The IEA forecasts global oil demand through 2030 in its annual World Energy Outlook.  According to a Bloomberg.com report the forecast is for the world oil demand to move from 85 million barrels of oil per day in 2008 to 105 million barrels of oil per day in 2030.  That is down slightly from last year’s forecast of 106 million barrels of oil per day, due to the global economic slump.

What is particularly interesting, however, is where that oil demand will be coming from.

The graphic below, published by Economist.com, shows that in 2030 the OECD countries (United States, Europe, and Japan combined) will use less oil  than they did in 1980.  But non-OECD countries will see massive increases, led by Asia and particularly China and India.  Transportation, specifically growth in car usage, will account for 97% of the increase.

“It’s the same royalty rate regardless of whether you have drilled and are taking oil and gas from a known play or whether you’re in a play where you’re a wildcatter and put up with a lot of risk for a discovery,” Salazar said. “I think if companies are taking a bigger risk, there ought to be ways of incentivizing that.”

He went on to say that onshore royalty rates have not changed in 30 years, and that he didn’t feel Gulf of Mexico should be considered “high-risk” projects.

APRA-E is an agency within the U.S. Department of Energy.

Last Wednesday its first director, Dr. Arun Majumdar, was confirmed by the Senate.  On Friday it announced the first research awards totaling $151 million.

The purpose of ARPA-E, as described in a New York Times article, is to “nurture…radical proposals, most of which will probably fail but a few of which could [quoting Energy Secretary Steven Chu] have ‘a transformative impact’” on energy technology.

Modeled after the Defense Advanced Research Project Agency (DARPA), its purpose is to fund high-risk, high-reward technology development.  Its objective is to quickly assess the viability of technology and decide whether continuing federal funding is appropriate, whether to make it available for venture capital investment, or whether to cease funding.

The program announced 37 awards in a variety of fields, including:

• Energy storage
• Biomass energy
• Carbon capture
• Renewable power
• Direct solar fuels
• Building efficiency
• Waste heat capture
• Vehicle technologies
• Water
• Conventional energy

The Senate also confirmed Dr. Arun Majumdar as Director of the new Advanced Research Projects Agency — Energy (ARPA-E).  This new agency, modeled on the Defense Advanced Research Projects Agency (DARPA), will focus on disruptive energy technology research.  It will focus on high risk, high potential return research using approaches pioneered in the venture capital industry.

The White House issued the following short biographical summaries for Drs. McNutt and Majumdar:

Dr. Marcia K. McNutt, Nominee for Director of the United States Geological Survey and Science Advisor to the Secretary of the Interior
Dr. Marcia McNutt studied geophysics at Scripps Institution of Oceanography in La Jolla, California and earned her PhD there in Earth Sciences in 1978.  She spent 3 years with the USGS in California working on earthquake prediction.  She joined the faculty at MIT in 1982 where she was appointed the Griswold Professor of Geophysics and served as Director of the Joint Program in Oceanography & Applied Ocean Science & Engineering, a joint program offered by both MIT & the Woods Hole Oceanography Institution.  Marcia has participated in 15 major oceanographic expeditions and served as chief scientist on more than half of those voyages.  She has published 90 peer-reviewed scientific articles and also chaired the President’s Panel on Ocean Exploration convened by President Clinton to examine the possibility of initiating a major US program in exploring the oceans.  She is a fellow for the American Geophysical Union, the Geological Society of America, the American Association for the Advancement of Science and the International Association of Geodesy.  She is a member of the National Academy of Sciences, the American Philosophical Society and the American Academy of Arts & Sciences and serves on numerous evaluation and advisory boards for institutions such as the Monterey Bay Aquarium, Stanford University, Harvard University and Science Magazine.

Arun Majumdar, Nominee for Director of the Advanced Research Projects Agency – Energy, Department of Energy
Arun Majumdar is currently the Associate Laboratory Director for Energy and Environment at Lawrence Berkeley National Laboratory and a Professor of Mechanical Engineering and Materials Science and Engineering at the University of California, Berkeley. He has had a highly distinguished research career in the science and engineering of energy conversion, transport, and storage ranging from molecular and nanoscale level to large energy systems. For his pioneering work, he was elected as a member of the National Academy of Engineering in 2005. At Berkeley Labs and UC Berkeley, he helped shape several strategic initiatives in the areas of energy efficiency, renewable energy as well as energy storage, and testified before Congress on how to reduce energy consumption in buildings. He has served on the advisory committee of the National Science Foundation’s engineering directorate, was a member of the advisory council to the materials sciences and engineering division of DOE’s Basic Energy Sciences, and was an advisor on nanotechnology to the President’s Council of Advisors on Science and Technology. Dr. Majumdar has also been an entrepreneur, and has served as an advisor to startup companies and venture capital firms in the silicon valley. He received his Bachelors in Mechanical Engineering at the Indian Institute of Technology, Bombay in 1985 and his PhD in 1989 from the University of California, Berkeley.

Murkowski is the ranking Republican on the Senate Energy and Natural Resources committee.

As reported in The Hill, she is open to voting in favor of a cap-and-trade bill if it includes provisions that expand domestic offshore oil and gas exploration as well as boosting nuclear energy.

Murkowski’s statement follows the joint op-ed in the New York Times last week by Sens. Lindsay Graham (R-So. Carolina) and John Kerry (D-Massachusetts).  Kerry is the lead sponsor of the Senate climate change bill.

In the op-ed the two Senators outline a set of principles they agree on:

1. Climate change is real and reducing greenhouse gases is a prime objective.  This should be done using market based systems to reduce impact on large carbon emitters;
2. Invest in renewable energy sources, but expand nuclear energy;
3. Break dependence on foreign oil and consider options to expand domestic onshore and offshore oil and gas production;
4. Preserve U.S. jobs by considering tariffs on imported products from countries without adequate measures to reduce carbon emissions.

It remains unclear whether climate legislation can pass the Senate this year, but Murkowski and Graham’s willingness to work on this issue with their Democrat colleagues improves the odds.

Please share examples of how past policy decisions have had long-term negative impact in oil and gas, minerals, water, etc.  Are there currently policies under consideration that could have similar long-term impact?  Let’s get a discussion going.

In an accompanying statement Kerry, chair of the Senate Foreign Relations Committee,  called the legislation “a security bill that puts Americans back in charge of our energy future and makes it clear that we will combat global climate change with American ingenuity. It is our country’s defense against the harms of pollution and the security risks of global climate change.”

Boxer, chair of the Senate Environment and Public Works Committee, continued, “[W]e know clean energy is the ticket to strong, stable economic growth — it’s right here in front of us, in the ingenuity of our workers and the vision of our entrepreneurs. We must seize this opportunity, or others will move ahead…”

Sen. Jim Inhofe (R-Okla.), ranking member of the Environment and Public Works Committee and an outspoken skeptic of anthropogenic climate change, responded sharply, “Despite an earnest attempt, including eight months of deliberation and negotiation to refashion the obvious, Senators Boxer and Kerry produced yet another massive energy tax that will destroy jobs, raise electricity and gasoline prices, and make America less competitive.”

The bill has two principal parts:

1. Specific policy initiatives for pollution reduction, transition, and adaptation, including:
   • Carbon capture and sequestration
   • Nuclear energy technologies
   • Water efficiency
   • Energy efficiency and renewable energy
   • Public transportation vehicle emission reductions
   • Clean energy and natural gas technologies
   • R&D programs
   • Workforce and job creation programs
   • Climate change adaptation and public health
2. Pollution Reduction and Investment (a.k.a. Cap-and-trade)
   • Targets reducing greenhouse gas emissions (referred to by authors as “global warming pollution”) to 97% of 2005 levels by 2012, 80% by 2020, 58% by 2030, and 17% by 2050.
   • Emissions covered include carbon dioxide, methane, nitrous oxide, sulfur hexafloride, hydrofluorocarbons emitted as a byproduct, perfluorocarbons, and nitrogen trifluoride.  The legislation give the EPA Administrator authority to include other anthropogenic greenhouse gases as deemed necessary to accomplish objectives of the bill.
   • Program focuses on approx. 7,500 facilities that account for nearly 75% of U.S. emissions.  According to the committee, 98% of U.S. businesses and 100% of farmers are not included in the program.  The full bill language has not yet been posted, to locate a list the targeted emitters, but materials supplied by the committee indicate it targets facilities emitting more than 25,000 tons of regulated emissions annually.

Senate committees will now begin considering the legislation, readying it for action on the Senate floor when the health care debate is finished.   Any bill passing the Senate would then have be conferenced with the Waxman-Markey bill passed by the House of Representatives.

He also explains how many of the major energy companies are moving aggressively in this space.  Many are focused on biofuels, which are closely associated with the transportation fuels these firms already refine, and market.  But others continue to pursue wind, solar, and geothermal energy, among others.

A Sept. 28, 2009 Newsweek article entitled Big Oil Goes Green For Real by Rana Foroohar expands on this theme:  “…companies are actually beginning to think about alternatives [energy] not just as a tool for greenwashing (throw up a few solar panels here, sponsor a conference on wind energy there) but as real businesses that might one day turn real profits–or at least help make fossil-fuel production more profitable.”

The article quotes former Chevron technology executive Don Paul who “…believe[s] the large integrated oil firms will eventually become major players — perhaps even the dominant players — in alternative energy.”

According to the Department’s press release, “[T]he MMS is carefully reviewing all of the comments submitted. Following the review and analysis of the comments, which is expected to take several weeks due to the large number of comments, the next step in the process is to initiate environmental analysis and public scoping opportunities associated with the five year plan, required by law, for oil and gas development in the OCS.”

Initial estimates by the Consumer Energy Alliance (CEA), a broad-based group with membership including transportation, agriculture, manufacturing, small business, chemistry, restaurants, retirees and energy providers, suggest that more than 325,000 of those comments are supportive of expanding access to the nation’s outer continental shelf.  CEA helped deliver more than 150,000 of these supportive comments.

According to a statement by CEA President David Holt, “The unified voices of Americans concerned with rising, unstable and increasingly unaffordable energy costs cannot be ignored. Thanks to the hard work of so many CEA supporters – as well as other organizations committed to advancing policies that help put our nation on a path toward energy security and affordability – Secretary Salazar will have overwhelming public support on his side if his agency and the administration decide to move forward with a commonsense plan that allows the American people to access more of the energy resources they need, demand and rightfully own.

“While the closure of this comment period marks a very early step in what is designed to be a long, deliberative process, the volume and intensity of public response on whether responsible offshore energy exploration should be part of our energy future suggests the status quo energy policies of the past will no longer be an option in the future. What we need now, and what these letters demand, is decisive action from this administration – not an effort to pocket veto these critical offshore energy resources.

“As the process of developing a forward-looking, supply-oriented five-year plan continues to move forward, CEA will remain active in leading the charge for an ‘all of the above’ approach to securing our energy future – a future that includes renewable energy, conventional energy, and a renewed focus on conservation.”