NewEnergyNews: THE NATURAL GAS AS BRIDGE IDEA

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

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YESTERDAY

  • THE STUDY: NEW ENERGY POSSIBILITIES – THE MICHIGAN EXAMPLE
  • QUICK NEWS, April 16: THE RACE AGAINST CLIMATE CHANGE; THE FAST RISING POTENTIAL OF U.S. NEW ENERGY; BIG TEXAS WIND SHRINKS ELECTRICITY MRKT PRICE
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    THE DAY BEFORE

  • THE STUDY: THE MONEY IN NEW ENERGY
  • QUICK NEWS, April 15: WORLD WIND TO BOOM THRU 2014; NAT GAS AND SOLAR WERE 75% OF U.S. 2013 NEW POWER; MAINE OFFICIALLY AFFIRMS SMART METERS’ SAFETY
  • THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: THIS COULD BE THE REAL VALUE OF SOLAR
  • QUICK NEWS, April 14: DE-RISKED RENEWABLES HAVE MORE INVESTORS THAN DEALS; THE MYTH OF CONSOLIDATION IN SOLAR; TEXAS BREAKS MORE WIND RECORDS
  • THE DAY BEFORE THAT

  • Weekend Video: Bill Maher On What’s Happening In The Oceans
  • Weekend Video: The Human Disharmony In The Climate System Symphony
  • Weekend Video: A Few Thoughts About Solar 2.0
  • AND THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE- THE CLIMATE CHANGE FIGHT MOVES DOWNTOWN
  • FRIDAY WORLD HEADLINE-SHIFTING AND GROWING AMONG GLOBAL SOLAR LEADERS
  • FRIDAY WORLD HEADLINE-UK OFFSHORE WIND SETTING RECORDS
  • FRIDAY WORLD HEADLINE-MICROGRIDS RISING AROUND THE WORLD
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT THURSDAY, April 10:

  • TTTA Thursday-FOX NEWS ON CLIMATE – FAIR AND BALANCED BUT MISLEADING
  • TTTA Thursday-RECORD SOLAR GROWTH GOES ON
  • TTTA Thursday-WIND’S DROPPING COST MEANS SAVINGS ON U.S. POWER BILLS
  • TTTA Thursday-EFFICIENCY SCORING BIG ACROSS THE COUNTRY
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • Wednesday, July 28, 2010

    THE NATURAL GAS AS BRIDGE IDEA

    The Future of Natural Gas: An Interdisciplinary MIT Study
    June 25, 2010 (Massachusetts Institute of Technology)

    THE POINT
    Two crucial things to know about natural gas right now are that (1) a lot of people who live near it hate it and (2) a lot of people who live far away from it think it is the bridge to the New Energy future.

    Natural gas can be used to generate electricity, to supply heat or as a transportation fuel. With the discovery of methods to obtain it from previously inaccessible shale deposits, it has become domestically abundant. And, because burning it creates roughly half the greenhouse gas emissions (GhGs) as burning coal and significantly fewer than burning oil, transitioning to it could mean replacing both the financial black hole of oil imports and the environmental degradations of coal mining with an energy source that would double the time the nation has to cope with the onslaught of global climate change.

    In The Future Of Natural Gas; An Interdisciplinary MIT Study (Interim Report), scientists who previously studied the practicality of “clean” coal and “safe” nuclear as means to face the coming “carbon-constrained” world say that in the next forty years (to the middle of this century) natural gas may be the best choice there is and a "bridge" to a New Energy economy. This suggests three possibilities.

    First, they may be right about the idea of using natural gas as a bridge. Or they may be underestimating what the New Energies are capable of right now. Or they may know what the New Energies are capable of but are choosing the inevitability of natural gas because they anticipated what the U.S. Senate is flagrantly displaying this week for all the world to see: U.S. fossil foolishness will only die hard, no matter how bad it is for the people of this great nation and this good earth.

    click to enlarge

    The paper’s “big picture” conclusions about natural gas:
    (1) The new-found abundance of international natural gas supplies will drive much more extensive use, especially in electricity generation.
    (2) The U.S. shale gas reserves will drive increased domestic use.
    (3) The increasing pressure to reduce GhGs will force a longer-term reduction of naturl gas reliance unless the capture and sequestration of fossil fuel emissions miraculously becomes both technically feasible and price-competitive with the ever-renewable, emissions-free wind, solar, geothermal and hydrokinetic energies.
    (4) The domestic and international natural gas markets are so volatile that things could change before this sentence ends.

    One of the biggest reasons there is so much talk about natural gas as the bridge to a New Energy future is that the present New Energy supply and infrastructure is inadequate to take over from coal. This is quite ironic. If the nation had not dallied with the volatilities of natural gas and sharply cut back on the research, development and deployment of New Energy in the 1980s, it might now be ready to throw off its fossil foolhardiness for good.

    Yet here are the big brains at MIT urging the nation to make a similar mistake yet again by turning to natural gas. It's formulation is nuanced: Technological advance (of New Energy and Energy Efficiency, “safe” nuclear and “clean” coal) should not be crowded out while natural gas rises in demand but development of natural gas, especially the shale reserves, should not be impeded by over-investment in technological advance before the technologies are mature.


    If there weren’t this small matter of global climate change, it might be fine to leave all this to the so-called invisible hand of the marketplace, though the invisibility of the oil & gas industries’ phantom lobbyists is probably not what Adam Smith had in mind when he coined the construction. Given the urgency of an all too rapidly rising global average temperature, it is patently obvious that all barriers to the development and implementation of New Energy and Energy Efficiency must be eliminated.

    One of those barriers is wasting time on developing any Old Energy infrastructure. That includes the cleaner fossil fuel (and “clean” coal and “safe” nuclear). When there is enough solar energy in the Southwest and enough wind off the Atlantic coast to power the Eastern Seaboard, what is the point of building natural gas pipelines?

    The use of compressed natural gas (CNG) as a heavy transport fuel may be the exception that proves the rule. Limiting its use to buses and trucks minimizes the need for a delivery infrastructure and maximizes its effectiveness as a replacement for oil. Especially as subsidized in the “no-energy” bill currently being considered by the Senate, there is merit in this limited application of the resource.

    The MIT report did not take much notice CNG as a heavy transport fuel because the authors do not expect it to be a large part of the potential market. It is true that it will not be a large part of the market but it could be a significant part. Just as Boone Pickens.

    MIT will deliver its full and final report on natural gas later this year but this interim paper could not be more timely

    Footnote: New research from Cornell university suggests that natural gas derived from shale by hydrofracturing could generate more life-cycle GhGs than coal. (See THE GHGS FROM NATURAL GAS) The process is certainly becoming controversial. (See MUST SEE TV - HBO'S GASLAND)

    click to enlarge

    THE DETAILS
    Determinative natural gas market factors:
    (1) lower GhGs
    (2) abundant newly accessible “unconventional” natural gas reserves via hydrofracture drilling techniques
    (3) the abundance of cheap natural gas supplies is once again making it more challenging for the New Energies to sustain a place in energy markets and expand their installed capacity and infrastructure to the point where they become price competitive
    (4) Regionalized natural gas markets in North America, Europe and industrialized Asia increase access to supplies
    each with a different market structure; and
    (5) Volatility in the diversified and unpredictable markets create feast or famine tendencies in supply, rapid and frequent price swings and a boom and bust industry

    The MIT study is aimed at providing “integrated, technically grounded analysis” to inform the debate over the feasibility of using natural gas as a bridge.

    The uncertainties that could impact the value of natural gas as a bridge:
    (1) How soon will GhG restraints be imposed and how strong will they be?
    (2) How extensive are the “unconventional” shale reserves and foreign conventional reserves?
    (3) Which New Energies will emerge and when? (And how will GhG restraints affect that emergence?)
    (4) How will “economics, geology and geopolitics” affect international gas markets?

    click to enlarge

    The MIT study examines the potential of natural gas to impact U.S. GhGs in the hope of educating “government, industry and academic leaders and decision-makers” on the “technical, economic, environmental and political issues” but also includes a consideration of the international marketplace.

    International Supply:
    The world is rich in natural gas and the U.S. is rich in unconventional (shale) gas.

    Recoverable resource: 16,200 Trillion cubic feet (Tcf) (12,400 Tcf to 20,800 Tcf), 150 times yearly world consumption.
    Economically recoverable resource: ~9,000 Tcf (at a gas price at or below $4/Million British thermal units (MMBtu) at the export point.

    U.S. unconventional (shale) supply:
    Recoverable shale gas resource: 650 Tcf (420 Tcf to 870 Tcf).
    Economically recoverable resource: ~ 400 Tcf (at a gas price at or below $6/MMBtu at the well-head).

    Environmental impacts of shale gas: “manageable but challenging.” The main challenges are in keeping gas and fracture fluids from leaking into the water table. Management is believed to be possible by following “industry best practices” for hydrofracturing and fracture fluid recycling and disposal.

    click to enlarge

    Policy:
    A “carbon-constrained” world will value the lower GhGs and high malleability of natural gas.

    Just the threat of a price being imposed on GhGs has increased the use of natural gas and the imposition of an emissions cap and a real price will increase that movement.

    Studies of a requirement to cut GhGs just 50% by 2050 shows the primary impacts to be a reduction in energy use and the displacing of coal use with natural gas.

    The only uncertainty to gas’s predominance is the technological advance of New Energy and Energy Efficiency, “safe” nuclear and “clean” coal (carbon capture and sequestration, CCS).

    If a cap and price mechanism aspires to cut GhGs 80% by 2050 (the minimum level science agrees is truly necessary to interrupt the rising global average temperature), this is expected to require “complete de-carbonization of the power sector.” MTI believes this would necessitate the development of CCS.

    MIT’s formulation is that technological advance (of New Energy and Energy Efficiency, “safe” nuclear and “clean” coal) should not be crowded out while natural gas rises in demand but development of natural gas, especially the shale reserves, should not be impeded by over-investment in technological advance before the technologies are mature.

    click to enlarge

    Demand and Infrastructure:
    The marketplace will demand natural gas, at least in the near term, because of its GhG profile and its malleability, allowing use for power generation, heating and transport. The demand will necessitate decisions about developing infrastructure.

    MIT foresees the primary growth of use in the electricity sector because of the GhG profile. It will be valuable as baseload supply and as a ramping partner to variable sources (wind and solar).

    Short- and long-term impacts will differ:
    In the short-term, more solar and wind will displace natural gas use for ramping if gas remains more expensive than coal. On the other hand, market forces will be driving generators toward base as baseload, especially underutilized existing Natural Gas Combined Cycle (NGCC) capacity.

    In the longer term, MIT expects 2 eventualities: (1) Increased natural gas (for its flexibility), but utilized less, and (2) displacement of all forms of baseload generation, including natural gas, as more variable generation is integrated into the transmission system. The 2 will vary by region.

    click to enlarge

    Use of compressed natural gas (CNG) as a vehicle fuel is not foreseen to be a major factor in the transition away from oil. Its role is expected to be in the private vehicle market. MIT found liquefied natural gas (LNG) to be unsatisfactory as a vehicle fuel because of the minus 162 degree Centigrade it requires for storage.

    Natural gas to methanol is a more practical option but methanol does not solve any GhG problems.

    Development of the shale gas reserves will necessitate expansion of pipeline, storage and processing infrastructure, a costly undertaking for an energy source expected to lose market share in the longer term.

    click to enlarge

    Markets & Geopolitics:
    North America, Europe and Asia form individual natural gas regional markets with differing characteristics.

    The U.S. market is described as functioning well and in no need of anything but a level playing field.

    International natural gas markets are face impediments. If they integrate successfully, they will grow and eventually turn the U.S. into a net importer.

    More use of LNG will increase international trading, steady prices and provide security of supply by diversifying sources.

    click to enlarge

    Security concerns:
    (1) Gas dependence extends foreign entanglements.
    (2) Some new market players, closed societies, could impede transparent markets.
    (3) Competition for control of some pipelines is intense and potentially volatile.
    (4) Longer supply chains increase vulnerability of infrastructure and supply.

    Research, Development and Demonstration (RD&D) into the development of unconventional (shale) reserves could be determinative by eliminating dangers. The feasibility of advances is significant, considering that it was technology advances that made today’s controversial exploration and development of shale gas possible.

    click to enlarge

    The study’s “high-level recommendations:
    (1) Natural gas will thrive if GhG-cutting policies create a “level playing field” for all energies. This would be a price on emissions and no subsidies to any energy source.
    (2) If there is no price on GhGs, policies should “mimic” a level-playing-field approach with efficiencies and displacement of coal with gas.
    (3) If there is no price on GhGs, supported RD&D and targeted shorter-term subsidies for low-emission technologies (New Energy, Energy Efficiency, “clean” coal, “safe” nuclear) might work.
    (4) Displace coal with NGCC.
    (5) Natural gas should grow with New Energy installed capacity.

    click to enlarge

    (6) Regulatory and policy barriers to CNG and natural gas liquid fuels for vehicles should be eliminated.
    (7) Policies that create an efficient, integrated, transparent, diverse international market will enhance security and economic growth.
    (8) Foreign policy measures to support natural gas: (a) energy should ne considered in U.S. foreign policy, (b) support the International Energy Agency (IEA) in getting natural gas into large emerging markets (China, India, Brazil), (d) share know-how for development of shale reserves, (e) advance physical and cyber-infrastructure, and (f) promote efficiency.
    (9) Environmental measures to support shale development: (a) Government-funded R&D, especially of subsurface aspects and improved water use in fracturing and recycling, (b) improved assessment of resources by the U.S. Geological Survey (USGS), (c) transparent public/private advancement of minimized impacts of fracturing operations and water management including communication of oil- and gas-field best practices, integrated regional water use and disposal, and disclosure of hydraulic fracture fluid components.
    (10) Public/private RD&D for environmentally responsible development

    click to enlarge

    QUOTES
    - From the report: “The environmental impacts of shale development are manageable but challenging. The largest challenges lie in the area of water management, particularly the effective disposal of fracture fluids. Concerns with this issue are particularly acute in those regions that have not previously experienced large-scale oil and gas development. It is essential that both large and small companies follow industry best practices, that water supply and disposal are coordinated on a regional basis, and that improved methods are developed for recycling of returned fracture fluids.”

    click to enlarge

    - From the report: “A more stringent CO2 reduction of, for example, 80%, would probably require the complete de-carbonization of the power sector. This makes it imperative that the development of competing low-carbon technology continues apace, including CCS for both coal and gas. It would be a significant error of policy to crowd out the development of other, currently more costly, technologies because of the new assessment of gas supply. Conversely, it would also be a mistake to encourage, via policy and long-term subsidy, more costly technologies to crowd out natural gas in the short to medium term, as this could significantly increase the cost of CO2 reduction.”

    click to enlarge

    - From the report: “Development of the U.S. vehicular transportation market using compressed natural gas (CNG) powered vehicles offers opportunities for expansion for natural gas use and reduction of CO2 emissions, but it is unlikely in the near term that this will develop into a major new market for gas or make a substantial impact in reducing U.S. oil dependence. However, significant penetration of the private vehicle market before mid-century emerges in our carbon-constrained scenario...Liquefied natural gas (LNG) does not currently appear to be economically attractive as a fuel for long-haul trucks because of cost and operational issues related to storage at minus 162 degrees Centigrade.”

    1 Comments:

    At 12:14 PM, Blogger Nancy said...

    Herman, you are amazing.

     

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