Non conventional oil and gas ( Drax follow up) lecture3

Question 1

What statement did the IPCC( Intergovernmental panel on climate change) make in 2014?

Answer 1

to hit climate change objections would need to stop using fossil fuels by 2100.

• IPCC states that most of the world’s electricity can and must be produced from low-carbon sources by 2050.
• pre- brexit/ referendum targets were extremely hard to meet.
• specific countries have said for coal they will move faster than that. UK has talked about 2025, Canada 2030 deadline.

Question 2

What is the 2009 Renewable Energy Directive?

Answer 2

• UK driven by EU 2009 Directive that sets a hard legal target of 15% of all energy not just electricity, when referring to energy system, electricity is just part of it) . UK finding this difficult.

Question 3

UK Renewables

Answer 3

• 2015 renewables were 8.3% of all energy (up to 7.0%) in 2014.
• 2015 renewables were 22.3% of electricity (up to 19.1% in 2014)- large amount of electricity from Drax, nearly a 1/4 and continuing to increase.
• deadline 2020, if we trigger article 50 and move out of EU in 2019, who knows what the target will be- at the moment still working to it but not very effectively.

Question 4

UK Renewables

Answer 4

-Renewables capacity increased by 20% in 2014:
Electricity from biomass up 42% (third Drax conversion) - down to burners converting coal to biomass
Solar up 87% - increased solar farms in recent years so scales up domestic use to an industrial scale .
Onshore wind up 23%

Question 5

Drax power station has switched 50% of its capacity to burn biomass instead of coal. What policies have caused this to happen? (6 marks)

Answer 5

• targets for carbon emission reduction (greenhouse emission targets as a driver of policy).
• emmission targets on nitrious oxide (nox) and sulfur dioxide (sox).
• renewable targets, government has put into place- set of policies to meet
• give specific acts
• get marks for being able to talk about large combustion plants directive and industrial emissions directive.

Question 6

Carbon emission cost eat into profits at power supplier Drax-

Answer 6

COAL fired power producer drax posted a fall in 1/2 year profit, as the company began paying a government imposed minimum price of carbon.

• earnings fell by 22% as it converted one of its generation units to biomass and the costs of emitting carbon more than doubled.
• earnings prior to tax, interests etc fell to £120m in 2013, fell from £154 the year before.

Question 7

Issues with carbon emissions

Answer 7

• carbon emissions have become very expensive, so if we want to take carbon emissions out of production we have to put TAX on carbon emissions to change system of private organisations ( industry there to make a profit for their shareholders) not a public goods system which is a major part of UK’s energy system problems.

Question 8

European Trading Scheme (ETS)

Answer 8

• to tax carbon through the EU, European Trading System is the way to do this.
• Cap and trade scheme- this sets a limit on no. of emissions and allows private companies to trade their allocation of emissions through EUAS (EU allowance) which should set a price for carbon & encourage people to squeeze carbon out of their system.
• heavy fines if not implemented and if a company has spare allocations they can keep them for future years or trade them
• problem of ETS is they over allocate too many permits for the amount of pollution going on and over capacited by a couple of billion tonnes per year.
• Permits ca. 16 billion tonnes of carbon emissions 2013-2020
• Over-capacity by 1.5-2.0 billion tonnes

Question 9

Cap and trade system

Answer 9

• Emissions trading or cap and trade is a government-mandated, market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants.
• System essentially saying they are expecting carbon to be more expensive in the future so factor it into trading schemes. talks collapsed so is an example of a failed system as seen by drop in EU allowances traded.
• carbon price from launch of system through to 2013 and you can see a downwards projectivity in carbon costs.

Question 10

UK Carbon Price Floor (CPF)

Answer 10

• Taxation under the Climate Change Levy on business using fossil fuels to generate electricity
• Establishes carbon price support effective from 1st April 2013
• UK response was to set a ‘ carbon price floor’- sets a minimum price for carbon in the UK so it underpins the ETS so states if they don’t make it mandatory, they will charge industries.
• thus, Drax or anyone one else using coal has to pay gov for that activity.
• if you charge £1.50 for every GJ and you have over 200 million the price escaltes to around 400 million a year that Drax has to pay to continue ‘as usual’ so essentially puts up the price of coal and Draxs’ future strategies.

Question 11

Renewables obligation certificates (ROCs)

Answer 11

To regulate energy systems they give certificates to those who generate renewable energies to meet EU energy directives.
- if they generate renewable electricity they get ‘ROCs’ certificate, there is an obligation for suppliers to buy ROCs, so they have to meet a certain amount of renewables in their energy mix and they do this by buying electricity and these ROCs with it so essentially there is a subsidy going back to the generators.

Question 12

Renewables obligation certificates (ROCs)

Answer 12

• Establishes obligation on suppliers to source renewable energy
• Achieved via a market system
• Scheme closing to new capacity 2017, full closure in 2037 - schemes already going will continue to be recognised to 2037 but after that entire scheme is over.
• if suppliers can’t meet those targets they have to pay a levy (certain amount to gov).
• periods of 2003-2015 and amount of electricity the gov has said must be in the electricty supply system so goes from 3% to 24% by 2014/15 - we were just short of that at 22.5% in 2015.

Question 13

ROCS- Drax

Answer 13

When Drax shifted to biomass they were eligible for Renewable Obligation Certificates so 2 plants are funded under ROCs- one plant, 3rd conversion at Drax is based on contracts for difference so have a contract with government to produce electricty and they will give them this price for the next 20-30 years
- essentially they put a price so charge if targets are not met have created a framework that wants to shift industry away to get a certain amount of renewable electricty.

Question 14

Contracts for difference

Answer 14

Long-term contracts to provide stable and predictable incentives for companies to invest in low-carbon generation (Energy Act, Dec 2013).

• been replaced by ‘contracts agree a strike price and electricity traded over time as long as that price is lower than strike price, govs price, the government will top up so industry is guarenteed to get £70/mwh to make economic basis.
• gov will make up difference if it goes above strike price, industry gets same amount but have to pay a bit back.

Question 15

Contracts for difference

Answer 15

Long-term contracts to provide stable and predictable incentives for companies to invest in low-carbon generation (Energy Act, Dec 2013).

• been replaced by ‘contracts agree a strike price and electricity traded over time as long as that price is lower than strike price, govs price, the government will top up so industry is guarenteed to get £70/mwh to make economic basis.
• gov will make up difference if it goes above strike price, industry gets same amount but have to pay a bit back.

Question 16

strike price example

Answer 16

controversy with investment into nuclear was the strike price is double what we are currently paying for electricity and big argument whether it’s the right thing to do.

Question 17

Coal-Bed Methane

Answer 17

-The process of coal formation also produces a lot of methane that is stored within coal
Estimated amount is about five-year supply

• Promising energy source however there are several environmental concerns
  1. Disposal of large volumes of salty water
  2. Migration of methane, which may contaminate surrounding areas
• methane co- occurs with coal so in the same way you get associated gas next to oil deposits, you also get it next to coal deposits and that can be successfully harvested so an impact of coal mining would be that methane emissions (potent greenhouse gas).

Question 18

Coal-Bed Methane

Answer 18

what you can do:

• it co-occurs with water in coal seams, so caol is laid down, it has layers and gaps between it.
• water & methane trapped in those layers
• if you extract, you pump out the water, allows methane to escape so can tap off methane and supply it as natural gas.

Question 19

non- conventional oil & gas

Answer 19

good for drax as they have been innovative but difficulty is if you set a strategy like moving out of coal by 2025 and have a privatised energy sector, a lot of companies are saying this combined with emission targets and carbon price, they can’t afford it anymore so will just close eg. Fery Bridge in region closed, just Drax that went forward with biomass conversion process.
- so problem for gov is that its fine to say they will move out of coal by 2025 but have to have a system to compensate for this lost.

Question 20

CBM Enhanced extraction

Answer 20

• Using CO2 or microbial injection to enhance extraction
• one way to think about carbon capture & storage
• already pump co2 into coal steams to extract the methane- pumping co2 creates the pressure and essentially pushes the methane out of the gaps. The carbon dioxide is then trapped in coal seams and we have a way of capturing that carbon dioxide
• also looking at microbial injections into coal, even think about burning coal seams, turning that into gas and then capturing that gas.

Question 21

Non-conventional sources of gas

Answer 21

• shale gas in mudstones (28% of US production)- mudstones, fine sedimentary rocks laid down in layers (can get gas trapped in micropores.
• Tight gas in sandstones (14% of US production)
• Horizontal drilling along rock layers
• tight gas is sandstones& by going through the process of releasing that material, we can extract gas that wouldn’t normally be accessible, hence the word ‘unconventional’.
• process of doing this is to dig vertical wells& technology has advanced to put horizontal links beneath ground and then pump water down it, water is the fracking liquid. puts pressure, fractures rocks so that methane can be released to be extracted& supplied as a conventional source.
• in mudstones they are very fine pores so have to do the extraction work, putting in a proping agent ( normally just sand particles that hold fractures open) creates friction usually chemical lubricants also injected down.

Fracking to release the gas

• Fracking liquid (water)
• Propping agent (sand)
• Lubricants

Question 22

shale gas

Answer 22

In the US, there has been a real boom in this

-exponential growth in exploitation, gas usage is fairly stable.

Question 23

Shale gas in the UK

Answer 23

• Estimated exploitable resource of 150 billion m3 (DECC, 2010) - in theory we have a lot we can commercially access but total reserve is much higher 500- 800bm3, sounds a lot but our consumption is 90 billion m3 of gas a year, so have rougly 2 years underground we could tap into commercially & exploit.
• Sufficient for 2 years of UK consumption
• Supplying 10% of UK consumption:
• 2500-3000 horizontal wells over an area 140-400 km2 (Tyndall Centre, 2011) - 3,000 wells would be needed over the size of the likes of isle of White to supply 10%.
• Possible reserves could be as high as 500-800 bm3

Question 24

exploitation rights

Answer 24

• gov has leased out exploitation rights so these are licenced blocks that are owned by companies as potential areas of exploitation of unconventional gases

Question 25

Shale gas in the UK

Answer 25

The estimated gas production stats under Cuadrilla Commercialisation Scenarios (2014-2040)

• important part of this assessment of how big the industry could be is US, its 40% of energy consumption,, uk is considerably less at 5% even at high exporation rates
• won’t explode and be a massive industry in UK, will be small % of total energy usage

Question 26

Fracking and seismic activity

Answer 26

• Creation of seismic micro-events is expected
• Potential for initiating larger events felt at the surface
• Preese Hall (near black pool on lancashire plan) exploratory site suspended after 2.3 event on 1 April 2011 and 1.5 event on 27 May 2011
• BGS and independent report for Cuadrilla Resources conclude that fluid injection at 2-3 km depth is the likely cause
• started testing and had seismic activity at 1.5 and 2.3 v. small but could be felt at the surface, independent report concluded it was fracking + led to huge debate on whether fracking should occur or not.
• in UK think about micro seismisty so when you eject water underground. you are causing seismic micro-events ( same process in some geo-thermal processes)
• potential to cause further movement.

Question 27

Objections to fracking

Answer 27

Ryedale district council votes on 5 year fracking ban( close to york)

Question 28

Oil shales and tar sands

Answer 28

-Reserves estimated at 10 times larger than liquid petroleum reserves
-Tar sands are sand and rock particles coated with bitumen ( mature oil but its a coating around sand particles, pretty easy to get out, dig tar sands up put them through hot water, bubble air into mix to form a throth and bitumen associated with throth so you can sim it off.
- tar sands exploitation slowing down when the oil price collapsed, higher price, more energy, you can afford to get oil out of the ground.
Alberta reserves approximate Saudi oil reserves
Production generates toxic sludge, greenhouse gases and contaminated water
-Oil shales are sedimentary rocks (‘mudstone’) rich in solid organic material called kerogen
-Beds up to 600 m thick under much of Colorado, Utah and Wyoming
- quite distructive eg. open cast mines
- yet production of chemical waste. greenhouse gases emitted
- contaminated water.

Question 29

Tar Sands

Answer 29

Sedimentary rocks or sands impregnated with tar oil, asphalt, or bitumen.
-Recovered by mining the sands and then washing the oil out with hot water.
-Most in Alberta, Canada
Strip mined
-Waste material has greater volume than mined void

Question 30

Oil shale

Answer 30

Fine grained sedimentary rock containing organic matter (kerogen).

• When heated to 500oC oil shale yields oil
• Destructive distillation
• The oil from shale called synfuel
• oil shales are different, they’re not mature oils
• organic matter- intermediate step where kerogen gets turned into oil once heated
• really destructive as not only do you have to mine it, you also have to heat to 300oc so you can get oil out of the system and then you can finally go through all the processing afterwords.

Question 31

Oil shale

Answer 31

Recovery done both surface and subsurface
Disposal of waste a problem because shale must be retorted
Volume of waste 20-30% greater than original volume.
Despite this oil shale may developed as oil prices rise.

Question 32

Oil shale

Answer 32

-Recovery done both surface and subsurface ( problem is you have to do retorting because you heat the rock up, it expands. Just made hole in the ground want to stick it back but it has expanded- forms great big mounds with huge inputs of energy and toxic waste.
-Disposal of waste a problem because shale must be retorted
–Volume of waste 20-30% greater than original volume.
Despite this oil shale may developed as oil prices rise - not a particularly economic thing to do depends on the price of oil but there is a lot of it.

Question 33

It takes energy to make energy

Answer 33

To harness, extract, process, and deliver energy requires substantial inputs of energy
Roads, wells, vehicles, storage tanks
Net energy = the difference between energy returned and energy invested
Net energy = energy returned – energy invested

for each unit of energy you put in, how much do you get back out- so for coal every unit of energy you put in for coal production you will get 40 units back.

light oil spurting from ground is easy to mine so you get 100.

Question 34

Energy returned on investment (EROI)

Answer 34

Energy returned on investment (EROI) = energy returned/energy invested
Higher ratios mean we receive more energy than we invest
Ratios decline when we extract the easiest deposits first and now must work harder to extract the remaining reserves

• US shale oil at best its 10 at lowest its 2, so every unit of energy you put into shale you only get 2 back.
• for tar sands ( most productive in world, gives about 5-7)
• • so difficult to get and expensive

Question 35

summary

Answer 35

• Very strong drivers for continued exploitation of fossil fuels
• Liquids and gases are cheap and convenient
• Clear example of setting economic objectives against environmental objectives
• • system is still fossil fuel driven
• there are strong drivers to keep it this way
• if we want to keep transitions away have a lot of work to do