Natural gas

The development of natural gas has been quite rapid in recent years. It has become a widely used and excellent fuel for power plants, presenting strong environmental advantages (providing a clean fuel emitting 50 % less CO2 per unit energy output than coal and 30 % less than fuel oil) which can be used in an efficient and flexible way. Natural gas fired power plants require comparatively low investments and are quick to install. Combined cycle power plants, which associate a gas turbine with a steam cycle exploiting heat recovered from the gas turbine exhaust gases, reach a high efficiency, close to 60 %. Gas fired power plants emit few pollutants to the atmosphere. Compact, quick to build and requiring a comparatively small investment, they have developed rapidly.

Natural gas is used also for residential heating applications and as a fuel in industry. Stored under pressure in a tank, it can even be used as an engine fuel, called NGV (natural gas for vehicles). This option can be applied for diversifying engine fuel supply sources. If it is properly used in a well adapted engine, it can lead to excellent results from the environmental standpoint, both in terms of a low pollutants emission at the local level and CO2 emissions.

The growing demand for natural gas combined with a growing distance between reserves and consuming areas led to rapid progress in international trade, increasing at an average rate of 6.8 % per year over the last twenty years, reaching 845 billion m3 in 2005 [84].

Transportation by pipe requires significant infrastructures, which leads to a mutual dependence between the supplier and the consumer. This mutual dependence represents a stability factor, but can also be considered as a threat within an uncertain geopolitical situation.

In recent years, LNG (liquefied natural gas) transportation by tanker has grown rapidly. As a result of the cost reductions already achieved at all the stages of this transportation chain and the increased flexibility it brings compared with pipe transportation, LNG represents a major growing factor for the international trade of natural gas.

LNG transportation by tanker is expected to grow at a rate of 7 % per year until 2020. The level of the international LNG trade has reached around 515 billionm3 ensuring 38 % of the international gas transit as compared with 22.3 % in 2005 [85]. The development of the international LNG trade therefore represents an important factor for diversifying gas supplies.

When the distance between the production and the consumer sites becomes too large, the transportation cost can become prohibitive and prevent the exploitation of some gas fields. The production of synthetic fuels from natural gas is a new outlet for natural gas and can be considered as an alternative to the direct transportation of natural gas in such cases. The future outlook in this area is discussed later in the chapter.

The recent increase in the price of natural gas, which remains strongly correlated to the price of oil, and also the economic crisis which occurred in the second half of2008 have made the future rate of growth more uncertain. Most recent estimations were based upon an average growth rate of around 2 % for the overall gas demand during the next two decades [85].

The proven reserves of natural gas amount to 181 000 billion m3, representing around 64 years of consumption. Taking into account that 1000 m3 of gas equals 0.9 toe, the reserves represent therefore around 163 billion toe, i.e. an amount close to the level of the oil reserves.

Although this situation is more favourable than in the case of oil (64 years of reserves at the present rate of consumption as compared with 40 years), the growth of the consumption could lead, if present reserves are not sufficiently renewed, to a gas peak by 2050.

Contrary to what happens in the case of oil, the recovery yield in the case of natural gas is comparatively high and therefore cannot be increased substantially.

However, natural gas has been explored less intensively than oil and the reserves of natural gas are therefore probably underestimated. There remains a large exploration potential for discoveries to be made. The renewal of gas reserves will be achieved in the future mainly through new discoveries and the exploitation of unconventional resources.

Resources of unconventional gas are very large. These resources include deep deposits, contained in low permeability sedimentary rocks ('tight gas'). Coal bed methane is already widely exploited in the USA and its production might be greatly increased in other regions of the world.

Very large quantities of methane are also trapped in the form of hydrates. Hydrates are solid inclusion compounds, which can be formed under pressure and at a sufficiently low temperature. Water molecules form a lattice in which molecules of light hydrocarbons, such as methane, can be trapped. They form deposits in various cold regions of the world, near the Arctic zone, in Siberia and in Canada. Hydrates are also trapped under the bottom of the oceans as a result of the huge pressure due to large water depths. For the time being, the exploitation of hydrates remains very limited, due to many difficulties resulting from the need to handle a solid phase, and also due to the fact that hydrates are often present in a very dispersed way.

In the future, an increase in energy prices could help to increase exploration efforts, giving access to new reserves of natural gas. It is therefore premature to consider a short term decline of natural gas production, due to a depletion of resources.

The advantages of natural gas in environmental terms are quite good, both at the local and the global level, with a level of CO2 emissions per unit of energy output much lower than in the case of coal. It is therefore an energy well adapted to the transition period, with a much lower environmental impact than coal, especially before the effective deployment of CO2 capture and storage technologies.

Financial End Game

Financial End Game

How to profit from the global crisis and make big bucks big time! The current global financial crisis has its roots embedded in the collapse of the subprime markets in the United States. As at October 2007 there was an estimated loss on the subprime market of approximately 250 billion. If you want to come out on top, you have come to the right place.

Get My Free Ebook

Post a comment