March 17, 2004
Coal Staging Comeback As Natural Gas, Oil Prices Rise

Triggering a lot of thoughts about energy is a good article Mark Clayton wrote in The Christian Science Monitor on February 26, 2004 that has been in my "ought to post about this" list for too long. The article is entitled America's new coal rush.

After 25 years on the blacklist of America's energy sources, coal is poised to make a comeback, stoked by the demand for affordable electricity and the rising price of other fuels.

At least 94 coal-fired electric power plants - with the capacity to power 62 million American homes - are now planned across 36 states.

Many different electric power companies have made the decision that coal is going to be cheaper than natural gas as a source of energy to generate electric power. After a long period during which most new electric power plants have been built to burn natural gas in order to reduce emissions this represents a substantial shift in long term views about availability of different fossil fuels. While part of that shift may be due in part to advances in coal-burning technologies that reduce emissions this shift also appears to be part of a larger pattern of a growing belief that both oil and natural gas production do not look like they will be able to rise as rapidly as demand. At some point in the next two decades it is quite probable that their production will actually fall. This spells a coming era of wrenching readjustments and difficult economic times.

Some experts claim that only half these plants may be built. But that is still a large number.

But experts caution that perhaps no more than half of all proposed plants will ever be built. It can take seven to 10 years for a coal power plant to go from planning to construction - and legal action and public protests often halt them.

My guess is that rising prices for other forms of energy will create conditions that will lead to the building of all of these planned coal-fired electricity generation plants and probably many more.

Industry plans for building coal electric power plants come from a US Department of Energy National Energy Technology Laboratory Office of Coal and Environmental Systems February 24, 2004 report entitled Tracking New Coal-Powered Power Plants: Coal's Resurgence In Electric Power Generation (PDF format).

CIBC World Markets economist Jeffrey Rubin says there are already signs that conventional oil production may have peaked.

Strip out unconventional sources of supply, and crude production is hovering around 65 million barrels, where it has been for the past four years. Has the world already seen the peak in conventional crude production?

The 82 millions per barrel total production today includes oil sands extraction and very deep sea extraction.

Dr. David Goodstein, Vice Provost and Professor of Physics and Applied Physics at Caltech, has recently written a book entitled Out of Gas: The End of the Age of Oil where he argues that the peak of oil production is rapidly approaching. A CalTech press release on the book provides a sketch of Goodstein's arguments on the coming decline in the production of oil.

But even the 1970s' experience would be nothing compared to a worldwide peak, Goodstein explains. Indeed, the country then experienced serious gas shortages and price increases, exacerbated in no small part by the Arab oil embargo. But frustration and exasperation aside, there was oil to buy on the global market if one could locate a willing seller. By contrast, the global peak will mean that prices will thereafter rise steadily and the resource will become increasingly hard to obtain.

Goodstein says that best and worst-case scenarios are fairly easy to envision. At worst, after the so-called Hubbert's peak (named after M. King Hubbert, the Texas geophysicist who was nearly laughed out of the industry in the 1950s for even suggesting that a U.S. production peak was possible), all efforts to deal with the problem on an emergency basis will fail. The result will be inflation and depression that will probably result indirectly in a decrease in the global population. Even the lucky survivors will find the climate a bit much to take, because billions of people will undoubtedly rely on coal for warmth, cooking, and basic industry, thereby spewing a far greater quantity of greenhouse gases into the air than that which is currently released.

"The change in the greenhouse effect that results eventually tips Earth's climate into a new state hostile to life. End of story. In this instance, worst case really means worst case."

The best-case scenario, Goodstein believes, is that the first warning that Hubbert's peak has occurred will result in a quick and stone-sober global wake-up call. Given sufficient political will, the transportation system will be transformed to rely at least temporarily on an alternative fuel such as methane. Then, more long-term solutions to the crisis will be put in place--presumably nuclear energy and solar energy for stationary power needs, and hydrogen or advanced batteries for transportation.

The preceding is the case that Goodstein makes in the first section of the book. The next section is devoted to a nontechnical explanation of the facts of energy production. Goodstein, who has taught thermodynamics to a generation of Caltech students, is particularly accomplished in conveying the basic scientific information in an easily understandable way. In fact, he often does so with wit, explaining in a brief footnote on the naming of subatomic particles, for example, that the familiar "-on" ending of particles, such as "electrons," "mesons," and "photons," may also suggest an individual quantum of humanity known as the "person."

The remainder of the book is devoted to suggested technological fixes. None of the replacement technologies are as simple and cheap as our current luxury of going to the corner gas station and filling up the tank for the equivalent of a half-hour's wages, but Goodstein warns that the situation is grave, and that things will change very soon.

"The crisis will occur, and it will be painful," he writes in conclusion. "Civilization as we know it will come to an end sometime in this century unless we can find a way to live without fossil fuels."

Goodstein sees the peak coming in this decade or the next decade. Needless to say, the world is in no way prepared to adjust to a declining supply of oil

Goodstein says that at current photovoltaic conversion efficiencies it would take an area of land 300 by 300 miles to get as much energy as we get from fossil fuels.

Solar energy will be an important component, an important part of the solution. If you want to gather enough solar energy to replace the fossil fuel that we’re burning today—and remember we’re going to need more fossil fuel in the future- using current technology, then you would have to cover something like 220,000 square kilometers with solar cells. That’s far more than all the rooftops in the country. It would be a piece of land about 300 miles on a side, which is big but not unthinkable.

Dr. Goodstein was kind enough to provide me with some of the basic facts that went into those figures. The energy that would be collected by 300 by 300 mile area is for the whole world and he's assuming a current world total fossil fuel burn of 10 TW (ten trillion watts). He's also assuming a 10% conversion efficiency for the photovoltaics.

Note of course that part of that energy could be gotten from rooftoops. Also, some could be gotten from other human structures. It is conceivable, for example, that future materials advances may allow the construction of roads that could operate as huge photovoltaic power collectors. Also, boosts in conversion efficiency could reduce the amount of area needed by a factor of perhaps 4 or 5 or even higher. For example, some researchers at Lawrence Berkely Labs have shown that an indium gallium nitride material can boost conversion efficiency to 50%. Also many uses of power could be made much more energy efficient.

Another recent book by Kenneth S. Deffeyes entiteld Hubbert's Peak : The Impending World Oil Shortage m akes similar arguments that the peak of world oil production is approaching.

Deffeyes used a slightly more sophisticated version of the Hubbert method to make the global calculations. The numbers pointed to 2003 as the year of peak production, but because estimates of global reserves are inexact, Deffeyes settled on a range from 2004 to 2008. Three things could upset Deffeyes's prediction. One would be the discovery of huge new oil deposits. A second would be the development of drilling technology that could squeeze more oil from known reserves. And a third would be a steep rise in oil prices, which would make it profitable to recover even the most stubbornly buried oil.

In a delightfully readable and informative primer on oil exploration and drilling, Deffeyes addresses each point. First, the discovery of new oil reserves is unlikely--petroleum geologists have been nearly everywhere, and no substantial finds have been made since the 1970s. Second, billions have already been poured into drilling technology, and it's not going to get much better. And last, even very high oil prices won't spur enough new production to delay the inevitable peak.

"This much is certain," he writes. "No initiative put in place starting today can have a substantial effect on the peak production year. No Caspian Sea exploration, no drilling in the South China Sea, no SUV replacements, no renewable energy projects can be brought on at a sufficient rate to avoid a bidding war for the remaining oil."

I've previously written here on the coming oil production peak.

On my ParaPundit site I've written extensively about the political ramifications of rising oil demand during a period of rising prices and greater dependence on the Middle East. One possible source of hope is the possibility of extracting natural gas from ocean gas hydrates. Or perhaps we will be saved by a breakthrough in desktop fusion. Conventional nuclear power has both cost and proliferation problems. What we need is a massive research push on the order of $5 to $10 billion dollars per year in many different energy technology areas to develop methods to produce energy from other sources and to use energy more efficiently.

Update: At a February 24 2004 symposium hosted by the Center for Strategic & International Studies energy industry investment banker Matthew W. Simmons presented a skeptical analysis of official Saudi Arabian oil reserve claims. (PDF format and the following links as well) A couple of Saudi Aramco employees argued for Saudi estimates. If Simmons is correct then the biggest oil field in Saudi Arabia may already be mostly depleted and the beginning of the decline of oil production in Saudi Arabia may happen decades sooner than conventional wisdom expects. Also from the event: the introduction and the event transcript.

Demand for energy is going to rise with rising populations and growing economies even as oil production may start to decline.

One of Goodstein's Caltech colleagues, chemistry professor Nathan S. Lewis, has calculated the total energy used in the world today, coming up with a grand total of 13 trillion watts consumed annually. That figure, he expects, will rise to 28 trillion watts in the next 40 years or so as the world's population increases from 6 billion to 10 billion.

Share |      Randall Parker, 2004 March 17 05:56 PM  Energy Fossil Fuels

Ken Hirsch said at March 17, 2004 7:45 PM:

I think energy research is nice, but there's essentially zero chance that it would significantly reduce Saudi oil income over the next thirty years.

Engineer-Poet said at March 17, 2004 8:19 PM:

I particularly like the IAGS position on some of these issues.  One of their pointers is to a DOE project on coal to liquids, such as methanol.

One feature that I have been pondering but have not seen written up anywhere:  a coal-gasification powerplant can divert syngas to other uses when power demand does not require the full output of the gasifier; coal syngas appears to be easy to convert to methanol.  This would make it relatively easy to both keep the electrical grid humming (good for charging plug-in hybrids), while the methanol output could stretch petroleum about 3:1 through use in blends up to M-85.  If you can reduce petroleum demand directly by 60% (through substitution by electricity) and then another 2/3 through blending with alcohol, you get a total demand reduction of 83%.  That would make the Saudis take notice.

This path also allows for conversion to renewable energy:  electricity is easily produced from many other sources (allowing the coal plant to be throttled back), and methanol can be made from hydrogen and carbon dioxide.  This yields a seamless path to total renewable energy without spending money to change the infrastructure.

Randall Parker said at March 17, 2004 9:19 PM:


I do not understand the basis of your pessimism on this point. 30 years is a long time. What can be done comes down to the question of how much the rate of advance of technology can be accelerated. I happen to think it can be accelerated substantially. One of the reasons I think that is that the amount of money now going into developing various energy technologies is fairly small. I've argued previously that $100 million per year from the US government for solar research is chump change. That is especially the case since some of that money is for subsidized purchases and refinements of existing processes. About a third of it was going to academic researchers a couple of years ago.

I see photovoltaics as a solvable problem with thin films or nanotubes or some other approach. Lower the price of photovoltaics by an order of magnitude and the market will see to it that it begins to displace oil. Even a partial displacement lowers Saudi income by lowering market prices below what they would have been.

I also think higher density batteries is a solvable problem. Donald Sadoway of MIT agrees. Again, we could up our effort by orders of magnitude. Ditto for other efforts aimed at technologies to produce energy more cheaply or to use it more efficiently.

There is no shortage of Ph.D.s trained in physics and chemistry who could be enlisted to work on scaled research efforts.

Noah said at March 18, 2004 10:48 AM:

I read an article about a year ago that involved this topic. The author was suggesting that we could build a number of solar 'collection points' on the moon, and that it was possible that the resulting energy could be beamed to Earth with microwaves. He suggested that using a few large sites strategically located around the moon (and the absence of a dense atmosphere) that this could produce enough energy to support a large amount of Earth's energy needs. There would then be a number of reciever points located around earth to recieve the energy 24 hours a day.

I know one of the big drawbacks would be that we would only have one source of energy, and if the system failed at any point (explosion on moon, significant weather changes on earth) that we would be in trouble. This system would have to be rock solid and have multiple failovers to encourage enough investment to make it work. It would also require contributions by a large number of countries, all working on the project with the drive similar to the Apollo missions to get this completed.

I do not have the knowledge required to know if this something that could actually work or if it is scientifically impossible. Would anyone here like to help me out with their thoughts?


Randall Parker said at March 18, 2004 11:04 AM:

Noah, Yes, we could build solar collectors on the moon for some cost in the hundreds of billions or at most a few trillion dollars. Ditto for doing it in low earth orbit (LEO) which is where it has been more often proposed.

My basic problem with moon-based and space-based solar collectors is that for a fraction of the cost of building the collectors up there we could do research to lower the cost of making and deploying collectors down here. That could be done more cheaply if the collector conversion efficiency could be raised while the manufacturing cost was simultaneously lowered.

Now, there is one big factor on the horizon that could make it much cheaper to put collectors into orbit: a space elevator. If nanotube technology advances to the point that a space elevator becomes feasible then orbital solar collectors would become orders of magnitude cheaper to deploy.

I do not see the argument for putting the solar collectors on the moon rather than in orbit. The moon has more background radiation than low earth orbit (LEO). So humans can not function on the moon as easily as they can in LEO. They'd have to spend most of their time well underground and use remotely controlled robots to install the collectors. My gues is that the proposers of this idea want to use lunar materials to make the photovoltaic cells and panels up there. But the amount of capital equipment and the number of skills operators and facilities required to do that would be pretty large at this point in time. The collectors would be much much more expensive to manufacture up there than down here. So that probably cancels out the benefit of the more intense sunlight available there.

I share the concern of those who do not want to rely on a single highly concentrated facility. Of course right now the whole world is too reliant on the rather unstable Middle East. That is reason for concern as well.

Ken Hirsch said at March 19, 2004 5:25 AM:

First, I am pessimistic because I remember the 1970s energy crisis when a lot of money was poured into energy research, most of which turned out to be boondoggles. There was a lot of push for energy efficiency, which did pay off. But it was 10 or 15 years before it started paying off in an aggregrate way, and that was for stuff that we already knew how to do.

Second, I don't believe there is any realistic prospect for energy storage. This is a problem that has been worked on for over a century and only small improvements have been made. There is a huge market in batteries and yet they are terrible. People hate them. They are pathetic. It would be nice if we could get breakthroughs on demand, but it almost never works that way.

Third, even if you get all the breakthroughs you hope for, it still takes many, many years to deploy a new technology. What's the most optimistic timetable? Five years to get it to a demonstration stage. Another five years to get it to production stage. And another five years before it starts showing up in significant aggregrate numbers. And that's only realistic for electricity production, which only accounts for a small percentage of oil use. If you want to start replacing oil use for transportation, you're talking at least another ten years after that.

In the meantime, the population has grown, the number of cars in the third world has grown, etc. Oil production will probably not change much over the next twenty years. What's the best you can hope for? To cut the Saudi income 5% twenty years from now? Maybe, maybe not. But even then it's a lot of money for Islamic radicals.

Randall Parker said at March 19, 2004 10:02 AM:


In terms of what tools scientists have available to do research the 1970s were the dark ages. Scientists can automate tests, simulate tests, automate analyses, and use a much larger body of knowledge from which to start. A big effort today would therefore progress much more rapidly.

Energy storage: MIT battery researcher Donald Sadoway is very optimistic about advances in battery research. Here's a quote from Sadoway in 2002:

“Within a handful of years, batteries will be powerful and cheap enough to propel a car 250 miles without a recharge. When this happens, automakers will junk the internal combustion engine.”

I know his group is working with lithium polymers and nanocomposite electrodes.

As for the speed of adaptation of innovations: It depends on what the innovations are and how big of a cost savings they provide. Make the cost savings big enough and the result will be a stampede.

Growing population: That will continue and so will the industrialization that increases the demand per person. So new technology can happen more quickly for the new energy capital equipment that will be built to satisfy this higher level of demand.

Randall Parker said at March 19, 2004 1:45 PM:

To emphasize: part of my enthusiasm for lithium polymers stems from the Sadoway article I excerpt at the bottom of this post. Now, can this be made to work? We obviously do not know. But we ought to be trying about 10 or 100 times harder in terms of dollars available for this type of research.

I think acceleration of the rate of research and development as a way to solve problems does not get the attention it deserves because the amount of time required to achieve some goal in terms of technological advancement is hard to predict. But a lot of these problems are considered to be solvable. There are not theoretical reasons why they can not be solved.

Think about the effort that went into research in the 1970s. If that level of effort had been continued in the 80s and 90s we might already have solutions.

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