Game changers spell end for old petroleum age

Every few years, the engineers toiling to supply energy to the world achieve advances that qualify as game changers. But often, the breakthroughs go unnoticed. That may be because energy companies hate to broadcast details of their cutting-edge technology to rival firms. Or the key improvements may be too subtle to impress outsiders. It is only years later that their profound impact on energy supplies and patterns of use become clear.

One such "stealth advance" occurred when Suncor, the oldest Canadian oilsands producer, borrowed giant lorries and hydraulic shovels from the hard-rock mining industry. When the company decided, in the early 1990s, to replace its established oilsands extraction setup - bucketwheels and drag lines to deposit the gritty black goo on conveyer belts - it called a press conference that only provoked yawns from the assembled reporters.

We just did not get it. Miners since time immemorial had used shovels to dig up pay dirt, and carts or their equivalent to carry it, so how could this be an industry-transforming step? But Suncor deployed the most enormous mechanised shovels ever built, mounted on zippy lorries the size of small houses, all made possible by manufacturing advances. It shifted dirt faster and more reliably than ever before. Within a couple of years, the marginal Canadian oilsands business was transformed into a profit spinner that attracted a rush of international capital.

Business boomed until spiralling construction costs, stricter environmental laws and slumping oil prices knocked the winds out of the industry's sails last year. But organisations such as OPEC and the International Energy Agency predict that Canadian oilsands producers will contribute to increased global oil supply as early as next year. Stealth advances have also transformed the gas transportation business, and now Qatar, one of the smaller Gulf states, is becoming one of the world's leading exporters of hydrocarbons, mostly in the form of liquefied natural gas (LNG). By the end of next year, it will be capable of exporting the equivalent of 5 million barrels per day of oil, making it the Gulf's second-biggest combined oil and gas producer after Saudi Arabia.

Transoceanic gas shipments began in 1959, but it is only recently that the LNG industry has shown signs of fulfilling its promise of making gas a globally traded commodity, carrying gas that was previously stranded to market. For Qatar, the winning technologies have included proprietary refrigeration processes and high-efficiency diesel motors. To develop state of the art production facilities and the world's biggest tankers for supercooled gas, the emirate's two state-owned LNG companies, Qatargas and Rasgas, have teamed up with western partners such as ExxonMobil and Royal Dutch Shell, which pioneered large-scale LNG technology.

In a third example of game-changing technical advances, US government energy analysts found early last year that gas production in the world's biggest energy consumer had unexpectedly jumped. Why? Because improvements in directional drilling and a technique called hydraulic fracturing had unlocked vast underground stores of shale gas that were previously too costly to produce. The new "fracking" technology greatly improved the industry's previous efforts to stimulate gas production from difficult reservoirs by underground blasting. One early experiment in Colorado used an atom bomb. But today's drillers inject pressurised fluids into shale to create cracks, and use fancy molecular cocktails to keep the gas-liberating fissures from being squeezed shut.

As a result, North America may never need to import gas, unless it chose to because the supply on offer was especially cheap or convenient. Last September, Canada's Kitimat LNG reversed a plan to build an LNG receiving terminal on the country's west coast. It now proposes a gas liquefaction facility to export Canadian shale gas to Asia. Last week, the Canadian unit of the Houston-based gas producer EOG Resources agreed to supply gas to the project.

Such quiet revolutions are energy producers' best response to the "peak oil" alarmists who predict an imminent, irreversible decline in global oil and gas production. But breakthroughs in electricity transmission could have even more profound consequences. Two in particular stand out: high voltage direct current (HVDC) electricity cables, making undersea electricity transmission economically feasible; and "smart grid" technology, combining power transmission with the internet to sense where electricity is available and route it to where it is needed.

A HVDC smart grid covering Europe, North Africa and the Middle East could form the backbone of an ambitious project to supply up to 15 per cent of Europe's power from hundreds of interlinked solar plants and wind farms proposed for the Sahara and the Arabian desert. The grid could transform what would otherwise be a collection of isolated plants, each unpredictably generating a small amount of electricity, into a massive, robust, reliable energy resource, unlocking renewable power for millions of consumers.

The project would take decades and hundreds of billions of euros to realise, but its proponents say existing technology with economies of scale can make it feasible. That could start bringing down the curtain on the petroleum age; and it will not be because of a lack of oil. @Email:tcarlisle@thenational.ae