Will Water Limit Fracking in Arabia?

• Poor water availability could hamper efforts to develop Saudi Arabia's shale gas resources, in order to meet growing gas demand from Saudi industry.
• Water recycling and alternative fracking fluids could provide the solution.  

Recent comments by Saudi Arabia's oil minister, Ali Al-Naimi, indicated that Saudi Aramco would soon begin exploring the country's shale gas resources. As another means of reducing oil consumption in the Kingdom's electricity sector, in order to preserve oil exports, this appears to make both practical and economic sense. However, as noted by the Wall St. Journal, compared to the US Saudi Arabia has much less water available for the hydraulic fracturing of shale and tight gas reservoirs. Absent a reallocation of its substantial conventional gas production, Saudi shale gas could become a key factor in global energy security. However, the techniques employed to extract it might be different from those that currently dominate the US shale gas scene.

It must seem odd that Saudi Arabia would even be interested in shale gas, a resource that wasn't exploited in the US until conventional gas production was declining steadily. Saudi Arabia might still be the world's largest oil producer, at least for now, but it is not the "Saudi Arabia of natural gas". Although the country has proved gas reserves comparable to those of the US, it apparently didn't win nature's gas lottery on the Arabian Peninsula. Saudi gas reserves and production amount to only about 10% and 19%, respectively, of the Middle East's gas totals. Iran and Qatar are far ahead. And while Saudi gas production has doubled since 2000, output in neighboring Qatar has expanded by a factor of six in the same interval.

Much of the Kingdom's conventional gas reserves are associated with oil production and are often required to be reinjected to maintain reservoir pressure and oil output. Available Saudi gas has been preferentially allocated to industrial projects, such as petrochemicals expansion. As a result, little new gas was supplied for power generation, so the Saudi electricity sector has been burning large and increasing quantities of oil that could otherwise be exported. The need for additional gas has become acute, but exploration in the vast Empty Quarter has not yielded the expected gas bonanza, while the internal price of natural gas has been constrained at levels well below even recent low US natural gas prices--too low to make most new production attractive on its own merits.

As if the economics of shale gas development weren't challenging enough in such an environment, the key ingredient that has fueled the US shale revolution, water, is in short supply in Saudi Arabia. The needs of cities and industry in this arid country exceed the water supply from aquifers to such an extent as to require 27 desalination facilities, delivering nearly 300 billion gallons annually. At several million gallons of water per hydraulically fractured shale gas well, the logic of burning oil to desalinate water to produce gas looks questionable. Fortunately, there are multiple emerging pathways for reducing or eliminating net water consumption in "fracking".

For starters, many US producers now routinely recycle the 10-30% of injected water that typically flows back from the well after hydraulic fracturing, for use in subsequent wells. Recycling has become the standard in places like Pennsylvania's portion of the Marcellus shale, reducing the call on fresh water for fracking. The oil services industry offers various techniques for cleaning "flowback" water, and new ones are under development, including the use of algae.

Drillers can further reduce freshwater consumption through the use of nitrogen in foam or other forms. ERDA, a precursor of the US Department of Energy, conducted research on that technique in the 1970s, and it has been refined since then. Nitrogen is readily available from air separation plants and does not depend on water, though it does require energy.

Another approach for waterless fracking has been field-tested in Canada, using gelled propane. A blog post in Scientific American described some of the pros and cons of this method, which is more expensive where water is cheap but might fit the bill in dry regions where LPG is readily available. For that matter, it might make sense in New Mexico if the Mancos Shale of the San Juan Basin turns out to be another viable tight oil play.

The upshot is that a shortage of fresh water shouldn't constitute an insurmountable obstacle to exploiting Saudi Arabia's unconventional gas resources, which Mr. Al-Naimi cited at 600 trillion cubic feet. However, it remains to be seen whether shale gas development is the best answer to a problem that has been created by selling natural gas to industry for as little as $0.75 per million BTUs, while burning $100 oil ($17 per million BTU) to generate electricity. Whether the ultimate solution is shale gas or something else, resolving this gap in Saudi industrial policy could have a significant impact on future oil prices.

A slightly different version of this posting was previously published on the website of Pacific Energy Development Corporation.  

Seeing Our Footprint

I know I've commented before on the number of PR lists that I'm on as a blogger. Every day brings emails touting some new process or product, a must-go conference, or a new book on energy or the environment to review. Even the subset of these that truly interests me and that I have every intention of writing about mostly gets swept aside by more urgent topics or the needs of my consulting clients. That nearly happened to a clever little book I received from National Geographic called "Human Footprint." I ran across it on my desk again today and decided it deserved a quick mention before I pass it to my daughter, who has been demanding it for weeks.

The book--more of a booklet at just 32 pages--is part of the National Geographic Kids line. It seems to be related to a "Find Your Footprint" contest and other materials on NatGeo's website. I had hoped to find at least some of the book's photography online, because its approach is extremely visual. It displays the accumulation of a lifetime's worth of consumption decisions such as the more than 13,000 pints of milk the average American will drink--and the Louisiana-sized grazing footprint of the cows that supply it--a huge collection of rubber ducks symbolizing the 28,433 showers we'll take, and my favorite, the 43,371 cans of soda we'll drink. On pages 28-29 they display all this stuff in front of a typical home, including the dozen cars the average American will own. And to tie this topic to the normal theme of this blog, those cars are estimated to drive an average of 627,000 miles. At the current average fleet fuel economy, that represents more than 25,000 gallons of gasoline, or 600 barrels, yielding on the order of 250 tons of CO2. And of course every product arrayed in front of that house represents an additional energy expenditure, as well as a recycling challenge for the resulting waste of all kinds.

The explicit message is to get kids to think about the consequences of all these choices, and then make smarter choices with reduced impact. The author provides some suggestions in that regard. But I wonder if the bigger effect will be on the parents who read it with their children. When I showed my daughter the pile of 3,796 disposable diapers on page 7, she just laughed. They clearly meant a lot more to me than to her. Now, you might argue that adults ought to be able to visualize their impact on the planet without gimmicks like assembling decades' worth of consumption in one place and photographing the result. Perhaps, but I suspect most of us are so distracted by busy lives that we rarely mentally integrate a week's worth of the contents of our trash and recycling cans over the thousands of such trips to the curb we make in a lifetime, let alone picturing the resources that went into making all these goods, from mines, oil & gas wells, power plants, factories and farms all over the world.

It's daunting, and no matter how one might view this from a social, ethical or political perspective, it seems pretty clear that the inescapable consequence of population growth, and especially of the dramatic improvement in incomes and wealth that is happening in large parts of the developing world, is that our individual footprints of both energy and material goods will be under increasing pressure in the years ahead. That's at the core of the drive to become more energy efficient, in order to avoid the worst scenarios of resource competition that otherwise lie ahead of us.

Technology and Critical Thinking

The other day I read a story in my local paper concerning a new technology for converting waste plastic into synthetic oil. The prototype "Envion Oil Generator" had been temporarily deployed at a solid-waste facility in Montgomery County, MD, and its owners were touting its benefits to the Washington Post. As I read the article, I found myself considering it on two levels: whether the reported details made sense, and whether the reporter was encouraging his readers to approach new inventions such as this with sufficient skepticism. We're living through a nearly unprecedented explosion in energy-related technology, and it's vital that the public not swallow every claim they encounter, because a large fraction of these technologies will ultimately prove to be either impractical or uneconomical, while some of them are in fact impossible, because they depend on the violation of basic physical laws. We might not all have the background for making detailed judgments about this, but I can suggest a few questions to ask in these situations, even if you don't have a science or engineering degree.

The first question is whether the description of the basic process seems logical. For example, in the case of the "Oil Generator" is it reasonable to expect that plastic could be turned back into something like crude oil by means of essentially just heating it up? After all, plastic is mostly derived from crude oil and natural gas in the first place, so perhaps heating it would cause it to decompose back into its constituents. If you Google on "plastic recycling", you'll see that this normally entails separating it strictly by type--those little numbers in the triangle that usually appears somewhere on an item--and then melting it. But that doesn't give you "oil"; it gets you back to the raw plastic, which can be used to make clothing, carpets, or some other recycled product. However, if you heat them further under the right conditions, the polymer chains of the plastic break down in a process called "thermal depolymerization." The result of that is a liquid that might resemble crude oil. OK, so far.

The next aspect you might look at is the whether any obvious physical laws are broken. Do the claims for the device hint at something impossible, such as getting more energy or mass out than are put into it? For example, the article indicates that this device can turn 10,000 tons of plastic per year into up to 60,000 barrels of oil. Is that plausible? A little Googling should turn up the fact that a typical crude oil has a specific gravity of around 0.85. That means that a gallon of it would weigh just over 7 lb., and a 42-gallon barrel would come in just under 300 lb., or 0.15 short tons. So the claim here is that 10,000 tons of plastic could turn into as much as 9,000 tons of usable oil. Personally, I'd say that sounds pretty optimistic, and I'd guess that a yield under 5 barrels per ton was likelier, particularly if the gas produced as a byproduct from the process is supposed to generate most of the energy for this conversion. At a minimum, though, this gizmo doesn't appear to bend any physical laws.

If you know a bit of organic chemistry, you could delve a little further into this, looking up the chemical structure of such common plastics as Polyethylene Terephthalate (PET or Type 1), Polystyrene (Type 5), and Polyvinyl Chloride (PVC or Type 3). De-polymerizing a random mix of those is either going to yield a stew of specialized petrochemical molecules, or if you break them down further you might get back to more basic chemicals full of double bonds and benzene rings. Neither result has much in common with the typical constituents of good-quality crude oil that refineries turn into gasoline, diesel or jet fuel, so it raises a key question about the value of the product this technology produces.

That brings us to the economics. The article quotes the company as claiming that the process costs only $10 per barrel of oil produced. It's not clear whether that $10 is just the operating cost or is meant to include the capital cost of the device, which apparently totals $6-7 million. Using the "PMT" function in Excel it took about 1 minute to determine that at an 8% cost of capital--about the best a small business could hope for in the current environment--the amortized hardware cost would be at least $611,000 per year over a 20-year life. Spread that over 60,000 bbls and you're already over $10/bbl, before you've paid for the first employee or the first kWh of purchased electricity. And since a device like this is unlikely to operate around the clock every day of the year, and the realistic yield is probably lower than 6 bbls/ton, it's not hard to come up with an effective fixed cost per barrel of around $20, over and above whatever variable costs are involved.

And then we come to the environmental impact of all this, and that hinges on assessing realistic alternatives. If the plastic would otherwise be buried in a landfill, this looks like a win-win, as long as the process complies with all local pollution regulations for stationary sources. However, if the device is chewing up plastic that could otherwise be recycled, the latter seems by far the better route, in terms of energy consumption and displacement of oil byproducts that would otherwise be used to make virgin plastic. It's also clear that a significant fraction of the input plastic is converted to CO2 and emitted to the atmosphere. Whether its emissions are higher or lower than those associated with burying the waste and producing new plastic isn't obvious.

Ultimately, all we can really conclude about the Oil Generator is that if it operates as advertised--a big if for any new technology--and if there is indeed a viable market for its output at some discount to crude oil, then this might leave a reasonable profit margin for the owners. That would also depend on how much rent the operators must pay, if any, for the land it sits on, how much plastic they could really run through it, and whether they would have to pay for that plastic or might even get paid to dispose of it. This is not meant as an endorsement of the company's claims, but then that wasn't the point of this exercise, which was more about taking my readers through the application of some basic critical thinking. Although the Post reporter didn't undertake all this analysis, he at least included a suitably skeptical viewpoint, instead of giving in to the breathless enthusiasm that seems so prevalent these days in reporting on any new technology with an environmental angle.

Trash and Energy

Over the weekend I read an interesting article in the Economist on the merits of recycling municipal waste (MSW.) Normally "premium content", the article appears to be accessible through a sponsored link. It got me thinking about the future of trash, and its two main energy implications. The Economist provides some interesting statistics on the energy and greenhouse gas savings associated with recycling, but largely ignores the potential conversion of non-recyclable waste into energy streams, either electricity or fuels. Such efforts have gotten significant media attention recently, including a high-profile project of ConocoPhillips and Tyson Foods. Given the volume of waste generated globally, the energy benefits of getting smarter about its management are too big to ignore.

The Economist starts with the question of whether recycling is truly beneficial and quickly confirms this, based on an analysis of life-cycle studies. I was struck by the potential to improve recycling rates in the US, which they cite at about 30%, to levels comparable to Germany's more than 50%. The example of San Francisco, which apparently recycles 69% of its waste, shows what is possible, though it might be hard to achieve this nationally. Even at current rates, recycling apparently saves 49 million tons of CO2 emissions here, the equivalent of about 0.7% of our total emissions. Doubling that won't get us off the hook for reducing emissions from other sectors, but together with making better use of the energy content of the non-recyclable waste, it could prove to be one of the cheaper sources of emissions reductions.

The article gives some hints about how recycling rates could be increased, and better technology seems to be the key. Much of our current recycling effort depends on households and businesses separating recyclable material from other waste, and sorting it into categories of plastic, glass, metal, paper, etc. The "single-stream" recycling technology mentioned in the article eliminates the pre-sorting but still requires separation of recyclables from non-recyclables. That step might benefit from some financial incentives, such as crediting can and bottle deposits at the point of trash collection, rather than returning them to the point of purchase, generating additional fuel and handling savings in the process. Finally, it ought to be possible to increase the scale of the sorting equipment at trash facilities to eliminate entirely the need for pre-sorting into categories by waste producers. With the entire MSW stream separated into recyclables, energy feedstocks, and residual non-recyclables, only a small fraction would still need to be landfilled. The environmental advantages of that are obvious, but the energy benefits should be quite meaningful, as well.