Demand for Unconventional Oil and Natural Gas Resources

Report Highlights

• Demand for unconventional oil will reach 10.31 million barrels in 2008, up from 8.59 million barrels in 2003 at an average annual growth rate (AAGR) of 3.8%.
• Through 2008, demand for unconventional natural gas will reach 12.78 trillion cubic feet, rising at an AAGR of 10.7% from 7.68 trillion cubic feet in 2003.
• Worldwide deposits of heavy hydrocarbons are estimated at 5,400 billion barrels and four-fifths of these are in the Western Hemisphere. In the U.S., they are estimated to be more than eight times those of remaining crude oil reserves.
• Through 2008, the use of unconventional oil and natural gas, a primary feedstock for chemicals and in petrochemical manufacture, also is expected to make major contributions to global energy demands.

INTRODUCTION

Numerous publications have warned that conventional oil production is near an unavoidable, geologically determined peak that could have consequences up to and including, “war, starvation, economic recession, and possibly even the extinction of homo sapiens.” Simultaneously, the U.S. is facing severe natural gas shortages. Deregulation and restructuring of the natural gas industry in many countries worldwide also have led to the development of new markets. These newer markets dramatically have changed how the industry operates. Also, over the past three years, new environmental legislation has come onstream. These factors have affected the demand pattern for natural gas.

New technologies for in-situ recovery of oil sands, and various other downhole technologies allow companies to optimize the production of petroleum resources from wells with more complex geometry and producing horizons that are in deeper coal beds, deeper and tighter formations, and in accumulations containing heavier oil or bitumen. These technologies have reduced both the operating and supply costs of unconventional oil. Renewed interest in these processes has led to huge investments in unconventional oil and gas development being driven by concerns of an imminent peak in world conventional oil and gas production.

This report covers the market for unconventional oil and natural gas resources and looks at the utilization scenarios. It assesses the role of unconventional oil and natural gas as a primary energy resource, and as the major feedstock for the production of highquality clean power and premium chemicals.

SCOPE OF STUDY

The report contains:

• An overview of the industry, its importance relative to the U.S. economy, a brief history and important indications for the industry
• Discussion of the government environmental/energy regulations including compliance and quantification of economic effects
• Analysis of the structure of the natural gas industry and competitive aspects
• Evaluation of unconventional oil and natural gas demand by product type with forecasts made to 2008
• Evaluation of unconventional oil and gas resources consumption by type and application, also with forecasts to 2008
• Analysis of technology and international aspects, and
• Profiles of more than 100 companies involved in the .

METHODOLOGY

In this report, both historic and current data have been used in the unconventional oil and gas analysis. Results of calculations presented here are based on three components: historic analysis of demand/use in the period from 2000 to 2003, estimates for 2003, and forecasted demand for the 2003 to 2008 time frame.

INFORMATION SOURCES

Information sources include trade data (national and international), company publicity literature, conference reports, world trade technical journals and interviews with company representatives.

RESEARCH CREDENTIALS

Edward Gobina is Research Professor in Chemical & Processing Engineering and has over 15 years research and teaching experience in petrochemical reaction engineering, catalysis and membrane technology. He has published extensively with over 80 publications in international scientific journals. He is the author of three patents on membrane related technologies and of over 10 previous reports relating to the chemical energy, and oil and gas industries. He is currently the principal investigator of three externally funded research projects involving postdoctoral researchers designing new compact reactor systems for enhancing fluid processing in offshore/deepwater platforms. Dr. Gobina is member of the European Membrane Society, the North American Membrane Society and the New York Academy of Sciences. He is currently the director at the Centre for Process Integration and Membrane Technology within the school of engineering at the Robert Gordon University in the U.K.