 All right, so yeah, just a little bit more about me. I actually graduated from Berkeley, and Stanford hired me nevertheless, so I'm glad you all know about that rivalry. I just wanted to point out, you know, I teach a bunch of classes, but maybe one that's maybe generally of interest to you is in the winter. Energy 293B, it's also cross-listed as electrical engineering 293B, and it's essentially about renewable heat, so renewable processes, but involving heat. So I thought I'd also tell you a little bit about energy resources engineering. So we offer a full suite of degrees, and our department, in a way, our technical mission is to sort of position students, our graduates, to be ready to respond to the sort of changing energy landscape, and that's also reflected in what our department does for research as well, and you can see these things here. So Adam Brandt, who you heard from this morning, is one of my colleagues in the department. So I was tasked with talking about oil, so I thought I would talk a little bit about innovations, because actually the oil and gas industry is an amazingly innovative industry, really slow for uptake on innovations, like things that are implemented. It's also one of the largest consumers of computing, actually it is the largest consumer of computing power, and I'll explain that. So this is a picture from the Coalinga oil field here in California, and so I'll just talk a little bit about innovations, and I won't get everything that's been important, but I'll talk about resources, and then I'll talk about technology. So in terms of resources, there's been, in addition to what people just kind of think about, there's been at least really two significant directions. One is to go after offshore oil, so this is actually, this is Mississippi Canyon 252, so if you know this is actually the Macondo well that blew out in the Gulf of Mexico. So there was about 5,000 feet of water, and then it continued on for about another 13,000 feet below the surface of the ocean to a depth of 18,000 feet. So if you think about that, you have to locate something in the ocean, and then drill something down, and then keep it safe. It's a pretty amazing amount of technology, and unfortunately they didn't get it quite right, but hopefully we've learned from that, and there's so offshore development is not just Gulf of Mexico, it's also offshore Africa is a really hot place at the moment, as well as offshore Australia, and the other kind of really big thing has been sort of tight resources, so you've all heard about shale, a lot of things that people refer to shale as not actually shale, it's sort of a generic term, and there's actually a geological definition that all things don't necessarily fit, so you could say sort of tight resources, and I couldn't fit all of the US in, but this at least captures a lot of the really major areas around the US, so geographically very large areas, very thick resources. So going after those, sort of in a way, again non-traditional resources has been a really big part of innovation, and then in terms of technology, for me these are sort of the four big things, other people would have a different list, so on the upper left is actually a picture from a microfluidic device, so these are actually the grains of a porous medium and everything else is flow space, so this is oil and water, and there's some funny chemistry going on in here, but actually being able to visualize what oil looks like in the pore space, and this is a one-to-one, this is an actual, you see the scale of 100 microns, so you're actually really looking at the right sort of scale. This has been a really transformational development, because people can develop better conceptual models, you can then, from your better conceptual model, can develop a better numerical model, and there's a whole field of study that talks about scale translation, so how do you go from, you know, something that's this scale where the fluids are really flowing to that sort of gigantic scale that we looked at on the previous slide, right, sort of the geographic scale. So a big part, I mentioned computing power, so a big transformational thing that's occurred starting from about the 1960s in the oil industry is the ability to build geological models and then actually simulate flow in them, so like a geologist might build a really nice picture of what the subsurface might look like, so you see here this structure, the different colors or different sort of geographical, sorry, geological layers, a reservoir engineer would come and take a small piece of that and then might conduct a flow simulation, so this is oil on top and water that's coning up underneath, so the ability to actually simulate things has been a really, and to do sort of a full suite of sort of probabilistic study has been a really transformational part of the industry. Another thing has been, so GP is geophysics, so geophysical imaging, so the earth is opaque, right, you know, we have lots of wells poked in all parts of the earth and so in a well you can look at something just opposite the well bore or maybe, you know, a little bit out, but there are geophysical techniques, you can actually see structure in the earth and layers, part of what might have gone to make this picture would be some geophysical imaging, but a combination of geophysical imaging and being able to actually drill in and steer in, and this is showing you a well that's come down, this is actually a deviated well because it's following whatever this cartoon layer is, that's been a very sort of important thing as well, so being able to reach out from an area on the surface and then drill out a very long distance and reach some, you know, what they refer to as a pay zone has been a really important thing as well, and then really the technology that everybody sort of loves to talk about, hydraulic fracturing, so this is showing you a long horizontal well, again you can imagine that this got into some layer that was quite interesting, and then, you know, fractures have been induced and if you drill, you know, depends on which direction, this is typically the direction that they drill in, so you get fractures that are normal to the well bore, but you could also have fractures that are along the well bore, so here's the quick question, what decade do you think hydraulic fracturing was developed in, basically the 1950s, 1960s, 70s, 80s, 90s, 2000, anybody got a, 50s, yeah, so basically the first hydraulic, well the first one that was done intentionally was about 1947, so really 1950s they started to apply it, probably it was done unintentionally, and the first time that people started to inject water, so it's actually really old technology, but this combination of hydraulic fracturing and horizontal wells has been sort of important as well, so you could ask the question, you know, has this made a difference in everything, you know, have these innovations really mattered, so we're looking at US crude oil production, so has anyone not heard of sort of like the Hubbard, you know, peak oil kind of, you've not heard of it, okay, so in, so I'll tell you the story real quickly, and I'll watch the time, so this geologist, well actually he was a physicist, he's referred to as a geologist, M. King Hubbard in the 1960s was tasked with predicting future oil production in the US, so he worked for Shell Oil, so Shell was trying to figure out what to do, so he basically applied a model, and his idea was sort of a bell shaped curve, so something like this that goes up and down, and so he applied a model, a logistic model, but you can think of it as basically a bell shaped curve, so in fact on this plot the gray line is my prediction using Hubbard's data, he was a little more conservative than me, but so in 1964, 62, if I remember the dates quite correctly, Hubbard predicted that oil production in the US would peak in the mid-1970s, and the green is actual data, and so in fact it did peak in the mid-1970s, and so you can see that, so again here's gray as his prediction, green is actually what's occurred, and there's some, some of these resources are part of the reason why things deviated sort of in the mid-1990s, so the blue lines, just to give you reference, are 1998 because this is when Mitchell Energy, actually they were going after gas in the Barnett Shell, but they're really the first company that really said we're gonna do hydraulic fractures and horizontal wells, and we're gonna make it sort of work, so if you want that sort of the modern, you know, beginning of the modern fracture age, so you can see, you can see there's this huge, you know, deviation, US oil production's gone up, but what's really interesting is this plot on the right, so in Hubbard's technique, and I'll, I spared you all the math, you plot the production rate, which is dndt over the cumulative production, so the total amount that's come out, versus the cumulative production, and if you get a straight line, that means you're obeying his model, right, so your system is following logistic growth, and you can, you know, just think of that as like, you know, a bell-shaped curve, so you can see from about, you know, 2000 or so, we're not following logistic behavior anymore, so people will talk about paradigm shifts, right, and they'll give you all kinds of examples about paradigm shifts and how you can know them or not, but this, this is a paradigm shift, that we're not following logistic growth, there are very few natural resource plays that don't follow logistic growth in some way, so you know, this, this may, with, you know, current sort of economics, this may turn around and kind of come down and go back, right, but at the moment it's a, it's a really significant deviation, the other thing that kind of Hubbert's technique gives you, if you just sort of take and plot a straight line, it kind of gives you ultimately what you might expect to produce, so you can see if we're actually going up, that means the, the, the ultimate sort of recovery, recoverable amount might, is projected to increase, so it's pretty, it's pretty interesting, right, that we can point to these innovations and actually see a, you know, see a signal and actually see a, see a paradigm shift. Any questions on that? Again, cut through, didn't, you know, give you five slides of equations to work through, but that's basically how it works and that's, that's what I find fascinating is that we're, we're, we're experiencing a much different kind of behavior and natural gas has a similar kind of a thing, so I want to tell you a little bit about the future and here's Yogi Vera, you know, known now for really kind of folksy sayings, like, you know, it's tough to make predictions, especially about the future, I think he said something too about, you know, nobody ever goes or anymore, it's too crowded, but those are his ten World Series rings that he won while he was a player, he won another three as a coach that aren't shown there, so pretty awesome, pretty awesome baseball player as we're heading into sort of the end run here, but this is always, you know, so I'll, I'll say a couple things about the future and keep that in mind, okay, so we need a little audience participation, okay, so you need to think out to 2040, okay, think about sort of the current energy landscape, okay, there's lots of renewable energy going on, going online at the moment, actually wind is following nice beautiful logistic growth, it makes a great test problem, you can actually try and figure out how much wind you think the US might build and it's a huge amount, so just as a point of reference, right now globally, if you think about, you know, just market share, fossil fuels are about 81, 82% market share for, for, for, for the total energy mix, so here are choices, 12%, 38, 37, 78, right, so why don't we do a quick show of hands, how many people think it's A, how many people think it's B, okay, so 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, let's say 15, okay, how many people say it's C, ooh, so a lot more, so about, we'll say that's about 35, okay, how many people say it's D, okay, so this, so, so this is actually interesting and somewhat a challenge, so the best sort of estimates, even considering in, you know, renewable growth, everything, is that we're, you know, sort of 2040, we're going to still be, you know, roughly three-quarters of our primary energy is going to be fossil fuels, okay, and, you know, battery electric vehicles are great, battery kind of things are great, predictions are that the primary energy source isn't going to transform as much, you know, there's still a lot of the primary energy source is going to be fossil fuels, batteries, you know, how they're deployed will give us a way of being more efficient, but as well as, you know, can store renewable energy, but really the underlying source is predicted to still be fossil fuels, so it is, it's a huge challenge, so I was going to talk about innovations in the oil and gas industry, so you could, there's a lot of things to consider, one of which is actually demand growth, so part of that is, you know, India is expected to have 100% increase in oil demand by 2040, China about a 50% increase in oil demand by 2040, okay, so you can see the other things, what I'm going to talk about is really sort of greenhouse gas emissions, pick up on some of the themes you heard from Kate a little bit, but why do I say this, because I think, you know, the, you know, the numbers really, so let's say that number is off, let's say it's 78%, say it's 60%, right, market share, that's still a lot of carbon that needs to be dealt with, and I think, you know, the oil and gas industry, you know, is going to try to rise to the challenge of helping to manage carbon, so there's a lot of things that could be, you know, done around greenhouse gas emissions, I'll talk about oil production for a little bit, I'm going to watch time, so I'll give you an example, because I think this is kind of a fun example, and it illustrates a little bit of sort of maybe like nonlinear thinking that we need, so this is a schematic of actually how oil is produced in the Kern River oil field here in California, Kern River is one of the oldest producing fields in the US, it still has two thirds of its original oil inside of it, even though it's been producing for over a century, so it's a, people talk about big oil fields, so it's an elephant, it's a huge, huge field, so oil is currently produced there in the following way, there is a so-called cogeneration plant, so there's an important thing missing here, which is natural gas, so this cogeneration plant burns natural gas, the primary thing that it does is it generates electricity, which gets sold out into the grid, a small amount gets actually used in the oil field, but it gets sold out into the grid, and instead of just venting all of the waste heat out of the smoke stacks of the natural gas fire plant, they capture that heat and they make steam, so that steam gets injected into the oil field because heat has a really profound effect on the viscosity of oil and it makes oil more producible, so that enhances the production of oil and also means that there's a fair amount of water that's produced, this water actually gets cycled back and gets reused. Kern River is also interesting because the water is actually fresh enough that if they clean it up, you can't drink it, but it is suitable for agriculture, so they actually sell some of their water that they produce for agriculture, so again, if you think about those carbon emissions that Kate talked about, this facility, even just discounting the oil that it produces, but this part of it makes a fair amount of CO2 and it's kind of quantified here on this slide, so the green, so first of all, this is in this really bizarre units of grams of CO2 per megajoule of gasoline before anything is blended into it, so it's pure just gasoline before anybody adds any ethanol or oxygenates or anything like that because the amount of ethanol gets added, gets changed by the season and all these kinds of things, so just in terms of, if you want just like a quantum, the green bar is the amount of CO2 produced just by combusting gasoline, so in all of these scenarios it's the same, so the bottom is sort of a conventional crude oil, so it's about 90 grams of CO2 per megajoule, so if we look at this line that's California thermal, the red is the equivalent CO2 emissions that are generated by burning natural gas to make steam, so people have pointed out correctly that all of that CO2 doesn't belong to the oil field, some of that CO2 belongs to the electricity and natural gas electricity is actually less CO2 intensive than sort of regular grid electricity, so they can actually take a little bit of an emissions credit which is why this box is a little bit red, but what's interesting if you think about California we have pretty good sunshine, maybe they don't need to actually burn as much natural gas to make heat, so this so-called California solar thermal, the red is gone because all of the heat is generated by solar energy and now you have something that's basically equivalent to conventional crude and that's about a 25% reduction in CO2 emissions, so it doesn't get rid of all of the issue of the green which is going to come from the burning of the gas, but maybe we can be really efficient when we do that, but it is a 24% sort of reduction if you can realize that, so I'll just show you one basically piece of technology that's being worked on, so this is a company that's over in the East Bay and they're sort of shtick if you will is they can make mirrors that you see inside of this glass house super inexpensively and they can get the optics really good, so this is a concentrating solar thermal process, so the mirror reflects light back up onto this receiver tube here and then you can boil water and use that for steam, so if you make a mirror that's really cheap it's really light, so if you put it out in the environment it's going to blow around and it's also going to get pitted by dust, so they actually put this inside of a so-called glass house, so it's basically a repurposed greenhouse and the other kind of interesting thing is you need to keep the thing clean, so when you have a structure like a glass house it can just sort of be washed automatically, so they have a nice kind of a process and they're in fact they're building one of these, they've built one of these in California, they've built one in the Middle East, they're currently building a second one in the Middle East that's a gigawatt of heat, so a thousand megawatts, and the reason for that is natural gas if you want to buy it in the Middle East is really expensive, so there's a couple of questions that are kind of interesting to think about, the sun doesn't shine all the time and I want to be able to inject that into the earth and recover oil, does the earth care if I inject, you know, I inject steam for eight hours a day and then really reduce it and then inject steam for, the earth doesn't care and that's basically a simulation that's showing you this, so these are actually vertical wells and this is the heat front and that's 240 C, the earth doesn't, you know, as I said the earth really doesn't care if you put in steam continuously or if you put it in in cycles, this is also pretty interesting if you think about you want to store heat, you know, you can use it later for the same kind of, the same sort of issue, so I'll just tell you, so that, you know, so you can ask some questions, right, does this make sense economically, does this make sense in an engineering way and, you know, that slide, previous slide sort of showed you some of the questions that we've asked about that, but we can do a really interesting thing with Kern River, so Kern River is an old oil field, they've been injecting steam in Kern River since even prior to 1980, so you can go back, you can get the historical data, so you know exactly how much steam they injected, you know, exactly how much oil was produced, you can ask questions about why do they inject this much steam and get this much oil and they injected half as much steam and still got the same oil, but, you know, that's another, maybe that's another story, but we know everything, so we know what water cost, we know what oil sold for, we know how much electricity cost, we know how much natural gas cost, so you can actually do basically an economic analysis with no uncertainty about the cost on oil, right, because that's always the biggest thing, you could, you know, there's one prediction that you can make about the price of oil is that the predictions that we make are going to be wrong, so we don't have to do that, no predictions, okay, so again I'll skip a whole bunch of stuff and I'll just show you sort of the bottom line, so these are a bunch of different scenarios, these are different discount rates, okay, so 5% discount rate and up to 15% discount rate, so this one is basically if you just burn natural gas and you make steam, this is if you make all of your steam by doing that cogeneration I showed you, this is the actual mix that they use between direct steam and cogeneration, this is 100% solar case, okay, so at a 5% discount rate which is not unreasonable giving, given what inflation's been and things, the solar case makes $23 billion before taxes are figured in, okay, so taxes are really get confusing because you might take a tax credit on installing a solar facility, you might not, so no taxes, this is just plain profit before people think about taxes, so the actual most profitable thing is to build a solar plant from day one, the other interesting thing too is you could say well I don't know, maybe I'm not that bullish on solar and you know my engineers don't want to turn down, I could tell you a whole story about why engineers don't want to turn down steam at night, I don't want to do that, I just want to run my plant just like I've run it and like if you give me solar steam I'll take solar steam, so this quarter 25% solar is about what you could do, it just annually you could make, you know if you said here's a hundred percent of my steam demand, I'm not gonna ever reduce rate, you could deliver about 25% of you know if you're steam just by solar and that still makes $21 billion and that's still more than any of these processes involving natural gas, okay, the discount rates illustrate you know an unfortunate thing about renewable energy is that they're very capital intensive right, the fuel is free, we haven't figured out how to tax the sun yet, maybe somebody will, but anyways if you really want to penalize a renewable process you just you just subject it to a high discount rate, but even at 10% these solar cases are kind of hanging in there, okay, so it's it's something to think about right and there's no again there's no subsidy at all, this is all just let's just build a solar plant from day one, okay, so I'll just I'll just I have some other stuff but I'll just maybe quickly summarize it right, so that doesn't take care you know that is the first part I told you about is really about reducing you know being more efficient, being smarter, you know if we're really gonna have something like three-quarters of our primary energy provided by you know fossil fuels we have to think of some way to really deal with that carbon, so you know Kate told you a little bit about sequestration, there's a lot of really interesting you know science questions about you know what is gonna happen with CO2 in the subsurface or you know what can we do on the surface to capture carbon in some sort of like a solid form, but maybe I'll hold off for another day there's some really interesting stuff about how we don't really know how to predict very well that's some micro particle image of a lot of symmetry to tell us a little bit better about the constituent relations and I just want to get to my last slide so that's pretty much what I wanted to say about you know innovation really is essential in the oil and gas industry and there have been some really you know big innovations and you know the hurdles to come are still really significant and you know I think that's actually a good thing challenges are good because it gets people to actually think out of the box and again as I said sort of think nonlinearly and I think I held for a couple minutes of questions so I'll see if you have any questions or comments yes so his question is have there been studies about you know this about the actual production over time I mean I showed so in an aggregate yes I showed you one right the Hubbert production rate yeah well that is quite that is volume yeah so we're generally we do better with predictions over longer term right then we do over like you know next year and the reason that is like the local economics or the small-scale economics are really hard to predict so like you know oil for it you know most people think oh great you know gas price of gasoline went down to the pump that's a good thing it's not a good thing for the environment it's really not a good thing for like long term planning on around energy processes either so yeah so like the long term predictions like like volumes versus time are generally okay but sort of the short-term ones are really hard to kind of get right because of this the variability yeah yeah so the question is how do I see peak oil playing on international scale you know you if we if we looked at like global data you can make an argument that maybe we were at peak oil ten years ago five years ago because that's what sort of was driving some of these unconventional resources that really sort of played in so I guess maybe the thing that we should so people argue about what's the oil endowment of the world right so some people say it's 13 trillion barrels some say it's 15 let's just say it's 10 because it's an even sort of a number so we've burned about a trillion barrels of oil okay the reserves are about another trillion okay and what people are arguing about is you know can we you know sort of secure the third trillion so there's there's tons of hydrocarbon out there it's really you know the peak oil argument is really a technology economics argument so yeah I guess it's got the zero time so I'll stop there but but we're not running out of resource where it's just you know are there better options if you don't even think environmentally we just think economically because there's a really low quality resources out there at ten you know the tenth trillion would be a really low quality resource okay that's it