Monday, July 15, 2013

Under Pressure* - Propane in New Hampshire – Part 1

As I drive through New Hampshire, I have seen a good number of the distinctive white propane storage cylinders dotting the landscape next to homes and commercial buildings, in backyards or sometimes rusting in fields. I got the sense, which I later confirmed, that propane usage in NH is higher than other New England states and I decided to do some research on this fuel source and its usage.

Natural gas, which consists largely of methane, and propane are similar in some respects. They are both hydrocarbon gases and they are both odorless and colorless. The distinctive smell of propane and natural gas that we know is due to the odorant distributors are required to add to the gas for safety reasons. The odorant is normally a smelly sulfide compound, like ethanethiol in the case of propane.

Methane consists of a single carbon and four hydrogen atoms and propane has three carbons and 8 hydrogen atoms. The chemical structures of the various hydrocarbon gases one might find in natural gas and store-bought propane are shown below.

Both gases can be compressed for storage purposes but a particularly attractive feature of propane is that it can be readily converted to a liquid form by compressing the gas at moderate pressures. It is this easy conversion of propane gas into liquid form, enabling useful amounts to be stored on-site in steel storage tanks of various sizes, that makes it a versatile fuel. At 80oF the pressure in a propane storage tank is about 150 pounds per square inch (psi) which is not much higher than the pressures in my road bike tires which I typically inflate to 110 psi with a bicycle pump. Natural gas can also be liquefied, but very low temperatures and higher pressures are involved.

Most of us are familiar with propane in its liquefied form in those 5 gallon propane tanks that many of us have attached to our backyard barbeques (unless you are a charcoal purist - which I used to be). Once condensed into a liquid, propane weighs quite a bit. In fact, a full 5 gallon tank of propane can contain almost 20 lbs of propane - which is why those little cylinders are so heavy once they are filled. The weight of the 5 gallon empty tank is about 20 lbs so a full tank weighs about 40 lbs. Liquid propane is readily converted back into a gaseous form simply by turning open the valve on the tanks and releasing the pressure.
Propane, like methane, is a clean-burning hydrocarbon gas with fewer harmful combustion products than oil or coal. The main emission products are carbon dioxide and water, but on a per energy unit basis, propane does release ~20% more carbon dioxide than natural gas. Out of all the carbon-based fuels, methane has the lowest amount of carbon released, per unit of energy released, which is the reason that carbon emissions in the US have dropped as we have moved from coal-fired to natural gas-fired electricity generation. The table below shows the carbon dioxide emissions per million BTUs produced by the combustion of different fossil fuels.

Other than backyard barbequing, propane has a host of other uses including petrochemical production, home heating and cooking, a fuel for industrial forklifts and extensive use in powering farm-based irrigation and refrigeration systems. It also has a growing importance, due to its portability and easy storage, as a back-up fuel for renewable energy systems such as solar power.
Some of the attractive features of propane include the following:
  • High energy density once liquefied and available in many different storage sizes.
  • Highly portable fuel.
  • Bulk transportation by pipeline, rail car or tanker truck.
  • Useful alternative to natural gas where natural gas pipelines are not available. It is often the fuel of choice in remote areas.
  • Versatile home-based fuel that can be used for heating, hot water and cooking applications.
  • Easy onsite storage and, if leaks occur, they do not contaminate the ground like oil.

To get an understanding of the propane business, it is helpful to know where propane comes from. Propane is a byproduct of the natural gas and oil business and it is not produced for its own sake. The byproduct nature of propane means that propane supply, and thus pricing, are highly dependent on oil refining output and natural gas supply. When natural gas is recovered from conventional or shale gas deposits, it is often accompanied by other hydrocarbon gases, such as ethane, propane, propylene and butanes. Natural gas that contains a lot of these other hydrocarbons is referred to as "wet" gas. These other gases are removed during the processing of natural gas, which serves to remove water, sulfur and other byproducts as well. The hydrocarbon gases are also separated into separate fractions - ethane, propane, butane, etc., - each of which has its own specific use. Propane is also a byproduct of the crude oil refining process, during which longer chain hydrocarbon molecules are cracked into shorter chain molecules such as propane, butane, pentane, etc.

Propane was first harvested and liquefied as a useful byproduct of oil refining which is why it is also sometimes called Liquid Petroleum Gas, or LPG. Because the propane we get is a byproduct of various gas separation processes, it does contain other components. The consumer grade we purchase is known as HD-5 (Heavy Duty – no more than 5% propylene) and it is required to contain over 90% propane, a maximum of 5% propylene and 5% ethane and butanes. It can also contain trace amounts of water and sulfur.
As with other energy forms, propane usage in New Hampshire has increased over time. Recent data indicate that over the 1960 to 2011 period, usage has increased 3.8% on a compounded annual basis, outstripping total NH energy use which grew by 2.4% over the same period. Even though growth in propane usage has been greater than that of general energy consumption, propane is a very small percentage of our total New Hampshire energy use: in 2011 it represented only 3.6% of the total consumption of energy in NH. So, in the larger scheme of things, some might view propane as unimportant, but for folks out in remote areas, without access to natural gas, it is very critical. The consumption figures for 2011 were 3.7 million barrels of propane, which is equivalent to 152 billion gallons (at 42 gallon/barrel) or 13.9 trillion BTU. The figure below shows the growth in NH propane consumption since 1960.

The following chart shows the 2011 annual consumption of propane in the New England States and it shows that my original hunch, that propane usage in NH was high, was correct.

However, if the numbers are adjusted to a per capita basis as I have done in the table below, it is Vermont and then New Hampshire that lead the pack on a per person basis. The state that uses the most propane overall is Texas, which is responsible for 60% of the US propane consumption. The reason for this high consumption is the large petrochemical industry in Texas and the bulk of propane consumption in Texas is for the production of petrochemicals used to produce plastics and other organic compounds.

Propane is a useful fuel but one of the biggest concerns associated with propane is its cost. In the table below, I show a listing of the costs of the various home energy sources we use in NH along with their recent energy prices. This is an update of one previously published in Closer to Home. Included in the table are the energy content per BTU/unit, the cost in $ per million BTU ($/MMBTU) and then, using energy conversion efficiency concepts for each fuel, I have calculated the cost of the useful energy produced from each type of energy, assuming the energy source is used for heating only.

It is easier to examine this information in graphical form and, to this end, I have generated the chart below which allows us to directly compare the costs of the input and useful heating output values for each of these fuel sources on a common basis, $ per million BTU. The chart tells us a lot but if we focus on propane which is right at the top of the chart, it is clear that at this time, propane is the most expensive fuel in the State on energy output basis. Presently, natural gas is by far the cheapest energy source in NH.

Like other energy sources, propane prices have risen over time as shown in the figure below and, for the most part, propane prices have moved in lock step with oil prices. The figure also clearly shows the decrease in natural gas prices since the large-scale advent of fracking technology in 2008 which is used to harvest natural gas from shale deposits. The tight relationship between propane and oil prices is somewhat explained by the fact that propane is a byproduct of oil production but propane is also a byproduct of natural gas drilling and there is presently a surfeit of propane due to all the natural gas we are harvesting. What's more, there is now so much propane being produced that we are now exporting propane from the US. New Englanders do not appear to have benefitted much from the increased supply of propane: that will be the topic of Part 2 of this blog where I will be looking at the supply, demand and pricing issues pertinent to propane usage in New England.

Many of us use propane at some time or another so a few safety comments about propane are appropriate. In terms of home usage, whether using a gas grill or for home heating, it is important to understand that propane is a highly combustible gas under pressure* and it is crucial to make sure that all the gas line fittings are tightly fastened and that there are no leaks. You can easily check for leaks using a soapy water solution and for those of you using propane for home heating and cooking, I would strongly recommend the installation of a combustible gas monitor in your home which can detect dangerous levels of methane and propane. If there is a propane leak you might be able to smell it, but sometimes, because propane is heavier than air, it can accumulate to dangerous levels in basements and trenches in or around your home where you might not be able to smell it. My advice is to back up your nose with technology. A home combustible gas detector unit only costs about $50 and is a wise investment. It will also work if you have natural gas in your home.

To wrap up this week's post, I thought I would cover a topic that is of great interest to all us home grillers. One of the great mysteries of gas grilling is how to determine how much propane is left in the propane cylinder and whether you will run out before all the hamburgers are grilled. Now, if you are like me, you have run out of propane when grilling on a Sunday evening when no refilling stations are open and you have had to endure dirty looks from your significant other and beer-fueled jibes from friends. Well, those days are over - there is an easy way to determine how much propane you have left. Simply weigh the cylinder on a regular bathroom scale and subtract the tare weight which you can find stamped on the top ring of the cylinder. The pictures below are of my propane cylinder just a few days ago. As you can see the weight of the cylinder is 28.5 lbs and the tare weight is 18lbs so my tank contained 10.5 lbs of propane – it was about half full.

The next thing to figure out is how much propane a grill will consume. Typically a home barbeque with all the burners running has a rating of about 40,000 BTU/hr. The BTU content of propane is 91,333 BTU/gal and, at 4.23 lbs propane per gallon, this is equivalent to 21,550 BTU/lb. This means that you should be able to grill for about 1 hour for every 2 lbs of propane you have in the propane tank. So, based on the photos above, I have enough in my tank to grill for about five hours. By the way, those pressure gauges that you can buy for propane tanks are pretty useless. Because propane is a liquefied gas, the vapor pressure is constant as long as there is propane in the tank. The pressure will only begin to drop when there is no longer any liquid in the tank and by then it might be too late and you are likely to run out of propane while grilling.

Until next time, don't run out of propane and remember to turn the lights off when you leave the room.

Mike Mooiman
Franklin Pierce University

(*Under Pressure – A big 1980s hit for Queen and David Bowie who put this song together while improvising in a recording studio in Montreux, Switzerland. It retains some of its improvisational roots in its "Um, boom, ba, bay.." type lyrics and its distinctive bass riff is something every bass player fools around with one time or another. It is easy to find this song on Youtube but here is an interesting version featuring Annie Lennox and David Bowie practicing for the Freddie Mercury tribute concert. David Bowie could not be more relaxed, singing and smoking at the same time.)


Sunday, July 7, 2013

Sixteen Tons* - Tough Times Ahead for Coal-Fired Electricity in New Hampshire

Prior to the commissioning of the Seabrook nuclear power plant in 1990, a large portion of the electricity generated in New Hampshire came from the combustion of coal. Since then, as shown by the data in the figure below, the importance of coal-fired electricity has diminished substantially. Last year coal was only responsible for 7% of the electricity generated in the State. In this post, we take a look at the coal-fired electricity business in New Hampshire and some of the challenges it faces.

To understand the coal-fired electricity business, we should start with the fuel – coal. Coal is the most abundant fossil fuel on the planet and it consists largely of carbon plus varying amounts of hydrogen, oxygen, nitrogen and sulfur. Coal used for electricity generation normally has a carbon content greater than 75% and it also contains compounds of aluminum,calcium and silicon that form coal ash when coal is combusted. On top on those elements, coal is also contaminated with deleterious metals, such as cadmium, mercury, selenium and lead. The key problem associated with coal is that, on burning, it releases these nasty elements and they end up in the off-gases, from which they have to be removed in expensive particulate capture and gas scrubbing units. In spite of these air cleaning units, considerable quantities of these metals are released into the atmosphere.

In a coal-fired power plant, the coal is pulverized and fed into a burner which heats a boiler that produces steam. The steam, in turn, drives a turbine which turns the generator to produce electricity. The main inputs to a coal-fired power plant are coal, water and labor; the outputs, other than electricity, are numerous and problematic. First of all, there are all the nasty contaminants such as sulfur and the deleterious metals that need to be removed from the off-gases in large water-based scrubbing units. These metals are recovered from the scrubbing solutions and then need to be disposed off as hazardous waste. A basic flowsheet for the coal-fired electricity business with the main inputs and outputs are shown in the figure below.

Generating electricity from coal is highly inefficient so there is a great deal of waste heat that is created. As I noted in Not So Classical Gas, the conversion efficiency for NH coal-fired power plants is only 31%. In other words, only 31% of the energy in the coal is converted into electricity and the other 69% is lost as waste heat. A great deal of this waste heat is transferred to the cooling water that is critical for the operation of these power plants. This cooling water either comes from natural waters in rivers and lakes or from the large evaporative cooling towers such as the ones shown in the figure below which are typical of power plants located away from large natural water supplies. The problem with using natural water supplies is that large volumes of water are needed to absorb the waste heat. In the process, the water is filtered, treated and is warmed up. This, of course, negatively impacts any fish and other aquatic creatures that might be sucked into the cooling water intakes. On the discharge side, the receiving water body might have a limited capacity to absorb the waste heat and this can impact the natural water ecosystem, affecting both plant and aquatic life forms.

Coal ash is another byproduct of coal combustion. This largely consists of a fine, non- combustible silica and calcium oxide residue and it often contains appreciable amounts of deleterious elements like mercury, cadmium, chromium and others. The ash is stored on-site at power plants or is disposed of in landfills. In some cases it can even be used as a component of Portland cement.
It is all these nasty byproducts - hazardous waste produced from the scrubber solutions, coal ash and a great deal of waste heat – that are behind the assertion that coal is a dirty fuel. And this does not even begin to consider the issues associated with coal mining - which is a difficult, complex and hazardous operation that has significant environmental impacts. Coal's only redeeming factors are that the US has large coal reserves and, until recently, on an energy equivalent basis, it was less expensive than natural gas.

New Hampshire has two large coal-burning plants both owned by Public Services of New Hampshire (PSNH): the large 440 MW facility located on the Merrimack River in Bow and the smaller Schiller plant located on the Piscataqua River in Portsmouth. Some technical details for these operations are provided in the table below.

Due to lower costs of wholesale electricity, driven by low natural gas prices, both of these operations have been challenged the past few years to provide electricity at prevailing market rates. As a result, the outputs from these operations have dropped off considerably and in 2012 the Merrimack plant only operated at 31% of its theoretical capacity and the older Schiller Station only ran at 9% of its theoretical capacity. However, as the chart below shows, in the first quarter of 2013, with the brief period of natural gas pipeline limitations that we encountered in New England, these operations, and particularly the Merrimack Station, were again able to operate at higher rates. In the first quarter the capacity factors of the Merrimack and Schiller operations were 0.83 and 0.32, respectively, which are higher than the 2012 numbers presented in the table above. Unfortunately, this improvement is most likely a short-term event. Recent monthly data from the EIA show that, in the second quarter, these plants are barely operating again. Other than in the unlikely advent of high natural gas prices, it appears to be another tough year ahead for these coal-fired operations.

On top of the market price challenges, the Merrimack plant has had to deal with new operating permits for discharge of wastewater from their operations, which limits water-borne metal discharges as well as waste heat. The latter limitation could even result in the installation of those large expensive cooling towers shown in the photo above. At this time I believe the wastewater discharge permit, which took the EPA 14 years (!) to draft, is still in dispute.
To compound PSNH's coal-fired electricity challenges, the NH Public Utilities Commission (PUC) recently released a report which discussed the challenges associated with PSNH's high cost of electricity, its dwindling customer base in a competitive environment, the challenges of recovering costs of past investments from a smaller group of customers and even the divestiture of PSNH electricity-generating operations, including their coal-fired power plants. If PSNH were to divest themselves of their generating assets, this would complete the process of deregulation, leaving PSNH just in the distribution business. But to do so would require the State to come to terms with how to compensate PSNH for past investments and fixed costs that they have not recovered through the sales of electricity. This is indeed a difficult and contentious issue and will require a lot of study. This would have all been easier years ago, before the advent of cheap natural gas, when coal plants still had value and stranded costs could have been recovered by higher prices for generating units. Now there is even some speculation that PSNH NH coal-fired power plants have no value at all.
So NH coal operations are being squeezed every which way. They have to deal with cheap natural gas, tougher air and water discharge restrictions, customer loss due to competitive landscape, and then - just two weeks ago - President Obama mentioned in a recent speech that he has directed the EPA to prepare to limit carbon dioxide emissions from new and existing coal-fired power plants. This is not good news for coal-fired energy in NH and perhaps it is time for PSNH to consider converting these their coal-fired operations to natural gas operations, which is what some utilities in other parts of the country are doing. Something has to be done otherwise we and PSNH are going to be singing that that famous line from the Tennessee Ernie Ford coal mining song, Sixteen Tons*, "Sixteen tons and what do you get - another day older and deeper in debt."
Quite frankly, it is all a bit of a mess. Because of foot dragging, extended negotiations during restructuring deliberations and legal actions by various parties, PSNH has perhaps held onto to its generating assets long after they should have been sold. With the recent advent of cheap natural gas, those coal-fired assets are now worth substantially less and, because legislation allows for cost recovery in the case of divestiture, modification or retirement of assets, NH residents are going to be on the hook one way or another for investments made by PSNH to maintain their coal-burning attributes.

Such are the joys and responsibilities of a public utility. On one hand, we want them to provide cheap and reliable electricity, we want them to be there as a backstop to other providers, we want them to invest in infrastructure build out and investors and lenders, who foot the bills for the infrastructure projects, quite correctly expect a financial return. Oh yes, and then we want them heavily regulated in a competitive environment as well. All of that comes at a price. The verdict on the wisdom of restructuring is, in my mind, still out. Yes, there is cheap electricity available and many folks are benefiting from lower rates, but we are still are going to have to foot the bills for past public utility investments, one way or another. If the message goes out that lenders and investors have to bear the brunt of the write-offs, this will send a chilling message to this group and future large-scale infrastructure investments, which we very much need, will become difficult to fund. There are tough days ahead as we work through the consequences of the restructuring programs underway.
There is perhaps some gloating over the way PSNH is being squeezed from all sides but it is important to note that natural gas is not necessarily an all-around better option. Yes, it is a cleaner fuel with far lower deleterious contaminant levels, but the means of recovery from shale via fracking has a host of associated issues including wastewater treatment, methane losses and seismic disturbances. A recent study showed that the greenhouse effect impact from fugitive methane emissions associated with shale gas is rather shocking. The article, published in the journal Climate Change, analyzed the methane emissions connected with shale gas exploitation and the authors compared the effect of higher methane emissions associated with fracking for natural gas with conventional gas wells. Even though methane combustion releases less carbon dioxide than coal burning, the increased methane emissions from shale gas extraction, coupled with the fact that the greenhouse effect of methane is 25x that of carbon dioxide, means that, in the short term (20 years), the greenhouse gas impact of shale gas is considerably higher than that of coal. However, over a 100-year period, shale gas is equivalent to that of coal because methane has a shorter atmospheric lifetime than carbon dioxide. This study suggests that transitioning from coal to natural gas produced from shale gas will do little in the short term for global warming trends. Now that is pause for thought.

So where do we stand at the moment? A week ago PSNH published a lengthy but well reasoned response to the PUC report and it is clear that there is much to be taken into account in the debate regarding the fate of PSNH's generating assets. The New Hampshire legislature has recently passed legislation SB 191 which requires NH to establish a ten year state energy strategy plan. We have a lot to think about and deal with in the next year or so and it is now time to set up conferences, roundtables and meetings so we can come up with a well-researched and thoughtful plan for the future. Remember: it is not just about us. It is about future generations as well and they expect us to make wise decisions. Let's make the best of this opportunity and not leave them with a battered can that we have just kicked down the road.

Until next time, remember to turn off the lights when you leave the room.
Mike Mooiman
Franklin Pierce University

(*Sixteen Tons – A song written by Merle Travis and made popular in the 1950s by Tennessee Ernie Ford. Johnny Cash did a great cover but here it is featuring one of my favorite guitar slingers Jeff Beck playing with Billy Gibbons of ZZ Top. Enjoy Sixteen Tons)

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