Navigant Research Blog

Fracking Well Microbes Could Be Boon or Barrier for Oil & Gas Industry

— October 27, 2016

Pipeline (2)“Life finds a way.” It’s a quote seen on inspirational posters, calendars, and mugs. One location where this phrase is particularly applicable, though, is in hydraulic fracturing wells. Scientists recently discovered unique colonies of microbial organisms growing in these wells. Microbes have a massive impact on the flow of elements through our environment, so their presence in highly inhospitable fracking wells could have widespread implications for the oil & gas industry.

Thirty-one unique colonies of microbes were found in two separate wells in Ohio. Despite being geographically separated by several hundred miles, the microbial communities were strikingly similar. One species, never before identified, has been dubbed Candidatus frackibacter. This microbe likely developed in hydraulic fracturing wells, having only been found in that environment. The rest of the colonies probably came from surface ponds and adapted to the high pressure, temperature, and salinity of the shale well environment.

Increased Yield

The impacts of these microbes on the oil & gas industry are multifold. First, a number of the microbes identified are methanogens, which produce methane as a byproduct of metabolism. Methane is a key component of natural gas, so the presence of methanogens could actually increase the net yield of a natural gas well. Osmoprotectants, compounds produced by certain bacteria to protect them from very high salt concentrations, are converted into methane by these microbes. In this case, the compound in question is glycine betaine. More research must be done, but someday oil & gas companies might stimulate wells with osmoprotectants in addition to fracturing fluid. The process of exploiting microbial methane is already in use in the coalbed methane industry.

Potential Damage

On the other hand, these microbes could have a profound impact on the longevity of fracturing infrastructure. Corrosion of metal pipes can be a microbial process, and can happen rapidly in aqueous systems once microbes grow to a sufficient concentration. Microorganisms can greatly change the pH and alkalinity of water, leading to corrosion. This is one motivation behind adding chlorine or other disinfectants to drinking water distribution systems. As microbes become more adapted to fracturing wells, the rate of corrosion could increase over time, resulting in additional costs to natural gas producers. Thus, it may become necessary to inhibit growth of microorganisms, including the methanogens mentioned above.

Previously thought too inhospitable an environment to support life of any kind, we now know hydraulic fracturing wells host their own unique population of microorganisms. These microbes can have a huge impact on the productivity—and lifespan—of these wells. As their exact composition becomes better understood, the oil & gas industry will need to make adjustments to maximize profits and minimize any potential damage.


Audi Motorsport Marks the End of an Era as It Shifts to Formula E

— October 26, 2016

Car driving fastOver more than 3 decades, few companies have demonstrated more consistently how to “Win on Sunday, Sell on Monday” than Audi. Since at least the 1980s, Audi has used its involvement in motorsports to demonstrate the efficacy of its latest technologies. In the process, the Volkswagen (VW)-owned premium brand has risen from a niche player to being considered on par with its chief competitors at Mercedes-Benz and BMW. However, as a direct result of the VW diesel emissions scandal, the Audi racing program is making its biggest pivot in nearly 20 years.

The modern era of Audi motorsports began in the early-1980s with the introduction of Audi’s Quattro all-wheel drive system. Drivers such as Michel Mouton, Walter Rohrl, and many others demonstrated that, from that time on, all-wheel drive would be essential in order to win in the World Rally Championship. But since most drivers don’t spend their days driving through forests at high speed, Quattro was then proven on tarmac in series like Trans Am.

Since 1999, Audi has been developing its latest powertrain technologies in endurance racing, including 13 overall victories in 18 years at the 24 Hours of Le Mans. The various evolutions of the R8 that competed from 1999 to 2005 demonstrated the efficiency of gasoline turbocharged direct injected (GTDI) engines that Audi brands in its production models as TSI. While most casual observers consider racing to be all about speed, efficiency can be just as important—especially in 24-hour endurance races like Le Mans. The more time a car spends in the pits getting refueled, the less time it is racking up miles on the circuit. Increasing the number of laps between stops from 10 to 11 and eventually to 14 or 15 laps makes a huge difference in the ability to win.

Performance and Efficiency

As a premium brand, Audi customers are often as interested in performance as they are in efficiency. In 2006, the company set out to prove that you don’t have to sacrifice one for the other. The new R10 and its successors, the R15 and R18, have been powered with a series of TDI turbodiesel engines that quickly came to dominate everywhere they ran—including the first ever victory by a diesel at Le Mans. Thanks to the particulate filters used on the R10, it was both smoke free and quieter than most gasoline racing engines.

In 2012, Audi launched the final series of its endurance racer with the R18 e-tron that paired a smaller TDI V6 with an electro-mechanical flywheel hybrid drive system. Like its predecessors that became the first Le Mans winners with GTDI and diesel engines, the R18 was the first hybrid to win Le Mans.

Following the September 2015 revelation that the VW Group (including the VW, Audi, and Porsche brands) had been cheating on diesel exhaust emissions on millions of vehicles around the world, the promotion of diesel was no longer viable. In the past year, the VW Group has made a major commitment to electrification, announcing that it will introduce 30 new plug-in models in the next 10 years. It is unlikely that any VW-owned brand will ever sell another diesel-powered light duty vehicle in the United States.

Following the final two races of the 2016 World Endurance Championship, the Audi effort will end entirely. It is now all about electrification, so from 2017 onward, Audi will focus instead on the battery-powered Formula E championship with a full, factory-backed effort launching in 2018. As the technology improves, electric racing will expand; by the 2020s, it’s likely that we will see full EVs at Le Mans and possibly the return of Audi.


New E-Bike with Unlimited Electric Range Shakes Up EV Industry as a Whole

— October 26, 2016

Electric range is a key factor for consumers when determining whether an EV can satisfy their transportation needs. In the car industry, perhaps the most significant development within the plug-in EV space is the imminent availability of 200-mile range EVs offered at reasonable prices ($35,000 to $40,000). In the power two-wheeler (PTW) market, similar electric range capabilities are now being offered by electric motorcycle manufacturers such as Zero Motorcycles.

Similar, But Different

For electric bicycles (e-bikes), range has not been as much of an issue compared to other EVs since e-bikes can be pedaled and are thus still operational even with a fully drained battery. However, range anxiety is still a significant concern for some riders since e-bikes are generally much heavier than traditional bicycles, making them undesirable to ride without electric assistance. The recently released VELLO BIKE+ is a self-charging electric folding bike that can be fully recharged while riding through an integrated kinetic energy recovery system (KERS). When in this self-charging mode, energy is collected through braking and pedaling downhill as mechanical energy is converted into electrical energy via the KERS.

The VELLO BIKE+ also appears to be the lightest e-bike on the market, weighing just 26 lbs., which also helps the e-bike use electricity more efficiently than heavier models. While the power of electric assistance under the self-charging mode is likely to be somewhat minimal in order to provide unlimited range, the low weight of the e-bike makes the VELLO BIKE+ practical for this application. Having such a low weight allows the e-bike to be easily pedaled under low levels of power electric assistance and reportedly manageable to pedal with no electric assistance at all. The Vienna, Austria-based company VELLO has raised over $230,000 on Kickstarter for the BIKE+.

Beyond E-Bikes

Creating an e-bike with unlimited range is a profound development for not only the e-bike industry, but also for the EV industry at large. E-bikes have now demonstrated that it is indeed possible to eliminate range anxiety, and new initiatives in the automotive industry offer the potential to do the same for EVs—such as the UK testing of roads that wirelessly charge EVs as they drive. At a time when an increasing number of jurisdictions are planning to ban internal combustion engine vehicles, electric range capabilities will become a crucial factor in the adoption of electric transportation of all kinds—whether on two wheels or four.


As Natural Gas Electricity Generation Grows, Risks and Opportunities Emerge for Energy Consumers

— October 26, 2016

Natural gas is becoming increasingly vital to US electricity generation. With vast new resources made available by hydraulic fracturing, use of the fuel is growing across various sectors, especially in the area of electricity. Although coal has led electricity generation since before 1950, natural gas finally took the highest share for most of 2015 and almost all of 2016 (as seen in the chart below).

While many welcome the growth of this cheap, low-emissions fuel, some risks are arising for energy consumers. Put simply: a system that depends heavily on natural gas is more susceptible to supply shocks. With slumping production and demand from the electricity sector, prices are already trending up. The monthly Henry Hub price reached $2.99/MMBtu in September, the highest in 20 months. This may be exacerbated by a colder winter that is driving predictions of higher gas and electricity prices and volatility compared to last year. And this week marks 1 year since the largest natural gas leak in US history hit southern California, the fallout of which still reminds us how unforeseen disasters can shock supplies.

This type of volatility can affect everything from household budgeting to the balance sheets of multi billion-dollar utilities. Notably, commercial and industrial electricity consumers can be heavily affected to the tune of millions of dollars by volatility in gas prices, electricity prices, or both. Thankfully, advances in alternative generation options exist to mitigate these risks.

Monthly Net Electricity Generation, All Sectors (Jan 2011 – Dec 2016)

AForni Blog

(Source: US Energy Information Administration)

Alternative Generation Advances

Renewables include technology solutions like wind and solar, and (in this context) other zero-emissions complements like battery storage and demand response. These technologies are being broadly embraced thanks to government support, cost declines, and emissions reductions initiatives. The dramatic growth in corporate renewable power purchase agreements is one of the most powerful examples of the Energy Cloud in action.

Onsite gas-fueled generation may seem subject to the same market vicissitudes affecting natural gas, but it has some key advantages, even over renewables. First, customers installing fuel cells, gensets, or microturbines can purchase long-term gas contracts that will guarantee a certain rate for gas (and therefore electricity)—a key risk mitigation tool. Compared to centralized generation, onsite gas generation is installed faster and with less regulatory risk, while also eliminating the transmission and distribution energy losses (and risks) of the electric grid. Compared to renewables, these technologies can be installed in a far smaller footprint and, crucially, generate electricity without relying on the wind or sun.

Onsite dual-fuel generation consists of gensets, turbines, or microturbines that can operate on diesel and natural gas (and often, other fuels). Such equipment has many of the same advantages of onsite gas-fueled generation, with the added bonus of accepting multiple fuel types. While natural gas is often the preferred fuel (due to emissions requirements and lower cost), shocks to natural gas supply and/or price can make an alternate fuel like diesel favorable, if only for a short period. Diesel can also be stored onsite, ensuring access in a major catastrophe. This technology has been most embraced in the US oil & gas sector, but has growing applications both stateside and abroad. Watch for the coming revolution in liquefied natural gas to open new opportunities in flexible generation, too.

Natural gas will be an important electricity fuel for a long time to come. But in an era with baseload in decline and renewables on the rise, these tools should not only mitigate natural gas risk, but also build flexibility into an electric grid that sorely needs it.


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