Emissions control for coal fired boilers

1. A Global Perspective of Coal & Natural Gas
Energy Options for the Future
Rita A. Bajura, Director
March 11, 2004
National Energy Technology Laboratory
Office of Fossil Energy

2. 188678 RAB 03/11/04
World Recoverable Coal Reserves
1,083 Billion Tons ─ 210-Year Supply at Current Use
0 50 100 150 200 250 300
Other
Poland
Kazakhstan
Ukraine
South Africa
Germany
Australia
India
China
Russia
United States
Billion Short Tons
Anthracite and
Bituminous
Lignite and
Subbituminous
DOE EIA website, accessed 02/26/04
United States
Russia
China
India
Australia
Germany
South Africa
Ukraine
Kazakhstan
Poland
Other
25%
9%
12%
16%

3. 188678 RAB 03/11/04
Increasingly, Coal Used for Electricity Generation
8% 6%
34% 26%
92%
66% 74%
94%
U.S.
Today Tomorrow
World
2002
1.1 B tons
2001
5.3 B tons
2025
1.6 B tons
2025
5.9 B tons
1.6% / year
0.4% / year
Electric
Other
EIA, AEO 2004 and EIA International Energy Outlook (except for
world: “electricity/other” split estimated from IEA, World Energy Outlook 2002)

4. 188678 RAB 03/11/04
Coal Consumption by Region
Billion Short Tons / Year
Africa
Central / South
America
North America
W. Europe
Middle East
Developing
Asia
E. Europe /
FSU
Industrialized
Asia
1.1
1.6
0.4
0.6
0.3 0.4
0.8
0.6
3.9
2.1
0.2
0.1
0.0
0.3
0.1
0.1
2001
2025
DOE EIA, International Energy Outlook 2003, Table A6

5. 188678 RAB 03/11/04
U.S. Fuel Prices to Electricity Generators
Natural Gas
Fuel
Prices
(2002
dollars
per
million
Btu)
0
1
2
3
4
5
6
1990 2000 2010 2020
Year
Oil
Coal
Nuclear
DOE EIA, Annual Energy Outlook 2004, Figure 73

6. 188678 RAB 03/11/04
Improved Global Coal Productivity
1
2
3
4
80 85 90 92 94 95 96 97 98 99
1,000
tonnes
/
miner
/
year
• Advanced technology
• Economies of scale
World Energy Outlook 2001 - Insights
World Energy Outlook: The Supply Prospects

7. 188678 RAB 03/11/04
Coal Productivity by Nation
0
4
8
12
A
u
s
t
r
a
l
i
a
U
.
S
.
C
a
n
a
d
a
C
o
l
o
m
b
i
a
S
o
.
A
f
r
i
c
a
U
K
R
u
s
s
i
a
P
o
l
a
n
d
G
e
r
m
a
n
y
I
n
d
i
a
C
h
i
n
a
1,000
tonnes
/
miner
/
year
Commercial
Subsidised
Developing
Productivity in developing countries
lags that in developed countries
World Energy Outlook 2001 - Insights
World Energy Outlook: The Supply Prospects

8. 188678 RAB 03/11/04
Coal Mining Safety
• U.S. solved many safety issues
−3,200 mine deaths in 1907
−30 deaths in 2003
• Still an issue in developing countries
−7,000 – 10,000 deaths / year
in Chinese coal mines
Longwall photo: NREL
U.S data: U.S. Dept. of Labor, Mine Safety & Health
Chinese data: China Labor Bulletin

9. 188678 RAB 03/11/04
0
20
40
60
1966 1976 1986 1996
330 GW of Coal-Fired Capacity
U.S. Generation Capacity Additions
Other
Natural Gas
Nuclear
Coal
NPC Study 2003 based on EIA, Platt’s , AEP
GW
Installed
Capacity

10. 188678 RAB 03/11/04
Broad Environmental Concerns About Coal
Cradle to Grave: The Environmental Impacts from Coal,
Clean Air Task Force, Boston, MA,June 2001

11. 188678 RAB 03/11/04
Environmental Impacts of Mining
• Land disturbance
• Habitat loss
• Dust and noise pollution
• Atmospheric emissions
• Solid wastes
• Surface and groundwater
• Infrastructure development and transport
movements

12. 188678 RAB 03/11/04
Regulators and Industry Working to Reduce
Environmental Impacts of Coal Mining
Improved
• Permitting
• Reclamation
• Groundwater
management
• Utilization of coal
mine methane
Reclaimed surface mine in western PA

13. 188678 RAB 03/11/04
St. Louis in 1939
Air Pollution Control Systems “Dust In The Wind,”
Omer Roberts, Environmental Engineer

14. 188678 RAB 03/11/04
0
1
2
3
4
1970 1980 1990 2000
Coal Use
Contaminant Emissions Down Sharply
U.S. Power Plants
Index:
1970
=
1.0
Electricity
Generation
Nitrogen Oxides
Sulfur Dioxide
Particulate
Matter
Natural Gas Use
Year EPA, National Air Quality and Emissions Trends Report, 1999 (March 2001)
DOE, EIA Annual Energy Review

15. 188678 RAB 03/11/04
Regulatory Complexity for Coal Plants
Current Environmental Regulations
NOx
SIP
Call
Re-
duc-
tions
Designate Areas
for 8 Hr Ozone
NAAQS
Marginal
8 Hr
Ozone
NAAQS
Attainment
Date
8 Hr Ozone
Attainment
Demonstration
SIPs Due
Assess
Effectiveness Of
Regional Ozone
Strategies
Possible
Regional NOx
Reductions?
(SIP Call II)
Mercury
Deter-
mination
Designated Areas
for Fine PM NAAQS
Haze Sec. 309
SIPs Due
Regional Interstate Transport
Rule to Address SO2/NOx
Emissions for Fine PM
NAAQS & Regional Haze
Final
Utility
MACT
New Fine PM NAAQS
Implementation Plans
Regional Haze
SIPs Due
Compliance
With Utility
MACT Latest
Attainment
Date for Fine
PM NAAQS
Additional Hg
Regulation Under
112(d) & (F)
Compliance
for BART
Sources
Second Regional
Haze SIPs Due
Compliance
for BART
Sources
Under
Trading
Program
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Fritz-Union Pacific CERA Week 2004
Moderate 8 Hr Ozone
NAAQS Attainment
Date
1 Hr Serious Area
Attainment Date
1 Hr Severe Area
Attainment Date
NOx
SIPs
Due Section
126 NOx
Controls
OTC
NOx
Trading
Serious
8 Hr Ozone NAAQS
Attainment Date
Proposed
Utility
MACT
Phase II
Acid Rain
Compliance

16. 188678 RAB 03/11/04
Environmental Control Technologies
Percent Removal and Cost
Technology
Electrostatic
Precipitation
Combustion
Modification
Flue Gas
Desulfurization
Selective Catalytic
Reduction
Particulates
99.9%
–
–
–
NOx
–
20 – 60%
–
80%
SOx
–
–
80 – 99%
–
Cost / kW
$40 – 50*1
$5 – 20*1
$145 – 200*2
$80*2
*1 World Bank, Table, Technologies for Reducing Emissions in Coal-Fired Power Plants
*2 CERA Into the Black: Advanced Technologies Clean Up Coal

17. 188678 RAB 03/11/04
Global Mercury Cycle
Metric Tons
Deep Ocean Pool
216,000 Mt
Mixed Layer
Ocean Pool
10,800 Mt
Atmospheric
Pool
5,200 Mt
Natural
Emissions
1,000 Mt / yr
Anthropogenic
Emissions
2,600 Mt / yr
Net Ocean Flux
1,200 Mt / yr
Land
Deposition
2,200 Mt / yr
Adapted from United Nation Environmental Program’s Global Mercury
Assessment, December 2002, which is based on Lamborg et al. (2002)
U.S. Coal
Contributes
2%
U.S. Coal
Largest U.S.
Emitter

18. 188678 RAB 03/11/04
Status of Technologies to Control Mercury
• No commercially available
technology for coal plants
• U.S. regulations likely in 2008 ─
2018
• Active DOE-funded research
program
• Co-control may remove 40-80%
Hg with bituminous coal
−Control much more difficult with
low-rank coals

19. 188678 RAB 03/11/04
Options for Mercury Control
Baghouse
or ESP Scrubber
Boiler
Sorbent
Injection
Stack
Cleaning
Enhanced
FGD
Hg
Hg
Hg
Hg
Hg Based on EERC

20. 188678 RAB 03/11/04
Field Sites for Mercury Control Testing
Alabama Power
Gaston
We Energies
Pleasant Prairie
PG&E
Brayton Point
Michigan SC Power
Endicott Plant
CINergy
Zimmer Plant
ADA-ES
Sorbent Injection
McDermott
Enhanced FGD
PG&E
Salem Harbor

21. 188678 RAB 03/11/04
CO2 From Energy Is Major Contributor
U.S. GHG Emissions Weighted by
Global Warming Potential
Contribution
from Coal 30%
Mining
Combustion
9%
8%
Energy-
Related
CO2 83%
Other
Methane
EIA Report #EIA/DOE-0573 “Emissions of Greenhouse Gases in the U.S. 2002,” Executive Summary (Oct. 2003)
Coal mining and coal combustion breakouts estimated from US EPA’s “Inventory of Greenhouse Gas Emissions and Sinks: 1990-2001

22. 188678 RAB 03/11/04
The Climate Change Problem
Stabilizing CO2 concentrations
(for any concentration from 350 to 750 ppm)
means that global net CO2 emissions
must peak in this century,
and
begin a long-term decline
ultimately approaching zero
… The Pre-Industrial Concentration Was 280 ppm
Edmonds

23. 188678 RAB 03/11/04
Technological Carbon Management Options
Improve
Efficiency
Sequester
Carbon
Reduce Carbon
Intensity
• Renewables
• Nuclear
• Fuel Switching
• Demand Side
• Supply Side
• Capture & Store
• Enhance Natural
Processes
All options needed to:
• Supply energy demand
• Address environmental
objectives

24. 188678 RAB 03/11/04
Improved Efficiencies Reduce Carbon Emissions
Current Chinese Plants
Current U.S. Plants
Today’s State-of-Art
DOE’s
2020
Goal
Gas
Turbine
Gas Turbine
Combined Cycle
% Efficiency, HHV
Tons
CO
2
per
MWh
0.2
0.6
1.0
1.4
20 30 40 50 60
Coal-
Fueled
Natural
Gas

25. 188678 RAB 03/11/04
Integrated Gasification Combined Cycle (IGCC)
Promising Pathway to Zero-Emission Plants
• Fuel and product flexibility
• Environmentally superior
• High efficiency
• Sequestration ready
Producing concentrated stream
of CO2 at high pressure
• Reduces capital cost
• Reduces efficiency penalty

26. 188678 RAB 03/11/04
IGCC Technology in Demonstration Stage
U.S. Coal-Fueled Plants
• Wabash River
−1996 Powerplant of Year
Award*
− Achieved 95% availability
• Tampa Electric
− 1997 Powerplant of Year
Award*
− First dispatch power generator
*Power Magazine

27. 188678 RAB 03/11/04
IGCC Issues
• Capital cost of 300-MW IGCC plants 5-20%
higher than pulverized coal units
−Economics for 600-MW IGCC plants appear more
favorable
• Longer shakedown to achieve high availability
• Chemical plant image

28. 188678 RAB 03/11/04
0
10
20
30
40
50
60
70
1975 1985 1995 2005
Year
Planned
Real • 400 gasifiers
• 43 GWt syngas
• 24 GW IGCC
equivalent
GWt Syngas
130 Operating
Gasification Plants
Significant Worldwide Gasification Capacity
Cumulative Capacity
DOE’s Worldwide Gasification Database, 2001

29. 188678 RAB 03/11/04
Approaches to Sequester Carbon
Separation and Storage Enhance Natural Processes
Depleted Oil /
Gas Wells,
Saline Reservoirs
Iron or Nitrogen
Fertilization of
Ocean
Forestation
Enhanced
Photosynthesis
Unmineable
Coal Seams
Deep
Ocean
Injection

30. 188678 RAB 03/11/04
Large Potential Worldwide Storage Capacity
0
200
400
600
800
1,000
1,200
Deep
Ocean
Deep
Saline
Formations
Depleted
Oil & Gas
Reservoirs
Coal
Seams
Terrestrial
Capacity
(GtC)
Annual
World
Emissions
6.5
Gigatons
Potential
Capacity Range
10,000
Storage Option
Storage Options: Carbon Capture & Sequestration Program @MIT
World Emissions: DOE/EIA, International Energy Outlook 2003, Table A10

31. 188678 RAB 03/11/04
Sequestration Is Feasible
One Million TPY CO2 Sequestration Projects
Weyburn CO2 Project
• Pan Canadian Resources
• Enhanced oil recovery
coupled with sequestration
Sleipner North Sea Project
• Statoil
• Produces natural gas with
high CO2 content
• CO2 sequestered in saline
reservoir under sea
Sleipner Photo from USGS Website

32. 188678 RAB 03/11/04
Sequestration Costs Appear Reasonable
• Incremental “average” impact on
new IGCC
−25% increase in COE relative to
non-scrubbed counterpart
• DOE’s goal is < 10% increase in
COE
• Retrofiting CO2 controls
expensive unless plant designed
for sequestration
Sum of costs for
• Separation
• Compression
• Transport
• Sequestration
Sum of costs for
• Separation
• Compression
• Transport
• Sequestration
DOE/EPRI report “Evaluation of Innovative Fossil Fuel Power Plants
with CO2 Removal,” EPRI Technical Report 1000316, December 2000
Economic Evaluation of CO2 Sequestration Technologies Report from
DEFC-26-00NT-40937, April 2002

33. 188678 RAB 03/11/04
Sequestration: A Dynamic Program
• Diverse research portfolio
−>60 projects
−$140M portfolio
• Strong industry support
−36% cost share
• Industry participation
−AEP
−Alstom
−BP
−ChevronTexaco
−Consol
− EPRI
− McDermott
− Shell
− TVA
− TXU
0
20
40
60
'97 '98 '99 '00 '01 '02 '03 '04 '05
1997 2001 2005
$60
$40
$20
$0
$ Million
Growing Funding

34. 188678 RAB 03/11/04
Carbon Sequestration Could . . .
• Remove enough carbon to stabilize CO2
concentrations in atmosphere
• Be compatible with existing energy infrastructures
• Be lowest cost carbon
management option

35. 188678 RAB 03/11/04
FutureGen: A Global Partnership Effort
One billion dollar, 10-year demonstration
project to create world’s first coal-based,
zero-emission electricity and hydrogen plant
President Bush, February 27, 2003
• Broad U.S. participation
− DOE contemplates
implementation by
consortium
• International collaboration
− Carbon Sequestration
Leadership Forum

36. 188678 RAB 03/11/04
Industry Group Announced Formation of
FutureGen Consortium
• American Electric Power
• CINergy
• PacifiCorp
• Southern Company
• TXU (Texas Utilities)
• CONSOL
• Kennecott Energy
• North American Coal
• Peabody Energy
• RAG American Coal
Holding
Charter members represent ∼1/3 coal-fired
utilities and ∼1/2 U.S. coal industry
Charter members represent ∼1/3 coal-fired
utilities and ∼1/2 U.S. coal industry

37. 188678 RAB 03/11/04
FutureGen Opens Door to “Reuse” of Coal in
Transportation Sector
Coal
Gasification
Coal Hydrogen
Fuel Cells
IC Engines
Geologic CO2
Sequestration
Zero Emission H2
Coal
Gasification
High Quality
Diesel Fuels
Clean Diesel Fuel
Shift and
Separation
Fischer-
Tropsch
Synthesis
H2
CO
Coal
H2
CO

38. 188678 RAB 03/11/04
Why Coal Is Important
• Coal remains the largest energy source
for power generation
−Potential future source for transportation
sector
• Abundant reserves ─ particularly in U.S.
−Contribute to energy security
• Relatively low and stable prices
• But coal has environmental impacts
−Increasingly, technology available to
address

39. 188678 RAB 03/11/04
World Proved Natural Gas Reserves
5,500 Tcf – 62-Year Supply at Current Use Rates
0 500 1,000 1,500 2,000 2,500
W. Europe
Central / S. America
N. America
Africa
Asia & Oceania
E. Europe / FSU
Middle East
Trillion Cubic Feet
Middle East
E. Europe / FSU
Asia & Oceania
Africa
N. America
Central / S. America
W. Europe
Iran
Russia
Qatar
US
Oil & Gas Journal, December 2002, on DOE EIA website, accessed 2/26/04

40. 188678 RAB 03/11/04
Natural Gas Pyramid
Notional View
High
• Production Difficulty
• Impact of Technology
Unconventional
− Coalbed Methane
− Tight Gas
− Shale Gas
− Methane Hydrates
New Fields
− Conventional
Cumulative Production
Based on Advanced Resources International and 1999 NPC Assessment
Low
Proved Reserves
Reserve Accumulation

41. 188678 RAB 03/11/04
How Natural Gas Is Used
U.S.
Today Tomorrow
World
44%
24%
40%
27%
Industrial
Electric
Other
23%
41%
36%
20%
34%
46%
2002
22.8 Tcf
2025
31.4 Tcf
1.8% / year
32% 33%
2001
90.3 Tcf
2025
175.9 Tcf
2.8% / year
U.S. data: EIA, AEO 2004, Table A13
World data: EIA, IEO2003, Table A5,except for sector splits
estimated from IEA WEO, Figure 3.9

42. 188678 RAB 03/11/04
DOE EIA, International Energy Outlook 2003, Table A6
Central / South
America
North America
W. Europe
Middle East
E. Europe /
FSU
Industrialized
Asia
Developing
Asia
Africa
46
27
14
8
26
15
5
2
6
4
12
4
46
24
22
8
2001
2025
Natural Gas Consumption by Region
Trillion Cubic Feet / Year

43. 188678 RAB 03/11/04
Increasing Natural Gas Prices in U.S.
$2
$3
$4
$5
2000 2005 2010 2015 2020 2025
’99
’00
’01
’02
’03
$
/
Mcf
DOE / EIA Annual
Energy Outlook
Publication Year
’04
Lower-48 Well-head Price in 2002; Quote from Guy Caruso in March 4, 2004 hearing
“Ave. 2003 price of
$5.50 likely to stay at
that level through at
least 2005”

44. 188678 RAB 03/11/04
U.S. Natural Gas Prices Are Volatile
0 10 20 30 40
S&P 500
Majors Index
E&P Index
NASDAQ
Crude Oil
Oil Service
Natural Gas
February 1997 - Present
% of Total Days with a + / - 3% Move
Simmons & Company

45. 188678 RAB 03/11/04
0
20
40
60
1966 1976 1986 1996
200 GW of New Gas-Fired Capacity Since 1998
U.S. Generation Capacity Additions
Other
Natural Gas
Nuclear
Coal
NPC Study 2003 based on EIA, Platt’s , AEP
GW
Installed
Capacity

46. 188678 RAB 03/11/04
Major North American Supply Basins Mature
U.S. Gas Well Productivity Drops 2/3
0
100
200
300
400
500
1960 1970 1980 1990 2000
0
100
200
300
400
500
1960 1970 1980 1990 2000
Year
Thousand
Cubic
Feet
/
Day
/
Well
Peak productivity:
435 Thousand Cubic Feet /
Day / Well in 1971
130 in 2002
DOE EIA, Annual Energy Review 2002, Figure 6.4

47. 188678 RAB 03/11/04
On a Treadmill!
We Are Draining Wells Quicker
Lower-48 Production Decline Trends
0
10
20
30
40
50
60
1992 1994 1996 1998 2000 2002
Bcf
/
Day
• Production declines increased in 1990s
• Need more wells to replace production
35%
Decline
65%
Decline
Year of Production Start
NPC Study September 2003; Base Data from IHS

48. 188678 RAB 03/11/04
Gas Production Forecast Changed Quickly
Domestic Natural Gas Forecast
18
22
26
30
2001 2005 2009 2013 2017 2021 2025
’02
’03
Tcf
/
Year
’04
Annual Energy
Outlook
Publication Year
Alaska Pipeline
+ 1.5 Tcf
- 4.7 Tcf
Decline in
2 Years
Annual Energy Outlook 2002, 2003 and 2004

49. 188678 RAB 03/11/04
Reduced Imports of Canadian Gas Also Forecasted
2
3
4
5
6
2001 2005 2009 2013 2017 2021 2025
Tcf
/
Year
’02
’03
’04
- 2.6 Tcf
50%
Decrease
Annual Energy
Outlook
Publication Year
Annual Energy Outlook 2002, 2003 and 2004

50. 188678 RAB 03/11/04
NPC 2003 Natural Gas Study
September 2003
• 18-month
comprehensive
assessment of N.A.
supply & demand
• Broad industrial
participation

51. 188678 RAB 03/11/04
Higher Prices Reflect Fundamental Shift in
Supply / Demand Balance
Traditional North American gas
producing areas
−Can only supply 75% of projected demand
−At best, production remains flat
Traditional North American gas
producing areas
−Can only supply 75% of projected demand
−At best, production remains flat
• New large-scale resources (LNG, Arctic)
could meet 20-25% of demand
− Have higher cost, long lead times,
development barriers
• New large-scale resources (LNG, Arctic)
could meet 20-25% of demand
− Have higher cost, long lead times,
development barriers
NPC 2003 Natural Gas Study

52. 188678 RAB 03/11/04
33
Tcf
25
Tcf
125
Tcf
21
Tcf
Technical Resource Impacted by Access Restrictions
69 Off-
Limits
NPC September 2003 Study
Rockies
Pacific
Offshore
Shelf
& Slope
Atlantic
Offshore
Shelf &
Slope
Eastern Gulf
Shelf & Slope

53. 188678 RAB 03/11/04
Technology Reducing Environmental Impact
Natural Gas & Oil Supply
Lower produced
water volumes
Fewer wells to add
same level of reserves
Lower drilling waste
volume
-120
-100
-80
-60
-40
-20
0
93 94 95 96 97 98 99
Reduced air pollutants
and greenhouse gas
emissions
Greater protection of
unique and sensitive
environments
Smaller footprints

54. 188678 RAB 03/11/04
Future Supplies Come from Traditional /New Sources
U.S. Natural Gas Supplies: 2000-2025
30-
25-
20-
15-
10-
5-
0-
LNG Imports
Tcf / Year
New Conventional
New Unconventional
Existing Fields
2000 2005 2010 2015 2020 2025
Pipeline Imports
Existing
Wells
Indigenous
Drilling
National Petroleum Council, 2003

55. 188678 RAB 03/11/04
DOE Developing Improved Technology for
Near-Term Unconventional Gas
Coal-Bed Methane
Improved technologies for
handling produced water
Deep Trek
Improved technologies for high-
temperature, high-pressure,
corrosive conditions found at
depths greater than 20,000 feet

56. 188678 RAB 03/11/04
For Longer Term, Methane Hydrates
May Be Promising
Mallik Gas Hydrate Project
• First dedicated hydrates test
wells
−Depressurization proved
more effective than heating
• Mackenzie Delta, Canada
• International team
Well photo by Hideaki Takahashi, Japex Canada
Ltd., courtesy of Natural Resources Canada

57. 188678 RAB 03/11/04
Methane Hydrate Deposits
World’s Known and Expected Locations
Range of Estimates
100,000 to 279,000,000 Tcf
Adapted from U.S. Geological Survey, based on K.A. Kvenvolden, “Methane Hydrate – A Major
Reservoir of Carbon in the Shallow Geosphere?” Chemical Geology, Vol. 71 (1988)

58. 188678 RAB 03/11/04
Increasing U.S. Reliance on Imported LNG
Net U.S. Imports of Natural Gas 1970 – 2025
-1
0
1
2
3
4
5
6
1970 1980 1990 2000 2010 2020
Overseas LNG
15% Demand
Canada
Mexico
Tcf
/
Year
Ten-Fold Increase from 2003 to 2025
DOE EIA, Annual Energy Outlook 2004, Figure 89

59. 188678 RAB 03/11/04
0
10
20
30
40
2000 2010 2020 2030
World LNG Capacity
6 to 10-Fold Increase Over 30 Years
IEA, World Energy Investment Outlook 2003
Tcf
/
Year

60. 188678 RAB 03/11/04
World LNG Infrastructure
• 6 Tcf capacity in 2003
• 17 liquefaction terminals
• 40 regasification terminals
• 151 tankers
− 55 under construction
• 12 exporting countries*
• 12 importing countries*
− Japan imports ½ world
production
Photo from Conversion Gas Imports,
A Texas Limited Liability Company,
Under DOE Cooperative Agreement
DE-FC26-02NT41653
*2002 U. off Houston Institute for Energy Law & Enterprise

61. 188678 RAB 03/11/04
North American LNG Regasification Terminals
A
C
1
3 4
2
8
27
6
18
20
5
11
21
12
19
7
14
B
D
16
17
9
28
30
29
31
10
15
22
23
24
25
26
31
33
34
13
35
Existing
Proposed
• 4 existing terminals
• 32 active proposals
• 15 Tcf if all built
• None under
construction
• 7-year construction
FERC, December, 2003

62. 188678 RAB 03/11/04
Numerous Global LNG Liquefaction Projects
Competing to Meet Growing Demand
Existing
Under Construction
Proposed National Petroleum Council, “Balancing Natural Gas
Policy, Volume I,” September 2003

63. 188678 RAB 03/11/04
Qatar Has Massive LNG Potential
900 Tcf of
Recoverable
Gas
• More reserves in one field than entire U.S.
• Higher gas prices leading to:
− Development of very large, low-cost gas reserves
− Large scale LNG and GTL facilities

64. 188678 RAB 03/11/04
0
1
2
3
4
Trinidad
II
&
III
Liby
a
1
0
Year
HH
Av
erage
Pric
e
Trinidad
IV
&
V
Nigeria
IV-V
Venezuela
Nigeria
III
Algeria
Abu
Dhabi
Indonesia
Arun
Trinidad
I
Qatar
Rasgas
III
Indonesia
Bontang
I
Qatar
Rasgas
II
Qatar
Rasgas
Oman
II
Nigeria
I-II
M
alay
sia
Tiga
Nigeria
Greenfield
QatarGas
Egy
pt
LNG
Brunei
Iran
Norw
ay
Snoev
hit
$/mmBtu
Delivered LNG Costs to Lake Charles
All-in Costs of $2 - $4 /mmBtu
Source: Deutsche Bank estimates 2002
10-year Henry
Hub Average
Price
Upstream at 15%
Liquefaction Plant
Regasification Plant
Pipe
Shipping to Lake Charles

65. 188678 RAB 03/11/04
LNG Gasification Plants
Technology Improving; Plant Sizes Increasing
%
Cost
Decrease
of
MMT
Capacity
0
1
2
3
4
1960 1970 1980 1990 2000 Around 2005
Algeria 1
Libya
Algeria 2
Brunei
Abu Dhabi 1
Algeria 3
Algeria 4
Malaysia 1
Australia 1
Qatar 1 Qatar 2
Oman 2
Indonesia 2
Malaysia 3
Indonesia 3
Qatar 3
Australia 2
Oman 1
Qatar 4
MMT
Capacity
Commissioning Date
USA
Nigeria
First MR Train
Indonesia 1
Abu Dhabi 2
Malaysia 2
50%
100%
0%
25%
75%
Natural Gas - A Global Target For New Investment In
MENA THOUGHT LEADERSHIP PROGRAMME 2003
Dubai, UAE, September 22, 2003 Booz/Allen/Hamilton
3
4
Costs
Falling Capacity
Increasing

66. 188678 RAB 03/11/04
LNG (and Pipeline) Safety
• 40-year history; 33,000
tanker voyages; no major
accidents
• January 2004 accident at
Algerian LNG complex
killed 27
• Regasification has fewer
complications
• FERC / DOT / Coast Guard
report in March on LNG
terminal safety
Rescue Worker at Algeria
LNG Plant Disaster
Photo from California Energy Commission Website

67. 188678 RAB 03/11/04
Dramatically Changed Perspectives On
Infrastructure Security
Tanker Docked at Everett, Massachusetts
Is It Safe?, Boston Globe, July 27, 2003

68. 188678 RAB 03/11/04
FERC’s LNG Safety
Review Includes This
Type of Concern
Typical Danger Zone
from LNG Spill and Pool
Fire in Boston Harbor
Outer Edge Of Thermal
Radiation Zone (5kW/m2)
Maximum Extent Of Fire Pool
Professor Fay’s 03/26/2003 Boston Harbor Report

69. 188678 RAB 03/11/04
Siting Options
LNG Regasification Terminals
• On shore
• Crossboarder
−Mexico
−Bahamas
• Offshore
−El Paso Energy Bridge
−Bishop Process
Bishop Process
• Offloading
• Regasification
• Salt Cavern Storage

70. 188678 RAB 03/11/04
Worldwide Stranded Gas
Tcf
5+
1 – 5
0.5 – 1
Undeveloped Non-associated
Gas Fields Larger Than 0.5 Tcf
Source: Petroconsultants S.A.

71. 188678 RAB 03/11/04
Options for Stranded Gas Resources
• Reinject
• Flare
• Expand local uses
−Petrochemicals
−Basic industries, e.g.,
aluminum
• Build pipeline
• Convert to transportable
product
−Gas-to-liquids
−LNG
−Gas-by-wire

72. 188678 RAB 03/11/04
Gas-Fired Distributed Generation
DG Benefits
• Defer new capacity
• Relieve transmission
congestion
• Enhance reliability
• Improve efficiency
• Promote green image
Reciprocating
Engines
Fuel Cells
Small Turbines
Microturbines

73. 188678 RAB 03/11/04
Natural Gas / Coal Competition
New Plants
Increasing Desire for Energy Security
0
1
2
3
4
5
6
Gas
price
$
/
MMBtu
Gas wins
Coal wins
• Coal wins short-term dispatch
• Gas wins long-term capacity share

74. 188678 RAB 03/11/04
Will Nation Be Prepared to Meet This Forecast?
0
5,000
10,000
15,000
20,000
1940 1955 1970 1985 2000 2015
GW
20
15
10
5
0
Coal Capacity History and Forecast
Surge Starting 2010
1940
Forecast - Annual Energy Outlook 2004; Historic Data - UDI 2001 Operating Data

75. 188678 RAB 03/11/04
1 1.0
No proposed plants
1-2 plants
3-4
5 or more
94 Proposed new plants
64 Gigawatts capacity
1
2.5
1
0.5
1
2.5
1
0.5
6
2.3
3
0.7
3
2.7
2
1.6
2
1.8
1
0.8
2
1.6
4
1.4
1
0.5 3
1.4
2
0.8
1
0.7 8 5.0
5
3.0
2
0.8
2
1.0
10
8.0
1
0.5
1
1.4
1
0.6
1
0.4
1
1.4
3
1.3
2
1.4
1
1.6
4
1.4
3
2.4
3
1.8
1
0.2
1
0.4
http://www.netl.doe.gov/coalpower/oces/pubs/ncp.pdf
Proposed New Coal Power Plants
February 2004
1
0.2

76. 188678 RAB 03/11/04
World Power Generation Capacity Additions
2000 – 2030
Clean coal
technologies needed
for 1,400 GW new
capacity
2,000
1,500
1,000
GW
500
0
Natural
Gas
Coal Hydro Non-
Hydro
Renewables
Oil Nuclear Fuel
Cells
International Energy Agency, World Energy Outlook 2002

77. 188678 RAB 03/11/04
Global Energy Investment Required
Next Three Decades
Power
60%
Nat. Gas
19%
Oil
19%
Coal 2%
Total
Investment
U.S.$16,096 billion
International Energy Agency

78. 188678 RAB 03/11/04
And Therefore . . .
• Coal and natural gas will continue to be major part of
U.S. and global energy mix for at least next 50 years
• Maintaining fuel diversity and flexibility is important
for price stability and continued economic growth
• LNG use will increase; meeting 5 Tcf demand will be
challenging
• Carbon sequestration at scale envisioned is still a
young technology
• Near-zero emission technologies (SO2, NOx, CO2, Hg)
will be necessary to secure long-term future for coal