Canada-wide Operating Practices for Hydraulic Fracturing Established

In an ongoing attempt to address concerns regarding hydraulic fracturing, the Canadian Association of Petroleum Producers last week identified six operating practices for its natural gas member companies. The operating practices complement regulatory requirements and support the Guiding Principles for Hydraulic Fracturing that the Association published in September 2011.

CAPP is encouraging its members to:

1. disclose fracturing fluid chemical additives
2. assess and manage the environmental and health risks associated with fracturing fluids
3. conduct ground water testing
4. monitor and report on water source and reuse practices
5. ensure wellbore design and construction integrity and
6. manage the risks associated with moving, handling and storing fracturing fluids.

CAPP’s member companies produce more than 90 per cent of Canada’s natural gas and crude oil. Although fracturing is not new, recent focus on the activity has prompted the industry to establish consistent practices across the country. These operating practices, and the subsequent results of implementation, which will be reported to the public, are designed to ensure responsible resource development and protection of the country’s water resources.

C-Suite Stars

Awards were handed out at the annual Alberta Oil C-Suite Star Awards last week. Here are the winners.

Top CEO –Steve Snyder, TransAlta Corp
Top CFO – Art MacNichol, Progress Energy Resources Corp
Top Chief Legal Officer – David Robottom, Enbridge Inc
Top Information Officer – Allan Danroth, Capital Power Corp
Top Community/Government Relations Executive – Robert Spitzer, Apache Canada Ltd
Top Human Resources Executive – Rachel Moore, Savanna Energy Services Corp
Top Risk Management Executive – Neil Smith, Crescent Point Energy Corp.

A Good Year for Oil, Not So Good for Gas

Oil and gas producers in Western Canada are more confident than in 2009, according to PwC’s Canadian Energy Annual Survey, released May 17, 2011.

The growing optimism is the result of a 26 per cent increase in revenue, a 15 per cent increase in cash flow, and a 113 per cent increase in profits. And most of this is due to increasing oil prices, up 27.9 percent to $79.98 US from $62.55 US in 2009. The rebound in oil prices allowed industry to increase capital spending almost 44 per cent to $56 billion US.

The upturn also attracted foreign companies who invested more than $17 billion in Canadian oil and gas assets during 2010.

Technologies such as horizontal drilling and multi-stage fracturing also played a role in helping oil producers access resources that a few years ago would have been uneconomical to produce. The same technologies were too successful on the natural gas side, leading to a supply glut and depressed prices for the second consecutive year. Some natural gas producers have reduced gas-directed drilling; some are shutting in gas until the market recovers.

Development of unconventional resources has raised environmental concerns, resulting again in a call for a national energy strategy.

Where is My Electricity Coming From at This Hour?

If you live in Ontario and want to know where your electricity is coming from at this hour, the Canadian Nuclear Society hosts a website called Where is My Electricity Coming From at this Hour?

All you have to do is go to the website and it not only tells you from whence your electricity comes, but also how many tonnes of CO₂ have been avoided by not burning coal, the number of homes being supplied by each electricity source, from whence your electricity came in past 48 hours and the capabilities and output of pretty much every generating unit in Ontario, be it nuclear, coal, natural gas, hydro, wind or other. The source for the generation data is Ontario’s Independent Electricity System Operator.

We’re pretty excited about this service, not only because of the transparency it provides, but also of its false-impression-busting capabilities. For example, the amount of CO₂ Ontario’s coal-fired generating plants emit gets a lot of coverage, and from this we get the impression that coal is one of the major sources of Ontario’s electricity, but in consulting Where is My Electricity Coming From at this Hour, we find that currently only four per cent is coming from coal. Forty-nine per cent is coming from nuclear power, 23 is coming from hydro, 18 from natural gas, five from wind and one from other, chiefly wood biomass.

And 16 hours ago, 4.6 per cent was coming from coal, and that was about as high as it got in the last 48 hours.

In fact, the website points out that 13,210 tonnes of CO2 that would have been emitted in the past hour if all the electricity in Ontario was coal-fired, have been avoided due to the use of other energy sources.

We wonder how many Canadians coast to coast know and understand where their electricity comes from, not only by the hour, but in general. Knowing where our electricity comes from may be useful in deciding how much we’re going to use and how we’re going to use it.

All in the Family

Natural gas. Propane. Butane.

Three common fuels with common uses. There are natural gas barbecues, propane powered cars, natural gas and propane furnaces, propane and butane stoves and torches, but, there aren’t any butane cars or natural gas lighters.

What makes them interchangeable is they are all closely related. Very closely. In fact, propane and butane are components of natural gas, accounting for one to five per cent. The other components are methane (75 to 95 per cent), ethane (five to 15 per cent), pentane (less than 0.5 per cent) and traces of nitrogen, water vapour, carbon dioxide and sulphur.

Methane, propane et al. consist solely of carbon and hydrogen in simple chains; the relative proportions are given in the accompanying table.

What makes them not so interchangeable is their physical properties and relative abundances.

Name	Formula	Melting Point	Boiling Point	Heating Value (MJ/kg)
Methane	CH4	-182.5	-161.6	55.5
Ethane	C2H6	-181.8	-89.0	51.9
Propane	C3H8	-187.7	-42.1	50.2
Butane	C4H10	-138.4	-0.5	49.2
Pentane	C5H12	-129.8	36.1	45.35

Processed natural gas, which is about 90 per cent methane, is used as fuel for space and water heating, generating electricity and powering vehicles. When used for heat or electricity or a barbecue, it is delivered as a gas via pipeline. Powering a vehicle is a different story. The natural gas has to be either compressed (CNG) or liquefied (LNG). CNG is the most common. It involves pressurizing the gas  to 20,000 to 24,000 kilopascals or 200 to 240 times the normal pressure at the earth’s surface.

At that pressure, the natural gas occupies less than 1/100 of its original volume. Liquefying natural gas involves cooling it to a temperature less than -162 °C at which point it occupies less than 1/600 of its original volume. Because of these requirements, natural gas lighters would be prohibitively expensive and far too large to carry in your pocket.

Propane makes a effective vehicle fuel because it is a liquid a lower pressures and higher temperatures than natural gas. It’s portable enough for barbecues and camp stoves, but still not enough for lighters. And it’s reasonably plentiful.

Butane is less plentiful than propane and much, much less plentiful than natural gas. Consequently, it isn’t used as vehicle fuel, but because of its low boiling point, it’s ideal for torches, cook stoves and lighters.

If It’s So Green, Why Does It Burn Blue?

We’ve all been told that natural gas is the greenest of the fossil fuels. Greener than coal and greener than petroleum products. So why is this?

It’s all a matter of carbon, or hydrogen depending on how you look at it. Natural gas is primarily methane with lesser amounts of ethane, propane, butane, pentane and heavier hydrocarbons, nitrogen, water vapour, sulphur and carbon dioxide. Processing removes most of these other components so by the time the natural gas is actually heating our homes, it’s almost totally methane.

Methane is composed of  four hydrogen atoms surrounding one carbon atom – CH₄ – which means there’s four times as much hydrogen as there is carbon.

Other fossil fuels are made of more complex carbon and hydrogen molecules. Gasoline, for example, is made of molecules containing from five to 12 carbon atoms, arranged in linear chains, branched chains and rings. As more carbon atoms are added, the relative proportion of hydrogen decreases. The chemical formula for ethane, the two-carbon molecule, is C₂H_6, giving a hydrogen to carbon ratio of 3:1. In a 12-carbon chain, C₁₂H₂₆, the hydrogen to carbon ratio is 2.4:1.

Carbon dioxide is a by-product of burning fossil fuels. It is also a greenhouse gas which has been linked to climate change. The less carbon there is in a substance, the less carbon dioxide it produces when burned. Natural gas, being mostly methane, has the least carbon of all the fossil fuels.

On average, natural gas emits 53.06 kilograms of CO₂ per million British thermal units (kg CO₂ per MMBtu). Gasoline emits 71.62 kg CO₂ per MMBtu and diesel emits 73.15 kg CO₂ per MMBtu. Bituminous coal emits 93.28 kg CO₂ per MMBtu.

Because of its relative greenness, natural gas has been replacing coal as fuel for heat and power generation in both Canada and the United States.

And to answer the question: natural gas burns with a blue flame when well oxygenated. This results in more complete combustion.

Natural Gas is More Energetic

Now and then we come across the term “barrel of oil equivalent” or BOE. It is a unit of energy equal to 5.8 million British thermal units, or the amount of energy released by burning a barrel of crude oil. It’s used to compare the relative values of different fuels, most often crude oil and natural gas. One BOE is roughly equal to 6,000 cubic feet of natural gas.

In other words, the energy content of a barrel of oil is 6,000 times greater than that of a cubic foot of natural gas. But it doesn’t really tell us which has the higher absolute energy content. We’re comparing apples and oranges on a couple of levels – liquid versus gas, barrels versus cubic feet, and while it’s easy to convert barrels to cubic feet (multiply by 5.615) it’s more difficult to work with the phase change.

Fortunately, we have a device known as the bomb calorimeter that measures the heat of combustion of a reaction, and thereby, the heat or energy content.

And rather than having 6,000 times less energy than crude oil, natural gas actually has about 1.15 times more energy than crude oil.

Natural gas has a heating value of 52.2 megajoules per kilogram, compared to 45.5 megajoules per kilogram for crude oil. And when we process the gas and refine the oil, the difference is even greater – 55.5 megajoules per kilogram for methane compared to 47.0 for gasoline and 44.8 for diesel.

So, kilogram for kilogram, natural gas packs more energy than crude oil.

Heating Values of Common Fuels

Fuel	Higher Heating Value (MJ/kg)	Lower Heating Value (MJ/kg)	HHV as a % of Methane HHV
Methane	55.5	50.0	100.0
Natural Gas	52.2	47.1	94.1
Motor Gasoline	46.5	43.4	83.8
Low-sulphur Diesel	45.6	42.6	82.2
Crude Oil	45.5	42.7	82.0
Bituminous Coal (wet)	27.3	26.1	49.2
Wood (dry)	20.6	19.6	37.1
Lignite	15.0		27.0
Peat (dry)	15.0		27.0

Energy BOT Squad’s Newest Member

Things are starting to heat up for the Energy BOT Squad. This week’s BOT is powered by Canada’s primary heating fuel: natural gas.

But GasBOT is no hothead (even if her pigtails are pretty bright) — natural gas is also a low-emission fuel source for electricity across the country. And, when it comes to natural gas-powered vehicles, she’s no slowpoke either. In fact, there are as many uses for natural gas across the country as there are places to find it.

Conventional? Sure: if you want to find conventional natural gas production you only have to go as far as Alberta, where Canada produces more than 75 per cent of its natural gas. But GasBOT’s also fuelled by unconventional sources like coal and shale, which can be found across the country. Together, all those natural gas resources keep Canada well supplied.

So whether she’s heating your house or burning rubber, GasBOT is a BOT to watch, which is why we’re going to spend the next week taking a look at natural gas across the country. So, GasBOT… activate!

You Decide

The Department of Energy and Climate Change in the UK is challenging you to solve the problem of reducing the country’s CO2 emissions by 20 per cent of 1990 levels by the year 2050.

The data behind the 2050 simulation is based on actual UK data. You read along and learn about how the country uses energy and then decide how you see its future. The program quantifies your ideas and prompts further questions about the impact of your choices.

When you are done you get a snap shot of what your world looks like – again nicely quantified and easy to understand – including geography references, scale and scope of development that would be required, nod to efficiencies realized and a literal count of things like wind turbines and nuclear power plants that would be required. You can return to your musing and try again or submit the results.

But what we really like about this sim is that it’s the foundation for the Pathway Debate. Eight climate and energy experts have set out how they think the UK could meet the target using the 2050 tool. Brilliant. This is one of the best online tools we’ve seen recently to help consumers understand the relationship between supply and demand. It’s about the energy mix and how all of the sources work together to power the future. So hop to it and take a spin or should we say a sim.

Really, everyone these days is an energy armchair critic, picking winners and losers and thinking they have a better idea. Now it’s your turn. You decide. And you just might learn something in the process.

Changing Circumstances Call for Changing State

Necessity is the mother of invention. When North American natural gas production peaked in 2002 and began a slow decline, liquefied natural gas (LNG) imports were seen as playing a major role in maintaining supply. At that time, they accounted for only 1.5 to 2.0 per cent of total U.S. supply. Natural gas pipeline imports from Canada accounted for up to 15 per cent and the rest was domestic production.

LNG technology consists of liquefying natural gas by cooling it to approximately -160°C. As a liquid, it occupies 1/600 of its original volume and can be easily transported by LNG tanker ships. In the United States, 18 LNG terminals, where the LNG would be regasified and put into pipelines, were planned, and another nine were planned for Canada.

But then two things happened. With the recession, the price of oil plummeted, and with it the price of natural gas. To that point, global natural gas pricing was tied at least loosely to the price oil. LNG imports became uneconomic.

At about the same time, advances in drilling and fracturing made shale gas economically viable, and North American production increased significantly. So much so that there was little need to import from outside the continent. The natural gas market in North America became separate from the global market, with prices that stayed low despite oil’s late 2010 rise.

Consequently, by December 2010 only five LNG terminals had been constructed in the U.S. and one in Canada; the rest were either cancelled or suspended.

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