference case" for the future:

In the reference case of this update, average annual Canadian gas deliverability is expected to be 476 million m3/d (16.81 Bcf/d) in 2007 and 464 million m3/d (16.38 Bcf/d) in 2008.

Going down...

Coal Bed Methane

Much of the hope for future supply rests on Coal Bed Methane.  Canadian production is just getting started, and is included in the forecasts above.  Let's look at the history of US CBM production:

(Diagram from most recent NRCan gas report)

Production may not have peaked yet, but that from the most prolific states already has.  How much longer will it be before decline of overall US CBM production sets in?

Arctic Gas

So, how about the future of gas from the Arctic?:

A new much higher cost of $16.2-billion for the Mackenzie Gas Project to bring Canadian Arctic gas to southern markets has put the project in doubt since it now needs a favourable government fiscal regime to make it economic.

Even then, it wouldn't be in operation for a while:

Assuming all approvals are in place in 2009, the earliest the proponents expect to be able to start construction would be the summer of 2010, when contractors would start shipping materials by barge to location along the Mackenzie river. This means the earliest date the pipeline could be onstream is 2014.

It doesn't look too good for Alaskan gas either (report from May, with analysis by Andy Weissman):

ExxonMobil Chairman and CEO Rex Tillerson told reporters after the company's annual meeting Wednesday that the $16.2 billion price tag for the delayed Mackenzie Valley pipeline is too expensive without more government subsidies.

"We are now in a situation where it's not economic at current costs," Tillerson said in an article published by The Globe and Mail. "It may just be that the project is going to have to wait for a different cost environment."

Weissman said Mackenzie - planned to begin production in 2014 -- is the smaller of two major pipeline projects on the drawing board - the other is a natural gas pipeline to be built next to the existing Alaskan oil pipeline.

Given ExxonMobil's comment on Mackenzie, it's unlikely either pipeline will be built, he said.

LNG Imports

Well, what about LNG?  If LNG is to come to the "rescue", it must come from somewhere.  Things don't look very bright on that front either.  Here is Chris Skrebowski, writing on new LNG production capacity:

The reluctance of companies to commit to building new capacity appears to stem from two prime influences. The first is the rapid inflation in construction costs, which is reported to have reversed all unit costs reductions in the last 20 years. This means new liquefaction trains will have markedly higher unit costs than recently built ones. The second uncertainty is the market reaction to high prices. There has been a tendency to believe gas demand is unresponsive to price. This belief in the low price elasticity of gas demand has been undermined by the gas demand falls seen in 2006 in the US, Chile, Austria, France, Hungary, the Netherlands, Portugal, Romania, Slovakia, Russia, Switzerland, the Ukraine, the UK and the Philipinnes. Although special circumstances may account for some of these declines, the general view is that gas prices may have reached the point where demand is impacted. As a result of these two concerns, virtually all LNG projects not underway are currently being reassessed.

The existing LNG cpacity in the USA hasn't been close to being saturated, at least up to the end of 2005:

US LNG capacity

(Diagram from most recent NRCan gas report)

One wonders if the enthusiasm for building more ports to receive gas will last, either in Canada or the US, if existing ones aren't near capacity and the supply is in doubt.


The summary of all this can be short.  It is unlikely that the total natural gas supply available in North America (including imports) will ever again be as high as it now is.  Get used to using less.

I'm rather suspicious of the coincidence of the drop in reserves estimates and the hand outstretched to the Canadian government for financial assistance. I'd expect that those estimates of reserve paucity go right back up to 'economic' once the loan guarantees are in.

When you approach a banker, you want to convince him that you are giving him an opportunity to be in on a sure thing; when approaching government you want to appear to be in need of assistance in doing a public service, in this case providing gas that would otherwise be uneconomic.

How much gas - and oil - is up there? Depends.

Last I recall, Exxon made something around 100 billion in 2006. But 16 for a pipeline down to their 'oilsands' projects is too much? Maybe I should just leave what I might say at this point to your imagination. Suffice it to say, these guys never quit.

When you approach a banker, you want to convince him that you are giving him an opportunity to be in on a sure thing; when approaching government you want to appear to be in need of assistance in doing a public service, in this case providing gas that would otherwise be uneconomic.

If you can't trust an oilman, who CAN you trust? ;-)

Ran across a humorous misspell that might be appropriate; demogouge.

You can trust an oilman - to do the appropriate thing. As in any competitive industry, there is no real obligation to tell the truth to those who have the audacity to ask a silly question. It isn't lying, but just silly answers to silly questions.

Watch what they do. I'd postulate that coalbed methane tells you what you need to know on gas; it used to be passed over. Once the oilsands went from pilot to production you didn't have to ask. Deploying that much money is the answer. It's the old 'follow the money'.

Superdeep holes and Arctic turf wars corroborate where we are in the scheme of things. As Laherrere stated, 'nine women can't make a baby in a month'. Plan accordingly.

Nicely done... It's worth noting as well that WestPacLNG just announced that they're officially shifting their plans for an LNG import terminal and co-generation plant from Prince Rupert (northern BC coast) to Texada island (only 130km/60mi from Vancouver).

$2 Billion... looking to be done in 5 years (so probably 10).

10 years? or 10 Billion?

The BC provincial government and Royal Dutch Shell (and others before) are trying to develop coal-bed natural gas in the Bulkley Valley in Northern BC but are meeting fierce resistance with First Nation and local representatives who have roadblocks etc planned. Is it possible that this is one reason there is a difference between reserves and resources? Increasingly the natural gas reserves are cohabitating with ecosystem services??

I doubt that this sort of thing accounts for much of the difference, in Canada at any rate. "Reserves" are discovered and available gas (not too far from pipelines). "Discovered resources" have been discovered but are not (yet) available for whatever reason, including angry residents. For most of Canada's "Discovered Resources", I think the problems are distance and technical challenges. "Undiscovered Resources" are too much of a guessing game for the attitudes of local residence to make a significant difference, even if they are considered when compiling the numbers.

The situation in the US may well be somewhat different.

Libelle, very good analysis.

This is indeed important information, with Canada on the decline, North American Natural Gas can in fact be on the edge of a cliff.

On this scenario, how long before Canada stops being a net exporter?

NRCan addressed this very point in their Canadian Energy Outlook for 2006. Canadian exports are already declining. Here are their data in graphical format.

I can see why canadian production might decline after 2015 - but why will canadian consumption drop so much then??
Or is that demand destruction DUE to lower production??

Being from the USA, I am pleased to be assured that our supply of NatGas from Canada is assured past 2020. ;=) - I'm joking.

If I were from Canada, I would immediately begin investigating what kind of deal has been made to cut NatGas consumption in the country by 1300 BCF/yr so that it can be exported to the US. Seems to me that's the only way the demand destruction could be DUE to lower production.

However, my wife suggests that maybe they expect global warming will reduce the need for NatGas in Canada by that amount by that time. Go figure.

Sam Penny
the Prudent RVer

NRCan tabulated the data in five-year increments. I do apologise but, on checking, I found I'd pulled a number from the wrong line into my table as the Canadian consumption in 2020. One day I'll learn that when things don't look right they probably aren't. The revised (and hopefully correct) graph is posted below. Although it appears that consumption has been straight-lined from 2005, there are demand differences in individual sectors. Some go up while a few go down.

This looks like the NG version of the Export Land Model.


No way I'm gonna read all that whole report. Reason, from summary:

The principal assumptions used to develop this Outlook to 2020 are:


  • Crude oil prices, in 2003 dollars, will decline to US$45 per barrel by 2010 and will remain constant thereafter. Although lower than today’s high level, this is much higher than the oil prices prevailing through most of the last two decades.

Need I say more?

Let's get to the point: where's the graph located?

PS when will you write your first post here? isn't it about time?

I built the graph from Table 17 (p.138). AFAIK NRCan did not provide a comparable figure.


I'll go there someday.

You didn't answer my second -make that 3rd- question.

NB: in your graphs, always state that -in this case- the graph addresses nat gas in Canada. I humbly suggest.

If we take the production decline rate that all this implies, and "normal" demand growth in Canada, then Canada would no longer be able to export gas sometime in the middle or latter half of the next decade. I think that the growth of Canadian consumption will end before that, though.

Would somebody please answer me a question. Undiscovered?!?! yeah so they estimate these crazy numbers on something that has not been discovered? Is this not crazy? It seems rather insane to me to put your eggs in a basket based on something that has not even been discovered let alone proven.

Thanks for the reply.

it's statistical.

if you know land A has X amount of oil+gas on it and you discover land B what do you do?

If B is similar to A then you can roughly approximate the amount of X in B.

That is the basic idea. There are more complicated ways to examining lands for similarity and prediction, but generally this is what you end up with.

That sounds rather ignorant to me personally but they have their methods I guess...

ya, it's a fairly standard way to do things with statistical analysis and whatnot. And it tends to be reasonably accurate.

Without an underlying physical model such statistical exercises are a joke. There is a non zero chance that there is oil under my cottage according to statistics. But that is vacuous nonsense since the rocks under it are simply of the wrong type (i.e. granite).

pretty much, but your cottage is also a small spot on the map. Expand your cottage to a footprint of 1000x1000 km and see how you do. Probably a bunch of different underlying geological formations, some which may be known to contain oil and some which won't.

most of ontario/quebec is also the canadian shield, so not much oil there.

Just look at the USGS's Report for 2000 of all the Total OIL out there, they put 25 billion barrels under the Greenland Ice Sheet. It is a big part in the numbers racket, you get that in some of the reasons for the Housing bubble popping seen recently. If it is not in hand it is not yours yet. If it is not in a storage tank and ready to be used, do not count on what you think is still in the ground.

The word in the bush across Alberta is that the lack of drilling in the 2006/2007 winter was an attempt by the industry to bring costs down. It certainly stalled wage inflation where I am. Of course, even if there was a desire to do much drilling, they really couldn't do much until three weeks ago. The wet spring made access impossible. Prices didn't exactly encourage drilling either.

Things are different now. With all the drilling that is going on, and being planned, it wouldn't surprise me that much to see a new production record from the WCSB in 2008. But after that, it would start to get pretty grim.

NG storage was almost full last autumn and Chesapeake Energy had to shut some production as there was nowhere to put it. Drilling costs were high and gas prices were low; thus some rigs were diverted to oil projects that had potential for a higher yield. If you will see NG priced at $14/mcf anytime soon, expect some more drilling for tight shale gas, CBM, interest in the Arctic, LNG projects, offshore hubs, etc.

They have been blowing down some gas caps in the Alberta West Sed. Basin. Prudhoe Bay has a huge gas cap.

Hello all, very nice posts from very devoted,
intelligent and sincere people. A big salute to
all of them.

On the basis of data on this site and from other
reliable sites I been able to do some simple
data calculations to show if solar is

The thread I am posting this might not be
directly talking about solar but I guess in
minds of all here at oildrum solar is quickly
becoming the only way out. So I took the liberty
of posting it here to get comments from those
intelligent minds working on the issue on this

Please have a critical look at the following
and be sure to comment about it. A criticizing
comment would be more welcome than an
appreciating one.

So here you go,

Human energy use in 2004 = 4.5 e 20 joules

Dividing this by 86400 and 365.25 we get 14.3
tera watts

In spain a solar plant of 11 MW (that is what is
available only when its working that is when
sunlight is present in sufficient quantity) cost
35 M dollars


On Aug 1 2007 dollars is 1.3671 that of euro


so 35 M dollars = 47.86 M dollars

so 1 M solar plant = 4.35 dollars

since solar is available at only day time about
2 hours after sunrise till 2 hours before sunset
so we can assume one third of the day, so thats
33% of time. Next we assume quarter of the days
to be cloudy, rainy etc or days when days are
less than 12 hours long. So 25%.

Therefore 1 watt solar plant (continuous)
= 4.35 * 4 = 17.4 dollars

Therefore 14.3 terra watts need
14.3 * 17.4 = 249 trillion dollar investments in
construction of power plants.

One more consideration, in order to have
electricity at other 75% of time when solar
plants are not working (that is at nights,
hours around sunrise and sunset,
winters longer nights, rainy days, cloudy days
etc) we must store solar energy in some form
then have it back. That conversion would cost
at least 20% lost per conversion, so two
conversions means 1 * 0.8 * 0.8 = 0.64, approx
one third energy lost.

Lets assume we be very efficient and all
factories etc work only when solar plants are
working (25% of time) then still we need some
lights at home, hospitals, military etc working
so they do need say 50% of energy at time when
solar plants are not working. That 50% comes
only at cost of 75% (1/0.64 * 50%) so that
75% + 25% = 1.25%. Means we must have 1.25 times plants available than the above mentioned 14.3 terra

It means we must have 250 * 1.25 = 313 trillion
dollars set aside for solar plant construction.

World GDP was 46.76 trillion dollars per year in
2006, 32% of which is industrial. Means
industrial sector produce 15 trillion dollars
per year.


Only industrial sector can contribute to solar
plant construction, the other sectors namely
services and agriculture can't help directly in
making a solar power plant. We can't put entire
world's industrial sector in solar plant
construction either because we do need some for
agriculture to grow food for over 6 billion
people. Without industries (chemicals, tractors,
food storage equipments etc) we can't have food
for that much people. So at best we can put
two-third of industrial sector for solar plant
construction, that means 10 trillion dollars per
year. At that rate we need a full 32 years to
make enough solar plants.

Since we still depend on fossil fuels for 86% of
world's energy usage and they are declining. So
along with them world gdp decline too, mean it
not stay at 47 trillion dollars. Assuming 5%
decline its half in 14 years then quarter in
another 14 years.

For first session of 14 years its
14 * (1+0.5)/2 = 14 * 0.75 = 10.5
years-equivalent. For next session of 14 years
its 14 * (0.5 + 0.25)/2 = 14 * 0.375 = 5.25 years-equivalent. So in 28 years of 5% declining
fossil fuels we get equivalent of 15.75
year-equivalent of world gdp today. By the time
fossil fuels reached quarter of its peak
production we must divert it all towards food
production and very essential medical, police, administration and military services only. So we
no longer have any significant industrial base
left to make more power plants after 28 years
from today, roughly by 2035.

In short we have approx 16 years equivalent of
world's current gdp left in next 28 years. That
boil down to 10 * 16 = 160 trillion dollars of
industrial productions we can divert to solar
plant constructions (if we can divert two-third
of all industry productions there). As noted
above we need 312 trillion dollars worth
investment in solar plants to reach today's
level of energy production of 4.5 e 20 joules
per year. That is half of whats needed so we can
never reach there. Thats a mathematical
certainity (remember that line from titanic

Forget about growth, its an exception not the
rule. We can't even stay at today's level of
consumption. Our best bet would no doubt be
solar as other sources such as biofuels and
wind is just solar in another form.

Two things, the total energy usage is mostly oil for transportation.

Of that 16TW probably only 5-8 TW as a max is required for work, the rest is wasted as thermal.

Electricity required to provide 5-8TW of work in the form of constant Wind (25% capacity) would be 20-32 TW of installed wind capacity. This would roughly cost at 1$/Watt in todays money, 20 to 32 trillion dollars.

Solar PV is roughly 4-5 times as expensive.

so between 80 and 160 trillion dollars.

Using roughly 5 trillion dollars in industrial output could built up wind rapidly.

However this will not happen. The wind industry is too immature for 5 trillion dollars of investment, heck XOM only recently passed .5 trillion market cap.

The reason wind is scalable and vastly so is because you recieve:
P~r^2 (power is proportional to radius squared)

However COSTS only increase in a linear fashion (ie r gets bigger from longer spanning blades) [even 3*r still scales in a linear fashion]

What everyone should be looking at is to see if increasing wind power can MATCH the decline of oil. it is unlikely wind turbines are going to get larger radii than current, as they already require special trucks and assembly equipment for the 60m radius blades. some locations maybe, but the standard tower will probably be 5-6MW.

This is one of the things i am working on. (what is the current loss in oil power expressed in years, and what number of additional wind generators will need to be built up in the same time period. what is the maximum generator production capacity?).

Two things, the total energy usage is mostly oil for transportation.

Of that 16TW probably only 5-8 TW as a max is required for work, the rest is wasted as thermal.

Electricity required to provide 5-8TW of work in the form of constant Wind (25% capacity) would be 20-32 TW of installed wind capacity. This would roughly cost at 1$/Watt in todays money, 20 to 32 trillion dollars.

Solar PV is roughly 4-5 times as expensive.

so between 80 and 160 trillion dollars.

Keep in mind that the cost to replace fosil fuel (FF) generation with wind is only one part of the equation, since the object is to convert FF transport to electricity there will be substantive costs in the creation of electric vehicles of all sorts (plug in cars, electric trains, trollies, light rail etc etc) that can use this electricity

Hold on. If power in wind scales proportional to blade radius r^2, the internal energies in structural strain in the blades will roughly as well.

You can't make the exact same blade twice as long, you need a more expensive and stouter blade.

I agree that wind power currently has good promise but I don't think that we're going to see much greater radii for a while because of the logistical barriers you've mentioned.

Next up---has anybody thought of how to extract wind power assuming you have TWO towers holding up some kind of rotating cylindrical structure?

Does this not work well because of varying wind directions?

the maximum length of blades are determined by slenderness ratios, with longer stiffer blades (carbon fiber or other composite materials) one can make much longer blades for only a little more cost. As well replacing old steel/aluminum/wood blades with lighter blades reduces wear/tear on critical bearing components. In addition composites have different cycle lifetimes than aluminums or steel.

the main idea is that one can capture energy traveling through the square of the radius (well pi*r^2), and simply increase the blade length to do that. Thus the economical solution is no longer a design problem, but a materials problem. That problem is solved.

The radii can go up much higher strictly based upon the strength of wound or laminated carbon fibre, it is transportation that is a bitch.

cylindrical stand up turbines (savonius turbines) work, but poorly because they do not take advantage of lift to capture energy. Only utilizing drag they are a much poorer wind turbine. In addition being right on the ground really sucks for wind, as windspeed increases to the 1/7th power of height, so V~h^1/7

This increase in power is due to interference with ground level objects by the wind, which saps the energy. (think windbreaks on the sides of highways) Another thing is that on sea the winds are stronger because of no obstacles, unlike land.

In the future, please make posts like this to the DrumBeat as it is off topic for this thread. Off topic posts may be deleted.

Stoneleigh, while it's true this topic is off topic to this thread, would you please consider asking the editors to ask Wisdom to prepare a guest post on this subject?

I have often seen on this site a call for a "Manhatten Project" to replace fossil energy; IMHO it is time for the TOD Bio-computer to consider just what form that Manhatten Project should take.

Thank you for your consideration,
Errol in Miami

Gilgamesh wrote:

"Two things, the total energy usage is mostly
oil for transportation. Of that 16TW probably
only 5-8 TW as a max is required for work, the
rest is wasted as thermal."

That is wrong. Breakup of world energy
consumption in different sectors of economy are
as follows:

Agricultural & Industrial usage (mining,
manufacturing, construction etc): 37%

Losses in energy transmission & Consumption in
production of energy: 27%

Transportation (personal and commercial): 20%

Residential (heating, lighting, appliances):

Commercial (lighting, heating, cooling,
provision of water, sewerage services): 5%


The above data shows that world energy usage is
not " mostly oil for transportation",
transportation in fact is just 20% of total
human energy consumption.

To have "5-8TW of work" we need more than that
much amount of power available because no
engine convert energy is usable form with 100%
efficiency. As far as I know internal
combustion engine is only 35% efficient. I don't
know figures about electric motors that how
much of electrical energy available is
converted by them into mechanical energy.

Running everything on electricity also increase
transmission losses. For example right now world
transportation is depending 95% on oil if we
replace this with electricity it simply increase
transmission losses.

Solar Panels produce Direct Current which need
to be converted into Alternating Current to be
transmitted at long distances. That is if you
are using Photo Voltaic cells.

In case of a turbine producing electricity say
from a hydro power plant the turbine is moving
in a circular motion, using magnets it produce
Alternating Current that is transmitted on
grid directly without any conversion. Thats not
the case for Photo Voltaic cells where there is
no circular motion. I don't know how much
percentage of energy usually lost by this
conversion of DC to AC so I didn't included that
in my calculations above.

If you are concentrating solar energy using
mirrors or lenses then running a mechanical
turbine on that for example by boiling water to run the turbine to generate electricity then there is
loss of solar energy at three levels, one is
while concentrating it, second is in boiling
water or heating boiled water and third is in
converting that mechanical energy into
electrical energy at the turbine.

From where you got your $1/watt figures for
wind power?

My calculations for solar are 17 dollars per
watt, that is not 4 or 5 times than wind. How
do you got your figures?

to take your numbers
We have in TW for world usage
Oil 5.6
Gas 3.5
Coal 3.8

as for oil, probably something along the lines of 1/10 to 1/5 of that oil energy is used to convert the rest into something usable

in FF usage every year, the MAX efficiency of natgas energy production is 60% but for sure not all natgas goes to electricity,
max for coal is ~40% eff

max for oil is ~35% eff (with if you stated correctly 20% of world energy is used for transport at 10-15% efficient)

This gives us a grand total of actual work being performed by each source as(in TW):
Oil 2 TW (from 15TW*0.2*0.1 + 5.6*(4/5)*.35) i'm giving you some extra here as well

gas 2.1TW (i'm giving you 60% efficiency here)

coal 1.5TW

gee looks like humanity performs ~5.6 TW of work with 15TW of heat input. I am also highballing these numbers.

my numbers still stand. for 5.6 TW of work 15 TW of heat input were needed. If we transition to a fully electric society comparable to today we would need roughly 5.6/(.25) = ~22 TW of installed wind capacity. My numbers stand.

remember these are MAXIMUM efficiencies. Stored chemical energy is converted to heat which is converted to kinetic and then to electricity. Wind power produces electricity, a higher quality source of energy and work. Heat is a lower quality source of energy and work.

from www.solarbuzz.com (don't laugh) the industrial average cost of a total solar install is something like 3.xx$usd/watt. We are talking industrial scale production here, so even 3.xx a watt is probably high.

costs for turbines are found by looking at various setups in germany, texas, canada. find the installed capacity and total capital investment. I divided the two so numbers are a bit iffy.

buying shipping and installing a 5MW turbine costs ~5 million dollars, the reason for wind power typically being more expensive than gas fired turbines is the lower capacity factor.

a 500 MW gasturbine plant cost ~ 500 million to a billion bucks to build, has efficiency from 35-60% depending on inputs and number of turbines and is combined heat and power or not.

yes transmission losses go up with more electricity, but the percentage stays the same. One can simply built the inverse of the loss more wind turbines and come out ahead.

FYI most electric motors are 85% efficient or better, and using break recharging a 5 fold energy savings can be realized in transportation.

most turbines collection ~40% of the energy passing through their swept area.

17 bucks a watt is aweful high to me.

A few questions for the editors:

1. How to write make a key post, I heard it
should be send as an email to you and your
find your email in your profile. I tried but
unable to find your email.

2. How to make a post at drumbeat?

Sorry for being dumb. Apologizes for hijacking
the thread :).

Send an email to editors@theoildrum.com or theoildrum@gmail.com with a topic/description of your post. If it is empirical, relevant and reads well, we will suggest you write it as a 'guest post'.

You can post in a drumbeat story the same way you posted here. And for many reasons, we prefer you post off-topic posts in the Drumbeat. Libelle spent much time and effort on this work and the discussion should be on natural gas in Canada, as opposed to solar statistics, unless there is an obvious overlap.

Nate, as I mentioned upthread, I for one would like to see Wisdom do a guest post to be submitted to the TOD Biocomputer ( with a nod to Hitchhiker's Guide... : )

Errol in Miami

Very nice analysis. Natural gas could be a huge problem for North America, and this explains some of the situation.

One type of unconventional gas that you did not mention is shale gas. I think some people have hope for it. A recent link posted by Westexas casts doubt on this. A recent analysis shows that decline rates are higher than were expected, so that production is not economic except possibly at a very high cost level. Horizontal drilling was expected to help costs, but instead is less economic considering decline rates (if I am reading this correctly).

The two new sources usually cited are shale gas and methane hydrates. Enormous amounts in place are often quoted for both. The question is how quickly they can be produced. There is (as those denying peak always point out) a lot of gas around, but it seems that it is unlikely to produce the sort of flow we have come to expect (a couple of cubic kilometres per day in N. America).

What I'm hoping will happen is that over the next thirty to forty years we shall be forced to learn to use much less gas (say, a factor of 10), and that the more distant and technically more difficult gas will then provide a long tail of output, which can then be used to make the transition to a truly sustainable (non-fossil fuel) future. I think it's feasible, but the transition will almost certainly be pretty chaotic at times.

According to Gilgamesh calculation wind power
is 1 dollar per watt.

"buying shipping and installing a 5MW turbine
costs ~5 million dollars"

"a 500 MW gas turbine plant cost ~ 500 million
to a billion bucks to build, has efficiency from

We know very well that wind is available only
20% of the time. So to have 1 watt continuous
you need to have 5 such plants that is $5 per
watt. Remember the figure of 15 TW is
continuous. It is because it came by dividing
yearly energy use by number of seconds in a year.

For time when wind is not blowing you need to
use the stored energy. To store the energy you
need to convert it once then to get it back you
need to convert it again. Two conversions means
further losses in energy.

In our current fossil fuel powered world that is
not a problem. The energy is stored in the
fossil fuels and we can use it anytime we want.
Like at peak electricity consumption hours we
can use more fossil fuel to generate more

"Solar PV is roughly 4-5 times as expensive"

Lets take the average (4.5) here.

So to have a solar watt you have to have
$5 * 4.5 = $22.5 per watt solar

My figures are $17 that is 25% less than the
above $22.5.

My figure of $17 came from the plant in Spain
11 MW in 35 M dollars.

I agree that taking energy out of fossil fuels
itself is a very inefficient process that get
approx only one-third of energy stored in fossil
fuels. So I take your figure 5.6 TW actual work.
Also taking your 85% efficient electric motor
we need (100/85 * 5.6=) 6.6 TW electrical.
Thats the good side of solar and wind.

The bad sides are basically two. One is to store
the energy somewhere then get it back when plant
is not working. Those conversions means loss of
approx one-third of energy. So to have 6.6 TW
you have to have 9.9 TW electrical.

Second is the transmission of electricity over
long distance that lose energy. But that can be
offset with loss of energy in transportation of
fossil fuels for comparison. Means losses in
transmission of energy are there no matter it is
of fossil fuel or electricity.

In top of all this you have to convert the
entire transportation to run on electricity
instead of fossil fuels. That itself requires
lots of industrial capacity to make enough
batteries and for car conversions.