William G. Rosenberg 79 John F. Kennedy Street Center for Business & Government Belfer Center for Science & International Affairs Kennedy School of Government, Harvard University W: 617.495.0834 M: 919.601.0563 [email protected]Gasification as a Strategic Energy and Environmental Option Project Contacts: Dwight C. Alpern Legal & Regulatory Issues Phone: (202) 343-9151 Fax: (202) 343-2356 [email protected]February 2005 Michael R. Walker Economic & Technical Issues Phone: (720) 842-5345 Fax: (720) 851-5784 [email protected]Reports available at: www.ksg.harvard.edu/bcsia/enrp
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William G. Rosenberg 79 John F. Kennedy Street Center for Business & Government Belfer Center for Science & International Affairs Kennedy School of Government,
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William G. Rosenberg79 John F. Kennedy StreetCenter for Business & GovernmentBelfer Center for Science & International AffairsKennedy School of Government, Harvard UniversityW: 617.495.0834 M: 919.601.0563 [email protected]
Gasification as a Strategic Energy and Environmental Option
$/mmBtu Average Delivered Fuel Prices to US Electric Generators
1
2
3
4
5
6
7
1990 2000 20101995 2005 2015 2020 2025
Historic Projected (EIA Annual Energy Outlook 2005 Reference Case)
Natural Gas
Coal
(EIA Annual Energy Outlook 1997 Reference Case)
1997 Natural Gas Price Forecast
Drivers
5 Gasification as a Strategic Option
96% of Capacity Built Since 2000 Natural Gas
50,000
100,000
150,000
200,000
250,000
300,000
1950's 1960's 1970's 1980's 1990's ‘00-’04
Other
Renewable
Oil
Hydro
Nuclear
Natural Gas
Coal
U.S. Net Summer Capacity Additions by On-Line Date
Sources: EIA, Form 860 for 2003; EIA, Electric Power Monthly, November 2004, Table ES3.
MW
Drivers
6 Gasification as a Strategic Option
TCF Demand from NGCC Fleet
NGCC Fleet Average Capacity Factor
1.0
1.7
2.3
3.0
3.7
4.3
5.0
1
2
3
4
5
15% 25% 35% 45% 55% 65% 75%
TCF
Current
Drivers
7 Gasification as a Strategic Option
Industry Needs Gasification Option to Stay in U.S.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1997 1998 1999 2000 2001 2002 2003 2004
6.0
6.5
7.0
7.5
8.0
8.5
9.0
Avg. Industrial Price ($/Mcf)
Industrial Consumption (TCF)
TCF$/Mcf
Industrial Natural Gas Prices & Consumption Chemical industry: $50
billion in business lost to foreign competition and 90,000 jobs cut since 2000
Fertilizer industry: 11 plants, representing 21% of U.S. capacity closed, only 50% of remaining capacity operating, several major fertilizer producers filed for bankruptcy.
Gasification Opportunities & Challenges
8 Gasification as a Strategic Option
Natural Gas Challenge
Sources: Historic data: EIA, Annual Energy Review 2003, Table 6-1; Projections: EIA, Annual Energy Outlook 2005, Table A-14.