Future U.S. Energy Supplies

Transcription

1 Future U.S. Energy Supplies Huntington University November 21 st, 2006 Brian H. Bowen The Energy Center at Discovery Park West Lafayette, Indiana 1

2 Why An Increased U.S. Interest in Energy? 9/11 & Increased Security: to reduce import dependence? Impact of Hurricane Katrina: Supplies and network Price rises at gasoline pumps: Crude oil above $60/barrel (1) Where are future U.S. energy supplies going to come from and (2) can we expect to see reduced imports dependency? Let s Consider Three Things Determinism Stewardship Technology 2

3 Determinism for New Energy Supplies 20 th Century 21 st Century 1961 To put a man on the moon by end of decade $180 Billion ($2006) 1942 Manhatton Project $32 Billion ($2006) Spent & Approved federal costs War On Terror (June 2006)= $437B NASA space shuttle, early 2005 = $145B Energy Policy Act of 2005 = $14B FutureGen, cost of project 2007 = $1B U.S GDP = $12.36 Trillion ($437B = 3.5%, $145B = 1.17%, $14B = 0.11%) 3

4 World Primary Energy Consumption (10 15 Btu, Quads) Quadrillion Btu Total Mature Market Transitional Economies Emerging Economies World Total % increase in total world primary energy consumption EIA forecast for Many forecasts for the next 20 years What about 50 years time? Years Indiana/year 2.88 Quads 4 Source: EIA International Data Projections,

5 Production curve from typical oil reservoir thought applicable to total world production Peaking Running Out Production World s Oil Production Peak & Imports Reserves Time Decades Peak EIA: 2037±10? Source: DOE-NETL U.S. Crude Oil Imports, Barrels/Day (January 2006) Barrels Per Day 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Canada 2,159,000 Mexico 1,581,000 Venezuela 1,512,000 Saudi Arabia 1,368,000 Nigeria 1,185,000 Canada Mexico Venezuela Saudi Arabia Nigeria Supplying Country 62% of U.S. crude oil imports are supplied by 5 countries 5

6 2005 U.S. Primary Energy Consumption by Source & Sector (Quadrillion Btu) Energy & Future Jobs Students Good News! 2nd Total 99.8 Quads (1 Quad = Btu) Source: 1st 6

7 U.S. Traditional Energy Sources 7

8 U.S. Import Dependence on Petroleum 8

9 Natural Gas Import Dependence More LNG ports More LNG ports = increased energy import dependence Four existing & many others LNG ports 2005 Liquefied Natural Gas (LNG) comprised 2% to 3% of the natural gas supply in the U.S. To make up 20% of the supply within 20 years 9

10 2005 Energy Policy Act Provides tax incentives and loan guarantees Tax breaks by subject area, TOTAL = $14 Billion $4.3 Billion for nuclear power $2.8 Billion for fossil fuel production $2.7 Billion to extend the renewable electricity production credit $1.6 Billion in tax incentives for investments in clean coal facilities $1.3 Billion for conservation and energy efficiency $1.3 Billion for alternative motor vehicles and fuels (ethanol, methane, liquefied natural gas, propane) 10

11 Gasoline Prices (Europe) 2005/6 Prices Will U.S. gasoline ever reach $5.0 per gallon? 11

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13 Coal Supplies in Indiana Power generation in Indiana gets 96% of its fuel supply from coal But - Half of Indiana s coal needs are imported from WY, IL, VA.. Coal mining counties 13

14 Significant Determinism How & When? Some significant determinism is probably needed and we can t really afford to leave things to the optimism or realism of market forces? A clear vision for what energy supplies we ll have in 50 years time might need a similar approach to a man on the moon by the end of the decade How can such a national will for a long-term energy plan be brought about? 14

15 Energy Stewardship Development, Health, Environment, Efficiency Can good stewardship stop at national boundaries? Rich Nations Agreed at UN to 0.7% of GNP To Aid on Official Development Assistance - rich nations provide 0.2% to 0.4% The risk of lung cancer death went up by 8% for every 10 μgrams of fine particles in a cubic meter of air. Heart disease deaths went up 6%. + Nicholas Stern & environment, 1% GDP now to prevent 20% reduction for grandchildren Sources: Journal of the American Medical Association Vol. 287, No. 9 National Center for Health Statistics U.S. Department of Health and Human Services * 15

16 Energy Efficiency & Btu/capita USA Germany India China Nigeria Afghanistan 2004 Million Btu/capita Average amount of energy consumed by each person in the country Need to improve western nations energy efficiency - switching of appliances and lighting, heating, A/Cs Demand pattern for energy in the 21 st century very different to the 20 th century Any return to low oil prices? Source: 16

17 Transport & Electricity EIA Electricity Forecasts for U.S. at 1.8 %/year 51% total increase India at 4.3%/year 163% total increase China at 4.8%/year 194% total increase Source: 17

18 Nitrogen oxides: ground-level ozone, smog Sulfur dioxide: acid-rain Carbon dioxide: greenhouse effects Pulverized Coal (PC) power plants in the U.S. have reduced their SO 2 emission rate by 71% from SO 2, NOx, CO 2, Hg Emissions 90% reduction from U.S. utilities results in a 1.7% reduction in total global Hg emission CO 2 - At present there is no U.S. Federal Policy When is a big question 18

19 U.S. Emissions of CO CO 2 Thousand Metric Tons Transport 29% Utilities 42% Others 29% CO 2 Globally What to do with 5.8 Billion Tons of CO 2? CO 2 Emissions in 2002 and 2003 in China rose at 8-9% per year and in the U.S. about 1% 19

20 CO 2 is a Huge Challenge CO 2 Capture & Sequestration Is there something better? International Energy Agency (IEA) predicts China would pass the U.S. in CO 2 emission by years earlier than expected 20

21 Indiana CO 2 Emissions Thousand Metric Tons Indiana Million Tons of CO 2 (5.6% of national CO 2 ) ~ Store CO 2 in Indiana s St Simon saline aquifers ~ or in New Albany shales or coal mines to pump out methane ~ or pump into old oil fields to yield oil ~ or recycle CO 2 Needs basic research 21

22 Initiatives in Indiana Duke Energy, GoGreen Renewable initiatives for us all? Purchase blocks of green power for $5 per month. World Belongs to our Children Cummins Engines, Columbus, IN, October New family of light-duty clean-diesel engines - Will be manufacturing new product that will increase fuel efficiency by 30 % or more Press Release: 22

23 Energy Stewardship What It Means Energy & economic growth are intimate partners we need to understand what this involves for both rich and poor countries Good health care is possible through a strong economy and a clean environment Legal implementation of CO 2 controls will have a great impact nationally and globally What can each of us do to improve energy efficiency? 23

24 Technology Advances mpg FreedomCAR & Hybrids H 2 Source, Filling stations Fuel Efficiency/environment New York city cabs 8-11 mpg Toyota Prius, NY city mpg Super Ultra Low Emission Vehicle As of Fall 2006 the Prius has become the car with the strongest consumer demand & longest U.S. waiting lists 24

25 IEA Conference, International Energy Association June 22, 2006, Paris Technologies can make a difference,.a sustainable energy future is possible, but only if we act urgently and decisively to promote, develop and deploy a full mix of energy technologies We have the means, now we need the will. Claude Mandil, IEA Executive Director 17 th century 20 th century 21 st century 25

26 Biomass - Ethanol Ethanol Production Projections Economics improve for cellulosic biomass. Less petroleum is used in cultivation & processing Alternative fuels broaden our supply base & lower environmental impacts 26

27 Hydrogen Economy H 2 Where from? Source: 27

28 Coal To Transportation Liquids, CTL Two processes involved for FT fuels: (1) (2) Coal Gasification Fischer-Tropsch Indiana Crane Naval Base 28

29 4 Major Issues - U.S. Electric Power Generation 2004 Data Clean Clean Coal Politically Correct PC Increased role: What % 10-20% Liquefied Natural Gas LNG More import dependence! 29

30 Base Load Power Plants Existing & Proposed More efficient power plants such as IGCC (clean coal) have near zero emissions, USCPC with higher efficiencies are good for the economy and result in better fuel economy Wabash, Indiana, IGCC, Integrated Gasification Combined Cycle ~ only two IGCC plants in U.S. Clean Coal Gasification ~ near zero emissions Edwardsport, Indiana New IGCC planned COAL & NUCLEAR Merom, Indiana, 1,000 MW ~ one of the cleanest Pulverized Coal (PC) power plants in the U.S. with electrostatic precipitators for flyash removal, a flue-gas desulfurization (FGD) system, etc 30

31 Nuclear Energy Zero Emissions but Safety & Waste Disposal 1990 no new capacity going on line All capacity fully on line by 1990 & increased load factors The accident at Three Mile Island in 1979 permanently changed things Significant growth in nuclear power usage in US since 1970s France & Germany are partnering to develop the European Pressurized Reactor (EPR), safer & more efficient In 1970s France decided to reduce dependence on energy imports. In 1973 fossil fuels accounted for 65% of gross power output. By 2005 nuclear accounted for 78% of it. 31

32 Cost of Renewables Coming Down California approved $3.2 Billion in rebates for solar energy to be granted over 11 years The goal is to create 3,000 MW by 2017, providing about 4% of California's total power generation Wind and sun are unpredictable Windmills have 2 MW max capacity Researching appropriate batteries COE = Cost Of Electricity Source: 32

33 Conventional & Fischer-Tropsch Fuel Costs $45/barrel Economics & risk are the key issues for commercialization of new technologies With a subsidy set at $45/barrel no losses will occur & so no risks for investors 33 Source: W. Tyner, Lugar Energy Security Summit, 2006

34 U.S. Energy Security & Independence ~ If Sufficient Technology Investment Today Transportation fuels future options 34 Source: Southern States Energy Board,

35 Technology Investment Purdue Energy Summit, August 29, 2006 Senator Richard Lugar: What is needed to make significant changes to energy policy?..reducing the risk in investing in clean coal technologies, biofuels, renewables, power grid, rail network... Southwest Indiana Aims to be Home to Large Natural Gas Plant, October 27, 2006 Governor Mitch Daniels: There are plans to build a $1.5 Billion coal gasification plant that would be the first in the country to make pipeline quality natural gas from coal beginning in

36 Energy & New Technology Commercializing new fuel options & improving vehicle efficiencies we can reduce dependence on oil imports There is an increased role for renewable energies while the bulk base load generation will come from coal (& nuclear) Reducing risk for investment in new technology should be a top priority Essential to fund applied research & demonstration projects Energy Supplies 50 Years Time Significant funds for basic research 36

37 Thank you for contacting The Energy Center at Discovery Park We look forward to future discussions & collaboration The Energy Center 500 Central Drive Potter Center 270 Purdue University West Lafayette IN Ph: