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Boiler emission controls.pdf

This document provides an overview of coal and natural gas as energy options for the future. It summarizes data on global coal reserves, current and projected coal consumption trends, and improving productivity in coal mining. The document also discusses environmental concerns related to coal such as emissions and impacts of mining. It covers regulatory requirements facing the coal industry and status of technologies to control emissions and sequester carbon. The overall perspective presented is that coal will continue to play a major role in meeting global energy demand but significant challenges around environmental and climate impacts must be addressed.

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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
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%
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)
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
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
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
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
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
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
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
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
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
188678 RAB 03/11/04 St. Louis in 1939 Air Pollution Control Systems “Dust In The Wind,” Omer Roberts, Environmental Engineer
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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”
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
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
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
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
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
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
188678 RAB 03/11/04 NPC 2003 Natural Gas Study September 2003 • 18-month comprehensive assessment of N.A. supply & demand • Broad industrial participation
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
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
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
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
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
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
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)
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
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
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
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
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
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
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
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
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
188678 RAB 03/11/04 Dramatically Changed Perspectives On Infrastructure Security Tanker Docked at Everett, Massachusetts Is It Safe?, Boston Globe, July 27, 2003
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
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
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.
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
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
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
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
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
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
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
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

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  • 1.
    A Global Perspectiveof 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 WorldRecoverable 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 CoalConsumption 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 ImprovedGlobal 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 CoalProductivity 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 CoalMining 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 19661976 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 BroadEnvironmental 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 EnvironmentalImpacts 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 Regulatorsand 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 19701980 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 RegulatoryComplexity 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 EnvironmentalControl 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 GlobalMercury 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 Statusof 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 Optionsfor 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 FieldSites 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 CO2From 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 TheClimate 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 TechnologicalCarbon 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 ImprovedEfficiencies 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 IntegratedGasification 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 IGCCTechnology 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 IGCCIssues • 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 19751985 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 Approachesto 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 LargePotential 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 SequestrationIs 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 SequestrationCosts 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 CarbonSequestration 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 IndustryGroup 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 FutureGenOpens 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 WhyCoal 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 WorldProved 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 NaturalGas 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 HowNatural 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 DOEEIA, 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 IncreasingNatural 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 19661976 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 MajorNorth 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 Ona 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 GasProduction 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 ReducedImports 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 NPC2003 Natural Gas Study September 2003 • 18-month comprehensive assessment of N.A. supply & demand • Broad industrial participation
  • 51.
    188678 RAB 03/11/04 HigherPrices 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 TechnicalResource 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 TechnologyReducing 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 FutureSupplies 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 DOEDeveloping 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 ForLonger 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 MethaneHydrate 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 IncreasingU.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 20002010 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 WorldLNG 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 NorthAmerican 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 NumerousGlobal 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 QatarHas 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.
  • 65.
    188678 RAB 03/11/04 LNGGasification 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 DramaticallyChanged Perspectives On Infrastructure Security Tanker Docked at Everett, Massachusetts Is It Safe?, Boston Globe, July 27, 2003
  • 68.
    188678 RAB 03/11/04 FERC’sLNG 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 SitingOptions 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 WorldwideStranded 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 Optionsfor 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-FiredDistributed 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 NaturalGas / 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 WillNation 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 11.0 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 WorldPower 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 GlobalEnergy 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 AndTherefore . . . • 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