implications of shale gas development for climate...

Implications of Shale Gas

Development for Climate Change

Richard G. Newell

Director, Duke University Energy Initiative and Gendell Professor of Energy and Environmental Economics,

Nicholas School of the Environment, Duke University

Workshop on Risks of Unconventional Shale Gas Development, National Academy of Sciences

May 31, 2013 | Washington, D.C.

Context

Richard Newell, NAS Shale Gas Workshop, May

31, 2013 2

• This presentation is part of larger workshop on the risks of

shale gas development, covering issues relating to water, air,

health, ecology, community, climate, and other impacts.

• This presentation focuses only on the greenhouse gas

impacts of shale gas development.

• Comprehensive analysis should consider the array of risks

relative to other energy sources, as well as the benefits of

shale gas development.

What questions are at play?


31, 2013 3

• Greenhouse gas (GHG) accounting

– Aggregate level. What are the total lifecycle GHG emissions of natural gas

use, including both combustion and upstream non-combustion emissions?

– Sectoral technology level. What are the relative GHG impacts of

technologies that use natural gas for electricity generation, transportation, and

buildings, compared to competing technologies?

• Decisions by producers, policymakers, equipment

manufacturers, and corporate and individual purchasers

– Which technologies are advantageous to promote/develop/market/purchase

taking into account GHG impacts?

– What issues need to be addressed to improve the GHG profile of technologies

based on natural gas?

– How does natural gas abundance change the baseline outlook for GHG

emissions and domestic and international policy responses?

Overview


31, 2013 4

• U.S. natural gas use and shale gas development

• Understanding the potential implications of increased natural

gas use on the climate

• Aggregate effects on U.S. energy and economy

• Non-combustion GHG emissions from natural gas

• Sectoral impacts: electricity, residential and commercial

buildings, transportation, and industry

• International implications

• Policy interactions and implications

Relevant existing evidence


31, 2013 5

• Baseline statistics

– Emissions accounting (EPA, industry, academia, NGOs)

– Energy data (U.S. Energy Information Administration (EIA), industry)

• Technology lifecycle analysis

– Various studies (source list at close of presentation)

• Energy modeling projections

– EIA Annual Energy Outlook 2013

• Reference case: current policies

• High oil and gas resource case (note also increases oil)

• Low oil and gas resource case (note also decreases oil)

– International Energy Agency World Energy Outlook 2011 and 2012

• New Policies case

• Golden Age of Gas case

– Other modeling studies

U.S. natural gas use and shale gas

development


31, 2013 6

7

Image source: U.S. Energy Information Administration, Annual Energy Review 2012.


31, 2013

trillion cubic feet in 2011

U.S. natural gas production, distribution, and use

Natural gas was about 26% of total CO2 and

CH4 emissions from U.S. fossil energy in 2011

8

Data source: U.S. EPA Greenhouse Gas Inventory 2013.


31, 2013

US GDP

Energy

8%

CH4 4%

Oil CO2

39%

Coal CO2

33%

Natural gas CO2

24%

2011 fossil energy

CO2 and CH4

emissions

5,553 Tg CO2e

Natural gas

CO2 and CH4

1,469 Tg CO2e

(26%)

Shale gas is a globally distributed and abundant

resource

9

Image source: U.S. Energy Information Administration.


31, 2013

North America has thus far been the focus

for shale gas production

Image source: U.S. Energy Information Administration.

10 Richard Newell, NAS Shale Gas Workshop, May

31, 2013

0

5

10

15

20

25

30

35

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Alaska 1%

U.S. shale gas production has surged and is

expected to growth further U.S. natural gas production

trillion cubic feet per year

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2013, Reference case.

Non-associated offshore

EIA Projection

Associated with oil

Coalbed methane

Non-associated onshore

Shale gas

2012

10%

5%

7% 6%

16%

34%

7%

6%

6%

50%

4%

Tight gas 24% 22%


31, 2013

History

Current and projected U.S. natural gas prices have

declined Henry Hub spot price

2010 dollars per million Btu

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2008 and 2013, Reference case.


31, 2013

0

1

2

3

4

5

6

7

8

9

10

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

2008 EIA projection

2013 EIA projection

Historical prices

Understanding the potential

implications of increased natural gas

use on the climate


31, 2013 13

Natural gas abundance has both direct and

indirect effects on GHG emissions and climate


31, 2013 14

Increased

natural gas

resources

and

production

Lower

natural gas

prices

Lower overall

energy prices

Net

climate

impact

( +/- ?)

Decreased

renewables & nuclear

consumption (-)

Decreased oil

consumption (-)

Increased natural gas

consumption (+)

Fuel

substitution

Increased

overall energy

consumption

(+)

Policy

Decreased coal

consumption (-) CO2

CH4

Aggregate effects on U.S. energy

economy


31, 2013 15

Natural gas is an important energy source, but is only

13% of all U.S. energy expenditures and 1% of GDP

16

Data source: U.S. Energy Information Administration Annual Energy Review 2012.


31, 2013

US GDP

Energy

8%

Natural gas 1%

2010 US GDP $15 Trillion

Energy

expenditures $1.2 Trillion

Natural gas

expenditures $159 Billion

Effects related to fuel substitution are likely to

dominate effects on aggregate energy demand


31, 2013 17

• Aggregate energy demand is driven primarily by

– Population growth

– Overall economic growth and stage of economic development

– Composition of GDP (e.g., share of services, manufacturing)

• Price changes have much bigger effects on fuel substitution

than overall energy demand

– Economists summarize this responsiveness through demand elasticities

measuring the % increase in consumption with respect to a % decrease in price

– EIA modeling, e.g., which embodies numerous such relationships has:

• very low elasticity of aggregate energy demand with respect to natural gas

price changes (<0.1)

• low-moderate elasticity of natural gas demand with respect to natural gas

prices in the residential/commercial (<0.3) and industrial sectors (<0.5)

• quite elastic demand for natural gas for electricity generation (1.5 - 2.5)

Greater U.S. shale gas leads to lower gas prices,

more energy use, slightly higher GDP, and slightly

lower GHG emissions in EIA projections


31, 2013

Scenario

(for 2040)

Natural gas

price $2011 at Henry Hub

Total energy

use Quadrillion Btu

GDP Trillion $2005

Cumulative

emissions

2010-2040* billion tonnes CO2e

Reference 7.83 $/mmBtu

108 $27.3 179

Percent difference relative to Reference case

High oil/gas

resource -45% +3% +1% -0.4%

Low oil/gas

resource +32% -1% -0.1% -0.8%

Data source: U.S. Energy Information Administration, 2013 Annual Energy Outlook.

Notes: *CO2e emissions computed by augmenting EIA CO2 emission estimates for coal, oil, and natural gas by

3.3%,1.5%, and 12.7% respectively to account for non-combustion CO2 and CH4 emissions, based on EPA

Greenhouse Gas Inventory 2013.

Non-combustion GHG emissions from

natural gas


31, 2013 19

87% of greenhouse gas emissions from

natural gas occur during the combustion phase

20



31, 2013

0

200

400

600

800

1,000

1,200

1,400

CH4 CO2 N2OField processing

Processing Transport/storage

Distribution

Combustion

Commercial

Residential

Industrial

Electricity

Combustion Transportation

million tonnes CO2e

0

20

40

60

80

100

120

140

160

180

200

1990 2005 2007 2008 2009 2010 2011

Non-combustion emissions from natural gas are

variable, but have fallen in the past several years

21



31, 2013

million tonnes CO2e

Field processing

Processing

Transmission/

storage

Distribution

CH4

CH4

CH4

CH4

CO2

CO2

0

2

4

6

8

10

12

0

1

2

3

4

5

6

7

8

9

10

1990 2005 2007 2008 2009 2010 2011

Upstream non-combustion GHG emissions have

fallen per unit of natural gas production

22

Data source: U.S. EPA Greenhouse Gas Inventory 2013 and U.S. Energy Information Administration.


31, 2013

tonnes non-combustion CO2e per million cubic feet of gross withdrawals

-11%

grams CO2e per megajoule

0

50

100

150

200

250

1990 1995 2000 2005 2006 2007 2008 2009 2010 2011

EPA estimates of methane emissions from natural

gas systems have changed over time million tonnes CO2e per year

2010 inventory

2011 inventory 2012 inventory

2013 inventory +120%

-33%

Data source: EPA Greenhouse Gas Inventories 2010, 2011, 2012, and 2013.


31, 2013 23

Non-combustion GHG emission estimates for shale gas are not

consistently lower or higher than conventional gas


31, 2013 24

Image source: Weber and Clavin 2012 with additional annotation based on data from U.S. EPA Greenhouse Gas

Inventory 2013.

Implied upstream

emissions from

2013 EPA inventory

(7g CO2e/MJ)

Electricity sector


31, 2013 25

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

conventional

unconventional

Most estimates have 40%-50% lower lifecycle GHG

emissions for electricity from natural gas than coal


31, 2013

life-cycle emissions for power generation

ratio of CO2e emission estimates for electricity generation from natural gas relative to coal

Lower per kWh emissions than coal

Higher per kWh emissions than coal

Data source: Listed authors. Notes: 100-year global warming potential (GWP) used unless otherwise indicated. *Howarth does

not account for differences in combustion efficiency of coal versus gas.

Skone et al

(NETL 2011)

Fulton et al

(2011)

Alvarez et al

(2011)

Burnham et al

(2011)

Howarth et al

(2011)*

Howarth et al

(20 Yr. GWP)*

CO2

CO2 CH4

CH4

0

500

1,000

1,500

2,000

Coal Natural gas Nuclear Renewables Petroleum liquids

+470 GWh

2005

2012

+138 GWh

-87 GWh

-12 GWh

-496 GWh

U.S. electric-sector CO2 emissions have declined

16% since 2005 due to fuel switching


31, 2013

annual net generation, 2005 and 2012

gigawatt hours Total net electricity generation

(all sources, gigawatt hours)

2005 4,055

2012 4,054

Data source: U.S. Energy Information Administration.

Greater shale gas leads to lower prices, fuel switching to gas,

and lower electricity GHG emissions in EIA projections


31, 2013

Scenario

(for 2040)

Natural

gas prices (delivered

for elec.)

Average

electricity

prices

Electricity

consumption

Natural gas

consumption

for electricity

Coal

consumption

for electricity

Nuclear and

renewables

consumption

Cumulative

electricity

CO2e

emissions*

2010-2040

Reference 8.55

$/mmBtu

10.8 ¢/kWh

5,200 GWh

1,600 GWh

1,800 GWh

1,800 GWh

71 billion

tonnes

Percent and absolute difference relative to Reference case

High oil

and gas -39% -14%

+4.2% (+200 GWh)

+49% (+800 GWh)

-21% (-400 GWh)

-9% (-200 GWh)

-5%

Low oil

and gas +26% +7%

-2.4% (-100 GWh)

-34% (-500 GWh)

+4% (+100 GWh)

+19% (+300 GWh)

+0.2%

Data source: U.S. Energy Information Administration, 2013 Annual Energy Outlook. Notes: *CO2e emissions computed

by augmenting EIA CO2 emission estimates for coal, oil, and natural gas by 3.3%,1.5%, and 12.7% respectively to

account for non-combustion CO2 and CH4 emissions, based on EPA Greenhouse Gas Inventory 2013.

Residential and commercial buildings

sector


31, 2013 29

Natural gas space and water heating tends to have

significantly lower GHG emissions than electricity


31, 2013 30

• Space heating*

– Natural gas boilers are about 50% less GHG-intensive (CO2 and CH4) than

electric heat from natural gas electricity

– Natural gas-powered heat pumps could further reduce emissions

– Lower-GHG electricity would improve the electric heat footprint

• Water heating**

– Natural gas water heating systems in 46 out of 50 states are less CO2 intensive

than electric heating systems

– In most states, natural gas water heating systems are ~60% less CO2 intensive

than electric heating systems

– Variation occurs between states due to electricity fuel mix

– Lower-GHG electricity would improve the electric water heating footprint

Sources: *Delucchi 2003 and Brenn et al 2010. **Czachorski and Leslie 2009, Gas Technology Institute.

Greater shale gas leads to lower prices, more energy use, and

lower GHG emissions in EIA residential and commercial

projections


31, 2013

Scenario

(for 2040)

Natural

gas prices (avg. res/

comm price)

Electricity

prices (avg. res/

comm price)

Aggregate

res/comm

energy*

consumption

Natural gas

consumption

for res/comm

Electricity*

consumption

for res/comm

Cumulative

res/comm

CO2e

emissions**

2010-2040

Reference 15.13

$/mmBtu

11.7 ¢/kWh

21.8 QBtu

7.9 QBtu

11.8 QBtu

67 billion

tonnes

Percent and absolute difference relative to Reference case

High oil

and gas -22% -13%

+5% (+1.1 QBtu)

+7% (+0.6 QBtu)

+4% (+0.5 QBtu)

-3%

Low oil

and gas +18% +7%

-3% (-0.6 QBtu)

-4% (-0.3 Qbtu)

-2% (-0.2 QBtu)

-0.2%

Data source: U.S. Energy Information Administration, 2013 Annual Energy Outlook. Notes: *Does not include

electricity-related losses. **CO2e emissions computed by augmenting EIA CO2 emission estimates for coal, oil, and

natural gas by 3.3%,1.5%, and 12.7% respectively to account for non-combustion CO2 and CH4 emissions, based on

EPA Greenhouse Gas Inventory 2013.

Transportation sector


31, 2013 32

0.0

0.2

0.4

0.6

0.8

1.0

1.2

TIAX (2007 for CA) Alvarez et al (2012) AEA (for EU 2011) Burnham et al (2012) Venkatesh et al (2011)

Natural gas passenger vehicles reduce

emissions by 10%-30% relative to gasoline

33

Data source: Listed authors.


31, 2013

life cycle emissions for passenger vehicles

ratio of CO2e emission estimates for CNG relative to gasoline vehicles

Lower emissions per km than gasoline

Higher emissions per km than gasoline

CO2 CH4

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Rose et al(2013)

TIAX (2007 forCA)

TIAX (2007 forCA)

Burnham et al(2012)

Alvarez et al(2012)*

Venkatesh et al(2011)

Climate benefits from natural-gas powered

heavy vehicles are less clear

34



31, 2013

life cycle emissions for transit buses

ratio of CO2e emission estimates for natural gas buses relative to diesel

Lower emissions per km than diesel

Higher emissions per km than diesel

*in heavy-duty trucks

LNG

CO2 CH4

CO2

CNG

Up-

stream

Industrial sector


31, 2013 35

Greater shale gas leads to more industrial energy use

and slightly higher GHG emissions in EIA projections


31, 2013

Scenario

(for 2040)

Industrial

natural gas

prices

Aggregate

industrial

energy*

consumption

Natural gas

consumption

by industry

Coal

consumption

by industry

Electricity*

consumption

by industry

Cumulative

industrial

CO2e

emissions**

2010-2040

Reference 9.09

$/mmBtu

28.7 QBtu

10.4 QBtu

1.6 QBtu

3.9 QBtu

52 billion

tonnes

Percent and absolute difference relative to reference scenario

High oil

and gas -39%

+7% (+2.1 QBtu)

+18% (+1.8 QBtu)

-3% (-0.05 QBtu)

+2% (+0.1 QBtu)

+0.3%

Low oil

and gas +28%

-4% (-1.1 QBtu)

-8% (-0.9 QBtu)

-5% (-0.1 QBtu)

-1% (-0.02 QBtu)

-1.4%

Data source: U.S. Energy Information Administration, 2013 Annual Energy Outlook. Notes: *Does not include

electricity-related losses. **CO2e emissions computed by augmenting EIA CO2 emission estimates for coal, oil, and

natural gas by 3.3%,1.5%, and 12.7% respectively to account for non-combustion CO2 and CH4 emissions, based on

EPA Greenhouse Gas Inventory 2013.

International implications


31, 2013 37

3,000

3,500

4,000

4,500

5,000

5,500

2010 2015 2020 2025 2030 2035

Projections for global natural gas use are rising

38

Data source: International Energy Agency 2011 and 2012 World Energy Outlook and 2011 “Golden Age of Gas” report.


31, 2013

primary global natural gas demand

billion cubic meters

2011 “Golden Age of Gas” scenario

2012 “New Policies” scenario

2011 “New Policies” scenario

3% lower CO2 emissions

than 2011 New Policies

scenario in 2035

-

200

400

600

800

1,000

1,200

2009 2010 2011

U.S. Rest of world

U.S. coal exports have increased, but represent a

fairly small share of global trade

39

Data source: U.S. Energy Information Administration and the World Coal Association. Calculated as U.S. net exports

as a share of global coal trade.


31, 2013

4% 5% 7%

global coal trade

million metric tons

Greater shale gas resources lead to lower U.S. coal production

and negligible effects on coal exports in EIA projections

40

Data source: U.S. Energy Information Administration 2013 Annual Energy Outlook.


31, 2013

U.S. coal production and gross exports

million short tons

0

200

400

600

800

1,000

1,200

2010 2015 2020 2025 2030 2035 2040

Reference case production

High oil/gas case production

Reference case exports

High oil/gas case exports

-159

M tons

+14

M tons

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Skone et al (2011 NETL) Venkatesh et al (2011) Jaramillo et al (2007)

NG LNG

LNG tends to have higher GHGs than domestic

natural gas for electricity, but still lower than coal

41



31, 2013

life cycle emissions for electricity generation

ratio of CO2e emission estimates for electricity from natural gas relative to coal

Lower emissions per kWh than coal

Higher emissions per kWh than coal

Policy interactions and implications


31, 2013 42

How does abundant natural gas interact with

and affect climate/energy policy?


31, 2013 43

• Lower natural gas prices make the cost of some policies lower

and other policies higher

– lowering the cost of options with relatively low GHG intensity will tend to make

achievement of climate goals less costly

• e.g., in current baseline scenarios no new US coal power is built in part due

to low natural gas prices; as a result, regulations that would regulate new

coal plant GHG emissions have no apparent impact

• e.g., under an emissions constraint, lower natural prices lower the cost of

meeting emission targets and (by design) do not affect emissions (e.g., EIA

AEO 2013, Jacoby et al. 2011, Brown and Krupnick 2010)

– in the context of renewable energy standards, however, lower gas prices will tend

to increase the incremental cost of maintaining those standards

• With substantial long-term GHG reductions, natural gas would

need to incorporate carbon capture and storage at reasonable

cost to continue as a competitive option

Concluding thoughts


31, 2013 44

• The GHG emissions intensity of natural gas has fallen; further

reductions in non-combustion emissions and improved combustion

efficiency could further this trend

– upstream emission estimates have fluctuated, but not sufficiently to alter the main

conclusions

• Thus far, shale gas has lead to decreased GHG emissions by

lowering prices and displacing more coal than renewables/nuclear

• Using current lifecycle GHG estimates, natural gas tends to lower

GHG emissions relative to coal electric power, gasoline personal

vehicles, and electricity for space/water heating

• Natural gas abundance alone will probably not have a substantial

effect on future GHG emissions; policy is the key factor

– but could influence relevant policy in ways that have a substantial effect

Sources


31, 2013 45

Advanced Resources International and ICF International. Greenhouse gas life-cycle emissions study: Fuel life-cycle of U.S. natural

gas supplies and international LNG. Prepared for Sempra Energy, Nov. 2008.

AEA, 2012. Climate impact of potential shale gas production in the EU. Report for the European Commission DG CLIMA

AEA/R/ED57412.

Alvarez, R.A., Pacala, S.W., Winebrake, J.J., Chameides, W.L., Hamburg, S.P., 2012. Greater focus needed on methane leakage

from natural gas infrastructure. Proceedings of the National Academy of Sciences 109, 6435-6440.

Brenn, J., Soltic, P., Bach, Ch., 2010. Comparison of natural gas driven heat pumps and electrically driven heat pumps with

conventional systems for building heating purposes. Energy and Buildings 42, 904-908.

Brown, S.P.A., Krupnick, A.J., 2010. Abundant shale gas resources: long-term implications for U.S. natural gas markets. Resources

for the Future Discussion Paper 10-41.

Burnham, A., Han, J., Clark, C.E., Wang, M., Dunn, J.B., Palou-Rivera, I., 2011. Life-Cycle Greenhouse Gas Emissions of Shale

Gas, Natural Gas, Coal, and Petroleum. Environmental Science & Technology 46, 619-627.

Czachorski, M., and Leslie, N., 2009. Source energy and emission factors for building energy consumption. Prepared for American

Gas Association.

Delucchi, M., 2003. A lifecycle emissions model (LEM): lifecycle emissions from transportation fuels, motor vehicles, transportation

modes, electricity use, heating and cooking fuels, and materials. UC Davis Institute of Transportation Studies.

Fulton, M., Mellquist, N., Kitasei, S., Bluestein, J., 2011. Comparing life-cycle greenhouse gas emissions from natural gas and coal.

Deutsche Bank Group, Worldwatch Institute, and ICF International. August, 2011.

Hekkert, M.P., Hendriks, F.H.J.F., Faaij, A.P.C., Neelis, M.L., 2005. Natural gas as an alternative to crude oil in automotive fuel

chains well-to-wheel analysis and transition strategy development. Energy Policy 33, 579-594.

Howarth, R.W., Santoro, R., Ingraffea, A., 2011. Methane and the greenhouse-gas footprint of natural gas from shale formations.

Climatic Change 106, 679-690.

Hultman, N., Rebois, D., Scholten, M., Ramig, C., 2011. The greenhouse impact of unconventional gas for electricity generation.

Environmental Research Letters 6.

International Energy Agency, 2011. Are we entering a golden age of gas? . Organization for Economic Cooperation and

Development.

International Energy Agency, 2012. World Energy Outlook 2012.

Jacoby, H.D., O'Sullivan, F., Paltsev, S., 2011. The influence of shale gas on U.S. energy and environmental policy. MIT Joint

Program on the Science and Policy of Global Change, Report No. 207.

Sources


31, 2013 46

Jaramillo, P., Griffin, Michael W., Matthews, Scott H., 2007. Comparative life-cycle air emissions of coal, domestic natural gas, LNG,

and SNG for electricity generation. Environmental Science and Technology 41, 6290-6296.

Lu, X., Salovaara, J., McElroy, M.B., 2012. Implications of the Recent Reductions in Natural Gas Prices for Emissions of CO2 from

the US Power Sector. Environmental Science & Technology 46, 3014-3021.

National Energy Technology Laboratory, 2011. Life cycle greenhouse gas inventory of natural gas extraction, delivery, and electricity

production. DOE/NETL-2011/1522.

Paltsev, S., Jacoby, H.D., Reilly, J.M., Ejaz, Q.J., Morris, J., O’Sullivan, F., Rausch, S., Winchester, N., Kragha, O., 2011. The future

of U.S. natural gas production, use, and trade. Energy Policy 39, 5309-5321.

Rose, L., Hussain, M., Ahmed, S., Malek, K., Costanzo, R., Kjeang, E., 2013. A comparative life cycle assessment of diesel and

compressed natural gas powered refuse collection vehicles in a Canadian city. Energy Policy 52, 453-461.

TIAX LLC, 2007. Full fuel cycle assessment: well-to-wheels energy inputs, emissions, and water impacts. Consultant report for

California Energy Commission.

U.S. Energy Information Administration, 2011. World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United

States.

U.S. Energy Information Administration, 2012. Annual Energy Review. DOE/EIA-0384(2011).

U.S. Energy Information Administration, 2013. Annual Energy Outlook. DOE/EIA-0383ER(2013.)

U.S. Environmental Protection Agency, 2013. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2011. Washington, D.C.

EPA 430-R-13-001.

Venkatesh, A., Jaramillo, P., Griffin, W.M., Matthews, H.S., 2012. Implications of changing natural gas prices in the United States

electricity sector for SO2, NOx and life cycle GHG emissions. Environmental Research Letters 7.

Venkatesh, A., Jaramillo, P., Griffin, W.M., Matthews, H.S., 2011. Uncertainty in life cycle greenhouse gas emissions from United

States natural gas end-uses and its effect on policy. Environmental Science and Technology 45, 8182-8189.

Weber, C.L., Clavin, C., 2012. Life Cycle Carbon Footprint of Shale Gas: Review of Evidence and Implications. Environmental

Science & Technology 46, 5688-5695.

World Coal Association, 2013. Coal Statistics. URL http://www.worldcoal.org/resources/coal-statistics/.

http://www.worldcoal.org/resources/coal-statistics/




For more information


31, 2013 47

Duke University Energy Initiative

www.energy.duke.edu

[email protected]

919-613-1305

http://www.energy.duke.edu/

mailto:[email protected]

Extra slides


31, 2013 48

EIA’s National Energy Modeling System

(NEMS)


31, 2013 49

Energy consumption in the U.S. by source

and sector


31, 2013 50

Source: U.S. Energy Information Administration, Annual Energy Review 2011.

U.S. energy consumption by source and

sector, including electricity breakdown


31, 2013 51

Source: U.S. Energy Information Administration, Annual Energy Review 2011.

Greater shale gas resources would decrease natural

gas prices

52

Source: U.S. Energy Information Administration, 2013 Annual Energy Outlook


31, 2013

$-

$1

$2

$3

$4

$5

$6

$7

$8

$9

2011 2015 2020 2025 2030 2035 2040

High oil and gas

resource case

Reference case

Henry Hub spot price

2011 $ per MMBtu

-38%

-45%

Lower natural gas prices also increase overall

energy use


31, 2013

90

95

100

105

110

115

2011 2015 2020 2025 2030 2035 2040

+1.6%

-1%

+3%

-1%

Source: U.S. Energy Information Administration, 2013 Annual Energy Outlook

Reference case

High oil and gas

resource

Low oil and gas

resource

Quadrillion Btus

Estimates of lifecycle natural gas emissions vary

54

Source: listed authors. Note: Skone estimates are based on current fleet of gas-fired electricity, not only NGCC.


31, 2013

0

200

400

600

800

1000

1200

Alvarez et al (2012) Burnham et al(2012)

Hultmann et al(2011)

Jiang et al (2011) Skone et al (2011)*

Conventional NGCC Unconventional NGCC Supercritical Coal

Life cycle emissions

gCO2e/kWh

Efficiency improvements in natural gas combustion for

electricity have reduced emissions intensity


31, 2013 55

natural gas combustion emissions

tonnes of CO2e per MWh

Source: Duke University Energy Initiative based on data from U.S. EPA Greenhouse Gas Inventory 2013 and U.S.

Energy Information Administration.

0.35

0.37

0.39

0.41

0.43

0.45

2007 2008 2009 2010 2011

Energy, electricity, and natural gas

consumption under different scenarios


31, 2013 56

0

20

40

60

80

100

120

140

Energy Electricity Natural gas

Reference High OG High growth

energy consumption in 2040

quadrillion Btu

Data source: Duke University Energy Initiative based on projections from the U.S. Energy Information Administration

2013 Annual Energy Outlook.

Elasticity test figure 2


31, 2013 57

Total energy Electricity Natural gas

Scenario in 2040

Use Price index Σ Use Price Σ Use Price Σ

Reference 108 QBtu

4.86 46

QBtu

$32 MMBtu

30 QBtu

$11 MMBtu

Difference relative

to Reference case

Difference relative

to Reference case

Difference relative

to Reference case

High oil and

gas resource +3% -6% .07 -1% -14% -.1 +27% -34% .6

High economic

growth +11% -10% .9 +11% +4% .9 +6% +8% .5

Source: Duke University Energy Initiative based on projections from the U.S. Energy Information Administration Annual Energy

Outlook 2013. Income elasticities calculated using the Reference case and High economic growth case. Demand elasticities

calculated using the Reference case and the High oil and gas resource case.

Scenario in 2040

Use GDP Σ Use GDP Σ Use GDP Σ

Reference 108 QBtu

$27 trillion

46 QBtu

$27 trillion

30 QBtu

$27 trillion

Difference relative to Reference case

High economic

growth +11% +12% .9 +11% +12% .9 +6% +12% .5

Elasticity test figure 3


31, 2013 58

Total energy Electricity Natural gas

Scenario in 2040

Use Price index Σ Use Price Σ Use Price Σ

Reference 108 QBtu

4.86 46

QBtu

$32 MMBtu

30 QBtu

$11 MMBtu

Difference relative to Reference case

High oil and

gas resource +3% -6% .07 -1% -14% -.1 +27% -34% .6




Energy consumption is influenced by a

variety of factors


31, 2013 59

• Income elasticities

– Aggregate energy demand (.7 in 2020, .9 in 2040)

– Electricity demand (.7 in 2020, .9 in 2040)

– Natural gas demand (.5 in 2020, .5 in 2040)

• Demand elasticities

– Aggregate energy demand (.03 in 2020, .07 in 2040)

– Natural gas demand (.44 in 2020, .60 in 2040)

• Electricity (2.4 in 2020, 1.4 in 2040)

• Industrial (.3 in 2020, .5 in 2040)

• Residential/commercial (.1 in 2020, .3 in 2040)

– Electricity demand (-.1 in 2020, -.1 in 2040)




All else equal, increased natural gas use could

decrease global emissions


31, 2013

Source: International Energy Agency 2011 World Energy Outlook “New Policies” scenario and 2011 “Golden Age of

Gas” report.

0 5 10 15 20 25 30 35 40

projected global emissions in 2035, gigatonnes

Emissions under 2011 “Golden Age of Gas” Scenario

2011 “Golden Age of Gas” scenario

Emissions under 2011 “New Policies” Scenario

-3%

International status of shale gas development


31, 2013 61

• Poland: Some companies have pulled out after unsuccessful tests (ExxonMobil,

Talisman, Marathon). Chevron and ENI are still there. Dozens of test wells drilled. No

production yet.

• UK: Test drilling by Cuadrilla Resources has occurred in Northern and Southern

England. No production yet.

• AU: Chevron has invested in the Central-AU Cooper Basin, no production yet.

• S. Africa: A moratorium on shale gas development was lifted in 2012, but no permits

for exploration have been issued. Shell and Chevron are interested.

• China: Shell has invested $1B. Dozens of test wells have been drilled in the Sichuan

basin. No production yet—geological and infrastructure challenges.

• Argentina: Chevron and EOG are in the Vaca Muerta shale, claiming good geology.

Test wells have been drilled, no production yet. This is an oil and gas play.

• Algeria: The government is pushing to develop shale gas, has partnered with ENI.

No production yet.

• Saudi Arabia will also drill some test wells into shale formations this year. Al-Naimi

(KSA oil minister) estimated over 600Tcf of unconventional gas reserves.

• EU: France, Bulgaria, and Romania have moratoria.

• Germany/Spain: Some companies have expressed interest in exploring, but nothing

has gone forward. Considerable local opposition.

Terminology for upstream emissions: EPA

and Weber/Clavin


31, 2013 62

Activity EPA calls it: Weber and Clavin call it:

Well pad construction Field production Preproduction

Well drilling Field production Preproduction

Fracking materials Field production Preproduction

Well completion Field production Preproduction

Flaring Field production Production/processing

Fugitive CH4 and CO2 at well Field production Production/processing

Workovers Field production Production/processing

Liquids unloading Field production Production/processing

Lease/plant energy Processing Production/processing

Vented CO2 at plant Processing Production/processing

Fugitive CH4 and CO2 at plant Processing Production/processing

Compression fuel Transmission/storage Transmission

Underground storage Transmission/storage n/a

Fugitive transmission Transmission/storage Transmission

Fugitive distribution Distribution Transmission??

implications of shale gas development for climate...

Documents