Water impact of an optimal natural gas production and distribution system: An MILP model and the case-study of Mexico

https://doi.org/10.1016/j.cherd.2019.11.028Get rights and content

Highlights

  • This work evaluates a macroscopic system for the exploitation and distribution of shale gas.

  • Optimal decisions include both the water management and the gas supply chain.

  • The case study uses real information from various governmental agencies in Mexico.

  • Data has been processed through the geographic information system ArcGIS.

  • Even in an optimal scenario, water availability for some municipalities is compromised.

Abstract

This study presents a mathematical programming approach for evaluating the exploitation and distribution of shale gas from potential reserves at a national level, depending upon existing infrastructure and water availability. The study describes an MILP model that simultaneously integrates water management with the design and planning of the supply chain, from basins to distribution markets and fresh water supply from available watersheds. The model is applied to a case based on the potential exploitation of shale gas basins in Mexico. The parameters of the model are mostly taken from the databases of the country, processed through the geographic information system ArcGIS. The solution provides the optimal decisions for exploitation and distribution, as well as for freshwater source selection and optimal wastewater management. Water management strategies include disposal, wastewater treatment in municipal plants and onsite treatment. The negative impact of water consumption of the optimal exploitation systems is assessed based mainly on the estimation of the water stress index. Results show that the shale gas exploitation would favor the energy independence of the country, but the availability of freshwater for some municipalities would be compromised.

Introduction

Natural gas from unconventional sources, also known as shale gas, has become one of the most promising energy sources in recent decades. With the discovery of shale gas reserves around the world, the shale revolution began in 2001 in the US. Currently, almost 44% of total natural gas withdrawal comes from shale gas wells and, according to the US Energy Information Administration (2015), an increase of 53% is projected for 2040.

For the US, the gas revolution has caused the reconfiguration of the gas industry, contradicting the prediction of shortages front short and long-term demand. Between 1990 and 2000, production experienced a growth of 0.7% each year, while consumption grew 2%; which caused an increase in imports of 9.4% annually. Between 2001 and 2011, however, production has grown 2%, in contrast to an increase in consumption of 1.3%, causing a decline in imports at a rate of 2% each year (US Energy Information Administration, 2011). Due to this continuing trend, US net natural gas exports are currently an average of 0.87 billion cubic feet per day. Because of geographical conditions, Mexico has become the consumer of 38% of these exports.

The dynamics of the natural gas industry in Mexico can be explained by the strong dependence ratio, in terms of supply and prices, which exists on the US market. From 2000 to 2013, the demand in Mexico has grown 6.2% each year, while production experienced an increase of 3.6%; the consequence is the increasing trend in imports (19% annually). A study published by the EIA in 2011, placed Mexico in fourth place worldwide with the largest gas shale resources. It has been estimated that the exploitation of shale gas in Mexico could attract between 7 and 10 million dollars, annually. The projections for the next 15 years indicate that 1.5 million direct and indirect jobs could be generated, strengthening the national energy industry by developing value chains and reducing imports of natural gas (SENER, 2016).

In contrast to the energy and economic benefits that the shale gas industry could provide to Mexico, the sector represents a negative impact on the environment; in particular, the depletion and degradation of watersheds, as well as the potential for groundwater contamination (Clark et al., 2013; Siirola, 2014).

Around the world, the development of large-scale shale gas production has been possible by the hydraulic fracturing (or fracking) and horizontal drilling technologies (Gregory et al., 2011; Vengosh et al., 2013; Ikonnikova et al., 2015). The application of hydraulic fracturing has resulted in the well known shale water management problem (Nicot and Scanlon, 2012; Small et al., 2014). A whole body of literature is available with the basic operational details and fundamentals of hydraulic fracturing (See for instance: Karapataki, 2012; Nicot et al., 2014; Rivard et al., 2014). In brief, a high-pressure mixture of sand, water, and small amounts of chemical additives is directed at the shale rock to release oil and gas from dense rock formations; hence, the process allows the gas to flow out to the head of the well. Fracking is usually combined with horizontal drilling, which helps to create new pathways to release gas (or to extend existing channels) and allows production at a large scale. The main environmental concerns about fracking are related to water consumption and water quality. Fracking uses huge amounts of water, which must be transported to the site at significant environmental cost; the production of shale gas requires a considerably larger amount of water than that of conventional natural gas (13−37 L/GJ against 9.3–9.6 L/GJ) (Clark et al., 2013). Furthermore, the produced wastewater contains salt, naturally occurring heavy metals and small amounts of chemical additives; the produced wastewater therefore needs proper management.

Current wastewater management strategies in shale gas sites can be classified into the following three strategies: (i) injection in disposal wells, (ii) treatment in municipal plants and (iii) onsite treatment (Rahm and Riha, 2014). In the first strategy, the wastewater is sent to disposal wells and pumped into deep impermeable rock layers. In general, the underground injection is the cost-effective option when nearby disposal wells are available. Nonetheless this option implies a risk of causing water contamination and inducing seismicity (US Environmental Protection Agency, 2011). The wastewater from shale gas production can also be transported to wastewater treatment plants. Then, the treated water is discharged to surface water. The final strategy involves onsite treatment for reuse, where water treatment units are installed at the shale site to treat the wastewater to achieve the necessary quality for reuse (Horner et al., 2011; Slutz et al., 2012). Due to the public concern on the water related environmental issues, it is important to develop the best approach to address challenges in the shale water management problem. The water management problem has been addressed mostly by evaluating the environmental impacts of hydraulic fracturing and through the estimation of the techno-economic analysis of specific water management options (Goldstein, 2013; McHugh et al., 2014; Best and Lowry, 2014; Rodriguez and Soeder, 2015).

The first mathematical model that addresses the long-term strategic planning and design of the shale gas supply chain was proposed by Cafaro and Grossmann (2014); in their approach, the drilling plan, the location and size of the processing plants, as well as the length and location of the pipes and the power of the gas compressors are addressed simultaneously. After the shale gas supply chain is analyzed, a clear dependence between hydraulic fracturing and water acquisition could be identified. More recent literature either focuses on the design and operation of the supply chain (Gao and You, 2015a,b; Calderon et al., 2015; Cafaro et al., 2016; Arredondo-Ramirez et al., 2016; Knudsen et al., 2014a,b; Drouven et al., 2017) or is concerned with the problem of water management (Yang et al., 2014; Mauter and Palmer, 2014; Gao and You, 2015a, b; Lira-Barragan et al., 2016a, b; Bartholomew and Mauter, 2016). An overview of this research area was reported by Gao and You (2017). Shale gas production is limited by several water-related constraints though, such as the availability of fresh water and the treatment of wastewater; also, the water management issues are caused by the production of shale gas. Hence, it is clear that, for an impact and feasibility studies, an integrated modeling framework considering both shale gas production and water management is required. Therefore, the evaluation of the shale gas supply chain and the water supply chain cannot be studied separately. Some reports present integrated modeling frameworks (Gao and You, 2015a, b; Guerra et al., 2016; Chen et al., 2017; Carrero-Parreño et al., 2018; He et al., 2018), and very few of them perform the analysis at a national level (Charry-Sanchez et al., 2014; Ren et al., 2015; Tan and Barton, 2017). In summary, in order to considering the water supply chain in a complex system where freshwater watersheds can be severely impacted, it is important to develop an integrated approach that considers all the challenges and opportunities that the particular conditions of the water sources of a given region provide.

In this work, an optimization framework based on mathematical programming has been developed. Most of the model components are based on the original work by Guerra et al. (2016), but the constraints have been redefined so that the model can be used for the particular conditions of the case-study and according to the available and more significant information at a national level. The resulting MILP model includes the evaluation of shale gas resources from the perspective of the supply chain as well as the decisions involved on the wastewater management strategies; in particular, a water stress index is estimated and has been used as one of the objectives for making the optimal decisions. The selection of the optimal shale gas basins to be exploited (an average number of wells in operation is predefined per basin) are also considered. The model has been applied to a case study based on the exploitation of shale gas reserves in Mexico. The parameters of the model were defined as close to reality as possible by using the economic and geographic databases of the country; all of the information with a geospatial component was processed through the geographic information system ESRI ArcGIS. A description of the Geographic Information Systems (GIS) methodology and the layers of information used in this work are provided in the supporting information file.

Section snippets

Problem superstructure

The problem considers a shale gas supply chain with given existing production and distribution infrastructures. The goal is to determine the optimal planning and scheduling for the shale gas production as well as the water management policies. Fig. 1 shows schematically the problem addressed in this work and the symbols used in the representation; as mentioned, the main conceptual components are similar to those reported by Guerra et al. (2016). The problem superstructure includes a set of

Mathematical formulation

This section describes the various components of the deterministic optimization model developed in this work for the design and planning of a shale gas supply chain and the corresponding water management policies. All of the symbols used in the modeling equations are defined in the supporting information accompanying this manuscript (although the basic information is also provided here). For each variable or parameter, superscripts are used as part of the identifier (variable name or parameter

Case study and results: exploitation of shale gas in Mexico and the use of ESRI ArcGIS

A discussion is conducted currently in Mexico about the potential exploitation of its shale gas reserves and the consequent impact on the environment. The proposed approach was applied to a case study involving a natural gas exploitation and distribution system from unconventional sources in Mexico. There are 6 previously studied shale gas basins recognized as potential sources of shale gas in Mexico: Chihuahua, Burro-Picachos, Sabinas, Burgos, Tampico-Misantla, and Veracruz. In addition, the

Conclusions

This paper evaluates the implementation of a natural gas production system from non-conventional sources by using a mathematical programming approach; the work focuses on the integration of both the water management and the gas supply chain. When compared to the current state of the art, this work provides the following contributions:

  • i)

    The integration of geographical information systems (ArcGIS) to a mathematical programming formulation to assess the current available infrastructure for the

Declaration of interests

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Acknowledgements

The authors would like to thank the financial support provided from CONACYT, Mexico, through grant 257018, and from TNM, Mexico, through grant 5725.16-P.

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