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(can of worms alert) Globe hasn't warmed in the last 16 years 76

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under "fossil fuel facts" ...

The United States has 261 billion tons of coal in its proved coal reserves.

and

The United States has 486 billion tons of coal in its demonstrated reserve base,

uh ? jargon ? "proven reserves" sounds like "demonstrated reserves"
 
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"demonstrated" means "proven+probable". These are very specific terminology used due to financial system (stock market) requirements.
 
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quite typical of any mined resource, boards of directors are not quite so willing to fund mine expansions for probable or inferred resources as they are for proven and mineable ore and for good reason. and speculators like to know what kind of mining stock they are buying as wild claims have been based on "un-proven" or "inferred" resources in the past.

•Probable reserves - Valuable mineralization not sampled enough to accurately estimate the terms of tonnage and grade. Also called “indicated reserves.”

•Proven reserves - Reserves that have been sampled extensively by closely spaced diamond drill holes and developed by underground workings in sufficient detail to render an accurate estimation of grade and tonnage. Also called “measured reserves”.

•Resource -The calculated amount of material in a mineral deposit, classified as measured, indicated, or inferred, based on the density of drill hole information used.

without a workable mine plan, none of the resources are considered "mineable"
 
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Just to round out the discussion. In Oil & Gas we mostly have three categories:
[ul]
[li]Proved developed: resources that can be economically extracted at current costs and prices with current technology and infrastructure for sales currently exists[/li]
[li]Proved undeveloped: resources that can be economically extracted at current costs and prices with current technology and infrastructure for sales currently does not exist[/li]
[li]Indicated additional: resources that could reasonably be extracted in a different cost/price scenario with reasonably expected technology[/li]
[/ul]

For our stuff, the price/cost thing is a big deal with the SEC.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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In the oil and gas area is there a measure of reserves attanable in a short duration?
If there were an estimated 30% unavailable (PFA number), how much is available gas or oil can be pulled from the ground?

My question is because what I heard from a gas guy down the hall claming the oil and gas people are a bunch of liers, because despite all the reserves, there isen't enough holes in the ground to extract the oil and gas fast enough to support a larger fleet of gas/ electric plants.
(Not my clame, but I ask because I want to know if anyone can verify).
 
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Most of the world thinks that Oil & Gas people are a bunch of liers. Nothing new there. I worked on preparing the SEC 10K reports for Amoco for 10 years, and I'll tell you that the SEC reserves definitions are set in concrete and companies play games with them at the company's peril (we were audited by some pretty sharp guys 8 years out of 10).

Reserves numbers do not have a time horizon. If a well is producing 25 MCF/day economically, is not declining, and has 275 MMCF of Proved Developed Reserves then it can be reasonably expected that it will take 30 years to recover the reserves. That 275 MMCF number might only be 10% of the actual gas in the ground, but the company feels that the other 90% is not economically recoverable (e.g., they might feel that the integrity of the production casing might only be 30 years and they haven't figured out an economic way to increase rate, and the well doesn't make enough gas to justify the capital to drill a replacement). If economic conditions change then all of those assumptions are revisited. Originally oil companies felt that at $5/bbl they would recover about 20% of the original oil in place in the Permian Basin of West Texas and East New Mexico. At $20/bbl companies decided that setting pumps might be cost effective and raised the number to 35%. At $30/bbl water floods became economic and the recovery increased towards 40%. As oil prices were approaching $100/bbl in the mid-1980's the companies decided that a CO2 flood made sense and upped the reserves to nearly 50% of original oil in place. Same resource, different economic climates.

In terms of gas to supply an increasing electric demand, your friend is both right and wrong. At today's (depressed) natural gas prices, no one is drilling development gas wells so a new plant coming on line will not spur an increase in supply. If the price doubles (to around $6/MCF) there are absolutely an adequate number of identified, leased drilling sites and existing gas-delivery infrastructure to satisfy any generator-construction schedule envisioned.

The price is low today because of a glut of gas from the new shale gas plays. Those fields are running at a small fraction of their potential and swamping the U.S. gas market (and international markets are closed due to EPA taking decades to approve export facilities). At a decent price to the producers there is plenty of gas, but what does a "decent price" do to the economics of gas-fired electric generation? Mostly the tipping point is around $5/MCF where the economics favor coal. At around $10/MCF the economics favor both coal and fuel oil over gas for electric generation. At less than $6/MCF the drilling economics favor oil drilling.

So I guess if someone turns on a multi-megawatt gas-fired station and finds that gas price has gone up, we are big fat liers yet again. The mainstream news outlets will be all over what liers we are and Congress will start hearings. Emotion will trump economics yet again and Congress will have to "do something" probably something stupid like price controls or "windfall profits taxes" both of which have historically shut down drilling regardless of pricing (silly emotions control both sides of the coin).

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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Thank you zdas. Here's our delima, if we decide to build a new power plant, and shut down an existing plant, it takes anywhere from 2 to 15 years to do that, depending on the type of plant. So fuel mix is one of the starting consiterations (I'm not in this decision process, but I am in as much as educating the public). What is the future price of each fuel type?
Solar is only available during the day, wind just isen't here, or exists mostly at nights, so neather are dependable. Hydro electric is expencive, and you must have a place for the water to come from and go to. So these can be a part of the mix of fuel, but we can't hang our hats on them.
Coal is the big question, and in existing plants is cheep, even with scrubber technology. It is doubtful in this climate if we can build any more of these.
Gas plants are inexpencive, in relation to other plant types, but are locked in to the fuel.

Mixed fuel plants, like coal or gas, or even oil, are possible but are essentually a coal plant with modifacations.
Gas or oil plants are like gas plants, but with modifacations.

Then there are small IC plants which burn oil or gas, but are inefficent.

Then there is the perceptions of plant type, cost of energy, and locations.

Personally the better plant decision is to keep older coal plants and add the technology to clean up the nonvisable exaust. And using long term contracts to better stablize the cost of fuel. Some people will argue the economics, but they can put comparable numbers on the table.
 
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I can't tell you with any confidence what the price was on Monday of this week, let alone in 15 years. If it is still $3/MCF then all the big gas players (who are currently operating gas fields at a net income that barely covers direct costs with no contribution to overhead or capital recovery) will not still be in the gas business. So throw that number out. If prices increase at the historical inflation rate then status quo would be about $5.50/MCF in 15 years, still a project to run away from. Guessing what the price really will do requires assumptions about lease activity (and lease jeopardy), government activity (new regulations, permits for export facilities, permits for gas-to-liquids plants, etc), and assumptions about inflation. If you nailed any one of those three guesses you'd be a hero in some fields, but for Oil & Gas missing any of them is catastrophic.

Historically, natural gas has sold (on an energy basis) for about 1/10th of the price of oil. Today it is 1/20th. All of the fuel-switchable facilities in the U.S. have been switched to gas since the price cratered in 2008. When the price was hovering around 1/10, many fuel-switchable facilities would switch on a weekly basis. Made for some interesting gas-control issues.

If you look at coal as a percentage of energy use it has been declining dramatically for the last 10 years. If you look at total electrical output from coal plants it has been flat over the same period. This says to me that nobody can get a permit for a new coal plant and all new facilities have been gas or gas/oil fuel switchable. If a couple of big export facilities open and add a couple of dollars to the cost of gas (one has permits in hand and expects to be exporting next year, 8 others are in the permit process) then the "fuel charge" on electric bills for both residential and commercial electric bills will exceed the basic electric bill again (like in 2007). Utilities don't care what fuel price is because it is a passthru for them, it matters to the consumers and therefore to the regulators. The absolute nonsense that came out of state and federal regulators and law makers in 2007 to stop the "gouging" really put a damper on drilling. That will happen again. It is hard to tell if it will be bad enough to impact drilling this time, probably not if two additional export facilities get permits, probably if no new permits are issued by this anti-business EPA.

Bottom line is that your company has long-term decisions to make in a very turbulent economic climate with several game changers on the horizon. There really never has been a time that that wasn't true. If it was my money I would bet on the thing that I can actually get a permit to build--gas fired, combined cycle. The combined cycle part is pretty important as a hedge against fuel price swings (it is rare for typical economics to favor combined cycle, but I'm thinking that I can permit a combined cycle plant with 20-30% more confidence that I'll get a permit, which probably tweaks the economics towards positive).

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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Well, I had thought that I partake in too much irrational , cynical thinking, but after reading the above posts, it seems to be a common pastime with many people.

One would think that a group of persons educated in the scientific method would find a calm, rational , reasoned, deliberate method of solving a technical question, but I guess not.
 
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What's needed is a rational, reasoned, deliberate regulatory and economic climate within which to solve the technical problems. That's what we don't have.

Regards,

Mike
 
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A little more information you don't have is that not ALL switchable gas/coal has been switched to gas. In fact far from it. Coal is just that much cheeper than gas.

I have seen some attempts to switch some coal to wood waste, but the processing of wood for the burner just isen't the same (and clogs up the works). But most of this isen't for cost reasons, unless you consiter the cost of landfill. The reason is we don't know what to do with it.

With the low cost of combined cycle plants, and the cost of coal, I don't understand why coal gassification hasen't cought on (because no one wants plant #1).

I also don't understand why there isen't more pre-treatment of coal to reduce sulfer (I also don't understand the chemistry).

But I have seen more interest in natural gas vehicle fuel. I have also heard of devices for home refueling of natural gas vehicles (described as plug in).

Suprising we haven't heard of Natural gas hybreds.
 
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I didn't say that. I said that all oil/gas switchable has been switched to gas. The coal/gas switchable plants have very different economics than oil/gas--I think because the price/BTU is closer to historical ratios (which strongly favor coal) than oil/gas is right now.

Natural gas is a really difficult motor fuel. The weight of pressure vessels is a big economy hit. Home fueling stations have a lot of hair on them (going from 10 inH2O to 3600 psig is a 5 stage recip, expect a fire or explosion per 10,000 fueling hours). Commercial fueling stations typically run at over 6,000 psig to be able to fill a tank in a reasonable time, you really don't want your stoner nephew maintaining something like that. At the end of the day CNG or LNG vehicles only make economic sense at about a 1/15 ratio (on a cost/BTU basis) between gas and gasoline/diesel. Currently it is 1/20 and natural gas vehicles are attractive. Historically it is 1/10 and gas as a motor fuel has terrible economics. Gas-to-liquids has a bit different economics and you can make gasoline or diesel from $10/MCF gas and make a profit in a $60/bbl crude market. Without Shale Oil, GTL is the best choice by far. Shale oil has the potential to drive U.S. crude prices under $60/bbl and big GTL plant economics gets a bit iffy. The wild card is LNG export. As I keep saying, that is a difficult permit to obtain.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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It is at least an order of magnitude easier to get sulfur out of gas than it is to get it out of coal on a cost per cleaned BTU basis. And most natural gas in the ground doesn't have even a trace of sulfur in it.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
 
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Has anyone calculated how many trees that would be, and given the growth time, how big of an area it would take? Then calculcated the average transportation cost?
This is why waste wood burning is an idea that may work. It has a negitive cost of land fill, and it only suplements existing fuels. It's not a solution, except to landfill, but reduces other fuels.
Which is why I don't understand why it was never pushed as a home heating idea.

Something strange about natural gas, and yet required with coal is the NOx requirements. Does a low NOx burner for coal put out more NOx than a low NOx burner for natural gas? If not, why are NOx requirements different for the two fuels?

Several years ago coal pre-treatment was going to save the world. Now it is not used.

Dry wall is not necessarly made from coal ash. It is made from Gysium, which is a mined gunk from the earth. It was supose to be lower cost than plaster and lath, and even plywood. Dosen't seem like that now. It is a breathing hazzard if it is airborn, and fills our land fills. However it does leave a hole where it is mined.
 
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