The document discusses the economic and environmental potential of the Utica Shale natural gas reserves in Ohio, highlighting job creation and energy independence benefits. It explores various natural gas applications, like micro-turbines and co-generation, and provides financial examples for installing gas-fired systems with associated payback periods. It underlines the advantages of natural gas vehicles and infrastructure while noting environmental impacts and technological specifics of different cogeneration technologies.

1. Kelly Tisdale, CEM, LEED AP
The Brewer-Garrett Company
September 25th, 2012

2.  Utica Shale
 Natural Gas Pricing
 Long Term Gas Pricing
 Opportunities
◦ Co-Generation
 Micro-Turbine
 Internal Combustion
 Combustion Turbine
 Standby Charges
◦ Natural Gas Vehicles
 ….Solar
 ….Wind
◦ Environmental Impact vs. Electricity
 LED

4. Utica Shale Gas Drilling
• 40% of Ohio sits above the Utica Shale gas deposit (see
graphic)
• Located approximately one (1) mile beneath the Earth’s
surface
• Extraction techniques called shale fractures or “fracing” have
been in use for over 60 years but are controversial
• Gas and petroleum resources are estimated to be viable for
50 to 100 years at current consumption rates
• Significant economic opportunities for Ohio …
• Can provide energy independence and security for the U.S.
• Gas is the least carbon intensive (CO2 emissions) of fossil
fuels used to generate electricity (coal, oil, natural gas)

5.  Drill site = approximately 650 acres + approx. 1M sq.
 650 acres at $5k per = $3.25M (mineral rights)
 Royalty = 18%
 Potential Annual Royalty at 5000 MCF per day at $4 =
$1,310,000+ Annually
 May offer attractive long term gas contract due to flat
constant load (micro turbines)
 Climate Neutrality may be selling point to Districts or
Municipalities
 Environmental Issues

6.  Boom for Ohio
◦ 200,000 jobs
 Steel, Trucking, Service, Construction
 Stable Long Term Gas
◦ 10 year Contract at $5MCF
 Environmental Impact
◦ Gas vs. Coal 430 vs. 1150 CO2
 Cogeneration means Boiler produces “0” emissions
 Opportunities
◦ Micro turbines
◦ Cogeneration
◦ Service
◦ Natural Gas Vehicles
 Manufacturing Expansion

7. Average Natural Gas Prices
Last Month 3.2
Last Year . . . . . . . . . . . . . . . . . . . . 4.0
Last 5 Years 5.6
Last 10 Years . . . . . . . . . . . . . . . . ... 5.8
Last 20 Years 4.4

9.  Micro turbines up to .5MW
◦ Usually 65kW increments
◦ Natural Gas Fired…
◦ Recuperators
◦ Capstone
 Gas engine .3 to 5MW
◦ Diesel or Natural Gas
◦ Waukesha, Caterpillar
 Turbines 3MW plus
◦ Solar – Saturn, Taurus, Mercury, Mars, Titan

10. Gas Micro-Turbines
• Combine energy conservation/efficiencies with on site
production of electricity (co-generation)
• Local production and local consumption significantly
reduces transportation and distribution costs
• Installation of high efficiency gas microturbines to
produce on-site electricity and reduce GHG emissions
Absorbers
TriGeneration

13. At
 $5 per MCF gas
 $.08 per kWh
Payback may be as little as 3 to 4 years
 Requires Cogeneration mode
 100% heat utilization

14.  200kW Unit
 Cost = $390,000 ($1950/kW)
 8,000 hours
 1,600,000 kWh = $128,000
 4,143 mmBtu = $20,715
 Purchased Gas = 16,480 mmBtu = $82,400
 Net Savings = $66,315
 Simple Payback = 5.88 years
 Maintenance = $15,000/year
 Simple Payback with Maintenance = 7.6 years

15.  375 kW Unit
 Cost = $588,000 ($1568/kW)
 8,000 hours
 3,000,000 kWh = $240,000
 9,800 mmBtu = $48,999
 Purchased Gas = 28,355 mmBtu = $141,776
 Net Savings = $147,223
 Simple Payback = 3.99 years
 Annual Maintenance = $28,000
 Payback with Maintenance = 4.9

16.  4,600 kW Unit
 Cost = $9,600,000 ($2087/kW)
 8,000 hours
 36,800,000 kWh = $2,944,000
 204,422 mmBtu = $1,022,112
 Purchased Gas = 326,158 mmBtu = $1,630,792
 Net Savings = $2,335,320
 Simple Payback = 4.11 years
 Annual Maintenance = $345,000
 Simple Payback with Maintenance = 4.82 years

17.  Long Term Gas Contracts
◦ Currently 5 years
◦ Expect longer soon
◦ Ability to negotiate with Well Driller
 Constant Load is Best for Driller
 Utilizing own natural resource
 Heat Load
◦ Process Loads
◦ Terminal Reheats
◦ Domestic Hot Water
◦ Swimming Pools
◦ Absorbers

18.  Most often sized for only a portion of electric
load… 65kW, or some multiple of, is the most
common size
 Best installation will be sized to use 100% of heat
 Payback w/o heat load is closer to 10 years
◦ Other reasons for install could be high 9s reliability
 All installations will significantly reduce
emissions
 Currently no standby costs

19.  Greenhouse Gases are Cut in Half
 Micro Turbine - 500 tons CO2
 Internal Combustion – 1,140 tons CO2
 Combustion Turbine – 19,288 tons CO2

20.  These costs were once prohibitive
 Essentially charged you a standby fee that
was almost equivalent to electric rate as if
you had actually used their electric
 Currently most traditional utilities say they
have no standby rate
◦ They expect you to negotiate with your electric
wholesaler
◦ They want to remain a “wires only”
 New Companies such as EnerNOC may view
Cogeneration as a negotiating opportunity

21.  Any waste reclaim producing energy
◦ Other than process primarily used for electrical
production
 Market Based
 Currently projected trade is $.02/kWh
annually
 CHP does qualify as Ohio Energy Efficiency
Targets (currently trade at $.05/kWh (one
time payment)

22.  Any waste reclaim producing energy
◦ Other than process primarily used for electrical
production
 Market Based
 Currently projected trade is $.02/kWh
annually
 CHP does qualify as Ohio Energy Efficiency
Targets (currently trade at $.05/kWh (one
time payment) but not as renewable

23.  A good payback under right conditions-gets
better with electric rate increases
 Helps when negotiating long term gas
contracts
 Potential negotiating leverage with Well Driller
 Reduces emissions and Carbon Footprint
◦ Could be a benefit to rally support from public
 Could help with electrical reliability
 The future will have many types of
Cogeneration
 Potential at virtually any Customer

24. Table II: Summary of CHP Technologies
CHP system Advantages Disadvantages Available
sizes
Gas turbine High reliability. Require high pressure gas or in- 500 kW to
Low emissions. house gas compressor. 250 MW
High grade heat available. Poor efficiency at low loading.
No cooling required. Output falls as ambient
temperature rises.
Microturbine Small number of moving parts. High costs. 30 kW to 250
Compact size and light weight. Relatively low mechanical kW
Low emissions. efficiency.
No cooling required. Limited to lower temperature
cogeneration applications.
Spark ignition High power efficiency with part- High maintenance costs. < 5 MW in
(SI) load operational flexibility. Limited to lower temperature DG
reciprocating Fast start-up. cogeneration applications. applications
engine Relatively low investment cost. Relatively high air emissions.
Compression Can be used in island mode Must be cooled even if recovered High speed
ignition (CI) and have good load following heat is not used. (1,200 RPM)
reciprocating capability. High levels of low frequency noise. ≤4MW
engine (dual Can be overhauled on site with
fuel pilot normal operators. Low speed
ignition) Operate on low-pressure gas. (102-514
RPM) 4-75
MW
Steam turbine High overall efficiency. Slow start up. 50 kW to 250
Any type of fuel may be used. Low power to heat ratio. MW
Ability to meet more than one
site heat grade requirement.
Long working life and high
reliability.
Power to heat ratio can be
varied.
Fuel Cells Low emissions and low noise. High costs. 5 kW to 2
High efficiency over load range. Low durability and power density. MW
Modular design. Fuels requiring processing unless
pure hydrogen is used.

25. Table III: Summary Table of Typical Cost and Performance Characteristics by CHP Technology*
Technology 1
Steam Turbine Recip. Engine Gas Turbine Microturbine Fuel Cell
Power efficiency (HHV) 15-38% 22-40% 22-36% 18-27% 30-63%
Overall efficiency (HHV) 80% 70-80% 70-75% 65-75% 55-80%
Effective electrical efficiency 75% 70-80% 50-70% 50-70% 55-80%
Typical capacity (MW e) 0.5-250 0..01-5 0.5-250 0.03-0.25 0.005-2
Typical power to heat ratio 0.1-0.3 0.5-1 0.5-2 0.4-0.7 1-2
Part-load ok ok poor ok good
970-1,300
CHP Installed costs ($/kW e) 430-1,100 1,100-2,200 2,400-3,000 5,000-6,500
(5-40 MW)
O&M costs ($/kWhe) <0.005 0.009-0.022 0.004-0.011 0.012-0.025 0.032-0.038
Availability near 100% 92-97% 90-98% 90-98% >95%
Hours to overhauls >50,000 25,000-50,000 25,000-50,000 20,000-40,000 32,000-64,000
Start-up time 1 hr - 1 day 10 sec 10 min - 1 hr 60 sec 3 hrs - 2 days
100-500 50-80
Fuel pressure (psig) n/a 1-45 0.5-45
(compressor) (compressor)
natural gas, natural gas, natural gas, hydrogen, natural
Fuels all biogas, propane, biogas, propane, biogas, propane, gas, propane,
landfill gas oil oil methanol
Noise high high moderate moderate low
hot water, LP heat, hot water, heat, hot water, hot water, LP-HP
Uses for thermal output LP-HP steam
steam LP-HP steam LP steam steam
2
Power Density (kW/m ) >100 35-50 20-500 5-70 5-20
Gas 0.1-.2 0.013 rich burn 3-
NOx ( lb/MMBtu) way cat. 0.036-0.05 0.015-0.036 0.0025-.0040
Wood 0.2-.5
(not including SCR)
Coal 0.3-1.2 0.17 lean burn
Gas 0.4-0.8 0.06 rich burn 3-
lb/MWhTotalOutput Wood 0.9-1.4 way cat. 0.17-0.25 0.08-0.20 0.011-0.016
(not including SCR) Coal 1.2-5.0. 0.8 lean burn

26.  1% of todays U.S. vehicle fleet is Natural Gas
 Greenhouse gas emissions can be reduced 25%
to 30%
 Smog / hydrocarbon emissions can be reduced
70%
 One diesel truck conversion equivalent to 325
cars off road
 Infrastructure of Natural Gas exists – 1.5 Million
miles of pipe in the U.S.
 U.S. - only 1.3% of worlds NGV
 Vehicle cost +$4,000
 Fuel price is a 5th of gasoline
(at 4$ gal. and 4$mcf it is a 7th)

27.  Market Changes
◦ Will soon be retrofitting all are lighting retrofits
again
◦ Timeline may put it approximately two to three
years before standard output of a 2x4 fixture or
compatible lamp will exceed 130 lumens per watt
and cost falls within Performance Contracting
parameters
◦ $60 Billion in retrofit
◦ Manufacturers already beginning to thin