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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 .

As I traveled through India on a recent business trip, the topic of energy was constantly on my mind (as it is every time I travel). I found out some interesting things about jatropha, toured a sugarcane ethanol plant, found a wind farm in the middle of nowhere, and encountered a native ethanol skeptic. Here are my impressions. [break]

Ethanol in India: Another Brazil

The highlight of my trip was definitely the tour of the Sanjivani sugar cane plant near Shirdi. This could be a model to the rest of the world (with some exceptions) regarding how sustainable ethanol should be produced, as they have the entire life cycle covered.

Sugarcane Headed to the Ethanol Plant

They take in the sugarcane from local farmers, and they produce sugar. Molasses is a by-product of sugar production, and they ferment that to make ethanol. Bagasse is also a by-product, and this is used to fire the boilers to provide power for the plant. The sludge waste that they produce is composted and mixed with the bagasse ash and given back to the farmers to put on their fields. As far as I can determine, this is an entirely sustainable process. But the bagasse is the key to the entire operation.

I quizzed them quite a lot about the bagasse boilers, and what I was told is that because the sugar extraction process produces very finely ground bagasse (I walked out of the plant covered with bagasse dust), and because the ash content in bagasse is very low - it is an ideal feed for the boilers. Very few sources of biomass fall into the category that 1). It is necessarily removed from the field as a by-product of the cultivation; 2). The resulting process pulverizes the biomass (not only does this make it easy to burn, but it dries easily as it passes through flue gas on the way into the boiler); and 3). The ash content is very low, minimizing maintenance of the boilers. This makes sugarcane ethanol a truly unique production method, and not something that is easily transferred to corn or cellulosic ethanol.

Not only were they making ethanol (95%; not fuel grade) but they had an entire chain of ethanol derivatives that originated from the sugarcane ethanol. These derivatives included important industrial chemicals such as acetic acid, acetic anhydride (very important in my current job), acetaldehyde, and ethyl acetate.

As mentioned above, the grade of ethanol that they primarily produce is industrial grade. This differs from fuel grade for blending in that the ethanol-water azeotrope isn’t broken; the final product is 95% ethanol and 5% water. This greatly reduces the energy usage, as it takes a lot of effort to get out that last 5% water. This is in fact the concentration that Brazil primarily uses for fuel, and makes the energy balance much more favorable than using anhydrous ethanol. For blending with gasoline, it is not a good option as the water will phase out. But for dedicated ethanol vehicles, the 95% grade seems to be a reasonable option for partially supplying the energy demands of many tropical countries.

In Search of the Elusive Jatropha Plant

If you are like me, when someone mentions jatropha, India immediately comes to mind. Most jatropha stories that I have seen mention India as leading the way on jatropha development. For a while, I had no reason to question these reports, but recently I started developing some doubts.

The doubts started when I was contacted by a biodiesel company in Turkey. They had shut down operations because feedstock costs had gotten too high, and they asked if I could help them find an alternative source. I asked them if they have looked into jatropha. They said they had, but weren’t able to locate anyone in India who could supply them. I thought this was odd given what I had heard about jatropha in India, so I agreed to look into it for them. I initially contacted a number of people with various Indian and biofuels connections, but nobody could point me to a concrete lead.

So one of the things I intended to do on my trip was track down that elusive jackalope, er jatropha. During my trip I asked practically everyone I met, which included a number of people involved in biofuels, and while almost everyone knew what it was, nobody could point to anyone who was actually producing it. I thought this increasingly odd, given the hype I had heard regarding jatropha and India.

Those who did know a little about jatropha in general, said that the problem is that the fertile land is being utilized to grow food (a billion people need a lot of land for food) and the marginal land typically has no roads or other infrastructure that could support a jatropha industry. While I did see a lot of seemingly marginal land as I drove around, it was pretty remote. Furthermore, I was told that jatropha requires about 3 years to produce, and not many farmers are likely to be willing to tie up their land for an extended period on an unproven crop.

So, while this doesn’t mean that there is no potential for jatropha, I left the country feeling that the jatropha situation in India has been highly overstated.

Transport: Mostly by Foot

Based on my observations, the vast majority of transport in India is by foot. I traveled pretty deeply into rural India, and almost everywhere I went there were always vast numbers of people walking along the roads. Motorcycles are abundant, and almost always had multiple passengers. At one point, I saw seven people (five of them young children) all piled onto a single motorcycle.

Mass Transit

In cities like Bombay, auto-rickshaws were everywhere. I rode in one, and would describe it as essentially like a motorcycle with a light-weight body built around it. Interestingly, the one I rode in (maybe all of them are like this) ran off of compressed natural gas. Speaking of which, there were a lot of alternative fuel vehicles in Bombay. I saw many CNG vehicles, and a taxi I rode in once was fueled by a propane tank in the trunk.

Sitting in an Auto Rickshaw

A Wind Farm and an Ethanol Skeptic

At one point we were driving through a very remote area, and suddenly a wind farm appeared. I took some photos. The farm appeared to be very distant from any cities, so I am not sure about how cost effective it was in that location.

Wind Farm in Rural India

One thing I didn’t expect to encounter was an ethanol skeptic, but at one of the meetings we had, (following my questions about jatropha), our host told me that “ethanol for biofuel is India’s greatest threat.” I asked why, and he said he feared that 1). The demand in the West for biofuel will result in a food versus fuel competition that would devastate India’s poor; and 2). That increased ethanol demand would exacerbate India’s already serious water problem.

Food

During the week in India, I had meat twice. The total I had was about 3 ounces of chicken on a pizza. I would have guessed that I would be constantly starving, but the food is very filling, and very good. I haven’t had vegetarian like that in the West. At a typical meal, I would have a carbohydrate (usually a flat bread), a vegetable, and a protein. Rice was always part of the meal. But the meals were very nutritious and healthy, so I plan to incorporate some of these meals into my normal diet.

My host (and Bombay native) Kapil Girotra informed me that India is self-sufficient in food. He also told me that 70% or so of the population is vegetarian, which means it requires less land to feed them. On the other hand, I saw a very large portion of the population that certainly is not getting enough to eat. So you might say that they are barely self-sufficient. They do produce enough food to feed their population, but I saw a lot of undernourished people.

The Poverty

The poverty in India is just stunning. We don’t have anything to compare it to in the West. The people that would be considered very poor in the West have it far better than the poor in India. They are literally starving to death. I once asked what happens if someone has a medical emergency in the slums. “If they have money, they live. If not, they die.” I just imagined a child getting hit with something incredibly painful like renal colic (and believe me, it is excruciating) and not being able to get help. I can’t imagine the strain on a parent going through that. I would rather have a finger chopped off than stand by helplessly while my child screamed in pain for hours. Seriously.

I think in the West we just tune it out when we see it on TV. But you can’t tune it out when you drive by mile after mile after mile of people living essentially in garbage dumps. I think we treat our unwanted pets in the West with more concern than we have for a starving 2-year-old half way around the world. I was frequently asked what I was thinking about, and once I replied “What it would be like to have everyone in India experience a little of America, and everyone in America come see this.”

The Traffic

It really isn’t accurate to call it traffic. It is chaos. It’s just a free-for-all out there. I would highly caution a Westerner against renting a car and attempting to drive. You will spend all of your time in a state of confusion, and you will hold up traffic while you try to figure out what to do. The constant honking (in lieu of signaling) was unnerving, and I felt at all times as if I should be flipping someone off. For me, Hell would be having to be a cab driver in Bombay for all eternity.

The roads are shared by people, bikes, motorbikes, auto-rickshaws, and cars. I frequently observed traffic going the wrong direction, and it was quite normal to have someone turn directly across your path. We had drivers who took us from place to place, and they would pass people on blind curves and hills, and sometimes they even passed someone in the act of passing someone else. I don’t think we have a proper frame of reference in the West for the “traffic” in India; especially in the big cities. And of course this means a constant haze hung over Bombay while I was there, which presumably gets scrubbed during the monsoon season.

Hazy Bombay Behind Me

The People

The population density is something else. I once wondered aloud just how many people I had seen on this trip. Kapil, the guy I was traveling with, said “Probably a good fraction of all the people you have ever seen in your life.” That is not an exaggeration. We traveled around the country, and with very few exceptions there were people lining the streets everywhere. Several times I would observe a crowd and wonder what was going on, but there was nothing going on. It was just a crowd. But it looked like a constant stream coming out of a major sporting event.

Despite the crowded conditions, I only saw violence once – when a man tried to drag another out of a car after a wreck. The people seem to cope quite well. Crime doesn’t seem to be nearly the problem you might expect in a city of that size and population density.

But with that many people comes a great deal of garbage. There was trash everywhere, and most of the time you could smell rotting garbage. One night we stayed well north of the city, but every once in a while my room would fill up with a garbage smell. I presumed the wind had shifted from Bombay.

Travel

It took forever to get anywhere. You look at a place, and think “It’s only 100 miles.” 3 hours later, you still aren’t there. We spent 20 hours on the road over the course of 4 days. They don’t have many rest stops and such with facilities that I could see. But the people I was traveling with never needed them. We would spend 7 hours in the car and never stop for a bathroom break. Needless to say, I limited my water intake on the trip, as I found that bathrooms were treated as a precious commodity. On a couple of occasions when I was in a meeting, I asked for the restroom and found someone standing outside of it, and a sign that said “VIPs and guests only.”

I traveled by train as well, after Kapil asked if I was up for an adventure. I thought “What could be so adventurous about riding the train?” It isn’t for everyone. If you like hot, sweaty bodies packed in like sardines (and that’s in 1st Class), then go for it. It took us an hour to get to our destination, and during that ride there were constantly people hanging out of the open doors, and it was standing room only. I wondered whether the people in 2nd Class were stacked like cord wood.

Conclusions

India was an eye-opening experience for me. I managed not to get sick while I was there, and I credit my host Kapil for his constant advice on what I should and shouldn’t eat and drink. (I don’t recommend the buffalo milk, by the way). The contrasts were amazing. Outside a cluster of $400/night hotels was the worst poverty I have ever seen. I once saw a guy pulling a hand cart and talking on a cell phone. Houses in the slums had satellite dishes on top of them. A number of times we walked down hallways of buildings that looked to be 100 years old and decrepit, and then stepped into one of the most modern offices you have ever seen.

One of the things this trip has done for me is to highlight the importance of efforts to transition to a more sustainable lifestyle and avoid the kind of collapse that is often discussed in relation to Peak Oil. I think if more people understood just how far society could fall - and I saw that in the slums of India - we could get serious about our energy situation in a big hurry.

Note:

This essay is a summary of some key points. However, for most of my trips I keep a detailed journal for future reference. But I publish them, and the full boring blow-by-blow can be found in two entries:

India Part I

India Part II

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).

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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.