Fossil Fuels

Conventional Energy

• usually referencing fossil fuels

• fuels used from industrial revolution to birth of environmental movement

• standard fuels from 20th century

Alternative Energy

• any form of energy not based on fossil fuels

• includes nuclear (not renewable)

• includes renewable

Renewable Energy

• any form renewed continually or annually

• possible to deplete bioenergy resources

Sustainability

rate of renewal vs. rate of consumption

Green Energy

a form of energy that has small life-cyle environmental impact

Green energy in extraction/production

renewable or non-depletable resource base

Green energy in processing

low energy intensity for production

Green energy in use

low in carbon and toxicity

Original Fuel Sources

• Earth: nuclear, geothermal

• Moon: tidal

• Sun: solar, wind, wave, bioenergy (photosynthesis), fossil fuels (old photosynthesis)

Coal Formation

plants in swamp to plants buried uner water and dirt to plants under hear and pressure to coal

Petroleum and natural gas formation

sea plants and animals covered by silt and sand in oceans to remains under heat and pressure into oil and gas

Conventional fossil fuels

coal, natural gas, liquid petroleum (crude oil)

Unconventional fossil fuels

coal-to-liquids, gas-to-liquids, petroleum from sands and shale, natural gas from gas-to-liquids and shale

Who is the #1 producer of hydrocarbon

The U.S.

Ranking of fossil fuels that the U.S. produces

• NG dry

• cruid oil

• coal

• NG liquid

Percentage of global fossil fuels in total energy supply

• 86%

• non-combustion use is a little more than 6 quads

• 10% go toward non-energy use

Measure of trading of coal

ton (2,000 U.S. pounds)

Typical energy density of coal

20 MMBTU/ton (10,000 BTU/Ib)

Measure for trading of natural gas

cubic feet (scf) or thousand cubic feet (mcf/kcf)

Typical energy density of natural gas

1 MMBTU per mcf

Measure for trading of petroleum

1 blue barrel (BBL) (42 US gallons)

Typical energy density of petroleum

5.8 MMBTU per barrel

Coal ranking (from lowest to highest carbon content)

• lignite

• subbituminous

• bituminous

• anthracite

Lignite Coal

• 25-35% carbon

• brown coal

• high moisture content

• burned at power plants to generate electricity

• leading states: texas and north dakota

Subbituminous Coal

• 35-45% carbon

• at least 100 million years old (from older plants/swamps)

• higher heating value than lignite

• mostly for electricity

• leading state: wyoming

Bituminous Coal

• 45-86% carbon (2-3x heat of lignite)

• most abundant rank of coal in U.S. (50%)

• used for electricity and as a raw material for steel and iron

• 100 to 300 million years old

• leading states: west virginia, kentucky, pennsylvania

Anthracite Coal

• 86-97% carbon

• very rare in U.S. because of depletion

How many tons of coal are in U.S. reserves

267.6 billion short tons (236 years)

Merits of Coal

abundant, domestic, cheap, easy to store, production and consumptoin closely matched

Drawbacks of Coal

significant land disturbance during extraction, carbon intensive, burning releases sulfure, mercury, heavy metals

How much has coal dropped in 20 years

60%

Underground Mining

remove the coal from the mountain

Surface Mining

• remove the mountain from the coal (primary)

• western coal seams are thicker and more compatible with surface mining (lower sulfur content)

Where is the most recoverable coal reserves and coal production in the U.S.

Wyoming

Benefits of western coal

clearner, more economical (thicker and more automation), less topogrophically impactful

Disadvantages of western coal

far from market, lower energy content

Key headwinds of coal

• greater requirement for scrubbers

• less demand from China, India, and EU

• more competitors for coal supply

• China is the world’s biggest coal consumer (accelerated in 2000s b/c China enetered WTO)

• coal in U.S. peaked in 2006 and China in 2025

Retail forms of natural gas

natural gas, compressed natural gas, renewable natural gas, liquefied natural gas

Forms natural gas is compatible with

pipelines (NG), cylinders and trucks and cars (CNG), ships and trucks (LNG)

Primary uses of natural gas

cooking/heating, electricity, feedstock

Associated gas

co-located with oil reserves (used to be flared off as waste product)

non-associated gas

reserves are independent from oil (“stranded gas” if isolated from markets)

Coal Gas

associated with coal deposits (town gas, coal bed methane, coal seam gas)

Renewable Natural Gas

from decomposing organic matter (biogas, biomethane)

Percentage of methane in natural gas

70-90%

What is added in natural gas to help identify leaks

mercaptan (SH4)

Wet gas

higher fractions of liquids (ethane, butane, propane)

Dry gas

higher fractions of methane

Dirty gas

high fractions of CO2 (“acid” gas)

Sour gas

high concentrations of sulfur

Merits of natural gas

clean compared with coal and petroleum, domestically abundant, relatively affordable, flexible for use

Drawbacks of natural gas

non-zero environmental impacts, significant flaring, concerns from leaks, volatile prices

Import trend of natural gas

• U.S. NG imports have shrunk and domestic production increased (became net exporter due to hydraulic fracturing)

• predominantly used for electricity generation

Petroleum Characteristics

• sweetness: sulfur content

• lightness viscosity (low=light)

• prefer light, sweet crude (easier to refine and have lower emissions)

Merits of Petroleum

high energy density, can be piped in raw or finished form, convenient boiling and freezing points

Drawbacks of Petroleum

non-zero environmental impacts, volatile prices, national security concerns

Main consumption of Petroleum

primarily grown for transportation

Unconventional Coal

Coal to liquids (CTL)

Unconventional natural gas

coalbed methane, gas to liquids (GTL), and shale gas

Unconventional petroleum

tar (oil) sands, heavy oil, oil shale, shale oil

Typical pathway for coal-to-liquid fuels

thermochemical conversion (direct and indirect)

How much coal would CTL require

• 0.5 tons of dry coal per barrel of liquid fuel

• 1 ton of coal = 20 MMBTU

• efficiency = 60%

• CTL fuels are much more carbon-intensive than petroleum-based fuels

• only pursued if liquid petroleum isn’t available because of wars or other geopolitics

Petroleum Resources

total petroleum in place in Earth’s crust

Unproved Reserves

• a subset of the total resource

• includes “probable” and “possible” reserves

• smaller than resources

Proved Reserves

• a subset of the total resource (based on price and tech)

• can be extracted with “reasonable certainty” with existing technology and economic conditions

• smaller than unproved reserves

Country with the largest resource base for unconventional petroleum sourves

U.S. (800 billion barrels of shale)

Improved recovery methods for petroleum

• waterflooding: water is pumped to force oil toward production well

• Immiscible gas injection: gas is injected maintain formation pressure

• Miscible gas injection: with hydrocarbons, in naturally or under pressure

CCS facilities in the U.S.

15 currently open(0.4% capture), 121 under construction/in development (up to 3% capture)

Approaches to oil sands production

• mining: for 250-330 feet of overburden

• in-situ: for deeper deposits (less topographic disruption, more energy intensive)

Oil Shale

• solid form of oil (rock)

• large domestic resource spread over a relatively-small geographic area

• energy density: 25-50 gallons of oils per ton (3-7 MMBTU per ton), about same as potato

Approaches to oil shale production

• mining and surface retorting

• in-situ production

Shale Oil

actual liqui crude oil (tight oil) trapped in low-permeability shale formations

Dominant source of natural gas production

shale gas

What enabled the economic production of shale gas

• high natural gas prices

• hydraulic fracturing

• horizontla drilling

Upstream oil and gas

exploration and production, development, gas and power marketing

Midstream oil and gas

• movement: pipelines, barges, railroads, import/export terminals

• storage: tanks, reservoirs, salt caverns

Downstream oil and gas

refining, fuels marketing, chemicals, intermediates, synthetics, polymers

Coal Midstream

• shipping via rails and barges

• coal terminals for exports to other countries

• coal storage with piles

• when oil prices are high, coal delovery prices are also high

• when oil prices are high, you get a lot of extra natural gas, which lowers gas prices

Where is the major trading hub for oil

• Cushing, OK

• 10 million of barrels stores

• west texas intermediate (WTI) crude oil

• floating roofs are useful

Strategic Petroleum Reserve

• emerged in 1970’s as response to energy crises

• intended to provide emergency supply

• federal government buys/sells oil for SPR

• total capacity: 714 MMbbl

Keystone XL Pipeline Controversy

• also about canadian tar sands

• capacity would change from 0.4 to 1.3 MMBD

• shortcut would cross international boundaries, environmental concerns

Crude oil shipments by rail

• increased with boom in shale production

• rail suffers more frequent but more extensive failures

• pipelines suffer less frequent but more extensive failures (perefered)

Products one barrel of liquid petroleum yields

• 1 BBL = 42 gallons by volume

• yields 44 gallons of product (because of swell or processing gain)

How to upgrade heavier products to lighter, refined fuels

thermocracking, catalytic cracking, hydrotreating

The “Crack Spread”

the difference in prices between incoming crude oil and outgoing distillates

Heat content for petroleum products

6 MMBTU per barrel

Top refinery crude processing sites in the world

India (1,240,000 b/d)

Changes in refining in America

• shut down a lot of smaller refineries

• capacity of refineries have grown

• economies of scale, easier to put scrubbers

• can take in more complicated crude

• more efficient and cleaner

• new refineries are under construction

• gasoline products going fown

• distillate fuel oil and jet fuel going up

European Refineries

produce higher fractions of the middle distillated (diesel) and lower fractions of gasoline

U.S. Oil Exports

• U.S. became a net exporter of oil in 2020

• we buy heavy crude and sell light crude

• our refineries have fine-tuned for heavy crudes

• heavy crude better for power plants due to storage reasons

U.S. Natural Gas Pipelines

• 2.7 million miles of natural gas pipelines in the U.S.

• gathering systems (low pressure), interstate transmission (high pressure), local distribution (low pressure)

Europe natural gas distribution network

1.4 million miles of natural gas pipelines

LNG Regulation

the Federal Energy Regulatory COmmission is responsible for authorizing the siting and cosntruction of onshore and near-shore LNG import or export facilities

The Jones Act

can’t move natural gas from one american port to another if not american made (biggest loser is Puerto Rico)

LNG Export Good News

• jobs for construction/operation of LNG terminals

• relieves glut of natural gas, helping producers find markets

• mitigates some energy security problems

• helps other countries decarbonize

LNG Export Bad News

• puts upward price pressure on natural gas for domestic consumers

• might slow down our decarbonization

• might import volatility from the global market

Who is the largest exporter of LNG in the world?

the U.S. (>6 TCF/year), roughly half goes to Europe