oil/gas the crisis looming beyond 2020, page-7

The way I see it, we dont have an energy problem ; we have a liquids problem.

We arent going to run out of oil, becuase we can make oil. Start with methane from, say, pigshit, then run it through a Gas-To-Liquids process, and we have oil.

The bad news is that this isnt cheap - GTL is about 20% efficent, which means we need about 30 000 cubic feet of gas to make 1 barrel of oil.

Similarly, shale-to-liquids (dig up shale, boil using your handy electricity source, dump the really icky waste down disused oil well, sell oil-from-shale) is also viable, but requires substantial capex and energy input.

Ditto, tar-sands-to-oil.

Ditto, alcohol-from-biomass.

My gut feeling is that all of these methods are viable at USD80 a barrel, and we'll end up using all of them.

At USD80, a lot of very marginal areas are worth exploring, which is good for Australia, becuase we have many marginal paleozoic sedimentary basins, that will be hard work to explore but might be viable (*). We aklso have quite a lot of reasonable-looking offshore country.

Hydrogen might be able to solve this, if we can find a way to safely store the stuff - and the stuff is highly explosive, can escape from just about anything, and is colourless, tasteless and smells like literally nothing. I did mention highly explosive, didn't I ?

Oh yeah, and we'll need to rebuild every service station to cope with it.

Making hydrogen is pretty easy - get your handy electricity source, drop wires into water, collect hydogen (Iceland, with it's copious geothermal energy and nearby oceans is planning to be the Saudi Arabia of the hydrogen economy).

I'm personally optimistic about battery-powered cars - people will just have to get over the cruising range, and rent a liquids-powered car for long trips.

Me, I'm expecting the Chinese government to lean on their car industry - tell em that they will have a USD8 000 subcompact dual- liquids/electric car within 2 years, or they're joining the Army - and if they need help, would you like us to buy Mitsubishi for their technical expertise (**).

But there dont appear to be either any big new undiscovered fields, or any technical breakthrough on the horizon to solve our liquids problem.

Ian Whitchurch

(*) Quick disclosure ; I'm a shareholder/founder in two companies with major holdings in Australian paleozoic basins

(**) Given the involvement of Mitsuibishi in the Japanese war effort, the Chinese would probably like to do this anyway, for the mere reason that revenge is a dish best served cold