2WHAT IS HYDROFRACKING?Hydraulic fracturing is a proven technology that has been used since the 1940s in more than 1 million wells in the United States to help produce oil and natural gas. The technology involves pumping a water-sand mixture into underground rock layers where the oil or gas is trapped. The pressure of the water creates tiny fissures in the rock. The sand holds open the fissures, allowing the oil or gas to escape and flow up the well.Is hydraulic fracturing widely used? Yes, and its use is likely to increase. A government-industry study found that up to 80 percent of natural gas wells drilled in the next decade will require hydraulic fracturing. Hydraulic fracturing allows access to formations, like shale oil and shale gas, that had not been assessable before without the technology. It also allows more oil and natural gas be to be brought to the surface from wells that had been produced without this technology.Doesn’t hydraulic fracturing present a serious threat to the environment? No. The environmental track record is good, and the technology is employed under close regulatory supervision by state, local and federal regulators. Hydraulic fracturing has been used in nearly one million wells in the United States and studies by the U.S. EPA and the Ground Water Protection Council have confirmed no direct link between hydraulic fracturing operations and groundwater impacts.
3ENVIRONMENTAL CONSIDERATIONS Who regulates hydraulic fracturing?There are multiple federal, state and local government rules addressing environmental protection during oil and gas operations, including the protection of water resources. These rules cover well permitting, well materials and construction, safe disposition of used hydraulic fracturing fluids, water testing, and chemical recordkeeping and reporting. In addition, API has created a guidance document on proper well construction and plans to release guidance documents outlining best- available practices for water use and management and protecting the environment during hydraulic fracturing operations.Isn’t there a risk that hydraulic fracturing will use up an area’s water supplies? No.Local authorities control water use and can restrict it if necessary. In many areas, water is recycled and reused; in some cases companies pay for the water they use, which comes from a variety of sources. Water requirements for hydraulic fracturing are less than many other commercial and recreational uses. In Pennsylvania, for example, all the 2009 hydraulic fracturing activity used only 5 percent of the amount of water used for recreational purposes, like golf courses and sky slopes. State agencies manage water in a way that safeguards the water needs by nearby communities and protects the environment. Companies recycle and reuse much of the water.Doesn’t hydraulic fracturing present a serious threat to the environment? No.The environmental track record is good, and the technology is employed under close regulatorysupervision by state, local and federal regulators. Hydraulic fracturing has been used in nearly one million wells in the United States and studies by the U.S. EPA and the Ground Water Protection Council have confirmed no direct link between hydraulic fracturing operations and groundwater impacts.How are the fluids kept away from aquifers and drinking water wells?Wells are drilled away from drinking water wells. Also, fracturing usually occurs at depths well below where usable groundwater is likely to be found. Finally, when a well is drilled, steel casing and surrounding layers of concrete are installed to provide a safe barrier to protect usable water.
4Simplified Steps In Hydraulic Fracturing 1. Water, sand and additives are pumped at extremely high pressures down the wellbore.2. The liquid goes through perforated sections of the well bore and into the surrounding formation, fracturing the rock and injecting sand or proppants into the cracks to hold them open.3. Experts continually monitor and gauge pressures, fluids and proppants, studying how the sand reacts when it hits the bottom of the well bore, slowly increasing the density of sand to water as the frac progresses.4. This process may be repeated multiple times, in “stages” to reach maximum areas of the well bore. When this is done, the well bore is temporarily plugged between each stage to maintain the highest water pressure possible and get maximum fracturing results in the rock.5. The frac plugs are drilled or removed from the well bore and the well is tested for results.6. The water pressure is reduced and fluids are returned up the well bore for disposal or treatment and re-use, leaving the sand in place to prop open the cracks and allow the gas to flow.
7Common Hydraulic Fracturing Equipment Although hydraulic fracturing, or fracing, operations take a relatively short amount of time to complete, theprocess requires the use of advanced technology and a variety of equipment. From data monitoring to frac blenders and pumps, this highly developed and monitored process involves a flurry of activities
8Example of Typical Deep Shale Fracturing Mixture Makeup
9Example of Typical Deep Shale Fracturing Mixture Makeup Product CategoryMain IngredientPurposeOther Common UsesWater99.5% water & sandExpand fracture and deliver sandLandscaping and manufacturingSandAllows the fractures to remain open so the gas can escapeDrinking water filtration, play sand, concrete and brick mortarOtherapproximately 0.5%AcidHydrochloric acid or muriatic acidHelps dissolve minerals and initiate cracks in the rockSwimming pool chemical and cleanerAntibacterial agentGlutaraldehydeEliminates bacteria in the water that produces corrosive by-productsDisinfectant; Sterilizer for medical and dental equipmentBreakerAmmonium persulfateAllows a delayed break down of the gelUsed in hair coloring, as a disinfectant, and in the manufacture of common household plasticsCorrosion inhibitorn,n-dimethyl formamidePrevents the corrosion of the pipeUsed in pharmaceuticals, acrylic fibers and plasticsCrosslinkerBorate saltsMaintains fluid viscosity as temperature increasesUsed in laundry detergents, hand soaps and cosmeticsFriction reducerPetroleum distillate“Slicks” the water to minimize frictionUsed in cosmetics including hair, make-up, nail and skin productsGelGuar gum or hydroxyethyl celluloseThickens the water in order to suspend the sandThickener used in cosmetics, baked goods, ice cream, toothpaste, sauces and salad dressingsIron controlCitric acidPrevents precipitation of metal oxidesFood additive; food and beverages; lemon juice ~7% citric acidClay stabilizerPotassium chlorideCreates a brine carrier fluidUsed in low-sodium table salt substitute, medicines and IV fluidspH adjusting agentSodium or potassium carbonateMaintains the effectiveness of other components, such as crosslinkersUsed in laundry detergents, soap, water softener and dishwasher detergentsScale inhibitorEthylene glycolPrevents scale deposits in the pipeUsed in household cleansers, de-icer, paints and caulkSurfactantIsopropanolUsed to increase the viscosity of the fracture fluidUsed in glass cleaner, multi-surface cleansers, antiperspirant, deodorants and hair color
10In addition to water and sand, other additives are used in fracturing fluids to allow fracturing to be performed in a safe and effective manner. Additives used in hydraulic fracturing fluids include a number of compounds found in common consumer products.Example of Typical Deep Shale Fracturing Mixture Makeup A representation showing the percent by volume composition of typical deep shale gas hydraulic fracture components (see graphic) reveals that more than 99% of the fracturing mixture is comprised of freshwater and sand. This mixture is injected into deep shale gas formations and is typically confined by many thousands of feet of rock layers.Fracturing Ingredients Product Category Main Ingredient Purpose Other Common Uses Water water & sand Expand fracture and deliver sand Landscaping and manufacturing Sand Allows the fractures to remain open so the gas can escape Drinking water filtration, play sand, concrete and brick mortar Acid Hydrochloric acid or muriatic acid Helps dissolve minerals and initiate cracks in the rock Swimming pool chemical and cleaner Antibacterial agent Glutaraldehyde Eliminates bacteria in the water that produces corrosive by-products Disinfectant; Sterilizer for medical and dental equipment Breaker Ammonium Persulfate Allows a delayed break down of the gel Used in hair coloring, as a disinfectant, and in the manufacture of common household plastics Corrosion inhibit iron, N-Dimethyl Formamide Prevents the corrosion of the pipe Used in pharmaceuticals, acrylic fibers and plastics Cross linker Borate salts Maintains fluid viscosity as temperature increases Used in laundry detergents, hand soaps and cosmetics Friction reducer Petroleum distillate “Slicks” the water to minimize friction Used in cosmetics including hair, make-up, nail and skin products Gel Guar gum or Hydroxyethyl cellulose Thickens the water in order to suspend the sand Thickener used in cosmetics, baked goods, ice cream, toothpaste, sauces and salad dressings Iron control Citric acid Prevents precipitation of metal oxides Food additive; food and beverages; lemon juice ~7% citric acid Clay stabilizer Potassium chloride Creates a brine carrier fluid Used in low-sodium table salt substitute, medicines and IV fluids pH adjusting agent Sodium or potassium carbonate Maintains the effectiveness of other components, such as cross linkers Used in laundry detergents, soap, water softener and dishwasher detergents Scale inhibitor Ethylene glycol Prevents scale deposits in the pipe Used in household cleansers, de-icer, paints and caulk Surfactant Isopropanol Used to increase the viscosity of the fracture fluid Used in glass cleaner, multi-surface cleansers, antiperspirant, deodorants and hair color
16What Is Marcellus Shale? Marcellus Shale is a geological formation that was formed by the accumulation of sediment into a sea. This formation was eventually buried over many thousands of years and compressed to produce an organic-rich black shale. This geological formation, which dates back to the Devonian time period , stretches from the Northeast to the Southwest in direction. The Marcellus starts at the base of the Catskills in upstate New York, stretches across the upstate toward Marcellus, New York (the town from which the formation is named) and southwest to West Virginia, Kentucky, and Ohio. The Marcellus Shale is known to be deeper on the southeast edge of the formation that borders the ridge and valley regions of New York, Pennsylvania, Maryland, and West Virginia. The Marcellus gets more shallow as it heads Northwest towards Ohio and Lake Erie.Why Now?Although throughout the geological world, Marcellus Shale has been identified as potentially rich in fossil fuels, it was not until recently that the industry has invested into exploration in Marcellus. Two factors are clearly present in the ramp up in exploration and production (E&P) activities related to Marcellus Shale. First, the success of the Barnett Shale play in North Central Texas has allowed companies to transfer the hydrofracturing technology to other areas, such as the Fayetteville Shale play (Arkansas), Haynesville Shale play (Louisiana and Eastern Texas), and the Marcellus Shale play. Second, the population centers of Northeastern U.S. are very close in proximity to the Marcellus Shale. This improves the economic conditions of the play because the demand for natural gas from this region is high; there are also costs associated with the transportation of natural gas so the close proximity will result in lower transportation costs.What Does the Future of Marcellus Hold?As America demands more and more energy, the role that natural gas will play in that demand is uncertain. One thing that is certain is the Marcellus play is shaping up to be a key supplier for domestic natural gas. Impacts from this industry are uncertain as well. Historically, the energy industry has gone through times of "boom and bust" and is driven by the economical conditions present across the nation. The industry is also known for paying a higher wage, on average, compared to an equivalent manufacturing job. One thing that is not uncertain, although, is that the natural gas industry associated with Marcellus Shale exploration will give the nation another source to potentially reduce the intake of foreign supplies of natural gas.The Lifespan of Marcellus ShaleThe natural gas development process was divided into three phases (called pre-drilling, drilling, and production), and the distinct occupational categories that comprise the workforce requirements for each phase were identified. This process was relatively straightforward, as all major occupations were listed and further separated by the distinct educational and training requirements when possible.
17MAP OF GAS EXPLORATION IN THE SHALE FORMATION IN THE USA
19WHY IS HYDRAULIC FRACTURING IMPORTANT WHY IS HYDRAULIC FRACTURING IMPORTANT? Application of hydraulic fracturing techniques, to increase oil and gas recovery, is estimated to account for 30 percent of U.S. recoverable oil and gas reserves and has been responsible for the addition of more than 7 billion barrels of oil and 600 trillion cubic feet of natural gas to meet the nation’s energy needs
20ENVIRONMENTAL CONSIDERATIONS Doesn’t hydraulic fracturing present a serious threat to the environment?No. The environmental track record is good, and the technology is employed under close regulatory supervision by state, local and federal regulators. Hydraulic fracturing has been used in nearly one million wells in the United States and studies by the U.S. EPA and the Ground Water Protection Council have confirmed no direct link between hydraulic fracturing operations and groundwater impacts.How are the fluids kept away from aquifers and drinking water wells? Wells are drilled away from drinking water wells. Also, fracturing usually occurs at depths well below where usable groundwater is likely to be found. Finally, when a well is drilled, steel casing and surrounding layers of concrete are installed to provide a safe barrier to protect usable water.
21Making Hydrofracking Safer Hydrofracking – The key to obtaining substantial yields of natural gas from wells drilled into hard shale rock has been used for many years throughout the US, Canada and many other countries.In recent years, as the technology has evolved, it has also become controversial in some areas.While EPA and regional governmental bodies are trying to optimize the risks versus returns and with consideration to US Energy Security new technologies are starting to emerge to deal with some of the potential problems.One issue which is starting to be addressed is the presence of Radium and other Radionuclides in Fracking Backflow Water.When rock is fractured deep beneath the ground there is often a certain amount of Radium present.Radium is a decay product of Uranium which was present in the rock hundreds of millions of years ago.EPA REQUIREMENTSWhat is required by the EPA?Right now the EPA (Environmental Protection Administration) is engaged in a complete review of Hydrofracking technology throughout the United States. The goal is to make sure that best practices can be developed to minimize danger while Hydrofracking evolves.EPA establishes allowable limits for radioactive nuclides in Backflow water. At present these limits are being re-evaluated and will likely be lowered.
22Facts & Figures About Natural Gas Natural gas, including unconventional shale gas resources, fuels our economy, delivers heat and power to over 60 million U.S. homes and provides our nation with a clean-burning, domestic energy source. According to a Massachusetts Institute of Technology study released in June 2010, natural gas is expected to double its share of the energy market, from 20 percent to 40 percent by 2050, making the development of this vital resource increasingly important to our nation’s future energy.Natural gas is essential to America's manufacturers, not only to power their operations, but also as a feedstock for many of the daily products we use—clothing, carpets, sports equipment, pharmaceuticals and medical equipment, computers, and auto parts. It is also a primary feedstock for chemicals, plastics and fertilizers.Over the past few years, the combination of horizontal drilling and hydraulic fracturing have unlocked the promise of natural gas in tight rock formations—sandstone in the intermountain West and shale throughout the central and eastern U.S.—and have led to a natural gas boom in several areas of the country.Improvements in technology and application of science have contributed to an 8 percent increase in U.S. natural gas production between 2007 and 2008, through development of tight shales and sandstones which, not all that long ago, were considered impractical or uneconomical to pursue.Among the first targets was the Barnett shale deposit in northern Texas. As a result of horizontal drilling and hydraulic fracturing, the Barnett Shale now produces over 7 percent of America’s natural gas, enough to power 20 million homes per year. Operators are able to drill underneath Fort Worth from miles outside the city limits with directional drilling.Success in the Barnett after years of drilling led to the application of lessons in technology and science that shortened the learning curve for development of emerging plays like the Fayetteville Shale in Arkansas, the Haynesville Shale in Louisiana and the Marcellus Shale in the northeastern United States. A recent EIA report noted that U.S. proven natural gas reserves rose 3 percent in 2008, and shale gas reserves rose an astonishing 51 percent over 2007.New resources have helped to increase natural gas supplies and improve U.S. energy security. They have also encouraged discussions about America's abundant natural gas as a clean, bridge fuel to the nation's energy future.Natural gas has many uses:Meets 24 percent of U.S. energy requirements.Heats 51 percent of U.S. households.Cools homes and provides fuel for cooking.Provides the energy source or raw material to make a wide range of products, such as plastics, steel, glass, synthetic fabrics, fertilizer, aspirin, automobiles and processed food.Natural gas demand is growing:Americans used 23.2 trillion cubic feet of it in 2008.Natural gas supplies about 64.9 million residential customers and 5.5 million commercial and industrial customers in 2007.It powers nearly 120,000 vehicles operating on American roads.Supply:At the end of 2008, U.S. natural gas reserves stood at trillion cubic feet—the highest level in over 30 years.The United States produced 20.6 trillion cubic feet (TCF) of natural gas in 2008—about 88 percent of U.S. consumption.Most natural gas used in the United States comes from North America.Hydraulic fracturing is a proven technology that has been used since the 1940s in more than 1 million wells in the United States to help produce oil and natural gas. The technology involves pumping a water-sand mixture into underground rock layers where the oil or gas is trapped. The pressure of the water creates tiny fissures in the rock. The sand holds open the fissures, allowing the oil or gas to escape and flow up the well.Is hydraulic fracturing widely used? Yes, and its use is likely to increase. A government-industry study found that up to 80 percent of natural gas wells drilled in the next decade will require hydraulic fracturing. Hydraulic fracturing allows access to formations, like shale oil and shale gas, that had not been assessable before without the technology. It also allows more oil and natural gas be to be brought to the surface from wells that had been produced without this technology.Doesn’t hydraulic fracturing present a serious threat to the environment? No. The environmental track record is good, and the technology is employed under close regulatory supervision by state, local and federal regulators. Hydraulic fracturing has been used in nearly one million wells in the United States and studies by the U.S. EPA and the Ground Water Protection Council have confirmed no direct link between hydraulic fracturing operations and groundwater impacts.
24THANK YOU QUESTIONS OR CONCERNS? The past year has been a tumultuous one for worldenergy markets, with oil prices soaring through thefirst half of 2008 and diving in its second half. Thedownturn in the world economy has had a significantimpact on energy demand, and the near-term futureof energy markets is tied to the downturn’s uncertaindepth and persistence. The recovery of the world’sfinancial markets is especially important for theenergy supply outlook, because the capital-intensivenature of most large energy projects makes access tofinancing a critical necessity.The projections in AEO2009 look beyond current economicand financial woes and focus on factors thatdrive U.S. energy markets in the longer term. Keyissues highlighted in the AEO2009 include higher butuncertain world oil prices, growing concern aboutgreenhouse gas (GHG) emissions and its impacts onenergy investment decisions, the increasing use ofrenewable fuels, the increasing production of unconventionalnatural gas, the shift in the transportationfleet to more efficient vehicles, and improved efficiencyin end-use appliances. Using a reference caseand a broad range of sensitivity cases, AEO2009 illustratesthese key energy market trends and exploresimportant areas of uncertainty in the U.S. energyeconomy. The AEO2009 cases, which were developedbefore enactment of the American Recovery andReinvestment Act of 2009 (ARRA2009) in February2009, reflect laws and policies in effect as of November2008.AEO2009 also includes in-depth discussions on topicsof special interest that may affect the energy marketoutlook, including changes in Federal and State lawsand regulations and recent developments in technologiesfor energy production and consumption. Some ofthe highlights for selected topics are mentioned inthis Executive Summary, but readers interested inother issues or a fuller discussion should look at theLegislation and Regulations and Issues in Focussections.Developments in technologies for energy productionand consumption that are discussed and analyzed inthis report include the impacts of growing concernsabout GHG emissions on investment decisions andhow those impacts are handled in the AEO2009 projections;the impacts of extending the PTC for renewablefuels by 10 years; the impacts of uncertaintyabout construction costs for electric power plants; therelationship between natural gas prices and oil prices;the economics of bringing natural gas from Alaska’sNorth Slope to U.S. markets; expectations for oilshale production; the economics of plug-in electric hybrids;and trends in world oil prices and production.World Oil Prices, Oil Use, and ImportDependenceDespite the recent economic downturn, growing demandfor energy—particularly in China, India, andother developing countries—and efforts by manycountries to limit access to oil resources in their territoriesthat are relatively easy to develop are expectedto lead to rising real oil prices over the long term. Inthe AEO2009 reference case, world oil prices rise to$130 per barrel (real 2007 dollars) in 2030; however,there is significant uncertainty in the projection, and2030 oil prices range from $50 to $200 per barrel inalternative oil price cases. The low price case representsan environment in which many of the majoroil-producing countries expand output more rapidlythan in the reference case, increasing their share ofworld production beyond current levels. In contrast,the high price case represents an environment wherethe opposite would occur: major oil-producing countrieschoose to maintain tight control over access totheir resources and develop them more slowly.Total U.S. demand for liquid fuels grows by only1 million barrels per day between 2007 and 2030 inthe reference case, and there is no growth in oil consumption.Oil use is curbed in the projection by thecombined effects of a rebounding oil price, morestringent corporate average fuel economy (CAFE)standards, and requirements for the increased use ofrenewable fuels (Figure 1).Growth in the use of biofuels meets the small increasein demand for liquids in the projection. Further, withincreased use of biofuels that are produced domesticallyand with rising domestic oil production spurred2 Energy Information Administration / Annual Energy Outlook 2009Executive Summary510152025TotalHistory ProjectionsResidential and commercialElectric power IndustrialTransportationBiofuelsFigure 1. Total liquid fuels demand by sector(million barrels per day)by higher prices in the AEO2009 reference case, thenet import share of total liquid fuels supplied, includingbiofuels, declines from 58 percent in 2007 toless than 40 percent in 2025 before increasing to41 percent in The net import share of totalliquid fuels supplied in 2030 varies from 30 percent to57 percent in the alternative oil price cases, with thelowest share in the high price case, where higher oilprices dampen liquids demand and at the same timestimulate more production of domestic petroleum andbiofuels.Growing Concerns about Greenhouse GasEmissionsAlthough no comprehensive Federal policy has beenenacted, growing concerns about GHG emissionsappear to be affecting investment decisions in energymarkets, particularly in the electricity sector. In theUnited States, potential regulatory policies to addressclimate change are in various stages of developmentat the State, regional, and Federal levels. U.S. electricpower companies are operating in an especiallychallenging environment. In addition to ongoinguncertainty with respect to future demand growthand the costs of fuel, labor, and new plant construction,it appears that capacity planning decisions fornew generating plants already are being affected bythe potential impacts of policy changes that could bemade to limit or reduce GHG emissions.This concern is recognized in the reference case andleads to limited additions of new coal-fired capacity—much less new coal capacity than projected in recenteditions of the Annual Energy Outlook (AEO). Insteadof relying heavily on the construction of newcoal-fired plants, the power industry constructs morenew natural-gas-fired plants, which account for thelargest share of new power plant additions, followedby smaller amounts of renewable, coal, and nuclearcapacity. From 2007 to 2030, new natural-gas-firedplants account for 53 percent of new plant additionsin the reference case, and coal plants account for only18 percent.Two alternative cases in AEO2009 illustrate howuncertainty about the evolution of potential GHGpolicies could affect investment behavior in theelectric power sector. In the no GHG concern case,it is assumed that concern about GHG emissions willnot affect investment decisions in the electricpower sector. In contrast, in the LW110 case, theGHG emissions reduction policy proposed by SenatorsLieberman and Warner (S. 2191) in the 110thCongress is incorporated to illustrate a future inwhich an explicit Federal policy is enacted to limitU.S. GHG emissions. The results in this case shouldbe viewed as illustrative, because the projected impactof any policy to reduce GHG emissions will dependon its detailed specifications, which are likely todiffer from those used in the LW110 case.Projections in the two alternative cases illustrate thepotential importance of GHG policy changes to theelectric power industry and why uncertainty aboutsuch changes weighs heavily on planning and investmentdecisions. Relative to the reference case, newcoal plants play a much larger role in meeting thegrowing demand for electricity in the no GHG concerncase, and the role of natural gas and nuclearplants is diminished. In this case, new coal plantsaccount for 38 percent of generating capacity additionsbetween 2007 and In contrast, in theLW110 case there is a strong shift toward nuclearand renewable generation, as well as fossil technologieswith carbon capture and storage (CCS)equipment.There is also a wide divergence in electricity prices inthe two alternative GHG cases. In the no GHG concerncase, electricity prices are 3 percent lower in2030 than in the reference case; in the LW110 case,they are 22 percent higher in 2030 than in the referencecase.Increasing Use of Renewable FuelsThe use of renewable fuels grows strongly in AEO-2009, particularly in the liquid fuels and electricitymarkets. Overall consumption of marketed renewablefuels—including wood, municipal waste, andbiomass in the end-use sectors; hydroelectricity,geothermal, municipal waste, biomass, solar, andwind for electric power generation; ethanol forgasoline blending; and biomass-based diesel—growsby 3.3 percent per year in the reference case, muchfaster than the 0.5-percent annual growth in totalenergy use. The rapid growth of renewable generationreflects the impacts of the renewable fuelstandard in the Energy Independence and SecurityAct of 2007 (EISA2007) and strong growth in the useof renewables for electricity generation spurred byrenewable portfolio standard (RPS) programs at theState level.EISA2007 requires that 36 billion gallons of qualifyingcredits from biofuels be produced by 2022 (a creditis roughly one gallon, but some biofuels may receiveEnergy Information Administration / Annual Energy Outlookmore than one credit per gallon); and although thereference case does not show that credit level beingachieved by the 2022 target date, it is exceeded by2030. The volume of biofuels consumed is sensitive tothe price of the petroleum-based products againstwhich they compete. As a result, total liquid biofuelconsumption varies significantly between the referencecase projection and the low and high oil pricecases. In the low oil price case, total liquid biofuel consumptionreaches 27 billion gallons in In thehigh oil price case, where the price of oil approaches$200 per barrel (real 2007 dollars) by 2030, it reaches40 billion gallons.As of November 2008, 28 States and the District ofColumbia had enacted RPS requirements that aspecified share of the electricity sold in the State comefrom various renewable sources. As a result, theshare of electricity sales coming from nonhydroelectricrenewables grows from 3 percent in 2007 to 9 percentin 2030, and 33 percent of the increase in totalgeneration comes from nonhydroelectric renewablesources. The share of sales accounted for by nonhydroelectricrenewables could grow further ifmore States adopted or strengthened existing RPSrequirements. Moreover, the enactment of polices toreduce GHG emissions could stimulate additionalgrowth. In the LW110 case, the share of electricitysales accounted for by nonhydroelectric renewablegeneration grows to 18 percent in 2030.Growing Production fromUnconventional Natural Gas ResourcesRelative to recent AEOs, the AEO2009 reference caseraises EIA’s projection for U.S. production and consumptionof natural gas, reflecting a larger resourcebase and higher demand for natural gas for electricitygeneration. Among the various sources of natural gas,the most rapid growth is in domestic production fromunconventional resources, while the role played bypipeline imports and imports of liquefied natural gas(LNG) declines over the long term (Figure 2).The larger natural gas resource in the reference caseresults primarily from a larger estimate for naturalgas shales, with some additional impact from the 2008lifting of the Executive and Congressional moratoriaon leasing and development of crude oil and naturalgas resources in the OCS. From 2007 to 2030, domesticproduction of natural gas increases by 4.3 trillionfeet (22 percent), while net imports fall by 3.1 trillioncubic feet (83 percent). Although average real U.S.wellhead prices for natural gas increase from $6.39per thousand cubic feet in 2007 to $8.40 per thousandcubic feet in 2030, stimulating production from domesticresources, the prices are not high enough to attractlarge imports of LNG, in a setting where worldLNG prices respond to the rise of oil prices in theAEO2009 reference case. One result of the growingproduction of natural gas from unconventional onshoresources, together with increases from the OCSand Alaska, is that the net import share of U.S. totalnatural gas use also declines, from 16 percent in 2007to less than 3 percent in 2030.In addition to concerns and/or policies regardingGHG emissions, the overall level of natural gas consumptionthat supply must meet is sensitive to manyother factors, including the pace of economic growth.In the AEO2009 alternative economic growth cases,consumption of natural gas in 2030 varies from 22.7trillion cubic feet to 26.0 trillion cubic feet, roughly7 percent below and above the reference case level.Shifting Mix of UnconventionalTechnologies in Cars and Light TrucksHigher fuel prices, coupled with significant increasesin fuel economy standards for light-duty vehicles(LDVs) and investments in alternative fuels infrastructure,have a dramatic impact on developmentand sales of alternative-fuel and advanced-technologyLDVs. The AEO2009 reference case includes a sharpincrease in sales of unconventional vehicle technologies,such as flex-fuel, hybrid, and diesel vehicles.Hybrid vehicle sales of all varieties increase from2 percent of new LDV sales in 2007 to 40 percent in2030. Sales of plug-in hybrid electric vehicles(PHEVs) grow to almost 140,000 vehicles annually by2015, supported by tax credits enacted in 2008, andthey account for 2 percent of all new LDV sales in4 Energy Information Administration / Annual Energy Outlook 2009Nonassociated conventionalNet importsAssociated-dissolvedNonassociated offshoreUnconventionalAlaskaFigure 2. Total natural gas supply by source(trillion cubic feet)2030. Diesel vehicles account for 10 percent of newLDV sales in 2030 in the reference case, and flex-fuelvehicles (FFVs) account for 13 percent.In addition to the shift to unconventional vehicletechnologies, the AEO2009 reference case shows ashift in the LDV sales mix between cars and lighttrucks (Figure 3). Driven by rising fuel prices and thecost of CAFE compliance, the sales share of newlight trucks declines. In 2007, light-duty truck salesaccounted for approximately 50 percent of new LDVsales. In 2030, their share is down to 36 percent,mostly as a result of a shift in LDV sales from sportutility vehicles to mid-size and large cars.Slower Growth in Overall Energy Useand Greenhouse Gas EmissionsThe combination of recently enacted energy efficiencypolicies and rising energy prices in the AEO-2009 reference case slows the growth in U.S.consumption of primary energy relative to history:from quadrillion British thermal units (Btu) in2007, energy consumption grows to quadrillionBtu in 2030, a rate of increase of 0.5 percent per year.Further, when slower demand growth is combinedwith increased use of renewables and a reduction inadditions of new coal-fired conventional powerplants, growth in energy-related GHG emissions alsois slowed relative to historical experience. Energyrelatedemissions of carbon dioxide (CO2) grow at arate of 0.3 percent per year from 2007 to 2030 in theAEO2009 reference case, to 6,414 million metric tonsin 2030, compared with the Annual Energy Outlook2008 (AEO2008) reference case projection of 6,851million metric tons in 2030.One key factor that drives growth in both total energyconsumption and GHG emissions is the rate of overalleconomic growth. In the AEO2009 reference case, theU.S. economy grows by an average of 2.5 percent peryear. In comparison, in alternative low and high economicgrowth cases, the average annual growth ratesfrom 2007 to 2030 are 1.8 percent and 3.0 percent. Inthe two cases, total primary energy consumption in2030 ranges from 104 quadrillion Btu (8.2 percent belowthe reference case) to 123 quadrillion Btu (8.6percent above the reference case). Energy-relatedCO2 emissions in 2030 range from 5,898 million metrictons (8.1 percent below the reference case) in thelow economic growth case to 6,886 million metric tons(7.3 percent above the reference case) in the high economicgrowth case.Energy Information Administration / Annual Energy Outlook 2009WHAT THE HECK IS HE TALKING ABOUT I AM LOSTFORGET ABOUT HYDROFRAC CRAP I AM HUNGRY AND LET TAKE A BREAKDO YOU KNOW ANYTHING ABOUT HYDROFRACTHANK YOU QUESTIONS OR CONCERNS?