Sgcp12 oxburgh-lords

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Sgcp12 oxburgh-lords

  1. 1. Shale  Gas    Threat  or   Opportunity?     Ron  Oxburgh   Smart Grids & Cleanpower Cambridge 14 June 2012 www.cir-strategy.com/events
  2. 2. Shale  Gas  •  Natural  gas  (methane)  that  never   escaped  from  the  rock  in  which  it  was   generated  by  decomposiBon  of   organic  maCer  •  Therefore  it  is  essenBally  mined  by   shaCering  the  rock  and  releasing  the   gas  to  travel  up  the  borehole  to  the   surface  
  3. 3. Shale  Gas  -­‐  Why  Now?  •  Technical  Advances  have  opened  up  new   possibiliBes:   –  Subsurface  acousBc  imaging  –  established  methods  enormously   enhanced  by  massive  compuBng  power   –  DirecBonal  drilling  –  ability  to  steer  the  direcBon  of  a  borehole   with  high  precision   –  Hydro-­‐fracturing  to  enhance  rock  permeability  •  Shale  gas  is  one  of  the  resources  newly  accessible  
  4. 4. Shale  Gas  &  DirecBontal  Drilling    
  5. 5.  Shale  Gas:  an  example  -­‐  US  Marcellus  Shale     •     Reserves      >  100T  m3     •     US  gas  use  2009  –  0.65T  m3   BUT:   •     ExtracBon  requires  abundant   water  for  fracturing   •     Water  returning  to  the  surface  is   contaminated  and  has  to  be  cleaned   •     Poor  pracBce  has  serious   environmental  consequences   •     Depth  range    hundreds  to  several   thousand  metres   •     Low  level  seismicity    
  6. 6. Shale  Gas  in  the  US  Today  •  Shale  gas  now  >25%  US  gas  producBon  (in  2000  zero   contribuBon)  •  1700  wells  in  Pennsylvania  2010  •  Water  3  million  gal/well  •  Return  water  highly  saline  and  contaminated  with  drilling   compounds  •  Poor  pracBce  has  generated  significant  public  opposiBon  in   some  areas     NTEL, E&P Focus summer 2010
  7. 7. Some  Shale  Gas  Reserves   40   World  Reserves     35   increased  by  >  x  10   SHALE  GAS     30   Widely  distributed   25      10^9  m3   20   15   Still Great SG Uncertainty! 10   ConvenBonal   5   gas  in  yellow   0   US   China   ArgenBna   Mexico   S  Africa   BP  2009,  FT  2011  
  8. 8. Prices  •  Much  convenBonal  gas  on  long  term  contracts  •  Spot  prices  variable    but  June  2012,  million  btu   –  Houston    $2   –  UK    $10   –  SE  Asia    $18  •  Gas  most  expensive  fossil  fuel  to  move;  liquefacBon   +  transport  +  re-­‐gasificaBon    <  $3  •  For  holders  of  exploitable  SG  reserves:   –  Increased  energy  security   –  Cheap  fossil  fuel  energy   –  Big  export  potenBal  (but  massive  capex  for  plant)  
  9. 9. Shale  Gas  –  The  Debate  •  Local  environmental  hazard?   –  Groundwater  polluBon   –  Groundwater  use   –  Earthquakes  •  Global  environmental  hazard?     –  Emissions  during  producBon   –  ProlongaBon  of  use  of  fossil  fuels  •  Beneficial  step  in  transiBon  to  a  low-­‐C  economy?     –  Displacing  coal  ?  -­‐  half    the  GHG  emissions  of  coal   –  Gas  fired  power  staBons  cheaper/quicker  to  build   –  Probably  easier  to  capture  CO2    
  10. 10. Blackpool Frequency  of  BriBsh  Earthquakes   British Geological Survey 2012
  11. 11. Conclusions  •  Gas  GHG  emissions  about  half  those  of  coal;  likely  that  adverse  local   environmental    effects  can  be  managed,  but  water  demand  sBll  high  •  TradiBonal  suppliers  less  able  to  control    global  gas  supply  •  Gas-­‐fired  power  staBons  cheaper  and  quicker  to  build;  aCracBve  backup   to  intermiCent  renewable  because  flexible  •  If  priced  compeBBvely  gas  may  displace  coal  for  electricity  generaBon     and    bunker  fuel  for  shipping  –  major  emissions  saving  •  Will  cheap  gas  ease  pressure  to  find  C-­‐free  alternaBves?  •  Major  economic  asset  for  ‘SG  countries’  •  US  energy  scene  already  transformed  –  only  quesBon  ,how  many  will   follow  and  how  fast?  
  12. 12. Oil & Gas Prices 1989-2009 100.00 90.00 Price   $/mmBTU   80.00 $80/T      Coal     4   70.00 $80  /Barrel        Oil   13.79  Oil $. Gas $*4 60.00 $3.9/mmbtu        Gas   3.9   Oil $ 50.00 Gas $ *4 40.00 30.00 20.00 10.00 0.00 89 91 93 95 97 99 01 03 05 07 09 19 19 19 19 19 19 20 20 20 20 20 Year
  13. 13. Shale  Gas  •  Low  Nox  &  Sox  •  Well  suited  to  CCS  •  X2  water  consumpBon  of  convenBonal  •  LNG  for  transportaBon  •  In  2000  SG  made  no  contribuBon  in  US  •  Today  25%  of  gas  used  •  Economics  of  transport  •  Blackpool  quake  1-­‐4-­‐11  mag  2.3  
  14. 14. The  Big  Picture  –  Paradoxical  Role  of   China   •  Largest  emiCer  of  CO2  world  wide  –  rapid  growth  of   demand  &  emissions   •  Highest  priority  to  take  electricity  to  the  centre  &   west   •  The  most  technologically-­‐literate  government  in  the   world  –  recognises  that  China  is  a  big  loser  from   climate  change   •  1/3  of  objecBves  in  new  5yr  plan  relate  to  clean   energy/climate  change   •  Aims  to  be  the  main  cleantech  supplier  &  climate   change  leader  in  the  world  
  15. 15. Energy  &  Emissions    China  &  Developed  Countries   8.00 7.00Tonne oil equiv./cap. yr 6.00 Developed    Countries   5.00 Emissions  of     2020   Today   4.00 Developed  Countries     3.00   2010     2.00 2015  China  Emissions   China   1965   today   1.00 Current  China  Emissions     2000      CHINA  WITH  CCS   0.00 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 Population billions
  16. 16. Oil & Gas Prices 1989-2009 100.00 90.00 80.00 70.00Oil $. Gas $*4 60.00 Oil $ 50.00 Gas $ *4 40.00 30.00 20.00 10.00 0.00 89 91 93 95 97 99 01 03 05 07 09 19 19 19 19 19 19 20 20 20 20 20 Year
  17. 17. Underground  Coal  GasificaBon  •  First  experiments  1912  by  Sir  William  Ramsay  in  Durham  (UK)   coalfield  •  In  20th  century  12  power  staBons  in  FSU;  today  one  in  Uzbekistan  •  Coal  combusted  in  place  underground  to  give  mostly  Syngas  –  CO   +H2  •  ACracBve  today  because:   –  Imaging  and  direcBonal  drilling   –  Ability  to  apply  carbon  capture  and  storage   –  High  efficiency   –  Low  water  use  
  18. 18. Underground  Coal  GasificaBon  Syngas  to   Steam  &  Process-­‐ ProducBon    Well   O2  ing/Use   InjecBon  well  Cultural  problem!!   A1er  Ingenia,2010  
  19. 19. Shale  Gas  
  20. 20. COAL  
  21. 21. •  Shale  gas  is  here  and  giving  US  a  major   economic  advantage  •  Major  within  country  advantage  –  pipeline   transport  •  Will  reduce  coal  burn  

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