Better To Export Natural Gas Fracking Or Advanced Coal Technologies?

Posted: Jan 17 2014, 5:41am CST | by , in News

 

Better To Export Natural Gas Fracking Or Advanced Coal Technologies?
Photo Credit: Forbes
 

World leaders are about to gather in Abu Dhabi to discuss how to feed the global energy appetite with the cleanest fuels and the most modern tools. Questions are bound to crop up involving whether to use more advanced coal or shale gas fracking technologies — or to ignore those altogether and go for the green.

The confab is coming during the release of BP’s Energy Outlook, which says that heat-trapping emissions will rise by 29 percent through 2035 and come mostly from the emerging economies. But the trends are favorable, with expected gains in natural gas and renewable energy, and coming at the expense of coal and oil.

For now, though, coal use is up, and rising. Worldwide coal production will jump by 500,000 short tons per year through 2018 — a 2.3 percent yearly growth rate, says the International Energy Agency.

To that end, it notes that China’s coal use is so massive that it would need to import twice as much liquefied natural gas as it now does to make a dent. And, here in the United States, coal’s market share is still greater than natural gas — at 40 percent of the electric generation market versus 30 percent. Government projections, though, expect that to change in the coming decades.

Here, carbon dioxide emissions have been falling: 2013 releases are 10 percent less than they were in 2005. But they are up about 2 percent between 2012 and 2013. Coal is the culprit, says the U.S. Energy Information Administration. Future growth will be constrained by tough federal emissions standards on new coal plants.

That is why the industry is eager to make progress on carbon capture. Good news on this front: Mitsubishi Heavy Industries and Southern Company announced this week a successful demonstration in Alabama in which they were able to capture and bury 90 percent of the carbon dioxide. And, Southern Company is partnering with the US Department of Energy to complete this year its Kemper power plant in Mississippi. There, the coal will first be gasified before it is burned, allowing the carbon to be separated before it is used to enhance oil recovery.

Given the expected jump in coal use, should this country export advanced coal technologies around the globe? Or, would it be better to sell U.S. shale gas drilling technologies, because such unconventional natural gas is cleaner?

“This process shows the power of economic forces and competition. Put simply, people are finding ways to use energy more efficiently because it saves them money. This is also good for the environment – the less energy we use the less carbon we emit. For example carbon dioxide emissions in the US are back at 1990s’ levels,” says BP’s Chief Economist Christof Ruhl.

Specifically, BP’s outlook expects global energy consumption to rise by 41 percent from 2012 to 2035. That’s an annual growth rate of 1.5 percent. Most of that increase will come from the emerging economies while energy use in the advanced countries will slowly creep up, mainly because of new efficiencies. It says that oil, natural gas and coal will each comprise about 27 percent of the energy mix with the rest coming from nuclear, hydroelectricity and renewables.

Renewables will escalate 6.4 percent a year  through 2035. Still, it will make up just 7 percent of the electricity demand. Natural gas, meantime, will enjoy a nice bump at 1.9 percent a year. Nuclear energy may match that. Furthermore, coal and oil will grow the least at 1.1 percent a year, all according to BP.

How to read into this? Economics, technology and politics all play a part. Consider China: Its economy is now growing at almost 8 percent a year. Along with India, it is building most of the world’s coal plants. The good news is that it trying to employ advanced coal technologies such as coal gasification, which gasifies the coal before it is burned and sent through the smokestack.

While this technology helps purify the coal, it is still an energy intensive process. That is, it takes energy to convert the coal to a synthetic gas, which contributes to overall carbon dioxide emissions. So, burying those releases would be preferable. But it is all expensive — especially given the relative price of natural gas.

So why not access shale in other countries? Success in the United States, for better for worse, can’t necessarily be replicated — for now. This country, in fact, has a head start on the rest of the world with Chesapeake Energy, Chevron Corp. and Console Energy making inroads — fuels that will, in some measure, get exported to Asia and Europe.

Shale gas is plentiful in China Poland, Argentina and France. But those countries are struggling either with their geographies or their political goals. China’s has the world’s richest formations.

“The U.S. shale gas revolution was three decades in the making …,” says Adi Karev, global leader for energy and resources at Deloitte Touche. “Although other countries, particularly Poland, China and Argentina, want to replicate this success, these countries still have a long road ahead before they can begin to see the gas volumes and supporting infrastructure needed to dramatically lower domestic natural gas prices and create export opportunities.”

France, meantime, has said that fracking for shale gas — and shale oil — would be offlimits and that its parliament would need to vote to make any changes. Many, of course, are making the case that such drilling is safe and that the country will need to access those deposits to achieve its climate and energy goals, if it cuts its nuclear energy production. Government reports there suggest that the drilling technology must improve before it would be gradually implemented within the country.

Indeed, the International Energy Agency in Paris says in its 2012 World Energy Outlook that unconventional gas deposits mainly consisting of shale gas will more than triple to 1.6 trillion cubic meters in 2035. A lot of capital and new technologies will be needed to access all of that, it says, noting that it can be done in a “satisfactory” way.

So as policymakers discuss their energy blueprints in Abu Dhabi next week, they will dissect the practicality of not just advanced coal and natural gas technologies but also of improving their green energy portfolios. No easy answers here, but as BP says, new thinking and open markets will help.

Source: Forbes

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