DECK 2 Flashcards
(41 cards)
What is fracking?
Technology that allows one to extract vast quantities of natural gas and crude oil from shale
How is fracking done?
Combination of horizontal drilling and hydraulic fracturing
What was the impact of fracking in the energy markets?
Drops in Natural Gas and Oil prices
What is the issue with scalability in traditional forms of sourcing energy?
- High capital investment
- Lead times are very long
- Barriers of entry was high due to threats if OPEC lowering prices
What are the factors in scaleability of fracking?
- Not as expensive compared to the development of new oil sources
- Lead times are months
- Additional supply can be bought in small increments
- Delivery of mechanisms are scaleable
Will shale oil be a game changer?
Yes, shale wells are cheap and low capital and easy to break even in and can be transported easily
Is scalability a game changer for renewables?
Yes
- Solar generation
- Storage such as lithium ion batteries
What was Saudi Arabia’s long-term strategy with oil prices?
Lower output to maintain price levels
What are some of the possible motives of Saudi’s strategy?
- Better to sell more at lower prices
- Drive out high-cost producers and discourage investment in new ventures
- Put pressure on Iran
- To cooperate with Russia OPEC
Talk about the West Texas Intermediate (WTI)
- When shale oil became a player in the market, OPEC changed their market behaviour to focus on retaining market share rather than supporting market price
- The ability of shale oil producers to react quickly to market conditions was a fundamental driver of the change in strategic bahaviour
- After Covid and the Russian invasion, prices rose again
What were the impacts of Covid in the economy?
- GDP plummeted
- Oil prices went down due to the lack of demand to go out (social distancing)
- Russia and Saudi engaged in an oil price war
What are some of the environmental concerns of Fracking?
- A lot of water is used
- Water used when fracking can contain chemicals that should not spill to the watershed (Causing water pollution)
How does fracking play in the energy trilemma?
Security- Shale oil and gas can make North America energy independent
Economy- Shale resources creates jobs and exports
Environment- Exploitation of oi and gas will increase co2 concentration and contribute to global warming. Water usage can cause contamination issues
Talk about the trilemma with Russia’s war?
Security- Dependence of Europe on Russian natural gas gave Europe no leverage on Russia
Economy- Western countries are using the economic penalties of Russia to change their behaviour, but some European countries are experiencing economic problems because of it
Environment- European energy policy has been very proactive in promoting environmentally friendly technologies
What are the sources of energy?
- Hydrocarbon
- Renewables
- Nuclear
What are some examples of hydrocarbons?
- Oil
- Coal
- Natural Gas
What are some examples of renewables?
- Hydro
- Wind
- Solar
- Geothermal
- Biomass
What are hydrocarbons?
Molecules consisting of hydrogen and carbon
CxHy
What is an example of natural gas (in the hydrocarbon category)?
Methane
CH4
Examples of Hydrocarbon Gas
- Methane (Dry and Wet)
Example of Hydrocarbon liquids
- Conventional Oil
- Bitumen
Examples of Hydrocarbon Solids
Coal (hard coal is mostly pure carbon)
Chemical formula of methane to energy
CH4 + 2O2 -> CO2 + 2 H20 + ENERGY
Chemical Formula for burning hydrogen?
2 H2 + O2 -> 2 H20 + ENERGY
