The meeting I was at last week was about switchgrass. Switchgrass is a perennial prairie grass, which is an excellent candidate to be used for biomass. But let me back up. Why are we talking about using grass for biomass or heat? Well … mostly because we’re running out of the fossil fuels we currently use to heat our homes.
Matt Simmons, author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy” says we hit peak oil in 2005 and we’ve hit a plateau where world oil production has been steady at 85 million barrels a day since then. Soon we’ll start down the backside of the peak oil curve and we will produce less and less crude oil each year. You refine crude oil into a number of products like gasoline, kerosene or jet fuel, butane, propane, diesel fuel and home heating oil. So if you heat with oil the price is going to become very expensive.
About 70% of North American homes are heated with natural gas, so how is its supply these days? Well – not very good. The US has hit peak natural gas as well. As early as 2001 a number of prominent energy organizations were still optimistic about the availability of natural gas in the US. The National Petroleum Council, Cambridge Energy Research Associates and the US Department of Energy all projected production of natural gas to continue to grow to meet growing demand up until 2020. By 2005 that had changed dramatically. Despite rising prices and increased drilling activity domestic production was now in permanent decline. This may be part of the “natural gas falling off a cliff” syndrome.
With oil wells, as the well is depleted you can continue to extract oil in ever decreasing amounts over time. Finding a natural gas deposit is more like puncturing a tire in your bike. Air will flow out very quickly, and then abruptly stop. Natural gas is in serious decline in North America.
As Kenneth Deffeyes reports in “Beyond Oil: The view from Hubbert’s Peak” ; “Between 1980 and 2002 the best of the natural gas targets were drilled. We’re now being served the leftovers.” The Canadian Gas Association who are the people who produce natural gas suggest we have about 8 years of natural gas left. They continue to drill more wells and find less gas. Proven reserves peaked at 99 trillion cubic feet in 1984 and by 2004 they had fallen to 56 trillion cubic feet. Canada uses about 6.5 trillion cubic feet a year, 55% which goes to the US and another whack of it goes to the tar sands to extract low quality oil from the bitumen and adds to the horrific carbon footprint of the process.
The US Energy Information Agency site agrees that Canada’s outlook is not good. http://www.eia.doe.gov/emeu/cabs/Canada/NaturalGas.html “Canada has continued to produce natural gas faster than it replenishes its reserves. Canada’s production/reserves ratio (the number of years of proven reserves remaining at existing production levels) has declined from 35 years in 1985 to 9 years in 2006. Along with falling production, demand for natural gas is expected to rise, driven by the oil sands industry and the power sector. According to Ziff Energy Group, natural gas demand by the oil sands industry could rise from 1 Bcf/d in 2007 to 2.8 Bcf/d in 2015. The combination of falling production and rising domestic consumption could impact Canadian natural gas exports to the United States: according to Ziff Energy Group, Canadian natural gas exports to the U.S. could fall to 5 Bcf/d by 2015, versus 9.9 Bcf/d in 2007.”
So the US EIA gives us about 6 or 7 years left. The only hope for North America is Liquid Natural Gas or LNG, which we get from countries with large gas reserves, like Russia and Iran, who aren’t generally friendly to North America. With LNG we use massive amounts of energy to chill it 163°C below zero so that it turns from a gas into a liquid. Then we put it in ships, which use lots of energy to keep it that cold and send it to America, and then we use massive amounts of energy to turn it from a liquid back into a gas to put into natural gas pipelines.
Wow, sounds like we’re going to need a lot of this stuff! Yes we are and no – LNG probably won’t be able to prevent extreme price increases for natural gas.
A recent ad in ‘The Economist” by ArcelorMittal recruiting workers advertised that “LNG is volatile. If not stored at 163°C below zero in the most secure, leak-proof tanks, it explodes.. VIOLENTLY!” I added the emphasis on violently, but the reality is that this stuff is very dangerous and surprisingly no one wants the unloading depots anywhere near them. In California, which uses a lot of natural gas for electricity generation, there was such a backlash against the unloading facilities that they had to be build them in Baha Mexico, and then ship the gas into California by pipeline.
According to a study called “Brittle Power, Energy Strategy for National Security” by the Rocky Mountain Institute, “The energy content of ONE standard liquid natural gas tanker, at 22 billion gallons of expanded gas, is equivalent to .7 megatons of TNT (that’s 1.4 billion pounds of dynamite). To put it another way, the explosive force of one LNG tanker is equal, roughly, to 55 Hiroshima bombs.” Whoa! Guess I don’t want any these floating bombs near my house either!
The likelihood that we’re going to be able to make up the loss of natural gas from our falling North American reserves with LNG are pretty remote. The consequence of this is going to be reduced supply and when you reduce the supply of something, the price goes up. When you reduce the supply of something as essential as natural gas, the price will sky rocket. If you heat with natural gas today you need a Plan B. Over the next couple of weeks I’ll give you some suggestions. They’re better for your pocketbook and they’re better for the planet.