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The Fossil Fuels:Natural Gas and Coal

Lecture #5HNRT 228 Spring 2015Energy and the Environment

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iClicker Question

• What is a typical drill depth for an oil well?– A Several hundred feet– B 1000 feet– C Several thousand feet– D All of the above– E Only A and B above

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iClicker Question

• Which of the following is (are) used to confirm the presence of oil in a well?– A Core samples– B Well logging– C Drill stem testing– D All of the above– E Only A and B above

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iClicker Question

• What is the name of the suspension used to keep fractures in rock open and allow oil to flow?– A crackant– B fracture suspension– C flowant– D fracturant– E proppant

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iClicker Question

• The process by which components in a chemical mixture are separated according to their different boiling points, is called– A Distillationism– B Fractionation– C Fractioning– D Fractional distillation– E Fractional fractionating

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iClicker Question

• Which of the following are not petroleum derived products?– A gasoline– B kerosene– C jet fuel – D plastics– E None of the above

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• Oil is trapped in rare geological structures

• Most of the oil in the world comes from a few large wells

• About one in ten exploratory drillings strike oil

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Overview of Natural Gas

• Supply of recoverable natural gas available at affordable costs has greatly increased over past 10 years

• Industry’s ability to produce natural gas from shales has gone from almost 0 to > 20% of U.S. needs in just 10 years

• Natural gas demand is at 22-23 Tcf/year in the U.S. (historic highs). Increased availability of gas will allow demand to continue to grow over next several years

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1999 View of Natural Gas Supply

• N. American natural gas reserves found each year were replacing produced gas, but…– Industry needed to drill more and

more wells just to hold reserves constant while demand for production was increasing

– Production from the Gulf of Mexico had peaked and was in decline

• The petroleum industry was starting to have success in producing gas from shale

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U.S. Reserve Base – Trends Before and After Shale Gas Production

Significant increase in gas reserves and production from shales starts in 1999

Source: EIA

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U.S. Natural Gas Production

U.S. natural gas production is at its highest level ever in 2008

+1.1%/yr -1.9%/yr +3.7%/yr

Source: EIA

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Offshore Gulf of Mexico in Steep Decline

Production is down by almost 50% from 2001-07

Source: EIA

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Enter Barnett Shale

• Barnett Shale– Geological formation located in the

Bend Arch-Fort Worth Basin of Texas– Consists of sedimentary rocks of

Mississippian age (354–323 million years ago)

– Formation underlies the city of Fort Worth and underlies 5,000 square miles (13,000 km2) and at least 17 counties of Texas

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Barnett Shale– Daily Production

While supply from offshore GoM has fallen by >6 bcf / day, Barnett Shale production has grown by > 4 bcf/d

Source: TX RR Commission

(TX RR Commission Areas 5 + 9 only)

- 4%

- 8%

- 0%

Percentage of U.S. natural gas demand supplied by Barnett Shale only

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What Has Changed to Allow us to Produce This Gas?

• Techniques to allow horizontal wells to be drilled efficiently have greatly improved– In 4Q ’06, Barnett wells drilled in 25

days for $161/ft;– In 2Q ‘08, Barnett wells drilled in 19

days for $131/ft – This is 24% faster and 19% cheaper

Source: Simmons

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Frac’d (Fracturing) Wells

Barnett shale is very hard, and it was virtually impossible to produce gas in commercial quantities from this formation until recent improvements were made in hydraulic fracturing technology and horizontal drilling, and there was an upturn in the natural gas price.

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What Has Changed to Allow us to Produce this Gas

• Ability to drill longer laterals• Experimentation on Completion

Methods:– Cemented/Uncemented liners– Staged Frac’ing– Simulfracs– Frac fluids and proppants

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What Has Changed to Allow us to Produce This Gas?

Ability to fracture shales and significantly increase production per well has dramatically improved– In 2005, the median initial production rate

Barnett Shale wells in Johnson County, TX was 2.2 Bcf /day

– In 2008, the median initial production rate for the Barnett wells in the same county was 7.0 Bcf/day

Source: IHS

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What Has Changed to Allow us to Produce This Gas?

Combining drilling + production efficiencies: – One rig in 2005 could drill 9 wells at 2

bcf/well Versus

– One rig in 2008 can drill 12 wells at 4.5 bcf/well

In 2005, the rig added 18 bcf of reservesIn 2008, the rig adds 54 bcf of reserves

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Conventional Well vs. Shale Gas Well Production Curves

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BarnettHaynesville

Marcellus

Woodford

Basins Where Additional Gas Will Be Produced From Shales

Estimated Gas In-Place in these Shales is ~ 2000 Tcf

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Today’s Relative Share of Energy Market by Fuel

Source: EIA – Annual Energy Outlook 2014

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iClicker Question

• Which shale basin stretches from West Virginia to New York?– A Haynesville– B Woodford– C Barnett– D Marcellus– E None of the above

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Natural Gas Use by Sector in 2008

21% Residential

29% Electricity Generation

14% Commercial

33% Industrial

3% Transportation

Source: EIA – Annual Energy Outlook 2009

Electricity generation from natural gas has grown at rate of 4%/year since 1990

Industrial usage of natural gas has fallen at rate of 2%/year since 1998

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Today’s Relative Share of Electricity Generation by Fuel

Natural Gas 21%

Nuclear20% Coal

49%

Oil 1%

Hydro 6%

Other Renewables 3%

Source: EIA – Electric Power Monthly, April 2009

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Natural Gas Supply thru 2030

Source: EIA – Annual Energy Outlook 2009

Alaska

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-20

-15

-10

-5 -

0 -

199

5

200

5

201

5

202

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History Projections

Unconventional

Conventional

Net Imports

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History: U.S. Natural Gas – Production & Consumption

Source: EIA

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Supply vs. Demand thru 2015

Available supply: Assume 1.8% growth / year in production capacity (starting in 2010) and net imports at 3 Tcf/yr vs. 3.3-4.0 Tcf/yr seen since ‘01

Demand (dashed curve): Assume 4% growth in use of gas for electricity generation after 1 year, 3% reduction in overall demand for 2009

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Natural Gas is Cleaner120

100

80

60

40

20

0

Natural Gas

Diesel Ethanol Blends

Low Sulfur Diesel

Bio Diesel

Gasoline

Relative Level of NOx Emissions

Relative Level of Particulate Emissions 120

100

80

60

40

20

0

Source: South Coast Air Quality Management District2007 Air Quality Management Plan Summit Panel

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Natural Gas is a Low Carbon Fuel

Natural Gas

Oil 28% more

Coal 43% more

0 50000 100000 200000150000

Pounds of Carbon per Billion BTU

Source: EIA, Natural Gas: Issues & Trends, 1998

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iClicker Question

• Which has lowest amount of nitrous oxide emissions?– A Diesel Fuel– B Gasoline Fuel– C Bio-diesel Fuel– D Ethanol-blend Gasoline– E Natural Gas

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iClicker Question

• Which has lowest amount of particulate emissions?– A Diesel Fuel– B Gasoline Fuel– C Bio-diesel Fuel– D Ethanol-blend Gasoline– E Natural Gas

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iClicker Question

• Which puts the lowest amount of carbon into the environment?– A Oil– B Coal– C Natural Gas

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Overall Economics of fuels before any carbon tax

$/KWh

Source: SDI research + team analysis

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Distribution of natural gas• Impractical to ship: must route by pipe• 1.3 million miles of pipe (250,000 miles of

mains)

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Natural Gas

• Extracted as oil-drilling byproduct– was once burned off at well head as means of

disposal• Mostly methane, some ethane, and a little

propane, butane• 2 times cheaper than electricity per energy

content, comparable gasoline per joule– this is recent: in 2004, it was 3.5 times

cheaper than electricity, 3 times cheaper than gas

• Well-suited to on-the-spot heat generation: water heaters, furnaces, stoves/ovens, clothes dryers– more efficient than using fossil-fuel-generated

electricity

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Summary of Natural Gas

• U.S. has a very large natural gas resource base remaining to be produced, and

• The petroleum industry has greatly improved its ability to produce gas from shales, so

• We believe supply capacity will be able to meet growing demand w/o significant cost increases unless government imposes onerous taxes and additional regulation.

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How much do we use, and where do we get it?

• In 2003, we used 21.8 Tcf (Tera-cubic feet, or 1012ft3); about 23 QBtu (23% of total)

• Out of the 21.8 Tcf used, 88% was domestic– 11.8% from Canada– 0.08% from Algeria (shipped in liquefied

form)– 0.03% from Mexico

• Have used about 1,100 Tcf to date

Q

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How much do we have left?

• Estimated recoverable amount: 871 Tcf• 40 years at current rate• Estimates like this do account for future discoveries

– present proven reserves provide only 8 years’ worth

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Recollecting Chemistry

• All fossil fuels are essentially hydrocarbons, except coal, which is mostly just carbon

• Natural Gas is composed of the lighter hydrocarbons (methane through pentane)

• Gasoline is hexane (C6) through C12

• Lubricants are C16 and up

kJ per gram

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Hydrocarbon Reactions

• Methane reaction:CH4 + 2O2 CO2 + 2H2O + energy1 g 4 g 2.75 g 2.25 g 55 kJ

• Octane reaction:2C8H18 + 25O2 16CO2 + 18H2O +

energy1 g 3.51 g 3.09 g 1.42 g 48

kJ• For every pound of fuel you burn, you get

about three times that in CO2

– one gallon of gasoline ~22 pounds of CO2– occupies about 5 cubic meters (1300

gallons) of space

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iClicker Question

• Which natural gas has the highest potential energy content per gram?– A Octane– B Heptane– C Butane– D Methane– E Hexane

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Aside: Carbohydrate Reactions

• Typical carbohydrate (sugar) has molecular structure like: [CH2O]N, where N is some integer– refer to this as “unit block”: C6H12O6 has N=6

• Carbohydrate reaction:[CH2O]N + NO2 NCO2 + NH2O + energy

1 g 1.07 g 1.47 g 0.6 g 17 kJ• Less energy than hydrocarbons because one

oxygen already on board (half-reacted already)• For every pound of food you eat you exhale 1.5

lbs CO2

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Coal• Coal is a nasty fuel that we seem to have a

lot of • Primarily carbon, but some volatiles (CO,

CH4)• Reaction is essentially C + O2 CO2 + energy• Energy content varies depending on quality

of coal, ranging from 4–7 Cal/g• Highly undesirable because of large amounts

of ash, sulphur dioxide, arsenic, and other pollutants

• Also ugly to remove from the ground

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Coal types and composition

NaturalGraphite

Anthracite

Bituminous

Bituminous

sub-bituminous

Lignite

Peat

Wood

fixed carbon

ash

volatile matter

moisture content

kJ/g

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29

35

31

27

25

21

20

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Use of Coal• 88% of the coal used in the U.S. makes

steam for electricity generation• 7.7% is used for industry and

transportation• 3.5% used in steel production• 0.6% used for residential and

commercial purposes• 0.1% used on Halloween for trick-or-

treaters <chuckle>

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Estimated Worldwide Coal Reserves

Country Amount(109 tonne)

Percentageof Total

United States 250* 25

Russia 230† 23

Europe 138 14

China 115 12

Australia 82 8.3

Africa 55 5.6

South America 22 2.2

North America 7.7 0.8

Total 984 100

*1st edition of book had U.S. at 1500 billion tons. What happened to all that coal?†1st edition of book had Russian coal at 4300 billion tons. Gross overestimates?

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U.S. Coal Production History

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iClicker Question

• Which country has the most coal reserves?– A Russia– B China– C United States– D Australia– E Canada

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When will coal run out?

• We use 109 tons of coal per year, so the U.S. supply alone could last as long as 250 (1500) years at current rate

• Using variable rate model, more like 75–100 (400–600) years– especially relevant if oil, gas are gone

• This assumes global warming politics doesn’t end up banning the use of coal

• Environmental concerns over extraction also relevant

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Shale Oil

• Possibly 600–2000 billion barrels of oil in U.S. shale deposits– compare to total U.S. oil supply of 230

billion bbl• Economically viable portion may only be 80

billion bbl• 8 times less energy density than coal

– lots of waste rock: large-scale disposal problem

• Maximum rate of extraction may be only 5% of our current rate of oil consumption– limited by water availability

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Tar Sands

• Sand impregnated with viscous tar-like sludge• Huge deposit in Alberta, Canada

– 300 billion bbl possibly economically recoverable

• It takes two tons of sands to create one barrel of oil– energy density similar to that of shale oil

• In 2003, 1 million bbl/day produced– grand hopes for 5 Mbbl/day; or 6% of world oil

production• 2002 production cost was $20 per barrel, so

economically competitive

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In Class Question for Group Discussion

• In 2009, we had “snowmageddon”. There was a political pundit talk show on television where the moderator of the show asked the panel about the weather storms (snow storms in USA and cyclones in Australia) and if they may be a result of global warming. The moderator quoted Al Gore about the reason that these weather patterns may be indicators of global warming. One of the pundit’s stated that Al Gore would link anything bad to global warming. Discuss in your groups these matters. Address two questions in your responses:– How is the moderator question itself flawed?– How may global warming and low pressure storm

intensity be causally linked?