200
which has allowed the production of “unconventional” resources that were
previously inaccessible. These are commonly referred to as “tight oil” and “shale
gas.” The scale of this development has moved the US importer of oil (60% of
consumption in 2006) and natural gas (16% of consumption in 2007) to become a
net exporter of gas in 2017 and (soon to be) petroleum (expected in 2020–2022).
Unconventional production of oil and gas is being deployed worldwide.
Coal deposits are more widely distributed in the world, leading producers of with
some notable exceptions, different from leading producers of oil and gas. Further,
because coal is primarily used for electricity generation, which can also be generated
from other primary energy sources, it is not as critical to the energy security modern
economies as petroleum.
Petroleum and natural gas can be moved efficiently over large land distances
(and shallow seas) by pipeline. Coal is primarily moved overland by rail or river
barge. Electricity can be moved efficiently over several hundred miles using
about- ground, High Voltage Alternating Current (HVAC) transmission lines.
Longer distances require more costly High Voltage Direct Current (HVDC) transmission lines.
Moving energy across seas and oceans typically requires ships. Because oil has
a high energy density (by mass and volume) and requires no treatment before or
after movement by ship, it is a relatively easy commodity to move. As a result,
transportation costs are relatively low, and oil prices are very similar in all major
markets around the world—moving up or down in unison.
In contrast, coal has a lower energy density (approximately 24 MJ/kg compared
to approximately 45 MJ/kg for oil) and, therefore, higher transportation costs per
unit of energy. Thus, islands that require energy to be shipped to them generally
utilize petroleum to a large extent (e.g., for electricity generation and heating as well
as transportation) than other locations.
Natural gas has a very low energy density and requires liquefaction before being
shipped. Thus, transportation of liquefied natural gas (LNG) has a high transportation
cost compared to oil and markets in different parts of the world typically have
notable differences in prices.
The movement of all energy sources requires significant infrastructure.
Energy is also “embedded” in the trade of other products. That is, energy is used
to produce products that are then traded to other countries. The location of the
energy used to produce a product is separated from the location of the final use or
consumption of the product. This increases energy use (and) in the country producing the product (known as “on-shoring”) and decreases the energy use in that country receiving and using/consuming the product (“off-shoring”). Energy-intensive
industries include bulk chemicals, refining, mining, agriculture, and iron, steel, and
aluminum production. Embedded energy is analogous to virtual water trade, as
discussed in the next section.
An important aspect of embedded energy is that any emissions of greenhouse
gases or other pollutants associated with the traded products are also on-shored or
off-shored.
P. Saundry and B. L. Ruddell
which has allowed the production of “unconventional” resources that were
previously inaccessible. These are commonly referred to as “tight oil” and “shale
gas.” The scale of this development has moved the US importer of oil (60% of
consumption in 2006) and natural gas (16% of consumption in 2007) to become a
net exporter of gas in 2017 and (soon to be) petroleum (expected in 2020–2022).
Unconventional production of oil and gas is being deployed worldwide.
Coal deposits are more widely distributed in the world, leading producers of with
some notable exceptions, different from leading producers of oil and gas. Further,
because coal is primarily used for electricity generation, which can also be generated
from other primary energy sources, it is not as critical to the energy security modern
economies as petroleum.
Petroleum and natural gas can be moved efficiently over large land distances
(and shallow seas) by pipeline. Coal is primarily moved overland by rail or river
barge. Electricity can be moved efficiently over several hundred miles using
about- ground, High Voltage Alternating Current (HVAC) transmission lines.
Longer distances require more costly High Voltage Direct Current (HVDC) transmission lines.
Moving energy across seas and oceans typically requires ships. Because oil has
a high energy density (by mass and volume) and requires no treatment before or
after movement by ship, it is a relatively easy commodity to move. As a result,
transportation costs are relatively low, and oil prices are very similar in all major
markets around the world—moving up or down in unison.
In contrast, coal has a lower energy density (approximately 24 MJ/kg compared
to approximately 45 MJ/kg for oil) and, therefore, higher transportation costs per
unit of energy. Thus, islands that require energy to be shipped to them generally
utilize petroleum to a large extent (e.g., for electricity generation and heating as well
as transportation) than other locations.
Natural gas has a very low energy density and requires liquefaction before being
shipped. Thus, transportation of liquefied natural gas (LNG) has a high transportation
cost compared to oil and markets in different parts of the world typically have
notable differences in prices.
The movement of all energy sources requires significant infrastructure.
Energy is also “embedded” in the trade of other products. That is, energy is used
to produce products that are then traded to other countries. The location of the
energy used to produce a product is separated from the location of the final use or
consumption of the product. This increases energy use (and) in the country producing the product (known as “on-shoring”) and decreases the energy use in that country receiving and using/consuming the product (“off-shoring”). Energy-intensive
industries include bulk chemicals, refining, mining, agriculture, and iron, steel, and
aluminum production. Embedded energy is analogous to virtual water trade, as
discussed in the next section.
An important aspect of embedded energy is that any emissions of greenhouse
gases or other pollutants associated with the traded products are also on-shored or
off-shored.
P. Saundry and B. L. Ruddell