Annual Energy Review Research Articles

Solutions for Sustainable Machining

The manufacturing industry contributes over 19% to the world's greenhouse gas emissions (U.S. Energy Information Administration, 2008, “Rep: Annual Energy Review 2008,” Report No. DOE/EIA-0384; Diaz et al., 2010, “Environmental Analysis of Milling Machine Tool Use in Various Manufacturing Environments,” 2010 IEEE International Symposium on Sustainable Systems and Technology.) and 31% of the total energy consumed annually in the U.S. (Herzog, T., 2005, “World Greenhouse Gas Emissions in 2005,” World Resources Institute, Washington, DC 2; Diaz et al., 2010, “Environmental Analysis of Milling Machine Tool Use in Various Manufacturing Environments,” 2010 IEEE International Symposium on Sustainable Systems and Technology.). There is therefore an increasing demand for sustainable solutions for the production technology industry. At the Technische Universitat (TU) Berlin, Germany, a collaborative research center (CRC) is focusing on new solutions for the sustainable machining of high performance alloys, with developments from machine tool frames to cutting tool technology being undertaken. An innovative machine tool concept with a modular frame, which allows a high level of flexibility, has been developed. Furthermore, add-on upgrading systems for older machine tools, which are particularly relevant for developing countries, have been developed. These systems allow the accuracy of outdated machine tools to be increased, thus making the machine tools comparable to modern systems. Finally the cutting process also requires solutions for dry machining, as the use of cooling lubricant is environmentally damaging and a significant cost contributor in machining processes. Two solutions are being developed at the TU Berlin: an internally cooled cutting tool and a heating concept for ceramic tools to allow dry machining of high temperature alloys, for example, for the aerospace industry.

Comments: Growth in Renewables

Editor's column The renewable energy sector is showing strong global growth, especially wind and solar power, but oil shows no sign of losing market share in the global energy mix, particularly after the steep drop in oil prices over the past 2 years. Investment in renewable energy reached an all-time high in 2015, with developing countries spending more than developed countries for the first time. Spending on renewable energy hit USD 286 billion last year, 3% higher than its previous record spend in 2011, according to data from the United Nations Environment Program and the Frankfurt School of Finance & Management. That is in sharp contrast with the steep cuts in capital spending in oil and gas projects since the drop in hydrocarbon prices began, although spending in renewables overall pales in comparison with oil and gas capital expenditure (capex). More than USD 150 billion was cut from oil and gas capex in 2015, with additional cuts evident this year. Investment in new solar and wind projects rose 50% last year. The growth came in developing countries, more than offsetting a decrease in renewable spending in Europe and North America. Renewable investment in developing countries totaled USD 156 billion, according to the UN/Frankfurt School data, an increase of 19% from the year before. Investment in developed countries equaled USD 130 billion, a drop of 8%. China spent roughly two-thirds of the developing country total (USD 103 billion), while India spent USD 10 billion and Brazil, USD 7 billion. China spent most of the money on solar photovoltaic, onshore wind, and nine large offshore wind projects. Renewables are making particular progress in power generation but have not been able to make solid inroads in the transportation sector, a mainstay of hydrocarbon use. Spending on biofuels has declined since peaking in 2007. The annual Renewables Global Status Report and the annual BP Statistical Review of World Energy, both released in June, confirm the growth in renewables. “Renewables are now established around the world as mainstream sources of energy” because of increasing cost competitiveness, policy initiatives, better access to funding, and energy demand growth in developing regions, said the Renewables report, published by REN21, an organization that works with governments, nongovernmental agencies, and academia to monitor and promote renewable energy use. But the BP report points out that a new consumption record was set for oil in 2015 as well, underscoring the worldwide thirst for energy in a variety of forms. Global crude production grew another 2.8 million B/D in 2015, with the US accounting for 1 million B/D of that. OPEC increased output by 1.6 million B/D last year, according to the BP report. Including crude oil, shale oil, and natural gas liquids, the US is the world’s largest oil producer at 12.7 million B/D with Saudi Arabia second at 12 million B/D. Due to its cheaper price, oil’s share in the global fuel mix rose for the first time since 1999. Total global energy consumption rose 1%, weaker than its decade average of 1.9% per year, with coal the only major fuel in decline. Global oil production rose 3.2% while demand rose only 1.9%. Renewable energy was 2.8% of world energy consumption, up from 0.8% a decade ago. JPT

Comments: New Reports Confirm Market Strain

Editor's column The oil market continues to wind itself through a period of oversupply and battles over global market share, with no short-term solution apparently in sight. Few analysts see an imminent sector-wide upstream recovery, and operators and the service sector seem to agree. The ramifications of the steep drop in prices since last year continue to make almost daily headlines. Crude oil production in the United States rose 9,000 B/D to 9.7 million bbl a day in April, the highest since May 1971, according to monthly data from the US Energy Information Administration (EIA). The slight increase in April from the previous month could indicate the US production is finally bottoming out, although in July, after 29 consecutive weeks of rig count declines, the US posted a slight gain in rig count, according to Baker Hughes’ weekly rig census. The latest version of BP’s annual Statistical Review of World Energy, released in June, said US oil production grew by 1.6 million B/D last year, becoming the first country to increase output by at least 1 million B/D for 3 years in a row. OPEC production continues to climb. Iraqi oil production rose to a record in June, and OPEC output reached its highest level since August 2012. Iraqi production rose by 567,000 B/D. Meanwhile, Saudi Arabia reported that it increased oil production to a record 10.56 million B/D in June, beating its previous record set in 1980. Overall, OPEC member output rose by 283,200 B/D to a 3-year high in June to 31.38 million B/D, according to a Bloomberg survey. US exploration and production (E&P) companies witnessed a nearly 20% decline in oilfield drilling costs from June 2014 to May 2015. The EIA said that lower rates from drilling service companies were caused by “downward pressure” on E&P capital expenditures. For the first time since 2011, global E&P capital expenditures will drop below USD 600 billion this year, a fall of 20.2%, according to an Evercore ISI survey. The survey predicted that that number could increase next year if oil becomes stable at USD 65 to USD 70 per bbl. Deepwater oil projects and gas facilities worth around USD 200 billion have been canceled or postponed this year because of the drop in prices, according to a new report issued by Ernst & Young last month. The consultancy expects the industry to make additional project cuts and delays as the industry anticipates a long period of lower oil prices. New data underscores why Saudi Arabia feared losing its global market share to other producers such as the US. Trade data show that Saudi Arabia last year was losing its market share to the US as well as to Iraq, Russia, and Iran in its sales to Asia in the second half of last year, according to Energy Intelligence. Saudi Arabia’s share of exports among the 20 largest crude sellers declined by 750,000 B/D in the second half of last year compared with the same period in 2013. Two-thirds of the drop came in a decline in Saudi sales to the US, while the rest came from losses in sales to China, India, Japan, South Korea, Taiwan, Thailand, and Singapore. Russia is now the third-largest crude oil supplier to China, with exports totaling 700,000 B/D in the second half of last year, an increase of 47% from year-earlier levels, according to Energy Intelligence. OPEC said its share of the global crude oil market last year declined to the lowest level since 2003. JPT

Historical trends in American coal production and a possible future outlook

The United States has a vast supply of coal, with almost 30% of world reserves [BP, 2008. BP Statistical Review of World Energy 2008. <www.bp.com> accessed 16 February 2009] and more than 1600 Gt (short) as remaining coal resources [Ruppert, L., Kirshbaum, M., Warwick, P., Flores, R., Affolter, R., Hatch, J., 2002. The US Geological Survey's national coal resource assessment: the results. International Journal of Coal Geology, 50, 247–274]. The US is also the world's second largest coal producer after China and annually produces more than twice as much coal as India, the third largest producer [BP, 2008. BP Statistical Review of World Energy 2008. <www.bp.com> accessed 16 February 2009]. The reserves are concentrated in a few states, giving them a major influence on future production. Historically many states have also shown a dramatic reduction in recoverable coal volumes and this has been closely investigated. Current recoverable estimates may also be too high, especially if further restrictions are imposed. The average calorific value of US coals has decreased from 29.2 MJ/kg in 1950 to 23.6 MJ/kg in 2007 as U.S. production moved to subbituminous western coals [Annual Energy Review, 2007. EIA – Annual Energy Review 2007. DOE/EIA-0384(2007), <http://www.eia.doe.gov/aer/> accessed 16 February 2009]. This has also been examined in more detail. This study also uses established analysis methods from oil and gas production forecasting, such as Hubbert linearization and logistic curves, to create some possible future outlooks for U.S. coal production. In one case, the production stabilizes at 1400 Mt annually and remains there until the end of the century, provided that Montana dramatically increases coal output. The second case, which ignores mining restrictions, forecasts a maximum production of 2500 Mt annually by the end of the century.

Comments: Price Drivers

Editor's column Two reports released last month help explain the dramatic rise in oil prices this year. The price of Brent, the world's dominant marker crude, has almost doubled in the past year and is up more than 40% since the start of this year. The weak dollar, the flow of money from other financial sectors to oil, and geopolitical blips may be responsible for some of the increase, but the real reason appears to be the basic fundamentals of supply and demand. The 57th edition of BP's annual Statistical Review of World Energy shows a global market tightly balanced, with little room for error. Last year, global oil production fell by 0.2%, the first decline in world output since 2002, while consumption increased 1.1%. World production decreased 130,000 BOPD to 81.53 million BOPD. OPEC production cuts accounted for some of that drop, but output in OECD countries fell 300,000 BOPD, reflecting aging oil fields. Some of the world's major oil provinces are posting production declines—including the North Sea, Russia, and Mexico—and may continue to fall. North Sea output has been declining since 1999 and Mexico's giant Cantarell field is in rapid decline. During this year's Offshore Technology Conference, Pemex Director General Jesús Reyes-Heroles acknowledged that the company's objective of maintaining crude output at 3.1 million BOPD through 2012 will be severely tested by the challenge to compensate for Cantarell's decline. Demand grew by approximately 1 million BOPD, according to BP's review, with consumption strong not only in Asia but in large oil-exporting regions such as the Middle East, South America, and Africa, which could limit exports to major consuming centers. Consumption growth slowed last year, due to weaker economies and higher prices, but was still above the 10-year average for the fifth year in a row. Oil prices have risen for 6 years in a row, the longest period of rising prices on record, according to BP, and are certainly on track to finish the year higher again. Similarly, the International Energy Agency's (IEA) most recent report notes lower global consumption than previously forecast, but predicts demand this year rising to almost 87 million BOPD, about 1% higher than last year. The IEA also revised down its estimates of non-OPEC production for this year, bad news for a tight global supply balance. Demand from developing countries continues to rise, which has pushed the energy sector into a whole new realm, according to Lane Sloan, a longtime Shell executive and author of the new book, Terra Incognita: A Navigation Aid for Energy Leaders. The population of China and India together is 2.4 billion, compared to the OECD population of 1.2 billion, and those nations are going through the industrialization process that OECD countries went through last century. As historian Daniel Yergin has noted, of all the interesting characters in the history of the oil industry, perhaps the two most significant are supply and demand.

Annual review of energy and the environment, vol. 27, 2002 [Book Review

Annual review of energy and the environment, vol. 27, 2002 [Book Review

The Energy Challenge

The Energy Challenge

Annual review of energy and the environment [Book Review

Annual review of energy and the environment [Book Review

Entropy and diminishing elasticity of substitution

In the debate over sustainable development and limits to growth, one critical issue has to do with substitutability. ‘Weak’ sustainability as the ability to maintain a generalized capacity to produce is described by Pearce, D.W., Atkinson, G.D., Dubourg, W.R., 1994. The economics of sustainable development. In: Socolow, R.H. (Ed.), Annual Review of Energy and the Environment, vol. 19, 457–474. Weak sustainability can occur in the face of a non-renewable, non-recyclable, essential resource if the economy can substitute capital for the essential resource is shown theoretically in Solow, R.M., 1974. Intergenerational equity and exhaustible resources. Review of Economic Studies, Symposium on the Economics of Exhaustible Resources, pp. 29–45; Hartwick, J.M., 1977. Intergenerational equity and the investing of rents from exhaustible resources. American Economic Review 67(5), 972–974; Dasgupta, P.S., Heal, G.M., 1979. Economic Theory and Exhaustible Resources, Cambridge University Press, Cambridge, 196–207. However, the analyses depend on a Cobb-Douglas production function with a constant elasticity of substitution out to infinity. This paper shows that a Cobb-Douglas function eventually violates entropy and that the elasticity of substitution between any two inputs must at some point become zero. Different types of substitution are examined to show how physics and the law of entropy cause the elasticity of substitution to decline.

Annual Review Of Energy And The Environment, Vol. 21

Annual Review Of Energy And The Environment, Vol. 21

Annual review of energy and the environment

This book is organized under the following headings: Energy end use and conservation; Energy resources and technologies; Risks and impacts of energy production and use; Energy policy; International and regional topics.

95/01058 Annual energy review 1993: Special issue - Energy in Europe, June 1994

95/01058 Annual energy review 1993: Special issue - Energy in Europe, June 1994

The History of the British Coal industry. Vol. 5: 1946–1982: The Nationalized Industry by William Ashworth, Mark Pegg

TECHNOLOGY AND CULTURE Book Reviews 975 extraction and refining of ever lower-grade ores, will the standard of living suffer; or will it rise, simply because economic growth based on technological advance is more important? This crucial question is addressed quantitatively—and bravely—in this pioneering collaboration of four Yale economists and resource experts. They focus on copper, as a paradigm of a scarce metal, con­ sidering all the details of geology, recycling, and substitution (e.g., by aluminum, optical fiber, etc.) that affect U.S. supply and demand. The methodology is innovative, substituting a linear programming prob­ lem for the daunting task of simulating a competitive market over the next 150 years. The results depend on the assumptions, as the authors readily admit. (For example, the book appeared before the discovery of high-temperature superconductivity.) Nonetheless, the base case yields specific predictions: Copper ex­ traction rate peaks at about the year 2100, but by 2070 copper mining of common rock (with maximum ore grade of 0.05 percent) becomes necessary (currently mined ore has a copper concentration of 0.5 percent). Recycling becomes big business as the price rises from $2 per kilogram to $120 (when common-rock mining takes over). But because of recycling and substitution, the macroeconomic impact is small; the estimated “drag” on GNP growth is about 0.03 percent per annum owing to all scarce metals, including copper—hardly a signif­ icant economic influence. An explicit assumption is the more or less simultaneous disappear­ ance of high-grade resources all over the world—a consequence of free trade. I accept this premise but want to point to a logical con­ sequence, namely, the disappearance ofglobal resource dependence— quite contrary to accepted wisdom that predicts increasing global inter­ dependence. I suggest that the current interdependence, whether for oil or other natural resources, is ephemeral. In the next century, the worldview is bound to change as countries, including the United States, perforce acquire resource autarky. S. Fred Singer Dr. Singer is chief scientist of the U.S. Department of Transportation. His “The Price of World Oil” (Annual Review of Energy 8 [1984]) projects future oil prices, con­ sidering substitution, but no recycling, and quasi-monopolistic market conditions. The History of the British Coal industry. Vol. 5: 1946—1982: The Nation­ alized Industry. By William Ashworth with Mark Pegg. New York: Oxford University Press, 1986. Pp. xxi + 710; illustrations, tables, notes, appendixes, bibliography, index. $98.00. This is the final volume of the National Coal Board’s five-volume History ofthe British Coal Industry, but only the third published. It covers the nationalization period 1946-82. William Ashworth examines the 976 Book Reviews TECHNOLOGY AND CULTURE movement, not in the narrow sense of costs and revenues or success and failure, but in relation to energy production versus consumption and, more importantly, the movement’s objectives and the context in which the government set them. The result is a generally sympathetic treatment. Nationalization began in July 1946 with the assistance of the newly elected Labour government and the mining unions. But the move­ ment had much wider support because of the coal industry’s sad shape and inability to provide the coal Britain needed for economic recovery without drastic reorganization. With tension high between owners and miners and the industry so unattractive to prospective workers, no passionate resistance occurred. Nationalization became a panacea for past and present problems and a promise for future efficiency and harmony. It was a response to the perceived shortcomings of private ownership. The government did not nationalize all mines. During this period its NCB left to private firms the operation of some smaller mines and closed others. Because of rising technological costs, private operation of larger mines also became a remote possibility by 1970, though Ashworth admits the lack of recent empirical evidence with which to compare the merits of public and private ownership of the coal mines. Nor was the NCB exactly a commercial undertaking. It was to supply the public with coal at favorable terms, to look after its employees’ welfare, and to make a reasonable profit. During the nationalization period, both internal and external forces produced a change in energy policy...

A Test of the Hotelling Valuation Principle

Time-series tests of the Hotelling r-percent rule for natural resource prices have not been strongly supportive, but the tests and the data are subject to serious difficulties. We propose here an alternative testing strategy based on another but less widely known implication of the Hotelling model. We test this implication, which we call the Hotelling Valuation Principle, by regressing the market values of the reserves of a sample of U.S. domestic oiland gas-producing companies on their estimated Hotelling values. We find that the estimated Hotelling values account for a significant portion of the observed variations in market values and that the Hotelling measures are better indicators of the market values of petroleum properties than two widely cited publicly available alternative appraisals.

Annual review of energy, Volume 8, 1983, edited by Jack M. Hol‐lander and Harvey Brooks. Palo Alto, CA: Annual Reviews, Inc., 1983, 541 pp. Price: $56.00 cloth

Annual review of energy, Volume 8, 1983, edited by Jack M. Hol‐lander and Harvey Brooks. Palo Alto, CA: Annual Reviews, Inc., 1983, 541 pp. Price: $56.00 cloth

Annual Review of Energy, Volume 8, 1983

Annual Review of Energy, Volume 8, 1983

Book Review: World Energy Supply, Extraction of Primary Energy and the Oil Shock, World Energy Supply – Resources, Technologies, Perspectives, Annual Review of Energy, Vol. 7, 1982, Improved Techniques for the Extraction of Primary Forms of Energy, the Third Oil Shock—The Effect of Lower Oil Prices

Book Review: World Energy Supply, Extraction of Primary Energy and the Oil Shock, World Energy Supply – Resources, Technologies, Perspectives, Annual Review of Energy, Vol. 7, 1982, Improved Techniques for the Extraction of Primary Forms of Energy, the Third Oil Shock—The Effect of Lower Oil Prices

Annual Review of Energy: Volume 2

Annual Review of Energy: Volume 2

Annual Review of Energy, Volume 1

Abstracts were prepared for the Overview, Energy in Our Future, and 27 chapters included in this first Annual Review of Energy. It provides a comprehensive review of the U.S. energy system. (MCW)

Annual Review of Energy, Volume 1

"Annual Review of Energy, Volume 1." Nuclear Science and Engineering, 62(2), p. 348 Additional informationNotes on contributorsH. G. MacPhersonAbout the Reviewer: H. G. MacPherson is a professor of nuclear engineering at the University of Tennessee, Knoxville, and is a chief scientist with the Institute for Energy Analysis of the Oak Ridge Associated Universities. Dr. MacPherson received his academic training at the University of California, Berkeley, and was associated with National Carbon Company (now a part of the Union Carbide Corporation) before joining the Oak Ridge National Laboratory (ORNL) in 1956. At ORNL, he headed the Reactor Division and, later, was deputy director. Over this span his research interests have been in high-temperature properties of graphite, in nuclear reactor technology and, now, in the energy dilemma.