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HYDRAULIC FRACTURING HYDRO FRACTURING HYDROFRACKING

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Title: HYDRAULIC FRACTURING HYDRO FRACTURING HYDROFRACKING


1
HYDRAULIC FRACTURINGHYDRO FRACTURINGHYDROFRACKIN
G
  • EPA RCRA CORRECTIVE ACTION WORKSHOP
  • ROCKY GAP, MD
  • NOVEMBER 8-10, 2010
  • Presenters
  • BHARAT BHAM, PADEP-NERO
  • PAMELA TROWBRIDGE, PADEP-SCRO

2
WHAT IS HYDROFRACKING?
  • Hydraulic fracturing is a proven technology that
    has been used since the 1940s in more than 1
    million wells in the United States to help
    produce oil and natural gas. The technology
    involves pumping a water-sand mixture into
    underground rock layers where the oil or gas is
    trapped. The pressure of the water creates tiny
    fissures in the rock. The sand holds open the
    fissures, allowing the oil or gas to escape and
    flow up the well.
  • Is hydraulic fracturing widely used? Yes, and its
    use is likely to increase. A government-industry
    study found that up to 80 percent of natural gas
    wells drilled in the next decade will require
    hydraulic fracturing. Hydraulic fracturing allows
    access to formations, like shale oil and shale
    gas, that had not been assessable before without
    the technology. It also allows more oil and
    natural gas be to be brought to the surface from
    wells that had been produced without this
    technology.
  • Doesnt hydraulic fracturing present a serious
    threat to the environment? No. The environmental
    track record is good, and the technology is
    employed under close regulatory supervision by
    state, local and federal regulators. Hydraulic
    fracturing has been used in nearly one million
    wells in the United States and studies by the
    U.S. EPA and the Ground Water Protection Council
    have confirmed no direct link between hydraulic
    fracturing operations and groundwater impacts.

3
ENVIRONMENTAL CONSIDERATIONS
  • Who regulates hydraulic fracturing?
  • There are multiple federal, state and local
    government rules addressing environmental
    protection during oil and gas operations,
    including the protection of water resources.
    These rules cover well permitting, well
    materials and construction, safe disposition of
    used hydraulic fracturing fluids, water testing,
    and chemical recordkeeping and reporting. In
    addition, API has created a guidance document on
    proper well construction and plans to release
    guidance documents outlining best- available
    practices for water use and management and
    protecting the environment during hydraulic
    fracturing operations.
  • Isnt there a risk that hydraulic fracturing
    will use up an areas water supplies? No.
  • Local authorities control water use and can
    restrict it if necessary. In many areas, water is
    recycled and reused in some cases companies pay
    for the water they use, which comes from a
    variety of sources. Water requirements for
    hydraulic fracturing are less than many other
    commercial and recreational uses. In
    Pennsylvania, for example, all the 2009 hydraulic
    fracturing activity used only 5 percent of the
    amount of water used for recreational purposes,
    like golf courses and sky slopes. State agencies
    manage water in a way that safeguards the water
    needs by nearby communities and protects the
    environment. Companies recycle and reuse much of
    the water.
  • Doesnt hydraulic fracturing present a
    serious threat to the environment? No.
  • The environmental track
    record is good, and the technology is employed
    under close regulatory
  • supervision by state, local and federal
    regulators. Hydraulic fracturing has been used in
    nearly one million wells in the United States
    and studies by the U.S. EPA and the Ground Water
    Protection Council have confirmed no direct link
    between hydraulic fracturing operations and
    groundwater impacts.
  • How are the fluids kept away from aquifers
    and drinking water wells?
  • Wells are drilled away from drinking water
    wells. Also, fracturing usually occurs at depths
    well below where usable groundwater is likely to
    be found. Finally, when a well is drilled, steel
    casing and surrounding layers of concrete are
    installed to provide a safe barrier to protect
    usable water.

4
  • Simplified Steps In Hydraulic Fracturing
  • 1. Water, sand and additives are pumped at
    extremely high pressures down the wellbore.
  • 2. The liquid goes through perforated sections of
    the well bore and into the surrounding formation,
    fracturing the rock and injecting sand or
    proppants into the cracks to hold them open.
  • 3. Experts continually monitor and gauge
    pressures, fluids and proppants, studying how the
    sand reacts when it hits the bottom of the well
    bore, slowly increasing the density of sand to
    water as the frac progresses.
  • 4. This process may be repeated multiple times,
    in stages to reach maximum areas of the well
    bore. When this is done, the well bore is
    temporarily plugged between each stage to
    maintain the highest water pressure possible and
    get maximum fracturing results in the rock.
  • 5. The frac plugs are drilled or removed from the
    well bore and the well is tested for results.
  • 6. The water pressure is reduced and fluids are
    returned up the well bore for disposal or
    treatment and re-use, leaving the sand in place
    to prop open the cracks and allow the gas to flow.

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7
  • Common Hydraulic Fracturing Equipment
  • Although hydraulic fracturing, or fracing,
    operations take a relatively short amount of time
    to complete, the
  • process requires the use of advanced technology
    and a variety of equipment. From data monitoring
    to frac blenders and pumps, this highly developed
    and monitored process involves a flurry of
    activities

8
  • Example of Typical Deep Shale Fracturing Mixture
    Makeup

9
Example of Typical Deep Shale Fracturing Mixture
Makeup
Product Category Main Ingredient Purpose Other Common Uses
Water 99.5water sand Expand fracture and deliver sand Landscaping and manufacturing
Sand 99.5water sand Allows the fractures to remain open so the gas can escape Drinking water filtration, play sand, concrete and brick mortar
Other approximately 0.5 approximately 0.5 approximately 0.5
Acid Hydrochloric acid or muriatic acid Helps dissolve minerals and initiate cracks in the rock Swimming pool chemical and cleaner
Antibacterial agent Glutaraldehyde Eliminates bacteria in the water that produces corrosive by-products Disinfectant Sterilizer for medical and dental equipment
Breaker Ammonium persulfate Allows a delayed break down of the gel Used in hair coloring, as a disinfectant, and in the manufacture of common household plastics
Corrosion inhibitor n,n-dimethyl formamide Prevents the corrosion of the pipe Used in pharmaceuticals, acrylic fibers and plastics
Crosslinker Borate salts Maintains fluid viscosity as temperature increases Used in laundry detergents, hand soaps and cosmetics
Friction reducer Petroleum distillate Slicks the water to minimize friction Used in cosmetics including hair, make-up, nail and skin products
Gel Guar gum or hydroxyethyl cellulose Thickens the water in order to suspend the sand Thickener used in cosmetics, baked goods, ice cream, toothpaste, sauces and salad dressings
Iron control Citric acid Prevents precipitation of metal oxides Food additive food and beverages lemon juice 7 citric acid
Clay stabilizer Potassium chloride Creates a brine carrier fluid Used in low-sodium table salt substitute, medicines and IV fluids
pH adjusting agent Sodium or potassium carbonate Maintains the effectiveness of other components, such as crosslinkers Used in laundry detergents, soap, water softener and dishwasher detergents
Scale inhibitor Ethylene glycol Prevents scale deposits in the pipe Used in household cleansers, de-icer, paints and caulk
Surfactant Isopropanol Used to increase the viscosity of the fracture fluid Used in glass cleaner, multi-surface cleansers, antiperspirant, deodorants and hair color
10
 
  • In addition to water and sand, other additives
    are used in fracturing fluids to allow fracturing
    to be performed in a safe and effective manner.
    Additives used in hydraulic fracturing fluids
    include a number of compounds found in common
    consumer products.
  • Example of Typical Deep Shale Fracturing Mixture
    MakeupA representation showing the percent by
    volume composition of typical deep shale gas
    hydraulic fracture components (see graphic)
    reveals that more than 99 of the fracturing
    mixture is comprised of freshwater and sand. This
    mixture is injected into deep shale gas
    formations and is typically confined by many
    thousands of feet of rock layers.
  • Fracturing Ingredients Product Category Main
    Ingredient Purpose Other Common Uses Waterwater
    sand Expand fracture and deliver sand
    Landscaping and manufacturing Sand Allows the
    fractures to remain open so the gas can escape
    Drinking water filtration, play sand, concrete
    and brick mortar Acid Hydrochloric acid or
    muriatic acid Helps dissolve minerals and
    initiate cracks in the rock Swimming pool
    chemical and cleaner Antibacterial agent
    Glutaraldehyde Eliminates bacteria in the water
    that produces corrosive by-products Disinfectant
    Sterilizer for medical and dental equipment
    Breaker Ammonium Persulfate Allows a delayed
    break down of the gel Used in hair coloring, as a
    disinfectant, and in the manufacture of common
    household plastics Corrosion inhibit iron,
    N-Dimethyl Formamide Prevents the corrosion of
    the pipe Used in pharmaceuticals, acrylic fibers
    and plastics Cross linker Borate salts Maintains
    fluid viscosity as temperature increases Used in
    laundry detergents, hand soaps and cosmetics
    Friction reducer Petroleum distillate Slicks
    the water to minimize friction Used in cosmetics
    including hair, make-up, nail and skin products
    Gel Guar gum or Hydroxyethyl cellulose Thickens
    the water in order to suspend the sand Thickener
    used in cosmetics, baked goods, ice cream,
    toothpaste, sauces and salad dressings Iron
    control Citric acid Prevents precipitation of
    metal oxides Food additive food and beverages
    lemon juice 7 citric acid Clay stabilizer
    Potassium chloride Creates a brine carrier fluid
    Used in low-sodium table salt substitute,
    medicines and IV fluids pH adjusting agent Sodium
    or potassium carbonate Maintains the
    effectiveness of other components, such as cross
    linkers Used in laundry detergents, soap, water
    softener and dishwasher detergents Scale
    inhibitor Ethylene glycol Prevents scale deposits
    in the pipe Used in household cleansers, de-icer,
    paints and caulk Surfactant Isopropanol Used to
    increase the viscosity of the fracture fluid Used
    in glass cleaner, multi-surface cleansers,
    antiperspirant, deodorants and hair color

11
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16
What Is Marcellus Shale?                          
                             Marcellus Shale is
a geological formation that was formed by the
accumulation of sediment into a sea. This
formation was eventually buried over many
thousands of years and compressed to produce an
organic-rich black shale. This geological
formation, which dates back to the Devonian time
period   , stretches from the Northeast to the
Southwest in direction. The Marcellus starts at
the base of the Catskills in upstate New York,
stretches across the upstate toward Marcellus,
New York (the town from which the formation is
named) and southwest to West Virginia, Kentucky,
and Ohio. The Marcellus Shale is known to be
deeper on the southeast edge of the formation
that borders the ridge and valley regions of New
York, Pennsylvania, Maryland, and West Virginia.
The Marcellus gets more shallow as it heads
Northwest towards Ohio and Lake Erie. Why
Now? Although throughout the geological world,
Marcellus Shale has been identified as
potentially rich in fossil fuels, it was not
until recently that the industry has invested
into exploration in Marcellus. Two factors are
clearly present in the ramp up in exploration and
production (EP) activities related to Marcellus
Shale. First, the success of the Barnett Shale
play in North Central Texas has allowed companies
to transfer the hydrofracturing technology to
other areas, such as the Fayetteville Shale play
(Arkansas), Haynesville Shale play (Louisiana and
Eastern Texas), and the Marcellus Shale play.
Second, the population centers of Northeastern
U.S. are very close in proximity to the Marcellus
Shale. This improves the economic conditions of
the play because the demand for natural gas from
this region is high there are also costs
associated with the transportation of natural gas
so the close proximity will result in lower
transportation costs. What Does the Future of
Marcellus Hold? As America demands more and more
energy, the role that natural gas will play in
that demand is uncertain. One thing that is
certain is the Marcellus play is shaping up to be
a key supplier for domestic natural gas. Impacts
from this industry are uncertain as well.
Historically, the energy industry has gone
through times of "boom and bust" and is driven by
the economical conditions present across the
nation. The industry is also known for paying a
higher wage, on average, compared to an
equivalent manufacturing job. One thing that is
not uncertain, although, is that the natural gas
industry associated with Marcellus Shale
exploration will give the nation another source
to potentially reduce the intake of foreign
supplies of natural gas. The Lifespan of
Marcellus Shale The natural gas development
process was divided into three phases (called
pre-drilling, drilling, and production), and the
distinct occupational categories that comprise
the workforce requirements for each phase were
identified. This process was relatively
straightforward, as all major occupations were
listed and further separated by the distinct
educational and training requirements when
possible.
17
MAP OF GAS EXPLORATION IN THE SHALE FORMATION IN
THE USA


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19
WHY IS HYDRAULIC FRACTURING IMPORTANT?Applicat
ion of hydraulic fracturing techniques, to
increase oil and gas recovery, is estimated to
account for 30 percent of U.S. recoverable oil
and gas reserves and has been responsible for the
addition of more than 7 billion barrels of oil
and 600 trillion cubic feet of natural gas to
meet the nations energy needs


20
ENVIRONMENTAL CONSIDERATIONS
  • Doesnt hydraulic fracturing present a serious
    threat to the environment?
  • No. The environmental track record is good, and
    the technology is employed under close regulatory
    supervision by state, local and federal
    regulators. Hydraulic fracturing has been used in
    nearly one million wells in the United States and
    studies by the U.S. EPA and the Ground Water
    Protection Council have confirmed no direct link
    between hydraulic fracturing operations and
    groundwater impacts.
  • How are the fluids kept away from aquifers and
    drinking water wells? Wells are drilled away from
    drinking water wells. Also, fracturing usually
    occurs at depths well below where usable
    groundwater is likely to be found. Finally, when
    a well is drilled, steel casing and surrounding
    layers of concrete are installed to provide a
    safe barrier to protect usable water.

21
Making Hydrofracking Safer       Hydrofracking
The key to obtaining substantial yields of
natural gas from wells drilled into hard shale
rock has been used for many years throughout the
US, Canada and many other countries. In recent
years, as the technology has evolved, it has also
become controversial in some areas. While EPA
and regional governmental bodies are trying to
optimize the risks versus returns and with
consideration to US Energy Security new
technologies are starting to emerge to deal with
some of the potential problems. One issue which
is starting to be addressed is the presence of
Radium and other Radionuclides in Fracking
Backflow Water. When rock is fractured deep
beneath the ground there is often a certain
amount of Radium present. Radium is a decay
product of Uranium which was present in the rock
hundreds of millions of years ago. EPA
REQUIREMENTS What is required by the EPA? Right
now the EPA (Environmental Protection
Administration) is engaged in a complete review
of Hydrofracking technology throughout the United
States. The goal is to make sure that best
practices can be developed to minimize danger
while Hydrofracking evolves. EPA establishes
allowable limits for radioactive nuclides in
Backflow water. At present these limits are being
re-evaluated and will likely be lowered.  
22
Facts Figures About Natural Gas
  • Natural gas, including unconventional shale gas
    resources, fuels our economy, delivers heat and
    power to over 60 million U.S. homes and provides
    our nation with a clean-burning, domestic energy
    source. According to a Massachusetts Institute of
    Technology study released in June 2010, natural
    gas is expected to double its share of the energy
    market, from 20 percent to 40 percent by 2050,
    making the development of this vital resource
    increasingly important to our nations future
    energy.
  • Natural gas is essential to America's
    manufacturers, not only to power their
    operations, but also as a feedstock for many of
    the daily products we useclothing, carpets,
    sports equipment, pharmaceuticals and medical
    equipment, computers, and auto parts. It is also
    a primary feedstock for chemicals, plastics and
    fertilizers.
  • Over the past few years, the combination of
    horizontal drilling and hydraulic fracturing have
    unlocked the promise of natural gas in tight rock
    formationssandstone in the intermountain West
    and shale throughout the central and eastern
    U.S.and have led to a natural gas boom in
    several areas of the country.
  • Improvements in technology and application of
    science have contributed to an 8 percent increase
    in U.S. natural gas production between 2007 and
    2008, through development of tight shales and
    sandstones which, not all that long ago, were
    considered impractical or uneconomical to pursue.
  • Among the first targets was the Barnett shale
    deposit in northern Texas. As a result of
    horizontal drilling and hydraulic fracturing, the
    Barnett Shale now produces over 7 percent of
    Americas natural gas, enough to power 20 million
    homes per year. Operators are able to drill
    underneath Fort Worth from miles outside the city
    limits with directional drilling.
  • Success in the Barnett after years of drilling
    led to the application of lessons in technology
    and science that shortened the learning curve for
    development of emerging plays like the
    Fayetteville Shale in Arkansas, the Haynesville
    Shale in Louisiana and the Marcellus Shale in the
    northeastern United States. A recent EIA report
    noted that U.S. proven natural gas reserves rose
    3 percent in 2008, and shale gas reserves rose an
    astonishing 51 percent over 2007.
  • New resources have helped to increase natural gas
    supplies and improve U.S. energy security. They
    have also encouraged discussions about America's
    abundant natural gas as a clean, bridge fuel to
    the nation's energy future.
  • Natural gas has many uses
  • Meets 24 percent of U.S. energy requirements.
  • Heats 51 percent of U.S. households.
  • Cools homes and provides fuel for cooking.
  • Provides the energy source or raw material to
    make a wide range of products, such as plastics,
    steel, glass, synthetic fabrics, fertilizer,
    aspirin, automobiles and processed food.
  • Natural gas demand is growing
  • Americans used 23.2 trillion cubic feet of it in
    2008.
  • Natural gas supplies about 64.9 million
    residential customers and 5.5 million commercial
    and industrial customers in 2007.
  • It powers nearly 120,000 vehicles operating on
    American roads.
  • Supply
  • At the end of 2008, U.S. natural gas reserves
    stood at 244.7 trillion cubic feetthe highest
    level in over 30 years.
  • The United States produced 20.6 trillion cubic
    feet (TCF) of natural gas in 2008about 88
    percent of U.S. consumption.

23
RESOURCES AND LINKS TO IMPORTANT INFORMATION
  • http//www.api.org/policy/exploration/upload/Hydra
    ulic_Fracturing
  • http//www.hydraulicfracturing.com/Pages/informati
    on
  • http//water.epa.gov/type/groundwater/uic/class2/h
    ydraulicfracturing
  • http//www.msetc.org/
  • http//strongerinc.org/
  • http//www.marcellus.psu.edu/resources/maps.php
  • http//live.psu.edu/tag/Marcellus_shale
  • http//extension.psu.edu/naturalgas
  • http//www.wpsu.org/gasrush/



24
THANK YOU QUESTIONS OR CONCERNS?
The past year has been a tumultuous one for
world energy markets, with oil prices soaring
through the first half of 2008 and diving in its
second half. The downturn in the world economy
has had a significant impact on energy demand,
and the near-term future of energy markets is
tied to the downturns uncertain depth and
persistence. The recovery of the
worlds financial markets is especially important
for the energy supply outlook, because the
capital-intensive nature of most large energy
projects makes access to financing a critical
necessity. The projections in AEO2009 look beyond
current economic and financial woes and focus on
factors that drive U.S. energy markets in the
longer term. Key issues highlighted in the
AEO2009 include higher but uncertain world oil
prices, growing concern about greenhouse gas
(GHG) emissions and its impacts on energy
investment decisions, the increasing use
of renewable fuels, the increasing production of
unconventional natural gas, the shift in the
transportation fleet to more efficient vehicles,
and improved efficiency in end-use appliances.
Using a reference case and a broad range of
sensitivity cases, AEO2009 illustrates these key
energy market trends and explores important areas
of uncertainty in the U.S. energy economy. The
AEO2009 cases, which were developed before
enactment of the American Recovery
and Reinvestment Act of 2009 (ARRA2009) in
February 2009, reflect laws and policies in
effect as of November 2008. AEO2009 also includes
in-depth discussions on topics of special
interest that may affect the energy
market outlook, including changes in Federal and
State laws and regulations and recent
developments in technologies for energy
production and consumption. Some of the
highlights for selected topics are mentioned
in this Executive Summary, but readers interested
in other issues or a fuller discussion should
look at the Legislation and Regulations and
Issues in Focus sections. Developments in
technologies for energy production and
consumption that are discussed and analyzed
in this report include the impacts of growing
concerns about GHG emissions on investment
decisions and how those impacts are handled in
the AEO2009 projections the impacts of extending
the PTC for renewable fuels by 10 years the
impacts of uncertainty about construction costs
for electric power plants the relationship
between natural gas prices and oil prices the
economics of bringing natural gas from
Alaskas North Slope to U.S. markets
expectations for oil shale production the
economics of plug-in electric hybrids and trends
in world oil prices and production. World Oil
Prices, Oil Use, and Import Dependence Despite
the recent economic downturn, growing demand for
energyparticularly in China, India, and other
developing countriesand efforts by
many countries to limit access to oil resources
in their territories that are relatively easy to
develop are expected to lead to rising real oil
prices over the long term. In the AEO2009
reference case, world oil prices rise to 130 per
barrel (real 2007 dollars) in 2030
however, there is significant uncertainty in the
projection, and 2030 oil prices range from 50 to
200 per barrel in alternative oil price cases.
The low price case represents an environment in
which many of the major oil-producing countries
expand output more rapidly than in the reference
case, increasing their share of world production
beyond current levels. In contrast, the high
price case represents an environment where the
opposite would occur major oil-producing
countries choose to maintain tight control over
access to their resources and develop them more
slowly. Total U.S. demand for liquid fuels grows
by only 1 million barrels per day between 2007
and 2030 in the reference case, and there is no
growth in oil consumption. Oil use is curbed in
the projection by the combined effects of a
rebounding oil price, more stringent corporate
average fuel economy (CAFE) standards, and
requirements for the increased use of renewable
fuels (Figure 1). Growth in the use of biofuels
meets the small increase in demand for liquids in
the projection. Further, with increased use of
biofuels that are produced domestically and with
rising domestic oil production spurred 2 Energy
Information Administration / Annual Energy
Outlook 2009 Executive Summary 1970 1985 1995
2007 2015 2030 0 5 10 15 20 25 Total History
Projections Residential and commercial Electric
power Industrial Transportation Biofuels Figure
1. Total liquid fuels demand by sector (million
barrels per day) by higher prices in the AEO2009
reference case, the net import share of total
liquid fuels supplied, including biofuels,
declines from 58 percent in 2007 to less than 40
percent in 2025 before increasing to 41 percent
in 2030. The net import share of total liquid
fuels supplied in 2030 varies from 30 percent
to 57 percent in the alternative oil price cases,
with the lowest share in the high price case,
where higher oil prices dampen liquids demand and
at the same time stimulate more production of
domestic petroleum and biofuels. Growing Concerns
about Greenhouse Gas Emissions Although no
comprehensive Federal policy has been enacted,
growing concerns about GHG emissions appear to be
affecting investment decisions in energy markets,
particularly in the electricity sector. In
the United States, potential regulatory policies
to address climate change are in various stages
of development at the State, regional, and
Federal levels. U.S. electric power companies are
operating in an especially challenging
environment. In addition to ongoing uncertainty
with respect to future demand growth and the
costs of fuel, labor, and new plant
construction, it appears that capacity planning
decisions for new generating plants already are
being affected by the potential impacts of policy
changes that could be made to limit or reduce GHG
emissions. This concern is recognized in the
reference case and leads to limited additions of
new coal-fired capacity much less new coal
capacity than projected in recent editions of the
Annual Energy Outlook (AEO). Instead of relying
heavily on the construction of new coal-fired
plants, the power industry constructs more new
natural-gas-fired plants, which account for
the largest share of new power plant additions,
followed by smaller amounts of renewable, coal,
and nuclear capacity. From 2007 to 2030, new
natural-gas-fired plants account for 53 percent
of new plant additions in the reference case, and
coal plants account for only 18 percent. Two
alternative cases in AEO2009 illustrate
how uncertainty about the evolution of potential
GHG policies could affect investment behavior in
the electric power sector. In the no GHG concern
case, it is assumed that concern about GHG
emissions will not affect investment decisions in
the electric power sector. In contrast, in the
LW110 case, the GHG emissions reduction policy
proposed by Senators Lieberman and Warner (S.
2191) in the 110th Congress is incorporated to
illustrate a future in which an explicit Federal
policy is enacted to limit U.S. GHG emissions.
The results in this case should be viewed as
illustrative, because the projected impact of any
policy to reduce GHG emissions will depend on its
detailed specifications, which are likely
to differ from those used in the LW110
case. Projections in the two alternative cases
illustrate the potential importance of GHG policy
changes to the electric power industry and why
uncertainty about such changes weighs heavily on
planning and investment decisions. Relative to
the reference case, new coal plants play a much
larger role in meeting the growing demand for
electricity in the no GHG concern case, and the
role of natural gas and nuclear plants is
diminished. In this case, new coal plants account
for 38 percent of generating capacity
additions between 2007 and 2030. In contrast, in
the LW110 case there is a strong shift toward
nuclear and renewable generation, as well as
fossil technologies with carbon capture and
storage (CCS) equipment. There is also a wide
divergence in electricity prices in the two
alternative GHG cases. In the no GHG
concern case, electricity prices are 3 percent
lower in 2030 than in the reference case in the
LW110 case, they are 22 percent higher in 2030
than in the reference case. Increasing Use of
Renewable Fuels The use of renewable fuels grows
strongly in AEO- 2009, particularly in the liquid
fuels and electricity markets. Overall
consumption of marketed renewable fuelsincluding
wood, municipal waste, and biomass in the end-use
sectors hydroelectricity, geothermal, municipal
waste, biomass, solar, and wind for electric
power generation ethanol for gasoline blending
and biomass-based dieselgrows by 3.3 percent per
year in the reference case, much faster than the
0.5-percent annual growth in total energy use.
The rapid growth of renewable generation reflects
the impacts of the renewable fuel standard in the
Energy Independence and Security Act of 2007
(EISA2007) and strong growth in the use of
renewables for electricity generation spurred
by renewable portfolio standard (RPS) programs at
the State level. EISA2007 requires that 36
billion gallons of qualifying credits from
biofuels be produced by 2022 (a credit is roughly
one gallon, but some biofuels may receive Energy
Information Administration / Annual Energy
Outlook 2009 3 Executive Summary more than one
credit per gallon) and although the reference
case does not show that credit level
being achieved by the 2022 target date, it is
exceeded by 2030. The volume of biofuels consumed
is sensitive to the price of the petroleum-based
products against which they compete. As a result,
total liquid biofuel consumption varies
significantly between the reference case
projection and the low and high oil price cases.
In the low oil price case, total liquid biofuel
consumption reaches 27 billion gallons in 2030.
In the high oil price case, where the price of
oil approaches 200 per barrel (real 2007
dollars) by 2030, it reaches 40 billion
gallons. As of November 2008, 28 States and the
District of Columbia had enacted RPS requirements
that a specified share of the electricity sold in
the State come from various renewable sources. As
a result, the share of electricity sales coming
from nonhydroelectric renewables grows from 3
percent in 2007 to 9 percent in 2030, and 33
percent of the increase in total generation comes
from nonhydroelectric renewable sources. The
share of sales accounted for by
nonhydroelectric renewables could grow further
if more States adopted or strengthened existing
RPS requirements. Moreover, the enactment of
polices to reduce GHG emissions could stimulate
additional growth. In the LW110 case, the share
of electricity sales accounted for by
nonhydroelectric renewable generation grows to 18
percent in 2030. Growing Production
from Unconventional Natural Gas
Resources Relative to recent AEOs, the AEO2009
reference case raises EIAs projection for U.S.
production and consumption of natural gas,
reflecting a larger resource base and higher
demand for natural gas for electricity generation.
Among the various sources of natural gas, the
most rapid growth is in domestic production
from unconventional resources, while the role
played by pipeline imports and imports of
liquefied natural gas (LNG) declines over the
long term (Figure 2). The larger natural gas
resource in the reference case results primarily
from a larger estimate for natural gas shales,
with some additional impact from the 2008 lifting
of the Executive and Congressional moratoria on
leasing and development of crude oil and
natural gas resources in the OCS. From 2007 to
2030, domestic production of natural gas
increases by 4.3 trillion feet (22 percent),
while net imports fall by 3.1 trillion cubic feet
(83 percent). Although average real U.S. wellhead
prices for natural gas increase from 6.39 per
thousand cubic feet in 2007 to 8.40 per
thousand cubic feet in 2030, stimulating
production from domestic resources, the prices
are not high enough to attract large imports of
LNG, in a setting where world LNG prices respond
to the rise of oil prices in the AEO2009
reference case. One result of the
growing production of natural gas from
unconventional onshore sources, together with
increases from the OCS and Alaska, is that the
net import share of U.S. total natural gas use
also declines, from 16 percent in 2007 to less
than 3 percent in 2030. In addition to concerns
and/or policies regarding GHG emissions, the
overall level of natural gas consumption that
supply must meet is sensitive to many other
factors, including the pace of economic
growth. In the AEO2009 alternative economic
growth cases, consumption of natural gas in 2030
varies from 22.7 trillion cubic feet to 26.0
trillion cubic feet, roughly 7 percent below and
above the reference case level. Shifting Mix of
Unconventional Technologies in Cars and Light
Trucks Higher fuel prices, coupled with
significant increases in fuel economy standards
for light-duty vehicles (LDVs) and investments in
alternative fuels infrastructure, have a dramatic
impact on development and sales of
alternative-fuel and advanced-technology LDVs.
The AEO2009 reference case includes a
sharp increase in sales of unconventional vehicle
technologies, such as flex-fuel, hybrid, and
diesel vehicles. Hybrid vehicle sales of all
varieties increase from 2 percent of new LDV
sales in 2007 to 40 percent in 2030. Sales of
plug-in hybrid electric vehicles (PHEVs) grow to
almost 140,000 vehicles annually by 2015,
supported by tax credits enacted in 2008,
and they account for 2 percent of all new LDV
sales in 4 Energy Information Administration /
Annual Energy Outlook 2009 Executive Summary 1990
1995 2000 2007 2015 2020 2025 2030 0 5 10 15 20 25
Total History Projections Nonassociated
conventional Net imports Associated-dissolved Nona
ssociated offshore Unconventional Alaska Figure
2. Total natural gas supply by source (trillion
cubic feet) 2030. Diesel vehicles account for 10
percent of new LDV sales in 2030 in the reference
case, and flex-fuel vehicles (FFVs) account for
13 percent. In addition to the shift to
unconventional vehicle technologies, the AEO2009
reference case shows a shift in the LDV sales mix
between cars and light trucks (Figure 3). Driven
by rising fuel prices and the cost of CAFE
compliance, the sales share of new light trucks
declines. In 2007, light-duty truck
sales accounted for approximately 50 percent of
new LDV sales. In 2030, their share is down to 36
percent, mostly as a result of a shift in LDV
sales from sport utility vehicles to mid-size and
large cars. Slower Growth in Overall Energy
Use and Greenhouse Gas Emissions The combination
of recently enacted energy efficiency policies
and rising energy prices in the AEO- 2009
reference case slows the growth in
U.S. consumption of primary energy relative to
history from 101.9 quadrillion British thermal
units (Btu) in 2007, energy consumption grows to
113.6 quadrillion Btu in 2030, a rate of increase
of 0.5 percent per year. Further, when slower
demand growth is combined with increased use of
renewables and a reduction in additions of new
coal-fired conventional power plants, growth in
energy-related GHG emissions also is slowed
relative to historical experience.
Energyrelated emissions of carbon dioxide (CO2)
grow at a rate of 0.3 percent per year from 2007
to 2030 in the AEO2009 reference case, to 6,414
million metric tons in 2030, compared with the
Annual Energy Outlook 2008 (AEO2008) reference
case projection of 6,851 million metric tons in
2030. One key factor that drives growth in both
total energy consumption and GHG emissions is the
rate of overall economic growth. In the AEO2009
reference case, the U.S. economy grows by an
average of 2.5 percent per year. In comparison,
in alternative low and high economic growth
cases, the average annual growth rates from 2007
to 2030 are 1.8 percent and 3.0 percent. In the
two cases, total primary energy consumption
in 2030 ranges from 104 quadrillion Btu (8.2
percent below the reference case) to 123
quadrillion Btu (8.6 percent above the reference
case). Energy-related CO2 emissions in 2030 range
from 5,898 million metric tons (8.1 percent below
the reference case) in the low economic growth
case to 6,886 million metric tons (7.3 percent
above the reference case) in the high
economic growth case. Energy Information
Administration / Annual Energy Outlook 2009
WHAT THE HECK IS HE TALKING ABOUT I AM LOST
FORGET ABOUT HYDROFRAC CRAP I AM HUNGRY AND LET
TAKE A BREAK
DO YOU KNOW ANYTHING ABOUT HYDROFRAC

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