SC 205 JOHN BUSH PHIL FRIEDEL DENNIS SILVERMAN

SC 205
JOHN BUSH
PHIL FRIEDEL
DENNIS SILVERMAN
OUR ENERGY FUTURE, THE SERIES
• Goal: To explain our current and future
energy needs and provide balanced
information for the ways to meet the demand.
• Part 1, fall 2013. Scott Tinker video, Switch,
gave us a world wide tour of energy sources
with pros and cons.
• Class participants were surveyed to determine
what energy segment should follow, Part 2.
PART 2 OVERVIEW
• Today – An introduction to natural gas –
properties, sources, production, usage –
focusing mainly on the advantages over its
primary competitor, coal
• Session 2 addresses hydraulic fracturing and
controversial issues
• Session 3 introduces an alternative source of
NG, ocean floor mining
HOW ENERGY IS MEASURED
• A Quad is the largest unit of energy we use: one
quadrillion Btu. 1,000,000,000,000,000 Btu. USA
energy usage is about 97 Q/yr. Global usage is about
500 Q/yr.
• A British Thermal Unit (Btu) is enough energy to raise
the temperature of one pound (pint) of water one
degree Fahrenheit.
• Natural gas is sold in Therms or 100 cubic feet of gas.
One Therm = 100,000 Btu. USA = 27 quads per year.
• Electricity is measured in kWh. One kWh = 3400 Btu.
One Therm = 29 kWh.
VIDEO and LECTURES
• 35 minute video T. Boone Pickens
• John Bush – Natural gas characteristics, where
it comes from, how is it used and transported.
Details of hydraulic fracturing in the field.
• Break
• Phil - Economic benefits
• Dennis – Greenhouse emissions and
geopolitics of natural gas
ECONOMICS OF NATURAL GAS
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GLOBAL NATURAL GAS
APPROXIMATE PRICES PER THERM WHOLESALE
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Japan
China
India
Germany
France
UK
US
$1.57
$1.52
$1.37
$0.90
$0.80
$0.70
$0.40 (down from $1 in 2009)
CHEAPER ENERGY
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Lowers prices of products
Improves global competiveness
Reduces negative balance of trade
Increases jobs and wages
Increases disposable income
Reduces deficits
ENERGY INTENSIVE COMMODITIES
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Aluminum, 68% of price
Iron and steel, 40%
Agriculture (conventional), 30%
Plastics, 40%
Glass uses 5 Quads per year
Concrete, chemical, paper
Combined, all industry consumes about 31
Quads
INDUSTRY USES NATURAL GAS
• One of the primary building-blocks for organic
chemicals processed into plastics, solvents,
antifreeze, fuels, fertilizer – thousands
• Petroleum is cracked at refineries to make the
feedstocks. Natural gas is already ‘cracked’
making many products less expensive.
• Chemical industries capital spending plans are
$10 billion per year for next 10 years.
• This would create 600,000 jobs by 2023.
COMMERCIAL USES OF ENERGY
18 Quads
• Heating and Cooling
• Lighting
• Transportation
TRANSPORTATION
Natural Gas
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Equivalent to 47% of the cost of diesel
Lower pollution
Less carbon dioxide
Adaptable to Fleets of Vehicles – Trucks, Buses
Possibly hydrogen fuel cells
Domestic vehicles lose trunk space. 600 NG
stations vs 120,000 gasoline stations.
MORE BENEFITS
• Electricity cost decrease $30 billion by 2020
• Gasoline could drop 30% saving about $750
per household annually
• GDP up an additional 2.8% cumulative by
2020
• 3 million jobs by 2020
• Today 1 million are employed by oil and gas
industries. Up 40% from 2007.
FUTURE ENERGY CONSUMPTION
NG
Coal
Oil
Nuc
Other
2012
2035
25.6 Tcf
17.3 Quad
18.5 Mbbl/day
769 TWh
664 TWh
30.4 – 39.1 Tcf
18.8 – 20.9 Quad
16.3 – 19.5 Mbbl/day
593 – 898 TWh
900 – 1500 TWh
USA Energy Production and Use 2013
97 Quads
AVAILABLE
Natural Gas
27
Domestic Oil
19
Imported Oil
17
Coal
18
Nuclear
7
Renewables
9
USED
Residential
Transportation
Commercial
Industrial
21
27
18
31
FUTURE ELECTRICAL
Trillion Watt-Hours
2012
• Coal
1512
• NG
1239
• Oil
70
• Nuclear 769
• Hydro 511
• Solar
11
• Wind
142
2035
1650
1726
50
786
793
61
227