Environmentally benign technologies can meet the president's hydrogen plan.
The prophets of doom have again been disappointed by worldwide estimates of proved reserves of oil and gas. We are definitely not running out of oil and gas. In fact, total world oil reserves increased from 1,032 billion barrels (Bbbl) to 1,213 Bbbl, and natural gas reserves from 5,451 trillion cubic feet (Tcf) to 5,501 Tcf over the past year. Even in the United States, proved oil reserves increased from 22.045 to 22.446 Bbbl and proved natural gas reserves from 177.427 to 183.460 Tcf thanks in part to oil reserve additions that exceeded production by 21 percent in 2001, and gas reserve additions that exceeded production by 31 percent in 2001 [see bibliographic references 1 and 2].
Another positive development is that OPEC's share of worldwide crude oil production dropped from 40.5 percent in 2001 to 38.2 percent in 2002 [see bibliographic reference 1]. The latest Energy Information Administration (EIA) report for 2001 , documents year-end proved reserves of 22.446 Bbbl of crude oil, 183.460 Tcf of dry natural gas (after removal of the heavier hydrocarbons beginning with propane), and 7.993 Bbbl of natural gas liquids (i.e., condensate, natural gasoline, and liquefied petroleum gases) .
Furthermore, the latest data suggest that U.S. energy independence will not be a credible concept for a long time, even though President Bush has outlined some strategies to gain this independence, such as conversion of surface transport to highly efficient electromotive drive powered by Proton Exchange Membrane fuel cells that operate at about 180°F. The ideal interim source of this hydrogen, both economically and environmentally, is on-board compressed storage from hydrogen filling stations that use fully commercialized, packaged natural gas steam reforming technology. Of all the currently available options for hydrogen refueling, this has the lowest well-to-wheels emissions of carbon dioxide (CO2). Moreover, the emissions of conventional pollutants-sulfur and nitrogen oxides, carbon moNOXide, reactive (non-methane) hydrocarbons, heavy toxic metals, and particulate matter-from this source of hydrogen are negligible .
In regard to energy independence, the United States can deal with this issue in spite of its need for oil imports from the politically unstable Middle East. Since the 1973-74 oil embargo, OPEC has increasingly become a positive force in maintaining a balance between world oil demand and supply and price stability, such as its current $22-$28/bbl price band policy (equivalent to $24-$30/bbl for U.S. benchmark West Texas Intermediate crude). The military action by the United States and Great Britain to dismantle the regime headed by Saddam Hussein and his sons should stabilize Persian Gulf oil production.
In any event, the latest oil and gas reserve data  belie the doomsayers and offer hope that the global abundance of the least carbon-intensive fossil fuel, natural gas (atomic hydrogen to carbon or H/C ratio of 4:1) and oil (H/C ratio of 2:1), will give us enough lead time to arrive at a least-cost strategy to transform the global energy system to sustainable and carbon-emission-free technologies . The United States has so far chosen not to tap astoundingly large reserves of oil and, especially, natural gas for environmental reasons, even though a comprehensive analysis of total environmental impacts might show that full exploitation of relatively low carbon-intensity and low pollutant emission domestic hydrocarbon resources may be the most rational strategy.
Problems With Gas Supply and Prices
Natural gas is the ideal transition fuel to a sustainable and carbon-emission-free energy system because it has the lowest carbon intensity and is the least-polluting of all fossil fuels . Therefore, the recent increases in natural gas prices caused by projections of a 2 percent to 3 percent production decline in 2003 creates a problem similar to the meteoric and destabilizing price rise during the 2000-01 California energy crisis when the Henry Hub cash market (the basis of New York Mercantile Exchange Natural Gas Futures) peaked at $9.13/million Btu in January 2001 .
Another indication of the likely decline in natural gas consumption in 2003, especially the very price-sensitive industrial and power generation markets, is that the 12-month NYMEX Strip on April 28, 2003, was still $5.577/million Btu . However, the history of U.S. natural gas reserve replacement shows that in eight of the years from 1990 through 2001, total additions to reserves exceeded production (including the 31 percent in 2001).
Several other factors have destabilized the U.S. natural gas market in recent months as Henry Hub cash market prices rose from $2.29/million Btu in January 2002 to $5.30 in January 2003, $7.35 in February 2003, and $8.06 in March 2003 after peaking at $13.31 on March 3 (prices moderated to the $5-$5.50/million Btu level in April). An additional problem has been the seesaw in underground natural gas storage statistics. There is a capacity for about 8.2 Tcf of natural gas in underground reservoirs for use in the winter months, when daily average demand of as much as 85 billion cubic feet a day (Bcf/d) greatly exceeds U.S. domestic production capacity of about 52 to 53 Bcf, plus net Canadian and liquefied natural gas imports, to provide an average total of about 60 Bcf/d . Of this 8.2 Tcf, roughly 4.4 Tcf is base or cushion gas needed to maintain the integrity of the geologic structures used for seasonal storage (such as depleted oil and gas fields and saline aquifers), and up to 3.8 Tcf working gas that can be withdrawn during the winter months and replenished during the nominal injection period from April 1 to Oct. 31 .
In practice, the storage is never quite full (about 3.4 Tcf generally is considered the upper limit), and price stability is enhanced if working gas levels are above 3 Tcf, preferably 3.1-3.3 Tcf at the beginning of the withdrawal season . During 2002, a surplus over equivalent year-ago levels changed into a huge deficit in 2003, reaching the 1 Tcf level in March. A large deficit relative to 5-year average levels also persisted, and storage dropped to a record low by March 31, since the EIA started reporting storage data in 1994 . In combination with the anticipation of a domestic production decline in 2003, this has created a bull-market mentality-an anticipation of long-term gas price levels substantially above the $1.80-$2.80/million Btu Henry Hub range from 1995-1999 . The war with Iraq also temporarily destabilized oil prices (although OPEC did a remarkable job in minimizing these fluctuations), which further destabilized gas prices because of the impact of fuel switching.
One unfortunate consequence of this instability in natural gas supplies and prices since the 2000-01 California energy crisis has been the cancellation or deferral of many gas-fired power generation projects using primarily the 60 percent (lower heating value) efficiency combined-cycle technology, in which about two-thrids of the power is generated in one or more combustion turbines, and the other third in steam turbines driven by steam generated with the waste heat from the combustion turbine exhaust. The EIA anticipated that total U.S. combined-cycle generating capacity would increase from 46.2 MW in 2000 to 301.4 MW in 2025 . This would create environmental benefits because carbon dioxide (CO2) emissions from gas-fired combined-cycle systems are only about one-third those of inefficient coal-fired steam-electric plants, which still provide about 55 percent of U.S. power supply . In addition, gas-fired generation also emits negligible or readily controllable conventional pollutants that are under regulation by the Environmental Protection Agency.
Obstacles to Full Exploitation of Gas and Oil Reserves
One of the obstacles facing U.S. producers are the obstacles they face in gaining access to oil- and gas-rich federal lands in the Rocky Mountain region. A joint study by the Departments of Interior, Energy, and Agriculture of the five basins straddling the Rocky Mountains region revealed a truly astounding estimate of their potential . One hundred and thirty-eight Tcf of natural gas and nearly 3.9 Bbbl of crude oil reserves can be technically recovered from 59 million acres of federal land. This rises to 226 Tcf of gas and 6.3 Bbbl of crude oil once another 44 million acres of non-federal lands in the five basins are included. These reserves estimates are based on a study by the U.S. Geological Survey, which identified an equally astounding 183 Tcf-roughly the current value of proved natural gas reserves in the United States-of recoverable natural gas in the same areas . Thus, constraints on domestic gas and oil exploration and development are not in the public interest. Although some 41 percent of the federal lands in the Rockies are completely closed to drilling, the vast majority of the hydrocarbon reserves are in areas where producers have some access . In fact, an estimated 57 percent of oil and 83 percent of gas reserves are available under standing leasing terms, and this rises to 85 percent of oil and 88 percent of natural gas reserves if leases with various manageable degrees of restrictions are included. But the focus on leasing in this study did not take account the numerous obstacles producers routinely confront in the permitting stage. In any event, this study illustrates that we need to reach an understanding among the various interest groups that develops a rationale for greater U.S. self-sufficiency in hydrocarbon fuels and, especially, environment-friendly natural gas.
The Need to Limit CO2 Emissions
The largest source of dissipative material flowing into the biosphere from human activities is carbon in the form of CO2, largely from combustion and processing of fossil fuels (natural gas, petroleum liquids, and coal). This is a problem because CO2 is the major anthropogenic greenhouse gas held responsible for much of the overall rise in average global surface temperatures of about 0.7°C since 1860 [3,9,10], although the widely fluctuating actual temperature record from 1860-2000 in no way indicates a direct cause-and-effect relationship between atmospheric CO2 concentrations and surface temperatures.
Tables 1, 2, and 3 summarize the proved reserves and the upper bounds of technically recoverable resources of (now) conventional fossil fuels and their potential carbon emissions in the form of CO2. It can be seen that even the upper bound of 20,000 Tcf technically recoverable natural gas resources (about three and a half times proved reserves) contains only 290 billion (109) metric tons (gigatonnes) of carbon. The upper bound of 3,600 Bbbl of technically recoverable petroleum liquids (crude oil and condensates, Canadian oil sands, and natural gas liquids), or about two and a half times proved reserves, contains 410 gigatonnes of carbon. Thus, the total carbon content of the potentially recoverable hydrocarbon fuels is only 700 gigatonnes. This compares with 4,450 gigatonnes of carbon in the upper bound of technically recoverable resources of coal and lignite (about six times the proved reserves). Thus, the total potential carbon emissions from conventional fossil fuels range from about 1,000 gigatonnes for the proved reserves to more than 5,000 gigatonnes for the technically recoverable resources.
This data has major implications for energy and environmental policy. This policy should strive to limit cumulative anthropogenic carbon emissions in the form of CO2 from 1991 to 2100 (largely from fossil fuel combustion) to 1,000 gigatonnes and, preferably, only 650 gigatonnes to stabilize atmospheric CO2 concentrations at 550 parts per million by volume (ppmv) and 450 ppmv, respectively [9,10]. Assuming median climate sensitivities to increases in CO2 concentrations, cumulative anthropogenic carbon emissions of 1,000 gigatonnes from 1991 to 2100 would limit further average global surface temperature increases to 2 to 2.5°C (3.6 to 4.5°F), and to less than 2°C (3.6°F) if these emissions are capped at 650 gigatonnes [3,9,10].
It is fortunate that the still growing abundance of economically recoverable natural gas and petroleum liquids resources gives us at least 20 years of lead time to decide how to stay most cost-effectively within a cumulative anthropogenic carbon emission limit of 1,000 billion metric tons between 1991 and 2100. The obvious first priority of U.S. energy policy must be to bring natural gas prices down by increasing supply, so that this least carbon-intensive and least-polluting fossil fuel, which is the ideal energy source for highly efficient central, modular, and distributed power generation, is utilized to the fullest extent in reducing current reliance on inefficient and inherently high conventional pollutant and CO2 emission coal-fired, steam-electric plants.
The basic problem in achieving this is, of course, that these largely or fully depreciated coal plants and the low price of coal (about $1.20/million Btu) make them a very low-cost source of power. The high efficiency of natural gas-fired, combined-cycle power plants cannot overcome this advantage at a total investment cost of roughly $500/kilowatt and current natural gas prices in the $5 million to $6 million Btu range. However, further increases in utilization efficiency are expected, both for natural gas and for petroleum products used as transportation fuels. Natural gas prices are also expected to drop to competitive levels as soon as the traditional delayed producer response to high prices increases exploration and production investments.
Unfortunately, even under the best of circumstances, it is already apparent that reliance on natural gas and petroleum liquids will not provide the several decades of lead-time necessary to convert the global energy system to high-tech renewable energy sources (such as wind, solar-thermal, and photovoltaic power) to provide a sustainable and carbon-emission-free source of electricity for all stationary energy requirements, and electrolytic hydrogen produced with this power as the dominant transportation fuel. This is why it is so important to further develop and commercialize coal-fired power generation in which the coal is first converted to hydrogen and CO2, the CO2 separated and sequestered, and the hydrogen used for highly efficient combined-cycle power generation and, possibly, as a source of transportation fuel . Such a shift in central power generation to a modification of the already fully developed Integrated Coal Gasification Combined-Cycle process could give us as much as a century of lead-time (thanks to large global coal and lignite reserves) before we must rely on emission-free and sustainable energy sources.
An additional consideration is what role nuclear breeder reactors of the inherently safe and proliferation-proof Integral Fast Reactor design could play in providing a very long-term source of emission-free power and of electrolytic hydrogen. It certainly seems prudent for the United States to resume nuclear breeder reactor research, development, and demonstration in concert with other industrial countries to assess this alternative or supplemental option for extending the lead-time to complete conversion of the global energy system to truly sustainable technologies.
- Marilyn Radler, "Worldwide reserves increase as production holds steady," , Vol. 100, No. 51, pp. 113-115 (Dec. 23, 2002).
- , 2001 Annual Report, Energy Information Administration, Office of Oil and Gas, U.S. Department of Energy, November 2002, Document No. DOE/EIA-0216(2001) (Not yet available to the general public.)
- Henry R. Linden, "Bridging the Carbon Gap: Fossil Fuel Use in the 21st Century," , Vol. 140, No. 21, pp. 32-41 (Nov. 15, 2002).
- , Vol. 19, No. 17 (April 28, 2003).
- "Monthly Energy Review, December 2002," Energy Information Administration, Office of Energy Markets and End Use, U.S. Department of Energy, Document No. DOE/EIA-0035(2002/12).
- Henry R. Linden, "How to Rationalize the Natural Gas Spot Market," Natural Gas, Vol. 14, No.1, pp. 14-18 (August 1997).
- "Annual Energy Outlook 2003 With Projections to 2025," Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy, January 2003, Document No. DOE/EIA-0383(2003).
- Andrew Ware, "Producers' Concerns Unheeded in New Rockies Reserve Study," , Vol. 19, No. 3, pp. 3-4 (January 20, 2003).
- J.T. Houghton, et al., eds. , 1996, Cambridge University Press.
- J.T. Houghton, et al., eds. , 2001, Cambridge University Press, Cambridge, U.K. and New York.
- "Evaluation of Innovative Fossil Fuel Power Plants with CO2 Removal," Electric Power Research Institute, Palo Alto, California, and U.S. Department of Energy, Office of Fossil Energy, Germantown, MD and NETL, Pittsburgh, Pa., Interim Report, Document No. 1000316, December 2000.
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