WVU Tech

1
The Effects of Not Using Coal
2
U.S. Electricity Generation by Fuel,
1980-2030 (billion kilowatthours)
History
Projections
Coal
Natural Gas
Nuclear
Renewables
Petroleum
EIA Annual Energy Outlook 2007
3
US Energy flow, 2005, Quads
Exports 4.64
Coal 23.05
Residential 21.87
Nat. Gas 18.76
NGL 2.32
Domestic 69.17
Fossil 85.96
Commercial 17.97
Crude Oil 10.84
Total 104.54
Nuclear 8.13
Industrial 31.98
Renewable 6.06
Nuclear 8.13
Renewable 6.06
Trans 28.06
Petroleum 28.87
Imports 34.26
Other 5.39
4
COAL
5
Source EIA
6
Source EIA
7

• US HAS ABOUT ONE-FORTH OF THE WORLDS COAL
  RESERVES VS.
• 3 OIL
• 4 GAS

Source EIA
8

• WV 297 MINES
• WY 21 MINES

Source EIA
9
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10

• Since 1980 the use of coal for electric power
  generation has increased dramatically.

11

• But the increase has come almost entirely from
  increased utilization of existing plants, not
  form new plants.
• And this increase cannot continue

12
of World Supply
5 10 15 20 25
30
Years in the US
GAS
0 2 4 6 8 10 12 14
16 18 20
PRICE /MMBTU
13

• Coal today produces about one-half of our
  Nations electricity.
• Would a large family with one spouse out of
  work, deep in debt and their house underwater
  discard (not trade discard) one-half of their
  cars and buy new ones.
• What will take coals place?

14
What if Coal Was Replaced?
15

• Between the idea and the reality falls the
  shadow.

16

17
Wind

• WIND POWER IS ACTUALLY A TYPE OF SOLAR POWER

18

• Solar and wind have one big drawback They
  cannot be used as capacity.
• Thus if we build 1000mw of wind or solar we
  still need to build 1000mw of coal, gas etc for
  those days when the wind isnt blowing or the
  sun isnt shining.

19

• The situation is even worse if we try to go
  entirely wind or solar.
• At best the sun only shines 12 hours a day.
• So if we want 1000 mw we have to build 2000,
  1000 to generate and 1000 to store for the night.
• And we have to build storage

20

• Thus IF THE SUN SHINES TWELVE HOURS A DAY we need
  to build 3 plants instead of one.
• In reality we will have to build 5-10 and in some
  locations it just wont work.

21

• Some say that Solar is now as cheap as coal.
• Assume that per Kilowatt that is true.
• The 3-51 argument means it is 3-5 times as
  expensive.
• And there is another problem.

22

• Total RatesRatebaseCost-of-Capital expenses
• Cost/kwh Total Rates/Total kwh

Lets replace all coal with new coal Old coal
has a depreciated basis of about 200-500/kw New
Coal has a cost of about 4,000/kw
23

• Lets replace Amos with a new coal plant.
• My guess is that it is on the books for about
  500/kw.
• 500/kw times 4 million kilowatts is 2 billion
• A new plant without CCS would probably cost
  3,000/kw
• for a total of 12 billion.

24

• Forget whether it is Solar,
• Coal, Wind, or treadmills.
• If it is new replacing
• old you are going to
• have rate shock
• PJM Study 7-gt45

25

• The 3-51 effect and the old-with new effect
  together will produce huge rate shock.
• We must question the effect on the economy,
  especially if the rest of the world does not also
  move

26
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27

• Solar has an energy density of about 170
  watts/m2. Lets be optimistic and call it 250 in
  Arizona.
• Thus it will take abut 4 square meters to
  produce 1 KW.
• Or 4 million square meters to produce 1,000 MW.
• But that assumes a 100 conversion efficiency.
  If one assumes a 15 efficiency we need about 27
  million square meters or 10.23 square miles or
  3.2 miles on a side.

28

• That assumes 100 coverage.
• Nothing will grow under this.
• Will the Southwest be willing to do this for the
  rest of the US?
• Or will we need to leave spacing between the
  panels.

Tucson

• That would put us up to 8-10 square miles for one
  1000mw Unit or 30-40 square miles in Arizona
  (and dont forget the 3-4X effect if you want
  electricity at night).

29

• Roof top solar is touted as one way to overcome
  this problem.
• Sun only shines 4 hours a day at Tech.
• Mountain top removal sites may make good solar
  and especially wind sites

30

• If we go to plug-in hybrids we will need coal
  and nuclear or solar/wind and storage as the cars
  will predominately charge at night

31

• But there is another huge cost problem

32
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• The current transmission system was designed to
  get power from large central station units to
  load centers.
• If you move the units you need a new system.

Imagine how useful the Interstate Highway System
would be if all of the cities were moved. For
instance Charleston to Slatyfork
34
PJM MISO Joint Study

• 5 Renewables
• 60,000mw new wind
• 75,600 mw new base load
• 10,000 miles of new EHVT costing 50 billion

35

• 20 renewables
• 229,000mw new wind
• 36,000mw new base load
• 15,000 miles of new EHVT costing 80 billion

36
That means years of litigation
Build
Absolutely
Nothing
Anywhere
Near
Anything
37
5.19 Return on Assets
38

• If the largest unit in a region is 1000mw then
  there are enough units running (spinning
  reserves) to pick up the deficiency if the unit
  trips off.

39

• Thus once we add solar or wind in an amount
  greater than the largest unit presently running
  we will have to add reserves.
• If we add more coal plants we dont need any
  additional reserves as there is no joint
  probability.
• But there is a probability that it will get
  cloudy or that the wind will stop blowing thus we
  need additional reserves for the installed
  capacity.
• Thus even if we go wind or solar we still need
  to install gas turbines raising the cost

40

• The energy into the system must be equal to the
  energy out.
• If a unit trips off the system frequency
  decreases.
• In the short-term it is the decrease in rotor
  inertia that supplies the incremental energy.
• But wind and solar have little inertia.
• Thus as we start to add significant amounts we
  are going to have to solve some very serious
  sytem stability problems.

41

• What if coal was replaced ?
• What would take its place?
• Natural Gas

42
NATURAL GAS
43
US Energy flow, 2005, Quads
Exports 4.64
Coal 23.05
Residential 21.87
Nat. Gas 18.76
NGL 2.32
Domestic 69.17
Fossil 85.96
Commercial 17.97
Crude Oil 10.84
Total 104.54
Nuclear 8.13
Industrial 31.98
Renewable 6.06
Nuclear 8.13
Renewable 6.06
Trans 28.06
Petroleum 28.87
Imports 34.26
Other 5.39
44

• 23.05/18.761.22
• Thus if we use one unit of gas today we would
  need to use 2.22 units in the future and that
  assumes no load growth.

45
NATURAL GAS CONSUMPTION SINCE 1993
SOURCE EIA
46
WORLDWIDE NATURAL GAS CONSUMPTION VS 1993
Source EIA
47
US NATURAL GAS PRODUCTION
Source EIA
48

• Natural gas production has spiked in the last two
  years.
• Only known violation of the Second Law of Thermo
  dynamics.

49

• The number of wells is increasing dramatically.
• We are recovering more coal-bed methane

Source EIA
50

• But the yearly output per well has been declining

51
Source. EIA
U.S. ABOUT 4
6 Quads Total, 1080 BOE
52
Source EIA
53
Source EIA
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• But what is the increased gas usage doing of the
  rest of the economy?
• Optimize Human Body

56
Demand Destruction
Source EIA
57

• Drove Petrochemical Business off shore
• Driven Glass business away.
• Every 1/mcf costs West Virginians about
  35,000,000

58

• Boom-and-Bust
• According to the EIA gas drilling rigs in
  operation are down 23 since August.
• Many plays are simply not economic to drill at
  todays prices and forward curves.
• And, even if they are many cannot get financing
  to drill.

59

• A10 year R/P ratio indicates that about 10 of
  the Natural Gas we will use this year was drilled
  last year.
• Thus supply could be sharply down.
• Shale Decline Curves
• But EIA says 2009 demand will be up 0.7 due to
  the cold wave.

60

• Additionally Futures purchases are down due to
  credit constraints.
• LOCs 3/8 percent
• Cash 10-15
• Cost-of-Carry has gone way up.

61

• Gas use is very seasonal.
• Gas is normally bought throughout the year.
• Due to the high cost-of-carry many are not buying
  forward.
• Gas prices are thus way down (4.80 /mcf) But
  the demand will be there next winter

62

• This unhedged demand plus the lack of drilling
  could create a price spike in prices.
• Especially if the Obama Administration puts on a
  carbon tax or Cap-and-Trade plan and reduces the
  use of coal for electric generation

63

• The next two years will witness the largest
  expansion of LNG Shipping terminals to date,
  about 10bcf/day.
• Supply terminals are critical there are plenty of
  ships and receiving terminals

64
-260 F

• A major factor (probably the major factor )
  determining gas prices in the future will be lng
  imports.
• For LNG to be economical Natural gas prices need
  to stay above 4.00/mcf

6001
65
Prices should stay above 4 per MCF due to the
Electric Generating Stations that are shut down
due to the high cost of gas. If gas falls below
4.00 per MCF the Spark Spread on many of
these plants will go positive driving demand and
price above 4.00.
66
PROPOSED
PERMITTED
EXISTING
67

• The world is not flat
• Unlike oil, gas prices vary wildly around the
  world
• Missing link is global market caused by ability
  to transport.

68

• The main constraint in transport is LNG
  liquefaction facilities.
• By 2010 there should be about 355 ships

69

• The keys to the LNG market are the interactions
  between Russia, Iran and Qatar

70

• The marginal cost of gas in Qatar, due to liquids
  is 0.00/mcf
• Qatar has announce plans to develop up to
  11bcf/day but is currently reevaluating the
  plans.

71

• In 2006 Iran produced about 4.15 mmbbls/day of
  oil and exported 2.55mmbbls/day.
• Today production is about 3.9mmbbls/day and
  exports have decreased to about 2.2mmbbls/day.
• 33,000bbls/day times 100/bbl is 3,300,000 per
  day.
• Iran is now importing about 200,000bbls/day of
  gasoline

72

• Many believe that Irans internal consumption,
  driven by subsidies, and its decline rates will
  reduce its oil exports to near zero in the next
  20 years.
• Thus Iran will develop its gas exporting
  business to compensate and has announced plans to
  export up to 10bcf/day

73

• Russia does not intend to see its near monopoly
  on the supply of gas into Europe disappear.

74
New LNG through 2012 Bcf/day

• US use is about 23,000 Bs per year or 63 Bs per
  day so the new supply coming online is equal to
  about 1/3 of US consumption.
• Certainly not all coming here

75

• Europe has about 800bcf of Storage (making them
  very vulnerable to Russian cutoffs)
• The US has over 4.2TCF of storage

76

• When a well is shut in water which has came out
  of hydrates can cause swelling in clay and other
  materials and radically decrease the porosity
  lowering output
• Therefore producers do not like to shut inwells.

77

• Therefore much of the increased supply may come
  to the US if there is no market for it in other
  countries.
• Likewise excess summer gas will come to the US as
  we are the only country with significant storage

78
Source RBC. LNG flows to the US to increase
rapidly
79

• We may trade off access to energy and lower CO2
  emissions for strategic insecurity

80

• Must not only cover replacements but growth
• 1,000,000 mw total installed capacity in U.S.
• 2 load growth is 20,000 mw per year

81
OIL
82
Hubbert Peak
US 48 Oil Production

• OIL WELLS AND FIELDS HAVE DECLINE CURVES
• EXXON-MOBIL AND SHELL EACH HAVE TO FIND ABOUT 4.4
  BILLION BARRELS OF NEW OIL PER YEAR JUST TO STAY
  EVEN

83
Hubbert Peak

• PROBLEM OCCURS LONG BEFORE 42 YEARS
• AND MAY OCCUR YEARS BEFORE THE PEAK
• PROBLEM OCCURS WHEN DEMAND EXCEEDS SUPPLY

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85

• 50 of oil supply comes from 120 giant oilfields
• Half are more than 40 years old or more
• 95 are over 25 years old
• 65 of gas supply in decline
• About 80 percent of the oil produced today flows
  from fields that were found before 1973, and the
  great majority of these are declining.
• The faster you pump from a field the faster the
  decline will be
• For every one barrel we discover we consume
  three.

86

• From now until 2030
• Usage from 86mmb/d -gt 105 mmb/d (1 Growth
  Rate)
• Total new discoveries needed 799,191 million
  barrels to keep reserves constant
• This doesnt count the fact that fields decline
  in productivity and new reserves will be needed
  for decline

3 Times Saudi Arabias
87
Motor Vehicles per thousand people correlates
closely with GDP per capita
88
This data is for Sweden as it is a very Green
Country. Yet China is currently at about 16
motor vehicles per thousand. (Lets call it 20)
89
Lets assume that over the next few years that
China gets up to 120 cars per 1000 People. That
is an extra 100 cars per 1000 people. 1.3
billion people is 1.3 million thousand
people Which would translate into 130 million
additional vehicles assuming the population did
not grow.
90
Assume that each of these cars drove 5000 miles
per year and averaged 30 mpg. Thats
21,666,666,666 gallons of gas. Or, assuming 42
gallons of oil ( one barrel) makes 20 gallons of
gas (US Average is 19.5) Thats an increase of
about 1billion barrels of oil per year.
91
World Demand is about 30 billion barrels per
day A Chinese increase of 1 billion barrels of
oil per year equals about 3 million barrels per
day or a 15 increase in US Demand and that is
only China. Total Demand is about 85 million bpd
(31 billion bbl/year) OPEC supplies about 33
million bpd
92
World energy use is likely to grow rapidly and
the more we turn to energy that must be imported
the more we must compete and the more money we
send offshore, hopefully to our friends.
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94
The further you drill down into the factors that
effect energy price, supply and demand the
more-and-more you run into human, not technical
factors.
My top seven factors (in no particular order) 3D
Seismography OPEC Iranian Revolution Directional
Drilling Russian Revolution Chinese
Revolution Subprime Mortgage Mess
How many of these factors were picked up in
forecasts in the 1960s.
95

• Oil Shale
• strip mining.
• vast quantities of water
• needs to be heated to 450-500C
• enriched with hydrogen via steam
• We are then left with a sludge which has
  increased in volume by 30 through the process
  and needs to be disposed of.
• four times as much greenhouse gases as
  conventional oil production
• wastes about 40 of its initial energy in
  production.

96
Tar Sands

• One-third (1,800 Gb) in Venezuela (Orinoco),
  One-third (1,700 Gb) in Canada (Athabasca) and
  the rest mainly in the Middle East
• Canadian production 1E6 barrels/day

Photo - Suncor
97

• One barrel of oil means digging out four tons of
  materials, and
• leaves you with 80 kg of greenhouse gases. and
• 3-5 barrels of waste water as well as the sand
  residue, and
• Uses 250 cubic feet of natural gas to mine, and
• 500 cubic feet of gas to upgrade to synthetic
  crude oil, and
• uses about 40 of its initial energy in mining
  and refining.

Tar Sands
Photo - Suncor
98
ELECTRICITY
99
Outputs
Inputs
CONVERSION LOSSES 26
Coal 20
Plant 0.7
Total 39.5 Quad
Nat Gas 6
TD 1
Oil 1
Resid 4
Nuclear 8
Comm 4
Renewable 4
Ind 3
Trans 0.2
DATA IN QUADS, SOURCE EIA, 2002 ENERGY SURVEY
Direct 0.6
100

• U.S. WILL TURN TO NUCLEAR
• No greenhouse gasses
• Energy Independence

101
NUMBER OF OPERATIONAL PLANTS
PERCENT ELECTRICITY GENERATED
27
27
UNITED KINGDOM
102
ALTERNATE ENERGY

• ALTERNATIVE ENERGY SOURCES SUCH AS WIND, SOLAR
  AND FUEL CELLS ARE ANOTHER WAY OF MEETING OUR
  FUTURE NEEDS.
• AND DEVELOPMENT OF THESE SOURCES WILL BE HELPED
  BY HIGHER PRICES.

103
Hydrogen Economy
104
Clean burning nothing but water
105

• Many say, The oceans are full of hydrogen, it
  is the most abundant element

106

• Everyone knows we can get energy by burning
  wood.
• How many people think we can get energy by
  burning wood ash?

107

• Water is Hydrogen Ash. All of the useful energy
  is already extracted
• First Law of Thermodynamics- Energy can
  neither be created nor destroyed
• Aint no such thing as a free lunch.
• Therefore to get energy out we must put
  additional energy in

108
Water is Hydrogen Ash
H
O
Energy
H
O

H
2
143 MJ/Kg
109
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110

• Water is Hydrogen ash
• As such it is about as low down the energy scale
  that you can get and thus takes more energy to
  free the Hydrogen.
• Other compounds have far more energy that we can
  use to make Hydrogen easier (less energy) but we
  give up the ability to use their energy directly.

H2
CH4
Energy
H2O
111

• Note the word steam, this is where the extra
  energy to transform the methane into Hydrogen
  comes from.
• Notice also the Carbon Monoxide which is deadly
  both to Humans and most Catalysts in Fuel Cells

Steam Reforming
CH4H2O(Steam) CO3H2
Syngas
112

• In this reaction the Carbon Monoxide is changed
  to CO2 and water.
• CO2 is a byproduct of changing methane (and any
  other hydrocarbon) to Hydrogen.
• But it is concentrated and can be extracted.

Shift Reaction
COH2O CO2H2
Thus the overall reaction is.
CH42H2O(Steam) CO24H2
113

• Steam reforming will also work directly with
  coal although only one H2 molecule is produced.
• The shift reaction then produces additional H2
  and CO2

Steam Reforming
CH2O(Steam) CO H2
Syngas
114
Ethanol

• Energy Balance
• Corn 1.3
• Sugar 8
• Cellulose 16

E85 (85 Ethanol -15 Gasoline) Decrease
petroleum use 85-88 Decrease CHG
19-25 Decrease Fossil Energy use 42-44 per
vehicle mile travelled Source Argonne Natl Labs
for EIA
115
Cellulosic Ethanol
Sugar
Ethanol
Enzyme
116
Cellulosic Ethanol

• Lignin gives the cell wall strength
• Hard to separate from the cellulose
• 115,000 BTU/Gal
• 76,000 BTU/Gal

117

• Not new Technology
• Germany WWII
• SASOIL

Coal to Liquids
118

• Methanol can also be produced from Syngas.
• Methanol may be a good fuel for fuel cell
  vehicles as it breaks down in to Hydrogen and CO2
• This step is the basis for coal gasification.
• Methanol however is poisonous and mixes with
  water

Fischer-Tropsch
CO22H2 CH3OH
119
Coal-to-Liquids

• Naphtha disposal
• Sulfur disposal
• CO2 Disposal
• Disposal

120
Coal-to-liquids

• Balance-of-payments
• National Security
• Strength of Dollar

121

• Greenhouse Gases are A global problem and must be
  solved globally.
• For one country to solve the problem unilaterally
  will be economic suicide

122
Pulverised Coal with CO2 Capture
CO2
Compressor
Coal
Pulverisier
CO2
Amine With CO2
Amine Regenerator
Coal
Amine
Heat
Boiler
123

• Heat and Compression are the problem
• It takes about 35 of the plants output to
  regenerate the Amine.
• It cant come from the boiler as the turbine
  would run at 65 load (and turbines dont run
  well at 65 load)
• SO we need additional heat which generates
  additional CO2
• Likewise CO2 compression takes energy

Heat
124

• Base Efficiency
• Amine Regeneration
• Compression
• To produce the same out put requires about a 35
  increase in plant size and an increase in coal
  burned of 70,000 pounds per hour (from 500,000
  for a 500 MW Plant)

35
(5)
(3.5)
26.5
125
Either road will result in burning more
coal The question is ,Do we do the needed
research and burn clean coal or do we concentrate
on solar etc and burn dirty coal? China and
India will go to coal. How do we get them to
follow on CCS if we wont lead.
Two Roads
126
Must turn to Energy Efficiency

• Long-Term Elasticity

127
The Effects of Not Using Coal
128
WVU TECH
129
(No Transcript)
130

• What if all coal went to gas

131
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132

• Effect on the US economy
• Jobs are being destroyed by mechanization
• Grandfather
• Service Station, supermarket, bank, Solaris
• Effect on interest and subprime from China
• Leakage from service economy