ryoichi komiyama *, yasumasa fujii university of tokyo (dept. of nuclear engineering)
DESCRIPTION
30 th USAEE/IAEE North American Conference, Oct.9-12, Capital Hilton Hotel, Washington DC “Concurrent Sessions 18. Economics of Nuclear and Unconventional Energy Resources”. Analysis of Shale Gas Impact on - PowerPoint PPT PresentationTRANSCRIPT
Ryoichi Komiyama *, Yasumasa FujiiUniversity of Tokyo (Dept. of Nuclear Engineering)
Michinobu Furukawa, Takeshi Nishimura, Koji YoshizakiTokyo Gas Co., Ltd.
* Assistant Professor, University of Tokyo* Visiting Scholar, Institute of Energy Economics Japan (IEEJ)
* Visiting Assistant Professor, University of California at Berkeley
Analysis of Shale Gas Impact on International Energy Market to 2050 Employing a
Regionally-Disaggregted World Energy Model
1
30th USAEE/IAEE North American Conference, Oct.9-12, Capital Hilton Hotel, Washington DC
“Concurrent Sessions 18. Economics of Nuclear and Unconventional Energy Resources”
2
Background
World Energy Model (DNE21)
Scenario - Natural Gas Production Cost Curve - CO2 Emissions Regulation
Simulated Results & Conclusions
Outline
Japanese Nuclear Policy(Before Fukushima Nuclear Accident)
3
Building 14 new nuclear power plant to 2030
After the accidentNatural gas-fired power generation is the economically most attractive alternative ?
Natural Gas Price (2009)
4
USA 4 $/MMBtu
Europe 6 $/MMBtu
Japan 9 $/MMBtu
16 $/MMBtu (Aug 2011)
(Source) Institute of Energy Economics Japan (IEEJ)
Levelized Cost of Power Generation*
5
*Assumption of Model PlantNGCC: Plant Capital Cost 1000$/kW, Lifetime: 30 years, Gas price: previous slide, Thermal Conversion Efficiency: 50%, Average cost of capital :7%Nuclear: Plant Capital Cost 4000$/kW, Lifetime: 30 years, Average cost of capital :7%
0
2
4
6
8
10
12
14
2009 2009 2009 Aug. 2011
USA Europe Japan
Natural Gas-fired CC Nuclear
Variable
O&M (Fixed)
Capital Cost
cent per kWh (2009)
Coal-fired8.2 cent/kWh
(Japan, Aug.2011)
Background
6
France3%
Poland3%
Norway1%
Other Europe
3%
United States13%
Canada6%
Mexico10%
China19%
Other Asia2%
Australia6%
South Africa
7%
Libya4%
Algeria3%
Other Africa
1% Argentina12%
Brazil3%
Other L.America
3%
Rapid Shale Gas Growth in USCurrently, U.S. is the largest natural gas production country, outstripping Russia. In United States, shale gas will
increase annually at 7 million ton-LNG, and explain 47% of total gas production by 2035 in DOE’s estimate. Global Potential of Shale Gas Shale gas resource is reported to be largely endowed in Europe, China and the other countries as well as USA, having
potentially impact on future international gas market. In Europe, Poland is at the forefront of shale gas exploration activity, offering attractive fiscal terms for participation of multiple companies actively drilling in multiple basins. In addition, there has been great interest in China’s potential for shale gas production, and several international companies have partnered with Chinese companies to explore potential shale resources.
Nuclear Accident Accerelate More Shift to Gas ?Severe accident in Fukushima and foreseeable stagnation in nuclear development enhance the alternative role of gas.
This presentation analyzes the quantitative prospect of natural gas demand and supply under global carbon regulation to 2050 and discuss its implication in global energy market.
U.S. Gas Production Outlook Shale Gas Resource (technically recoverable resource (TRR))
Total Shale Gas Resource ： 6,622 tcf*Total Conventional Gas Resource ： 6,609 tcf(Global Gas Consumption ： 100 tcf)
(Source) EIA/DOE(Source) EIA/DOE
World Energy Model (DNE21) This energy model (DNE21) features a detailed representation of regional treatment, nuclear and
renewable energy. Cost Minimization Model: The model seeks the solution that minimizes the discounted total
system cost for the years from 2000 to 2100 at ten-year intervals and multiple regions, under various kinds of constraints, such as amount of resource constraints, energy supply and demand balance constraints, and CO2 emissions constraints. (Report of 2050)
16 million variable, 24 million constraints: The model is formulated as a linear optimization model, of which the number of the variables is more than 16 million and that of the constraints is 24 million.
7
Regional Disaggregation 54 regions, 82 nodesThe world is divided into 54 regions. In the model, several large countries such as the United States,
Russia, China and India are further divided into several sub-regions. Furthermore, in order to reflect geographical distribution of the site of regional energy demand and energy resource production, each region is constituted by “city node” shown as round markers and “production node” shown as square markers, the total number of which amounts to 82 points.
City node, Production nodeThe city node mainly shows representative points of the intensive energy demand, and the production
node exhibits additional representative points for fossil fuel production to consider the contributions of resource developments in remote districts. The model, in detail, takes account of intra-regional and inter-regional transportation of fuel, electricity and CO2 between these 82 points.
8
Electric Power Load Curve (World, 2050)
Optimal Power Dispatch (World, 2050)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0-4 4-8 8-12 12-16 16-20 20-24time period of the day
electricity demand (GWh/h)
wintersummer
intermediate
-2000
0
2000
4000
6000
8000
10000
0-4 4-8 8-12 12-16 16-20 20-24
GWh/h
Time period of the day
Coal
Oil
Natural Gas
BiomassHydro
PV
Nuclear(LWR)
Wind
Battery Charge
Battery Discharge
IGCC
Power Generation Dispatch
9
Optimal power generation dispatch in 82 nodes (54 regions) is respectively calculated at 6 time periods in 24 hours on 3 seasons (summer, winter, mid-season)
Basic Outline of World Energy Model (DNE21)
10
st i ttr te i j t
e i ttr i j tf i t
u i tfd g i tr g i t
tistSTtisttStorageCostDisctjitetrTCtjiteTConCost
tieECtiestCostructCotjitrTRjitrTransCosttDisctifDCtifDistCosttDisc
tiuUSiuOpeCosttDisctigfdSVigfdSaveCosttDisctigrPRigrdCosttDiscTCST
,,,,,,,,,,,
,,,,,,,),,()(,,,,
,,,,,,,,,,,,,Pro
igrExhausttigrPRtTermt
,,,,,)( tigrnewableRetigrPR ,,,,,,
0,,1,,),,(,,,,,,,,,
,,,,,,,,,,,,,Pro
tifSTtifSTtifStrageEfftjitrTRtijtrTRijftrTransEffi
tifDCtiuUStifuConvEffitigrPRtifrdEffi
tr jtr j
ur g
tifddFinalDemantigfdSVtifDCtiffdDemEffigf
,,),,,(,,,,, tigfdSaveLimitstigfdSVtifdSaveEffi ,,,,,,),,(
2g
2,,2,,,Rem,,,,,,t
tirECttirtigrPRtigrPUtiFactor
2
2,,2,,,Rem,,,,t
tiuECttiutiuUStiuCUtiFactor
2
2,,,,2,,,,,Rem
,,,,,,,,,,,,,,,,
t
tjitetrTCttjitetrT
tijtetrTRtijtetrTUtiFactortjitetrTRtjitetrTUtiFactor
)2,,2,,,TRem(,,,,,,,,2
ttetrTCtttetrtjitetrTRtjitetrTUtiFactorti j
Objective function:
Major Constraints: (Depletion of fossil resources) (Production of renewable energy)
(Primary Demand & Supply Balance)
(Secondary Demand & Supply Balance)
(Energy Conservation)
(Primary Energy Production Constraint)
(Energy Conversion Constraint)
(Energy Carrier Transportation Constraint: Onshore)
(Energy Carrier Transportation Constraint: Offshore)Index d:Time period of day （ Biomass ・ Hydro ・ Wind ・ Solid Dem. ・ Liquid Dem. ・ Gas Dem. ： 1 ， PV ・ Elec. Dem. ： 6 ） , e:Prod. ・ Conv. technology(e {(r:energy ∊resource) (u:conv. technology)}), f:Fuel(Coal∪ ， Oil ， Gas ， Biomass ， Hydrogen ， Methane ， Methanol ， Ethanol ， DME ， Fuel Oil ， CO ， Electricity), fd ： Type of energy demand （ Solid ， Liquid ， Gaseous ， Electricity ） , g:Grade of energy resource(1 ～ 7), i,j: Regional nodes (1 ～ 82), r: Energy source(Conventional fossil （ Coal ， Oil ， Gas ）， Unconv. fossil （ Heavy oil/Tar sand ， Oil shale ， Shale gas ， Other unconv. gas ）， Biomass(Energy crop ， Forest biomass ， Round wood residue ， Black liquid ， Used paper ， Lumber residue ， Crop harvesting residue ， Sugar cane residue ， Bagass ， Household garbage ， Human waste ， Animal waste) ， Nuclear ， Hydro ・ Geothermal ， PV ， Wind ， EOR ， CCS(Gas well) ， CCS(Aquifer) ， CCS(Ocean), ECBM), s:Season （ Biomass ・ Hydro ・ Wind ・ Solid Dem. ・Liquid Dem. ・ Gas Dem. ： No difference ， PV ・ Elec. Dem. ： Summer, Winter, Mid season ） , st: Energy storage, t:Year(2000 ～ 2100, 11 year point), te: Transportation facility(Coal ， Oil ， Gas ， Hydrogen ， Methanol ， DME ， CO2 ， Electricity), tr: Transportation mode(Onshore ， Offshore), u:Conversion technology(Coal-fired ， Oil-fired ， NGCC ， IGCC, Nuclear ， Hydro ・ Geothermal ， PV ， Wind ， Biomass direct combustion ， BIG/GT ， STIG ， Waste generation ， Hydrogen generation ， Methanol-fired generation ， Partial oxidation (coal, oil), Natural gas reformation, Biomass thermal liquefaction, Biomass gasification, Shift reaction, Methanol synthesis, Methane synthesis, Dimethyl ether (DME) synthesis, Diesel fuel synthesis, Water electrolysis, Biomass methane fermentation, Biomass ethanol fermentation, Hydrogen liquefaction, Liquid hydrogen re-gasification, Natural gas liquefaction, Liquefied natural gas re-gasification, Carbon dioxide (CO2) liquefaction, Liquefied CO2 re-gasification)Exogenous variables CostructCost: Energy production & conversion cost[$/(Mtoe/year),$/kW] ， ConvEffi :Energy conversion efficiency[%] ， CUtiFactor: reciprocal of capacity factor ， DemEffi: Energy consumption efficiency [%] ， Disc: Discount rate ， DistCost :Distribution cost[$/Mtoe] ， Exhaust: Fossil fuel resource amount[Mtoe] ， FinalDemand:Final energy demand[Mtoe] ， OpeCost: Operating cost[$/Mtoe] ， ProdCost: Resource production cost[$/Mtoe] ， ProdEffi: Production efficieny[%] ， PUtiFacotr: Reciprocal of prodaction facility capacity factor ， Pupv: Capacity factor(PV)[%] ， Rem:Remaining rate of facility ， Renewable: Renewable energy resource[Mtoe] ， SaveCost:Energy saving cost[$/Mtoe] ， SaveEffi: Energy saving efficiency[%] ， SaveLimits: Energy saving potential[Mtoe] ， StorageCost: Energy storage cost[$/Mtoe] ， StrageEff: Energy storage efficiency[%] ， TConCost: Transportation facility cost[$/(Mtoe/year),$/kW] ， Term:length of time[year,day,hour] ， TransCost: Transportation cost[$/Mtoe] ， TransEffi: Transportation efficiency[%] ， TRem: Remaining rate of transportation facility ， TUtiFactor: Capacity factor of transportation facility[%]Endogenous variables DC: Energy demand[Mtoe] ， EC: Energy production & conversion capacity[Mtoe/year,kW] ， PR: Energy production[Mtoe] ， SV: Energy saving[Mtoe] ，ST: Energy storage[Mtoe] ， TC: Energy transportation capacity[Mtoe/year,kW] ， TCST: Objective function[$] ， TR: Energy transportation[Mtoe] ， US: Energy input[Mtoe]
Nuclear Fuel Cycle Model
11
Nuclear Fuel Cycle Model Charge/Discharge pattern of Nuclear Fuel
Nuke Technology Light-water reactors (LWR), light-water MOX reactors (LWR-MOX), and fast breeder reactors (FBR) are
considered. This model considers 4 types of nuclear fuel and SF: fuel for initial commitment, fuel for equilibrium charge, SF from equilibrium discharge, and SF from decommissioning discharge.
Commissioning/DecommissioningFuel for initial commitment is demanded when new nuclear power plants are constructed. Equilibrium charged
fuel and equilibrium discharged SF are proportional to the amount of electricity generation. Decommissioning discharged SF is removed from the cores of decommissioned plants, considering time lags of various processes in initial commitment, equilibrium charge, equilibrium discharge and decommissioning discharge.
ReprocessingIn waste management, SF, which is stored away from power plants is reprocessed or disposed of directly.
Uranium 235 and Plutonium can be recovered through reprocessing of SF. Recovered Uranium 235 is recycled through re-enrichment process. Some of recovered Pu is stored if necessary and the remaining Pu is used as FBR and LWR-MOX fuel. It is assumed that SF of FBR is also reprocessed after cooling to provide Pu.
Nuclear Fuel Cycle Model
12
unit cost
LWR capital cost $/kW 2000
FBR capital cost $/kW 3000
LWR/FBR load factor % 80
annual leveling factor % 19 235U enrichment $/kg-SWU 110
UO2 fabrication $/kg-U 275
MOX fabrication $/kg-HM 1100
SF reprocessing $/kg-HM 750
VHLW final disposal $/kg-HM 90
SF storage $/kg-HM/yr 8
SF direct disposal $/kg-HM 350
FBR cycle cost $/MWh 10
Pu storage $/kg-Pu/yr 500
PV capital cost $/kW 6000
Discount rate % 5
Life time of plant yr 30
LWR LWR(MOX) FBR
Initial Commitment U (t/GWe)
235U content (%) Pu (t/GWe)
Heavy metal (t/GWe)
76.7 3.2 0.0
76.7
76.7 3.2 0.0
76.7
68.161
0.3 4.286 75.502
Equilibrium Charge U (t/GWe)
235U content (%) Pu (t/GWe)
Heavy metal (t/GWe)
18.5 4.6 0.0
18.5
17.61 0.711 1.233 19.46
10.692
0.3 0.715 11.75
Equilibrium Discharge U (t/GWe)
235U content (%) Pu (t/GWe)
Heavy metal (t/GWe)
17.4 1.07 0.15 17.6
17.04 0.44 0.79
18.22
9.476 0.129 0.882 10.747
Decommissioning Discharge U (t/GWe)
235U content (%) Pu (t/GWe)
Heavy metal (t/GWe)
73.3 1.79 0.56 74.0
68.01 0.53
3.615 73.625
63.09 0.183 5.128 70.429
Cost Data Nuclear Fuel Characteristics by Reactor
Natural Gas Resource Global conventional gas resource is estimated to be 17,000 tcf. Current world gas demand is around
100 tcf, and R/P ratio on a resource basis represents 170 years. World unconventional gas amounts to 31,000 tcf. Global endowments of coal-bed methane, tight-
formation gas, gas from fractured shales are assumed to 9,000 tcf, 7,000 tcf and 15,000 tcf respectively.
In terms of conventional resource, almost three-quarters of the world’s natural gas resources are located in the Middle East and FSU. Russia, Iran, and Qatar together mostly accounted for the ratio. The rest of the world are distributed fairly evenly on a regional basis.
Including unconventional resources, however, the portion of Middle East and FSU explains for about 40% of the world resources, and N.America individually holds around 20%.
In this analysis, methane-hydrate is not within the scope due to the uncertainty of commercialization.
13(Source) Rogner, H. H., (1997), EIA/DOE etc.
0
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12000
Conventional Shale Gas Other Unconventional
tcf
0.0
1.0
2.0
3.0
4.0
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9.0
10.0
0 2000 4000 6000 8000 10000 12000 14000
tcf
real (2000) US$/MMBtu
Shale Gas Production Cost Curve
Shale Gas Production Curve (World)
14
Reference Scenario
3.6 $/MMBtu
1.8 $/MMBtu
• Production cost in Marcellus 、 Bernett 、 Haynesville
• Onshore conventional, highest (Rogner)
Onshore conventional lowest (Rogner)
Technological-Advanced Scenario
Breakthrough Scenario
Several scenarios regarding shale gas production curve are assumed to investigate the sensitivity of its production cost. The lowest production cost is 5.8$/MMBtu in Reference Schenario, 3.6$/MMBtu in Technologically-advanced Scenario and 1.8$/MMBtu in Breakthrough Scenario. The aggregate curve shifts in accordance with the decreasing rate of the lowest cost in each curve.
Technologically-advanced Scenario and Breakthrough Scenario is applied after 2020.
5.8$/MMBtu
(Source) Rogner, H. H., (1997), EIA/DOE etc.
(Conv.Gas) 1 ～ 9 $/MMBtu (2 ～ 7cent/kWh*)
(Shale Gas) Reference 6 ～ 9 $/MMBtu (5 ～ 7cent/kWh*) Tech. Adv. 4 ～ 7 $/MMBtu (4 ～ 6cent/kWh*) Breakthrough 2 ～ 5 $/MMBtu (3 ～ 5cent/kWh*)
* Levelized cost of power gen. in model plant
Gas Production Cost
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0 10000 20000 30000 40000 50000
tcf
$/MMBtu
Natural Gas Production Cost Curve (World)
Reference Scenario
(Remarks) Gas demand, world (2009) ： 104 tcf (2.2 billion ton-LNG) Conventional gas resource (this analysis) ： 17,000 tcf (340 billion ton-LNG) Shale gas resource (this analysis) ： 14,000 tcf (310 billion ton-LNG)
15
Breakthrough Scenario
2 cent/kWh*
8 cent/kWh*
* Levelized cost of power gen. in model plant
Nuclear (4000$/kW)
Nuclear (2000$/kW)
Nuclear (3000$/kW)
CO2 Emissions Regulation
16
Halving Global CO2 emissionsGlobal CO2 emissions is designed to halve those emissions by 2050, stabilizing
global temperature growth at 2 centigrade. (Similar to 450 ppm scenario in IPCC)
Developed Countries Decrease CO2 by 80% until 2050 In developed countries, such as USA, Japan, Germany, UK, Canada and South Korea,
the CO2 emissions in each country should be decreased by 80% until 2050.
0
5
10
15
20
25
30
35
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Gt-CO2
Regulation Curve of World CO2 Emissions
CO2 Shadow Price (Marginal Mitigation Cost)*
17
CO2 shadow price in 2050 = 50 $/t-CO2 ～ 400 $/t-CO2
⇒ increasing gas-fired generation cost by 2 ～ 15 cents/kWh
(Developing countries) 50 $/t-CO2 ⇒ Gas price +3 $/MMBtu (Gas-fired +2 cents/kWh)
(Developed countries) 150 ～ 400 $/t-CO2 ⇒ Gas price +8 ～ 21 $/MMBtu (Gas-fired +6 ～ 15 cents/kWh)
Note: Gas-fired cost: 2 ～ 7 cents/kWh, Nuclear: 4 cents/kWh
* simulated results in the model
Power Generation Mix (World)
0
2000
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6000
8000
10000
12000
14000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
2000
4000
6000
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12000
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2000 2010 2020 2030 2040 2050
Pow
er G
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ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
2000
4000
6000
8000
10000
12000
14000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
2000
4000
6000
8000
10000
12000
14000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
24%
34%
30%
30% 46%
No CO2 Regulation
CO2 Regulation
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
24%
11%
10%9%
13%
18%
34%24% 23%
12%
9%
13%
21%
11%
34%33%
10%
24%
34%24%
10%
Coal
Gas
Nuclear(LWR)
BIG/GT
PVWind
Hydro
Coal
Gas
Nuclear(LWR)
BIG/GT
PVWind
Hydro
Coal
Gas
PV
Coal
Gas
PV
In no CO2 regulation scenario, shale gas is competitive mainly with coal, and in CO2 regulation scenario, with nuclear (light water reactor).
18
0
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20000
25000
30000
2000 2010 2020 2030 2040 2050
Ener
gy P
rodu
ction
(MTO
E/ye
ar)
year
Nuclear
PV
Wind
Hydro
Biomass
Unconv. Natural Gas
Shale Gas
Natural Gas
EOR
Oil Shale
Oil Sand
Crude Oil
Coal0
5000
10000
15000
20000
25000
30000
2000 2010 2020 2030 2040 2050
Ener
gy P
rodu
ction
(MTO
E/ye
ar)
year
Nuclear
PV
Wind
Hydro
Biomass
Unconv. Natural Gas
Shale Gas
Natural Gas
EOR
Oil Shale
Oil Sand
Crude Oil
Coal
0
5000
10000
15000
20000
25000
2000 2010 2020 2030 2040 2050
Ener
gy P
rodu
ction
(MTO
E/ye
ar)
year
Nuclear
PV
Wind
Hydro
Biomass
Unconv. Natural Gas
Shale Gas
Natural Gas
EOR
Oil Shale
Oil Sand
Crude Oil
Coal0
5000
10000
15000
20000
25000
2000 2010 2020 2030 2040 2050
Ener
gy P
rodu
ction
(MTO
E/ye
ar)
year
Nuclear
PV
Wind
Hydro
Biomass
Unconv. Natural Gas
Shale Gas
Natural Gas
EOR
Oil Shale
Oil Sand
Crude Oil
Coal
19
Primary Energy Mix (World)
Shale Gas: Reference
No CO2 Regulation
CO2 Regulation
21%19%
2%
26%
21%
28%
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
35%
28%22%
26%
21%
35%22%
21%
35%
22%
21%
35%
22%
23%
15%38%
20%
12%
27%
1%
22%
17%
12%
24%
8%25%
Coal
Oil
Gas (Conv.)
Coal
Oil
Gas (Conv.)
Shale Gas
CoalOil
Gas (Conv.)
Nuclear
Biomass
CoalOil
Gas (Conv.)
Nuclear
BiomassShale Gas
Since shale gas production is observed to increase even in CO2 regulation scenario, shale gas is considered to be cost-effective option in carbon-constrained scenario.
Shale Gas Impact on Energy Mix Increase in shale gas production will have a significant impact on the other energy source. In no CO2 regulation, shale gas mainly replaces coal-fired power plant. In CO2 regulation
case, it substitute nuclear, photovoltaic and wind power. The development of shale gas will ensure more time enough for innovative technologies to
commercialize , such as nuclear and renewable energy technologies.
20 60 10 40Annual Inc. of Shale Gas to 2050 (Million LNG-ton)
Shale Gas Production(Billion LNG-ton)1.2 2.8 0.5 1.7
-4000
-3000
-2000
-1000
0
1000
2000
3000
4000
Tech
. Adv
.
Brea
kthr
ough
Tech
. Adv
.
Brea
kthr
ough
No CO2 regulation CO2 regulation
Ener
gy P
rodu
ction
(MTO
E/ye
ar)
Nuclear
PV
Wind
Hydro
Biomass
Unconv. Natural Gas
Shale Gas
Natural Gas
EOR
Oil Shale
Oil Sand
Crude Oil
Coal
-2500
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
Tech
. Adv
.
Brea
kthr
ough
Tech
. Adv
.
Brea
kthr
ough
No CO2 regulation CO2 regulation
Pow
er G
ener
ation
Cap
acity
(GW
) FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
20
Change in Primary Energy Mix （ 2050 ）
Change in Power Gen. Mix （ 2050 ）
CoalCoal
Shale Gas
Nuclear(LWR)Nuclear
Gas(Conv.)
Gas
PVWind
Biomass
PVWind
Biomass
0
500
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2000
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3000
2000 2010 2020 2030 2040 2050
Pow
er G
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ation
Cap
acity
(GW
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year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
500
1000
1500
2000
2500
3000
2000 2010 2020 2030 2040 2050
Pow
er G
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ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
500
1000
1500
2000
2500
3000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
500
1000
1500
2000
2500
3000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
21
Power Generation Mix (North America)
40%29%
12%
No CO2 Regulation
CO2 Regulation
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
26%
15%
24%
13%
40% 14%
26%
40%
21%
11%
40%
26%
40%
26%
7%
28%
18%
21%
12%
24%
26%
16%
9%
Coal
Gas
Wind
Nuclear(LWR)
PV
Coal
Gas
Wind
Nuclear(LWR)
PV
Coal
Gas
Wind
Nuclear(LWR)
PV
Coal
Gas
Wind
Nuclear(LWR) PV
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal
22
Primary Energy Mix (North America)
22%
20%
No CO2 Regulation
CO2 Regulation
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
38%
17%
11%
26%
26%
11%
22%
36%
38%
17%
11%
12%
26%
11%
22%
7%
38%
17%
30%
17%
9%
11%
22%
38%
17%
11%
14%
7%12%
7%
15%
20%
22%
16%
7%13%
Coal
Oil
Gas
Wind
Nuclear
Coal
Oil
Gas
Wind
Nuclear
Coal
Oil
Gas
WindNuclear
Biomass
Hydro
PV
Coal
Oil
Gas
WindNuclear
BiomassHydro
PV
23
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2000 2010 2020 2030 2040 2050
Mtoe
Iran
Russia（Middle）
KazakhstanRussia（West）
Saudiarabia
USA（Gulf）0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2000 2010 2020 2030 2040 2050
Iran
Russia（Middle）
KazakhstanRussia（West）
Saudiarabia
USA（Gulf）
USA（Middle West）
China（West）
USA（East）
USA（Gulf）USA（Middle）
Mtoe
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2000 2010 2020 2030 2040 2050
Iran
Russia（Middle）
KazakhstanRussia（West）
Saudiarabia
USA（Gulf）
Mtoe
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2000 2010 2020 2030 2040 2050
Iran
Russia（Middle）
KazakhstanRussia（West）
Saudiarabia
USA（Gulf）
USA（Middle West）
China（West）
USA（East）USA（Middle）
Mtoe
No CO2 Regulation
CO2 Regulation
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
Shale Gas Production Outlook
0
500
1000
1500
2000
2500
2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050
N.America Europe Oceania China Oth. Asia M.E. Africa L.America FSU
Conventional+Other Unconv. Shale
Mtoe
0
500
1000
1500
2000
2500
200020502000205020002050200020502000205020002050200020502000205020002050
N.America Europe Oceania China Oth. Asia M.E. Africa L.America FSU
Conventional+Other Unconv. Shale
Mtoe
0
500
1000
1500
2000
2500
200020502000205020002050200020502000205020002050200020502000205020002050
N.America Europe Oceania China Oth. Asia M.E. Africa L.America FSU
Conventional+Other Unconv. Shale
Mtoe
Shale Gas Production Outlook
24
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
CO2 Regulation
In no CO2 regulation scenario with shale gas breakthrough scenario, China, Middle East and Latin America represents a considerable growth of shale gas production. North America will be placed as major gas production region as well as Middle East and FSU. In CO2 regulation, shale gas production will proceed in its resource endowed country, though CO2 regulation restrict gas consumption per se compared with CO2 regulation scenario.
0
500
1000
1500
2000
2500
2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050 2000 2050
N.America Europe Oceania China Oth. Asia M.E. Africa L.America FSU
Conventional+Other Unconv. Shale
Mtoe
No CO2 Regulation
LNG Trade Outlook (World)Shale gas growth eventually enhance the self-sufficiency in gas supply in North America and China, and decrease LNG import in these countries, where LNG import is previously supposed to be expanded.
No CO2 regulation scenario:Global LNG trade will grow toward 2050 in “Reference Scenario”, while that trading will decrease by 70% in “Shale Gas Breakthrough” scenario significantly. CO2 regulation scenario:Global LNG trade will decline toward 2050 in “Reference Scenario”, while the rate of decline will be more accelerated in “Shale Gas Breakthrough” scenario.
25
147
216
145
50
8968
15
0
50
100
150
200
250
Ref.
Tech
. Adv
.
Brea
kthr
ough Ref.
Tech
. Adv
.
Brea
kthr
ough
No CO2 regulation CO2 regulation
2009 2050
million ton
Since international LNG market to 2050 is calculated to be relaxed mainly due to increasing shale gas production, Japanese LNG import increase in no CO2 regulation with shale gas breakthrough case, compared with Reference Scenario.
Japanese LNG import price (shadow price) will decline by 10% towards 2050. Relaxation of global LNG market backed by shale gas growth will provide more affordable LNG price with increase in Japanese LNG import.
26
LNG Import Price （ Shadow Price ）
Japan 、 no CO2 regulation
1.0
1.2
0.9
1.1
0.7
0.8
0.9
1.0
1.1
1.2
1.3
2000 2010 2020 2030 2040 2050
(2000 = 1.0 )
Reference
Breakthrough
Concluding Remarks
Environmental ImpactImpact of chemical composition of fluids used in the hydraulic
fracturing process on human health and the environment ?
Natural Gas Pricing IssuesTenuous relationship between Atlantic and Pacific market , Asian LNG import price is correlated with crude oil, preferable effect of shale gas on Asian LNG market ?
Nuclear and RenewableAdvanced nuclear reactor ? Renewable ? Natural gas is a key alternative resource after severe nuclear
accident in Fukushima ?27
Calculated results suggest that shale gas development potentially have a broad impact on global energy mix and LNG trading
Uncertainty
8.8
3.9
0
5
10
15
20
25
19901991199219931994199519961997199819992000200120022003200420052006200720082009
Shale Gas
Tight gas
Lower 48 onshoreconventional
Lower 48 offshore
Coalbed Methane
Alaska
Natural Gas Price(Henry Hub)
tcf, $/MMBtu
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00Alaska
Coalbed Methane
Lower 48 offshore
Lower 48 onshoreconventional
Tight gas
Shale Gas
tcf
Background The share of shale gas in US gas production rapidly increase from 4% in 2005 to 16% in 2009. The amount of shale gas production in 2009 reach 3.3 tcf (68 million ton-LNG), showing an annual increase at
15 million ton-LNG, and unconventional gas production in aggregate dominates 56% in 2009 while conventional gas production continuously decrease.
U.S. gas production growth is attributable to advanced production technologies, especially horizontal drilling and hydraulic fracturing techniques that has made the country’s vast shale gas resources accessible, and estimates of shale gas resources have been rising.
The movement of natural gas price tend to be different from that of oil price showing a high level. The ratio of natural gas price to oil price represents 0.3 in thermal equivalent.
U.S. shale gas production has recently continued to grow despite low natural gas prices. However, as North American natural gas prices have remained low, and in contrast, liquids prices have risen with international crude oil prices, U.S. shale drilling has concentrated on liquids-rich shales such as the Bakken shale formation in North Dakota and the Eagle Ford formation in Texas.
28(Source) EIA/DOE
4%(2005)
16%(2009)
Natural Gas Production in U.S. Incremental Increase in US Gas Production (2005-2009)
(Source) EIA/DOE
Extensive shale gas production decrease global system cost by from 3% to 9% in 2050 in no CO2 regulation scenario, by from 2% to 4% in 2050 in CO2 regulation scenario.
In both CO2 regulation scenario, massive growth of shale gas production will decline energy system cost.
29
Total System Cost (World)
No CO2 Regulation CO2 Regulation
-450
-400
-350
-300
-250
-200
-150
-100
-50
02010 2020 2030 2040 2050
billion $
▲ 4%
▲ 11%
▲ 3%
▲ 9%-450
-400
-350
-300
-250
-200
-150
-100
-50
02010 2020 2030 2040 2050
billion $
▲ 3%
▲ 9%
▲ 2%
▲ 4%
Tech. Adv.
Breakthrough
Tech. Adv.
Breakthrough
0
500
1000
1500
2000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
500
1000
1500
2000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
500
1000
1500
2000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
0
500
1000
1500
2000
2000 2010 2020 2030 2040 2050
Pow
er G
ener
ation
Cap
acity
(GW
)
year
FBRLWR-MOXLWRPVWindHydropowerWaste FiredSTIGBiomass Direct FiredBIG/GTIGCCMethanolH2Natural GasOilCoal
30
Power Generation Mix (China)
65% 65%
65% 65%
45%
12%
37%
No CO2 Regulation
CO2 Regulation
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
9%
15%
30%
14%
12%
16%
38%
19%
12%
16%
39%
31
Primary Energy Mix (China)
24% 24%
24% 24%30%
30%
23%
46%
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000 2010 2020 2030 2040 2050
Ener
gy S
uppl
y (M
TOE/
year
)
year
Nuclear
PV
Wind
Hydropower
H2
Methanol
Biomass
Natural Gas
Oil
Coal
No CO2 Regulation
CO2 Regulation
Shale Gas: Reference
Shale Gas: Reference
Shale Gas: Breakthrough
Shale Gas: Breakthrough
22%
61%
23%
38%
17%
8%
26%
22%
61%
23%
32%
6%
8%
22%
61%
13%
19%
8%
45%
8%
22%
61%
16%
18%
7%
43%
Coal
Oil
Gas
Nuclear
Coal
Oil
Gas
Nuclear
Coal
Oil
Gas
Nuclear
BiomassHydro
CoalOil
Gas
Nuclear
BiomassHydro