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 • . GLOBAL NATURAL GAS APPROXIMATE PRICES PER THERM WHOLESALE • • • • • • • 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 • • • • • • Lowers prices of products Improves global competiveness Reduces negative balance of trade Increases jobs and wages Increases disposable income Reduces deficits ENERGY INTENSIVE COMMODITIES • • • • • • • 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 • • • • • • 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