Last week the National Research Council published a comprehensive study of the seismic hazards and risks of a variety of energy-related drilling activities. Despite widely publicized reports of drilling-related quakes in Ohio and Arkansas, the report concluded that such events are very rare, compared to both the total number of wells drilled and to naturally occurring earthquakes. Nor are the technologies with the highest rates of induced seismicity necessarily the ones that come first to mind. Rather than ignoring these risks because of their rarity, the committee of university and industry experts that produced the report recommended the development of new protocols for monitoring and managing these risks, as well as further research into the potential for induced seismicity from emerging technologies like carbon capture and storage (CCS.)
The study encompassed four categories of energy-related drilling, including oil & gas exploration and production, geothermal energy, liquid disposal wells, and CCS. Within oil & gas, they looked at conventional production and "enhanced recovery", along with hydraulic fracturing or "fracking". The latter two techniques involve pumping water or some other fluid into a reservoir to stimulate production. For geothermal, they considered conventional geothermal, both liquid- and vapor-dominated reservoirs, and "enhanced" or engineered geothermal systems, which pump fluid into hot, dry rock to extract useful heat. They found recorded seismic events in all categories and sub-categories, though again the numbers are small, particularly for quakes large enough to cause damage: Fewer than 160 recorded events globally over magnitude 2.0 within a period of about 30 years from a well population in the millions, and against a natural annual background of 1.4 million small earthquakes of 2.0 or greater and more than 14,000 larger quakes of 4.0 or greater.
In assessing the incidence of seismic events attributed to or suspected to have been caused by energy activities, the committee set a threshold for what they called "felt seismic events". This is crucial, because all of these technologies routinely cause minuscule events--"microseisms"--that can be detected by a seismometer in close proximity, but would go unnoticed by anyone standing on the surface. Magnitude 2.0 seems to be the lowest level event likely to be felt by an observer in the vicinity, while an event of 4.0 would be accompanied by more shaking over a larger area, and thus felt by many more people. Having grown up in earthquake country, I can attest to this. Anything below about 4.0 would often be mistaken for a train or large truck passing by, while most damage was due to quakes of 5.0 or greater. For comparison, last year's quake in Mineral, VA that affected the Washington Monument and National Cathedral registered 5.8. Only about a dozen of the induced seismic events included in the study were larger than that.
It's important to note that the mechanisms by which various energy-related drilling and injection processes trigger felt seismic events are fairly well understood. Scientists and engineers have known since the 1920s that human activities can trigger quakes, and the geosciences have advanced enormously since then. The main contributing factors identified in the report were the effect of fluid injection on increasing the pressure in the pores of subsurface rocks near faults, along with the "net fluid balance", which they defined as the "total balance of fluid introduced into or removed from the subsurface." As a result of these factors, drilling approaches in which the net fluid balance isn't materially altered, such as in waterflood enhanced oil recovery, or for which the changes are short-lived, as in hydraulic fracturing, tend to have very low rates of inducing felt seismic events. In particular, the study found only one documented felt seismic event, of magnitude 2.8, attributable to shale fracking, out of 35,000 fracked shale gas wells.
By contrast, liquid disposal wells, which steadily increase subsurface pore pressure over time, along with several types of geothermal production, exhibit somewhat higher rates of felt seismic events, though these are still relatively rare and generally minor in impact. At least theoretically, CCS seems to have a somewhat higher potential for causing seismic events, although this has apparently not been manifested in the substantial number of wells injecting CO2 for enhanced oil recovery--cited in the report as 13,000 as of 2007 and many more today. Surprisingly, the largest quakes attributed to human activities were associated with conventional oil production, including a couple of 6+ quakes in California and one measuring 7.3 in Uzbekistan.
One of the most interesting findings in the report was that there is no single government agency in the US with jurisdiction over induced seismic events associated with energy production. Responsibility--and capabilities--appear to straddle the Environmental Protection Agency, US Geological Survey, Forest Service and Bureau of Land Management, along with various state agencies. The committee proposed the development of new coordination mechanisms to address these events, as distinct from the ad hoc cooperation that has taken place to date.
I'm not sure what policy makers--the report was commissioned by the Chairman of the Senate Energy and Natural Resources Committee--and the public will make of these findings. At least from a statistical perspective the technologies assessed here look safe in terms of their seismic risks, and it would be hard to justify sweeping new regulations on the basis of this report. (I don't know how practical the "traffic light" monitoring system the authors propose would be.) On the other hand, with the exception of a few people in naturally quake-prone areas--including one neighbor back in California who thinks they are "fun"--earthquakes are fear-inducing, in both anticipation and experience. Arriving at a consensus on how low a risk of felt seismic events is acceptable might not be easy, especially where natural earthquakes are rare. Although the public's appetite for reassurance seems to be fairly low these days, it's clear that the National Research Council, an arm of the private, non-profit National Academies chartered by Congress during the Lincoln administration, sees no reason to panic about the seismic hazards and risks entailed in energy-related drilling.
Showing posts with label earthquake. Show all posts
Showing posts with label earthquake. Show all posts
Wednesday, June 20, 2012
Thursday, March 17, 2011
Fewer Choices Post-Fukushima?
Even before the resolution of the crisis at the Fukushima Daiichi reactor complex--a crisis that has diverted media attention from the much larger humanitarian crisis caused by last Friday's tsunami--its consequences for nuclear energy policy are rippling across the globe. It is extraordinarily premature to form conclusions about these events, although that didn't stop many from arriving at similarly hasty and under-informed conclusions in the case of last spring's Deepwater Horizon accident. Pervasive instant analysis promotes knee-jerk responses. If the nuclear renaissance that had already been slowed by the recession and financial crisis was struck a fatal blow last week, what could that mean for our energy choices in the years ahead?
Although I want to focus mainly on the potential consequences in the US, what has already transpired in Germany provides a cautionary tale. As reported Tuesday, seven nuclear power plants of similar vintage and/or design to the damaged quartet at Fukushima are being shut down, at least temporarily, as the German government reassesses its decision to extend the operating life of the country's 17 power reactors. Germany hasn't been comfortable with its nukes for some time, though I find it remarkable that 70% of the population is apparently concerned that an accident that required an epic earthquake and a tsunami to trigger could happen there, too. (The next time someone lectures you about German practicality, this would be a fine counter-example to trot out.) However odd that reaction might seem to me and others with an engineering/hard science bent, it's a reminder that nuclear risks are viewed differently than many others, perhaps because radiation is invisible and insidious in its effects. Even if the reactors are finally cooled down with no further incidents and no injuries beyond the plant personnel, who have taken great risks for the public good, we will tend to focus on how much worse the outcome could have been.
Yet shutting down those nuclear plants in Germany is not without consequences, either, as noted by the Breakthrough Institute. Germany's greenhouse gas emissions will inevitably increase, because the country is already adding renewable generation as fast as it can and must make up any shortfall from fossil fuels. After committing an estimated €120 billion ($167 billion) for solar power through 2011, based on the 20 years of feed-in tariff support existing installations will receive, Germany still gets just 2% of its annual generation from solar, compared to around 24% from nuclear. That's mainly because Germany is such an unsuitable location for solar.
What about the US? Nuclear power supplied almost 20% of the electricity generated here in 2010, compared to 45% for coal, nearly 24% for natural gas, 10% for all renewables, and less than 1% from oil. Any notion of replacing the contribution of nuclear power in the longer term would require careful consideration of the energy sources that might fill the gap--based on scale and growth potential--and what it would mean for efforts to cut greenhouse gas emissions by reducing the generation of electricity from coal, which accounted for 81% of the emissions from the electricity sector and 26% of all US emissions in 2009. As for replacing nuclear power in the short run, that's simply out of the question, unless we want to bring on a recession that would make 2009 look like a boom year.
It's not that it's impossible to imagine a US energy mix without nuclear. After all, that's what we had on a much smaller scale prior to the 1960s. We certainly have enough coal and natural gas to take up any slack, although I don't think that would be quite the desired solution of those who would be most eager for an end to nuclear power. For that matter, a combination of geothermal power and concentrated solar power (CSP), the former baseload and the latter at least dispatchable, could also fill the gap, although a geothermal build-out on that scale would provoke concerns about "induced seismicity", while CSP would be largely a regional solution or require lots of very long-distance, high voltage power lines that present massive NIMBY issues of their own. Wind power, which until last year was growing at around 40% annually, could provide 20% or more of the generating mix by 2030, but it can't substitute for nuclear's central role without far more cheap power storage than we can reasonably expect to have available by then. And while solar has great potential, especially as its cost falls, it's no better suited to delivering reliable 24/7 power than is wind, and it is starting from an even smaller level than wind's 2.3% of generation last year.
The likeliest replacement for nuclear power in the US would thus be a combination of sources similar to our current non-nuclear mix, comprised of about 55% coal, 30% gas and 15% renewables, with some help from efficiency. On the basis of the average emissions from these sources, making up for the loss of the 807 billion kilowatt-hours generated by nuclear last year would increase US greenhouse gas emissions by around 580 million tons of CO2-equivalent per year, or 10% of net US emissions in 2009. That would hardly be conducive to meeting our Copenhagen pledge to reduce emissions by 17% by 2020, but then in a non-nuclear world most such pledges would have to be considered null and void.
Barring a worst-case outcome in Japan, I don't expect a groundswell in the US if favor of abandoning nuclear power--not even for the 35 reactors of generally similar design to the ones at Fukushima. Despite that, the emissions figures I calculated above remain relevant. Without a concerted effort to build new power reactors in the next two decades, the US will be on a sure path to de-nuclearization, as 41 of the existing plants would reach the end of their lives and operating licenses--many after a full 60 years of operations--by the mid-2030s. That process could accelerate significantly if the facilities that are awaiting license extensions now face much tougher scrutiny and are turned down in significant numbers. In that case we could lose up to 10,000 MW of nuclear capacity by the end of this decade, generating roughly the same annual output as our entire current wind power capacity. There are some who are already working to make that happen, either openly or more subtly. In that context the story on MSNBC yesterday listing US nuclear reactors in order of earthquake risk was either a public service or fear-mongering, depending on your perspective.
Whether we back away from nuclear power all at once, as Germany seems poised to consider doing, or one plant at a time, the result would be much the same: increased emissions, costlier and less reliable power, at least in the near-to-medium term, and more strain on infrastructure. I still think we'll choose to include nuclear in our evolving future energy mix, particularly given the significant improvements in the technology since the Fukushima reactors were built, along with the development of new, smaller-scale nuclear power options. Yet I have to admit my confidence in that result has been shaken by the reaction to the events in Japan.
Although I want to focus mainly on the potential consequences in the US, what has already transpired in Germany provides a cautionary tale. As reported Tuesday, seven nuclear power plants of similar vintage and/or design to the damaged quartet at Fukushima are being shut down, at least temporarily, as the German government reassesses its decision to extend the operating life of the country's 17 power reactors. Germany hasn't been comfortable with its nukes for some time, though I find it remarkable that 70% of the population is apparently concerned that an accident that required an epic earthquake and a tsunami to trigger could happen there, too. (The next time someone lectures you about German practicality, this would be a fine counter-example to trot out.) However odd that reaction might seem to me and others with an engineering/hard science bent, it's a reminder that nuclear risks are viewed differently than many others, perhaps because radiation is invisible and insidious in its effects. Even if the reactors are finally cooled down with no further incidents and no injuries beyond the plant personnel, who have taken great risks for the public good, we will tend to focus on how much worse the outcome could have been.
Yet shutting down those nuclear plants in Germany is not without consequences, either, as noted by the Breakthrough Institute. Germany's greenhouse gas emissions will inevitably increase, because the country is already adding renewable generation as fast as it can and must make up any shortfall from fossil fuels. After committing an estimated €120 billion ($167 billion) for solar power through 2011, based on the 20 years of feed-in tariff support existing installations will receive, Germany still gets just 2% of its annual generation from solar, compared to around 24% from nuclear. That's mainly because Germany is such an unsuitable location for solar.
What about the US? Nuclear power supplied almost 20% of the electricity generated here in 2010, compared to 45% for coal, nearly 24% for natural gas, 10% for all renewables, and less than 1% from oil. Any notion of replacing the contribution of nuclear power in the longer term would require careful consideration of the energy sources that might fill the gap--based on scale and growth potential--and what it would mean for efforts to cut greenhouse gas emissions by reducing the generation of electricity from coal, which accounted for 81% of the emissions from the electricity sector and 26% of all US emissions in 2009. As for replacing nuclear power in the short run, that's simply out of the question, unless we want to bring on a recession that would make 2009 look like a boom year.
It's not that it's impossible to imagine a US energy mix without nuclear. After all, that's what we had on a much smaller scale prior to the 1960s. We certainly have enough coal and natural gas to take up any slack, although I don't think that would be quite the desired solution of those who would be most eager for an end to nuclear power. For that matter, a combination of geothermal power and concentrated solar power (CSP), the former baseload and the latter at least dispatchable, could also fill the gap, although a geothermal build-out on that scale would provoke concerns about "induced seismicity", while CSP would be largely a regional solution or require lots of very long-distance, high voltage power lines that present massive NIMBY issues of their own. Wind power, which until last year was growing at around 40% annually, could provide 20% or more of the generating mix by 2030, but it can't substitute for nuclear's central role without far more cheap power storage than we can reasonably expect to have available by then. And while solar has great potential, especially as its cost falls, it's no better suited to delivering reliable 24/7 power than is wind, and it is starting from an even smaller level than wind's 2.3% of generation last year.
The likeliest replacement for nuclear power in the US would thus be a combination of sources similar to our current non-nuclear mix, comprised of about 55% coal, 30% gas and 15% renewables, with some help from efficiency. On the basis of the average emissions from these sources, making up for the loss of the 807 billion kilowatt-hours generated by nuclear last year would increase US greenhouse gas emissions by around 580 million tons of CO2-equivalent per year, or 10% of net US emissions in 2009. That would hardly be conducive to meeting our Copenhagen pledge to reduce emissions by 17% by 2020, but then in a non-nuclear world most such pledges would have to be considered null and void.
Barring a worst-case outcome in Japan, I don't expect a groundswell in the US if favor of abandoning nuclear power--not even for the 35 reactors of generally similar design to the ones at Fukushima. Despite that, the emissions figures I calculated above remain relevant. Without a concerted effort to build new power reactors in the next two decades, the US will be on a sure path to de-nuclearization, as 41 of the existing plants would reach the end of their lives and operating licenses--many after a full 60 years of operations--by the mid-2030s. That process could accelerate significantly if the facilities that are awaiting license extensions now face much tougher scrutiny and are turned down in significant numbers. In that case we could lose up to 10,000 MW of nuclear capacity by the end of this decade, generating roughly the same annual output as our entire current wind power capacity. There are some who are already working to make that happen, either openly or more subtly. In that context the story on MSNBC yesterday listing US nuclear reactors in order of earthquake risk was either a public service or fear-mongering, depending on your perspective.
Whether we back away from nuclear power all at once, as Germany seems poised to consider doing, or one plant at a time, the result would be much the same: increased emissions, costlier and less reliable power, at least in the near-to-medium term, and more strain on infrastructure. I still think we'll choose to include nuclear in our evolving future energy mix, particularly given the significant improvements in the technology since the Fukushima reactors were built, along with the development of new, smaller-scale nuclear power options. Yet I have to admit my confidence in that result has been shaken by the reaction to the events in Japan.
Tuesday, March 15, 2011
Energy in the Aftermath of the Sendai Quake
Investors and companies around the world are scrambling to assess the impact of the Sendai earthquake and tsunami on supply chains and markets, both within Japan and globally, between the direct damage from the event and the disruption to critical infrastructure in its aftermath. An item I spotted in this morning's Wall St. Journal provided an early clue concerning the potential ripple effects in global energy markets, as Chevron sold a cargo of Indonesian crude to a power customer south of Tokyo. However, it remains to be seen whether demand destruction or the impairment of supply capabilities will dominate over the short, medium and longer-term recovery periods.
The impact on the Japanese power grid extends beyond the shutdown of 9,702 MW of nuclear power capacity, including 2,812 MW at Fukushima Daiichi that will not resume operations for many years, if ever. Some fossil fuel power plants have also shut down, and more than a fourth of the country's refining capacity is down, cutting off a significant supply of power plant fuel oil, along with a wide range of other petroleum products. That helps explain the interest in light, sweet Indonesian crude that can be burned directly in power plants as a replacement for low-sulfur fuel oil. Significant quantities of Indonesian Minas crude formerly came to the US west coast for a similar purpose, when we still had a lot of oil-fired power generation, although the crude was normally processed to remove the valuable light products from the fuel oil before sale to utilities. (My first job in the industry was at a refinery that did just that as part of a contract Texaco had with a southern California utility.)
Burning crude oil for power is a practical stop-gap, and as long as so many of Japan's refineries remain shut for damage assessment and repair, it shouldn't have much impact on the global crude market, since the crude those refineries would have otherwise run is now surplus. That explains the $5 per barrel drop in crude prices this week. However, if demand recovers faster than Japanese refinery capacity returns to operation, much of that extra crude oil will need to be processed in refineries elsewhere around the Asia-Pacific region, to provide the refined product imports that Japan will need.
It's much harder to assess the medium-term situation, because it will be some time before the full extent of the damage to industry, power generation and transportation is known. If more demand was destroyed than the capacity to supply it, then Japan could actually end up with surplus energy capacity until demand recovers, and that would be a bearish factor in global energy markets. If more energy supply than demand was destroyed, as seems possible given the largely agrarian nature of the part of Japan that suffered the worst consequences of the quake and tsunami, then Japan could be importing additional supplies of energy from regional sources for a long time.
I've had several people ask me about the potential of these events to increase Japan's demand for renewable energy, and I think that's a likely outcome. As of the end of 2009 Japan already had the world's third-largest installed solar power capacity at 2,600 MW, to which another 1,000 MW or so was apparently added last year. For Japanese businesses suffering from rolling brownouts, solar power is one of their few options other than diesel generators for becoming more self-sufficient fairly quickly. However, at the scale of the grid, intermittent solar isn't a great substitute for 24/7 nuclear power. With Japan's average solar insolation, it would take about 5,000 MW of solar panels to replace the annual output of a just one of the Fukushima Daiichi reactors (#2, 3 or 4) at an installed cost in the neighborhood of more than $20 billion. That might give a welcome shot in the arm to photovoltaic manufacturers that are still expanding rapidly but have been overly-dependent on faltering European solar incentives. I don't know enough about the Japanese grid to know how easily they could adjust to such a shift from centralized, baseload power to distributed, cyclical generation.
The long-term outcome seems impossible to gauge at this point, and I hesitate to even speculate while the engineers are still working to cool down the damaged nuclear plants. (The American Nuclear Society has a useful site with updates and background on the Japanese reactors.) Much depends on how well Japan's nuclear industry will be seen to have responded to these incidents. Unless these facilities are either rebuilt or replaced with new, next-generation nuclear plants, then Japan's imports of LNG, coal and other fuels could increase significantly, until and unless renewables ramped up enough to make up the difference. Japan is already the world's largest importer of LNG, and it is perfectly situated to absorb the output of the new LNG plants planned for Australia. That could boost global LNG prices for years to come.
Disclosure: My portfolio includes investment in Chevron, which is mentioned above and owns projects and facilities that could be affected by these events.
The impact on the Japanese power grid extends beyond the shutdown of 9,702 MW of nuclear power capacity, including 2,812 MW at Fukushima Daiichi that will not resume operations for many years, if ever. Some fossil fuel power plants have also shut down, and more than a fourth of the country's refining capacity is down, cutting off a significant supply of power plant fuel oil, along with a wide range of other petroleum products. That helps explain the interest in light, sweet Indonesian crude that can be burned directly in power plants as a replacement for low-sulfur fuel oil. Significant quantities of Indonesian Minas crude formerly came to the US west coast for a similar purpose, when we still had a lot of oil-fired power generation, although the crude was normally processed to remove the valuable light products from the fuel oil before sale to utilities. (My first job in the industry was at a refinery that did just that as part of a contract Texaco had with a southern California utility.)
Burning crude oil for power is a practical stop-gap, and as long as so many of Japan's refineries remain shut for damage assessment and repair, it shouldn't have much impact on the global crude market, since the crude those refineries would have otherwise run is now surplus. That explains the $5 per barrel drop in crude prices this week. However, if demand recovers faster than Japanese refinery capacity returns to operation, much of that extra crude oil will need to be processed in refineries elsewhere around the Asia-Pacific region, to provide the refined product imports that Japan will need.
It's much harder to assess the medium-term situation, because it will be some time before the full extent of the damage to industry, power generation and transportation is known. If more demand was destroyed than the capacity to supply it, then Japan could actually end up with surplus energy capacity until demand recovers, and that would be a bearish factor in global energy markets. If more energy supply than demand was destroyed, as seems possible given the largely agrarian nature of the part of Japan that suffered the worst consequences of the quake and tsunami, then Japan could be importing additional supplies of energy from regional sources for a long time.
I've had several people ask me about the potential of these events to increase Japan's demand for renewable energy, and I think that's a likely outcome. As of the end of 2009 Japan already had the world's third-largest installed solar power capacity at 2,600 MW, to which another 1,000 MW or so was apparently added last year. For Japanese businesses suffering from rolling brownouts, solar power is one of their few options other than diesel generators for becoming more self-sufficient fairly quickly. However, at the scale of the grid, intermittent solar isn't a great substitute for 24/7 nuclear power. With Japan's average solar insolation, it would take about 5,000 MW of solar panels to replace the annual output of a just one of the Fukushima Daiichi reactors (#2, 3 or 4) at an installed cost in the neighborhood of more than $20 billion. That might give a welcome shot in the arm to photovoltaic manufacturers that are still expanding rapidly but have been overly-dependent on faltering European solar incentives. I don't know enough about the Japanese grid to know how easily they could adjust to such a shift from centralized, baseload power to distributed, cyclical generation.
The long-term outcome seems impossible to gauge at this point, and I hesitate to even speculate while the engineers are still working to cool down the damaged nuclear plants. (The American Nuclear Society has a useful site with updates and background on the Japanese reactors.) Much depends on how well Japan's nuclear industry will be seen to have responded to these incidents. Unless these facilities are either rebuilt or replaced with new, next-generation nuclear plants, then Japan's imports of LNG, coal and other fuels could increase significantly, until and unless renewables ramped up enough to make up the difference. Japan is already the world's largest importer of LNG, and it is perfectly situated to absorb the output of the new LNG plants planned for Australia. That could boost global LNG prices for years to come.
Disclosure: My portfolio includes investment in Chevron, which is mentioned above and owns projects and facilities that could be affected by these events.
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