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Natural Gas: how big is the problem?
Posted by Luis de Sousa on December 5, 2006 - 11:11am in The Oil Drum: Europe
Topic: Supply/Production
Tags: electricity generation, gas shortages, mitigation, natural gas, peak natural gas, russian gas [list all tags]
Doesn't this graph just chill you?
Let's try to have a broader look on the Natural Gas supply challenge that both Europe and North America face these days, with the help of Jean Laherrère.
Jean Laherrère presented an article entitled "Oil and Gas: what future?" at the Groningen annual Energy Convention, a few days ago. This article is available, as usual, at Jean's space in OilCrisis.com.
On the first half of the article Jean goes through the usual assessment of Discovery, Reserves and Production for Conventional Oil showing the same results as in previous papers, resulting of the merging of two major data bases: IHS Energy's and Wood Mackenzie's. In this latest paper he goes on and does the similar concerning Natural Gas.
Jean Laherrère's work is really priceless, in fact he has the data (which most of us hasn't) but he really knows what information to get out of it, producing excellent easy to read graphs.
Reserves
Jean explains that for Natural Gas the assessment of remaining reserves is more difficult, for both data bases concern different domains: Wood Mackenzie reports solely recoverable gas reserves whilst IHS Energy reports considerable amounts of stranded gas. Although not as reliable as oil data, the data for gas already yields a clear downward trend:
The peak in Natural Gas remaining reserves was crossed in the late 1980s (circa 6000 Tcf), just ten years after Conventional Oil. The cross point with political reserves happened in the turn of the century, equally ten years after the same event for Conventional Oil. This ten year lag is very interesting for it shows the same pattern of political under-reporting followed by over-reporting registered for Conventional Oil. The same story, happening ten years later.
Discovery
Modelling discovery is also harder, for in 1971 the North Dome gas field was found in the Persian Gulf (shared by Iran and Qatar), totaling circa 1500 Tcf (or 15% of the Ultimate). So Jean took this field out and adjusted a logistic curve to the remaining Cumulative Discovery, which fitted pretty good, and added back North Dome. Modeling it this way the logistic points to an Ultimate over 9000 Tcf; Jean indicates that this number is line with previous assessments that pointed to an Ultimate circa 10 000 Tcf.
Production
To forecast future production Jean added a cycle for Unconventional Gas, with an Ultimate of 2000 Tcf, and two for Conventional Gas: an early one with an Ultimate of 500 Tcf and a peak circa 1980 and another with an Ultimate of 9500 Tcf and a peak circa 2025.
At peak production, All Gas (Conventional + Unconventional) will go over 140 Tcf/y, from the current 97 Tcf/y, an increase of 45% in little more than 20 years. Still, numbers from the IEA or EIA already disagree largely from this assessment, showing that neither of these two institutions is using logistic modeling techniques.
So far so good, right? Wrong. As probably most of TOD readers know, there's no such thing as a World Natural Gas Market, meaning that geographic regions unconnected with gas pipelines must be assessed separately. So does Jean.
North America
This is when things start looking grim. Production is neatly mirroring Discovery with a 23 year lag. This contrasts to Conventional Oil where the production curve doesn't mimic the discovery the same way. While Conventional Oil production at peak will be around 75 Mb/d, the discovery peak went over 120 Mb/d. Natural Gas Production looks like a smoothed version of Discovery, less noisy, but with the same background trends at the same yearly ratios.
Simply put, by 2010 Conventional Gas production can be half of what is today in North America, falling from 20 Tcf/a to 10 Tcf/a. Jean doesn't hesitate to say that shortages will soon occur in this part of the world. Production already peaked in 2001, declining 5% up to 2005, so a downward trend is already there, but will that cliff unfold? Unconventional Gas production has been rising too slowly to avoid the peak, can it avoid the cliff?
Europe
Europe is yet to go over the peak, and up to now, good neighbours (Algeria and Russia) have been helping sending all the gas asked for. Europe will shortly face its dependency; modeling production with an Ultimate of 750 Tcf, Jean shows this graph:
Consumption has been growing at a much sharper pace than Production, which to make matters worse is going into decline.
More good neighbours please.
FSU
Last but not least Jean looks into production in the FSU, the big neighbour. Jean's estimate for the FSU's Ultimate is 2000 Tcf which means a production peak before 2020. Moreover, in spite of a growth up to a production rate of 35 Tcf/y, internal demand will leave by then a meager 10 Tcf/y to export. Finally Jean casts doubts on the will of Gazprom to make the investments needed to ramp up production in the years to follow.
The Importance of Gas
From Jean's work we get to know that both wealthy sides of the Atlantic are heading for trouble. With Peak Oil in site, all we needed was an even sooner Gas Peak. Let's have a look at what Gas means to our daily life.
First of all Gas is a much more effective way to generate heat at home than using electricity or oil products. Electricity is partially generated from Gas; there are losses in transport and losses in transforming electricity into heat. From Oil we have the overheads of transport and refinement. With Gas we just have a little overhead in transport; there are nearly zero losses and no refining.
Secondly Gas is today the best energy source we have to tackle the daily periodic variations in electricity demand. Whilst Coal and Nuclear provide the base energy, they do not allow for the sharp variations in output required when folks start to wake up or when they arrive from work and turn on all of their electronic gadgetry. Take the following graph, showing the supply and demand put to the Portuguese electric grid on a sample period of two days last Spring:
Electricity Demand and Supply on two sample days in Portugal. Red - Coal, light blue - Small Hydro, white - Gas, dark blue - Big Hydro, green - Other Renewable, yellow - Imported (Nuclear), magenta - Diesel Oil, thick black line - Demand.
The electricity generated from Coal keeps quite steady during the course of the day, while Hydro and Gas provide the agility needed to accommodate the variations. During the night cheap Nuclear energy is imported to fill the dams that discharge during the day. Hydroelectric generation is not always possible like this, during the Summer minimum flow has to be maintained and during the Winter maximum flow cannot be surpassed. So the real agility comes from Gas.
The use of Diesel Oil is also possible, recurred to on crisis periods where available Gas isn't enough and direct electricity imports are impossible (such was the case in the morning of the first day). As seen above heat generation from Gas is potentially more effective than from Oil products, making it a cheaper way to generate electricity. When the Diesel power plants are turned on it means that the immediate generating capacity is close to full. These periods are, to my knowledge, still rare. Portugal is probably different from the majority of the other OECD countries, but an interesting case, for every major energy source is used for generating electricity.
Mitigation
Options aren't many; the imminence of the subject makes it hardly solvable with new infrastructure: new pipelines from distant suppliers, new power plants using different sources of energy, more LNG terminal ports and more LNG tankers; they all take time to come on line. This side of the issue has been extensively covered at TOD (here, here, here or here).
We need a gaseous inflammable substance to use in our power plants and to send through the pipelines to our homes. That can be obtained by Coal gasification - what was formerly known as Town Gas. But this option might stump into constraints in the Coal industry, Town Gas might only be the translation of the infrastructure constraints from Gas transport to Coal mining (and gasification).
Still there is some electricity generation capacity from Oil, but it is unlikely that either Europe or North America will be able grow imports much more from what they are now. And of course, for home heating Oil doesn't help much.
The only mitigation option left is Conservation, will it be enough?
Luís de Sousa (fka lads)
The last time we switched gas supplies, from Town Gas to Natural Gas, we changed all of our household burner nozzles to accomodate the different gas calorific value.
I have a belief that it will be different this time. Rather than anerobically heating coal to obtain the gas (and then using the resultant coke for steel production) this time we'll use a pure oxygen entrained flow gasification process to yeild CO and H2 (Town Gas) and ash.
This will produce more gas for a ton of coal but will produce no coke.
Then, instead of changing the huge amount of gas infrastructure we've accumulated since the 60's, what we'll do is use a FT type process to produce methane (aka Natural Gas) with the Town Gas mix.
This will enable us to continue using all of our existing distribution and consumption infrastructure.
I would expect such coal gasification facilities to be based very close to coal import facilities such as the ports at Bristol etc.
I would also expect to see the complete decline of Natural Gas electricity generation. Plus many households may transition onto storage type heating using surplus Nuclear electricity generated during the night.
Of course, that assumes we have the gumption to build new nuclear facilities soon. Which I fear, we may not.
Oh, and we could do with a few million PassivHauses too.
Andy
Empirically it seems to me that changing the nozzles might be less expensive, and it's done just once. Going for methane an EROEI loss would have to be permanently accepted. The problem is that you can't change the nozzles at every place at the same time.
This is a very important observation, though I don't know any system that allows you to do that. Electric companies would have a much easier task if it weren't for the variations on demand from daytime to nighttime. If those curves on the last graph were straight lines instead, a lot of waste would be spared on the switch on/off processes.
This was exactly the problem we had the last time. People aren't allowed to modify or work on gas appliances. It has to be done by an approved technician.
In the 60's there were far fewer users of gas appliances than there are now. The changeover would be immense.
What would drive the decision would be the selling price of the gas. If it is high enough then it will be economical to build FT plants. If not then conversion might be cheaper. Remember what we're effectively doing here is comparing capital costs (for FT or conversion) with ongoing inefficiency costs. History has shown that lower capital costs will win if we can accept the higher running costs. Especially if these can easily be passed on to the final consumer.
There is also another issue with Town Gas. It is very poisonous. The CO content can easily asphyxiate someone if there is a gas leak. Indeed before Natural Gas ovens a common method of suicide was to stick your head in a gas oven and turn on the gas.
With Natural Gas all you get is a splitting headache and you'll maybe pass out, but you won't usually die.
Because of this I think there would be a central government & consumer preference for "safer" natural gas.
That said, I think there is definite scalability issue with this route.
"I would also expect to see the complete decline of Natural Gas electricity generation. Plus many households may transition onto storage type heating using surplus Nuclear electricity generated during the night"
"This is a very important observation, though I don't know any system that allows you to do that."
In the UK there are many common storage heating systems used in houses and flats. Indeed my house used to have a storage type heating system until I ripped it out and threw it in the local dump.
They operate on the priniple of heating up large heavy ceramic bricks and then allowing them to release their heat when electricity is expensive. Unfortunatly they are difficult to control and are ugly to look at.
Mine met their demise due to their age and cosmetics.
I now run direct heat electrical resistance heating. I try not to run it at peak periods.
Andy
What makes them popular of course is the price differential which is about three times higher rate for day vs night electricity usage. And then the underlying reason is that most of the generation comes baseload nuclear and coal. No natural gas in Bulgaria. Hydro is used for balancing, but the need for demand side management to smooth the peaks is also obvious.
Gas is burnt in domestic devices but squirting it through a first nozzle to produce a fast flow, sucking air through an adjacent aperture to mix with the gas by a venturi effect and the passing the mixture through a second nozzle and burning it as it emerges.
In this way you get complete combustion rather than just the hydrogen burning leaving some of the carbon as soot.
The gas air mixture has to emerge from the second nozzle at somewhat higher than the flame propagation velocity in that gas. As the gas spreads out from the nozzle it speed drops to be below the flame velocity. The flame point will stably sit at the distance away from the nozzle that the gas velocity equals the flame velocity.
If the gas emerges too slowly through the nozzle the flame will blow back through it to the first nozzle. If it is too fast the flame front will be too far away from the nozzle and be prone to being blown out by draughts.
I remember our house being changed over. It was done area by area and our house was without gas for about 6 hours while the change was made.
With good pipe insulation the efficiency of such systems can be more than 50% - higher than the efficiency of gasification + F-T conversion. In addition such systems can utilise the waste heat from thermal plants, the fuel maybe waste biomass etc.
With population continuing to concentrate in big cities, I see at least 50% of the households covered by central heating. The main obstacle is that someone will have to commit to spending the huge resources for it, but better do it now, while we are still not pressed to implement partial and ineffective solutions.
Thxs for this very informative keypost. The news is not good, that's for sure. I believe the
best use of natgas going forward is for making fertilizers, not electricity or heat, until relocalized permaculture and full recycling of all possible nutrients is accomplished. This transition to the new lifestyles cannot be accomplished overnight, but will take years to develop.I have posted before that
humans should be quite content with naturally occurring darkness if they understand that this tradeoff means that food and water is still available. This is the best way to reduce postPeak violence levels.The sheer levels of sunlit manual labor required postPeak will make most go straight to bed shortly after sundown anyhow. Recall that I believe 60-75% of the present modern civilizational labor force needs to move in this direction. Fertilizers will be key to farm and garden yields until full organic methods predominate.Vast energy savings can be accomplished virtually overnight if we have the combo of political leadership and citizen will and cooperation. That is why I continue to push for maximum Peakoil Outreach.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
http://www.prosefights.org/coal/northantelope/northantelope.htm
This led me to vernon's natural gas posts.
regards
http://www.prosefights.org/shattuck/shattuck.htm
What, other than oil and natural gas, form of energy to make fertilizer do you suggest?
This process may not be economic now but there must come a time when rising oil and gas prices make it so.
My concern is that in the future where are they going to get all of the energy [BTUs] required to blast the overburder and coal? And diesel to transport the coal?
http://www.prosefights.org/coal/northantelope/northantelope.htm#overburden
Its almost impossible to buy glass cups, bowls, etc in the UK now that doesn't have made in Bulgaria, Romania, etc stamped on it.
I'd guess the same is true of the nitrate fertiliser industry too.
So the FSU countries are still exporting the gas, just in value added forms. Which should, in theory, be good for their economies.
Andy
You seem young. You should be dating. Banging girls like Spears. But you wanna get mixed up in this. That makes you crazy.
Other "options" are demand destruction and export of NG-intensive manufacturing processes. We have seen examples of this in the US and UK already, where companies and industries have tmeporarily suspended manufacturing production (ie NG consumption) at times of high prices, or have simply shut down their factories and shifted manufacturing processes to countries with NG in high supply (plastics, fertilisers, etc)
I think we need to look at the composition of demand to understand how much more industrial NG-demand can "offshore" itself, before we get down to the core demand of power generation and space heating
Whether you think that Russian gas will be altogether absent in a couple decades, or that Putin or others will withhold it for political reasons, the simple reaction should be to limit our consumption.
Instead, we push to "liberalize" more, a move guaranteed to structurally encourage investment in gas- (or coal-)fired plants as they are easier and cheaper to finance by the private sector. Insane.
I have yet to hear a politician say we need to use less gas (or less oil).
On the movie "Oil, Some & Mirrors", it is said that today's politicians are mere business men, deciding only on and for quarterly results. That's a remarkable remark.
I'd also note that from Socialists to Christian Democrats, passing through Liberals, the politics are the same: "liberalize".
I have no faith in democratic capitalistic societies to successfully cope with decreasing gross energy supplies.
Their solution is to increase supplies by building pipelines from North Africa and Caspian via Turkey. Increasing number of LNG trains and LNG receiving terminals. It seems like these avenues will satisfy natural gas demands for the medium term barring natural disasters or geo-political crisis.
I'm still trying to understand how a gas crisis in North America will effect Canadian tar sand production.
Does anyone have numbers. Off hand I'd think that NG shortages will probably cause problems.
On a similar vien the thick high sulfur oil use quite a bit of NG for the upgrade process. Agian not sure how much but I'd have to guess its significant.
And finally NG liquids have become a fairly important product in the oil process obviously they will drop as gas production drops.
In North America I assume the response will be to convert to coal for electricity generation. I'm not sure it will be fast enough to prevent shortages though.
Needless to say high natural gas prices will probably cause serious problems for industries that remain in North America.
It sounds like Europe will be right behind North America but its my understanding that Europe does not have the large coal deposits present in North America.
As for the Tar Sands, I've read at TOD comment threads that for each barrel of syn-crude produced 0.7 barrels of oil equivalent are spent in Natural Gas. I'm yet to confirm this from a technical paper, but this is in line with prof. Charlie Hall's assessment of Tar Sands as a net energy looser.
On Coal, in spite of having considerable reserves, the US is importing the stuff, just like it's done here in Europe. Anyway Coal reserves at least in Germany and Britain are still important.
In the end I think the crisis will be felt simultaneously on both sides of the Atlantic and I see both competing for the scarce NGL infrastructure.
Hughes_D_OilSands_Boston_2006.pdf
He had this to say:
Let's take those one by one:
- waste issue - a problem with a number of known and readily available solution. What makes it a problem is the NIMBYsm that does not allow to implement them.
- time-to-build - largely a problem because of licensing and NIMBYsm. Otherwise technological plant construction time is only 3-4 years.
- risk - every technology has its risks, and we have always traded risks for benefits.
- energy transmission to sites ??? This problem for nuclear is trivial compared to hydro or wind (per energy produced of course).
- NIMBYsm - speaks for itself.
So 4 from 6 reasons derive largely from NIMBYsm, and the other two are questionable. Now if we want to bet our energy future on such arguments and leave it to coal to fill the gap, then so be it. I just need to express my disagreement every time I am reminded to where this is pushing us.I can accept the possible need for nuclear power and I think that several styles of reactors are safe and feasible.
On the other hand I'd only support reactors as needed if there was a very strong wind/solar program and location of heavy industry near hydro or other plentiful sources. If at that point we still needed some reactors fine.
I'd much rather see a nuclear reactor than a coal fired plant.
But its insane to use a nuclear reactor to make oil. The concept is simply crazy.
I don't remember anyone suggesting that. Renewables and nuclear will start replacing oil indirectly - by electrifying the transportation, displcing natural gas (which can be used for transportation too) etc. There are many options we know of today, and many more will be invented in the course of action.
One thing I'm sure of - if we start a nuclear program today in 10 years we will be more than happy that we did. I'm not holding my breath though.
Its being suggested by many. The oil sands and shale oil require process heat and hydrogen to mine and upgrade the sludge to something you can put in a gas tank, and its sure more reliable than natural gas.