Design and optimization of shale gas energy systems: Overview, research challenges, and future directions

Abstract The “shale revolution” has been a game changer in the global energy market and raised the importance of optimal design and operations of shale gas energy systems. This article highlights key challenges and identifies potential research opportunities in the corresponding area. A brief introduction of shale gas energy systems and their significant impacts are first presented, followed by a comprehensive overview and classification of relevant publications. Based on the literature review, we further investigate and discuss the research challenges of developing integrated, sustainable shale gas energy systems under the guidance of “triple bottom line” and integrated approaches of material flow analysis and life cycle optimization. Leveraging the large amount of data from shale gas industry, data-driven optimization methods could open up new research opportunities for hedging against uncertainty in design and operations of shale gas energy systems. Moreover, potential opportunities are explored by introducing game theory into modeling and optimization of decentralized shale gas systems with multiple stakeholders. The benefits of enabling emerging technologies/operations are discussed as well.

[1]  Ruud Weijermars,et al.  Shale gas technology innovation rate impact on economic Base Case – Scenario model benchmarks , 2015 .

[2]  J. Nash.  NON-COOPERATIVE GAMES , 1951, Classics in Game Theory.

[3]  M. Kaiser.  Profitability assessment of Haynesville shale gas wells , 2012 .

[4]  Paulina Jaramillo,et al.  Uncertainty in life cycle greenhouse gas emissions from United States natural gas end-uses and its effects on policy. , 2011, Environmental science & technology.

[5]  T. Stephenson,et al.  Modeling the Relative GHG Emissions of Conventional and Shale Gas Production , 2011, Environmental science & technology.

[6]  Lazaros G. Papageorgiou,et al.  Optimisation approaches for the synthesis of water treatment plants , 2017, Comput. Chem. Eng..

[7]  Robert Dilmore,et al.  Leakage detection of Marcellus Shale natural gas at an Upper Devonian gas monitoring well: a 3-d numerical modeling approach. , 2014, Environmental science & technology.

[8]  Xiuli Wang.  CHAPTER 8 – Underground Natural Gas Storage , 2009 .

[9]  A. Jiménez-Gutiérrez,et al.  Water and energy issues in gas-to-liquid processes: Assessment and integration of different gas-reforming alternatives , 2014 .

[10]  Washington State,et al.  Quarterly Census of Employment and Wages , 2012 .

[11]  Andrea P. Ortiz-Espinoza,et al.  Techno-Economic Assessment and Environmental Impact of Shale Gas Alternatives to Methanol , 2014 .

[12]  Richard Broderick,et al.  Key Shale Gas Water Management Strategies: An Economic Assessment , 2012 .

[13]  F. You,et al.  Shale Gas Supply Chain Design and Operations toward Better Economic and Life Cycle Environmental Performance: MINLP Model and Global Optimization Algorithm , 2015 .

[14]  Avner Vengosh,et al.  Water Footprint of Hydraulic Fracturing , 2015 .

[15]  Nguyen Van Duc Long,et al.  Techno-economic analysis of potential natural gas liquid (NGL) recovery processes under variations of feed compositions , 2013 .

[16]  Ian J Laurenzi,et al.  Life cycle greenhouse gas emissions and freshwater consumption of Marcellus shale gas. , 2013, Environmental science & technology.

[17]  Diego C. Cafaro,et al.  Regional variation in water-related impacts of shale gas development and implications for emerging international plays. , 2014, Environmental science & technology.

[18]  Xu Andy Sun,et al.  Adaptive Robust Optimization for the Security Constrained Unit Commitment Problem , 2013, IEEE Transactions on Power Systems.

[19]  B. Scanlon,et al.  Water use for Shale-gas production in Texas, U.S. , 2012, Environmental science & technology.

[20]  Fengqi You,et al.  Optimal design and operations of supply chain networks for water management in shale gas production: MILFP model and algorithms for the water‐energy nexus , 2015 .

[21]  Anthony J. Culyer,et al.  Equivalent Annual Cost , 2014 .

[22]  Antonio Espuña Camarasa,et al.  Improving supply chain planning in a competitive environment , 2012, Comput. Chem. Eng..

[23]  Fengqi You,et al.  Deciphering the true life cycle environmental impacts and costs of the mega-scale shale gas-to-olefins projects in the United States , 2016 .

[24]  Helmut Rechberger,et al.  Material Flow Analysis , 2016 .

[25]  Gonzalo Guillén-Gosálbez,et al.  Macro‐economic multi‐objective input–output model for minimizing CO2 emissions: Application to the U.S. economy , 2016 .

[26]  Mahmoud M. El-Halwagi,et al.  Optimal planning and site selection for distributed multiproduct biorefineries involving economic, environmental and social objectives. , 2014 .

[27]  N. Shah,et al.  Transfer Prices for Multienterprise Supply Chain Optimization , 2001 .

[28]  Arkadi Nemirovski,et al.  Robust optimization – methodology and applications , 2002, Math. Program..

[29]  Garvin A. Heath,et al.  Life cycle greenhouse gas emissions from Barnett Shale gas used to generate electricity , 2014 .

[30]  Fengqi You,et al.  Toward more cost‐effective and greener chemicals production from shale gas by integrating with bioethanol dehydration: Novel process design and simulation‐based optimization , 2015 .

[31]  Heinrich von Stackelberg.  Market Structure and Equilibrium , 2010 .

[32]  Timothy J. Skone,et al.  Role of Alternative Energy Sources: Natural Gas Technology Assessment , 2012 .

[33]  Nikolaos V. Sahinidis,et al.  Optimization under uncertainty: state-of-the-art and opportunities , 2004, Comput. Chem. Eng..

[34]  Ignacio E. Grossmann,et al.  Multi‐period planning, design, and strategic models for long‐term, quality‐sensitive shale gas development , 2016 .

[35]  N. Hultman,et al.  The greenhouse impact of unconventional gas for electricity generation , 2011 .

[36]  Ignacio E. Grossmann,et al.  Recent advances in mathematical programming techniques for the optimization of process systems under uncertainty , 2015, Comput. Chem. Eng..

[37]  Corrie E Clark,et al.  Life cycle water consumption for shale gas and conventional natural gas. , 2013, Environmental science & technology.

[38]  Cécile Murat,et al.  Recent advances in robust optimization: An overview , 2014, Eur. J. Oper. Res..

[39]  Andreas Jørgensen.  Social LCA—a way ahead? , 2012, The International Journal of Life Cycle Assessment.

[40]  Frank Male,et al.  Managing the Increasing Water Footprint of Hydraulic Fracturing in the Bakken Play, United States. , 2016, Environmental science & technology.

[41]  Gonzalo Guillén-Gosálbez,et al.  Multi-objective optimization of waste and resource management in industrial networks Part I: Model description , 2014 .

[42]  I. Grossmann,et al.  Optimal use of hybrid feedstock, switchgrass and shale gas for the simultaneous production of hydrogen and liquid fuels , 2013 .

[43]  M. El‐Halwagi,et al.  Process Design and Integration of Shale Gas to Methanol , 2014 .

[44]  W. M. Griffin,et al.  Life cycle greenhouse gas emissions of Marcellus shale gas , 2011 .

[45]  Fengqi You,et al.  Optimal processing network design under uncertainty for producing fuels and value‐added bioproducts from microalgae: Two‐stage adaptive robust mixed integer fractional programming model and computationally efficient solution algorithm , 2017 .

[46]  Qiang Wang,et al.  Natural gas from shale formation – The evolution, evidences and challenges of shale gas revolution in United States , 2014 .

[47]  J. Vanbriesen,et al.  Research Articles: Oil and Gas Produced Water Management and Surface Drinking Water Sources in Pennsylvania , 2012 .

[48]  Vikas Khanna,et al.  Process based life-cycle assessment of natural gas from the Marcellus Shale. , 2013, Environmental science & technology.

[49]  Keith A. Bullin,et al.  Compositional nal variety complicates processing plans for US shale gas , 2009 .

[50]  Mahmoud M. El-Halwagi,et al.  Multiobjective optimization of biorefineries with economic and safety objectives , 2013 .

[51]  N. Shah,et al.  Fair electricity transfer price and unit capacity selection for microgrids , 2013 .

[52]  Mahmut Parlar,et al.  Game-theoretic analyses of decentralized assembly supply chains: Non-cooperative equilibria vs. coordination with cost-sharing contracts , 2010, Eur. J. Oper. Res..

[53]  Francisco Facchinei,et al.  Generalized Nash equilibrium problems , 2007, 4OR.

[54]  Jian Zhang,et al.  A novel conceptual design by integrating NGL recovery and LNG regasification processes for maximum energy savings , 2013 .

[55]  M. El‐Halwagi,et al.  Optimization and Selection of Reforming Approaches for Syngas Generation from Natural/Shale Gas , 2014 .

[56]  Elizabeth A. Casman,et al.  Economic incentives and regulatory framework for shale gas well site reclamation in Pennsylvania. , 2011, Environmental science & technology.

[57]  Andreas Jørgensen,et al.  Methodologies for social life cycle assessment , 2008 .

[58]  C. H. Whitson,et al.  Shale-gas scheduling for natural-gas supply in electric power production , 2014 .

[59]  Mahmoud M. El-Halwagi,et al.  Optimization of the production of syngas from shale gas with economic and safety considerations , 2017 .

[60]  Omar J. Guerra,et al.  Preliminary Evaluation of Shale Gas Reservoirs: Appraisal of Different Well-Pad Designs via Performance Metrics , 2015 .

[61]  Omar J. Guerra,et al.  Financial Considerations in Shale Gas Supply Chain Development , 2015 .

[62]  Trevor Long,et al.  Net present value (NPV) , 2017 .

[63]  Serge Domenech,et al.  Optimization methods applied to the design of eco-industrial parks: a literature review , 2015 .

[64]  Laurent El Ghaoui,et al.  Worst-Case Value-At-Risk and Robust Portfolio Optimization: A Conic Programming Approach , 2003, Oper. Res..

[65]  F. You,et al.  Optimal design of sustainable cellulosic biofuel supply chains: Multiobjective optimization coupled with life cycle assessment and input–output analysis , 2012 .

[66]  Fengqi You,et al.  Risk Management for a Global Supply Chain Planning Under Uncertainty : Models and Algorithms , 2009 .

[67]  John A. Veil,et al.  Offsite commercial disposal of oil and gas exploration and production waste :availability, options, and cost. , 2006 .

[68]  D. Zavala-Araiza,et al.  Allocating methane emissions to natural gas and oil production from shale formations , 2015 .

[69]  J. D. Hughes,et al.  Energy: A reality check on the shale revolution , 2013, Nature.

[70]  Jeroen B. Guinee,et al.  Handbook on life cycle assessment operational guide to the ISO standards , 2002 .

[71]  Xiang Li,et al.  Robust Scenario Formulations for Strategic Supply Chain Optimization under Uncertainty , 2013 .

[72]  Fengqi You,et al.  Design under uncertainty of hydrocarbon biorefinery supply chains: Multiobjective stochastic programming models, decomposition algorithm, and a Comparison between CVaR and downside risk , 2012 .

[73]  D. Allen,et al.  Spatial and temporal impacts on water consumption in Texas from shale gas development and use , 2014 .

[74]  T. C. Edwin Cheng,et al.  Coordination of supply chains with bidirectional option contracts , 2013, Eur. J. Oper. Res..

[75]  L. V. Wassenhove,et al.  Sustainable Operations Management , 2005 .

[76]  A. Barbosa‐Póvoa,et al.  Towards supply chain sustainability: economic, environmental and social design and planning , 2015 .

[77]  I. Nikolaou,et al.  A reverse logistics social responsibility evaluation framework based on the triple bottom line approach , 2013 .

[78]  A. Azapagic,et al.  Life cycle environmental impacts of UK shale gas , 2014 .

[79]  Jiří Jaromír Klemeš,et al.  A Review of Footprint analysis tools for monitoring impacts on sustainability , 2012 .

[80]  Qiang Xu,et al.  Optimal design and operation for simultaneous shale gas NGL recovery and LNG re-gasification under uncertainties , 2014 .

[81]  Timothy V. Bartholomew,et al.  Multiobjective Optimization Model for Minimizing Cost and Environmental Impact in Shale Gas Water and Wastewater Management , 2016 .

[82]  Bjarne A. Foss,et al.  Shut-in based production optimization of shale-gas systems , 2013, Comput. Chem. Eng..

[83]  R. Tan,et al.  Game theory approach to the analysis of inter-plant water integration in an eco-industrial park , 2009 .

[84]  Mahmoud M. El-Halwagi,et al.  Optimal planning and infrastructure development for shale gas production , 2016 .

[85]  S. Riha,et al.  Toward strategic management of shale gas development: Regional, collective impacts on water resources , 2012 .

[86]  Ignacio E. Grossmann,et al.  Strategic planning, design, and development of the shale gas supply chain network , 2014 .

[87]  Fengqi You,et al.  A computational framework and solution algorithms for two‐stage adaptive robust scheduling of batch manufacturing processes under uncertainty , 2016 .

[88]  Efstratios N. Pistikopoulos,et al.  A bilevel programming framework for enterprise-wide process networks under uncertainty , 2004, Comput. Chem. Eng..

[89]  Game-Theoretic Analysis of Cooperation Among Supply Chain Agents: Review and Extensions , 2006 .

[90]  Fengqi You,et al.  Deciphering and handling uncertainty in shale gas supply chain design and optimization: Novel modeling framework and computationally efficient solution algorithm , 2015 .

[91]  Ignacio E. Grossmann,et al.  Investment optimization model for freshwater acquisition and wastewater handling in shale gas production , 2015 .

[92]  Dimitris Bertsimas,et al.  Tractable stochastic analysis in high dimensions via robust optimization , 2012, Math. Program..

[93]  F. Gracceva,et al.  Exploring the uncertainty around potential shale gas development – A global energy system analysis based on TIAM (TIMES Integrated Assessment Model) , 2013 .

[94]  José Miguel Laínez,et al.  Optimal integration of third-parties in a coordinated supply chain management environment , 2016, Comput. Chem. Eng..

[95]  G. Heath,et al.  Harmonization of initial estimates of shale gas life cycle greenhouse gas emissions for electric power generation , 2014, Proceedings of the National Academy of Sciences.

[96]  James G. Speight,et al.  Chapter 3 – Production Technology , 2013 .

[97]  Jeanne M. VanBriesen,et al.  Life Cycle Water Consumption and Wastewater Generation Impacts of a Marcellus Shale Gas Well , 2013, Environmental science & technology.

[98]  Shaun M. Seydor.  Understanding the Marcellus Shale Supply Chain , 2012 .

[99]  Jonathan F. Bard,et al.  A bilevel programming approach to determining tax credits for biofuel production , 2000, Eur. J. Oper. Res..

[100]  K. Govindan,et al.  A fuzzy multi criteria approach for measuring sustainability performance of a supplier based on triple bottom line approach , 2013 .

[101]  Bill Hefley,et al.  The Economic Impact of the Value Chain of a Marcellus Shale Well , 2011 .

[102]  Yongpei Guan,et al.  Data-driven risk-averse stochastic optimization with Wasserstein metric , 2018, Oper. Res. Lett..

[103]  M. K. Luhandjula.  Fuzzy stochastic linear programming: Survey and future research directions , 2006, Eur. J. Oper. Res..

[104]  Sheila M. Olmstead,et al.  Risks and risk governance in unconventional shale gas development. , 2014, Environmental science & technology.

[105]  J. M. Ponce-Ortega,et al.  Optimal Water Management under Uncertainty for Shale Gas Production , 2016 .

[106]  A. Ingraffea,et al.  Methane and the greenhouse-gas footprint of natural gas from shale formations , 2011 .

[107]  Paul I. Barton,et al.  Optimal dynamic allocation of mobile plants to monetize associated or stranded natural gas, part I: Bakken shale play case study , 2015 .

[108]  Thomas C. Kinnaman.  The economic impact of shale gas extraction: A review of existing studies , 2011 .

[109]  J. Elkington.  Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development , 1994 .

[110]  Serge Domenech,et al.  Design of bioethanol green supply chain: Comparison between first and second generation biomass concerning economic, environmental and social criteria , 2016, Comput. Chem. Eng..

[111]  Adisa Azapagic,et al.  Shale Gas: A Review of the Economic, Environmental, and Social Sustainability , 2016 .

[112]  Michael Q. Wang,et al.  Life-cycle greenhouse gas emissions of shale gas, natural gas, coal, and petroleum. , 2012, Environmental science & technology.

[113]  David J Campbell,et al.  Natural gas plays in the Marcellus Shale: challenges and potential opportunities. , 2010, Environmental science & technology.

[114]  Fengqi You,et al.  Design of Sustainable Product Systems and Supply Chains with Life Cycle Optimization Based on Functional Unit: General Modeling Framework, Mixed-Integer Nonlinear Programming Algorithms and Case Study on Hydrocarbon Biofuels , 2013 .

[115]  Omar J. Guerra,et al.  An optimization framework for the integration of water management and shale gas supply chain design , 2016, Comput. Chem. Eng..

[116]  Ignacio E. Grossmann,et al.  Optimization models for planning shale gas well refracture treatments , 2016 .

[117]  J. Caballero,et al.  Shale gas flowback water desalination: Single vs multiple-effect evaporation with vapor recompression cycle and thermal integration , 2017 .

[118]  Yinyu Ye,et al.  Distributionally Robust Optimization Under Moment Uncertainty with Application to Data-Driven Problems , 2010, Oper. Res..

[119]  Mahmoud M. El-Halwagi,et al.  Multi-objective optimization of process cogeneration systems with economic, environmental, and social tradeoffs , 2012, Clean Technologies and Environmental Policy.

[120]  R. Reedy,et al.  Source and fate of hydraulic fracturing water in the Barnett Shale: a historical perspective. , 2014, Environmental science & technology.

[121]  Fengqi You,et al.  Integrating Hybrid Life Cycle Assessment with Multiobjective Optimization: A Modeling Framework. , 2016, Environmental science & technology.

[122]  R. Jackson,et al.  A critical review of the risks to water resources from unconventional shale gas development and hydraulic fracturing in the United States. , 2014, Environmental science & technology.

[123]  D. Dzombak,et al.  Water Management Challenges Associated with the Production of Shale Gas by Hydraulic Fracturing , 2011 .

[124]  A. Jiménez-Gutiérrez,et al.  Targeting of the Water-Energy Nexus in Gas-to-Liquid Processes: A Comparison of Syngas Technologies , 2014 .

[125]  Paulina Jaramillo,et al.  Life cycle consumptive water use for oil shale development and implications for water supply in the Colorado River Basin , 2014, The International Journal of Life Cycle Assessment.

[126]  J. M. Ponce-Ortega,et al.  Optimal reuse of flowback wastewater in hydraulic fracturing including seasonal and environmental constraints , 2016 .

[127]  Paul I. Barton,et al.  Optimal dynamic allocation of mobile plants to monetize associated or stranded natural gas, part II: Dealing with uncertainty , 2016 .

[128]  Menachem Elimelech,et al.  Desalination and reuse of high-salinity shale gas produced water: drivers, technologies, and future directions. , 2013, Environmental science & technology.

[129]  F. You,et al.  Game theory approach to optimal design of shale gas supply chains with consideration of economics and life cycle greenhouse gas emissions , 2017 .

[130]  Hua Wang,et al.  Cost Effective Recovery of Low-TDS Frac Flowback Water for Re-use , 2011 .

[131]  Fengqi You,et al.  Stackelberg-game-based modeling and optimization for supply chain design and operations: A mixed integer bilevel programming framework , 2017, Comput. Chem. Eng..

[132]  Patrice Marcotte,et al.  An overview of bilevel optimization , 2007, Ann. Oper. Res..

[133]  Steffen Jenner,et al.  Shale gas vs. coal: Policy implications from environmental impact comparisons of shale gas, conventional gas, and coal on air, water, and land in the United States , 2013 .

[134]  J. Siirola.  The impact of shale gas in the chemical industry , 2014 .

[135]  Fengqi You,et al.  Fair profit allocation in supply chain optimization with transfer price and revenue sharing: MINLP model and algorithm for cellulosic biofuel supply chains , 2014 .

[136]  Serge Domenech,et al.  Water integration in eco-industrial parks using a multi-leader-follower approach , 2016, Comput. Chem. Eng..

[137]  C. Weber,et al.  Life cycle carbon footprint of shale gas: review of evidence and implications. , 2012, Environmental science & technology.

[138]  Jose B. Cruz,et al.  Bi-level fuzzy optimization approach for water exchange in eco-industrial parks , 2010 .

[139]  Adam Brandenburger,et al.  Biform Games , 2007, Manag. Sci..

[140]  Minbo Yang,et al.  A systematic simulation-based process intensification method for shale gas processing and NGLs recovery process systems under uncertain feedstock compositions , 2017, Comput. Chem. Eng..

[141]  Fengqi You,et al.  Unraveling Optimal Biomass Processing Routes from Bioconversion Product and Process Networks under Uncertainty: An Adaptive Robust Optimization Approach , 2016 .

[142]  Jiehui Yuan,et al.  A review of the technical and economic evaluation techniques for shale gas development , 2015 .

[143]  Ignacio E. Grossmann,et al.  Optimization models for shale gas water management , 2014 .

[144]  R. Tan,et al.  Analysis of inter-plant water integration with indirect integration schemes through game theory approach: Pareto optimal solution with interventions , 2011 .

[145]  Fengqi You,et al.  Sustainable design and synthesis of energy systems , 2015 .

[146]  William G. Elmer,et al.  New Single-Well Standalone Gas Lift Process Facilitates Barnett Shale Fracture-Treatment Flowback , 2010 .

[147]  R. W. Watson,et al.  An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play , 2009 .

[148]  Gérard P. Cachon,et al.  Game Theory in Supply Chain Analysis , 2004 .

[149]  Ignacio E. Grossmann,et al.  Lagrangian relaxation based decomposition for well scheduling in shale-gas systems , 2014, Comput. Chem. Eng..

[150]  Oa,et al.  The Process of Hydraulic Fracturing , 2013 .

[151]  M. Mauter,et al.  Expert Elicitation of Trends in Marcellus Oil and Gas Wastewater Management , 2014 .

[152]  J. Abad,et al.  Impact of Shale Gas Development on Regional Water Quality , 2013, Science.

[153]  Anthony J. Marchese,et al.  Constructing a Spatially Resolved Methane Emission Inventory for the Barnett Shale Region. , 2015, Environmental science & technology.

[154]  José Miguel Laínez,et al.  Scenario-based dynamic negotiation for the coordination of multi-enterprise supply chains under uncertainty , 2016, Comput. Chem. Eng..

[155]  Andrew Burnham,et al.  Life-cycle analysis of shale gas and natural gas. , 2012 .

[156]  Fengqi You,et al.  Optimal supply chain design and operations under multi-scale uncertainties: Nested stochastic robust optimization modeling framework and solution algorithm , 2016 .

[157]  Sangwon Suh,et al.  Functions, commodities and environmental impacts in an ecological–economic model , 2004 .