FOSSIL FUELS IN THE TRANSITION

Transcription

1 FOSSIL FUELS IN THE TRANSITION Gene Whitney, Ph.D. Energy Section Research Manager October 12, 2009 Presented to the Board on Earth Sciences and Resources National Research Council of the National Academies Thanks to Dr. Paul Parfomak, Larry Parker, and Brent Yacobucci on whose work some of this talk is based.

2 U.S. Fossil Fuel Consumption Current situation: How much energy do we need, how do we use it, and how much do we have? Possible energy pathways Implications of current decisions for the future of fossil fuels CRS-2

3 U.S. Total Energy and Renewable Energy Consumption by Source 2007 Nuclear electric 84% of U.S. energy comes from fossil fuels EIA, Annual Energy Review 2007 CRS-3

4 U.S. Fossil Fuel Consumption How much do we use? CRS-4

5 Energy Flow, 2008 (Quadrillion Btu) Coal Natural Gas Petroleum Nuclear electric 8.46 Renewable energy 7.30

6 Primary Energy Consumption by Source and Sector, 2008 (Quadrillion Btu) CRS-6

12 How much do we have? Title Conventional Oil and Gas Deposits Shale Gas Oil Sands Methane Hydrates Oil Shale Source: Historical production and proved reserves figures are from Energy Information Administration, undiscovered technically recoverable resource value is from U.S. Geological Survey, and discovered and undiscovered sub-economic resources uses the lower estimate for oil shale resources from RAND as a minimum. Notes: Discovered and undiscovered sub-economic resources would include poor quality or small deposits of conventional oil, some deposits of oil sands, and various other forms of oil deposits such as oil shale.

13 U.S. Proved Reserves of Oil = 21.3 billion barrels U.S. Proved Reserves of Natural Gas = trillion cubic feet EIA, December, 2007, CRS-13

14 Technically Recoverable Crude Oil, Natural Gas, and Natural Gas Liquids Resource Estimates, 2007 U.S. Proved Reserves of Oil = 21.3 billion barrels U.S. Proved Reserves of Natural Gas = trillion cubic feet EIA Annual Energy Review 2008 CRS-14

15 Total U.S. Endowment of Reserves and Technically Recoverable Oil and Natural Gas (sum of EIA reserves, EIA reserve growth, USGS, and MMS UTRR values) Oil (Bbo) Natural Gas (Tcf) Total U.S. TRR 208 a 1533 Proved reserves Total U.S. endowment * * Potential Gas Committee estimate of future supply of natural gas (2009 ) = 2074 tcf. Including 616 tcf of potential natural gas resources occurring as shale gas Note: Bbo = billion barrels of oil, Tcf = trillion cubic feet a. Represents the total of technically recoverable oil plus natural gas liquids. CRS-15

16 U.S. fossil fuel reserves and resources expressed as BOE BOE = Barrels of oil equivalent Fossil Fuel Native units BOE Technically 229 billion barrels 229 billion BOE recoverable oil a Technically 1771 trillion cubic feet b 313 billion BOE recoverable natural gas Recoverable reserve base of coal 262 billion short tons billion BOE TOTAL U.S. fossil fuel 1446 billion BOE endowment a. Technically recoverable oil and natural gas includes proved reserves plus undiscovered technically recoverable resources. b tcf per BOE per EIA 2007 CRS-16

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18 CRS-18

19 natural gas ^ CRS-19 Source: Chesapeake Energy 2009 Investor Presentation:

20 Annual U.S. Coal Production EIA: CRS-20

21 Pause to calibrate: How title much is 1.2 billion tons of coal? CRS-21

22 Pause to calibrate: How much is 1.2 billion tons of coal? Coal hopper car holds 100 tons of coal. Coal unit train has 100 cars (approximately), so a train carries 10,000 tons of coal. 1.2 billion tons of coal = 120,000 unit trains per year = 329 unit trains per day, = 13.7 unit trains per hour. CRS-22

23 title CRS-23

24 If we continue on the current path.

25 Examining alternative energy paths Energy efficiency Renewable energy Nuclear power Advanced coal power Carbon capture and sequestration Plug-in hybrids & electric vehicles Distributed energy resources

26 A Few Assertions U.S. and the world need to reduce CO 2 emissions while population and economies continue to grow. Human beings respond to price signals. Transition to low-carbon economy is not primarily a government project (Manhattan, Apollo) private sector must drive it. Technology development, economics, and policy may interact in unexpected ways Energy solutions must ultimately be global CRS-26

27 Goal: Reduce U.S. CO 2 emissions to 1990 levels by CRS-27

28 In general, for proposed solutions, it is critical to examine: Potential opportunities and limitations of specific technological measures which may be needed to meet CO 2 abatement goals. Key infrastructural, environmental, regulatory, or operational uncertainties which might affect how much of that potential could practically be achieved. Assess the time frame over which such measures could be expected to work, and how these measures may fit together. CRS-28

29 U.S. Energy Options and Future Energy Mix: Energy Efficiency and Conservation Electricity-Efficiency Potential not being realized: 5-7% vs. 30% deemed possible. Impacts from Electricity-Efficiency Initiatives not as effective as projected measures not adopted. Point of action is often at the light socket level. Uncertainty about the Efficiency Opportunity because of historical underachievement Will codes and laws improve this?

30 U.S. Energy Options and Future Energy Mix: Renewable Energy Technologies Solar Expensive + transmission requirements Wind Power Today s technology could meet 20% of electric demand Transmission Requirements who pays? 12,000 20,000 miles of new transmission needed Transmission Grid Operation Uncertainty Biomass Power Generation Biomass Fuel Supply Food competition Carbon offsets vs. biomass CRS-30

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32 Estimated Annualized Cost of Power Without Carbon Controls Technology Non Fuel Total Total O&M Operating Capital Annualized Cost Fuel Cost Costs Return $/Mwh Coal: Pulverized $5.57 $11.13 $17.31 $45.79 $63.10 Coal: IGCC $5.46 $10.41 $15.97 $67.02 $82.99 NG: Combined Cycle $2.57 $30.57 $33.27 $28.50 $61.77 Nuclear $6.13 $5.29 $8.23 $74.99 $83.22 Wind $6.67 $0.00 $6.67 $74.07 $80.74 Geothermal $13.69 $0.00 $13.69 $45.54 $59.23 Solar: Thermal $13.71 $0.00 $13.71 $86.61 $ Solar: Photovoltaic $4.17 $0.00 $4.17 $ $ Kaplan, 2008, Power Plants: Characteristics and Costs, CRS Report RL34746 CRS-32

33 Wind Power Resources in the United States Most wind potential lies far from load centers. Source: National Renewable Energy Laboratory (2008).

34 Pause to calibrate: Replacing coal with wind: 2-MW Wind Turbine

35 U.S. Electrical Generating Capacity, by fuel (megawatts, 2007) Energy Source Number of Generators Generator Nameplate Capacity Net Summer Capacity Net Winter Capacity Coal Petroleum Natural Gas Other Gases Nuclear Hydroelectric Conventional Wind Solar Thermal and Photovoltaic Wood and Wood Derived Fuels Geothermal Other Biomass Pumped Storage Other Total EIA Electric Power Annual 2007, CRS-35

36 Pause to calibrate: Replacing coal with wind: Coal installed electric generating capacity = 336,040 megawatts Typical commercial wind turbine = 2 megawatts Wind turbines required to replace coal capacity = 168,020 turbines. Overbuild requirements vary due to intermittent nature of wind. Don t forget transmission infrastructure and cost.

37 U.S. Energy Options and Future Energy Mix: Carbon Capture and Sequestration Many analysts have high expectations for CCS CCS Technology Uncertainty no commercial product exists no operational CCS plant exists Even cap-and-trade requirements may not be sufficient to spur CCS deployment EOR may be transition mechanism for infrastructure development IPCC Carbon Capture and Storage, CRS-37

38 Pause to calibrate: Carbon Capture and Sequestration CRS-38 EIA Report #: DOE/EIA-0573(2007),

39 Pause to calibrate: CCS Weyburn, Sask., sequestration project: 1 million metric tonnes of CO 2 per year. Total CO 2 emissions from coal and natural gas electricity generation = billion tons per year. If we can capture and store HALF of those emissions, i.e., billion tons per year, we would need 1,139 projects the size of Weyburn. = 23 Weyburn-sized projects for each of the 50 states if coal plants were evenly distributed, but CRS-39

40 U.S. Energy Options and Future Energy Mix: Advanced Coal-fired Power Generation Efficiency improvement from 33% to 46% Uncertainty in Advanced Coal Plant Financing and Permitting CRS-40

41 Who knows the answer..? The cost of building and operating coal plants with and without CCS systems, the cost of natural gas, nuclear power and renewable sources of power, the cost of emissions offsets from outside the utility sector, and ultimately the market price of CO 2 itself are all variables that will dictate the decisions of future power plant developers. These variables are all highly uncertain from today s perspective and may create a set of economic drivers dramatically different from those anticipated by policymakers. Ken Berlin and Robert M. Sussman, Center for American Progress (May 2007) CRS-41

42 U.S. Energy Options and Future Energy Mix: Nuclear Energy Cost Safety Nuclear Waste Disposal Nuclear Proliferation constraints 104 reactors at 65 sites in 31 states generating 20% of U.S. electricity Existing infrastructure nearing obsolescence Nuclear Power Construction Uncertainty Time and capital required are problematic Proposed construction schedules improbable NIMBY CRS-42

43 U.S. Energy Options and Future Energy Mix: Electrifying the U.S. transportation system Electric passenger cars The fundamental reasons why the electric car has not attained the popularity it deserves are (1) The failure of the manufacturers to properly educate the general public regarding the utility of the electric; (2) The failure of [power companies] to make it easy to own and operate the electric by an adequate distribution of charging and boosting stations. The early electrics of limited speed, range and utility produced popular impressions which still exist. CRS-43

44 U.S. Energy Options and Future Energy Mix: Electrifying the U.S. transportation system Electric passenger cars The fundamental reasons why the electric car has not attained the popularity it deserves are (1) The failure of the manufacturers to properly educate the general public regarding the utility of the electric; (2) The failure of [power companies] to make it easy to own and operate the electric by an adequate distribution of charging and boosting stations. The early electrics of limited speed, range and utility produced popular impressions which still exist. Electrical World Journal, 1916 (quoted by Sergey Brin in NYT ) CRS-44

45 U.S. Energy Options and Future Energy Mix U.S. Energy Options and Future Energy Mix: Electrifying the U.S. transportation system Affordability - Volume Need 50% of new car sales by 2025 Emissions of engines to support batteries Capacity of electrical generating and transmission system Infrastructure requirements for charging or battery exchange.in addition to onboard fuel CRS-45

46 U.S. Energy Options and Future Energy Mix CRS-46

47 U.S. Energy Options and Future Energy Mix U.S. Energy Options and Future Energy Mix: Distributed Energy Resources For example, rooftop photovoltaics, natural gas-fired microturbines, wind turbines, CHP, and fuel cells to supplement or enhance grid power. Predictable energy costs, power reliability, and power quality Higher capital costs per kw of capacity than centralized power Investment required up front (compare to grid connection) CRS-47

48 U.S. Energy Future: A few key questions: Energy efficiency Can the United States overcome socioeconomic barriers o achieve four times more potential savings than ever before? Renewable energy Will there be enough transmission for wind power? Is here enough land to grow the needed biomass? Nuclear power Could the United States build new plants fast enough to atter? Advanced coal power Will banks fund them and regulators approve them? Carbon capture and sequestration Will the technology be commercially eployable in 10 years, 25 years, or never? Plug-in hybrid electric vehicles How much low carbon electricity would e available to charge their batteries? Distributed energy resources Would carbon costs change distributed nergy economics enough to spur deployment? CRS-48

49 Making Policy on a Moving Landscape Congress and other policy makers must: Consider the consequences of inaction or failure Weigh the possible outcomes for carbon control Adjust to underperformance of individual CO 2 measures Anticipate possible failure of the CO 2 mitigation portfolio Forecast the economic cost of CO 2 mitigation and who bears that cost Balance the desirable with the doable CRS-49

50 H.R (Waxman-Markey) 1428 pages Energy RES, CCS, clean transportation, smart grid, nuclear, energy efficiency, green jobs Climate Change Cap-and-trade, agriculture, adaptation, exporting clean technology CRS-50

51 Simplified Emission Allowance Distribution 2016 H.R (Waxman-Markey) CRS-51

52 Simplified Emission Allowance Distribution 2030 H.R (Waxman-Markey) (Parker and Yacobucci, 2009) CRS-52

53 Impacts of Waxman-Markey Comparison of Seven Analyses of H.R Environmental Protection Agency (ADAGE, IGEM, IPM) Energy Information Administration National Black Chamber of Commerce Heritage Foundation Congressional Budget Office American Council for Capital Formation/National Association of Manufacturers Massachusetts Institute of Technology H.R (Waxman-Markey)

54 otal Estimated U.S. Greenhouse Gas Emissions Under H.R (Parker and Yacobucci, 2009, CRS Report R40809) HR 2454 Reference CRS-54

55 Fossil Energy Consumption Impacts from H.R (Parker and Yacobucci, 2009, CRS Report R40809)

56 Senate Energy and Climate Change Bills S The American Clean Energy Leadership Act of 2009 (532 pages) RES, national transmission grid, cyber grid protection, offshore O&G leasing, energy innovation, market transparency S The Clean Energy Jobs and American Power Act (Kerry-Boxer) (821 pages) RES, CCS, cap-and-trade, water efficiency, nuclear, offshore O&G leasing, energy R&D, adaptation, natural resource protection CRS-56

57 U.S. Energy Policy IMPROVE ENERGY SECURITY EXPAND NUCLEAR POWER RESTORE ECONOMY REDUCE ENERGY COSTS REDUCE CO2 EMISSIONS REDUCE OIL IMPORTS ELECTRIFY TRANSPORTATION SYSTEM COAL RENOVATE ELECTRICAL GRID CAPTURE AND SEQUESTER CARBON R&D EXPAND RENEWABLE TAX CREDITS ENERGY EXPAND DOMESTIC MORE OFFSHORE PRODUCTION IMPROVE EFFICIENCY USE MORE NATURAL GAS MANDATE GREEN BUILDINGS PROMOTE CONSERVATION

58 Contact slide Gene Whitney, Ph.D. Energy Section Research Manager Congressional Research Service Library of Congress 101 Independence Ave., SE Washington, DC CRS-58

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