 In the nuclear area there are a number of pro- grams to enhance the performance of existing plants and to develop improved fuel cycles and advanced reactors see talks by McCarthy, section ‘‘Nuclear Energy’’ and Christian, sec- tion ‘‘Nuclear Industry Perspective.’’  In the fusion energy area, the U.S. has re- joined the International Thermonuclear Experimental Reactor activity—see Dean talk, section ‘‘Paths to Fusion Power.’’ Sequestration of CO 2 There is a large potential for the sequestration of CO 2 in a variety of storage options—gas and oil reservoirs, coal seams, saline aquifers, the deep ocean, and through conversion to minerals and by bio- conversion, see Figure 5. CCTP Process The CCTP process is involved in Federal R&D portfolio review and budget input. It has a strategic plan and a working group structure in the areas of  Energy production,  Energy efficiency,  Sequestration,  Other gases,  Monitoring and measurement, and  Supporting basic research. It has issued a competitive solicitation/RFI seeking new ideas. The keys to meeting the President’s goals are:  leadership in climate science,  leadership in climate-related technology,  better understanding of the potential risks of climate change and costs of action, Robust set of viable technology options that address energy supply and efficiency/productivity,  integrated understanding of both science and technology to chart future courses and ac- tions,  global approach… all nations must partici- pate. A GLOBAL PERSPECTIVE OF COAL & NAT- URAL GAS: RITA BAJURA (NETL) Coal Reserves and Use The world’s recoverable reserves of coal are 1083 billion tons, a 210 year supply a t the current annual consumption. The United States has the largest amount of these reserves—25%. Russia has 16%, China 12%, and India and Australia about 9%. Increasingly, coal is used for electricity pro- duction, 92% of 1.1 billion tons in the U.S. in 2002 and a projected 94% of 1.6 billion tons in 2025. g Fig. 6. 73Energy Options for the Future The bulk of the coal-fired electrical capacity of 330 MWe in the U.S. was built between 1966 and 1988. Similarly in the world, usage in electricity production was 66% of 5.3 billion tons in 2001, and a projected 74% of 5.9 billion tons in 2025, as illustrated in Figure 6. While the DOE-EIA predicts that oil and natural gas prices will rise over the next 20 years, it predicts that coal prices will remain constant. A major factor affecting coal prices has been the steady improvements in coal productivity across the globe, with a doubling of output per miner per year from 1990 to 1999. Australia, the U.S. and Canada lead with a productivity of 11,000 to 12,000 tons per miner per year. Productivity in de veloping and transitional countries lags that in developed coun- tries. Coal mining safety has been improved a lot in the U.S. In 1907 there were 3200 mine deaths, in 2003 there were 30. However, this is still an issue in developing and transitional countries e.g., in China there were 7000–10,000 deaths per year in coal mines. Environmental Concerns There are numerous environmental impacts in the mining and use of coal, as illustrated in Figure 7. Regulators and industry are working to reduce these impacts through: improved permitting, reclamation, groundwater management, and utilization of coal mine methane. Contaminant emissions from fossil fired U.S. power plants, relative to fossil use, are down sharply as shown in Figure 8. Coal plants operate under a complex system of environmental regulations that relate to the emissions of particulate matter, SO x , and NO x . The cost of removal of various percentages of these materials is shown in Table 4. Mercury emissions are also a concern and the use of coal is the largest U.S emitter, contributing about 2% of world emissions. Today, there is no commer- cially available technology for limiting mercury emis- sions from coal plants. There is an active DOE-funded research effort. There are a number of field sites where mercury control is being tested. Co-control may be able to remove 40–80% Hg with bitum inous coal but control will be much more difficult with low-rank coals. U.S. regulations are likely to be promulgated in the period from 2008 to 2018. Climate Change. CO 2 from energy use is a major contributor—83%, to green house gas warming potential. The coal contribution is 30%. Stabilizing CO 2 concentrations (for any concentration between 350 and 750 ppm) means that global net CO 2 emissions must peak in this century and begin a long-term decline ultimately approaching zero. The pre-industrial level was 280 ppm. The technological carbon management options are:  Reduce carbon intensity using renewable energies, nuclear, and fuel switching. Fig. 7. 74 Sheffield et al.  Improve efficiency on both the demand side and supply side.  Sequester carbon by capturing and storing it or through enhancing natural processes. All of the options need to supply the energy demand and address environmental objectives. Considerable improvements in efficiency are possible for coal plants, as shown in Figure 9. The DOE’s 2020 goal is 60%. The integrated gasification combined cycle (IGCC) plant is a prom- ising pathway to ‘‘zero-emission’’ plants. It has fuel and product flexibility, high efficiency, is sequestra- tion ready and environmentally superior. It can produce a concentrated stream of CO 2 at high pressure, reducing capital cost and efficiency penal- ties. It is being demonstrated at the Wabash River plant, which achieved 96% availability and won the 1996 powerplant of the year award, and at the Tampa electric, which won the 1997 award. The issues for the IGCC are that a 300 MWe plant costs 5–20% more than pulverized coal units however, economics for a 600 MWe plant appear more favorable. They take a longer shakedown time to achieve high availability and they suffer from the image of looking like a chemical plant. Worldwide there are 130 operating Fig. 8. Table 4. 75Energy Options for the Future gasification plants with 24 GWe IGCC-equivalent, with more underway. Sequestration. There are numerous options for separation and storage of CO 2 including unmineable coal seams, depleted oil and gas wells, saline aquifers, and deep-ocean injection. Sequestration can also be achieved through enhancing natural processes such as forestation, use of wood in buildings, enhanced photosynthesis and iron or nitrogen fertilization of the ocean. The potential capacity for storage is very large compared to annual world emissions. There remain concerns about the possibility of leaks from some forms of sequestration, but it has been demonstrated e.g., in the Weyburn CO 2 project, in which CO 2 , produced in the U.S., is piped to Canada to support enhanced oil recovery; and in the Sleipner North Sea project, in which a mil lion tonnes a year of CO 2 are removed from natural gas and sequestered in a saline aq uifer under the sea. The costs, including separation, compression, transport, and sequestration, appear reasonable. The incremental average impact on a new IGCC is expected to be a 25% increase in cost of electricity (COE) relative to a non-scrubbed counterpart. DOE’s goal is to reduce this increment to <10%. Note that retrofitting CO 2 controls, unless a plant was designed for it would be expensive. There is a diverse research portfolio with >60 projects and a $140 M portfolio. There is strong industry support with a 36% cost share. From AEP, Alstom, BP, Chevron Texaco, Consol, EPRI, McDermott, Shell, TVA, and TXU. The sequestration option could remove enough carbon from the atmosphere to stabilize CO 2 concentra- tions, be compatible with the existing energy struc- ture, and be the lowest cost carbon management option. FutureGen: A Global Partnership Effort This effort is a ‘‘one billion dollar, 10-year demonstration project to create the world’s first coal- based, zero-emission electricity and hydrogen plant’’ President Bush, February 27, 2003. It has broad U.S. participation and DOE contemplates implementation by a consortium. There is international collaboration including a Carbon Sequestration Leadershi p Forum. An industry group has anno unced the formation of a FutureGen Consortium. The charter members repre- sent about 1/3 of the coal-fired utilities and about 1/2 of the U.S. coal industry—Americxan Electric Power, CINEnergy, PacificCorp, TXU (Texas Utilities), and CONSOL, Kennecot Energy, North American Coal, Peabody Energy, RAG American Coal Holding. FutureGen opens the door to ‘‘reuse’’ of coal in the transportation sector through producing clean diesel fuel with Fischer-T ropsch synthesis. Also, hydrogen may be produced, by a shift process and separation with sequestration of the CO 2 for use in fuel cells and IC engines. g Fig. 9. 76 Sheffield et al. Why Coal is Important Coal remains the largest energy source for power generation. It is a potential source for transportation. There are abundant reserves—particularly in the U.S. It contributes to our energy security. It had relatively low and stable prices. It has environmental impacts but, increasingly, the technology is becoming avail- able to address them. Natural Gas Resources and Use The world’s proven gas reserves of 5.500 Tcf could supply the current annual usage for 62 years. The largest reserves are in Iran, Qatar and Russia. However, there is more gas than the proven reserves including unconventional sources such as coalbed methane, tight gas, shale gas and methane hydrates for which the production is more difficult and will be impacted by technology. In the U.S., 22.8 Tcf was used in 2002, 32% in industry and 24% for electricity production. The DOE-EIA predicts a usage of 31.4 Tcf in 2025 with 33% in industry and 27% for electricity. Worldwide usage in 2001 was 90.3 Tcf with 23% in industry and 36% for electricity increasing to 175.9 Tcf in 2025 with 46% for electricity. The usage is illustrated in Figure 10. The EIA predicts that gas prices are likely to stay at the 2003 average of $5.50 per Mcf through at least 2025. In fact, U.S. gas prices are quite volatile with ±3% moves on 32 days of the year. Nevertheless, there has been construction of 200 GWe of new gas- fired capacity since 1998 in the U.S., despite a significant decrease in U.S. production since the peak in the 1970s. In fact while wells are being drilled more quickly there has been a decline in production from the lower-48 states. This decline is reflected in the lowering projections of the EIA. The shortfall has been made up from imports from Canada, Mexico and from shipments of LNG, but reduced imports from Canada are now forecast. An 18-month comprehensive assessment of North American supply and demand has been made with broad industrial involvement—‘‘Balanc- ing Natural Gas Policy: Fueling the demands of a growing econ omy,’’ National Petroleum Council, September 2003. The higher prices reflect a funda- mental shift in the supply/demand balance. The traditional North American gas producing areas can only supply 75% of the projected demand and at best sustain a flat production. New larger-scale resources (LNG, Arctic) could meet 20–25% of demand. But they have higher cost, long lead-times and developmental barriers. The technical resources are impacted by access restrictions to the Pacific offshore (21 Tcf), the Rockies (69 Tcf), The Eastern Gulf Shelf and Slope (25 Tcf) and the Atlantic offshore Shelf and Slope (33 Tcf)—6 to 7 years of U.S. usage. Projections for future U.S. use are shown in Figure 11. Fig. 10. 77Energy Options for the Future Liquid Natural Gas (LNG) LNG will supp ly an estimated 15% of U.S. demand by 2025. Worldwide it is expected that LNG capacity will increase from 6 Tcf per year in 2003 to 35 Tcf in 2030. In 2003, there were 17 liquefaction terminals, 40 regasification terminals, 151 tankers with 55 under construction, and 12 exporting and 12 importing countries. Japan alone imports 1/2 of the world’s production. In the U.S., there are 4 terminals, 32 active proposals amounting to 15 Tcf if built, but none are under construction and there is a 7-year construction period. Numerous global LNG liquefaction projects are competing to meet the grow- ing demand. Qatar has massive reserves of 900 Tcf—more than the entire U.S. The higher gas prices are leading to the development of this very large, low-cost reserve with large-scale LN G and gas-to liquids facilities. As the LNG plant size has increased, improved technology has led to falling costs. Safety remains a concern as there have been serious accidents at facilities. Nevertheless, in its 40-year history, with 33,000 tanker voyages, there have been no major accidents. There is a dramatically changed perspective on infrastructure security in regard to the facilities since some of the facilities are close to major popula- tion centers such as Boston. Solutions to this concern include citing the facilities off-shore. Environment Technology is reducing the environmental impact of natural gas and oil supply. Fewer wells with a smaller footprint are needed to add the same level of reserves. There are lower drilling waste volumes, lower produced water volumes, and reduced air pollutants and greenhouse gas emis- sions. There is a greater protection of unique and sensitive environments. Methane Hydrates Methane hydrates consist of methane trapped in ice in which the methane density is comparable to liquid methane. They form when the temperature is cold enough at the given pressure e.g., in the tundra of the north or in the seabed at sufficient depth. For the longer term they may be a promising source of methane. The international Mallik Gas Hydrate project in the Mackenzie Delta of Canada has the first dedicated hydrates test wells. And depressur- ization has proved more effective than heating in extracting the methane. The estimated amount of such hydrates is huge and they are widely dispersed as shown in Figure 12. Stranded Gas A large amount of gas exists as so-called ‘‘stranded gas’’ i.e., isolate or small. Options for this gas are to reinject it, flare it, expand local uses in petrochemicals and basic industries such as alumi- num. If economic build a pipeline. Alternatively, convert it to liquids, LNG or electricity. Fig. 11. 78 Sheffield et al. Gas-fired Distributed Generation The advent of fuel cells and efficient engines including recipr ocating engines, small turbines, micro-turbines has enhanced the attractiveness of distributed generation that can defer new capacity, relieve transmission congestion, enhance reliability, improve efficiency, and promote the green image. Future In the natural gas-coal competition it is expected that coal will win for short-term dispatch and gas for long-term capacity share, because of an increasing desire for energy security. It is forecast that there will be a surge in coal capacity starting in 2010 in the U.S. There areproposals for 94 new plants with acapacity of 64 GWe. Worldwide there are proposals for thousands of GWe of new capacity, including 1400 GWe of coal technologies as shown in Figure 13. The estimated global investment required is 16.2 trillion dollars over the next three decades (IEA). Therefore it is expected that coal and natural gas will continue to be a major part of the U.S. and global energy mix for at least 50 years. Maintaining fuel diversity and flexibility is important for price stability and continued economic growth. LNG use will increase; meeting a 5 Tcf demand will be chal- lenging. Carbon sequestration at the scale envisioned is still a young technology. Near-zero emission technologies (SO x ,NO x ,CO 2 , mercury) will be necessary to secure a long-term future for coal. RUNNING OUT OF AND INTO OIL: ANALYZ- ING GLOBAL OIL DEPLETION AND TRANSI- TION THROUGH 2050: DAVID GREENE (ORNL) WITH JANET HOPSON AND JIA LI (U. TEN- NESSEE), HTTP://WWW-CTA.ORNL.GOV/ CTA/PUBLICATIONS/PUBLICA- TIONS_2003.HTML Introduction In regard to the question ‘‘are we running out of oil,’’ the pessimists aka ‘‘geologists’’ argue that geology rules, note that discovery lags production and that peaking not running out matters, and expect a peak by 2010 (conventional oil). The optimists aka ‘‘economists’’ argue that economics rules, expect that the rate of technological progress will exceed the rate of de pletion and that the market system will provide incentives to expand, and redefine resources. The questions to answer if one took the opti- mists’ viewpoint, but quantified it, are:  How much oil remains to be discovered?  How fast might technology increase recovery rates?  How much will reserves grow?  How fast will technology reduce the cost of unconventional sources?  How much unconventional oil is there and where is it? g pp ypp () Fig. 12. 79Energy Options for the Future In this approach, there are no Hubbert’s bell- shaped curves for production, and no geological constraints on production rates. However, costs do rise with depletion! The Resource/Production ratio limits expansion of production. It is analogous to a limit based on the life of cap ital, but there is no explicit calculation of capital investment. There are no environmental/social/political constraints on production—ANWAR, etc. are fair game. What is Oil?  Conventional oil is defined here as liquid hydrocarbons of light and med ium gravity and viscosity, in porous and permeable res- ervoirs, plus enhanced recovery and natural gas liquids (NGLs).  Unconventional oil is defined as deposits of density > water (heavy oil), viscosi- ties >10,000 cP (oil sands) and tight forma- tions (shale oil).  Liquid fuels can be made from coal or natu- ral gas (not considered here). Many estimates have been made of the amount of oil as illustrated in Figure 14. Conventional oil: The USGS (2000) estimates a mean ultimate recovery of conventional oil of 3345 billion barrels (bbls) with a low of 2454 bbls (95% probability) and high of 4443 bbls (5% probability), with cumulative produc- tion to date of 717 bbls. If there were no growth beyond the 2000 production level, production could continue for a 50 years at the mean level. With a 2% growth rate, peaking might occur around 2025. Unconventional oil: A comparable amount to remaining conventional oil is estimated to exist. A large part of it is shale oil in the U.S. and oil sands in Canada and Venezuela. In contrast, the pe ssimists estimate 2390 bbls of conventional oil and 300 bbls of unconventional oil. Modeling of Future Demand and Supply A computer model has been constructed to explore how oil production might evolve up to 2050 under the projections for oil demand in the en ergy scenarios of the IIASA/WEC (2002). The reference scenario A1 represents ‘‘business- as-usual". Oil consumption rises from about 3.9 Gtoe/a to about 8.8 Gtoe/a (1 tonne of oil equivalent (toe) = 7.3 bbls), much of the future growth is predicted to be in the developing world, see Figure 15. An ‘‘ecologically driven scenario" C1 was also considered. In this scenario, oil consumption peaks at about 5.3 Gtoe/a around 2020 and then declines towards today’s usage. Both optimistic and pessimistic assumptions about oil resources were used. A risk analysis was Fig. 13. 80 Sheffield et al. carried out by defining the key parameters below as random variables: Prices for the different types of oil were taken to be—conventional oil $20/bbl, heavy oil and bitumen $15/bbl or $25/bbl, and for shale oil $40/bbl or $90/bbl. Various assumptions were made about the growth rate of Middle East production, technological change, recovery/reserve expansion, speculative resources parameters, target R/P ratio, and supply and demand parameters such as short run demand elasticity, short run supply elasticity and the adjustment rate. Depending on the assumptions the trade-off between the production of conventional and uncon- ventional oil varied. So, if lower cost oil from Middle East production continued at a high level the demand for higher cost unconventional oil would be low—conventional oil production peaked earlier. If Middle East production was lower then oil prices were higher making unconventional oil more com- petitive—conventional oil production peaked later. In the reference case, with the mean USGS data, the Rest of the World (ROW) conventional oil g Fig. 14. Fig. 15. The average growth of oil use in the world is 1.9%/yr. 81Energy Options for the Future production peaks before 2030, with a mean year of 2023. In the pessimistic case, the mean year for peaking of ROW conventional oil is 2006. The total world conventional oil peaks between 2040 to after 2050. The year of peaking depends strongly on the rate of expansion of Middle East production and the resulting production of unconventional oil. Under the median assum ptions, unconventional oil must expand rapidly after 2020, see Figure 16. The depletion of all kinds of oil resources from the model is shown in Figure 17. Rapid expansion of heavy oil and oil sands is needed to allow world oil use to continue to grow. Large amou nts of shale oil might also be produced, mainly in the U.S., but the ability to achieve estimated production levels is more uncertain. US petroleum production and imports continue to increase during this period, but the fraction from U.S. production increases owing to the U.S. produc- tion of unc onventional oil. The Middle East could maintain a dominant position in its share of total production through 2050. Even in the low growth scenario, the ROW conventional oil would peak around 2017. Conclusions Present trends imply that ROW conventional oil will peak between 2010 and 2030. The rate of produc- tion is likely to decrease after 2020 in any case. The transition to unconventional oil may be rapid: 7–9%/ year growth. First supplies will be from Venezuela, Canada, and Russia. Vast quantities of shale oil (or liquids from coal and NG) may be needed before 2050. Caveats on the model are that it does not include geologic constraints on production rates; relies on target resource-to-production ratios; does not include environmental or political constraints; does not include coal- or gas-to liquids; the resource estimates of unconventional oil are weak; and scenario were used, not market equilibrium-based modeling of oil demand. THE POTENTIAL FOR ENERGY EFFICIENCY IN THE LONG RUN: MARILYN BROWN (ORNL) Introduction The key points are that:  A large economic potential for energy efficiency exists from deploying current technologies.  Technology advance will further expand this potential.  Energy efficiency can moderate the need for new energy supplies and: – reduce greenhouse gas emissions, – improve air quality, – strengthen electric reliability and energy security. g gy g Fig. 16. Under median assumptions, unconventional oil production must expand rapidly after 2020. 82 Sheffield et al. . is used for electricity pro- duction, 92% of 1.1 billion tons in the U.S. in 20 02 and a projected 94% of 1.6 billion tons in 20 25. g Fig. 6. 7 3Energy Options for the Future The bulk of the coal-fired. technology. In the U.S., 22 .8 Tcf was used in 20 02, 32% in industry and 24 % for electricity production. The DOE-EIA predicts a usage of 31.4 Tcf in 20 25 with 33% in industry and 27 % for electricity before 20 30, with a mean year of 20 23. In the pessimistic case, the mean year for peaking of ROW conventional oil is 20 06. The total world conventional oil peaks between 20 40 to after 20 50. The