McCain says “I have a long record of that support of alternate energy….. I’ve always been for all of those and I have not missed any crucial vote.”
Yet John McCain has been the Senator with …

Maryland Legislation Taps Energy Efficiency as the First Fuel

Governor O’Malley’s Energy Efficiency Bills Are Passed by Legislature

Washington, D.C. (April 9, 2008): Maryland’s legislators gave final approval this week to two landmark energy bills that together aim to reduce the state’s energy consumption by 15% by 2015. The legislation, proposed by Governor Martin O’Malley, sets the stage for Maryland to become a leader in capturing the benefits of energy efficiency.

“These two bills provide a foundation for a clean and sustainable energy future for the state of Maryland,” said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy (ACEEE). “Maryland’s policies now recognize energy efficiency as the ‘first fuel’ for meeting its future energy needs.

[break]

A study released in February by ACEEE evaluated a suite of energy efficiency policies for Maryland and found that more than enough energy efficiency resources exist in the state to meet Governor O’Malley’s ambitious 15 by ‘15 goal, and confirmed that reducing electricity consumption is the quickest, cheapest, and cleanest way for policymakers to bring consumer bills down and keep the lights on in the state.

Two of the bills are key to meeting the Governor’s goals. The first codifies the goal of reducing per capita electricity consumption 15 percent by 2015. This target, known as an energy efficiency resource standard, will require the state’s electric utilities to achieve 10% savings by 2015 and the Maryland Energy Administration (MEA) to oversee programs to meet the remaining 5%. The second bill establishes a Strategic Energy Investment Fund supported by the proceeds of upcoming auctions of the state’s carbon dioxide emission allowances and administered by MEA. About half of this new fund, which is expected to reach $100 million or more per year, is to be expended on programs to reduce energy consumption, including low- and moderate-income electric customers.

In addition, the General Assembly passed a bill that requires energy-efficient and environmentally friendly design and materials for new state buildings and public schools, and a separate bill that boosts the state’s renewable portfolio standard (a target for the portion of the state’s energy derived from wind, solar, and other renewable sources) to 20 percent by 2022.

Among all the possible energy resources available to the state, energy efficiency is the least-cost and the quickest to deploy,” said Maggie Eldridge, ACEEE’s State Team Leader. “By committing to investing in energy efficiency, Maryland can meet its future electricity needs while containing energy costs for the state’s consumers. This legislation is an extremely smart investment for all Marylanders.

ACEEE’s analysis shows that the benefits of energy efficiency include lower consumer electric bills, improved system reliability, significant job and economic development in the state, and reduced pollution. Our analysis of policy options available to Maryland identified potential net consumer electric bill savings of about $900 million and over 8,000 new in-state jobs in 2015,” said Eldridge. “The provisions included in this year’s energy legislation and last year’s appliance efficiency standards address about 90% of the efficiency savings that we identified.

Helping consumers save energy means helping families reduce their electric bills, said Ed Osann, Senior Associate with ACEEE. We commend the General Assembly for answering the Governor’s call to help Marylanders make their energy use more efficient.

The foundation for a more energy-efficient Maryland is now in place, said Neal Elliott, ACEEE’s Associate Director for Research. “ACEEE looks forward to working with the Maryland Energy Administration, the Public Service Commission, utilities, and consumers as new programs are developed that will achieve these ambitious goals. Based on our work with leading energy efficiency programs across the country, we are confident that Maryland can succeed.”

Energy Efficiency: The First Fuel for a Clean Energy Future-Resources for Meeting Maryland’s Electricity Needs can be downloaded for free at http://aceee.org/pubs/e082.htm or purchased for $50 plus $5 postage and handling from ACEEE Publications, 1001 Connecticut Avenue, N.W., Suite 801, Washington, D.C. 20036-5525, phone: 202-429-0063, fax: 202-429-0193, e-mail: aceee_publications@aceee.org .

About ACEEE: The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection. For more information about ACEEE and its programs, publications, and conferences, visit http://aceee.org .

I was invited to a blogger’s conference call on April 1, hosted by the American Petroleum Institute (API). We were told that each blogger would be allowed to ask one question of Peter Robertson, Vice Chairman of the Board of Directors of Chevron Corporation. The material we were provided in advance was the written statement of Mr. Robertson, prepared for the House Select Committee on Energy Independence and Global Warming. It included a number of charts, including this one:

My question was, “How realistic is EIA’s Chart 5 scenario? If you look at Chart 5, it looks like there is no need to conserve.”

[break]
This was the discussion:

03:35 MS. TVERBERG: I was looking at the charts that you sent out earlier today with various projections of things. If you look at Chart 5: U.S. Domestic Oil Supply and Demand, if you look at it, it basically says that including imports, the total amount of oil available will continue to go up through 2025, and that the amount that the U.S. will produce including enhanced oil recovery and new discoveries will go up. I mean, this pretty much gives the view that you don’t need to conserve because there’s plenty of oil that’s going to be available. How realistic do you think this scenario that the EIA has put together is?

04:21 MR. ROBERTSON: Well, I mean, you know, of course this doesn’t – this is the U.S. So –

MS. TVERBERG: Well, this is the U.S., right.

04:28 MR. ROBERTSON: This is the U.S. so this says that we’re going to have to import, you know, about the same amount of oil, according to this case and the next 20 years, and the real problem is, you know, is that available to be imported? I mean, everybody else in the world is obviously competing for that 11.5 million barrels as well. So you know, what is going to happen to prices during this period and how tight is the rest of the world going to be?

So I mean, I think the point of this chart was really to make a point about U.S. We need – there are existing crude and – this is oil now, this is not gas, so this is just what’s going to be needed – oil, this is really almost a transportation fuel chart because the main thing that oil is used for –, not the only thing, but the main thing it’s used for is transportation fuels. And so far, we have difficulty substituting something for transportation fuels.

So this is sort of an oil chart, but what it says is that look how important our existing oil production is in the United States and look how it declines unless we do additional exploration and we get some new technology and we, you know, we get some areas where we can explore and all of these things, because the biofuels – and the biofuels part of this chart is what – you know, is the – what happened in the energy bill last year, so that’s – and you can see the impact of that. It’s still – it’s important, but it’s still not going to change the position.

05:50 So even after all this, even if we do – if we’re able to keep the existing crude production flat – which we haven’t done for many, many, many years – you know, as you guys know where it was nine million barrels a day about 20 years ago, now we’re about five million barrels a day in the U.S. You know, and that – that sort of trend line is besides a blip here, probably from the Gulf of Mexico. You know, the trend line has sort of been down for a long time. So we’re going to have hard work just keeping this flat. It says that, you know, we’re still going to have to import a lot of oil, and that’s the problem. And the opportunity is to shrink that amount of oil that we import, because we are going to be competing with the rest of the world for it, and who knows what the price of it will be.

John Felmy, API’s Chief Economist, then pointed out what is easy to miss. EIA’s top line is really an estimate of demand. Demand is estimated based on an economic model that includes the desired level of economic growth together with a growth in efficiency equal to what it has been in the past — about 1.6% per year, plus the expected impact of the new fuel economy requirements from the 2007 legislation. Thus, Chart 5 does have some efficiency growth built into it, but even including the efficiency gains, it is indicating an increase in expected oil consumption.

EIA determines expected imports by subtracting its estimate of the amount of oil the US will produce from its estimate of future demand. This produces the 11.5 million barrels a day of oil imports it shows as expected for 2025. The EIA makes the assumption that someone, somewhere, will have oil available to export, when it is needed.

I never really got an answer regarding how realistic Mr. Robertson thought this scenario was. Clearly he thought the forecast for US oil production was a stretch, and import costs would be high. Mr. Robertson’s prepared charts did not include EIA’s estimates of the future cost of oil, but the EIA 2008 Energy Outlook Report shows them to be as follows:

It sounded like neither Mr. Robertson nor Mr. Felmy had much confidence in these cost estimates.

Conference Call Information

There were a total of six bloggers on the conference call:

Margot Gerritsen - Smart Energy
Dave Schuler - Outside the Beltway
Geoff Styles - Energy Outlook
Gail Tverberg - The Oil Drum
Brian Westenhaus - New Energy and Fuel
Carter Wood - Shopfloor.org

In additional there as Peter Robertson, from Chevron; John Felmy, chief economist at API, and Jane Van Ryan, host from API. Ms. Ryan has tried recently inviting more liberal bloggers, but has not succeeded in getting any to participate.

The transcript of the call can be found here. The audio version of the call can be found here.

Other Questions

Carter Wood said that the low dollar had been a boon to companies doing exports, and wondered what Chevon’s position was on the level of the dollar. Mr. Robertson said that Chevron wanted the dollar higher, so that oil wouldn’t be so expensive for customers.

Geoff Styles wondered if there were any areas of agreement, where the industry and government might work together. Mr. Robertson indicated improved energy efficiency was one such area. Another was allowing more drilling in restricted areas. A third was raising people’s view of the industry so that they view it as an important industry, doing high tech things, so that young people will be attracted to studying to be geologists and engineers.

Margot Gerritsen commented on the current lack of funding by the Department of Energy on oil and gas projects of all kinds, such as enhanced oil recovery and research on improved methods for unconventional gas and oil recovery. Mr. Robertson said that the industry was paying a lot of money in royalties and fees, and that at least a little of that is set aside for research under the recent energy bill. Ms.Gerritsen observed that fashions in funding change, and now the money is going to carbon sequestration and renewable fuels.

Brain Westenhaus asked about how decisions were made for allocating capital among the various different choices, such as renewables, enhanced oil recovery and new drilling. Mr. Robertson said that they evaluate and are involved with a lot of different projects. Historically, oil has had the best return for stockholders. Renewables are mostly not too far along, are expensive for the purchaser, and hard to scale up. It is often difficult to get permitting for oil and gas processing facilities in the United States. This can force the company to build facilities overseas instead.

Changing the Conventional Wisdom

In Mr. Robetson’s prepared statement, he closes with a section he calls “Changing the Conventional Wisdom”, in which he lays out what action steps he thinks are necessary. This is a shortened version of those steps.

First, we need to value energy as a precious resource. Energy efficiency is the most immediate and important action that each of us can take to contribute to rising energy prices. The United States must become a nation of energy savers.

Second, I would urge you to be sensitive to the issue of scale and timeframe. I hope that I have been able to demonstrate Chevron’s commitment to the development of alternative sources of energy. This is an ambitious undertaking and one that we are embracing. But the scale of the energy system means that despite our combined efforts, renewables will meet less than 10 percent of demand in 2030, according to EIA estimates. We must continue to bring traditional energy supplies to market, even as we are developing alternatives sources of energy.

Third, on the supply side, we need your help to open up the 85 percent of the Outer Continental Shelf that is now off limits to environmentally responsible oil and gas exploration and development. We cannot expect other countries to expand their resource development to meet America’s needs when our government limits development at home.

Finally, I would encourage careful evaluation of policies that can lead to unintended consequences and create inefficiencies in the gasoline supply system. Today we have 17 “boutique” fuel requirements across the country, requiring us to blend unique gasoline products for different states and different localities. More requirements on fuels are being added through renewable fuel mandates and proposed climate policies.

Comments

Whether or not Mr. Robertson and Chevron believe in peak oil, I think Mr. Robertson approaches are reasonable ones. I don’t think that anyone would disagree with energy efficiency. It is hard to see how alternative fuels will scale up in a short time frame, and nearly everyone can agree that having a having too many fuel types is a problem.

I personally think that drilling at home is a far better solution than pointing fingers at someone overseas, and accusing them of not pumping as much oil as they are able to. I think blaming the National Oil Companies is all too easy a solution, and I am glad Chevron did not take this route.

I know many people are opposed to opening up the outer continental shelf to drilling. With the long lead times involved, it will take many years - quite possibly ten - before any oil can be produced, and many years after that before all of the oil is removed. As a comparison, it become economically attractive to drill in the North Sea in the mid-1970s, and we are still producing oil and gas there now.

I know a lot of people think we should save this oil and gas for future generations, but it seems to me that producing this oil very much depends on having the required infrastructure in place - things like roads, pipelines, the electrical grid, trained engineers, and companies set up to handle all of the logistics involved. It seems to me that if we wait too long, we may never be able to produce this oil and natural gas. I doubt that the quantity makes a difference from a climate change point of view.

If we wait too long, the quantities of oil and gas in pipelines will drop below the minimum operating level, or pipelines will fall into disrepair, so they cannot be used. Road surfaces may not be adequately maintained to bring necessary equipment to desired locations. Equipment such as helicopters needed for production may no longer by available. Trained personnel may be hard to find. We need to be planning thirty or more years ahead, and things can change a lot in that time.

I was invited to a blogger’s conference call on April 1, hosted by the American Petroleum Institute (API). We were told that each blogger would be allowed to ask one question of Peter Robertson, Vice Chairman of the Board of Directors of Chevron Corporation. The material we were provided in advance was the written statement of Mr. Robertson, prepared for the House Select Committee on Energy Independence and Global Warming. It included a number of charts, including this one:

My question was, “How realistic is EIA’s Chart 5 scenario? If you look at Chart 5, it looks like there is no need to conserve.”

[break]
This was the discussion:

03:35 MS. TVERBERG: I was looking at the charts that you sent out earlier today with various projections of things. If you look at Chart 5: U.S. Domestic Oil Supply and Demand, if you look at it, it basically says that including imports, the total amount of oil available will continue to go up through 2025, and that the amount that the U.S. will produce including enhanced oil recovery and new discoveries will go up. I mean, this pretty much gives the view that you don’t need to conserve because there’s plenty of oil that’s going to be available. How realistic do you think this scenario that the EIA has put together is?

04:21 MR. ROBERTSON: Well, I mean, you know, of course this doesn’t – this is the U.S. So –

MS. TVERBERG: Well, this is the U.S., right.

04:28 MR. ROBERTSON: This is the U.S. so this says that we’re going to have to import, you know, about the same amount of oil, according to this case and the next 20 years, and the real problem is, you know, is that available to be imported? I mean, everybody else in the world is obviously competing for that 11.5 million barrels as well. So you know, what is going to happen to prices during this period and how tight is the rest of the world going to be?

So I mean, I think the point of this chart was really to make a point about U.S. We need – there are existing crude and – this is oil now, this is not gas, so this is just what’s going to be needed – oil, this is really almost a transportation fuel chart because the main thing that oil is used for –, not the only thing, but the main thing it’s used for is transportation fuels. And so far, we have difficulty substituting something for transportation fuels.

So this is sort of an oil chart, but what it says is that look how important our existing oil production is in the United States and look how it declines unless we do additional exploration and we get some new technology and we, you know, we get some areas where we can explore and all of these things, because the biofuels – and the biofuels part of this chart is what – you know, is the – what happened in the energy bill last year, so that’s – and you can see the impact of that. It’s still – it’s important, but it’s still not going to change the position.

05:50 So even after all this, even if we do – if we’re able to keep the existing crude production flat – which we haven’t done for many, many, many years – you know, as you guys know where it was nine million barrels a day about 20 years ago, now we’re about five million barrels a day in the U.S. You know, and that – that sort of trend line is besides a blip here, probably from the Gulf of Mexico. You know, the trend line has sort of been down for a long time. So we’re going to have hard work just keeping this flat. It says that, you know, we’re still going to have to import a lot of oil, and that’s the problem. And the opportunity is to shrink that amount of oil that we import, because we are going to be competing with the rest of the world for it, and who knows what the price of it will be.

John Felmy, API’s Chief Economist, then pointed out what is easy to miss. EIA’s top line is really an estimate of demand. Demand is estimated based on an economic model that includes the desired level of economic growth together with a growth in efficiency equal to what it has been in the past — about 1.6% per year, plus the expected impact of the new fuel economy requirements from the 2007 legislation. Thus, Chart 5 does have some efficiency growth built into it, but even including the efficiency gains, it is indicating an increase in expected oil consumption.

EIA determines expected imports by subtracting its estimate of the amount of oil the US will produce from its estimate of future demand. This produces the 11.5 million barrels a day of oil imports it shows as expected for 2025. The EIA makes the assumption that someone, somewhere, will have oil available to export, when it is needed.

I never really got an answer regarding how realistic Mr. Robertson thought this scenario was. Clearly he thought the forecast for US oil production was a stretch, and import costs would be high. Mr. Robertson’s prepared charts did not include EIA’s estimates of the future cost of oil, but the EIA 2008 Energy Outlook Report shows them to be as follows:

It sounded like neither Mr. Robertson nor Mr. Felmy had much confidence in these cost estimates.

Conference Call Information

There were a total of six bloggers on the conference call:

Margot Gerritsen - Smart Energy
Dave Schuler - Outside the Beltway
Geoff Styles - Energy Outlook
Gail Tverberg - The Oil Drum
Brian Westenhaus - New Energy and Fuel
Carter Wood - Shopfloor.org

In additional there as Peter Robertson, from Chevron; John Felmy, chief economist at API, and Jane Van Ryan, host from API. Ms. Ryan has tried recently inviting more liberal bloggers, but has not succeeded in getting any to participate.

The transcript of the call can be found here. The audio version of the call can be found here.

Other Questions

Carter Wood said that the low dollar had been a boon to companies doing exports, and wondered what Chevon’s position was on the level of the dollar. Mr. Robertson said that Chevron wanted the dollar higher, so that oil wouldn’t be so expensive for customers.

Geoff Styles wondered if there were any areas of agreement, where the industry and government might work together. Mr. Robertson indicated improved energy efficiency was one such area. Another was allowing more drilling in restricted areas. A third was raising people’s view of the industry so that they view it as an important industry, doing high tech things, so that young people will be attracted to studying to be geologists and engineers.

Margot Gerritsen commented on the current lack of funding by the Department of Energy on oil and gas projects of all kinds, such as enhanced oil recovery and research on improved methods for unconventional gas and oil recovery. Mr. Robertson said that the industry was paying a lot of money in royalties and fees, and that at least a little of that is set aside for research under the recent energy bill. Ms.Gerritsen observed that fashions in funding change, and now the money is going to carbon sequestration and renewable fuels.

Brain Westenhaus asked about how decisions were made for allocating capital among the various different choices, such as renewables, enhanced oil recovery and new drilling. Mr. Robertson said that they evaluate and are involved with a lot of different projects. Historically, oil has had the best return for stockholders. Renewables are mostly not too far along, are expensive for the purchaser, and hard to scale up. It is often difficult to get permitting for oil and gas processing facilities in the United States. This can force the company to build facilities overseas instead.

Changing the Conventional Wisdom

In Mr. Robetson’s prepared statement, he closes with a section he calls “Changing the Conventional Wisdom”, in which he lays out what action steps he thinks are necessary. This is a shortened version of those steps.

First, we need to value energy as a precious resource. Energy efficiency is the most immediate and important action that each of us can take to contribute to rising energy prices. The United States must become a nation of energy savers.

Second, I would urge you to be sensitive to the issue of scale and timeframe. I hope that I have been able to demonstrate Chevron’s commitment to the development of alternative sources of energy. This is an ambitious undertaking and one that we are embracing. But the scale of the energy system means that despite our combined efforts, renewables will meet less than 10 percent of demand in 2030, according to EIA estimates. We must continue to bring traditional energy supplies to market, even as we are developing alternatives sources of energy.

Third, on the supply side, we need your help to open up the 85 percent of the Outer Continental Shelf that is now off limits to environmentally responsible oil and gas exploration and development. We cannot expect other countries to expand their resource development to meet America’s needs when our government limits development at home.

Finally, I would encourage careful evaluation of policies that can lead to unintended consequences and create inefficiencies in the gasoline supply system. Today we have 17 “boutique” fuel requirements across the country, requiring us to blend unique gasoline products for different states and different localities. More requirements on fuels are being added through renewable fuel mandates and proposed climate policies.

Comments

Whether or not Mr. Robertson and Chevron believe in peak oil, I think Mr. Robertson approaches are reasonable ones. I don’t think that anyone would disagree with energy efficiency. It is hard to see how alternative fuels will scale up in a short time frame, and nearly everyone can agree that having a having too many fuel types is a problem.

I personally think that drilling at home is a far better solution than pointing fingers at someone overseas, and accusing them of not pumping as much oil as they are able to. I think blaming the National Oil Companies is all too easy a solution, and I am glad Chevron did not take this route.

I know many people are opposed to opening up the outer continental shelf to drilling. With the long lead times involved, it will take many years - quite possibly ten - before any oil can be produced, and many years after that before all of the oil is removed. As a comparison, it become economically attractive to drill in the North Sea in the mid-1970s, and we are still producing oil and gas there now.

I know a lot of people think we should save this oil and gas for future generations, but it seems to me that producing this oil very much depends on having the required infrastructure in place - things like roads, pipelines, the electrical grid, trained engineers, and companies set up to handle all of the logistics involved. It seems to me that if we wait too long, we may never be able to produce this oil and natural gas. I doubt that the quantity makes a difference from a climate change point of view.

If we wait too long, the quantities of oil and gas in pipelines will drop below the minimum operating level, or pipelines will fall into disrepair, so they cannot be used. Road surfaces may not be adequately maintained to bring necessary equipment to desired locations. Equipment such as helicopters needed for production may no longer by available. Trained personnel may be hard to find. We need to be planning thirty or more years ahead, and things can change a lot in that time.

Matt Mushalik is a retired civil engineer and regional planner from Sydney, Australia. In this post, he provides an update of his incremental production graphs, which he first provided in the post Did Katrina Hide the Real Peak in World Oil Production? And Other Oil Supply Insights

Matt has an ingenious way of graphing oil production. In his graphs, he separates oil production between base production, which stays the same during the entire graphing period, and incremental production, which is the “top” of the graph, after base production is subtracted. He then groups together different countries with similar production patterns, for some interesting analyses.

Figure 1 - Incremental Oil Production Stacked with Declining Groups at Bottom

[break]
It has been about six months since our previous article. The additional time allows us to continue and deepen the analysis. As in the earlier post, incremental production profiles of various countries or groups of countries are stacked in such a way that it gives us information about production trends. Incremental production in a given country and period is defined as the production exceeding the minimum production in that period.

Individual Country and Small Group Profiles

Before trying to explain Figure 1, it is helpful to look at some less complicated graphs. Figure 2 shows incremental production profiles individually. The tick marks on the side correspond to 1 million barrels of oil a day, so one can tell approximately how much production has recently been increasing or decreasing, for the countries or groups shown. What is shown for each country or group is equivalent to the top “slice” of the graphs for that country or group.

Figure 2 - Incremental Crude Oil Production Profiles, December 2007

A few comments about the profiles on the above chart:

• Iraq - production drops during and after the Iraq war
• Venezuela - a steady decline and a big drop during the strike in 2003
• Angola, Brazil, Azerbaijan, Kazakhstan, Algeria, Libya, Canada, China, and Russia - all countries with increasing production
• Saudi Arabia - boosts production during the Iraq war and in 2004, but then is not able to maintain production levels in 2006/07. Recent uptick in production still leaves it below 2004/2005.
• Nigeria - fairly flat production; high year 2005
• Peaks 2006/2007 - Ecuador, Vietnam, India, Qatar, EIA’s “Other”, Kuwait, UAE - These countries appear to be on a plateau or slightly declining.
• Peak 8/2005 - Iran, Mexico, Malaysia
• UK and Norway - shows North Sea decline
• Post Peak - Indonesia, Egypt, Syria, Gabon, Argentina, Colombia, Australia, Oman, Yemen, Denmark - all in terminal decline
• US - on a declining path since its peak in 1971, showing production drops during hurricane seasons

Four Major Groups of Countries

To get a better overview of the underlying trends further groups are formed:

Figure 3 - Incremental Crude Oil Production Profiles for Groupings of Countries 2007

• Top Group - Iraq and Venezuela shown separately with their big production drops in 2003

• Second Group - the growth wedge (+ 8 million b/d) showing clear signs that Russia plus some other hitherto growing countries are maxing out

• Third Group - “peaking group” - the various recent peak and the plateau groups - This group is dominated by Saudi Arabia, Kuwait and UAE. The rebound in 2007 is mainly from Saudi Arabia. Production for this group dropped between 2001 and 2002, then increased by a whopping 6 million barrels a day between 2002 and 2005. If one compares 2001 and 2007, production is just 2 million barrels a day higher now.

• Fourth Group - the decline wedge (US, North Sea, others post peak). This group’s incremental production went down from 6 million barrels a day in 2001 to 2 million barrels a day in 2007.

In these graphs, note that the base production (the amount that did not change) is not shown. Also note the colors of countries are the same between graphs, so that they can be better identified.

These groups can now be stacked in two different ways to give us different information:

(1) Starting with declining countries on the bottom
(2) Staring with the growing countries on the bottom

Graph with Declining Countries on the Bottom

From bottom to top: declining group, peaking group and growing group. Iraq and Venezuela are put on top as their one-off production drops in 2003 distort the picture if stacked somewhere in between. Because of the definition of incremental production, their layers are disproportionately thick because of the big temporary drops in production. To minimize the distortion this causes, they are put at the top of the graph. This is the graph shown at the top of the post, which we show again here.

Figure 1 - Incremental Oil Production Stacked with Declining Groups at Bottom

The bottom black line shows the underlying trend in the declining group of countries.

The second from the bottom black line outlines the sum of the bottom two groups - that is, the declining group, and the recent peak/plateau group. The trend line clearly shows an underlying peak when these two groups are combined.

The third from the bottom black line adds the “growing group” to the previous two groups. The growing group of countries was able to offset the declining trend after the peak and lift total crude production to an only slightly declining trend.

White and black crosses mark the points used for the declining trend lines. Increasing trend lines have been inserted by estimating the growth between a low in 2002 to a maximum in May 2005.

Graph with Growing Countries at the Bottom

Figure 4 - Incremental Oil Production Stacked with Growing Groups at Bottom

In a different view of the same data, production profiles from growing countries are stacked at the bottom and Saudi Arabia on top. The graph clearly shows that Russia, Kazachstan and Brazil have maxed out (unless megaprojects change this in the future) and that Saudi Arabia is no longer performing its function as swing producer.

This analysis helps us understand what the late Dr. Ali Bakhtiari called the transition phase T1 between growth and decline. During the Australian Senate hearings on oil supplies in July 2006 Ali said this transition phase would start in 2006 and last for three to five years. It seems the transition phase is marked by two crude oil peaking events, one in 2005 and another one happening right now. The big question is therefore how long will that peaking of the hitherto growing group take? These are the current trends:

Former Soviet Union

We have already mentioned that Russia seems to be at peak. In other Former Soviet Union countries, Kazachstan’s doubling of oil production starting in 2005 has stalled, leaving just Azerbaijan with an annual increase of 200 thousand barrels a day.

It is possible that the increase will be greater than this. Russia, Kazachstan, and Azerbaijan have megaprojects scheduled to begin production in 2008 which total 1,186,000 million barrels a day in maximum production. This total production is not expected to be reached in 2008, and a significant share of it will be needed to offset declines in older fields. Given these considerations, increased production for the Former Soviet Union may be somewhat more than 200,000 barrels a day, perhaps on the order of 400,000 barrels a day. This may very well be an overestimate. Numerous reports suggest, such as this one, indicate that Russian production will fall in 2008.

Figure 5 - Incremental Oil Production for Azerbaijan and Kazachstan

Angola and Brazil

Angola joined OPEC and will come under a quota system. A recent announcement indicates that Angola’s production for 2008 is expected to reach a plateau of 2 million barrels a day, and maintain that level until 2013. Production for December 2007 is reported to be 1,986,000 barrels per day, so Angola has apparently now reached its peak production, and only a plateau can be expected henceforth.

Brazil’s growth has apparently flattened. There are four megaprojects scheduled to start production in Brazil in 2008. The ultimate production for the 2008 projects is expected to be 475,000 barrels a day, although not all of this is expected to be realized in 2008. There are also a number of megaprojects (totalling 648,000 barrels a day in ultimate production) that were expected to begin near the end of 2007. If the various 2007 and 2008 projects come on board as planned, Brazil’s production may increase by 400,000 or 500,000 barrels a day in 2008. (All of these future production estimates are very rough.)

Other African Countries

In another group of African countries Algeria’s and Libya’s growth is modest, but steady while Sudan and Equatorial New Guinea grew at 300 Kb/d last year. There do not seem to be any significant megaprojects for these countries for 2007 and 2008. If decline rates are as in other countries, the increases for these countries may be smaller for 2008.

Figure 6 - Incremental Oil Production for Several African Countries

Canada

For Canada we know the potential is in syn crude from tar sands but this is limited by the supply of natural gas. CO2 emissions are a big problem and NASA climatologist James Hansen has not included this un-conventional oil in his carbon balance. There is just no room for it, according to this paper he wrote.

Irrespective of environmental and climate change concerns, there are a number megaprojects planned for the Canadian tar sands. The ultimate production from these total 266,000 barrels a day from projects with 2007 start dates and 605,000 barrels a day for projects that are planned to start in 2008, according to the megaprojects list. Some of these are very long term projects - not to be completed until 2018. Actual production increases are likely to be much more modest. Canada’s oil production grew less than 100,000 barrels a day in 2007. It would be surprising if Canada’s 2008 oil production grows more than 200,000 or 300,000 barrels a day.

Conclusions

This analysis is mostly a review of what has happened in the past with oil production. Another article, very closely related to this one, was written by Matt and is posted on the Sydney Peak Oil website.

We have included a few very rough estimates of production for some of the increasing countries for the future. It looks as though there still will be countries with increases in 2008. Our rough estimates of increases for the countries shown total only about 1.0 to 1.5 million barrels a day. This is fairly similar to what the increases for the growing group of countries has been over the past five years. This is not very much to offset the countries with declining production.

There are many countries that we have not considered to be growing, that theoretically may grow in the future. Saudi Arabia and Iran would be two in this category. We have not made any estimates, upward or downward, for these countries. If oil production is to stay on its current plateau, it would seem like we would need increases from some of these countries as well.

We remain on a bumpy crude plateau, where the exact timing of new projects and the coming hurricane season will determine which temporary wiggles we get on the production curve. 2008 should be an interesting year.

We have run several articles recently on nuclear power and without fail they have stimulated enthusiastic debate. This is an opportunity to continue that debate. To start us off we have three guest contributions:

Skip Meier - Nuclear Waste
Bill Hannahan - We have yet to design the Model T of nuclear power plants
Charles Barton - Thorium Reserves

Last week the UK’s Business Secretary, John Hutton gave one of the most pro-nuclear speeches from a Government minister in which he compared the potential of new nuclear development with the North Sea: “the most significant opportunity for our energy economy since the exploitation of North Sea oil and gas,” (Platts). Labour MP Colin Challen responded with a letter in The Guardian:

John Hutton’s latest reflections on nuclear power demonstrate how rapidly British energy policy is regressing to its default mode - dig it up and burn it. At the same time as we are promised the nuclear pipe dream, we are also set to have new coal-powered power stations without carbon capture and storage. This comes at the same time as we have fought for one of the lowest renewables targets in the EU, are languishing third from bottom in current renewables provision out of 27 EU states, and are announcing yet another microgeneration review.

The message Hutton’s department seems to want to promulgate in its energy policy is to reassure everybody that no serious change is needed, that we should carry on increasing our demand for energy and that climate change isn’t as urgent as some people make out. One can only conclude that the Department for Business, Enterprise and Regulatory Reform is utterly unfit for purpose and should have the title Department for Fiddling While Rome Burns.
Colin Challen MP
Lab, Morley & Rothwell

[break]

Nuclear Waste

Skip Meier
70ish Theoretical Physicist with educational studies in the mid 1960’s to 1973. Ph.D. work in General Relativity and Quantum Field Theory during the early

radioactive materials, including HLRW.

Introduction

There are at least three expressed goals for the increased use of nuclear fission to provide us with useful supplies of electrical energy as fossil fuels go

into decline and anthropomorphic global warming becomes manifest and increasingly more threatening.

• To quickly increase the number of nuclear power plants and electrical output from them over the 21st C. allowing coal and natural gas fired plants to be

  phased out while sustainable and renewable sources of electric energy can be developed and employed. Moving into the 22nd C. and beyond, we can then begin to

  phase out nuclear power based upon fission energy.

• To develop sufficient electric nuclear power generation as quickly as possible to provide base load requirements into the foreseeable future.
• To quickly adapt nuclear power as the predominant source of energy while moving to a *all electric* society.

It is my position here that disposal of high level radioactive waste (HLRW) is a major concern for all of the above goals and that permanent isolation by

deep geologic burial will be necessary - but is not sufficient. I will be using
the definitions for “high-level radioactive waste” and “spent nuclear fuel”, often referred to as nuclear waste, from
the US Nuclear Waste Policy Act (NWPA) found at this site: Link

(12) The term “high-level radioactive waste” means—
(A) the highly radioactive material resulting from the reprocessing of spent
nuclear fuel, including liquid waste produced directly in reprocessing and any
solid material derived from such liquid waste that contains fission products in
sufficient concentrations; and
(B) other highly radioactive material that the Commission, consistent with
existing law, determines by rule requires permanent isolation.
(23) The term “spent nuclear fuel” means fuel that has been withdrawn from a
nuclear reactor following irradiation, the constituent elements of which have not been
separated by reprocessing.

I will not be addressing the issues of the actinic (and transuranic) fractions of the spent fuel but only the fission decay products - the high level

radioactive waste as defined in (12) above.

The Physics of Nuclear Fission and Power Generation

For every Kg of fissile fuel that undergoes fission approximately 850-950 gm of highly radioactive waste isotopes are produced.

1 GWe continuous power generation will produce 8.76 GKWhe energy (1 GW Year), consume about 900-1000Kg of fissile fuel and produce about 850-950Kg of high-

level radioactive waste (HLRW) per year. This waste is a mixture of isotopes with greatly varying half-lives (decay rates) ranging from fractional seconds to

1My+.

The daughter isotopes will each undergo radioactive decay following the exponential decay function given by A(t) = A(initial)e^ct with c being the individual

decay rate of each and related to the half-life by c = -0.693/(half-life in years). However, and this is critical to the understanding of the problem of

HLRW, while the fission products
undergo their individual decay rates and deplete, more HLRW is being generated at the rate given above - about 850-950 Kg/(GW Year).

The exponential decay function must be reconsidered and modified when the isotope undergoing decay is also being produced. For simplicity, if the rate of

production is held constant and is represented by “S”, then the amount of that isotope present after a time t is given by the exponential function:

A(t) = [A(initial) + S/c] e^ct - S/c
where c is as before.

Because c is negative -S/c is a positive quantity and e^ct will go to 0 with increasing time, leading to the constant value -S/c for the amount of HLRW

accumulated and eventually maintained with a constant yearly production rate.

As stated above, each fractional isotope in the HLRW has a different half-life (HL); each will accumulate to a different limit as time progresses; but a feel

may be obtained for what occurs by using an average HL of 50 yrs. (based on the assumption made by many that after 500 years the HLRW is ‘harmless’.)

Assuming this gives c = -0.014/yr (from c = -.693/HL).

A value of S = 900Kg/yr. and the c above gives an eventual steady state value of:

64 tonne HLRW as the asymptotic limit for each GW Year unit of energy generated and after 500 years (10 HL’s) 63 tonne will be present on the

planet.

It is certainly true that the 900 Kg produced during the first year will have been reduced to 0.9 Kg. after 500 years but there will be 63 tonne requiring

isolation.

Let us consider the single HLRW isotope Cs(137) - which is both a beta and high energy gamma emitter with a HL of 30 yr. and therefore very dangerous. Cs

(137) makes up about 3.5% (by mass) of the fissioned nuclei and therefore has a yearly rate of production of about 31.5Kg/yr. for each GW Year unit of energy

production.

For Cs(137), c = -0.023 and with S = 31.5 this gives an accumulated steady state value of:

-S/c ~= 1.4 tonne for each GW Year unit of continuous energy production.

Associated Health Risks

High level radioactive waste does not exist in nature (at any measurable level), is partially composed of isotopes of elements, for example cesium, iodine

and strontium, that are easily incorporated into the chemical and physiological structures of organisms - they are readily taken up and, if not isolated,

will pass up the food chain - in both land and water - from plant/algae to herbivore to carnivore (becoming more concentrated with progression); as they

decay within the longer lived higher organisms, cellular and organ damage can occur as well as DNA modification leading to cancer some time later.

Additionally - and very important - some are extremely dangerous without ingestion; merely being in proximity can be very damaging if not fatal. Since

‘proximity’ depends not only on ‘closeness to’ and which isotope (and amount thereof) is present but also on time of exposure, it is very difficult to

protect against accidental exposure without permanent isolation of the HLRW; this will become exceedingly more difficult as we increase our nuclear power

generation output and the total amount of accumulated(-ing) HLRW which include some second (and third) generation isotopes of the original HLRW - for

example, Cs(135) with a half-life of 2.5 My.

A review of the radiative characteristics of (some) the HLRW products can be reviewed on the following two links (Wikipedia sites, not complete):

Fission product

Fission product yield

We have yet to design the Model T of nuclear power plants.

Bill Hannahan

Each new technology has a life cycle. It starts with an idea, then a prototype. If the technology involves high energy and/or hazardous materials, the

prototype is often the most dangerous example, but there is only one prototype, so its risk to society is low. Risk to the public is greatest when the

immature technology is first deployed in large numbers.

We have frozen nuclear power technology at its most dangerous stage of evolution for 30 years, yet it safely generates about 20% of our electricity in the

U.S., 80% in France. Next generation plants will have fewer parts and passive safety systems, including the ability to contain a full meltdown.

General Electric ESBWR
Nuclear News on the ESBWR (.pdf)

Westinghouse AP1000

Areva EPR (.pdf)

Today we should be designing fourth generation nuclear plants, building third generation plants, living off the energy of second generation plants and

converting our first generation plants into museums. In fact, no two nuclear power plants are exactly alike. We have yet to build the Model T of nuclear

power plants.

Imagine that Boeing built airplanes in a swamp, outdoors, far away from any attractive place to live, using minimal tooling and equipment. Workers and

equipment would be exposed to rain snow dust heat and insects. Very high salaries would be required to attract workers away from their families to work in

harsh conditions. Productivity and quality would be low. The airplanes would be more expensive, less clean, less safe and less reliable than modern factory

built planes. That is the way our first generation nuclear plants were built.

We should build facilities to mass produce floating nuclear power plants. They would consist of a canal 600 feet wide and a mile long, enclosed inside a

building equipped with high quality lighting, heat, air conditioning, fire protection, communication systems, cranes and tooling, that provide a comfortable

safe efficient work environment.

The process begins with a dry dock where a massive steel reinforced concrete barge is constructed. It is floated down the canal for installation of modular

equipment. Employees will have safe, permanent, high paying jobs in an attractive coastal location. The application of assembly line techniques will

dramatically reduce man-hours, construction time and cost, while improving safety and quality. The completed plants will be towed to coastal or offshore

sites, prepared in parallel with plant construction.

The biggest single element in the cost of conventional nuclear plants is the interest on the loan to build the plant, about 1/3 of the total cost, due to the

long construction time. Floating plants will be produced initially at the rate of two per year ramping up to about six per year, eliminating most of the

interest expense.

A facility to mass produce floating nuclear power plants was actually built, for details see here.

We can make clean safe inexpensive energy available all over the world, have the high paying jobs and control the technology. We can design the plants to be

highly resistant to acts of terror and the diversion of nuclear material, insist that plants be subject to international inspection as a condition of sale or

lease and sell or lease these plants at a cost that is much lower than traditional construction methods, eliminating the fig leaf of energy production to

hide a nuclear weapons program.

Cost

Reducing U.S. emissions now is of minor importance. If we eliminate all of our greenhouse emissions tomorrow, the developing world would gobble up the

savings in a relatively short period of time.

The most important goal for the U.S. should be to accelerate the use of our technical capacity to develop energy technology that is less expensive than

fossil fuel and can be implemented quickly all over the world. People will make the switch quickly and voluntarily, not kicking and screaming.

This is why the U.S. should increase R&D spending for non-fossil energy sources from $3.00 per person per year to $300.00 per person per year, $90 billion

per year.

The money could be raised simply by adding 2.25 cents to the cost of each kWh.

We should be pushing every technology as hard as possible and building demo plants of each as it becomes possible.

What are the odds that a submarine reactor on steroids is the best way to produce massive amounts of commercial nuclear power? There are dozens of ways to

split uranium and thorium atoms, here are a few examples.

2.25 cents per kWh would raise $18 billion each year from our existing nuclear power plants, more than enough to build at least one demonstration facility to

mass produce floating nuclear power plants and several prototype reactors using advanced technology. That leaves $72 billion per year for non nuclear energy

R&D.

Mandating the widespread use of expensive energy systems has resulted in the highest electricity prices in the world, Denmark, 41 cents per kWh, Germany, 30

cents per kWh (Electricity prices for EU households and

industrial (.pdf)) yet they still get most of their electricity from fossil fuel.

We pay 9.5 cents per kWh in the U.S… A year’s supply of electricity costs the average American $1,260. Mandating expensive energy systems could easily

double that figure. Technology mandates are far more expensive than the cost of developing better technology.

Letting a bunch of gray haired law school graduates in Washington DC try to cherry pick energy technology is a formula for disaster.

France is 80% nuclear, most of the rest is hydro, and they pay 19 cents per kWh. France runs its nuclear power industry like the U.S. runs the post office,

and they are building windmills now to show more renewable energy, so their cost will likely rise in coming years.

Our nuclear power plants have been paid off for a long time and they help keep prices down. The operation and maintenance cost for U.S. nuclear plants in

2006 was 2.0 cents per kWh (link) including the fuel assembly cost of 0.5 cents per

kWh, of which the uranium cost was 0.19 cents per kWh.

Expensive energy systems will not solve the world’s energy problem because most people cannot afford them.

If we spend 2.25 cents per kWh on R&D for a decade or so we can solve the energy problem and save over $1,000 per person per year for centuries. Accelerating

the development of low cost, clean, safe energy systems is the greatest and cheapest gift we can provide to future generations.

For more details go to: Bill Hannahan’s essay on energy.
Download the PDF and spreadsheet (mid page).

Thorium Reserves

Charles Barton
Charles Barton grew up in Oak Ridge, where his father was a reactor chemist. Barton learned about Liquid Fluoride Thorium Reactors from his father, who

of thorium cycle reactors in providing the world’s energy needs.

In 1962 a team of Geologists from Rice University in Houston, Texas, took a few months to explorer the Conway Granites of Vermont. At the time Rice

Geologists were usually involved in a search for oil, but these geologists were under contract from Oak Ridge National Laboratory to look for Thorium. ORNL

Scientist had the crazy idea that they could build a thorium fuel cycle reactor that could produce a billion watts of electrical power for a year from less

than a ton of thorium.

The Rice Geologists J. A. S. Adams, M.-C. Kline, K. A. Richardson, and J. J. W. Rodgers reported:

The costs of extracting the uranium and thorium from the Conway granite are estimated by workers at the Oak Ridge National Laboratory to be less

than $100/pound, or at most five to ten times the present costs of nuclear raw materials. This source of nuclear fuels, therefore, is currently uneconomic

compared to the sources now being utilized. In terms of total energy content, however, the Conway granite represents an energy resource several orders of

magnitude larger than the lower cost material. In the long-term future, when supplies of cheap uranium and thorium may start to be exhausted, sources such as

the Conway granite may become increasingly important and necessary.

They concluded:

Thus the importance of the present work on the Conway granite lies in the indication that tens of millions of tons of thorium are available when

the need for vast amounts of higher-cost nuclear fuel becomes pressing. These amounts may be compared to the few hundreds of thousands of tons of previously

estimated thorium reserves. It is reassuring to know that the long-term future of nuclear power is not limited by the supply or by a prohibitively high cost

of fuel. Furthermore, the Conway granite may become even more important considering the likelihood that improved extraction techniques may make the thorium

available at costs well below the $100/pound estimated in preliminary laboratory experiments. It is also possible that larger amounts of lower-cost thorium

might be realized by locating high-grade ore reserves such as the Lemhi Pass, Idaho, area may prove to be, or by finding a large granitic batholith more

economic than the Conway.”

…

“Finally, it should be noted that the statistical and exploration techniques developed in the present work and described above, particularly the portable

gamma-ray spectrometer, may make it possible to explore for thorium and develop reserves far more cheaply and rapidly than was the case for uranium.

Source (.pdf)

Last year the a rumor began to circulate on the Internet of a remarkable geological find at Lemhi Pass in Idaho. Recently the USGS has estimated the United

States Thorium reserve at 160,000 tons, but the story that was circulating claimed an assured reserve at Lemhi Pass alone of 600,000 tons. Thorium is a

heavy metal. Like Uranium 238, Thorium 232 is fertile. Thorium absorbs neutrons, in reactors and other neutron rich environments. The neutron triggers a

transformation process that converts Th233 into U233. U233 is fissionable like U235 and Pu239.

Thorium Energy, Inc., the major holder of the Lemhi Pass thorium vein, recently posted on the Internet a report on its Lemhi Pass finding:

Thorium Energy, Inc.â„¢ owns the proprietary mineral rights to the largest claim in this region, representing what is believed to be one of the

single largest privately owned Thorium reserves in the world.

…

The Company’s reserves consist of 68 separate resource claims, each consisting of approximately 20 Acres, located in the Lemhi Pass Region, which is situated

along the border between Idaho and Montana. Included in the Company’s claims are significant mining veins, which contain 600,000 tons of proven thorium oxide

reserves. Various estimates indicate additional probable reserves of as much as 1.8 million tons or more of thorium oxide contained within these claims. The

Company’s claims also include significant deposits of rare earth metals.

…

Metallurgy tests conducted in the region estimate that the average mine run grade is approximately 5% or more of thorium oxide (ThO 2). In fact, vein

deposits of thorite (ThSiO 4), such as those that occur in the area of the Lemhi Pass, present the highest grade thorium, mineral, and are believed to

contain approximately 25 to 63 percent thorium oxide (ThO 2) per ton of raw ore. Thus one ton of thorium ore could potentially yield as much as 500-1,200

lbs. of high grade thorium oxide (ThO 2), as compared with less than one percent of raw Uranium ore that is typically utilizable. The deployment of Lemhi

Pass Thorium represents a more economically feasible source of nuclear grade ore than Uranium deposits.

Source (.pdf)

Why is this thorium reserve just now being discovered? An Australian Government, Geoscience Australia report states:

“Exploration for thorium to date has been minimal and there are no comprehensive records of resources, mainly because of a lack of large-scale commercial

demand.”

What is true of Australia is also true of the United States, and indeed the rest of the world.

Research has demonstrated that it is possible to design reactors that will convert thorium 232 to U233 very efficiently. 800 kg of thorium 232, under a

ton, converted into U233 can produce a billion watts of electricity for a year.

See Liquid Fluoride Reactor (Wikipedia)

The 600,000 proven tons of thorium at Lemhi Pass represent enough energy to power the United States for as much as 400 years. 1.8 million tons of thorium

contains enough energy to power the United States for well over 1000 years. The tens of millions of tons of thorium that Rice University Geologists reported

in 1962 finding in the Conway granites of Vermont could last the United States for a very long time.

While we spend a lot of time talking about traditional energy sources based on depleting resources that are extracted from the ground, I think its important to remember that the fastest growing sources of energy are solar and wind, and that these will never run out. As M King Hubbert put it regarding solar power in particular :

The biggest source of energy on this earth, now or ever, is solar. I used to think it was so diffuse as to be impractical. But I???ve changed my mind. It???s not impractical???This technology exists right now. So if we just convert the technology and research and facilities of the oil and gas industries, the chemical industry and the electrical power industry???we could do it tomorrow. All we???ve got to do is throw our weight into it.

Both Stuart Staniford’s recent “Powering Civilization to 2050” post and (to a lesser extent) Scientific American’s “Solar Grand Plan” concentrated on using photovoltaic solar cells to provide the bulk of our energy needs. While both thin film and traditional silicon based PV cells seem to set new efficiency records every couple of months (a CIGS cell recently reached 19.9% efficiency in lab tests, and multi-crystalline silicon PV cells recently reached 19.5% efficiency), the most promising mechanism for large scale solar power generation seems to be solar thermal power (often referred to as concentrating solar power, or CSP).

[break]

While this subject has been covered previously at TOD (from a slightly UK-centric viewpoint), I thought it was worth revisiting as solar thermal power has received a lot of press attention lately, as experience with generating power in this way grows and the potential becomes clearer to a larger number of parties.

History

Concentrated sunlight has been used to perform useful tasks for many centuries. A legend claims Archimedes used polished shields to concentrate sunlight on a Roman fleet to repel them from Syracuse in 212 BC. Leonardo Da Vinci considered using large scale solar concentrators to weld copper in the 15th century. Auguste Mouchout successfully powered a steam engine with sunlight in 1866 - the first known example of a concentrating solar-powered mechanical device.

Concentrating Solar Power (CSP) systems use lenses or mirrors combined with tracking systems to focus sunlight which is then used to generate electricity. The primary mechanisms for concentrating sunlight are the parabolic trough, the solar power tower (not to be confused with solar updraft towers) and the parabolic dish. The high temperatures produced by CSP systems can also be used to provide heat and steam for a variety of applications (cogeneration). CSP technologies require direct sunlight (insolation) to function and are of limited use in locations with significant cloud cover.

Solar thermal power plants have been in commercial use in southern California since 1985. An area of desert around 250 km by 250 km covered with CSP power generation could supply all the world’s current electricity demand.

Solar thermal plants can be built in their entirety within a few years - much faster than many conventional power projects. Solar thermal plants are built almost entirely with modular, commodity materials (and thus have short development and construction times) and do not encounter the sort of opposition on environmental grounds that traditional forms of power generation like coal and nuclear face.

Operational plants include :

* US (California) - 354 MW FPL’s Solar Energy Generating Systems (SEGS) plant, using parabolic troughs
* US (Arizona) - 1 MW Acciona Energy’s Saguaro Solar Generating Station using parabolic troughs
* Spain (Seville) - 11 MW Abengoa’s PS10 solar tower
* Australia (NSW) - 35 MW Liddell Power Station using fresnel reflectors
* US (Nevada) - 64 MW Acciona Energy’s Nevada Solar One plant (not to be confused with the Solar One / Solar Two experimental plants) using parabolic troughs

Plants currently under construction :

* Spain (Seville) - 20 MW Abengoa’s PS20 solar tower
* Spain (Seville) - 20 MW (each) Abengoa’s PS20 and AZ20 solar towers
* Spain (Seville) - 50 MW (each) Abengoa’s Solnova 1 and 3 using parabolic troughs (5 plants planned in all)
* Spain (Andalusia) - 17 MW Sener’s Solar Tres solar tower (molten salt energy storage)
* Spain (Andalusia) - 50 MW (each) Sener’s Andasol I, II and III plants (molten salt energy storage)

Solar Thermal Heating Up

There has been a spate of new announcements regarding solar thermal power over the past year - there are over 5,800 MW of solar thermal plants in the planning stages worldwide.

The company receiving the most attention seems to be Ausra, a company set up by Dr David Mills (who pioneered the CSP plant at the Liddell power plant in New South Wales using compact linear Fresnel-reflector technology) with backing from Vinod Khosla and Kleiner, Perkins, Caulfield & Byers (see here for a brief demo of how their technology works). Mills estimates that solar thermal plants could provide more than 90 percent of current U.S. power demand at prices competitive with coal and natural gas. “There’s almost no limit to how much you can put into the grid,” he says.

Mills presented a paper (pdf) at the IEA SolarPACES conference in Las Vegas recently which revealed some interesting statistics about the construction cost of solar-thermal technologies: US$3,000 per kW of capacity, estimating this will drop to US$1,500 per kW over the next “several” years. The New York Times last year quoted GE Energy executives estimating coal plant construction between US$2,000 and US$3,000 per kW. Ausra says it can generate electricity for 10 cents per kWh (close to the current cost using natural gas), and it expects the price to drop even further.

According to Technology Review:

What distinguishes Ausra’s design is its relative simplicity. In conventional solar-thermal plants such as Solel’s, a long trough of parabolic mirrors focuses sunlight on a tube filled with a heat-transfer fluid, often some sort of oil or brine. The fluid, in turn, produces steam to drive a turbine and produce electricity. Ausra’s solar collectors employ mass-produced and thus cheaper flat mirrors, and they focus light onto tubes filled with water, thus directly producing steam. Ausra’s collectors produce less power, but that power costs less to produce.

Ausra is initially planning a 177 MW plant in California, and has committed to supply 1,500 MW of power to Californian utilities PG&E and FPL. They are also rumoured to be moving in to Texas as well.

PG&E have also signed a 25-year deal with Ausra competitor Solel Solar Systems of Israel to buy power from a 553 MW solar thermal plant that Solel is developing in California’s Mojave Desert. FPL has also hired Solel to upgrade the SEGS solar-thermal plants it operates in the Mojave.

Another PG&E contract is with BrightSource to supply between 500 MW and 900 MW of power per year from solar tower plants in California, beginning in 2011, with the first of a number of 100 MW facilities being built in Ivanpah.

Other companies active in the US include eSolar (linked to Google’s energy initiatives), RocketDyne and SkyFuel.

Abu Dhabi’s Masdar Initiative and Spain’s Sener are have formed a joint venture to build and operate concentrating solar power plants across the world’s sunbelt regions called Torresol Energy.

Independently of Torresol, Masdar is developing its 100 MW “Shams 1” CSP plant in Abu Dhabi.

Algeria and Germany have signed a a joint research agreement for the development of a new generation of large-scale, low-cost solar thermal power plants (which could contribute to the Desert-TREC vision of large scale CSP in North Africa powering Europe).

More new plants are being planned in :

* Algeria - 20 MW Abengoa’s plant in Hassi-R’Mel
* Australia - 10 MW Queensland State Government facility in Cloncurry
* Australia - 154 MW Solar Systems and TRUEnergy’s plant in Mildura
* Egypt - 70 MW plant in Kuraymat
* Iran - 17 MW plant in Yazd
* Israel - 250 MW plant in Ashalim
* Morocco - 20 MW Abengoa’s plant in Ain-Ben-Mathar
* US (Arizona) - 280 MW Abengoa and Arizona Public Service’s plant in Gila Bend
* US (California) - 50 MW Inland Energy’s plant in Victorville
* US (California) - 250 MW FPL Energy’s Beacon Solar Energy Project

Feasibility studies are also being done in Oman, China and Mexico.

Energy Storage

One of the key differentiating factors between solar thermal power and solar PV is that heat energy is more easily (and efficiently) stored than electricity, with solar thermal plants often combining energy storage into the design to enable around-the-clock, dispatchable electricity generation.

Most solar thermal plants are looking to use molten salt for storing energy - other alternatives being developed are graphite (in the Cloncurry development), heated water / steam (for the Ausra plants) and heat-transfer oil such as therminol (for the Abengoa plant in Arizona).

Cost

The existing plants prove that concentrated solar power is practical, but costs must decrease. Electricity from solar thermal plants currently costs between US$0.13 per kilowatt hour (kWh) and US$0.17 per kWh, depending on the location of the plant and the amount of sunshine it receives. Conventional power plants generate electricity for between US$0.05 and US$0.15 per kilowatt hour (not including any carbon taxes or cap and trade related costs) but in most places it’s below US$0.10 (wind power generally costs around US$0.08 per kWh).

An economic analysis released last month by Severin Borenstein (pdf), director of the University of California’s Energy Institute, notes that solar thermal power will become cost competitive with other forms of power generation decades before photovoltaics will, even if greenhouse-gas emissions are not taxed aggressively.

In 2006 a report by the Solar Task Force (pdf) of the Western Governors??? Association concluded that CSP could provide electricity at US$0.10 per kWh or less by 2015 if 4 GW of plants were constructed.

According to Bernhard Milow from the German Aerospace Center (DLR) electricity from solar thermal plants could cost as little as ???0.04 per kWh [US $0.06/kWh] by 2020, with well sited plants potentially generating power at lower prices than coal.

The US DOE began supporting large scale CSP last year, aiming to reduce the cost of CSP power to 7-10??/kWh by 2015 and 5-7??/kWh by 2020. The DOE estimated that reaching these cost targets could lead to installation of up to 35,000 MW of new generating capacity by 2030 in the US. James Fraser at The Energy Blog commented at the time that it was 5 years too late (given recent commercial activity in the area) and that PV solar may beat these price goals before solar thermal does, but that more solar options are good in any case, as both PV and thin film solar manufacturing will be constrained by availability for materials for some time as production continues to accelerate.

Another estimate from Sandia labs showed solar thermal costs (for solar towers) could fall to around 4 cents per kWh by 2030.

Stirling Engines

Another variant on the solar thermal power theme are Stirling engine based power plants, which generate electricity directly rather than first storing the energy as heat.

Stirling Energy Systems seems to be the leader in this field, with some reports talking about agreements with Southern California Edison and San Diego Gas & Electric for up to 1.75 GW of power. The company recently set a new world record of 31.25% for Solar-to-Grid conversion efficiency.

Other companies pursuing stirling engine based solutions are Infinia and SunPower (not to be confused with its larger namesake in the PV industry).

Passive Solar Thermal - Solar Hot Water And Others

Generating power isn’t the only way to utilise solar thermal energy of course - solar hot water is a very cheap and efficient way of replacing gas or electricity usage with solar energy. Solar hot water systems are in widespread use in Australia, with state and federal governments encouraging people to upgrade their home hot water systems to solar - almost cost free in some states. The New Zealand government is also encouraging the use of solar hot water systems.

Some larger scale uses of solar thermal hot water are being put in place by Abengoa in Texas and Colorado.

Solar hot water is in wide use in China as well, with the city of Rizhao becoming somewhat famous for achieving widespread takeup of the units.

An unusual variation of the direct capture of solar energy in the form of heat is from a Dutch company that has developed a “Road Energy System” that siphons heat from roads and parking lots to heat offices and homes.

And one final use of solar thermal power - it can keep your house warm, if your windows face the right way, and even better, have insulating glass that doesn’t let the heat out again - which could help make your building energy positive.

I had thought that the short thread that has run through my last few posts – relating to the imminence of a fuels crisis, and the lack of political perception of the problem, had run out. And then I read the piece from Salon that threadbot had as the top story on Drumbeat on Sunday. Taken with a conversation that I had with the Nurse (who lives in Ottawa) today, it led me to this additional comment. And to put that in context, for those who live further South, while Ottawa might get about 100 inches (250 cm) of snow in a normal winter, this year it has had more than 166 inches (421 cm) and the snows are not over. Part of the reason that I bring this up, in context of the Salon article, was the line in that article that said (and I recognize that I am taking it a little out of context)

And for that only one alternative fuel is even remotely plausible — carbon-free electricity.

And my tiny mind asks, where, with a 20-inch (50 cm) snowstorm does one find this source to supply a city of 1,148,800 inhabitants in the short term.
[break]
My worry is that there seems to be a lack of understanding about what we are really talking about when we talk about post-peak oil. I started this thread back with an article on Botswana that began

The habit of bargaining has become so engrained that statements of shortage are quite commonly read as bargaining positions leading to a price hike, rather than that you literally can’t have any. But we are now in a time when the reality of growing shortages, and in more than just crude oil, is going to start imposing such a disconcerting awareness.

The pre-supposition that underlies many of the articles, we see about the need to change the sources for our fuel supply, such as that in Salon, is that we have plenty of time in which to make those decisions. The reality is that we do not.

When I quoted from “Cape Wind” I mentioned that one way that New England coped with the natural gas shortage of 2004 was to close the schools. This was also one of the ways of coping back when we had the energy shortages of the 1970’s. But it is not a permanent solution to anything, The hope is that we might have learned some of the lessons from those experiences. However, the problem is that we may not have learned enough, and there is enough supply, in the short term to slip discussion just long enough that other remedial measures won’t be taken.

Natural gas usage in the United States went up 6.2% in 2007, with residential consumption going up 8% and electrical power use rising 9.9%. ( Natural Gas –Year in Review 2007 (pdf) ). At the same time the production of natural gas from the Gulf dropped 4.5%, while the increase in supply came from the Barnett Shale and the Rocky Mountain region. However it has been noted that the life of wells in the former is likely to be less than four years, with production per well halving after the first. In the very short term the relief in supply will come from the natural gas surplus from the West will make its way through the Rockies Express pipeline to needy customers in the East, even though it is currently held up by bats. The pipeline should reach full delivery capacity as far East as Missouri this year, and then, shortly thereafter be able to deliver some 1.6 Bcf/day out to Clarington, Ohio freeing up supplies to go all the way up into New England. In the process it is driving up the prices of natural gas in the West, which until now did not have sufficient market for the gas they were producing.

A survey by The Associated Press found that households across the Rocky Mountains buying natural gas from major utilities pay as little as $6.36 a decatherm, a heat value roughly equal to 1,000 cubic feet of gas, depending on the quality.

In other parts of the continent, notably Georgia and South Carolina, natural gas can top $25 a decatherm. Hawaii has the country’s highest average prices at more than $34, according to the U.S. Energy Information Administration.

As those fields are now able to more easily supply the nation one wonders how long the available supply will last. Current estimates of sufficient supply to meet national needs for ten years may shorten as demand continues to increase, and questions of storage have not completely gone away.

Increasingly the Western supply will look to the development of unconventional gas supplies, such as coal bed methane. And it must be remembered that as the fields decline so the number of wells that must be drilled each year must go up. Over a period of ten years, for example, the number of wells required to sustain production from Canadian fields increased threefold. And now there are increasing concerns with the supply from Canada, because of increased costs and continued lower well productivity.

The increasing demand for natural gas offset by the short-term increase in availability is going to lead to more comments that we cry “Wolf” when we look at the energy supply situation. After all we are increasingly able to get LNG from different sources. In the past year we have increased supply and drawn it from a wider resource base, with supplies now coming from Trinidad and Tobago, Egypt, Nigeria, Algeria, Qatar and Equatorial Guinea.

But this abundance is very transient and will unfortunately in that short period sap the strength from the message of concern over longer-term supply. And, it occurs as other nations in need are also competing to purchase supply not only for the short-term, but with longer-term contracts. If, in the short-term we do not need that much, by the time the longer term rolls around the option to purchase may have gone away. We also tend to neglect the growing needs of the economies of the producing nations. There is already evidence that the Export Land Model will apply to natural gas supplies from the Middle East, with Leanan drawing our attention to the developing shortages of natural gas supply among the nations of the Middle East.

Unable to gain access to gas from Qatar or Iran, the northern emirates of Ras al Khaymah and Al Fujayrah have been obliged to import diesel and coal to meet their power generation needs, said Simon Williams, a senior economist with HSBC in Dubai.

“Demand has accelerated more quickly than anticipated and additions to supply have fallen behind,” he said. “They’ve had little option but to look to alternative sources of energy supply. The irony of the Gulf importing hydrocarbon energy is not lost on anyone.”

There is also the continuing lack of success in finding natural gas in Saudi Arabia again, from Monday’s Drumbeat.

New discoveries have fallen far short of expectations.

Meanwhile, Saudi Arabia is seeing a huge increase in domestic demand for the fuel as a feedstock for everything from desalination plants to heavy industry and power generation.

With the interesting comment from Sadad al-Husseini, former head of exploration and production:

“It is just unfortunate that so much money has been spent to confirm what we knew already,”

The Hearst report noted that it would take around 20-years to find and develop new technologies and supplies and to put them into place. We do not have the sense of urgency to impel us to do so. The message of “Sorry, there is none,” when it comes will mean that the years of grace are over. And as the scale of the problem then becomes evident we will probably, again, blame the fuel companies, rather than those politicians who fail to recognize and address the underlying problems.

[Comments fixed.]

The Engineer-Poet recently had a post on The Cogeneration Stopgap at the Oil Drum, which looked at how the combination of cogeneration (generating combined heat and power - CHP - using natural gas) and heat pumps could be used to heat North American homes much more efficiently and extend the life of North America’s dwindling natural gas reserves for a period of time while houses are retrofitted to make them more energy efficient and natural gas use is replaced with electricity. The only example of cogeneration technology touched on in the article was from Climate Energy, whose CHP unit is made by Honda.

An Australian company working in this area called Ceramic Fuel Cells was in the news recently after landing a $240 million deal with Dutch energy company Nuon to supply 50,000 CHP units by 2014. The company still needs to meet a number of commercial requirements set by Nuon - in particular improving the durability of the cells from two years to four.

The company is hoping that production will begin by June 2009 in a new €12.4 million factory in Heinsberg, Germany, which aims to produce 10,000 2 kW units per year. The cells are expected to emit 60% less carbon dioxide than traditional combustion generators. The company is also partnering with Britain’s Powergen, Germany’s EWE and Gaz de France.
[break]
Ceramic Fuel Cells

Ceramic’s fuel cells have been under development for several years, listing on the ASX in 2004 and the AIM shortly after. The company specialises in solid oxide fuel cells, which convert natural gas (and presumably biogas) into power and heat without burning the fuel. The cells convert about 50 per cent of the energy in the fuel to electricity - traditional gas-fired power stations manage around 30 per cent - with another 35 per cent of the potential energy captured as heat from the catalytic process.

The company doesn’t have any plans to market units in Australia in the foreseeable future, preferring to concentrate on the European market due to higher energy prices, specific CHP rebates in Germany, feed-in tariffs and possible carbon credits for trading on the EU emissions trading scheme (set up under the Kyoto protocol).

CHP in Britain

Reuters reported that boilers containing Ceramic’s units could be sold in Britain in 2010 if utility company Powergen orders units this year. The article estimates that fuel cell units for home units will be priced between 1,500 and 2,000 pounds and that larger units priced at over 3,000 pounds will be operated by utility companies. The same report goes on to speculate that because utilities will save so much money by producing electricity using CHP (which they believe is twice as efficient as centralised generation and sending power through the grid), that they expect utilities will eventually start giving next-generation boilers to customers for free, with the units having a 4-5 year payback period.

Powergen has also previously looked at a different micro-CHP approach using Stirling Engines attached to water boilers. I can’t tell what happened to this plan, though the company is assume was the prospective supplier - Disenco - is still marketing a CHP product (although full production isn’t due to begin until this year, which may explain the absence of progress).

Another British CHP company called Ceres Power received an order for 37,500 units from British Gas owner Centrica in January, for delivery from 2011. These units are smaller but cheaper than Ceramic’s units. Carbon Commentary have looked at this unit and claimed the main challenge facing CHP vendors in the UK is a the lack of feed-in tariffs - which would presumably affect Ceramic as much as Ceres.

Bloom Energy

Another company that has received a lot of attention in the fuel cell market is US company Bloom Energy, who are also developing solid oxide fuel cells (though there is some legal argument underway about who actually developed the technology in this case). Bloom Energy

The company is investigating using natural gas and ethanol as fuel for the cells, and most reports speculate the cells will be able to generate 100 kw of power (the company’s web site says absolutely nothing). One report from Business 2.0 claims the company is aiming to sell units for around US$10,000.

Bloom is backed by a number of high profile investors, including the omnipresent Kleiner Perkins Caulfield Byers, and has raised US$100 million in funding. According to Vinod Khosla, the company is currently building a “massive” facility in Mumbai, India.

One possible application for Bloom’s fuel cells is in data centres, with the cells used to eliminate the need for uninterruptible power supplies (UPS’s) and thus (in some cases) the need for additional disaster recovery (DR) facilities.

Japan

Japan has also seen trials of hydrogen fuel cells for CHP, with the hydrogen coming from reformed natural gas. The cells are leased for 1 million yen (US$9,500) for a 10-year period from Matsushita Electric Industrial Co. Toyota, Honda and Toshiba are all also working on fuel cells, usually as part of efforts to develop fuel cell vehicles.

The Japanese Government is spending 2.4 billion yen (US$310 million) per year on fuel cell development and plans for 10 million homes (25% of Japanese households) to be powered by fuel cells by 2020.

The Air Car

One last note - a commenter on the “Air Car” articles noted that MDI’s main business seems to be a variable-fuel stationary power supply, so presumably they could be a vendor in this market at some point as well.

Crossposted from Peak Energy

In his second new TV spot of the day ??? this one now playing in Pennsylvania ??? Barack Obama’s campaign releases a 30 second ad that takes a strong stand against Big Oil, saying he ???won???t let them block change anymore.???

My question to you is: Does he have it right? Is this the correct political frame? Is it a winning political frame?

[Hat tip: NY Times Political Blog: "Obama's Big Oil Ad Draws Fire"...go there and fly the TOD flag if you are so inclined.]