Energy Research at DOE Was It Worth It? Energy Efficiency and Fossil Energy Research 1978 to 2000 (2001) / Chapter Skim
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Appendix F: Case Studies for the Fossil Energy Program
Appendix F: Case Studies for the Fossil Energy Program
Pages 162-214
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From page 162... ...
The oil and gas production category comprises the following technologies: 162 Enhanced gas production from coal-bed methane, Well drilling, completion, and stimulation, Downstream fundamentals, Enhanced gas production from Eastern gas shales, Enhanced oil recovery, Field demonstrations of extraction technologies, Fuel production from oil shale, Seismic technology, and Enhanced gas production from Western gas sands. The case studies are treated in this appendix in the same order they are listed here.
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From page 163... ...
Perhaps equally important is DOE's role in supporting coal preparation technology development in academia, which helps to train technical people for the industry. Benefits and Costs Since coal cleaning and beneficiation add to the costs of pulverized coal supplies, there evidently is no current economic benefit for the application of the advanced technologies developed by DOE.
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From page 164... ...
While the spin-offs from separation technologies have found commercial application in the other industries, they do not warrant according this area a high priority. DIRECT COAL LIQUEFACTION Program Description and History The DOE direct liquefaction program in the 1970s and early 1980s consisted primarily of large-scale demonstration projects with broad industry participation in response to the energy crisis perceived at that time.
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From page 165... ...
2001b. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Direct Coal Liquefaction.
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From page 166... ...
The impact of high petroleum prices on worldwide exploration efforts and the positive impact of new technology on finding and producing crude oil were not fully accounted for. Another reason for the premature demonstration programs was the lack of a suitable ongoing long-term R&D program when the energy crisis began.
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From page 167... ...
, with much of the work being conducted on commercial products. PFBC technology development became focused on improving its energy efficiency and environmental performance and on reducing its capital cost to allow it to compete against the use of coal in IGCC systems.
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From page 168... ...
. Therefore, realized economic benefits can be assigned to TABLE F-4 Benefits Matrix for the Fluidized-bed Combustion (FBC)
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From page 169... ...
The committee believes that especially when using lowrank coals, AFBC systems provide economic and environmental benefits as options to pulverized-coal boilers with flue gas desulfurization systems, the other technologies that can service the specialty industrial market. When using lowcost, low-valued fuels, AFBC systems can show economic advantages over the next-best alternative, small combinedcycle or simple-cycle gas turbine plants.
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From page 170... ...
2000b. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Gas-to-Liquids Technology, December 4.
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From page 171... ...
CThe program has been well supported by industry. It has averaged about 50 percent cost sharing with industry, reflecting 20 percent for basic research, a minimum of 50 percent for pilot and demonstration projects, and about 65 percent for some large-scale projects.
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From page 172... ...
IMPROVED INDIRECT LIQUEFACTION Program Description and History The primary goal of the improved indirect liquefaction program is to produce clean hydrocarbon fuels and/or oxygenated compounds such as methanol from coal. This is part of the DOE Clean Fuels Program conducted jointly by the Office of Fossil Energy and the Office of Energy Efficiency and Renewable Energy.
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From page 173... ...
Realized Benefits/Costs Options Benefits/Costs Knowledge Benefits/Costs Economic benefits/costs Environmental No benefits benefits/costs Security No benefits benefits/costs DOE RD&D costs: $320 millions Industry cost share: $164 millions No realized economic benefits Improved state-of-the-art technology could Enhanced knowledge of novel catalysts be deployed when economics are and reactor designs favorable and the price of oil increases Advances in gas separations, Fischer sufficiently~ Tropsch synthesis, carbon sequestration Plant integration to coproduce fuels and technolo~v and reductions in process electricity improves economics Liquid Phase Methanol Process demon s trate de If CO2 is sequestered, total fuel cycle emissions are less than for petroleum, and there are potential significant carbon savings compared with other conventional coal and gas options f Can produce gasoline and diesel fuels that exceed proposed EPA tier 2 sulfur specifications Fuels from coal would displace oil use None O , contingencies Advances relating to petroleum hydroprocessing Development of knowledge base to produce clean fuels from coal in an environmentally acceptable manner aUnless otherwise noted, all dollar estimates are given in constant 1999 dollars.
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From page 174... ...
The IGCC program has not only represented a long-term investment in coal-fueled energy options, but represents an important option in DOE's Vision 21 program for the development of advanced power generation systems for commercial applications beyond 2015. Basically, the IGCC technology integrates the advances in highpressure gasifiers with a combination of advanced gas turbine designs and conventional steam turbines to produce electricity at thermal efficiencies at least 10 percent greater than conventional steam power plants.
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From page 175... ...
and, possibly, fuel cell electricity production in the long term. DOE projections, the economies may begin to favor IGCC in the next 5 years as a result of added costs for emission controls on conventional pulverized coal-fired plants, rising natural gas costs, and assumed improvements in IGCC performance.
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From page 176... ...
None Offers opportunity for continuing improvement in thermal efficiency and environmental performance of coalbased power plants far into the future Offers the potential for combined power production and chemical processing using synthesis gas Provided critical knowledge for improved, cost-effective emission reduction technologies, including hot gas cleanup None aUnless otherwise noted, all dollar estimates are given in constant 1999 dollars through 2000. ball of FE's benefit estimates are based on a comparison of an IGCC plant with a state-of-the-art 1990s pulverized coal plant.
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From page 177... ...
The perceived goals of the DOE program included the following: (1) accelerate R&D to improve power-plant-related emission control technology options for SO2 and NOX such that the emission goals of the CAA would be met with high collection efficiency, reduced costs, increased reliability, and reduced space requirements for all plant designs and fuel alternatives; (2)
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From page 178... ...
Exclusive of PM emission control RD&D, the total investment in SO2 and NOX emission reduction technology for large coal-fired boilers amounts to more than $525 million since the late 1970s. These costs of advancing a range of retrofit technology options for use in extending the life of the current fleet of coal-fired power plants were underwritten mainly by the public through government funding and the electricity ratepayer.
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From page 179... ...
The demonstration of a variety of second-generation emission control technologies for SO2 and NOX probably accelerated their commercial viability by several years. The investment probably has given the electric power generation industry sufficient options to meet the current requirements of the CAA in a timely manner.
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From page 180... ...
Since the completion of the CCT program, FE has continued to fund advanced concepts for emission control technologies applicable to the current fleet of conventional power plants. Ongoing RD&D includes work on the superclean plant concept incorporating very-high-efficiency emission controls and on ways to reduce mercury emissions.
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From page 181... ...
. The DOE emission control program has focused on four areas sampling and measurement development for mercury compounds in stack effluents; mercury sorbent characterization; coal cleaning; and mercury emission control technology, including stabilization in ash.
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From page 182... ...
The DOE/industry program to find a practical means for the removal of mercury from power plant effluents anticipated such regulation: It provided conceptual options for mercury control, such as sorbent injection into flue gas, but will require further development to reduce to practice. Benefits and Costs The economic significance of this program lies principally in the avoidance of any costs that might have been imposed for added emission control technology on existing plants to reduce HAPs emissions (Table F-12~.
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From page 183... ...
The main goal of the DOE program is to ensure that the use of coal for energy production remains viable and is based on the latest information on solid waste chemistry and the technologies for disposal of coal-related solid waste. The DOE program was initiated in 1979.
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From page 184... ...
TABLE F-13 Benefits Matrix for the Waste Management/Utilization Technologies Programa Realized Benefits/Costs Options Benefits/Costs Knowledge Benefits/Costs Economic DOE R&D costs: $77 million benefits/costs Industry costs: Approximately $100 millions Avoided sequestration costs associated with RCRA nonhazardous determination: estimated at $3 billions Environmental None benefits/costs Security None benefits/costs None Avoided costs of diversion of land for storage of hazardous material None Development of materials utilized from FGD sludge and ash Characterization of waste material in storage and in utilized material Design manual for clean coal by-product management and landfill design for combustion ash None aUnless otherwise noted, all dollar estimates are given in constant 1999 dollars. bWhile FE provides no comprehensive estimate of industry expenditures, industry (including EPRI)
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From page 185... ...
2000. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Turbine Systems Technology Area, November 22.
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From page 186... ...
to be used in these gas turbines when they are integrated with gasification/gas cleanup subsystems into an IGCC concept. This integrated system will be the most efficient and environmentally acceptable way to use coal for power generation and will be an important benefit for the environment and for the nation as a whole if it is to rely on coal as a major energy source.
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From page 187... ...
If this is the case, it is not clear how FE expects ATS systems installed by 2005 to generate $5.7 billion in economic benefits. There could be spin-off concepts, which would be beneficial for the current class of gas turbine combined cycles; however, this is not the goal of the ATS program, and it is extremely difficult to give economic credit to DOE rather than industry for these spin-off benefits.
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From page 188... ...
The attractiveness of fuel cells for power generation has been the claim of high efficiencies with reduced environmental impact. However, as with gas turbine combined cycles, these claimed efficiencies can only be achieved in combination with other power generation systems, i.e., combined-cycle operation.
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From page 189... ...
Lessons Learned Fuel cells, as a technology to generate power directly from fuel with no moving parts, have an appeal, and for some Realized Benefits/Costs Options Benefits/Costs Knowledge Benefits/Costs DOE R&D costs: $1167 million through benefits/costs 2000 for three fuel cell technologies (PAFC, MCFC, SOFC) The early low-temperature fuel cells, which were subsidized, produced no economic benefit Environmental None benefits/costs Security benefits/costs None Potential market by 2003; 400-MW per year manufacturing plant expected by 2005 Could be used as back-up and stand-alone power sources Fuel cells provide clean power and emit None 60 percent less global warming gases than combustion engines Potentially higher efficiency and lower NOX emissions than small single-cycle gas turbines None Development of compact fuel reformers, electrolyzers, critical materials and processes, and multilayer ceramic technology Distributed generation could provide improved grid stability aUnless otherwise noted, all dollar estimates are given in constant 1999 dollars.
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From page 190... ...
The promised efficiency of fuel cells is a moving target. Gas turbine combined cycles have become the accepted power generation technology for the utility industry, and their efficiencies are projected under the DOE ATS program to reach 60 percent.
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From page 191... ...
The R&D did, however, result in some knowledge benefits, among them the following: · Provided a database for technologies that require the injection of solids into pressurized chambers, · Contributed to combustor development for subsequent clean coal technology projects, · Contributed insights on collecting current from multiple power sources that may be applicable to fuel cells, · Provided a database for pressurized high-temperature gas heaters, · Provided MHD generator information that may find applicability in defense programs (missile defense) and NASA programs (wind tunnels, assisted launch vehicles)
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From page 192... ...
At the same time, studies indicated that even if developed, the MHD power generation system would not be competitive on an efficiency or cost basis with alternatives that were already in use by the utility industry. The data suggest that this information led to DOE's decision not to request funding after 1981, except for 1985.
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From page 193... ...
2001c. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Coal-bed Methane Program, January 10.
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From page 194... ...
"These included the test of use of vertical wells in deep, unminable coals, testing the use of vertical wells in multiple coalbeds, and combining in-mine, multiple horizontal boreholes and CBM-fueled gas turbines for on-site power generation. A major breakthrough occurred when DOE demonstrated that CBM could be efficiently produced using vertical wells, as opposed to only using in-mine horizontal boreholes.
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From page 195... ...
2000m. MULE letter response to questions on the Dnlling, Completion, arid Stimulation Program from the Committee on Benefits of DOE R&D on Energy Efficiency and Fossil Energy, December 4.
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From page 196... ...
2000m. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Drilling, Completion, and Stimulation Program, December 4
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From page 197... ...
Supporting Research DOE supports industry projects in such areas as horizontal drilling, coil tubing and slimhole drilling, and underbalanced drilling. Acivancecl Completion and Stimulation Systems · Real-time downhole stimulation monitoring and control system.
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From page 198... ...
production of oil and gas benefits/costs In addition to the projects already completed, there are many still in the pipeline that will provide significant future economic benefitse Makes technologies immediately available to the entire industry, including small and medium-size firms that have limited R&D budgets Allows drilling for deeper and/or unconventional gas Potential to enhance the net value of gas resources Permits accelerated and incremental production Requires fewer wells to be drilled and thus reduces volume of wastes produced Allows drilling in environmentally sensitive areas Potentially large increase in domestic U.S. oil and gas production and reserves R&D on the use of titanium pipe in extended-reach drilling, expandable metal packers, matrix and fracture acidizing, in situ rock stress measurements, geomechanics of sand control, geomechanics of horizontal completions, polycrystalline compact diamond drill bit technology, underbalanced drilling technology, mud pulse telemetry, high-temperature measurements while drilling, and other areasf R&D on the utilization of drill cuttings for wetland restoration R&D on slimhole technologies and underbalanced drillingh DOE involvement ensures the technology is widely available to increase oil and gas production and reserves aUnless otherwise noted, all dollar estimates are given in constant 1999 dollars through 2000.
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From page 199... ...
2000n. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Downstream Fundamentals Area Research, December 6.
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From page 200... ...
EASTERN GAS SHALES PROGRAM Program Description and History Naturally fractured shales containing natural gas within fractures have long been known in the Appalachian, Illinois, Realized Benefits/Costs Options Benefits/Costs Knowledge Benefits/Costs Economic DOE R&D costs: $49 million benefits/costs Industry costs: $6 millions Significant value, but so far back in the scientific chain that it is hard to quantifyC None Environmental None None None benefits/costs Security None None None benefits/costs Analytical techniques and thermodynamic data for petroleum, coal liquids, shale oil, and tar sands Development of fundamental thermodynamic data used to design and operate refining and petrochemical processes Research on process fundamentals and on fuels chemistrye Development of an extensive and unique database containing the analysis of thousands of domestic and foreign crudes aUnless otherwise noted, all dollar estimates are given in constant 1999 dollars through 2000. bFor most of the period 1978-2000, industry's cost share was zero or very small; however, since 1995 it has been about 50 percent.
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From page 201... ...
The increased gas production, proved reserves, and pace of drilling in gas shales reflect the contribution of industry and GRI (especially in the Michigan Basin) , but the strong presence of the DOE program seems particularly significant to the increased production that is taking place.
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From page 202... ...
The direct benefits come from the increased production from the shale formations and were derived from the estimated volumes of incremental shale gas production DOE credits to the program. Consideration must be given to production that would have occurred in the absence of the program, production induced by the existence of Section 29 tax credits under the Natural Gas Policy Act, and production resulting from the R&D activities of GRI.
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From page 203... ...
The program is designed to involve academia, government research organizations, and industry with programs in chemical methods, gas flooding, microbial methods, heavy oil recovery, novel methods, and reservoir simulation. Funcling and Participation The EOR demonstration programs managed by DOE from FY 1978 through FY 1989 expended of approximately $110 million, with industry cost sharing amounting to about 203 $200 million.
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From page 204... ...
Enhanced oil recovery techniques that worked well in the laboratory were difficult to deploy effectively in complex reservoirs. This led to programs in field demonstration that would substantially enlarge the ability to characterize complex reservoirs and the important finding that as much as half of the unrecovered oil in complex reservoirs could be recovered without expensive EOR techniques, if the reservoir and its fluid behavior could be properly understood.
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From page 205... ...
, DOE calculates that the Field Demonstration program will result in 1291 million barrels of incremental oil production and 1736 Bcf of incremental gas production from 1996 to 2005. It also assumes that net revenues will amount to 17.5 percent of sales revenue, that 4 to 6 percent of production will come from federal lands; and that state severance taxes will average 4.55 percent.
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From page 206... ...
CFE estimates using TORIS (Total Oil Recovery Information System) that the Field Demonstration program will result in 1291 million barrels of incremental oil production and 1736 Bcf of incremental gas production from 1996 to 2005.
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From page 207... ...
2000r. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Oil Shale Technology, December 12.
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From page 208... ...
The ultimate use of knowledge gained or options identified will depend on international events and domestic energy and economic developments and on our ability to find ways to deal with the environmental problems associated with oil shale development. While most of the program attention has been on using shale oil as a refinery feedstock to alleviate U.S.
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From page 209... ...
While FE anticipates that use of oil shale for refinery feedstock is not likely prior to 2030, the program established the potential of shale oil to replace crude oil. eIssues here relate to how to mine and crush the mined shale, and FE has supported waterjet-assisted mining projects, blasting patterns for mining, and ways to control crushing of shale.
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From page 210... ...
The incremental benefits of the DOE programs were estimated by subtracting the industry-only benefits from the DOE + industry benefits. Third, estimated benefits due to DOE R&D were estimated for oil production, natural gas production, and dollars saved owing to increased efficiency.
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From page 211... ...
In another calculation of benefit/cost ratios, DOE credited the Seismic Technology program with 3 percent of total domestic oil production and 1 percent of total domestic natural gas production. With an average net revenue at 17.5 percent of sales revenues, a realized economic benefit of $4145 million (1999 dollars)
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From page 212... ...
LIFE estimates $1626 million in increased net revenues and cost savings to gas producers in the Rockies; inclusion of the industry cost share in the program would reduce the benefits credited to DOE. FE further estimates $591 million from royalties on federal lands and from increased state severance taxes due to displacement of imports, and it credits 70 percent of the increased gas production in the Rocky Mountain gas basins since 1987 to WGSP.
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From page 213... ...
2000j. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Stationary Fuel Cells Program, December 6.
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From page 214... ...
2000. MULE Letter response to questions from the Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy: Reservoir Efficiency Processes, Enhanced Oil Recovery, Production Research, December 4.
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