Cost, noise, and ruination of scenic views are among the reasons windmills are losing their attraction in the Netherlands.
Arguments over the high cost and maintenance of sea-based turbines, as well as complaints from residents about unsightly land-based models, have brought the Dutch to an impasse.
Offshore wind farms produce more electricity than onshore ones but it costs twice as much as onshore wind power due to the higher cost of materials, more expensive drilling methods, and more complex maintenance.
The Netherlands is a densely populated country. The United States can much more easily build lots of wind farms across the plains states without encroaching on the lives of a large number of people. The Dutch can only do that my building offshore. But offshore wind power costs twice as much.
The continued financial crisis and resulting fiscal austerity in many European countries has undermined political support for renewable energy subsidies. For example, Germany's Economy Ministry has just proposed a large reduction in solar subsidies. While solar panel prices are already down 30% in 2011 demand cuts due to slashing of subsidies could result in much lower prices in 2012. Will the same happen for wind? Or will the wind turbine makers just slash production?
Spain's new government, under heavy pressure from high bond interest rates, may entirely eliminate solar and wind power subsidies. It is hard to see how the Southern European countries can afford to continue any renewable energy subsidies. This may lead to even lower prices for photovoltaics. If you are thinking about putting PV on your house you might want to wait for even cheaper prices next year.
BP's 2011 Statistical Review of World Energy is out and the biggest news: China has become the biggest world energy consumer.
BP, in its 60th annual Statistical Review of World Energy, said China accounted for 20.3 per cent of demand, compared with the United States' 19 per cent.
The report said China's consumption rose by 11.2 per cent last year. American demand increased 3.7 per cent.
For carbon dioxide emissions China already blew past the United States about 5 years ago due to China's much heavier reliance on coal. Now China has surpassed the US in total heat energy used across all energy types. The Chinese economy's heavy reliance on coal makes it more immune to high oil prices. Though high level of car sales in China threatens to make China much more vulnerable to high oil prices.
King Coal gained market share. China was was responsible for two thirds of the coal consumption rise.
Thermal coal consumption in the global energy mix in 2010 rose to 29.6%, its highest level since 1970, according to the BP 2011 Statistical Review of World Energy.
In 2001, coal accounted for 25.6% of the global energy market.
Oil's share of the energy market continues to decline. The remaining oil costs more to extract and prices are high.
Oil remains the world’s leading fuel, at 33.6% of global energy consumption, but it continued to lose market share for the 11th consecutive year.
When will coal's market share surpass oil? It depends on China most of all. If the Chinese slow up their nuclear power plant construction program they'll keep ramping up their coal consumption until they hit the limits of available domestic coal.
So are renewables gaining ground against fossil fuels? In a word: No. Fossil fuels gained market share overall.
The growth in fossil fuels was so strong that although non-fossil-fuel energy also had a record year, its share of the world total primary energy decreased a little.
Here's what's interesting. While wind grew by 24.6% and solar by 73% they are such a small fraction of total non-fossil fuels energy that their high percentage growth rates did not translate into a high percentage growth rate for non-fossil fuels overall. Solar still amounts to only 0.1% of total electric power and an even smaller percentage of overall energy production. Wind is now 1.6% of global electric power. It needs a few more doublings to become a major player.
Wind and solar are helped by subsidies. But in order to scale they've got to compete on price.
The 7.4% rise in natural gas consumption is especially impressive, almost as high as coal's 7.6% increase. Can gas shale production ramp up outside of the United States enough to allow the natural gas rate of production growth to surpass coal?
Solar energy's got to go thru 4 doublings just to catch up with where wind energy is now. While solar gets huge attention in the price it is really a very minor bit player even today.
Microsoft co-founder Bill Gates and former Dupont CEO Chad Holliday say we spend too little on energy R&D and energy is a big problem.
But our country is neglecting a field central to our national prospect and security: energy. Although the information technology and pharmaceutical industries spend 5 to 15 percent of their revenue on research and development each year, U.S. companies' spending on energy R&D has averaged only about one-quarter of 1 percent of revenue over the past 15 years.
And despite talk about the need for "21st-century" energy sources, federal spending on clean energy research -- less than $3 billion -- is also relatively small. Compare that with roughly $30 billion that the U.S. government annually spends on health research and $80 billion on defense research and development.
There are two problems here. One problem is the approach of Peak Oil, exacerbated by rapid industrialization in high population countries. The amount of extractable oil in the ground is finite and most oil producing countries have already peaked in production. Oil is hard to substitute for in transportation. I expect Peak Oil to cause an economic contraction that will last for several years until substitutes start to make a substantial difference.
The other potential problem is global warming. The time line for that is longer. In the next 20 years we'll feel the effects of Peak Oil much more severely than changes in climate. If Peak Coal comes sooner than expected (see Richard Heinberg's Blackout for an overview of pessimistic views on coal reserves) then global warming isn't going to become as important a political issue as Peak Oil. Though if James Hansen's more bleak assessment of climate sensitivity to CO2 levels (i.e. 350 ppm is allowable max) even the coal reserve estimates reported by Heinberg end up being too much if we want to avoid a big sea level rise.
I am more worried about Peak Oil. If push comes to shove we can always do climate engineering to cool the planet (admittedly that doesn't stop ocean acidification). But our dependence on oil amounts to an Achilles Heel for industrialized nations. Kicking that dependence is going to be painful.
A couple of U Del economists think a government rebate to encourage people to buy new appliances might result in more energy used for refrigerators as some buyers will just add a refrigerator rather than replace it.
NEWARK, DEL – Taxpayers will lose a significant portion of the $300 Million they are shelling out for the federal government's appliance rebate program and the energy-saving program could actually increase energy usage, two University of Delaware economists say.
Economics Professors Burton Abrams and George Parsons published their analysis of the program in the 1st Quarter 2010 issue of the Milken Institute Review. (Published Jan. 11, 2010)
Abrams and Parsons focused their analysis on refrigerators – a major energy user. They believe in some cases, consumers will buy new refrigerators but keep the old for extra capacity, increasing energy usage. Unlike the Cash for Clunkers program, the appliance program does not require salvaging older models
They added benefits to the consumer and what society gets back in environmental benefits, and found for every $100 spent by taxpayers for refrigerators, $6 is lost.
The rebates, which range from $50-$200, could be lowered to $30 and result in the same consumer response, they wrote.
Abrams and Parsons say while Cash for Clunkers wasted $825 million, this new program's loss will be significantly smaller but is similarly ill conceived.
Aren't appliances mostly imported? So doesn't this incentive also increase the trade deficit? If reduced energy usage combined with a boost in employment is the goal then I suspect it would make more sense to provide economic incentives for home efficiency. Insulation installation requires labor and a lot of the materials are still domestically made.
The US government could more easily and cheaply incentivize old inefficient appliance replacement by creating a web site where people could enter serial numbers and other info about an appliance to get an estimate of how much energy it uses per year, what their local cost is per kwh, and what they'd save per year if they bought one of a list of highest rated energy efficient replacements. Information is much cheaper to generate and dispense and can be very powerful in its effects.
While China does not want to pay a heavy price to cut CO2 emissions the Chinese may have 18 nuclear power plants under construction by the end of 2010. That's impressive. To put it in perspective the United States has 104 nukes total and probably of average smaller size.
Nonetheless, the government has set ambitious targets for renewable energy, which is supposed to account for 15 percent of the country's fuel mix by 2020, and for tree planting, to boost forest cover to 20 percent of China's land mass by the end of next year. China plans to quadruple its nuclear power; by the end of next year, it may have 18 nuclear energy plants under construction, half of the world's total under construction.
I am skeptical of claims that CO2 emissions reduction would cost so much that it would cripple the economy. Cost estimates for new nuclear plants cover a pretty wide range. Even if we were to assume a very high figure of $10 billion per nuke the United States could double its nuclear power plant capacity for about $1 trillion dollars or 1/14th of a single year's GDP. That amount of nuclear power plant capacity could displace about 40% of total coal used to generate electricity (nukes currently generate 20% of US electricity and coal generates about 50%). Or spend $2.5 trillion and totally phase out coal for electric power. The real cost would likely be much lower due to efficiencies of construction from building hundreds of nukes.
Coal is responsible for 36% of US carbon dioxide emissions. Coal used for electric power generation is responsible for 32% of US CO2 emissions. So for $2.5 trillion the US could cut about a third of total US CO2 emissions. Though the initial nuke build would release a lot of CO2. That would be paid back and eventually our CO2 emissions would go down by a third.
WASHINGTON -- A new report from the National Research Council examines and, when possible, estimates "hidden" costs of energy production and use -- such as the damage air pollution imposes on human health -- that are not reflected in market prices of coal, oil, other energy sources, or the electricity and gasoline produced from them. The report estimates dollar values for several major components of these costs. The damages the committee was able to quantify were an estimated $120 billion in the U.S. in 2005, a number that reflects primarily health damages from air pollution associated with electricity generation and motor vehicle transportation. The figure does not include damages from climate change, harm to ecosystems, effects of some air pollutants such as mercury, and risks to national security, which the report examines but does not monetize.
We use too much fossil fuels because the market doesn't capture all their costs in the market prices for their use.
Damages caused by coal electric plant conventional pollution (unrelated to climate change) adds up to 3.2 cents per kilowatt hour generated in the US.
Coal accounts for about half the electricity produced in the U.S. In 2005 the total annual external damages from sulfur dioxide, nitrogen oxides, and particulate matter created by burning coal at 406 coal-fired power plants, which produce 95 percent of the nation's coal-generated electricity, were about $62 billion; these nonclimate damages average about 3.2 cents for every kilowatt-hour (kwh) of energy produced. A relatively small number of plants -- 10 percent of the total number -- accounted for 43 percent of the damages. By 2030, nonclimate damages are estimated to fall to 1.7 cents per kwh.
Climate related costs of CO2 emissions are harder to calculate and so the estimated costs vary over 2 orders of magnitude.
Coal-fired power plants are the single largest source of greenhouse gases in the U.S., emitting on average about a ton of CO2 per megawatt-hour of electricity produced, the report says. Climate-related monetary damages range from 0.1 cents to 10 cents per kilowatt-hour, based on previous modeling studies.
A small number of coal plants produce a large fraction of all the coal pollution. That small number of plants should be shut down or forced to rapidly upgrade their equipment.
Burning natural gas generated far less damage than coal, both overall and per kilowatt-hour of electricity generated. A sample of 498 natural gas fueled plants, which accounted for 71 percent of gas-generated electricity, produced $740 million in total nonclimate damages in 2005, an average of 0.16 cents per kwh. As with coal, there was a vast difference among plants; half the plants account for only 4 percent of the total nonclimate damages from air pollution, while 10 percent produce 65 percent of the damages. By 2030, nonclimate damages are estimated to fall to 0.11 cents per kwh. Estimated climate damages from natural gas were half that of coal, ranging from 0.05 cents to 5 cents per kilowatt-hour.
Coal and natural gas electric power could in theory be taxed at the amount of their external costs. However, even if that happened the money would not accurately flow to those who get stuck with the costs in proportion to the costs of each person. Though a tax would reduce the total size of the external costs by providing incentives to shift toward use of cleaner power sources. Matthew Wald of the New York Times has a pretty good article in Technology Review about the prospects for nuclear power as an alternative to fossil fuels. One of nuclear power's problems: US government subsidies for wind power favor wind over nuclear power.
Wind now gets bigger production subsidies than nuclear on every kilowatt-hour generated, proportionally more loan guarantees, and a guaranteed market: many states insist on a certain quota of renewable energy, sometimes regardless of cost. In contrast, nuclear power receives production subsidies on only the first 6,000 megawatts of capacity (four or five reactors' output), and its pool of loan guarantees is shrinking relative to the price of construction.
"Right now, the federal incentives are much more conducive to pushing forward renewables," said Jim Miller, the chief executive of the energy company PPL, in June. His company, based in Allentown, PA, would like to build a reactor but will not do so without federal loan guarantees. It will not get them, at least not under the 2005 Energy Policy Act, in which Congress approved only enough to assist a handful of plants: $18.5 billion. "Nothing is currently in place to move the nuclear industry along at the pace people perceived it would move when the 2005 act was passed," Miller says.
The debate over exactly when we will reach "peak oil" is irrelevant. No matter what new oil fields we discover, global oil production will start declining in 2030 at the very latest.
That's the conclusion of the most comprehensive report to date on global oil production, published on 7 October by the UK Energy Research Centre.
Steve Sorrell, the report's author, argues that even 2030 is too soon for governments to prepare. Yes, governments can't prepare. I used to think it was worth trying to get them to prepare. Now I expect the only policies we'll get that help prepare for Peak Oil will come as a side effect of trying to reduce CO2 emissions for climate.
If we were lucky (and I do not think we are) then Peak Oil wouldn't happen until 2030. By then costs of electric cars will have fallen enough to make a big shift to electric transportation practical. Plus, genetic engineering of algae might make algae biodiesel a practical (albeit probably more expensive) alternative for longer range ground travel. But my guess from all my reading is that the peak comes much sooner. So the adjustment will be wrenching.
If you are an entrepreneur or inventor prepare by developing post-peak solutions for the marketplace. Got any ideas?
Assembly Bill 1103, signed into law in 2007 and set to start taking effect in 2010, will require owners to provide 12 months’ worth of comparable energy-use information to prospective buyers or full-building tenants as well as financiers. It was originally scheduled to take effect for all properties Jan. 1, but draft implementation regulations from the California Energy Commission last month proposed a three-year phase-in period, starting with the largest buildings in July 2010.
I see this as a positive step since it increases market transparency. This can lead to higher energy efficiency in a few ways. First off, current owners will have incentives to look for ways to increase efficiency at least a year before a sale. Second, buyers with better skills at boosting energy efficiency could conceivably hunt around for buildings that have poor energy efficiency and hence lower resale value so that the buyers can buy inefficient buildings and improve efficiency for a profit. Third, companies constructing buildings will have more incentive to use more energy efficient designs since efficiency will play a larger role in determining eventual sales price.
One of the ways the market fails with building energy efficiency is with rental apartments where the renter pays all the utility bills. The renter typically doesn't own the refrigerator or heater or air conditioner. The owner doesn't have as much incentive to put in more efficient equipment since it is the tenant paying the bills. The tenants typically do not get to see the utility bills of the previous tenants. So the tenants can't choose more efficient apartments.
I'd like to see more policy changes for houses and apartments that provide better incentives for higher efficiency. We need these improvements before more Peak Oil price shocks make people too poor to do lots of retrofitting for efficiency.
Urban planners hoping to help mitigate CO2 emissions by increasing housing density would do better to focus on fuel-efficiency improvements to vehicles, investments in renewable energy, and cap and trade legislation now being voted on in Congress, according to the study, released Tuesday. It concludes that increasing population density in metropolitan areas would yield insignificant CO2 reductions.
Plus it amounts to trying to get people to do something they clearly don't want to do: live closer to each other.
Even if 75 percent of all new and replacement housing in America were built at twice the density of current new developments, and those living in the newly constructed housing drove 25 percent less as a result, CO2 emissions from personal travel would decline nationwide by only 8 to 11 percent by 2050, according to the study.
I find it curious that a doubling of density would cut miles driven by only 25%. I would expect a doubling of density to cut miles driven in half. Why isn't this the case? Zoning laws that keep housing away from commercial buildings?
I see a fundamental flaw in attempts to cut oil consumption to cut CO2 emissions: The oil is going to get burned no matter what any one country or group countries does with their energy policies. The uses of oil and users of oil are so many that an attempt to cut demand in one area will just free up oil to be used elsewhere. Oil production will peak and decline for reasons unrelated to global warming.
It makes more sense to me to focus on shifting from oil to nuclear, solar and wind for electric power generation. It seems more within the realm of the doable to cut global coal demand than the cut global oil demand.
Make car transportation expensive enough and people will live closer to work even without moving into higher density housing. People will effectively swap jobs and houses to live closer to work. Peak Oil will do that more effectively than any government policy.
Currently in the United States 95% of all transportation energy comes from oil and 71% of consumed oil gets used for transportation. Want to decrease the amount of oil burned in trucks, cars, trains, ships, and airplanes? Develop ways to use other energy sources in transportation. Most notably, better and cheaper batteries would allow most commuting to be done under electric power. A build up of more nuclear power plants along with some wind and solar would then cut emissions from fossil fuels burning.
I do not expect this report will have much impact on the urban enthusiasts who want us all to move into multi-story apartment buildings and ride on subways. They'll eventually get some satisfaction for their dreams when Peak Oil really starts to bite. But that crisis will come on too fast for many to move into cities as a way to adjust. I expect electric cars and electric bicycles to do more and faster than a big surge in urban construction.
Put aside for the moment whether you personally think that atmospheric CO2 build-up constitutes a serious threat to the human race. If highly educated scientists who think global waming is a threat won't make sacrifices to cut their CO2 emissions what are the odds the world as a whole will act to reduce risks that do not materialize for decades?
AT A recent dinner at the University of Oxford, a senior researcher in atmospheric physics was telling me about his coming holiday in Thailand. I asked him whether he was concerned that his trip would make a contribution to climate change - we had, after all, just sat through a two-hour presentation on the topic. "Of course," he said blithely. "And I'm sure the government will make long-haul flights illegal at some point."
I had deliberately steered our conversation this way as part of an informal research project that I am conducting - one you are welcome to join. My participants so far include a senior adviser to a leading UK climate policy expert who flies regularly to South Africa ("my offsets help set a price in the carbon market"), a member of the British Antarctic Survey who makes several long-haul skiing trips a year ("my job is stressful"), a national media environment correspondent who took his family to Sri Lanka ("I can't see much hope") and a Greenpeace climate campaigner just back from scuba diving in the Pacific ("it was a great trip!").
A lot of eco-tourism strikes me as simply amazing. People are flying to distant places to see glaciers that might melt in part because people fly to distant places to see them before CO2 emitted by airplanes wipes out glaciers and flows areas.
From the tropics to the ice fields, doom is big business. Quark Expeditions, a leader in arctic travel, doubled capacity for its 2008 season of trips to the northern and southernmost reaches of the planet. Travel agents report clients are increasingly requesting trips to see the melting glaciers of Patagonia, the threatened coral of the Great Barrier Reef, and the eroding atolls of the Maldives, Mr. Shapiro said.
Imagine you really believe that airplane exhaust is going to destroy something. Are you going to jump on an airplane to see it before people like yourself destroy it?
I'm also reminded of Al Gore's eye-popping monthly utility bills. This sort of "do as I say, not as I do" is not persuasive.
Again, I'm not calling on you to take a side in the climate debate. But if the threat is real then I do not see human nature as conducive to solving it via billions of people deciding to restrain their fossil fuels consumption.
Solution? Maybe technological advances will happen that make cleaner energy cheaper than fossil fuels. Then there won't be much sacrifice involved in switching. Another possibility: Peak Oil. We won't be able to burn as much oil as we want to use for eco-tourism.
Update: A recent study by David Hardisty, M.Phil., and Elke Weber, Ph.D., of Columbia University illustrates how people apply discount rates to future environmental losses and gains that make support for long term benefits hard to build up.
The researchers conducted three studies with 65, 118 and 146 participants, respectively. They presented participants with a series of situations, forcing them to choose between different outcomes involving air quality, mass transit, garbage pile-up from a workers' strike, and monetary gain and loss (for example, paying a parking ticket in a smaller amount now or a larger amount later).
As examples of the various scenarios presented, participants picked:
- 21 days of clean air now over 35 days of clean air next year;
- a short-term fix for mass transit now, instead of a long-term fix later;
- a $250 lottery win now over a $410 win a year later.
Previous studies found that people are not particularly rational about personal finance. For example, if they came into some cash while carrying two loans, they might completely pay off the smaller loan right away, even though they could instead start paying off the larger, higher-interest loan – a strategy that would reduce their overall interest.
In the new studies, across scenarios, participants downplayed future gains significantly more than future losses. Employing a formula used by economists, "with our particular scenarios and measurement techniques, [we] found annualized discount rates that averaged out to roughly 34 percent for monetary and environmental gains and 9 percent for losses," Hardisty said.
Charles T. Maxwell, senior energy analyst at Weeden & Co., has been analyzing the oil industry for longer than most of us have been alive. Well connected and respected within the industry, his opinions can not be portrayed as coming from the fringe. Maxwell believes world oil peaks by 2015 and we are headed for a 10-12 year financial downturn as a result.
A lot of people have said that the year 2015 is too far out for the peak. But I built a big margin in there because I thought we might have two recessions. I didn’t dream that we would have one really big one. So I’ve still got 2015 out there. But if you said to me last July, when do you really believe the peak is going to come, I would have said 2013. I started years earlier by estimating 2015 and I happily held to that view as I saw the recession begin to develop because I could see that we would probably push it off a little bit.
For your purposes, I’ve got 2008 for the peak of non-OPEC-not really a peak, it’s a plateau, but we’re falling off it now. And then 2011 for the peak of the top 50 listed companies, the ones that dominate the stock market, so the stock market investors will say the oil industry has peaked because their stocks have peaked. And then I’ve got 2013 for the peak of black crude oil and then 2015 for the all-liquids peak, which I take to be ultimate peak oil. And that would include gas-to-liquids, coal-to-liquids, NGLs. And it would include both synthetic and natural crudes.
Solar costs too much, ethanol is a loser (I totally agree), and Maxwell even thinks ultimately we are going to be disappointed by wind.
If you look at solar power, it’s terrific, so terrific, so fast growing….that without a subsidy, no one will use it. So it’s not very attractive, and people don’t admit that. And I think it’s the same thing with ethanol, which was a loser from the start. And I think it’s the same thing with wind energy. I think wind energy is going to turn into a huge disappointment because so many hopes are being pinned on it.
I have two main questions about wind: How fast will wind's costs fall? Also, how much can long distance DC power lines allow wind from different areas to back each other up? The second question really has two components. The first relates to the cost effectiveness of really long range (thousand or more miles) transmission of electricity. Will superconductors help? If so, how soon? The other component relates to wind: how uncoupled are wind patterns in areas many hundreds of miles apart? I think the jury is still out on that and I've yet to see the published study using real world data from enough locations far enough apart from each other and over years of measurement. I'm taking a skeptical view of large scale baseload wind power.
A partial shift toward electric cars will lessen the problem with wind's intermittency. But we still need baseload power. We could free up more natural gas for use in transportation by building up more baseload nuclear power. Granted, nuclear power won't help us in the 2010s. But it could make a much bigger contribution in the 2020s.
In the second part of his interview Maxwell looks at the fuels we have to turn to as major sources when oil production starts declining yearly across the globe. He sees natural gas, coal, nuclear, and conservation as the main energy sources we can hope to turn to as substitutes. Note that he doesn't see wind and solar as major alternatives in the 2015 time frame. Leave aside the long term potential. What happens in 2015, 2016, 2017? We all eat in the short run.
In effect, by 2015 we’ve got five fuels that we’re talking about here: oil, gas, coal, and nuclear. And the fifth one we’ll call a “fuel,” which is energy efficiency and conservation. It acts like a fuel. It gives you more work done at lower energy volumes. So in that situation you have really got Hubbert’s peak operating to keep you from using the oil alternative. The obvious easy answer politically is to import more oil, but there’s not going to be any place to import more oil from. And the costs are going to be higher and higher, so we’re stalled out on that one. But you go on with oil; you don’t stomp on oil because that would increase the size of your problem immensely, very quickly, and without any reasonable basis. You just can’t emphasize it because it isn’t a solution; it’s just a maintenance story.
Maxwell correctly sees the main problem with nuclear is build times.
So then you go over to nuclear and you don’t have the time. You can try to summon up anything you want but if you don’t get it for 10 years…the vulnerability is going to be right here between 2011 and 2021. That decade is going to, I think, be the maximum vulnerability; that’s when we’re going to take it on the chin. So nuclear can’t get there in time. We should be doing something on nuclear for days ahead, but it won’t help us during the upcoming decade unless we started it today and we aren’t going to start it today because the public is not yet ready for it.
France is really in the best position to assure affordable electric power going to the Peak Oil era. Already 80% of France's electric power comes from nuclear power and the French are building another nuclear reactor at Flamanville. For a variety of reasons few of the French oppose nuclear power. On nuclear power I think the French are wiser than Americans overall.
Maxwell sees a bright future for natural gas from shale fields. Maxwell is responding to the much brighter prospects for extracting the massive amounts of natural gas in the shale plays. The Haynesville shale in Louisiana, Barnett shale in Texas, Marcellus shale in the US Northeast and other shales can be accessed with horizontal drilling and hydrofracturing. I'm beginning to think that the T. Boone Pickens Plan for powering cars with natural gas makes sense. Electric cars will have a role too. But existing cars can be converted to natural gas (especially if legislative and regulatory bodies decide to allow it) pretty quickly and for far less money than existing cars can be converted to electric power.
In a nutshell, I do not see a viable alternative to natural gas powered cars. Biodiesel algae looks too long term. The energy returns from corn ethanol are too low (and we do not have enough land to grow enough corn anyhow). Conversion of coal to liquid costs much more and is too dirty. A shift to more electric powered cars makes sense. But the time to make the transition is too long and the costs too high for electric powered cars to be the main transportation response to Peak Oil.
I do not see mass transit as a solution for most people because even in Europe with much higher fuel costs and more subsidized mass transit 85+% of passenger miles traveled are still by car. Mass transit takes more time because it is not door-to-door. For people with lower budgets or shorter distance traveling needs conversion of bicycles to electric power could pretty cheaply keep a lot of people going to work.
Maxwell expects an economic crisis that lasts from 10 to 12 years as we start to respond to Peak Oil too late. That sounds about right to me. The economy will shrink as the amount of oil available to drive it declines every year. To do the massive capital investments needed to develop alternatives a larger fraction of a shrinking pie will need to be allocated (whether by market mechanisms or government fiat) toward developing alternatives and investments in efficiency. One can claim we already have many of the technologies we need to adjust to Peak Oil. I would agree. But capital build lead times are long and turn-over in auto fleets and other equipment that uses energy takes many years. Few people or companies can afford to just junk all their cars, trunks, and other equipment and replace it with stuff that runs on electric power and natural gas.
Maxwell sees $300 oil as inevitable. I am less sure. Writing from Switzerland Francois Cellier argues that demand destruction will keep oil below $200 per barrel in the long run. Though even if that's a long term upper limit one can still imagine spikes above that price. So when world oil production starts declining at 4-5-6% per year how high will prices go? Possibly if the US dollar goes into a major decline against some other currencies $300 per barrel would be possible. Though I suspect that the dollar's value will be a lot less if and when that happens.
What do the alternatives cost? Electric power derived from a number of sources is going to play a larger role as in energy-intensive applications as oil gradually fades from the scene. The Institute for Energy Research has a report Levelized Cost of New Electricity Generating Technologies which you can view as a graphical of expected comparative costs for the main methods of generating electricity in 2016. Note they have wind and solar as still far more expensive than natural gas or coal with carbon capture and storage (CCS). But if low carbon dioxide emissions at the lowest possible cost is your goal then nuclear beats fossil fuels with CCS. Also, wind isn't far above the costs of nuclear, natural gas and coal. But it is not dispatchable (i.e. only generates when the wind blows - now when you want it to).
Some of my own policy recommendations:
Got any good energy policy ideas?
Contrary to the view in some quarters that mass transit is an unalloyed blessing buses and subways around New York City generate harmful levels of noise.
Using sensitive noise dosimeters, the team of researchers, led by exposure scientist Richard Neitzel from the School of Public Health at the University of Washington and Robyn Gershon, DrPH, an environmental and occupational health scientist and faculty member at the Columbia University Mailman School of Public Health, conducted hundreds of measurements of noise levels at platforms and stations, as well as inside of vehicles on New York City subways (MTA and PATH), buses (MTA), ferries (Staten Island), commuter railways (LIRR, SIRR and Metro North), and the Roosevelt Island tramway.
The scientists found that on average, the MTA subways had the highest noise levels, at 80.4 decibels (dBA), followed by the Path trains, at 79.4 dBA, and the tram, at 77.0 dBA. The lowest average levels measured, 74.9 dBA and 75.1 dBA, were obtained from the LIRR and Metro-North trains, respectively. The very highest levels measured in the study were found on an MTA subway platform (102.1dBA) and at a bus stop (101.6 dBA).
In contrast, the noise level of a whisper is 30 dBA, normal conversation is 60 to 70 dBA, a chainsaw is 100 dBA, and gunfire is 140 dBA.
Regards bus stops: I go out for walks and hate to see a bus approaching. They are louder than just about anything else on the road. Plus, the older ones belch diesel exhaust smoke (the newer ones are built under a tougher regulations and are not as bad). Well, why can't they have better mufflers? Would effective mufflers really cost too much or weigh too much?
Subways are the worst. Again, does it cost too much to make subway stations safe for human hearing? Imagine some corporation generated such noise levels without providing protection. It would get fined and sued. Why do government-owned mass transit systems get away with damaging hearing?
In general, noise levels were significantly higher at platforms compared to inside vehicles for all forms of mass transit, except for ferries and the tram. The borough with the highest mass transit noise levels was Manhattan, followed by Queens and the Bronx. Major hubs were noisier than local stops and underground trains and stations were significantly louder than those aboveground. According to Dr. Gershon, of all mass transit, subways had the highest noise levels, with roughly half of the maximum levels exceeding 90 dBA. "At some of the highest noise levels we obtained (ex. 102.1 dBA on the subway platforms), as little as two minutes of exposure per day would be expected to cause hearing loss in some people with frequent ridership, based upon the International Organization for Standardization models for predicting hearing impairment from noise."
Cars take you from where you want to start to where you want to end up. You can control who you ride with. You can choose a car with very good noise insulation and a quiet engine. Can can choose which music to listen to and do not need ear plugs to listen to it. Granted, you have to drive and pay attention to the road. Cars come with trade-offs. But given the advantages it is not surprising that most people choose to drive.
Blogger "Engineer-Poet" (who many of you will recognize for his data-rich comments postings here) argues that a bill in the US Congress that provides rebates for trading up to more efficient vehicles requires very little improvement in MPG in order to get the rebate.
There is NO solution to this problem on the supply side. The supply needed to continue BAU does not exist; oil prices high enough to expand supply will instead collapse the economy before that supply can be brought to market. The only way this challenge will be met is on the demand side, by shifting to other energy sources where it is feasible and aggressive economizing where it is not.
What's depressing is the utter inadequacy of our government response. Let's take this "Cash for Clunkers" bill (HR2751). It would give a $3500 rebate for the purchase of a vehicle achieving as little as two miles per gallon more than the one traded in. A five MPG increase nets $4500.
This will help clear dealer lots, but it won't do squat for our real problems:
It's almost as if this bill was intended to screw the country.
- It will not significantly reduce our fuel consumption; we will still be burning far too much to accomplish too little.
- It will not fix the bad production mix of the auto companies; it adds demand for guzzlers only slightly less thirsty than the ones they'd replace. But worst of all,
- It will leave us with a brand-new fleet of guzzlers which will not be paid off for years at the exact time when we are facing radical increases in the cost of oil.
A 2 MPG increase is pretty pathetic. The rest of us as taxpayers are going to subsidize this?
The minimum requirements for absolute fuel efficiency seem pretty lame to me: 22 MPG for cars, 18 MPG for small light duty trucks, and 15 MPG for large light trucks. These are pretty low bars to meet. Though for cars the absolute size of the improvement required is 4 MPG. For large light trucks the improvement required is only 2 MPG. Also, the existing vehicle has to be below 18 MPG. So that leaves out a lot of old vehicles. Still, pick-up truck drivers with a 1990s truck that has low fuel efficiency can get a newer car that has a couple more MPG and save a few thousand dollars at taxpayer expense. That seems like bad policy to me.
Why not focus the purchase incentives at stylish hybrids and other high fuel efficiency cars? Drop incentives for selling trucks. Put the bar above 25 MPG at least. The price of oil is headed toward another spike in a year or two. People shouldn't get subsidies paid by the rest of us to buy trucks that are below 20 MPG.
Update: To be clear: I'm not advocating an improved version of "cash for clunkers". But my argument is that if we are going to make taxpayers pay subsidies for a small subset of us to buy new cars that these cars ought to bring about a much bigger fuel efficiency increase than this plan requires. Create a bigger public good. I doubt that the net effect will be beneficial. But it will at least be less bad if the MPG requirements are raised.
If those who project a rather imminently starting long term decline in world oil production are correct then I also expect to see a decline in demand for electric power in the short to medium term. Previously I believed that Peak Oil means bigger demand for substitutes - and that's probably still true for liquid fuels substitutes if any can be made viable in time. But patterns in changes in energy demand in this recession have caused me to rethink my views about electric power demand. The recession has lowered the prices of oil, natural gas, coal, and even photovoltaic panels. Why? Lower economic activity lowers demand for a very wide range of goods and services.
Coal demand might go down overall post-peak as well. Coal demand for electricity generation, for steel plants, and for other industrial processes has plummeted in this recession. An oil supply decline will probably cause a long recession that will depress demand for steel and industrial products as well. So coal doesn't look like a big winner post-peak either. Am I wrong about this?
A post oil peak environment will differ from today in one important respect. The prices of oil will be much higher than today and therefore demand for substitutes will be greater at the same level of economic activity. So a 3% decline in the economy in the current recession leads to less demand for substitutes than is the case when the price of oil is higher and the economy shrinks the same 3%. But our current level of economic activity even in a recession strikes me as higher than what we'll see when oil production declines 3-4-5% per year for year after year. The economy can't develop substitutes fast enough to allow economic growth or even economic stability during a period of declining oil supplies.
A post peak environment will eventually differ from today in another important respect: people will eventually know we've past Peak Oil. Longer term decisions about substitutes will factor in the expected yearly decline in oil availability. So, for example, oil burning heater sales will plummet much more than the economy shrinks. Why buy capital that is of declining usefulness. This will lead to greater demand for ground sink heat pumps and therefore more electric demand to operate those ground sink heat pumps. But I do not expect that new source of demand to make up for declines in demand coming from overall lower economic activity.
You can get an idea of how much electric power demand drops in a recession by looking at a new report by the North American Electric Reliability Corporation (NERC). NERC is the regulatory body for the combined electric power grid of the United States and Canada. NERC expects summer 2009 electric power demand in the US and Canada to be down 1.8%.
Decreased economic activity across North America is primarily responsible for a significant drop in peak-demand forecasts for the 2009 summer season (Figure 1). Compared to last year’s demand forecast, a North American-wide reduction of nearly 15 GW (1.8 percent) is projected. In addition, summer energy use is projected to decline by over 30 Terawatt hours (TWh), trending towards 2006 summer levels. While year-over-year reduction in electricity use is not uncommon — industrial use of electricity has declined in 10 of the past 60 years4, for example — it is critical that infrastructure development continues despite this decline. Based on the information provided as part of this assessment, most Regions have not yet experienced adverse impacts on infrastructure projects. However, WECC has indicated that some generation and transmission projects have been deferred or cancelled, in part due to overall economic factors.
My main point: I do not see supplies of electricity as the rate limiting factor for moving away from use of oil in a post-peak economic environment. I could be wrong on this point and I'm writing this post because I'd like to hear from you dear readers. I realize some of you do not think we are anywhere near the peak in world oil production. But can we just put that debate to the side for the sake of this discussion and consider a hypothetical? Here's the hypothetical: world oil production starts an irrevocable decline some time in the next 5 years. What happens to electric power demand?
The reason I say the next 5 years is that electricity becomes more substituteable for oil the further into the future we go. Technological advances will lower the costs for nuclear, solar, and wind electricity while other technological advances (e.g. better batteries, better heat pumps for heating, even ways to use electricity to generate liquid fuels) enable electricity to get used in more places where oil gets used today. But in the short term substituting is more costly and takes longer to do.
Next question: If what I'm saying about electric power demand in a post-peak economy is true then what are the policy implications? I can see one big one: incentives for cleaner electric power sources are less important than incentives for shifting demand from oil to electricity. So tax credits or loan guarantees for wind, nuclear, and solar do less good than, say, tax credits for electrifying rail or putting in ground sink heat pumps or tax credits for shifting more quickly to pluggable hybrids.
In a report to be presented at a meeting in Rome, the International Energy Agency (IEA) will forecast a 3.5 per cent contraction in global power consumption this year, according to its chief economist, Dr Fatih Birol.
“This shows how deep a recession we are in,” Dr Birol said yesterday. “Oil demand has declined in the past due to oil price shocks and financial crisis, but electricity consumption has never decreased. If you want to measure the health of an economy, you look at the electricity consumption.”
I've read estimates for global economic decline of about 1.5% in 2009. So electric power consumption is declining more than economic activity? Why?
Update II The US Department of Energy's Energy Information Administration does not expect total energy usage per capita to grow over the next 20 years due to regulations that require higher efficiency energy usage.
Growth in energy use is linked to population growth through increases in housing, commercial floorspace, transportation, manufacturing, and services. Since 1980, U.S. energy use per capita has remained relatively stable, between 310 and 360 million Btu per person. In periods of high energy prices (particularly, oil prices) energy consumption per capita has tended to be at the low end of the range, and in periods of low energy prices it has tended to move toward the high end. With the expectation that oil prices will remain high throughout the projection period, coupled with recent legislation enacted to increase energy efficiency, energy use per capita in the reference case drops below 310 million Btu in 2020 and continues a slow decline through 2030 (Figure 35).
Transportation is the hardest sector to shift away from oil usage since liquid fuels work so much better than competing energy sources in cars and trucks. Will rising transportation costs pull down the whole economy or will people rapidly shift to living closer to work and will rail expand quickly to substitute for trucks?
Back in January 2007 the Bush Administration and Congress agreed to raise standards for auto fuel efficiency. Now the Obama Administration has decided to raise those standards even faster. The Obama Administration has decided to accelerate the rate at which car fuel economy must rise.
By 2016, passenger cars must average 39 miles per gallon and light trucks 30 mpg. A senior administration official said the proposal will boost the price of the average price of a vehicle by $1,300 -- or $600 more than the per vehicle increase predicted under a Bush administration fuel efficiency proposal.
The proposal will force automakers to meet a fleetwide average of 35.5 mpg by 2016 -- four years ahead of what Congress required in 2007, when it mandated 35 mpg by 2020. The higher costs could add $13 billion to $20 billion annually in total new car costs.
My take: this regulation will help prepare the auto makers for Peak Oil. Granted, the politicians in Washington DC seem oblivious to that approaching disaster. But by accident the US government is causing auto makers to take some steps to prepare for Peak Oil.
Cars and light trucks account for 17% of total U.S. greenhouse gases, according to EPA data.
By contrast in 2006 35% of US CO2 emissions came from electric power generation To cut CO2 emissions in a big way requires cutting coal electric power plant emissions in a big way. But doing that will increase electric bills in lots of states. So you do not hear the Obama Administration touting a similar scale agreement that cuts CO2 emissions from the electric power industry.
Internationally burning coal is the biggest single source of CO2 emissions.
Coal’s share of world carbon dioxide emissions grew from 39 percent in 1990 to 41 percent in 2005 and is projected to increase to 44 percent in 2030. Coal is the most carbon-intensive of the fossil fuels, and it is the fastest-growing energy source in the IEO2008 reference case projection, reflecting its important role in the energy mix of non-OECD countries—especially China and India. In 1990, China and India together accounted for 13 percent of world carbon dioxide emissions; in 2005 their combined share had risen to 23 percent, largely because of strong economic growth and increasing use of coal to provide energy for that growth. In 2030, carbon dioxide emissions from China and India combined are projected to account for 34 percent of total world emissions, with China alone responsible for 28 percent of the world total.
Flat and eventually declining oil production will increase the demand for coal and natural gas. But I expect one net effect of Peak Oil will be a lowering of CO2 emissions. Already the big run-up in oil prices that peaked in the summer of 2008 caused changes in consumer behavior that cut oil demand and the high oil prices contributed to the recession that cut oil demand even further.
What remains unclear to me: how fast will battery technology improve? Higher fuel efficiency standards and declining oil production will be a lot easier to handle with better batteries for longer range electric cars.
Update: Some argue against higher fuel efficiency standards based on safety concerns. However, while that's probably true overall there are some cases where it is not true. SUVs are safer for passengers than small cars - as long as you are in the SUVs hitting the small cars. But small cars are safer the fewer SUVs are on the road. Higher mass in a car makes that car more dangerous to other cars it runs into.
It has been argued by some that not owning a car saves you money, but my argument is that the opposite is true. Manhattan, the only place I’ve ever lived where it’s reasonable for people to make do without a car, is ridiculously expensive compared to everywhere else. It’s a lot less expensive to live somewhere else and own a car, than it is to be carless in Manhattan. A one bedroom apartment costs $3000/month. A $700/month apartment someplace else would free up $27,600/year to cover the cost of car ownership. On top of that, the local income tax rate is around 10%, higher than any other place in the nation.
Looking at the average cost of owning a car is a deceptive statistic, because most people choose to buy a much more expensive car than they need, and you are averaging in overpriced luxury vehicles with basic transportation. You can buy a brand new car such as the Nissan Versa for less than $11,000, and I’m sure it’s a reliable enough vehicle to get you to work or to the supermarket. Most people choose to spend more on a car in order to display their higher status to other drivers, but that’s a choice they don’t have to make. It’s hard to see why insurance, maintenance, gasoline, and depreciation on a Nissan Versa should cost you more than $5000 per year. This is a lot less expensive than living in San Francisco or New York City.
You can certainly find counter-examples. I do not live in a densely populated city and yet I still manage to walk to work most days. At the same time, I still own a car (and used it to evacuate with lots of possessions recently for a few days when a massive fire threatened to burn down Santa Barbara) since cars are very useful. So his argument sounds broadly correct to me. To live in the same number of square feet of housing space in a city costs far more than in a suburb. That housing savings outweighs the car cost if you choose your car based on cost effectiveness. You can even step up a level or two above a Versa and still save money by commuting.
The trade-offs between city and suburb vary by region. But keep in mind that even though NYC is a cost outlier so are its suburbs. Indianapolis has cheaper housing than NYC or SF. But the suburbs of Indianapolis cost much less than northern New Jersey and Long Island.
You can also save money by living in a much smaller place. But most people do not want to do that. People with kids especially do not want to live in a shoe box. Even if the parents can stand it I think it unkind to kids to deprive them of yards to play in and safe neighborhoods. Then there's the time wasted with mass transit waiting for buses, leaving and coming home based on when the transit runs, and time getting too and from transit stations.
A lot of mass transportation advocates point to Europe as a sort of "shining city on a hill" example of what can be accomplished with mass transit. But I suspect these advocates do not understand just how little mass transit accomplishes in Europe. Check out table 3 at this link which shows percentages of distances traveled in Europe by car, rail, tram & metro, and bus & coach. What you'll see is that cars account for over 80% of distance traveled in 11 western European countries and only gets below 80% in Denmark, Austria, and Ireland. In those countries cars still accounts for about three quarters of distance traveled. These are all countries with fuel prices, population densities regulatory regimes, and mass transit subsidies far higher than what we find in the United States. Yet Europeans still choose to use to cars for over three quarters of miles traveled.
I expect the coming of Peak Oil will change the trade-offs between suburban and city living to some extent. But a lot of people will shift to electric cars and scooters rather than living in denser surroundings or ride buses. Personal transportation is incredibly convenient as compared to mass transit. $200 per barrel oil won't change that.
Update: If you are going to take public transportation at least stay out of NYC subways where the sound is so loud it causes hearing damage. Or at minimum wear ear plugs.
Chemical engineer, former oil field worker, and energy policy writer Robert Rapier comments about an Energy Information Administration Energy Conference press panel he recently appeared on. Rapier makes an argument I fully agree with: trying to cut down the oil industry before substitutes are practical is just asking for trouble.
A representative from (I believe) the California Independent Petroleum Association got up and made a statement that he felt that despite the important role the industry plays, they are being demonized and singled out for punitive taxes. I responded that I could empathize; that one of my greatest concerns is that we will discourage domestic oil and gas production, and then biofuels fail to deliver per expectations. In that case I think we become even more dependent upon OPEC.
Fellow panelist Eric Pooley disagreed and said we need even stronger incentives for moving away from oil. That really misses the point I was making, though. You can have the strongest incentives in the world, but they can't assure that technology breakthroughs will occur. So while you are promoting one industry at the expense of another, very successful industry that plays a critical role in the world, what is the contingency plan if the incentives don't pay off?
We can't replace most uses of oil in the next 10 years. Grain crops for biomass ethanol can't do it since we don't have enough land. Maybe cellulosic ethanol tech will mature. But if it does then say bye bye to lots more rain forests. Maybe biodiesel algae will mature and drop far enough in cost to become viable. I certainly hope so. But I don't think we should count on it. The problem might take 20 years to solve for all we know.
I happen to think we are pretty close to world peak oil production and urgently need to develop energy substitutes. But that's not an argument for heavily taxing the oil industry or restricting where they can drill. We are already in enough trouble. Why make it worse?
I'm such an enthusiast for electric cars and better batteries because to the extent that we can shift a portion of our transportation needs to electric power we reduce our dependence on liquid fuels. Our approaching energy crisis is really a liquid fuels crisis. We have lots more scalable ways to produce electricity than we do liquid fuels.
But electric vehicles have limits. As Alan Searchwell explains some usage patterns map better to what electric vehicles do well.
Electric drive systems should be able to gain some serious traction in the commercial vehicle market since electric drive in commercial vehicles is a more viable option NOW. One reason is that a large percentage of delivery vehicles operate on fixed routes and schedules so their use and charging cycles can be planned with more certainty than an individual's personal transportation. Smaller delivery vehicles also tend to do shorter range trips, so electric drive systems are a particularly good fit. Routes can be planned so that vehicles return to base long before they run out of juice. In addition, fleet operation bases can be equiped with high power fast charging stations or battery swap stations, if fast turnaround times are more important than the cost of spare battery packs. School buses, airport shuttles and other pasenger moving operations that frequently move people on routes that are less than 50 miles round trip also present opportunities.
For example, during a recent trip to the US, I spent some time at a car rental location and observed that there were a couple of shuttles making trips to Miami International Airport and back, a trip that I estimate takes less than half an hour to complete. Also at the location were several shuttles sitting idle. If these shuttles were electric, the idle ones could be plugged in while the shuttles were working. When the working ones need charging, they could be plugged in and one of the idle ones used to replace them.
We need to shift to electric (and to trains for that matter) where we can so that the remaining liquid fuels can be used in application where electric power isn't practical.
Heather Mac Donald points out that even though the state of California is trying to fill in a $42 billion dollar budget deficit the people of California are so adamantly opposed to a gasoline tax increase that the state legislature opted to increase the sales tax rather than enact a carbon tax.
So did a proposed 12-cents-a-gallon surcharge on gas make it into the crippling $12.8 billion in tax hikes which the California legislature finally passed yesterday? Of course not. Voters would raise bloody hell. Better, apparently, to kill all businesses slowly with a sales tax hike than to interfere with Californians’ right to cheap gasoline. Liberal politicians’ pious devotion to the science of global warming never translates into action, unless the costs of action can be safely transferred onto non-voters. And environmental groups are just as cowardly. I sure didn’t notice the Sierra Club or the NRDC protesting when presidential candidate Hillary Clinton called for a suspension of the federal gas tax last year.
This is not an amazing result. Gasoline taxes are so unpopular that their levels haven't even kept up with inflation for funding road maintenance. I realize some of you support a carbon tax because you are worried about global warming. But in spite of the fact that California enacted a law in 2006 to cut carbon dioxide emissions 25% by 2020 the people of California are not willing to pay a even a small price to achieve this goal. This has important ramifications for the global warming policy debate.
How unpopular are higher gasoline taxes in the US for roads and bridges? In August 2008 a poll found nearly two thirds of Americans opposed higher gasoline taxes to fix bridges. In July 2007 an overwhelming majority of Americans opposed a 50 cent gasoline tax.
Eighty-six percent (86%) of Americans oppose a proposal to increase gasoline taxes by 50 cents a gallon. A Rasmussen Reports national telephone survey found that just 8% favor such a tax hike.
Consider the contrast with cigarette taxes. Since most people do not smoke and they see cigarettes as harmful it is easy for many governments to impose high taxes on cigarettes and other tobacco products.
Eighty-five percent of the 1,018 adults polled opposed an increase in the federal gasoline tax, suggesting that politicians have good reason to steer away from so unpopular a measure. But 55 percent said they would support an increase in the tax, which has been 18.4 cents a gallon since 1993, if it did in fact reduce dependence on foreign oil. Fifty-nine percent were in favor if the result was less gasoline consumption and less global warming. The margin of sampling error is plus or minus three percentage points.
But so far this qualified support hasn't translated into a tax rise. Governor Deval Patrick of Massachusetts is proposing a 19 cent gasoline tax to help close the Massachusetts budget gap. Note that even if he succeeds the amount is so small that it will have minimal impact on gasoline demand. Several other states are considering gasoline tax increases to cut budget deficits. But again, even if these taxes are enacted the increases are small and fall far short of the high gasoline taxes in Europe that have pushed so many Europeans into very small cars.
Politicians who want to reduce carbon dioxide emissions will continue to find back door ways to do this where the higher costs are hidden from most voters. California and other states and countries have enacted requirements on utilities to get more electricity from renewables. This causes electricity prices to rise. But there's no identifiable tax on utility bills for this purpose. So few voters think to complain.
Tax credits and other subsidies for solar, wind, other renewables, and nuclear represent another way around popular opposition to fossil fuels energy taxes. Tax something else and then use the cash to subsidize non-fossil fuels energy sources. I happen to like this approach as a way to reduce growth of coal usage for generating electricity. Just due to conventional pollutants alone I wish we either burned much less coal or imposed stricter regulations on coal burning plants to cut mercury, particulate and other pollutant emissions. But the coal industry has done an excellent job of obstructing regulations to reduce pollutants.
Probably the most dramatic way that government policy attempts to work around opposition to fossil fuels taxes is with car fuel efficiency regulation. The US federal government and state government have enacted regulatory requirements for more fuel efficient cars. A more economically efficient way to reduce fuel usage is a tax. But this more economically efficient method isn't used because the public is too opposed. Hence the regulations to force car makers to make more fuel efficient cars.
I expect Peak Oil will eventually drive US gasoline prices up to levels close to Europe's current levels. I hope the rise in gasoline prices due to Peak Oil won't be so sudden and severe that our economy is crippled as a result. One thing a higher gasoline tax would do now is provide incentives to get ready for Peak Oil before it hits in full force. But the popular opposition to high gasoline taxes effectively precludes the optimal amount of preparation needed for Peak Oil.
Update: Think you can follow the global warming debate from political op-ed columns? Check out Carl Zimmer's run-down of a newspaper's mistakes in fact checking reports about ice cap areas.
Residential energy credits of 30 percent of the cost of certain improvements are available to homeowners, Ms. Weltman noted, with caps of $500 to $2,000, depending on the improvement. They include qualified expenditures on equipment for solar electric power, solar water heating, fuel cells, wind energy and geothermal heat pumps, and for their installation. More traditional energy-saving improvements, like increasing insulation to use less heating oil or natural gas, do not qualify.
Home energy efficiency differs from car energy efficiency in fundamental ways. Most notably, one gives up comfort, convenience, and utility when shifting to a smaller and more fuel efficient vehicle. By contrast, many home efficiency improvements increase comfort. Sealed gaps cut down on drafts. Multi-paned windows with argon gas fillers reduce the coldness one can feel in the winter when standing next to a window.
So if home energy efficiency improvements have such big upsides (along with payback times short enough to justify) why do so many homes lag in their energy efficiency? Why don't more government policies push for energy efficiency to the same extent that government policies push for car fuel efficiency? My guess: car manufacturing is a lot more centralized and standardized as compared to home construction. It is a lot easier for governments to focus on a couple dozen car makers than thousands of home builders and remodelers.
A similar problem is posed for individual home owners. One can't precisely estimate how much many home energy upgrades will cut heating and cooling bills. The uncertainty of the size of the benefit probably reduces home energy efficiency investments below the optimum. Even if one is buying a new appliance that is precisely rated on energy efficiency one doesn't necessarily know the energy efficiency of the older appliance that is being replaced or how much one uses that particular appliance.
Policy changes about cars can also accomplish faster changes. Houses have much longer lifecycles than cars. Changes in policies for new cars will ripple into over half the vehicle miles driven in about 6 or 7 years after the first car built to a new fuel efficiency specification rolls off the assembly line.
Housing construction regulations are also much more local both for historical and practical reasons. The ideal energy efficiency design elements for a house on a Maine hillside is different than the ideal house design for Florida, Brazil, Alaska, London, or Darwin Australia. The ideal design on that Maine hillside also differs depending on whether the house is to be built on a southward or northward facing side of the hill. The sun beating down in Arizona makes photovoltaics economics far more favorable there than in Edinburgh Scotland. Cloud cover and length of daylight varies by season and latitude. Attempts to come up with regulations to mandate higher housing efficiency might meet with success in a small flat country with consistent climate throughout. But in a larger nation building efficiency regulations are problematic at a national level.
Still, as Will Stewart points out, big energy and cost savings are to be had from better design of homes and commercial buildings.
For example, DoE’s NREL monitored one passive solar house built 16 years ago, finding primary energy costs savings of 56% compared to similar houses built to the Model Energy Code; small tweaks in the design could have realized a total of 70% energy savings. It may surprise some, but this house cost no more to build than other homes in the neighborhood. With regard to commercial and government buildings, an initial upfront investment of up to $100,000 to incorporate green building features into a $5 million project would result in a savings of at least $1 million over the life of the building, assumed conservatively to be 20 years.
Still, one can take the regulatory attempts too far. Britain's net-zero requirements for energy efficiency of new buildings looks like a case of pursuing dwindling marginal returns into negative returns (though I'd be happy if someone can prove me wrong on this point).
Stepping up a level, the Passive House architectural movement (originating in Germany) has been realizing designs that save 75-90% of a building’s primary energy use. Architecture 2030, an independent research organization, understands that strides that can be made in building energy efficiency. In 2006, it initiated the 2030 Challenge, which calls for a 50% reduction in new building energy fossil fuel use by 2010, and net-zero energy use by 2030. The UK is much more aggressive with a net-zero requirement for all of its new buildings by 2016.
Also see Will Stewart's passive solar series on The Oil Drum.
T. Boone Pickens wants to transition cars to natural gas power. But his plan has elicited some opposition. The CEO of FedEx thinks electric cars are the way to go and FuturePundit is inclined to agree.
But Mr. Pickens has his opponents, including FedEx CEO Fred Smith, who favors electrification of the transporation fleet. Mr. Smith argues that hybrids are the way to go, and is putting his money where his mouth is. With 80,000 motorized vehicles, FedEx now boasts the largest fleet of commercial hybrid trucks in North America.
Without naming Mr. Pickens, the company’s director of sustainability, Mitch Jackson, upped the ante on Sunday with a blog item blasting natural gas as transport fuel of the future. After citing a list of reasons against using natural gas instead of diesel, Mr. Jackson concludes that “substituting one fossil fuel for another may mean we’re shifting our energy supply, but it doesn’t necessarily mean we’re going anywhere.”
I see a few downsides to natural gas. First off, I do not want a car with a shorter travel range and less space for luggage due to the bigger storage tank. Second, burning natural gas doesn't increase vehicle fuel efficiency by much. Whereas hybrids do. Third, we need to move toward ways of powering cars that break our dependency not just on oil but on fossil fuels in general. When oil production starts declining the demand will rise for natural gas as a substitute for other purposes. Why put transportation on natural gas too?
Advances in lithium battery technology are going to enable us to use electricity for most of our miles traveled on the ground. That is good news because we have multiple ways to generate electricity including several ways that do not use fossil fuels as inputs. Nuclear, geothermal, wind, solar, and hydro will all compete. Their costs will go down, not up. They are far more sustainable than fossil fuels.
To be fair, Boone wants to cut the demand for natural gas to generate electricity by building more wind farms. This would free up natural gas for use in transportation. But current gasoline prices limit the potential demand for natural gas vehicles. Hybrids face a similar problem with hybrid sales down more than overall car sales. The technologies for hybrids, pluggable hybrids (which currently are far from compelling), and pure electric cars are going to improve and this will reduce the advantages of natural gas powered vehicles.
Update: The car companies mostly seem to be ignoring Pickens about natural gas - at least in their product planning announcements. Whereas the move toward electric vehicles is pretty clear. For example, Ford is going to bring out pure electric and pluggable hybrid electric vehicles as early as next year.
In addition to the new 2010 Fusion hybrid, Ford said the plans include a full battery electric van-type commercial vehicle in 2010, a full battery electric passenger car in 2011, and next-generation hybrid vehicles, including a plug-in version by 2012.
A fully electric passenger car in 2011. Anyone know details about the size of it?
Update II: In a nutshell here is why I prefer electric vehicles: Electric power can be generated from many energy sources. Therefore electric cars will uncouple our societies and economies from such a heavy (and need I say harmful?) dependence on oil. With great batteries suitable for use in cars we can use nukes, solar, geothermal, wind, waves, hydro, natural gas, coal, or other energy sources to generate electric power and therefore to move us down the road.
Correct those flaws, and heating and cooling costs are typically cut by 20 percent to 30 percent, a saving of more than $1,000 annually in some households. In addition, carbon dioxide emissions and the strain on the national electric and gas systems are reduced.
About 140,000 houses will be weatherized with public help this year, a total that President-elect Barack Obama has promised to raise to one million, to reduce energy consumption and cut energy costs for households and taxpayers, who often absorb those costs for the poor. This would represent a historic shift in emphasis for the federal and state governments, reducing poor people’s energy bills instead of helping to pay them.
One can argue whether governments should subsidize home heating. But leave that aside. If a government is going to subsidize heating I'd rather in subsidize insulation rather than fuel supply. Insulation is far more cost effective. It reduces pollution, reduces waste, and cuts our dependence on dwindling supplies of imported oil.
I've made this argument in the past. A lot of leaky older houses are cheaper to seal up and insulate than to pay higher costs for heating for many years. What would help this process: more automated methods to measure heat leaks and detect their sources. Lots of contractors will quote assorted ways to improve a house's insulation. But uncertainty about how much such work will cut energy bills reduces the motive of home owners to upgrade their insulation.
The Democrats feel under so much pressure in an election year from voters unhappy with high gasoline prices that House Democrats are ready to allow limited offshore drilling. The 50 to 100 mile limit still will place some oil fields off-limits. But $5 gasoline in a few years will melt those limits as well.
Even more surprising, the turnabout is led by the House speaker, Nancy Pelosi, who has a history of fighting oil drilling going back to the early days of her career in California.
Under a measure being assembled for a vote in the House next week, oil rigs could go up 50 miles from the shores of states that welcome drilling and 100 miles off any section of the United States coast — a stark reversal on an issue that has been a Democratic environmental touchstone since the 1980s.
“It shows what $4 a gallon gas will do,” said Daniel J. Weiss, a senior fellow on energy and climate issues at the Center for American Progress Action Fund, an advocacy group.
By the time gasoline hits $6 per gallon the ban on drilling in the Arctic National Wildlife Refuge (ANWR) will get lifted as well. The environmentalists in the Democratic party didn't intend this. But they've preserved the oil for use after the world hits Peak Oil. So that ANWR will will get sold for $200+ per barrel.
Offshore drilling is a local issue in California coastal areas. The Santa Barbara County Board of Supervisors voted in support of offshore drilling.
A divided Santa Barbara County Board of Supervisors voted Tuesday in support of offshore drilling, after an impassioned daylong hearing in which this year's record gas prices trumped the memory of a disastrous oil spill.
By a 3-2 vote that broke along geographic lines, supervisors agreed to send a letter to Gov. Arnold Schwarzenegger urging him to change state policy and "allow expanded oil exploration and extraction" off the county's coast.
My guess is Arnie won't try to lift the drilling ban until Californians feel in a crisis from $6 or $7 gasoline. But California will flip on this issue too as the economy sinks with Peak Oil.
Looking to spitshine the South Coast’s recently tarnished environmental legacy, the Santa Barbara City Council took on the issue of offshore oil drilling this week, declaring unequivocally in an official resolution to all who might listen that they are against any new oil and gas leases in the waters off our shores.
I'm not telling you to support or oppose offshore drilling. I'm just saying that once world oil production comes off its plateau and starts declining people will become desperate for more energy supplies. Opposition to drilling, opposition to nuclear power, and other forms of opposition to energy will evaporate.
The poorer folks in New Hampshire are worrying over how they'll keep warm in the next winter. Modest proposal: move to dwellings which cost less to heat.
With the average price of heating oil at $4.53 a gallon, and the average use in New Hampshire about 800 gallons of oil each winter, a pre-buy contract can cost as much as $4,000.
The price of heating oil could hit $5 or more this winter. Poor folks in cold states won't be able to afford it. Agencies that provide tax-funded heating oil aid will get far more applications while at the same time existing claimants will want more money to pay for the higher prices. Some people are going to get really cold.
State officials don't know how much money they will receive for fuel assistance next year, but Lovett said the office is working with the governor and the state's congressional delegation to secure more money than last year. She said the program will definitely need it just to provide a benefit with the same buying power, but she couldn't say how much more her office might need.
Scothorne hopes legislators in Washington will allocate enough to make a difference, she said. If not, the outcome could be devastating. If you think prices are going up then start making the moves you would make once prices hit $5, $6 per gallon.
"I'm concerned about people dying," she said. "I'm concerned about them turning down the heat so low that things are going to freeze. I'm afraid they're going to light candles. I'm afraid that they're going to use inappropriately vented space heaters, propane. Those are my fears because they're just not going to have the money. Even with assistance, they're not going to have the money."
What the politicians and government workers are not mentioning: Some people are going to have to move. The sooner the better. The situation for them is already untenable. Some could move to apartment buildings where each apartment shares lots of common walls with other apartments and therefore is much cheaper to heat. Others are going to have to move to more moderate climates.
The heating aid agencies ought to start evaluating poor people to decide who should be offered help to move. Retreat from big old houses into apartments. Or convert the big old houses into apartment buildings so that more people share the heating bill. Four times as many occupants is like cutting the price of oil to $1.25 a gallon.
Some people are switching to alternatives. In Massachusetts wood pellet sales have already surged this summer in preparation for the winter.
In the past, summer sales of alternative heat sources tended to be slow. But this year is different, said dealers interviewed for this article
"We've seen a significant increase in sales of pellets this year — more than a 100 percent sales increase from this time last year," said Bart Raser, owner of Carr Hardware & Supply, based in Pittsfield.
Today, there are over 80 pellet mills across North America that produce in excess of 1.1 million tons of fuel per year, according to a Pellet Fuels Institute study. The same study showed that from 1998 to 2004, the U.S. pellet appliance shipments increased by 33,000 units.
The Governor of Maine wants to encourage the shift toward wood heating. That's an improvement over trying to help people stick with oil.
AUGUSTA (July 2, 2008): Facing a winter where home heating oil likely will be $4.50 or more a gallon, a task force created by the governor believes the public is ready to start making the switch back to the state’s most plentiful homegrown resource – wood.
The goal is to convert 10 percent of home oil-based heating systems to wood in five years, using pellet or wood chip technology, according to a draft report released by Gov. John Baldacci’s Wood-to-Energy Task Force.
The Governor might come out with a bond proposal to finance wood furnaces for schools. I wonder how the economics of that move compares with ground sink heat pumps.
Semi-seasoned wood now sells for $328 a cord, up from about $220 last summer.
While Yankee Fireplace & Grill City in Middleton would normally sell plenty of grills around the Fourth of July, customers are instead getting ready for winter.
Wood "pellet stoves are pretty much bonkers right now," said C.T. Watt, a Yankee Fireplace site surveyor. "A lot of manufacturers are telling people if they order now, they may not get them until February."
One place homeowners can get a bang for their buck is by looking in the attic, said Randy Bridges, who manages Penquis' weatherization program for qualified low-income households. Before people lay down lots of insulation, they should locate and seal up leaks in the roof, joints, chimney and walls.
''A lot of homeowners right now are just blowing in insulation and they are making our job more difficult because they are covering up the air leaks,'' said Bridges.
Get ahead of the problem. Do not simply react to what's happening once the price pain forces your hand. The people who wait can't find wood stoves or hybrid cars or other in-demand items.
Nationally, four of the 10 biggest VC deals in the first quarter of 2008 were in alternative energy, according to the National Venture Capital Association. About $625 million was invested in 44 deals, marking a 51 percent increase from the first quarter of 2007.
The big flow of VC money into alternative energy technologies shows that capitalists really aren't permanently wedded to oil. Investors will put their money into anything they see as having a reasonable chance of earning good returns on the money invested.
One VC firm alone just raised $450 million for clean tech investing. Most of that money probably hasn't been invested it. It takes time to find suitable prospects.
RockPort Capital Partners says it has closed its third venture capital fund, pulling in commitments of more than $450 million to be focused on clean technology investments.
A lot of ways to make solar, wind, batteries, biomass, and other potential energy sources are going to get tried with all this money.
Vinod Khosla is reportedly angling for $640 million from the California Public Employees’ Retirement System (CalPERS). CalPERS would become Khosla Ventures’ only other limited partner if it puts up the money.
Khosla, famed Sun Microsystems co-founder and Khosla Ventures founder, , is fond of ethanol companies such as Range Fuels in Broomfield, Colo. and Mascoma in Boston. These are companies with capital-intensive projects, and that makes the $244 billion CalPERS a valuable partner for Khosla.
Still, while good greentech exits may be few and far between for now, some analysts and companies believe they are just around the corner (see Greentech Exits Ahead? and Funding Roundup: Solar, Biofuels Dominate Light Week).
As I've said in the past: there's a price of oil and gasoline at which just about every limit on oil drilling will get lifted. People who argue for more drilling can save their breath. Market prices will persuade better than any argument - rational or otherwise. Most Americans want to lift some of the limits on drilling.
Now, voter anger over soaring gasoline prices is shoving this perennial dispute to the top of Washington's energy agenda. On the New York Mercantile Exchange, benchmark crude for July delivery fell $1.88 Friday to settle at $134.86, near its all-time high. Last Monday, the average retail price for a gallon of regular unleaded was $4.039, according to the Energy Information Administration.
A recent Gallup poll shows 57% of Americans support opening up new territories to drilling, while a Wall Street Journal-NBC News poll conducted this month shows 59% of Americans saying Congress should take the lead on responding to high gas prices.
Currently little drilling is allowed off of US coasts outside of the Gulf of Mexico and even parts of the Gulf of Mexico near Florida are off limits. Plus, the Alaska National Wildlife Reserve and some park areas in the lower 48 states are off limits as well. All those limits will be lifted when world oil production starts falling.
WASHINGTON — President Bush, reversing a longstanding position, will call on Congress on Wednesday to end a federal ban on offshore oil drilling, according to White House officials who say Mr. Bush now wants to work with states to determine where drilling should occur.
The move underscores how $4-a-gallon gas has become a major issue in the 2008 presidential campaign, and it comes as a growing number of Republicans are lining up in opposition to the federal ban.
The party’s presumptive presidential nominee, Senator John McCain of Arizona, used a speech in Houston on Tuesday to say he now favors offshore drilling, an announcement that infuriated environmentalists who have long viewed him as an ally. Florida’s governor, Charlie Crist, a Republican, immediately joined Mr. McCain, saying he, too, now wants an end to the ban.
The NIMBY environmentalists have done us a great service and we should thank them. They've managed to preserve some billions of barrels of oil for the coming years when we will need them far more than we did in the past. Granted, the amount of oil they saved is not enough to prevent the coming decline in world oil production. But that preserved oil will help make the adjustment to a post-oil economy less painful.
Update: Threats of a destroyed tourist economy from an oil spill miss the point that tourism runs on oil. How many flights to Florida are getting canceled as airliners cut back on flights and go bankrupt?
Sen. Bill Nelson (D-Fla.) decried McCain's stance. "He ought to know he'd ruin Florida's $65-billion tourism economy by allowing oil rigs off the coast."
Nelson ought to argue for a tax on offshore oil that will pay for a high speed electric rail line to Florida.
Why don't more plants and foundries convert their waste heat into electricity? Lisa Margonelli argues that the regulatory environment for electric power usage is a major impediment toward reuse of waste heat.
Much more problematic are the regulations surrounding utilities. Several waves of deregulation have resulted in a hodgepodge of rules without providing full competition among power generators. Though it’s cheaper and cleaner to produce power at Casten’s projects than to build new coal-fired capacity, many industrial plants cannot themselves use all the electricity they could produce: they can’t profit from aggressive energy recycling unless they can sell the electricity to other consumers. Yet byzantine regulations make that difficult, stifling many independent energy recyclers. Some of these competitive disadvantages have been addressed in the latest energy bill, but many remain.
Ultimately, making better use of energy will require revamping our operation of the electrical grid itself, an undertaking considerably more complicated than, say, creating a carbon tax. For the better part of a century, we’ve gotten electricity from large, central generators, which waste nearly 70 percent of the energy they burn. They face little competition and are allowed to simply pass energy costs on to their customers. Distributing generators across the grid would reduce waste, improve reliability, and provide at least some competition.
Small quibble: Those large central electric generators can achieve efficiencies far above 30%. A combined cycle plant that only generates electricity can achieve 60% efficiency. However, that is not a reason to waste heat generated in industrial processes. So her main point remains.
Also, regards the point about competition: In some (though not all) US states the various electric power generator plants compete with each other. The companies that operate the power plants compete to sell electric power to the companies which deliver it to residential and business customers. Since this migration to a more competitive environment of electric suppliers is incomplete more regulatory changes could increase the amount of competition and allow more sources of electricity onto the grid.
An increased use of waste heat for electric power generation would reduce pollution from burning fossil fuels, cut electric power costs, and lower costs in industries that currently waste a lot of heat.
Promoting efficiency, however, has been an underutilized policy option. In fact, many current government policies do not reward conservation or, worse, encourage waste. The Internal Revenue Service, for example, creates a perverse incentive to waste energy by allowing commercial landlords to write off their energy costs every year. At the same time, it requires building costs to be depreciated on a 30-year schedule, effectively devaluing investments in energy efficiency. Removing such perverse incentives would help encourage greater efficiency but alone would not be enough to spur the efficiency gains we need.
30 years might be too long a write-off period, especially since many pieces of equipment do not last 30 years. But instant total deduction of energy saving investments seems too short a period of time.
We need greater energy efficiency. The costs of new coal and nuclear power plants have soared and natural gas which is widely used for electric power generation has gone up in price as well. So new conventional power plant capacity isn't going to come cheap. We would benefit from greater use of waste heat for electric power generation since it would reduce the demand for expensive new electric power plants and keep electric rates down on our monthly bills.
My guess is that some county in Maine or Minnesota is probably hardest hit by energy prices overall due to their need for very costly heating oil. But in terms of percentage of income going to gasoline poor Camden Alabama is the hardest hit county in America.
But the county is poor - household income of $26,000 is nearly half the national average - and people have to travel a long way to work.
The combination of low wages and long travel times means the people of Camden, for the second year in a row, spent a higher portion of their income on gas than anyone else in the country, according to a new study from the Oil Price Information Service, a research firm that tracks data for AAA.
In Camden, drivers put 13% of every paycheck right into the gas tank. In wealthy towns around New York City, people spend less than 2% of their income on gas.
This affords me an opportunity to make a point that really needs making: As we come up on and pass the peak in world oil production government policy ought to be aimed more at getting the poor to move to dwellings and towns which will reduce their need for energy rather than spend tax money to pay part of the energy bills of poor people. Less energy available will mean the absolute need to use less energy. Government subsidies delay needed adjustments in life styles.
In the United States there's a federal program, Low Income Home Energy Assistance Program, to provide poor people with money to buy heating oil. State and local governments as well as local charitable groups provide additional aid. In Massachusetts the average beneficiary of this aid gets $1000 this year.
The fuel-assistance programs the agencies run combine federal and state funds and will provide about $140 million in assistance this heating season to between 130,000 and 140,000 clients statewide. The federal government released $40 million in emergency aid last week to 11 states, including Massachusetts, which is receiving an additional $5 million.
Heating fuel aid is the wrong response to this problem. The coming decline in world oil production can't be prevented by providing people cash to buy heating oil or propane. We need to shift gears and aim to reduce energy usage. For example, people who can't afford to heat a house should live in a multi-unit apartment with shared walls and heavy insulation. People who can't afford to travel from their rural residency to work should move into more densely populated areas. The message people need to hear is that they need to adapt and change how they live.
Transportation isn't the toughest energy adaptation problem. We can greatly improve the energy efficiency of moving us around. Albeit there are costs in reduced comfort. Building efficiency strikes me as a harder problem to solve both because buildings last far longer than cars and because buildings cost much more. Upgrading the housing stock is a tall order. But that's all the more reason not to use government programs to allow people stay where they are living in unsustainable ways.
The surge in value has made oil executives and shareholders extremely happy, but at what price for Americans? A congressional forum last fall in Boston produced riveting testimony from a mother, an Iraq War veteran, whose husband still serves in the Persian Gulf. Her second child was born sickly and frail, requiring extensive hospitalization and intensive aftercare. But one of the prescriptions -- a warm home -- proved unaffordable for the young mother, who had to move in with her mother to keep her children warm and healthy.
But people who move in together reduce the number of dwellings that need to be heated and in doing so they reduce energy usage. Well, reduced energy usage is necessary in the face of limited oil reserves and swelling Asian demand.
Politicians could constructively engage to deal with the hardships caused by rising oil prices by encouraging construction of multi-unit dwellings, mixed zoning that puts homes and workplaces closer together, new building designs for greater energy efficiency, upgrades of existing buildings for energy efficiency, a shift from oil heaters to ground sink heat pumps, and other measures that will reduce the need for energy. Poor old rural folks in cold areas like Maine could be helped to move into senior citizen apartments in town within walking distance of stores and medical offices.
Promoting the green design, construction, renovation and operation of buildings could cut North American greenhouse gas emissions that are fuelling climate change more deeply, quickly and cheaply than any other available measure, according to a new report issued by the trinational Commission for Environmental Cooperation (CEC).
I've long thought that cars get a disproportionate amount of attention over the energy they use. We should focus harder on building efficiency over car efficiency for a few reasons. First off, buildings last longer and cost more. Decisions made about building construction stay with us for a longer period of time than decisions about which car to drive. As the effects of Peak Oil hit with full force we can shift to motorcycles, bicycles converted to electric power, and very small cheap cars. But houses and office buildings can last for 100 years and longer.
A second reason to focus more on buildings is that most measures for making a building more efficient (e.g. better insulation and sealing, multi-pane windows facing southward, ground sink heat pumps) do not make buildings less comfortable. In fact, they can make buildings more comfortable. By contrast, most people prefer bigger cars for greater comfort and safety. They won't give up the big cars until gasoline goes up even higher.
Very few of the new buildings get built with the most efficient designs possible.
North America’s buildings cause the annual release of more than 2,200 megatons of CO2 into the atmosphere, about 35 percent of the continent’s total. The report says rapid market uptake of currently available and emerging advanced energy-saving technologies could result in over 1,700 fewer megatons of CO2 emissions in 2030, compared to projected emissions that year following a business-as-usual approach. A cut of that size would nearly equal the CO2 emitted by the entire US transportation sector in 2000.
It is common now for more advanced green buildings to routinely reduce energy usage by 30, 40, or even 50 percent over conventional buildings, with the most efficient buildings now performing more than 70 percent better than conventional properties, according to the report.
Despite proven environmental, economic and health benefits, however, green building today accounts for a only small fraction of new home and commercial building construction—just two percent of the new non-residential building market, less than half of one percent of the residential market in the United States and Canada, and less than that in Mexico.
I am expecting energy price rises to drive a push toward more efficient building construction. If you are thinking about building a house or commercial building think about future energy prices when you choose your design.
Here's a reason to be bullish on wind turbine sales. The European Commissions proposes to require 20% of total European energy from renewables by 2020.
As a means of achieving this the Commission wants to boost energy production from renewable sources to 20 per cent of the EU total, from the current level of 8.5 per cent. It also aims to ensure that 10 per cent of all vehicle fuel comes from biofuels by 2020.
I think the biomass transportation fuels requirement is unwise because it is going to result in a lot of habitat destruction. The EU mandarins are trying to work around that effect by placing restrictions on where biomass energy comes from. But their attempts to prohibit biomass fuels from future forest clearings isn't enforceable. All that the producers of sugar cane ethanol and palm oil biodiesel have to do is tear down new areas for use to grow crops for food and use the old areas to grow crops for biofuels. Plus, Brazil, Indonesia, Malaysia and similar countries can always sell the crops from the newly cleared areas to China and India.
The problem is that any increase in demand for biomass energy crops drives up total demand for crops and inevitably causes more land to be cleared for agricultural uses. Even if the EU bans biomass energy imports from whole countries that still doesn't prevent that demand growth. If the EU buys more biofuels from, say, Brazil while banning imports from, say, Africa and South East Asia all that'll do is drive Chinese demand away from Brazil and toward those latter areas. The EU's rules will not reduce total demand for land to grow biofuels crops.
Britain has been given a lower goal to reach but a harder goal from where Britain is now.
Britain has been set the ambitious target of producing 15 per cent of its total energy from renewables by 2020, up from 1.3 per cent on the 2005 figure.
Note this rule does not allow the European countries to achieve it by using nuclear power even though nukes do not emit the carbon dioxide the fear of which is the motivation for the rule in the first place. That's dumb. France's 50 or so nukes make it a much lower emitter of carbon dioxide. Those nukes also make the French net exporters of electric power to neighboring countries.
The investment required to get Britain’s energy supplies anywhere near the target mean that electricity prices are likely to rise 10-15 per cent by 2020 even before other inflationary factors are taken into account.
Will this regulation really increase costs above where costs might otherwise go? I am doubtful. The critics of this regulation ought to step back and look at bigger energy market trends. Price increases for electricity might be unavoidable for another reason: declining natural gas production could make electricity much more expensive. Russian natural gas supplies can't be relied upon and their costs will probably rise very substantially in coming years. So a government mandated shift toward renewables might turn out to push the European electric power industry in a direction it needs to go anyway.
The real flaw I see in this proposal is that it leaves out nuclear power. A European level regulation that let nuclear power satisfy part of the requirement might allow a reduction in fossil fuels usage at a lower cost.
Britain generates nearly 5% of its electricity from renewables, but less than 2% of its overall energy needs. Because it is far easier to increase renewable electricity supplies, the government expects that wind power especially will have to deliver the lion's share of the target, with renewables generating as much as 35-40% of all electricity within 12 years.
The European Commission claimed the package would cost the average European citizen £115 a year. Britons will pay far more because the country lags in the green energy stakes.
Open Europe, a Eurosceptic think-tank supported by Marks & Spencer boss Sir Stuart Rose, said a typical family would be paying a £730 levy by 2020.
José Manuel Barroso, the EC president, claimed it would cost every European £2.20 a week, but a Eurosceptic think-tank pointed to a leaked government document which stated the package could cost UK households up to £730 a year. However, the EC said the measures were a vital step in the fight against global warming and other countries must now join the effort.
The real costs will depend heavily on the rate of technological advance in wind, solar, waves, and other technology areas for renewables.
The number of wind turbines on land in Britain is likely to grow from just under 2,000 now to 5,000, according to the British Wind Energy Association. But the really substantial increase will be in offshore wind, with turbines installed in the seas around Britain's coasts likely to increase from just under 150, to about 7,500.
SAN FRANCISCO — The conceit in the 1960s show “The Outer Limits” was that outside forces had taken control of your television set.
Next year in California, state regulators are likely to have the emergency power to control individual thermostats, sending temperatures up or down through a radio-controlled device that will be required in new or substantially modified houses and buildings to manage electricity shortages.
The proposed rules are contained in a document circulated by the California Energy Commission, which for more than three decades has set state energy efficiency standards for home appliances, like water heaters, air conditioners and refrigerators. The changes would allow utilities to adjust customers’ preset temperatures when the price of electricity is soaring. Customers could override the utilities’ suggested temperatures. But in emergencies, the utilities could override customers’ wishes.
Okay, this is kinda creepy. It also draws attention to a deeper regulatory failure: the lack of dynamic electric pricing. If the demand for a product or services gets too high then the price should rise. The regulatory agencies and suppliers should not be in the business of deciding which particular use of electricity should be curtailed in a shortage. Raise the price and let the various users decide whether they want to cut back or pay more.
So why doesn't the California Energy Commission require new homes to install electric meters that support dynamic pricing? Let homeowners then program their thermostats to change to different target temperatures depending on the price of electricity. Homeowners could even program dishwashers and clothes washers and driers to kick on once electric prices drop below some max level.
We need dynamic pricing in order to enable wider usage of wind and solar energy. Wind and solar aren't dependable. Okay, charge more when the sun doesn't shine and the wind doesn't blow. Charge less on long windy days with blue skies.
Dynamic pricing also works in favor of nuclear power. Nuclear is a baseload power source. Dynamic pricing will reduce demand peaks and valleys. So more electric power will get used as baseload power under a dynamic pricing scheme. This plays to nuclear's strengths (though the state of California opposes nuclear power). We need nuclear power in order to provide substitute electric power after natural gas production peaks and world coal production peaks maybe in 2025 (and see CalTech professor David Rutledge on an earlier peak in coal production).
Another point: If the California Energy Commission insists on going through with their regulatory proposal they ought to provide an incentive for installation of solar panels. Basically, allow any house with more than some amount of solar panels to be free from the restrictive effects of this regulation. Build a house that generates energy and become more free in your usage of energy.
Meters that can read prices every hour are also the centerpiece of aggressive conservation efforts in Virginia and Maryland, where Gov. Martin O'Malley (D) has pledged to reduce the state's electricity consumption by 15 percent by 2015. Fluorescent light bulbs that outlast traditional incandescent ones, rebates on energy-efficient appliances, free energy audits -- all are on the table for customers of Pepco, Virginia Dominion Power and BGE, among others.
"At the end of the day, people want to understand what their electricity is costing them and what they are getting for it," said Steven B. Larsen, chairman of the Maryland Public Service Commission, the state's utility regulator. "The basic concept is that technology can help save us money."
Smart meters have not been mandated, but they are being used in several states. The Illinois legislature has required the expansion of peak pricing programs, and Florida and California are among those conducting pilot programs.
This is a necessary development. Two of our big prospects for future electric generation, wind and solar, are not dependable. To use more wind and solar we need to adjust electric prices based on not just demand but also on available supply. Charge less when the sun shines and the wind blows. Charge more at night and overcast and winter days. Charge more as well when the breezes die down.
Dynamic pricing also helps nuclear power because it shifts more demand away from peak periods. Nuclear works best as baseload power that is running constantly 24 hours a day and 365 days a year. Nuclear capital costs are too high to operate a nuclear power plant only during hot afternoons. Dynamic pricing will partially flatten demand and by doing so make nuclear able to supply a larger fraction of total used electric power.
Given the trend in world oil production (the second graph is really bad news) we urgently need new energy technologies. Luckily, we can find plenty of signs that venture capitalists recognize the scope of the problem and the opportunity to massively profit from new energy sources. (and you VCs feel free to offer me a job)
Nick Parker, chairman of the Cleantech Group of analysts, said: "There is no doubt this year will break records in terms of the amount invested. But this year will also be notable for the amount of commercial take-up of clean technologies."
Last year, more than $4bn (£1.9bn) of venture capital was invested in environmental technologies such as renewable energy, water technologies and carbon reduction technologies. The sector is now the biggest recipient of venture capital funds in the US, and in the first three quarters alone about $3.8bn of venture capital was invested, Mr Parker said.
Take all these figures with a grain of salt. There are lots of types of investments getting counted up together in broad categories relating to energy and the environment. But all signs are that energy has become a very attractive area for VC funding.
Venture capital firms poured nearly $900 million - a record - into U.S. startups developing clean and green energy systems in the three months that ended Sept. 30, according to a report out today.
The total flow of dollars to all U.S. startups - $8.07 billion - rose 8 percent compared with the same three months last year, and the energy category soared 28 percent, according to data furnished by the San Francisco office of Dow Jones Venture One.
The quarterly MoneyTree report by the accounting firm PricewaterhouseCoopers and the trade group National Venture Capital Association finds venture capital funding going up in general with a big surge in energy.
With investments in the emerging "clean tech" industry continuing to soar, Silicon Valley companies received more than $2.48 billion in venture capital in the third quarter of 2007 - a sign that the valley's entrepreneurial culture is thriving despite broader economic worries.
The quarterly MoneyTree Report found that the valley's total venture investments, while dipping slightly from the previous quarter, represented robust 9 percent year-over-year growth. As usual, Silicon Valley and the broader Bay Area outpaced other tech hubs by a wide margin, reaping 35 percent of the $7.1 billion in venture investments in the United States.
My guess is that the big surge in clean tech funding is due to rising oil prices. The regulatory environment for pollution and recycling just hasn't tightened up fast enough this year to account for such a huge surge in funding.
Nationally, the clean tech industry, which crosses traditional MoneyTree sectors and comprises alternative energy, pollution and recycling, power supplies and conservation, saw record investment levels with $844 million going into 62 deals in the third quarter. This represented an 80 percent increase in the dollar level and 35 percent increase in the number of deals in the sector over the second quarter of the year.
2. $100 million in GreatPoint Energy, which converts coal and biomass into clean, natural gas.
4. $77 million in HelioVault, developer of technology for depositing thin-film photovoltaic coatings.
Interest in clean energy was especially keen, as oil prices soared toward $90 a barrel. In addition to the GreatPoint deal, one of the largest financing rounds ever in the alternative energy field, Konarka Technologies Inc., a Lowell company developing solar cells for building materials and mobile phones, raised $45 million.
Some of these companies are going to succeed. I am cheering them on. Declining world oil production is going to make the development of substitutes a very urgent matter. The economic disruption due to declining oil is going to be enormous. Even with great substitutes hitting the market in the nick of time we are still going to get hit by obsolescence of massive amounts of capital equipment and personal possessions that are dependent on oil-based products to make them work. The need to replace all that equipment will therefore lower living standards during the transition period to solar, wind, nuclear, and geothermal power.
An article in Businessweek challenges the claim by many corporations that they are becoming highly environmentally compatible.
Hailed as an environmental pioneer, FedEx (FDX ) says on its Web site that it is "committed to the use of innovations and technologies to minimize greenhouse gases." With 70,000 ground vehicles and 670 planes burning fuel, the world's largest shipper is a huge producer of heat-trapping gases. Back in 2003, FedEx announced that it would soon begin deploying clean-burning hybrid trucks at a rate of 3,000 a year, eventually sparing the atmosphere 250,000 tons of greenhouse gases annually from diesel-engine vehicles. "This program has the potential to replace the company's 30,000 medium-duty trucks over the next 10 years," FedEx announced at the time. The U.S. Environmental Protection Agency awarded the effort a Clean Air Excellence prize in 2004.
Four years later, FedEx has purchased fewer than 100 hybrid trucks, or less than one-third of one percent of its fleet. At $70,000 and up, the hybrids cost at least 75% more than conventional trucks, although fuel savings should pay for the difference over the 10-year lifespan of the vehicles. FedEx, which reported record profits of $2 billion for the fiscal year that ended May 31, decided that breaking even over a decade wasn't the best use of company capital. "We do have a fiduciary responsibility to our shareholders," says environmental director Mitch Jackson. "We can't subsidize the development of this technology for our competitors."
Beware of press releases. You all do not see how many press releases I pass on mentioning because I'm skeptical of the claims. Even for some of those I end up reporting on I have serious doubts. Lots of claims aren't going to hold up with time. Even claims of goals already accomplished are often suspect.
The article is full of anecdotal reports of companies which decided even much shorter payback times for boosted energy efficiency were not worth the money spent. That information has important implications. Once oil production peaks and prices go much higher we have many more opportunities to improve energy efficiency once we absolutely need to.
Renewable energy credits (RECs), touted by corporations as a way to offset the pollution effects of electric power they buy from a local utility, sound like a fraud.
Rather than enjoying his role as an REC pioneer, Schendler felt increasingly anxious. In private, he pushed REC brokers for hard evidence that new wind capacity was being built. Their evasiveness gnawed at him. He asked veterans in the renewable energy field whether his marketing message was legitimate. "They laughed at me," he says.
The trouble stems from the basic economics of RECs. Credits purchased at $2 a megawatt hour, the price Aspen Skiing and many other corporations pay, logically can't have much effect. Wind developers receive about $51 per megawatt hour for the electricity they sell to utilities. They get another $20 in federal tax breaks, and the equivalent of up to $20 more in accelerated depreciation of their capital equipment. Even many wind-power developers that stand to profit from RECs concede that producers making $91 a megawatt hour aren't going to expand production for another $2. "At this price, they're not very meaningful for the developer," says John Calaway, chief development officer for U.S. wind power at Babcock & Brown, an investment bank that funds new wind projects. "It doesn't support building something that wouldn't otherwise be built."
The $2 per supposed megawatt hour really does not cause another megawatt hours of electricity to get generated. It has a small effect on the margin. What is the real effect? Does the $2 shift generation of a tenth of a megawatt hour to wind? Or a hundredth? The effect is real but small. The money effectively just buys a corporation the right to claim (though not honestly) that a given megawatt hour was generated for that corporation in order to prevent a megawatt hour from getting generated by burning fossil fuels.
The fact that RECs have become a big deal with lots more money getting spent on them ought to give one pause about other claims made by corporations about how they are becoming very environmentally friendly. If they are willing to deceive us (and probably themselves to some extent) on this what else are they lying about?
The green movement is still scoring some successes in corporations in part because corporations end up examining more proposed investments for reducing energy use and pollution. So more projects are likely to get approval than would be the case were corporaitons not trying to project a nicer image to the public.
We are going to hear more about corporate "green" projects for another reason: More projects will become cost justifiable on an ROI basis as the cost of fossil fuels goes up and as new technologies lower the costs of substitutes. But keep in mind that corporations will implement these projects based chiefly on expected returns on money invested and secondarily based on perceived value for marketing purposes and lobbying purposes.
Jesse Ausubel , Director of the Program for the Human Environment at Rockefeller University, says that renewable energy sources are bad for the environment.
Renewable does not mean green. That is the claim of Jesse Ausubel of the Rockefeller University in New York. Writing in Inderscience's International Journal of Nuclear Governance, Economy and Ecology, Ausubel explains that building enough wind farms, damming enough rivers, and growing enough biomass to meet global energy demands will wreck the environment.
Ausubel argues that nuclear energy uses the smallest land footprint by far.
Ausubel has analyzed the amount of energy that each so-called renewable source can produce in terms of Watts of power output per square meter of land disturbed. He also compares the destruction of nature by renewables with the demand for space of nuclear power. "Nuclear energy is green," he claims, "Considered in Watts per square meter, nuclear has astronomical advantages over its competitors."
Ausubel sees the need for large amounts of land as the flaw with renewables.
On this basis, he argues that technologies succeed when economies of scale form part of their evolution. No economies of scale benefit renewables. More renewable kilowatts require more land in a constant or even worsening ratio, because land good for wind, hydropower, biomass, or solar power may get used first.
I gotta pick some nits here. First off, wind has economies of scale where the towers capture more energy the taller they get. Also, photovoltaics can be improved for conversion efficiency.
Hydro requires a lot of land.
A consideration of each so-called renewable in turn, paints a grim picture of the environmental impact of renewables. Hypothetically flooding the entire province of Ontario, Canada, about 900,000 square km, with its entire 680,000 billion liters of rainfall, and storing it behind a 60 meter dam would only generate 80% of the total power output of Canada's 25 nuclear power stations, he explains. Put another way, each square kilometer of dammed land would provide the electricity for just 12 Canadians.
Well, the steeper the drop the less land is required. The problem we have with hydro is we do not have enough steep drops and even if we did we'd be restricting the natural flow of huge quantities of river water and fish.
Ausubel sees biomass energy as terrible and I agree.
Biomass energy is also horribly inefficient and destructive of nature. To power a large proportion of the USA, vast areas would need to be shaved or harvested annually. To obtain the same electricity from biomass as from a single nuclear power plant would require 2500 square kilometers of prime Iowa land. "Increased use of biomass fuel in any form is criminal," remarks Ausubel. "Humans must spare land for nature. Every automobile would require a pasture of 1-2 hectares."
Some biomass wastes such as plant cuttings collected as part of trash collection could be used with little or no harm. But most biomass use competes with other species and basically takes food and habitat away from other species.
Again, Ausubel sees problems with wind. But can't wind towers be built on farm fields so that the same lands produce crops and energy simultaneously?
Turning to wind Ausubel points out that while wind farms are between three to ten times more compact than a biomass farm, a 770 square kilometer area is needed to produce as much energy as one 1000 Megawatt electric (MWe) nuclear plant. To meet 2005 US electricity demand and assuming round-the-clock wind at the right speed, an area the size of Texas, approximately 780,000 square kilometers, would need to be covered with structures to extract, store, and transport the energy.
At least wind towers would leave most of the ground area still available for wild plants and animals. Also, wind towers built off coast beyond visibility from land could leave land habitats undisturbed.
Ausubel finds fault with solar due to land area usage. But if photovoltaics were restricted for use only on existing structures (e.g. on houses, commercial buildings, and even on bridges) then the amount of additional land used could be minimized. The amount of area we'd need for solar power is two Ohios for enough solar power for the entire world. Though that's based on current world energy consumption and 10% efficient photovoltaics. We could create 50% efficient photovoltaics and then only put photovoltaics on human structures and get enough energy.
Update: For electric power currently our practical choices are coal (ugh), natural gas (dwinding in supply), wind (variable supply and not available everywhere), and nuclear. Solar is still too expensive. Though that will change. If you want to oppose some of these sources to the point of banning them or at least ceasing new construction then you've got to explain what else you'd want to use instead and how much more you are wiling to make us all pay to use your preferred alternative(s).
Over a period of years I've repeatedly argued that fossil fuels will not get phased out by putting high taxes on them. The reason is simple: In countries where voting publics have a lot of influence over their rulers the elected officials will get scared out of enacting more fuel taxes. Scott Rasmussen of polling firm Rasmussen Reports found in a recent poll that an overwhelming majority of Americans oppose higher gasoline taxes.
Eighty-six percent (86%) of Americans oppose a proposal to increase gasoline taxes by 50 cents a gallon. A Rasmussen Reports national telephone survey found that just 8% favor such a tax hike.
Just 17% of Americans believe that such a gasoline tax hike would have a positive impact on the economy. Seventy-nine percent (79%) believe it would have a negative impact, including 64% who believe the impact would be Very Negative.
Some people who fear global warming think fossil fuels taxes are absolutely necessary in order to save the world. But they need to go back to the drawing more and consider other policy options. Higher prices on petroleum products are pretty much a non-starter. For feasible options look at policies that will lead to cheaper competing non-fossil fuels energy sources. Think carrots, not sticks.
The lower classes already are feeling the pinch from the rises in fuel and food prices. They devote larger percentages of their incomes to fuel and food than do those with high incomes and high net worths.
One reason hiking the gas tax generates such strong opposition is that consumers would react to higher gas prices by cutting back on entertainment expenses, vacations, and major purchases. An earlier survey found that half would cut back on groceries if the price of gas jumps a dollar a gallon.
Since the year 1998 gasoline prices in the United States have already more than doubled in inflation-adjusted terms. That's far more than higher gas tax advocates can hope to accomplish in the United States or in most of the other countries with lower gasoline prices.
WASHINGTON, May 28 — Even as Congressional leaders draft legislation to reduce greenhouse gases linked to global warming, a powerful roster of Democrats and Republicans is pushing to subsidize coal as the king of alternative fuels.
Prodded by intense lobbying from the coal industry, lawmakers from coal states are proposing that taxpayers guarantee billions of dollars in construction loans for coal-to-liquid production plants, guarantee minimum prices for the new fuel, and guarantee big government purchases for the next 25 years.
The United States has 27% of the world's coal. Russia has 17% and China 13%. Coal can get turned into gaseous and liquid fuels. Tim Appenzeller, a writer for the National Geographic, says if we burned all the world's coal we'd increase atmospheric CO2 by a full order of magnitude.
Coal already generates about half of US electricity and that percentage might rise in coming decades. The coal industry wants big money to encourage greater use of coal for transportation as well. That would almost double CO2 emissions per mile driven.
Among the proposed inducements winding through House and Senate committees: loan guarantees for six to 10 major coal-to-liquid plants, each likely to cost at least $3 billion; a tax credit of 51 cents for every gallon of coal-based fuel sold through 2020; automatic subsidies if oil prices drop below $40 a barrel; and permission for the Air Force to sign 25-year contracts for almost a billion gallons a year of coal-based jet fuel.
I would rather spend the same amount of money on photovoltaic, nuclear, and battery research. Cheap polluting coal is the temptation we need to find ways to avoid. We shouldn't spend tax dollars to embrace it.
If we hit "Peak Oil" 5 years from now will CO2 emissions rise more or less rapidly? That depends on what we replace the oil with. If we shift toward coal-to-liquid then CO2 emissions would skyrocket.
For electricity coal use is growing more rapidly in China than in the US. China's coal use might double in the next 20 to 25 years while US use goes up only 50%. But a shift toward coal use for transportation would make coal use go up even more rapidly.
We need cheaper nuclear and solar photovoltaic power. Add in much cheaper and higher energy density batteries and we could shift transportation away from fossil fuels. That's the future I'd like to see.
Most of Silicon Valley's current emphasis is on clean energy. Entrepreneurs here are aiming to transform solar, fuel-cell, and biofuel projects into viable industries with huge potential. Already, the market amounts to $55 billion – more than the entire Internet advertising market dominated by the high-tech region's current darling, Google. In 10 years, the clean-energy market by one estimate could quadruple. In the past year, for the first time, more silicon in the US has gone toward making solar panels than computer chips. More important, venture capitalists are pouring money into clean technology, thanks to a confluence of events.
We aren't going to go into a long economic depression due to Peak Oil. Nor are we just going to keep using fossil fuels as our biggest sources of energy. Solar photovoltaics, wind, nuclear, and other non-fossil fuels energy sources are going to displace fossil fuels.
The venture capitalists are placing many energy bets.
Silicon Valley is buzzing with optimism. Venture capital funding jumped sixfold to $300 million from the first to the third quarter last year.
Over a 25 year period the cost of photovoltaics fell by almost an order of magnitude.
The price for a watt of solar power, adjusted for inflation, went from $21.83 in 1980 to $2.70 in 2005, according to Applied Materials.
Within five years, a SunPower spokesperson predicts, the price of solar power will rival – without any subsidies – the price of conventional power.
Can the cost of photovoltaics fall much more rapidly in the future? What we've witnessed for decades were improvements in making photovolatics from silicon crystals. A shift to other types of materials using completely different fabrication methods (e.g. TiO2 nanotubes) will eventually lower costs by orders of magnitude. I can't say this will happen in the next 5 or 10 years. Maybe. But it will happen some day. Photovoltaics will not always come at too high prices.
International Energy Agency chief economist Fatih Birol says China will surpass the United States in greenhouse gas emissions in 2007 or 2008 at the latest.
Mr Birol, of the Paris-based IEA, which advises governments on energy policy, said: "China's economic growth and use of coal production over the last few months has surprised us all.
"If they continue to surprise us in terms of very high economic growth and corresponding coal production, China will overtake the US much earlier than 2009 - more like this year or the next."
China doesn't just overtake the United States and then stop. In 10 years time China's emissions might be double the US. Think about what that means. Projections of future atmospheric CO2 concentrations might be low. Efforts of industrialized countries to reduce emissions might get more than cancelled out by growth in China, India, and other Asian developing countries.
Latest data shows China is building a coal-fired power plant every four days, British foreign ministry official John Ashton said on Monday.
China's rate of coal plant construction could even accelerate as compounding effects of economic growth increase the absolute amount of economic growth per year.
The attempt by European countries to decrease carbon dioxide and other greenhouse gas emissions counts for little compared to China's rapid expansion in coal mining and burning.
Growth in the emerging Asian giant's emissions puts in perspective Western efforts to fight climate change, Birol said.
"What we do in Europe may be with good intentions, may be very ethical... but if you put it in terms of numbers its meaning is very limited."
The international treaty approach to emissions is not going to work. The less developed countries are basically arguing that the more developed have polluted so much and the less developed are basically saying "you should stop so we can have our turn".
Poorer people are less concerned about pollution than richer people. Poorer people want more stuff. Richer people have enough stuff that they turn more of their attention to fulfilling other desires such as better esthetics and health.
In China the levels of conventional pollutants are way higher than what you'll find in industrialized countries. The Chinese aren't going to find it in themselves to care about CO2 emissions. They haven't even yet placed much importance on conventional pollutants which have much direct and immediate effects on health.
If human-caused global warming is a problem then the most efficacious way to slow and reverse CO2 emissions is to greatly accelerate the rate of development of clean energy technologies. The Chinese would give up coal and embrace cleaner sources of energy if those cleaner sources were cheaper than coal. Sufficiently advanced technologies will lower the costs of photovoltaics, wind, nuclear, and other non-fossil fuel energy sources. Prices will drop so far that market forces alone will cause a phase-out of fossil fuels use.
Clean energy technologies that cost less will provide many benefits. Even if you count yourself a global warming skeptic keep in mind that cheaper clean energy technologies will reduce conventional pollution. Also, lower costs mean higher living standards and less money sent to the Middle Eastern Muslim oil sheikdoms.
Some populations will subject themselves to carbon taxes and other costs to lower carbon dioxide emissions. But most won't. Even the countries that have imposed higher energy prices on themselves have limits to how far they'll go to reduce greenhouse gas emissions. But cheap ways to produce clean energy could solve this problem. We need a big push to develop the needed technologies.
Daniel B. Wood of the Christian Science Monitor reports on an environmental fight in California about "green" energy that requires ruination of beautiful views.
Los Angeles - California and the city of Los Angeles have set an ambitious goal for 'greener' power: obtain 20 percent of their energy from renewable sources by 2010.
But to do that difficult decisions need to be made. Wind, solar, and geothermal electric power produced in the rural reaches of the state must be somehow be transported to faraway cities – meaning some transmission lines must cut through national forests, wildlife refuges, and other treasured land areas.
Solar panels require the expanse and cloudless climes of desert areas, wind requires the funneling effect of mountain passes, and geothermal power is derived from hot or steamed water underground.
Daniel Wood then raises the important question:
But how does the city get the energy to where it's needed without spoiling the pristine environments that it's trying to preserve?
Ooo, Ooo! I know! Do you? Obvious, isn't it? The pristine environments don't get preserved. Sorry.
If the city of Los Angeles wants power that doesn't require covering large areas of the desert with solar panels or wind towers and which doesn't require towers that cut across beautiful parklands then they ought to build some nuclear reactors near downtown. But nuclear power is taboo among most greenies. So here come the power lines across forests and land areas with lots of wind towers. It is all done in the name of environmental protection.
What does a growing population, expanding economy, and a legislature's demand for "green" power mean? Lots of power lines cutting across scenic vistas.
California is fast-tracking several big alternative-energy projects in the southernmost quarter of the state costing $4 billion. A proposal to build power lines, substations, and transmission towers through a national forest, two wildlife preserves, and a rural village used in TV and cinema westerns has provoked the ire of environmental groups even as authorities say no final decisions have been made.
Local renewable energy requires technological advances. Cheap photovoltaics with high conversion efficiency plus a cheap way to store the electricity for night use could allow use of building surfaces as electric generators rather than rural land areas. High efficiency photovoltaics would also avoid the need for power lines to bring wind energy from distant places. But the needed technologies are probably 10 or 20 years away.
Back in the 1970s California environmentalists preached a halt to population growth. They abandoned that position in order to seem non-racist (non-whites came to account for most population growth). Now they are fighting a losing battle. Their losses are accelerating. Enthusiasms for energy sources that require large land footprints (e.g. biomass energy) amplify the growing land footprints of growing populations.
Land is the natural resource in shortest supply. With enough energy we can create building materials from a large range of raw materials. But we can't create land area. Rising affluence increases the demand for land as people build bigger houses, vacation homes, and other structures along with more roads to reach them. Plus, greater demand for agricultural products for food, fiber, and energy add additional demands for land.
Albuquerque, N.M. - The drive to build more power plants for a growing nation – as well as the push to use biofuels – is running smack into the limits of a fundamental resource: water.
Already, a power plant uses three times as much water to provide electricity to the average household than the household itself uses through showers, toilets, and the tap. The total water consumed by electric utilities accounts for 20 percent of all the nonfarm water consumed in the United States. By 2030, utilities could account for up to 60 percent of the nonfarm water, because they use water for cooling and to scrub pollutants.
Rising per capita energy consumption combined with rising populations is especially problematic for arid regions. But cheaper solar and wind power could reduce the use of water for electric generation. Also, superconductor technologies could enable placement of more generators near coastlines.
Biomass energy is also a big source of water usage and looks set to grow due to government subsidies.
Smaller populations would reduce environmental burdens and make per capita improvements in living standards easier to accomplish. But the idea of population growth control became taboo after the 1970s. Pity that.
The entire agricultural industry is eagerly awaiting the first USDA Planting Intentions Report, which is scheduled to be released on March 30. The key question is how many acres will be diverted to corn production this year, because of the great demand for corn in the ethanol process and the resulting high corn prices.
The trade has been given an early indication of how big that acreage swing will be with the release of the Allendale Farm Survey, which was made public in early March. Their report suggests that an additional 12.4 million acres will be devoted to corn in 2007, raising the total corn acreage to 90.76 million. That would be the largest corn crop acreage since 1944, when 95.475 million acres were planted.
More corn means less soybeans for animal feed which means higher meat prices. Time to become a vegetarian.
The surge in corn acres will come mainly at the expense of soybeans, according to the survey. Soybean farmers are expected to plant 65.92 million acres, which represents a decline of 9.6 million acres from 2006.
Soybeans also get used for biodiesel (which makes far less sense than corn ethanol). Well, less soybeans plus more demand for soy for biodiesel equals higher prices.
"These budgets have a corn-after-corn yield of 170 bushels per acre, a soybean yield of 55 bushels per acre, and $25 per acre of direct payments," he noted. "Total non-land costs are $338 per acre for corn and $249 per acre for soybeans. Costs include crop insurance premiums of $32 for corn and $18 for soybeans, representing the costs of a Crop Revenue Coverage policy at an 85% coverage level."
Using these budgets, operator and farmland return is $338 per acre for corn and $249 per acre for soybeans.
Every time you fill up with gasoline you'll also be driving up your cost of cotton clothing. In spite of growing worldwide demand for cotton acreage dedicated to cotton in the United States will drop 14%.
According to the National Cotton Council's Early Season Planting Intentions Survey, U.S. growers intend to plant 13.2 million acres of cotton in 2007. This significant decrease of almost 14% reflects the fact that we are facing very different market conditions than we were at this time last year.
Meanwhile demand for cotton is showing no signs of slowing around the globe, especially in China.
Compare Asian industrialization to that of the West. First off, it comes on in addition to the West's industrialization. Second, it involves a much larger group of people and so eventually a much larger growth in demand. This means much more demand for land for agriculture, housing, industry, and roads. On top of this comes increased land demand for biomass energy. I see a problem here.
“It’s not the food made from corn, it’s food from animals that eat corn that will increase,” says Ron Plain, University of Missouri agricultural economist. “This is a major shift for agriculture. In the past, corn producers have grown food for people and feed for livestock. Now we add fuel to the list. I don’t see us doing that without having a lasting impact on the face of agriculture.”
“Higher feed costs put pressure on the livestock industry to cut production,” he adds. “When you consider that we’ve pushed corn prices up 16 dimes, that’s $80 less per head for the cow/calf operator.”
Plain expects U.S. cattle, swine and poultry inventories to shrink, resulting in higher grocery prices.
“Ethanol and inflation will raise prices for meat, eggs, milk, cheese and other dairy products about 12 percent by 2009,” he says. “I don’t expect consumers to reduce meat and dairy consumption much because of the increase, however.”
I'm hearing anecdotal reports of cuts in cattle herds and in pigs. For example, some Canadian farmers faced with a doubling of barley costs can not make a profit on their pigs and so are getting out of pig raising.
More land can get shifted into production and undoubtedly we will see more of that. But the land already in production achieves higher yields than the land not in production. The marginal productivity of additional production will be lower with higher costs.
China's rising living standards will generate more demand for meat and grains. On top of that the Bush Administration is promoting biomass energy in Latin America. Say bye bye rainforests.
The use of biomass energy brings more forms of demand directly into competition with each other. Demand for animal feed, human food, and textiles competes with demand for energy to move cars and trucks around. If biomass energy starts getting used for plastics and rubber that'll put more forms of demand in competition with each other. Plus, there's the demand for food on the part of wild animals. Land shifted into food production is land that is not feeding wildlife foodchains.
Can advances in biotechnology so increase yields of corn that prices can go down eventually? How much currently unused land can get shifted into corn production? Will cellulosic ethanol increase the ethanol yield per acre enough to provide some relief? Or will cellulosic ethanol lower the price of biomass ethanol production enough to provide incentives to move even more land into ethanol production?
Eric McErlain of the Nuclear Energy Institute notes that tougher emissions restrictions on coal burning plants work to make nuclear power more competitive.
But as we've noted here at NEI Nuclear Notes before, nuclear plants in Asia have been built in 42-48 months -- about the same amount of time it will take to build advanced coal-fired plants like ultra-super critical or IGCC plants.
Further, NEI estimates say that the capital cost of nuclear power plants is expected to be competitive with advanced coal-fired power plants. If you factor in capital costs from new nuclear power plants, productions costs and most importantly, the cost of carbon controls on fossil-fueled power plants -- something that Gore vigorously endorsed in his oral testimony -- the cost of electricity from nuclear energy is very competitive when compared to coal and more affordable than electricity from renewables. For more, see our recent Wall Street Presentation.
In a nutshell: Coal loses its position as the cheapest electric power source if coal burners are forced to emit no pollutants at all. The costs of halting all conventional pollution and CO2 emissions add up to make coal more expensive than nuclear. Whether nuclear displaces coal for baseload demand therefore depends on how rapidly publics in various countries come to support a zero emissions policy toward fossil fuels pollution.
As living standards rise I expect governments to move toward zero tolerance policies toward pollutants. The more affluent people become the more they will embrace policies aimed at making their environments as perfect as possible. Rising affluence translates into greater demand for goods and measures that increase both health and esthetic enjoyment.
For now though, coal is on a worldwide tear. Mark Clayton of the Christian Science Monitor reports on the huge worldwide coal binge.
So what does the future hold? An acceleration of the buildup, according to a Monitor analysis of power-industry data. Despite Kyoto limits on greenhouse gases, the analysis shows that nations will add enough coal-fired capacity in the next five years to create an extra 1.2 billion tons of CO2 per year.
China is the biggest builder of new coal plants and looks likely to remain so. But the data on future rates of coal plant building in China is shaky and the Chinese government is not open on this subject (and its rapid economic growth as a non-open society is troubling). Many countries, even in green Europe, are rushing to use more coal because it is cheaper.
For example, the United States is accelerating its buildup dramatically. In the past five years it built 2.7 gigawatts of new coal-fired generating capacity. But in the next five years, it is slated to add 37.7 gigawatts of capacity, enough to produce 247.8 million tons of CO2 per year, according to Platts. That would vault the US to second place –just ahead of India – in adding new capacity.
Even nations that have pledged to reduce global warming under the Kyoto treat are slated to accelerate their buildup of coal-fired plants. For example, eight EU nations – Germany, Italy, Poland, Spain, Bulgaria, Hungary, Slovakia, and the Czech Republic – plan to add nearly 13 gigawatts of new coal-fired capacity by 2012. That's up from about 2.5 gigawatts over the past five years.
Leave aside CO2 for the moment. The huge increase in coal usage is also increasing the emissions of lots of conventional pollutants including particulates and mercury. But people will put up with it because it is cheap or because they have little say in the decision making processes that allow these plants to get built..
In 2006, venture capitalists put $727 million into 39 alternative energy start-ups, compared with $195 million in 18 such firms for 2005, according to the National Venture Capital Association.
For investors in alternatives to oil and gas, the driving force has been the belief that whoever develops the next great energy sources will enjoy spoils that will make the gains from creating the next Amazon.com or Google seem puny in comparison.
Unless we are hitting peak oil right now I do not expect it to make much of a dent on world economic development. Oil prices are already high enough to cause a flood of money into energy technologies.
The VCs are also upping the spending on fossil fuels technologies.
Yet money has also flowed into start-ups built to serve the oil and gas industries. In 2006, venture capitalists put $163 million into 18 such companies, up from $56 million in 14 oil and gas ventures in 2005. This is an investment category that has ebbed and flowed and that was as high as $586 million in 1999, the height of the dot-com bubble.
There's big money in energy. Consider just oil. At about 85 million barrels a day of world oil production and $60 per barrel that is about $5.1 billion dollars per day. Throw in coal, natural gas, nuclear electric, hydro, and assorted other energy sources and the amount of money spent on energy is enormous. This enormous quantity of money and the growing demand for energy assure that investment money for research, development, and capital investments will be there to find new solutions as old energy sources dry up.
My arguments about energy are motivated by a desire to switch away from dirty fossil fuels sooner and to develop cheaper energy sources that are simultaneously cleaner. I also want to avoid switching to biomass to an extent that the demand for biomass drives large scale habitat destruction.
The Electric Power Research Institute claims in a new report that the United States can't reduce carbon dioxide (CO2) emissions from electric power plants below 1990 levels any sooner than 20 years from now and that only with their most optimistic scenario.
Electric power companies, which emit about one-third of America’s global warming gases, could reduce their emissions to below the levels of 1990, but that would take about 20 years, no matter how much the utilities spend, according to a new industry study.
No, if money was no object then the entire fleet of coal and natural gas burning electric generation plants could be replaced by nuclear power plants. But it is a question of how much money we are willing to spend.
They think their lowest emissions scenario is optimistic.
The report, prepared by the Electric Power Research Institute, a nonprofit consortium, is portrayed as highly optimistic by its authors, who will present the findings on Thursday at an energy conference in Houston.
The study assumes only a two thirds increase in nuclear power.
The industry study calls for 64 gigawatts of additional nuclear power by 2030, an increase of about two-thirds from the current level. For the first time in three decades, several companies have expressed interest recently in ordering new reactors, but they will probably take nearly 10 years to build and experts expect no more than six or eight in the first round.
The study’s figure implies a net increase of about 50 new reactors by 2030; the Energy Department is counting on about 10.
But imagine instead that we no longer built new coal or natural gas burning electric plants and all new electric plants used energy sources that generate no carbon dioxide. Coal burning technology isn't ready for full carbon sequestration. So go with nuclear and wind instead.
Most drastically, we could halt all carbon dioxide emissions from electric generation (cutting out a third of US CO2 emissions) by switching to only non-fossil fuels for electric power generation. For example, in the United States we could switch to nuclear where we now use coal and natural gas. In 2005 nuclear power accounted for 19.3% of total electric power generated. The United States had 104 nuclear reactors operating in 2005 with a total capacity of 97 gigawatts (almost 1 gigawatt per plant). So as a rough first approximation if we built 400 nuclear power plants or 4 times as much as we already have we could shut down all the fossil-fuels burning plants. Though that would not provide enough electric power during the peak afternoon demand periods.
So here's my question for knowledgeable readers: What percentage of electric power is used for baseline demand and what percentage is used for above baseline usage? Would we have to build 6, 7, or even 8 times as many nuclear plants as we have now in order to eliminate all use of fossil fuels to generate electricity? The multiple is certainly less than 10 and lower if we institute variable pricing for electricity to flatten out demand. Also, hydro could be used for part of the peak demand capacity. But the multiple is higher in order to account for growth in demand which now runs at 1.5% per year.
The average nuclear power plant now operating is smaller than the average that would get built in a new nuclear power plant building program. But if we had to build 8 times as much nuclear power (about 800 gigawatts) as we now have and they cost $1.5 billion per 1 gigawatt of capacity then we are looking at $1.2 trillion dollars to build a fully nuclear electric power plant fleet. That's less than 10% of the US economy's product for one year. Spread out over 20 years it'd be one half of one percent of US GDP per year. So how can eliminating a third of all US carbon dioxide emissions be beyond the possible and affordable?
Mind you, I'm guesstimating. But I'm probably within a factor of 2 or 3 of the real cost. So this stays within the realm of the possible even if my estimate is low. Anyone know pertinent facts that would make a refined estimate more accurate?
We'd have to pay more for electricity if use of fossil fuels for electric generation was gradually prohibited. Nuclear power currently costs more than polluting coal plants. Plus, basically throwing away old coal and natural gas electric power plants has costs (how big the costs would depend on how rapid the phase-out). But we'd get cleaner air, less mercury in fish, and other health benefits. Also, a massive nuclear power plant building program would drive down the cost of nukes.
Update: If we go to an all-nuclear (or mostly nuclear with photovoltaics and wind and geothermal too) electric generation infrastructure then we'd reduce CO2 emissions by more than a third. Why? Within 20 years battery-powered cars are going to become feasible for most uses. Nuclear power and sufficiently advanced batteries combined could probably cut CO2 emissions in half.
The approximate cost of stopping the generation of CO2 for electric is the difference in cost between coal electric and nuclear electric (more if existing coal and natural gas burning plants are shut down before they wear out). That's probably 2 cents per kwh at most. Consider that in the United States electric prices cover a much larger range with, for example, costs in kwh for Connecticut of 16.25, Maine 14.55, Indiana 8.27, West Virginia 6.33 (cheap dirty coal), Kentucky 7.12 (again cheap dirty coal), Wyoming 7.8, Oregon 7.46 (hydro), California 14.23, and Hawaii at 23.57.
I do not see how an additional 2 cents per kwh is going to slow economic growth by much. Also, the real cost difference will likely become smaller if nuclear power plant construction gets ramped up to a rapid rate. Newer reactor designs will eventually lower costs as well.
Conclusion: We could greatly reduce CO2 emissions for a fairly low economic cost.
Here are some basic conclusions I've come to about the CO2 problem so far:
I do not foresee future calamity from CO2 emissions. We have too many affordable options for dealing with global warming. But to be prudent and lower the costs of dealing with the problem we should accelerate energy research and think seriously about a big shift toward nuclear, geothermal, and other non-fossil fuels electric power sources.
If anyone has more accurate data for some of the guesstimating I did above I'd like to hear from you. Is there some reason why I'm underestimating the costs of a switch from coal and natural gas to nuclear? The biggest reason I can see is the cost of generating peak electric power. But my sense there is that dynamic pricing will cause a big flattening of the demand curve as capital and home appliances get designed to shift more demand to when electricity is cheaper.
Why no use of other non-fossil fuels energy sources in this analysis? To demonstrate the practicality of moving away from fossil fuels I wanted to use a power source that already has costs much closer to the cost of coal. Wind and solar introduce even bigger peak power supply problems than nuclear does. And they cost more. Solar is way too expensive. They'll both fall in price. But I wanted to demonstrate that we could phase out coal and natural gas for electric power without waiting for technological advances.
George W. Bush wants to scale up ethanol production in order to reduce gasoline use by 20% in a decade. I continue to think this is a bad idea. David Victor at Stanford University tells MIT's Technology Review that a big scaling up of ethanol production is premature without cellulosic technology.
TR: One of the technologies the president emphasized is converting wood chips and grasses, known as cellulosic feedstocks, into ethanol. Could that make his goals achievable?
DV: You have to be careful because a very large part of our biofuels policy is not about energy at all. It's really about the heartland and farm politics because the current corn-based biofuels don't really save us that much energy. Cellulosic biomass [which is potentially much more efficient] is still really some distance off in the future. If we try to meet these aggressive targets very quickly, what we're going to end up with is a much, much larger version of the current, already inefficient, corn-based ethanol program.
TR: Documents released by the White House said that the vast majority of the 20 percent reduction in gasoline use in the next decade should come from using more biofuels such as ethanol. Is this a good strategy?
DV: In my view, this is a dangerous goal because the other technologies [such as cellulosic ethanol] are not available, [and] it really demands that we dramatically scale up our corn-based ethanol program. And I think that has serious ecological problems because of the large amount of land that they're going to have to put under cultivation. [There are] big economic problems because [making ethanol from corn] certainly isn't competitive with other ways of making biofuels, such as from sugar.
Note when he says that biofuels made from sugar are more competitive he's almost certainly referring to cane sugar from Brazil, not beet sugar from US farm fields. Currently the United States has restrictions in cane sugar imports in order to protect the domestic farmers who produce cane or beets for sugar. The Brazilians can grow cane sugar at lower cost and can therefore make ethanol for a lower cost.
The US government also effectively blocks Brazilian ethanol import. So neither Brazilian cane sugar or ethanol made from sugar cane can be imported at a competitive price. But there's an ecological advantage in blocking US import of Brazilian ethanol: This reduces agricultural demand for Brazilian rain forests.
I'd like to repeat what is surely a familiar refrain for long time FuturePundit readers: We'd be better off accelerating battery, nuclear, and photovoltaics technologies. They'll eventually provide cheaper energy than ethanol. Plus, they'll use a much smaller land footprint and produce less pollution than ethanol produced from agriculture.
My fear about cellulosic technology: It will make biomass ethanol so cheap that humanity will put large swathes of the world under cultivation to make ethanol. Continued world economic growth is going to increase demand for transportation fuel by double, triple, and even more eventually. If we make biomass energy cheap then say good bye to the natural state of ever larger chunks of land.
Do the Detroit automakers want to move toward electric vehicles? GM just introduced their Volt electric car prototype which would go 40 miles on a wall socket charge and further on a 3 cylinder engine recharge. Now the US automakers want the US government to spend $100 million per year to speed up the development of batteries that can work better in cars and trucks.
General Motors Corp., Ford Motor Co. and DaimlerChrysler AG have asked the U.S. government for $500 million over five years to subsidize research into advanced batteries for cars and trucks.
The automakers made the request last month after meeting with President George W. Bush in the White House in November, said Stephen Zimmer, an advanced engineering director at DaimlerChrysler's Chrysler unit.
The Detroit makers are saddled with an expensive union and an high exchange rate for the dollar as a result of manipulations by East Asian governments. Therefore they are losing big money and aren't in a position to do much research.
Current US federal government funding of battery research is very low.
Since 1991, the U.S. government has subsidized battery research at the rate of about $25 million a year.
$25 million a year is chump change. Even $100 million per year isn't much. The article reports a claim by a spokesman for GM that Japan and other East Asian countries are spending a few hundred million dollars to subsidize the development of battery technologies in order to give their automakers a competitive advantage.
Given the current $3 billion per week burn rate for US forces in Iraq (which understates total costs since deaths and disabilities will cost us far into the future) the $100 million per year proposed above would pay for 6 hours of the US expenditures in Iraq. 6 hours. We could defund Muslim fundamentalists if we developed cleaner and cheaper replacements for oil and we'd raise our living standards in the process.
Fossil fuels usage brings big external costs in the form of pollution. We are better off accelerating the development of technologies that'll reduce and eventually eliminate the need for fossil fuels.
Faced with Democratic majorities in both houses of Congress some big companies that extract and use large amounts of fossil fuels are reexamining their opposition to restrictions on carbon dioxide (CO2) emissions and on other so-called greenhouse gases. Companies would rather start bargaining once they see CO2 emissions regulations as inevitable.
Exxon Mobil Corp., the highest-profile corporate skeptic about global warming, said in September that it was considering ending its funding of a think tank that has sought to cast doubts on climate change. And on Nov. 2, the company announced that it will contribute more than $1.25 million to a European Union study on how to store carbon dioxide in natural gas fields in the Norwegian North Sea, Algeria and Germany.
George W. Bush still has over 2 years left to go in his presidency. So the energy industry does not face an immediate threat of tougher regulations. But they need to think long term because their capital investments have operational lifespans measured in decades.
The US electric power industry has not expanded much since being mostly deregulated. Demand growth has reached a point where the industry can't wait any longer to build new plants. They suddenly find themselves wanting regulatory certainty that was less important when they were only trying to prevent costly regulations on existing plants.
Duke Energy, for example, has not added significant power generation in two decades, and customer demand is rising 1 to 2 percent a year. The company has included a price for the carbon emitted in its cost estimates for a new coal-fired generating plant proposed for Indiana.
"If we had our druthers, we'd already have carbon legislation passed," said John L. Stowell, Duke Energy's vice president for environmental policy. "Our viewpoint is that it's going to happen. There's scientific evidence of climate change. We'd like to know what legislation will be put together so that, when we figure out how to increase our load, we know exactly what to expect."
One reason companies are turning to Congress is to avert the multiplicity of regulations being drafted by various state governments.
Electric power plant operators face a dilemma. Electric power plants last decades. Decisions on their designs made today need to be optimal over the life of the plants. Should they build nuclear? Coal with conventional emissions controls only? Coal with CO2 capture technologies?
If they built new electric generator plants now under current regulations and tougher regulations are enacted 5 or 10 years from now the cost of retroffing those plants to capture CO2 will be far higher later than if they design and build the plants to allow CO2 capture. But if the tough regulations do not come fairly soon then the money spent on the CO2 capturing design will turn out to be a bad investment. They are better off knowing sooner when the regulations will come and what the regulations will be.
Regulatory uncertainties are not their only problem. They have to make guesses about future natural gas prices and also possible breakthroughs in competing technologies such as wind and photovoltaics. Huge capital investments made today in nuclear or coal could turn out bad choices 10 years from now if photovoltaics become dirt cheap.
Tougher regulations on CO2 emissions are pluses for all the non-fossil fuel energy sources. Companies like Duke and Entergy would be a lot more inclined to build nuclear plants if, say, CO2 emissions taxes were going to add 2 cents per kwh of coal generated electricity.
What I'd like to know: What does Duke Energy think its cost is for using today's technology to do full CO2 capture and sequestration for a new coal-fired electric power plant?
What I'd also like to know: Does the cost of full CO2 capture and sequestration make new nuclear power plants a cheaper source of electricity than coal?
As for the environmental effects of CO2 emissions regulations in the United States: China's growth in use of coal is so fast that US efforts to restrict emissions won't matter.
Already, China uses more coal than the United States, the European Union and Japan combined. And it has increased coal consumption 14 percent in each of the past two years in the broadest industrialization ever. Every week to 10 days, another coal-fired power plant opens somewhere in China that is big enough to serve all the households in Dallas or San Diego.
To make matters worse, India is right behind China in stepping up its construction of coal-fired power plants — and has a population expected to outstrip China's by 2030.
By 2012, the plants in three key countries - China, India, and the United States - are expected to emit as much as an extra 2.7 billion tons of carbon dioxide, according to a Monitor analysis of power-plant construction data. In contrast, Kyoto countries by that year are supposed to have cut their CO2 emissions by some 483 million tons.
China is the dominant player. The country is on track to add 562 coal-fired plants - nearly half the world total of plants expected to come online in the next eight years. India could add 213such plants; the US, 72.
To restate an argument that I know long time readers are already bored of by now: We need to accelerate the development of non-fossil fuels energy technologies. If we make those technologies cheap enough they will replace coal and oil without the need for impossible to achieve international treaties. China and India aren't going to go along with the greenie dreams of some affluent Western environmentalists. Poorer people have more immediate worries.
Fossil fuels burning continues to rise and atmospheric carbon dioxide concentrations continue to rise as well. In some areas such as in China the emission of conventional pollutants is also on the rise. This trend can only be stopped by advances in cleaner energy technologies. Andrew Revkin of the New York Times reports that in inflation-adjusted terms government-funded energy research has dropped in the United States and other industrialized countries.
In the United States, annual federal spending for all energy research and development - not just the research aimed at climate-friendly technologies - is less than half what it was a quarter-century ago. It has sunk to $3 billion a year in the current budget from an inflation-adjusted peak of $7.7 billion in 1979, according to several different studies.
That $3 billion a year amounts of about a week and a half of the cost of US military operations in Iraq. With the longer term costs of disability and medical problems of injured soldiers the current budget costs of the war understate the real total costs. Why not spend money on research to make oil obsolete and Middle Eastern politics irrelevant to the United States?
We need advances in nuclear, solar photovoltaics, solar heating, batteries, and energy efficiency boosting technologies such as better insulation materials and more efficient engines. Rather late in his presidency George W. Bush wants to up energy research.
President George W. Bush has sought an increase to $4.2 billion for 2007, but that would still be a small fraction of what most climate and energy experts say would be needed.
Federal spending on medical research, by contrast, has nearly quadrupled, to $28 billion annually, since 1979. Military research has increased 260 percent, and at more than $75 billion a year is 20 times the amount spent on energy research.
Internationally, government energy research trends are little different from those in the United States. Japan is the only economic power that increased research spending in recent decades, with growth focused on efficiency and solar technology, according to the International Energy Agency.
Libertarians argue against government funding of energy research. But energy is an industry where large market failures inflict lots of costs that do not show up in prices. Worse, lots of voters in democracies and leaders of countries in non-democratic countries prefer lower energy prices with large external costs. Even where voters attach some importance to cleaner air their attention is not focused on the issue. Whereas lobbyists and political action committees have the money to spend to influence policy and block and delay attempts to reduce pollution. In this situation I strongly prefer convincing people to support larger amounts of government funding for energy research.
Environmentalists make the huge mistake of just arguing for restrictions on fossil fuel usage. Few populaces are willing to inflict such restrictions on themselves. Some of the Kyoto Accord signers have let their fossil fuels energy usage skyrocket (e.g. Canada) even as their left-leaning politicians criticised the United States for not signing that agreement to reduce fossil fuels emissions.
Environmental campaigners, focused on promptly establishing binding limits on emissions of heat-trapping gases, have tended to play down the need for big investments seeking energy breakthroughs. At the end of "An Inconvenient Truth," former Vice President Al Gore's documentary film on climate change, he concluded: "We already know everything we need to know to effectively address this problem."
My message to the impractical environmentalists: US state governments haven't even been able to raise gasoline taxes so that highway tax revenues keep up with growing populations and more miles driven per year. So states can't keep up with highway construction. If the states can't raise gasoline taxes to fund popular and immediately beneficial highway construction how do you expect to get Americans to inflict higher taxes on gasoline and other fossil fuels in order to derive a potential benefit decades from now? The level of taxes needed to make a significant dent in the growth in US fossil fuels usage would have to be very sizeable. The United States just went through a period where gasoline costs rose by more than a dollar a gallon and the impact on gasoline consumption was pretty small. Americans aren't going to vote for a $4 per gallon gasoline tax.
Worse yet for the environmentalists, most of the growth in fossil fuels usage is now coming from Asia, and China especially. The 1.3 billion Chinese people aren't going to keep their very low living standards in order to avoid using more energy.
A typical new coal-fired power plant, one of the largest sources of emissions, is expected to operate for many decades. About one large coal-burning plant is being commissioned a week, mostly in China.
China's growth in energy demand is going to accelerate. As long as they maintain a 7% or 8% yearly growth rate their absolute growth rate will get larger and larger. The Chinese people are even less inclined than Americans to restrict their energy usage for the benefit of all the people who will be alive 75 or 100 years hence. But all those coal power plant investments the Chinese are making will be with us for a long time to come.
"We've got a $12 trillion capital investment in the world energy economy and a turnover time of 30 to 40 years," said John P. Holdren, a physicist and climate expert at Harvard University and president of the American Association for the Advancement of Science. "If you want it to look different in 30 or 40 years, you'd better start now."
Experts say acceleration of energy technology advances is the best way to cut back on emissions growth.
Many experts say this means the only way to affordably speed the transition to low-emissions energy is with advances in technologies at all stages of maturity.
I'm not an expert but I've made that argument many times on FuturePundit.
I do not expect the worst case scenarios for global warming to come to fruition because even wiithout higher government funding of energy research we'll eventually reach a tipping point where advances in photovoltaics and batteries technologies make them cost competitive with fossil fuels. Advances made in nanotechnology (made mostly for other purposes) will enable much cheaper methods of photovoltaics fabrication. So solar will begin to displace fossil fuels from the energy marketplace.
But the argument for higher funding of energy research is that it can make cleaner energy sources become cost competitive much sooner. We'd benefit in a number of ways. Most obviously potential threat of global warming could be avoided. But one doesn't have to take the global warming threat seriously in order to find substantial benefits to research into cleaner energy resources. Fossil fuels also pollute the environment with particulates, oxides of sulfur, oxides of nitrogen, mercury, and other toxins. We'd be healthier if we used cleaner energy sources.
Cheaper cleaner energy sources would raise living standards. First off, they'd be cheaper. So we'd pay less for energy. But also, the health benefits of cleaner energy include economic benefits. Lower rates of asthma, lung cancer, and other health problems would reduce medical costs and sick time from work.
Once technological advances are made they start paying back. The sooner the advances get made the sooner the payback starts and the greater the total benefit.
Democratic lawmakers and Gov. Arnold Schwarzenegger on Wednesday struck a deal on legislation to reduce the state's greenhouse gas emissions by 25 percent over the next two decades.
Under the bill, California would take the lead in limiting greenhouse gas by reducing emissions to 1990 levels by the year 2020.
This can only be accomplished by either much higher energy prices or big technological advances. California has a better chance of achieving this goal of the price of oil remains high.
California's economy and population have grown since 1990. So to reach the 1990 level of emissions California will have to cut emissions 25%.
Democrats and top aides to Gov. Arnold Schwarzenegger have spent the last few months negotiating a bill that would put the state on the path to reducing its emissions by an estimated 25 percent by 2020, to the levels of 1990.
But the cut per capita will be higher due to population growth which will occur in the next 15 years. Though the state government could (at least in theory) set fossil fuels energy taxes so high that the population of the state declines.
The bill gives the California Air Resources Board, which enforces the state’s air pollution controls, the lead authority for generally establishing how much industry groups contribute to global warming pollution, for assigning emission targets, and for setting noncompliance penalties. It sets out a two-year time frame, until 2009, to establish how the system will operate and then allows three years, until 2012, for the industries to start their cutbacks.
Will California state, county, and local governments be forced to reduce emissions by 25%? Or will they take the "Do as I say, not as I do" approach.
Also, will most of the requirement for emissions reduction be placed on industry and not on private individuals or governments? If that happens then the percentage decrease in energy for industry will be much higher than 25%.
Will some future California legislature scale back the ambitions of this law? Will exemptions be made or time tables changed? I suspect so.
Rising energy prices in California will drive higher energy using industries to move to other states or abroad. Also, rather than build CO2 emitting coal and natural gas fed electric power plants the state government could let electric prices rise until demand falls enogh to cause a great reduction in CO2 emissions by power plants.
Update: Think about the politics involved in implementing such a large reduction in CO2 emissions. Will fear of the mass of voters prevent the California state government from upping gasoline taxes? If so, the goal becomes hard to meet by energy demand reduction.. Demand for energy will rise greatly by 2020. The size of reduction needed as compared to trend is probably more on the order of 35% or 40%. How to accomplish that without providing a strong disincentive against use of vehicles?
The big recent run-up in oil prices has temporarily almost stopped the growth in US oil demand,. But to actually reverse oil demand growth and by such a large amount is far harder. It can be done with prices or with technological innovations. To do it with prices probably would require an additional gasoline tax of $3 or $4 or $5. Elected representatives of the people aren't going to do that to their voters - not in America anyway.
Biomass might be able to do it. The ratio of hydrocarbons out to hydrocarbons in for farming will improve in the next 15 years. Cellulosic technology and bioengineered plants could make biomass ethanol a viable way to reduce net carbon emissions.
Another possibility comes from breakthroughs in battery technology. A shift to electric cars would make it pretty easy to make a huge cutback in carbon dioxide emissions. Electric power plants burning coal and natural gas could probably sequester carbon for about 2 cents a kilowatt hour. Also, wind power will get cheaper.
I also wonder how much the goal will get met by cheating. How to cheat? Buy electricity from another state. Build electric power generator plants in Nevada and ship the electric power in. Emissions would drop in California.
Heavy energy using industries in California should start developing their exit strategies. Their cheapest way to emit less in Calfornia is to emit more somewhere else.
I also expect a lot of money to pour into lobbying in Sacramento as various industries and groups play a game of political hot potato and try to win exemptions for their groups from emissions reductions requirements.
The costs of achieving the goals of the new legislation are unknown. Traditional coal-fired power plants emit about a ton of carbon dioxide per megawatt-hour generated. State-of-the-art gas-fired power plants emit about half that amount. Currently, credits for voluntary reductions in the U.S. trade for anywhere from $1 a ton to $5 a ton. However, nobody knows what those prices will be under a mandatory, California-only market.
$1 per 1000 kwh would be a tenth of a penny per kwh as compared to a California electric price of about 13 cents per kwh or about 8 cents per kwh nationally. So a tenth of a penny wouldn't impact electric power prices much. But I do not see where a supply of carbon credits would be large enough to supply the entire electric power industry.
The California plan, which won final legislative approval Thursday but which still faces a battle in the courts before it can take effect, calls for a 25 percent cut in emissions of carbon dioxide by 2020. It envisions controls on some of the largest industrial groups including utilities and oil refineries.
Oil can get refined in other states and piped in. Big computer server farms can move out of the state and get accessed over the internet.
What businesses would be affected?
Utility plants, oil and gas refineries, factories and cement kilns, among other major emitters of the gases.
California can not accomplish its goal unless it reduces gasoline consumption. But it might not have the legal authority to cut tailpipe CO2 emissions. If the state government tries to cut everything else more in order to make up for the inability to cut vehicle tailpipe emissions then energy for non-transportation purposes will have to become very expensive.
While environmentalists are hailing the measure, some businesses argue that the only way for oil refineries to meet the tough caps would be to reduce production of transportation fuels by 17%, said Tupper Hull, a spokesman for the Western States Petroleum Association trade group. "This has the potential to be very damaging to the California economy," Hull said. "It will put a lot of strain on the marketplace." Already, Hull said, the state's 14 refineries are operating at capacity, producing 45 million gallons of gasoline and diesel a day. California also imports 3.5 million gallons a day from other regions.
California can't stop that importation. If the state did then the importers could sue in federal court on US constitutional grounds.
Here is why I think that refiners and electric power generators from outside of California will be able to generate carbon emissions and sell their products into California unhindered by the state government's attempt to reduce greenhouse gas emissions.
Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
I expect we will see court cases fought over the application of this legislation where interstate commerce is involved. Sellers of electricity, refined oil products, and other products will fight in court for their ability to produce outside of California and sell into California. Oregon, Baja California Mexico and other neighoring regions will produce and sell more energy products into California as a result of this legislation.
The New York Times reports on plans by Rentech to build a plant to convert coal to liquid fuel burnable in diesel engines.
Here in East Dubuque, Rentech Inc., a research-and-development company based in Denver, recently bought a plant that has been turning natural gas into fertilizer for forty years. Rentech sees a clear opportunity to do something different because natural gas prices have risen so high. In an important test case for those in the industry, it will take a plunge and revive a technology that exploits America's cheap, abundant coal and converts it to expensive truck fuel.
"Otherwise, I don't see us having a future," John H. Diesch, the manager of the plant, said.
If a large scaling up of coal-to-liquid (CTL) production takes place then an increase in pollution seems likely. Though perhaps advances in conversion technologies and tougher regulations could prevent this. The use of coal to make liquid fuels will increase CO2 emissions since the conversion plants will emit CO2 and of course the liquid fuel will emit CO2 just as conventional diesel fuel does. Those who view rising CO2 emissions with alarm therefore see a shift to CTL as a harmful trend.
And, uniquely in this country, the plant will take coal and produce diesel fuel, which sells for more than $100 a barrel.
The cost to convert the coal is $25 a barrel, the company says, a price that oil seems unlikely to fall to in the near future. So Rentech is discussing a second plant in Natchez, Miss., and participating in a third proposed project in Carbon County in Wyoming.
That sounds very profitable. The longer the price of oil stays high the likelier that capitalists will decide it is worth the risk to build CTL plants. Many are holding back worried that oil prices could tank again as happened in the early 1980s. That price decline drove the Beulah North Dakota Great Plains Synfuels Plant into bankruptcy. Though it was restarted and now produces natural gas from coal profitably. Though the bankruptcy cut the capital cost of operating that plant and so is not a perfect measure of the profitability of processes to convert coal to gas or liquid.
The rise in US natural gas prices has led to a cutback in the production of ammonia and ammonia-based fertilizers from natural gas in the United States. Ammonia production has ramped up in countries which have cheaper natural gas due to a surplus of local production (e.g. in the Middle East). But synthetic gas can be produced from coal for cheaper than recent natural gas prices. Rentech intends to convert an existing ammonia plant to coal gas and then at the same site they will implement a coal-to-liquids process to make synthetic diesel fuel.
Denver, Colorado-Rentech, Inc. (AMEX:RTK) announced today that its wholly owned subsidiary, Rentech Energy Midwest Corporation (REMC), has entered a Professional Services Agreement (PSA) with Kiewit Energy Company (KEC), Houston, Texas, a subsidiary of Kiewit Corporation located in Omaha, Nebraska. WorleyParsons, under contract to KEC, will lead the Front End Engineering and Design (FEED) from their offices in Houston, Texas. FEED services will include the planned coal gasification conversion of REMC's natural gas fed ammonia fertilizer facility in East Dubuque, Illinois and the production of ultra-clean fuels based on Rentech’s patented and proprietary Fischer-Tropsch (FT) coal-to-liquids (CTL) technology.
Rentech intends to implement ConocoPhillips E-Gas™ Technology for clean coal gasification at the site to produce syngas initially for use in the production of ammonia and ammonia-based fertilizers and ultra-clean FT fuels.
The FEED contract for the first phase of the project, which includes the conversion of the ammonia plant feedstock to coal derived syngas and the installation of FT liquids production, has been initiated. The results of the FEED work will be used to advance the project and provide a basis for an Engineering Procurement and Construction Contract. FEED activities are scheduled for completion during the first half of 2007. REMC's East Dubuque facility is expected to be the site of the United States' first commercial CTL plant utilizing clean coal gasification in conjunction with the Rentech Process.
The New York Times article also mentions GreatPoint Energy which has a pilot plant coal-to-gas (CTG) plant in Des Plaines Illinois. Their process uses a new catalyst that lowers the heat needed and therefore the energy loss from conversion of coal to natural gas. They list several advantages of their process:
Produces methane in a single step and in a single reactor
- Pipeline grade product
- No need for external water gas shift reactor
- No need for external methanation reactor
- Produces CO2 as a valuable sequestration-ready byproduct
Significantly reduces operating temperature
- Lower cost reactor components
- Lower maintenance costs and higher reliability
- Eliminates costly high temperature cooling
Utilizes steam methanation
- Eliminates costly air separation plant
- 65% overall efficiency
- Thermally neutral reaction process
- No need for integrated power plant
I like the fact that this process produces CO2 already separated out. This lowers the cost of CO2 sequestration.
The price of oil has gotten so high that lots of talented people with entrepreneurial streaks are coming up with cheaper ways to get liquid and gaseous fuel from coal. Given that I do not expect the political system to impose sufficiently stringent emissions regulations on coal-based energy processes I'm ambivalent about these developments. But the GreatPoint Energy process is reason for more optimism. If they really can produce the CO2 as a separate product of their process then perhaps coal-based energy technologies which are both low cost and low in emissions is an attainable goal.
Even if the plants that convert coal to liquid and gaseous fuels can be made to be carbon-neutral at low cost a shift to coal on a scale sufficient to increase liquid fuels production would still lead to higher CO2 emissions. The liquids would get burned in vehicles and vehicle consumption of hydrocarbon liquids would rise.
Advances in battery technology show the most promise for reducing both conventional pollutant emissions and CO2 emissions. First off, cheap and high energy density batteries would lower the cost of hybrids. That would increase efficiency of burning liquid fuels and therefore reduce emissions. Also, batteries will enable a migration toward use of electricity to charge up vehicles. Then stationary power plants - whose emissions are far eaiser to reduce - will supply an increasing fraction of all energy used in transportation.
The migration to pluggable hybrids and pure electric vehicles will allow nuclear, solar, and wind to provide power for transportation. Also, coal-burning electric plants could in theory be made to have zero emissions. Whether the cost of zero emissions coal will ever compete with nuclear, wind, and future cheaper photovoltaics remains to be seen.
David Morris is the vice president of the Institute for Local Self-Reliance says the current US federal 51 cents per gallon subsidy for ethanol should get replaced by a program that protects against price falls. (shorter New York Times version of the article here)
It will be difficult, if not impossible, to politically justify a 51 cent per gallon incentive for ethanol if there is an ethanol mandate for 10 or 20 or 30 billion gallons and oil prices remain high.
Ethanol needs no financial incentives to compete when crude oil prices are over $65 a barrel. However, history demonstrates the volatile nature of oil prices. The price of oil in the last 10 years has dropped below $20 per barrel several times. Moreover, the cost of ethanol production is highly dependent on the cost of its feedstock, and although corn prices have not varied nearly as dramatically as oil prices, they do vary. Corn prices briefly topped $4 per bushel in the late 1990s, although they have held fairly steady at about $2 per bushel for most of the last 20 years.
How might we redesign the federal incentive to honor the nation’s commitment to both farmers and taxpayers? The incentive needs to be structured to protect the farmer-producer if the price of oil plunges or the price of the feedstock(corn, soybeans, cellulose) jumps. The taxpayer must be protected from having to underwrite handsome subsidies when the biofuels industry no longer needs them.
Farmers have pushed for years to get more people using gasoline mixed with ethanol made from corn kernels, but so far such ethanol has replaced only about 3 percent of the nation's gasoline, and by most estimates, the country would never be able to grow enough corn to replace more than 10 or 12 percent of its fuel supply.
But high oil prices make plant biomass competitive.
"If you think we're heading towards a future where oil prices are going to stay relatively high, $50-plus a barrel, then the energy cost delivered in plant biomass is much, much less than the energy cost delivered in oil," said Bruce E. Dale, head of the Biomass Conversion Research Laboratory at Michigan State University. "I'm completely convinced that this industry is going to happen on economic grounds alone. The demand for liquid fuels is so high and rising that we're going to convert an awful lot of stuff to liquid fuels."
Scientists have projected that in the long run, ethanol made from biomass could be cheaper than gasoline or corn ethanol, costing as little as 60 cents a gallon to produce and selling for less than $2 a gallon at the pump. But right now it would be more expensive than gasoline, and the low prices are likely to be achieved only after large plants have been built and technical breakthroughs achieved in operating them.
The most promising future for biomass energy comes from developments to break down cellulose (often referred to as "cellulosic technology") so that all of a plant could get converted into ethanol and many more types of plants could serve as inputs to ethanol production..
Cellulose, like starch, is made up of glucose molecules, but packed so tightly they're extremely hard to break apart. Plants use cellulose chiefly as a structural material -- it helps trees and grasses stand upright. If efficient ways were developed to break open the molecules, a wide variety of agricultural wastes or specially planted energy crops could feed the new industry.
Scientific progress has been slow, but now it seems to be accelerating. Enzymes needed for the process used to cost more than $5 per gallon of ethanol, but biotechnology companies, under government research contracts, have reduced that to 30 cents per gallon. A handful of small companies, exploiting the drop, are already making small amounts of ethanol from biomass, and claim that they are close to doing so at competitive prices. Not only are they shopping for locations for bigger plants, they are also signing contracts with farmers to supply raw material.
A lot of environmentalists are thrilled at the prospect of cellulosic technology. But picture countries with 10 or more times the population density of the United States (e.g. India) shifting heavily toward biomass to power a growing economy with eventually hundreds of millions of more cars. What would happen to the already shrinking habitats where animals live? They'd be converted into fields to grow plants for cellulose.
I prefer accelerating research and development of photovoltaics, batteries, and nuclear power. Advances on these fronts will enable a shift toward electric power for cars and reduce the ecological footprint of our methods for generating energy.
OTTAWA, June 13 — In an effort to revive a nuclear energy program that has been marred by billions of dollars in debt, cost overruns and disappointing performance, the province of Ontario on Tuesday announced a plan to spend about 20 billion Canadian dollars ($18 billion) to build reactors and refurbish some current units.
The plan also includes about 20 billion Canadian dollars for renewable energy projects and 6 billion Canadian dollars ($5.3 billion) for power conservation.
They will spend big money on renewables and conservation as well. Yet in spite of putting up big money for these purposes they obviously do not think big efforts in those areas will solve all their energy problems. So they were faced with a choice between coal and nuclear.
At least 2 new nuclear power plants will be built.
The project will initially involve at least two units at a cost of about 2 billion Canadian dollars each. But that number is expected to rise after an analysis by the government-owned Ontario Power Generation on the feasibility and cost effectiveness of renewing current stations.
The $2 billion Canadian is about $1.8 billion in US Dollars per reactor.
I've stated we face a choice between coal and nuclear. The Ontario government decided they faced that choice and they chose nuclear power. The Ontario government has decided to move away from coal.
Energy Minister Dwight Duncan directed the Ontario Power Authority (OPA) today to proceed with its recommended 20-year electricity supply mix plan, with some revisions.
The plan achieves a healthy balance by moving away from coal in favour of new nuclear power and renewable energy. The government has set targets that will double energy efficiency through conservation and double the amount of energy from renewables by 2025.
The government has directed Ontario Power Generation (OPG) to undertake feasibility studies for refurbishing units at the Pickering and Darlington sites. OPG has also been directed to begin the work needed for an environmental assessment for the construction of new units at an existing nuclear facility. Nuclear is expected to continue to be the single-largest source for Ontario's electricity in 2025.
The Association of Power Producers of Ontario (APPrO) welcomed today's announcement on Ontario's supply mix, saying that they are confident the power generation industry can bring forward the kind of supply contemplated by the government, on time, on budget and for a reasonable cost, said APPrO President David Butters. He added that development of this new generation will mean billions of dollars worth of new investment and jobs in Ontario, bringing environmentally sustainable new technologies and innovation, along with new jobs and a host of economic opportunities.
I bet htis Canadian decision will have some influence on the energy debate in the United States and in Britain. The British press has been reporting that the government is shifting toward a more pro-nuclear stance.. The Ontario government decided they didn't want the pollution that more coal plants would bring. That choice will appeal to some people in the United States.
Now, as temperatures creep up in much of the country and the peak air-conditioning season begins, it's worth noting that from an energy perspective, there's much good happening in California. More than 30 new power plants have come online in the past six years, generating 12,000 megawatts. The California Energy Commission estimates that it will have generation reserves of more than 20% this August, nearly three times what's required should power usage spike.
The better story, though, lies on the demand side of the equation, or what the state's fitness-focused governor might call portion control. Since California began aggressively pursuing energy efficiency in the mid-1970s, the state's per-capita electricity usage has remained flat at around 6,500 kilowatt-hours per person. In the rest of the country, consumption has risen from 8,000 to 12,000 kilowatt-hours in the same time frame. In terms of carbon emissions, that's the equivalent of keeping 12 million cars off the road.
Click through and you can read about all the ways the state government of California has managed to keep demand for electricity lower. However, one way is not mentioned in the article: electricity costs more in California than in most states. California's electricity is about 12 cents per kilowatt-hour (kwh) and in New England it costs about 13 cents per kwh with 16.45 per kwh in New York (wow!) versus a US national average of 9.67, 8.32 for the Moutain states and 6.97 for Wyoming. Therefore a chart of per capita energy usage by state shows Hawaii (22.83 cents per kwh), Rhode Island (14.84), New York (16.84), and California (12.98) at the 47th thru 50th spots. Whereas at the top of the list cheap electric Wyoming (6.97) has over three times the per capita electricity usage of California and not coincidentally about half the electric cost of the 4 lowest per capita electric using states. Prices have powerful effects on demand. The next biggest electricity using states are Kentucky (6.44), South Carolina (8.75), and Alabama (7.99). States with cheap electricity use more electricity. No surprise there.
How much of California's lower electric usage is due to higher electric prices? How much is due to weather that provides more natural lighting and the opportunity to spend more days outside? How much is due to government policies aimed at encouraging conservation and more efficient energy usage?
A historical analysis which compared California and national electric prices and per capita electricity usage along with per capita income (affluent people can afford to spend more to heat the jacuzzi and use air conditioning) might be able to tease out the effects of government policies versus prices. Of course, electric price differences are also a product of government policies where some regions put up bigger obstacles for coal and nuclear plants and new electric plants in general. Also, California and other states that mandate increased use of renewable electric energy sources are driving up electric prices and thereby discouraging electric usage.
George W. Bush is not a believer in many government efforts to improve energy efficiency. The Bush Administration continues to cut energy conservation programs.
If Congress accepts the Energy Department's proposed 2007 budget, it will cut $152 million - some 16 percent - from this year's budget for energy-efficiency programs. Adjusting for inflation, it would mean the US government would spend 30 percent less on energy efficiency next year than it did in 2002, the ACEEE says.
One energy-efficiency program on the chopping block is the Heavy Vehicle Propulsion and Ancillary Subsystems. It helps improve the fuel efficiency of heavy-duty trucks, one of the nation's biggest oil consumers. That program is "zeroed out" in the 2007 budget request.
The same fate awaits the $4.5 million Building Codes Implementation Grants program. It helps states adopt more energy-efficient requirements for new buildings, the nation's largest consumer of electricity and natural gas.
The $8 million Clean Cities program has helped clean-fuel technologies, like buses that run on compressed natural gas, get to market. But it's slated for a $2.8 million cut.
The article lists other programs that will be cut and includes conflicting views on the efficacy of all these programs. I suspect that program for raising building code standards for energy efficiency is money very well spent. Big improvements in building efficiency are achievable with existing technology and can be made fairly cheaply on new construction. Best to make sure the new buildings are energy efficient since the average building lasts for many decades.
CHICAGO -- More than 130 wind turbines are proposed for the hilltops of central Wisconsin, but that project and at least 11 others have been halted by the Defense Department as it studies whether the projects could interfere with military radar.
Some people do not want to see views around the country ruined by wind farms. Others think wind farms are cool things to look at. My attitude is that having a few of them will provide some neat things to go look at but the operative word here is few. I want to look at mountains and just see mountains. I want to look at coasts and just see birds and perhaps the occasional passing ship. I realize this is just a personal esthetic preference. But I'm hardly alone in this preference.
The regulatory obstacles affecting so many projects are a side effect of efforts by Senator Ted Kennedy and allies to prevent a single wind farm from ruining views from Cape Cod and Nantucket. Whoever said the upper classes aren't powerful?
They say their wind turbines are victims of the ongoing dispute between Cape Cod residents and developers of the proposed Cape Wind farm in Nantucket Sound. The Defense Department study was put in the 2006 Defense Authorization Act -- inserted, say wind farm developers, by senators who want to block Cape Wind.
"This legislation was intended to derail Cape Wind, but it had a boomerang effect and affected a lot of projects around the country," said Michael Skelly of Horizon Wind Energy, a Texas company constructing the country's largest wind farm near Bloomington, Ill.
Tell the peasants to eat cake. We don't want to ruin the view from our country houses at Versailles.
The rate of wind turbine permit applications to the US Federal Aviation Administration has more than quadrupled since 2004.
The FAA has received more than 4,100 wind turbine applications so far this year, compared with about 4,300 in 2005 and 1,982 in 2004.
Not to worry wind power fans. Big money is lining up to invest in wind turbines. So the upper classes will be represented on both sides of the battle with probably more money lined up for the spread of wind farms than against it.
How about a market in views? Then the Cape Cod folks could refuse to sell their views. Others could sell theirs.
I happen to like scenic vistas myself and would prefer we accelerate research on both solar photovoltaics in order to come up with more visually preferable alternatives. I figure shingles and siding made from nanotech materials that aren't even recognizable as photovoltaics will be the best solution.
I also think we ought to accelerate the development of next generation nuclear reactor designs.
As the cost of natural gas and oil remain high we are going to start using more alternatives. Coal is going to be the biggest winner. We are also going to see farms expand into natural areas to grow more crops for biomass. Plus, many more wind farms will get constructed. I prefer accelerating technological developments to lower the costs of alternatives that have fewer environmental impacts. But not enough people hold this view with enough intensity for this view to have much choice. So more coal and more wind towers are in our future.
High energy prices are focusing more minds on energy policy. A big push is on to set a national goal of 25% of energy from renewables by 2025.
In Washington this week, a bipartisan group of lawmakers, industry leaders (including the three Detroit automakers), farm groups, governors, county officials, and environmentalists launched an effort to have the nation get 25 percent of its total energy from renewable sources by 2025.
This ambitious proposal - dubbed "25x'25" - goes well beyond what Congress and the White House have enacted so far, and it's likely to encounter environmental and economic speed bumps along the way.
The goal of securing one-fourth of the nation's total energy from renewable sources such as wind, solar, biomass, and biogas by 2025 was introduced this week as a concurrent resolution in both houses of Congress. So far, it has at least 30 cosponsors with the number growing daily.
The big downside of such a coalition is that they will make biomass for vehicle ethanol a big component of that drive. Whether that would yield a net environmental benefit is arguable. On the bright side, the ratio of energy out to energy in will rise due to the development of cellulosic technologies and a shift toward switchgrass and other biomass energy sources instead of corn. But the amount of land that would need to move into farm production will still increase substantially. This coalition ought to state how much additional land they expect to use to reach their goal.
At an international level a move toward biomass would be even more problematic for the environment. Picture densely popualted tropical countries cutting down rainforests to plant fields for biomass. Not a pretty picture.
The supporters of this initiative think attitudes are shifting in their direction. I tend toward the "Seen one way" view in this first paragraph.
Seen one way, this new energy effort is a coalition of well-known special interests like ethanol producers, tree farmers, and solar equipment manufacturers. But boosters believe a critical mass of public support has developed that puts a strong political wind at their backs.
One example: The kick off session for the annual meeting of the Western Governors Association this weekend in Sedona, Ariz., focuses on clean energy. The WGA, whose 18 state executives (11 of whom are Republicans) oversee the fastest growing states in terms of population and energy consumption, will propose the development of 30,000 megawatts of "clean and diverse energy" across the American West by 2015 while increasing energy efficiency 20 percent by 2020.
The coalition has a website at 25x25.org.
“Today we have Republicans and Democrats, rural and urban interests, and representatives from over 140 different farm, forestry and environmental organizations coming together behind a common energy goal for the nation,” said 25x’25 Steering Committee Co-Chair Bill Richards. “This introduction is truly unprecedented.”
Lead sponsors include: Sens. Charles Grassley (R-Iowa) and Ken Salazar (D-Colo.), Dick Lugar (R-Ind.), Tom Harkin (D-Iowa) and Reps. Bob Goodlatte (R-Va.), Collin Peterson (DMinn), Marilyn Musgrave (R-Colo.) and Mark Udall (D-Colo.)
Does a forest produce more cellulose and more energy per year than a field growing switchgrass? After all, the forest is there 365 days a year. Whereas most agricultural plants are just for a much shorter growing season. How much more energy per acre could be harvested per acre on a tree farm that grows for, say, 10 or 20 years as compared to the same land used for seasonal agriculture? Anyone know?
Support has been building for the 25x'25 initiative from all across the country. Over 100 organizations have endorsed the vision, including broad-based farm organizations like the American Farm Bureau Federation, the National Farmers Union, and companies like Deere & Company; as well as environmental groups like NRDC, Environmental Defense and the National Wildlife Federation. In addition, Governors Jeb Bush (R-Fla.), Dave Heineman (R-Neb.), Tim Pawlenty, (R-Minn.), Brian Schweitzer (D-Mont.), Ed Rendell (D-Pa.) and Mitch Daniels (R-Ind.) have endorsed the goal, as have the state legislatures of Colorado, Nebraska, Kansas and Vermont.
What do the NRDC and National Wildlife Federation think of the idea of shifting millions more acres of land into agricultural uses even as more land gets shifted into residential usage due to largely immigrant-driven population growth? Any lights on in the environmental movement?
How much biofuel can we produce?
Producing energy from America's abundant farm and forest lands is an idea whose time has come. In the State of the Union address this year, President Bush set a goal of replacing 75% of our oil imports from the Middle East by 2025 - a quantity very similar to 25x'25 (because most of our oil comes from other regions). Oak Ridge National Laboratory reports that we have more than 1 billion tons of unused raw materials each year that could be used to make biofuels. In fact, one of America's leading venture capitalists says 25x'25 is too conservative a goal, and that we can shoot higher and move faster.
A lot of those "unused raw materials" currently serve as food for a large variety of plant and animal species. I'm guessing the "leading venture capitalist" mentioned is Vinod Khosla.
How do we produce that much biofuel?
To get to 25x'25, we will need to use all kinds of plants for biofuels. Today ethanol is made from corn, sugar cane, and sweet sorghum. Biodiesel is made from oil seeds like soybeans and canola and from nuts like coconut, palm, and jatropha. Advanced biofuels can be made from the "cellulose" in trees, grass, agricultural residue (corn stalks, cotton gin, rice hulls), and municipal solid waste. Cellulose makes up the majority of a plant's structure and can be broken down into sugars, which can then be fermented and made into ethanol. The President vowed in the State of the Union to make advanced ethanol available by 2011. Once commercialized, advanced ethanol will be competitive with $35 per barrel oil. Studies indicate that the U.S. can produce 50 billion gallons of cellulosic ethanol using only agricultural residue.
50 billion gallons sounds like a lot right? Well, divide it by 300 million people. That's only 167 gallons per person. Note that ethanol has a much lower energy density than gasoline. Plus, energy will be used to collect the agricultural residue and operate the ethanol production plants. So the gain is even smaller than that suggested by the gallons per person. We'd be better off accelerating the development high conversion efficiency photovoltaics and better battery technologies. The photovoltaics would use far less land and have less environmental impact. Also, nukes would use far less land as well.
Some folks like to fantasize and prophesize about how this or that trend is going to eventually bring about a collapse of civilization. FuturePundit has a few worries about the continued existence of humanity. But most of the scenarios about civilizational collapse are extremely unlikely. One scenario promoted in some circles is a worldwide shortage of fresh water. The exhaustion of fresh water resources poses a problem for the poorer countries in the world. But industrialized economies which can afford to produce large amounts of energy can not collapse due to shortages of fresh water. A Technology Review survey of the water desalinization industry in Spain provides some useful data about water desal costs.
One of the main challenges that remains with the desalination process is the cost of the energy required to produce freshwater. Though different processes demand varying amounts of energy (desalting seawater with membranes requires the most, as it takes tremendous pressure to push the water through the membrane), it remains an issue in terms of cost and environmental issues, as nations around the world battle rising greenhouse gas emissions, such as those emitted by power stations.
In the last 30 years, the amount of energy required for desalination has fallen precipitously, and along with it the price. Decades ago it took approximately 12 kilowatt-hours of energy to produce one cubic meter of freshwater using RO technology; today it takes on average between 3 and 4 kilowatt-hours of energy. Even today, however, the cost of that energy makes up about 40 percent of the total cost to produce each cubic meter of water.
“We are very close to the minimum energy for desalination,” says Juan Maria Galtés, director of special projects for Inima. “There’s a point where it’s impossible to go any further,” because of the high pressure needed to separate salt from water.
Developments in new kinds of membranes or other tweaks in plant efficiency could help engineers continue to shave off small amounts of energy, reducing both the cost and the environmental impact.
A cubic meter is 264.173 gallons. Electric costs vary within and between countries. But 10 cents a kilowatt-hour for retail sales is close enough to the average to be useful for rough calculations. The 4 kilowatt-hours needed to produce 1 cubic meter of water therefore cost about 40 cents. Since the article claims energy is only 40% of the cost of desalinization that suggests desal costs about $1 per cubic meter (these are high side estimates btw). Maybe the Spaniards assumed higher or lower cost per kwh of electricity. So that's a rough guess. But a useful one. See below where I connect that number to information about how much water the United States uses.
New nuclear plants probably could produce electricity for less than 5 cents per kwh. But what about solar and wind? They cost more. But in theory their lack of continuous availability shouldn't pose a problem since we could store up purified water when the sun shines and the wind blows. But the problem with this idea is that current designs of desal plants require continuous availability of power. However, industry and governments are looking for ways to make desal from non-continuuos energy sources more feasible.
The engineering involved in using renewable energy to power a desalination plant can be relatively simple: solar or wind generators can be hooked up to an existing utility grid, which then offsets the power demands of the desalination plant.
The challenge, however, in coupling desalination directly with renewable energy such as solar or wind power lies in the variability of renewable energy. The membranes used in reverse osmosis need to be kept wet, and the systems that make up a desalination plant have been developed to handle a steady stream of water. Solar energy is plentiful when the sun shines and wind power only when the wind blows.
Researchers in the Canary Islands have spent the past decade developing stand-alone small plants that could provide water for approximately 100 to 300 families, about the size of a small village in a developing country. ITC projects are also carried out in conjunction with other international research institutes or companies.
On one Canary Island test site, photo-voltaic panels are hooked up to a battery, which feeds a steady supply of electricity to a small desalination plant. “But batteries aren’t great because you have to replace them after, say, five or 10 years, and then you have to dispose of them as well,” says Piernavieja. “It’s better to develop a system that needs no batteries in the first place.”
Some day really cheap photovoltaics combined with cheaper equipment for doing desalinization will make desalinization much cheaper. But for now nuclear power would be tbe best way to scale up desalinization - unless you are willing to either let coal burning electric plants pollute or to pay much more for cleaner coal burning plants.
I like to work out costs of switching from current methods of getting resources to alternative methods because the costs of alternatives represent worst cases for what happens if we really do run out of this or that resource. Suppose the United States had to totally switch over to using only desalinated water. The US uses 40 billion gallons of water per day.
A report by the U. S. Geological Survey (USGS), "Estimated use of water in the United States in 2000" (USGS Circular 1268), shows that about 408 billion gallons of water per day were withdrawn for use in the United States during 2000. Withdrawals in 1990 averaged nearly 1,620 gallons per day per person; in 2000, the per capita average had declined to about 1,430 gallons per day. During the same decade, the United States experienced a population increase of about 33 million. Total withdrawals increased steadily from 1950 to 1980 but have varied less than 3 percent since 1985.
That 408 billion gallons of water per day amounts to about 1.544 billion cubic meters. Well, if desalinization of water costs about $1 per cubic meter then it would cost about $1.54 billion per day or $563.7 billion per year to get all water in the United States from desalinization. That would be rather expensive and the price of water would get so high that people would find many ways to drastically cut their water usage. So it is unlikely we'd ever spend a half trillion dollars a year on water even if the United States suffered a massive continent-wide drought. But since the United States has a $12.4 trillion a year (and growing) economy it could afford to spend a half trillion a year on water.
A massive shift to desalinization plants could be done in concert with a nuclear power plant building program to lower the cost of electricity. Plus, huge demand for desal would drive the development of cheaper desal technology. So the cost of desalinated water would drop for a couple of reasons. At the same time, the higher price for desalinated water would drive demand for a shift to technologies that used water more efficiently and therefore lowered the demand for water. As a consequence of all this I'd be surprised if a shift to desalinated water would cost more than a couple hundred billion dollars per year. To put that in perspective, our current approximately 21 million barrels of oil consumed per day in the United States works out to about 7.6 billion barrels per year. Well, an oil price rise from $20 to $60 per barrel cost about $300 billion per year. Worse yet, most of that money was exported.
A continent-wide drought is probably not possible. But if it happened our need for crop irrigation would rise to compensate for lack of rains. However, we could switch to the methods of agriculture used in Israel and reduce evaporation with ground covering, no-till farming, and plant more crops with lower water needs.
Mind you, I do not expect a massive nationwide drought that dries up all the rivers. IRather, the lesson here is that shortages of other resources can be solved given energy which is cheap enough. Given sufficiently energy we can solve other resource limitation problems by performing filtration, purification, and many other processes on readily available forms of matter to produce anything we might need for food, shelter, transportation, and other needs.
Some might argue we couldn't run massive desal plants because we are headed for an economic collapse due to a world wide peak and decline in oil production. But we can convert coal into liquid fuels for about $40 to $45 per barrel. Plus, we can run the desal plants on nuclear power. So sorry doomsters. There's no bone dry Mad Max Peak Oil Apocalypse awaiting us in the future.
Thermoelectric-power plants accounted for 48 percent of total withdrawals (195,000 million gallons per day [Mgal/d]) in 2000. Surface water was the source for more than 99 percent of total thermoelectric-power withdrawals, one third of which were saline. Historically, large supplies of water, mainly for cooling, had to be available to operate thermoelectric-power plants. For this reason, large power plants have been sited near the oceans, the Great Lakes, the Gulf of Mexico, and large rivers.
Withdrawals for irrigation were about 137,000 Mgal/d, second only to thermoelectric power nationwide. Irrigation represented 34 percent of total withdrawals and 40 percent of total freshwater withdrawals. Eighty-six percent of irrigation withdrawals, and 75 percent of the total land irrigated in 2000 were in the 17 conterminous Western States. Withdrawals for irrigation have remained nearly stable since 1985 despite an 8-percent increase in total acres irrigated.
Since salt water is usable for power plant cooling a large number of nuclear power plants sited near coastlines to generate electricity for desalinization would not themselves increase the demand for fresh water. Also, if fresh water ever become extremely scarce then salt water could be piped inland for use in cooling inland electric power plants.
If fresh water was made into a market then rising prices would provide incentives for much more efficient water usage. In the event of severe water shortages the most rational response would be to create water markets.
For instance, per capita use of public water is about 50 percent higher in the West than the East mostly due to the amount of landscape irrigation in the West (see map below). However, per capita use can also vary greatly within a single state. For example, in 1985 the demand for municipal water in Ancho, New Mexico, totaled 54 gallons per capita per day (gal/cap/day) while in Tyrone, New Mexico, municipal demand topped off at 423 gal/cap/day (Grisham and Fleming, 1989). Rural areas typically consume less water for domestic purposes than larger towns.
The areas that have high usage rates could cut way back to rates closer to what the lower usage areas have. Granted, there'd be a lot less lawn grass. But civilization would not teeter, let alone collapse.
The US Interior Department's Minerals Management Service (MMS) has proposed leasing areas offshore Virginia, the Gulf of Mexico, and Alaska for energy development. Oil and gas developers are happy with the proposal - as far as it goes. "It's a step in the right direction," says Mike Linn, chairman of the Independent Petroleum Association of America.
"However, the majority of the Outer Continental Shelf (OCS) remains off- limits," he says, noting that some 90 percent of US waters have drilling bans - an area whose potential resources could replace Persian Gulf oil imports for several decades.
In its recent five-year leasing proposal, MMS estimates undiscovered resources to include 85.9 billion barrels of oil and 419.9 trillion cubic feet of natural gas technically recoverable from all federal offshore areas.
At $70 per barrel that oil is worth $6 trillion dollars or about half of one year of the United States GDP. The oil, if extracted, would generate local jobs and replace imports as well as lower prices. At $7 per 1000 cubic feet (close to current prices but half of the peak price hit several months back) the natural gas would be worth about $3 trillion. So all told perhaps $9 trillion worth of energy is sitting out on the US continental shelf waiting for exploration to find it.
A substantial contingent in Congress including 115 House members favor a moratorium on drilling in areas closer to coast lines. But if we really are entering the "Peak Oil" period and the price of oil continues to rise then I'm betting the opposition to coastal oil drilling will lose their battle. Let gasoline hit $4 a gallon and the demand for more oil exploration is going to get pretty loud. Let gasoline hit $6 a gallon and I expect to see oil rigs going in within site of the expensive coastal houses owned by rich folks - just like the oil rigs off of Santa Barbara (which I think look pretty cool lit up at night).
While the environmentalist opponents to offshore drilling are eventually going to lose I think they've served a few useful purposes. First off, they've forced oil companies to use better safety equipment and methods to reduce the risk of accidents. Second, they've delayed drilling in many areas while safety technologies have advanced. So when drilling finally happens the risk of accidents will be much lower. Thirdly, and perhaps most importantly, by delaying offshore oil and natural gas extraction the environmentalists have kept oil and natural gas in the ground until it becomes much more valuable. When "Peak Oil" hits that offshore oil will cushion the blow of the transition period.
For "Undiscovered, technically recoverable oil in the US" (and since it hasn't been discovered there's a substantial error in this estimate) a chart at the bottom of the article shows Alaska as containing one third of the remaining undiscovered offshore oil and one half of the undiscovered onshore oil in the United States. The Gulf of Mexico comes in a close second. Alaska and the Gulf of Mexico are what we have left.
The United States finds itself in a worsening financial situation due to a large trade deficit whose growth is partially driven by rising oil prices. When the dollar declines as a result of the trade deficit that will effectively lower the cost of oil for countries whose currencies appreciate against the dollar. Therefore their demand for oil will rise and that will drive up the price of oil even higher in dollar terms.
In the first chapters of its semi-annual World Economic Outlook, the IMF said that over the past two years, higher oil prices had accounted for one-half, or about one percentage point of GDP, of the deterioration in the US current account.
Oil prices are now high enough to provide incentives to develop coal for a wider range of uses. Perhaps an accelerated shift toward coal will put a longer run ceiling on the price of oil. But right now the United States would benefit financially from scaling up extraction of offshore oil and natural gas. How about a tax on new offshore fields to fund research on photovoltaics, batteries, nuclear molten salt reactors, and other non-fossil fuel energy sources? A small tax could fund billions of dollars of energy research per year.
If photovoltaics installations were primarily market driven you'd expect photovoltaics installations to be heating up in high sunlight places like southern California, Arizona, and New Mexico. FuturePundit thinks the lop-sided growth in photovoltaic demand so heavily weighted toward Germany is a sign that the demand growth is driven by regulations, not market prices.
World solar photovoltaic (PV) market installations reached a record high of 1,460 Megawatts (MW) in 2005, representing annual growth of 34%, says the annual PV market report issued today by Solarbuzz LLC, a San Francisco based solar energy consultancy.
Germany's PV market grew 53% to 837 Megawatts in 2005, corresponding to 57% of the world market. This level is eight times the size of the United States market. Japan's 14% growth took it to 292 MW.
Solar cell production reached a consolidated figure of 1,656 MW in 2005, up from 1,146 MW. Japanese producers maintained their leadership with 46% share, while Europe accounted for 28%. US cell production was 156 MW in 2005.
"Cumulative installed solar PV electricity generating capacity expanded by 39% in 2005 and now exceeds 5 Gigawatts worldwide and investment in new plant to manufacture solar cells exceeded $1 billion in 2005," said Craig Stevens, President of Solarbuzz LLC. "Meanwhile, the PV industry raised more than $1.8 billion on capital markets over the past 12 months."
The increase in demand obviously was not driven by falling prices for photovoltaics.
Despite a rise of 12% in silicon feedstock capacity, tight supply caused long-term polysilicon contract prices to increase by up to 25%. The on-going capacity shortfall will restrict world PV market growth to just 10% in 2006.
Solarbuzz market demand forecast scenarios show worldwide industry revenues will reach $18.6 to $23.1 billion with annual PV installations between 3.2 and 3.9 Gigawatts in 2010
Generous new German government subsidies for solar installations in that country have especially pressured supplies just as California has approved its own 10-year, $2.9 billion program giving residents a $7,000 subsidy to add the units to their homes.
How about spending a few hundred million a year on photovoltaics research? Or how about spending a few hundred million a year insulating buildings and doing other things to make buildings more efficient? I'm far from convinced that subsidizing photovoltaics purchases is the most cost effective way to reduce fossil fuels consumption or accelerate energy technology development. I bet smaller subsidies per house to install solar hot water in a far larger number of houses would save more energy per dollar spent.
Solar photovoltaics systems prices rose at least 10% due to high silicon costs.
For years, solar cell prices gradually fell as demand grew and efficiency improved. But the tug of war between the huge chip industry and the growing solar cell manufacturing sector has pushed costs of solar systems up at least 10 percent, said Howard Wenger, executive vice president of Berkeley-based PowerLight Corp., which calls itself the nation's largest buyer of solar cells. A typical installation of a system that is integrated into the roof now averages about $21,000.
We need scientists to discover ways to make non-silicon photovoltaics materials that are far cheaper to manufacture.
Germany's subsidies are driving up prices so far that California's subsidies are getting out-competed.
What's not going up is the rate of installations. In California, which boasts 80 percent of the nation's solar energy production, installations, which surged almost 40 percent in each of 2003 and 2004, slowed last year to 22 percent, according to California Energy Commission statistics.
The commission has subsidized up to 90 percent of the solar installations statewide since 1998.
Preliminary estimates for 2005 show global photovoltaic (PV) cell production increased more than 40% from nearly 1200 MW in 2004 to 1727 MW in 2005. European production growth outpaced Japan, U.S. production was relatively lackluster, but the real highlight was in the aggregate of small, global producers outside of the major markets that more than doubled cell production.
But what is the average output of that 1727 MW of theoretical capacity? 30% of that? Note that the shift in demand toward Germany from California probably lowers average realized output as a percent of total capacity for new installations as compared to existing installations since Germany is further north and has more clouds.
Ron Kenedi, an executive in Sharp's photovoltaics business, told Reuters that a shift toward much thinner silicon-based photovoltaics will provide a solution for high refined silicon prices.
One thing driving up the cost is a shortage of refined silicon, the main active component of solar panels. Its price has risen 120 percent over the last 14 months.
But costs could ease as Sharp moves to producing "thin film" solar panels that use 2 to 3 microns of refined silicon, rather than the 200 microns in conventional panels, he said.
"We're starting to produce them and probably will produce them in the United States," he said, adding that new silicon refineries should open in 2008.
SunPower Corporation, a majority owned subsidiary of Cypress Semiconductor, is pursuing another method to make photovoltaics more cost effective: Sunpower claims to have the highest conversion efficiency for light turned into electricity for any photovoltaics product on the market.
SUNNYVALE, Calif., April 4, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- SunPower Corporation (Nasdaq: SPWR), a Silicon Valley-based manufacturer of the world's highest efficiency, commercially available solar cells and solar panels, today announced volume shipments of its new line of industry-leading solar panels. This next generation line of products comprises panels rated at 220, 215 and 95 watts respectively, and is designed to maximize energy production from a limited solar array footprint in residential, commercial, and remote power applications.
The new line of solar panels, SPR-220, SPR-215 and SPR-95, offers efficiencies of up to 17.7 percent, producing up to 50 percent more power in a given roof area compared to conventional solar panels, while reducing installation costs per unit of power. The SPR-215 panel incorporates the company's uniquely attractive, all-black design that enhances the appearance of roof-mounted solar systems. The SPR-220 was recently listed by Photon Magazine as the highest efficiency panel available worldwide.
Sales figures for photovoltaics are not the numbers to watch. Prices are key. I'll be a more excited when photovoltaics costs stop rising and start falling again. I'll be a lot more excited about photovoltaics when prices start falling rapidly.
Technology Review has an article reviewing the prospects of diesel hybrid vehicles. PSA Peugeot Citroën has demonstrated a record efficiency diesel hybrid but the diesel and the hybrid both add to the total cost.
What's holding back commercialization is cost. A diesel-powered car in Europe already costs $1,750-2,400 more than an equivalent gasoline model, and PSA estimates that making a diesel hybrid could double that premium. Hence, PSA says controlling costs will be a challenge, but it is starting to engineer cost-shaving solutions.
Note that even in Europe with much higher gasoline prices the diesel hybrid is still seen as too expensive to justify the fuel savings.
But diesel hybrids would be more efficient than gasoline hybrids.
What's clear is that diesel hybrid technology has significant potential. According to a 2003 study by MIT's Laboratory for Energy and the Environment, a study that remains one of the most comprehensive projections for propulsion technologies, diesel hybrids should outperform nearly all other propulsion technologies through 2020 -- including fuel-cell cars that run on hydrogen derived onboard from gasoline. Fuel cells using pure hydrogen offered a marginal benefit in efficiency, but only when combined with hybrid technology, and at a significantly higher price.
But the hydrogen fuel cells only make sense if or when materials are found to store hydrogen at room temperature. If active air conditioning is needed to keep the hydrogen cold then cars will use energy even when stationary.
In theory fuel cells burning liquid hydrocarbons might surpass diesel engines in efficiency and would not suffer the hydrogen storage problem.
What will mature more rapidly? Battery technologies or fuel cell technologies? If battery technologies mature more rapidly then the world could move toward all electric vehicles. If fuel cells mature more rapidly then battery improvements could still get used in combination with fuel cells to power fuel cell hybrids. Batteries allow regenerative braking to capture energy that would otherwise be lost. Unless a fuel cell design can enable a non-battery dependent method of capturing the braking energy the role of battery-based hybrids seems set to grow even if fuel cells start competing with the internal combustion engine.
Technology Review has another article reporting on an advance at the University of North Carolina at Chapel Hill that may greatly reduce the cost of fuel cells.
Joseph DeSimone, the UNC-Chapel Hill chemistry and chemical engineering professor who heads the lab where the work was done, thinks they can increase the membrane's surface area 20 to 40 times by using different patterns, increasing the power density proportionately.
Such improvements in power density mean that a much smaller fuel cell could provide adequate power for a vehicle. The material is also easier to work with, which should reduce manufacturing costs.
They mention that these fuel cells might work well with methanol. I'm guessing the fuel cell cost problem is going to get solved before the hydrogen storage problem. So initial vehicle fuel cells are probably going to burn liquid hydrocarbons.
Nuclear power is destined to play a major role in America's energy future, but the industry needs more young scientists, a leader of the U.S. Nuclear Regulatory Commission (NRC) told an MIT crowd recently.
In the near future, U.S. utilities will seek to build 17 new nuclear reactors at 11 sites to go online by 2015, but NRC Commissioner Peter B. Lyons says that will be an "immense challenge," partly because the industry is losing people to retirement and there is a dearth of young people going into science and technology.
I'm surprised to hear him claim so many nuclear reactors will not just begin construction but actually go online by 2015.
Lyons sees wind and solar limited by their intermittent availability.
He predicted that the "intermittent character of solar and wind" will prevent them from playing a dominant role as future energy sources. "I don't know how to get a large percentage -- as much as 15 or 20 percent -- from intermittent sources," he said.
Coal may be tapped for electricity needs but will require new cost-efficient and environmentally friendly plants. "The only other source is nuclear energy," Lyons said, and for nuclear energy to play a "strong supporting role, the public has to be confident of the safe and secure operation of existing plants."
Dynamic pricing would allow solar and wind to play marginally larger roles. However, there's a limit to how far market forces are going to shift demand around to the times when the wind blows and sun shines.
In order for solar and wind to entirely displace fossil fuels we'd need to develop much cheaper ways of storing electricity. That will probably happen some day. But in what decade? The cost of these power sources plus the cost of their storage has to come in under the cost of coal and nuclear for them to supply all or even most energy needs.
If one really wants to phase out fossil fuels entirely then the substitutes have to compete on cost. Currently electricity is one of the most expensive ways to heat a house. Heat pumps and geothermal heat pumps help improve electricity's competitiveness. But so far I've yet to see a strong clear economic argument for how electricity could compete for heating with electricity's becoming much cheaper. Electricity stands a better chance (and hence nuclear, wind, and solar stand a better chance) of competing for transportation energy due to advanceds in battery technologies.
For most of our electricity needs our choice remains between coal and nuclear. If you oppose nuclear you de facto support coal. Either that you support higher prices for energy (and some do). Some who oppose nuclear power take offense at this line of argument. But what competitive alternatives are there? Conservation (which really means increased energy efficiency) costs effort and money. People aren't going to make bigger efforts to conserve without higher prices. Though I'm the first to admit (and support) regulations on building designs and appliance designs can accomplish some increases in energy efficiency. Still, even a sudden shift in public willingness to demand more efficient new homes won't eliminate most of the home demand for fossil fuels.
The only way to produce more choices for energy sources is to make a bigger effort at research. The same is true for ways to increase energy efficiency. But energy efficiency improvements will not draw an end to the fossil fuels age. Only cheaper non-fossil fuels energy sources will do that.
I keep hoping that fossil fuels will run out and necessity will force us to switch to other energy sources. However, dramatic stories about technological advances to extract far more fossil fuels from the ground keep popping up. Enhanced oil extraction, oil shale extraction, oil tar sands extraction, coal liquification, and other fossil fuels technologies are going to keep fossil fuels around for a long time unless we make much bigger efforts to develop far better technologies for non-fossil fuels energy sources.
An ICM poll of Brits for The Guardian appears to show a widespread willingness to sacrifce and reduce energy consumption to prevent global warming.
About a third of the UK's greenhouse gas pollution comes from domestic heating, and the poll reveals that people would be willing to spend an average of £331 to make their homes more environmentally friendly, even if the move brought them no direct cost saving. Only 16% said they would not pay anything, with 32% willing to invest over £100 and 8% more than £1,000. More than half (51%) said they or their family had boycotted a company because its products damage the environment.
Excuse me for asking a rude question but if these folks are so willing to spend for the environment why haven't they already done so? How can they be willing to spend an average of £331 (about $577 dollars)? They've had plenty of time (years, decades) to do that spending already. I doubt they are spending £331 per year on home insulation and just haven't gotten around to making their 2006 expenditures for their next triple paned argon glass window for another room in the house.
The poll suggest that voters do not share the prime minister's assertion that policies to drive the economy forward should take precedent over those to address climate change. Asked which two areas should be priorities for the government, 28% highlighted action to tackle climate change and 16% wanted the economy to grow faster. The signal from those aged 18-24 was clearer: 35% picked climate change and 9% the economy.
People want lots of stuff done by other people which they do not have to pay for themselves.
Oh, but look at what sacrifices we are making.
Some 82% of households said they had turned the central heating down, 75% had installed low energy lightbulbs, 25% had cycled at least one journey instead of using the car and 24% said they had decided against a holiday that involved flying.
Did they cycle for the exercise? To lose weight? To see the scenery? Or maybe to save money for that trip to Thailand next winter?
Do these poll results represent a strong willingness on the part of the British people to sacrifice for the environment? No, of course not. How did British aircraft emissions rise by 12% in one year if the British people are willing to curb their own fossil fuels consumption? Foreign tourists? I doubt it.
The text of the draft "open skies" treaty, obtained by the Guardian, is likely to alarm environmental activists who argue that the seemingly unstoppable growth in air travel is among the main contributory factors to global warming. Aviation emissions rose by 12% last year and now account for about 11% of Britain's total greenhouse gas emissions - the fastest growing sector. The government's chief scientific adviser, Sir David King, has described global warming as a bigger threat to the world than global terrorism.
Who is using all that aviation fuel? Basically anyone who can afford it. Why does the US use more fuel per capita than Europe? Higher average per capita GDP. More people can afford more airplane trips, bigger houses, bigger cars.
I'd love to see installation of R80 level of building insulation become enviro-chic like Toyota Priuses are in my neighborhood. But the Priuses are just so much more visible as a way to make a statement. Noone can see your insulation and few will notice whether your window panes have fresh putty to prevent air leaks. Besides, the money they save on fuel helps to pay for heating the hot tub and Priuses are cheaper than a big SUV.
Update: Governments that want to encourage conservation are missing the boat by not more loudly promoting improved building efficiency. Trying to force people into smaller vehicles runs up against the human desire to live the high life. But improved building efficiency doesn't face the obstacle of conflicting with basic human desires
Governments could make building efficiency differences more visible in the market through inspection when houses are sold where each house would get rated for efficency. Also, for new house construction in addition to a basic minimum ordinance for insulation local governments could adopt a standard for rating buidlings by scales that quantify how much a house exceeds the minimum. Then when houses go for sale the energy efficiency of a house could be a selling point and the market would reward more efficient houses with higher valuations. Market incentives would produce more efficient housing.
US President George W. Bush recently spoke at a Johnson Controls battery technology development facility in Milwaukee Wisconsin and Bush is showing signs of taking seriously his stated support for accelerating the development of new energy technologies across a wide range of technologies (which is not to say I agree with him on all points).
Secondly, government can help. Government provides about a third of the dollars for research and development. Two-thirds come from the private sector, one-third comes from the government. And so I propose to double the federal commitment to the most critical basic research programs in the physical sciences over the next decade.
He is starting to put some money where his mouth is.
Now, I laid out what's called an Advanced Energy Initiative. And a cornerstone of the initiative is a 22 percent increase in funding for clean energy research at the Department of Energy. And it's got two major goals, or two objectives. First, to transform the way we power our cars and trucks. And, secondly, to transform the way we power our homes and offices.
We can't move much of the car market to hybrids until battery costs fall and battery storage capacities rise. But big improvements in building energy efficiencies are achievable using already existing technologies. I think improvements in building efficiency are easier to achieve than improvements in vehicle efficiency because people resist riding in smaller cars and with less powerful engines. So we need new tech to improve vehicle efficiency. But better building insulation does not clash as much with lifestyle desires. Though some people want lots of windows and that does reduce the level of insulation in buildings there's a lot of room for building efficiency improvements.
So let me talk to you about the first one. Our nation is on the threshold of some new energy technologies that I think will startle the American people. It's not going to startle you here at Johnson Controls because you know what I'm talking about. (Laughter.) You take it for granted. But the American people will be amazed at how far our technology has advanced in order to meet an important goal, which is to reduce our imports from the Middle East by 75 percent by 2025, and eventually getting rid of our dependence totally.
The first objective is to change the way we power our cars and trucks. Today's cars and trucks are fueled almost exclusively by gasoline and diesel fuel, which, of course, comes from oil. To transform the way we power the vehicles, we have got to diversify away from oil. I just gave you a reason from a national security perspective, as well as economic security perspective why reliance upon oil is not good for the United States.
And so here are three ways that we can do that, change our reliance from oil. First, invest in new kinds of vehicles that require much less gasoline. It's a practical thing to do. Secondly, find new fuels that will replace gasoline and, therefore, dependence on oil. And, finally, develop new ways to run a car without gasoline at all.
The most promising ways to reduce gasoline consumption quickly is through hybrid vehicles. Hybrid vehicles have both a gasoline-powered engine and an electric battery based on technologies that were developed by the Department of Energy. In other words, this technology came to be because the federal government made a research commitment. That's why I think it's double -- important to double research as we go down the next decade. The gasoline engine charges the battery, which helps drive the vehicle. And the twin sources of power allow hybrid cars and trucks to travel about twice as far on a gallon of fuel as gasoline-only vehicles. That is a good start when something that can go twice as far on a gallon of gasoline than the conventional vehicle can.
Bush is getting over the original obsession of his Administration on hydrogen and seems to be realizing that development of better batteries is a highly desirable and achievable goal. Well, better that political leaders learn late than never.
Bush even seems to be aware that switch grass would be better than corn as a biomass source of energy. We need better technology for converting the cellulose in the switch grass into more usable sugars. But that's a solvable problem.
Now, we're on the edge of advancing additional ethanol production. New technology is going to make it possible to produce ethanol from wood chips and stalks and switch grass, and other natural materials. Researchers at the Energy Department tell me we're five or six years away from breakthroughs in being able to produce fuels from those waste products. In other words, we're beginning to -- we're coming up with a way to make something out of nothing. And this is important because it's -- economics are such that it's important to have your ethanol-producing factories or plants close to where the product is grown.
That's why E85 has spread throughout the Midwest, that's where you're growing the corn. Pretty soon, you know, if you're able to grow switch grass and convert that into ethanol, then you're going to have availability for ethanol in other parts of the country.
E85 from corn ethanol is spreading because politicians subsidize it. Corn ethanol is not going to solve our transportation energy problem. Corn would be better used for heating. But corn doesn't scale. It requires too much land in order to make a serious dent in energy needs.
This is a long speech on energy and I'm skipping over his coal and nuclear comments. In a nutshell, he's for development of cleaner ways to burn coal. But he's not forcing coal burners to rapidly clean up their acts since that'd cost real money. He's also for a resumption of nuclear power plant construction in a big way.
He is for solar.
Another electricity source with enormous potential is solar power. Today Americans use small amounts of solar power, mainly to heat water or to power small consumer products like outdoor lights. After spending some time with you all here, I'm going over to Michigan to go to a company that manufactures thin film, photovoltaic cells. That's kind of a fancy word for cells that can generate electricity directly from sunlight.
The technology -- solar technology has the potential to change the way we live and work, if you really think about it. For example, roof makers will one day be able to create a solar roof that protects you from the elements and, at the same time, powers your house. And that's what these folks are working on.
The vision is this: that you will have -- that the technology will become so efficient that you'll become a little power generator in your home, and that if you don't use the energy you generate, you'll be able to feed it back into the electricity grid. The whole purpose of spending money on solar power -- and we intend to spend $150 million next year in funding for both government and private research -- is to bring to market as quickly as possible this important and impressive technology. It's really going to help change the way we live, we think, and we want solar power to become competitive by 2015.
The $150 million per year for solar is chump change. Some estimates place the wasteful corn ethanol subsidy at $3 billion per year. 20 years from now I bet we will be getting 10 or 20 or more times the power from photovoltaics than from corn ethanol.
He's also for wind. Go read the full speech if you are interested.
Update: I do not think Bush's recent speeches on energy are a huge step forward. A huge step forward would put a couple billion dollars a year into solar research, a couple billion into batteries, maybe a billion into accelerating pebble bed nuclear reactors or other advanced reactor concepts, and still other initiatives. These initiatives should be on a scale similar to the corn ethanol boondoggle but in productive directions rather than aimed at satisfying farmers and Archer Daniels Midland.
A good step forward for federal energy policy would include an initiative to make all new and existing federal government buildings extremely well insulated and energy efficient. This is called "leading by example". Bush could also call on local governments to raise standards for insulation on building code. Also, federal education funding could be diverted toward insulating schools and for installation of passive solar water and space heating systems. The money spent that way would cut fuel bills and make more local money available for education.
Still, I think it very helpful for Bush to state that elimination of US energy imports from the Middle East is a desirable goal and that energy is a national security issue. Yet here's the bottom line: Bush's actual policies on energy fall far short of his rhetoric on energy. The US government could very productively spend several billions a year more on a large range of energy research initiatives. The federal government could also lead by example and implement a lot of conservation measures for buildings and its vehicle fleet using existing technology.
As previously reported here once again the news is full of reports that Kyoto signatories are not meeting their emissions reductions targets. Greenhouse gas emissions are rising in Britain and hitting Kyoto emissions reductions targets is looking less likely.
A DTI spokeswoman said the UK's total carbon dioxide emissions, including the contribution from homes, cars and air travel, was now expected to total some 529 million tons by 2010.
That is 10.6 per cent below their level in 1990 - but compared with the Government's own target of a 20 per cent cut - or even the 12 per cent reduction required to meet Kyoto, they are not meeting requirements.
In 2004, the projection for total CO2 emissions in 2010 was 518 million tons, suggesting the UK is getting further and further away from meeting its targets.
The Brits would probably have to stop their economy from growing if they wanted to meet that target. Either that or they'd have to build a large number of nuclear power plants and wind farms in a hurry.
In the U.S., figures released by the Energy Information Administration at the end of 2004 showed that emissions had risen by 13.4 percent from 1990 levels.
But according to 2003 figures cited by Friends of the Earth Europe this week, some countries which, unlike the U.S., do have legally binding Kyoto targets are doing as badly, or even worse.
For instance, Austria was set a Kyoto target of -13 percent, but emissions are running at +16.6 percent. Italy's target was -6.5 percent, and its actual emissions are +11.6 percent. Others that are off target include Belgium, the Netherlands and Spain, while France, Britain and Germany are nearer to being on track.
Compared to the aggregate -8 percent target for the E.U.'s then 15 member states, the actual situation is -1.7.
"If current trends continue, Europe will not meet its Kyoto target," the green group said, adding that "if emission levels continue to develop as they did over the last three years, the [15 E.U. members'] emissions in 2010 will be +2.8 percent above of what they were in 1990."
The cost of emissions reduction rises with each additional step. The easier reductions come first. I expect bigger industry and consumer opposition for each additional attempt to cut emissions. Governments will favor imposing more regulations on industry than on consumers since the owners of capital are a much smaller number of voters than the employees. But the cost per quantity of emissions reduction is probably cheaper in the home than in the workplace.
Like other industrialized countries, Japan has committed itself to reducing its carbon emissions substantially by the year 2010 - in Japan's case to 6% less than 1990 levels.
But despite its good intentions, Japan's performance has been embarrassingly weak - carbon emissions have actually increased by nearly 8%.
Japan's problem is that it already has tried hard to make its economy energy efficient and therefore the Japanese have already adopted many more energy efficient practices and technologies that were relatively cheap to adopt.
One of Japan's difficulties is that it was already very energy-efficient at the time of the Kyoto treaty. The country has few natural energy sources of its own, making its vital manufacturing industries highly dependent on imported fuel.
So when the two oil shocks of the 1970s pushed up prices, Japan set about using its technological ingenuity to cut down on its fuel consumption.
There was a huge investment in nuclear power stations; Japan relies on nuclear power for one third of its electricity production.
That's the problem with conservation. It does not serve as a substitute for replacing fossil fuels with non-fossil fuels and there's a limit to how energy efficient an economy can become without a big hit in living standards. See my previous post on just how far the Japanese have already gone in shifting toward adopting conservation technologies.
Prices now average $ 5.63 to $ 5.90 a ton, according to the World Bank and think tanks. Futures for 2010 worldwide are averaging between $ 10.96 and $ 23.30, with highs above $ 30.
Estimates by the World Bank and private think tanks say Western Europe, Japan and Canada together may need somewhere between 2.5 billion and 3.0 billion tons of credits in the five years through 2012 to meet their commitments under the Kyoto Protocol. That comes to between 300 million to 800 million tons per year.
"Even 40 percent of the amount needed is going to be hard to reach," said Hitoshi Kurihara, manager of the public-private emissions investment team Japan Carbon Finance.
He estimates that the Kyoto Protocol could cost Japan as much as 2 trillion yen in carbon credits.
If the cost goes back up to $30 per ton and the needed tons goes to 800 million per year that'd be $24 billion per year. That's not a large figure compared to the sizes of the national economies in question.
The US economy has also become much more energy efficient in the last 15 years. But economic growth was faster then rate of increase in energy efficiency in the US.
Although overall net GHG emissions have increased more than 20% during the last 15 years, the economy as represented by the GDP grew 46%.
Still, there's one area where the US could do much more to make the US economy more energy efficient: Building codes. Require new construction to be built to higher insulation standards. That'd be a pretty cheap approach to take to increase energy efficiency.
Also, I favor making building energy efficiency a standard part of reports provided to home and commercial building buyers. Buildings could get constructed to some minimum level of efficiency. But an efficiency rating system could capture information about ways that a builder exceeded the regulatory minimum so that this information could be used as part of advertisements when buildings go on the market. Why not be able to easily find out that, say, a building's walls and roof have R70 insulation or triple pained argon glass windows or an orientation that increases solar heating?
Canada has consistently failed to meet its Kyoto targets and currently exceeds greenhouse gas emission targets by about 25 per cent.
Greenie commentators in many of the Kyoto Accord signatories point to the United States as irresponsible for failing to join in the Kyoto restrictions on CO2 and other greenhouse gases. But the Kyoto signatories are mostly failing to reach their emissions targets and some like Canada (whose press has conditioned much of its populace to look down on the United States) have done next to nothing to meet their treaty obligations. I see this moral posturing as a distraction from the discussion that really ought to take place: How best to accelerate scientific and technological developments in order to technologically obsolesce fossil fuels?
Canada's failure to meet its Kyoto limits flows in large part from a healthy rate of economic growth. Whereas Japan's smaller failure is a reflection of both a slower rate of economic growth and previous efforts to increase energy efficiency. The United States has performed similarly to Canada partly due to immigration driving up the size of the US population (more people consuming energy at US per capita rates of energy consumption) and faster economic growth than Europe.
What would be far more interesting than these country comparisons versus their Kyoto percentage reductions and increases since 1990 would be time graphs showing ratios of energy usage to per capita GDP adjusted to purchasing power parity (PPP).
A U.S. focus on developing cleaner technologies for the future was not enough to tackle the immediate threat from global warming, EU Environment Commissioner Stavros Dimas said.
"The U.S. still thinks that technology will find the answer," Dimas said, "but we know we need reductions" in fuel emissions.
Planet Earth to Stavros Dimas: carbon dioxide emissions will not decline until technological advances provide ways to more cheaply make non-fossil fuel energy. Technology is the answer. The political will does not exist - even in the Kyoto signatory nations - to pay a big price to reduce CO2 emissions. In late 2005 Tony Blair finally admitted that countries will not pay a high price for emissions reductions aimed at preventing global warming.
The second thing, though, is that I think – and I would say probably I’m changing my thinking about this in the past two or three years. I think if we are going to get action on this, we have got to start from the brutal honesty about the politics of how we deal with it. The truth is no country is going to cut its growth or consumption substantially in the light of a long-term environmental problem. What countries are prepared to do is to try to work together cooperatively to deal with this problem in a way that allows us to develop the science and technology in a beneficial way.
He's a slow learner. But at least he learned. Some are still in denial about the obvious.
Eyeing a successor treaty to the Kyoto Protocol, due to expire in 2012, Blair said despite U.S. concerns, there would have to be more decisive action to cut emissions.
"In my view, this can only be done if you have a framework that in the end has targets within it," he told a committee of senior parliamentarians. "If you don't get to that point...the danger is you never have the right incentives to invest heavily in clean technology."
U.S. President George W. Bush has rejected a targets-based approach in favor of developing clean technologies to curb greenhouse emissions. Remarks by Blair last year were interpreted as a sign he was moving toward the U.S. position, but Tuesday's comments are an apparent reassertion of his commitment to the Kyoto Protocol and a successor treaty.
China alone was responsible for almost half of greenhouse gas emissions in 2005. Probably it will become responsible for more than half in 2006 and an increasing percentage in future years. China is not going to sign up for emissions reductions. Only technologies that obsolesce fossil fuels will cut Chinese emissions.
What Stavros Dimas ought to say is that "if the Bush Administration thinks that technological advances are the answer then why is the Bush Administration doing so little to accelerate the rate of advance in energy technologies?" George W. Bush doesn't walk the talk. Dimas ought to call him on it. Similarly, Tony Blair ought to say "President Bush, I agree with your stated approach to energy. So why aren't you implementing it as policy?"
I don't know whether global warming will happen, to what degree, or with what trade-offs in costs and benefits (and there would certainly be benefits such as longer growing seasons and milder winters in the colder regions). But I continue to be interested in phasing out fossil fuels because we have other compelling reasons to develop replacements for fossil fuels. One such compelling reason is that fossil fuels produce conventional pollutants that hurt us down here on the ground much sooner than the theorized global warming. Another reason is that money sent to the Middle East causes problems for the rest of the world with Islam and terrorism and increases defense and security costs. Another reason for the United States especially is that imported oil is making a huge trade deficit even worse (now at 5.8 percent of US GDP).
Last but not least, cheaper alternatives would really be cheaper. Lower costs from the development of better energy technologies would enable much more rapid economic growth and higher living standards the world over.
CARSON - BP and Edison International said Friday they plan to team up on a $1 billion hydrogen-fueled power plant in southern California.
The plant, near the BP refinery in Carson 20 miles (32 km) south of Los Angeles, would come online by 2011 and generate 500 megawatts of electricity, about enough to power 325,000 homes.
Gov. Arnold Schwarzenegger said the plant would be the first in America to use a new process that uses a chemical process to produce clean-burning hydrogen from petroleum coke, a residue from refining crude oil.
Note that contrary to some news reports this is not a done deal. The costs are higher on this approach and BP wants government subsidies before going ahead with it.
While some articles on this story claim the petroleum coke is currently worthless this article says the petroleum coke from refineries is currently sold to Asia and used as an energy source.
Refineries in the South Bay and Harbor Area create about 17,000 tons of petroleum coke a day during the production of gasoline, diesel and jet fuel, officials said. BP Carson, which makes the Arco brand, alone creates about 4,000 tons a day.
The coke is not thrown away. It is often shipped to Asia, where it is simply burned as a fuel. It can also be used in the production of aluminum.
The BP-Edison project would consume about 5,000 tons per day, according to Ted Craver, CEO of the Edison Mission Group, the Edison subsidiary which will work on the project.
The proposed Carson project would combine a number of existing industrial processes to provide a new option for generating electricity without significant CO2 emissions. Petroleum coke produced at California refineries would first be converted to hydrogen and CO2 gases and around 90 percent of the CO2 captured and separated.
The hydrogen gas stream would be used to fuel a gas turbine to generate electricity. The captured CO2 would be transported by pipeline to an oilfield and injected into reservoir rock formations thousands of feet underground, both stimulating additional oil production and permanently trapping the CO2.
BP is hoping for tax incentives and regulatory incentives so that customers will buy the electricity which will be more expensive to produce.
Final project investment decisions will follow further study by the partners and review by the California Energy Commission and the South Coast Air Quality Management District. BP and EMG are beginning project discussions with state and federal government agencies and local stakeholders and are exploring options for selling the electricity the plant would generate. BP is in discussions with Occidental Petroleum to develop options for sequestering the CO2 in Occidental’s California oilfields.
The costs of hydrogen power are higher than those of traditional power plant fuels. As a result, the project will depend, in part, on incentives provided in the Federal Energy Policy Act of 2005 for advanced gasification technologies. In addition, continued progress on the California Public Utilities Commission's electricity "resource adequacy" procurement policies will encourage this first-of-its-kind facility.
Sounds like they want to extract hydrogen from the petroleum coke and in the process extract the carbon as carbon dioxide. Then they intend to pipe or otherwise ship the CO2 to oil fields while burning the hydrogen to generate electricity. My guess is that if the price of oil keeps going up the price of petroleum coke will rise as well. Perhaps in 2 years the unprofitability problem will have grown worse and this proposed facility won't get built.
I wonder how the cost of generating electricity using this method compares to the costs of generating electricity by burning corn. No need to sequester the CO2 from burning corn since corn gets its carbon from the atmosphere in the first place.
With wind farms popping up from New York to Texas to California, wind power is riding high in the saddle again. Explosive growth of more than 40 percent this year - 3,400 megawatts of new generation is expected - could make the United States the world's largest wind-power market, a new report shows.
State government mandates are a big reason why wind power equipment sales are hitting new records.
Among the biggest factors spurring growth are states taking the reins of leadership from the federal government on energy mandates. Eager to cut air pollution, global warming, and rising electric rates, at least 22 states have approved "renewable portfolio standards" - legislation requiring utilities to include renewable sources like wind, solar, hydro, and biomass in their energy mix.
At the rate wind power is being installed on the ridges and plains of North America - US and Canada - wind power will grow by 4,250 megawatts this year, compared with about 2,600 megawatts last year. If Congress renews the tax credit in 2007, the industry could be installing 6,000 megawatts a year by 2010, according to a new study by Mr. Chua.
The industry added about 2,500 megawatts of wind power last year, a record 35 percent increase, according to the American Wind Energy Association, an industry trade group. The country's wind capacity is more than 9,200 megawatts in 30 states, enough for 2.4 million average U.S homes.
Wind power still makes up less than 1 percent of the nation's electricity, but experts expect wind to generate at least 5 percent by 2020.
Whenever I see claims about wind capacity I always wonder whether the numbers represent maximum output in high winds (I suspect the answer is Yes). If so, what the average operating output is for most wind farms? 35%? 40%? I also wonder what percentage of the time each wind farm generates little or no electricity.
Suppose wind does supply 5% of US electricity by 2020. Sound like much? Not really. First of all, US electricity demand will rise by a lot more than 5% by 2020. So wind power will not prevent an increase in fossil fuels burned for electric generation. Given the high cost of natural gas and declining US natural gas production expect the fossil fuel of choice for electricity generation to continue to be coal.
The electric power industry continued growing in 2004. Electricity generation and sales rose for the third straight year to record levels, growing by 2.3 percent and 1.7 percent, respectively, over the 2003 levels, as the U.S. economy continued to grow.
3 years times 1.7% equals about 5%. So wind might supply 3 years or 20% of the electric power production growth that will occur in the next 15 years in the United States. Maybe wind could really take off and supply half of the future growth in demand. Yet even that rosier scenario would not prevent a big growth in fossil fuel (mostly coal) burning for electric power generation.
Wind power is not making gains due to falling equipment prices. The surge in demand for new wind turbine equipment was so strong that prices rose for 2006 deliveries.
The North American wind turbine market saw record growth in 2005; installations surpassed record levels seen in 2001 and 2003, with the majority of them onshore. From an industry that finally broke US$3 billion in 2005, the market is expected to more than double to just under US$7.5 billion in 2010. These figures, detailed in the EER study, factor significant price increases implemented for projects in 2006 and beyond, but also take into consideration greater vendor competition that will arise as local manufacturing capacity and new turbine models are introduced in the coming years. Improved competition will, however, not be sufficient to reduce prices to the extent they have risen for 2006.
Simply put, market share in 2005 was determined more by manufacturing capacity than by competitive strategies or items such as cost and product positions. All wind turbine vendors active in North America in 2005 sold-out of available capacity and therefore market share has been determined by how many turbines could be manufactured and delivered. The demand was even stronger than anticipated, and as a consequence, a turbine shortage transpired and availability became an important criterion for selection.
The oil price rise has driven up prices for a wide range of competing energy sources. The price of coal has doubled. In many parts of the country wood pellets have doubled in price. Natural gas is way up on declining domestic production and growing demand.
The price of coal will fall as more mines open in response to higher coal prices. Wind turbine prices will fall as factories ramp up production capacity.
Instead of having 99 billion barrels of oil reserves Kuwait might have only 48 billion with only 24 billion of those actually proven. So says a report in the Petroleum Intelligence Weekly (PIW). The PIW claims to have seen internal Kuwaiti documents that contradict their public oil reserve claims.
"PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records," the weekly PIW reported on Friday.
I am sorely tempted to say something sarcastic about dynastic governments and honesty in the Middle East. But I'll resist the temptation.
I have no idea where they got this figure from ... I don't think it's accurate,' Farouk Al Zanki, the chairman of state-run Kuwait Oil Company (KOC) said in Kuwait City.
I'd tell you how relieved I am to read their denial but I'm really trying hard not to say something sarcastic.
Jeremy Leggett, author of a new book The Empty Tank : Oil, Gas, Hot Air, and the Coming Global Financial Catastrophe (lest you be in any doubt where he stands on "Peak Oil" and in the UK I think the same book is titled Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis) , says that all of OPEC mght be over-reporting their oil reserves by 300 billion barrels.
But consider what A M Samsam Bakhtiari of the National Iranian Oil Company (NIOC) has told the Oil & Gas Journal about the existing-reserves question: "I know from experience how 'reserves' are estimated in major Middle Eastern and Opec countries, and the methods used are usually far from scientific, as the basic knowledge for such a complex exercise is not to hand." Bakhtiari is withering about Saudi Arabia's reserves hike of 90 billion barrels in 1990. But he is not too keen on his own national figures either. The BP Statistical Review cited 92 billion barrels of "proved" oil reserves at the end of 1993, but Bakhtiari preferred the estimate of a retired NIOC expert, Dr Ali Muhammed Saidi, who could add the proved reserves up to only 37 billion barrels.
Dr Mamdouh Salameh, a consultant on oil to the World Bank, agrees there is a 300-billion-barrel exaggeration in Opec's reserves. More recently, a former director of Aramco has said that Saudi Arabia's proved developed reserves stand at 130 billion barrels.
300 billion barrels would be about $20 trillion at today's market prices.
The big flap from a couple of years ago where Royal Dutch Shell was found to have greatly overreported their own oil reserves makes me give more credence to the claims that governments have overreported oil reserves as well. A lawsuit by mostly Dutch pension funds has brought the Shell oil reserves story back into the news just as the accusation about Kuwait reserves has surfaced.
The complaint alleges that between 1997 and 2003, Shell executives knowingly overstated the company's oil and natural gas reserves by an aggregate 33 percent (about 6 billion "barrels of oil equivalent," the standard metric used to express reserves). The pension funds also charge that the oil company inflated its reserve replacement ratio (RRR) — a key performance indicator in the oil business — and overstated future cash flows by a total of $100 billion over six years.
But in order to really overestimate on a far more massive scale you need the sovereign power of government.
Christopher Flavin, president of the Worldwatch Institute, argues that most oil is under the control of national oil companies whose public reports can not be trusted. (same article here)
Those who take a more sanguine view of the global oil prospect point to the 1.1 trillion barrels of "proven" reserves that are currently on the books of the world's oil companies -- equivalent to all the oil extracted over the past century, or more than 40 years of consumption at the current rate. Although those same figures appear in most official oil reports, it turns out that roughly three-quarters of the world's oil is controlled by state-owned companies, whose reserve figures are never audited and are based as much on politics as on geology. Many countries have added paper barrels to their reserves at times they weren't even looking for oil.
I do not trust the Middle Eastern governments to be either competent or honest in estimating their oil reserves. Anyone disagree?
I used to hope that the oil production peak would come sooner because it would force a migration to less polluting energy sources. However, unlike peak oil doomsters I expect a migration to coal, liquified and gasified coal, oil tar sands, and oil shale and that such a migration could happen pretty rapidly once it becomes clear that peak oil has been reached.
The disruption of the shift will have some economic costs. But we probably already have reached an oil price where coal liquification and oil shale extraction are economically viable. I hope Shell's in situ oil shale extraction technology works so that we do not have to have landscapes littered with expanded shale rock because we'll be using oil from shale one way or another.
I would rather build thousands of nuclear reactors than shift toward coal, oil shale, and oil tar. Certainly hitting the oil production peak will accelerate nuclear development. But a scaling up of nuclear reaction construction will take time and when peak oil hits the rush will be on to scale up other energy sources that can be brought on line more quickly.
I hope peak oil does not usher in biomass energy on such a scale that lots of rainforests and species bite the dust. Perhaps genetic engineering of crop plants can provide a way to reduce the footprint of biomass energy production. But environmentalists who want to save rainforests and species ought to be working overtime lobbying for more photovoltaics research and they ought to support nuclear energy development. Either that or bye bye monkeys and big cats.
U.S. policy in the Middle East is driven by baseless fears that an “oil weapon” can cut off our fuel supply, a Johns Hopkins researcher has concluded.
In a peer-reviewed journal article, Roger J. Stern argues that the decades-old belief that petroleum-rich Persian Gulf nations must be appeased to keep oil flowing is imaginary and the threat of deployment of an "oil weapon" is toothless. His review of economic and historical data also shows that untapped oil supplies are abundant, not scarce.
Stern’s analysis, titled “Oil market power and United States national security,” appears in the Jan. 16-20 online Early Edition of Proceedings of the National Academy of Sciences. In the article Stern argues that the longstanding U.S. security concern that our oil supply could be threatened is wrong.
The real security problem, says Stern, comes from market power. Persian Gulf oil producers, he says, collude to command artificially high prices that could never exist in a competitive market. Excessive OPEC profits result, he says. These contribute to instability in the region, terror funding and the likelihood that a Persian Gulf superpower could emerge if one state captured the oil production of its neighbors. Because of these threats, the United States has concluded it must use military force to block state-on-state aggression in the region and to contain terrorism.
“U.S. appeasement of the oil market power not only helps create these problems, it makes them inevitable,” said Stern, a doctoral student in the Department of Geography and Environmental Engineering. “Why do we follow this schizophrenic policy? We do it because we believe the ‘oil weapon’ might be used to reduce our supply if we somehow offend the OPEC countries. My research shows the oil weapon is completely implausible.”
According to the journal article, recent history shows that attempts to use an oil weapon have consistently failed. The idea, Stern says, dates back to the mid-1930s, when the League of Nations considered cutting off oil to Italy as punishment for its aggression in Ethiopia. The league realized the oil weapon couldn’t work, however, because non-league nations could continue to supply Italy. Keeping oil out of Italy would have required a blockade, an idea dismissed as impossible to enforce. What was true for Italy then is true for the United States today, Stern says.
What I've never understood about Washington DC elites who swallow this fallacy is if they really do believe it then why not act on this belief in ways designed to decrease US reliance on oil? Tens of billions of dollars get spent by the US each year on weapons development. If the Middle Eastern oil producers really do possess such a potent weapon then why not respond with a national security policy in the same way the US would respond to any other threatening weapon and develop "weapons" in the form of technologies that would render oil essentially obsolete?
If we are going to act as if we believe this fallacy why not at least make our response to the fallacy productive of a useful end? We could develop cheaper and cleaner energy technologies a lot more rapidly if the national security types in Washington DC treated an end to the oil dependency as a big national security gain for the United States. The end of the dependence on oil and other fossil fuels by the development of cheaper non-fossil fuels energy technologies would provide both environmental gains (cleaner air) and economic gains (cheaper energy and not imported either). Funding of the research would be far less expensive than the Iraq war too.
High oil and natural gas costs are leading to a shift toward biomass for heating. Stoves which burn wood pellets and whole wood are especially popular. The Carlisle Sentinel in Pennsylvania reports sales of wood pellet stoves are up for home heating.
Dogas says stove business is up because people “don’t want to pay the high prices” for heating oil— which, he estimates costs $1,200 to $1,500 per year.
The average person needs three tons of wood pellets per year to heat a home, which comes to only about $600, he says.
Or, cut your own wood
Wood stoves are even cheaper. They cost $450 per year, or less if a person cuts the wood, he adds. However, Dogas adds wood stoves require more work.
Wood pellet stoves are hard to come by due to a large recent increase in demand. Wood pellet prices have soared as well.
At Miller’s Stove Shop in Shippensburg, owner Richard Miller ran out of pellet stoves six weeks ago.
He also notes the price wood pellets went from $165 per ton last year to $250 per ton this year.
Weiss picked up 4 tons of coal in September, at $110 per ton, and simply dumped it through the basement window. Getting coal delivered costs more - about $180 per ton, said Groff.
A Binghamtom New York newspaper also reports higher fuel pellet prices.
Pellet stoves cost $1,500 to $3,500, depending on the model, dealers said. It takes 3 to 5 tons of pellets, on average, to heat a home over the typical Southern Tier heating season. Usually, one 40-pound bag is enough to heat a home for the day.
The shortage also has caused a rise in the price of pellets. A ton of pellets, which cost between $150 to $180 this summer, is now going for $220 — if you can get it.
At 2000 lb per ton a house that needs 5 tons of wood pellets for heating would cost about $1000 to heat for a winter.
Even when consumers find bags of pellets, they're often hit by sticker shock. Last year, bags sold for as little as $3, or $150 for a ton. But the additional cost of truck fuel for delivery of the pellets to the stores is being passed on to consumers. One Bowen Farm Supply employee said she'd heard of a gas station selling them for as high as $8 a bag.
But a $5 bag of pellets can keep the home fires burning for 24 hours. That would translate to a monthly bill of $150.
Chimney sweep Jeremy Biswell, owner of Flues Brothers in Overland Park, Kan., says a wood stove is always a better choice for heating than an open hearth, even for occasional use.
"Typically in an open fireplace, you're losing 90 percent of the heat up the flue," Biswell said. That translates to 10 percent efficiency. By comparison, he said, older wood stoves are 50 percent to 60 percent efficient, and new ones are 71 percent to 78 percent efficient. "With a wood stove, you're getting more of that heat back into the house."
But old wood stoves and fireplaces are big polluters. 10% of Washington state's air pollution is reported to be from burning wood and the American Lung Association of Washington discourages wood burning inside the home due to potential health harms. However, wood is popular in the Puget Sound area and newer stoves are at least an order of magnitude cleaner than older stoves and fireplaces.
But burning wood as an alternative fuel already has a following here. According to the federal government's 2004 American Housing Survey, 7,000 King County households — 1.6 percent — use wood as their main heating fuel. In Snohomish County, 14,600 homes do, or 5.6 percent.
If you burn wood, you owe it to your neighbors to minimize emissions.
Make sure you have a wood stove certified by the EPA that also meets Washington state standards. (Check the list at www.orcaa.org/woodstovecert.html.) Uncertified stoves (sold before 1992) and fireplaces may release 40 to 60 grams of smoke per hour, compared with 2 to 5 grams per hour from a newer EPA-certified stove. If you're getting rid of an old, uncertified wood stove, take it to a scrap-metal recycler; it's illegal to sell it or give it away.
But there's a worse polluter for heating: Unfortunately coal is also making a comeback for home heating.
Numbed by the thought of $400 heating bills, people are turning back to the age-old fossil fuel that kept their parents and grandparents warm. While not the cleanest option, the black stuff is so cheap that some customers are waiting three months to buy a coal stove or furnace.
"We can't get the stoves fast enough," said Brenda Groff, owner of Groff's Stove Shop in Boyertown, Pa. "People are so desperate they want the display model."
Better wood pellets or corn for heating than coal. At least the corn and wood do not emit lots of mercury and arsenic.
Propelled by high energy costs, federal incentives, and an eased licensing process, at least 104 projects in 29 states - with 2,400 megawatts of new capacity - have been granted "preliminary permits" by the Federal Energy Regulatory Commission (FERC), which regulates hydropower development. Many other projects in the works have not yet been officially reported by FERC, observers say.
This is happening against a backdrop of fights by environmentalists to get old dams torn down. Make energy prices high enough and I think the rate at which environmentalists win the dam battles will drop.
If the best existing dams were upgraded to generate electricity they could generate 17 gigawatts of power.
About 4 in 5 projects on the books are tiny - producing less than 20 megawatts of power. But if all 104 projects now in the planning stages are built, they would contribute 2.4 gigawatts to generating capacity nationwide.
The potential exists for much more, say federal researchers. Of 80,000 existing dams, only about 2,500 generate electricity. Upgrading those hydropower dams could boost power by 4,300 megawatts. Retrofitting the most promising of the remaining 77,000 dams could generate as much as 17,000 megawatts, according to a recent US Department of Energy Report.
Would you rather have more dams for electricity or more coal burning power plants or more nuclear power plants?
To put that potential 17 gigawatts of additional hydroelectric power in perspective, in the United States the US government's Energy Information Administration projects 174 gigawatts of additional electric power generating capacity from coal by the year 2030.
In the AEO2006 reference case, the projected average prices of natural gas and coal delivered to electricity generators in 2025 are 31 cents and 11 cents per million Btu, respectively—higher than the comparable prices in AEO2005. Although the projected levels of coal consumption for electricity generation in 2025 are similar in the two forecasts, higher natural gas prices and slower growth in electricity demand in AEO2006 lead to significantly lower levels of natural gas consumption for electricity generation. As a result, projected cumulative capacity additions and generation from natural-gas-fired power plants are lower in the AEO2006 reference case, and capacity additions and generation from coal-fired power plants through 2025 are similar to those in AEO2005. In the later years of the AEO2006 projection, natural-gas-fired generation is expected to decline, displaced by generation from new coal-fired plants (Figure 5). The AEO2006 projection of 1,070 billion kilowatthours of electricity generation from natural gas in 2025 is 24 percent lower than the AEO2005 projection of 1,406 billion kilowatthours.
In the AEO2006 reference case, the natural gas share of electricity generation (including generation in the end-use sectors) is projected to increase from 18 percent in 2004 to 22 percent around 2020, before falling to 17 percent in 2030. The coal share is projected to decline slightly, from 50 percent in 2004 to 49 percent in 2020, before increasing to 57 percent in 2030. Additions to coal-fired generating capacity in the AEO2006 reference case are projected to total 102 gigawatts between 2004 and 2025, as compared with 86 gigawatts in AEO2005. Over the entire period from 2004 to 2030, 174 gigawatts of new coal-fired generating capacity is projected to be added in the AEO2006 reference case, including 19 gigawatts at CTL plants.
Nuclear generating capacity in the AEO2006 reference case is projected to increase from about 100 gigawatts in 2004 to about 109 gigawatts in 2019 and to remain at that level (about 10 percent of total U.S. generating capacity) through 2030. The total projected increase in nuclear capacity between 2004 and 2030 includes 3 gigawatts expected to come from uprates of existing plants that continue operating and 6 gigawatts of capacity at newly constructed power plants, stimulated by the provisions in EPACT2005, that are expected to begin operation between 2014 and 2020.
Coal is cheaper than natural gas. But burning coal generates more pollution. Making coal burn with less emissions raises the cost of burning coal. About half of the new electric power generation capacity added between now and 2030 is projected to be from coal.
Currently the whole world has about 350 gigawatts of nuclear electric capacity. But China might build 300 gigawatts of nuclear power plants by the year 2050.
If you do not want higher energy prices and you do not want energy sources that pollute then the only remaining option is to greatly accelerate the rate of advance of energy technologies. But I do not see a political consensus in favor of that option in the United States or in Europe for that matter. Over in China they are going to burn enormously larger quantities of coal and build dozens or hundreds of nuclear power plants. The US is sticking with the use of increasing amounts of coal. Technological advances will eventually make coal less bad than it is today. But it is not clear to what extent governments will force the coal burners to use more expensive technologies to burn coal more cleanly. Is there any prospect for coal gassification to make cleaner coal at no higher total cost?
At the heart of the Regional Greenhouse Gas Initiative (RGGI) is a "cap and trade" program that sets a fixed limit on CO2 emissions. The right to emit the gas then becomes a tradable commodity on Jan 1, 2009. Companies that produce less carbon dioxide can sell their credits to others, giving an economic incentive to cut emissions and sell, rather than buy, credits.
The RGGI caps regional CO2 emissions at 121.3 million short tons through 2014, then cuts them to 10 percent below that level by 2018. Some say the pact will cost households an additional $3 to $24 per year on their electric bills, although the RGGI governors expect new technology and energy efficiency to reduce rates.
As I've previously argued, for electric power our three choices are coal at its current level of dirtiness, nuclear, or higher prices. The New England states (which already have higher prices) have opted for still higher prices. Keep in mind that New England is more densely populated than most of the US. So in order to achieve the same level of air quality as the plains or Rockies states New England has to impose tougher and more expensive emissions regulations.
Though in this case the New England states are pursuing emissions reduction for a gas that mainly affects temperature (and in a way that would make winters less severe). The New Englanders would benefit more by incurring the same level of additional costs to cut particulate, mercury, and other pollutants that have more direct health impacts. While a CO2 reduction will reduce some other pollutants as well the same amount of money could reduce those other pollutants much more if CO2 reduction is not part of the equation.
As for increased energy efficiency: The New England governors would need to increase electric bill costs by much more than $24 per year to get people to install a lot of more energy efficient devices. But the best way for New England to reduce energy usage would be to spend on reducing the use of fossil fuels for heating. Better insulation and solar heating would provide the best bang for the buck.
We ought to solve the potential CO2 emissions problem in the longer term by obsolescing fossil fuels. If one is to believe Ray Kurzweil (see The Singularity Is Near: When Humans Transcend Biology) then by the 2020s artificial intelligence will solve the nanotech problems and solar power will provide us with all the power we need. If Ray is right (and he might well be) then we ought to focus environmental efforts on improving the air quality for breathability so we can avoid illness in the shorter run. Then let rapidly advancing technology obsolesce oil long before the temperates rise by much.
If Ray is right then the New Englanders have their environmental priorities wrong.
In the first three quarters of this year, U.S. venture-capital firms funneled $67.7 million into the solar-energy sector, up from $31.4 million for all of 2004, according to the National Venture Capital Association, an Arlington, Va., trade group.
That's more than 30 times the amount invested 10 years ago and presents more evidence that record-high energy prices have incited a monumental push for cheaper forms of energy.
The NVCA says solar investments for the first three quarters of 2005 represented more than a third of the $194.6 million invested by venture-capital firms in the entire U.S. energy industry.
The article also reports revenues for solar energy sales have grown 50% in the last year. However, a venture capitalist quoted in the article says few solar start-ups are near to getting new products to market and most start-ups are basically doing science projects hoping for a breakthrough. So while the higher oil and natural gas prices have stimulated demand for solar equipment no big price breakthroughs resulting from technological advances are in sight.
I expect the price of oil to stay high enough in future years to maintain higher levels of investments in alternative energy technologies. But one can only guess when investments will finally pay off with price competititve alternatives to fossil fuels.
The cost of solar repels many homeowners. Solar panels, storage batteries and installation start at about $20,000 for modest dwellings, and $25,000 to $30,000 for three-bedroom homes. It’s more depending on the direction the house faces and the duration of sunshine in winter months, and the battery systems require monthly monitoring and maintenance.
The first step is making homes more energy-efficient with extra insulation and fluorescent lighting, Deri said.
Deri also recommends systems that only supplement existing systems - solar water heaters, or solar air systems - which cost from $1,500 to $5,000."They pay for themselves in three to six years," he said.
The biomass story is similar to the solar story: Biomass and solar are both more competitive for heating than they are for electric generation or transportation. Yet electricity and cars get more attention than space heating. A pity that. A lot more people ought to be using corn and solar to heat their houses and commercial buildings.
COLUMBIA, Mo. - Ameren Corp. is considering building a second nuclear power unit in Callaway County, although the idea is only in the discussion phase, said Gary Rainwater, chief executive officer of Ameren.
Rainwater expects such a plant to take 5 years to construct and to go online in 2017 at the earliest. He says on paper nuclear power looks like the best choice.
Rainwater said the Electric Power Research Institute projects that tighter EPA carbon dioxide emission rules could double the cost of burning coal to more than 8 cents a kilowatt hour. The cost of nuclear power, meanwhile, would remain flat at about 4.5 cents per kilowatt hour.
Think about it from the perspective of Rainwater and other CEOs of electric power plant operators. Right now the price gap between coal and nuclear is pretty small. On the one hand fear of nuclear elicits much more public opposition. But coal puts out much more pollution in the form of particulates, oxides of sulfur and nitrogen, mercury, and carbon dioxide. If electric power plant operators build more coal plants and emissions regulations get tougher then they'll be stuck with large additional costs. Then if competitors build nuclear plants the coal operators will get undersold in competitive electric power supply markets. A choice to build more coal plants means they could incur massive losses. But if they build nuclear plants then their risk of additional costs due to regulatory changes are much lower once the nuclear plants are in operation.
I keep saying that we have three choices for more electric power in the foreseeable future:
A) More coal plants with more pollution.
B) Nuclear power.
C) Higher prices.
An opponent of nuclear power has to then choose between options A and C.
In California legislators and regulators have clearly chosen option C (and utility bills in California already bear witness to this fact). California Electric power generators have regulatory requirements to get more power from renewable sources.
The fundamental feature of California's new program is the requirement that all major utilities in the state buy 1 percent more renewable energy each year so that at least 20 percent of their total electric supply portfolio is made up of renewable generation by 2017. This requirement could result in procurement of up to an additional 21,000 GWh of renewable energy each year.
When you see news reports that California power generators are making deals to build wind farms and large Stirling solar electric generator facilities out in California deserts this is not a sign that market costs for these power sources have fallen to equal conventional sources. To consider wind and solar as competitive we have to assign high external costs to conventional sources. While those external costs do not show up in market costs and so perhaps Stirling solar and wind really are competitive in some situations once external costs are accounted for. Hard to tell because external costs are hard to price (and I welcome links in the comments to sources for external costs of different power sources).
Wind doesn't work as an option in areas with little wind such as the American Southeast. Also, the sun obviously does not shine at night and shines less in the winter. In the longer run better batteries technologies and long distance superconductivity technologies will eventually solve some of the problems that come from inconsistent availability of wind and sun. But for the foreseeable future we still need electric power sources that can satisfy baseline demand growth. So in this era of high natural gas prices we end up coming back to nuclear or coal for electric power generation.
Check out this table of electric power costs by sector and by state for the United States. (and see here for more charts and tables from the US Department of Energy Electric Power Monthly report). California and the Northeast have high electric costs as do outliers Alaska and Hawaii. The rest of the United States as much lower electric costs. While Californians pay over 12 cents per kilowatt hour (kwh) and New Englanders pay over 13 cents per kwh almost all of the rest of the nation pays less than 9 cents per kwh and a few even pay less than 7 cents per kwh. Proximity to hydroelectric dams and coal fields account for some of the lower cost regions. But also lower population density states can tolerate higher emissions per kwh generated and still have cleaner air to breathe than the higher population density states.
So what do you prefer? Nuclear, coal with current emissions regulations, or higher prices?
Update: While some might protest we really do face the three choices listed above. I'm not arguing that "higher prices" is a bad choice. Whether it is or not depends on what the external costs are for nuclear and for coal with current allowed emissions levels. But we need to start off with a clear understanding that before we consider external costs the choices we face differ in price.
We face several higher priced choices:
C.a) Coal at varying levels of increased emissions controls. Prices would rise. Pollution levels would drop. Electric consumption would not grow as rapidly.
C.b) No more power plants. Increased demand would translate into higher prices. This would force people to adopt more conservation measures. It would also lower living standards.
C.c) Solar Stirling. Only works during the day. In theory we could use Solar Stirling so that coal plants could shut down during the day so that total emissions are reduced.
C.d) Wind. Simillar to Solar Stirling in that it would cost more and not be available all the time. So we'd still need more coal (or nuclear) plants to provide reliable baseload supply. But the coal plants would not operate as much per plant on average.
C.e) Solar photovoltaics. More expensive than Solar Stirling or Wind. But allows local generation and use.
C.f) Lots of Liquified Natural Gas terminals. These are widely opposed for safety reasons but could probably bring in enough natural gas to meet the increased electric demand with more natural gas electric plants. Domestic natural gas production is declining in the US and Britain. World natural gas demand is going to rise. Prices will rise as well.
If we choose a tough enough version of option C.a (in the extreme: zero emissions) while also disallowing new nuclear plant construction we will automatically get some amount of the other options as the price for coal electric rises.
The energy debate comes down to the question of how much are you willing to pay to avoid risks or external costs that you oppose?
Now, in the longer run we'll have technological advances that will reduce risks, external costs, and market prices for most of these options. Some day photovoltaics will be much cheaper and batteries will allow easier shifting of solar power from day to night. Advances in nuclear power plant technology will reduce waste problems, costs, and risks. Wind and Solar Stirling will advance and get cheaper as well. I repeatedly have argued for a sort of massive Manhattan Project to develop a large range of energy technologies and far more formidable figures such as the recently deceased Nobel Laureate scientist Richard Smalley have made this argument as well. But right now we need more electric generator plants and we will need more next year and the year after that and so on. We are faced with today's choices and today's costs for each choice. So given today's choices which do you choose and why? Do you favor higher priced choices?
Update II: One key question in the energy debate is just how big are the external costs for each energy source? How to measure these costs? How big is the uncertainty in those measurements?
Also, some oppose nuclear power on national security grounds (e.g. the possibility that terrorists could blow up a nuclear bomb next to a nuclear reactor and thereby release large amounts of nuclear materials in surrounding areas - I think terrorists would blow up NYC or DC first though). But fossil fuels have their own national security costs that don't get the attention I think they deserve. Saudi money has corrupted portions of the political class in Washington DC. Oil money funds the spread of Wahhabism and radical Islam. A portion of the US defense budget goes to US forces in the Middle East. How to measure those costs? They seem pretty big to me.
For a number of reasons I favor government funding of energy research aimed at developing energy sources that have much lower external costs. First off, new energy technologies that would be cheaper than fossil fuels would lower overall energy costs even at market prices. Plus, the cleaner technologies would lower the external costs that regular market failure and political market failure allow to happen. In addition, national security costs would be reduced for a number of reasons as less money flowed to Middle Eastern oil producers and political competition for influence over the Middle Eastern oil greatly dedlined.
MONTREAL, Dec. 6 - Under pressure from other industrialized countries at talks here on global warming, the Bush administration announced on Tuesday that it had signed an agreement with a coalition of energy companies to build a prototype coal-burning power plant with no emissions.
The project, called FutureGen, has been in planning stages since 2003. But the Energy Department said here that a formal agreement had been signed under which companies would contribute $250 million of a cost estimated at $1 billion.
A lot of coal plants will get built and put into operation during the 10 year construction time for the FutureGen plant. Once it is completed new coal plants will not all get built using the FutureGen technologies. Even more advanced coal emissions control technologies will probably cost more than not using them.
On the one hand, acceleration of technological advances to reduce emissions is a good thing. On the other hand, note that the emphasis is on developing technology that will lower the cost of emissions control. The emphasis is not on taxing pollutants or simply outlawing pollutants. Well, why is that? Industry lobbies and people do not want to pay more for electricity.
I tend to favor the expenditure of taxpayer money to accelerate research into ways to produce energy that are inherently cleaner in large part because there's a limit to how much people will impose costs on themselves in order to reduce external costs on others. Humanity's fairness and virtue are pretty limited. We evolved to have these limitations. Research will eventually produce cleaner technologies that will get deployed and displace fossil fuels by being cheaper even before considering external costs. This can be accomplished without changing or improving human nature.
Of the two lines, the Alaska Gas Pipeline is the behemoth. Its most likely route would stretch 1,700 miles from Alaska's Prudhoe Bay to Canada's Alberta province. The line would cost $20 billion and take a decade to build, but the project has picked up momentum under the whip of Alaska Gov. Frank H. Murkowski (R) and $18 billion in loan guarantees approved last year by Congress.
The second line, the Mackenzie Valley Pipeline, would start 250 miles east of the Alaska line, on Canada's portion of the Beaufort Sea. It would snake 800 miles through forests of spruce and pine along the Mackenzie River -- one of the world's longest with no bridge or dam. This all-Canada route would cost $6 billion and is predicted to take three years to complete once construction begins.
I can see one free market argument for the loan guarantees: Most of the risk is political. If the government was stuck with the bill for a partially completed pipeline that was stopped due to environmentalist opposition then the government would be less likely to bow to environmentalist pressures to stop the project.
Environmentalists are opposed but see at least one pipeline as inevitable. I figure they both will get built. Declining US natural gas production in the lower 48 states makes the economics too attractive and both the US and Canadian publics do not want high heating and electric bills.
The bigger footprint, after the construction crews have left, will be in opening the mineral-rich area to further exploration and development.
Mostly for that reason, some environmentalists favor the Alaska Pipeline, which follows the route of the existing oil pipeline and Alaska Highway.
"We think it's the lesser environmental evil," said Stephen Hazell, a director of the Sierra Club of Canada. Environmental groups have largely bowed to the inevitability of at least one of the projects.
The Canadian pipeline is being delayed by negotiations with native tribes. Environmentalists are more opposed to the smaller Canadian project because it would open up an area for development that currently is hard to reach. The roads built in Alaska for the oil pipeline could be used for the Alaskan natural gas pipeline and so won't do as much to make inaccessible areas accessible.
The environmentalists also fear the Canadian natural gas will be used as an energy source for harvesting oil from the Alberta tar sands. About that fear: The environmentalists who want to bring an end to the age of fossil fuels should spend a lot more time promoting the idea of a broad research effort to develop cleaner technologies. Their fight against fossil fuels is doomed because as soon as prices rise high enough the majority of the public will swing around toward supporting more pipelines and drilling. Fossil fuels use will not get regulated out of existence. Only lower prices for other energy sources will bring an end to fossil fuels use.
From Maine to Florida, from Virginia to Missouri, as much as half the United States confronts the possibility that harshly cold weather will lead to restrictions of natural-gas supplies. In some places - areas heavily dependent on natural gas to produce electricity - the prospect of "rolling blackouts," or controlled power outages, is much higher than in previous winters.
Any natural-gas cutoffs would primarily affect electric-power plants and factories fueled by gas, not homes, and be most likely in the Northeast.
If cold deepens for prolonged periods, the likelihood of interrupted natural-gas supplies rises to 30 percent in the Northeast and to 10 percent as far south as Florida and as far west as Missouri, according to a recent report by the Interstate Natural Gas Association of America (INGAA), a trade association representing gas pipeline companies. In a "worst-case" scenario, chances of interrupted gas rise to 40 percent for the Northeast and 25 percent across the eastern seaboard.
Nuclear power anyone?
New England is more dependent on natural gas.
Overall, 23 percent of America's electricity-generating capacity is fueled by natural gas. In New England, however, fully 40 percent of electricity is drawn from natural-gas-fired power plants, up from just 17 percent in 1999.
Rolling blackouts would probably lessen opposition to liquified natural gas terminals for off-loading LNG ships. The United States has much higher natural gas prices than most of the world because US production is declining and we do not have enough LNG terminals.
The main energy choices for the future are coal and nuclear. Opposition to nuclear amounts to support for coal. In Britain the debate is now on for whether to re-open long closed coal mines. Many of Britain's nuclear power plants will close by the 2020s. Wind power can't make up for those losses combined with increased demand from economic growth. Hence Tony Blair keeps bringing up nuclear power in speeches. In the last month natural gas prices in Britain have more than quintupled.
On the face of it, this winter's rocketing gas prices look a simple problem with simple causes. A drop in North Sea gas production combined with cold temperatures has led to prices soaring since the start of the month, from about 30p a therm (a unit of energy) to a peak of just over 160p.
Britain's political debate on energy seems to be advancing faster than America's at the moment. They know they face a huge problem between aging nuclear plants, declining North Sea production, rising imports costs, political instability in the Middle East, and worries about greenhouse gas emissions. Check out this opinion piece for nuclear power by Henry Porter in the UK's Observer. That's a publication on the left side of the political spectrum over there.
I only wish a huge research push by government was part of their debate.
Countries whose leaders like to pose as environmentalist Miss Goodie Two Shoes forgot that moral posturing eventually fails if countries fail to honor their treaty commitments.
Canada is among those countries most likely to run into difficulty implementing its commitments, as in 2003 the country had increased its emissions by 24.2 pct from the base 1990 level, far from its 2012 target of a 6 pct reduction.
Japan, meanwhile, recorded a 12.8 pct increase over the 13 years to 2003 and is headed for an increase of 12 pct by 2010 instead of the intended 6 pct reduction.
And although the 15-member European Union, which ratified the treaty en bloc in 1997, achieved a reduction of 1.4 pct in emissions from 1990 to 2003 -- it is still a long way from the 8 pct target in 2012 -- most of the 15 countries have seen emissions increasing.
Read the full article for more details about the more egregious treaty violators. Spain's emissions have risen 41.7% since 1990. I'm guessing Spain has seen some very hefty increases in per capita income due to economic liberalization post-Franco. But that's just the problem: Economic growth makes more more able to afford energy consumption. As long as increased energy demand is satisfied by fossil fuels carbon dioxide emissions will rise with expanding economies.
Last year nearly half of all CO2 emissions increases came from China. Attempts to deal with CO2 emissions with a regulatory approach are hopelessly naive. Every country is going to point away toward other countries and suggest others should sacrifice.
Instead of a regulatory approach what we need is a massive effort at energy research and development across a wide range of energy technologies. The recently deceased Nobelist Richard Smalley proposed that the United States spend $10 billion per year on energy research and development with nuclear, solar photovoltaics, and an assortment of other approaches all as elements of the big drive to develop new energy technologies.
I think Smalley's approach makes far more sense than moralizing and signing of treaties. But too many groups are intent upon fighting yesterday's battles over who to blame or who to make suffer or which energy technology to stop. Why advocate useful measures when you can spend the same amount of time demonizing SUVs, Hummers, George W. Bush or oil companies? Why take the rise in atmospheric CO2 seriously when you can point at environmentalists as a bunch of crack-pots? Political activists enjoy partisan mudslinging ("mostly say 'hoo-ray for our side'") a lot more than they do solving problems. So the more reasonable approach which could produce cheaper and cleaner energy technologies remains the road not taken. How long is this state of affairs going to last? Isn't it getting old? Why not solve the problem?
The New Scientist reports that government-engineered demand for biofuels is destroying rainforests.
THE drive for "green energy" in the developed world is having the perverse effect of encouraging the destruction of tropical rainforests. From the orang-utan reserves of Borneo to the Brazilian Amazon, virgin forest is being razed to grow palm oil and soybeans to fuel cars and power stations in Europe and North America. And surging prices are likely to accelerate the destruction.
The rush to make energy from vegetable oils is being driven in part by European Union laws requiring conventional fuels to be blended with biofuels, and by subsidies equivalent to 20 pence a litre. Last week, the British government announced a target for biofuels to make up 5 per cent of transport fuels by 2010. The aim is to help meet Kyoto protocol targets for reducing greenhouse-gas emissions.
Hey, I've repeatedly said that biomass crops are mostly a bad idea. Why increase the demand for crop land in the tropics? High efficiency photovoltaics will use less land area than biomass and most photovoltaics could be placed on existing human structures. Greenies who want immediate reductions in fossil fuels consumption ought to look at better insulation and building designs. For the medium and long term we should be accelerating nuclear and photovoltaics research and development. Better battery technology is the way to reduce the need for liquid fuels. With higher energy density and cheaper batteries we can get transportation energy from nuclear, wind, and photovoltaics.
They agreed to spend $450 million in 2006 on Yucca Mountain, the planned underground repository for 77,000 tons of the nation's most radioactive nuclear waste.
The project's budget was $577 million in each of the past two years, and Bush asked for $650 million for the dump in his 2006 budget request.
The nuclear waste that will eventually to go Yucca Moutain (assuming Yucca Mountain goes into operation in 2012 or some later date) sits at nuclear plant sites around the United States. Each state Congressional delegation doesn't want a nuclear waste disposal site in their jurisdiction. So Nevada's delegation predictably tries to slow Yucca's development. But I do not expect the Nevada delegation to stop it entirely.
Note that the money that is not getting spent here is money that has already been paid by the United States nuclear power plant operators. The nuclear power industry pays a tax to fund the construction of a nuclear waste storage site. The nuclear power industry has paid much more in taxes than has been spent to date preparing Yucca Mountain.
Development of a plant to convert plutonium from old nuclear weapons into useful nuclear power plant fuel has also been slowed.
Spends $220 million to build a plant at the federal Savannah River complex in South Carolina where weapons-grade plutonium would be processed into a mixed-oxide (MOX) fuel — a less dangerous fuel for commercial power reactors. That figure is $118 million lower than Bush's request.
Congress ought to be greatly accelerating the development of nuclear power, not slowing it. Similarly, Congress ought to greatly accelerating research into photovoltaics and into electrochemistry for next generation batteries. We can't phase out fossil fuels without first developing technologies for producing and storing energy from non-fossil fuel energy sources.
The United States Congress seems entirely unserious about energy policy. The growth of China will boost greenhouse gas emissions 50% by 2030 if current trends continue.
Yesterday the International Energy Agency warned that the growing appetite of China - added to the huge demand in the US and Europe - had created an unsustainable trend. Energy demand and greenhouse gas emissions will soar by more than 50% by 2030 if consumers keep burning oil unchecked, the agency warned.
Most thinkers have just not factored in what the growth of China means. China won't magically stop growing once 2030 hits. Each year will bring further growth and therefore further economic growth in energy demand. See my posts "Planned Coal Plants Reverse 5 Times CO2 Impact Of Kyoto Protocol" and "Carbon Dioxide Emissions Continue Rapid Increase". China produced nearly half the carbon dioxide emissions rise in 2004. China's fraction of the total increase will probably rise much higher in future decades.
If we melt the ice on Greenland the world sea levels will rise about 20 feet. Lots of valuable real estate will be lost. It is very imprudent to simply hope a large increase in atmospheric CO2 won't lead to a climate change large enough to melt the Greenland ice pack. It is especially imprudent because the steps we could take to prevent such a drastic result are probably not very expensive.
I'm not arguing for slowing economic growth or imposing heavy taxes to prevent that outcome. We just need to greatly accelerate the rate of advance of non-fossil fuels energy technologies. The recently deceased Nobel laureate Richard Smalley (felled by cancer at age 62 - what a terrible waste) argued for $10 billion a year to fund research into a wide range of energy technologies. Smalley was right. Acceleration of the rate of technological advanes is the right solution. $10 billion per year is less than one tenth of one percent of the US economy. It is quite affordable. The technologies developed by such an effort would eventually be cheaper than fossil fuels and would displace fossil fuels just by market decisions to go with the lower cost energy sourcse. So why aren't we already making the big push to develop new energy technologies? Our current course seems like a reckless gamble.
NEW HAVEN, CONN. – They're not rocket scientists. But conservation consultants John Pierson and Parthiban Mathavan were able to save New Haven Public Schools $1.1 million in energy costs last fiscal year.
How? By peeking out the window and deciding that a mild winter morning does not require full-blast heat at the 50 schools they monitor.
"We are always dreaming up ways to be more efficient," says Mr. Pierson. Typically, heat or air-conditioning was on 24/7 - even if no one was in school. Stopping that saved $600,000 the first year. "A lot of it is common sense."
So how many millions or tens of millions of dollars has New Haven wasted cooling and heating buildings for years or decades while the buildings were empty? How many other city, county, and state governments are still doing this even today?
Some conservation is very easy to do but governments lack the incentive to make even easy decisions to save costs.
"One of the big problems I see with municipalities is they get used to paying the bills, grumble about the price, and don't do a lot to investigate cost and consumption," Melchiori says. "To me, we are not employing any technology that anyone else couldn't employ.... It is a lot of common-sense application of existing possibilities; we just actually applied it."
A state government could do its citizens a favor if it passed a law requiring all state, county, and local governments to collect basic information on energy costs, and publish the information on the web in a state government database. Imagine the database contained energy costs per month along with energy types used, quantities of each energy type (e.g. kilowatt hours of electricity, gallons of heating fuel, millions of square feet of natural gas, and so on) and square feet of space for each building. Then concerned citizens search the database and look for energy usage per building, compare similar buildings, and spot likely sources of waste. Such a database would be even more helpful if it included temperature information per town per day so that outside temperature could be adjusted for when analyzing costs.
The knowledge that journalists and regular citizens were going to be looking through their energy usage data would give quite a few elected officials the incentive to find ways to eliminate waste and use cheaper energy sources. Transparency on costs will improve efficiency, lower costs, and improve the quality of governments.
British Prime Minister Tony Blair is saying privately that he is for construction of additional nuclear power plants in the UK.
TONY Blair has thrown his personal backing behind the expansion of nuclear power generation in Britain. The new reactors would be built on existing nuclear sites and replace those which are to be decommissioned in the near future.
The Prime Minister will sell the nuclear build programme to the public and the Labour Party as a job-creating solution to the problems posed by global warming and Britain’s growing dependence on imported energy supplies from unstable countries. The Prime Minister expects a year-long inquiry into Britain’s future energy requirements to conclude that more nuclear energy is the only practical way to reduce greenhouse gas emissions.
Blair has privately disclosed that he is in favour of more nuclear reactors and that he expects the findings of the inquiry to make a case that can be supported by an all-party consensus.
Blair is responding to the failure of the EU to meet its Kyoto Accord CO2 reduction targets, the unlikelihood that even tougher reduction targets can be met without nuclear power, and public concern about dependence on oil from the Middle East. The war in Iraq and high oil prices are fueling (sorry, couldn't resist) that concern.
Blair is prepared to go as far as he can without prejudging the nuclear review. A fortnight ago, he made the case for nuclear power to the Labour Party conference while stopping short of calling for its implementation.
"Global warming is too serious... to split into opposing factions on it," he told delegates. "And for how much longer can countries like ours allow the security of our energy supply to be dependent on some of the most unstable parts of the world?"
The Department of Trade & Industry confirmed on Friday that it has been holding discreet talks with major energy providers about nuclear options: E-On and RWE of Germany, and EdF of France. BNFL has a design for a new plant.
I have long argued for greatly accelerated development of new technologies as the most appropriate response to both the potential threat of global warming (about which I'm not much concerned) and the eventual exhaustion of fossil fuels energy sources. New energy technologies will be cleaner just in terms of ground level conventional pollutants and this alone is reason enough to develop them. Blair has recently demonstrated a new appreciation of the value of accelerated energy technology development. But will he allocate more public funds toward this purpose or make other policy changes that accelerate the rate of energy technology development?
Environmentalists signal the extent of their belief in the danger of global warming when they start arguing for nuclear power as an energy source. I think we could phase out the use of fossil fuels eventually by making solar energy our primary energy resource. But that requires many technological advances that lie in the future. We could make those advances come more quickly. The global warming alarmists ought to put half as much effort to lobbying for photovoltaics and battery research as they do in raising alarms about a supposed coming environmental disaster. We'd be better off with the resulting technology even if the global warming fears are exaggerated. However, while waiting for those advances for those who urgently want to reduce CO2 emissions nuclear is a necessary substitute for many uses of fossil fuels today.
Nuclear power has one sort of insurance policy advantage: If a huge volcanic eruption or a massive meteor ever blotted out the sun for a few years solar power would become worthless. Nuclear power would keep on ticking. If you want to survive natural disaster scenarios involving reduction of sunlight then nuclear is the best power source.
Some schools are turning down thermostats, limiting bus service or hiring energy consultants. In Council, Idaho, the schools expect to halve their $10,000 monthly heating bill with a new system that runs on wood chips produced when state crews thin trees along the highways. Last month, Gov. Sonny Perdue of Georgia closed the schools for two days because school buses were running out of diesel fuel.
In Marengo, Iowa, the county courthouse remains closed on Mondays to give its gas boilers an extra day off, and employees work four 10-hour days. In Marshalltown, Iowa, officials have traded traffic lights for stop signs at six intersections.
Insulation upgrades, shifts to alternative fuels, shifts to more fuel efficient vehicles, and changes to lifestyles are all reported in the article.
The growing role of biomass for heating is the most interesting response. People are turning to biomass heat sources including wood and corn to save money.
Some suppliers of the stoves and the pellets and wood they burn are running out of inventory or hiring extra employees to meet the demand. In Walla Walla, Wash., Chris Neufeld, vice president of Blaze King Industries-USA, said his company had a backlog worth $1 million for stoves that cost about $2,000 apiece.
In Waverly, Ill., Don Magelitz, who sells corn stoves, is more than eight weeks behind on deliveries and has a backlog of 200 orders.
Biomass for heating makes more sense that biomass for ethanol production. When corn is used for heating a far larger fraction of the chemical energy serves a useful purpose. Production of ethanol takes energy to operate the chemical plant and some energy is lost as heat. but when corn is burned inside a building then that heat serves a useful purpose.
I was recently surprised to learn that corn is a very economically competitive source of heating energy. In the comments section of my recent post on ethanol in Brazil you will find a discussion of corn stoves and the economics of different heat energy sources. Unless you happen to have a free source of wood the cheapest heat energy source appears to be corn. A lot of corn stoves have automated corn fuel feeders and thermostats. But most of the models I looked at had bins that stored only a day or two of fuel. Construction of a bigger bin and feeding system would allow a much longer period of time between refuelings. Anyone seriously considering this option should check out the price of corn by the bushel for deliveries of many bushels at a time. You'd also need storage facilities for handling hundreds or thousands of pounds of corn. Ideally the stored corn from a large bin would gravity feed into the corn stove.
Liquid fuels are most needed for transportation. To the extent that corn and other biomass sources displace heating oil for heating they free up a liquid fuel source far better suited for transportation. The heat loss of converting corn to ethanol is avoided. The total amount of energy available is increased. More generally, stationary uses of liquid fuel should be especially targetted for displacement by biomass, solar, nuclear and other sources. Liquid fuel is too valuable for transportation to be wasted in other applications. Currently (as of 2002) 82% of #2 heating oil used in America is used in the American Northeast. Policymakers ought to take notice and encourage migration to other heat energy sources and better insulation in the northeast.
The need for liquid fuel in transportation is also an argument for the development of better battery technology. Eliminate the need for liquid fuel and suddenly many more energy sources such as nuclear, wind, biomass, and photovoltaics could be used to power cars.
World energy-related carbon dioxide (CO2) emissions rose by 4.5% last year, their fastest rate since 2000, according to first estimates by German economics institute DIW. The figures show that EU-15 emissions climbed only marginally in 2004 after increasing significantly in 2003 released.
Nearly half of carbon dioxide emissions growth in 2004 came from China. Continued economic growth in China and elsewhere in Asia means even more growth in CO2 emissions.
DIW's early review of 2004 data confirms China as currently the major driver of global emissions growth. It released an extra 579m tonnes of CO2 in 2004, a year-on-year increase of 15%. In comparison, world emissions increased by 1.2bn tonnes to stand at 27.5bn tonnes, or 26% above their 1990 level.
The folks who fear global warming are going to find themselves talking to a wall (a "Great Wall") if they try to convince the Chinese to stop their increase in fossil fuels consumption.
Emissions growth in industrialised countries in 2004 was far less rampant. Energy-related CO2 rose by 1.3% across the OECD area, DIW reported. In the USA it increased by 1.4%. In the old EU-15 countries it rose by 0.7%, less than half the rate of increase in 2003, according to official EU figures (ED 21/06/05).
Meanwhile, DIW estimates that EU-15 emissions of all six Kyoto greenhouse gases rose by just 0.3% in 2004, again well down on their 1.3% increase in 2003 according to official EU figures. According to the German institute, EU-15 emissions are now 1.4% below their 1990 level compared with a commitment to minus 8% by 2010.
The "EU-15" refer to the core and more industrialized western European Union countries. Note the 0.7% rise in CO2 emissions in the EU-15 versus 1.4% in the US and 1.3% in the whole set of OECD countries. The EU-15 aren't managing to stop, let alone reverse, CO2 emissions growth. The EU is growing more slowly in population and in total economic output than the United States. So a substantial portion of the EU-15 's slower growth in CO2 is a consequence of slower economic growth rather than success of government policies aimed at reducing emissions.
To make their Kyoto Accord goals by 2010 the EU-15 will have to reverse emissions growth very soon and achieve substantial reductions every year. I do not see them accomplishing this goal. They'd have to slow their economies even more. That's politically unpalatable. The EU is getting a lot of help from high oil and natural gas prices. But unless oil prices go higher still I'm skeptical that the EU countries will honor their Kyoto commitments.
If the countries with the strongest dedication to CO2 emissions reduction can not manage any better than they've achieved so far what chances are there for the rest of the world to stop CO2 emissions growth? Not gonna happen folks.
The best hope the CO2 emissions reduction advocates have is if Matthew Simmons and the other "Peak Oil" advocates are right and the peak of oil production is on the near horizon of the next 5 to 10 years. That'd put a huge brake on CO2 emissions growth. However, even if conventional oil production peaks my bet is that massive investments will bring on big production increases from oil shale in Wyoming and Colorado, oil tar sands in Alberta Canada, and coal in several countries.
CO2 emissions will eventually reduce substantially when solar, wind, and nuclear energy become cheap enough to substitute for fossil fuels. Also, advances in battery technology would enable the use of solar, wind, and nuclear energy for transportation and that would shift a lot of demand away from fossil fuels. People who fear global warming (and I'm not yet convinced it will be severe or a net harm) should join those who think technological advances are the way to bring the fossil fuel age to an end. I want to obsolesce fossil fuels for other reasons including the desire for cleaner air, less flow of money to Islamic theocracies, elimination of a big import expense, and greater economic efficiency and economic growth from the development of better energy technologies. Those seem compelling enough reasons regardless of climate effects.
Greenhouse gas emissions from the EU's 15 pre-2004 member states dropped by 0.5% between 2001 and 2002, latest estimates compiled by the European Environment Agency show.
The reasons for the decrease include warmer weather in most EU countries which reduced the use of carbon dioxide-producing fossil fuels to heat homes and offices. Slower economic growth in manufacturing industries, which also lowered fossil fuel use, a continuing shift from coal to gas and specific measures to reduce greenhouse gas emissions were the other main reasons.
Emissions of the six greenhouse gases had risen by 0.2% and 1.3% a year in 2000 and 2001 respectively.
The fall in 2002 took total EU15 emissions to 2.9% below their level in the base year used for calculations - 1990 in most cases.
A mild winter and slow economic growth in one year allowed EU-15 emissions to decline. Hardly a sign they are on track to make their goals.
Foreign Policy interviews Houston energy investment banker Matthew Simmons (author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy) about the coming world peak in oil production and what could be done to soften the economic blow of declining oil production. (requires free registration)
FP: If you were the secretary of energy right now, what policies would you recommend to President Bush?
MS: If we restructure the way we use fuels, we might be able to get along very well with oil in decline. The single-most energy inefficient way we use oil is large trucks delivering goods over large distances. If you take all the goods that are trucked more than, say, 50 miles, onto railroad tracks, depending on the length of travel, you’d use between 3 to 10 times less energy. If you put them on a marine vessel, it’s even more efficient. So forget about just-in-time inventory. Once you get the large trucks off the road, you make a tremendous dent in traffic congestion, which is public enemy one through five on passenger car fuel efficiency.
But won't this happen anyhow if fuel costs for vehicles double or triple? To make that shift happen now would require either high energy taxes (not going to happen) or government edict forcing less truck use and more tain use (again not going to happen). If what he's saying is true then that is great news. We can gradually migrate businesses nearer to rail lines and adjust distribution patterns to reduce energy usage. But to do that now doesn't seem in the realm of the politically possible.
How much of transportation fuel is for trucks and how much for cars? Of the portion used by trucks how much of that is for home delivery? Also, what portion of total truck fuel use is for trips longer than, say, 50 miles or 100 miles?
My suspicion is that mail order deliveries by UPS and FedEx save fuel. People who would have driven to a store to buy something instead get the product delivered by truck to their door. Since that same truck passes through a neighborhood delivering to many other doorsteps the net effect must be a reduction in energy consumed as compared to having each purchaser drive to a store to pick up the same product. Furthermore, growth in home delivery increases fuel efficiency by allowing each delivery truck to empty its contents over a shorter delivery route.
Simmons argues for more work performed from home.
We also need to embrace the concept of distributed work. In most of our non-manufacturing commercial jobs, we assume that it’s better to have a lot of people working at the same site, even though it’s not necessary. By allowing people to work at home and keep their jobs, all they have to do is invest in communications such as video conferencing, the Internet, and cell phones.
I've heard claims that most work must get done in offices. But I can think of some big categories of work where that is not the case. For example, a lot of phone service work such as order taking could get done by home workers. This raises some security issues. But those issues seem like solvable problems in many cases.
Simmons wants more energy efficient agriculture.
We also have to change the way we distribute food. An amazing amount of the global food supply is transcontinental and produced by energy-intensive large-scale agriculture. Whole Foods, a successful grocery retailer, has basically created organic farming near each store it builds. The produce is less energy-intensive to grow and ship.
If fuel becomes a lot more expensive then I expect the market to provide sufficient incentive for shifts toward less energy-intensive production methods and transportation patterns. From a policy perspective the most important question is whether governments currently behave in ways that create obstacles for approaches with greater energy efficiency. Well, what government-erected obstacles can any readers see for greater energy efficiency?
The biggest obstacle I can see for greater energy efficiency in transportation is the unfriendliness of roads for bicyclists. I'd use a bicycle with perhaps a pull cart to go to a grocery store if I didn't have to fear getting hit by a car. The bicycling would be good exercise. But peddling down narrow shoulders around parked cars strikes me as risky business.
I find credible Simmons' arguments for why oil production is going to peak sooner than government projections. See the interview for some of his observations about various oil fields. But I'm less convinced by his argument on what we should do about falling oil production.
I think governments should lead more by example. Governments should set an example in the category of energy usage where the biggest improvements in efficiency can be achieved with the least impact on living standards. Think of energy usage as dividing up into three main categories: transportation, building heating/cooling/lighting, and industrial processes (e.g. aluminum smelting or fertilizer manufacture from natural gas). Of the three buildings seem most ripe for greatly improved efficiency using the best of today's technology. Specifically, I'd like to see all levels of government impose building codes on themselves for their own buildings that have much higher requirements for insulation and building efficiency.
Building efficiency increases are best designed in before the buildings get constructed. Buildings last decades or even centuries. Every year that goes by without the usage of best energy efficiency practices for building construction leaves us with another year's worth of unoptimized housing stock that we'll be stuck with for decades to come. Governments should steer societies down the road of greater energy efficiency by imposing tough efficiency requirements on themselves. By designing government buildings to meet high energy efficiency objectives governments can save money, demonstrate what can is possible using existing technology, and provide incentives to develop more energy efficient building technologies.
As for houses and commercial buildings: For starters, how about local building codes that have a standardized set of several levels of energy efficiency where each building gets built and certified as meeting some level. Each house could get built to which ever level the builder or owner chooses. Then that level gets included in the title. When the house or apartment building or commercial building goes on the market it can have an energy efficiency rating revealed in ads and during inspections. Building efficiency information would serve a purpose similar to that of car fuel effiiciency ratings.
Suppose the oil peak comes sooner as Simmons expects. Oil can rise above substitute replacement costs but only temporarily. Also, economies will contract before driving oil to $200 per barrel. I expect oil shale, oil tar sands, wind, coal, and nuclear to substitute on different time scales. Suppose the oil peak pessimists are right. What's the worst we are in for?
The second thing, though, is that I think – and I would say probably I’m changing my thinking about this in the past two or three years. I think if we are going to get action on this, we have got to start from the brutal honesty about the politics of how we deal with it. The truth is no country is going to cut its growth or consumption substantially in the light of a long-term environmental problem. What countries are prepared to do is to try to work together cooperatively to deal with this problem in a way that allows us to develop the science and technology in a beneficial way.
Now, I don’t think all of the answers lie in just – in developing the science and technology, but I do think there is no way we are going to tackle this problem unless we develop the science and technology capable of doing it.
Blair is beginning to sound realistic on energy policy. National governments all over the world that signed onto the Kyoto Accord to reduce greenhouse gas emissions have failed to follow through.
Canada leads the laggards with emissions growth at 20 percent from 1990 although it has committed to a 6 percent reduction by 2012.
Japan's emissions are up 12 percent and it has to cut them also by six, while New Zealand must show zero growth and is currently up 21 percent.
The European Union as a whole is doing better, with a 2.9 percent fall toward a 2012 target of minus 8 percent. But there are problems, for example, in Italy, which is 8 percent higher and must go 8 percent lower.
Japan would be further from Kyoto compliance if it didn't spend the 1990s in economic stagnation. Canada, enjoying better economic growth, is predictably further from compliance.
I do not see how the EU can meet their Kyoto goals. Large tax increases on energy are politically unpalatable. The European countries need to increase energy efficiency much more rapidly than their economies grow so that energy use can drop even as economic output increases. They've already gone after much of the lower lying fruit. It gets harder to squeeze out even more efficiency. Europe already has higher fuel taxes than the United States and so fuel taxes there would have to be raised even higher still to provide greater incentives for lower energy usage. I do not see that as in the cards.
Even where higher levels of energy efficiency are theoretically possible (e.g. in insulation of buildings) the problem is that the efficiency can only be realized by replacing large amounts of capital and housing stock with newer and more efficient designs. Efficiency gains from such measures cost too much to implement quickly and take decades to achieve.
Part of the EU's energy efficiency gain came from the collapse of the Warsaw Pact. Less efficient communist capital equipment that used more energy to get jobs done was replaced by more efficient capital equipment from the rest of the world. But, again, the easier parts of this have already been done as well.
Considering all these factors my guess is that Europe seems very unlikely to meet its Kyoto goals. Kyoto compliance might even get worse between now and 2012 due to economic growth increasing the demand for energy. Similarly, Canada, New Zealand, and Japan aren't going to get near treaty compliance.
Director of Canada's Climate Change Bureau Alex Manson lays part of the blame for Canada's non-compliance on the United States which has experienced only 12% growth in CO2 emissions versus 20% for Canada (and I trust readers are good enough at math to see the obvious problem with this argument).
He said Canada picked up the pace against emissions in 2003, but it has been hurt by the fact that its biggest trading partner -- the United States -- withdrew from Kyoto in 2001. U.S. emissions are 12 percent up since 1990.
Canada has begun to take some steps toward reducing CO2 emissions with an agreement reached with car companies to raise fuel efficiency of new vehicles.
Switzerland has so far reduced CO2 emissions only 4% versus its stated 10% reduction goal.
While the Reuters article above puts the US green house gases increase at 12% since 1990 the EPA puts the increase at 20% from 1990 to 2003. From that Green Car Congress link:
Although overall net GHG emissions have increased more than 20% during the last 15 years, the economy as represented by the GDP grew 46%. The good news is that the economy appears increasingly less emissions-intense. The bad news is that despite the increased efficiency, we are still increasing our emissions even on a net basis year-to-year.
That gap between economic growth and energy growth represents a very large increase in US energy efficiency since 1990. Much of the difference in CO2 emissions between Europe and the United States since 1990 can be chalked up to faster economic growth and population growth in the United States. The US economy has become steadily more energy efficient as measured by a rising ratio of inflation-adjusted GDP per unit of energy consumed. But the economic growth rate has risen even faster than the rate of increase in energy efficiency. So total energy usage has increased and this has driven the increase in CO2 emissions in the United States.
Technologies that increase energy efficiency will lower the cost of the energy component of production and therefore cause faster economic growth. As a result, part of energy efficiency gains inevitably get lost as per capita GDP rises and people buy more goods and services.
Aside: If anyone can point to a source for comparative United States and EU-15 total economic growth from 1990 to 2003 or 2004 please post in the comments or email me. I'd like to get a better sense of how much the energy use difference between the US and EU is due to the difference in total economic growth.
Part of the US growth in energy demand is a consequence of an overall increase in worker productivity. An overall productivity gap has opened between workers in the United States and the core more industrialized EU states.
On average, the productivity level of the EU-15 was at 92% of the U.S. level in 2004, down from 99% in 2000 and 100% in 1995. This decline reflects both the relatively slow pace of European productivity growth and the acceleration of U.S. productivity gains after 1995. Still, six European countries—Luxembourg, Norway, Finland, Ireland, Belgium, and the Netherlands—exhibit higher productivity levels than the U.S. in 2004.
While the productivity gap between the EU-15 and the U.S. is 8 percentage points in 2004, the per capita income gap is 28 percentage points. With the exception of Luxembourg, no European country has turned this relatively high productivity into a per capita income higher than the U.S. This is because EU countries have a smaller fraction of the population employed than the U.S., and those that are employed generally work fewer hours.
From 2000-2004, the U.S. Gross Domestic Product growth came primarily from increased labor productivity (2.9%). Hours worked for this period fell -.4%, resulting in GDP growth of 2.5% for 2000 to 2004. During this period, the EU-15 showed GDP growth of only 1.4% with productivity growth at 1% and hours worked at .4%.
A closer examination of the proximate sources of change in total GDP growth after 1995 shows that while trend labour productivity accelerated in the United States, it slowed in the European Union and Japan, resulting in a convergence of productivity growth rates across the three major economies (Figure V.1). In the case of the European Union, the impact on GDP growth from the slowdown in productivity per hour was partly offset by an increase in employment growth. Despite such improvement in labour market performance, even faster employment growth in the United States accounted for most of the differences in growth in GDP per capita between the two economies. Japan is the only country having faced a deceleration in both productivity and labour resource utilisation. Conversely, only a few countries (Canada, Sweden, Finland, Ireland and Greece) enjoyed a clear improvement in both sources of growth in GDP per capita after 1995.
The only way to substantially reduce CO2 emissions is to develop energy technologies that obsolesce fossil fuels. Those energy technologies are coming eventually. People who want those technologies to come sooner (whether to avoid global warming or get cleaner air to breathe or to lower total energy costs) ought to support accelerated development of nuclear and photovoltaic energy technologies.
The neat thing about technological advances is that once the advances are made they start paying back and continue to pay back for years and decades to come. The sooner the advances get made the sooner the payback starts. Global warming worries aside, advances in non-fossil fuel energy technologies such as nuclear, photovoltaics, and wind will pay back by lowering energy costs and enabling greater economic growth with cleaner air as a side effect. I want the advances sooner because I want the many benefits sooner.
Matthew Simmons is a Houston energy investment banker who has written a much discussed book (Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy) arguing that the Saudis have far less oil reserves than they claim. In a recent interview Simmons makes an important point about projections on how long oil in the Alaska National Wildlife Refuge (ANWR) could run the United States If ANWR goes into production well after the point of world peak oil production then the number of months oil from ANWR will operate the US economy will be much longer because the US economy will be running on much less oil as world oil production declines.
The environmental community’s claim that ANWR contains only a six months supply of oil is a calculation that assumes the nation has no other source of oil when ANWR oil comes on line, Simmons said.
“On that standard, we end any new energy development, period,” Simmons said. “What is very important about the urgent need to find more oil at ANWR, the Naval Reserve or somewhere else on the slope is the inevitable decline of North Slope oil, and the fast decline that will happen if a gas pipeline is built and the gas caps (are) blown down.”
Moreover, it would not take 10 years to get a big oil find in ANWR into production since the infrastructure is in place, Simmons observed.
“At some point, the oil that flows through the 2 million bpd pipeline must fall to a level insufficient to get oil over the Brooks Range other than by shutting in for part of a month so the oil can be batched,” he explained. “If all ANWR does is extend the life of the pipeline, it has filled a very valuable role.
The view I've had about ANWR for a very long time is that some day it will get put into production once world oil production peaks. The environmentalist opposition to ANWR will end up being a blessing but not for the reasons that motivated the environmentalists. The delay in the ANWR drilling will make oil available to the United States from a US field when prices are much higher.
The environmentalist opposition to ANWR drilling should probably continue just so that ANWR remains effectively as a national petroleum reserve tappable when oil gets scarce. This is a position assured to anger both environmentalists and ANWR drilling advocates. But, hey, I call 'em as I see 'em.
If the peak oil pessimists are correct then the debates we have today about ANWR drilling, continental shelf drilling, car efficiency standards, nuclear power, and many other energy policy areas will soon seem old and perhaps quaint. Higher energy prices will change many energy policy debates. All those years of attempts at rational debate on energy will get wiped away by a wave of rising oil prices.
I see one irony in all this. If oil production peaks sooner then opposition to nuclear power will dissolve. The only way that environmentalist opposition to nuclear power can prevent a resurgence of nuclear power in Western countries (excluding France where the public never wavered in support for nukes) is if oil production can continue to rise for long enough that solar power and wind power can get cheap enough to serve as substitutes.
Looked at from this perspective Shell's promising technology for extracting oil from oil shale probably works against nuclear power. If Shell's efforts with oil shale succeed the US might again become a net oil exporter - which would represent a huge shift in the US's financial position vis a vis the rest of the world. Since about 80% of oil shale is on federally owned land the US government looks set to rake in big royalties when oil production peaks.
Coal, wind, solar, and nuclear power are currently all poor substitutes for oil. We need better batteries or other ways to convert electric power into forms that can power vehicles. But if peak oil comes sooner (say in the next 10 years) then the incentives to produce better batteries will probably solve that problem.
After 5 years of trying the US House Of Representatives voted to approve an energy bill deal worked out with Senate negotiators. Cost estimates range from $13 to $14.5 billion over 10 years.
Efficiency and conservation programs would get about $1.3 billion (euro1.1 billion) of the more than $14.1 billion (euro11.8 billion) in total tax breaks over 10 years, according to lawmakers who have been briefed on the legislation worked out in negotiations between the House and Senate. About $3 billion (euro2.5 billion) in tax breaks would go for renewable energy source, mostly to subsidize wind energy.
It is hard for non-nuclear renewable tax credits to go to anything other than wind. The other options all cost way too much.
Nuclear power will also be a hedge against the possibility that the price of natural gas - which fires some of Entergy’s other plants - will continue to rise. The downside, Hebert said, is that the plants take a long time to permit and build. If Entergy is first in line to build a new plant, as he hopes, the process could take a decade or more.
That’s where the energy bill comes in. It extends the coverage of the Price-Anderson Act, which limits the liability for current nuclear-power-plant accidents to $9 billion each, to new plants. Its "standby support insurance" will ensure the first six plants to go through federal and state licensing processes can recover up to $500 million for delays caused by regulatory logjams or lengthy legal challenges during construction.
It also provides production tax credits for the first half-dozen plants, giving them the same incentives as power produced by wind turbines, and it has $1.2 billion in tax write-offs to help offset the costs of funds needed to ensure that the plants can be safely torn down, or "decommissioned."
How much of that 10+ years of delay in putting up nuclear plants comes from the regulatory approval period and how much from the construction period? Anyone know? Surely it should not take 10 years to build something.
* Offers $2 billion in federal insurance to cover delays in building 6 new nuclear power reactors.
* Creates production tax credit for new nuclear plants at a rate of 1.8 cents per kilowatt hour for electricity produced over an eight-year period.
Wind gets a similar per kilowatt hour tax credit. the 1.9 cent per kilowatt-hour tax credit for renewables in this bill will cut the cost of a Maine wind farm by 30%.
Without the tax credit, the $68 million wind development project would be 30 percent more expensive, according to Peter Gish, managing director of UPC Wind Partners, Evergreen's parent company.
The wind farms have to get built between the beginning of 2006 and the end of 2008 to qualify. Apparently this extends a tax credit that had just expired. So all those existing wind farms that people point to as examples of the competitiveness of wind were built with hefty tax credits. I wonder how many of the reports comparing costs of different energy sources (e.g. the recent report in The Economist that someone brought up in comments of a another post) assume those tax credits in their calculations.
Of course, to be fair to wind power the coal burners are allowed to emit pollutants that produce external costs that do not show up in the price of coal burner electricity.
Also, how long does wind's tax credit last? 8 years for nuclear is not that long since nuclear's capital cost takes decades to pay back and nuclear plants can last for 50 or more years. My guess is that wind is getting the bigger tax credit.
The $11 billion net cost of the tax package plus the $2 billion direct spending comes to a relatively modest (for an energy bill) $13 billion over 10 years, with further costs depending on future appropriations.
Production credits for a large assortment of industries are to be expected since industries make donations in elections and employ people back in districts. By in my view funding of energy research would provide much bigger pay-offs in the long run.
In pursuing that goal, Boucher said more than $3 billion dollars in tax benefits and incentives will be utilized to encourage electric utilities to use a new generation of clean-coal technologies that will enable coal to be burned almost as cleanly as natural gas.
"In addition, this bill helps us reduce our dependence on foreign oil by unleashing the power of the American farmer.
"This legislation includes an historic Renewable Fuel Standard, which will result in the doubling of the use of clean- burning and renewable ethanol. The production and use of 7.5 billion gallons of ethanol by 2012 will displace over 2 billion barrels of crude oil. America has a strategic reserve of motor fuels in the cornfields of Illinois, the rice fields in California, and the cane fields of Florida, and it's time we tap it.
"This legislation also helps alleviate the hidden tax on American consumers, farmers, small businesses and manufacturers that comes in the form of higher natural gas prices. Increased natural gas prices have had an adverse impact on the American economy for too long. Several provisions in H.R. 6, including the streamlining of the LNG infrastructure permitting process and the inventory of America's off-shore resources, are significant steps toward ensuring that our Nation has an adequate and affordable supply of natural gas.
Ethanol production will rise to 7.5 billion gallons per year from the current 4 billion per year. More waste. More happy corn farmers. Archer Daniels Midland's board of directors must be happy. Refiners get the mandate to buy the ethanol. You'll pay at the pump.
Aside: I like the extension of daylights savings time by a month because I'd rather have more sunlight at the end of the day than at the beginning of it. So I've always disliked turning back the clock in the fall.
"The energy bill is not going to make a meaningful difference in U.S. supplies," said Steve Enger, an analyst at Petrie Parkman & Co., an energy investment bank in Denver.
Measures in the bill to increase fossil fuels energy production will make little difference in the long run. Oil not extracted now will sit there waiting for future use. Therefore the deletion of an opening of Alaska's Arctic National Wildlife Refuge probably doesn't hurt much. ANWR probably will be opened eventually as oil becomes more scarce.
Only measures that accelerate the development of sustainable energy sources (wind, nuclear, solar, etc) provide a long term benefit. Therefore the bill's subsidies for the nuclear power industry will make a difference by bringing nuclear power back to life. Also, the wind power subsidies might make a difference in the growth of wind power. But the bill strikes me as a big opportunity loss for accelerating research on 4th generation nuclear plants, photovoltaics research, and battery research.
The bill imposes requirements for more efficient appliances. That'll help on the demand side. But passive solar building designs and better insulation do do much more to lower demand.
About 60 percent of South Korea’s energy is expected to come from nuclear power stations in three decades, a drastic rise from its current level of 40 percent.
The Ministry of Science and Technology (MOST) said yesterday it predicts the nation’s dependency on nuclear power will soar thanks to the next-generation nuclear facilities under construction.
``If we cannot find a new energy source to replace today’s fossil fuels, we have no choice but to raise our reliance on nuclear power,’’ MOST director general Kim Young-shik said.
My guess is that 40% of South Korea's electricity, not of its total energy comes from nuclear power. The article probably got it wrong (perhaps due to a translation error).
The South Koreans are a smart bunch of people and they are betting on nuclear power. They already get a lot of power from nuclear reactors and also are actively engaged in 4th generation nuclear reactor research and fusion reactor research.
I agree with those who suspect the Saudis are greatly exaggerating their oil reserves. A recent president of Aramco disputes the official Saudi Arabian line on the expandability of Saudi production. I strongly suspect the oil era does not have many decades left to run (and the global warming debate is based on a big false assumption about oil reserves). I write about energy policy because I see energy as a big problem we need to solve sooner, not later.
Worldwide, there are 440 nuclear power plants, and 24 more are under construction, according to the International Atomic Energy Agency in Vienna.
New nuclear stations and an extended life for existing ones will offset the closure of aging plants to keep the share of nuclear energy in the global power capacity mix at 12 percent in a decade, according to estimates from PricewaterhouseCoopers.
The two wild cards in my opinion: a decline in Saudi oil production and breakthroughs in solar photovoltaics production costs.
Most reactor building is in countries that are new to nuclear power. There are 25 reactors under construction in 10 countries, according to the World Nuclear Association, an industry group, and another 112 are planned or proposed.
Interest is keenest among expanding Asian economies. Of the last 30 nuclear reactors to have connected to the power grid, 20 have been in Asia. India, where nuclear power accounts for 2.8% of electricity production, has nine reactors under construction. It wants to boost the amount of electricity generated by nuclear plants by 100 times by the middle of the century.
The authority idled the reactor in northern Alabama in 1985 because its physical layout didn't match architectural drawings. Restarting Browns Ferry 1 will cost about US$1.8 billion. New plants may be built within six years, Senate Energy Committee Chairman Pete Domenici, a New Mexico Republican, said in April.
Nuclear plants may contribute about 200 gigawatts of the 4,800 gigawatts of new capacity needed until 2030, according to the IEA. European countries will add more than 40 gigawatts of nuclear capacity by 2030, the IEA said.
Nuclear capacity will increase in Asia to 8 percent of the region's total in 10 years, from 5 percent now. China, the world's second-largest electricity consumer after the US, plans to add about 30 gigawatts of nuclear generation by 2030, while Russia could add another 22 gigawatts. Korea may add 17 gigawatts and Japan about 14 gigawatts, according to the IEA.
Note above the absolutely huge growth in total electric generation capacity forecast in the next 25 years. My guess is that oil will stay expensive and perhaps rise further. This will shift demand away from oil toward natural gas and that will keep natural gas expensive. So nuclear will compete with coal and wind and in the longer term with solar. But wind may win out in areas which ban nuclear and coal power plants.
A study by the UK's Royal Academy of Engineering last year showed that one unit of gas generation costs four cents per megawatt-hour, compared with 4.3 cents for a nuclear plant, 4.7 cents for a coal-fired plant and 6.7 cents at a wind park.
Total costs of producing nuclear power, including construction and decommissioning, are likely to be US$46 per megawatt-hour in 2010, less than the US$50.80 for a gas-fired station and the US$54.39 for a coal-fired plant, a study published in March by UBS AG said. The calculation assumes oil prices fall to US$32.50 a barrel, after 2007. If oil prices slid below US$28, nuclear wouldn't be competitive against gas, UBS said.
If coal plant operators were forced to reduce emissions now then my guess is coal would cost at least as much as wind power and perhaps more. Though emissions control technology advances in the future will reduce the cost of emissions reduction I still expect coal emissions reduction to remain fairly expensive. So far in the United States the coal burners have managed to delay tougher regulatory standards on emissions. But I expect the American public to attach increasing importance to cleaner environments. As living standards rise people place greater value on esthetic and health considerations. So coal plant lobbyists are eventually going to lose against public opinion.
My guess is that nuclear power in East Asia is going play out in a manner similar to the French pattern. The East Asia peoples won't take environmentalist objections seriously and instead will see nuclear as the cleanest, most reliable, and cost effective alternative to fossil fuels. The future of nuclear power in the United States is less clear. While some environmentalists are having second thoughts about their opposition so far coal looks set to meet the bulk of future growth in US demand with wind and nuclear playing smaller roles. At some point the price of photovoltaics will plunge and solar power may become the biggest energy providers. But until then nuclear looks like the most cost effective cleaner alternative to coal.
John J. Fialka of the Wall Street Journal reports on Tennessee Republican Senator Lamar Alexander's battle against wind electric generator tower subsidies.
Compared with other emerging renewable-energy sources in the U.S., wind power is a giant, growing about 25% each year because, with its subsidies, it is increasingly cost-competitive with natural-gas-fired power in some states. Sen. Alexander says he wants to remove wind power's subsidies before it gets bigger. "We are ruining the outdoors for no good reason," he said during an interview. "These aren't your grandmother's windmills."
That is so: A modern wind generator stands on a 300-foot tower with flashing red lights that can be seen for more than 20 miles. Its blades are 95 feet long and when the wind is blowing it can generate enough electricity to power 500 homes. Since wind comes and goes, it normally operates at about 35% of capacity.
The Democrats are backing a proposal to require electric utilities to buy 10% of their electric power from renewable sources by 2020 (and does that include nuclear?). Alexander opposes that and he also opposes a $3.7 billion tax credit the bulk of which is expected to go to wind farm construction.
The proposal Sen. Alexander failed to stop last week establishes a "national renewable portfolio standard." It would require large utilities to generate 10% of their electricity from renewable resources by 2020, a requirement financed by a small increase in electricity rates. Energy companies that don't generate renewable power would have to buy credits from those that do, which would be an incentive to use wind, geothermal, solar and other sources.
Mr. Alexander says that would spell an environmental "disaster" for the Southeast, where strong wind exists mainly on mountaintops. In a recent speech he envisioned hundreds of turbines "with their flashing red lights atop the blue ridges of Virginia, above the Shenandoah Valley, along the foothills of the great Smoky Mountains...and down the Tennessee River Gorge." The sound of these machines, the senator said, is like "a brick wrapped in a towel tumbling in a clothes drier on a perpetual basis."
I like scenic vistas. I don't understand why environmental groups are willing to support wind power. Would they rather ruin scenic vistas than build nuclear power plants? I guess so. They even want to use taxpayers money and higher electric prices to subsidize the ruin of scenery. How about you? do you mind seeing wind towers 20 miles off on mountain tops or coast lines? I can see putting them 30 miles offshore beyond view of most people.
Senator Alexander is certainly correct that the US Southeast has little wind power potential and that most of the potential in the Southeast is in the mountains. See this map of wind in the United States. (or see a newer and higher resolution wind map of the United States) Most of the Mississippi valley is pretty poor for wind as well. The Northeast has wind at the coast and on mountains. Do you want your coastal and mountain scenic views ruined by wind towers?
On that previous map note the "Superb" wind ratings for Alaska's Aleutian islands. Could wind towers on an Aleutian island provide such cheap power to economically justify siting an aluminum smelter or other highly energy intensive industry on one of those islands?
To get a feel for how much wind varies with time check out this map of wind intensities over the United States per hour for the last 6 hours. At the moment I viewed the map the US was experiencing pretty low levels of wind almost everywhere in the lower 48 states.
I'd rather accelerate research into nuclear power and photovoltaic materials. Nanotech photovoltaics of the future will be used to create photovoltaic roof tiles and siding that blend in to housing exteriors without any esthetic loss. Billions spent per year on wind tower construction subsidies would be better spent on photochemistry and nanotech research. The wind subsidies are literally orders of magnitude larger than the amount spent on photovoltaics research today. This seems like bad policy getting worse.
A New York Times article on solar energy installed by homeowners demonstrates that the home photovoltaics market is the product of government subsidies.
In moving toward the energy mainstream, solar expenses have dropped to around $8 a watt, from roughly $100 three decades ago; the cost is even less if a system is installed as part of a new home's construction.
In either case, that puts the price of a system that can reduce electric bills significantly - like a three-kilowatt system - in the $20,000 range. That's still a lot of money, but buyers may be able to get a lot of it back immediately, through government incentives. And with energy prices rising, the payback period for the rest is getting steadily shorter.
With real costs like those described below I have to wonder how long it takes for the energy used to manufacture the photovoltaic panels to be balanced out by energy collected once they are installed. Some of the manufacturing cost has got to be due to energy consumption.
On Long Island, Mr. Sunde's systems are working smoothly, and he expects them to keep doing so over their guaranteed 25-year life. A staunch environmentalist who had dreamed of owning solar panels since he was a boy, he now has more power than he needs.
He couldn't have done it without the incentives. With rebates and tax refunds, he chopped nearly 75 percent off the $115,000 bill, bringing the cost down to $30,000. With about 7.5 kilowatts for each house, he wound up paying about $2 a watt.
He did so well because Long Island kicked off New York's incentive programs with rebates of up to $6 a watt. Now it's in line with the rest of the state, offering $4, while the newer New Jersey program, is the most generous in the New York metropolitan area, with incentives of $5.50 a watt.
Over all, he calculates the payback period at a bit over 15 years.
Government subsidies paid almost three quarters of the cost of his system and yet the payback period was still over 15 year. Absent those subsidies the installation of solar photovoltaics systems on houses in much of the United States would be very rare. Payback periods would be longer than the lifetimes of most homeowners (though eventually SENS technologies will change that).
But even with large subsidies few homeowners see photovoltaics as worthwhile. If most homeowners wanted to use these subsidies governments would have to abandon these subsidies programs due to high costs.
The article reports on a woman who installed pool heater which she expect to pay itself back in 2 years and a guy who installed solar heating for his home who expects a payback in 8 years. In each case no tax subsidies contributed to the heating installations. Well, this raises an obvious question: Why are governments spending large amounts of money on subsidizing photovoltaic systems when smaller amounts of money on thermal heating systems will pay back more quickly without subsidy? If the government wants to get the most out of its energy subsidy dollars it ought to subsidize heating rather than electric generation. Or if the goverment doesn't want to spend the money it could increase the spread of solar heating by putting requirements for it in building codes.
If governments (including state governments) want to encourage the development of cheaper photovoltaics then my advice is that governments should shift money from subsidies to fund more photochemistry research to discover processes for making photovoltaics that are inherently cheaper. Subsidizies for the purchase of photovoltaics made by processes which are inherently expensive just aren't going to get us to cheap photovoltaics.
Even though Japan is already among the most frugal countries in the world, the government recently introduced a national campaign, urging the Japanese to replace their older appliances and buy hybrid vehicles, all part of a patriotic effort to save energy and fight global warming. And big companies are jumping on the bandwagon, counting on the moves to increase sales of their latest models.
On the Matsushita appliance showroom floor these days, the numbers scream not the low, low yen prices, but the low, low kilowatt-hours.
A vacuum-insulated refrigerator, which comes with a buzzer if the door stays open more than 30 seconds, boasts that it will use 160 kilowatt-hours a year, one-eighth of that needed by standard models a decade ago. An air-conditioner with a robotic dust filter cleaner proclaims it uses 884 kilowatt-hours, less than half of what decade-old ones consumed.
Japan far produces more economic output per unit of energy than other industrialized countries.
This dependence on imports has prodded the nation into tremendous achievements in improved efficiency. France and Germany, where government crusades against global warming have become increasingly loud, expend almost 50 percent more energy to produce the equivalent of $1 in economic activity. Britain's energy use, on the same measure, is nearly double; the United States nearly triple; and China almost eight times as much.
From 1973 to today, Japan's industrial sector nearly tripled its output, but kept its energy consumption roughly flat. To produce the same industrial output as Japan, China consumes 11.5 times the energy.
But Japan's residential and home sectors have witnessed doublings of energy use over the same period. Rising affluence has allowed people to buy bigger cars, drive more miles, build bigger houses, and use more heating and air conditioning. Rising efficiency in appliances and cars have failed to prevent this trend.
Part of the differences in energy use between countries is a reflection of differences in residential home sizes. Large homes consume more energy for heating and cooling than small homes. Another part of the difference stems for the average distance between homes and work. Another part stems from average vehicle fuel efficiency. I think the odds of getting people in the United States to drive smaller calls and live in smaller homes closer to their jobs are pretty slim.
How much of Japan's increased energy efficiency could be copied by the United States without major changes in American lifestyles? That answer depends on answers to many subquestions. For example, do the Japanese insulate their residences better than Americans? If so, by how much? Also, how far from ideal most cost effective insulation is the average American house or apartment building?
Thanks to Ergosphere's E-P for the NY Times article tip.
The political opportunity exists for selling energy conservation policies to the American people. An overwhelming majority of the American people want to find ways to reduce foreign oil use.
New Haven, Conn. - A new Yale University research survey of 1,000 adults nationwide reveals that while Americans are deeply divided on many issues, they overwhelmingly believe that the United States is too dependent on imported oil.
The survey shows a vast majority of the public also wants to see government action to develop new "clean" energy sources, including solar and wind power as well as hydrogen cars.
92% of Americans say that they are worried about dependence on foreign oil
93% of Americans want government to develop new energy technologies and require auto industry to make cars and trucks that get better gas mileage
The results underscore Americans' deep concerns about the country's current energy policies, particularly the nation's dependence on imported oil. Fully 92 percent say this dependence is a serious problem, while 68 percent say it is a "very serious" problem.
But keep in mind that most people do not want to be inconvenienced by policies designed to reduce oil dependence.
Energy policy reminds me of immigration policy as a subject area where the elites are lagging behind and ignoring the desires of the masses. I think most people understand tha the world's increasing dependence on a country which won't allow women to drive and whose majority admires Osama Bin Laden is a bad thing. That country shows few signs of reforming.
Writing for the New York Times John Tierney draws attention to a worldwide trend toward a reduction in wars.
You would never guess it from the news, but we're living in a peculiarly tranquil world. The new edition of "Peace and Conflict," a biennial global survey being published next week by the University of Maryland, shows that the number and intensity of wars and armed conflicts have fallen once again, continuing a steady 15-year decline that has halved the amount of organized violence around the world.
Before his death Julian Simon predicted to Tierney that the incidence of war would decline.
"I predict that the incidence of war will decline," he told me in 1996, two years before his death. He based his prediction on the principle that there is less and less to be gained economically from war. As people get richer and smarter, their lives and their knowledge become far more valuable than the land, minerals and natural resources they used to fight over.
The Iraq war is sometimes described, by both foes and supporters, as a pragmatic venture to keep oil flowing, but not even the most ruthless accountant can justify the expense. Even before the war, America's military costs in the Persian Gulf were much greater than the value of all the oil it was getting from the region, and now it's spending at least four times what the oil's worth.
Knowledge about how to create new resouces avoids the need to come to blows over existing useful resources. Technological societies can reduce their need to get entangled relationships with more backward but resource-rich societies by making technological advances which eliminate the need for the natural resources.
Tierney's argument about costs illustrates why an increase in government energy research funding makes so much sense. Even before the war were US military costs in the Persian Gulf high enough to justify much more government funding of research aimed at obsolescing oil.
The cost of the Iraq war is growing with no end in sight. Even official cost estimates understate the total cost of the Iraq war because the soldiers who die will make no future economic contributions to the US economy (or to the raising of their children) and survivor benefits will cost the public purse. Plus, the maimed will need care for decades to come with some requiring institutionalizatoin. Some of the injured survivors will be unable to work again while others will be able to work only at diminished levels. Due to advances in medical treatments the permanently damaged outnumber the killed.
In February, President George W. Bush’s Administration requested approximately $3.5 billion for fiscal 2006 for the Science Office—a 3.8% cut from 2005.
More than two-thirds of U.S. senators have signed a letter recommending an increase of 3.2% in the FY 2006 DOE Office of Science budget. Senator Lamar Alexander (R-TN) and Senator Jeff Bingaman (D-NM) were joined by 66 of their colleagues in signing a letter to Energy and Water Development Appropriations Subcommittee Chairman Pete Domenici (R-NM) and the subcommittee's Ranking Member Harry Reid (D-NV) advocating a $3.715 billion budget for the Office of Science.
This strong demonstration of bipartisan support for the Office of Science comes at a key time. Appropriators will wrap up their hearings in the next few weeks and will then start drafting their FY 2006 budget bills. Setting the stage for this year's budget cycle was a Bush Administration request of a 3.8% reduction in the Office of Science's budget to $3.463 billion for the fiscal year that begins on October 1. This amount is less than the FY 2004 budget (see http://www.aip.org/fyi/2005/016.html.)
The $421 billion US Defense Department baseline budget plus at least $85 billion in supplementary appropriations - mostly for Iraq but also for Afghanistan - include only part of the total cost of defense. Once other security related items are added in US defense costs add up to over $667 billion.
If other security items are added in - homeland security ($40.4 billion), foreign policy and international stability ($31.7 billion), and Veterans Affairs ($68.3 billion) - the grand total reaches $667.2 billion. That exceeds any annual sum the US has ever paid for security in any war at any time, Mr. Wheeler notes. It even exceeds annual security spending today by all other nations on Earth.
US federal energy research spending therefore equals about a half of a percentage point of US defense costs. Yet technological advances could obsolesce oil, reduce money available for terrorism, reduce money available to spread Wahhabi Islam, and greatly decrease US interests in the Persian Gulf and in the Middle East as a whole.
When faced with arguments for war or projections of future conflicts over resources we should always stop and ask ourselves whether armed conflict could be avoided by accelerated advances in science and technology.
Will the trend toward less armed conflict continue indefinitely? Here are some reasons why that may not be the case:
We can not avoid all violent conflict. But scientific and technological advances could eliminate the motives and means behind some conflicts.
Update: Some factors weigh in favor of reduced conflict in the future. Most obviously, the populations of the Western countries, Japan, and China are all rapidly aging. War is a young man's game. As young men become proportionally smaller portions of various populations the mainstream of each population will oppose war. Also, small family sizes make mothers especially more reluctant to risk losing a single son at war.
The effects of future rejuvenation therapies will cut in both directions. By making populations physically younger and boosting testosterone levels rejuvenation will make populations more physically able to engage in war. But the knowledge that one's own death in war would cost one thousands of years of foregone life might make people very risk averse. Some rejuvenation enthusiasts make that argument. But I'm not totally sold on it because human minds are flawed and humans do not always properly calculate risks and benefits. Look at gambling addicts or people who engage in dangerous sports for the thrill of it. Rejuvenation by itself will not make people perfectly rational calculators. For a substantial fraction of the world's population urges for immediate gratification of desires for revenge, pleasure, and dominance might override fears of death or desire for longer term satisfaction.
Felicity Barringer of the New York Times reports on the potential for a political deal that would restrict greenhouse gas emissions in exchange for enabling a comback for nuclear power.
In recent statements, three top environmental experts - Fred Krupp, the executive director of Environmental Defense, and Jonathan Lash, the president of the World Resources Institute and James Gustave Speth, the dean of Yale's School of Forestry and Environmental Studies - have stopped well short of embracing nuclear power, but they have emphasized that it is worth trying to find solutions to the economic, safety and security, waste storage and proliferation issues rather than rejecting the whole technology.
These efforts to edge away from the established orthodoxy coincide with moves by Senator John McCain, a Republican from Arizona, to offer significant financial incentives for the development of three new nuclear technologies -each with its own corporate backer - as part of a bill he and Senator Joseph I. Lieberman, Democrat of Connecticut, are sponsoring to regulate emissions of heat-trapping gases.
The proposed subsidies are in part to fund the cost of getting the first reactor of each design through the regulatory process. The first reactor for each desgn will be far more expensive and financially risky. The cost of funding the whole design will otherwise fall on either the first buyer or each design maker. The design makers do not want to pay because they fear a politically risky environment. Regulatory barriers might go up due to shifting political winds after just a few reactors get built. The provision of the federal funds is also seen as an important risk reducer because it basically would signal a commitment of the federal government to allow new nuclear power plants to be built.
What is referred to as 3 new technologies are 3 conventional nuclear plant designs (probably all light water reactors). These are not breeders, pebble bed modular reactors, or any other radical departure from existing designs. General Electric is one of the corporations with new nuclear plant designs. The article doesn't say but Westinghouse's AP1100 is probably another design on the list. Anyone have a guess as to the identity of the third corporation with a new nuclear plant design?
The addition to the McCain-Lieberman bill, which is being circulated in draft form, would codify a new political bargain. Conservatives would support emission controls in return for liberal support for a new generation of nuclear power plants, a shift that could reshape the existing alignments on these issues.
Most of the environmental groups mentioned in the article still emphatically oppose nuclear power. But environmentalist opposition to nuclear power is now far less uniform than it has been for the last few decades. Some notable environmentalists such as Stewart Brand are thinking that nuclear power is the lesser evil as compared to carbon dixoide emissons. Whether that is a correct assessment of the situation remains to be proven, both on the risks of nuclear power and the risks from rising CO2 emissions.
I see an irony in the debate amoong environmentalists about nuclear power and global warming: If we were to wait to deal with the prblem of rising carbon dioxide until new technologies are developed (which happens to be the course I advocate - combined with a much bigger push to develop new energy technologies) we could probably reverse the carbon dioxide emissions rise in 20 or 30 years without much use of nuclear power. Within a decade or two photovoltaics might be cheap enough to compete as a source of energy. Also, advances in battery technologies will some day solve the problem caused by the inability of ground-based solar power to support electricity 24 hours a day. An attempt to substantially reduce oil, natural gas, and coal consumption with existing technologies runs flat into the fact that only nuclear power can scale cheaply enough to offer a realistic alternative today.
The people who accept the most gloomy predictions of the effects of rising carbon dioxide are therefore (rightly or wrongly) painting themselves into a corner where nuclear power suddenly becomes a contender once again. Environmentalists have stoked up the popular fear of the global warming boogeyman to the point where they now find themselves forced them to wrestle with their fear of the nuclear power boogeyman.
In my view the environmentalist groups have made a big mistake for decades by putting far more emphasis on what they are against (nuclear power, conventional pollutants, greenhouse gas emissions, etc) and not enough effort to promote the development of cost effective technologies that could displace older dirtier technologies. The best way to solve the problems caused by fossil fuels burning is more basic research and technological development. Research can lead to technologies will be both cleaner and cheaper than fossil fuels. Given cheaper alternatives the market will phase out fossil fuels without expensive regulatory regimes and controversial international treaties.
The environmentalist groups which advocate for a reduction in greenhouse gas emissions ought to advocate just as loudly for increased basic research in electrochemistry to produce discoveries that will enable new type of batteries to be developed. Similarly, the environmentalist groups ought to be loud advocates for higher funding of photochemistry research in order to produce discoveries that will lead to cheaper photovoltaics. Both these areas of research are underfunded and both can produce discoveries that will enable a post-fossil fuels economy.
Mark Clayton of the Christian Science Monitor has written an article reporting on the growing coaltion on energy policy forming between environmentalists and national security hawks.
What's new is that security-minded conservatives have begun to jump on the energy-independence bandwagon too.
Last fall, the Institute for the Analysis of Global Security, a Washington think tank on energy, issued a plan called "Set America Free." In December, the bipartisan National Commission on Energy Policy released its strategy. Last month, a bevy of national-security "energy hawks," military brass, and industry officials, as well as prominent Democrats and environmentalists, published their plan under the name Energy Future Coalition.
"We believe that the United States' dependence on imported petroleum poses a risk to our homeland security and economic well-being," wrote EFC in a letter to President Bush in March signed by more than 30 military and security officials, including Robert McFarlane, former national security adviser to President Ronald Reagan.
The new found interest in energy policy among Washington DC national security types bodes well that energy policy will improve. The development of a big coalition between environmentalists and national security hawks would be hard for either major American political party to ignore. The US government doesn't spend just mere billions on defense. It spends serious hundreds of billions with the Department of Defense alone spending around $400 billion per year. Additional national security money is spent through the Department of Energy and the Department of Homeland Security. National security types are accustomed to throwing around large sums of money.
But even if hawks can build a coalition that supports big spending on energy research and conservation efforts will they get it right, or even half right? A lot of them seem to understand that oil's days are numbered. They certainly understand the national security problems caused by the world's dependence on Middle Eastern oil. Some of them even want rapid progress and not just the distant hope of some day developing enough technology to switch to hydrogen. So they might get it right enough to speed up progress in areas that matter.
Certain options rise to the forefront when the goal becomes phasing out oil. The big problem is transportation. We either must find other ways (i.e. biomass) to generate a lot of liquid hydrocarbons or we must find ways to make cheap and light batteries. If we can solve the battery problem then the non-oil ways to power cars become wind, solar photovoltaics, nuclear, or coal. Cheap light batteries should therefore be seen as enabling technologies that open up a lot of possibilities to replace oil.
My hope is for a big increase for research into electrochemistry in hopes of finding better materials for making batteries combined with a big increase for research into photochemistry to find better materials for making photovoltaics. I'd also like to see an acceleration of nuclear energy research into pebble bed modular reactors, breeders, and reactor designs that would use a particle accelerator as a neutron source. Better reactor designs could reduce nuclear waste generation, reduce accident risks, lower costs, and make nuclear power more nuclear weapons proliferation resistant.
I'd also like to see the US government place high energy efficiency standards on itself (and its suppliers) in order to demonstrate how much energy efficiency is achievable. Lead by example.
The latest advocates are former fans of renewable energy at the European Union, who say the strategy will be "essential" if the EU is to meet targets for limiting the emissions of the greenhouse gas CO2. This month, at a conference in Brussels, Europe's new commissioner for energy, Andris Piebalgs, said the EU could cut CO2 emissions while continuing to burn its native coal and lignite. And still stay economically competitive.
Notice the phrase "former fans of renewable energy". Now that the Euros have put themselves on the hook to meet Kyoto Accord carbon dioxide (CO2) emissions reduction targets their leaders are finally looking hard at the cost of a large scale shift to non-fossil fuel energy sources and they are not liking what they are finding. Hence Tony Blair's sudden warming to nuclear power and the EU energy commissioner's embrace of technologies for clean coal. These people are beginning to sound a lot like the Bush Administration (leaving aside Bush's deal with the coal burners that put them on the slow road to cleaning up their power plants).
Solar photovolatics are literally an order of magnitude more expensive than nuclear or wind. So what is being discussed here is the idea of making extremely clean coal power that can compete with nuclear and wind power.
Cost is the big issue. CO2 has to be separated from the exhaust fumes, piped to an oil field, coal field, or other suitable deep underground formation, and then piped down into the ground. Each step has a cost associated with it. Does anyone know which of the steps is most expensive?
Note that injection of CO2 into coal can help to produce methane from coal. So part of the sequestration cost can be offset by the value of the extracted methane. Similarly, CO2 injection into depleted oil fields can be used to enhance extraction of oil from those oil fields. So again part of the sequestration cost might be offset by additional energy extracted as a result.
At an estimated current price of $40 to $60 per tonne of CO2, carbon storage and burial is still not cheap, though its proponents say it could soon compete with renewable energy.
So here is the question: In a modern high efficiency coal burning electric generating station how many kilowatt hours of electricity are generated per tonne of CO2 emitted? Does anyone know the answer? Take that number and divide the $40 or $60 by that number to get the cost of CO2 sequestration per kilowatt-hour. For coal to compete that cost must work out to at most a couple of pennies per kilowatt-hour.
This is part of a bigger question I've asked here before: Given current technologies what is the total cost (measured in pennies per kilowatt-hour) for reducing emissions from coal burning electric power stations by 99+%?
My guess is that even with technological advances achievable within the next 5 years very low emissions coal burning is going to be a lot more expensive than nuclear. Look forward 20 years and maybe photovoltaics will be as cheap as nuclear. But right now nuclear is the cheapest way to reduce CO2 emissions while simultaneously producing little in the way of other immediate pollution.
A recent decision by the government-owned Los Angeles Department of Water and Power (LADWP) to go ahead with a wind power installation in the Mojave is worth reviewing for what it says about the current state of wind power. A couple of years ago the municipally owned power generator for Los Angeles announced plants to build wind towers in the Mojave Desert for electric power.
ATLANTA, GEORGIA (February 27, 2003) — GE Wind Energy will supply 80 wind turbines for a new, 120-megawatt facility in California’s Mojave Desert that will be the first wind project for Los Angeles Department of Water and Power (LADWP), the nation’s largest municipally owned utility.
When completed in the summer of 2004, the Pine Tree Wind Project will produce clean, renewable electricity for LADWP customers. The project is being developed by Wind Turbine Prometheus, LLC, a partnership between Zilkha Renewable Energy, LLC and Prometheus Energy Services, LLC. Wind Turbine Prometheus will utilize GE’s well-proven 1.5-megawatt wind turbines. The machines will be installed on approximately 22,000 acres of land located 12 miles north of Mojave, California.
According to the AWEA, California leads the United States in wind energy production, with a total wind generating capacity of 1,822 megawatts. The total installed capacity of wind energy in the U.S. at the end of 2002 was more than 4,600 megawatts, or enough to serve more than 1.2 million households.
But what is the average output of those 4,600 MW max windmills?
The Pine Tree Wind project, which will be the largest municipally owned wind plant in the U.S., would provide up to 120 megawatts (MW) of renewable energy -- enough to power approximately 56,000 homes per year. Located approximately 12 miles north of Mojave, Calif., 6 miles west of Highway 14, the project consists of 80, 1.5 MW wind turbine generators, as well as a 10-mile transmission line and electrical substation.
Wind power is not without its environmentalist opponents. According to a March 2005 report the project now faces environmentalist objections over dangers to migratory birds.
And just when it seemed poised to go forward in advance of a mayoral election that could be decided by a handful of environmentalist votes, the Pine Tree Wind Farm has hit yet another obstacle: the defenders of the hundreds of songbirds that some ornithologists believe fly through the proposed 22,000-acre site in the Mojave Desert every year.
A proposed $162 million project that would supply clean energy to 120,000 Los Angeles homes, the Pine Tree Wind Farm could help the DWP meet a goal of 20 percent renewable energy by 2017, as set by the Los Angeles City Council last year.
56,000 homes or 120,000 homes? Maybe it depends on how hard the wind is blowing. 56,000 on average and 120,000 when the wind is blowing hard? Anyone know?
The Los Angeles Department of Water and Power (LADWP) Board of Commissioners approved the final Environmental Impact Report to move forward with a new energy generation facility that will provide up to 120 megawatts (MW) of wind power for the City of Los Angeles.
The wind tower site size has shrunk.
It will be located on 8,000 acres (about 12.5 square miles) in the southern Sierra Nevada Mountains, approximately 12 miles north of Mojave, Calif.
The birders of the Audobon Society are not mentioned in the list of environmental organizations excited about this project.
A coalition of environmental organizations -- including the Coalition for Clean Air, Global Green USA, Natural Resources Defense Council, Center for Energy Efficiency and Renewable Technologies, and Physicians for Social Responsibility-Los Angeles -- voiced support for the project during today's Board meeting. In a letter addressed to the Board, the group's stated that LADWP has taken appropriate steps to address stakeholder concerns about the project's impacts on the local community, wildlife and natural resources.
All these stories do not translate these costs into cents per kilowatt hour. Nor do they provide any indication of what percentage of maximum output the windmills are expected to achieve on average or how much it costs for the LADWP to maintain backup natural gas fired generators to step in and supply power when the wind is blowing more slowly.
The LADWP is a monopoly power provider owned by a government. It can make investment decisions that a power provider in a competitive market could not afford to make. Therefore the decision of the LADWP to build a wind farm can not be taken as an indication that wind power is competitive.
As near as I can tell most wind power installations are being installed because some government jurisdictions want to decrease the percentage of power they obtain from fossil fuels and they find wind power as the most acceptable way to do so. Wind currently costs much less than solar photovoltaics and the jurisdictions installing wind towers are unwilling to consider nuclear power. So wind is effectively the only game in town for them. But when wind projects are announced the expected cost in kilowatt-hours is rarely mentioned.
Are there places where the wind blows so hard and so steadily that it can compete economically with natural gas and coal? My guess is that the answer is "Yes". But one has to look at the politics behind each big wind installaton to determine what portion of all the wind installations are being installed purely based on economic considerations.
Mind you, I'm not opposed to use of environmental considerations when choosing power sources. But I'd like to see more transparency in decisions that will increase electric prices in exchange for lower emissions. What price is being paid to decrease what types of pollution? The price is more worth paying in order to avoid the higher emissions from a coal burning electric plant than it is when the other alternative is a natural gas burner. On the other hand, coal costs less in the first place. So the price difference is higher between coal and wind power.
Another point: While one can find estimates for cost of electricity from coal burning electric plants (see a previous post of mine on nuclear power costs for some comparative cost data on coal electric) I've yet to come across cost data on coal plants that are made to burn super clean. Imagine a coal plant that removed 99+% of its mercury, uranium, other heavy metals, particulates, and oxides of nitrogen and sulfur. What would electricity from such a plant cost?
Has the coal industry been so successful in delaying the imposition of tougher regulations on coal burning plants that the development of a market for extreme coal emissions scrubbing technology has been delayed? That's the way it looks to me. Are local authorities in the United States so hampered by the national government from imposing tougher emissions controls on fossil fuel burning power plants that the local authorities turning in frustration toward wind power? Again, that is the way it looks to me. Am I right or wrong in these beliefs?
Over at the NEI Nuclear Notes blog Elizabeth King reacted to an earlier discussion we had here on Futurepundit about nuclear power costs and has written a post on efforts by the nuclear power industry to set and achieve goals for nuclear power capital costs.
To ensure a common basis for comparison, the capital costs of electric generating technologies are expressed in dollars per kilowatt of capacity. The capital costs used in such comparisons are so-called “overnight” capital costs—i.e., they assume the plant is built “overnight” and thus do not include interest charges and financing costs.
In order to provide competitive electricity, the nuclear industry has determined that the next generation of nuclear reactors must have overnight capital costs in the range of $1,000 – $1,200 per kilowatt of generating capacity for the so called “Nth-of-a-kind” nuclear plant. Nth-of-a-kind capital costs are achieved after first-time design and engineering costs have been recovered and as industry incorporates improvements in construction techniques and construction management gained during construction of the first few units.
Let us suppose the nuclear power industry has met this stated cost goal. Well, how to translate those numbers into kilowatt-hour (kwh) prices that are a few pennies each at the residential meter? As a starting point I'll note that there are 8760 hours in a year. Also, nuclear plants run for decades and the new designs are supposed to last longer (anyone know how much longer?).
There are additional costs including nuclear fuel costs, labor costs, maintenance costs, waste disposal costs, decommissioning costs, and still other costs.
Also, how many nuclear plants would have to be built before “Nth-of-a-kind” costs would be 90+% of the cost of building a nuclear plant?
I have cells operating at about 300 watts per kilogram, which is double what lithium ion is doing today. I think there's plenty of room at the top here. We're not banging up against the ceiling yet.
Where will the next big leap come from? Solid-state batteries. We think the next improvement will come from eliminating any liquid from the battery. We think that there are opportunities for looking at multilayer thin-film laminate with no liquid, a polymer as the electrolyte separator. You're looking at something that's similar to a potato chip bag, a polymer web coated with a different layer of chemistry. We can make that by the square mile -- it's not difficult to do. We're talking about a doubling or tripling of the capacity of today's batteries, as opposed to a 20% or 30% improvement.
Sadoway also says that the fuel cell fad starting in the 1990s caused a shift of government research funding away from batteries toward fuel cells. But he says that even before the fuel cell fad the government was putting little into battery research funding.
I think the US government's focus on fuel cells and hydrogen research is a mistake. We could achieve some major gains in energy efficiency much sooner if battery research was ramped up. Hybrid vehicles are becoming popular now whereas hydrogen fuel cell vehicles are probably decades into the future. Hybrids avoid the need to totally replace the existing infrastructure for delivering energy for transportation.
Batteries could also serve as an important enabling technology for both wind and solar energy by providing a way for energy generated at peak times to be used when the wind doesn't blow and the sun does not shine. Battery technologies pushed forward now could first find large scale use in hybrid vehicles. Then as wind and solar photovoltaics become cheaper the battery technology will already be available to enable their more rapid adoption.