Tag Archives: CO2

Time to seize a prosperous future fuelled by natural gas

Compared with coal, natural gas produces half the carbon dioxide, less than a third of the nitrogen oxide and just one per cent of the sulphur dioxide, with virtually no particulates. That China is looking to import LNG from B.C.’s shale gas is good news for both Canada and for the Earth’s atmosphere. But LNG will only slow China’s massive coal-fired power growth. Here’s the really good news. According to the U.S. Energy Information Administration (EIA), China possesses the world’s largest technically recoverable shale gas reserves that, at 1,115 trillion cubic feet, are almost twice as large as Canada’s. These vast resources remain undeveloped due to the early stage of Chinese recovery technology. That’s why the University of Calgary’s announcement of a new Canadian/Chinese Research Centre aimed at unlocking that potential is so newsworthy. At the signing ceremony in Beijing on October 23, U of C President Elizabeth Cannon stated that the project “will help China move from a coal economy over to gas.”

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Natural gas climbs on Obama US energy plan and cold weather

 

President Obama spoke Wednesday at Georgetown University in Washington about America’s energy security. (Photo: Doug Mills, New York Times)

Natural gas prices climbed Wednesday as President Barack Obama said he wanted the United States to use more of it instead of foreign oil. Obama has declared he wants to cut US oil imports by a third by 2025 and announced a number of initiatives that would see the US use more natural gas, and biofuels to power vehicles and produce electricity.

 

But the prices increase was not on Obama’s statements alone… colder-than-normal temperatures are expected to cover parts of the Midwest and East Coast through this weekend, lifting gas-heating needs and drawing down natural gas inventories in advance of the spring shoulder season.

Here on HRN we have long stated that North America needs to better leverage their natural gas resources in an effort to reduce carbon emissions. In the US, there is the added benefit of reducing dependance on foreign oil suppliers in the middle east who do not share the same interests as the US.

The US has become the largest producer of natural gas in the world, with abundent reserves found in shale gas deposits. Unfortunately, rather then keep up higher production rates and increase usage in power generation and transportation, plans are underway to start to export natural gas to China and other countries… and export the lower carbon benefit along with it.

Canada can also use more natural gas in power generation and transportation. Last reports published still had Canada sitting at just over 12,500 compressed natural gas vehicles across the country. That is a dismal number. The US is not much better but at least the number is going up. A number of US companies with large fleet vehicles have already made the conversion recognizing the many advantages to compressed natural gas vehicles. For example, Verizon’s purchse of over 500 CNG vans last June (See HRN: “Verizon buys natural gas vans“).

Point. Lets take full advantage of the energy resources we have in North America rather then exporting it and burning higher carbon resources. It is obvious that we can not entirely replace one energy source with another. It will take all available resources to meet our growing energy demands. However, the energy mix can make better use of lower carbon energy sources like natural gas, and zero carbon energy sources like wind, solar and hydro. (Keep in mind that the mineral resources, and manufacturing of wind, solar etc takes energy which is generally provided by oil, and coal).

So while Obama has suggested that increased usage of US natural gas is important, and noted that Canada’s oil sands are the best secure supply of oil, dont forget Canada’s vast resources of natural gas from shale reserves in the Horn River Basin and elsewhere in Canada. Though Canada can use more domestic natural gas for its own power generation and transportation, it will still produce a surplus. And if the US is not their to buy the Asian market will be.

Wall Street Journal: US GAS: Futures Rise on Cold-Weather Boost

 

Verizon buys natural gas vans

The momentum for natural gas within the North American transportation system gained another big customer today when Ford announced that Verizon Communications will purchase 501 vans outfitted with engines that burn compressed natural gas (“CNG”). Terms of the deal were not disclosed.

Verizon plans to use the 2010 model Ford E-250 cargo van and save an estimated 1.62 metric tons of carbon dioxide each year compared to the output of models that run on conventional gasoline. The vans are primarily driven by technicians making house calls to install phone, cable television and Internet services.

Ken McKenney, Sustainable Fleet-Technical Engineering Lead for Verizon stated:

“Verizon’s fleet team is constantly on the watch for new, lower-carbon technology. CNG is a leading alternative fuel choice right now, so converting these cargo vans to run on the cleaner-burning fuel helps us cut CO2 emissions and fuel consumption. We will continue to find ways to increase the efficiency of our fleet.”

In March 2009, AT&T announced plans to invest $350 million into converting and purchasing vehicles powered by compressed natural gas. (See HRN: AT&T to invest in 8,000 compressed natural gas vehicles)

Press Release: Verizon to Cut CO2 Emissions by Converting 501 New Ford E-Series Vans to Run on Natural Gas

International interest grows in China’s shale gas potential

International interest in China’s shale gas potential continues to grow, Sinopec and BP are in discussions to collaborate on the exploration and development of shale gas in China. Back in November, a joint development agreement was signed between Royal Dutch Shell and PetroChina for a shale gas project  in Sichuan, south-west China.

According to a the Financial Post, Sinopec stated in a company newsletter that talks with BP were going “smoothly” and that any agreement would help China use foreign technology to speed up the development of its potentially large shale gas reserves.

No details have been disclosed by Sinopec or BP, but reports indicate an agreement between the two companies would might include two blocks it has charted by Sinopec consisting of  a 2,000 square kilometre area in Kaili, in southwestern Guizhou province and a 1,000 square kilometre block in Huangqiao, Jiangsu, a province in eastern China

A major shale gas discovery – like one in Europe – would have considerable implications for the natural gas market. Natural gas provides China a cleaner alternative fuel source to oil and coal and the Chinese government is eager to develope their natural gas resources. Back in November, when President Barack Obama visited China,  the US and Chinese governments signed a co-operation initiative to promote investment and joint studies of China’s shale gas potential.

Coal-fired electric power plants are a major contributor to CO2 emissions in China, who is well aware of the effects of these emissions on air quality and health for China’s population. China is moving in the right direction and has reduced coal consumption in the last year. A good portion being offset by increasing nuclear power generation by approximately 75% last year with new state-of-the-art nuclear power facilities (and more to come). And despite its own domestic production potential China continues to secure natural gas sources including a deal announced with Russia back in October 2009. It is apparent that China clearly sees natural gas as an important and growing part of their energy needs within a lower carbon energy mix.

Anyone who has traveled to China’s major cities has seen, and tasted the pollution in the air. It is obvious that no one understands the importance of reducing the carbon emissions better then China and they are moving in the right direction with natural gas as part of the solution.

Financial Times: BP and Sinopec join forces in shale gas talks

Horn River basin still the best kept secret in natural gas

Back in June, Keith Kohl of Energy and Capital called the Horn River basin “The best-kept secret in natural gas discoveries”. In his latest article “How Canada is Suffering from Peak Natural Gas” he goes into detail about how Canada’s powerhouse energy province Alberta has been recording declining production in conventional gas since 2001 and that no amount of conventional drilling in Alberta is going to reverse this trend.

But despite the concerning decline of Alberta’s natural gas production, Mr. Kohl once again reminds his readers of the “best kept secret in natural gas”… British Columbia’s Horn River basin. In his October 13th article he states;

There’s but one province that has managed to increase natural gas production year after year: British Columbia. Back in 2000, BC made up just 12% of Canada’s overall production. Since then, that share has grown to over 18%.

The Horn River Basin isn’t news to us. In fact, I still believe this unconventional shale play is one of the best-kept secrets in natural gas discoveries. It’s a trend too costly to ignore.

Please don’t get me wrong: Alberta is will continue to be a powerhouse for Canadian energy. But I’ve found, more often than not, it’s worth it to stay ahead of the curve. Once BC gets a sufficient infrastructure in place (a few pipeline stocks come to mind), they’re going to give Alberta a run for their money.

Some forecasts predict that British Columbia will surpass Alberta in total natural gas production by 2020 – perhaps sooner. Analyst Michael Mazar of  BMO Capital Markets has stated; The Horn River Basin “has the potential to render those plays obsolete.” (See HRN: Will the Horn River Basin make Alberta the next “have-not” province?”)

Infrastructure is moving forward at a fast pace in BC and production estimates continue to grow. Fort Nelson is fast becoming the “next Fort McMurray” in Canada. Overall, Canada has a great opportunity to leverage increased domestic natural gas resources to lower carbon emissions by increasing the amount of natural gas used in the country’s overall energy mix.

Energy and Capital: “How Canada is Suffering from Peak Natural Gas” by Keith Kohl

Natural gas key to cutting CO2

According to a major study by the International Gas Union (“IGU”) the world needs to increase natural gas production by 70%  in order to reduce carbon dioxide emissions quickly enough to avoid the worst effects of climate change.

The study’s main conclusion was that economic and environmental factors should push global gas demand to more than 4 trillion cu m/year (about 141.2 tcf) by 2030, from about 3 trillion cu m currently.

The study then compared two 2030 scenarios.

  • Scenario 1 – Continuation of current policy trends. Conclusion – Primary energy demand would reach 16.5 billion tonnes/year of oil equivalent in 2030. Of this, natural gas would represent 23%, or 4.3 trillion cu m. Carbon dioxide emissions from all fuels under this scenario would reach 41.6 billion tpy.
  • Scenario 2 – Green-Policy. Conclusion – Primary energy demand would reach 15 billion toe/year in 2030. Of this, natural gas would represent 28%, or 4.8 trillion cu m. Carbon dioxide emissions from all fuels under the “green policy” would reach only 27.7 billion toe/year, compared with 30 billion toe/year currently.

HRN supports the increased usage of natural gas in the overall energy mix and will be launching a new project to support this position.

Reuters: Natural gas to play key role in cutting CO2  – study