On February 22, the Oregon Legislative Assembly passed HB 3619, which will modify the Oregon Business Energy Tax Credit (”BETC”). Based on the bill’s overwhelming support in both the House and Senate, it is expected to be signed by the Governor. The bill primarily relates to the amount of BETC available to a manufacturer of renewable resource equipment, including solar panels, but the bill also contains provisions relevant to the BETC generally.

The prospect of going through a cold winter with inadequate heat is a real one.  More and more Americans are putting their winter heating fuel on credit, increasing their level of debt and the burden of servicing it.  This cannot continue indefinitely.  When the ARM resets or the credit cards max out, the whole house of cards (including paying the mortgage) falls down.  Foreclosure is the problem in the mid-term, but freezing strikes as soon as there’s no fuel for the furnace.

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This problem is made much worse by fuel shortages and the consequent price spikes.  As fuel supplies go down, prices go up.  The alternative is rationing, but this has costs too; if commerce is shut down, employees don’t get paid and the problem of paying for heat is much the same.

The problem comes down to affordability.  Whether there is a limit to the gas available, or if incremental supplies command unaffordable prices, the alternatives are to do more with less, or do without.  As N. American gas supplies are already shrinking, any good solution has to involve getting out in front of the problem and staying there.

So what can we do?

In the end, natural gas will be too expensive to burn just for space heat.  The obvious long-term solution for most areas is a combination of superinsulation and passive solar design; if you need no fuel, you don’t care how much it costs.  Does anyone care about the cost of spermaceti anymore?  But that’s a 50-year goal; the immediate problems are going to center around keeping existing buildings warm and lit until they are finally renovated or replaced.

If we have a relatively fixed building stock and a declining supply of gas for heat, the problem becomes one of getting the same amount of heat out of less fuel.  The big question is if we can do that, and how?

Can we do it?  I believe the answer is “yes”.

Why should you believe me?  Because I see a way for it to be done.  The technologies have been with us for decades, though newer ones will improve the performance.  It’s attractive enough that some businesses have been moving this way for years; all we have to do is accelerate the existing trends.

How do we do it?  In the longer term, we replace natural gas with electricity.  But this takes a relatively long time to plan and build generators, transmission lines, and so forth.  In the short term, we do jiu-jitsu with entropy.

The nature of the fix

Getting into the details requires a discussion of entropy.

Entropy is a rather arcane concept, and hard to grasp without at least an introductory course in thermodynamics.  I’m not going to ask that of readers here, or take the time and space for the digression.  I’m just going to ask you to accept three things:

• That energy is conserved; any energy in a system came from somewhere, and can neither be created ex nihilo nor disappear.
• That energy in the form of work (turning a shaft, electricity) is more useful than energy as heat.
• That work can be used to move other energy around in useful ways.  One is to push heat from a lower temperature to a higher temperature.

How does this help fix things?  It helps if I restate the problem.

The nature of the problem

We have a lot of building stock which was constructed with relatively poor insulation and little attention to passive heat gain and thermal mass.  Most of this building stock is heated by burning fuel in an open flame at a couple of thousand degrees F, then diluting the heat down to a comfortable temperature.

This dilution of heat involves an enormous increase in entropy.  Allowing an increase in entropy means throwing away an opportunity to do useful work.  What kind of useful work could we want?  Simple:  we could use some work to push more heat (a lot more) to where it does us some good!  And how do you do that?  A few pictures might help:

Here is house #1.  It needs 45 million BTU of heat per year to stay warm in the winter.  If it is heated by a condensing gas furnace at 90% efficiency¹, it will use 50 million BTU/year of gas (and 5 million BTU goes up the chimney).  At near-future prices of perhaps $1.50/therm (100,000 BTU), the gas will cost about $750/year.  As natural gas supplies shrink, the price of natural gas will tend toward parity with the price of oil.  Oil at $100/barrel is roughly $1.70/therm; since natural gas is interchangeable with oil for some purposes, we can expect this to be a price floor relatively soon.

90% efficiency may sound like a lot, but it isn’t in this context.  The gas furnace is essentially taking the expensive energy as high-temperature heat and, by diluting it, immediately throwing a great deal of its usefulness away.  We don’t have to do this.  What we want to do is take the fuel and extract some of the energy as work; we can use the waste heat for heat, and the work as the muscle for our jiu-jitsu.  Climate Energy even has complete systems for sale; not the exact specifications desired, but proof that it works.

Climate Energy’s cogenerator efficiency is our major point of interest.  They claim 18.5 thousand BTU/hr in to get 1.2 kW of electricity out (about 4100 BTU/hr of electricity).  This is a thermal efficiency of about 22%.  Losses come to another 2400 BTU/hr, or about 13%.  The losses are a bit high (probably due to the design), but the efficiency seems about par for an engine of that size.

When the heat demand goes over 12,000 BTU/hr, the Climate Energy system has to fall back to a conventional furnace.  This sacrifices the advantage from cogeneration.  We can improve the system efficiency with two changes:

1. Making the engine bigger, to supply all heating demand from the engine and reduce heat losses to the cylinder walls.
2. Using outside air to feed the engine and recover latent heat in the exhaust.

With these changes, we can almost certainly hit 30% thermal efficiency in the cogenerator, and 90% total efficiency².

Assume that we’ve got it.  What do we do with it?  Using this in just one house wouldn’t help.  Gas demand would go from 50 million BTU/year to 75 million BTU/year per house.  How does this improve matters?

Sharing is caring

The twist comes when we get to houses #2 and #3.  In the process of heating itself, house #1 would generate 22.5 million BTU (6590 kWh) of electricity.  Electricity is energy, but it isn’t just some random form of energy; it represents work, which is far more useful than heat.  As a matter of fact, it can be used to push heat from colder temperatures to warmer ones using a heat pump.  The best heat pumps can achieve leverage of 4:1 and more (HSPF of 13.6 or greater).

House #1’s cogenerator makes 6590 kWh of electricity, or 22.5 million BTU worth.  House #2 needs 45 million BTU of heat, but its heat pump only needs 11.25 million BTU of electricity (3295 kWh) to supply it.  The surplus passes on to house #3, which is completely heated by the remaining 3295 kWh.  We’re now heating three houses on the gas that it formerly took to heat one and a half; given that it would have taken 150 million BTU to heat all three houses using gas furnaces, the net reduction is 50%.  At $1.50/therm, the total cost of heating all three houses is just $1125/year, or $375 each.  The reduced demand for gas will help hold the price of gas down.  If oil goes to $200/bbl and natural gas prices follow suit, gas will cost about $3.45/therm and the combination of cogeneration and heat pumps would save about $2600/year.

I hear you saying “Wait!  You can’t make 135 million BTU of heat out of 75 million BTU of gas!”  You’re right; there is something missing from this diagram.  The part that isn’t shown is the 67.5 million BTU of heat taken from the outdoors by the two heat pumps and pushed indoors, courtesy of the capabilities of energy in the form of work.  Energy is conserved throughout.  Entropy also increases at every step, satisfying the Second Law of Thermodynamics.

What would this cost?  In mass production of several million units per year, I suspect a cogenerator could cost as little as $2500 (this is about what a much more powerful car engine, with 4 times as many cylinders and much more complexity, costs).  A single-cylinder engine making 6 kW of power at 30% efficiency would generate 14 kW (47,800 BTU/hr) of waste heat.  One such engine could replace a small-size furnace.  If the price of natural gas is equivalent to $200/bbl oil, the cogenerator would pay for itself in less than 5 years.

Half a loaf will get you to the store

The final objection, and also valid:  “This only gets us halfway.  Once gas supplies fall below 50% of today’s, we’re stuck again.”

That’s true as far as it goes, but nothing happens in isolation:

• We can get better than 30% efficiency.  Delphi and other companies are working to make solid-oxide fuel cells for automotive use.  These are already achieving efficiencies in the neighborhood of 50%.  At 50% efficiency, one house with a fuel cell can power FOUR houses with heat pumps, and fuel demand falls another 20%.  Even 50% isn’t the limit; direct-carbon fuel cells (DCFC’s) can turn charcoal into electricity with efficiency as high as 80%.
• The cogenerator is (remember the title?) a stopgap.  Cogenerators can make up the difference between the rapidly-increasing power needs of heat pumps and the slower increase of other electric generation (esp. renewable generation), the decline of gas supplies
  and the renovation and replacement of the building stock.  We will probably spend the next 10 years installing engine cogenerators, another 20 years building fuel cell cogenerators to replace worn-out engines, and the last 20 years phasing them all out as the building stock gets updated.

Can we build this many cogenerators?  It looks easy.  The USA currently buys about 17 million light vehicles per year, and 99% of them come with some sort of piston engine.  Many of these engines have 6 or more cylinders, and can produce at least 100 horsepower (75 kilowatts) per engine.  There are roughly 50 million buildings heated with natural gas; converting 10% of them per year would require just 5 million cogenerators.  If each cogenerator has one cylinder producing 6 kW, this is about 5% as many cylinders and less than 2.5% as much power as each year’s vehicle fleet.

Other twists

Nothing happens in isolation, and the cogenerator/heat pump scheme would be no exception; it would be intimately connected to the electrical grid, and by extension it would connect to everything else that’s plugged in.  The effects snowball, and they’re all good:

1. Any other source of power offsets demand for natural gas; if houses 1-3 have wind power available 30% of the time, about 5900 kWh (1/3 for the heat pumps, 2/3 for a resistance heater to substitute for the cogenerator) would cut gas use by 30%.  If off-peak wind power costs 4¢/kWh, this would use $236 of electricity to displace $338 of natural gas at $1.50/therm.  If natural gas climbs to $3.45/therm, the wind would displace $776 of gas.
2. Electric vehicles or PHEVs could be charged from the extra generation resource; shortage of electricity would be put off for quite some time.
3. Adding to #2, displacing petroleum from motor fuel would allow it to be used as heating fuel… in cogenerators, further extending the supply of both heat and electricity.
4. Adding as much as 300 GW of cogeneration to the grid, most of it within a block of the point of use, would add stability to the grid and slash transmission losses.
5. Any community with enough cogenerators would be able to operate as an “island” during a winter grid outage, making power interruptions far less troublesome.  Given electric vehicles with V2G capability, these islands could be as small as one house.

As you can see, there are many reasons to start on this path now.

Summary

A large part of the USA needs heat in the winter, and much of this is supplied by natural gas.  N. American gas supplies are shrinking rather rapidly, so we must do something about it for both the long and short term.  While we wait for the building stock to turn over, the combination of cogenerating furnaces, heat pumps and other grid-connected devices can shrink our total fuel demand, allow us to make substitutions much more easily and turn big problems into minor inconveniences.  If we want a warm, clean, secure and affordable future, this is a good place to start.

Footnotes:
1.  90% is on the low end of efficiency figures for condensing furnaces (which go up to about 97%), but it makes the numbers neater.  The broader conclusions are the same.
2.  These numbers are also chosen to make the arithmetic come out more neatly; small changes make small differences.

Further reading

Ground Source Heat Pumps, by Heading Out.

Are the days of easy-to-reach oil at an end?

Apart from a new price high, this week has been more of the same - oil prices have been high, and boy, are they looking to stay that way.

But what people are talking about now is the one factor that may keep those prices in place.

And the words of the day are ‘peak’ and ‘oil’.

Even in the UAE, where oil brings in the lion’s share of the country’s revenues, there is more than a little speculation about how much oil there really is.

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Matt Simmons: Twilight In The Desert - The Risk Of Peak Oil

Matt Simmons has posted the slides from his presentation to the Minnesota House of State Representatives.

Oil sands freeze a no-brainer for Big Oil

Everybody loves a no-lose proposition. Some people make a career out of searching for them: the investor who pays $10 for stock in a company with $11 per share of cash in the bank; the acquisitive CEO who buys a struggling competitor, strips out the best asset and sells the rest at a profit. No-lose deals are hard to find, but the shrewd exploit them – and never let it be said that the big oil companies aren’t shrewd.

Angola: Oil Production Reaches 1.9 Mn Barrels Per Day

Angola is since last week producing 1.9 million barrels of crude oil per day, thus moving from the previous 1.7 million until the end of 2007. Still, estimates indicate that by the end of this year the production should reach 2 million barrels a day.

Russia’s Gazprom signs agreement to develop Iran’s huge South Pars field

MOSCOW — Iran and Russia have signed a major energy deal.

Russia’s state-owned Gazprom reported an agreement to explore and develop energy reserves in Iran. Gazprom said it would work with Iranian companies to develop the South Pars field, regarded as the largest reserves of natural gas.

Plug-in cars could actually increase air pollution

The expected introduction of plug-in hybrid electric vehicles could cut U.S. gasoline use but could increase deadly air pollution in some areas, two reports say.

That’s because a plug-in’s lower tailpipe emissions may be offset by smokestack emissions from the utility generating plants supplying electricity to recharge the big batteries that allow plug-ins to run up to 40 miles without kicking on their gasoline engines. Plug-ins, called PHEVs, are partly powered, in effect, by the fuel used to generate the electricity.

Fresh records for price of wheat

High-protein spring wheat on the Minneapolis Grain Exchange rose by almost 25% to record levels on Monday.

Kazakhstan has become the latest country to put export restrictions on wheat as it battles against inflation.

Russia and Argentina have already imposed similar export restrictions.

CHINA: Staring At Grain Imports

BEIJING (IPS) - With global food prices on an upward spiral, China is facing renewed fears that its growing demand for grain to feed the world’s largest population may lead to imports from international markets, driving prices higher and spurring further food inflation.

The resurging “threat of China’s food security” may have induced more fatigue than alarm if it was not coming at a time of unprecedented scarcity of arable land, which is increasingly being converted to grow biofuels, and because of fresh challenges posed by global warming.

‘Doomsday’ seed vault opens in Arctic

LONGYEARBYEN, Norway - A “doomsday” seed vault built to protect millions of food crops from climate change, wars and natural disasters opened Tuesday deep within an Arctic mountain in the remote Norwegian archipelago of Svalbard.

“The Svalbard Global Seed Vault is our insurance policy,” Norway’s Prime Minister Jens Stoltenberg told delegates at the opening ceremony. “It is the Noah’s Ark for securing biological diversity for future generations.”

Climate Critics Rattle Virgin Atlantic CEO

LONDON - When a Virgin Atlantic Boeing 747 took off from London’s Heathrow Airport on Sunday, carrying a symbolic 25% load of biofuel blend, most eyes were on the airline’s billionaire president Sir Richard Branson. He called the event a “historic occasion,” warned that peak oil could hit in the next six years, and voiced his frustration that other airlines were not working hard to promote biofuels.

But on the sidelines of the press conference, Steve Ridgway–the less well-known Chief Executive of Virgin Atlantic–was in a more thoughtful mood, voicing his concern over the pressures that had pushed the aviation industry into the environmental spotlight.

3rd artificial flood set for Colo. River

This is the third such test on the river since 1996, and it could end as the most controversial amid questions about whether the government has shirked its obligations to protect the canyon’s natural resources.

At issue is how to manage a structure that stores water and provides electrical power for millions across the West, yet has also damaged a complex ecosystem.

Indian tribes exercising water rights

GREAT FALLS, Mont. — For decades, ranchers and farmers across the West have tapped into rivers and streams on or near Indian reservations. Now, as drought conditions plague big parts of the region, they’re concerned their access to those sources could dry up.

Although the U.S. Supreme Court gave tribes the primary rights to streams on their reservations in 1908, until recently, 19 tribes in the West had not exercised those rights. This year, tribes in Montana, New Mexico, Idaho, Nevada and California are on the verge of securing their claims.

Agnes B: fashion designer funds polar odyssey

PARIS (AFP) - Paris fashion designer with a conscience, Agnes B. was among thousands who massed on a seashore this weekend to give a hero’s welcome to a sailboat that deliberately remained trapped in Arctic pack ice for almost a year and a half to research global warming.

UN climate head: US stand a `nonstarter’

NEW YORK - The U.N. climate chief on Monday welcomed statements by Bush administration officials that the United States would accept a binding international commitment to reduce global-warming gases. But he said their insistence that China and other developing nations do the same “is not realistic.”

“If it’s a quid pro quo, then it’s a nonstarter,” said Yvo de Boer, executive secretary of the Bonn-based U.N. climate secretariat.

Global Warming Melts New Sea Lanes for Norilsk, ConocoPhillips

(Bloomberg) — Norilsk, the world’s biggest producer of nickel, is building its own shipping fleet to capitalize on the melting of the polar ice caps.

The company ordered five reinforced cargo vessels that can plow through the waters north of Siberia as new sea routes open. Norilsk is spending at least 320 million euros ($467 million) to buy reinforced vessels rather than rent both freighters and icebreaker escorts.

The thawing sea “has enormous economic implications, and commerce is going to push this ecological zone to the limit,” says Rear Admiral Timothy McGee, head of the U.S. Navy’s Meteorology and Oceanography Command.

On Wednesday, the Public Utilities Commission of Nevada (PUCN) is expected to rule on the legality of renting or leasing renewable energy equipment in the state, a decision that could have wide-reaching implications for the distributed energy market.

Although the last few years have seen the solar PV market facing a significant challenge due to shortages and allocations of polysilicon, consulting company Frost & Sullivan believes that 2008 will bring a turnaround. According to the company’s latest forecasts, the global solar photovoltaic market earned revenues of $6.49 billion in 2005, and should reach more than $16 billion by 2012 as polysilicon supply catches up with demand.

Speaker of The U.S. House of Representatives Nancy Pelosi, House Majority Leader Steny Hoyer, and Ways and Means Committee Chairman Charles Rangel have released a statement on the Renewable Energy and Energy Conservation Tax of 2008 (H.R. 5351), which will be voted on in the House this week.