MODELING FRESH WATER CONSUMPTION ASSOCIATED WITH PRIMARY ENERGY PRODUCTION IN THE USA

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MODELING FRESH WATER CONSUMPTION ASSOCIATED WITH PRIMARY ENERGY PRODUCTION IN THE USA 2010-2040 James J Dooley The Combined GCAM Community Modeling Meeting and GTSP Technical Workshop for 2013 October 2, 2013 The author gratefully acknowledges the Platform for Regional Integrated Modeling and Analysis (PRIMA) for funding this work 1

Coal Underground coal mining Surface coal mine Mining and washing/benefication for high and medium sulfur coals Mining of low sulfur coals Mining and washing/benefication for high and medium sulfur coals What is included in primary energy production? Mining of low sulfur coals Uranium Hard rock uranium mine (including milling) In situ leaching uranium mine Uranium hexaflouride conversion Uranium enrichment via gaseeous diffusion or centrifuge Fuel Rod/ Pellet Assembly Bioenergy Ethanol Produiction Biodiesel Production 2 Natural Gas Crude Oil Imported Crude Oil Domestically produced oil Domestic offshore gas production Onshore gas production Domestic offshore Domestic onshore Primary oil production Secondary water flooding Oil production from tight formations including hydrofacking Tertiary Oil Production Conventional natural gas production Coalbed methane production Shale gas / tight gas production including hydrofacking Steam driven EOR CO2-EOR Natural gas processing, dehydration, compression to pipeline pressures Non-hydrocarbon injection EOR Crude oil refining

Four Cases from AEO2013 Were Used To Explore Changes in Primary Energy Production Cases in US 2010-2040 Reference Case Low Energy Imports US dependence on imported oil is 37% by 2040 (down from 60% in 2005). Real GDP grows at an average annual rate of 2.5 percent from 2011 to 2040. Crude oil prices rise to about $163 per barrel (2011 dollars) in 2040. US follows Low Uranium Production Scenario. US becomes net energy exporter in mid 2030s. US energy production from shale gas, tight gas, and tight oil wells expands rapidly. Also transportation fuel efficiency rises rapidly depressing domestic demand for liquid fuels and VMT growth is modest (0.2%/year). US energy related GHG emissions are 4% below Reference Case by 2040. US follows High Uranium Production Scenario. High Energy Imports Ctax$25 US dependence on imported oil is 44% by 2040. Estimated ultimate recovery (EUR) per shale gas, tight gas, and tight oil well is 50 percent lower than in the Reference case. Improvements in vehicle fuel efficiency are slower to materialized and vehicle miles traveled is higher than in other cases. US energy related GHG emissions are 1% higher Reference Case by 2040. US follows Low Uranium Production Scenario. Applies a price for CO 2 emissions throughout the economy, starting at $25/tCO 2 in 2014 and rising by 5 percent per year through 2040 (reaching about $90/tCO 2 in 2040). US energy related GHG emissions are 31% below Reference Case by 2040. US follows High Uranium Production Scenario. 3

Fresh Water Consumption (km 3 /year) 7.2 7 6.8 6.6 6.4 6.2 6 5.8 5.6 5.4 US Primary Energy Production 2010-2040 Total Fresh Water Consumption (km 3 ) Reference Ctax25 High Import Low Imports 4

Reference Case Fresh Water Consumption by Fuel (km 3 /year) 7 Fresh Water Consumption Associated with US Primary Energy Production Reference Case (km 3 /year) 6 5 4 3 2 1 Oil Refining Crude Oil Production Natural Gas Biofuel Refining Coal Uranium 0 5

Estimating Fresh Water Consumption for US Uranium Production Uranium Hard rock uranium mine (including milling) In situ leaching uranium mine Uranium hexaflouride conversion Uranium enrichment via gaseeous diffusion or centrifuge Fuel Rod/ Pellet Assembly 6

Two Scenarios of US Domestic Uranium Production (t U 3 O 8 ) 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% US Dependence on Imported Uranium USA Domestic Uranium Production 7

Low Domestic Uranium Production Case Fresh Water Consumption by Technology/ Process Fresh Water Consumption by State High Domestic Uranium Production Case 8

Estimating Fresh Water Consumption for US Coal Production Coal Underground coal mining Surface coal mine Mining and washing/benefication for high and medium sulfur coals Mining of low sulfur coals Mining and washing/benefication for high and medium sulfur coals Mining of low sulfur coals 9

Coal Production by Region (EJ) Reference Case Coal Production (EJ) 25 20 15 10 5 0 Fresh Water Consumption for Coal km^3 Reference Case Water for Coal Production 0.180 0.160 0.140 0.120 0.100 0.080 0.060 0.040 0.020 - Appalachia High Sulfur (Bituminous) Applachia Low Sulfur (Bituminous) Eastern Interior High Sulfur (Bituminous) Western Interior High Sulfur (Bituminous) Gulf of Mexico High Sulfur (Lignite) Western Montana Low Sulfur (Sub-Bituminous) Wyoming Low Sulfur (Sub-Bituminous) Rocky Mountain Low Sulfur (Bituminous) Rocky Mountain Medium Sulfur (Bituminous) Akaska / Washington State Low Sulfur (Sub-Bituminous) Applachia Medium Sulfur (Bituminous) Eastern Interior Medium Sulfur (Bituminous) Eastern Interior Medium Sulfur (Lignite) Gulf of Mexici Medium Sulfur (Lignite) Dakota Medium Sulfur (Lignite) Western Montana Medium Sulfur (Sub-Bituminous) Wyoming Medium Sulfur (Sub-Bituminous) Rocky Mountain Low Sulfur (Sub-Bituminous) Rocky Mountain Medium Sulfur (Sub-Bituminous) 10

$25/tCO2 tax Case Coal Production (EJ/year) Coal Production by Region (EJ) 25 20 15 10 5 0 Appalachia High Sulfur (Bituminous) Applachia Low Sulfur (Bituminous) Eastern Interior High Sulfur (Bituminous) Western Interior High Sulfur (Bituminous) Gulf of Mexico High Sulfur (Lignite) Western Montana Low Sulfur (Sub-Bituminous) Wyoming Low Sulfur (Sub-Bituminous) Rocky Mountain Low Sulfur (Bituminous) Rocky Mountain Medium Sulfur (Bituminous) Akaska / Washington State Low Sulfur (Sub-Bituminous) Fresh Water Consumption for Coal km^3 $25/tCO2 tax Case Water for Coal Production 0.200 0.150 0.100 0.050 Applachia Medium Sulfur (Bituminous) Eastern Interior Medium Sulfur (Bituminous) Eastern Interior Medium Sulfur (Lignite) Gulf of Mexici Medium Sulfur (Lignite) Dakota Medium Sulfur (Lignite) - Western Montana Medium Sulfur (Sub-Bituminous) Wyoming Medium Sulfur (Sub-Bituminous) Rocky Mountain Low Sulfur (Sub-Bituminous) Rocky Mountain Medium Sulfur (Sub-Bituminous) 11

Fresh Water Consumption for US Coal Production Fresh Water Consumption (km3/year) Fresh Water Consumption for US Coal Production 2010-2040 (km 3 /year) 0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 Reference Ctax25 0.04 High Import 0.02 Low Import 0 The Low Import case also reduces US coal production due to its abundant domestic oil and natural gas As one would expect, the climate policy significantly reduces US coal production. 12

Estimating Fresh Water Consumption for US Biofuel Refining Bioenergy Ethanol Produiction Biodiesel Production 13

Domestic US Biofuel Production (millions of bbls/day) US Domestic Biofuel Production (millions bbls/day) 1.2 1 0.8 0.6 0.4 0.2 0 2010201520202025203020352040 US Biofuel Fresh Water Consumption (km3/year) 0.2 0.15 0.1 0.05 Fresh Water Consumption associated with US Domestic Biofuel Refining (km 3 /year) 0 Ethanol - Low Energy Imports Scenario Ethanol - High Energy Imports Scenario Ethanol- Reference Scenario Ethanol - Ctax$25 Scenario Biodiesel - Low Energy Imports Scenario Biodiesel - High Energy Imports Scenario Biodiesel - Reference Scenario Biodiesel - Ctax$25 Scenario 1 4

Estimating Fresh Water Consumption for US Natural Gas Production Natural Gas Domestic offshore gas production Onshore gas production Convetntional natural gas production Shale gas / tight gas production including hydrofacking Coalbed methane production Natural gas processing, dehydration, compression to pipeline pressures 15

Fresh Water Consumption km 3 /year) 0.3 0.25 0.2 0.15 0.1 0.05 0 Fresh Water Consumption (km 3 /year) for US Natural Gas Production 2010-2040 Reference Ctax25 High Import Low Imports 16

US Domestic Natural Gas Production (tcf/year) Natural Gas Production by State and Formation (tcf/year) 100% 80% 60% 40% 20% 0% TX Shale Gas LA Shale Gas Offshore Gulf Coast Natural Gas CO Coalbed Methane WY Coalbed Methane AR Shale Gas OK Shale Gas PA Shale Gas Fresh Water Consumption for Natural Gas Production (km3/year) Fresh Water Consumption for Natural Gas (km3/year) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% TX Conventional Natural Gas LA Conventional Gas Alaska Conventional Natural Gas CO Conventonal Gas WY Conventional Natural Gas AR Conventional Gas OK Conventional Natural Gas NM Coalbed Methane 17

Estimating Fresh Water Consumption for US Domestic Crude Oil Production Imported Crude Oil Domestic offshore Primary oil production Crude oil refining Crude Oil Domestically produced oil Secondary water flooding Oil production from tight formations including hydrofacking CO2-EOR Domestic onshore Tertiary Oil Production Steam driven EOR Non-hydrocarbon injection EOR 18

19 Percent of US Crude Oil Production by State and Production Process 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Domestic Crude Oil Production 0% Percent Fresh Water Consumption Associated with US Crude Oil Production by State and Production Process Fresh Water Consumption Crude Oil Production 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% TX Primary Production TX Secondary Water Flooding TX Tight Oil TX CO2-EOR AK Primary Production AK Secondary Water Flooding AK Tight Oil AK CO2-EOR CA Primary Production CA Secondary Water Flooding CA Tight Oil CA CO2-EOR CO Primary Production CO Secondary Water Flooding CO Tight Oil CO CO2-EOR WY Primary Production WY Secondary Water Flooding WY Tight Oil WY CO2-EOR ND Primary Production ND Secondary Water Flooding ND Tight Oil ND CO2-EOR Lower 48 Offshore Other

Fresh Water Consumption (km3/year) 6 5 4 3 2 1 Fresh Water Consumption for US Crude Oil Production (km 3 /year) Reference Ctax25 High Import Low Import 0 Fresh Water Consumption (km3/year) 6 5 4 3 2 1 Fresh Water Consumption for Refining (km 3 /year) Reference Ctax25 High Import Low Import - 2010201520202025203020352040 20

A Shift to Lower Resource Grades Might Result in More Water Intensive Primary Energy Production! A shift to lower grades of primary energy resources implies a more energy-intensive primary energy sector.! Whether this shift to lower grades of the primary energy resource results in a more water intensive primary energy system is very dependent upon fuel, site and reservoir specific characteristics. Tight Oil / Gas Formations Enhanced Oil / Gas Production 21 Fresh Water Consumption (km3/year) 7.2 7 6.8 6.6 6.4 6.2 6 5.8 5.6 US Primary Energy Production 2010-2040 Total Fresh Water Consumption (km 3 /year) Reference Ctax25 High Import Low Imports 5.4 Primary Oil / Gas Production Derived from Figure 1 Stylized Depiction of water use and energy production as a function of time (figure taken from Supplemental Information for Nicot and Scanlon, 2012)

22 Backup Slides

23 What is happening at the state, basin, and production technology level that drives the difference in fresh water consumption between these scenarios?

US Primary Energy Production 2010-2040 Total Fresh Water Consumption (km3) 7.2 Changes in Fresh Water Consumption Low Import Case minus Reference Case (km 3 /year) Fresh Water Consumption (km 3 /year) 0.600 0.500 0.400 0.300 0.200 0.100 0.000-0.100-0.200-0.300-0.400 Fresh Water Consumption (km3/year) 7 6.8 6.6 6.4 6.2 6 5.8 Reference Low Imports 5.6 Texas Crude Oil Refining Lousiana Crude Oil Refining Mississipi Crude Oil Refining Texas Crude OilProduction New Mexico Crude Oil Production Oklahoma Crude Oil Production Utah Crude Oil Production Wyoming Crude Oil Production Montana Crude Oil Production Illinois Crude Oil Refining Missisipi Crude Oil Production Colorado Crude Oil Production North Dakota Crude Oil Production Alaska Crude Oil Production California Crude Oil Refining New Jersy Crude Oil Refining Indiana Crude Oil Refining Kentuky Crude Oil Refining Kansas Crude Oil Refining Ohio Crude Oil Refining Oklahoma Crude Oil Refining Pennsylvania Crude Oil Refining Total 24

Difference in National and Regional Fresh Water Consumption Ctax$25 Case Compared to Reference Case (km 3 /year) Fresh Water Consumption (km3/year) 0.30 0.20 0.10 - (0.10) (0.20) (0.30) Fresh Water Consumption (km3/year) 6.6 6.5 6.4 6.3 6.2 6.1 5.9 5.8 Texas Crude Oil Refining Texas Crude OilProduction Texas Natural Gas Production Lousiana Crude Oil Refining Mississipi Crude Oil Refining Mississipi Crude Oil Production West Virginia Coal Production Kentuky Coal Production Illinois Crude Oil Refining Illionois Uranium Enrichment Illinois Coal Production Wyoming Coal Production California Crude Oil Refining New Jersy Crude Oil Refining Total 6 US Primary Energy Production 2010-2040 Total Fresh Water Consumption (km3) Reference Ctax25 5.7 25

Fresh Water Consumption (km3/year) Difference in National and Regional Fresh Water Consumption High Import Case Compared to Reference Case (km 3 /year) 0.6000 0.5000 0.4000 0.3000 0.2000 0.1000 0.0000 Fresh Water Consumption (km3/year) Texas Crude Oil Refining Lousiana Crude Oil Refining Mississipi Crude Oil Refining Texas Crude OilProduction Wyoming Crude Oil Production Texas Natural Gas Production Illinois Crude Oil Refining Missisipi Crude Oil Production Colorado Crude Oil Production California Crude Oil Refining New Jersy Crude Oil Refining Total 7.2 7 6.8 6.6 6.4 6.2 6 5.8 US Primary Energy Production 2010-2040 Total Fresh Water Consumption (km3) Reference High Import 5.6-0.1000 26

Super Fast Summary as I am way over my allotted time already!! The consumption of fresh water for primary energy production is small compared to water use for crude oil refining or electricity production.! It is a good thing we have an Integrated Assessment Model that we can use as it would be interesting to see what happens to primary energy fresh water consumption (as well as total fresh water consumption)! when there is significant deployment of PHEVs,! in world that had a transportation sector that is dominated by biofuels 27

28

Coal Underground coal mining Surface coal mine Mining and washing/benefication for high and medium sulfur coals Mining of low sulfur coals Mining and washing/benefication for high and medium sulfur coals Mining of low sulfur coals Uranium Hard rock uranium mine (including milling) In situ leaching uranium mine Uranium hexaflouride conversion Uranium enrichment via gaseeous diffusion or centrifuge Fuel Rod/ Pellet Assembly Bioenergy Ethanol Produiction Biodiesel Production 29

Imported Crude Oil Domestic offshore Primary oil production Crude oil refining Secondary water flooding Crude Oil Oil production from tight formations including hydrofacking Domestically produced oil CO2-EOR Steam driven EOR Tertiary Oil Production Non-hydrocarbon injection EOR Domestic onshore Domestic offshore gas production Natural Gas Onshore gas production Convetntional natural gas production Coalbed methane production Shale gas / tight gas production including hydrofacking Natural gas processing, dehydration, compression to pipeline pressures 30

Reference Case Fresh Water Consumption by Fuel (km 3 /year) Fresh Water Consumption Associated with US Primary Energy Production Reference Case (km 3 /year) 7 6 5 4 3 2 1 Oil Refining Crude Oil Production Natural Gas Biofuel Refining Coal Uranium 0 Fresh Water Consump0 on in 2040 (km 3 /year) Crude Oil Refining 4.896 Crude Oil Produc0on 1.087 Natural Gas 0.199 Biofuel Refining 0.171 Coal 0.170 Uranium 0.007 31

Total Domestic Energy Production/ Consumption and Total Energy-related GHG Emissions 120 Total Domestic Energy Production and Total Domestic Energy Consumption (Quads/year) 110 100 90 80 70 60 Reference Total Domestic Supply Reference Total Consumption Low Imports Total Domestic Supply High Imports Total Domestic Supply Ctax$25 Total Domestic Supply Low Imports Total Consumption High Imports Total Consumption Ctax$25 Total Consumption Energy Related Greenhouse Gas Emissions (GtCO2e/year) 7 6 5 4 3 2 1 Reference emissions Low Imports emissions High Imports emissions Ctax$25 emissions 0 32

Water Use in the Low Domestic Uranium Production Case US Government has a monopoly on the conversion of U 3 O 8 to UF 6 and there is only one site in Southern Illinois that does this step in the nuclear fuel cycle. 3 3

34 Water Use in the High Domestic Uranium Production Case

Fresh Water Consumption (km3/year) 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Fresh Water Consumption for US Crude Oil Production (km 3 /year) Reference Ctax25 High Import Low Import 35

3 6 US Domestic Natural Gas Production (tcf/year) Natural Gas Production by State and Formation (tcf/year) 35 30 25 20 15 10 5 0 TX Shale Gas TX Conventional Natural Gas LA Shale Gas LA Conventional Gas Offshore Gulf Coast Natural Gas Alaska Conventional Natural Gas CO Coalbed Methane CO Conventonal Gas WY Coalbed Methane WY Conventional Natural Gas AR Shale Gas AR Conventional Gas OK Shale Gas OK Conventional Natural Gas PA Shale Gas NM Coalbed Methane Other Fresh Water Consumption for Natural Gas Production (km3/year) Fresh Water Consumption for Natural Gas (km3/year) 0.25 0.2 0.15 0.1 0.05 0