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Combustion Industry News

From the IFRF's correspondent in Australia
From the Sydney office
Contributed by Patrick Lavery
Australia, Friday 6th July 2018

Methane leakage a talking point at World Gas Conference after Nature paper estimates leakage rates higher than previously thought

There have been renewed questions about the amount of methane leaking from natural gas and oil wells across the US, after a paper was published in Nature in late June estimating that the amounts were 13 million tonnes per year, about 60% higher than presently estimated by the US Environmental Protection Agency. As the paper’s publication occurred just before the latest triennial World Gas Conference (held this time in Washington DC), its findings quickly became a topic of discussion, with numerous senior oil and gas figures stating their opinions. Bernard Looney, chief executive of Upstream with BP said that gas “will not win the argument that it needs to win if we don’t all put methane as an issue on the table,” while Rachel Kyte, chief executive of Sustainable Energy for All, said “let’s not leave the room with the elephant still here, untouched. You have to plug that methane leak.” It appears there was also a general recognition that methane leaks are lost revenue, and that there might be a financial advantage in reducing flaring and keeping gas byproducts from oil drilling, and in fixing up aging, leaking gas infrastructure. There was a note of caution, though, with Sara Ortwein, president of XTO Energy Inc saying that more needed to be done to make solutions more cost effective. Oil and gas companies will also have in mind the negative reputational consequences that elevated levels of greenhouse gas emissions by their companies would produce, and the prospect of tighter regulation.

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US EPA chief Scott Pruitt resigns

On the topic of EPA regulation, the head of the US EPA, Scott Pruitt, has resigned, citing unrelenting personal attacks as his reason for leaving. Mr Pruitt has been the subject of a string of questions regarding his spending of public money and other abuses of office which has added to the controversy about the direction he gave to the EPA. The resignation does not come as a surprise, especially after the recent appointment of Andrew Wheeler, a former coal-industry lobbyist, as his deputy, which was seen as a pre-emptive move to line up a replacement for Mr Pruitt. Mr Wheeler will indeed take over as the acting head of the EPA, and it can be expected that he will take the role on the permanent basis. President Donald Trump has thanked Mr Pruitt for “an outstanding job”.

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Sweden’s grid operator predicts winter shortfall after closure of nuclear power plants

Following the coverage in the last Combustion Industry News of the possible future approach to grid operation in Germany, in which supply would dictate consumption patterns, shifting with the intermittency of solar and wind power generation, there is news from Sweden in an associated vein this fortnight. The Swedish grid operator is predicting that with the closure of a number of nuclear power plants in the next two years, the country will be forced to import power during winters as wind power generation will be unlikely to be able to cover peak demand. Last winter, following the closure of one nuclear power plant, Sweden used its reserve energy plants to make up a power shortfall, which shows that the situation is already tight. The news raises a couple of interesting questions – if both Germany and Sweden arrive at situations where they need to be importing electricity in winter, will neighbouring countries – Denmark and Finland, for example - follow a similar path? In such a case, who will be generating all the electricity in winter, and how?

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German opinion polls show majority favours Russia as a gas supplier over the US

An opinion poll of 1001 people in Germany has found that 61% of respondents would prefer Russia as a gas supplier instead of the US, with 13% nominating the US as their preferred choice. The results are interesting in light of the US’s ambition to export more LNG and the political tensions between the USA, Europe and Russia, with none of the relationships at the moment being straight forward. Within Europe itself there is probably a wide range of opinions also, where countries such as Poland and the Baltic States may differ in their stances as compared to Germany. Public opinion may have some influence on future decision making.

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A look back on ‘peak oil’ proves enlightening

An interesting article looking back on the popularity of predictions of ‘peak oil’ in the 2000s hand early 2010s as been published on the Forbes website, written by Michael Lynch, one of the prominent critics of the belief at the time. He outlines how the concept of peak oil was based on poorly applied statistical techniques over short spans of data and the underlying belief that geology determined production trends, which gave a distorted picture of reality. In fact, knowledge of reserves, and the ability to exploit them, changes with time and under economic and political factors. For example, some of the justification for the idea of ‘peak oil’ in the early to mid-2000s was that production was already falling in some parts of the world (according to the theory, because of geology), but in reality the 2003 invasion of Iraq and coincidental shutdown of production in Venezuela were the reason for production dropping by one billion barrels. Some predictions that have not come to pass have been a collapse in Saudi Arabian oil production and the prediction that Russian production could not grow beyond 8 million barrels per day (it is currently 11 and increasing). There was also hubris to the peak oil theories, with a 1998 article in Scientific American stating that predicting “when oil production will stop rising is relatively straightforward once one has a good estimate of how much oil there is left to produce.” This was still going in 2012, when a Greenpeace official said “Oil company cheerleaders proclaiming huge supplies of oil are dead wrong. Peak oil is as real as rain, and it is here now. Not 2050. Not 2020. Now.”  Deniers of peak oil were derided as making “declarations of fact-free faith”.  The new enthusiasm for the idea of stranded fossil fuel assets is a good sign that the idea of ‘peak oil’ has now passed, but as history shows, prediction is a very difficult game. The article is well worth reading.

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Technology Centre Mongstad and SINTEF strengthen CCS ties

Norwegian research organisations Technology Centre Mongstad and SINTEF have agreed to work more closely on carbon capture and storage projects, extending and strengthening their existing relationship. The two organisations have already worked together on such projects, having complementary capabilities, and the heads of both organisations see the new agreement as cementing Norway’s position as a leading country in terms of CCS research and technology.

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Bipartisan USE IT bill looking to incentivise carbon dioxide utilisation in the US

A bipartisan bill is being prepared by members of the US Senate that would attempt to further incentivise the use of carbon dioxide captured from industrial facilities. Being led by Senator John Barrasso, a Republican from Wyoming, the ‘USE IT’ bill is also supported by two Democrats and another Republican, a team that last year worked together to get the provisions into the federal budget that provide tax credits for CCS installations per tonne of carbon captured. The new bill would provide more support for research and development, and would thus complement the existing tax credits, which support deployment. Senator Barrasso opposes a tax on carbon emissions, preferring to take the approach that carbon dioxide should be seen as a resource, not a burden. The preparation of the bill comes as a new group backed by renewables companies has begun to advocate for a federal carbon tax that would return a dividend to citizens, a scheme reminiscent of one brought to the White House shortly after Mr Trumps election, but not adopted.

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Animation shows NO2 levels in China from 2005-2018

The Financial Times has created an animation showing the changing concentrations of nitrogen dioxide across eastern China from 2005 to 2018 as measured by a NASA satellite. The levels vary from season to season, with the winter months of November-February being the worst because of heightened coal burning for heating, and January 2013 saw a highly intense peak (coinciding with a peak of coal-burning in the country). The worst polluted areas were the North China Plain (south of Beijing) and to the west of Shanghai. After the 2013 peak, NO2 concentrations declined until 2016 from a mix of lower economic activity, tighter pollution controls, and a shifting of industrial activity to summer months. However, in the last few years levels have once again begun to increase, presumably from an uptick of economic activity. The FT page also includes an interesting image showing pollution levels and the location of coal-fired power plants which demonstrates the link between the two (oil and coal firing contributes 50- 70% to total NO2 emissions).

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Feasibility study to be conducted into a cocoa pod-fired plant in Ivory Coast

In news from the Ivory Coast, the U.S. Trade and Development Agency has approved a grant to conduct a feasibility study into a 60-70 MW cocoa pod waste-fired power plant in the south of the country. Ivory Coast is the world’s largest producer of cocoa, and at present much of the cocoa pods are simply wasted, meaning that a plant firing the pods would have a cheap source of fuel. The country is hoping to develop as much as 424 MW of biomass-fired generation capacity by 2030 to help meet the rapidly escalating demand for electricity, which is growing at around 10% annually, but also to maintain its status as a net energy exporter.

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