1. Natural Gas Technologies For The Future
Melanie Kenderdine
Gas Technology Institute
Energy and Nanotechnology: Strategy for the Future
Houston, Texas
May 2-4, 2003

2. Drivers for Natural Gas Demand
Resource Abundance
Overall Growth in Energy Demand
Geopolitics of Oil
Inexpensive Power Generation
Environmental Benefits

3. World Gas Consumption By Region, 1999 & 2020
Eastern Europe
North America
Ind. Asia
Dev. Asia
W. Europe
Middle East
Africa
C./S. America
1999
2020 est.
Source: EIA, International Energy Outlook, 2002

4. % World Gas Reserves By Region36 36
Eastern Europe
North America 5
W. Europe 3 8
Middle East
Asia & Oceania 4 8
C./S. America
Africa
79% of the world’s gas reserves are in 12 countries
Source: EIA, International Energy Outlook, 2002

5. World Coal/Gas/Oil Consumption By Region, 1999/2020
Eastern Europe
North America
Ind. Asia
W. Europe
Middle East
Dev. Asia
C./S. America
Africa
Source: EIA, International Energy Outlook, 2002

6. % World Oil/Gas/Coal Reserves By Region: Geopolitical Issues In Focus57 36 27
North America 26 36 18 7 30
Eastern Europe
W. Europe 5 9 3 8 3
Asia & Oceania 8
Middle East 4 2 8
C./S. America 6 6
Africa
Coal
Gas
Source: EIA, International Energy Outlook, 2002
Oil

7. Global Electricity Consumption: 75% Demand Increase by 2020

8. Economics of New Baseload Electric Plant Costs Are Driving US Gas Demand

9. % Increases in CO2 Emissions, 1999/2020
Eastern Europe
+45%
North America
+ 42%
Ind. Asia
+23%
W. Europe
+21%
Middle East
+72%
Dev. Asia
+122%
C./S. America
+139%
Africa
+140%
Worldwide Carbon Emissions Expected to Increase 61%

10. Technology Challenges for Natural Gas

11. Challenge #1: Developing Conventional/ Unconventional Gas Resources
Near Term
Enhanced Drilling
Enhance Seismic Techniques
Reservoir Management
Unconventional Gas Production
Mid Term
Ultradeep-Water Production
Unconventional Gas Production from multiple sources
Deep Drilling
Advanced Coalbed Methane
Long Term
Methane Hydrates
New Architecture for Ultradeep-water Production and Transport

13. Countries With Coalbed Methane Development Programs
United Kingdom
Canada
Russia
United States
Ukraine
China
Brazil
Australia

15. Location of World’s Known and Expected Methane Hydrate Deposits

16. Methane Hydrates: Long Term Potential, Significant Hurdles
Enormous potential resource. USGS estimates that there are 320,000 tcf in the US.
Methane is 10 times more effective than CO2 in causing global warming. Impacts of methane hydrate production unknown.
Gas hydrates may cause landslides on the continental slope
Production methods unclear
Role in ecosystem not clearly understood

17. Challenge #2: Accessing Stranded Natural Gas Resources
Near Term
LNG Infrastructure and Efficiency
LNG Quality
Gas to Liquids
Mid Term
Super Pipelines
Floating LNG Production/ Regasification/ Storage
GTL
Compressed Natural Gas Transport
Long Term
Methane Hydrates
Gas by Wire

18. World’s Stranded Gas Reserves By Region and Amount$8
$11 $6 $6
$10 $6 $5
Import Markets
Source: World LNG/GTL Review
($US Recent Price)
10-60 tcf
tcf
tcf
1500 tcf

19. World’s LNG Facilities and Markets: Growing Regional and Global Markets
Source: World LNG/GTL Review
Existing Facilities
Proposed Facilities
Markets

20. LNG Costs and Infrastructure
Gas Production: ………………$ $1.30
Liquefaction: …………………..$ $2.50
Shipping………………………….$ $1.10
Regasification…………………...$ $1.50
TOTAL: $ $6.40
Source: GTI LNG Source Book, 2001
17 LNG Liquefaction (Export ) Terminals
40 Regasification (Import) Terminals
130 LNG Tankers (120 M Metric Ton Capacity)
Source: University of Houston Institute for Energy Law & Enterprise

21. R & D Needs for Liquefied Natural Gas: Lowering Cost, Increasing Flexibility
Floating LNG liquefaction/ regasification/ storage facilities
Subsea cryogenic pipelines for offloading product to onshore storage facilities
Use of salt caverns for LNG storage
Micro-LNG facilities

22. Gas To Liquids Technology: Accessing Stranded Gas, Serving Middle Distillate Market
technology enables us to
bring stranded gas to
markets by converting
gas into high quality
liquid fuels that can be
transported to market in
the existing petroleum
infrastructure

23. Gas To Liquids Technology: Reducing Capital Costs
Capital costs of GTL have been reduced by 60% in last decade. Still, syngas step accounts for 60% of the capital costs.
Research to address this cost:
Direct conversion from methane to desirable liquid hydrocarbon via catalytic oxidation
Catalysis improvements for indirect conversion
Plasma technology for conversion of natural gas into syngas before catalytic reaction
Ceramic membranes
Co-location with LNG plants

24. Challenge #3: Extending the Resource Base By Developing Alternatives to Natural Gas
Near Term
Wind Energy
Geothermal Energy
Mid Term
Coal Gasification
Coal Liquefaction
Enhanced Oil Recovery
Biomass Gasification
Solar Photovoltaics
Long Term
Hydrogen and Hydrogen Infrastructure
Affordable Nuclear Power Plants With Manageable Waste

25. Enhanced Oil Recovery Could Change the Geopolitics of Oil
Canada billion barrels heavy oil
Venezuela 272 billion barrels heavy oil
Saudi Arabia reserve estimates: 250 billion barrels
Steve Holditch, SPE Conference, 2002

26. EOR Technology Challenges to Produce Venezuelan/Canadian Heavy Oil Reserves
Evaluation of formations*
Special engineering*
New types of completion methods*
Significant hydraulic fracturing*
Horizontal and multi-branched well bores*
Advanced drilling technologies* +
Carbon sequestration
Desulfurization technologies
*Steve Holditch, SPE Conference, 2002

27. Anthracite/Bituminous
Subbituminous/Lignite

28. Coal/Biomass Gasification: Rivals Natural Gas in Environmental Quality
Produce hydrogen, ammonia, or synthetic natural gas from coal or biomass
High-efficiency production of electricity with no release of carbon dioxide to the atmosphere
High-sulfur coal easily handled with GTI’s technology
“Green Power From Coal”

29. R &D Challenges for Commercial Coal or Coal/Biomass Gasification
Lowering of Cost -- $1200 per megawatt hr. compared to $900 for conventional coal fired plant
Membranes to separate oxygen from air for gasification process and hydrogen and CO2 from coal gas
Feeding and uniformity of feedstock
Improved gasifier designs
Advanced cleaning technologies
Recycling of solid wastes +
Carbon sequestration

30. Distributed Generation Large Scale Distributed Generation
Challenge #4: More Efficient Use of Natural Gas/ Environmental Mitigation
Near Term
Power Generation
Gas Turbines
Distributed Generation
End Use Efficiency
Mid Term
Advanced Gas Turbines
Large Scale Distributed Generation
Fuel Cells
Gas to Liquids
Gasification
Long Term
Carbon Sequestration
Super Batteries

31. Global Diesel Market: 36 million barrels per day
World’s 3 Major Auto Manufactures Moving To Low Sulfur Diesel Engines/Regulations
US:
15 ppm
2006
EU:
50 ppm
2005
Germany:
10 ppm
2003
Japan:
50 ppm
2004
Global Diesel Market: 36 million barrels per day

32. Environmental Regulations Could Drive Gas to Liquids Market
9% lower
30% lower
43% lower
45% lower
Hydrocarbons
Carbon Monoxide
Nitrogen Oxides
Particulates
Gas Derived Diesel
Petroleum Derived Diesel

33. Regional Supply/Demand Patterns Suggest Various Technology Pathways for Natural Gas
LNG Infrastructure
CNG Transport
Unconventional/Ultra-deep
Gas to Liquids
Fuel Cells
Hydrogen
Methane Hydrates
Enhanced Oil Recovery
Renewables
Infrastructure Improvements
Super Pipelines/Pipelines
Energy Efficiency
LNG
Coalbed Methane
Methane Hydrates
Ultra-deepwater Coalbed Methane
LNG Efficiencies
Methane Hydrates
Fuel Cells
Hydrogen
Renewables
Coal/Biomass Gasification
Pipelines/Superpipelines
LNG Efficiencies
Coalbed Methane
Energy Efficiency
Methane Hydrates
Ultra-deepwater
Distributed Generation
Gas-to-Liquids
LNG Efficiencies
Energy Efficiency
Enhanced Oil Recovery
Ultra-deepwater Development
LNG
CNG Transport
Methane Hydrates
Renewables
Ultra-deepwater
Distributed Generation
Gas-to-Liquids
LNG Efficiencies
Energy Efficiency
Coal Gasification
Gas-to-Liquids
Coalbed Methane
Coal Gasification
LNG Efficiencies
All regions should invest in carbon sequestration

34. Government R&D Expenditures in Select Countries for Nanotechnology
US………….$700 M per year DOE…………………$197 M (Fy04 req)
EU………….$600 M per year
Japan………$1 B (2002)
Taiwan……..$600 M per year

35. Challenge #1: Developing Conventional/ Unconventional Gas Resources
Near Term
Enhanced Drilling
Enhance Seismic Techniques
Reservoir Management
Unconventional Gas Production
Coalbed Methane
Mid Term
Ultradeep-
Water Production
Unconventional Gas Production from Shales/Tight Sands/Deep Drilling
Advanced Coalbed Methane
Long Term
Methane Hydrates
New Architecture for Ultradeep-water Production and Transport
Possible Nanotechnology Applications
Advanced fluids mixed with nanosized particles to improve drill speed
Nanosensors for reservoir characterization
Removal of gas impurities via nano –separation
Nanocrystalline substances for drilling materials

36. Challenge #2: Accessing Stranded Natural Gas Resources
Near Term
LNG Infrastructure and Efficiency
LNG Quality
Gas to Liquids
Mid Term
Super Pipelines
LNG
GTL
Compressed Natural Gas Transport
Long Term
Methane Hydrates
Gas by Wire
Possible Nanotechnology Applications
Nanocatalysis for gas to liquids production
Nanoscale membranes for gas to liquids production
Nanostructured materials for compressed natural gas transport

37. Challenge #3: Extending the Resource Base By Developing Alternatives to Natural Gas
Possible Nanotechnology Applications
Nanotubes for fuel cell cars
Nanocatalysis for coal liquefaction
Nanocomposites for hydrogen storage
Nanosensors for reservoir characterization
Filters for more efficient ethanol processing
Near Term
Wind Energy
Geothermal Energy
Mid Term
Coal Gasification
Coal Liquefaction
Enhanced Oil Recovery
Biomass Gasification
Solar Photovoltaics
Long Term
Hydrogen and Hydrogen Infrastructure
Affordable Nuclear Power Plants With Manageable Waste

38. Challenge #4: More Efficient Use of Natural Gas/ Environmental Mitigation
Near Term
Power Generation
Gas Turbines
Distributed Generation
End Use Efficiency
Mid Term
Advanced Gas Turbines
Large Scale Distributed Generation
Fuel Cells
Gas to Liquids
Gasification
Long Term
Carbon Sequestration
Super Batteries
Possible Nano-technology Applications
Nano-crystals or photo catalysts to speed up the breakdown of toxic wastes
Nano-scale coatings for more efficient catalytic conversion
Nano-structure catalysts to remove pollutants/ impurities from natural gas
Nanocrystalline materials for water treatment
Polymeric nano-particles to remove pollution from catalytic conversion

39. Nanotechnology: Avoid the “Valley of Death”
Maximize interdisciplinary collaboration
Involve industry as stakeholders
Utilize university research capability
Leverage federal/national labs
Emphasize pre-competitive results
Include studies on technology choices/ down selection & technology migration
Societal Implications of Nanoscience and Nanotechnology, Sep/ 29,2000