Easwaran Kanason

Co - founder of NrgEdge
Last Updated: May 8, 2019
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Business Trends
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In April 2018, the Northern Territories of Australia lifted a ban on fracking that has been in place since 2016. It is a move that has had energy companies salivating, tempted by sky-high estimates of shale gas and oil trapped deep underneath the Outback. It is also one few of the Australian territories to embrace fracking after massive opposition on environmental and social grounds, which has already seen fracking banned by legislation in most places in Australia.

Why is this happening? With a massive onshore area, Australia is known to be onshore gas-rich. Tapping into this has long been the ambition of the country’s energy players, but they have had to face an organised grassroots and political opposition that has campaigned to prevent fracking from taking place, citing issues over water pollution, geological stability and environmental impact. Add to this conundrum of Australia’s internal supply/demand balance – where the country as a whole is a major exporter of LNG through the giant offshore projects in Western Australia, while the more industrialised and populous East and Southeast face a domestic gas crunch.

Origin Energy is hoping that it will be able to solve these issues, while proving that responsible fracking can assuage citizenry concerns and showcase it as a ‘good energy player’. It has announced plans to drill two new wells in the Beetaloo Basin this year; named after a cattle ranch the size of Hawai’i, Beetaloo has been called the ‘best immediate prospect’ the replacing dwindling gas from the Bass Strait in Victoria state. An estimate suggests that Beetaloo holds some 500 trillion cubic feet of gas, a size that would put it on par with pioneering US shale basins like Marcellus and Barnett. Drilling that occurred prior to 2016 suggested a recoverable resource of 6.6 tcf, which alone would be enough to supply an LNG export train for 20 years. The new round of drilling – at the liquids-rich Kyalla and Velkerri shale plays – is aimed to looking for liquids, the sort of shale oil that has been found in onshore USA and that truly revolutionised the industry there.

Origin Energy (and its partner Falcon Oil & Gas) isn’t the only player in Northern Territories shale. Fellow Australian player Santos is also looking to start drilling in the NT McArthur basin this year, having already submitted its environmental management plan to the NT government after calling it the ‘largest and most promising shale gas opportunity in Australia.’ If any of this gas (that is yet-to-be-explored) makes it to commercialisation, it will come to market around 2024-2025 at the earliest – just in time to stave off the chronic shortage of natural gas on the east coast.

But it won’t be easy. Even if the shale gas and shale liquids are commercially viable, the Beetaloo and McArthur basins are – to put it simply – in the middle of nowhere. Origin Energy’s permit area is roughly three times the size of Singapore in area with little human activity beyond farming. It is also some 2,500 kilometres away from Sydney and the closest industrial applications that would require that gas, necessitating a massive expansion of cross-state gas transmission networks and pipelines. Connection to Darwin and its port facilities is also possible, sending the gas overseas or within Australia as LNG, but that too will require significant investment of at least A$1.5 billion. In that sense, the issues facing Australian shale are not different from that faced by US shale: there is plenty of gas. Getting it out of the ground is the easier part; getting it to market is the far harder part.

The Beetaloo and McArthur Shale Basins:

1. Beetaloo
- 600km southeast of Darwin, ~30,000 square kilometres
- Holds an estimated 70% of total shale gas resources in the Northern Territories
- Origin Energy/Falcon Oil & Gas hold exploration permits for EP76, EP98 and EP 117 (covering 4.6 million acres)

2. McArthur
- 500km southeast of Darwin, ~180,000 square kilometres
- Very high unconventional oil and gas potential’, particularly in the Barney Creek Formation
- Santos holds exploration permits for EP161, EP162, EP189 and EP(A)288

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The United States consumed a record amount of renewable energy in 2019

In 2019, consumption of renewable energy in the United States grew for the fourth year in a row, reaching a record 11.5 quadrillion British thermal units (Btu), or 11% of total U.S. energy consumption. The U.S. Energy Information Administration’s (EIA) new U.S. renewable energy consumption by source and sector chart published in the Monthly Energy Review shows how much renewable energy by source is consumed in each sector.

In its Monthly Energy Review, EIA converts sources of energy to common units of heat, called British thermal units (Btu), to compare different types of energy that are more commonly measured in units that are not directly comparable, such as gallons of biofuels compared with kilowatthours of wind energy. EIA uses a fossil fuel equivalence to calculate primary energy consumption of noncombustible renewables such as wind, hydro, solar, and geothermal.

U.S. renewable energy consumption by sector

Source: U.S. Energy Information Administration, Monthly Energy Review

Wind energy in the United States is almost exclusively used by wind-powered turbines to generate electricity in the electric power sector, and it accounted for about 24% of U.S. renewable energy consumption in 2019. Wind surpassed hydroelectricity to become the most-consumed source of renewable energy on an annual basis in 2019.

Wood and waste energy, including wood, wood pellets, and biomass waste from landfills, accounted for about 24% of U.S. renewable energy use in 2019. Industrial, commercial, and electric power facilities use wood and waste as fuel to generate electricity, to produce heat, and to manufacture goods. About 2% of U.S. households used wood as their primary source of heat in 2019.

Hydroelectric power is almost exclusively used by water-powered turbines to generate electricity in the electric power sector and accounted for about 22% of U.S. renewable energy consumption in 2019. U.S. hydropower consumption has remained relatively consistent since the 1960s, but it fluctuates with seasonal rainfall and drought conditions.

Biofuels, including fuel ethanol, biodiesel, and other renewable fuels, accounted for about 20% of U.S. renewable energy consumption in 2019. Biofuels usually are blended with petroleum-based motor gasoline and diesel and are consumed as liquid fuels in automobiles. Industrial consumption of biofuels accounts for about 36% of U.S. biofuel energy consumption.

Solar energy, consumed to generate electricity or directly as heat, accounted for about 9% of U.S. renewable energy consumption in 2019 and had the largest percentage growth among renewable sources in 2019. Solar photovoltaic (PV) cells, including rooftop panels, and solar thermal power plants use sunlight to generate electricity. Some residential and commercial buildings heat with solar heating systems.

October, 20 2020
Natural gas generators make up largest share of U.S. electricity generation capacity

operating natural-gas fired electric generating capacity by online year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Based on the U.S. Energy Information Administration's (EIA) annual survey of electric generators, natural gas-fired generators accounted for 43% of operating U.S. electricity generating capacity in 2019. These natural gas-fired generators provided 39% of electricity generation in 2019, more than any other source. Most of the natural gas-fired capacity added in recent decades uses combined-cycle technology, which surpassed coal-fired generators in 2018 to become the technology with the most electricity generating capacity in the United States.

Technological improvements have led to improved efficiency of natural gas generators since the mid-1980s, when combined-cycle plants began replacing older, less efficient steam turbines. For steam turbines, boilers combust fuel to generate steam that drives a turbine to generate electricity. Combustion turbines use a fuel-air mixture to spin a gas turbine. Combined-cycle units, as their name implies, combine these technologies: a fuel-air mixture spins gas turbines to generate electricity, and the excess heat from the gas turbine is used to generate steam for a steam turbine that generates additional electricity.

Combined-cycle generators generally operate for extended periods; combustion turbines and steam turbines are typically only used at times of peak load. Relatively few steam turbines have been installed since the late 1970s, and many steam turbines have been retired in recent years.

natural gas-fired electric gnerating capacity by retirement year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Not only are combined-cycle systems more efficient than steam or combustion turbines alone, the combined-cycle systems installed more recently are more efficient than the combined-cycle units installed more than a decade ago. These changes in efficiency have reduced the amount of natural gas needed to produce the same amount of electricity. Combined-cycle generators consume 80% of the natural gas used to generate electric power but provide 85% of total natural gas-fired electricity.

operating natural gas-fired electric generating capacity in selected states

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Every U.S. state, except Vermont and Hawaii, has at least one utility-scale natural gas electric power plant. Texas, Florida, and California—the three states with the most electricity consumption in 2019—each have more than 35 gigawatts of natural gas-fired capacity. In many states, the majority of this capacity is combined-cycle technology, but 44% of New York’s natural gas capacity is steam turbines and 67% of Illinois’s natural gas capacity is combustion turbines.

October, 19 2020
EIA’s International Energy Outlook analyzes electricity markets in India, Africa, and Asia

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Today, EIA is releasing its International Energy Outlook 2020 (IEO2020), which analyzes generating technology, fuel price, and infrastructure uncertainty in the electricity markets of Africa, Asia, and India. A related webcast presentation will begin this morning at 9:00 a.m. Eastern Time from the Center for Strategic and International Studies.

global energy consumption for power generation

Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)

IEO2020 focuses on the electricity sector, which consumes a growing share of the world’s primary energy. The makeup of the electricity sector is changing rapidly. The use of cost-efficient wind and solar technologies is increasing, and, in many regions of the world, use of lower-cost liquefied natural gas is also increasing. In IEO2019, EIA projected renewables to rise from about 20% of total energy consumed for electricity generation in 2010 to the largest single energy source by 2050.

The following are some key findings of IEO2020:

  • As energy use grows in Asia, some cases indicate more than 50% of electricity could be generated from renewables by 2050.
    IEO2020 features cases that consider differing natural gas prices and renewable energy capital costs in Asia, showing how these costs could shift the fuel mix for generating electricity in the region either further toward fossil fuels or toward renewables.
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IEO2020 builds on the Reference case presented in IEO2019. The models, economic assumptions, and input oil prices from the IEO2019 Reference case largely remained unchanged, but EIA adjusted specific elements or assumptions to explore areas of uncertainty such as the rapid growth of renewable energy.

Because IEO2020 is based on the IEO2019 modeling platform and because it focuses on long-term electricity market dynamics, it does not include the impacts of COVID-19 and related mitigation efforts. The Annual Energy Outlook 2021 (AEO2021) and IEO2021 will both feature analyses of the impact of COVID-19 mitigation efforts on energy markets.

Asia infographic, as described in the article text


Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)
Note: Click to enlarge.

With the IEO2020 release, EIA is publishing new Plain Language documentation of EIA’s World Energy Projection System (WEPS), the modeling system that EIA uses to produce IEO projections. EIA’s new Handbook of Energy Modeling Methods includes sections on most WEPS components, and EIA will release more sections in the coming months.

October, 16 2020