Utility executives face volatile energy markets, skyrocketing fuel prices, and changing federal energy policies. How are utilities benefiting from the turnaround in energy trading?
Reversing the Gas Crisis: The Methane Hydrate Solution
Commercialization of methane recovery from coastal deposits of methane hydrates could head off an impending gas shortage.
to plot the record up to the present and then extend it in a sigmoidal (probabilistic), symmetrical curve whose enclosed area represents the total resource base, including cumulative production and proved reserves. Aside from the fact that the past U.S. natural production curve is not sigmoidal, the midpoint of U.S. gas production for Table 1 would be about 1,151 Tcf. Subtracting 989 Tcf of cumulative production gives only another 162 Tcf of remaining cumulative production, until it might peak, or at least plateau, using the widely questioned Hubbert methodology. At the latest production levels of 19.70 Tcf in 2001 to 23.99 Tcf in 2025 projected by EIA (), this would give only a few more years of increases in annual domestic supply. Clearly, this possibility is one of the highest priorities for investigation of the role the enormous U.S. resources of methane hydrates could play to avert such a crisis for U.S. residential, commercial, and industrial gas consumers.
The Threat From Excessive Demand
An additional 11.7 Tcf/year would be required if the existing 311 GW of largely old, depreciated, inefficient coal-fired steam-electric plants-which provide more than one-half of U.S. power demand operating at an average operating factor of about 70 percent-were replaced by gas-fired, combined-cycle units operating at 60 percent (lower heating-value basis) efficiency. However, CO 2 emissions would be reduced by two-thirds and conventional pollutant emissions (except for nitrogen oxides, which are easily controlled) essentially eliminated. In addition, between 2001 and 2025, another 170 GW of gas-fired, combined-cycle capacity at an investment cost of only about $500/kW operating at an average load factor of 50 percent are projected () . This would require another 4.6 Tcf/year, or a total of about 16 Tcf. But the Energy Information Administration in its latest report forecasts an increase only from 23.4 Tcf to 31.3 Tcf in U.S. gas supply between 2001 and 2025 (including net imports) and an increase of a mere 3.0 Tcf/yr (from 5.4 to 8.4 Tcf/yr) for power generation (). Thus, if these 311 GW of coal-fired, steam-electric capacity were replaced by 2025, largely because they are responsible for 1/3 of U.S. CO 2 emissions, and all of the additional 170 GW of additional gas-fired, combined-cycle capacity really were built, the net increase in gas requirements for power generation between 2001 and 2025 would be about 13 Tcf/yr (11.7 + 4.6-3.0). This would lead to total 2025 gas requirements of about 43 Tcf/year, which clearly is not attainable and would severely limit the ability of the majority of gas consumers to obtain adequate supplies of gas at affordable prices. This conflict between the gas and electric industry to meet with natural gas the growing constraint on pollutant and greenhouse gas emissions is a further incentive to commercialize recovery of methane from the abundant U.S. methane hydrate resources.
Increasing Reliance on Clean-Coal Technologies
The increase in natural gas prices and the impending shortages of natural gas already have sharply reduced the projections of increases in gas-fired, combined-cycle capacity. In the equivalent of Table 3 in EIA's , an increase of 255 GW