Coal and Natural Gas

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Production of non Renewable

Energy Resources

2Source: IEA Key World Energy Statistics 2011

World Primary Energy Production

including Renewables

3Source: World Coal Institute http://www.worldcoal.org/pages/content/index.asp?PageID=188

accessed 12 Nov 2007

Provable Fossil Fuel Reserves

(2008 data):

Resource Units

Proved

Recoverable

Reserves end

2008

2008 Annual

Production

Reserves to

Production

Ratio

Bituminous Mtonnes 404762.00 5224.600 77

4Prepared by KG from World Energy Council 2010 survey of Energy Resources

Sub-Bituminous Mtonnes 260789.00 598.300 436

Lignite Mtonnes 195387.00 916.300 213

Total Coal 860938.00 6739.200 128

Conventional Oil Million Barrels 1238834.00 29973.800 41

Shale Oil Million Barrels 4786131.00 6.461 740830

Natural Bitumen Million Barrels 249670.00 646.200 386

Extra Heavy Oil Million Barrels 59133.00 1708.600 35

Non Conventional Oil 5094934.00 2361.26 2158

Conventional Natural Gas Billion m2 185544.00 3403.900 55

Shale Gas Billion m3 187514.16

Uranium ktonnes 2301.80 43.880 52

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Coal

• History of Coal

• Where is coal found?

• Coal Reserves

• Combustion of Coal

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• Combustion of Coal

• Uses of Coal

• Coal Prices

• Reference: Boyle , Everett, Ramage Energy Systems and Sustainability

• Reference: World Coal Institute: http://www.worldcoal.org

“Coal is a fossil fuel. It is a combustible, sedimentary,

organic rock, which is composed mainly of carbon,

hydrogen and oxygen. It is formed from vegetation,

which has been consolidated between other rock strata

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which has been consolidated between other rock strata

and altered by the combined effects of pressure and heat

over millions of years to form coal seams.”

World Coal Institute: http://www.worldcoal.org

Brief History of Coal Use

• From Bronze Age times coal has been used as a fuel for heating, cooking and lighting

• In Elizabethan times the poularity of coal grew alongside the poularity of brick buildings. From 17th century concerns about atmospheric pollution from coal fires.

• 1709 – Darby’s use of coke (coal product) as a substitute for charcoal in smelting of iron.

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• 1709 – Darby’s use of coke (coal product) as a substitute for charcoal in smelting of iron.

• Industrial revolution (circa 1700 – 1850) explosive rise in demand for coal as fuel and as input to smelting of iron.

• Coal remained the dominant worlwide commercially traded fuel source right up to 1960’s when oil overtook coal primarily due to rise in transportation use.

• Although the relative importance of coal fell coal production continued to grow steadily up to 1990.

• The 1990’s were a period of stable coal production but has grown rapidly since 2000 due to the explosive growth in demand of the Chinese economy China since entry to WTO in 2001.

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From: Boyle , Everett, Ramage Energy Systems and Sustainability

Which Countries have Coal?

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2006 Hard Coal Production Total Global Consumption: 5370Mt (estimate)

PR China

49%India

Australia

6%

South Africa

5%

Russia

5%

Rest of World

8%

PR China

USA

India

Australia

South Africa

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Source: World Coal Institute

http://www.worldcoal.org

USA

19%

India

8%South Africa

Russia

Rest of World

Note in 2006 Brown Coal / Lignite accounts

for an additional 914Mt

Comment

• Coal Reserves are far more widespread than

Oil reserves

• On an energy basis coal reserves are far

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• On an energy basis coal reserves are far

greater than conventional oil reserves (not

including shale).

Chemistry and combustion of coal

• Ash Content varies from 10% to 30%. Ash is inert and remains behind after combustion

• Typical dry Ash Free Coal by mass: Carbon 88%, Hydrogen 5%, Oxygen 5%, Nitrogen 1%, Sulphur 1%

• Sulphur content varies up to 5%

• Combustion Products

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• Combustion Products– Carbon + Oxygen → Carbon Dioxide (C02). Incomplete combustion give

Carbon Monoxide (CO)

– Hydrogen + Oxygen → Water (H2O)

– Sulphur and nitrogen give rise to polluting sulphurous (SO2) and nitrous oxides (NOX).

• On an equal energy basis Coal combustion produces significantly more greenhouse gas than Oil or Natural gas.

Emission Factors (From SEI ENergy in Ireland 1990-2009)

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Uses of Coal (UK 2000)

• Electricity Generation: Approx 66%

• Iron and Steel: Approx 20%

• Direct use & Smokeless fuels: approx 10%

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• Direct use & Smokeless fuels: approx 10%

Source of estimates: Boyle Everett and Ramage.

16World Coal Institute: http://www.worldcoal.org accessed 12/11/07

Secondary Fuels Derived From Coal

• Coal Gas – a mixture of H2, CO and CH4 was a by-product of coke production for the iron and steel industry. In the 19th century and first half of the 20th century coal derived gas was widely used in the public gas supply, in street lighting and for domestic use. Coal gas distribution has been almost entirely supplanted by natural gas (methane: CH ) but it is still used within the steel works.

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(methane: CH4) but it is still used within the steel works.

• Pure methane can be produced from coal but there has been little economic incentive to pursue this

• There are a number of liquefaction processes available which aim to make a petrol substitute from coal: Fischer Tropsch Process (used in South African Sasol plants to produce 10000 barrels per day). Bergius process extensively used in Nazi Germany (estimated 80000 barrels per day).

Natural Gas

• History of fuel gases

• Location and Reserves of Natural Gas

• Chemistry of Natural Gas

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• Chemistry of Natural Gas

• Uses of Natural Gas

Useful Reference:

Energy Information Administration International Energy outlook 2007: Chapter 4 Natural Gas available online http://www.eia.doe.gov/oiaf/ieo/nat_gas.html

Natural Gas Reserves

19Images taken from: Energy Information Administration International Energy outlook 2007: Chapter 4

Natural Gas available online http://www.eia.doe.gov/oiaf/ieo/nat_gas.html accessed 12 Nov 2007

Natural Gas Production and

Consumption

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Questions

• Natural Gas was formed million of years ago. How come the graph of natural gas reserves shows a continually increasing trend?

• Are there reasons why we may be further away from the time of “peak gas” than from the time of peak oil?

• Is there a disparity between consumers of gas and producers of gas?

• Gas fields are often but not always found in conjunction with oil fields.

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• Gas fields are often but not always found in conjunction with oil fields. Are there similarities between the location of gas reserves and oil reserves?

• Gas consumption is more concentrated in developed nations than oil consumption. Why is this? What infrastructure is required for oil consumption? What infrastructure is required for gas consumption?

• Is natural gas more likely to be used in an urban economy or a rural economy?

History of Gas use

• Beginning of 19th century coal gas (town gas) a by product of coke production for Iron and Steel industries was initally used for street lighting and eventually for domestic lighting, cooking and heating. Soon dedicated gasworks were constructed to generate coal gas for urban populations.

• In first half of 20th century electricity replaced gas for lighting but coal

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• In first half of 20th century electricity replaced gas for lighting but coal gas was still in widespread use for domestic heating and cooking

• Natural Gas deposits originally discovered in conjunction with Oil.

• Natural Gas networks were established in USA in 1950’s and in Europe in the 1960’s.

• Natural gas requires no conversion process and was adopted as a clean / safe replacement for coal gas. Coal gas rapidly fell out of favour.

• Natural gas use rose dramatically in later half of 20th century for residential heating, for industrial heating and for electricity generation.

Chemistry of Natural Gas

• Raw Natural Gas: 70-90% Methane CH4 5-15% Ethane C2H6 + other impurities

• Raw Gas is processed to remove impurities (including some commercial by products) and increase the percentage of methane for fuel use (Pipeline Quality Gas).

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percentage of methane for fuel use (Pipeline Quality Gas).

• Methane+Oxygen→Carbon Dioxide (CO2) and Water (H2O)

• Methane and its combustion products are odourless and colourless but as a safety precaution minute amounts of odourant (mercaptan) may be added.

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Source: EIA The Crucial Link Between Natural Gas Production

and Its Transportation to Market available online at http://www.eia.doe.gov

Usage of Natural Gas

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Electricity Generation From Gas

• In many countries Gas has displaced Oil from electricity Generation. The key drivers are:

– Cost: Gas is historically cheaper than oil. It is considerably dearer than coal but some of that difference is offset by efficiency.

– Efficiency: Combined cycle gas turbines offer efficiencies approaching 60% while tradional open cyle plants are closer to 40% efficient

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60% while tradional open cyle plants are closer to 40% efficient

– Cleanliness – Natural gas has lower emissions than oil and significantly lower emissions than coal.

• Example– Open Cycle Gas Turbine firing temperature 1200°C final exhaust

temperature 500°.Theoretical maximum Efficiency (Carnot Efficiency) = 47%

– Combined Cycle Turbine Firing temperature 1200°C, Final Exhaust temperature 100°C. Theoretical Maximum Efficiency (Carnot Efficiency) = 74%

–

Fossil Fuel Price Trends

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Energy Price Trends

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Source of chart World Coal Organisation, 2009

Coal: Liquid Fuels

US Steam Coal Price for Electricity Generation

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Source of data: US Energy Information administration price update 20 June 2010.

Questions

• Investigate why the price of gas is closely

linked to the price of oil

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linked to the price of oil

• Why is the price of coal not linked more

closely to the price of oil?

Gas / Oil Price Links

• The price of gas tracks the price of oil closely.

• Economics would suggest that if the market is operating efficiently then this close tracking would indicate that gas and oil are close substitutes for each other.

– Both fluid fuels: can both be used in turbines and boilers

– The replacement of oil by gas in electricity generation indicates that gas can indeed substitute for oil in many cases

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– The replacement of oil by gas in electricity generation indicates that gas can indeed substitute for oil in many cases

– Natural Gas cannot be used in transportation – which may explain the slight premium that oil has historically attracted on an equal energy basis

• The price of coal does not track the price of oil as closely as natural gas. Possible reasons include:

– Conversion Efficiency – Gas and oil combustion is generally more efficient than coal combustion

– Environmental “externalities” being reflected in the price of coal

– Possible Reasons for Market Failure:• High Switching costs (coal is not a fluid)

• Possible seller collusion (the sellers of gas and sellers of oil are closely related)

Question to Think about

• Which of the following fuels do you think

will still be important in 50 years time: Oil,

Coal, Natural Gas. Justify your answer.

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Coal, Natural Gas. Justify your answer.