Higher natural gas futures prices for 2021 and a continued glut of crude oil are prodding U.S. shale firms to boost gas drilling and production. Shale producers are increasing spending on natural gas, a change from the past, amid forecasts for a 45% jump in gas prices next year compared to a 15% gain for Brent prices. The largest U.S. shale oil producer, EOG Resources, this month said next year it will start selling gas from 15 new wells from a newly discovered field holding 21 trillion cubic feet of gas.
(Bloomberg) -- To keep coal-fired power plants running in an era of lower emissions, Japan’s top electricity producer aims to dilute the fossil fuel with ammonia. It’s a plan that would require further development of the technology and imports of the gas to surge at least 100-fold.Replacing 20% of coal used by the country’s plants will need ammonia imports to reach 20 million tons a year from as soon as 2030 compared to about 200,000 tons now, according to Jera Co. By 2050, the company intends to run the plants entirely on the gas, a potential further jolt for global demand.It’s a proposal that illustrates the challenges in Japan to meet the country’s new climate targets. Environment Minister Shinjiro Koizumi has called for financial support from the government for companies seeking to lower their carbon footprint, while the government is considering funding research into new green technologies.Read more: Japan Pledges Net-Zero Emissions by 2050 Without Clear RoadmapDeploying carbon-free fuels at thermal power plants would make Japan one of the world’s top consumers of ammonia, a market in which global production was about 150 million tons last year, according to the U.S. Geological Survey.Mass production of the gas at low cost is a major obstacle, according to Takeo Kikkawa, a professor at the International University of Japan. “Another issue is safe handling of ammonia as it’s toxic gas and harmful for humans if it leaks from storage,” he said.There are also technical hurdles. Boilers in all existing coal plants will need to be upgraded so that the turbines that can burn ammonia, according to Daine Loh, a power & renewables analyst at Fitch Solutions.“The targets are a bit ambitious at the moment,” Loh said by email, referring to Jera’s goals. Co-firing coal with ammonia is “still very much in its experimental stage, and even if this works, it will be greatly dependent on the economic viability of it, so we are still a very long way to go.”Jera, a joint venture between Tokyo Electric Power Co. and Chubu Electric Power Co., plans to convert all of its coal power plants to run on 100% ammonia by 2050 under a bid to become carbon neutral by that year. It’s hard to predict how much ammonia Jera will need to use to achieve carbon neutrality, a spokesman at the company said.Most ammonia is made by burning natural gas or LPG that emits pollution, but Japan has promoted the development of green ammonia, which is made with renewable energy. Saudi Arabia sent the world’s first shipment of blue ammonia, a version made from fossil fuels with a process that captures and stores carbon dioxide emissions, to Japan earlier this year for power generation.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
As the world races towards a greener future, coal country could stand to benefit drastically by embracing the hydrogen boom