Shale gas

The Fast solution to Pollution

The need of a new energy source

The worlds population has reached 7 billion
and is projected to reach 10 billion in the
coming decades. Globally, the food supply
chain consumes 30% of the worlds available
energy. New technologies brings perks, but
also increase the consumption of electricity.
The world will need greatly increased energy
supply in the next 20 years, especially
cleanly-generated electricity. Infact its
demand is increasing twice as fast as overall
energy use and is likely to rise by more than
two-thirds 2011 to 2035. In 2012, 42% of
primary energy used was converted into
electricity.

Oil and coal, the consequences

A regular sunny day under the smog cage in
Shangai. The situation in China is so critical that
certain areas are forbidden to citizens due to high
pollution.

Pollution is the concern of our days. The

environment is suffering the abuse of oil and coal
combustion, which involves a fallout on human
health.

The Decarbonization challenge

There are many signs of the state of worlds global pollution: glacial retreat, temperature rising, increments in
respiratory disease, and much more. Among all just temperature has been chosen as a traffic light to the
situation:
The red light is set on 4C, that is the increment that is not permitted to happen to not put at risk the
environment more than already is.
The green light doesnt exists. In fact its impossible to prevent global warming considering the actual
situation.
The yellow light, the last hope, is set on 2C.
The time is running out, less than 10 years are left to reach the peak of global emissions beyond which will not
be possible to hit the yellow. The global emissions must be cut by 50% and not exceed 1075 GtCO2 in total by
2050, after that year it must continue to fall. If the road its not uphill enough, even if all the requirements are
met there is still a 50% chance to miss the 2C objective.

Alternatives
Countless are the possible solutions to try to obtain cleaner and safer energy.
Hydroelectric and geothermic plants are the most powerful ones, but the exploitation of the
sources depends a lot from the geological conditions. Wind farms and solar panels have very costly
maintenance with a strong dependency from the weather, not considering their vulnerability. The
future hope will probably be the use of the seas power, but there isnt yet a practical solution
available.

What is Shale gas?

Hydrocarbons can be stored in large volumes in
rocks, which are in principle not reservoir rocks
at all, but shales, and other very fine grained
rocks in which the volume necessary for storage
is provided by small fractures and extremely
small pore spaces. Such rocks possess extremely
low permeability. This is called shale gas or shale
oil.
After the development of this resource in
America, many studies were done about this
argument. The results lead to the discover of
huge shale gas reserves all over the world.

Fracking

Truths, Myths and Legends 1/2

Fracking pollutes air more than any other extraction

method. Wrong
Fracking is the same procedure used in oil extraction but
the burnt methane gas emits less CO2 than oil wells.
Fracking could pollute water basins. Wrong
The well is pressurized, so the gas wont flow from
fractures. Also the shales around are impermeable.
Fracking could cause earthquakes. Wrong
Again the procedure is the same as oil extraction,
nevertheless the coal mines causes a lot more
earthquakes.
Fracking needs a lot of space. True
With the actual technology, the drilling and extraction
of shale gas requires space for the well, filters,
compressors and tanks.

Myths and Legends 2/2

Fracking procedure wastes water. Wrong
The 60% could be reused. Also, 19000 cubic meters
are needed to operate hydraulically fractured shale
well for a decade. The same amount is needed to
run a 1000MW coal fired power plant for 12 hours.
Frackings water is toxic. Wrong
The substances used in the process are under the
5% of the water used, also are basically composed
of sand and other substances that could be found
also in everydays food.
Fracking needs a proper regulamentation. True
There are lots of accidents, explosions and
environmental damages caused by improper
fracking. Shale gas extraction proves to have lower
greenhouse gas emissions along the entire fuel
chain than coal and oil, then just adding commons
sense could avoid all the problems listed above

NGVs
Natural gas vehicles (NGVs) operate on the same basic principles as
gasoline-powered vehicles. This type of fuel is gaseous rather than liquid at
standard pressure and temperature, then some modifications are required
to make an NGV work efficiently. These changes are primarily in the fuel
storage tank, fueling receptacle/nozzle and the engine.
Most NGVs operate using compressed natural gas (CNG), which is stored on
board vehicles in high-pressure tanks. It may also be stored in the form of
liquefied natural gas or LNG.

When the engine is started, natural gas flows from the bottles into a fuel
line, then enters a regulator to reduce the pressure. The gas feeds through
a gaseous fuel-injection system, which introduces the fuel into the
cylinders. Sensors and computers adjust the fuel-air mixture so that when
a spark plug ignites the gas, it burns efficiently and very cleanly. For LNG,
the liquid is heated, converting it back to a gas.

Pollution of Gasoline, Diesel and NG

Todays NGVs could easily get the better of
Diesel and Gasoline fuelled vehicles. Not only
the performances are nearly the same, but
the GHG emissions are much lower for NGVs,
not considering the price of Cng, getting lower
and lower while Shale gas gets foothold.

The infrastructure
One of the key advantages that shale has
over other unconventional gases and
hydrogen its the existence of an
infrastructure, the same used for
conventional gas.
There are many pipelines that connect every
continent, while many others are being built
at the moment. This permits the faster
growth of fueling stations, assuring the
related growth of ngv sells.
One of the obstacle of other sources is the
costs incurred in creating an infrastructure
big enough to guarantee an easy vehicle
refuel. For example, converting the actual
distribution to hydrogen just in North
America would cost at least 500trillion
dollars.

Ngv Market Situation

NGVs on roadways worldwide is projected to reach 35.2 million by
2020.
China and Pakistan the largest markets, Thailand and India are
growing CAG between 8 and 16%.The combination of readily
available and inexpensive CNG, vehicle availability, and strong
government support are contributing to these countries NGV
expansion.
North Americas LDV grows with CAG 19% NGV but will remain the
smallest segment because of the limited availability of both
vehicles and refueling infrastructure. Buses, as well as MD and HD,
are growing at similar annual compound rates and are anticipated
to account for 47 percent of total bus sales and 5 percent of total
truck sales by 2020.
The Western and Eastern European markets often are linked
because Russia and the Middle East supply much of the natural
gas consumed by countries in those markets. Italy and Ukraine are
the slowest growing because of their relative maturity.

HD NGVs China

2013

2030

Manufacturer N. Engines
SDEC
6571
Yuchai
19507
Weichai
15400
Sinotruk
6673
Cummins
9240
FAW
4107
DongFeng
4107
Total
65605

Manufacturer N. Engines
SDEC
94792
Yuchai
281414
Weichai
222169
Sinotruk
96273
Cummins
133302
FAW
59245
DongFeng
59245
Total
946441

Value of the market, Firm X Case 1/2

Pros

Firm Xs products quality and durability is at top level.

The brand is Italian.
Partnerships with CNH, FGA, Chrysler and many others.
Know how, people and patents.
The only producer of factory level components, the competitors only produce retrofitted parts.
A dedicated consultant on field for all the contracts duration.

Cons

ECU is the new product.

Market penetration and interpretation is very low, due to the absence of a real TC in China.
Only two people stationary in China with low business experience.
The price is at European level, so its the highest in the Chinese market.

Value of the market, Firm X Case 2/2

2013

Pressure regulator
Firm X
Competitor 1
Competitor 2
Competitor 3

Mkt Share Ecu

Mkt Share
63,22 Firm X
0
10,17 Competitor A
43,66
14,08 Competitor B
42,25
12,52 Competitor C
14,08

Firm X is the most powerful player in PRs, but also

basically absent in ECUs market.

10/2014->10/2019->10/2024
With this market volume even the great
expenses for the TC (Technical Center)
case in the worst scenario results in a
better outcome than the No TC
alternative.

Case
Best No TC
Best TC
Medim No TC
Medium TC
Worst No TC
Worst TC

Npv 5y
Npv 10y
Mkt share PR Mkt Share ECU
2328,89
12397,10
100,00
100,00
2666,62
13695,95
100,00
100,00
1217,21
7463,07
73,40
63,22
1778,10
8846,42
73,40
63,22
-3222,55
-474,72
63,22
0
-2463,20
1344,57
63,22
0

Other NG transport applications

Natural gas can be used in all classes of vehicles

motorcycles, cars, vans, light and heavy duty trucks,
buses, lift trucks, locomotives. Marine applications
are increasing, with tug boats, ferries, barges and
ships using CNG and LNG. Natural gas powered
aircraft are also being trialled by Boeing, while Space
Xs new engine, the Raptor, will propel the Mars
Colonial Transporter.

LD Alternatives? 1/2

?
Which one would you choose?

LD Alternatives? 2/2

At the moment, there are 544 stations all over the world.
500T$ needed for the infrastructure conversion.

Only available on lease because the

price estimated is at well over $1
million.
2 Ferrari FF
MSRP: $295,000
Base Engine: 6.3L V12 652HP
1 Lamborghini Aventador
MSRP: $441,600
Base Engine: 6.5L V12 691hp

Are Hydrogen and Electric cars really Clean?

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Both hydrogen and electric cars use

fuel cells, Graphite is a key
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PF

No CO2 emissions from the car, but what about the road the energy
has to travel? Lets take a look to the Well to Wheel chart.

(*) Reference Vehicle : Gasoline CO2 emissions (Tank-to-Wheel) : 140 g/km

Source : Concawe & DENA German Energy Agency

Conclusions
What this study evidences about shale gas:
Its abundant and could really help to satisfy the always growing energy demand.

The extraction is cleaner than any other fuel, but needs proper regulamentation.
Its a powerful resource to substitute oil and coal in both energy production and transportation helping
decarbonisation.
The diffusion of shale gas could even reduce price of energy, due its availability. Even now the price for
1MWh is 66 pounds from gas factories, 120 from offshore wind farms and 90 from nuclear.
The distribution infrastructure is already well developed, with a strong growth in the years to come.
The transportation world is already changing following the shale gas wave with trains, ships, aircrafts and
bikes over classic NGVs. This markets volume is so big that need a very careful economic analysis.

Its the only fuel that could help reduce pollution while waiting for an economic and non-polluting way to
use hydrogen.

Thank you for your attention

Disclamer
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