Archive for February, 2012

Low natural gas prices: the good and the bad

In January, natural gas prices hit 10-year lows.  This is due to a couple of factors, mostly increased supply and decreased demand.  The increase in supply comes courtesy of the newly tapped gas fields using hydraulic fracturing, or fracing (pronounced “fracking”), to extract previously unrecoverable gas reserves.  The decrease in demand is a result of our slow economic recovery and an unseasonably warm winter.  Currently, spot prices for natural gas are about a quarter of what they were during the 2008 peak.  These low prices will result in over $100,000 in savings on our gas bills at both schools next year.

So, low prices sound great, right?  They’re saving us (and the rest of the US) a lot of money.  Additionally, electric utilities are beginning to switch from coal to natural gas for generation (increases in coal prices have helped this trend), which results in less CO2 and other pollutants being emitted.  For example, in Ohio, a traditionally coal-dominated state, electricity generated from natural gas has surged from 1% in 2001 to 9% by the end of 2011.

Now for the bad news.  Most new gas production in the US is a result of fracing (see shale gas increase below), which has unknown environmental consequences.  A study released by EPA last year found carcinogenic fracing compounds in an aquifer in Wyoming, but the gas industry, as always, insists that it’s a safe process.  A nationwide safety study on fracing is expected to be completed later this year.  While links between fracing and aquifer contamination are still not yet known, the process of any oil and gas drilling usually results in surface spills and other environmental damages.

There is another drawback to lower gas prices.  As prices decline, the relative competitiveness of renewable and alternative energies decreases.  Natural gas is often referred to as a “bridge fuel,” meaning it is a relatively clean fuel that can displace coal and oil until renewable energies are cost-competitive.  If low prices become the norm, this bridge will begin to extend farther into the future.  Government policy, such as tax credits for wind and solar (currently in effect, but set to expire soon) could help alleviate the effects of natural gas prices on renewables.

Current projections of our natural gas supply are around 100 years, but many feel that is grossly overstated and could be as low as 20 years.  Futures prices for gas don’t rise above the $5 mark until 2016, though, which means we could have several more years of low prices.  The key takeaway is that there is considerable uncertainty in future prices, supply, and regulations.

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How it works: Chilled water

Another vital part of campus infrastructure is the production and distribution of chilled water.  Chilled water is used to dehumidify and cool buildings during the summer months.  It’s a very efficient way of cooling, often two to three times more so than a residential air conditioner.  Without further adieu, here’s how it works.

Chilled water is produced at either a central plant (like at Hollins) or at each individual building (like at Emory).  A chiller uses the same principles as your home air conditioner, except that instead of cooling the air directly it cools water.  This is done because water has a great capacity to store and absorb energy.  A chiller can be either air-cooled or water-cooled.  Water-cooled chillers tend to be much more efficient because they use water as their heat exchange medium rather than air.

Regardless of the type, chillers operate in a similar fashion.  They use the vapor compression cycle to extract heat from one medium and reject it to another (just like your air conditioner at home).  A chiller uses a refrigerant that is compressed and then put through an expansion device (causing a release of heat which cools the refrigerant) to extract heat from the chilled water loop and reject it to the outside air (air-cooled) or to a cooling tower (water-cooled).  Chilled water is typically cooled to 40-45 degrees and then distributed in a series of insulated underground pipes to buildings.  Once it gets to the building, it is distributed to cooling coils in air handlers, which distribute the cooled air the same way they do heated air.  As the chilled water circulates through the building, it extracts heat from the air and is then sent back to the central plant to be cooled again.

Chillers are notorious energy hogs.  They use between .5-1.2 kW per ton of cooling produced (a ton is unit of measurement used in cooling and refrigeration and equals 12,000 btu’s).  The central plant at Hollins has 1300 tons of cooling capacity, meaning that it can use up to 1 megawatt on a really hot day.  That’s almost half of the load for the entire campus!  That’s why we’re pushing for higher temperature set points during the summer.  Finding a balance between comfort and energy efficiency is always often a complicated endeavor, though.

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