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Securing a sustainable oil future for the U.S. transportation and energy production sectors is a difficult energy, environmental, and economic challenge. ORNL researchers are studying ways to reduce transportation vehicles’ consumption of oil and to recover and refine oil more efficiently. Other researchers have developed computer models to estimate the cumulative impacts of oil price shocks on the U.S. economy and to assess the potential impacts of significant changes on oil refineries.

ORNL and Oil Research

Some 13 billion barrels of oil have flowed down the 800-mile-long Trans-Alaska Pipeline.
Some 13 billion barrels of oil have flowed down the 800-mile-long Trans-Alaska Pipeline (shown above). Two separate incidents of sabotage of the pipeline have each resulted in large spills. Less than a month after the shocking events of September 11, a man fired a hunting rifle at the pipeline 50 times, causing a spill of 6800 barrels of oil onto the tundra. In 1978 vandals blew up a section of the pipeline, releasing 700,000 barrels of oil to the environment. Gate valves have been strategically placed along the pipeline to isolate sections of the pipeline and minimize the size of potential spills in the event of a pipe rupture. (Photo courtesy Alyeska Pipeline Service Company)

For three decades the U.S. government has had the goal of reducing our nation’s reliance on imported oil for our energy supplies. President Bush reiterated this goal in his State of the Union address on January 29, 2002. He said: “Good jobs also depend on reliable and affordable energy. This Congress must act to encourage conservation, promote technology, build infrastructure, and it must act to increase energy production at home so America is less dependent on foreign oil.”

Today 39% of the energy used in the United States comes from oil, and 53% of the oil we consume is imported. How we consume this oil has changed, however. In the 1970s, one-fifth of our electricity was produced using oil; today, only 1% of our power comes from burning oil (and one-fifth of our electricity is produced by nuclear power plants). In the 1970s one in four American homes burned oil for heating; today only one in ten U.S. homes is heated by oil (mostly in the Northeast). Most of the oil we import is used for transportation, which accounts for almost two-thirds of total petroleum use in the United States.

ORNL and University of Tennessee researchers at the National Transportation Research Center (NTRC) are working to reduce the need for oil in transportation in several ways. They are studying better and cheaper ways to manufacture lightweight-carbon-fiber composites to replace heavier steel for automotive body parts; the lighter the vehicle, the less fuel it will consume. They are developing smaller electric motors and power electronics modules for hybrid vehicles; hybrid vehicles use less gasoline or diesel fuel because they have an electric motor to help power the wheels during acceleration and stopping. The NTRC researchers are also helping to develop advanced emissions controls for diesel engines (which are 40% more efficient than gasoline engines) to enable diesel engines to meet tougher environmental standards in the next few years.

IMPROVING OIL EXTRACTION

About half of the oil being used in the world today and about 8% of the oil used in the United States comes from Saudi Arabia. The oil production cost for the Saudis is estimated at 80 cents a barrel. Oil is harder to come by in the United States; our oil production costs run about $10 a barrel. The Bush administration has proposed extracting oil from the Arctic National Wildlife Refuge (ANWR) in Alaska. However, according to Tom Schmidt of ORNL’s Nuclear Science and Technology Division (NSTD), our nation could have access to more oil than exists in ANWR or even Saudi Arabia if it were technically possible to drill at water depths greater than 5000 feet and into the seafloor of the Gulf of Mexico. To achieve this goal, a research program is needed to develop drilling equipment that could withstand extremely high water pressures at such a depth.

ORNL is evaluating the use of a modified centrifugal contactor as a deep downhole separator to recover oil from underground oil-water mixtures.
ORNL is evaluating the use of a modified centrifugal contactor as a deep downhole separator to recover oil from underground oil-water mixtures. To eliminate the cost of lifting and treating the water, the idea is to pipe it into an underground formation and send only the oil up the well pipe for collection.

One problem that makes oil recovery so expensive in the United States is that, in some cases, 90% of the “crude oil” brought up from a well is actually water, which must be separated from the oil. Considerable energy is required to lift the oil-water mixture from deep within the earth. Today the oil is separated from the water above ground, and the water (which is classified as a hazardous waste under U.S. regulations) must be treated to remove benzene, toluene, and other pollutants before it can be discharged into the ocean.

The proposed solution to making oil recovery cheaper is to separate the oil from the water deep within the earth. NSTD’s Joe Birdwell is evaluating the use of a modified centrifugal contactor, originally developed for other Department of Energy applications, as a deep downhole separator that may someday be used to recover oil from underground oil-water mixtures.

The separator contains a rotor that spins so fast that the heavier fluid (i.e., water) is thrown toward the rotor wall and the lighter fluid (i.e., oil) flows in an inside ring. The separated fluids exit the rotor through different channels. If a reliable downhole separator is devised, the idea is to pipe the water back into an underground formation and send only the oil up the well pipe for collection.

ORNL's deep downhole separator contains a rotor that would spin fast enough to separate the heavier water from the lighter oil.
ORNL’s deep downhole separator contains a rotor that would spin fast enough to separate the heavier water from the lighter oil.

“One technical challenge is to make the separator narrow enough to fit into oil well pipes with a diameter of only about 6 inches,” says Robert Jubin, leader of NSTD’s Process Engineering Research Group (now on military leave). “Another challenge is to get the throughput of oil needed. Still another is to get the device to work for long periods of time without getting gummed up with underground solids such as sand.”

ORNL researchers led by Joanna McFarlane and Debbie Bostick, both of NSTD, have done modeling research to characterize the pollutants in water produced in oil fields. This information will help oil companies decide how to treat the water to make it safe for discharge into waterways.

OIL RESERVE AND REFINERY MODELING

Paul Leiby, an economics modeler in ORNL’s Environmental Sciences Division (ESD) has developed computer models, in collaboration with David Greene of ORNL’s Engineering Science and Technology Division and ESD’s Randall Curlee and Russell Lee, that can be used to estimate the cumulative impacts of oil price shocks on the U.S. economy. “The oil that we buy from the Middle East is not competitively priced,” Leiby says. “Oil in the Middle East can be produced and delivered for $3 per barrel, but the world pays around $20 to $30 per barrel. The volatility of oil prices is also a problem. A per-iodic drop in oil prices makes people lose interest in investing in energy-efficient equipment and domestic oil production technologies.”

On the other hand, consumers also at times face the opposite problem of oil price shocks—large spikes in oil prices in response to a 1% decrease in oil supplies. “The United States has experienced 18 oil market disruptions since the 1950s,” Leiby says. “These shocks are usually caused by wars between nations; internal conflicts, such as revolutions and civil wars; major accidents, such as the Exxon Valdez oil spill; and intentional economic actions, such as the 1974 oil embargo.” [Because of its displeasure with the United States for supporting Israel during the 1973 Arab-Israeli war, the Organization of the Petroleum Exporting Countries (OPEC), dominated by Muslim nations, embargoed sales of oil to the United States, causing gasoline shortages, price rises, and long lines at gas stations.]

The Strategic Petroleum Reserve can rapidly add oil to the market during supply-reduction emergencies.
The Strategic Petroleum Reserve, located at Bayou Choctaw, Louisiana, and other sites, can rapidly add oil to the market during supply-reduction emergencies.

According to Leiby, nine of the past ten recessions in the United States were preceded by oil price shocks. Leiby and his colleagues have written many papers that assess the benefits and costs of imported oil. They have also recommended policies to DOE to cushion the U.S. and world economies against oil price shocks. “First, we need to reduce oil imports by consuming less oil, say, by driving less, traveling in carpools, and driving vehicles designed to go further on less fuel,” Leiby says.

“Secondly, we need to stockpile oil, as we are doing in the Strategic Petroleum Reserve (SPR), so we can protect ourselves against an oil price shock. We drew oil from the SPR in 1991 during the Persian Gulf War when the military forces of the U.S.-led coalition, expelled the Iraqi army that had invaded Kuwait. Third, we need to invest in producing flexible technologies that will allow fuels to be rapidly switched in response to an emergency.”

One example of a flexible technology is an industrial boiler that can quickly switch from oil to natural gas. Other examples are multifuel automobiles now being developed. Their engines can run on ethanol, methanol, or compressed natural gas—instead of gasoline—when an oil crisis hits. Also being developed is the grid-connected, hybrid-electric car. This vehicle can run on both a gasoline-driven (or diesel-fueled) motor and an electric motor. Then if a gasoline or diesel fuel shortage occurs and prices rise suddenly, the owner can connect the car to the power grid to recharge the battery. The car can then be operated as an all-electric vehicle, at least for short trips around town.

“We have characterized for DOE the oil market and the cost to the economy of oil price disturbances,” Leiby says. “The problem is that a small group of nations in the Middle East is intentionally influencing oil supply for economic and sometimes political reasons. The geopolitical forces that motivated OPEC behavior in the mid-1970s and is leading to regional conflicts and terrorist activity today could continue to destabilize oil supplies. The U.S. is wise to make preparations.”

An oil refinery in the U.S.
An oil refinery in the U.S.

Leiby and his colleagues have used modeling to assess how much oil should be stored in the SPR, when it should be used, how well it can offset disruptions in our oil supply, and how fast it should be drawn down to keep oil prices stable. Right now, the SPR holds about 600 million barrels of oil in Louisiana caverns, but the ORNL researchers looking into these issues recommend that the SPR be filled to its capacity of 700 million barrels.

The ORNL models of the SPR are being maintained for DOE’s Office of Fossil Energy. The models help planners prepare for energy security emergencies, such as the blockage of oil tanker traffic by nations or terrorist groups. The models also assess the potential impacts of drawdowns on oil markets and the economy in general.

An ORNL researcher is modeling potential impacts of changes in the U.S. oil refinery industry.
An ORNL researcher is modeling potential impacts of changes in the U.S. oil refinery industry.

ORNL’s Gerald Hadder maintains U.S. petroleum refinery models that can be used to assess the potential impacts of a significant change for the refinery industry. For example, what would be the gasoline supply impacts of legislative proposals to ban ethers, which may threaten groundwater quality? How would different gasoline types accommodate substantial percentages of ethanol, under proposed renewable fuels standards? How would proposed changes in gasoline driveability (determined by distillation properties) affect refinery operating costs and investments? What will be the refining and transportation-fuel-supply impacts of U.S. regulations that call for significant reductions in the sulfur content of gasoline and diesel fuel by 2005–2006, to ensure the effectiveness of advanced emissions controls in fuel-efficient vehicles? Hadder can also predict the economic impacts of an accident or deliberate attack on an oil refinery.

Other ORNL research focuses on improving oil-refining processes. Brian Davison and Abhijeet Borole, both of ORNL’s Life Sciences Division, are modifying bacterial enzymes to make them stable enough in an oil environment to react readily with hydrocarbon and sulfur-containing molecules to upgrade crude oil. Bioprocessing of oil could someday be more economical than using hydrogen at high temperatures in oil refineries to make gasoline and other usable products from crude oil.

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