The Future of Oil, Gas and Coal Dependent on Perception and Competition
Gas-to-liquids plants can cost up to $15 billion. Coal-to-liquids plants cost
even more. Investments in these plants is highly dependent on the perceived
demand. This factor, in turn, is a function of attractiveness of alternatives
such as wind, solar, electrical energy storage, tar sands, coal bed methane,
underground coal gasification, shale gas, shale oil, oil shale, small modular
nuclear, small scale LNG, advanced coal-fired power plants, etc. All these
alternatives are continually assessed in two publications: Oil, Gas, Shale and
Refining Markets and Projects and Fossil and Nuclear Power Generation: World
Analysis and Forecast published by the McIlvaine Company. (www.mcilvainecompany.com)
The biggest variable in the mix among these alternatives is coal conversion. The
proven coal reserves (defined as presently known and economically minable) is
860 billion tons. This quantity would supply the world at present consumption
levels for another 100 years. But coal has a much bigger potential than just
this identified resource. Consider that there is one trillion tons of coal under
the North Sea. Billions of dollars are being invested in underground
gasification technology to inject steam and oxygen and extract gas. CO2
generated in the process would be used to increase yield of shrinking North Sea
oil reservoirs.
China is well underway with a program to convert coal to gas, fuels and
chemicals at a rate equal to the entire U.S. shale gas program. If the projects
in the planning stage are implemented, China will utilize 20 percent of the
world’s annual coal consumption just to make gas and liquid products.
The ultimate mix between all these energy sources will be be determined by
perception and competition. In a chess game, the winner does a better job of
perceiving the moves of the loser. Among the losers to date are owners of LNG
regasification terminals in the U.S. They did not perceive the moves of shale
gas extraction companies. However, if they convert these terminals to export LNG
and build others to do so, then power plants which are relying on large
quantities of cheap gas will be the losers. So both the quality of the
competition and the perception of the opponent are factors in success. Some of
the important inputs include:
• The differential price between diesel and LNG is a critical market factor.
• Crude represents 65 percent of final fuel price.
• The disparity between oil and gas prices on an equivalent Btu basis is a
function of access.
• Gas is not economically transported overseas except as LNG, whereas oil is
economically transferred.
• Even if the price of oil drops, the market for gas is not impacted if gas
prices also drop proportionately.
• Until the U.S. has the capability to sell large quantities of LNG offshore,
the price disparity will continue.
• Investors and gas producers are expecting gas in the U.S. to remain at $5/MMBtu.
• China expects to make gas from coal at less than $5/MMBtu.
• Shale gas operators are expected to keep expanding as long as oil is above
$70/bbl.
• Oil companies such as Chevron are bullish on increased oil and gas demand and
are continuing with high levels of investment.
• Saudi Arabia is able to increase or decrease output to maintain price levels.
Many other producers need price levels above $90 barrel to keep their economies
healthy.
• The oil reserves of Middle East producers are less than 50 years.
• The Saudi production cost is only $6/bbl.
• The Saudi oil value is much higher than $100/barrel because it is a resource
which is dwindling at 4 percent per year.
• The result is that the Saudi supply will be adjusted to balance long term
value and short term needs.
• Stranded gas and other sources of LNG where the acquisition price of the gas
is negative will be unaffected by oil fluctuations between $80-110 bbl.
• Safety perceptions of nuclear energy vary widely from country to country.
• Environmental perceptions including climate change also vary widely between
the developed and developing economies.
All these factors will continue to make projections about the production from
each of these resources very speculative.
For more information on Oil, Gas, Shale and Refining Markets and Projects, click
on: http://home.mcilvainecompany.com/index.php/markets/28-energy/471-n049.
For more information on Fossil and Nuclear Power Generation: World Analysis and
Forecast, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/113-n043.
Industrial Scrubber System Revenues to Exceed $8 Billion In 2019
Industrial plants will be spending more than $8 billion annually for scrubber
systems by 2019. This is the conclusion reached by the McIlvaine Company in
Scrubber/Adsorber/Biofilter World Markets. (www.mcilvainecompany.com)
Scrubber Revenues ($ Millions)
Subject 2019
Total 8,050
Absorber 3,648
Adsorber 1,563
Biofilter 596
Dry Scrubber 651
Other 312
Particulate 1,280
These forecasts include applications in the iron and steel, refining, chemical,
food, petrochemical, non ferrous metals, pharmaceutical industries to remove
particulate and gases from stack discharges. They do not include scrubbers used
on coal-fired boilers. One reason is that the coal-fired boiler market is as
large as the scrubber market in all other industries. This market is the subject
of another McIlvaine report.
A third market is developing which will also need to be separately evaluated.
This is the coal gasification and liquefaction market. Scrubbers are used in
clean up of the gas produced in the indirect gasification processes. This market
is potentially going to be bigger than either the industrial scrubber or power
plant scrubber market.
There are less than100,000 MW of power plant scrubbers sold for new and retrofit
applications each year. At $100,000-$200,000 MW this is an annual market of $10
billion to $20 billion. These scrubbers are cleaning up plants which burn 300
million tons of coal per year.
Coal gasification requires even more investment in scrubbers per ton of coal
processed. China is planning to convert 1.5 billion tons of coal per year into
synfuels and clean gas, fuels and chemicals. Other nations are also following
this path. Posco in South Korea is installing a coal gasifier in its steel mill
and has set up a joint venture to build gasifiers elsewhere. India and Indonesia
have substantial coal reserves and are initiating projects. Australia has
canceled its carbon tax and is actively developing underground gasification. The
U.K. could potentially use the underground coal gasification technology to
utilize coal reserves in the North Sea. CO2 could be re-injected into the
dwindling oil reserves in the area and, thus, also boost oil output.
With this level of activity it is very likely that the coal gasification
scrubber market will be more than $10 billion per year at a peak period a few
years from now.
This large market will be temporarily covered in the industrial scrubber market
report. More information on this is found at: N008 Scrubber/Adsorber/Biofilter
World Markets.
Information on the power plant scrubbers is found at: N027 FGD Market and
Strategies.
Renewable Energy Briefs
Yahoo Signs Long Term Power Purchase Agreement with OwnEnergy
OwnEnergy, a national leader in the development of mid-sized wind farms,
announced that it has entered into a long-term Power Purchase Agreement (PPA)
with Yahoo!, Inc. Under the terms of the PPA, Yahoo will purchase wind power
which will be used to offset much of Yahoo's energy usage in the Great Plains
region.
"It's great to see a leading tech company like Yahoo working to expand the use
of renewable energy, and its involvement in this project will enable us to
generate both local jobs as well as financial upside for members of the Rush
County community," said Jacob Susman, Founder and CEO of OwnEnergy.
OwnEnergy partners with energy entrepreneurs across the country to develop wind
projects. The company's local partners are leading members of wind-rich
communities who play an active role in project development and receive a share
of project ownership in return.
SPI Solar Subsidiary Announces EPC Agreements for 100 MW of Solar PV Projects in
Hebei Province, China
SPI Solar, a vertically-integrated photovoltaic solar developer, announced that
its wholly-owned subsidiary, Xinyu Xinwei New Energy Co., Ltd., has signed
engineering, procurement and construction agreements for 100 megawatts of solar
PV projects in Julu County, Hebei Province, China. The three separate agreements
call for the development of two rooftop sites (consisting of 50 MW and 30 MW,
respectively) for ecological agricultural farm rooftop installations, as well as
a distributed grid project (consisting of 20 MW).
For the rooftop projects, construction on the 50 MW project – phase I − is
scheduled to begin in October 2014, with completion and grid connection expected
in April 2015. Construction on the 30 MW project – phase II − is scheduled to
begin in May 2015, with completion and grid connection anticipated in August
2015.
Construction of the 20 MW DG project is scheduled to begin in October 2014, with
completion and grid connection anticipated in March 2015.
Panasonic Partners with Powertree Services to Construct 68 Solar Powered EV
Charging Stations with Energy Storage in San Francisco
Panasonic Enterprise Solutions Company announced it is providing engineering,
construction and procurement services to Powertree Services Inc. to build 68
electric vehicle charging stations at multi-unit residential properties in San
Francisco.
Construction has begun on the stations, which link together key energy services
to provide value for property owners, tenants, EV drivers and the grid. They are
designed to be powered by solar energy and to incorporate a battery storage
component. When complete they will have the ability to supply high power
charging to vehicles, ancillary services provided to the utility to support the
grid, solar power to tenants and supplemental power to the buildings. The
stations are scheduled to be completed by Earth Day 2015.
When complete, the 68 stations will result in a total installed capacity of 6.1
megawatts of power and 2.5 megawatts of EV charging capacity. Each station is
configured to support up to 70 amps or 18 kilowatts. This is roughly equivalent
to 60 to 70 miles of range for every hour of charging. The exact rate of
charging depends on vehicle models. The stations will be powered by on site
photovoltaic panels, and can generate clean energy for building use, or have the
ability to provide backup generation, in the event of a grid outage.
Alterra Power and Fiera Axium Complete $176.5 Million Jimmie Creek Hydro Project
Financing
Alterra Power Corp. and Fiera Axium Infrastructure Inc. (through a managed fund)
announce the completion of a $176.5 million non-recourse loan facility for the
$227.4 million Jimmie Creek hydroelectric project.
The Jimmie Creek project will provide 62 MW of clean power capacity to southwest
British Columbia and will sell 100 percent of its power to BC Hydro for 40 years
beginning in August 2016. Alterra and Fiera Axium now own 51 percent and 49
percent of the project, respectively.
Biogas Plant Enables Industrial Company to Become More Self-Sufficient
PlanET Biogas has recently commissioned their fifth Biogas plant into service.
The 1.5 MW plant is situated on Singleton Birch’s Ltd. site at Melton Ross,
Barnetby, and North Lincolnshire. In Future, Singleton Birch Ltd, focused on
processing and delivery of limestone/chalk, will produce 40 percent of their
onsite power requirements from biogas. Four local Farmers are providing 30,000
tons of feedstock every year.
For more information on Renewable Energy Projects and Update please visit:
http://www.mcilvainecompany.com/brochures/Renewable_Energy_Projects_Brochure/renewable_energy_projects_brochure.htm
Headlines for Utility E-Alert –October 17, 2014
UTILITY E-ALERT
#1196 – October 17, 2014
Table of Contents
COAL – US
Xcel sets April for end of Coal burning at Burnsville Power Plant
COAL – WORLD
Marubeni to develop 1,800–2,000 MW Coal-fired Power Plant in Myanmar
Samsung to develop $2.5 Billion Thermal Power Plant in Central Vietnam
GAS/OIL – US
Wärtsilä to supply 112 MW Peaking Power Plant in North Dakota
New MD Power Plant provides Sustainable Power to DEC Members
GAS/OIL – WORLD
1MDB awarded contract for 2,000 MW Malacca Power Plant
GE to support Iraq’s 750 MW Combined Cycle Power Plant Project
Parsons Brinckerhoff /WBHO named EPC Contractor for Mozambique Gas-fired Power
Project
AES Dominicana Power Plant conversion to Combined Cycle
Wärtsilä to supply a 139 MW Flexicycle Power Plant in Mexico
CO2
Exelon, CB&I, 8 Rivers develop Zero Emission Natural Gas-fired Power Project
NUCLEAR
Canada unveils New Regulations to enhance Nuclear Emergency Management
BUSINESS
AES signs Agreement to sell Interest in Turkish Assets for $125 Million
Duke Energy Progress seeks FERC approval to buy Generation Assets in North
Carolina
URS Corporation named Exclusive Licensee for Linde Group’s NOx Removal
Technology for North America Power Industry
Mitsui expands Astoria IPP stake
Two Pipeline Projects competing for Dunkirk Power Plant in New York
Why More Coal is going to Increase the Gas Turbine Market
HOT TOPIC HOUR
“Dry Scrubbing” will be the Hot Topic Hour on October 23, 2014
“Power Plant Cooling Decisions” is Hot Topic Hour November 13
Upcoming Hot Topic Hours
For more information on the Utility Tracking System, click on: http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/89-42ei
“NOx Reduction Innovations for Coal-fired Power Plants” to be conducted over the
Internet on Thursday, November 6, 2014, at 10:00 a.m. CST
Some issues to be addressed during the webinar are:
• How does the need to remove mercury and reduce SO3 change the catalyst
selection?
• Should you regenerate rather than discard catalyst?
• How long will catalyst last before it is
Cleaned,
Renovated,
Regenerated?
• Where do hydrogen peroxide and ozone options make sense?
In place of catalyst where NOx levels are low
Trim for SCR if very high efficiency needed
• Where should you consider SNCR?
As a substitute for SNCR
In conjunction with SCR
• Should you contract with a supplier to monitor, clean and replace catalyst as
needed?
• Where is the catalytic filter the best answer?
• Do you also have to invest in SO2 and particulate control?
• Do you have a use for recovered heat from 850oF clean gas?
• Is space limited?
Panelists and others involved with the specification, supply, use or service of
Coal-fired Power Plant NOx Reduction equipment or services are invited to submit
articles, case studies or white papers describing their equipment, services or
experience prior to the date of the panel discussion. These or an abstract of
them may be published in the Utility E-Alert and other of our newsletters as
appropriate in the weeks preceding the panel to develop interest and questions
from the potential audience. We will also post them on our web site so that
potential attendees can review them. Please send your white papers, articles and
PP presentations to Dina Mohr at: mcilvaine_hot_topic_hour@earthlink.net with a
copy to me.
Attendance at the panel discussions will be free for all utility personnel and
panelists and there is no charge for publishing or posting the articles, case
studies or white papers on our web site.
Click here to view schedule and register
McIlvaine Hot Topic Hour Registration
On Thursday at 10:00 a.m. Central time, McIlvaine hosts a 90 minute web meeting
on important energy and pollution control subjects. Power webinars are free for
subscribers to either Power Plant Air Quality Decisions or Utility Tracking
System. The cost is $300.00 for non-subscribers.
See below for information on upcoming Hot Topic Hours. We welcome your input
relative to suggested additions.
DATE SUBJECT
October
23 Dry Scrubbing
November
6 Coal-fired Power Plant NOx Reduction Innovations
13 Power Plant Cooling
December
18 Boiler Feedwater Treatment
Click here for the Subscriber and Power Plant Owner/Operator Registration Form
Click here for the Non-Subscribers Registration Form
Click here for the Free Hot Topic Hour Registration Form
----------
You can register for our free McIlvaine Newsletters at: http://home.mcilvainecompany.com/index.php?option=com_rsform&formId=5
Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com