04 Jan, 2018
Availability and usage of traditional forms of electricity can be a moving target.
Fossil fuels (crude, natural gas and coal) make up the majority of the energy that the U.S. produces, according to data from the Department of Energy (DOE). The top five energy-producing states overall (Texas, Wyoming, Pennsylvania, Louisiana and West Virginia) are also the top five fossil energy-producing states. The combined fossil energy produced by these five states accounts for more than 42 percent of the total energy produced in the U.S. each year.
By comparison, the bottom five energy-producing states (Rhode Island, Delaware, Hawaii, Nevada and New Hampshire) are responsible for producing only 0.2 percent of the nation’s energy, while they consume about two percent of the nation’s energy – a 10-fold difference in volume.
On the rise in this country is natural gas, with new discoveries nearly every month about sources that can be retrieved from the ground with new extraction methods. Right now, the United States is challenging Australia and Qatar as the world’s largest exporter of natural gas, according to a new report by the International Energy Agency (IEA).
Global gas demand is expected to grow by 1.6 percent a year for the next five years, with consumption on track to hit almost 4,000 billion cubic meters by 2022. Demand from China is projected to account for almost 40 percent of that growth.
The United States – the world’s largest gas consumer and producer – will account for 40 percent of the world’s extra gas production to 2022, thanks to the remarkable growth in its domestic shale industry, according to the IEA.
By 2022, U.S. production will be more than a fifth of global gas output. Production from the Marcellus shale formation – one of the world’s largest shale fields extending along the eastern edge of the U.S. through New York, Pennsylvania, West Virginia, Ohio and Kentucky – will increase by 45 percent between 2016 and 2022.
Coal remains the go-to energy source
While most of the news in traditional energy is about natural gas and liquefied natural gas, coal is still the preferred fossil fuel source, with more attention to different ways of using that resource.
In 2016, the electric power sector accounted for an estimated 92 percent of total U.S. coal consumption.
According to data from the U.S. Energy Information Administration (EIA), coal represented 34 percent of the total U.S. utility scale electricity generation to date in 2017, with production expected to increase eight percent in 2017 and two percent in 2018. Coal exports were 55 percent higher in the first six months of 2017 compared to the same period in 2016.
Because nearly all coal produced in the United States is used to generate electricity, coal production and coal-fired electricity generation are closely connected. In 2017 and 2018, as natural gas prices are expected to increase, coal is expected to regain some share of the electricity generation mix, and coal production is expected to increase slightly.
But there are signs that coal may not retain its position as the most-used energy source.
The past decline in coal production has not been uniform across the three major coal-producing regions in the United States. Production declines in the western region, which includes the Powder River Basin that spans parts of Wyoming and Montana, have been similar to the overall U.S. production, falling 36 percent since 2008.
Production declines in the Appalachian region have been more pronounced, falling by 53 percent since 2008.
Coal production is expected to increase most in the western region in 2018. Forecast production levels in the Appalachian and interior regions are relatively flat.
Technology to help development
The DOE’s office of Fossil Energy (FE) has selected nine projects to be managed by the National Energy Technology Laboratory to support the development of advanced technologies that will help the early adoption of small-scale modular coal-gasification technologies that can be used for power and other applications.
One of those gasification technology projects is being developed now at the Research Triangle Institute in the Research Triangle Park, North Carolina, funded with $2 million from the DOE.
A second pilot testing project by the same group will be funded by $3 million from the DOE. Other DOE-funded development is underway at the University of Kentucky Research Foundation in Lexington; North Carolina State University in Raleigh; the University of South Carolina in Columbia, and the University of Alaska in Fairbanks.
Oil still in the mix
With much of the easy-to-produce oil already recovered from U.S. oil fields, producers have attempted several enhanced oil recovery (EOR) techniques that offer prospects for ultimately producing up to 60 percent more crude oil.
According to the National Energy Technology Lab, three major categories of EOR have been found to be commercially successful to varying degrees:
- Thermal recovery, which involves the introduction of heat such as the injection of steam to lower, or thin, the viscosity of the heavy viscous oil, and improve its ability to flow through the reservoir. Thermal techniques account for over 40 percent of U.S. EOR production, primarily in California.
- Gas injection, which uses gases such as natural gas, nitrogen or carbon dioxide (CO2) that expand in a reservoir to push additional oil to a production wellbore, or other gases that dissolve in the oil to lower its viscosity and improves its flow rate. Gas injection accounts for nearly 60 percent of EOR production in the United States.
- Chemical injection, which can involve the use of long-chained molecules called polymers to increase the effectiveness of waterfloods, or the use of detergent-like surfactants to help lower the surface tension that often prevents oil droplets from moving through a reservoir. Chemical techniques account for about one percent of U.S. EOR production.
Each of these techniques has been hampered by its relatively high cost and, in some cases, by the unpredictability of its effectiveness.
The EOR technique that is attracting the most new market interest is CO2-EOR. First tried in 1972 in Scurry County, Texas, CO2 injection has been used successfully throughout the Permian Basin of West Texas and eastern New Mexico, and is now being pursued to a limited extent in Kansas, Mississippi, Wyoming, Oklahoma, Colorado, Utah, Montana, Alaska and Pennsylvania.
The DOE’s research and development program is moving into new areas, researching novel techniques that could significantly improve the economic performance and expand the applicability of CO2 injection to a broader group of reservoirs, and expanding the technique out of the Permian Basin of West Texas and Eastern New Mexico into basins much closer to the major sources of man-made CO2.
Next generation CO2-EOR has the potential to produce over 60 billion barrels of oil, using new techniques including injection of much larger volumes of CO2, innovative flood design to deliver CO2 to un-swept areas of a reservoir, and improved mobility control of the injected CO2.
According to a report from the Organization for Economic Cooperation and Development (OECD), “Energy: The Next Fifty Years,” not much will change on the energy front in the coming years. “There is a fair degree of consensus on the energy outlook for the next twenty years,” the report states in the introduction. “Capital turnover is low, and in power generation, housing and to a lesser extent transportation, most of the capital stock of the coming years will use current (or past) technologies. Moreover, the dynamics of energy demand have been quite stable since 1982, and are generally expected to continue along their long-term trajectory.”
Up to around 2020, according to the report, energy use will continue to be dominated by fossil fuels. Oil consumption will be driven mainly by transportation, and gas use will grow rapidly as the preferred fuel for heating, process use and power generation. Coal use is expected to remain heavy in North America as well as in China and other developing countries.
After that, from 2020 to 2050, energy systems that will emerge will be shaped by a multitude of opportunities and constraints. For example, many end-use devices, such as cars, industrial processes, heating systems, parts of the building stock and infrastructures will begin to be replaced by new technologies, and many existing power plants will be at the end of their lifetime.
The OECD report also states that, by 2050, all energy technologies and devices will have been replaced at least once, offering a wealth of possibilities to set the evolution of both the economy and society on a much more energy efficient path. Oil production will probably have started to decrease, followed closely by gas.
But when that decline will begin is anybody’s guess. An article in Scientific American says gas will be the primary source of energy by 2034, citing a projection from engineering firm Black and Veatch. The projection from the firm finds that nearly half of U.S. electricity will come from natural gas combustion turbines or combined-cycle units, whereas conventional coal-fired generation will shrink to just 23 percent (although few of the power plants will be shut down). Nuclear will grow to provide nearly 150,000 megawatts of electricity as renewables jump from just 54,000 megawatts today (excluding hydroelectric dams) to more than 165,000 megawatts in 2034.
What this means to economic developers is that the availability and usage of traditional forms of electricity can be a moving target, with some predicting nothing will really change to others expecting a sea-change of sorts as oil resources run low and coal production begins to ebb.
What looks certain is that natural gas will continue to grow as energy over the coming years, and, along with other traditional energy sources, stay ahead of other sustainable offerings that are still being developed – for at least the foreseeable future.
But stand-by: Given the entrepreneurial interests of energy companies heeding the demands of customers for cleaner and more available energy – or tracking the growth of the trend of consumers now “going off the grid” and generating their own energy from home-based renewable sources – it would be wise to keep an eye on the technological advances on the horizon and those being proposed in the labs across the country, and take advantage of the economically viable solutions to energy use still to come.