With abundant new supplies of gas making it the cheapest option for new power generation, the largest U.S. wind-energy producer, NextEra Energy Inc., has shelved plans for new U.S. wind projects next year and Exelon Corp called off plans to expand two nuclear plants. Michigan utility CMS Energy Corp. canceled a $2 billion coal plant after deciding it wasn’t financially viable in a time of “low natural-gas prices linked to expanded shale-gas supplies,” according to a company statement.

Read more HERE

For a topic that has elicited much emotion and passion from environmentalists and energy industry representatives alike, yesterday’s session was remarkably tame, even by scientific workshop standards. Speakers dispassionately presented their data and interpretation of same, and any disagreements were aired in the most collegial of terms. Anticlimactic, I imagine for those who were hoping for drama, but as one who was hoping to get a better sense of the state of the science, I found it to be quite informative.

ExxonMobil: Fracking Is a Big Part of the Future

Michael Parker of ExxonMobil opened the session with a summary of the company’s most recent energy outlook, projecting national, regional and global energy demands out to 2040. ExxonMobil projects that:

• global demand will, not surprisingly, rise — by about 30 percent by 2040;
• the largest part of that growth will come from natural gas, with demand to increase by 60 percent;
• a good deal of that increase will come from unconventional gas reserves (i.e., shale gas via fracking); and
• most of the increased production of natural gas in the United States will be from unconventional sources like shale gas from fracking.

Interestingly, worldwide demand for coal is expected to peak and begin a gradual decline.

In the United States, ExxonMobil expects that natural gas will overtake coal by 2025 as the second most-used fuel next to oil — the uptick in use will come from electricity generation as natural gas continues to erode the use of coal. Driving the switch from coal to natural gas will be economics — since its advent, fracking has helped make gas-powered power plants a better economic bet than coal-fired ones. (ExxonMobil also expects that “policies that impose costs on higher-carbon fuels” will encourage the shift to natural gas.)

Another interesting part of Parker’s presentation was the national perspectives. Again not surprisingly, driving most of the rise in global energy demand will be China’s and India’s economies. But I was surprised by U.S. projections: While U.S. population is expected to grow at an annual rate of about 0.7 percent out to 2040, and gross domestic product by 2.4 percent, energy demand is projected to decrease annually by about 0.2 percent, thanks largely to improved efficiency in our energy use.

Does Fracking Undermine Drinking Water?

This is a huge question with only a tiny bit of data — enough to raise some questions, but not enough to provide definitive answers.

At yesterday’s workshop, Duke University’s Avner Vengosh summarized his data from Pennsylvania and New York that provide circumstantial but not yet slam-dunk evidence of methane contamination of some wells in the vicinity of fracking.

The Environmental Protection Agency’s David Jewett described a new national study on “”Hydraulic Fracturing and Its Potential Impact on Drinking Water Resources,” which the agency launched in hopes of resolving this question.

Of special note in Jewett’s presentation was his announcement at the outset that he would not discuss the so-called Pavillion groundwater study, a study carried out by EPA scientists who found evidence of compounds associated with shale gas drilling and fracking in drinking water wells in Wyoming. The report is undergoing peer review, and until that’s completed, EPA is not talking about it (in the meantime a draft report [pdf] is available).

Shale Gas: A Global Warming Goodie or a Baddie?

The accepted wisdom is that natural gas is a winner compared to the other fossil fuels. The reason is simple: On an energy-unit-to-energy-unit basis, burning natural gas emits less carbon dioxide (CO2) than does coal or, to a lesser extent, oil. But Cornell University’s Bob Howarth and colleagues challenged this contention based on the following:

• The key hydrocarbon in natural gas is methane;
• Methane is a much more effective greenhouse gas in its own right than CO2; and so

If enough methane is lost throughout the system, from losses at the wellhead to leaks from pipes and storage facilities during transport and delivery (collectively referred to as fugitive emissions), then, from a global warming point of view, natural gas may not be such a great choice.

Whether that last point is correct or not depends upon the size of the fugitive emissions. In their April 2011 paper, Howarth and colleagues argued that fugitive emissions from shale gas extraction are quite large and, so, jumping on the fracking bandwagon would be a poor choice for our energy future.

Since last April, several new papers on the issue have been published — the most recent by a Cornell colleague disputing Howarth et al’s fugitive emissions numbers. Yesterday, Howarth defended his numbers and reiterated his conclusion. The bottom line here is: The dearth of data on fugitive emissions means we need to get busy getting these data to resolve this issue.

Driving home the importance of getting a better handle on fugitive emissions was a really interesting set of statistics Howarth presented at the end of his talk: 40 percent of U.S. methane emissions come from natural gas systems and account for 19 to 44 percent of our total greenhouse gas emissions.

The Takeaway: We Gotta Get Natural Gas Right

After yesterday’s session, a small group of us retired to the Faculty Commons for a glass of wine, dinner, and conversation. We were treated to a short talk by Richard Newell, a Duke professor and the director of Duke’s Energy Initiative, who returned last fall from a stint in the Obama administration as the head of the Energy Information Administration. Richard provided a fascinating overview of the issue from the perspective of someone who has spent the last two years trying to make sense of the nation’s long-term energy future.

Some relevant history: Hydraulic fracturing is as old as … well if not quite the hills, let’s just say it’s not new. A kind of hydraulic fracturing was first done in the late 19th century using nitroglycerin (see here, here and here [pdf]). Horizontal drilling is also not all that new, dating back to the 1950s. It wasn’t until the 1990s that the two were put together, and the application of the process to extract shale gas didn’t really begin until the middle part of the last decade, but since then, it’s become a game changer — initially responsible for a percent or two of all natural gas production, it’s now producing about 30 percent of U.S. supply.

The economic impact has been huge. For instance, in 2006, the federal government was discussing ways to accelerate the construction of billion-dollar port facilities for processing imported liquified natural gas because it was believed we faced an imminent natural gas shortage that would put our electricity supply at risk. Today we have an overabundance of natural gas, prices are down and few are lining up to invest in such a facility.

Another point Richard made: The global shale gas resource is huge, so large that exploiting it will dominate supply and therefore set natural gas prices at least for the next decade. So from today’s perspective, shale gas is here to stay, a resource that will be exploited. So we’d better get it right.

Source: Huffington Post

Exxon’s study, which is set to be released Thursday, forecasts that global energy demand will grow about 30 percent by 2040 as the world population climbs to nine billion from seven billion, the Journal said.

Natural gas will overtake coal as the second-largest fuel source overall, ranking behind oil and powering everything from electrical plants to home-heating systems.

But according to the Exxon report, coal use will continue to grow through 2025 around the world, primarily in developing nations such as China and India and the African continent, because economic growth will be fastest in emerging nations, the newspaper said.

Exxon in recent years has bet big on the natural gas business and had purchased U.S. shale gas producer XTO Energy in 2010.

It’s been nearly a month since Robert Howarth’s paper claiming that shale gas was worse for climate change than coal made its big splash in the New York Times. I expressed quite a bit of skepticism at the time – and readers of this blog proceeded to dissect the paper in the comments. Now, the Department of Energy’s National Energy Technology Laboratory (NETL) has applied ISO standard methodology, and a substantial understanding of industry operations, to do the calculation itself (PDF of a presentation last week at Cornell). Its conclusion? Used to generate electricity, natural gas – conventional or not – results in far less emissions than coal.

Using a 100-year global warming potential and assuming an average power plant, unconventional gas results in 54% less lifecycle greenhouse gas emissions than coal does. Even using a 20-year global warming potential, as Howarth controversially argues one should, the savings from substituting unconventional gas for coal are almost 50%. The NETL study acknowledges – and explores – a range of uncertainties. But it finds nothing close to the problems that Howarth claims.

The NETL documents don’t address the Howarth study explicitly, but if you flip to page 25, you’ll see a big part of the discrepancy explained. Some readers will recall that Howarth found a large fraction of produced gas from unconventional wells never made it to end users, assumed that all of that gas was vented as methane, and thus concluded that the global warming impacts were huge. As the NETL work explains, though, 62% of that gas isn’t lost at all – it’s “used to power equipment”.

The NETL work also does a much more careful job looking at things like losses from long distance transmission. In addition, it doesn’t include losses from local distribution, since there’s no local distribution involved in using gas for power generation.

Bottom line: Those who were skeptical of the Howarth study were reacting correctly. There’s still much useful work to be done, but for now, the NETL work is a far more useful guide for thinking through the gas emissions issue.

Michael A. Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment

Source: Council on Foreign Relations

The outlook for rising demand “reflects improving living standards for people around the world,” CEO Rex Tillerson said. Demand is expected to jump 75 percent in China, the world’s most populous nation, where millions of people are buying cars and various home appliances for the first time.

Tillerson said that. “newly unlocked supplies of shale gas and other unconventional energy sources” would prove “vital” in meeting a projected 35 percent rise in energy demand.

Yet it’s that “least-cost” option for power generation that has kept King Coal on top for so long. Coal has been the cheapest energy around, and state regulators’ traditional mandate has been to support cheap power, not clean power.

“The reality is that coal generation as we know it today won’t be as cheap,” said Nils Mellquist, a senior researcher at Deutsche.

Deutsche Bank analysts outlined a plan yesterday aimed at cutting coal’s share of energy generation from 47 percent to 22 percent in the next two decades.

Using more gas, increasing wind and solar power to 14 percent of the energy mix, and adding more nuclear power would achieve a 44 percent reduction in carbon dioxide emissions from the electricity sector in 2030, according to the Deutsche Bank report.

“The role that natural gas can play we think is so significant that it can form a bipartisan agreement,” said Mark Fulton, global head of climate change investment research.

Read the Full Article HERE

The blog posting highlights Bennett’s opinion that “based on current supply forecasts, that the Nymex price for natural gas may one day no longer be based on delivery at Henry Hub in South Louisiana” (psst… if not there, then where?) and it talked about using the metaphor of an elephant for natural gas. Using an elephant as an icon for promoting natural gas may not be the best idea (they have large footprint, unlike natural gas), but the author is right- natural gas needs proper branding.

Read below some of the highlights from Nissa Darbonne posting on the Oil and Gas Investor blog site.

There is an elephant in the U.S. energy-policy debate: the undeniable benefits of greater reliance on natural gas as a leading source of fuel, and no matter what each American would like to see Washington achieve via energy policy.

– Natural gas has greater energy content, in an Mcf of gas versus a gallon of gasoline comparison. An average-car fill-up—approximately 16 gallons of fuel—would cost about $8.40 at today’s natural gas price

– Its carbon footprint is lower than that of coal and crude oil. It produces 90% fewer particulates and half as much greenhouse gas

– It is necessary as a backup power-generation fuel source if the U.S. is to power more homes and businesses with solar and wind. Natural gas-fueled power plants can sit ready, idle when solar and wind don’t carry their load

– It is available in great quantity domestically, suggesting reduced dependence on foreign oil, thus fewer U.S. dollars sent abroad and less interest in keeping up relations with hostile exporters and their enemies

– Generally, there isn’t a lower-carbon-footprint fuel that is available domestically—or abroad—in sufficient quantity and as inexpensively

In days past natural gas producers were busy trying to figure out the U.S. shale-gas plays, surfacing supplies, and working to keep up with natural gas demands. Before there was no real need to product a market for natural gas, but now we have all this domestic supply of natural gas and how people and the industry view natural gas and the promotion of it as a product needs to change.

Let’s hope that the American Natural Gas Alliance uses the $100 million that has been pledged and work creatively to come up with really effective branding for natural gas that Americans can undersrand and identify with. If milk could do it, “Got Milk” and pork with “the other white meat”- surely natural gas can do it.

Have any suggestions?

Read More About the American Natural Gas Alliance
See an article in the Wall Street Journal for more details on the American Natural Gas Alliance.

More than 20 of the nation’s largest independent natural gas exploration and production companies have formed the American Natural Gas Alliance (ANGA). The group hopes to increase awareness and appreciation of America’s clean and abundant supply of natural gas among consumers and policy makers.

The organization has appointed Rodney W. (“Rod”) Lowman as president. Lowman is establishing the natural gas alliance’s governance structure, public policy priorities, and strategic communications initiatives.

“Our mission is to increase market appreciation for American natural gas as the clean, abundant, affordable, and dependable solution to the most challenging energy and environmental issues facing the US,” says David A. Trice, president and CEO of Newfield Exploration Co. and chairman of ANGA.

Posted by: C. Keddy

The price of natural gas has fallen from $13 per million British thermal units to $4 per million btu in less than a year. Today, coal provides almost 50% of the U.S.’s electricity while natural gas provides 21%.

The price and amounts of natural gas in the U.S with the shale play in Haynesville (area in Louisiana that could become the world’s largest producing gas field) could give ‘dirty’ coal a run for its money. Coal is cheap and an entrenched old technology. Clean atural gas and technology improvemets will cause coal costs will dip even further. The growth in takeup for domestic, secure and clean natural gas is going to be explosive !

Posted: C. Keddy

Interesting points about natural gas coming to the rescue:

- gas-fired power plants emit on average 37% less CO2 than coal-fired plants
- the U.S has more gas-fired generating capacity than coal-fired
- if we doubled our utilization of existing gas-fired power plants and burned correspondingly less coal, the country would emit roughly 330 million fewer tons of CO2 per year (or a reduction +5% of all US net emissions)
- gas-powered plants are on average 37% more efficient than coal-fired plants
- Greenpeace is on board with using natural gas as a low-carbon solution to move away from using coal

C.Keddy