Supply And Demand Of Hydrocarbons - Trends And Forecasts - Implications For Power Generation

British Petroleum (BP, 2005), indicates that world reserves for oil to be 1198 billion barrels, for natural gas the equivalent of 1156 billion barrels of oil and for coal the equivalent of 3219 billion barrels of oil. If we take into consideration the mean aver-age annual increase in demand of the last three years for oil, 2.6%, for natural gas, 3.9%, and for coal, 6.6%, then their respective reserves? lifespan are calculated to be 27, 34 and 38 years. Without taking into account their annual increase in demand, lifespan increases to 38, 67 and 161 years respectively. Since zero increase or perpetual increase in energy demands on finite resources is unrealistic the selection of the most suitable energy commodity for power generation rests upon the law of supply and demand of each commodity. This defines its price hence its selection for the production of cheap electricity. When the ratio of supply to demand is less than one, peak production is achieved. Any further increase in demand results in price increase to quench its demand. The Association for Oil and Gas Peak (ASPO) has calculated that when oil demand exceeds 84 million barrels/day, Peak Oil Production will be attained thus prices will start to increase in order to even demand with supply. Correspondingly, Gas Peak Production is expected to take place when demand exceeds 9.1 or 10.2 billion cubic meters/day. Peak Oil production has been calculated to take place in the current year, 2006, while Gas Peak production is estimated to take place between 2020 and 2025 provided that gas will not cover the energy deficit created from the lack of oil otherwise Gas Peak production could arrive as early as 2010. The use of coal for power generation is considered a better alternative than oil and gas if new combustion technologies with an energy efficiency of 43%, Germany, and 47%, Denmark, are adopted. These not only extend the lifespan of coal reserves but reduce also CO2 emissions by 25% and 31%, respectively. In the very near future CO2 sequestration and fixation in deep geological strata will eliminate its emissions thus rendering the use of coal the cheapest feedstock for power generation.