The document discusses the opportunities and issues around natural gas. It notes that natural gas power plants are more efficient than coal plants and produce fewer emissions. However, shale gas extraction through hydraulic fracturing poses various environmental and health risks, including potential groundwater contamination and increased seismic activity. The document outlines recommendations from the International Energy Agency to promote responsible shale gas development, including measuring impacts, engaging communities, minimizing water usage, eliminating emissions, and ensuring robust regulation.

1. Natural Gas
Issues and Opportunities

2. Why Natural Gas?
• Power

3. • clean technology favors natural gas for power
gas turbine plants are more efficient than coal plants

5. • Very high conversion loss in typical thermal
power plant

6. • cogeneration – at NYU, 90% efficiency

7. microturbines and fuel cells

8. • environmental and public health concerns
In U.S., for instance, tightening standards for power plants:

9. • including greenhouse gas regulations
• EPA is proposing that new fossil‐fuel‐fired power
plants meet an output‐based standard of 1,000
pounds of CO2 per megawatt‐hour (lb CO2/MWh
gross).
• New natural gas combined cycle (NGCC) power
plant units should be able to meet the proposed
standard without add‐on controls. In fact, based on
available data, EPA believes that nearly all (95%) of
the NGCC units built recently (since 2005) would
meet the standard.

10. • Of course, regulations to reduce greenhouse
gases, including carbon dioxide, are coming into
greater force all over the world:
• European Union’s cap-and-trade regime
• Australia’s cap-and-trade program
• California (9th largest economy in the world) is instituting
economy-wide cap-and-trade program
• Northeast U.S. states have the Regional Greenhouse Gas
Initiative (RGGI) for CO2 from power plants
• China is piloting cap-and-trade programs; China also
committed at the Copenhagen climate conference in 2009 to
achieving a 40-45% reduction in CO2 emissions per unit of
GDP by 2020 compared with the 2005 level (carbon
intensity)

11. natural gas prices are low, will rise,
but in a stable manner
“Natural gas continues to be the fuel of choice in many regions
of the world in the electric power and industrial sectors, in
part because of its lower carbon intensity compared with coal
and oil, which makes it an attractive fuel source in countries
where governments are implementing policies to reduce
greenhouse gas emissions, and also because of its significant
price discount relative to oil in many world regions. In
addition, it is an attractive alternative fuel for new power
generation plants because of low capital costs and favorable
thermal efficiencies.” – EIA, International Energy Outlook
2011

12. lower costs for power

13. cleaner fuel

14. natural gas vehicles

15. good for fleets

16. inefficent ICE

17. natural gas for fuel cells highly efficient

18. Where’s the gas?

19. China and North America

20. shale gas resources
•China – 50 to 100 bn BOE
•Europe – 92 bn BOE
•Latin America - 50 to 100 bn BOE
•U.S. - 100 bn BOE
•Canada – 27 bn BOE

21. How Much Will We Need?

22. Where Will it Be Needed?

25. shale gas extraction
See also fracking video

26. concerns
There are risks both for individual sites and cumulatively:
• Groundwater contamination
• Surface water contamination
• Water resources
• Release to air
• Risk to biodiversity
• Noise impacts
• Visual impact
• Seismicity
• Traffic

27. general risk causes
In general, the main causes of risks and impacts from high-volume hydraulic fracturing
identified in the course of this study are as follows:
• The use of more significant volumes of water and chemicals compared to
conventional gas extraction
• The lower yield of unconventional gas wells compared to conventional gas wells
means that the impacts of HVHF processes can be greater than the impacts of
conventional gas exploration and production processes per unit of gas extracted.
• The challenge of ensuring the integrity of wells and other equipment throughout the
development, operational and post-abandonment lifetime of the plant (well pad) so as
to avoid the risk of surface and/or groundwater contamination
• The challenge of ensuring that spillages of chemicals and waste waters with potential
environmental consequences are avoided during the development and operational
lifetime of the plant (well pad)
• The challenge of ensuring a correct identification and selection of geological sites,
based on a risk assessment of specific geological features and of potential
uncertainties associated with the long-term presence of hydraulic fracturing fluid in
the underground

28. • The potential toxicity of chemical additives and the challenge to develop
greener alternatives
• The unavoidable requirement for transportation of equipment, materials
and wastes to and from the site, resulting in traffic impacts that can be
mitigated but not entirely avoided.
• The potential for development over a wider area than is typical of
conventional gas fields
• The unavoidable requirement for use of plant and equipment during well
construction and hydraulic fracturing, leading to emissions to air and noise
impacts.

29. highest profile concern:
Poor well design or construction can lead to
subsurface groundwater contamination
arising from aquifer penetration by the well,
the flow of fluids into, or from rock
formations, or the migration of combustible
natural gas to water supplies.
(See recent EU paper: Support to the identification of potential risks for the environment
and human health arising from hydrocarbons operations involving hydraulic fracturing in
Europe)

30. “Golden Rules”
The International Energy Agency issued its report, Golden Rules for A Golden Age of
Gas, in May of 2012.
“The technology and the know-how already exist for unconventional gas to
be produced in an environmentally acceptable way,” said IEA Executive
Director Maria van der Hoeven. “But if the social and environmental impacts
are not addressed properly, there is a very real possibility that public
opposition to drilling for shale gas and other types of unconventional gas will
halt the unconventional gas revolution in its tracks. The industry must win
public confidence by demonstrating exemplary performance; governments
must ensure that appropriate policies and regulatory regimes are in place.”

31. Measure, disclose and engage
• Integrate engagement with local communities, residents and other stakeholders
into each phase of a development starting prior to exploration; provide sufficient
opportunity for comment on plans, operations and performance; listen to
concerns and respond appropriately and promptly.
• Establish baselines for key environmental indicators, such as groundwater quality,
prior to commencing activity, with continued monitoring during operations.
• Measure and disclose operational data on water use, on the volumes and
characteristics of waste water and on methane and other air emissions, alongside
full, mandatory disclosure of fracturing fluid additives and volumes.
• Minimise disruption during operations, taking a broad view of social and
environmental responsibilities, and ensure that economic benefits are also felt by
local communities.
Watch where you drill
• Choose well sites so as to minimise impacts on the local community, heritage,
existing land use, individual livelihoods and ecology.
• Properly survey the geology of the area to make smart decisions about where to
drill and where to hydraulically fracture: assess the risk that deep faults or other
geological features could generate earthquakes or permit fluids to pass between
geological strata.
• Monitor to ensure that hydraulic fractures do not extend beyond the gasproducing
formations.

32. Isolate wells and prevent leaks
• Put in place robust rules on well design, construction, cementing and integrity
testing as part of a general performance standard that gas bearing formations
must be completely isolated from other strata penetrated by the well, in particular
freshwater aquifers.
• Consider appropriate minimum-depth limitations on hydraulic fracturing to
underpin public confidence that this operation takes place only well away from
the water table.
• Take action to prevent and contain surface spills and leaks from wells, and to
ensure that any waste fluids and solids are disposed of properly.
Treat water responsibly
• Reduce freshwater use by improving operational efficiency; reuse or recycle,
wherever practicable, to reduce the burden on local water resources.
• Store and dispose of produced and waste water safely.
• Minimise use of chemical additives and promote the development and use of
more environmentally benign alternatives.
Eliminate venting, minimise flaring and other emissions
• Target zero venting and minimal flaring of natural gas during well completion and
seek to reduce fugitive and vented greenhouse-gas emissions during the entire
productive life of a well.
• Minimise air pollution from vehicles, drilling rig engines, pump engines and
compressors.

33. Be ready to think big
• Seek opportunities for realising the economies of scale and co-ordinated
development of local infrastructure that can reduce environmental impacts.
• Take into account the cumulative and regional effects of multiple drilling,
production and delivery activities on the environment, notably on water use and
disposal, land use, air quality, traffic and noise.
Ensure a consistently high level of environmental performance
• Ensure that anticipated levels of unconventional gas output are matched by
commensurate resources and political backing for robust regulatory regimes at
the appropriate levels, sufficient permitting and compliance staff, and reliable
public information.
• Find an appropriate balance in policy-making between prescriptive regulation and
performance-based regulation in order to guarantee high operational standards
while also promoting innovation and technological improvement.
• Ensure that emergency response plans are robust and match the scale of risk.
• Pursue continuous improvement of regulations and operating practices.
• Recognise the case for independent evaluation and verification of environmental
performance.

34. 谢谢。
Bill Hewitt, September 24, 2012
For the Elion Resource Group
For more, see To Frack or Not to Frack? and Natural Gas (Revisited)
Also,