Fossil fuels (coal, oil & natural gas) consist of a series of increasingly complex hydrogen and carbon compounds ranging in composition from the lightest of gases (Methane) through a sequence of increasingly heavier gases and oils to tar and even asphalt. Coal is, of course, always solid, but also exhibits a range of increasingly complex hydrocarbons. Natural gas is the lighter end of the hydrocarbon series that typically consist of 80 – 95% Methane (CH4), and a few to fractional percentages of Ethane (C2H6), Propane (C3H8), Butane (C4H10), Isobutane (C4H10), Pentane (C5H12), Hexanes (C6H14), Cyclohexane (C6H12), Heptane (C7H16), and Octane (C8H18). The heavier the hydrocarbon molecule, ie, larger number of carbon and hydrogen atoms, the more readily the gas liquefies under pressure.
Methane, being the most abundant gas, is used principally for home heating and as a fuel for industrial production and electricity generation. It is also used as a feed stock for chemicals such as agricultural fertilizers. Propane, somewhat heavier, is sold in the liquefied state as bottled gas for domestic use. Butane, limited in quantity and easily liquefied, is used in small applications such as a propellant in pressurized spray cans and in cigarette lighters where it immediately returns to the gaseous state for easy ignition when the pressure is released. .
A number of contaminants may be present in natural gas such as nitrogen, carbon dioxide, oxygen, hydrogen, helium, argon, hydrogen sulfide, carbon monoxide, water, and sometimes oil. These must be separated from the gas and utilized separately or disposed of in an environmentally appropriate manner.
Interestingly, carbon and hydrogen atoms bond easily into many different molecular arrangements and combine readily with other elements such as nitrogen and oxygen. This makes possible the building of complex molecules in nature to form amino acids that provide the basic building blocks of proteins, the stuff of life! Hence, we too, along with all other life forms, are made of hydrocarbons.
Natural gas is derived predominantly from formerly living plants, both terrestrial and marine, thus its common reference as a “fossil” fuel along with its close relatives, coal and oil. The organic matter that served as the source for natural gas accumulated with fine grained sediments (silt and clay) deposited by rivers in low lying coastal depressions and in marine basins off the mouths of rivers. The organic matter was buried quickly, protected from decay and gradually, through long periods of time and under the influence of geothermal heat and overburden pressure, degraded to the residual hydrogen and carbon compounds that became natural gas.
Coal was formed almost entirely from terrestrial plants, pollens and spores that accumulated in stagnant swamps and preserved from decay under anaerobic (oxygen starved) conditions. While coal is the solid, in situ, remains of plant material, the more fluid and mobile hydrocarbon gas by-products of organic decomposition were driven off in the coal forming process to become entrapped in nearby rocks. The Appalachian basin that extends parallel to the east coast of the U.S. from northern Alabama to Canada is an excellent example of the association of coal and natural gas. During the Pennsylvanian period of the Paleozoic era, 286 to 320 million years ago, this region was characterized by a series of lush tropical swamps that hosted thick accumulations of dead plants and sediments buried and compressed into layers of coal and rocks. The sequence of rocks and coal were subsequently crumpled and folded into vast mountain ranges by tectonic forces within the earth that have since been carved into scenic ridges and valleys by the erosive force of running water (click on Charles Holbrook in the left sidebar to review the article on Earthquakes for an understanding of this process). Coal is mined, augured and stripped today in West Virginia, Kentucky and Pennsylvania from these rocks interspersed with numerous producing gas fields throughout the region.
Natural Gas Energy Equivalency to Oil:
The relationship of oil to natural gas on an energy equivalency basis is about 6:1. Energy output is measured in British Thermal Units (BTUs) and is used as a standard comparison for the heat value of different fuels. A 6:1 ratio means that 6000 cubic feet of natural gas will produce the same amount of heat energy as one barrel (42 U.S. gallons) of oil. Given the current price of natural gas at about $3.80 per mcf (thousand cubic feet) and the price of oil near $82.00 per barrel, natural gas is an energy bargain. At today’s prices, one could purchase 21.6 mcf of gas for the cost of one barrel of oil that would yield 3.6 times more energy. It is also a clean burning fuel.
In the mid-1960s: before the Arab – Israeli wars; before the mid-East oil producing nations nationalized their oil resources; and, before the Arab oil embargoes; oil was priced at about $3.00 per barrel and natural gas was $0.20 per mcf. The price ratio between oil and natural gas then was 2.5:1 on a BTU basis. Back then, 45 years ago, one could buy only 15 mcf of gas for the price of a barrel of oil compared to 21.6 mcf at today’s prices. So, not only is natural gas a significantly better energy bargain than oil, it is also less expensive today than it was 45 years ago compared to the price of oil. The U.S. is nearly self-sufficient in natural gas whereas more than 60% of our daily consumption of oil must be imported from foreign countries, aggravating an already bloated trade deficit.
Infrastructure and Logistical Considerations:
A friend, fellow geologist and former colleague in the petroleum industry, Jim Brown, illuminates a number of contrasts between natural gas and the other fossil fuels that bear on price differences, energy yields and the logistical and infrastructure requirements for production, transportation and marketing:
• Natural gas development requires enough reserves to economically support the building of expensive infrastructure such as pipelines, compression stations, etc. to transport the gas to point of sale. Gas must be compressed every so many miles and oil must be pumped. Gas transportation is very inflexible, being dependent on pipelines, and that limits marketing options. Small reserves without access to an existing pipeline may be left behind.
• Oil and coal, on the other hand, can be trucked, barged, shipped or transported by pipeline optimizing market flexibility. Additionally, both oil and coal, unlike natural gas, can be stored at the site of the producing well or mine and trucked out periodically when sufficient volume has accumulated for optimum transportation efficiency.
• Transporting oil by tankers is substantially cheaper than liquefying and transporting natural gas (LNG). Transporting coal from foreign markets is not an issue since the U.S. is self sufficient in coal reserves.
• The price of natural gas will be suppressed relative to the price of oil so long as it remains in competition with coal for industrial and power generating customers. Many of these customers can readily shift back and forth between the gas and coal depending on which is more cost effective at any given time. Coal is extremely cheap and will influence the price of gas as long as coal is allowed to be used to generate electricity.
• Oil is inherently more valuable than gas because it can be used as a transportation fuel as well as many other applications including the feedstock for more than 3000 petrochemical and synthetic products. Gasoline is an extremely concentrated form of energy and is most cheaply made from oil. If natural gas could compete as a viable transportation fuel, its price/value would rise accordingly.
• Wet gas is more valuable than dry because the liquids can be stripped out and refined into a broad array of end products. It is an interesting tidbit that the word “gasoline” originated with natural gasoline (gas condensate), but was replaced by cracking technology that allowed the efficient refining of crude oil into gasoline.
• One of the new technological innovations in fossil fuels is the creation of syndiesel from natural gas. It can be transported and distributed by trucks and has a higher BTU value than traditional diesel with few or no pollutants. Exxon is pursuing such a venture in Qatar capitalizing on the Eurasian market where a higher percentage of cars are designed to run on diesel.
• A renowned authority on oil prices, Henry Groppe, once used a coffee cup as a prop to illustrate just how much energy is stored in gasoline and how efficient and cheap it is. “At $3.00/gallon, much of it tax, a cup of gasoline that costs less than 19 cents will transport 5 people and some luggage over 2 miles at 35mpg. This illustrates the extreme difficulty in finding an alternative to gasoline as a vehicle fuel.”
The Need for a Comprehensive National Energy Policy:
If the promoters of natural gas as the solution to American’s reliance on foreign oil succeed, increasing demand will certainly lead to rising natural gas prices. The price gap between oil and natural gas will narrow, leading to higher prices for consumers across the board for home heating, electricity generation, industrial production, etc.
The ultimate solution to lessening America’s dependence on foreign sources of energy must include increasing domestic production of oil, coal and natural gas to improve the supply/demand balance and expand the use of nuclear energy for electricity generation.
America can only move in the direction of less reliance on foreign energy imports and stem the huge outflow of American trade dollars with an enlightened National Energy Policy that simplifies the regulatory nightmare and encourages domestic energy development by opening up new areas for exploration combined with realistic, achievable and cost effective environmental safeguards.