1. 1 Building Technology Bridges to a Sustainable Future: The Potential of Natural Gas as an Energy Protagonist for the 21 st Century The 18 th World Energy Congress Buenos Aires, October 24 th, 2001 Hiroshi Urano President of the International Gas Union

2. 2 Methane: The Most Hydrogen-Rich Hydrocarbon Methane (CH 4 ) H/C = 4 Oil H/C = 2 Coal H/C = 1 Wood H/C = 0.1 Sources: Marchetti, Nuclear Science and Engineering, 1985

3. 3 A New Perspective on Methane as a Protagonist Conventional: “Methane as a Supporting Actor” 1) Reserves Natural Gas … 60 years Oil … 40 years 2) Clean Fuel: Coal 100 / Oil 78 / Methane 59 3) High Efficiency of Utilization New: “Methane as a Protagonist” 1) Abundant Reserves and Resources for Centuries 3D Seismic Tech. Deep Drilling Tech. Dynamic Approach 2) Versatility Combustion Tech. Hydrogen Tech. GTL 3) Carbon Management CO 2 Stabilization

4. 4 Global Energy Reserves and Resources Nakicenovic et. al, Global Energy Perspectives, 1998 WEC ConsumptionResource base Additional occurrences 1850 to 19901990 ReservesResource Oil Conventional903.2150145295 Unconventional -- 1933325251,900 Natural gas Conventional411.7141279420 Unconventional -- 192258450400 Hydrates ----- 18,700 Coal1252.26062,7943,4003,000 Total2567.01,2823,8085,09024,000 Uranium 170.557203260150 in FBRs -- 3,39012,15015,5408,900 Adapted from Nakicenovic et. al, 1998 (Gtoe)

5. 5 Versatility in Natural Gas: The “Amphibious” Energy The Age of Combustion Technology Advanced Combined Cycle Micro-gasturbines Absorption type chillers Methane is uniquely well-adapted for a life in two Ages. The Age of Hydrogen Technology Fuel cells for Stationary & Mobile applications

6. 6 Fuel Cell Development Source: The Japan Gas Association, 2000 Mobile-type Stationary-type

7. 7 Carbon Management 1. To Increase Efficiency 2. Substitution to Lower-Carbon Fuels 3. Carbon Sequestration: To capture, transport and store carbon permanently

8. 8 Beginning in 2000, IGU embarked on a three-year research program that focuses specifically on ways to deal with Climate Change Issues. Do natural gas and its technologies have the potential for solving the problem of global warning? If so, to what degree? Is it possible to enhance that potential ? If so, what areas should be explored by the world’s gas industries? With these questions in mind, IGU has organized the Global Energy Scenario Project. IGU’s GES Project

9. 9 Global Energy Scenarios 2000 2100

10. 10 Advanced Combined Cycle Power Generation Power Station in Yokohama, Japan High Performance Gas Turbine Sources: MHI, TEPCO, 2001

11. 11 Potential for Reducing CO 2 Emissions: Phase-1 Methane Technology Options Sources: IGU GES Project, 2001 Coal Natural Gas Oil Others Electricity Generation Industry Sector Agriculture, Residential, etc. Transport Sector (Road) Electricity Generation Industry Sector Agriculture, Residential, etc. Others CO 2 Emissions: 6.1 Gt-C (1996) Electricity Generation Available Technologies The Latest Available Data

12. 12 Potential for Reducing CO 2 Emissions: Phase-2 Methane Technology Options Sources: IGU GES Project, 2001 Coal Natural Gas Oil Others Electricity Generation Industry Sector Agriculture, Residential, etc. Transport Sector (Road) Electricity Generation Industry Sector Agriculture, Residential, etc. Others CO 2 Emissions: 6.1 Gt-C (1996) Electricity Generation Available Technologies The Latest Available Data PEFC Efficiency Improvement +

13. 13 Methane Technology Options Phase-3 Large Scale CO 2 Sequestration Recovery of Methane from Urban Refuse Sustainable Urban Design Enhanced Utilization of Renewables and Recycling Integrated Demand- and Supply-Side Management

14. 14 Building Technology Bridges to a Sustainable Energy Future 1.will provide an excellent and tangible measure of risk reduction in the near-term; 2.will provide a valuable timing option – to benefit from new information while retaining the flexibility of having a larger technology menu from which to make future choices; 3.will provide a wide range of positive environmental benefits for today and the future – on a commercially viable basis; 4.will provide real options for employing the vast range of methane-based technologies today and in the future in an incremental and flexible way; and 5.will provide the potential for achieving a “minimum regret” approach to mitigating the risks of global climate change. The adoption of a phased portfolio of methane-based technologies:

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16. 16 “Sustainable Urban System Design Project” - Seven Regional Teams -

17. 17 Renewable Methane from Refuse and Organic Waste Source: The Japan Gas Association, 2000 Chemical Solution Methanation Methane Reaction in Supercritical Water (Temp. >374ºC, Press. > 22 MPa) Sewage Processing Plant Separator Refuse Catalyst Organic Waste Plastics Crusher

18. 18 Methane Hydrates Occurrences Sources: Kvenvolden and Lorenson, U.S. Geological Survey, 2000 : Beneath the Seafloor : Under Permafrost

19. 19 Sources: U.S. DOE National Renewable Energy Laboratory, 1999 Cost ($/GJ) 45 35 30 20 10 0 Steam Methane Reforming (Large Scale) Steam Methane Reforming (Small Scale) Coal Gasification Partial Oxidation of Hydrocarbons Biomass Gasification Electrolysis Photovoltaics-based Electrolysis (2000) Photovoltaics-based Electrolysis (2010) Wind-based Electrolysis (2000) Wind-based Electrolysis (2010) 5 15 25 40 Economics of Hydrogen Production

20. 20 Sources: IGU GES Project, 2001 Case 4 Well-Head Market ACC Natural Gas Pipeline CO 2 Transportation CO 2 Sequestration in Aquifer Case 3 Well-Head Market ACC High Voltage DC CO 2 Sequestration in Aquifer CO 2 Transportation Methane Steam Reforming Well-Head Market Natural Gas Pipeline Fuel Cell (CHP) CO 2 Transportation CO 2 Sequestration in Aquifer Methane Steam Reforming Well-Head Market Fuel Cell (CHP) Hydrogen Pipeline CO 2 Sequestration in Aquifer CO 2 Transportation Case 2Case 1 Relative Cost Competitiveness

21. 21 Sources: IGU GES Project, 2001 Cost Natural Gas Transportation Methane Steam Reforming Fuel Cell (CHP) Natural Gas Transportation CO 2 Transportation CO 2 Sequestration CO 2 Removal Hydrogen Transportation Fuel Cell (CHP) High Voltage DC Distance: Gas Well  Market 1,500 km Energy Transformation Point (Gas Well or Market)  Aquifer 1,500 km Case 1Case 3Case 2Case 4 ACC CO 2 Sequestration CO 2 Removal CO 2 Transportation CO 2 Sequestration CO 2 Removal CO 2 Transportation CO 2 Sequestration CO 2 Removal Methane Steam Reforming Combined CycleCombined Heat and Power CO 2 Transportation Relative Cost Competitiveness

22. 22 Global Energy Reserves and Resources Nakicenovic et. al, Global Energy Perspectives, 1998 WEC ConsumptionResource base Additional occurrences 1850 to 19901990 ReservesResource Oil Conventional903.2150145295 Unconventional -- 1933325251,900 Natural gas Conventional411.7141279420 Unconventional -- 192258450400 Hydrates ----- 18,700 Coal1252.26062,7943,4003,000 Total2567.01,2823,8085,09024,000 Uranium 170.557203260150 in FBRs -- 3,39012,15015,5408,900 Adapted from Nakicenovic et. al, 1998 (Gtoe)

23. 23 The Relative Yield of Oil and Gas: for Carbonate Source Rocks of the Aquitaine Basin, France 2000 3000 4000 5000 6000 80 160 100 120 140 Oil Sources: Hunt, Petroleum Geochemistry and Geology, 1996 and Le Tran, 1972 Gas 0100200300 Hydrocarbons (ml/g-Total Organic Compounds) 400 180 Temperature (ºC) Depth (meters)

24. 24 1985 1975 1965 1955 1985 (5% of reserves) 8 6 4 2 0 10203040506070 $000s Source: M.A.Adelman,“Mineral Depletion, with Special Reference to Petroleum”,1990 Capacity (MB/D) Investment Required per Daily Barrel (Excluding North America and Western Europe)

25. 25 CO 2 Emissions attributed to Power Generation “The Compound Advantage of Natural Gas” Natural Gas CoalOil 59 78 100 CO 2 Emissions from fossil fuel combustion (Coal = 100) Natural Gas CoalOil 54% 35% 33% Thermal Efficiency of Power Generation (%LHV) Gas: State-of-the-art efficiency for ACC in Japan -- Thermal efficiencies applied for coal & oil are present world-wide average. Natural Gas OilCoal 100 76 36 CO 2 Emissions attributed to Power Generation Note: Coal = 100(kg/MWh)

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