An unprecedented diversity of energy sources and players will come to market in 2015. This breadth of sources reflects the underlying, long-term trend of the world’s shift away from fossil fuels.
In US oil and gas, the focus is still on shale development. Producers are beginning to open up the Utica Shale, several thousand feet below currently productive shale layers, possibly the richest shale of all, in the northeast. Net US shale gas production will continue to increase in 2015, though at a slower pace than in previous years, with analysts and the US Energy Information Administration forecasting soft prices, especially through March. Many forecasters see prices rebounding above $3.50 later in the year after falling, perhaps even below $2.50, during the summer.
A portion of the new production will be reserved for export. Late in 2015, Houston-based Cheniere Energy Inc. is slated to begin sending liquefied shale gas to Korea and India, among other locales. Six other export ventures have received federal permits and are ready to build terminals, running the total approved volume of exports to about 8 billion cubic feet of gas a day. These will be the first significant LNG export projects in the US in at least 20 years, coming as demand for LNG is spiking across Europe and Asia. However, at current prices, US LNG delivered to Asia isn’t profitable. Europe is still a viable market, but companies that have made large bets on Asian exports, such as Cheniere, face an uncertain future.
Shale’s growth outlook strong — but…
The wealth of shale gas in the northeastern US will continue to spark new opportunities. In 2015, IMG Midstream LLC in Pennsylvania will begin building the first of at least nine electric generation mini-plants across the western part of the state. IMG will buy gas from area producers to power standalone engines, each of which can spin up enough electricity to power as many as 9,000 homes. The plants, sized to local markets, can gather gas from low-producing wells that otherwise might not be economical to operate. Look for other players to find this kind of niche.
NET Power, based in Durham, North Carolina, offers another innovation. Its new design for an electric generation plant involves a process that separates oxygen from air and burns gas in pure oxygen, leaving only carbon dioxide as a residue. Carbon dioxide gas, more efficient than steam, drives turbines to make electricity. The leftover CO2 can be pumped back down spent oil and gas wells to pressurize formations and squeeze even more fuel from them. The plant design eliminates a number of generating-plant components, including the smokestack, and can occupy a small space, suiting it to small or niche markets as well as larger ones. In 2015, the company will finalize the design of a 50-megawatt, $140-million demonstration plant in Texas.
Shale oil is on less firm ground. Global oil demand is still sluggish, especially in China, despite the recent price drop of more than 50 percent. With oil prices around $50, US shale oil production will be a money-losing enterprise for many until, and if, until prices rise again.
The price plunge biases US shale drilling and production toward the northeast, where shale deposits hold more gas than oil. Gas demand will see buoying prices and profitability from shale deposits where gas dominates.
The other good news is that in 2015, shale producers may begin to vanquish the specter they call “the Red Queen.”
That character in Alice in Wonderland found herself running as fast as she could just to stay in the same place. In some cases, production from shale oil and gas wells falls by three-quarters during the first year, forcing producers to drill as fast as they can to maintain steady levels of production. Now, Halliburton and other well-service companies are using new hardware and software, including artificial-intelligence applications, to help solve the problem.
Analyzing fast-dying wells, researchers discovered they hadn’t been drilled to the site’s “sweet spot.” The new technology will enable producers to position wells more accurately and adjust fracking and production techniques to suit the quirks of individual rock types. Some wells reworked using the new methods have boosted production by nearly a third.
The new technology will add life to the shale-oil play, but long-term price forecasts — perhaps flat through 2020 and beyond as a result of low demand, conservation and shifts to cleaner fuels — will continue to pinch margins.
Clean coal actually “clean”
In the past, “clean coal” has been an oxymoron, actually referring to processes that gather and store residue left after coal is burned. But new processes that clean coal before it gets to the furnace are becoming available, creating new products for secondary markets and raising the value of raw coal itself.
Clean Coal Technologies, a New York firm with stock traded over the counter, is marketing a suite of processes that dehydrate coal and gasify it. Dehydrated coal is lighter and, therefore, far cheaper to ship while also yielding more energy pound for pound. The company’s proprietary method guarantees the dried coal’s structural stability to minimize the risk of crumbling or spontaneous combustion. Two of the company’s processes heat the coal so lighter hydrocarbons can be harvested for sale to plastics and chemical makers. When burned, the remaining coal emits less greenhouse gas.
CCT estimates its processes can pay for themselves in less than four years and yield a 30 percent return on investment. In 2015, the company will pursue contracts in Asia while it tests its numbers and techniques at a coal-burning power plant in Oklahoma owned by the utility company AES.
New beginning for nuclear?
Nuclear energy will reintroduce itself to the world in 2015.
By year’s end, India will put the finishing touches on a demonstration reactor designed to burn a mix of uranium and thorium, a far less radioactive alternative to uranium that can’t melt down or be turned into bomb payloads.
India, with one of the world’s largest concentrations of thorium, is designing its future electric grid with thorium as a key component. So is China; thorium is commonly found with rare-earth elements, and China dominates the world’s rare-earth market, with piles of mine tailings littering its landscape. In 2015, Thor Energy, Norway’s thorium initiative, will finish initial tests of its blended thorium and uranium fuel for conventional nuclear reactors that will offer greater efficiencies and lower costs. Thor expects to market its product in 2018.
But 2015 will see novel reactor designs as well as novel fuels.
One design that has intrigued engineers for decades — a design touted by many thorium advocates — is the molten salt reactor, or MSR. Instead of using rods of fuel, as conventional nuclear power plants do, MSRs make a slurry of radioactive fuel salts and coolants. The fluid can be handled and controlled more easily than radioactive rods and can work at lower temperatures and pressures, increasing safety. The MSR doesn’t hold more fuel than it needs at a given moment, so it can’t “go critical. And it burns nuclear fuel more efficiently than today’s reactors, creating less radioactive waste.”
Transatomic Power Corporation, a concept-stage company in Boston with an all-star advisory team of nuclear engineers, is working on a redesigned MSR that would burn nuclear waste from conventional reactors.
But the most radical redesign belongs to Ian Scott in England.
After retiring as chief scientist for Unilever, the global food and personal-care conglomerate, Scott returned to his earlier love of nuclear science. Investigating MSR designs from the 1950s and 1960s, he discovered that
engineers had miscalculated the necessary diameter of the pipes ferrying the fluids. Because of the mistake, the engineers concluded that MSRs would not only have to pump molten salt through a reaction chamber, but also around a complex series of heat exchangers, tanks, valves and compartments, all of which would become too radioactive to be approached by humans. The extra complexity persuaded engineers to abandon the concept.
Scott rectified the mistake and designed a much smaller “Simple MSR” around his now-patented discovery, one that eliminates the extraneous plumbing. He then circulated the design among leading engineers in Britain’s nuclear-power establishment, asking them to find the flaws in his design. None could.
Through 2015, Scott and Moltex Energy, his development company, will be looking for investors to finance construction of a prototype and for an entity to license commercial rights. He expects his reactor to eventually deliver electricity at a price competitive with today’s cheapest coal-made power.
Renewables come into play
Wind power is expected to grow 17 percent in 2015 and the biofuels industry — which makes chemically identical gasoline and jet-fuel replacements from plants and algae — will see more than one commercial plant break ground. It’s this relentless incremental growth that leads more than one analyst to believe that, by 2025, renewable energies will claim a large enough installed base and market share to tamp down oil prices and make ever-more-costly fossil fuel projects of far less interest to investors.
The subtle shift underway is most clearly seen in solar energy. In 10 US states, the price of electricity generated from solar panels has fallen to, or below, the price of conventional grid electricity. That trend will continue through 2015 and will be the case in all 50 states by 2016. The price is being driven down further by the Solar Community Initiative, in which corporations including Cisco and 3M are banding together to buy solar systems in bulk and providing them at deep discount prices to employees.
Massive investments in manufacturing capacity and processes, subsidized by national governments in countries such as Germany and China, have wrought economies of scale that have slashed retail prices for systems. The next wave of innovation in solar electricity will de-emphasize economies of scale in manufacturing in favor of cell designs that boost efficiency. Larger manufacturers bought four small solar startups with innovative, high-efficiency cell designs in 2014. In 2015, small, creative solar-design firms will continue to be attractive takeover targets.
Hydrogen-fueled cars and more
In 2015, the public will be introduced to its hydrogen future by two developments.
First will be hydrogen fuel-cell cars offered for sale by Toyota, Honda and Hyundai. (A fuel cell uses a chemical reaction to convert gases into heat or electricity.) Initially, the cars will be targeted to regions that already have some hydrogen-refueling infrastructure — southern California, in the US, for example. But this modest introduction will establish hydrogen as a fuel source in the public mind while automakers stake a claim to the technology.
Fuel cells also are appearing in homes — at least in Japan and Germany. The Viessmann Group, a leading German manufacturer of heating and cooling systems, has partnered with Panasonic to adapt Japanese fuel-cell technology to European markets. The refrigerator-size unit splits natural gas into hydrogen and carbon dioxide and burns the hydrogen, not only to heat space but also to generate electricity. The manufacturer claims 90 percent fuel efficiency for the units.
Second, at least one exotic form of hydrogen energy, completely new to the general public, will make its debut.
The most likely candidate is the SunCell from BlackLight Power (Trends Journal, summer 2012). The New Jersey company’s technology uses hydrogen gas in the presence of a proprietary cocktail of catalysts at exact pressures and temperatures. Backlight claims it delivers power that is as much as 1,000 times greater than the cell’s energy consumption. The company is partnering with a small number of manufacturers and will negotiate geographic distribution licenses for commercial distribution, still at least three years away.
An alternative possibility is Energy Catalyzer, or E-Cat (Trends Journal, autumn 2011) from Italian inventor Andrea Rossi. Rossi uses hydrogen gas and powdered nickel with unspecified catalysts in a process he claims releases more energy than it consumes.
In October 2014, physicists at the University of Bologna independently tested an E-Cat. The testing team reported an energy harvest, in the form of heat, more than three times the amount of energy the machine used to operate. The team also found evidence of nuclear isotopes — isotopes not present at the beginning of the test— in the used fuel. The research team postulated that the only way to account for their presence was that a nuclear reaction had occurred. That led some to claim that Rossi’s device proves the viability of “cold fusion,” the incendiary claim of limitless, clean nuclear energy that roiled the scientific community in 1989.
Defkalion Green Technologies (Trends Journal, spring 2013), a breakaway venture from one of Rossi’s failed E-Cat business partnerships, publicly tested its own version of a nickel-hydrogen technology in Texas in July 2013. The test failed to demonstrate any excess energy. Defkalion’s investors and business partners fled, and the company is attempting to regroup in Canada.
In 2015, energy markets will be marked by innovations that improve the value of traditional fuels even as those fuels are being supplanted by improved renewable and new alternative-energy technologies.