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HomeMy WebLinkAbout11 Cook Inlet Energy Supply AlternativesCook Inlet Energy Supply Cook Inlet Energy Supply Alternatives StudyAlternatives StudyBy: Dunmire Consulting By: Dunmire Consulting For: Alaska Natural Gas Development AuthorityFor: Alaska Natural Gas Development AuthorityCompleted: March 30, 2006Completed: March 30, 2006Contract: 06Contract: 06--04020402 AgendaAgendaƒƒWhy CI Energy Alternatives StudyWhy CI Energy Alternatives StudyƒƒStudy ResultsStudy ResultsƒƒStudy ConclusionsStudy Conclusions Dunmire Consulting TeamDunmire Consulting TeamƒƒCarolyn DunmireCarolyn Dunmireƒƒ20 years energy industry experience20 years energy industry experienceƒƒLake and Peninsula Borough StudyLake and Peninsula Borough StudyƒƒIntegral North AmericaIntegral North AmericaƒƒCharlie Sassara and Shawn O’FallonCharlie Sassara and Shawn O’FallonƒƒSurvey and stakeholder analysisSurvey and stakeholder analysisƒƒCronshaw ConsultingCronshaw ConsultingƒƒMark CronshawMark CronshawƒƒPipeline alternatives and financial analysisPipeline alternatives and financial analysis Cook Inlet Energy Alternatives Cook Inlet Energy Alternatives Study ObjectivesStudy ObjectivesƒƒIdentify and quantify major energy Identify and quantify major energy sources in Cook Inletsources in Cook InletƒƒIdentify energy alternativesIdentify energy alternativesƒƒEstimate onEstimate on--line dateline dateƒƒQuantify future costsQuantify future costsƒƒCompare alternativesCompare alternatives Supply AlternativesSupply AlternativesIncrease gas supply to Cook InletIncrease gas supply to Cook InletImplement coal gasification such as Agrium’s Blue Sky Project.Coal GasificationDevelop and deliver gas from Copper River, Bristol Bay orNenana Basins.Other Alaska GasImport Liquefied Natural Gas from outside to existing Kenai LNG facility. Import LNGDevelop Coal Bed Methane in Susitna Basin.CBMDeliver North Slope gas to Cook Inlet with methane carrier for liquids line.Enriched Gas LineDeliver North Slope gas to Cook Inlet with Bullet Line.Bullet LineDeliver North Slope gas to Cook Inlet with Spur Line from a main gas line.Spur LineEnhance existing gas production and develop new production in Cook Inlet.Increase ProductionDescriptionAlternative Demand AlternativesDemand AlternativesReduce consumption or substitute for natural gasReduce consumption or substitute for natural gasReplace gas-fired electric generation with coal-fired power (Emma Creek)Coal PowerReplace gas-fired electric generation with small-scale hydro power.Hydro PowerReplace gas-fired electric generation with wind power (Fire Island Project).Wind PowerReplace gas-fired electric generation with small-scale nuclear power.Nuclear PowerReplace gas-fired electric generation with tidal power (Knik Arm Project)Tidal PowerImplement end-use gas conservation programs (weatherization, efficiency)Gas ConservationImplement end-use conservation programs (appliance & light bulb upgrade)Electric ConservationImplement small-scale electric generation at point-of-use to displace central gas-fired electric generation.Distributed Generation Replace gas-fired electric generation with geothermal generation (Chena HS)Geothermal Power Evaluation ProcessEvaluation ProcessPotential impacts of the alternative on Alaskan citizens such asincreased employment, economic activity, and permanent fund. Highest ranked alternatives have potential for positive impacts.Alaskan CitizensUnmitigated environmental impacts associated with the alternative. Highest ranked alternatives have fewest impacts.Environmental Uncertainty associated with level of energy service, start-up date, investment, or operation for the alternative. Highest ranked alternatives have lowest levels of uncertainty.UncertaintyEffect that the alternative will have on residential monthly gasand electric bills. Highest ranked alternatives can lower bills.%Monthly Bill Total capital investment needed by an alternative to deliver energy service. Top alternatives need lowest investment.$InvestmentYears from present that the alternative starts to deliver energyservice. Highest ranked alternatives start immediately.5 yearsStart-up DateWhat must happen before the alternative can produce energy. Highest ranked alternatives have lowest hurdle to clear.Prerequisites for SuccessAmount of energy service provided by the alternative reported in billon cubic feet of natural gas per year. Highest ranked alternatives provide level of energy service equivalent or greater than Cook Inlet’s gas demand.Energy ServiceCharacteristicsIconEvaluation Criterion Energy ServiceEnergy Service200 kW to 100 MW (Chena Hot Springs or Mt. Spurr)0.25 -5.0Geothermal Power0.5-20 MW tidal power (17 MW potential in Knik Arm)0.25-1.0Tidal Power10 MW of distributed generation (<1 MW per project).0.25-0.50Distributed Generation10-50 MW of small-scale run-of-river hydro projects.0.5-2.5Hydro Power10-50 MW of nuclear generation at Galena.0.5-2.5Nuclear PowerReduce expected growth in electric demand.0.5-2.5Electric Conservation50-100 MW of wind generation at Fire Island. 2.5-5Wind PowerReduce expected growth in home and business gas demand.2.5-5Gas Conservation200 mega-watts (MW) of electric generation.10-15Coal PowerImported LNG to be used to meet peak winter demand. 40-120Import LNG40 Bcf as feedstock. 25 Bcf for 350 MW electric generation.40-65Coal GasificationBristol Bay may hold 7 Tcf of gas. Nenana Basin 3-10 Tcf.50-100Other Alaska GasDevelop 1 Tcf of CBM.100-200CBMDevelop 1.4 trillion cubic feet (Tcf) of gas in Cook Inlet. 100-200Increase ProductionDepends on pipeline capacity (400-600 million cubic feet/day)145-220Spur LinePipeline capacity 1 Bcf per day.360Bullet LineAdditional 16.5 million barrels of liquefied petroleum gas LPG360Enriched Gas LineEnergy ServiceBcf/yearAlternativeRank Prerequisites for SuccessPrerequisites for SuccessGeothermal resource located near load or grid-intertie.Geothermal PowerSuccessful implementation of commercial-scale projects.Tidal PowerSuccessful implementation of small scale nuclear technology and licensing.Nuclear PowerAccess to imported LNG affordable to Cook Inlet consumers.Import LNGDiscover and implement commercial gas production in other Basins.Other Alaska GasDiscover and implement commercial production in Susitna Basin.CBMConstruction of main line from North Slope to Spur take-off point.Spur LineIncreased industrial gas demand to 0.5 Bcf per day in Cook Inlet to support project.Enriched Gas LineSuccessful demonstration of gasification technology with Alaskancoals. Coal GasificationIncreased industrial gas demand to 0.5 Bcf per day in Cook Inlet to support project.Bullet LineSuccessful demonstration of clean coal technology using Alaskan coalCoal PowerSuccessful large scale wind power project in Alaska.Wind PowerAccess to sufficient electric load and infrastructure.Hydro PowerAffordable & reliable fuel cell projects using non-gas hydrogen source.Distributed GenerationIncrease rates. Implement efficiency and education programs.Electric ConservationHigher contract prices for Cook Inlet gas to promote exploration.Increase ProductionIncrease residential and commercial gas rates to promote efficiency.Gas ConservationPrerequisitesAlternativeRank StartStart--up Dateup Date2009 – Chena Hot Springs demonstration operating, Mt. Spurr evaluation.Geothermal2015 – Demonstration project under construction.Tidal Power2012 - Proposed start-up date for Galena project.Nuclear Power2008 - Healy Clean Coal Plant restart possible in 18 months. 2014 - Emma Creek project operational.Coal Power2012-2020 Long lead time to complete licensing, raise capital.Hydro Power 2012 – Bristol Bay leases sold in 2005. Other Alaska Gas2012 – Depends on completion of main line to Spur take-off. Spur Line2012-2016Bullet Line2012Enriched Gas Line6–10years2011 – Reported start-up date for Agrium Blue Sky project.Coal Gasification2011– Depends on retrofit starting in 2009.Import LNG2011 - Preliminary permitting and feasibility completed for Fire Island.Wind Power2010 - Demonstration projects have been successful.Distributed Generation 2008 - Leasing and community standards complete.CBM2007 – Implement conservation programs.Electric Conservation2–5 years2006 – Presently occurring because of higher contract prices.Increase Production2006 – Presently occurring because of rate increases.Gas Conservation0-1 yearStart-up DateAlternativeRank Capital InvestmentCapital Investment$10 - $100 million ($2 million per MW)Tidal Power$25 - $100 million ($10 million per MW for low temp.)Geothermal Power$1- $5 billionOther Alaska Gas$1- $5 billionCBM$4 billion with 2 LPG tankersEnriched Gas Line$3 - $4 billionBullet Line$500 millionIncrease Production$400 - $500 million Coal Power$300 - $500 million $700 - $900 million if main line follows Highway Route.Spur Line$$$>500million$100 - $500 millionCoal Gasification$100 - $200 millionWind Power$75 - $150 millionNuclear Power$50 - $100 millionElectric Conservation$70 - $200 millionImport LNG$25 - $100 millionGas Conservation$$100 – 500million$25 - $50 million ($5 million per MW)Distributed Generation$10 - $100 million ($1 to $2 million per MW)Hydro Power$<$100millionLevel of Investment AlternativeRank Monthly BillMonthly Bill6 - 9 cents per kWh.Tidal Power5-7 cents per kWh (for low temperature projects).Geothermal PowerDepends on world market prices of LNG, transport, & operating costs.Import LNGHigher gas prices needed to encourage investment in exploration.Other Alaska GasHigher gas prices needed to encourage investment in developmentCBMHigher gas prices needed to encourage investment in development.Increase Production+50- 100%Cook Inlet consumers could pay substantial share of pipeline cost.Bullet Line10-20 cents per kWh depending on value of by-products (hydrogen)Nuclear PowerGas transport costs subsidized by income from LPG exports.Enriched Gas LineProduction costs uncertain with Alaskan coals. Power as by-product.Coal Gasification5 -15 cents per kWh for fuel cells. Lower costs if heat can be used. Distributed PowerGas rates to Cook Inlet would be bounded by Lower 48 prices.Spur Line7-15 cents per kWh.Hydro Power7-12 cents per kWh.Wind Power5-10 cents per kilo-watt hour (kWh).Coal Power+0-50%Can reduce total monthly bill.Electric ConservationCan reduce total monthly bill.Gas ConservationSavingsProduction Costs and IssuesAlternativeRank UncertaintyUncertaintyAvailability, cost, and level of energy service in Alaskan waters.Tidal PowerLow temp system operation, lifetime of geothermal resource.Geothermal PowerAmount of economically recoverable gas in Bristol Bay, Copper River, and Nenana Basins.Other Alaska GasAmount of economically recoverable gas in Cook Inlet.CBMAmount of economically recoverable gas in Cook Inlet.Increase ProductionAvailability and cost of imported LNG.Import LNGReliability and affordability of small-scale nuclear reactor.Nuclear PowerEfficiency of coal gasification process with Alaskan coals. Transport and cost of coal. Value of gasification products.Coal GasificationRoute, completion, cost of main line carrying North Slope gasSpur LineOperating cost, availability, and efficiency of fuel cells.Distributed PowerCost over-runs and delays are possible. Dense phase technology.Enriched Gas LineCost over-runs and delays are possible. Bullet LineAvailability and level of energy service.Wind PowerOperation of clean coal technology with Alaska coals.Coal PowerCost and availability of electric power.Hydro PowerPersistence, level, and cost-effectiveness of energy savings.Electric ConservationPersistence, level, and cost-effectiveness of energy savings.Gas ConservationTypes of UncertaintiesAlternativeRank Unmitigated Environmental ImpactsUnmitigated Environmental ImpactsWater quality and water consumption (cooling water source).Geothermal PowerProduced water disposal. Industrial landscape. Noise.CBMAsh disposal, cooling water requirements, increased greenhouse gas emissions. Impacts from coal mining.Coal PowerAsh disposal. Facility emissions. Impacts from coal mining.Coal GasificationLoss of undeveloped land. Wildlife. Risk of spills/accidents.Other Alaska GasLand use. View shed. Wildlife. Waste water into Cook Inlet.Risk of spills/accidents. Remediation of offshore platforms.Increase ProductionAquatic impacts. Naval traffic constraints.Tidal PowerAquatic and surface/site impacts.Hydro PowerRisk of accident. Long term land use. Nuclear waste.Nuclear PowerRisk of leaks/spills. Facility emissions, noise, odor.Import LNGNoise. View shed impacts.Wind PowerRisk of accident. Increased access provided by ROW.Enriched Gas LineRisk of accident. Increased access provided by ROW.Bullet LineRisk of accident. Increased access and travel opportunities provided by right-of-way (ROW) (positive/negative impact)Spur LineNet positive. No transmission impacts.Distributed PowerNet positive environmental impacts.Electric ConservationNet positive environmental impacts. More efficient fuel use.Gas ConservationPotential Unmitigated ImpactsAlternativeRank Positive or negative?Positive or negative? Alaskan CitizensAlaskan CitizensRenewable energy resource/energy security. Imported technology.Geothermal PowerRenewable energy resource/energy security. Imported technology.Tidal PowerImported fuel. Large negative impact on economy.Import LNGImported generation technology (negative impact).Nuclear PowerRenewable energy resource/energy security. Imported technology.Wind PowerMoney saved on energy bills stays in the economy. Imported technology.Electric ConservationMoney saved on energy bills stays in the economy.Gas ConservationEnergy security with indigenous renewable energy resources.Hydro PowerNew job opportunities/industries in remote locations.Imported generation technology (negative impact).Distributed PowerNew jobs. Energy security by using indigenous energy resource. Coal PowerNew jobs. Retention of industrial operations and jobs.Coal GasificationNew jobs. Increased State revenues.Other Alaska GasNew jobs. Increased State revenues.CBMNew jobs. Increased State revenues.Increase ProductionNew jobs, increased State revenues.Bullet LineNew jobs, increased State revenues.Enriched Gas LineNew jobs, increased State revenues from North Slope gas development. Spur LinePotential ImpactsAlternativeRank Top AlternativesTop AlternativesƒƒNear termNear term: : Gas ConservationGas Conservationand and Increased ProductionIncreased Productionin Cook Inlet would in Cook Inlet would prolong gas supplies and buy time to select prolong gas supplies and buy time to select long term option and raise funds.long term option and raise funds.ƒƒIntermediate termIntermediate term: : Coal GasificationCoal Gasificationcould could keep industrial facilities operating and provide keep industrial facilities operating and provide electric power. Depends on process feasibility electric power. Depends on process feasibility with Alaskan coals.with Alaskan coals. Top AlternativesTop AlternativesƒƒLong Term: Enriched Gas LineLong Term: Enriched Gas Linemay be may be better investment than Bullet Line. better investment than Bullet Line. ƒƒCoalCoal, , Wind, and Hydro Wind, and Hydro deserve equal deserve equal consideration.consideration.ƒƒGeothermal and TidalGeothermal and Tidalmerit further merit further research.research.ƒƒSpur Line tops the list if pipeline carrying Spur Line tops the list if pipeline carrying North Slope gas is built through AlaskaNorth Slope gas is built through Alaska.. Cook Inlet’s Energy Future?Cook Inlet’s Energy Future? Contact InformationContact InformationƒƒCook Inlet Energy Supply Alternatives Cook Inlet Energy Supply Alternatives Study available at: Study available at: http://www.angda.state.ak.us/http://www.angda.state.ak.us/ƒƒDunmire ConsultingDunmire ConsultingCarolyn DunmireCarolyn Dunmiredunmire@fone.netdunmire@fone.net