Record setting US “Natural Gas Power Burn”… Frac yeah!

Guest “burn, baby, burn!” by David Middleton

According to the US Energy Information Administration, these nominally United States set a new record for natural gas-fired electricity generation in July 2020.

Figure 1. Daily US volume of natural gas consumed for electricity generation (billion cubic feet, Bcf). US EIA

On July 27, 2020, US power plants burned 47.2 billion cubic feet (Bcf) of natural gas, beating the previous record by nearly 2 Bcf. The US also set a record for electricity generation from natural gas, peaking at “316 gigawatts (GW) in the late afternoon” of July 27.

Figure 2. Daily Lower 48 electricity generation by source. US EIA

Of the electricity generated on July 27 in the Lower 48 states, natural gas held the largest share at 45%, followed by coal with a 24% share. Remaining shares included nuclear at 17%, renewable energy at 12%, and other sources at 3%.

Natural gas is a key power generation resource because it has the flexibility to supply electricity at any time, including at times of peak demand. In contrast, some renewable energy technologies and nuclear power plants may be nondispatchable and not able to adjust their generation to meet load. For example, nuclear power plants may already be running at or near maximum capacity and may be unable to respond to shifts in load.

The U.S. electric power sector has been moving toward more natural gas-fired and renewable-powered generation and away from coal-fired and nuclear-powered generation during the past several years. For example, between 2011 and 2019, 103 coal-fired power plants with a total of 22.2 GW of capacity were replaced by or converted to natural gas, primarily in the eastern half of the country.

From January 2019 through May 2020, the United States added 13.8 GW of new natural gas-fired net summer capacity and retired 5.4 GW. The net change of 8.4 GW is second only to the 12.6 GW added for onshore wind turbines since January 2019, according to EIA’s Preliminary Monthly Electric Generator Inventory.

Combined-cycle power plants have generated most of the new natural gas-fired capacity, using the latest high efficiency natural gas turbine technology. The retired natural gas-fired plants were less efficient steam plants or combustion turbines. This change has allowed the fleet of natural gas-fired generators to provide more electricity for a given level of natural gas consumption.

US EIA

The net addition of 8.4 GW of “new natural gas-fired net summer capacity” will actually be capable of generating nearly twice as much electricity as the 12.6 GW of new onshore wind capacity. Combined cycle natural gas-fired power plants can deliver >85% capacity factor. Wind generally struggles to maintain 30%.

  • 0.85 x 8.4 GW x 24 hr/d x 365 d/yr = 62,546 GHh/y
  • 0.3 x 12.6 GW x 24 hr/d x 365 d/yr = 33,113 GHh/y

And, natural gas works at night and when the winds don’t blow (or blow too hard).

Perspective

While electricity generation is the top end use for natural gas in the US, it only accounts for about 36% of the total demand.

Figure 3. Natural gas consumption by sector. US EIA

No single State currently provides enough natural gas to cover just the demand for electricity generation.

Figure 4. US natural gas production by State. US EIA

“Shale” plays currently account for about 75% of US natural gas production and no single play produces enough natural gas to cover just the demand for electricity generation, although the Marcellus and Utica, combined, come close.

Figure 5. US “shale” gas production by play. US EIA

What if…?

(Dana) BASH: Thank you, Mr. Vice President. Just to clarify, would there be any place for fossil fuels, including coal and fracking, in a Biden administration?

(Joe) BIDEN: No, we would — we would work it out. We would make sure it’s eliminated and no more subsidies for either one of those, either — any fossil fuel.

Second Night of Democratic Debate, July 31, 2019, CNN

While Mr. Biden has subsequently said he would not ban frac’ing, he has more or less said that he would or would not do many contradictory things… What if frac’ing was banned? Or if “shale” actually “died” as in the failed prediction of many financial analysts? Where would we get the natural gas, upon which our economy depends? Alaska? The Gulf of Mexico? Other offshore areas that have never been open to drilling?

The US outer continental shelf (OCS) has enormous oil and natural gas resource potential.

Figure 6. Undiscovered technically recoverable resource potential, US OCS. BOEM.

While 327.58 trillion cubic feet (Tcf) would only provide for a bit more than 10 years worth of current consumption, past history tells us that government agencies always grossly underestimate what the oil industry will find and produce. Alaska’s North Slope has already produced 16 billion barrels of petroleum liquids. Currently developed areas will ultimately produce a total of about 30 billion barrels. The government’s original forecast for the North Slope’s total production was 10 billion barrels. The current USGS estimate for undiscovered oil in the Bakken play of Montana & North Dakota is 25 times larger than the same agency’s 1995 estimate. In 1987, the MMS (now the BOEM) undiscovered resource estimate for the Gulf of Mexico was 9 billion barrels. Today it is 48 billion barrels.

The MMS increased the estimate of undiscovered oil in the Gulf of Mexico from 9 billion barrels in 1987 to the current 48 billion barrels because we discovered a helluva a lot more than 9 billion barrels in the Gulf over the last 30 years. Almost all of the large US fields discovered since 1988 were discovered in the deepwater of the Gulf of Mexico. In 1988, it was unclear whether or not the deepwater plays would prove to be economic.

However, only the Western and Central Gulf of Mexico areas are currently open to exploration.

While the Gulf of Mexico’s significance in natural gas production has declined since the advent of the “shale” revolution, recent YUGE deepwater discoveries have begun to reverse that trend.

Figure 7. Gulf of Mexico natural gas discoveries coming online 2016-2019. US EIA.

Of particular note are the discoveries in eastern Mississippi Canyon, Viosca Knoll and De Soto Canyon. Many of these are in the Jurassic Norphlet formation. While the average productive well in the Gulf of Mexico yields about 1 million bbl of oil and 7 Bcf of gas, the two most prolific gas wells ever drilled in the Federal waters of the Gulf of Mexico were Norphlet wells in the shallow waters of Mobile Bay, each producing over 270 Bcf of gas. Most of the Norphlet play is in the Eastern Gulf of Mexico (offshore Florida), which is off limits to exploration.

Since crude oil and natural gas will be the life-blood of our economy us for decades to come, when Mr. Biden says, “[W]e would work it out. We would make sure [US fossil fuel production is] eliminated,” where does he expect it to come from? Russia?

Who’s up for some Deep Purple?

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August 26, 2020 at 09:06PM

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