Transcript Slide 1

3 JUNE 2011
UNCONVENTIONAL NATURAL GAS:
A BRIDGE FUEL FOR THE FUTURE OR
AN ENVIRONMENTAL HAZARD?
BRADY HAYS
ASSOCIATE VICE PRESIDENT, B&V WATER
U.S. Energy Consumption by Energy Source
Hydrocarbon Fuels Still Dominate Portfolio
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What about CO2 Emissions?
U.S. CO2 Emissions from Fossil Fuel Combustion
Natural Gas
Petroleum
Coal
Tg CO2 Eq.
2,000
1,500
Relative
Contribution
by Fuel Type
1,000
Coal-Fired
Power Plants
1/3 of U.S.
CO2 Emissions
500
0
Residential
Commercial
Industrial
Transportation
Electric
U.S. Territories
Inventory of U.S. Greenhouse Gas Emissions and Sinks:
4
Fossil Fuel Emission Levels
Pounds per Billion BTU of Energy Input
Pollutant
Natural Gas
Oil
Coal
Carbon Dioxide
117,000
164,000
208,000
Carbon Monoxide
40
33
208
Nitrogen Oxides
92
448
457
Sulfur Dioxide
1
1,122
2,591
Particulates
7
84
2,744
Mercury
0.000
0.007
0.016
Source: EIA
• Natural Gas Improves Air Emissions:
• 50% less GHG than Coal; 30% less GHG than Oil
• Acid Rain & Smog: NOx, SOx, PM >99% Reduction
• Zero Mercury Emissions
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Is Natural Gas the Bridge Fuel to Renewable Energy?
Surprisingly, America has more gas generation capacity – 450 gigawatts –
than it does for coal. However, public regulators generally require
utilities to dispatch coal-generated power in preference to gas. For that
reason, high-efficiency gas plants are in operation only 36 per cent of
the time. By changing the dispatch rule nationally to require that
whenever coal and gas plants are competing head-to-head, gas
generation must be utilized first, we could quickly reduce coal
generation and achieve massive emissions reductions.
-- Robert F. Kennedy, Jr., Financial Times, 19 July 2009
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Nearly 100 GW of Announced Gas for Power
Gen over 10 Years
MRO
3 GW
WECC
28 GW
RFC 11 GW
SPP
3 GW
TRE
13 GW
Source: SNL.
NPCC
13 GW
SERC
21 GW
FRCC
6 GW
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Decarbonization of the US Power Generation
Natural Gas
Hydro
Nuclear
6%
7%
21%
21%
20%
2011
40%
4%
IGCC
2035
11%
21%
48%
Renewable
Coal
Source EIA: Depends on robustness and timing of regulation
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Reducing Imports of Transportation Fuels
Source EIA: Reference Case
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Energy Security: Natural Gas is a US Energy Source
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Unconventional Gas Reserves
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Horizontal Drilling and Hydraulic Fracturing Process
Animation
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Environmental Concerns – Water and Air Quality
• Poorly cased wells allow gas to escape into underground
aquifers;
• The shale gas industry uses dangerous chemicals in the
fracking process that might contaminate groundwater;
• Waste water returning to the surface during production,
contaminated with salt and radon, may pollute streams;
• The industry’s use of water for fracking depletes a scarce
resource;
• Inefficient systems lead to excess air pollution
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Frac Fluid – Transparency is Required
Additive Type
Main Compound
Purpose
Iron Control
Citric Acid
Prevent precipitation
Oxygen Scavenger
Ammonium Bisulfite
Reduce corrosivity
pH Adjustment
Sodium Carbonate
Maintain effectiveness
Proppant
Silica sand
Keep fracture open
Scale Inhibitor
Ethylene Glycol
Reduce deposition
Surfactant
Isopropanol
Increase viscosity
pH Adjusting Agent
0.011%
KCI
0.06%
Breaker
0.01%
Gelling Agent
0.056%
Water and Sand
99.51%
Other
Surfactant
0.085%
0.49%
Scale Inhibitor
0.043%
Acid
0.123%
Friction
Reducer
0.088%
Crosslinker
0.007%
Iron Control
0.004%
Corrosion Inhibitor
0.002%
Biocide
0.001%
Source: ALL Consulting based on data from a fracture operation in the Fayetteville Shale, 2008
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Better Managing Water Resources
Current Approach:
•5 MGallons of Freshwater / well
•2 MGallons of Flowback/Produced Water
Hauled for Disposal
•1000s of Trucks
100% Recycle Model:
•3 MGallons of Freshwater / well
•0.2 MGallons of Flowback/Produced Water
Hauled for Disposal
•100s of Trucks
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Protecting A Communities Natural Resources
• Horizontal Drilling: Maximize industry best practices for Completions to ensure
protection of local groundwater supplies and minimize the loss of methane
emissions during process
• Hydraulic Fracturing: Transparency to disclose frack fluid constituents and MSDS;
• Freshwater Supply – Reduce local freshwater resources by 50%; Target >50% by
impaired waters such as flowback, municipal wastewater or industrial effluent
• Water Reuse & Disposal: Maximize Beneficial reuse of flowback and produced
waters brought to surface with adequate treatment to reuse within operation or to
Regulated discharge limits. Deepwell injection should be used for concentrated
brine and NORMs streams
• Water Transport: Minimize truck hauling for supply and disposal of water; Trucks
disrupt communities, impact safety and increase air pollution; Maximizing liquid
gathering systems to transport water for supply and reuse in co-located right of
ways with gas gathering can reduce truck traffic by >50%
• Power Generation & Transmission: Minimize the use of inefficient, temporary diesel
engines; Maximize the use of efficient natural gas turbines and electric motors;
Maximize the use of electrifying fields or available power transmission grids to reduce
associated air quality emissions Reduce GHG & Air Emissions by >30%
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Sustainable Infrastructure for Unconventional Gas
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Strategies to Maximize & Protect Communities
Natural Resources
• Natural Gas can lead to significant improvements in Air Quality
Emissions compared to current Power & Transport Fuels
• Unconventional Natural Gas supplies can improve energy security at
economically advantageous prices
• Unconventional Natural Gas can bolster local economies with job and
business creation/expansion, real estate price increase, and new housing
starts
• Sustainable Strategies & Infrastructure can be put in place to:
• 50%-75% improvement in water recycling
• 10%-25% reduction in freshwater consumption
• 20%-40% reduction in GHG, NOx, SOx emissions
• 25%-50% reduction in truck traffic
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U.S. Energy Demands
There are already nearly 15 million natural gas fuelled vehicles in the
world. Natural gas fuelled vehicles are already widely used in some cities
such as Washington DC, Kuala Lumpur and New Delhi as a pollution control
measure. Now that natural gas tanks for cars have become much smaller,
the only obstacle to car drivers also switching to cheap and low emission
gas is a lack of infrastructure in the form of refueling stations – admittedly
a formidable hurdle. Gas-powered vehicles produce almost no particulates,
60% less volatile organics, 50% less nitrogen oxides and 90% less carbon
monoxide, which means less smog, ozone and brown haze.
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Decarbonization Approach
• The dominant fuel in the world fuel mix has gradually shifted from
wood to coal to oil over the past 150 years, with gas the latest fuel to
grow rapidly. At this rate gas may overtake oil as the dominant fuel by
2020 or 2030. The consequence of this succession is that the
carbonhydrogen ratio in the world fuel mix has been falling steadily,
because the ratio of carbon to hydrogen atoms is about 10-to-1 in wood,
2-to-1 in coal, 1-to-2 in oil and 1-to-4 in gas. On its current trajectory, the
average ratio would reach 90% hydrogen in 2060, having been 90%
carbon in 1850.
• although increased energy use means that carbon dioxide emissions are
rising all the time, the world is nonetheless slowly decarbonizing. A
sudden and forced acceleration of this decarbonization is climate
change policy.
• switching as much power generation from coal to gas as possible, and as
much transport fuel from oil to gas as possible, would produce rapid and
dramatic reductions in carbon dioxide emissions
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U.S. Greenhouse Gas Emissions
Per Capita and Per Dollar of Gross Domestic Product
170
Real GDP
160
140
130
Population
120
110
100
Emissions
per capita
90
80
Emissions
per $GDP
70
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
60
1990
Index (1900 = 100)
150
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Emissions Allocated to Economic Sectors
2,500
Electric
Power
Industry
Transportation
Tg CO2 Eq.
2,000
1,500
Industry
1,000
1,000
Agriculture
Commercial
Residential
500
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Note: Does not include U.S. Territories
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Global Fuel Mix Outlook Next Five Years
Natural Gas
Solar and Wind
Coal
Nuclear
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