COLUMN-Drought risk adds energy headache-Gerard Wynn

Thu Mar 15, 2012 8:32am EDT

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(Gerard Wynn is a Reuters market analyst. The views expressed are his own.)

By Gerard Wynn

LONDON, March 15 (Reuters) - Countries struggling to plot a greener energy mix face the extra headache of water scarcity from drought, squeezing their options as they look to cut carbon emissions and source locally.

Energy choices are still wide open, from hydrogen to wind power and clean coal, in electricity generation and road transport.

Yet accounting for water, to allow for climate change and concerns that energy demand compounds water scarcity, forces tradeoffs.

For example, policymakers seeking more secure supplies of liquid transport fuels find that both tar sands and biofuels use more water than conventional gasoline - estimates put corn ethanol at 100 or 1,000 times more.

And in a tradeoff with cutting carbon emissions, the unproven technology of carbon capture and storage could cut CO2 emissions from coal-fired power plants by 90 percent, but increase water consumption by the same amount.

Low-carbon geothermal and hydro power can both use far more water than fossil fuels. The exceptions are wind and solar power, which tick all the boxes (local, low carbon and low water).

Meanwhile shale gas can use more freshwater from underground supplies than conventional oil and gas, posing a limit on growth and a risk for groundwater contamination.

Water is a growing concern because most of the rise in energy demand will be in developing countries, notably in Africa which already faces stiff challenges including competition with irrigation for farming and access to safe drinking water.

Meanwhile increasingly erratic rainfall is one of the main climate change impacts already observed, from the Mediterranean to the Indian monsoon, alongside higher temperatures and more frequent heat waves.

ENERGY SOURCE

Water is used for resource extraction (oil, gas, coal, biomass), energy conversion (refining and processing) and power generation.

In primary energy extraction and refining academics agree that biofuels consume by far the most water, roughly followed in descending order by tar sands, conventional crude oil, coal, uranium and natural gas.

Biofuels are especially thirsty, depending on the level of irrigation, because of the water used to grow farm crops such as corn and then refine these into ethanol.

Water scarcity has been a theme at the major World Water Forum in Marseille this week, where the U.N.'s World Water Development Report cited research that biofuels require up to 1,000 times more water than gasoline, per kilometre.

A Harvard University study reported corn ethanol as one to two orders of magnitude (10 to 100 times) more thirsty than alternatives.

Meanwhile, shale gas appears to be in the same range as conventional gas, but poses a threat as exploitation grows.

A report prepared for the U.S. Department of Energy in 2010 ("Water Management Technologies Used by Marcellus Shale Gas Producers") found an average U.S. well used 2.2 million gallons of freshwater, and concluded that for the vast Marcellus field in the east of the country: "If the number of new shale gas wells continues to rise rapidly, water supplies could become a barrier".

POWER

Electricity generation also compounds water use, for example in cooling to remove waste heat and to generate steam to drive a turbine.

A Global Environment Facility report, also published this week, estimated that an average, 1 gigawatt thermal power plant (burning fossil fuels or using nuclear power generation) used the equivalent of 25 Olympic-sized swimming pools a day.

But there are differences: in particular the experimental technology carbon capture and storage (CCS), meant to all but eliminate CO2 emissions from fossil fuel power plants, increases water consumption by 50-90 percent, according to a study by the World Energy Council (WEC).

That's because of cooling in the CO2 capture process itself and because extra energy is needed to run the plant.

After CCS and hydro power (potentially a massive water consumer through evaporation), in descending order come nuclear power and then traditional coal power, advanced coal, gas, solar and wind power, according to the WEC study.

Consumption is an equal concern in developed countries: the east of England was recently declared in drought, an expected climate trend which led the ratings agency Standard and Poor's to warn of higher costs to water and power companies.

Britain's Environment Agency says the electricity generation sector is the second biggest abstracter after public water.

LESSONS

The key concern is that emerging sources of energy worldwide, from tar sands to biofuels and CCS technology, are more water-intensive than traditional fuels, while curbing water use may conflict with cutting carbon.

The U.N. report this week made recommendations including:

1. Improve water data (water consumption estimates for shale gas and tar sands, massive emerging resources, are sometimes contradictory)

2. Integrate water and energy plans and policy, given that mutual dependence can reinforce demand: water is needed to produce energy, and energy to extract water

3. Support fuels which are local, low-carbon and low-water

4. Use reclaimed water (from industry or waste) for energy production wherever possible

5. Invest in water and energy conservation and efficiency (Reporting by Gerard Wynn; editing by Jason Neely)

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