Coal-powered energy – the best substitute

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Coal-powered energy

KARACHI:
Since Pakistan came into being, people have been facing loadshedding due to shortage of power supply, with frequent outages affecting economy in many ways.
Uncountable working hours have been lost, leading to an increase in poverty and economic loss of billions of rupees to the country. Surprisingly, it is happening despite the fact that only about 60% of the population has access to electricity. According to the World Energy Statistics 2011, published by the International Energy Agency (IEA), Pakistan’s per capita electricity consumption is one-sixth of the world average.
World average per capita electricity consumption is 2,730 kilowatt hours (kwh) compared to Pakistan’s per capita electricity consumption of 451 kwh.
According to the Pakistan Energy Year Book 2011, the country’s installed power generation capacity is 22,477 megawatts and demand is approximately the same. The country needs to redesign the electricity portfolio and substitute oil and gas with an abundantly available indigenous fuel source. It must develop indigenous energy resources to meet future electricity needs and can overcome energy crisis by utilising untapped coal reserves.
Fortunately, Pakistan has a very inexpensive source to get energy through coal. Coal is economically viable and a long-term solution to balance the demand and supply chain of electricity in the country, which has the fifth largest coal deposits in the world.
According to last estimates made in 2011, coal deposits in the country are up to 185 billion tons. The largest deposits are in Thar desert, which is about 850 trillion cubic feet spanning over 10,000 square kilometers, surprisingly more than the oil reserves in Saudi Arabia having a collective quantity of approximately 375 billion barrels.
At present, 40.6% of world’s electricity is being generated from coal and it is the single largest contributor to world electricity generation. By looking at the electricity generation mix of the countries that are blessed with coal, it is evident that coal is the largest contributor.
Countries like Poland, South Africa, China, India, Australia, Czech Republic, Kazakhstan, Germany, USA, UK, Turkey, Ukraine and Japan are generating 96%, 88%, 78%, 78%, 77%, 72%, 69.9%, 52.5%, 52%, 37%, 31.3%, 27.5% and 22.9% of electricity from coal respectively. In comparison, Pakistan generates only 2.27% of electricity through coal.
However, coal reserves of only Thar can generate 20,000MW of electricity for the next 40 years without loadshedding and at a rate Rs4 less than the current cost of electricity production. The government has given the task to experts to enhance energy efficiency by focusing on coal and ensure large scale power generation through this resource.
How coal produces electricity
Technically, producing electricity through coal is a simple process. In most coal-fired plants, chunks of coal are crushed into fine powder and are fed into a combustion unit where they are burnt at a very high temperature. Following this, the burning coal is used to generate steam that is used to spin one or more turbines to generate electricity.
However, during the process, sulfur dioxide and nitrous oxides are produced as well, which cause an increase in smog, ozone depletion and acid rain. Nitrous oxide is also a very powerful greenhouse gas. Even before power is produced, the transportation of coal also poses health risks due to coal dust and emissions from vehicles.
Lastly, heavy metals from coalmine waste can seep into groundwater and rivers. Despite the negative aspect, the significance of coal is not easy to ignore.
Recently, work on a 50MW Underground Coal Gasification (UGC) project has started, which is expected to cost Rs8.898 billion with foreign exchange component of Rs5.847 billion. It has been approved by the Executive Committee of National Economic Council (Ecnec).
If successful, the project will encourage investment from leading international companies.
At the International Coal Conference 2011, Pakistan had invited investors from around the world, encouraging them to pour money into coal power projects as the country initially requires $1.2 billion to build power generation infrastructure in Thar. Japan is keen to finance transmission lines from the Thar coalfield to the national grid and Chinese companies have expressed interest in developing coal-based power plants in Thar and Badin.
The writer comments on economic and energy-related issues

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Thar coalfield - Wikipedia, the free encyclopedia

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From Thar coal to utility poles: Power politics in Pakistan

Until recently he was a national hero. Today he stands accused of being ‘intellectually dishonest’ and a ‘fraud’.

The rise and fall of Dr. Samar Mubarakmand, the man who rose to prominence for his involvement with Pakistan’s nuclear weapons programme, reveals a story of technological hyperboles and lack of transparency while millions of dollars were invested in a project whose feasibility reports have not been made public. All what is known about the project are the claims by Dr. Mubarakmand about the coal gasification project based on Thar coal to generate the much needed electricity in Pakistan.

The huge gap between the demand and supply of electricity in Pakistan has exposed the State’s failure in delivering a product to the market where sufficient willingness to pay e

From Thar coal to utility poles: Power politics in Pakistan | Blog | DAWN.COM

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HE shale gas revolution is upending global energy, and could hold the promise of alleviating South Asia’s energy woes. But so mired is the region in strife, scams and vested interests, that it is letting a wondrous gift slip by.

A few years ago, George Mitchell of America came up with a technology called fracking to extract natural gas from shale, a sedimentary rock. Natural gas from shale is called shale gas, and is just another form of natural gas. Both Pakistan and India have solid reserves of shale gas, but have not begun exploiting them.

The US has taken the lead in extracting its vast deposits of shale gas, making global natural gas prices plummet from $8 for a unit of gas in 2008 to around $2 today. And many other countries too are richly endowed in shale, so natural gas could stay

Shale gas solution? | Opinion | DAWN.COM

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Discovery of shale, tight gas in Sindh

PPL to drill deep sea exploratory well in 2014

* Acquires rights of exploration in block located 100km from Baghdad, Iraq

* Expects 150 BCF discoveries of shale, tight gas

By Sajid Chaudhry

ISLAMABAD: The Pakistan Petroleum Limited (PPL) in collaboration with foreign exploration company ENI is set to start for the first time drilling of exploratory well in Sindh’s deep sea, 200 nautical miles from Arabian Sea, in 2014, said PPL Managing Director Asif Murtaza here on Tuesday.

He informed the Senate’s Standing Committee on Petroleum and Natural Resources that PPL has acquired exploration rights in a block located 100 kilometres from Baghdad, Iraq for oil exploration and hoped that it will be a potential block, which will result in oil discovery.

Updating the Senate body, which met at the Parliament House with Senator Muhammad Yousuf in the chair, PPL MD informed that drilling of exploratory well has already started in block acquired in Iraq and there are bright chances of oil discovery. In case of major success, Pakistan would benefit greatly as its foreign exchange would be saved, which is at present being spent on oil imports. The company is already working in Yemen on two blocks.

He explained to the committee that in Makran Deep Sea some 12-exploration wells were drilled and none gained success. Many foreign exploration companies still have interest in drilling exploration wells in Makran Deep Sea, however, drilling has been delayed for a year.

Ministry of Petroleum Additional Secretary Naeem Malik informed the committee that drilling of an exploration well in deep sea requires at least $100 million investment and foreign companies take decisions with due care. The federal government has recently announced new exploration incentives policy and those companies which would make first three discoveries in deep sea would be given extra benefits with incentives to encourage more companies to come forward.

The PPL MD informed that PPL is working in Zandan Block of Khyber Pakhtunkhwa (KP) and is planning to acquire five more blocks in KP as the Tal Block area has great potential of discoveries.

To exploit unconventional gas reserves in the country, some seven exploratory wells, eight appraisal wells, and 19 development wells have been planned in next five years and expected outcome would be 150 billion cubic feet (BCF) shale and tight gas production in the country.

He informed that shale and tight gas price approval has been sought from the regulator to speed up the exploration activity. He further informed that some seven pilot projects have been planned for exploration of shale and tight gas reserves. He further informed that in Kairther Block one exploratory well Rahman-1 is under way. He informed that Hala, Kotri, Notari North, Jangshahi, Gambat and south blocks are potential areas for discovery of shale and tight gas reserves.

He informed that PPL has geared up its seismic survey activities in the country and some 780-kilometre-area was surveyed in 2011-12 and during this fiscal year some 1,400-kilometre-area has been surveyed so far. During the meeting it was informed that District Kohlu, Balochistan has huge gas reserves and due to the law and order situation exploration companies do not go there. However, PPL MD expressed his company’s willingness for exploration in Kohlu area upon improvement in law and order situation.

The additional secretary informed the committee that in Kohlu type of areas where owners of the land do not want government to explore oil and gas, ‘Alaska Formula’ can be opted for under which they can directly ink agreements with foreign exploration companies and upon discovery they can sell their production to the government under an agreement. However, investment for the exploration activity would need to be arranged by the company or owner of the land where exploration will be carried out.

He further informed that federal government is collecting 12.5 percent royalty on gas production and entire amount is transferred to the provinces and if any provincial government is not spending such amount on the welfare of their population it is its fault and the federal government can’t be blamed.

The additional secretary further informed the committee that under the new Corporate Social Responsibility (CSR) applicable on oil and gas exploration companies, each company is required to spend $30,000 to start their work in any block on social services for the benefit of the local population. Upon production of 2,000 barrels the company is required to spend $50,000 annually and companies that would be producing over and above 2,000 barrels per day oil equivalent are required to spend $700,000 annually under CSR initiatives.

Daily Times - Leading News Resource of Pakistan

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Proppant prospects in the pipeline | Industrial Minerals

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Reports of new gas reserves of 40 trillion cubic feet are specially welcome at this moment in Pakistan when it is facing a very serious and growing energy crisis. Even if the demand doubles from the current one trillion cubic feet a year to two trillion cubic feet a year, the estimated current gas reserves can last as long as 30 years or more.

Pakistan is particularly heavily dependent on natural gas for its energy needs. Demand for natural gas in Pakistan has increased by almost 10 percent annually from 2000-01 to 2007-08, reaching around 3,200m cubic feet per day (MMCFD) last year, against the total production of 3,774 MMCFD, according to Pakistani official sources. But, during 2008-2009, the demand for natural gas exceeded the available supply, with production of 4,528 MMCFD gas against demand for 4,731 MMCFD, indicating a shortfall of 203 MMCFD.

The gas supply-demand imbalance is expected to grow every year to cripple the economy by 2025, when shortage will be 11,092 MMCFD (Million standard cubic feet per day) against total 13,259 MMCFD production. The Hagler Bailly report added that Pakistan's gas shortage would get much worse in the next two decades if it did not bring on any alternative sources.

Shale gas offers an alternative source for energy-starved Pakistan. Rough estimates indicate the presence of at least 33 trillion cubic feet of unconventional gas reserves trapped in rocks, according to an ENI Pakistan report. Another report by Shahab Alam, technical director of Pakistan Petroleum Concessions, puts the estimate at 40 trillion cubic feet of tight gas reserves in the country. These unconventional gas reserves are in addition to the remaining conventional proven gas reserves of over 30 trillion cubic feet.

With the pioneering work done in the United States on deep drilling and hydraulic fracturing (fracking) to extract hydrocarbons from shale rock, it is now estimated that the US alone has over 1000 trillion cubic feet of recoverable unconventional gas, according to the Wall Street Journal. Unlike the bulk of world's conventional natural gas reserves that are found in Russia, Iran, Venezuela and Qatar, the shale gas reserves have been discovered in rock formations spread across many parts of the world, including China, North America, Western Europe, India and Pakistan. Many energy analysts argue that tapping these new hydrocarbon resources could be a game-changer in terms of global economics and geo-politics.

Increased production of gas from shale in the US has created a glut, pushing down gas prices from $13/BTU (million British thermal units) four years ago to just $4.23/BTU today, even as the price of oil has more than doubled. By contrast, the Iran pipeline gas formula links the gas price to oil prices. It means that Pakistan will have to pay $12.30/BTU at oil price of $100/barrel, and a whopping $20/BTU for gas if oil returns to its 2008 peak of $150/barrel.

To encourage investment in developing domestic shale gas, Pakistan has approved a new exploration policy with improved incentives as compared with its 2009 policy, a petroleum ministry official said recently. Pakistan Petroleum is now inviting fresh bids to auction licenses to explore and develop several blocks in Dera Ismail Khan (KPK), Badin (Sind), Naushero Firoz (Sind) and Jungshahi (Sind), according to Oil Voice.

Under the new policy, exploration companies will be offered 40-50% higher prices for the extracted gas compared with the $4.26/Btu price announced in Exploration and Production Policy 2009. Companies which succeed in recovering gas from tight fields within two years will get 50% hike over the 2009 price and if it takes more time they will get only a 40% hike on the 2009 price. As an added incentive, the leases for the fields will now be for 40 years instead of 30 in the 2009 policy, the official said.

Even with the higher prices for the tight gas offered to the exploration companies, it is estimated that Pakistan will have to pay a maximum of $6.50/Btu for the gas compared with $12.30/Btu for gas imports, according to a report by Platts.

Development of shale gas in Pakistan, or anywhere else, is not without risks, particularly risks to the environment. In the United States, there have been many reports of ground water contamination from chemicals used to fracture rocks, as well as high levels of methane in water wells. In the absence of tight regulations and close monitoring, such pollution of ground water could spell disaster for humans and agriculture.

Given Pakistan's heavy dependence on natural gas for energy and as feedstock for industries such as fertilizer, fiber and plastics, it's important to pursue shale gas fields development under reasonably tight environmental regulations to minimize risks to the ground water resources.

Source: 40 Trillion Cubic Feet of Shale Gas Reserves in Pakistan

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India holds 527 tcf of shale gas reserves


In January last year, the US Energy Information Administration estimated that India held 38 trillion cubic feet of proven natural gas reserves.

That was good enough for the needs of the nation for 29 years, it was said.

What if that figure was upped to a fantastic 527 trillion cubic feet?
Yes, 527 trillion cubic feet of gas, of which 50%, or over 260 tcf, were recoverable?

That amount of fuel could last for at least 200 years and would potentially be the fifth biggest hoard in the world.

China has the most, followed by US and Argentina.
A M Dayal, an emeritus scientist with the National Geophysical Research Institute (NGRI) in Hyderabad, said his scientists have identified 28 sedimentary basins of shale gas (natural gas found trapped in shale formations under the ground), including ten potential producing basins, across India.

These have been classified according to their hydrocarbon potential, and hold an estimated 527 trillion cubic feet (tcf) of reserves, he said.

With government policy framework on shale gas exploration expected in the next 18-24 months, and given industry’s keenness to get into exploration of the clean non-conventional energy source that is also less expensive — no processing is necessary — India can look forward to commercial production of shale gas in the next five years or by 2017, Dayal said.

Shale gas is being increasingly tapped across the world as conventional energy sources like oil and coal turn scarce and expensive.

For instance, the US has been recovering shale gas for several years. Its reserves at 2009-end were estimated at 60.6 trillion cubic feet. By 2011, the figure rose to 827 trillion cubic feet. Shale production is projected to increase from 23% of total US gas production in 2010 to 49% by 2035. Unconfirmed data even suggest that shale gas usage has helped reduce the cost of gas in the US. China is among the countries that are now looking at shale gas as source of energy.

According to scientists working on Indian shale gas, recovery rate of up to 50% is much higher than the 30% in oil and gas reserves. “Unlike conventional hydrocarbon traps, shales cover large areas and they remain a source of gas for a very long time,” said Dayal.

With the US getting into shale gas in a big way, oil and gas exploration companies in India are “ready to get into shale gas sector. They all know India is a big market”, said Dayal.

A stumbling block could be lack of a clear policy framework. Shales are available equally in the blocks already allotted to oil exploration companies. But they can’t touch the shale yet. Shale gas blocks have to be separately allotted for exploration.

However, the NGRI scientists can work on developing shale gas in India, independent of the guidelines.

“Under the 12th Five-Year Plan, we are planning to work in the Canbay basin, the Assam-Arakan basin, the K-G basin and the Damodar basin. When the exploration companies are given the blocks, they have to get the core of the shale and analyse it for geo-chemistry and petro-physics results.That will decide whether or not it is economic to take the project forward. That’s where we plan to play a role since we have the infrastructure and the grant of the Oil Industry Development Board,” said Dayal.

A potential problem in India could be that shales are mostly found about 2,000 metres deep on shore, in areas of human habitation, unlike oil drilling that takes place offshore. Specially designed water borewells may be needed in such areas to tackle escaping methane gas. Use of high-power compressors and other equipment could also unsettle local populations, while shale drilling could affect ground water reserves.

But all such challenges are not insurmountable, scientists said.

“There is an immediate need for us to tap the shale. Conventional sources are either expensive or drying up. After Bombay High, there is no big discovery on the conventional front. Even the reserves in D6 are proving to be uncertain,” Dayal said.


Source: India holds 527 tcf of shale gas reserves

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According to the department of US Energy Information Administration (USEIA) Pakistan has 51 Trillion Cubic Feet (TCF) of Shale Gas only in the Southern Pakistan which are technically recoverable while huge potential exists in the other basins of the country.

1. Pakistan has attained maturity in most current producing basins, while exploration in offshore Pakistan is highly capital investment and has not yielded positive results so far, it is expected that new fields will be predominantly smaller gas fields. Therefore, policy initiatives need to be taken to explore and develop Shale Gas resources.

2. Currently no Shale Gas is being produced in Pakistan and significant work is required to kick start this high potential energy source. The pilot projects in Pakistan are to be treated as research and development work with economic viability for production. The competent authority shall , in consultation with the E & P companies , ascribe work units to different types of technical activities including commercial economics studies, unconventional surveys, specialised G&G studies and multicomponent seismic surveys as well as well operations such as horizontal drilling, multilateral drilling , multi-phase hydraulic fraccing etc that are to be performed during the course of specific pilot project(s).

3. Exploring, drilling, and in turn the development and production of Shale Gas is much more difficult and requires "State-of-the-art-technology" entailing massive investments with longer recovery cycle.

4. In order to explore/produce every molecule, the Government is in the process of preparation of Shale Gas Framework providing lucrative incentives to E & P Companies to jump start Shale Gas exploration and enhance the gas production to meet the energy crisis in Pakistan.

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http://csis.org/files/publication/120824_Nakano_ProspectsShaleGas_Web.pdf