Alternatives magazine - Issue 19 - Extreme oil

2. CONTENTS
FEATURE
EDITORIAL
BY OLIVIER APPERT,
IFP Chairman and CEO
(Institut français du pétrole)
EXTREME OIL 04 “WE ARE ENTERING
AN ENERGY TRANSITION”
With the price of oil averaging four times more than in 2002 on an annual
basis, exploration and recovery methods are improving by leaps and bounds. VIEWPOINT 10
T
echnological advances are helping us meet a trio
Is the green bubble
The result: a new race for black gold, with oil companies looking at deposits about to burst?
of challenges: rising demand, climate change, and
the non-renewable nature of most energy, almost 70%
that, until recently, were considered impossible to operate. A tour of the new It bears no resemblance to the Internet bubble or real
of which emits greenhouse gases. We are entering
estate speculation. For Dr. Robert Bell, the future of
oil landscape. renewable energies is assured. The technologies are an energy transition that we hope will lead us from
continually improving and have practical applications. our present unsustainable situation to a more “carbon light”
economy by 2050. Electricity and transportation are major targets
for improvement.
Electricity is not an issue in terms of primary energy resources,
since it can be generated by nuclear power, renewable energies,
✔ Cover
15
natural gas and coal. On the other hand, it will require considerable
12
Offshore oil, such as capital, whether for power generation or electricity transmission
at this oil platform
in the North Sea, and distribution.
represents one third Transportation is virtually dependent on oil (95%) and accounts
of world production PERSPECTIVES
today. DECODING (
( Electricity: for about 60% of total oil consumption. Here, the focus is primarily
alternatives
3 rd quarter 2008
V Biomass:
energy in the making
hunting down line losses
Improving Europe’s power grids, whose weak
on improving energy efficiency – of privately owned vehicles,
the road transportation industry and dedicated fleets – to reduce
Publication Manager: Michel-Hubert Jamard.
Wood, straw, agricultural residues, organic waste… consumption and thus dependency on the OPEC oil producing
Editors: Thierry Piérard, Virginie Lepetit. interconnections and line losses consume excess
biomass is everywhere you look. But the efficient use countries. Unconventional sources of oil, such as deep offshore
Photos: Keith Wood/Gettyimages® (cover), IFP (p. 3), fuel and emit more CO2, means maximizing energy
Larry Lee Photography/Corbis (p. 4), Jiri Rezac/ Réa of this source of green electricity requires optimization efficiency and better flow management. A closer look. oil or oil sands, are another path to dependency reduction.
(pp. 6-7), Étienne de Malglaive/Réa (pp. 6-7), Technip In these fields, significant progress in exploration and production
(pp. 8-9), Éric Nocher (p. 10), Paul Langrock/ Zénith-
of biomass collection and combustion processes.
Laïf-Réa (p. 14), Lester Lefkowitz/Corbis (p. 15), techniques has pushed back the limits for reaching reserves
Médiathèque RTE/Favier Gilles (p. 16), Hein van that were, until recently, unusable. To achieve the diversification
den Heuvel/ zefa/Corbis (pp. 16-17), Gina Le Vay/
18 19
IN BRIEF KIOSK A selection of books and of energy supplies so necessary to the transportation sector, we need
Gettyimages® (p. 17), Morgane Le Gall “Nature
versus Technology” designed by Arik Levy and Research, environment, transportation: websites for more information on to develop new fuels – first generation biofuels now, second genera-
produced by Saazs (p. 20). tion biofuels later – such as lignocellulosic biomass or municipal
Illustrations: Mr Suprême (p. 11), A. Dagan (p. 12).
energy news clippings from Alternatives. the topics discussed in this issue.
Design and production: : 8192 waste, or synfuels made with gas or coal, none of which compete
with food applications. Ultimately, we can expect to see synergies
emerge between oil and nuclear power, with the latter helping
www.areva.com to optimize energy-greedy oil production and refining operations. ■
The opinions expressed by the authors of articles in this magazine are
their sole responsibility and do not necessarily reflect AREVA’s opinions.
ISSN 1637-2603
In accordance with the French law of January 6, 1978 on Data
Processing and Civil Liberties, as amended by the law of August 6, 2004,
any person has the right to request the correction or deletion of his or her
AT A GLANCE Greenhouse gas reduction
personal data. This right may be exercised by letter posted to T.M.S.
objectives in Europe
107
,000 km 2
2,000,000 metric tons 4,244 4,151
Mt CO2 eq
4,000 3,924
3,602
■ EU-15 ■ EU-10
Paper (novatech gloss) certified from mixed FSC and elemental chlorine- That’s the total surface area of Brazilian oil grants covered by a request That's the threshold crossed for the first time on 3,000
CO2 emissions
free pulp, ISO 9706, ISO 9001 and ISO 14001, as per EC directive for proposals to be launched in December. All of the grants are located on land. September 23, 2008 in the European carbon market, 2,000
in the European
Union 10 and 15,
98/638 on heavy metals content and EEC standard 89/109 regarding
contact with food. Environmentally friendly ink (100% plant-based). In September, Brazil also kicked off oil extraction from ultra-deep sea deposits. where CO2 emissions permits are traded under the Kyoto 1,320
979
1,388 in metric tons
1,000 849 equivalent of CO2.
© 2008 AREVACOM The offshore reserves, located 6,000 meters beneath the sea under a 1,000-meter Protocol. Daily trading averaged 1.251 million metric
salt layer, are estimated at 5 to 8 billion barrels of recoverable light crude oil. tons during the month of September, setting a new record 0
Energy is our future, At present, Brazil's reserves total 14 billion barrels. and topping the monthly average for August by 47%. 1990 2006 Kyoto objective 2020 objective, assuming the distribution
emissions emissions (2008-2012) of emissions between EU-15 and EU-10
don’t waste it! remains the same
Source: Mission Climat - Caisse des dépôts.
Data: European Environment Agency, June 2008.

3. FEATURE An overview of challenges tied to energy
With the price of oil four times more than in 2002 on an average
annual basis, exploration and recovery methods are improving by leaps
and bounds. The result: a new race for black gold, with oil companies
looking at deposits that, until recently, were considered impossible to
operate. A tour of oil’s new frontiers, from the oil sands of Canada’s Far
North to the ultra-offshore depths of the Brazilian coastline.
F
acing the potential depletion Petroleum Institute, IFP, “the majority of Bituminous sands cost almost
of their conventional fields, unconventional crudes are degraded crudes five times as much to extract
the oil companies are rushing found at shallow depths in loose, highly per- as Middle East oil
towards unconventional meable sands. These crudes have been altered Prices required for profitable oil production,
including costs associated with CO2 emissions
crudes. These are oils formed by water seepage and bacteria. The lightest
by dense, high-viscosity molecules were destroyed in the process, while in dollars per barrel
hydrocarbons that must be the oil was artificially enriched in asphaltenes Bituminous sands 70
EXTREME OIL made lighter and more fluid before they
can be extracted cost effectively in sufficient
quantity. Unconventional crudes also include
oil found in deep offshore fields. With the
price of crude still averaging 40% more than
and resins. They also contain heavy metals,
nitrogen and sulfur, which require special
refining treatment.”
Using current production methods and re-
covery rates (the amount of oil that can be
Arctic oil
Extra-heavy oil
(Canada, Venezuela)
Ultra-deep offshore
40
40
60
last year on an annual basis and four times extracted from the deposit) in the 20-50% Deep offshore 35
higher than eight years ago, every method is range, Canada can claim 152.2 billion barrels 15
Middle East
being used to recover the black gold, even if of recoverable reserves with these resources.
it means extracting oil from depths of more That is second only to Saudi Arabia, which
than 2,000 meters or operating oil fields where has 264.2 billion barrels in reserves1. At an Source: IEA, 2007.
the raw material is more tar than liquid. average recovery rate of 10%, the Orinoco Belt
Operating these fields can help to push back contains about 50 billion barrels of extra-heavy per barrel in Venezuela, and exceeds $40 in
Peak Oil, or the point in time when global oil crude. Canada; this compares with $5-8 for new
production will begin to decline. First stop on The industrial development of these hydro- conventional crude extraction projects in the
our journey: Venezuela and Canada, world carbon deposits requires considerable capital Middle East.
champions of extra-heavy crudes. and expertise due to their extraordinary size. The Athabasca and Orinoco oils are very
The average production cost for deposits dissimilar. A cold extraction process can be
150 billion barrels may under development ranges from $20 to $30 used for Orinoco oils. A diluting agent,
be recoverable in Canada
The term “extra-heavy crudes” refers to cer-
tain types of oils, such as high-density crudes Natural gas: the Alaskan dream
from Venezuela and crudes from the bitumi-
nous sands of Canada. Strictly speaking, the Oil companies looking for new resources are willing promise in this respect. Nearly 15 billion barrels of
to pay top dollar to access as yet unexploited recoverable oil reserves and more than 2 trillion
bulk of extra-heavy oils is found in Venezuela,
areas, as they did for ultra-deep offshore fields cubic meters of natural gas are believed to be
in the Orinoco Belt of the Orinoco River basin. in the Canadian Far North, or in sub-arctic regions located in this area. Despite opposition from
Bituminous sands, on the other hand, are such as Snovhit in Norway or Stockman in Russia. environmental associations, the U.S. administration
✔ A platform in the far north found mostly in the Athabasca region of The Chukchi Sea deposits of Alaska are full of granted hundreds of exploration permits in February.
Oil companies looking for new
resources are ready to pay top Alberta, Canada. According to the French
dollar to access as-yet unexploited
territories. The far north of Norway,
04 / ISSUE 19 / ALTERNATIVES
Russia and Alaska are the most
coveted regions. ISSUE 19 / ALTERNATIVES / 05

4. FEATURE
naphtha (the very light component of crude One third of world oil rigs, which became taller and taller. Floating
oil) is injected into the bottom of the well and production is offshore systems were used when the construction of
at the well head to facilitate oil flow and extrac- Another oil frontier is located more than 1,500 fixed platforms became impossible. Only a
tion, which is also stimulated with pumps. meters under the surface of the sea, where dozen fields are operated at a depth of more
Naphtha is used again to transport the crude oil is extracted from ultra-deep offshore fields. than 1,500 meters. Oil companies use float-
by pipeline to refineries some 200 kilometers According to the French Petroleum Institute, ing production, storage and offloading
away. IFP, offshore crudes of all types platforms (FPSO) moored
Athabasca crudes are practically solid; they currently account for one with cables to ensure the sta-
are extracted from wells or from open pit fourth of the world's proven Only a bility of the rig above the drill
mines. Although oil companies identified the
fantastic potential of this region decades ago,
reserves and one third of glo-
bal oil production. Ultra-deep
dozen fields point, even in strong winds
or currents.
the operation of bituminous sand deposits is fields (1,500 meters or more) are operated
relatively recent. The high cost of separating represent only 3% of the world's at depths of Pipes: too heavy
the oil from the sand was a barrier to the devel- reserves and 0.5% of its more than for their own good!
opment of these deposits, since the price of production. Oil can now be Operating costs – exploration,
crude didn’t cover operating costs. Fluctu- extracted at depths eight times 1,500 meters. development and production
ating oil prices are not the only reason for the greater than the early offshore – have risen from about $10
proliferation of this type of project in Canada: wells – from 312 meters in 1978 to 2,540 per barrel in 2000 to as much as $20-30 today.
at long last, proven extraction processes are meters in 2007 (see chart) – and the 2,700- Going to such extremes to look for oil is still
now available to operate these deposits. meter threshold is expected to be crossed this far from easy. Deepwater projects are fraught
year. Geologists are presently focusing on a with difficulties, stemming mostly from water
Bituminous sands: half-dozen major basins: the Gulf of Guinea, temperatures and equipment weight. At
thirsty for water ✔ Canada the Gulf of Mexico, the northern part of the depths of more than 2,000 meters, traditional
Two main mining methods are used for bitu- Bituminous sand mine pits North Sea, the Brazilian and Australian coast- pipes connecting the rig to the ocean floor are
are always very extensive,
minous sands, depending on the depth of the like this one operated lines, and the China Sea. Enormous progress unable to support their own weight. Manu-
by Shell Albian.
deposit and other features. has been made in offshore oil exploration and facturers are working to develop pipes made
The traditional open pit mining method, production, particularly in seismic research. with metals that are lighter than steel, or with
which requires enormous mechanical shov- ✔ Canada Production rigs have also improved greatly. composite materials. Below 1,500 meters,
els, is used in areas where the sands are less This huge truck can carry Initially, the fields were operated from fixed water temperature is only 4°C. The oil is
400 metric tons of sand
than 70 meters below grade. Huge trucks or containing 200 barrels
conveyor belts move the sands to a process- of oil.
ing facility that uses hot water to strip the The depth of offshore operations has risen eightfold in 30 years
oil, which is then recovered by dilution in
light crude. This process accounts for two-
thirds of Canada’s production. It requires large
quantities of water, which must be filtered
after use. The spent sands are stripped sever-
al times and then returned to the mine. 312 m
In the steam flooding method, steam is injec- 540 m
ted into the sands through a horizontal well. 752 m
The resulting heat decreases the viscosity of 1,027 m
the oil, which is recovered in another well.
This is expensive technology. Huge amounts 1,650 m
1 - Location
of water and a lot of energy are needed to 2 - Operator 1,709 m 2,540 m
supply the steam injected into the deposit. 3 - Rig 1,853 m
The process also generates large amounts of
1978 1989 1991 1994 1997 1997 2000 Oct. 2007
greenhouse gases. All of these factors raise
Cognac, Jolliet, Marlim, Marlim, Mensa, Marlim Sul, Roncador, Gulf of Mexico,
operating costs. Environmental constraints 1 Gulf of Mexico, Gulf of Mexico, Brazil Brazil Gulf of Mexico, Brazil Brazil at water vortex
also affect overall project economics. The United States United States United States
2
steam flooding method will be subject to CO2 Shell Conoco Petrobras Petrobras Shell Petrobras Petrobras Anadarko
3
Fixed Tension leg Semi- Semi- Underwater FPSO* FPSO* FPSO*
taxes, increasing the cost of the oil produced. platform platform submersible submersible connection * FPSO: Floating Production
Ultimately, operators will have to invest capital platform platform from a Storage and Offloading platform.
satellite field
to capture and sequester the gases produced.
06 / ISSUE 19 / ALTERNATIVES ISSUE 19 / ALTERNATIVES / 07

5. FEATURE
EXPERT OPINION
THIERRY PILENKO
Thierry Pilenko is Chairman
PEAK OIL:
and CEO of Technip, a world leader pumped at temperatures of 80 to 100°C, OIL DENSITY:
word for word
in engineering, technologies and Oil density is expressed in degrees of API gravity,
projects in the oil, natural gas and and must be kept as hot as possible to pre-
a measure of the American Petroleum Institute. Oil
petrochemicals fields. Technip designs vent paraffin or hydrate buildup in the pipes. is “light” at an API gravity of greater than 31.1°,
and manufactures flexible flowlines The pipes must therefore be kept at strictly “medium” if it is 22.3° to 31.1°, “heavy” if is it 10°
and platforms, and has a dedicated controlled temperatures and pressures. to 22.3°, and “extra-heavy” if it is less than 10°.
fleet of specialized vessels for
subsea construction and pipeline
installation.
How deep can oil extraction go? Because the
deepwater oil fields being explored are increas-
ingly smaller, scattered, or far from shore,
By way of comparison, North Sea Brent sweet
crude, the standard for oil traded in London,
is a light oil with an API gravity of 38°.
when will it happen?
oil companies are faced with new challenges. At current consumption levels, oil reserves are expected
Oil quality can vary. It is often heavier and more deltas such as the Niger, the Mississippi, the to last about 40 years. Gas reserves are estimated at 65 years.
viscous, and is sometimes deposit-prone. Volga and the Ural, or beneath ancient basins
in the North Sea, Algeria or the Middle East. But each additional percentage point in recovery postpones
Ultra-deep fields: Such deposits represent a colossal challenge the deadline by two years.
the new frontier for engineers. Pressures and temperatures are
Not all ultra-deep fields are found offshore. very high at such depths2, and existing tools
While there are no oil fields in operation today and methods are either unsuitable or com- ccording to the BP Statistical
ONLY ONE THIRD at depths of more than 5,600 meters, many
geologists believe that additional oil and gas
reserves lie even deeper (6,000 to 8,000
pletely ineffective. At depths of more than
4,000 meters, exploration is difficult and
drilling is very expensive. Nonetheless, gas is
A Review of World Energy, there are
1.39 trillion barrels of proven oil
reserves1. This compares with one trillion
OF ALL OIL DEPOSITS meters underground) in specific geologic
configurations, such as the piedmont areas
being pumped in the North Sea from approxi-
mately 5,500 meters below the ocean floor
barrels consumed since the beginning of the
oil era. Reserve estimates have risen con-
are actually exploited of the Andes or Central Asia, in major river in the Glenelg, West Franklin and Elgin
Franklin fields, at temperatures approaching
200°C. This is a feat, since electronics have
stantly, thanks to the discovery of new de-
posits and, more recently, the extraction of
frontier oils. Another opportunity exists to
a short lifespan above 170°C. Obviously, postpone Peak Oil: increasing the recovery
Alternatives: What are the personnel for onshore facility How many more years will When oil drillers must use different equipment under rate at existing fields is as good as discov- ✔ SparGulf of Mexico.
the
platform in
main technical limitations construction in some regions technical advances contin- and nuclear power these circumstances. Also, the deeper the geo- ering a new deposit.
to exploiting unconven- of the world? ue to push back Peak Oil? logic strata, the poorer the seismic image, as Approximately 35% of the oil in the ground
tional deposits? T. Pilenko: Innovation
work well together image quality deteriorates with distance. is recovered, meaning that an average of two additional 10% in the recovery rate – admit-
Thierry Pilenko: On the technical level, is has enabled us to push back Technological advances continue to push barrels of oil is left in the ground for each tedly a very favorable scenario – would
We have to find solutions there anything we don’t the decline in the North Sea The rush for Canada’s bituminous sands back Peak Oil. Oil may be a fossil fuel in finite barrel brought to the surface. Exploiting a recover 600 billion additional barrels from
for the extreme conditions know how to do yet? by ten years or so. And we is a boost for nuclear power. Enormous quantity, but the age of oil is not over yet! field to the maximum requires advanced global reserves.
present in ultra-deep waters, T. Pilenko: We know how shouldn’t forget that only quantities of power are needed to heat the Every day, oil company engineers look for recovery techniques. The primary recovery Tertiary recovery begins when a deposit
such as temperature and pres- to drill 3,000 meters below 30 to 40% of all oil deposits sands to extract the oil. The current sources new ways to postpone the terminal decline, rate from light crude deposits (the percen- approaches the end of its operating life. The
sure. But the magnitude of sea level, but we still don’t are actually exploited. of power – gas- and oil-fired plants – relea- so that the oil we cannot recover today will tage of oil surging naturally to the well viscosity of the oil is lowered by injecting
the projects on an economic, know how to pump the oil. Exploitable reserves would se large quantities of CO2 and are thus a be accessible in the future. This is a must if head) is often about 25%. Even in liquid polymers, carbon dioxide or steam into the
environmental and human Another example: we’re well practically double at a recov- major source of pollution. In early 2008, we are to continue to provide power to some form, oil contains dissolved gases that are deposit. In situ burning is another method:
scale also raises crucial versed in synfuel production ery rate of 60%. Upstream, Bruce Power, a private nuclear utility that sectors which, unlike the fuel sector, have not released when the reservoir's pressure drops some of the oil is burned in the deposit itself
concerns. How does one mine processes – GTL (gas to the advances in seismic supplies one fifth of Ontario's electricity, yet found an industrial-scale substitute for due to drilling, or when oil surges to the sur- to heat the surrounding rock. The heaviest
the oil sands of Canada while liquid), CTL (coal to liquid), research are helping us to applied for a license from the Canadian black gold. ■ face. Operators always try to regulate the oil components are burned in the process
limiting CO2 emissions? How etc. – but we have yet to discover deposits that weren’t Nuclear Safety Commission (CNSC) to build pressure of the reservoirs and the output of (5 to 10% of the crude content). The tempe-
1. BP 2008 Statistical Review.
does one sustain local econom- achieve fully satisfactory visible before, as happened in four nuclear power plants in Alberta. The 2. At a depth of 4,500 meters, the temperature is about 150°C the wells to extract the oil and the dissolved rature reaches 600-800°C, pushing the oil
ic development in producer energy yields. I am convinced Brazil recently. The issues are application follows a decision by the and the pressure is 500 bar. Beyond 6,000 meters, the tempera- gases simultaneously and for as long as towards the production wells. ■
ture is around 300°C and the pressure is 1,000 to 1,500 bar.
countries? How does one that research and develop- inescapable over the relatively Canadian federal government to prohibit possible. 1. Including bituminous sands.
adapt solutions proven in the ment will take us beyond long term for all non-renew- the construction of new coal-fired plants Significant progress has also been made in
Gulf of Mexico to environ- our present limitations. For able natural resources, which beginning in 2011, unless their green- all methods of secondary recovery. Solutions
ments as demanding as those
of the Arctic Circle? During
example, we’ve developed
solutions that will make it
by definition are finite.
And in them converge
house gases are captured and sequestered
underground. That requirement increases
@ • U.S. Energy Information Administration (EIA):
www.eia.doe.gov
• Institut français du pétrole
(French Petroleum Institute): www.ifp.fr
to increase the recovery rate include the
injection of gas or water into the reservoir.
the design phase, how does possible to liquefy natural scientific, technical, societal, the cost of the megawatt-hour from coal • Bulletin de l’Industrie pétrolière As Nathalie Alazard-Toux, Director of
(Petroleum Industry Bulletin, in French):
one factor in pressures gas at sea, turning resources economic and geopolitical by 50% compared with nuclear power, http://aspofrance.viabloga.com/files/PRB_BI Economic Studies at the Institut français du
on the equipment market, that weren’t exploitable considerations. ■ according to Bruce Power CEO Duncan P_22Jan2008.pdf pétrole, explains, “each additional percen-
• International Energy Agency - Oil Market Report:
or the availability of qualified before to good use. Hawthorne. http://omrpublic.iea.org tage point in recovery for all known deposits
increases global reserves by two years.” An
08 / ISSUE 19 / ALTERNATIVES ISSUE 19 / ALTERNATIVES / 09

6. VIEWPOINT
IS THE GREEN BUBBLE ABO UT TO BURST?
It bears no resemblance to the Internet bubble or recent real estate speculation.
For Dr. Robert Bell, author of The Green Bubble, the future of renewable energies
is assured. These technologies are continually improving, producing practical
applications and laying the foundations of our future.
with cellulosic ethanol (produced
with the entire plant) is the real key ZOOM
W
ith some 55 prepared to announce specific goals to a transition to electric vehicles. Recent
billion euros for 2009-2011. Because hybrids are clearly the so- financial
invested The landscape was different for the lution for the future. I truly believe bubbles
worldwide photovoltaic sector. Price/earnings that in ten to fifteen years more than • The Internet and
telecom bubble burst
in 2007, in- ratios, or the ratio between a com- 70% of all automobiles in the United after five years of
cluding pany’s market capitalization and its States will be hybrids. The exact tim- euphoria, from 1995
46% in wind earnings, were soaring just before ing of the switch depends on to 2000. The first signs
power 2, the green energy market the crash. In July, U.S. companies government action, but we’re headed of the bubble appeared
in 1995, when the stock
has surpassed investment in the First Solar and SunPower had P/E in that direction. Climate change price of Netscape
Internet and will soon overtake that ratios of 100 and 255 respectively. Wind power doesn’t have this prob- ty on a single site in Texas, to be combined with the economic crisis tripled on the first day
of the telecom market. While the fi- These levels are consistent with a lem, and the main obstacle to completed by 2014. The project gives governments a tremendous of trading after the
nancial crash of the fall of 2008 may speculative bubble. On October 23, photovoltaic solar energy will soon is expected to cost $10 billion, or opportunity to push in this direc- initial public offering.
Investors went on to
slow things down, there can be no their P/E ratios had dropped to disappear, with the price of silicon, $2.50 per GW. This is a rather tion, no matter what the price of buy up new technology
doubt that the market is close to its 42 and 52. the main component of solar cells, attractive capital outlay compared oil may be. We’ve seen this already: stocks indiscriminately,
peak. A speculative bubble is un- about to drop. At least, that’s what with more capital-intensive projects for the second year in a row, regardless of the
avoidable at the end of the game: Recent technical innovations the CEO of Q.Cells said to the like nuclear power plants. Will this gasoline consumption was down company’s revenue
or profits, which were
financial markets in the United States are very promising Financial Times in late June, predic- give wind power an edge in the 4% in California in 2007. This trend often zero.
THE OPINION OF always generate unsustainable bub- Financial experts continually cite ting that the market would be awash current economic crisis? Only time will continue. • The subprime crisis.
bles. But we’re not there yet. Far these P/E ratios to compare what is with silicon. Soon, we’ll also be able will tell. All of these technologies are just A real estate bubble
ROBERT BELL from it! Hedge funds liquidated their happening in renewable energies to store electricity on a large scale, entering a period of growth. We’re succeeded the Internet
bubble in 2000. A lot
Robert Bell is Chair of
“green investments” to raise cash in today with the Internet bubble. They which is necessary to make up for America is switching not on the eve of a green bubble, of investors, a lot
the Department of Economics
October 2008, causing an even har- forget that photovoltaic cell manu- the intermittent nature of green ener- to hybrids but rather at the start of a period of money to invest,
der crash for these stocks than for facturers doubled their sales each gies. NGK Insulators of Japan is now Biomass has a bright future as well. similar to what the French call “the easy credit (the now
at Brooklyn College, New York. the rest of the market. But they’ll year before the crash. In my opinion, capable of manufacturing sodium- Installed capacity quadrupled last Glorious Thirties”. This may not infamous subprime
In his previous books, Dr. Bell rebound quickly. I don’t expect to it’s completely wrong to believe that sulfur batteries that can store large year, if one includes energy from prevent crises from happening, or
loans)… all the ingre-
explained how new technologies dients were there for
see a “green bubble” in the next few every new technology eventually amounts of electricity. I think this will waste incineration and biogas from periods of recession, but the gen- soaring real estate
tend to fuel speculation. He authored years, at least not to the extent of means that the bubble must burst. cause renewable energies to take treatment plants. These resources eral trend will be upward. Green prices in the United
The Green Bubble1 in February 2007, the Internet and telecom bubble of This is far from the truth. Some tech- off completely and even to surpass also offer a response to rising fuel energies are laying the foundations States during the first
giving his explanation for the years of the century.
the nineties. The main difference nologies do in fact change the world nuclear power. Just take a look at prices. First-generation ethanol of true industrial growth. ■ The bubble deflated
stampede towards renewable today is that demand for green ener- in which we live. Renewable ener- the wind power projects announced fuel is available, and the controver- abruptly in 2007,
energies. For him, climate change gy is real, rising, and a growth engine gies fall into this category. The only by developers in recent months. One sy over the use of corn as fuel or as triggering a global
1. The Green Bubble, Robert Bell, Abbeville Press, crisis.
will turn our economies upside for manufacturing and production. question now is whether the tech- of them, Mesa Power, is about to food is overblown, in my opinion. 2007.
down. We are about to enter an And demand for wind turbines is nologies being offered by companies build 4 GW of generating capaci- But second-generation ethanol made 2. Data from SEFI, New Energy Finance.
era of intense capital investment still growing. In fact, it has been so can meet our needs today, not those
and speculation surrounding green strong that the industry’s backlog we might have in forty years – or even
energy. But the growth is not now represents two years of produc- in ten years. In this respect, fuel cells
without basis, because it is these tion – or at least, it did before the don’t have a very bright future. Not
technologies that will free us of
our dependency on oil.
financial crisis. Since then, Gamesa,
a wind turbine manufacturer, has
only is the technology too expensive,
it needs coal, oil or natural gas to
We’re at the beginning of a period similar
halted production and is no longer produce the hydrogen it uses as fuel. to what the French call ‘the Glorious Thirties’.
”
10 / ISSUE 19 / ALTERNATIVES ISSUE 19 / ALTERNATIVES / 11

7. V DECODING A guide exploring a natural phenomenon, a technology, a mechanism…
BIOMASS:
ENERGY IN THE MAKING Wood, straw, agricultural residues, organic waste… biomass
How a biomass plant works is everywhere you look. But the efficient use of this source of green
Like other power plants, a biomass plant burns fuel. Instead of fossil fuels, it burns plant
or animal residues and by-products: wood, straw, agricultural residues, organic waste, electricity – the world’s second largest renewable energy source –
etc. Burning these fuels produces steam that drives a turbine connected to an electric
generator. The turbine-generator combination, turning at very high speed, generates requires optimization of biomass collection and combustion processes.
electricity.
iomass is back on the political the European Communities: the amount of
1. Collection and preparation
Biofuels can rarely be used in their natural state.
More often than not, they contain too much water
and are too diverse to be used in an industrial
boiler. Once the wood, straw, agricultural residue
or organic waste has been collected, it is processed
and mixed for optimum boiler operation.
4. Turbine and electric generator
The pressurized steam drives a high-speed
turbine. The turbine in turn drives an electric
generator, producing electricity in the form
of alternating current. A transformer raises
the voltage of this current so that it can be
carried over the high voltage power grid.
When the steam exits the turbine, it is
converted back into water by a condenser
B agenda. In mid-June of this year,
the French government gave this
renewable energy a boost by select-
ing twenty-two projects to generate
power and heat with biomass… though the
decision came a year and a half after the
request for proposals! The plants, to be com-
electricity generated from biomass (including
biogas, municipal waste and wood) has
practically doubled in six years, rising from
40 to 80 TWhe between 2000 and 2005. This
is an improvement, but it still only represents
2.5% of the electricity supplied to Europeans.
On a global scale, biomass contributes just 1%
and sent back to the boiler.
missioned by 2010, will be located in eleven of total electric power generation.
3. Boiler different regions and will consume energy Yet biomass is an energy resource found all
Inside the boiler, pressurized cold water flows from organic plant matter. The power gener- over the world, whether as agricultural waste,
through a series of tubes. The heat released by
combustion is used to heat the water flowing through ated will be bought at a firm price of 128 euros wood chips, or dried treatment plant sludge,
these tubes, turning it into superheated steam. per megawatt-hour. Most of the fuel will come to name but a few. Biomass power plants
from forest and paper industry waste, but straw have managed to gain a foothold mainly in
and even grape pomace will be used in some countries that produce large volumes of
cases. The plants will have a combined gen- organic waste, including waste from the
erating capacity of 300 MWh, raising France’s paper and agri-food industries, household
installed biomass capacity to a total of refuse, and biogas from the fermentation of
700 MWe. A drop of water in the ocean in the treatment plant sludge. At the top of the list:
overall scheme of France’s electricity! the United States, which generated 56 TWh
It is true that France has long neglected of biopower in 2005, and Brazil, which favors
biomass. In 2004, electricity generated from bagasse from sugar cane and biogas from
2. Combustion chamber
Pre-mixed biomass fuel is burned in the combustion biological resources represented a mere distillery effluents.
chamber, releasing heat. The lower heating value 1.74 TWhe in France, just 0.3% of its power Generating electricity from biomass is a
(LHV, or amount of heat released during combustion)
varies according to the material and its moisture consumption. This will rise to 0.6% once the very simple process. It works on the
content: 4.9 kWh/kg for wood pellets, 4 kWh/kg new plants have come on line. The trend is the same principle as any other thermal
for straw, and 2.5 kWh/kg for wood. same in all of the EU’s 27 member states, power plant operating with coal
according to Eurostat, the statistical office of or heavy fuel oil. Like those
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