Research by the barrel

Research by the barrel

The United States is the world's largest consumer of energy, though China will soon overtake us. Eighty-five percent of the energy we use comes from oil, gas or coal, with oil the leader because of its importance to transportation. We produce 10 percent of the world's petroleum, and we consume 24 percent.

Oil is a matter of numbers: how much is left, how much we need, how much we pay, how much damage it incurs. Stanford researchers—scientists, economists, engineers and political scientists—are working on all these matters, on which so much of the world's economy and security rely.

Energy research is under way at more than 20 departments, schools, independent laboratories and affiliates programs at Stanford, and much of it has to do with oil. The department formerly known as Petroleum Engineering, today Energy Resources Engineering, is the principal hub.

"Our transition from petroleum to energy resources was meant to position us to evolve with and impact the direction of energy research in general," said department chair Lou Durlofsky. "The idea is not that we're abandoning conventional oil and gas; rather, the idea is that we're broadening the program to address a wider range of research and teaching areas."

It is precisely that wider range that inspired the recent establishment of the Precourt Institute for Energy (PIE), which brings together researchers in many energy-related fields. The institute, led by Lynn Orr, the Keleen and Carlton Beal Professor in Petroleum Engineering, will embrace new projects as well as centers and research groups already in existence.

Running out?

The 2008 presidential campaign at times seemed to be all about oil. Skyrocketing prices (which later went down), the need (or not) to drill offshore and the desire to free the country from the clutches of "foreign oil" were all topics of animated debate.

Grebe after spill

A grebe warms itself on the rocks near Albany, on San Francisco Bay. Usually grebes don't sit on rocks, but this one was covered with oil after a tanker ship hit San Francisco Bay Bridge on Nov. 7, 2007.

oil spill cleanup

Contract workers clean the rocks south of Albany Beach on Nov. 14, a week after the spill. Oil continued to wash ashore here for months. Photos: Friends of Five Creeks

Regarding the problem of foreign oil, researchers point out that oil is fungible, it moves around and is traded, and there's no way of telling where your gas originated. The principal supplier to the United States is Canada, followed, in order, by Saudi Arabia, Mexico, Venezuela and Nigeria.

Renewable energy is a priority for the Obama administration, venture capitalists and anyone concerned about the viability of the planet. In California, the Global Warming Solutions Act (AB 32) mandates that the state reduce overall greenhouse gases to 1990 levels by 2020, which has spurred research and development in new sources. (Oil, of course, is only part of the panorama; roughly half the electric power in the United States is generated by coal.)

But regardless of the commitment to a green economy, there is little doubt that in the coming decades the world will use just about every drop of oil it can squeeze out of the Earth. How long will it last?

"Peak oil" is the point at which the rate of production starts to decline and new technologies are implemented. Calculation of that point uses the so-called Hubbert bell curve, named after M. King Hubbert, a Shell geologist who in 1956 forecast a peak of U.S. oil production. The curve tracks discoveries and production; the difference between the two at any given time represents reserves.

It is generally assumed that the globe has, very broadly, 3 trillion barrels of oil. The first trillion has been produced. The second trillion sits in reserves (oil we know is there but haven't yet extracted) and could probably last for 40 years at current rates of consumption, according to the International Energy Agency (IEA).

Where will the third trillion come from? New discoveries (such as in the Caspian region), new sources (so-called heavy oils) and what is known as enhanced recovery, or new extraction technologies.

Roland Horne

Roland Horne

"The Saudis are working a lot harder to get the oil out than they used to," Roland Horne, the Thomas Davies Barrow Professor in the School of Earth Sciences, told the Woods Institute's Energy Seminar last fall. "More rigs are being set up to extract the same amount of oil. Wildcat drilling is less effective than it used to be, and the fields are yielding less. It's getting harder and more expensive to discover and deliver oil."

According to an IEA report in November, production continues to outstrip discoveries. Not only are we doing more with less, but production is flattening. "Current global trends in energy supply and consumption are patently unsustainable," the report said, "environmentally, economically and socially."

A contentious curve

Not everyone agrees that the Hubbert curve is operative. Steven Gorelick, the Cyrus Fisher Tolman Professor in the Department of Environmental Earth System Science, is not a fan. He notes that no matter when the peak oil conversation takes place—now, in the 1950s or in-between—it always seems like we have 40 years left. This makes him suspicious.

"The Hubbert curves seems logical, but it's not a statistical distribution," he said, "and it's full of fallacies. It's a bad model, and it just doesn't fit the data."

Production can be (and is) declining for reasons other than declining resources, he points out. Reserves are defined by our ability to get them out; if we can't get at them, they're not reserves. Our abilities change with every new technological innovation. So do our needs and behavior. And there are substitutes for oil, he says; they may not be good ones, but they're there. Peak oil is a fashionable fear, he says, not one based on science.

One of Gorelick's opposites on this issue is geophysicist Amos Nur, the Wayne Loel Professor of Earth Sciences, Emeritus. The two appeared together at a 2005 event titled "The End of Oil?" with Nur taking the position that production is irreversibly declining.

Somewhere in the middle is Horne, former chair of the Department of Energy Resources Engineering, for whom there are several peaks: one in reserves, which has to do with geology, and one in the rate of production, which has to do with economics and politics. Also, there are peaks in gas, coal and uranium. It's a complicated picture.

But in any case, he says, the easy oil is gone.

Not just 'Drill, baby, drill'

So engineers are focusing on new ways of getting that third trillion out, a challenge that requires a combination of multiple tasks and expertise.

Geological modeling and geostatistics, by which scientists deduce the distribution of rock properties in the subsurface, are longstanding strengths at Stanford, Durlofsky said. Then comes flow simulation, using computational models to figure out how oil, water and gas move through subsurface formations. Durlofsky himself is an expert in the modeling of flow in reservoirs and wells.

"Wells can be very complicated," he said. "You might picture them as extending just vertically, but they are often horizontal and can even contain branches that extend out from the main bore. Some of the newest high-tech wells contain control valves that operate deep in the subsurface but can be opened or closed from the surface."

Then you have to get the oil out, which also involves a lot of computation. Enhanced oil recovery (EOR) refers to methods for getting more out of existing production or for unlocking unrecoverable reservoirs. EOR has been used for decades, especially in Texas; according to Horne, it could account for as much as a quarter of U.S. oil production by 2030.

One of EOR's chief champions at Stanford is Margot Gerritsen, assistant professor of energy resources engineering.

Gerritsen on oil rig

Margot Gerritsen, during her trip to an oil platform in the Gulf of Mexico. Photo: Courtesy Margot Gerritsen

"Our department is the only one at Stanford that works on reservoir simulation," Gerritsen said. "Looking ahead, we'd like to do more with EOR and CCS," or carbon capture and sequestration, "because we have lots of knowledge there." Trained as a computational mathematician (PhD, Stanford '97), Gerritsen is an expert in fluid flow modeling, particularly for gas injection and in-situ combustion, two methods for forcing out the oil.

"We'd also like to be doing in-situ upgrading," she said. "Heavy oils are very dirty and expensive, because they cost more to refine and there's a lot of waste. So we'd like to improve the quality of the oil inside the reservoir, which we hope we'll be able to do with combustion.

"If the combustion and steam go on inside the reservoir, then the goop is left behind."

Heavy oil

So what about that heavy oil that's so dirty and expensive?

"Everyone has an opinion," Durlofsky said, "but most people agree that we're going to have to tap into so-called unconventional resources, of which heavy oil is one. We're investigating, both computationally and in the lab, to understand how they can be produced more cleanly."

Sally Benson

Sally Benson

Gerritsen is an optimist about the virtues of using these resources, which include tar sands in Alberta and Venezuela and oil shale in Utah and Colorado. President Obama's first trip abroad as president was to Canada, and tar sands were on the agenda. It is a politically fraught issue; Greenpeace, for one, says that skyrocketing carbon dioxide emissions in Canada as a result of tar sands development constitute a violation of the 2002 Kyoto Protocol.

Stanford engineers think they might be able to help. CCS, a technique still largely in the planning stages, is the process by which carbon dioxide generated from coal-fired (or natural gas-fired) power plants is stashed away someplace where it will never come back. The plan is to put it into subsurface formations, mostly saline aquifers, but also depleted natural gas and oil reservoirs.

People who study flow mechanics for the purpose of oil extraction thus can help with the CCS process. "We use a combination of theory, experimentation and simulation to predict the size of the CO2 plume, where it will move and how much we can store," said Sally Benson, director of Stanford's Global Climate and Energy Project (GCEP) and one of Stanford's chief researchers in CCS. Another overlap between sequestration and extraction can be found in EOR; carbon dioxide can be injected into reservoirs to force out stubborn oil. Some of the injected CO2 remains in the reservoir. The CO2 that comes out with the oil is separated and then reinjected back underground.

National oil companies

David Victor

David Victor

Another objection to the peak oil debate comes from another corner of the university, law Professor David Victor's Program on Energy and Sustainable Development (PESD), a multi-year, interdisciplinary program housed at the Freeman Spogli Institute for International Studies.

Assistant Director for Research Mark Thurber, who has a doctorate in mechanical engineering, recently wrote an article titled "Why the Peak Oil Debate Misses the Point in an NOC-Dominated World," NOCs being national oil companies. According to this argument, the fact that 80 percent of the world's proven reserves are in the hands of state-run companies that often behave in an economically counterintuitive fashion has far more impact on available supplies than does the actual amount of petroleum in the Earth.

"Governance, not geology, is what matters most" in determining how much oil we have, Victor said.

The world's top NOCs are those of the Middle East, Venezuela, Africa, Russia and Latin America. In terms of ownership of oil reserves, they occupy the top 14 slots. ExxonMobil comes in at No. 15.

"The main limits on supply are above-ground factors," Thurber said. "Resources have peaked in some places, but there's a lot left. But for political reasons, because of the people with title to the oil, you can't get at it."

Venezuela is an obvious example. At one time, Petróleos de Venezuela (PDVSA) was relatively independent. But as the price of oil rose, President Hugo Chávez was tempted to meddle, Victor said. Revenues from the company pay for social programs while new exploration languishes. At the same time, non-NOCs cannot risk investing there, and so vast reserves go untapped.

Stanford law graduate David Hults (JD '08) is a PESD research fellow with a master's degree in international relations and work experience at the U.S. Department of State. In a paper on the Venezuelan national company, he argues that Chávez's overhaul of the company has weakened its performance while giving Chávez greater access to oil wealth.

"I became interested in energy, most of all in oil, as a way of understanding change within Venezuela," he said. "Since starting my PESD fellowship I've looked more broadly at oil-sector governance in the developing world. It drew my attention because oil fuels many developing economies, yet the governance systems for oil vary enormously."

One exception to the rule is Brazil, whose NOC, Petrobras, recently announced major underwater exploration efforts. Petrobras is "unbelievably efficient, it's run like a best-practices private firm," Victor said. "In Brazil, the investments are so huge and sophisticated that no one knows enough to meddle."

The paradox of plenty

But if Brazil is managing to benefit from its natural resources, that is not the case with other countries, which find that sitting atop great wealth can be a great misfortune. War, poverty, corruption and environmental degradation are the rule, not the exception. This notion is often referred to as the resource curse, though political science Professor Terry Karl prefers "paradox of plenty," the title of one of her books and the topic of her fall sophomore seminar, Oil, Regime Change and Conflict.

According to Karl, the Gildred Professor in Latin American Studies, "Petro-states become marked by especially skewed institutional capacities." Over-reliance on oil revenues to the detriment of other sectors; a lack of productive linkages throughout the economy; an emphasis on capital-intensive heavy industry for extraction; and overly quick development all mark the petro-states. Victor refers to NOCs as instant cash machines; likewise, Karl speaks of these countries' "addiction to oil rents. They are inherently unstable, with no structural defenses against boom-bust cycles and no civil society to ensure economic and cultural health."

Terry Karl's class

Political scientist Terry Karl, surrounded by Iraq, Colombia, Azerbaijan, Venezuela et al., aka her sophomore seminar students. Photo: Courtesy Terry Karl

These were the challenges facing the 14 members of Karl's sophomore seminar. Each one represented an oil-producing country of varying economic and political health; they included the United Arab Emirates, Colombia, Venezuela, Congo, Iraq, Nigeria and Azerbaijan. Class discussions explored history, the environment, ethnic rivalries, dictatorships, geography and infrastructure as the students tried to figure out what their countries should and will do with their oil.

"Oil prices have dropped 60 percent since summer," Karl noted one day. "How many of you won't be borrowing soon?" The United Arab Emirates' and Colombia's hands shot up.

But though Colombia may avoid short-run economic ruin as oil prices decline, its representative in the seminar acknowledged it was a mixed blessing. Guerrillas and drug traffickers have bombed Colombian pipelines. In Nigeria, oil companies buried pipelines to avoid that problem, which led to an even graver environmental catastrophe.

Colombia is not the only country where armed rebels of one sort or another have gotten involved in oil. Nearly all the students reported regional, class or ethnic tensions or fighting. Some were new conflicts, perhaps spurred by oil and its wealth; others were old ones that had been exacerbated or transformed. Oil and democracy do not generally mix, they found, though there also are cases, which the class quickly identified (Russia is a prime example, or it was), where oil can buy peace.

"What a messy story this is!" exclaimed Karl as the students analyzed the circular causes and effects of war, corruption, environmental decay and poverty. "We have rebels, governments, oil companies, paramilitaries, armies ... Who controls this mess?"

Petroviolence

Michael T. Klare, who was introduced to a Stanford audience in the fall by Paul Ehrlich with the words, "He is my hero," is not optimistic that this mess is going to get cleaned up any time soon. The Five Colleges Professor of Peace and World Security Studies at Hampshire College, Klare was invited to Stanford by the Woods Institute. While here, he gave several talks outlining the oil crisis, which he said was the result of increased demand from Asia, diminishing supply (the peak problem) and the emergence of new, insecure supply centers such as Venezuela, Africa and the Caspian Sea.

The geopolitics of oil is nothing new; Iraq was essentially created to ensure that Britain would have a source of oil, and the CIA helped overthrow the government of Iran in 1953 after it tried to nationalize its oil. But Klare is worried that oil will be the cause of major violence in the short run. A recent Pentagon report predicted that China and the United States could clash over oil, and the Department of Defense has requested more military hardware in the face of this threat. Chinese leaders, of course, have the same fears about the United States, he said.

"It's a self-sustaining arms race, and no one's paying attention," Klare said. "Averting an oil war is the most important foreign policy priority for the next American president."

Amos Nur also predicts global conflict over diminishing energy resources; in a paper revised in 2007, he said, "The Gulf War, the 9/11 attack and the current war in Iraq are just the first three skirmishes. These conflicts pale in comparison to the potential conflict over oil with China."

But David Victor begs to differ. "It's not efficient to go to war over oil," he said. In a recent article, he was even more blunt: "Classic resource wars are good material for Hollywood screenwriters. They rarely occur in the real world."

Victor, also an adjunct senior fellow at the Council on Foreign Relations, criticizes what he calls the "threat industry's" simplification of China's economic strategy, the impact of high oil revenues (more complicated than it appears) and global climate change. In his view, the principal place to look for trouble is failed states, dictatorship and under-investment.

The profession

David Victor has degrees in history, political science and international relations and teaches at the Law School. Margot Gerritsen worked on mathematics and fluid mechanics, particularly waves. Mark Thurber studied mechanical engineering. Sally Benson is a hydrologist. Terry Karl specializes in comparative politics and human rights.

And they all study oil.

One of the most interesting of Stanford's various affiliates programs related to oil is called Smart Fields. The idea is that the oil field and, by extension, the academic field must be integrated in order to optimize science and production. The multidisciplinary venture, hosted by the Center for Computational Earth and Environmental Science, spans schools and departments.

"Management science and engineering people are world-class experts in optimization algorithms," Durlofsky said. "The geophysics people know the seismic and sensing technology, and we know about reservoir modeling and flow, so the idea is to integrate them all.

"Oil may be just a portion of the overall energy picture for our students, so they have to have broad training," he added. Applications to the Energy Resources Engineering Department are way up, he said, both in oil research and in new energy resources.

Roland Horne said the challenges are urgent and immense, providing excellent opportunities for young engineers and related professionals. If you're willing to travel, take on lots of responsibility early on, train in new fields and keep a broad perspective—then maybe oil is for you.

Lynn Orr also stressed the multidisciplinary aspects of oil research.

"There is lots of potential for useful collaboration," he said. GCEP will be part of PIE, as will the existing Precourt Energy Efficiency Center, and PESD also will work with the new institute.

"There is a need for social scientists and technology designers to interact to help us make rational decisions on how we use energy," he said. "There is an opportunity for interaction among geologists, geochemists, hydrologists and engineers to figure out how to trap CO2," which is his particular field of expertise.

"And there is much potential for engineers and scientists in multiple disciplines to work together at the boundaries of their fields to design new conversion technologies and to work with those who design policies to encourage more efficient use of energy and lower greenhouse gas emissions."