Pictures of the Future        Fall 2008

Indispensable Assets

The world’s population is growing, and so is its demand for raw materials. That’s made natural resources costly. Siemens is developing efficient, environmentally-friendly technologies to keep raw materials available at reasonable prices.

The roots of our prosperity literally run deep—in some cases, several thousand meters below the earth. That’s where the life blood of our civilization lies, trapped in stone, covered by oceans or hidden beneath the desert sands for millions of years. The subject is raw materials, and they range from oil and gas to potable water and precious metals.

A growing world population is developing an ever-greater thirst for these resources, and that is driving up prices and making oil and metal ores more expensive than ever before. Mother Earth doesn’t yield up her treasures as willingly today as she did only a few decades ago, when oil and gas were practically spewing out of the ground in some regions and a number of metals could be found just a few meters below the surface. Many of the world’s best-known natural resource deposits will soon be depleted, which means companies must find new ones in places that are harder to reach. This will make exploration and extraction more costly. In order to pump oil profitably from the deep ocean or mine copper in remote regions, we will need highly efficient technologies for extracting nature’s treasures in the most environmentally-friendly manner possible.

"The oil industry in particular needs cost-cutting technology that can also raise productivity and efficiency," says Michael Koolman, an oil and gas expert at Siemens’ Energy Sector. "Companies in the industry continue to make a lot of money, but they also have to invest a lot more than they used to in new equipment." According to market research institute CERA, the cost of oil drilling and the construction of new wells has more than doubled in the last eight years. There’s no end in sight to this price spiral, as demand for oil continues to grow at a breathtaking pace. Today, we collectively consume around 84 million barrels of oil per day—but by 2030 that figure is expected to reach 116 million barrels, according to the International Energy Agency (IEA—see Interview). The IEA also estimates that some $5.4 trillion will have to be invested in new oil fields between now and then if the rising demand for energy is to be met.

"The future of oil exploration lies on the ocean floor," says Koolman. It is there, he says, that the largest untapped petroleum reserves can be found. Because the most lucrative deposits are no longer located in shallow coastal waters, but instead beneath the high seas, exploiting them is a very complex and expensive undertaking. Oil companies have to drill several kilometers into the ocean floor in stormy seas. And through it all, ships and drilling platforms must be kept in exactly the right position, as any significant motion threatens to twist drilling rods, potentially resulting in damage costing millions.

Yet this is a challenge that sophisticated technology from Siemens can help overcome—as is already the case at an oil platform operated by Transocean, which began drilling off the coast of Nigeria in May 2008. Here, Siemens’ new SIPLINK system is helping the giant floating island stay put even if power should fail (see Offshore Drilling). It does this by linking the two electrical networks on board the platform in such a way that the drive systems are continually supplied with energy and will keep operating even if one of the networks fails. SIPLINK also reduces energy consumption by up to 30 %. The system not only makes the platform more secure than before, but also much less expensive to operate.

Along with petroleum from beneath the high seas, in the future our oil will be obtained from unconventional sources such as tar sands. "Although this type of extraction is nearly three times more expensive than conventional oil production, the expected long-term trend in oil prices ensures that even the most costly procedures will become increasingly profitable," says Koolman. Experts believe there are some 178 billion barrels of oil in Canada’s tar sands—one of the biggest such deposits in the world. "However," he points out, "Extraction here is often very damaging to the environment." That’s because huge areas must be transformed into open-pit mines or hot steam must be pumped into the sand to bring the oil-bearing substance to the surface. This consumes huge quantities of water and energy, according to Koolman. But a new procedure developed by Siemens could radically reduce the need for excavation and water (see Tar Sands): Researchers plan to heat up oil-bearing sands with an induced electrical current to extract oil from viscous sands.

The new procedure is still being tested in  a laboratory at Siemens Corporate Technology in Erlangen, Germany; but plans call for a pilot facility to go into operation in Canada as early as 2010. The innovative method is not only much more environmentally sound and energy-efficient than the conventional technique; it’s also much more productive, as Koolman points out: "This method could increase a customer’s profits by some 20 %."

Pipeline Simulator. Sophisticated solutions are needed not only for extracting oil but also for transporting it, as petroleum must sometimes travel thousands of kilometers to get from its source to the consumer. This requires systems ranging from huge automated pumping stations to intelligent monitoring systems (see Pipelines).

To help customers visualize how such highly automated systems work, Siemens has established a Pipeline Demo Center in Fürth, Germany. The Center illustrates  how various technologies can interact with one another to overcome the challenges of such highly complex transport networks. "Visitors to the center can follow the path of oil or natural gas through a pipeline and test our innovations themselves," says Sanjeev Sinha, who is responsible for pipeline projects at Siemens Energy. "There’s no other place like it."

The mining industry also needs unique innovations, as companies continue to dig ever deeper in order to reach minerals such as iron ore and copper. This not only costs a lot of money and energy but can also cause grave environ­mental damage. Some deposits are located in almost inaccessible regions, which pushes up investment costs for their extraction. The amount of copper used worldwide each year is expected to increase to some 28 mill. t by 2025, according to Germany’s Federal Institute for Geosciences and Natural Resources. The figure for 2004 was 16.5 mill. t. To satisfy this demand, copper mining companies will have to invest in highly efficient technologies that raise productivity and lower energy consumption.

The operator of the Los Pelambres copper mine in Chile is doing just that with sophisticated innovations from Siemens that have made the mine one of the most profitable in the world (see Copper Mining). One such innovation is a new type of conveyor belt that transports ore from the mine down to the valley at Los Pelambres. This ingenious 13-km belt generates electricity while transporting the ore. The mine produces around 15 % of its electrical energy on its own, which saves a lot of money—and more than 50,000 t of CO₂ emissions per year.

These savings may be of interest to the ore processing industry, which is looking for ways to reduce its use of raw materials (see Rare Minerals), many of which have gotten very expensive in the last four years. The price of copper has nearly tripled, for example. And there may soon be shortages of rare materials such as the indium used in light-emitting diodes, as known deposits head for depletion. Recycling is one solution, and many companies are now taking steps to recycle products with a view to recapturing raw materials. For instance, Siemens designed the new Oslo subway to be completely recyclable. Companies can also replace rare and expensive raw materials or avoid using them at all. A Siemens Corporate Technology team, for example, is studying this and also proposing alternative materials. For example, the company is now developing special techniques to reduce the amount of indium it uses and is funding the development of laser welding processes requiring no solders made of silver and tin.

Thirsty Planet. There’s one very valuable resource that many think we have a surplus of—water. Although 71 percent of the earth’s surface is covered by water, over 97 percent of it is undrinkable. Clean drinking water is thus a rare commodity, although this usually only becomes apparent after a natural disaster such as the earthquake that hit China in May 2008. As that tragic event illustrated, advanced solutions are needed to purify contaminated water (see Water Purification).

One such solution is the Skyhydrant from Siemens, which can produce some 10,000 liters of clean drinking water a day. It uses ultramodern membrane filtering technology developed by Siemens’ Memcor subsidiary in Aus- tralia for municipal water treatment applications, among other things. To coordinate its water technology expertise, Siemens set up a global competence center in Singapore, which, since Fall 2007, has been developing innovations that will keep our most valuable raw material available at a reasonable price and at a low level of energy consumption.

Ultimately, the value of key raw materials can’t be calculated, says petroleum expert Matthew Simmons (see Interview), who suggests that demand for oil must be reduced. "If we don’t use less," he says, "we could be looking at a savage resource war."
                                                                                                                Florian Martini