implications of abundant natural gas - joint global change ...€¦ · 29/04/2013 · implications...
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Implications of Abundant
Natural Gas
JAE EDMONDS AND HAEWON MCJEON APRIL 2013
April 29, 2013 1
Gas and the Global Energy System
April 29, 2013 2
Gas is has been a growing component of the global energy system for some time.
Grubler et al., 2012: Chapter 1 - Energy Primer. In Global Energy Assessment - Toward a Sustainable Future.
A brief history of thinking about Natural
Gas Resources
April 29, 2013 3
In the 1990s total gas reserves were thought to be more abundant than oil, but gas
production was expected to peak and decline before mid-21st century, because gas
exploitable resources were economically limited to “conventional” resources.
Unconventional resources were thought to be too expensive ever to be relevant.
In 1997, Rogner’s work on natural resources indicated that “unconventional gas” was
abundant. But, modelers either were slow to incorporate unconventional gas (and oil)
into their thinking or priced them as more expensive than “conventional” resources.
And then a technological
revolution happened.
The natural gas revolution
4
The application of technologies for accessing “unconventional” gas shales in the United
States has dramatically increased gas production, and estimates of recoverable
resources even more.
And, dramatically reduced natural gas prices.
Source: EIA, Annual Energy Outlook 2012
Key Questions
As application of new production technology spreads beyond the United
States:
How will this change our understanding of the scale and composition
of the evolving global energy system?
How will this affect energy security and international trade?
How will this affect local and regional air quality?
What effect will this have on CO2 and other GHG emissions and the
technologies for their use in the near term and long term?
Globally and regionally
With and without emissions mitigation policies
Implications for regional air pollution
April 29, 2013 5
April 29, 2013 6
How Much Gas Is Out There?
How much natural gas is there and how much does it cost?
How much in the larger sense means resource availability
Oil, Gas and Coal
Conventional and unconventional for oil and gas
Coal is just too abundant to divide up that way.
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
oil gas coal
EJ
unconventionalresource
unconventionalreserve
conventionalresource
conventionalreserve
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
oil gas coal
EJunconventionalresource
unconventionalreserve
conventionalresource
conventionalreserve
Fossil Fuel Resources
7
How much does it cost?
To help us understand the implications of abundant and inexpensive
natural gas availability for the global energy system, we have
developed three alternative global and regional resource supply
schedules.
Gas Technology Circa 1990 (Gas Tech 1990 or GT1990) this supply
schedule reflects an understanding of gas resource availability circa
1990s.
Gas Technology Circa 2000 (Gas Tech 2000 or GT2000) this supply
schedule reflects an understanding of gas resource availability in the
early 2000s.
Gas Technology Circa 2000 (Gas Tech 2010 or GT2010) this supply
schedule assumes that advanced technologies can be successfully
deployed globally.
April 29, 2013 8
0
5
10
15
20
0 10000 20000 30000 40000
20
05
Ext
ract
ion
Co
st (
20
05
$/G
J)
Cumulative Resource (EJ)
GT1990 GT2000 GT2010
The three gas supply schedules (global)
GT1990 - Conventional Gas Resources Only, ca 1990s
GT2000 - Expensive Unconventional Gas, ca 2000s
GT2010 - Abundant and Inexpensive Gas Resources, 2010 and beyond
April 29, 2013 9
The Global Change Assessment Model
GCAM is a global integrated assessment model
GCAM links Economic, Energy, Land-use, and Climate systems
Technology-rich model
Emissions of 16 greenhouse gases and short-lived species: CO2, CH4, N2O, halocarbons, carbonaceous aerosols, reactive gases, sulfur dioxide.
Runs through 2095 in 5-year time-steps.
Dynamic Recursive
Open Source/Model and Documentation available at: http://www.globalchange.umd.edu/models/gcam/
14 Region Energy/Economy Model
151 Agriculture and Land Use Model
April 29, 2013 10
April 29, 2013 11
Gas and the Global Energy
System
April 29, 2013
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75
20
80
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85
20
90
20
95
Glo
bal
Nat
ura
l Gas
Pro
du
ctio
n (
EJ) GT2000
GT1990
Adding Abundant but EXPENSIVE
unconventional gas to Conventional gas
12
Increased late 21st century production
When gas prices were driven up past present prices
Near-term gas production and use were similar in GT1990 and GT2000.
0
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Glo
bal
Nat
ura
l Gas
Pro
du
ctio
n (
EJ) GT2010
GT2000
0
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$/G
J
domestic natural gas GT2000domestic natural gas GT2010LNG imports GT2000LNG imports GT2010
Abundant AND Inexpensive gas changes
our understanding of the near term
13
Abundant and inexpensive gas is introduced in North America in 2015
and globally in 2020.
The increase in natural gas production accelerates.
And lowers the price of natural gas around the world. N. Gas Price N. Gas Production
168 210 198 99
224 307 121
354 313
0
400
800
1200
2005 2050GT2000
2050GT2010
EJ/y
r
trad biomass
geothermal
solar
wind
hydro
nuclear
biomass
coal
natural gas
2050 Global Primary Energy Consumption
April 29, 2013 14
493
1,005 1,007
-50
-25
0
25
50
2015 2020 2025 2030 2035 2040 2045 2050
EJ/y
r
net changebatteryCHPsolarwindhydrogeothermalnuclearbiomassliquid fuelgascoal
Abundant and Inexpensive Gas Penetrates
Power Production
Abundant and inexpensive natural gas displaces other energy carriers
in power generation
Where it helps lower generation costs
15
Change in Fuel Mix for Power Generation resulting with Abundant and inexpensive natural gas rather than expensive unconventional gas
Global power sector consumption in 2005 = 185 EJ/yr
Global consumption in 2005 (EJ)
-40
-20
0
20
40
building industry transport electricity
113 152 88 185
EJ/y
rothers
renewables
nuclear
district heat
trad biomass
hydrogen
electricity
biomass
coal
gas
liquid fuel
2050 Global Final Energy Consumption Change
April 29, 2013 16
0
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80
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35
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40
20
45
20
50
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
GT2000
GT2010
Former Soviet Union Global
But, a 20% increase in gas use is a much
smaller change in global energy use.
This effect is more pronounced in some regions with existing
infrastructure for natural gas based economy (e.g. FSU).
April 29, 2013 18
Gas Trade
-600 -400 -200 0 200 400 600Cumulative Natural Gas Net Export (EJ)
Former Soviet Union
Canada
Middle East
Africa
Australia_NZ
Southeast Asia
Latin America
China
Eastern Europe
Korea
India
Japan
USA
Western Europe
-600 -400 -200 0 200 400 600Cumulative Natural Gas Net Export (EJ)
Former Soviet Union
Canada
Middle East
Africa
Australia_NZ
Southeast Asia
Latin America
China
Eastern Europe
Korea
India
Japan
USA
Western Europe
April 29, 2013 19
Cumulative Natural Gas Net Export
2005-2050
Gas Tech ca. 2000 Gas Tech ca. 2010
Global natural gas consumption in 2005 = 99 EJ/yr
Cumulative USA natural gas consumption in 2005-2050 = 1200 EJ ~ 1600 EJ
April 29, 2013 20
Gas and Greenhouse
Emissions—Without Climate
Policy
Carbon and Energy
How does abundant gas affect expected greenhouse gas emissions?
CO2, and total climate forcing.
Carbon and energy
Petroleum = ~20 PgC/EJ
Coal = ~27 PgC/EJ
Natural gas = ~14 PgC/EJ
Nuclear, Solar, wind, geothermal, and other renewable energy forms
= ~0 PgC/EJ
Bioenergy is 0 net emissions for the energy sector, but indirect land use
change emissions are accounted.
Methane emissions have a (100 year) Global Warming Potential of
~25 gCO2/gCH4
12% of methane emissions was from natural gas in 2005.
Sources include: emissions from FF, e.g. coal mining, gas transmissions
& distribution, gas venting, etc., (also land use, agriculture, animal
husbandry, waste …)
April 29, 2013 21
Carbon-energy ratios in the larger economy
XGAS: Expensive unconventional gas scenario
Average carbon intensities (kgC/GJ):
Natural gas ~14 Petroleum ~20
Coal ~27
Average global 2030 ~17
Regional average carbon-energy ratios in 2010 (kgC/GJ):
Average US ~16
Average China ~22 (modern ~24)
Average India ~16 (modern ~20)
Average W. Europe ~15
Average Africa ~11 (modern ~15)
April 29, 2013 22
0
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GtC
GT2010
CO2 Emissions: Abundant and Inexpensive
versus Expensive Unconventional Gas
April 29, 2013 23
0
5
10
15
202
00
5
20
10
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GtC
GT2000
GT2010
CO2 Emissions: Abundant and Inexpensive
versus Expensive Unconventional Gas
• Virtually no change in Fossil Fuel CO2 emissions.
• Slightly higher in the early years due to increased energy consumption.
• Slightly lower in the later years due to crowding out coal.
April 29, 2013 24
-2
-1
0
1
2
3
4
5
6
2005 2050GT2000
2050GT2010
Rad
iati
ve F
orc
ing
(Wm
-2)
250
350
450
550
650750850
Co
nce
ntr
atio
n
(pp
mv
CO
2-e
q)
Radiative forcing increases slightly.
Reduced SO2 from coal burning reduce cooling effect.
Increased fugitive methane emissions from natural gas extraction.
Smaller countervailing effect of reduced fugitive methane emissions
from coal mining.
Reduced Black Carbon emissions from coal burning.
Slightly reduced CO2 emissions from reduced biomass land use
change emissions.
Climate Forcing: Abundant and Inexpensive
versus Expensive Unconventional Gas
April 29, 2013 25
Radiative Forcing Radiative Forcing Difference
CO2
CH4
N2O
Other Kyoto Gases
SO2
All Other Gases
Net Total
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Rad
iati
ve F
orc
ing
Dif
fere
nce
Why did CO2 emissions not decline?
Two effects of abundant and inexpensive “unconventional”
gas
1. Carbon-intensity reduction effect—on average more gas
means a lower carbon-energy ratio
2. Demand expansion effect—on average energy is less
expensive, so people use more.
These two effects roughly cancel—at a global scale.
April 29, 2013 26
-100
-80
-60
-40
-20
0
20
40
60
Afr
ica
Au
stra
lia_N
Z
Can
ada
Ch
ina
East
ern
Eu
rop
e
Form
er S
ovi
et U
nio
n
Ind
ia
Jap
an
Ko
rea
Lati
n A
mer
ica
Mid
dle
Eas
t
Sou
thea
st A
sia
USA
Wes
tern
Eu
rop
e
ΔMtC 2030
2050
Regional changes in carbon emissions
27 April 29, 2013
-80
-40
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80
20
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EJ/y
r
trad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change
Global Primary Energy Consumption Change
April 29, 2013 28
In general changes are
modest
Global Total ≈ 493 EJ/yr in 2005
-20
-10
0
10
20
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15
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EJ/y
r
trad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change -8
-4
0
4
8
20
15
20
20
20
25
20
30
20
35
20
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EJ/y
r
trad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change
-80
-40
0
40
80
20
15
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EJ/y
rtrad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change -20
-10
0
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20
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20
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EJ/y
r
trad biomassgeothermalsolarwindhydronuclearbiomasscoalnatural gasoilnet change
Global
USA
China
Africa
29
April 29, 2013 30
Gas and Emissions Mitigation
Abundant natural gas and greenhouse
gas emissions mitigation
How is that understanding different compared with our earlier
understanding?
Which policy?—Stabilization of greenhouse gas concentrations (the
goal of the Framework Convention on Climate Change)
Analysis assumptions:
Ambitious policy goal: 450 ppm CO2-e (2.6 Wm-2) in 2100
Idealized policy
All regions face a common carbon tax
All sectors face a common carbon tax
The carbon tax rises over time at the idealized “Hotelling” rate.
Full suite of technologies available
Nuclear, CO2 capture and storage (CCS), bioenergy, forest sequestration,
renewable energy, energy efficiency
April 29, 2013 31
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
0
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2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
GT2000
GT2000 450 CO2e
GT2010
GT2010 450 CO2e
Abundant and inexpensive gas
increases gas usage in climate
mitigation scenarios.
Larger than in the expensive gas
reference scenario.
But, not as large as in the Abundant
and inexpensive gas reference
scenario—i.e. climate mitigation does
not enhance gas usage.
Fossil Fuel Consumption
Abundant and inexpensive
gas reduces oil demands,
but not much.
Climate policy reduces the
demand for oil, but also, not
much.
Abundant and inexpensive
gas reduces coal
demands, but not much.
Climate policy reduces the
demand for coal use, a lot.
OIL COAL GAS
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
GT2000
GT2000 450 CO2e
GT2010
GT2010 450 CO2e
Abundant and inexpensive gas
increases gas usage in climate
mitigation scenarios.
Larger than in the expensive gas
reference scenario.
But, not as large as in the Abundant
and inexpensive gas reference
scenario—i.e. climate mitigation does
not enhance gas usage.
Fossil Fuel Consumption
Abundant and inexpensive
gas reduces oil demands,
but not much.
Climate policy reduces the
demand for oil, but also, not
much.
Abundant and inexpensive
gas reduces coal
demands, but not much.
Climate policy reduces the
demand for coal use, a lot.
OIL COAL GAS
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
0
50
100
150
200
250
300
350
400
2005 2015 2025 2035 2045
Pri
mar
y En
erg
y C
on
sum
pti
on
(EJ
/yr)
GT2000
GT2000 450 CO2e
GT2010
GT2010 450 CO2e
Abundant and inexpensive gas
increases gas usage in climate
mitigation scenarios.
Larger than in the expensive gas
reference scenario.
But, not as large as in the Abundant
and inexpensive gas reference
scenario—i.e. climate mitigation does
not enhance gas usage.
Fossil Fuel Consumption
Abundant and inexpensive
gas reduces oil demands,
but not much.
Climate policy reduces the
demand for oil, but also, not
much.
Abundant and inexpensive
gas reduces coal
demands, but not much.
Climate policy reduces the
demand for coal use, a lot.
OIL COAL GAS
April 29, 2013 35
Carbon Price
0
20
40
60
80
100
120
2005201020152020202520302035204020452050
20
05
$/t
CO
2
GT2000 450 CO2e
GT2010 450 CO2e
Summary
Natural gas has been increasing its market share for decades
Technologies that make commercially available gas more abundant
and less expensive accelerate this trend
This has major implications for competition among all primary energy
sources; for energy production, transformation, distribution and end
use; energy security; local and regional air pollution; investments in
facilities and infrastructure; supply and value chain interactions within
and among sectors and regions and trade
Gas displaces other fuels but does not significantly alter the overall
scale of the global energy system through 2050
Gas trade patterns change significantly, e.g. the USA becomes a small
net exporter
Availability of abundant, less expensive gas through 2050 does not
significantly change
Global fossil fuel CO2 emissions or total radiative forcing, or
The carbon price required in an idealized mitigation scenario
April 29, 2013 37
END