Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

Issues in Focusalternatives more viable commercially. Those trendsare reflected in the AEO2006 projections.In the reference case, based on projections for theUnited States and project announcements coveringother world regions through 2030, the supply ofsyncrude, synthetic fuels, and liquids produced fromrenewable fuels approaches 10 million barrels perday worldwide in 2030. In the high price case, nonconventionalliquids represent 16 percent of totalworld oil supply in 2030, at more than 16.4 millionbarrels per day. The U.S. share of world nonconventionalliquids production in 2030 is 15 percentin the reference case and nearly 20 percent in the highprice case (Table 14).The term “nonconventional liquids” applies to threedifferent product types: syncrude derived from thebitumen in oil sands, from extra-heavy oil, or from oilshales; synthetic fuels created from coal, natural gas,or biomass feedstocks; and renewable fuels—primarily,ethanol and biodiesel—produced from a variety ofrenewable feedstocks. Generally, these resources areeconomically competitive only when oil prices reachrelatively high levels.Synthetic Crude OilsAt present, two nonconventional oil resources—bitumens(oil sands) and extra-heavy crude oils—areactively being developed and produced. With technologyinnovations ongoing and production costs decliningsteadily, their production increases in theAEO2006 projections, provided that the world oilprice remains above $30 per barrel. Development of athird nonconventional resource, shale oil, is morespeculative. The greatest risks facing syncrude productionare higher production costs and lower crudeoil prices. In AEO2006, production of syncrude worldwideincreases to 5.3 million barrels per day in the referencecase and 8.5 million barrels per day in the highprice case in 2030.Oil sands. Bitumen, the “oil” in oil sands, is composedof carbon-rich, hydrogen-poor long-chain molecules.Its API gravity is less than 10, and its viscosity is sohigh that it does not flow in a reservoir. It can containundesirable quantities of nitrogen, sulfur, and heavymetals.The percentage of bitumen in oil sands depositsranges from 1 to 20 percent [49]. After the bitumen isextracted from the sand matrix, various processes,including coking, distillation, catalytic conversion,and hydrotreating, must be applied to createsyncrude. On average, about 1.16 barrels of bitumenis required to produce 1 barrel of syncrude. Canada’sresource of 2.5 trillion barrels of in-place bitumen isestimated to be 81 percent of the world total [50]. Economicallyrecoverable deposits in Canada amount toabout 315 billion barrels of bitumen under currenteconomic and technological conditions [51], and in2004 Canada shipped more than 87 million barrels oflight, sweet syncrude [52]. If fully developed, the bitumenresources in Canada could supply more than 40years of U.S. oil consumption at current demandlevels.Currently, there are two methods for extracting bitumenfrom oil sands: open-pit mining and in situ recovery.For deposits near the surface, open-pit mining isused to extract the bitumen by physically separatingit from the sand and clay matrix, at recovery ratesapproaching 95 percent. For deposits deeper than 225feet, the in situ process is used. Two wells are drilled,one of which is used to inject steam into the deposit toheat the sand and lower the viscosity of the bitumenand the other to collect the flowing bitumen and bringit to the surface. Addition of gas condensate, lightcrude, or natural gas can also reduce viscosity andallow the bitumen to flow. Much of today’s productioncomes from open-pit mining operations; however, 80percent of the Canadian oil sands reserves are toodeep for open-pit mining.Table 14. Nonconventional liquid fuels production in the AEO2006 reference and high price cases, 2030(million barrels per day)Synthetic crude oils Synthetic fuels Renewable fuelsTotal production Oil sands Extra-heavy oil Shale oil CTL GTL BTL Biodiesel Ethanol TotalReference caseUnited States — — — 0.8 — — 0.02 0.7 1.5World 2.9 2.3 0.05 1.8 1.1 — — 1.7 a 9.9High price caseUnited States — — 0.4 1.7 0.2 — 0.03 0.9 3.2World 4.9 3.1 0.5 2.3 2.6 — — 3.0 a 16.4a Includes biodiesel.52 Energy Information Administration / Annual Energy Outlook 2006