unlocking the global potential of natural gas GAS TECHNOLOGY INSTITUTE 2012 Annual Report

Transcription

1 unlocking the global potential of natural gas GAS TECHNOLOGY INSTITUTE 2012 Annual Report

2 technology solutions and technical insight to address worldwide energy challenges

3 economic prosperity. energy security. environmental stewardship. All these contribute to a promising future for humanity and the health of our planet. At GTI, we re working to make this future a reality by unlocking the global potential of natural gas. The shale gas revolution has had a profound impact in the United States. Clean and abundant natural gas has helped to enhance the security of our nation s energy portfolio and meet growing energy needs. It has contributed to a dramatic reduction in U.S. greenhouse gas emissions, as increased natural gas use in electricity generation replaces coal and complements renewable resources. Ultimately, hundreds of thousands of new jobs will emerge, driven by growth in shale gas production and the industrial renaissance in manufacturing and chemicals production. But the compelling economic and environmental benefits of natural gas are far greater than just a national story. Gas is rapidly becoming the go-to resource for many developing countries and regions with growing power needs. GTI has the expertise and is wellpositioned to support this global expansion. We helped unlock the potential of unconventional gas resources in North America decades ago, and we re working today to expand the body of scientific knowledge and promote the exchange of leading best practices. Meeting society s future energy needs safely, affordably and responsibly will require new technology developments and improved ways of producing, transporting and using energy. You ll see throughout this report the many ways GTI professionals are taking on these important challenges, providing solid solutions to the market recap We made solid progress and had a successful year in Our engineers and scientists executed hundreds of technical projects, performing safely in our laboratories and attaining record levels of customer satisfaction. GTI inventors were awarded 18 patents from the United States Patent and Trademark Office, a high water mark in our company s efforts to bring innovative ideas to the market. The financial health of our organization remains strong. We continue to refresh a substantial backlog of pending projects from utilities, private companies and government agencies across the energy value chain. Many new contract awards are focused on important national priorities: reducing the environmental footprint of shale gas production, developing natural gas and biomass alternatives to highpriced petroleum-based fuels, and enhancing the integrity of our nation s vast pipeline infrastructure. On behalf of the company s Board of Directors and management team, we d like to thank our employees, business partners and sponsors for their commitment to advancing the state of energy technology and our customers who express their confidence in us. David C. Carroll, President & CEO Terry D. McCallister, Chairman of the Board

4 GTI completed both proprietary and public reports for the Polish Operators Association on the potential environmental impacts and mitigation strategies during the exploration and appraisal phase of shale gas development in Poland. Both documents reference the North American shale experience, and will help the gas industry in Poland build from these lessons learned and help enhance public awareness and acceptance of shale gas exploration. A new 10kW fiber laser was installed at GTI in late 2012, providing 3X the power of the previous system. It will support the development and commercialization of downhole laser energy applications in oil and gas. unconventional gas Shale gas is a clean, affordable, and abundant resource that is changing the global energy outlook. GTI is working to ensure safe, economical, and responsible development by expanding knowledge and acceptance of unconventional resources worldwide.

5 GTI s 3rd annual Global Unconventional Gas Summit, co-hosted by the China Energy Research Society, was held in Beijing, China in November A series of high-level signing ceremonies took place alongside the event. SPT Energy Group and GTI signed a framework cooperation agreement for a training and learning center. An agreement of understanding between the U.S. Trade and Development Agency, the Department of Energy, the Department of Commerce and the Chinese National Energy Agency was also signed. Through Shale Alliance for Energy Research Pennsylvania (SAFER PA), we are making progress on bringing together government, environmental organizations, academia, the natural gas industry, and other stakeholders to advance technology, analysis, and education to support safe and sustainable development of Pennsylvania shale resources. Current Board Members include representatives from GTI, Pennsylvania State University, University of Pittsburgh, Drexel University, Groundwater Environmental Services, Tetra Tech, Universal Well Services, and Shell Exploration & Production. GTI was awarded $6.2 million from by the Research Partnership to Secure Energy for America (RPSEA) to develop advanced methods and techniques for design and execution of environmentally safe and economically efficient hydraulic fracturing operations. This work builds off an innovative technique developed in GTI s recently completed Marcellus Shale field-based industry collaborative R&D project. Project results were presented at the Society of Petroleum Engineers (SPE) Unconventional Resources Conference in Texas in April 2013, and were also shared at a joint GTI/RPSEA industry workshop held in Pittsburgh in May. 4

6 gas processing As new sources of energy are discovered and produced, GTI is developing innovative cleanup systems to remove contaminants and bring pipelinequality gas to market at lower costs. A versatile technology to purify natural gas is being developed by GTI and PoroGen Corporation. The hollow fiber contactor technology offers significant economic advantages with much smaller size and lower cost than conventional options. It enables gas processing for floating LNG platforms where stringent gas quality is combined with compact configurations. It also can be used in natural gas pipeline applications, and is ideal for stranded gas locations, permafrost environment, or construction in remote areas. In addition, the technology is applicable to pre- and postcombustion carbon capture. GTI is looking for a commercial partner who is well-positioned to bring this technology to market. GTI has developed a comprehensive sulfur removal process that will treat tonnage levels of H 2 S, replacing acid gas removal, sulfur recovery, and tail gas treating processes in one step. Preliminary process performance and economics suggest a 40% cost savings compared to competing technologies and a 32% reduction in operating expenditures. GTI is looking for a commercial partner and host site for a pilot-scale demonstration of this flexible and cost-effective process. UCSRP: A Flexible Sulfur Removal Process for Sweetening Natural Gas, a paper written by Energy Conversion staff Arun Basu, Howard Meyer, Dennis Leppin, Jim Zhou and Ajay Makkuni was presented with the Best Paper Award from the Fuels and Petrochemical Division at the 2012 AIChE Spring Meeting.

7 In November 2012, GTI was notified of a DOE ARPA-E award to convert methane to methanol via a low-temperature process. In this project, GTI is developing a new process to convert natural gas into liquid methanol with a hydrogen byproduct. Current methods to produce liquid fuels from natural gas require massive capital expenditures and significant energy expenditures. GTI will create a new process that uses metal oxide catalysts that are continuously regenerated in a reactor that is similar to a battery. This process is more efficient and less capital-intensive than current approaches and has the added benefit of operating at room temperature. Converting natural gas into gasoline or diesel fuel can raise the value of regionally abundant natural gas reserves, and also enable monetization of remote resources that can be transported to users as a liquid through conventional pipelines and tankers. GTI s partial oxidation gas turbine (POGT) technology was selected for development by ARPA-E as part of a natural gas to liquid fuels (GTL) process. Aerojet Rocketdyne, as the prime contractor, will modify their gasifier to operate as a high-temperature, high-pressure natural gas partial oxidation reactor and further the design of the expander, and GTI will perform systems testing on the reactor and economic evaluations on the entire GTL system. extracting the most value from natural resources Global demand for power, hydrogen, liquid fuel and chemical production is growing as access to low-cost resources provides new market opportunities. Our focus is on ways to convert abundant resources into high-value products. 6

8 A liquefaction system based on intellectual property developed by GTI is being used at a 13,000- gallon-per-day landfill gas-to- LNG production facility operated by Waste Management and Linde at the Altamont Landfill in California. The award-winning facility produces biomethane that is used to fuel a fleet of trash haulers and is estimated to displace 2.5 million gallons of diesel fuel and nearly 30,000 tons of GHG emissions statewide annually. GTI is talking with several companies who are well-positioned to expand this liquefaction technology to new markets. The technology can be used on stranded gas at production sites, turning it into a resource that can be monetized rather than flared, and it can also create LNG from wastewater bio-gas and digester gas. biofuels production and clean-up Scientists at GTI are looking at ways of engineering microorganisms to produce liquid transportation fuels from natural gas feedstocks. Two technological approaches are being evaluated for this biological conversion. The direct production route involves the engineering of biocatalysts designed to produce infrastructure-compatible transportation fuels. The indirect route involves a two-stage process using methane to grow microorganisms to produce a high-quality, carbon-rich biomass (stage 1) that could be converted via GTI s IH 2 technology into hydrocarbon fuel (stage 2). As the international population continues to rise, so will the need for cost-effective renewable energy sources. GTI has unique capabilities in biofuel and bio-methane production and processing technologies to generate pipeline-quality gas, liquefied natural gas, liquid transportation fuels and hydrogen.

9 A novel thermal catalytic process, IH 2, produces liquid transportation fuels from woody biomass, agricultural residues, algae, and aquatic plants. Techno-economic and lifecycle analysis results illustrate that the technology can convert wood and agricultural residue biomass to gasoline and diesel blending components for less than $2.00/gallon with greater than 90% reduction in greenhouse gas emissions. DOE funding enabled rapid development of the IH 2 technology. GTI has signed an exclusive worldwide licensing agreement with CRI Catalyst Company (CRI), and is providing ongoing support. GTI hosted a tour and open house for a new IH 2 pilot plant in April We are now demonstrating long-term operation of the facility, confirming catalyst life and stability. In late 2012, DOE awarded GTI, and project partners CRI and Valero, another project to evaluate the IH 2 process in a configuration to maximize integration with existing crude oil refineries. GTI is working with Haldor Topsøe on an integrated biorefinery to make renewable drop-in gasoline at GTI s gasification campus. This pilot-scale project converts wood into bio-derived gasoline by combining biomass gasification and syngas cleanup steps with a unique process to turn syngas into gasoline. In 2012, significant construction and installation of major pieces of equipment took place. A GTI-based Andritz/Carbona biomass gasifier turns wood into syngas. The GTI Morphysorb process removes carbon dioxide and sulfur gases, and Topsøe s integrated gasoline synthesis (TIGAS) process converts the syngas into gasoline. Other partners in this DOE-funded project include forest products company UPM and petroleum products company Phillips 66. The project team completed commissioning and shakedown in January 2013, and conducted its first test campaign in March. The pilot plant gasified woody biomass through a series of integration and optimization steps, culminating in fully integrated operation during which the plant produced 570 gallons of gasoline. 8

10 GTI is creating an internal inspection strategy tool (in the form of relational database software) that will assist operators in selecting the most appropriate inspection technology for a specific pipe segment to address the unique threats based on the pipe s vintage, known material properties, and construction techniques. The industry will also be able to quantify the potential market for new inspection technologies based on the gaps identified by the software tool, optimizing new technology development and allowing the industry to focus R&D efforts toward the highest priority applications. infrastructure integrity A safe, reliable, and more intelligent infrastructure is critical to match abundant new supply with growing demand and maintain confidence in the nation s natural gas delivery system. The capture of accurate, high-quality data is important for operator analysis and decisionmaking. At GTI, work is underway to create asset lifecycle tracking technology to assist the industry with a new ASTM standard a unique identifier for piping and appurtenances of gas distribution systems for comprehensive tracking and traceability of components from manufacturing through retirement. Additional pilot projects to validate performance are ongoing and commercialization is anticipated this fall. Three successful demonstrations in 2012 showcased the use of GIS-enabled software running on tablet computers, real-time, subfoot accurate GPS and barcode scanning to automate the process of capturing new asset installation information. A pilot project with PECO Energy using the intelligent utility technology to map RFID marker ball installation to assist in accurately relocating assets and prevent excavation damage was also completed successfully. New initiatives underway will develop similar systems to track transmission facilities, meters, and regulators.

11 A new pipe location technology developed by GTI, with funding support from OTD, is now available from Sensit Technologies. The handheld acoustic pipe locator (APL), named the ULTRA-TRAC APL, is used to detect and locate both metallic and nonmetallic buried gas and sewer pipes. It can be universally applied for use in most soils and ground coverings such as grass, asphalt, concrete, and dirt. The technology is expected to save the industry millions of dollars by helping to reduce the potential for damage to difficult to locate buried pipes and the resulting incidents that can cause customer outages. GTI has established a Gas Quality Resource Center (GQRC) to provide a common understanding and knowledge base about gas quality and interchangeability issues. The GQRC provides analysis of flowing gas supplies in North America, constituent trends across identified regions, and analysis of technical regulatory trends associated with pipeline tariffs. It will also help to identify information gaps and research needed to maximize supplies while balancing the needs of pipeline integrity and end use concerns. The system is set to launch in late 2013, and an annual subscription service will be available. Gas Quality Resource Center GTI s hydro-testing alternative program will identify and ultimately validate technologies that can provide an assessment that is at least equivalent and, at times, superior to a construction hydrotest. The first phase of this program will characterize and quantify pipe that has not been subjected to a construction hydro-test to allow the selection of inspection technologies that could provide an assessment that regulators accept as equivalent to a hydro-test. The second phase of the program will perform validation studies of inspection tools to demonstrate their hydro-test equivalence and to obtain regulatory acceptance. 10

12 natural gas transportation fuels Low-cost domestic natural gas is creating inroads in the diesel-dominated heavy-duty vehicle market. To promote greater adoption and penetration across all NGV markets, GTI is delivering infrastructure, vehicle, engine, component, and system solutions. Funded by the U.S. Department of Energy (DOE) through its Advanced Research Projects Agency-Energy (ARPA-E), GTI is performing research on two new projects to help overcome market barriers to increased NGV use in light-duty vehicles. Partnering with Northwestern University, NuMat Technologies, and Westport Innovations, Inc., researchers are working to identify a new adsorbent material to be used along with a conformable storage tank to enable more flexible and lighter storage systems while reducing costs. The other project is using an adsorbent with a thin tailored shell to dramatically reduce the storage pressure. The shell acts like nanovalves that can be opened and closed on demand to enable vehicle refueling, driving, or storage. Team members include the University of Louisville and University of South Carolina. A major new product introduced to the market in 2013, the Cummins Westport Inc. (CWI) ISX 12G natural gas engine targets regional trucking, vocational and refuse markets in North America. GTI worked with CWI, with support from Utilization Technology Development (UTD) and the California Energy Commission, to develop and commercially launch the new heavy-duty engine that operates exclusively on CNG or LNG. Pre-commercial demonstrations of other advanced heavy-duty vehicles are underway with Clean Air Power (CAP)/Volvo, US Hybrid, Freightliner, UC Riverside, Calko Transport and SoCal Gas. GTI is also supporting CWI in the development of a 6.7-liter ultra-low emission medium-duty dedicated natural gas engine, ideal for school bus, package delivery, and class 5-7 trucks.

13 A new mobile fueling technology developed by GTI debuted at the 2012 Republican and Democratic National Conventions. The FuelMule is a mobile fast-fill compressed natural gas (CNG) fueling station that gives NGV fleets fueling capability at their home base or anywhere without the need to build a fueling station. GTI has worked with Ultimate CNG to bring the technology to fruition. Overcoming capital investment issues associated with building new fueling infrastructure will help to reduce barriers of NGV market entry. GTI is partnering with the Center for Electromechanics at the University of Texas at Austin (UT-CEM) to engineer new ways to refuel natural gas vehicles at home, making ownership easier and more affordable for consumers. More than $4 million in funding was granted from ARPA-E to develop a cost-effective compressor for at-home natural gas vehicle refueling systems. The team will develop a compressor that will use fewer moving parts and offer a more reliable and less costly system. The goal is to replace current technology, which comprises multiple pistons and cylinders, with a single cylinder and piston moving through a linear motor. 12

14 power generation Recognizing the operating cost and emissions benefits of on-site power and combined heat and power, GTI is developing, demonstrating, and deploying new gas-fired technologies. GTI is working with CMR Group to develop and commercialize a costcompetitive natural gas quality sensor that can be used for fast-response monitoring of natural gas and bio-methane quality in stationary natural gas engines and turbines, as well as for industrial processes. The variability in composition and heating value of resources may increase with the influx of new shale gas, which can affect reliability of operation, making real-time monitoring a high priority. Commercial introduction of the technology is anticipated within the next year. GTI is developing and demonstrating a hybrid-generation CHP system that can use natural gas, biogas produced by anaerobic digesters at wastewater treatment plants, or landfill gas in distributed generation applications. The novel system integrates a self-powered, fuel reforming gas turbine system with a reciprocating internal combustion engine to increase on-site power and thermal generation with high system energy efficiency. It also meets air-emissions regulations without catalytic after-treatment of exhaust gases. It will be tested at the San Bernardino Water Reclamation Plant with funding from the California Energy Commission and SoCal Gas. A GTI research team is developing a cost-effective, small- to medium-size gas turbine-based combined heat-andpower (CHP) system that can significantly increase energy efficiency while meeting air-emissions regulations. With funding provided by the DOE Advanced Manufacturing Office, the California Energy Commission s Public Interest Energy Research (PIER) program, and Utilization Technology Development (UTD), laboratory tests have shown total efficiency of over 84%. Field testing of the system at a food-processing plant in California has proven the system can meet even the most stringent emissions criteria (CARB 2007), with NO x emissions at half of the required lb/mw-h and carbon monoxide and total hydrocarbon emissions also far below requirements. A commercialization strategy is now under development.

15 2012 saw the launch of 10 demonstration programs through GTI s Emerging Technology Program (ETP) focused on accelerating the adoption of the latest end use and energy efficiency technologies with space and water heater systems and high-efficiency gas heating rooftop packages key areas of initial interest. These collaborative activities in the beyond development stage are being supported by eighteen North American members. GTI is also leading an emerging technology program for Nicor Gas (an AGL Resources Company) and working with Nicor Gas Energy Efficiency Program implementers to help them identify new products and processes that could be rolled into existing or future energy efficiency programs. GTI has provided important technical information regarding the benefits of source energy which measures energy consumption from the point of origin to the point of use and includes energy losses that occur with conversion and distribution and greenhouse gas methodologies to support energy efficiency standards. Source energy is now included in the final version of the International Green Construction Code (IgCC), published in the spring of GTI is working with the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) and other parties to include source energy in a suite of major building codes. Working with gas industry partners and the California Energy Commission, GTI is developing technology for the commercial foodservice market, creating a suite of higher-efficiency natural gas appliances including fryers, ovens, ranges, broilers, steamers and other important kitchen equipment. Additional efforts to demonstrate mature, commercially available technologies in commercial foodservice applications will focus on market analysis and energy audits of low-volume fryers, conveyor ovens, and pilotless ranges. Researchers will place equipment in various restaurants to showcase the cost and cooking performance benefits of replacing existing appliances. residential/commercial appliances and equipment Using clean natural gas to meet growing energy demand will lower energy consumption, reduce energy costs, and control greenhouse gas emissions. GTI is advancing the creation and adoption of high-efficiency natural gas technologies to benefit businesses and families. 14

16 GTI is building its international training activities. We partnered with the China Gas Association (CGA) to deliver training courses to an array of Chinese gas utilities, covering natural gas distribution topics. Additional classes are slated for China in 2013, along with onsite courses for visiting Chinese gas industry professionals at U.S. utilities. GTI also presented training workshops at LNG China in 2012 and hosted the Global Unconventional Gas (GUG) Summit, which will be held again in Beijing in October training New employees come on board, markets and regulations evolve, and technologies advance. GTI helps companies rapidly adapt via professional development for the energy industry, with courses on gas distribution, transmission, marketing, and supply that are industry-driven. To keep pace with advancing technologies, DOE is funding a curriculum of training on modern energy-efficient building systems. Working with the DOE s National Energy Technology Laboratory, GTI developed 22 online training modules on five topic areas including boilers, water heaters, HVAC systems, electric, and combined heat and power. These modules are designed to equip technicians, supervisors, and contractors with the knowledge and skills needed to provide effective and sustainable inspection, troubleshooting, and maintenance of existing systems. Materials are available for onsite classroom training as well as online elearning programs. In 2012, GTI received a grant through the Illinois Green Economy Network to use the new curriculum to teach courses at community colleges and host webinars. Additional sessions and webinars are slated for GTI s training group set a new record for online/self-study course participation, and earned the highest revenue to date. Two new online courses, How an LNG Plant Operates and LNG Plant Safety, were introduced last year. We are continually refreshing our energy and LNG curriculum to add topics of current interest, and have developed comprehensive custom training programs for plant operators, specific to facility equipment, process flow, and operating procedures. Over 50 open enrollment and onsite offerings hosted by GTI around the globe including the U.S., Canada, China, Spain, Trinidad, Brazil, and the Dominican Republic trained nearly 1,400 students in 2012.

17 our expertise aligns with the natural gas value chain Supply Reservoir Characterization Well Construction and Completion Produced Water Management Liquefied Natural Gas (LNG) Gasification Technology Development Gas-to-Liquids Technology Development Integrated Biorefinery Systems Development Natural Gas, Renewable Gas, and Syngas Cleanup and Separations Solutions Delivery Data and Integrity Management Infrastructure Rehabilitation and Improvements Environmental Matters and Gas Quality Breakthrough Technology Materials and Analytical Testing Chemical Research Services End Use Residential/Commercial Appliances and Equipment Industrial Process Heat and Steam Power Generation and Combined Heat and Power Alternative Transportation Fuels Full-Fuel Cycle Measures of Energy Use Natural Gas-Solar Thermal Hybrid Equipment Fuel Cells and Energy Storage 16

18 2012 Financials (in millions) Project Revenue Royalty and Other Revenue Total Revenue Current Assets Current Liabilities Net Current Assets Total Assets Total Liabilities Net Assets Unrestricted New Business Contracts $ 51.9 $ 2.1 $ 54.0 $ 20.6 $ 16.7 $ 3.9 $ 90.3 $ 26.8 $ 63.5 financial and business overview Improved Safety Practices and Results We continued a positive trend in our safety practices, and GTI did not have any lost time accidents in calendar year At 0.43, our OSHA recordable medical cases rate was better than the industry average. LDCs 37% State/Local 19% Industry 12% Federal 32% Customer Satisfaction We strive to produce substantial results for our customers, complementing their internal expertise with our technical knowledge to help them achieve success. GTI continued to deliver highvalue products and services to the marketplace. We exceeded our corporate goal for customer satisfaction, and also achieved a very favorable Net Promoter Score (NPS). Record Patents It was a record year for our intellectual property portfolio. We reached a new high, with 18 patents assigned to GTI. We have also been very prolific in submitting patent applications, with 47 applications pending with the U.S. Patent Office at year s end.

19 GTI Executive Team GTI Board of Directors David Carroll President and CEO Vann Bush Managing Director, Energy Conversion Paul Chromek General Counsel and Secretary Rachel Garrido Director, Human Resources Jim Ingold Vice President of Finance, Treasurer, and CFO Edward Johnston Vice President, Research Operations Richard Kaelin Executive Director, Washington Operations Bill Liss Managing Director, End Use Solutions Rodney Rinholm Executive Director, Business Development and Education Ronald Snedic Vice President, Corporate Development Carlos A. Cabrera Executive Chairman, Ivanhoe Energy Inc. David C. Carroll President and CEO, GTI (Ex Officio Director) Arthur C. Corbin President and CEO, Municipal Gas Authority of Georgia Charles D. Davidson Chairman and CEO, Noble Energy Inc. Marc J. Florette Member of the Executive Committee, Research and Innovation Director, GDF SUEZ John D. Hofmeister Founder and CEO, Citizens for Affordable Energy Ronald W. Jibson Chairman, President and CEO, Questar Corporation Alexander A. Karsner Founder and CEO, Manifest Energy, LLC Terry D. McCallister Chairman and CEO, WGL Holdings, Inc. and Washington Gas (Chair) Rebecca Ranich Director, Deloitte Consulting LLP (Vice Chair) Thomas E. Skains Chairman, President and CEO, Piedmont Natural Gas David F. Smith Executive Chairman, National Fuel Gas Company John W. Somerhalder II Chairman, President and CEO, AGL Resources Lori S. Traweek Senior Vice President and Chief Operating Officer, American Gas Association Global Presence David Carroll officially became the Vice President of the International Gas Union (IGU) in In this role, he chaired the Steering Committee of the LNG 17 Conference, the largest global gas event in 2013, and served as emcee of the conference. GTI staff shared technical expertise on acid gas removal in floating LNG applications at the poster session, moderated sessions and panels at the specialized transportation and training exhibition pavilions, and also made a number of presentations at the pavilions. Corporate Citizenship GTI helps our neighbors in need through various voluntary actions that reflect our culture, our values, and the way we do business. Toys for Tots Campaign Annual Food Drives United Way Campaign LifeSource blood drives JPMorgan Chase & Co. Corporate Challenge

20 Our Mission GTI solves important energy challenges, turning raw technology into practical solutions that create exceptional value for our customers in the global marketplace. GAS TECHNOLOGY INSTITUTE Headquarters 1700 South Mount Prospect Road Des Plaines, Illinois GTI-13/ ABS2m 2013 Gas Technology Institute. All rights reserved. Follow Us Online: