The Methane Age: Likely Gains in Current Technologies, Emerging Technologies and Their Likely Consequences, Economic - Political - Geopolitical

W O R K I N G P A P E R

The Wethene

Age

Likely Gains in Current Technologies

Emerging Technologies and Their Likely Consequences Economic - Political - Geopolitical

H-H. R o g w S. M e s s n e r M . S L r u b e g g e r E. Schmidt

November 1986 WP-86-68

I n t e r n a t i o n a l l n s t ~ t u t e for Applied Systems Analysis

NOT FOR QUOTATION

WITHOUT THE PERMISSION OF THE AUTHORS

The Methane

Age

Likely Gains in C u r r e n t Technologies

Emerging Technologies a n d Their Likely Consequences Economic

-

Political

-

Geopolitical

H-H. Rogner S. Messner M. Strubegger E. Schmidt

November 1986 WP-86-68

Summary of a Task F o r c e Meeting, "The Methane Age"

May 14-16, 1986, Hotel Lover, S o p r o n , Hungary Organized by

The I n t e r n a t i o n a l I n s t i t u t e f o r Applied Systems Analysis A-2361 Laxenburg, Austria

with t h e c o o p e r a t i o n of

The Hungarian Committee f o r Applied Systems Analysis Bureau f o r Systems Analysis of t h e

State Office f o r Technical Development Budapest, Hungary

Working P a p e r s are i n t e r i m r e p o r t s o n work of t h e I n t e r n a t i o n a l I n s t i t u t e f o r Applied Systems Analysis a n d h a v e r e c e i v e d only limited review. Views or opinions e x p r e s s e d h e r e i n d o n o t n e c e s s a r i l y r e p r e s e n t t h o s e of t h e Institute o r of i t s National Member Organizations.

INTERNATIONAL INSTITUTE FOR APPLIED SYSTE;MS ANALYSIS 2 3 6 1 Laxenburg, Austria

This document summartzes t h e presentations and discllssiorrr of t h e Task Force Meeting on 'The Methane Age" held in Sopron, Hungary, from May 14-16, 1986. I t also inaludes insights and suggestions t h a t emerged f r o n poetmeeting or o t h e r follow-up activities as of October 15, 1986. R u t h e r m o r e , s e v e r a l of the p a p e r s given at t h e meeting have not yet been received in final form. This suxtmary has been p r e p a r e d based on IIASA-made t r a n s c r i p t s of these presentations and t h e in- t e r p r e t a t i o n i s t h e sole responsibility of t h e authors. When all p a p e r s are re- ceived in final form, this summary w i l l b e revised, if necessary, to conform to t h e written versions of t h e meeting's presentations.

Thomas H. Lee Direc~tor

The Methane Age

Likely Gains in C u r r e n t Technologies

Emerging Technologies and Their Likely Consequences Economic

-

Political

-

Geopolitical

H-H. Rogner, S. Messner, 151. Strubegger a n d E. ,Tchrnidt

Background and Purpose of the Sopron Meeting

Unlike most c o n v e n t i o n a l g a s s t u d i e s , t h e r e c e n t l y c o m p l e t e d IIASA a n a l y s e s of t h e E u r o p e a n g a s m a r k e t f o r e s e e a n i n c r e a s i n g c o n t r i b u t i o n of n a t u r a l g a s t o p r i m a r y e n e r g y s u p p l i e s i n a b s o l u t e a n d r e l a t i v e t e r m s . S i n c e oil a n d n u c l e a r as- sume s i m i l a r t r e n d s i n a l l s t u d i e s

-

t h e a p p r e c i a b l e g r o w t h of n u c l e a r a n d contin- u e d d i s p l a c e m e n t of o i l - t h e f u t u r e m a r k e t e x p a n s i o r ~ of m e t h a n e o c c u r s p r i m a r i l y at t h e e x p e n s e of c o a l , at l e a s t f o r t h e n e x t s e v e r a l d e c a d e s ( s e e F i g u r e 1).

1983

2000

Y E A R S

FIGURE 1. P r i m a r y E n e r g y Consumption, ;Vestern E u r o p e , 1985-2030.

H COAL

CRUDE OIL NAT. GAS HYDRO NUCLEAR

g

OTHERS

One e x p l a n a t i o n f o r t h e d e v i a t i n g IIriSA findings i s t h e e x p l i c i t i n f l u e n c e of t w o f a c t o r s , t h e d y n a m i c s of which are usually d i s r e g a r d e d in medium- a n d long- t e r m e n e r g y s t u d i e s - t e c h n o l o g y a n d p o l i c y .

R e g a r d i n g t e c h n o l o g y , t h e IIASA a n a l y s e s a s s ~ l m e d t e c h n i c a l p r o g r e s s along t h e e n t i r c e n e r g y c h a i n f r o m r e s o u r c e e x t r a c t i o n to end-use convc2rsion f o r a l l en- e r g y t e c h n o l o g i e s . On t h e a g g r e g a t e , t e c h n i c a l p r o g r e s s followed histor-ically ob- s e r v e d g r o w t h p a t t e r n s . More s p e c i f i c a l l y , a n a b o v e a v e r a g e p r o d u c t i v i t y g r o w t h w a s a t t r i b u t e d t o m e t h a n e e x p l o r a t i o n a n d p r o d u c t i o n t e c h n o l o g i e s . This assump- tion i s b a s e d o n t h e f a c t t h a t finding a n d p r o d u c i n g m e t h a n e as s u c h i s a r e l a t i v e l y r e c e n t a c t i v i t y . P r e v i o u s l y , m o s t m e t h a n e w a s p r o d u c e d as a c o n s e q u e n c e t o find- ing a n d p r o d u c i n g oil. H e n c e , t h e t e c h n i c a l a n d p e r c e p t u a l e n v i r o n m e n t f o r g a s e x p l o r a t i o n a n d p r o d u c t i o n i s s t i l l r a t h e r o i l - t a i l o r e d . The d e v e l o p m e n t of a g a s - t a i l o r e d t e c h n i c a l e n v i r o n m e n t will b e a c c o m p a n i e d b y s u b s t a n t i v e p r o d u c t i v i t y in- c r e a s e s .

P r o d u c t i v i t y i s o n e m a j o r d e t e r m i n a n t f o r economic v i a b i l i t y a n d t h u s a c r i t i - c a l v a r i a b l e i n long-term e n e r g y p r o j e c t i o n s . T h e omission of t e c h n i c a l p r o g r e s s in long-term s y s t e m s planning may l e a d to d i v e r g i n g p r o s p e c t s as e x e m p l i f i e d b y t h e IIASA G a s S t u d y .

The p r i m a r y p u r p o s e of t h i s Task F o r c e Meeting t h e r e f o r e was t o c o l l e c t t h e b e s t p o s s i b l e judgment o n t h e p a t t e r n of f u t u r e g r o w t h of m e t h a n e i n g l o b a l e n e r g y m a r k e t s , p a r t i c u l a r l y when d r i v e n by c o n s t a n t i m p r o v e m e n t across t h e full a r r a y of m e t h a n e - r e l a t e d t e c h n o l o g i e s .

This judgment i s t o b e m e a s u r e d b y w h e t h e r o r n o t m e t h a n e c o n t i n u e s i t s d e c a d e s - l o n g world p r i m a r y f u e l m a r k e t p e n e t r a t i o n ( a g a i n s t c o a l , oil, a n d nu- c l e a r ) f o r t h e n e x t s e v e r a l d e c a d e s ( s e e F i g u r e 2 f o r t h e h i s t o r i c a l m e t h a n e g r o w t h ) .

1- 1WO 1 1 1- 1 1.10 1- 1-

rum

FIGURE 2. Methane S h a r e in P r i m a r y E n e r g y S u p p l y , 1900-1985.

Then, to f o r m t h e b e s t judgment o n how growing m e t h a n e u s e will a l t e r ( r e - s t r u c t u r e or d i s r u p t ) t h e e x i s t i n g r e l a t i o n s h i p ( s o u r c e , g r a d e , a n d consumption p a t t e r n s ) among t h e c u r r e n t m a j o r p r i m a r y f u e l s c o a l , o i l , a n d n u c l e a r a n d e s p e - c i a l l y s o with r e g a r d t o t h e e l e c t r i c utility i n d u s t r i e s . ¹

l ~ o r a g e n e r a l statecnent o f t h e purpose o f t h e meeLIng and suggested IIASA follow-up 8ctions, see Schmidt and Vasko (1985).

In summary, t h e most i m p o r t a n t i s s u e s of t h e meeting w e r e :

o t o s u r v e y a n d t o t h e e x t e n t p o s s i b l e e s t a b l i s h t h e state of t h e a r t of t h e full a r r a y of m e t h a n e - r e l a t e d t e c h n o l o g i e s f r o m e x p l o r a t i o n t o end-use c o n v e r - sion; a n d

o t o e s t i m a t e how f a r a n d how f a s t e a c h of t h e s e v e r a l m e t h a n e - r e l a t e d t e c h n o - l o g i e s would g r o w .

T h e n e e d to d e v e l o p q u a n t i t a t i v e d e s c r i p t o r s b a s e d o n a s o u n d d a t a s e t , a n d s u b s e q u e n t r i g o r o u s a n a l y s e s , i s p e r h a p s o n e of t h e most i m p o r t a n t r e q u i r e m e n t s t h a t e m e r g e d f r o m t h e meeting. T h e l o n g e r - r a n g e t a r g e t in t h i s area i s t h e a t t e m p t to combine many individual t e c h n o l o g i c a l p e r f o r m a n c e i m p r o v e m e n t s i n t o a s i n g l e f u n c t i o n , indexing t h e c o n s t a n t l y improving a t t r a c t i v e n e s s of m e t h a n e to t h e e n d u s e r s as a f u n c t i o n of time. T h e i s s u e of w h e t h e r or n o t IIASA s h o u l d o r would p u r - s u e t h i s a c t i v i t y f u r t h e r w a s n o t d e t e r m i n e d at t h e meeting.

Planning and Conduct of the Meeting

T h e meeting w a s s t a r t e d b y IIASA p e r s o n n e l reviewing t h e I n s t i t u t e ' s p a s t a n d c u r r e n t e n e r g y work in g e n e r a l a n d t h e n a t u r a l g a s r e l a t e d work in p a r t i c u l a r . This included t h e work o n E u r o p e a n g a s i s s u e s , t h e Dynamizing T e c h n o l o g i e s S t u d y , a n d t h e L,ogistic S u b s t i t u t i o n of P r i m a r y Fuels S t u d y . F u r t h e r m o r e , t h e a c t i v i t y of t h e MIT/KFA Consortium o n m e t h a n e - f i r e d high p e r f o r m a n c e combined c y c l e s w a s a l s o c o v e r e d in c o n s i d e r a b l e d e t a i l .

The c o n t r i b u t i o n s of t h e o u t s i d e e x p e r t s are h i g h l i g h t e d i n t h e following p a r a - g r a p h s .

R.A. H e f n e r 111 p o i n t e d o u t t h a t t h e p e c u l i a r i t i e s of n a t u r a l g a s r e g u l a t i o n s in t h e US w a r r a n t p a r t i c u l a r a t t e n t i o n . D e s p i t e t h i s s p e c i a l s i t u a t i o n in t h e US, I-Iefner 111 d e s c r i b e d promising o p p o r t u n i t i e s f o r f u t u r e n a t u r a l g a s u s e in t h e world. F o r e x a m p l e , n a t u r a l g a s shows, unlike o i l , a r e s o u r c e b a s e p e r v a s i v e n e s s t h r o u g h o u t t h e world. I n t h e p a s t , n o t t a k i n g i n t o a c c o u n t t h e r e s o u r c e p o t e n t i a l of n a t u r a l g a s , e s p e c i a l l y at g r e a t e r d e p t h s , l e d , a c c o r d i n g to H e f n e r , to d i s t o r t e d e n e r g y p o l i c i e s b a s e d o n t h e a l l e g e d s c a r c i t y of t h i s e n e r g y c a r r i e r .

D.A. D r e y f u s o b s e r v e d t h a t g a s also h a s some d i s a d v a n t a g e s when c o m p a r e d t o oil. I t i s n o t e a s i l y s t o r e d a n d t r a n s p o r t e d , a n d i s a much l e s s c o n c e n t r a t e d s o u r c e of e n e r g y . T h e m o s t p r o b a b l e s c e n a r i o , b a s e d o n h i s view, i s t h e " p r o v i n c i a l r o l e " . To a s s u m e t h i s r o l e , g a s must b e c o m p e t i t i v e l y p r i c e d with r e s p e c t to e l e c t r i c i t y a n d p e t r o l e u m , at t h e p o i n t of u s e o r b u r n e r t i p .

The wide v a r i e t y of p o s s i b l e unconventional s o u r c e s of g a s p o t e n t i a l l y s u r - p a s s i n g , many times, t h e c o n v e n t i o n a l o n e s w e r e a s s e s s e d b y R . Hanneman. T h e s e are n a t u r a l g a s p r o d u c e d b y r e a c t i o n s of u l t r a d e e p c a r b o n with a p r i o r o r g a n i c a n c e s t r y , a n d a b i o g e n i c g a s with n o biological h i s t o r y .

S c i e n t i f i c f o u n d a t i o n s of a n a b i o g e n i c g a s e x i s t e n c e were p r e s e n t e d by T.

Gold, l a r g e l y b a s e d o n a s t r o p h y s i c a l c o n s i d e r a t i o n s . He a l s o d e s c r i b e d t h e r e c e n t e x p e r i m e n t a l d r i l l i n g in t h e S i l j a n m e t e o r i t e i m p a c t crater in Sweden f o r a s o u r c e of a b i o g e n i c g a s .

S e v e r a l s p e a k e r s (Hanneman, V a r n a d o ) p o i n t e d o u t t h e d i f f i c u l t y i n accommo- d a t i n g t e c h n o l o g y f o r e c a s t s with t h e r e c e n t g a s m a r k e t s i t u a t i o n in t h e US. One must t a k e i n t o a c c o u n t t h e "gas b u b b l e " c r e a t e d b y c o n s e r v a t i o n m e a s u r e s , h e a v y d r i l l i n g in t h e late 1 9 7 0 s a n d e a r l y 1 9 8 0 s , a n d i n t e r f u e l switching. T h e p o s s i b i l i t y of a b r u p t c h a n g e s i n p r i c e s , when t h e b u b b l e d i s a p p e a r s , w a s n o t e x c l u d e d .

F o r a n i n c r e a s e of n a t u r a l g a s in e n e r g y consumption, technology should play a significant, e v e n i f not y e t fully identified, r o l e . S . Varnado e x p l a i n e d t h e poten- t i a l existing p r o g r e s s in m a t e r i a l r e s e a r c h , e l e c t r o n i c s a n d v a r i o u s p r o c e s s e s h a v e in increasing t h e efficiency of g a s e x p l o r a t i o n ( h i g h e r b i t p e n e t r a t i o n r a t e s , i n c r e a s e d economy, new methods of drilling, e t c . ) . Constantly improving technolo- g y will b e a k e y element in expanding t h e use of n a t u r a l g a s .

T. S c h u r d e s c r i b e d t h e p o t e n t i a l solutions needed f o r t h e wider use of n a t u r a l g a s in t h e t r a n s p o r t a t i o n s e c t o r . H e r e o n e h a s to t a k e i n t o a c c o u n t t h e high p e r - fection r e a c h e d b y competing d i e s e l engines, burning t h e h e a v i e s t r e s i d u a l oil (ef- ficiencies up to 5 3 X ) .

M. Lonnroth d e s c r i b e d d i f f e r e n t development s c e n a r i o s f o r t h e g a s fields of n o r t h e r n Norway as well as t h e a c t o r s involved in o t h e r E u r o p e a n g a s m a r k e t s c r u c i a l f o r t h i s development. Moreover, M. Lonnroth e x p r e s s e d his i d e a s on r e s h a p i n g t h e c u r r e n t e l e c t r i c i t y supply system toward more d e c e n t r a l i z e d s m a l l e r g e n e r a t i o n units a n d a s t r o n g e r interr-elation between t h e g a s a n d t h e e l e c t r i c i t y utilities.

E x p e r t s from t h r e e s o c i a l i s t c o u n t r i e s (USSR, H u n g a r y , Czechoslovakia) p r e s e n t e d t h e s i t u a t i o n of n a t u r a l g a s e x p l o r a t i o n and use in t h e i r c o u n t r i e s and a l s o t h e most i m p o r t a n t r e c e n t issues. The p a r t i c i p a n t s w e r e informed a b o u t t h e r e s e a r c h , p e r f o r m e d u n d e r t h e l e a d e r s h i p of M.A. S t y r i k o v i c h , o n t h e i n t e r n a t i o n - a l n a t u r a l g a s m a r k e t .

All p a p e r s given at t h e meeting, some in d r a f t s , some in final f o r m , a r e avail- a b l e f o r distribution.

Sopron Conclusions/Key Questions

The following p a r a g r a p h s contain a summary of t h e k e y questions a d d r e s s e d by t h e p a r t i c i p a n t s and t h e conclusions t h a t e m e r g e d from t h e meeting a n d s e v e r a l follow-up a c t i v i t i e s .

C o n c L u s i o n / K e y Question 1: M e t h a n e as t h e Major GLobaL h e L ?

Methane will p r o b a b l y continue i t s h i s t o r i c a l l y o b s e r v e d m a r k e t p e n e t r a t i o n a g a i n s t a l l o t h e r p r i m a r y fuels. S e e F i g u r e 3 f o r t h e i n c r e a s i n g methane m a r k e t p e n e t r a t i o n s t a r t i n g at t h e t u r n of t h e c e n t u r y . In f u t u r e expanding methane u s e , m a r k e t p e n e t r a t i o n will b e d r i v e n by t h e following f o r c e s :

o Availability.

F a r more competitively p r i c e d methane is being found t o d a y t h a n p r e v i o u s l y t h o u g h t to e x i s t . N e w worldwide r e s e r v e s , e s p e c i a l l y o u t s i d e t h e US, a r e ex- panding r a p i d l y ( s e e Table 1 a n d F i g u r e 4). F u r t h e r m o r e , methane is now found t o b e b r o a d l y d i s t r i b u t e d a r o u n d t h e e a r t h - o n - s h o r e a n d off-shore alike - more s o t h a n oil. This makes i t a much m o r e a t t r a c t i v e f u e l from t h e s t a n d p o i n t of geopolitical a n d national s e c u r i t y a n d b a l a n c e of payments con- s i d e r a t i o n s .

If D r . M a r c h e t t i ' s logistic s u b s t i t u t i o n model (Marchetti a n d Nakicenovic, 1979) a n d f o r e c a s t s p r o v e to b e t r u e ( s e e F i g u r e 3 ) , t h e amount of methane to b e found must b e enormous. The a n a l y s e s given at t h e meeting showed t h a t methane demand would r e a c h i t s p e a k a r o u n d t h e y e a r 2060-2070 at a l e v e l of a b o u t 30 trillion c u b i c m e t e r s (tcm). This is roughly a n o r d e r of magnitudc:

l a r g e r t h a n p r e s e n t world oil consumption in e n e r g y t e r m s , and roughly twelve times t h e p r e s e n t world consumption of 1.7 tcm of methanc. Thc asymp- t o t i c level for- i n t e g r a t e d methane consumption i s a b o u t 2500 tcm of which l e s s t h a n 2% h a v e a l r e a d y b e e n e x t r a c t e d .

F'IGURE 3. World Primary Energy Substitution. SOURCE: Nakicenovic (1985).

TABLE 1. Proven Reserves of Natural G a s , Evolution by Major Geographic Regions (in 109m3 and

X).

1970 1975 1980 1984 1985

North America 9428 8547 8015 8283 8330

Latin America 1874 2353 4353 5335 5454

Western Europe 3571 3962 3870 5435 5599

Eastern Europe 12599 24274 31613 36620 38078

Africa 3834 5243 5683 5920 5884

Middle East 6792 15516 18681 22387 25609

Asia/Oceania 1550 3362 4796 6393 7243

World Total 39608 63257 77011 90373 96197

P e r c a t a g e Distribution Western Industrialized

Countries 34 21 17 17 16

Planned Economy

Countries 32 39 42 4 1 4 1

OPEC 29 35 34 33 34

Developing Countries

Outside OPEC 5 5 7 9 9

SOURCE: Cedigaz, 1985.

FIGURE 4 . Evolution of P r o v e n R e s e r v e s of Oil and N a t u r a l Gas in t h e World.

SOURCE: Cedigaz, 1985.

The new s u p e r - s c a l e dimension of t h e methane r e s o u r c e i s s u e i s obvious. If t h e s e q u a n t i t i e s are to b e r e a l i z e d , completely new s o u r c e s of methane must b e found a n d developed (Marchetti, 1986).

An abiogenic o r i g i n f o r t h e s e new r e q u i r e d s o u r c e s i s postulated by P r o f . Gold (Gold a n d S o t e r , 1982; Gold, 1985). A h y p o t h e s i s of a n d by itself star- tling, p r o v o c a t i v e , a n d y e t to b e p r o v e n . W e note h e r e t h a t t h e nonbiological h y p o t h e s e s f o r methane formation were set f o r t h by s e v e r a l USSR, German and F r e n c h s c i e n t i s t s in t h e nineteenth c e n t u r y . In e s s e n c e , P r o f . Gold in- t e g r a t e s t h e p r e s e n t understanding of t h e formation p r o c e s s of t h e e a r t h with t h e a b u n d a n c e of h y d r o c a r b o n s in t h e s o l a r system a n d concluded t h a t t h e formation of most h y d r o c a r b o n s i s t h e r e s u l t of t h e outgasing of abiogenic methane originating f r o m t h e formation o f , a n d t r a p p e d d e e p inside, t h e e a r t h .

P r o f . Gold's g e n e r a l t h e o r y of t h e nonbiological or abiogenic formation of most h y d r o c a r b o n s c o n t i n u e s to g a i n i n c r e a s i n g c r e d i t a b i l i t y a n d i n c r e a s i n g worldwide a c c e p t a n c e . C u r r e n t drilling i n t h e Siljan crater i n Sweden i s o n e a t t e m p t t o confirm t h e e x i s t e n c e of s u c h r e s o u r c e s , a n e f f o r t financed by t h e Swedish State Power Board a n d t h e US Gas R e s e a r c h I n s t i t u t e .

Also, i t might or might n o t b e t h a t d r a s t i c a d v a n c e s i n e x p l o r a t i o n a n d drilling technology will b e r e q u i r e d to p r o d u c e abiogenic methane at competitive p r i c e s .

Dr. Hanneman c h a r a c t e r i z e d t h e methane r e s o u r c e s i t u a t i o n more b r o a d l y ,

i.e. o v e r and a b o v e conventional a n d a b i o g e n i c methane s o u r c e s , listing fu- t u r e methane s o u r c e options as follows: conventional, shallow t o d e e p , associ- a t e d a n d nonassociated, unconventional, t i g h t s a n d s , Devonian s h a l e s , c o a l s e a m methane, p u r e p r e s s u r e a q u i f e r s , g a s h y d r a t e s , s u b d u c t e d d e e p s o u r c e s , o t h e r abiogenic s o u r c e s . Also, m o s t impressively Figure 5 (of Hanneman, 1986) l i s t s t h e unconventional r e s o u r c e s of j u s t t h e US at o v e r 8500 trillion c u b i c f e e t (230 tcm). This c o m p a r e s with c u r r e n t official r e s e r v e f i g u r e s of l e s s t h a n 200 t r i l l i o n c u b i c f e e t (5.4 tcm), a n d c u r r e n t US annual consumption of a b o u t 17 t r i l l i o n c u b i c f e e t (or 460 billion c u b i c m e t e r s ) .

825 TCF TlGHT

CUS

s m s

FIGURE 5. Unconventional Gas R e s o u r c e s of t h e United States. SOURCE: Hanne- man, 1986.

One should n o t e , however, t h e r e i s n o implication t h a t t h e s e v a s t unconven- t i o n a l r e s o u r c e s could b e r e c o v e r e d with today's technology.

o Environment

The environmental movement will c o n t i n u e to gain worldwide political weight.

Our b e s t judgment i s t h a t t h i s will c o n t i n u e f o r d e c a d e s to come.

Also, methane i s now q u i t e r e c o g n i z e d as t h e most benign of t h e o t h e r f u e l s b y a wide margin. This i s e s p e c i a l l y t r u e if economic comparisons are made on a n e x p a n d e d b a s i s t h a t includes s o c i e t a l a n d environmental damage e f f e c t s as well as t h e u s u a l s t a n d a r d utility accounting components of f u e l c o s t s , c a p i t a l costs a n d o p e r a t i n g a n d maintenance costs. This point c a n n o t b e overem- phasized.

S p e c i f i c a l l y , t h e e x t e r n a l damage c a u s e d by burning a t o n of c o a l or oil are e s t i m a t e d to b e o v e r $100. The c o r r e s p o n d i n g c o s t s f o r methane are estimat- e d to b e a b o u t $35 (see Working Consultative G r o u p , 1966).

o Acceptability: Anti-Nuclear Movement

A s t h e growing p r o - n u c l e a r movement f a l t e r s , or in many cases now, i s a c t u a l - l y r e v e r s e d , methane o f f e r s itself as a n intriguing a l t e r n a t i v e and as a r e a d i l y a v a i l a b l e and most a c c e p t a b l e r e p l a c e m e n t fuel.

C o n c L u s i o n / K e y Question 2: T e c h n i c a l P r o g r e s s , I n n o v a t i o n a n d Zmprove- m e n t s of Methane Techno logies?

Again, i t i s m o s t Important Lo n o t e h e r e t h a t no comprehensive analysis h a s not y e t b e e n made of how much growth i s l e f t i n e i t h e r t h e a b o v e individual o r t h e full s e r i a l a r r a y of m e thane technologies. But p r i v a t e , off-the-record estimates b a s e d o n limited, individual judgment, not calculations, r a n g e from one Lo t w o o r d - ers of magnitude f o r t h e combined s e r i a l e f f e c t of a l l possible technological im- provements. Compared to historically o b s e r v e d t e c h n i c a l p r o g r e s s , t h e s e esti- mates s u g g e s t t h a t t h e o v e r a l l technological improvement f a c t o r in t h e full set of methane-related technologies in t h e n e x t 50 y e a r s could b e as g r e a t as t h e c o r r e s p o n d i n g o v e r a l l p e r f o r m a n c e improvement f a c t o r i n commercial aviation in t h e p a s t 50 y e a r s . Clearly, t h e s e e s t i m a t e s a r e r a t h e r based o n lifetime e x p e r i - e n c e and engineering judgment t h a n o n a r i t h m e t i c .

S e v e r a l suggestions were made f o r inclusion in t h e a r r a y of methane-related technologies Lo b e examined f o r t h e i r p o t e n t i a l impact on o v e r a l l productivity growth. Among them a r e :

o S a t e l l i t e s e a r c h .

o Magnetic anomalies: super-sensitive a e r o m a g n e t i c mapping.

o G r a v i m e t r i c and density anomalies.

o Carbon isotope r a t i o s .

o Helium a n d helium isotope r a t i o s . o Radon e x c e s s e s .

o S e l e c t i v e metallic element anomalies.

o Vegetative anomalies.

o E l e c t r o c h e m i c a l anomalies.

o Fully computerized geochemical/geophysical p r o s p e c t i n g . o S e a r c h i n g f o r Lithogenic as w e l l as abiogenic methane.

o S e a r c h i n g f o r methane completely unassociated with oil o r sedimentary depo- s i t s .

o Vastly improved 3-D seismic.

U l t r a d e e p drilling techniques.

P o l y c r y s t a l l i c diamond b i t s combined with s m a r t down hole e l e c t r o n i c s . Wide bandwidth MWD (measurement while drilling).

Vastly improved down hole motors.

Highly s t e e r a b l e drilling p a c k a g e s guided by h a r d e n e d e l e c t r o n i c s . Vastly improved d r i l l p i p e and casing m a t e r i a l s .

Drilling h u n d r e d s of producing holes from a single platform (off-shore and on-shore both).

S c i e n t i f i c f r a c t u r i n g . Bigger d i a m e t e r pipes.

New, highly automated pipe laying t e c h n i q u e s .

o Building t h e p i p e s i n p l a c e with metal ion/plasma s p r a y t e c h n i q u e s (Sandvick p r o c e s s ) .

o S u b s t a n t i a l improvements in t h e efficiency of pipeline pumping t u r b o machinery.

o Improving e f f i c i e n c y of g a s turbine/combined c y c l e s from c u r r e n t 40% to a c h i e v a b l e 60% a n d p o t e n t i a l 65%.

The s e r i a l e f f e c t of combining a l l conceivable a d v a n c e m e n t s of methane- r e l a t e d technologies could r e s u l t i n as much as one-to-two o r d e r s of magnitude t e c h n i c a l improvement o v e r t h e n e x t s e v e r a l d e c a d e s , adding to t h e a t t r a c t i v e n e s s of methane to v a r i o u s e n d - u s e r s . I t i s most i m p o r t a n t to n o t e h e r e t h a t t h e r e i s n o g e n e r a l l y a c c e p t e d method f o r measuring " a t t r a c t i v e n e s s " of a n d end-user system, or a p r i m a r y e n e r g y s o u r c e . W e d o n o t e , however, t h a t t h e old m e a s u r e s , i.e. cost p e r kilowatt h o u r of e l e c t r i c i t y g e n e r a t i o n , are wholely i n p u t costs b a s e d meas- ures a n d h a v e b e e n highly misleading. In some cases t h e y h a v e l e d to c a t a s t r o p h i c financial a n d s o c i e t a l r e s u l t s , to t h e point of imperiling t h e f u t u r e of s e v e r a l new technologies a n d t h e commercial atomic power i n d u s t r y .

S e v e r a l of t h e p a r t i c i p a n t s viewed t h e development of a n e n t i r e l y new set of m e a s u r e s f o r a t t r a c t i v e n e s s , as p e r h a p s t h e p r i m a r y task f o r t h e system-oriented r e s e a r c h e r s a n d p r a c t i t i o n e r s o v e r t h e n e x t d e c a d e s .

A p a r t from t h e o l d e r m o r e familiar simplistic t e r m s r e l a t i n g to s t r a i g h t capi- t a l , f u e l a n d o p e r a t i n g & maintenance c o s t s , s u c h m e a s u r e s should a c c o u n t f o r o G e n e r a l s o c i e t a l a c c e p t a b i l i t y of t h e e n t i r e system.

o Total e x t e r n a l damage c a u s e d b y installing a n d o p e r a t i n g t h e system o n a cradle-to-grave lifetime basis.

o G e n e r a l r o b u s t n e s s of t h e system to a l l f o r m s of possible i n t e r r u p t i o n s . o Minimum lumpiness of c a p i t a l a n d physical p l a n t investment.

o Minimum o p t i c a l comprehensibility p e r systems unit (systems t h a t c a n h a r d l y b e s e e n are l i a b l e to b e e v a l u a t e d as much more a t t r a c t i v e t h a n t h o s e with high o p t i c a l comprehensibility).

No r e a l s u b s t a n t i v e work h a s b e e n d o n e y e t o n developing a t r u e a t t r a c t i v e - n e s s m e a s u r e f o r e n e r g y systems. W e s u s p e c t t h a t when i t finally g e t s done, t h e r e s u l t s will b e o r g a n i z e d in t h e form of r a t h e r complex f u n c t i o n s with many t e r m s heavily weighted with values r e p r e s e n t i n g comprehensive s o c i e t a l costs.

C o n c l u s i o n / K e y Question 3: New Insight from Disaggregated Component Costs? Deep D r i l l i n g in Heartland Europe V e r s u s P e r i p h e r a l P r o d u c t i o n and Imported Methane?

Transmission a n d d i s t r i b u t i o n c o s t s dominate e v e n in s u c h u l t r a high cost p r o - ducing areas as T r o l l a n d S l e i p n e r . The conclusion, b y induction, i s t h a t i t may p a y to s p e n d s e v e r a l times as much o n ultra-deep drilling f o r methane in h e a r t l a n d Eu- r o p e , i.e. o n s i t e s c l o s e to t h e m a r k e t , t h a n to p r o d u c e o n t h e p e r i p h e r y a n d t h e n

"pipeline in".

The point w a s r a i s e d b y o u t s i d e e x p e r t s t h a t to d a t e , insufficient emphasis h a s b e e n p u t o n d i s a g g r e g a t i n g t h e component costs i n t h e cradle-to-grave p r o c e s s of finding a n d developing new methane s o u r c e s , a n d t h e n d e l i v e r i n g i t to t h e many dif- f e r e n t e n d - u s e r s i n h e a r t l a n d E u r o p e .

In r e s p o n s e to t h i s s u g g e s t i o n , IIASA p r o d u c e d some f i r s t - o r d e r e f f e c t calcu- l a t i o n s , a f t e r t h e meeting, Largely f o r h e a r t l a n d E u r o p e . The d a t a c l e a r l y show t h a t e v e n though t h e North Sea e x p l o r a t i o n a n d p r o d u c t i o n costs w e r e e x t r e m e l y high (many billions of d o l l a r s f o r a single platform), t h e dominant cost component t o t h e ' E u r o p e a n e n d - u s e r was t h e pipeline costs ( S t r u b e g g e r a n d Messner, 1986).

By t h e same token activities such as t h e PRG's Scientific Deep Drilling Pro- gram (DM 450 million), t h e USSR's well established Scientific Deep Drilling Pro- gram (Kola peninsula, etc.). and t h e quite new complex commercial production dril- ling program in t h e P a r i s Basin (with t h e basin p e r h a p s positioned d i r e c t l y under- neath t h e c i t y ) a r e both on t h e r i g h t t r a c k and worthy of close and c a r e f u l a t t e n - tion.

If one to t w o o r d e r s of magnitude of technological perfoimance improvement could be achieved, s e v e r a l of t h e a t t e n d e r s of t h e Task Force Meeting concluded t h a t methane will c e r t a i n l y b e t h e bridge fuel between t h e f i r s t and second nuclear a g e ( f i r s t n u c l e a r a g e now o v e r ) . During t h a t period, methane would continue to steadily r e p l a c e oil and c o a l (and in some c a s e s nuclear) f o r many, but c e r t a i n l y not all, uses.

F o r a r e c e n t , well documented institutional assessment of t h e possible p e r f o r - mance improvement f a c t o r s t h a t should b e considered h e r e , and t h e e x t e n t of t h e RDT&E (Research Development Test and Engineering) funding s e e Linden (1985).

Conclusion/Key Question 4: Methane a d E l e c t r i c i t y

-

f i e r c e EM-Use Competition?

This w a s r a i s e d as a major issue t h a t should b e investigated e a r l y , p a r t i c u l a r - ly s o in r e s p e c t to t h e r e s t r u c t u r i n g e f f e c t i t might have on t h e e l e c t r i c utility systems.

Proceeding on t h e assumption t h a t abundant methane is, and will continue to b e , available at a t t r a c t i v e p r i c e s , t h i s v e r y interesting issue w a s r a i s e d by Dr.

Lonnroth as to what t h e end-use competition would be between networked electrici- t y g e n e r a t e d from methane v e r s u s networked methane as a n end-use fuel.

A f i r s t o r d e r assessment f o r h e a r t l a n d Europe suggests t h a t t h e size of t h e generating stations would s h r i n k by one to t h r e e o r d e r s of magnitude and t h e gen- e r a t i n g units would b e much more broadly dispersed. Another possible n e t r e s u l t would b e t h a t more power would b e distributed by a finely s t r u c t u r e d e l e c t r i c g r i d (fueled by a moderately c o a r s e l y s t r u c t u r e d methane g r i d ) r a t h e r t h a n by a super-finely s t r u c t u r e d methane g r i d ( L o m r o t h and Schmidt, 1986).

In t h e United S t a t e s , t h e r e s u l t s of t h e EGEAS (Electric Generation Expansion Analysis System) Study undertaken at MIT were unexpected (EPRI, 1982). They in- dicate t h a t methane f i r e d combined cycles would b e c l e a r l y t h e m o s t cost efficient method of new e l e c t r i c generation installations in seven out of nine utility d i s t r i c t s making up t h e e n t i r e US generation g r i d .

The study w a s broad in n a t u r e , including capacity planning, government poli- c y , and g a s utilization a s p e c t s in addition t o d i r e c t economic comparisons. The fi- nal r e s u l t s , however, w e r e e x p r e s s e d in t e r m s of d i r e c t economic comparison.

The study highlighted t h e f a c t t h a t in a period of g r e a t and multifaceted un- c e r t a i n t y (public a c c e p t a n c e of t h e various systems, oscillating fuel and capital costs, oscillating load growth, cancellation of almost fully completed plants, e t c . ) - such as t h e times we are now experiencing

-

methane f i r e d combined c y c l e s o f f e r a powerful advantage from t h e standpoint of having t h e smallest " r e g r e t " c o s t penal- t i e s , i.e., if t h e utility guesses wrong, o r makes a mistake, t h e combined c y c l e sys- t e m c a r r i e s with i t t h e l e a s t " r e g r e t " c o s t .

The study concluded with t h e following statement r e f e r r i n g to n a t u r a l gas f i r e d combined cycles: ' T h e i r economic competitiveness cannot b e denied. Their environmental advantages, s a f e t y a s p e c t s , ease of siting, and modularity make them a n ideal system in an era of uncertainty.

"

C o n c l u s i o n / K e y w e s t i o n 5: Methane: A P r o v i n c i a l , I n t e r n a t i o n a l o r In- t e r c o n t i n e n t a l FLeL?

Dr. D r e y f u s h e a v i l y s t r e s s e d t h e point t h a t t h e f u t u r e r o l e of methane e i t h e r as a provincial, i n t e r n a t i o n a l , or i n t e r c o n t i n e n t a l f u e l was f a r f r o m c l e a r . In t h e US, methane t e n d s to b e mostly a national or e v e n r e g i o n a l f u e l (in Dreyfus' terrni- nology a p r o v i n c i a l fuel). C u r r e n t l y , in E u r o p e methane i s a n i n t e r n a t i o n a l fuel.

In J a p a n , a t r u l y i n t e r c o n t i n e n t a l fuel based almost solely o n LNG t r a n s p o r t .

The fundamental i s s u e seems to b e w h e t h e r or n o t t r a n s p o r t a t i o n costs (par- t i c u l a r l y LNG c o s t s ) c a n e v e r b e sufficiently lowered to make methane a r e a l world, i n t e r c o n t i n e n t a l l y t r a d e d commodity.

The J a p a n e s e are c l e a r l y t h e l e a d e r s in t e s t i n g t h e i n t e r c o n t i n e n t a l methane- as-a-commodity t r a d e hypothesis. They c u r r e n t l y h a v e f i v e LNG r o u t e s in o p e r a - tion, importing r o u g h l y 2 5 million t o n s of LNG p e r y e a r .

These J a p a n e s e s u p p l y r o u t e s are from widely d i s p e r s e d g e o g r a p h i c a l s o u r c e s , including Cook I n l e t , Alaska, t h e Middle E a s t , Borneo, Indonesia, and Malaysia. A l s o a new s u p e r LNG s o u r c e i s just being d e v e l o p e d in t h e Dampier Ar- c h i p e l a g o (Indian Ocean, n o r t h w e s t Australian Continental S h e l f ) . This r o u t e will dwarf t h e e x i s t i n g o n e s , r e q u i r i n g t h e c o n s t r u c t i o n of a s p e c i a l f l e e t of s e v e n LNG t a n k e r s .

Dr. D r e y f u s e x p r e s s e d t h e firm view, however, t h a t LNG in g e n e r a l and J a p a n e s e LNG i n p a r t i c u l a r was s t i l l markedly uneconomic (cost c o n s i d e r a t i o n s s e e m not to b e t h e only c r i t e r i a f o r J a p a n e s e LNG import). W e d o n o t e t h a t J a p a n e s e i m p o r t s of LNG h a v e i n c r e a s e d from 3.1 billion c u b i c m e t e r s (2.8 millions tons of oil e q u i v a l e n t ) in 1 9 7 3 to 37.6 billions of c u b i c m e t e r s (34 million tons of oil equivalent) in 1985. This i s o v e r a twelvefold i n c r e a s e i n 1 2 y e a r s . S t i l l , to put m a t t e r s i n t o p e r s p e c t i v e , world LNG t r a n s p o r t , most of which i s to J a p a n , amounts to just 3% of t o t a l world methane use (OECD/IAEA, 1986).

C o n c l u s i o n / K e y w e s t i o n 6: A Mcy'or O v e r r i d i n g E z o g e n o u s World Force - The Fradeoff M e t h a n e V e r s u s Nuclear?

In s h o r t e s t possible summary, o u r fundamental view h e r e i s t h a t f i r s t g e n e r a - tion commercial atomic power p l a n t s (and a l l r e l a t e d n u c l e a r technology develop- ment), c e r t a i n l y i n most of t h e Western World, i s s t a l l e d f o r s e v e r a l d e c a d e s . In t u r n , m e t h a n e - r e l a t e d technologies a n d t h e i r d i r e c t l y r e l a t e d commercial applica- tions are now e n t e r i n g a r a p i d growth p h a s e . Methane may v e r y well become t h e b r i d g e fuel between t h e f i r s t a n d s e c o n d n u c l e a r a g e s .

This o b s e r v a t i o n i s g e n e r a l l y c o n s i s t e n t with IIASA's p a s t work. H e r e , t h e em- e r g e n c e of t h e s e c o n d n u c l e a r age i s a n t i c i p a t e d b e c a u s e of growing environmental c o n c e r n s r e g a r d i n g t h e p o t e n t i a l a d v e r s e impacts of a continual C02 accumulation in t h e a t m o s p h e r e . Though substantially lower t h a n in t h e case of c o a l , t h e methane a g e i s i n e x t r i c a b l y a s s o c i a t e d with C02 emissions, unless fossil fuel combustion p r o c e s s e s o c c u r i n a totally enclosed s y s t e m a n d with p u r e oxygen (Hafele et a l . , 1 9 8 6 ) . The t e r m s e c o n d n u c l e a r age must b e viewed in t h e b r o a d e s t c o n c e p t possible, including t h e n u c l e a r e n e r g y s u p p l i e d by t h e s o l a r system.

P e r h a p s i t should b e c a l l e d t h e "second e n e r g y age." S p e c i f i c a l l y , i t i s c o n s i s t e n t with t h e broadly-sketched i n t e r f u e l substitution p a t t e r n s c o v e r e d in E n e r g y i n a E n i t e World (Hgfele et a l . , 1981). E n e r g y in a E n i t e W o r l d , IIASA's l a r g e s t c o m - p l e t e u n d e r t a k i n g to d a t e , c l e a r l y t a k e s t h e position t h a t f o r t h e n e x t s e v e r a l de- c a d e s t h e p r i n c i p a l competition of p r i m a r y fuels a n d t h e p r i m a r y f u e l technologies will b e methane a n d n u c l e a r ( s e e C h a p t e r 8 of Hafele e t al., 1981).

S i n c e E n e r g y i n a f i n i t e World was published in 1981, we h a v e s e e n no sub- s t a n t i a l e v i d e n c e t o c o n t r a d i c t t h i s g e n e r a l assessment. Considerable new evi- d e n c e t e n d s to r e i n f o r c e i t .

Consider t h e f a c t s : S i n c e t h e e a r l y 1 9 7 0 s , n u c l e a r power In t h e world h a s grown by a f a c t o r of s e v e n , i.e., from 200 TW(h) in 1 9 7 3 t o 1385 TW(h) g e n e r a t e d in 1985. In t h e OECD c o u n t r i e s , t h e c o r r e s p o n d i n g growth I s f r o m 188 TW(h) to 1131 TW(h), in c e n t r a l E u r o p e t h e c o r r e s p o n d i n g growth i s 62 TW(h) to 444 TW(h) (Stru- b e g g e r a n d Messner. 1986).

The growth f o r methane i s a l s o impressive. World methane u s e h a s i n c r e a s e d by a f a c t o r of 1.4 in t h e c o r r e s p o n d i n g p e r i o d from 1 2 4 5 billion c u b i c m e t e r s in 1 9 7 3 to 1 7 3 5 bcm in 1985.

Key C o n c l u s i o n / Q u e s t i o n . 7: The G r o w i n g Anti-Nuclear Movement?

In r e c e n t y e a r s , n u c l e a r power h a s come u n d e r s e v e r e a t t a c k b y d i v e r s e g r o u p s a n d f a c t i o n s . This a n t i - n u c l e a r movement i s now s o influential a n d e f f i c i e n t t h a t i t may v e r y well r e s u l t in a much s l o w e r n u c l e a r g r o w t h rate or e v e n a nega- t i v e growth rate f o r commercial power r e a c t o r s o v e r t h e n e x t s e v e r a l d e c a d e s ( t h e s e comments at t h i s writing apply only to t h e Western world c o u n t r i e s ) . In t h i s r e s p e c t , w e a l r e a d y see t h e movement's d r a m a t i c e a r l y s u c c e s s e s in E u r o p e , t h e US, a n d e v e n t o some d e g r e e i n J a p a n . Specifically, Austria h a s built a commercial atomic power p l a n t t h a t t h e e l e c t o r a t e voted n o t to start. The physical removal (full s i t e c l e a r i n g ) of t h i s mint-condition p l a n t (Zwentendorf) h a s a l s o b e e n d e c r e e d . Dismantling will start in 1987.

Sweden h a s v o t e d anti-nuclear a n d t h e a u t h o r i t i e s are s e t t i n g f o r t h a s c h e d u l e f o r t h e shutdown of i t s e n t i r e f l e e t of commercial reactors. Anti-nuclear public opinion c e r t a i n l y a p p e a r s to b e i n c r e a s i n g in most Western c o u n t r i e s with p e r h a p s t h e e x c e p t i o n of F r a n c e .

The s i t u a t i o n in t h e US, t h e world's major n u c l e a r o p e r a t o r , i s almost c a t a s - t r o p h i c . Cancellations of multibillion d o l l a r n u c l e a r power s t a t i o n s , f r e q u e n t l y o v e r 75% complete (and sometimes as high as 95% complete) are n o l o n g e r uncom- mon. The most r e c e n t of t h e s e i s t h e f o u r plus billion d o l l a r Consumers Power Mid- land S t a t i o n (95% complete). And most important, t h i s s t a t i o n will now b e c o n v e r t e d to a methane f i r e d , combined c y c l e unit. The methane will most p r o b a b l y come from near-by high flow rate w e l l s t h a t h a v e b e e n r e c e n t l y completed in t h e same s t a t e , Michigan ( t h e r e c e n t P r a r i e d u Chien d r i l l tests in t h e u p p e r Michigan Basin h a v e p r o d u c e d some of t h e h i g h e s t flow rate methane wells in t h e world).

Investigations are now being made of t h e e f f e c t s of s h u t t i n g down a l l or major p o r t i o n s of most of t h e Western world's commercial r e a c t o r f l e e t . An a n a l y s i s w a s made by RAND a b o u t a y e a r ago, b a s e d on t h e shutdown of s e v e r a l site-specific r e a c t o r s including t h e Indian P o i n t S t a t i o n (Consolidated Edison) a n d Zion (Com- monwealth Edison) ( s e e S t u c k e r , 1985). The r e s u l t s c l e a r l y show t h a t t h e n e t r e s u l t i n g e f f e c t s o n t h e consumers a n d s u r r o u n d i n g i n d u s t r y would b e almost unno- t i c e a b l e .

Individual E u r o p e a n governments a r e now making s i m i l a r a n a l y s e s . F o r exam- p l e , in t h e FRG s i x independent s t u d i e s came to s i m i l a r conclusions as t h e RAND s t u d y . IIASA h a s made o n e s u c h f i r s t - o r d e r - e f f e c t s a n a l y s i s f o r a n u c l e a r p h a s e o u t in c e n t r a l E u r o p e (Messner, Golovine, S t r u b e g g e r , 1986). S e v e r a l q u i t e signifi- c a n t conclusions e m e r g e f r o m t h i s IIASA Study:

(1) In h e a r t l a n d E u r o p e , if s u c h commercial atomic power moratorium (adopting t h e Swedish p r e s i d e n c e ) were d e c l a r e d today, t h e macro-effects o n t h e con- s u m e r in p a r t i c u l a r a n d i n d u s t r y in g e n e r a l would b e e n t i r e l y manageable.

(2) The full e f f e c t of a p h a s e o u t would o c c u r a f t e r t h e t u r n of t h e c e n t u r y . Much of t h e make up (networked) r e p l a c e m e n t e n e r g y would come from new e l e c t r i - c i t y g e n e r a t e d by methane f i r e d combined c y c l e plants o r from additional d i r e c t l y pipelined methane. Most simply s t a t e d : methane would b e t h e major r e p l a c e m e n t fuel. Also, t h e r e i s p l e n t y of i t a r o u n d at a n a c c e p t a b l e p r i c e . (3) The impact o n t h e environment would not b e of a n y c o n c e r n .

Conclusion

The final s e s s i o n of t h e Task F o r c e Meeting w a s devoted to conclusions a n d recommendations f o r f u r t h e r work at IIASA. From t h e discussions t h e following c a n b e summarized:

o I n c r e a s e d methane use would make a n e x c e l l e n t case s t u d y as a p a r t of t h e field of t h e dynamics a n d impacts of new technology.

o I t w a s a g r e e d t h a t i t would b e u s e f u l to s t u d y t h e r o l e of c o u n t r i e s endowed with l a r g e g a s r e s e r v e s (Algeria, Australia, t h e N e a r a n d Middle E a s t i n gen- e r a l ) a n d t h e impact of i n c r e a s e d g a s t r a d e on world t r a d e , national s e c u r i t y c o n s i d e r a t i o n s a n d geopolitics.

o This s t u d y r e q u i r e s a systems a p p r o a c h b e c a u s e b o t h t h e technology a n d methane as a n e n e r g y s o u r c e act in a n i n t e r n a t i o n a l political a n d economic environment.

o IIASA could p r o v i d e t h e a p p r o p r i a t e s t r u c t u r e and c o h e r e n c e r e q u i r e d f o r t h e s t u d i e s on methane a n d e s t a b l i s h c o n f i d e n c e in a methane r e s o u r c e d a t a b a s e with information from t h o s e who c o n s i d e r g a s s e p a r a t e from oil.

o T h e r e i s a g a p in t h e knowledge of t h e technology-economy r e l a t i o n s h i p i n methane e x p l o r a t i o n a n d use. The g a s p r o d u c e r s indicated t h a t t h e y would a p - p r e c i a t e i t if t h e whole "causal t e c h n o l o g i c a l chain" from drilling to b u r n e r s could b e a s s e s s e d economically. This c o n s t i t u t e s a n i m p o r t a n t i n p u t f o r deci- sion making i n t h e e x p l o r a t i o n a r e a . The trade-off between local d e e p drilling costs a n d long d i s t a n c e t r a n s p o r t a t i o n costs must b e c l e a r l y e s t a b l i s h e d . o A s f o r t h e s t u d y i t s e l f , t h e m a j o r cost elements t r e n d should b e identified o v e r

a 20-40 y e a r s p a n a n d t h e i r e f f e c t d i s a g g r e g a t e d . This should show what t h e p o t e n t i a l i s f o r methane p r i c e r e d u c t i o n .

o The widespread u s e of methane will h a v e a n impact o n t h e o t h e r utility net- works, e s p e c i a l l y o n e l e c t r i c i t y . The t r e n d will obviously b e t o w a r d l a r g e - s c a l e d i s p e r s e d systems. T h e r e i s a need f o r new policy m e a s u r e s to s e c u r e c o o p e r a t i o n between a g a s network a n d "companion" e l e c t r i c power n e t w o r k .

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Task Force Meeting on

T H E M E T H A N E A G E Likely Gains in Current Technologies

Emerging Technologies and Their Likely Consequences Economic - ^Political - Geopolitical

May 14-16, 1986 Hotel Lover, Sopron, Hungary Organized by:

The International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria

with the cooperation of

The Hungarian Committee for Applied Systems Analysis Bureau for Systems Analysis of the

State Office for Technical Development, Budapest, Hungary

Program

Tuesday, May 13:

Arrival of Participants

20:OO Dinner (Dinner Speaker: Robert A. Befner 111)

Wednesday, May 14:

09:OO-09:lO Opening; Objective of Meeting -- Advice and Counsel on IIASA "Methane Age" Research Plan

( E m Schmidt)

09:lO-09:35 Overview of IIASA's Technology-Economy-Society Program and its relation t o Methane Technology

(N. Nakicenovic)

09:35-1O:OO Results of Current Gas Studies (H. Rogner)

- IIASA Gas Studies

- European Communities

- Gas Research Institute

- International Gas Union

- World Energy Conference

- ^etc.

1O:OO-10:15 Coffee Break

10:15-11:15 The Technology and Implications of Combined Cycle

Systems (T.H. Lee)

Wednesday, May 14 (continued):

11:15-12:OO The Engineers' Contribution t o the Methane Age (J.R. Metz

/

T. Schur)

12:OO-12:45 What are the sensitivities (exogenous, policy and technological dynamics) on methane in energy markets? (Diecussion)

12:45-14:30 Lunch

14: 30-15: 30 Energy Technology Substitution

&

Long Waves and Pulses (C. Marchetti)

15:30-16:30 New Theory, New Exploration Techniques and Recent Developments in Astrophysics (T.

old)

16:30-17:OO Coffee

17:OO-18:OO Exploration on Drilling (S. Varnado) 19:OO-21:OO Visit t o Local Wine Cellar

Thursday, May 15:

09:OO-10:30 Presentation by A. Khorkov 10:30-10:45 Coffee

10:45-11:30 Presentation by J. Subai

11

:

30-12: 30 Gas Research Inetitute - Technical Survey (R. Hanneman)

12:30-14:OO Lunch

14:OO-15:OO Gas Research Institute - Policy Survey (D. Dreyfus)

15:OO-16:OO Troll Dance (M. Loennroth) 16:OO-16:30 Coffee

16: 30-17: 30 Discussion of non-IIASA participants t o make recommendations on what IIASA should d o in the field and what their own involvement might be)

19:OO Dinner

Friday, May 16:

09:OO-12:30 Continuation of Discussion and Closing Session

Lint of Participants D r . D. D r e y f u s

US G a s R e s e a r c h I n s t i t u t e C h i c a g o

P r o f . T. Gold

C o r n e l l U n i v e r s i t y , I t h a c a , NY &

T r i n i t y C o l l e g e , C a m b r i d g e , U .K.

D r . R . Hanneman Vice P r e s i d e n t R e y n o l d s Metals Co.

Richmond, Vir.

R.A. H e f n e r 111 P r e s i d e n t

T h e GHK Companies Oklahoma City D r . A. K h o r k o v

USSR Academy o f S c i e n c e s Moscow

D r . M. L o n n r o t h

T h e P r i m e M i n i s t e r s Office S t o c k h o l m

T. S c h u r a n d J.R. Metz S u l z u r B r o s .

W i n t e r t h u r , S w i t z e r l a n d D r . S.G

.

V a r n a d o

Vice P r e s i d e n t NL I n d u s t r i e s S u g a r l a n d , T e x a s