TPG 4140 NTNU Natural Gas World Wide Professor Jon Steinar Gudmundsson Department of Petroleum Engineering and Applied Geophysics Norwegian University of Science and Technology Trondheim August 28, 2013

What we know about natural gas … Environmentally friendly Widely available in certain regions Lower in price than crude oil More difficult to distribute than crude oil Shale gas has changed the industry More gas than crude oil produced in Norway Norway uses very little natural gas “Petroleum” in Norway means oil and gas Other aspects?

Outline World economy runs on fossil fuels Associated and non-associated gas Natural gas has low emissission Statistics for resources, production and consumption Reserves and production (BP 2012) R/P ratio, world, regions, Norway Trade, gas prices and electricity generation Golden age of gas (IEA 2010) Gas grows twice as fast as total energy…

Taylor et al. 2012

Annual fossil fuel consumption Bryant, S. (2007), JPT September.

Bryant, S. (2007), JPT September.

Global primary energy supply

Backwith, JPT, November 2011

Gas for Heat, Electricity, Chemicals and Fuels Non-associated gas (from gas reservoirs) Associated gas (from oil reservoirs) Unconventional gas Tight gas (sandstone, needs fracturing) Shale gas (shale, needs fracturing) Coal bed methane (biogenic, adsorbed on coal) Town gas (from coal, H2, CH4, CO2 & CO, historical) Biogas (modern)

Canadian Association of Petroleum Producers 2013

Oil Field Johan Sverdrup 1. 7-3. 3∙109 bbl Statfjord 3 Oil Field Johan Sverdrup 1.7-3.3∙109 bbl Statfjord 3.5∙109 bbl, Ekofisk 3.1∙109 bbl

Gas-Condensate Field Aasta Hansteen, 47 GSm3 Ormen Lange 400 GSm3, Snøhvit 134 GSm3

Natural Gas Production Norway 2008 70 % sold, 24 % injected, 3 % fuel, 3 % NGL

Canadian Association of Petroleum Producers 2013

CO2 Emissions Per Unit of Electrical Energy Produced for Energy Sources 17

Natural Gas Cleanest Fossil Fuel Emission of CO2 (in kg CO2/MWh) 1,200 (340%) Lignite-fired power 850 (230%) Hard coal-fired power 350 (100%) Gas-fired CCGT Source: US Department of Energy (DOE), US Energy Information Administration (EIA) 18 18

IEA 2013

Statistical Review of World Energy BP and IEA compile comprehensive data Oil, Natural gas, Coal, Primary energy BP www.bp.com IEA www.iea.org Norwegian Petroleum Directorate www.npd.no

Conversions Used in Norway

Conversions, Units and Prices 1 Sm3 = 35.3 scf (standard cubic feet) S = Standard (1 atm., 15 C, in Norway) M = Mega, G = Giga, T = Tera Commas ,,, & Periods … (Norwegian vs. English) MM = Million, B = Billion, T = Trillion MMscfd = Million standard cubic feet per day BCM = Billion Cubic Metre (hybrid unit) TCF = Trillion Cubic Feet Trillion kWh = 10,000 TWh QBTU = Quadrillion BTU = 1015 BTU = 1 million billion BTU BTU (British Thermal Unit) = 1055.056 J (ISO) = 1.055 kJ 10 $/MMscf = 53 NOK/GJ = 2.1 NOK/Sm3 ($ = 5.6 NOK, 40 MJ/Sm3) 10 €/MWh = 22 NOK/GJ = 0.9 NOK/Sm3 (€ = 8 NOK, MJ = 0.278 kWh, 40 MJ/Sm3)

Proved natural gas reserves at end 2009 www.bp.com

Distribution of proved gas reserves in 1992, 2002 and 2012 Percentage BP Statistical Review of World Energy 2013 © BP 2013 25

Today’s and Tomorrow’s Reserves “Today’s global petroleum reserves reflect yesterday’s exploration efforts plus today’s economics and technology in each country. Tomorrow’s reserves depend on worldwide exploration today, advances in technology and future prices” Bogart & Ebneyousef, SPE 25829, 1993

Gas production/consumption by region Billion cubic metres Production by region Consumption by region BP Statistical Review of World Energy 2013 © BP 2013 27

Gas consumption per capita 2012 Tonnes oil equivalent Source: Includes data from Cedigaz. BP Statistical Review of World Energy 2013 © BP 2013 28

Oil, Natural Gas and Coal in the World

Gas reserves-to-production (R/P) ratios Years 2012 by region History BP Statistical Review of World Energy 2013 © BP 2013 30

Norway R/P=18.2 www.bp.com

Major gas trade movements 2012 Trade flows worldwide (billion cubic metres) Source: Includes data from Cedigaz, CISStat, GIIGNL, IHS CERA, Poten, Waterborne. BP Statistical Review of World Energy 2013 © BP 2013 32

Chart of natural gas trade www.bp.com

Gas prices $/Mmbtu CIF = Cost, Insurance and Freight 34 BP Statistical Review of World Energy 2013 © BP 2013 34

Coal segment of electricity generation www.iea.org

Taylor et al. 2012

Annual carbon dioxide emissions from fossil fuels

Taylor et al. 2012

Taylor et al. 2012

Fatih Birol, International Energy Agency 23 June 2013, The Financial Times US emissions of CO2, the gas that scientists say is mainly responsible for climate change, have been in decline since 2007, and last year hit their lowest level since 1994, according to the government’s Energy Information Administration. However Fatih Birol, chief economist at the International Energy Agency, a Paris-based think-tank backed by 28 governments, said last week the decline was principally a result of US power generators switching away from coal and towards gas, which typically creates about half as much CO2 when burnt for an equivalent output of electricity.

Birol (2013)

Birol (2013)

Birol (2013)

Birol (2013)

Summary World economy runs almost entirely on fossil fuels (gas more than coal 2030 and eventually more than oil) Gas reserves have increased over 20 % the last ten years. Year-to-year affected by economic crisis Only 25 % of reserves outside the Middle East and Europe and Eurasia (mainly Russia) R/P world about 60, Norway about 20 LNG strong growth, now 30 % of world trade Price in range of 0.8-2.3 NOK/Sm3 (range 3x)

References Backwith, R. (2011): Quantifying the Invisible: Getting a Handle on Methane’s Climate Impact, JPT, November, 54-57. Birol, F. (2013): Developments in Global Gas Markets and Implications for Europe, International Energy Agency, Presentation, 8 pp. Bogart, A.J. & Ebneyousef, M.H. (1993): The Meaning of Reserves in Context of Global Economic Security and Survival, SPE 25829, 8 pp. Bryant, S. (2007): Geologic CO2 Storage – Can the Oil and Gas Industry Help Save the Planet? JPT, September, 98-105. Nysæter, J.B. & Wottrich, V. (2012): Gas Markets 101, Presentation, TPG 4140 Natural Gas, Department of Petroleum Engineering and Applied Geophysics, NTNU, 53 pp. Taylor, R.S., Tertzakian, P., Wall, T., Graham, M, Young, P.J. & Harbinson, S. (2012): Natural Gas: The Green Fueld of the Future, SPE 136866, 13 pp.

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