PCI: Will Natural Gas Fuel America in the 21st Century?

[GliderGuider]

J. David Hughes is a geoscientist who has studied the energy resources of Canada for nearly four decades, including 32 years with the Geological Survey of Canada as a scientist and research manager. As team leader for unconventional gas on the Canadian Gas Potential Committee, he coordinated the recent publication of a comprehensive assessment of Canada’s unconventional natural gas potential. Over the past decade he has researched, published, and lectured widely on global energy and sustainability issues in North America and internationally. He is currently president of a consultancy dedicated to research on energy and sustainability issues.

In other words, when it comes to natural gas, he knows what he's talking about. Hughes is a Fellow of the Post Carbon Institute, who published this report.

Will Natural Gas Fuel America in the 21st Century? (63-page PDF)

Abstract

Natural gas has increasingly been touted as a “bridge fuel” from high-carbon sources of energy like coal and oil to a renewable energy future. This is based on renewed optimism on the ability of horizontal drilling and hydraulic fracturing to access natural gas from previously inaccessible shale gas deposits. A review of the latest outlook (2011) of the U.S. energy Information Administration (EIA) reveals that all eggs have been placed in the shale gas basket in terms of future growth in U.S. gas production. Without shale gas, U.S. domestic gas production is projected to fall by 20% through 2035.

Shale gas is characterized by high-cost, rapidly depleting wells that require high energy and water inputs. There is considerable controversy about the impacts of hydraulic fracturing on the contamination of surface water and groundwater, as well as the disposal of toxic drilling fluids produced from the wells. A moratorium has been placed on shale gas drilling in New York State. Other analyses place the marginal cost of shale gas production well above current gas prices, and above the EIA’s price assumptions for most of the next quarter century. An analysis of the EIA’s gas production forecast reveals that record levels of drilling will be required to achieve it, along with incumbent environmental impacts. Full-cycle greenhouse gas (GhG) emissions from shale gas may also be worse than previously understood, and possibly worse than coal.

Even assuming the EIA forecast for growth in shale gas production can be achieved, there is little scope for wholesale replacement of coal for electricity generation or oil for transportation in its outlook. Replacing coal would require a 64% increase of lower-48 gas production over and above 2009 levels, heavy vehicles a further 24% and light vehicles yet another 76%. This would also require a massive build out of new infrastructure, including pipelines, gas storage and refueling facilities, and so forth. This is a logistical, geological, environmental, and financial pipe dream.

Although a shift to natural gas is not a silver bullet, there are many other avenues that can yield lower GhG emissions and fuel requirements and thus improve energy security. More than half of the coal-fired electricity generation fleet is more than 42 years old. Many of these plants are inefficient and have few if any pollution controls. As much as 21% of coal-fired capacity will be retired under new U.S. environmental Protection Agency (EPA) regulations set to take effect in 2015. Best-in-class technologies for both natural-gas- and coal-fired generation can reduce CO2 emissions by 17% and 24%, respectively, and reduce other pollutants. Capturing waste heat from these plants for district and process heating can provide further increases in overall efficiency. The important role of natural gas for uses other than electricity generation in the industrial, commercial, and residential sectors, which constitute 70% of current natural gas consumption and for which there is no substitute at this time, must also be kept in mind. Natural gas vehicles are likely to increase in a niche role for high-mileage, short-haul applications.

Strategies for energy sustainability must focus on reducing energy demand and optimizing the use of the fuels that must be burnt. At the end of the day, hydrocarbons that aren’t burnt produce no emissions. Capital- and energy-intensive “solutions” such as carbon capture and storage (CSS) are questionable at best and inconsistent with the whole notion of energy sustainability at worst.

There is also a set of three supplements to the article, downloadable in one 15-page PDF. They cover natural gas use in agriculture and transportation, as well as the public health aspects of fracking.

Agriculture and Natural Gas
By Michael Bomford

The vast majority of natural gas supporting American agriculture today is used to manufacture farm inputs like pesticides, plastics, and fertilizers -- and nitrogen fertilizer production in turn accounts for most of that. Moreover, synthetic fertilizer used in the U.S. is increasingly imported, further increasing our dependence on gas from foreign and unconventional (i.e., shale gas) resources. These constraints underline the need for a stronger push towards organic agriculture and other fossil fuel free food system solutions.

Problems and Opportunities with Natural Gas as a Transportation Fuel
By Richard Gilbert and Anthony Perl

Despite the hype to the contrary, natural gas should have only a modest role in fueling future mobility. And the best use of this limited fuel is not to burn it directly in internal combustion engines, but rather to generate electricity (while also generating heat in efficient cogeneration arrangements) to power a 21st century electrified transportation system.

Public Health Concerns of Shale Gas Production
By Brian Schwartz, MD and Cindy Parker, MD

With so many existing and projected shale gas wells expected to remain in operation for years and thus leave a legacy of contaminated air, soil, and water, the long-term and cumulative effects over space and time converge to raise the public health concerns to a high level. The EPA and public health scientists need to better evaluate the risks, and determine how best to regulate shale gas production to avoid another legacy -- as happened with coal -- affecting the health and well-being of millions of people for generations.

[HysteryDiagnosis]

1. There are silver linings here and there, this is one imho, I hope they explode onto the

scene with these projects asap.

www.rentechinc.com

[louis-t]

2. If there is an America left after all the fracking.

[GliderGuider]

3. Desperate people do desperate things.

Back when I was a doomer I used to think that the devastation would come after the collapse, as the survivors "ate the songbirds out of the trees".
Now that I'm an optimist, I think most of the devastation will be wreaked in our vain attempt to prevent collapse.

[Bill USA]

4. what's Prosser trying to do build a 'temporary insanity defense'?

In his interview, the report says, Prosser told a detective he remembered "feeling the warmth on the side of Justice Bradley's neck in his hands." He said that he then pulled his hands back and then he believed he "went limp."

"Oh my God, I'm touching her neck," {like as if he didn't know what he was doing when he did it -B_USA} Prosser said he thought, adding later, "What does any self-respecting man do when suddenly that man finds that his hands, or part of his hands are on a woman's neck? Get them off the neck as soon as possible."

When Prosser was asked by detectives if he felt he needed to apologize, he said he had talked with people about doing that but felt he had done nothing wrong. {don't admit to any reason for feeling guilty, noooooo. "Doesn't count, I didn't know I did it!"}

[miyazaki]

5. Can't agree with Gilbert and Perl. n/t

[GliderGuider]

6. Could you elaborate? n/t

[miyazaki]

9. Well over 90 percent of people have to drive to work.

When gas prices rise to four and five bucks a gallon you can imagine this devastating effect.
If the government would set a precedent and a message to the world that we will immediately start
utilizing our own massive supplies of natural gas for automobiles it would cut the existing price of gas in half.
Don't even have to make the switch to flex fuel or all CNG vehicles right away. Or we can sit on our dumb butts for another ten years or more waiting for some alternative fuel and pay half a trillion to middle east countries
every year for their oil.

[NickB79]

14. Did you read the article at all?

For one, there's this:

"A review of the latest outlook (2011) of the U.S. energy Information Administration (EIA) reveals that all eggs have been placed in the shale gas basket in terms of future growth in U.S. gas production. Without shale gas, U.S. domestic gas production is projected to fall by 20% through 2035."

And following from that, we have this:

"Even assuming the EIA forecast for growth in shale gas production can be achieved, there is little scope for wholesale replacement of coal for electricity generation or oil for transportation in its outlook. Replacing coal would require a 64% increase of lower-48 gas production over and above 2009 levels, heavy vehicles a further 24% and light vehicles yet another 76%. This would also require a massive build out of new infrastructure, including pipelines, gas storage and refueling facilities, and so forth. This is a logistical, geological, environmental, and financial pipe dream"

THEN, we have this news story: http://www.nytimes.com/2011/08/25/us/25gas.html?_r=1

"Geologists Sharply Cut Estimate of Shale Gas"

The gist of it is, we don't have the massive reserves of natural gas that the gas industry has been saying we have.

[miyazaki]

15. I read it, and it's another glossed over, non-solution

toiler paper pamphlet and about as full of shit as the anti-nukes.
It seems they're both indulged in magic bullet train fantasies.

Good scientists, engineers and economists have been promoting
this for years and know it can offer nearly immediate relief despite
shortages of shale gas which hardly accounts for the majority of
existing supplies. It's not a total conversion anyway.

The conditioning of four dollar a gallon gasoline has been underway
for quite some time. Once it sustains that price and later on to five
a gallon, any economic recovery for this country is finished.

[GliderGuider]

16. That seems to be a standard problem with most of these sorts of analyses

The deeper one looks, the fewer "solutions" one sees.

The price of oil and gasoline is part of a feedback loop - it's both a symptom and a cause of economic difficulty. You've noted the cause - rising oil prices interfere with economic activity. However, it's also a symptom because the market uses price to direct the allocation of oil in an environment characterized by increasing scarcity and oil-dependent economic growth. The combination is custom-made to produce global economic oscillations: a repeating pattern of decline and attempted recovery, with each subsequent recovery peaking at a lower level than the one before. I call it the "Stairway to Hell".

We are experiencing a predicament rather than a problem. The quality that makes it a predicament is that it consists of multiple interlocking problems, a situation in which "solving" one makes another one worse, with a net effect that in the most hopeful case is as likely to be negative as positive.

Here's an example:

Consider the factors that interweave with oil: climate change, biofuels, coal and natural gas supplies, combustion infrastructure, food production and distribution, economic dependence on oil for transportation etc.

Now take the "solution" of biofuels. Climate change is improved, but: the net energy available per gallon goes down, soil and ground water are depleted to grow fuel crops, ocean dead zones increase from added fertilizer runoff, food prices are impacted as fuel crops squeeze out food crops, international tensions are increased as fuel consumers buy up productive land in other countries to grow fuel instead of food, etc.

There are no stand-alone "solutions", except to the most casual analysis. The deeper one dives into the network of effects and causes, the more the values of proposed "solutions" deteriorate, until they are ultimately seen to go negative. There may be some exceptions to this rule (like permaculture) but I have seen none yet that work on anything like the scale we would need to make the human industrial experiment sustainable.

People who are conditioned to see only "problems with solutions" (i.e. who have an engineering or economic world-view rather than an ecological one) have a hard time with what they interpret as the inherent negativity and defeatism of this perspective.

[4dsc]

7. I think NG will have little impact on peak oil predictions

I am of the belief that we will face catastrophic effects of falling oil production in the later part of this decade and NG production will have little to do to stop the fall.

[GliderGuider]

8. Yes, at the moment oil and NG serve largely separate domains.

The same goes for oil and electricity. I agree with Hirsch - we are at Peak Oil now, and it will take 20 years to build out replacement infrastructure based on other energy sources. All while the economy is gyrating like a stripper on speed. We may eventually git 'er done, or we may not. Gotta wait and see what new surprises reality has in store for us.

[FBaggins]

10. Keep in mind that Hirsch was one of the ones telling us that the peak in Ngas was past.

Saying we were in permanent decline.

Times can change quickly.

[GliderGuider]

11. Hirsch quoted others, including CERA.

In his 2005 report Hirsch wrote:

http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf

• CERA now finds that “The North American natural gas market is set for the longest period of sustained high prices in its history, even adjusting for inflation. Disappointing drilling results … have caused CERA to revise the outlook for North American supply downward … The downward revisions represent additional disappointing supply news, painting a more constrained picture for continental supply. Gas production in the United States (excluding Alaska) now appears to be in permanent decline, and modest gains in Canadian supply will not overcome the US downturn.”

• Raymond James & Associates finds that “Natural gas production continues to drop despite a 20 percent increase in U.S. drilling activity since April 2003.”

“U.S. natural gas production is heading firmly downwards…”

• “Lehman now expects full-year U.S. production to decline by 4% following a 6% decline in 2003. …. Domestic production is forecast to fall to 41.0 billion cubic feet a day by 2008 from 46.8 in 2003 and 52.1 in 1998. After a sharp 12% fall in 2003, Canadian imports are seen dropping...”

• The NPC now contends that “Current higher gas prices are the result of a fundamental shift in the supply and demand balance. North America is moving to a period in its history in which it will no longer be self-reliant in meeting its growing natural gas needs; production from traditional U.S. and Canadian basins has plateaued.”

Hirsch's own assessment was quite moderate: "In the short run, there may be interest in the substitution of natural gas for oil in some applications, but the current outlook for natural gas availability and price is cloudy for a decade or more,"

The actual size of shale gas reserves in the USA is still a subject for debate, as is their accessibility in the face of rising public opposition to fracking.

The American natural gas supply has improved since Hirsch published his report in 2005. It's now back to what it was in 1970:



As you say, things can always change.

[FBaggins]

13. He really went beyond that.

After all, an entire section was dedicated to what we should have learned from natural gas. Implying that the debate is over and we shouldn't listen to the optomists on oil supplies because they were so badly wrong on natural gas supplies. He specifically rubishes the notion that higher prices can result in new supplies coming on line.

The actual size of shale gas reserves in the USA is still a subject for debate

But the debate is entirely around whether they're vast... really vast... or really REALLY vast.

It's now back to what it was in 1970:

Yes... and if the infrastructure was in place to handle more of it (particularly for export), the production would be much higher.

As for fracking opposition. It doesn't matter whether I think resurgence of gas production is a good or bad thing... it is what it is. I certainly prefer it to oil and coal. And if similar technological advances started to look reasonable for oil extraction... an even larger boom would follow. The dollars speak far louder than a few flammable faucets.

[kristopher]

12. The OP presents a false definition of what is meant by a "bridge"

That refers to the fact that continued investment in natural gas generation is a positive contribution to the overall effort to move away from carbon even though natural gas is carbon based.

The technologies we will use to replace coal will be renewable.

Natural gas is very flexible - it has the ability to ramp up and down quickly - which is a valuable contribution to a renewable grid.

There is a great deal of existing natural gas generating capacity that is underutilized. That represents a resource that helps achieve higher penetrations of renewables more rapidly than would be possible if we had to wait for other flexible sources such as biomass, water power, or storage to be deployed.

This means we can dedicate our scarce development and deployment funds to the backbone technologies of wind and solar and use those to close the coal and nuclear plants.

Finally, the capital investment related to natgas is both low and adapatable. The positive carbon reduction benefit of the low capital cost is that when it is time to abandon carbon altogether the financial loss isn't as significant and resistance will therefore be less and the fact that it is adaptable means that some portion of the natgas generating facilities will be able to continue to operate on biomethane.