Natural gas has a bad rap in some parts of the country, because the process of fracking is not popular. But many people looking at cheap natural gas from the global perspective see it as a good thing.

Henry Jacoby, an economist at the Center for Energy and Environmental Policy Research at MIT, says cheap energy will help pump up the economy.

“Overall, this is a great boon to the United States,” he says. “It’s not a bad thing to have this new and available domestic resource.” He says cheap energy can boost the economy, and he notes that natural gas is half as polluting as coal when it’s burned for electricity.

“But we have to keep our eye on the ball long-term,” Jacoby says. He’s concerned about how cheap gas will affect much cleaner sources of energy. Wind and solar power are more expensive than natural gas, and though those prices have been coming down, they’re chasing a moving target that has fallen fast: natural gas.

“It makes the prospects for large-scale expansion of those technologies more chancy,” Jacoby says.

Natural Gas: ‘A Bridge To Nowhere’?

From an environmental perspective, natural gas could help transition our economy from fossil fuels to clean energy. It’s often portrayed as a bridge fuel to help us through the transition, because it’s so much cleaner than coal and it’s abundant. But Jacoby says that bridge could be in trouble if cheap gas kills the incentive to develop renewable industry.

“You’d better be thinking about a landing of the bridge at the other end. If there’s no landing at the other end, it’s just a bridge to nowhere,” he says.

In the short run, at least, the wind industry isn’t too worried about this. Denise Bode, who heads the American Wind Energy Association, says low gas prices don’t undercut current prices for wind, because those are mostly fixed by 20-year contracts, not market prices.

And even if wind is a bit more expensive than natural gas, she says utilities still want it in their mix. Windmills aren’t subject to changing fuel prices, so the cost of production is quite predictable. That’s not true for natural gas — there’s no guarantee that today’s cheap prices will stay as low as some predict.

“It’s very difficult to really know how certain that is, so you always want to balance that with something that is certain,” Bode says.

Reducing Political Will For Renewables?

What really worries her isn’t natural gas — it’s politics. Wind could lose a huge tax break at the end of this year. And that would have a much more dramatic effect than low natural gas prices.

“You’ll see very low numbers” for new wind installations if the federal production tax credit expires,” Bode says. “In fact, I think EIA [the U.S. Energy Information Administration] projects almost zero for 2013.”

The solar industry’s subsidies run for several more years, so they are not in that bind, at least not yet. But Trevor Houser, an energy analyst at the Rhodium Group, says these tax credits and other incentives like state renewable standards are key if renewables are to grow and mature during the natural-gas glut.

“Long-term renewable deployment in the U.S. is going to depend primarily on policy,” Houser says. “Is there enough concern about environmental consequences to put in place incentives for renewable energy?”

That partly depends on how much of a premium people and companies will be willing to pay for cleaner energy. Right now, with natural gas so cheap, that premium is fairly substantial.

“If those prices hang around for another three or four years, then I think you’ll definitely see reduced political will for renewable energy deployment, ” Houser says. “But we don’t expect prices that low to hang around that long, because low prices are in many ways self-correcting.”

Gas is so cheap now that companies that produce it are struggling to make a profit. So Houser expects prices to move up. That will help close the price gap between gas and renewable energy.

Even so, there’s still a huge way to go before prices and government policies do enough to significantly reduce emissions of the gases that contribute to global warming.

Source: www.npr.org

Both Italian and U.S. companies recently announced the discovery of massive natural gas fields off Mozambique, which could dramatically alter the Mozambiquean economy.

U.S.-based energy giant Anadarko Petroleum announced earlier this week that its natural gas reserves in its Mozambican reserve bloc fields could be three times larger than earlier estimated, comprising up to 30 trillion cubic feet of recoverable natural gas.

Italian oil and gas company Eni SpA two weeks ago also announced that it has discovered large amounts of gas off Mozambique and stated that it plans to invest $50 billion to develop the resources.

Eni SpA’s estimated reserves? A mere 22.5 trillion cubic feet.

Houston-based Anadarko Petroleum stated that its Barquentine-3 appraisal well “encountered more than 662 net feet of natural gas pay, expanding the estimated recoverable resource range from 15 to more than 30 trillion cubic feet.”

After announcing that Anadarko Petroleum announced that its estimated recoverable resources had effectively doubled. Anadarko Petroleum Chairman and CEO Jim Hackett said that this could be one of the most important natural gas fields discovered in the last decade worldwide, commenting, “In parallel, we’ve continued to advance an expandable LNG (liquefied natural gas) development that will support this world-class field. This is great news for Mozambique, as our ongoing activities will continue to spur meaningful investment in the region, generate significant revenue for the government and offer a multitude of opportunities for the people of Mozambique. The positive results of each appraisal well we have drilled and analyzed have continued to increase our estimate of recoverable resources and natural gas in place on our block, and add to our confidence that this could be one of the most important natural gas fields discovered in the last 10 years.”

Anadarko Petroleum is currently the operator of one of Mozambique’s major offshore Indian Ocean exclusive economic zone (EEZ) offshore concessions area and has a 36.5 percent interest in the joint venture project. Other investors include Mitsui Exploration and Production Mozambique Area 1 Ltd. with a 20 percent share, BPRL Ventures Mozambique B.V. with a 10 percent stake and Videocon Mozambique Rovuma 1 Ltd with 10 percent, while Cove Energy Mozambique Rovuma Offshore Ltd retains 8.5 percent and India’s Bharat Petroleum has 10 percent as well, with Mozambique’s national oil company Empresa Nacional de Hidrocarbonetos E.P. de Mocambique ‘s retaining a share as well through the initial exploration phase.

Should the projects be developed, Mozambique is able to transship its output to two of the world’s top liquefied natural gas markets, Japan and South Korea, along with being in a prime position to service other rapidly emerging Asian gas markets, such as China and India.

The future?

Anadarko Petroleum is considering building a complete liquefied natural gas (LNG) facility to facilitate shipments of future production to East Asia, but is considering all options, with its final investment decision for a LNG train to process Mozambique’s offshore natural gas production expected in 2013, when, if all goes well, initial production will begin five years later in 2018.

As for Eni SpA’s production?

Eni SpA Chief Executive Paolo Scaroni said in an interview last month after visiting East Africa, “We aim to have several liquefiers working for Southeast Asia. The gas is targeted for Asia,” adding that Eni SpA was looking at constructing 2-3 liquefiers in Mozambique and that the first production of LNG gas could occur in 2016.

Not relying exclusively on the words of his new best international energy buddies, Mozambiquean President Armando Guebuza is sending advisors to Nigeria and Angola to survey their oil and natural gas operations.

But with a major U.S. and Italian firm ready to move forward, there seems little doubt that Mozambique’s natural gas reserves will be fast tracked to production, with the only questions being when and how.

Source: www.oilprice.com

Speaking on the sidelines of his visit to Beijing Oil Industry University, Gholamreza Rashed said the two countries will take practical steps to launch joint educational and industrial projects before October 2012.

He added that the two sides have agreed to carry out joint research on oil and gas industries and launch post-graduate (PhD) courses in relevant fields of study.

Rashed also signed an agreement with president of the Beijing Oil Industry University, Zhang Laibin who said Iran had as an important role in supplying energy to developing countries.

Iran’s Oil Industry University is currently working with similar universities in France, Canada and Australia and holds joint educational courses with them.

Iran is OPEC’s second largest oil producer and the fourth largest crude oil exporter.

The country holds the world’s third-largest proven oil reserves and the second-largest natural gas reserves.

Source: www.tehrantimes.com

The country holds an estimated 111.9 trillion cubic feet of proven reserves, ranking it 11th largest worldwide, according to the BP statistical review of energy.

The Shell-led Basrah Gas Company (BGC), a joint venture between the South Gas Company (51 per cent), Shell (44 per cent) and Mitsubishi, was established in 2008, and will be responsible for the collection and processing of associated gas from the Rumaila, West Qurna-1 and Zubair oilfields.

Currently, the fields collectively flare up to 700 million cubic feet a day (cfd), a figure that will increase in line with rising oil production.

Yet Iraq’s natural gas activities this year have not been confined to the huge oilfields in the south.

In June 2005, the government inked a deal with a group headed by Kuwait Energy to develop the Siba gasfield, also in southern Iraq, with capacity expected to reach 100 million cfd. A consortium around Turkey’s national oil and gas company was contracted to develop the Mansuriya gasfield in the east of the country.

In the same month, the government initialled an agreement with South Korea’s Kogas for the development of the Akkas field in the western Anbar province.

Kogas will have sole responsibility for the project after the Kazakh company KazMunaiGas pulled out of the deal.

The government is also looking at the export market. Apart from the liquefied natural gas export plans mooted in the agreement with Shell, it is looking at exports through pipelines.

In May, Iraq entered into a strategic energy partnership with the EU, in which the government agreed to explore possible exports of natural gas to Europe in return for a guaranteed market for an anticipated surplus of natural gas in the coming decades.

Negotiations between the two sides are expected to start before the year is over.

Source: www.thenational.ae

Twenty-nine states and the District of Columbia now have renewable electricity mandates. President Obama and several members of Congress have supported one at the federal level. Polls routinely show strong support among voters for renewable energy projects — as long as they don’t cost too much.

But there’s the rub: while energy sources like sunlight and wind are free and naturally replenished, converting them into large quantities of electricity requires vast amounts of natural resources — most notably, land. Even a cursory look at these costs exposes the deep contradictions in the renewable energy movement.

Consider California’s new mandate. The state’s peak electricity demand is about 52,000 megawatts. Meeting the one-third target will require (if you oversimplify a bit) about 17,000 megawatts of renewable energy capacity. Let’s assume that California will get half of that capacity from solar and half from wind. Most of its large-scale solar electricity production will presumably come from projects like the $2 billion Ivanpah solar plant, which is now under construction in the Mojave Desert in southern California. When completed, Ivanpah, which aims to provide 370 megawatts of solar generation capacity, will cover 3,600 acres — about five and a half square miles.

The math is simple: to have 8,500 megawatts of solar capacity, California would need at least 23 projects the size of Ivanpah, covering about 129 square miles, an area more than five times as large as Manhattan. While there’s plenty of land in the Mojave, projects as big as Ivanpah raise environmental concerns. In April, the federal Bureau of Land Management ordered a halt to construction on part of the facility out of concern for the desert tortoise, which is protected under the Endangered Species Act.

Wind energy projects require even more land. The Roscoe wind farm in Texas, which has a capacity of 781.5 megawatts, covers about 154 square miles. Again, the math is straightforward: to have 8,500 megawatts of wind generation capacity, California would likely need to set aside an area equivalent to more than 70 Manhattans. Apart from the impact on the environment itself, few if any people could live on the land because of the noise (and the infrasound, which is inaudible to most humans but potentially harmful) produced by the turbines.

Industrial solar and wind projects also require long swaths of land for power lines. Last year, despite opposition from environmental groups, San Diego Gas & Electric started construction on the 117-mile Sunrise Powerlink, which will carry electricity from solar, wind and geothermal projects located in Imperial County, Calif., to customers in and around San Diego. In January, environmental groups filed a federal lawsuit to prevent the $1.9 billion line from cutting through a nearby national forest.

Not all environmentalists ignore renewable energy’s land requirements. The Nature Conservancy has coined the term “energy sprawl” to describe it. Unfortunately, energy sprawl is only one of the ways that renewable energy makes heavy demands on natural resources.

Consider the massive quantities of steel required for wind projects. The production and transportation of steel are both expensive and energy-intensive, and installing a single wind turbine requires about 200 tons of it. Many turbines have capacities of 3 or 4 megawatts, so you can assume that each megawatt of wind capacity requires roughly 50 tons of steel. By contrast, a typical natural gas turbine can produce nearly 43 megawatts while weighing only 9 tons. Thus, each megawatt of capacity requires less than a quarter of a ton of steel.

Obviously these are ballpark figures, but however you crunch the numbers, the takeaway is the same: the amount of steel needed to generate a given amount of electricity from a wind turbine is greater by several orders of magnitude.

Such profligate use of resources is the antithesis of the environmental ideal. Nearly four decades ago, the economist E. F. Schumacher distilled the essence of environmental protection down to three words: “Small is beautiful.” In the rush to do something — anything — to deal with the intractable problem of greenhouse gas emissions, environmental groups and policy makers have determined that renewable energy is the answer. But in doing so they’ve tossed Schumacher’s dictum into the ditch.

All energy and power systems exact a toll. If we are to take Schumacher’s phrase to heart while also reducing the rate of growth of greenhouse gas emissions, we must exploit the low-carbon energy sources — natural gas and, yes, nuclear — that have smaller footprints.

Source: www.nytimes.com