The Future of Oil, Gas and Coal Dependent on Perception and Competition
Gas-to-liquids plants can cost up to $15 billion. Coal-to-liquids plants
cost even more. Investments in these plants is highly dependent on the perceived
demand. This factor, in turn, is a function of attractiveness of
alternatives such as wind, solar, electrical energy storage, tar sands, coal bed
methane, underground coal gasification, shale gas, shale oil, oil shale, small
modular nuclear, small scale LNG, advanced coal-fired power plants, etc.
All these alternatives are continually assessed in two publications:
Oil, Gas, Shale and Refining Markets and Projects
and Fossil and Nuclear Power Generation: World Analysis and Forecast
published by the McIlvaine Company. (www.mcilvainecompany.com)
The biggest variable in the mix among these alternatives is coal conversion.
The proven coal reserves (defined as presently known and economically minable)
is 860 billion tons. This quantity would supply the world at present consumption
levels for another 100 years. But coal has a much bigger potential than just
this identified resource. Consider that there is one trillion tons of coal
under the North Sea. Billions of dollars are being invested in underground
gasification technology to inject steam and oxygen and extract gas. CO2
generated in the process would be used to increase yield of shrinking North Sea
oil reservoirs.
China is well underway with a program to convert coal to gas, fuels and
chemicals at a rate equal to the entire U.S. shale gas program. If the
projects in the planning stage are implemented, China will utilize 20 percent of
the world’s annual coal consumption just to make gas and liquid products.
The ultimate mix between all these energy sources will be be determined by
perception and competition. In a chess game, the winner does a better job
of perceiving the moves of the loser. Among the losers to date are owners of LNG
regasification terminals in the U.S. They did not perceive the moves of
shale gas extraction companies. However, if they convert these terminals
to export LNG and build others to do so, then power plants which are relying on
large quantities of cheap gas will be the losers. So both the quality of the
competition and the perception of the opponent are factors in success.
Some of the important inputs include:
•
The differential price between diesel and LNG is a critical market factor.
•
Crude represents 65 percent of final fuel price.
•
The disparity between oil and gas prices on an equivalent Btu basis is a
function of access.
•
Gas is not economically transported overseas except as LNG, whereas oil is
economically transferred.
•
Even if the price of oil drops, the market for gas is not impacted if gas prices
also drop proportionately.
•
Until the U.S. has the capability to sell large quantities of LNG offshore,
the price disparity will continue.
•
Investors and gas producers are expecting gas in the U.S. to remain at $5/MMBtu.
•
China expects to make gas from coal at less than $5/MMBtu.
•
Shale gas operators are expected to keep expanding as long as oil is above
$70/bbl.
•
Oil companies such as Chevron are bullish on increased oil and gas demand and
are continuing with high levels of investment.
•
Saudi Arabia is able to increase or decrease output to maintain price levels.
Many other producers need price levels above $90 barrel to keep their economies
healthy.
•
The oil reserves of Middle East producers are less than 50 years.
•
The Saudi production cost is only $6/bbl.
•
The Saudi oil value is much higher than $100/barrel because it is a resource
which is dwindling at 4 percent per year.
•
The result is that the Saudi supply will be adjusted to balance long term value
and short term needs.
•
Stranded gas and other sources of LNG where the acquisition price of the gas is
negative will be unaffected by oil fluctuations between $80-110 bbl.
•
Safety perceptions of nuclear energy vary widely from country to country.
•
Environmental perceptions including climate change also vary widely between the
developed and developing economies.
All these factors will continue to make projections about the production from
each of these resources very speculative.
For more information on Oil,
Gas, Shale and Refining Markets and Projects,
click on:
http://home.mcilvainecompany.com/index.php/markets/28-energy/471-n049.
For more information on
Fossil and Nuclear Power Generation: World Analysis and Forecast,
click on:
http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/113-n043.
Industrial Scrubber System Revenues to Exceed $8 Billion In 2019
Industrial plants will be spending more than $8 billion annually for scrubber
systems by 2019. This is the conclusion reached by the McIlvaine Company
in
Scrubber/Adsorber/Biofilter World Markets. (www.mcilvainecompany.com)
Scrubber Revenues ($ Millions)
Subject |
2019 |
Total |
8,050 |
Absorber |
3,648
|
Adsorber |
1,563
|
Biofilter |
596 |
Dry Scrubber |
651
|
Other |
312
|
Particulate |
1,280 |
These forecasts include applications in the iron and steel, refining, chemical,
food, petrochemical, non ferrous metals, pharmaceutical industries to remove
particulate and gases from stack discharges. They do not include scrubbers used
on coal-fired boilers. One reason is that the coal-fired boiler market is
as large as the scrubber market in all other industries. This market is the
subject of another McIlvaine report.
A third market is developing which will also need to be separately evaluated.
This is the coal gasification and liquefaction market. Scrubbers are used
in clean up of the gas produced in the indirect gasification processes.
This market is potentially going to be bigger than either the industrial
scrubber or power plant scrubber market.
There are less than100,000 MW of power plant scrubbers sold for new and retrofit
applications each year. At $100,000-$200,000 MW this is an annual market
of $10 billion to $20 billion. These scrubbers are cleaning up plants
which burn 300 million tons of coal per year.
Coal gasification requires even more investment in scrubbers per ton of coal
processed. China is planning to convert 1.5 billion tons of coal per year into
synfuels and clean gas, fuels and chemicals. Other nations are also
following this path. Posco in South Korea is installing a coal gasifier in its
steel mill and has set up a joint venture to build gasifiers elsewhere.
India and Indonesia have substantial coal reserves and are initiating projects.
Australia has canceled its carbon tax and is actively developing underground
gasification. The U.K. could potentially use the underground coal
gasification technology to utilize coal reserves in the North Sea. CO2
could be re-injected into the dwindling oil reserves in the area and, thus, also
boost oil output.
With this level of activity it is very likely that the coal gasification
scrubber market will be more than $10 billion per year at a peak period a few
years from now.
This large market will be temporarily covered in the industrial scrubber market
report. More information on this is found at: N008
Scrubber/Adsorber/Biofilter World Markets.
Information on the power plant scrubbers is found at:
N027 FGD
Market and Strategies.
Renewable Energy Briefs
Yahoo Signs Long Term Power Purchase Agreement with OwnEnergy
OwnEnergy, a national leader in the development of mid-sized wind farms,
announced that it has entered into a long-term Power Purchase Agreement (PPA)
with Yahoo!, Inc. Under the terms of the PPA, Yahoo will purchase wind power
which will be used to offset much of Yahoo's energy usage in the Great Plains
region.
"It's great to see a leading tech company like Yahoo working to expand the use
of renewable energy, and its involvement in this project will enable us to
generate both local jobs as well as financial upside for members of the Rush
County community," said Jacob Susman, Founder and CEO of OwnEnergy.
OwnEnergy partners with energy entrepreneurs across the country to develop wind
projects. The company's local partners are leading members of wind-rich
communities who play an active role in project development and receive a share
of project ownership in return.
SPI Solar Subsidiary Announces EPC Agreements for 100 MW of Solar PV Projects in
Hebei Province, China
SPI Solar, a vertically-integrated photovoltaic solar developer, announced that
its wholly-owned subsidiary, Xinyu Xinwei New Energy Co., Ltd., has signed
engineering, procurement and construction agreements for 100 megawatts of solar
PV projects in Julu County, Hebei Province, China. The three separate agreements
call for the development of two rooftop sites (consisting of 50 MW and 30 MW,
respectively) for ecological agricultural farm rooftop installations, as well as
a distributed grid project (consisting of 20 MW).
For the rooftop projects, construction on the 50 MW project – phase I − is
scheduled to begin in October 2014, with completion and grid connection expected
in April 2015. Construction on the 30 MW project – phase II − is scheduled
to begin in May 2015, with completion and grid connection anticipated in August
2015.
Construction of the 20 MW DG project is scheduled to begin in October 2014, with
completion and grid connection anticipated in March 2015.
Panasonic Partners with Powertree Services to Construct 68 Solar Powered EV
Charging Stations with Energy Storage in San Francisco
Panasonic Enterprise Solutions Company announced it is providing engineering,
construction and procurement services to Powertree Services Inc. to build 68
electric vehicle charging stations at multi-unit residential properties in San
Francisco.
Construction has begun on the stations, which link together key energy services
to provide value for property owners, tenants, EV drivers and the grid. They are
designed to be powered by solar energy and to incorporate a battery storage
component. When complete they will have the ability to supply high power
charging to vehicles, ancillary services provided to the utility to support the
grid, solar power to tenants and supplemental power to the buildings. The
stations are scheduled to be completed by Earth Day 2015.
When complete, the 68 stations will result in a total installed capacity of 6.1
megawatts of power and 2.5 megawatts of EV charging capacity. Each station is
configured to support up to 70 amps or 18 kilowatts. This is roughly equivalent
to 60 to 70 miles of range for every hour of charging. The exact rate of
charging depends on vehicle models. The stations will be powered by on site
photovoltaic panels, and can generate clean energy for building use, or have the
ability to provide backup generation, in the event of a grid outage.
Alterra Power and Fiera Axium Complete $176.5 Million Jimmie Creek Hydro Project
Financing
Alterra Power Corp. and Fiera Axium Infrastructure Inc. (through a managed fund)
announce the completion of a $176.5 million non-recourse loan facility for the
$227.4 million Jimmie Creek hydroelectric project.
The Jimmie Creek project will provide 62 MW of clean power capacity to southwest
British Columbia and will sell 100 percent of its power to BC Hydro for 40 years
beginning in August 2016. Alterra and Fiera Axium now own 51 percent and 49
percent of the project, respectively.
Biogas Plant Enables Industrial Company to Become More Self-Sufficient
PlanET Biogas has recently commissioned their fifth Biogas plant into service.
The 1.5 MW plant is situated on Singleton Birch’s Ltd. site at Melton Ross,
Barnetby, and North Lincolnshire. In Future, Singleton Birch Ltd, focused on
processing and delivery of limestone/chalk, will produce 40 percent of their
onsite power requirements from biogas. Four local Farmers are providing 30,000
tons of feedstock every year.
For more information on Renewable Energy Projects and Update
please visithttp://www.mcilvainecompany.com/brochures/Renewable_Energy_Projects_Brochure/renewable_energy_projects_brochure.htm
Headlines for Utility E-Alert –October 17, 2014
UTILITY E-ALERT
#1196
– October 17, 2014
Table of Contents
COAL – US
COAL – WORLD
GAS/OIL – US
GAS/OIL – WORLD
CO2
NUCLEAR
BUSINESS
HOT TOPIC HOUR
For more information on the Utility Tracking System, click on:
http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/89-42ei
“NOx Reduction Innovations for Coal-fired Power Plants” to be
conducted over the Internet on Thursday, November 6, 2014, at 10:00 a.m. CST
Some issues to be addressed during the webinar are:
• How does the need to remove mercury and reduce SO3 change
the catalyst selection?
• Should you regenerate rather than discard catalyst?
• How long will catalyst last before it is
Cleaned,
Renovated,
Regenerated?
• Where do hydrogen peroxide and ozone options make
sense?
In place of catalyst where NOx levels are low
Trim for SCR if very high efficiency needed
• Where should you consider SNCR?
As a substitute for SNCR
In conjunction with SCR
• Should you contract with a supplier to monitor, clean
and replace catalyst as needed?
• Where is the catalytic filter the best answer?
• Do you also have to invest in SO2 and
particulate control?
• Do you have a use for recovered heat from 850oF
clean gas?
• Is space limited?
Panelists and others involved with the specification, supply, use or service of
Coal-fired Power Plant NOx Reduction equipment or services are
invited to submit articles, case studies or white papers describing their
equipment, services or experience prior to the date of the panel discussion.
These or an abstract of them may be published in the Utility E-Alert and other
of our newsletters as appropriate in the weeks preceding the panel to develop
interest and questions from the potential audience. We will also post them on
our web site so that potential attendees can review them. Please send your
white papers, articles and PP presentations to Dina Mohr at:
mcilvaine_hot_topic_hour@earthlink.net with a copy to me.
Attendance at the panel discussions will be free for all utility
personnel and panelists and there is no charge for publishing or posting the
articles, case studies or white papers on our web site.
Click here to view schedule and register
McIlvaine Hot Topic Hour Registration
On Thursday at 10:00 a.m. Central time, McIlvaine
hosts a 90 minute web meeting on important energy and pollution control
subjects. Power webinars are free for subscribers to either
Power Plant Air Quality Decisions or Utility Tracking System. The
cost is $300.00
for non-subscribers.
See below for information on upcoming Hot Topic Hours. We welcome your input
relative to suggested additions.
DATE |
SUBJECT |
|
October |
||
23 |
Dry Scrubbing |
|
November |
||
6 |
Coal-fired Power Plant NOx
Reduction Innovations |
|
13 |
Power Plant Cooling |
|
December |
||
18 |
Boiler Feedwater Treatment |
Click here for the
Subscriber and
Power Plant
Owner/Operator
Registration Form
Click here for the
Non-Subscribers
Registration Form
Click here for the Free
Hot Topic Hour Registration
Form
----------
You can register for our free McIlvaine Newsletters at:
http://home.mcilvainecompany.com/index.php?option=com_rsform&formId=5
Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com