file under: Business + Industry, Environment, Smart Energy, Energy

Currents: Natural Gas in the Energy Mix

Our specialists discuss the path to renewables, adapting our infrastructure to the changing energy landscape, and protecting the environment as we recover resources.

February 05, 2013

natural gas smart energyNatural Gas. Is it a Bridge to Renewables?
Natural gas continues to be recovered from conventional reserves—high permeability formations where the gas flows freely from the formation to the wellhead—in substantial amounts around the world. But these formations are becoming depleted in highly accessible locations. Until recently, this caused concerns about reliability of natural gas as a major energy source.

For many years, geologists have known about untapped unconventional natural gas and oil reserves, but these resources were trapped in rock formations requiring artificial stimulation to allow the hydrocarbons to flow to the wellhead. In the past, these resources were not economically recoverable, but this has changed dramatically and rapidly with the advent of horizontal drilling and multi-stage hydraulic fracturing, or “fracking.” Horizontal drilling allows access to shale formations that tend to be relatively thin in depth but expansive horizontally.

The quantity of oil and natural gas now available from unconventional resources—particularly in the United States and Canada—has tremendous economic and geopolitical implications in the global energy arena. Recent estimates suggest more than one hundred years of supply, and readily recoverable quantities that can be converted to liquids for export to global customers.

Additionally, natural gas is a clean-burning energy source (emitting about half the carbon dioxide of coal and essentially no particulates, sulfur or nitrogen oxides emissions) and is continuously available to supplement solar and wind energy sources. Natural gas plants can also be placed close to where power is needed unlike nuclear, coal, wind farms or solar fields, which all have significant siting constraints and need extensive transmission networks.

With any energy source, there are many environmental considerations and protective measures that must be carefully, diligently applied. Unconventional oil and gas development is no exception. Care must be taken to manage the environmental impacts on our land, air, and surface water. Care must also be taken to manage potential subsurface concerns such as groundwater quality protection and potential seismic effects.

Because natural gas prices are low, some suggest that this will slow the transition from hydrocarbon-based energy to renewable energy. But large scale transition to renewables is a multi-decade proposition, and will require massive infrastructure investments in addition to yet unavailable technology advancements. As such, natural gas offers a “bridge” to a longer term future of greater reliance on renewables.

natural gas pumpAdapting Infrastructure to Meet New Demands
The use of new drilling and “fracking” technologies to recover shale gas has prompted more discussion about natural gas powering everything from manufacturing facilities to vehicles. The U.S. Energy Information Administration projects natural gas production from shale will almost triple by 2035—and the infrastructure improvement will be steady from now until then.

Because it’s cleaner burning, using more natural gas to replace other fossil fuels will lower carbon emissions and benefit the environment. And while supplies are ample and prices are low, switching from other sources can mean significant cost savings. But transitioning to using more natural gas on a larger scale in the United States will require substantial infrastructure changes. Many of these changes are well underway.

One area of conversion that has rapidly responded to the availability and cost of natural gas is the retrofitting of fleet vehicles to use compressed natural gas (CNG) as their fuel source. In particular, buses used for public transportation are being converted. Converting these vehicles to CNG will lower fuel costs and reduce emissions, especially important as emission standards for trucks and other fleet vehicles continue to become more stringent. This transition requires that we retrofit existing vehicles, build new vehicles that use natural gas as a fuel source, and also build fueling stations for CNG.

Doing so can offer many benefits. Because natural gas-powered vehicles have the advantage of long range transportation—as compared with electric vehicles that still need to be charged frequently, and are better suited for local usage—they make sense for use as buses, taxis and fleet vehicles used for product shipments. This conversion of existing fleet vehicles is being undertaken now by numerous, significant product shipment companies, with the technologies in place, and the economic payback so favorable. The availability of natural gas also has significant implications for other infrastructure. The process of retrofitting existing buildings to use natural gas, for example, is also underway. And on a larger scale, utilities that operate existing coal-fired plants, which face increasing regulatory and environmental restrictions, are considering the use of natural gas as a preferred fuel source.

But the landscape is always in flux. The U.S. Department of Energy (DOE) is currently reviewing at least 16 applications for liquefied natural gas export projects. Terminal facilities once planned to be locations where imported liquefied natural gas from tankers would be degasified for domestic use are being repurposed to allow liquefication and storage of domestic natural gas for export to the world market, reacting to demand and pricing. Stay tuned for the results of the DOE evaluations. | Jack Keating, CDM Smith senior vice president

natural gas water containmentEnvironmental Stewardship in an Emerging Energy Market
Fueled by booming exploration and exploitation of shale oil and gas, many energy firms are repositioning their businesses and developing new operations and infrastructure to access untapped resources and meet greater worldwide demand. Paramount to this emerging market development is sound environmental stewardship—an objective that goes beyond permits and regulatory compliance.

Most oil and gas development follows a sequence of activities, providing multiple opportunities for environmental protection. From land and mineral leasing, permitting and site design and development, to production and restoration, companies can complete their environmental due diligence at frequent steps. It is important during development planning to consider accessibility of natural resources, as well as the true cost of development to ensure an economical project. Environmental studies and impact statements, while not required in all countries, can identify mitigation measures to protect the air, wildlife and groundwater.

Water management is a significant and very visible element of oil and gas development. Drilling may require nearly 100,000 gallons of water, while reservoir stimulation—hydraulic fracturing—may use up to 10 million gallons. Acquiring, handling, and treating that volume of water is a start-to-finish focus that, if managed properly, can save money and significantly reduce the water footprint of development activities. From the start, operators must consider all water challenges, such as source location and legal requirements, and identify opportunities for alternative resources, such as brackish water or reclaimed wastewater to reduce dependence on fresh supplies. New treatment technologies and mobile and centralized treatment systems allow developers to effectively collect, transport and treat produced water for safe discharge or beneficial reuse at the next site.

Along with fracturing, the advent of horizontal drilling has accelerated the rapid development of these unconventional resources. This technique requires less infrastructure, reducing the need for multiple vertical wells and pads to just a single pad location for several horizontal wells. Even with a minimized footprint, there is still a need for responsible infrastructure development such as access roads, stormwater/erosion control, spill containment and lined impoundments. This is especially true as development moves closer to more densely populated and sensitive areas.

The final step is to remove manmade structures and roads, plug abandoned wells and close impoundments, restore site contours and re-vegetate the landscape for a natural, post-production life. Following these cradle-to-grave best practices will help ensure a successful, profitable and environmentally friendly operation. | Kevin Molloy, CDM Smith vice president