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.
Margonelli also argues tax policy discourages energy efficiency (PDF format).
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.
A commission sees the greatest energy conservation potential in better building design.
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.
Britain might pay 15% to 20% more for electricity from expensive offshore wind towers.
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.
Electric power is the easiest form of energy to shift over toward renewables.
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.
British families might end up paying about $1400 per year more per family. Ouch.
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.
That figure originally came from a British government report.
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.
Britain is looking at 10,000+ more wind turbines to satisfy this regulatory requirement.
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.
California's regulatory authorities are taking over your home thermostat.
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.
Dynamic pricing based on short term changes in supply and demand is a spreading experiment.
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.
A list of top 10 VC deals in 3Q 2007 has 2 energy entrants.
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.
Also in 3Q Konarka got $45 million for solar photovoltaics.
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.
This trend toward larger amounts of VC funding for energy did not just start. See my December 2005 and March 2007 posts about venture capital funding for energy.
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.
The coal industry wants government subsidies to start producing liquid fuels for transportation.
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.
"Get 'er done" kinds of people are investing in cleaner energy technologies.
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.
China is turning on a new coal-fired electric power plant once every 4 days.
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.
Water to generate electricity for a household is 3 times as much as water used directly by a home.
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.
Expect higher meat and dairy costs as farmers cut back on their herd sizes.
“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.”
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“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..
VCs see huge riches in creating the next great energy source.
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.
The report is available online as an Executive Summary, Presentation, and Presentation Q&A.
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.
The US capacity expansion is down in the noise next to China.
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.
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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 so