Between the Poles

USGS confirms EPA's draft report on contamination of ground water in Wyoming

I blogged about a draft EPA report that linked groundwater contamination to fracking.  In response to complaints by domestic well owners regarding objectionable taste and odor problems in wellwater, the U.S. Environmental Protection Agency (EPA) investigated ground water contamination near Pavillion, Wyoming. The objective of the EPA's investigation was to determine the presence of ground water contamination and to differentiate shallow source sources (pits, septic systems, agricultural and domestic practices) from deeper sources (gasproduction wells using fracking).

EPA delayed convening the peer review panel on the draft Pavillion report until a report containing USGS data collected from the EPA's two wells is publicly available.  The USGS report is now available, but the USGS provided only the raw data and no interpretation. However, according to a preliminary analysisby the EPA,  the results are consistent with the EPA's draft report.  An analysis of the USGS data commissioned by the Sierra Club also concluded that "the organic chemistry at MW01 [one of the EPA's wells] has not changed substantially since the EPA sampled the well. The chemistry of MW01 found by the USGS is similar to that found by the EPA."

The EPA plans to complete its own analysis of the water samples and then turn over all of the data for an independent peer review later this year.

Proving that ground water is contaminated is one thing.  Proving that fracking is the cause is another.  A major review of hydraulic fracturing by the University of Texas, Fact-Based Regulation for Environmental Protection in Shale Gas Development, found "no direct evidence that fracking itself has contaminated groundwater."  But it did find that contamination of groundwater can happen when chemicals used in the fracking process escape into the water table closer to the surface from poor well-bore casings and inadequately lined storage ponds.  However, there is now some question about the objectivity of the University of Texas report.

U.S. carbon dioxide emissions in first quarter of 2012 lowest since 1992

According to the U.S. Energy Information Administration (EIA), energy-related carbon dioxide (CO₂) emissions during the first quarter (Jan to Mar) of 2012 were the lowest since 1992 for this period. The EIA says that CO₂ emissions in Q1 2012 were low because of a mild winter, the continuing decline in coal-fired generation and reduced gasoline demand. Energy-related CO₂ emissions totaled 1,340 million metric tons during the first quarter of 2012.   CO₂ emissions from coal were down to 387 million metric tons in Q1 2012, the lowest first quarter CO₂ emissions from coal since 1983. About 90% of the energy-related CO₂ emissions from coal come from electric power generation and utilities are burning more natural gas and less coal for electricity generation.  Burning natural gas produces about 50% less CO₂ per kWh than coal according to the EPA.

In its Annual Energy Outlook for 2012 the EIA has projected energy-related CO₂ emissions in 2020 to be more than 9 % below the 2005 level, and even in 2035 4% less than 2005.  Emissions per capita are projected to fall by about 1.0 % per year from 2005 to 2035.  Natural gas replacing coal, more renewable fuels, energy efficiency improvements, and slow growth in electricity demand are the primary factors leading to reduced emissions.  It should be noted that the EIA projection assumes no new regulations or legislation to limit CO₂ emissions.

Coal-fired generation projected to decline from 48% in 2008 to 38% in 2020

The Energy Information Administation (EIA) is projecting that based on current legislation, the proportion of electricity generated from coal-fired plants will continue to decline, reaching 38% in 2020. The decline is primarily due to the low price of natural gas and the EPA's Cross-State Air Pollution Rule and the Mercury and Air Toxics Standards. The projected fuel mix is sensitive to natural gas prices and the performance of the economy.

The EIA is also projecting that 49 gigawatts (GW) of coal-fired capacity will be retired through 2020.  That is about one-sixth of the existing coal-fired power generation capacity in the U.S.

The projection of coal-fired retirements is sensitive to natural gas prices and economic growth and could range from a low of about 30 GW to 70 GW depending on the performance of the economy.  Most of the retirements are expected to occur in parts of the U.S. where there is excess capacity currently. 

The EIA's projection does not include possible future regulation such as the U.S. Environmental Protection Agency proposed carbon pollution standard for new power plants.  

EPA is proposing that new fossil‐fuel‐fired power plants meet an output‐based standard of 1,000 pounds of CO₂ per megawatt‐hour (lb CO2/MWh gross).  New natural gas combined cycle (NGCC) power plant units should be able to meet the proposed standard without add‐on controls, but new power plants designed to use coal would need to incorporate technology to reduce carbon dioxide emissions to meet the standard, such as carbon capture and storage (CCS).

The EPA's new proposed rule would not apply to existing units already operating or units that will start construction over the next 12 months.

San Bruno explosion inquiry points to flawed GIS information

Flawed information flows affect safety

One of the major challenges facing the world's utilities is one of data management, optimizng information flows that involve multiple divisions within a utility. I have blogged about this challenge on multiple occasions (here, here, here and here).  This process needs to be optimized otherwise the quality of the information ("records") about the utility's overhead and underground infrastructure, where it is located and its maintenance history, is impaired, potentially leading to serious accidents like the gas explosions in Belgium in 2004 and the San Bruno explosion in 2010.

The basic process for designing, building and operating and maintaining a utilities network is essentially the same the world over and involves a cumbersome, inefficient, paper-based process.  Designers or planners create the initial design, called a construction drawing. Construction crews, often comprised of sub-contractors, build the facilities using paper construction drawings.  During construction, the drawing may be marked up or redlined to reflect changes in the original design.  After construction is completed, the construction drawing, now referred to as an "as-built", is forwarded to the records department.  The records department typically redrafts the paper as-built into the permanent records database, which is maintained as the company's record of its network infrastructure.

For work relating to connecting or disconnecting customers to the network, adding new services, repairing or replacing network facilities, and call-before-you-dig requests the records department is responsible for preparing maps showing the location of the utility's network facilities to assist field staff.  

The symptoms associated with a flawed process for managing records are as-built backlogs stretching from months to years, resulting in out-of-date data, and poor communication between the field and records staff, resulting in inaccurate data about network facilities in the records data base .  Inaccurate and out-of-date records not only reduce the productivity of field staff, but impact the safety of utility workers and the public, the primary concern of all gas and electric utilities.

San Bruno explosion

In the San Francisco Chronicle it was reported that "Federal investigators had determined that a major factor in the San Bruno explosion was PG&E's ignorance that its pipe had a seam running down the length of the line, which ruptured at an incomplete weld in San Bruno on Sept. 9, 2010.  Such a seam would have been noted on an accurate geographic information system report, and if it had, PG&E would have been legally obligated to prove it was in good condition."

Yesterday a utility company engineer testified that he "repeatedly told his bosses the company was relying on flawed data to vouch for the safety of its gas transmission lines before the San Bruno disaster, but that the utility took no steps to fix the problem."  He said that gas-system managers had ignored his and other employees' concerns that the company was relying on incomplete and inaccurate records contained in its geographic information system.

Optimizing information flow problem

The important conclusion here is that installing a GIS does not solve the fundamental problem, which is an information flow problem.  The most critical business process improvement is ensuring a digital information flow, pre-posting digital CAD designs directly into the records database, rather than redrafting the information from paper as-builts.  The second most important process improvement is proving a direct wireless link for field staff enabling them to participate directly in ensuring the quality of the records database. 

Heathrow Airport is an example where there is a lot of underground infrastructure, and it is an environment where even a minor accident carries the risk of serious consequences.  Heathrow has developed work processes around a data management system which ensures web-based access to high quality information about Heathrow's infrastructure.  At Heathrow standards, guidelines, and work processes are designed to ensure reliable data.  The most critical business benefit is safety.  Other benefits of Heathrow's apporach are that it minimizes rework, increases re-use of designs and provides for efficient handover for engineering designs from design to construction to operations. 

The direct benefits of business process improvement are eliminating the as-built backlog, with the important benefit that the records database is uptodate, and accurate data, because the entire field staff is participating in maintaining data quality.  Reliable data reduces the risk of accidents like Sana Bruno.  It also improves efficiency and productivity.  As utilities move to the new world of smart grid, or intelligent networks, reliable data about the network has become even more essential.

EIA reports 22% drop in coal-fired power generation

The June 2012 Electric Power Monthly from the U.S. Energy Information Administration (EIA) has power consumption by fuel type comparing 2011 and 2012 year to date through April.

Net Generation (thousand megawatthours)

Fuel                                              2012         2011  (%change)    
                                      
Coal ..........................................444,909     568,288  (-21.7%)
Natural Gas .............................. 371,095     277,007  (34.0%)
Nuclear .....................................253,833     257,741  (-1.5%)
Hydroelectric Conventional ............97,781     114,201  (-14.4%)
Other Renewables ........................75,432      66,317 (13.7%)
Solar Thermal and Photovoltaic ..........714           386  (85.2%)
Wind ...........................................51,034      42,172  (21.0%)
All Energy Sources.................. 1,256,851 1,299,292  (-3.3%)

What this shows is that the amount of power generated from coal is nearly 22% less year to date April 2012 compared to year to date April 2011 while power generated from natural gas is up 34%.  One of the reasons is the dramatic drop in the price of natural gas to a price comparable to coal.

                       ($/million Btu)
                 April 2012   April 2011
Coal..............$2.44         $2.39
Natural gas....$2.74         $4.85

According to the EIA report, for January to May 2012, more then twice as much generating capacity was added, mostly wind, solar, and natural gas, than was retired.  None of the new capacity and most of the retired capacity was coal.

New generating units.........5,627.1 MW (none coal-fired)

Retired generating units.....2,776.7 MW (1,635.5 MW coal)

APPA National Conference: Energy efficiency is the cheapest alternative fuel

This week I spent a few days at the American Public Power Association (APPA) National Conference in Seattle.  The priority issues facing APPA members in 2012 are similar in many respect to those facing the entire electric power industry, but there are certain aspects of the unique characteristic of APPA members that differentiate them from investor owned utilities (IOUs). They are all government owned, but have the ability to 100% debt finance capital investment.  They also tend to have a close relationship with the local community and are better positioned for developing successful community-based programs such as energy efficiency.

By way of background, the APPA, which is based in Washington DC, is a not-for-profit, non-partisan service organization founded to advance the public policy interests of its members. It represents most of  the more than 2,000 community-owned electric utilities in the US. Most public power utilities are owned by municipalities, but some are owned by counties, public utility districts, and states.  For example,  all of Nebraska is served by public power.  APPA members also include joint action agencies (state and regional consortia of public power utilities) and state, regional, and local associations that have purposes similar to APPA.

Regulation, fuel mix and power rates

The utility industry as a whole is facing interesting times in the U.S. The electric power industry is getting more complcated as Mr Crisson emphasized repeatedly.

At the top of the list of things that the APPA is concerned about is regulation.  This has not always been the case for public utilities, because they are government and in the past most of the regulation came from their municipal governments.  But this year Federal regulation, especially that from the EPA is directly affecting public power utilities.  One third of public utilities generate power and a significant proportion of that is from coal-fired plants.  Related to the EPA's Mercury and Air Toxics Standards (MATS), the closure of 26 GW of coal-fired capacity has already been announced.  Estimates of the total coal plant closures range between 40 and 70 GW and even higher.  The APPA is very concerned about the time frame for compliance of three years.  As a measure of that concern, the APPA has filed suit against the EPA for the first time in its history with a petition for reconsideration asking the EPA to grant additional time to public power utilities to meet the MATS standard.

It seems certain that the fuel mix for electric power generation is going to change significantly in the short term.  Speakers at the APPA event were very pessimistic about the future prospects for coal. The alternatives that APPA members are considering are energy efficiency, renewables, nuclear, hydro (small and large scale), and natural gas. 

Energy efficiency

For many APPA members the cheapest "alternative fuel" is energy efficiency and this is an area for which municipal utilities are in a much better position that IOUs because they are part of government and can  participate directly in the process of setting energy efficiency standards for building codes. 

In 1990 Burlington voters approved a bond to fund energy efficiency programs.  Since 2003, Burlington Electric Department (BED) customers and all Vermont electric customers pay a small monthly Energy Efficiency Charge (EEC) that supports efficiency programs.  The City's annual electricity consumption in 2009 was about 2 percent greater than in 1989.  BED has been able to meet the energy needs of a growing local economy over the last 19 years through efficiency.  BED estimated that energy efficiency investments save Burlington consumers more than $10.1 million of retail electric costs annually. BED's energy efficiency program began in 1991 with Burlington Electric Department's Guidelines for Energy Efficient Construction, that was adopted for state wide construction.  BED has a very high proportion of LEED-certified buildings.

Both Tacoma Power and BED said that they are not only participating in writing building codes, but also in inspection and enforcement, something that I suspect it would not be possible for an IOU to do.

Natural gas

The alternative fuel that is getting the most attention is natural gas, because reserves appear to be substantial as a result of hydraulic fracturing technology, and the price of natural gas in the U.S. domestic market continues to be exceptionally low.  Henry Hub prices ended at $2.18 per MMBtu last week.  But there are concerns about security of supply, the future of natural gas prices and the effect of LNG exports on prices.  Many utilities are not convinced that this is the silver bullet.

In addition more EPA and other agency regulations are expected in the future, for example, on CO₂ emissions and toxics and CH₄ emissions related to shale gas and hydraulic fracturing.  Increasing EPA and other Federal agency regulations are expected to lead to increased fuel prices and more decomissioning of coal-fired capacity.  Some speakers even foresee similar regulation being applied to natural gas fired plants as is currently shutting to coal-fired capacity.

One speaker, Art Berman, argued that because of the depletion of conventional reserves and the unexpectedly rapid decline in production from shale-gas wells, 2-3 years for a shale-gas well versus 20-30 years for a conventional well, reserves are significantly overstated. He cited evidence from the Haynesville shale-gas play that without new wells, production would decline 48% per year.

Berman believs that increasing demand, for example from fuel switching from coal, the rapid decline in production from shale-gas wells and environmental regulation will likely raise natural gas prices.  He argued that the industry needs a $7 price to be commercially viable.

Nuclear power

Another alternative fuel type is nuclear.  I attended a standing-room-only presentation by Nuscale, a small  modular nuclear reactor (SMR) manufacturer, that claims that its small scale reactor is able to shut down safely in the event of a station blackout, which is what occurred at Fukushima Daiichi.  Nuscale has announced its first US customer, South Carolina Gas and Electric, and is the planning stage to build a SMR plant at Savannah River.  Other manufacturers of SMR reactors include Babcock & Wilcox and Westinghouse.

Hydro

In some parts of the country there is interest in medium scale hydro projects, especially because hydro provides dispatchable capacity.  Intermittent power creates demand for capacity that can be ramped up rapidly (dispatchable) which includes hydro, gas-fired, and storage batteries and pumped hydro. Snohomish County PUD has just commissioned a 8.3 MW hydro project at Young's Creek, the first new hydro project in Washington state in 20 years and expects to build more in the future.  Even in California where large scale hydro is not considered to be renewable, Sacramento Metropolitian Utility District (SMUD) is actively pursuring a 400 MW 3 unit variable speed pumped storage hydro project at Iowa Hill, primarily because it would provide dispatchable capacity to backstop intermiitent sources.  I blogged previously about Switzerland intending to use similar pumped hydro capacity to become "Europe's battery."

Department of Energy

The Department of Energy (DOE) has sent a memorandum to the Power Marketing Agencies (PMAs) requesting them to take a leadership role in the DOE's goal of creating a more secure and sustainable electric sector nationwide.  The PMAs are instructed to include NERC reliability standards, integrate variable resources, enable scheduling on an intra-hour basis, support centralizing dispatch, include responding to solar flares and minimize cyber-security vulnerabilities in their strategic and capital improvement plans.  The APPA in a response to the memorandum says  that these proposals will result in increased electricity rates for BPA (Bonneville Power Administration), WAPA (Western Area Power Administration), SWPA (Southwestern Power Administration), and SEPA (Southeastern Power Administration) customers.

Workforce issues

A major issue facing electric power utilities, and other utilities, that was called out by Mr Crisson as a priority was workforce turnover, often referred to as the aging workforce.  I have blogged about this problem many times and it was gratifying to hear the CEO of the APPA call this out as a priority issue.

Technology and innovation

There was a lot of discussion of new technologies that are transforming the electric power grid including advanced grid technology, often referred to as smart grid, power storage technology including large scale lithium ion batteries, electric vehicles, small modular nuclear reactors, and distributed generation (typically small scale intermittent sources such as wind and solar).  The challenge for a historically conservative industry is to focus more on innovation in order to speed up the rate of adoption of new technology.

Ohio bill requires limited disclosure of chemicals used in hydraulic fracturing

A shale-gas boom is expected in northeastern Ohio as energy companies begin to exploit the Marcellus and Utica shale deposits.  But there are concerns about the effect of hydraulic fracturing on aquifers and on seismic activity.

The Ohio legislature has passed a bill (SB 315) setting new rules for hydraulic fracturing in Ohio.  The bill requires limited disclosure of the chemicals used in hydraulic frracturing.  The bill also requires water sampling within 1,500 feet of proposed wells. It mandates that oil and gas wells be tracked between the time they are drilled and the time they are capped. Waste fluids from other states must be disclosed before they can be injected into wells in Ohio.  The legislation requires increased inspection of wells, and requires well owners to hold liability insurance coverage.

With regards to injected chemicals the bill requires that (emphasis mine)

(10)(b) If applicable, the trade name and the total volume of all products, fluids, and substances, and the supplier of each product, fluid, or substance used to stimulate the well. The owner shall identify each additive used, provide a brief description of the purpose for which the additive is used, and include the maximum concentration of the additive used. In addition, the owner shall include a list of all chemicals, not including any information that is designated as a trade secret pursuant to division (I)(1) of this section, intentionally added to all products, fluids, or substances and include each chemical's corresponding chemical abstracts service number and the maximum concentration of each chemical. The owner shall obtain the chemical information, not including any information that is designated as a trade secret pursuant to division (I)(1) of this section, from the company that stimulated the well or supplied the chemicals. If the company that stimulated the well or supplied the chemicals provides incomplete or inaccurate chemical information, the owner shall make reasonable efforts to obtain the required information from the company or supplier.

and it goes on to say that if the chemical involved has not been disclosed because it is a trade secret, a medical professional can request the exact chemical composition, which he or she must keep confidential.

H)(1) If a medical professional, in order to assist in the diagnosis or treatment of an individual who was affected by an incident associated with the production operations of a well, requests the exact chemical composition of each product, fluid, or substance and of each chemical component in a product, fluid, or substance that is designated as a trade secret pursuant to division (I) of this section, the person claiming the trade secret protection pursuant to that division shall provide to the medical professional the exact chemical composition of the product, fluid, or substance and of the chemical component in a product, fluid, or substance that is requested.

According to the Marietta Times, the bill allows people to sue to learn what chemicals energy companies use in their hydraulic fracturing operations, but people who believe a chemical sickened them or polluted their land, would have to prove that a specific chemical compound, many of which are typically not divulged by drillers because they are claimed to be trade secrets, made them sick or polluted their land.

IEA reports that US fossil-fuel CO2 emissions have dropped by 7.7% since 2006

The International Energy Agency (IEA) reports that global CO2 emissions from fossil-fuel combustion reached 31.6 gigatonnes in 2011, according to its preliminary estimates. This is up 3.2% over 2010. The breakdwon for energy-related CO2 emissions by fuel-type is

1. coal 45%
2. oil 35%
3. natural gas 20%.

In 2011, CO2 emissions continued to rise for non-OECD countries, though the total for OECD countries actually decreased

• Non-OECD 6.1% increase
• OECD 0.6% reduction.

The largest emitters are, in order, China, the United States, the European Union, and India.

China

China is responsible for the largest contribution to the global increase, up 9.3%, primarily as the result of increased coal combustion.   But China has dramatically improved its energy intensity, reducing the amount of CO2 emitted per unit of GDP by 15% between 2005 and 2011.

United States

CO2 emissions in the United States dropped 1.7%.  The IEA ascribed the decease primarily to switching from coal to natural gas in power generation as well as a warm winter.  US emissions have fallen by 430 Mt (7.7%) since 2006, the largest reduction of all countries or regions. The IEA says this is the result of

• lower oil use in the transport sector (linked to efficiency improvements, higher oil prices and the economic downturn which has cut vehicle miles travelled)
• substantial shift from coal to gas in the power sector.

EU

CO2 emissions in the EU in 2011 were down by 1.9%, as the EU continues toward its 20-20-20 goals by 2020.

India

India’s emissions rose by 8.7% and it now is ahead of Russia in emissions.

Japan

The IEA reported that Japan’s 2011 emissions increased by 2.4%, which is not unexpected as for most of the time it had few nuclear reactors running, and now has none operating.

Successful test of natural gas extraction from methane hydrate reservoir in the Alaskan North Slope

Estimates of the amount of carbon sequestered in methane hydrates and found in Arctic permafrost and in ocean sediments along the world's continental shelfs range widely, but is believed to be large and has even been compared to the total known reserves of fossil fuels.

Beginning in February, 2012 The U.S. Department of Energy (DoE) together with ConocoPhillips and the Japan Oil, Gas and Metals National Corporation conducted a small scale test project in the North Slope of Alaska to extract natural gas from methane hydrate using a production technology, developed through collaboration between the University of Bergen, Norway, and ConocoPhillips.  It involved injecting a mixture of carbon dioxide (CO2) and nitrogen into the methane hydrate formation to release methane gas (natural gas).  DoE has announced that the test has been successful in extracting a steady flow of natural gas from methane hydrates.  The technology involves in situ exchange of CO2 with CH4 molecules within the methane hydrate structure.  Depressurization then leads to production of methane gas.

DoE says that based on the successful test it plans to conduct a long-term production test in the Arctic.  It also plans to test technologies to identify and extract methane hydrates on a larger scale in the U.S. Gulf Coast.

This technology also has the potential to be used to sequester CO2, for example, from conventional fossil-fuel burning power plants.  The DoE intends to analyze the data acquired as part of the test to determine how efficient CO2 sequestration in the methane hydrate reservoirs is.

Geospatial World Forum: How GDF Suez built a gas distribution asset management system in 10 months

At the Geospatial World Forum in Amsterdam, Radu Negoita, GIS Manager at GDF Suez Energy Romania, gave a fascinating overview of how GDF Suez has built a location aware asset management system in 10 months.  Natural gas is a rapidly growing source of energy that is cleaner from an emissions perspective than traditional energy sources such as coal.

GDF SUEZ Energy România has over 1.3 million customers and is a leader in the gas distribution and delivery market.  Its main buiness is the distribution of gas to consumers. The total gas distribution network managed by GDF Suez  is 16,000 km.  Natural gas distribution is a regulated activity to ensure the safe operation of the network which is comprised of  pipes, residential connections, regulator stations, sensors/measurement systems, and other types of assets.

Data acquisition

In 2007 GDF Suez initiated a data acquisition project to capture information including location about all their network assets.  It is an ongoing effort using using internal resources.  GDF Suez relies on GPS and total stations to capture accurate locations for their assets.

Asset management system

The objective of the asset management system is to improve the productivity of gas distribution operations by automating manual asset management processes.  The core is an asset management system that manages the assets in a centralized database (Oracle Spatial) and provides desktop (AutoCAD Map 3D) and web based tools (Autodesk Infrastructure Map Server) for optimizing data quality and providing secure access to the information across the organization. The core database relies on data versioning (long transactions) to manage asset updates safely in a production environment.  It relies on an open architecture to enable integration with SAP plant maintenance, SynerGEE network analysis, and other enterprise systems.  It supports design sketches and redlining of design drawings and provides multi-criteria analysis for investment planning.

Project development

The project lifetime was ten months which, based on my experience with similar asset management systems in a range of utilities, I find quite remarkable in terms of how fast the production system was delivered.  This involved a full project lifecycle including business requirements analysis, development of the hardware and software architecture, installation of Oracle Spatial database and configuring the gas network model, configuration and installation of the application, data migration and testing and training.  The solution was deployed and in production in 2010 and currently supports 600 active users.

The system provides automated data capture from field measurement systems, multi-user editing of asset location and properties, creation and editing of network topology, generation of job estimates, tabular and graphical reporting, and provides an operations dashboard for monitoring progress and the status of the network.

The desktop client is used for field data acquisition, creation of the new assets; geometry, attribute and topology editing and network state analysis.

The web client, which is used by the majority of the users, provides a viewer for attributes and geometry of the network; navigation and searching of maps, and report generation.

Plant maintenance

Plant maintenance is based on a maintenance plan for all assets of the network including pipes, residential connections, valves, regulator stations, and so on.  The master system which manages the assets is the geospatial asset management system. SAP- PM manages maintenance network assets in terms of preventive and corrective maintenance.  It also handles exceptions and other operations events on the network.

Future developoment

GDF Suez' future development plans include integration of the asset management system with the SCADA, SAP asset accounting, and workforce management enterprise systems.  They also intend to develop a crew routing and dispatch module and a mobile client for field staff.