Fuel switching while energy supply - co2 emissions issues


Fuel switching
In the near term, while energy supply and conversion remains dominated by fossil fuels, switching from
coal to oil or gas can play an important role in emission reduction. If energy conversion efficiencies were
similar, a shift from coal to oil would imply a reduction in carbon emissions of 26 per cent, from oil to gas
23.5 per cent, and from coal to gas 43 per cent per unit of primary energy. Taking into account the
estimated methane leakage in the production, transport and use of these various fuels would slightly reduce
the gap between oil and gas and widen the gap between oil and coal.
When fossil fuels are used to produce electricity, the advantage of natural gas is increased by the higher
efficiency of current, state-of-the-art, combined cycle gas turbine technologies over oil and coal-fired
power plants (see below). IEA’s World Energy Outlook (2002) foresees that the share of gas in world
energy demand will increase from 23% today to 28% in 2030. New power stations will take up 60% of this
increase, usually using CCGT.
Fuel switching toward natural gas seems limited more by geographic constraints than by technology
considerations. Although 90 countries hold significant natural gas reserves, 70 per cent of world reserves
are located in the former Soviet Union and the Middle East. The reserve/production ratio of 65 years
globally is unevenly distributed, from 250 years for the Middle East to only 9 years for North America
(IEA, 2001a). Even more striking is the ratio of natural gas reserves to total energy consumption, as
suggested by Siddiqi (2002). 

This ratio is lower than three years for some large countries with huge coal
reserves such as China, India and the USA. In these cases, fuel switching towards natural gas is likely to
aggravate rather than resolve energy security concerns.
Technological progress, however, has proven instrumental in fostering gas use and, in particular,
international gas trade, especially with liquefied natural gas (LNG). It has led in the past decades to sharp
decreases in investment and operating costs all along the LNG chain. Investment costs for liquefaction
plants and tankers have been more than halved since the 1970s, as well as self-consumption of the entire
chain. For the vast majority of experts, the downward trend in costs of the LNG chain has not
yet run its course, even though many estimate that most of the reduction process has
already been accomplished. (Valais et al, 2001). Similarly, future developments of high-pressure
technology and offshore pipeline technology are expected to play a major role in reducing the costs of
large-scale long-distance pipeline projects.
A second limit to fuel switching toward gas would be the global availability of conventional natural gas
resources. Proven reserves might provide about 60 years of consumption at current rates; total estimated
resources, including undiscovered gas, represent from 170 to 200 years of supply (IEA, 2001a).
Technological improvements have already reduced (and will likely continue to reduce) costs of identifying
new gas reservoirs, as well as costs of drilling and production engineering, allowing the exploitation of
new resources. If, however, gas were to replace all other fossil fuels, reserve and resource production
ratios would come down to, respectively, 15 years and 40 years at best.
Beyond these conventional resources, additional gas resources exist in sea-floor methane gas hydrates

which are estimated to represent twice as much energy potential than all other fossil fuels
combined (including the large coal and unconventional oil resources). In the US alone, methane hydrate
resource estimates are more than a hundred times larger than the resource estimates of other conventional
and unconventional gas (Office of Fossil Energy, 1998). Clathrates are a crystalline form of water and
mostly methane stable under pressure-temperature conditions common in shallow marine sediments and
permafrost. They can also be used for energy storage and transportation, and sequestrating CO2.
No technology currently exists to use this enormous energy resource. Depressurisation, thermal stimulation
and solvent injection are possible candidates for commercial exploitation – but a prerequisite would be to
develop tools for identifying and characterising concentrated deposits. If a technology were to be
developed, it could have, with respect to climate change, a kind of Janus’ double face. On the one hand, it
could prolong the era of fossil fuels and ultimately add a supplementary 10 000 Pg of carbon into the
atmosphere (on top of the 5 000 Pg from the combustion of the currently known fossil resource base).
Absent associated developments of CO2 capture and storage technologies, such uses would imply an
increase in atmospheric concentrations of up to 20-fold (substantially higher than the seven-fold increase
projected with full combustion of current resources). On the other hand, such developments could
stimulate the near-term replacement of coal and oil6
Unconventional gas reserves are usually more costly to exploit, but their associated CO2 emissions are
often much lower per unit of energy than those of other gas reserves. In some cases, as with coal-bed
methane, recovery reduces methane emissions – with their larger-than-CO2 global warming potential.
However, the case for gas is not unequivocally positive: in some cases, (even in conventional gas),
resources contain a high share of CO2, sulphur or other toxic compounds that require large amounts of
energy to clean – thus increasing the effective carbon intensity of these resources.
It must be noted that a number of countries are switching away from zero-emitting sources to fossil fuels.
This is the case in several OECD countries that are currently phasing out nuclear power; it is also the case
in a number of developing countries that are expanding energy supplies (for example, in Brazil, where
constraints on hydro power are prompting the development of thermal generation facilities). Still other
countries, seeing considerable volatility in gas prices, are reconsidering the option to build new coal-fired
thermal generation.

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