Monday Jun 24, 2013
- Tuesday Jun 25, 2013 -
Philadelphia, Pennsylvania - USA
Data Informed´s Marketing Analytics and Customer Engagement provides marketing, sales, and customer support managers with the information they need to create an effective data-driven customer strategy. more...
Monday May 20, 2013
- Saturday May 25, 2013
- 8:30 AM Eastern -
Stowe, Vermont - USA
Legal Essentials for Utility Executives: May 19 to 25, 2013 and October 6 to 12, 2013 This rigorous, two-week course will provide electric utility executives with the legal foundation to more fully understand the utility regulatory framework, the role of more...
We know you have something to say!
There is an immediate need for articles on
the hot topics in the Power Industry!
EnergyPulse, like no other publication,
also provides a means for our readers to
immediately interact with experts like you.
A publication that I occasionally refer to as a compendium of London wine bar gossip recently offered a few choice observations about oil that deserve elaboration and a wider circulation. I place these observations in the category of facts, and use them to present a few comments on associated fictions. First and foremost it was noted that “Unfortunately for consumers, OPEC has little incentive to expand that ‘cushion’ in the short term. It would, in effect, be spending money to reduce its revenue, since the price of oil would undoubtedly fall if traders had no fear of future shortages” (The Economist, October 21, 2006).
The unforthcoming “cushion” that is being referred to above is sufficient production capacity to ensure at all times an excess of supply over the predicted demand for OPEC and/or world oil. This situation has been appearing in my work for the last five years, and is spelled out at some length in my forthcoming textbook (2007). I can add that since the major producers in OPEC have little or no reason to raise their output to the levels desired by the major oil consumers, they also have no need to indulge the fantasies of assorted experts and pseudo-experts by declaring themselves ready to welcome foreign executives and technicians in order to help them determine optimal extraction programs for their reserves of oil and gas. Students of the oil markets would do well to accept these realities.
Pointing things like this out appears to have increased my unpopularity in certain high-value circles in North America and Europe, however I am unable to understand why. As a teacher of economics and finance I am merely fulfilling my responsibility to inform interested parties what – in the light of mainstream economic logic – could conceivably take place as compared to what certain people want to happen, or think will happen, or even what will actually be experienced: the basic issue here is the optimum use of currently available information. Recognizing this, I feel perfectly comfortable saying that since without exception the OPEC countries now possess or have easy access to all the expertise that they require, and more important given the rapidly expanding market for their products, it can hardly be true that they are unable to function without the assistance of Big or Not-so-Big Oil.
According to the article cited above, Amy Jaffee of Rice University gratuitously declared that “most of the OPEC countries’ national oil companies have a dismal record on investment and expansion.” The reason for her disappointment can be ascertained from the following statement by the Economist’s energy experts: “Given all the uncertainties involved, a rational OPEC planner would probably resolve simply to maintain exports at today’s levels rather than add capacity.” With the exception of my own work, this is the first time that I have encountered this obvious but vital pronouncement.
The key word above is “rational”, while the phrase “given all uncertainties” is superfluous, because although there may be some uncertainties about the exact quantity of reserves at the disposal of various OPEC oil producers, there can hardly be any about the laws of supply and demand. According to the article being discussed, Saudi Arabia “has plans to pump a third more oil”, which sounds impressive but actually amounts to only an extra three and one half million barrels (= 3.5 mb/d) at the most, and thus means a total 12-12.5 mb/d, at some unspecified time in the future. For better or worse, this is not what President Bush and his advisers have been waiting to hear, assuming that they prefer lower oil prices to higher. The oil minister of Saudi Arabia once said that his country would be able to supply 15 mb/d in the foreseeable future, and in addition could maintain that amount indefinitely, but he could hardly have been serious. Something that is even more far-fetched is the contention by the International Energy Agency (IEA) that OPEC will be able to supply 57 mb/d of an expected 121mb/d of global requirements around 2030.
In my textbook I calculated the required OPEC output to be 60 mb/d at that point in time if the dreams of the IEA are to come true, but regardless of assumptions and mathematical slight-of-hand, neither 57 mb/d nor 60 mb/d has the slightest possibility of being realized. I think that it is best for all of us on the buy side of the oil market if our political masters understand this as soon as possible. I also have very serious doubts as to whether Saudi Arabia, for example, would be capable or willing under any circumstances to provide its share of the mythical 121 mb/d conjured up by the IEA, which comes to about 20 mb/d if a linear extrapolation is employed. This might also be the right occasion to note that according to an important French insider, Christophe de Margerie (director of exploration for Total), 121 mb/d is out of the question at any date in the future.
Before changing the subject, an issue that needs to be addressed is how a reduction in OPEC output would be managed if one were necessary in order to support an oil price floor of $60/b. The usual opinion is that most OPEC countries would object to making a cut in their production, but to me this implies that somebody in authority was asleep during the courses in development economics that he or she might have taken, because (ceteris paribus) they should be overjoyed for the opportunity to keep as much oil as possible in the ground, since a simple option of this nature would contribute to maintaining or increasing the oil price.
The difference between the oil market today and that market a decade ago is that certain sophisticated producers would be overjoyed. Any doubts that anyone may have on that score should be discarded as soon as possible. For example, one major OPEC country recently announced that instead of continuing to think in terms of a one generation time-horizon for the output of their natural gas, they now want this resource to provide them with a generous income for 100 years. It is a short step from expressing an intention of this nature about gas to adopting the same attitude for oil, although it happens to be true that the government of Saudi Arabia has been clear on this point since at least l973. Regardless of the promised or actual output of Saudi oil, high or low, it is patently unwise at the present time to believe that they will produce more than 12.5 mb/d.
Why should they? Would you if you were in their place?
Much attention is directed to OPEC’s attempt to impose a $60/b floor on the oil price, with comparisons frequently made to the $78/b ‘spike’ once enjoyed by all oil producers. The thing to notice here is that $78/b was really and truly a ‘spike’, which suggests that it was unsustainable. $60/b cannot be regarded as a spike, but the belief here is that it is also unsustainable, although not in the way envisioned by oil optimists such as Dr Michael Lynch. Having experienced a comparatively long stretch of $70/b oil, the OPEC countries are hardly in the mood to rejoice at having to accept a REDUCTION in their revenue of 27.5 x (70 – 60) = 275 million dollars a day for a long period of time. (Here 27.5 mb/d is the current OPEC output, while I take $70/d as a ‘putative’ sustainable price.) The ostensible floor that OPEC is gearing up to defend is $60/b, but it would be naïve to believe that OPEC’s goal at the present time is less than 65 or $70/b.
A basic position that I have always held is that oil is much scarcer than commonly realized. My textbook is filled with all sorts of numbers whose purpose is to support this belief, however recently I encountered some interesting work by Fredrik Robelius, a doctoral student of physics and petroleum engineering at Uppsala University. Robelius notes that 20 years ago 15 oil fields had the capacity to produce more than one million barrels of oil a day, while today there are only 4 fields. These are Ghawar in Saudi Arabia, Kirkuk in Iraq, Greater Burgan in Kuwait and Cantarell in Mexico. Cantarell is the most recent to be brought into operation, but due to its attraction for North American consumers, its output began falling last year. Burgan has also peaked. This is the kind of information that all students of the oil market need to keep in mind.
It has been said that Canterell’s decline will be more than compensated for by the large ‘strike’ in the Gulf of Mexico called ‘Jack’ (or Jack-2), but as has been pointed out by Robelius (2006) and Len Gould (2006), this allegation is a misunderstanding, or worse. Very likely any good news being circulated about that venture is another component of the ‘hype’ that is flooding the oil world, and mostly has to do with boosting share prices, as well as attracting some billions for exploration and production. As noted by Chris Skrebowski, editor of the Petroleum Review, there are so many lies in circulation these days about oil that it is almost impossible to carry out a credible analysis.
There are still a few observers who disagree with the analysis provided above, but I have good reason to believe that their number diminishes every year: the oil spike referred to above concentrated a great many recalcitrant minds. I also believe that it is apparent now that the global macroeconomy will not find it easy to deal with an ‘early’ peaking of global oil production. Everything considered, an early peaking is something that should be be avoided at all costs if possible, and since it could involve serious losses of one sort or another to all players on the oil market, both OPEC and the major oil importing countries should turn to an interesting axiom from game theory which says that when cooperation is possible, it always – or almost always – pays to attempt to bring it about.
NOT THE REAL DEAL
Having made some favourable comments about a ‘piece’ in one of my least favoured publications, I would now like to make some unfriendly comments about a presentation in ‘Forbes’, which to me ranks with ‘Fortune’ as an outstanding review.
Christopher Helman (2006) begins a discussion of the oil future by citing Michael C. Lynch’s claim that the oil price could fall to $45/b by mid 2007, and touch the 20s in 2008. According to Dr Lynch, the recent high oil price can be easily overcome. Since a great deal of Lynch’s optimism is based on new projects, this might be the place to cite a recent statement by Chris Skrebowski: “The time lag between discovery and first oil production for a major project is currently averaging over 6 years. A few large projects are taking as little as 4 years, but many others are taking up to 10 years. This means there is now little or no chance of significantly altering the production outlook for 2010, while even that for 2012 is already largely determined”.
In a curious flight of fancy, Lynch has noted that the price of oil is is not rising but declining if expressed in grams of gold, which is an observation that is completely without any scientific relevance to anyone except possibly Steve Forbes – owner and publisher of Forbes – who wants the international monetary system reinvented to make gold the ‘reserve of last resort’ (2006). The last time I encountered a suggestion of this incongruity was during the Nobel Prize lecture at Uppsala University by Professor Robert Mundell, who suggested that Japan should adopt the U.S. dollar as its national currency. On that occasion I believe that I countered Professor Mundell’s advice with a favourite aphorism of Mr Forbes: “With all thy getting get understanding.” Needless to say, with a Nobel Prize safely in his possession, along with the prize money, he might have argued that a great deal of understanding was unnecessary on his part.
Apart from this show of respect for what has been called the most “noble” of all commodities, Dr Lynch envisages an ‘Oil Spring Busting Out All Over’, to slightly alter the title of an American musical comedy ‘hit’. Detail is unnecessary here, because almost everything Mr Helman chooses to cite is based on sheer delusion. For instance, India will soon be supplying an important part of its oil requirements from domestic resources, which is impossible, and the firm ‘Apache Energy’ is revitalizing a stretch of the UK North Sea with “new recovery techniques”. The latter claim can be classified as preposterous, because if there were substantial reserves to be obtained from the UK North Sea, they would be the object of exploitation by one or more of the oil majors with greater experience in the region. There was also a reference to the above mentioned activities of Chevron, Devon Energy and Statoil in the Gulf of Mexico, where the ‘Jack’ bonanza that they are advertising has been referred to as humbug by some very serious observers; however as Professor Kjell Aleklett recently mentioned, even if the claimed quantities of new oil did exist they would not substantially alter the world oil picture. Lynch also tells us that the ‘Twilight in the Desert’ that Matthew Simmons wrote about is actually a new dawn, and he apparently believes that ExxonMobil and BP are so discouraged by oil price prospects that they have started returning cash to shareholders rather than use it for exploration and production. The argument in my textbook is that they are passing out this money to shareholders because it makes more economic sense than using it to search for oil that does not exist – at least in the amounts that they consider to be worth extracting.
What we have with the ruminations of Dr Lynch and a few others is a soap opera that has been confected to support the crank conclusions of the IEA. Every decade for the last 40 years oil additions to global oil reserves have declined by fairly large volumes, while increments in consumption have been considerable, and in the coming years the gap between these could be greater than ever, particularly if present trends are maintained. Moreover, rumour has it that the IEA researchers do not have a great deal of faith in the projections they so grandly present their clients, however they feel compelled to offer them because more realistic estimates are not politically acceptable.
More realistic estimates are, fortunately, increasingly acceptable in the corridors and restaurants of power in Washington D.C., where the president of the U.S. has spoken of his country being hooked on oil. Doing something about this suggests, in the language of finance, that the time may have come for decision makers everywhere to go long on realism and short on nonsense.
In a recent article in EnergyPulse (2006), Alan Caruba insists that plenty of oil could be located in the Western Hemisphere if the search for it were more intensive, which may or may not be true, however he is correct when he states that it is better to put more effort into looking for and producing what oil is available, than to engage in á series of wars in order to assure access to various energy resources. Taking into consideration the fact that substitutes have been found for these resources, and clarifying for all concerned the relevant direct and indirect benefits, it may be time to begin thinking in terms of a Manhattan Project type effort that involves the large-scale production of e.g. biofuels and hydrogen. There have been many systematic and impressive arguments in EnergyPulse and elsewhere that this is an idea whose time has not arrived, but given the economic and political consequences of a too early peaking of the global oil output, it might turn out to be an optimal strategy.
Aleklett, Kjell (2006). Comment: oil production limits mean opportunities,
conservation (Aug 21). Oil and Gas Journal (August 21).
Banks, Ferdinand E. (2007). The Political Economy of World Energy: An
Introductory Textbook. Singapore, London and New York: World Scientific.
______ (2006). ‘Economic theories and oil market realities’. Energy and
Beyer, Jim (2006). Comment on Reynolds. EnergyPulse (www.energypulse.net).
Caruba, Alan (2006). ‘Peak oil or lots of oil’. EnergyPulse
Nice Article. From reading your article, while I agree with everything you say, it would be interesting to see how the "human element" or geo-political pressures play into your model and thought process. It seems to me that politics and energy are linked to the global hip. What is your analysis.
Ferdinand E. Banks 11.2.06
In the long run the "human element" will have to take a back seat to geology and economics, but in the short run it/they means a great deal. For example, if the oil price hadn't fallen by 25% we might have had some sensible observations from Big Oil and their friends, but now many of this crew feels that they have the right to express whatever irrationall thoughts come into their heads, and this includes irrational thoughts that they themselves don't believe (i.e. disinformation), but which they think will provide them with certain economic advantages.
In my work I am no longer interested in what will happen in the long run, because I feel certain that I know what will happen in 10 or 15 years - although of course I could be wrong. The big issue is what will happen in the short run. To a certain extent I am an optimist here because of the public pronouncements of e.g. President Bush and Prime Minister Blair- unless I am mistaken, they no longer feel that they have to suffer fools in energy matters; but there are an awful lot of voters out there who are dreaming about a rosy oil scenario that I can't see happening.
Malcolm Rawlingson 11.2.06
Ferdinand, Thank you for an excellent and informative article. I am no economist but I can certainly fully appreciate your analysis. What you say here makes so much more sense than the bafflegab expunged by the western media.
It is just common sense to say that if you were an oil producing nation that had only one product why would you pump it out at low prices when you have the option of keeping it IN the ground and selling it later for more.
The first way sends your economy onto the rocks in short order: the latter sustains your economy for many years. It is pure insanity to think any oil producing nation would deliberately destroy its future power or world influence to provide cheap oil to bolster western or Asian economies. where is the sense in that.
So one can readily forecast the continued pronouncements that there is plenty of oil left because there is no incentive to say anything else. Those people will be saying there is plenty of oil left as the very last barrel of it is squeezed out of the ground. The fact that it is complete nonsense and there's nothing to support it is neither here nor there. While one can appreciate the need for those nations to give us a false level of security basing ones economic and cultural future on such pronouncements (dare I say lies) on the other had is pure folly.
I agree with you too that western nations need to move to alternatives sooner rather than later and such a move should not be dependent on oil price but accurate forecasts of its future and present availability.
The much vaunted "hydrogen economy" probably is the long term way but the energy source for it will have to be either nuclear fission or nuclear fusion.(Hydrogen is not an energy source - because there are no hydrogen mines)
While I doubt very much we will be pumping pure hydrogen through pipes as we do with methane - a much more likely scenario is the conversion of carbon and hydrogen to methanme at a nuclear plant so that these are the source of both electricity and methane gas. The latter can be pumped through existing infrastructure with no changes.
Of course such a scenario requires a significant expansion of nuclear power plants which is inevitable simply to meet our electricity demands. A few more will also meet our methane demands also enabling true independence from oil and gas producers.
Ferdinand E. Banks 11.3.06
I would like to add one thing to your comment Malcolm. As you say "It's pure insanity to think that any oil producing nation would deliberately destroy its future power or world influence to provide cheap oil...". What needs to be added is that ITS PURE INSANITY TO THINK IT EVEN IF IT TURNS OUT THAT THEY DO IT!
Len Gould 11.3.06
Ferdinand's last is very insightfull. With no way to guage the various political and other incentives / pressures on the elites of many OPEC oil producers, we must simply stop listeneing to their projections and start using our own common sense.
Arvid Hallén 11.3.06
Great article, as always.
Jim Beyer 11.3.06
This is a very persuasive piece on why the prospect of Peak Oil should not be ignored. Even conservative thinkers can admit that a rapid decline in oil supplies could leave us without the energy to rebuild the energy sector, leading to a large economic decline or worse.
I'm pretty contrived with respect to analogies, but I will risk one here. I think that in hindsight, most would agree that improved levees in New Orleans would have been preferred to cleaning the place up after Katrina. It certainly would be less expensive. I think what Prof. Banks is saying is that Peak Oil is at least a possible Katrina, and the entire United States and much of the world is the vulnerable New Orleans. Given the grave consequences of a sudden peak oil event, some protection seems wise and warranted.
But I respectfully disagree that a "Manhattan Project type project" is needed, if you are referring to a scientific breakthrough of some sort. Most monies allocated to such an endeavor would probably be squandered with little outcome (Remember the Toxic Waste Superfund?). Our problems with energy are 90% political, not technical. Unfortunately, this makes them much HARDER to solve than winning World War II, or even sending a man to the moon.
I'm not sure what to suggest specifically other than to stop suffering energy fools so gladly. They exist in a broad spectrum, from Cheney to Lovins, and unlike oil, there appears to be no peaking of production anytime soon.
Ferdinand E. Banks 11.4.06
Let me make a couple of comments on your comment Jim. I dont know where I stand on analogies, but I always use one where global peak oil is concerned: I begin my lectures with discussing at great length what happened in the U.S. As far as I'm concerned, if you understand the history of oil production in the U.S., to include certain technical details, then it's impossible to deny that a peak might be around the corner - though perhaps not as close as the dyed-in-the-wool peak-oilers think.
Now, about this Manhattan Project sort of thing. The subject 'Industrial Organization' might be called 'applied game theory'. What this tells me is that since it would be very bad news for me and my investments if the price of oil had continued up to $100/b, then the presence on this earth of a certain amount of biofuel capacity might be just what I need to preserve my humble capital in case of another price escalation. *Might'! In fact 'backward induction' tells us that the threat of establishing this capacity might achieve the desired results. Where does the 'Manhattan Project' come in? The point here is that if this capacity is deemed desirable, then it should be understood by one-and-all that it will/could come into being fast, and regardless of the cost.
Len Gould 11.6.06
CNN anounced this morning analyst consensus that the price of oil has bottomed out and is set to begin rising again. 'Course it's likely just cold weather and nothing to do with the congressional election timing ...
Thomas Schofield 11.7.06
Do you see any prospect of the various technologies being developed for the liquefaction or gasification of coal to relieve the pressure on oil? The U.S. has the world's largest reserves of coal and is the world's largest consumer of energy. To an economic illiterate, this seems an simple solution - if the technology can be perfected.
Greg Noble 11.7.06
Thank you for the piece, discussion and thank you all for your patience with the real progress of this issue. I would venture that most readers have been around from different motivations for decades. What Jim stated is the worst case scenerio, 90% poilitics has and will continue to derail most strategies in reality and the game theory. All major players and parties are encamped around the protection of margins and power while claiming the higher ground, at least before their utilites commission and in expensive ad campaigns or committee testimony. It is rarely a forward facing seat on the regional train in the Southwest, there are ten - fifteen large cogeneration facilities in our state that are shutdown for no other reason that ecomomic bypass. The utility is selling central generation from old coal plants vs. encouraging efficient distributed generation. Can you hear Nero's harp from here? The scariest part is the 'all renewables are created equal' politics... Is this "no child left behind" politics in energy economics. We need fleet fuels or firm dispatchable peak or baseload. Commercial & industrial conservation and biofuels for fleets or even CHG fleets would be a step on solid ground.
Ferdinand E. Banks 11.7.06
I make a point of NOT watching The West Wing (on TV), but last week I had no choice, and found myself looking at the debate between Mr Democrat and Mr Republican. Mr Democrat said that he would NEVER go to war for oil, while Mr Republican told him that war had no place in the discussion because the oil exporting countries would not risk losing the big bucks that they are now enjoying.
In another semi-debate in Forbes (October 30), Jim Rogers - who knows a lot about commodities - said that $100/b oil is going to happen, while Stephen Roach of Morgan Stanley sees further oil price declines on the way.
My advice is to ignore Roach and pay attention to Rogers. Regardless of whether Rogers is right or wrong this time, we can't handle $100 oil. Forget about it! There are a lot of things that Mr Roach doesn't know about commodities, but he probably knows enough macroeconomics to understand what that kind of oil price could mean - and it aint nothing nice. What he doesn't understand is that since China has a gigantic trade surplus - I have heard a trillion dollars mentioned - they will not allow a fall in their macroeconomic growth rate of a few percent to keep them from buying the oil that they think they need. In fact, oil is likely what the Chinese trade or charm offensive in Africa is all about.
The oil price is now about $60/b, and OPEC has said that they will take steps to keep it from going lower. Steps should also be taken by the oil importers in the form of increased oil inventories and the capacity to rapidly produce enough alternative fuels to keep it from exceeding that figure, at least at the present time. Where capacity is concerned, that probably means the equivalent of an EXTRA 2 or 3 million barrels of oil per day in one form or another, because since - as Mr Republican said - the oil exporting countries are in business, they prefer money to the war that they might find themselves in if oil did reach $100/b. Moreover, the technologies are available to provide this extra capacity. It might be more expensive than it will be in 5 or 10 years, but everything considered, it will be less expensive than the alternative.
And by the way Greg, what is game theory except politics - at least the kind that I teach. As for the other kind - the kind that you find in the unread journals - well, the less said about that and its devotees the better.
Warren Reynolds 11.7.06
Prof. Banks: A very good and realistic analysis of the oil scene. Your ending sentence “this is an idea (biofuels or hydrogen) whose time has not arrived, but given the economic and political consequences of a too early “peaking” of the global oil output, it might turn out to be an optimal strategy”. I agree. It takes time to “ramp up” the Solar-Hydrogen economy so now is the time for the conversion before the “oil crash” (i.e. peaking).
As you have pointed out, the supply-demand scenario is the one that will cause the economic problems in the not too distant future and not the oil depletion.. The world has been searched many times over by the geologists of the oil companies and there are no new Saudi fields. The “Jack” find in the Gulf or the proposed UK North Sea extension is just a drop in the bucket compared to the Saudi fields. You mentioned that the oil producing countries have no desire nor incentive to increase oil production just confirms the forthcoming large difference between supply and oil demand. Your calculations have also confirmed the approximate 50 million bbl/day shortfall of oil (120-60) by 2012 as predicted by others.. This “oil crash” will be devastating to our economy.
Let us also be realistic. The current falling oil prices have just lulled us into thinking that there will always be oil and why conserve ? I foresee that the oil price will again shortly increase to $70, $80 and even $120/bbl as demand outstrips supply. The Chinese and their trillion dollar surplus could afford the $90-120/bbl oil. Where does that leave us ?
What would happen if gasoline was $15-20/gallon as well as exorbitant diesel and heating fuel costs ? Our electric bills would skyrocket. Coal could not help us. The 60 day supply at the coal power plants would soon be gone. The diesel locomotives that transport the coal would not operate at this high cost structure. So, no coal or no fuel oil only nuclear which is only 20% of our electric needs. Nuclear power would also wind down since fresh nuclear fuel rods are transported by diesel trucks. There would be massive layoffs, scant food in the supermarkets and bank foreclosures (The Feds could barely handle the few Savings and Loan failures of the past let alone the expected large number bank failures). Not a pretty picture. So, the only alternative to this increasing economic spiral is the hydrogen route.
By the way, Thomas: The gasification or liquefaction of coal are well established chemical processes. However, they are too energy intensive to become widely used. No, coal is not the answer.
Arvid Hallén 11.7.06
50 million barrels per day shortfall in 2012?! What are you smoking?
Supply will not be 60 mb/d in 2012, nor will demand be 120 mb/d at any reasonable price. Maybe you meant 2021? Or 2031 even?
Coal liquefaction is highly energy positive, the problem is that it is not entirely money positive, considering the high capital costs, the high coal costs and the high oil price volatility. Still, the Chinese are building them. Likely a wise plan, though ruinous for the climate.
Juan Pablo Perez Castillo 11.7.06
I found your article very refreshing, since its not a view shared many many in this world dominated by self-interest and quick enrichment. If you are not already a member of ENATRES, I would suggest you may wish to join the web group, which has more than 600 professionals around the world and deals exclusively with energy matters, where oil has a privileged position for obvious reasons (Google will take you to it, otherwise please let me know).
In response to one comment, you write -- "As you say "It's pure insanity to think that any oil producing nation would deliberately destroy its future power or world influence to provide cheap oil...". What needs to be added is that ITS PURE INSANITY TO THINK IT EVEN IF IT TURNS OUT THAT THEY DO IT! "
You are quite correct, although I would not call it insanity, since you will find that the position is mostly held by ordinary people who know little or nothing about the topic and are therefore excused from being insane, or by elites in postions of privilege and power who are ideologically at the extreme right of the economic and political spectrum and are therefore obviously not insane.
In other words, when the oil producing countries (OPEC members) have acted as if they were insane, they have done so because of political pressure from abroad or from their own elite, who want to enrich themselves at whatever price. Its the insanity of the market fanatics or neo-conservatives--the first, enslaved by their economic ideology; the second, enslaved by their political ideology.
The common sense notion that it is better to sell a non-renewable resource at a higher price tomorrow than at a lower price today is relevant and makes sense only to an owner of the resource, not to an operator licensed to extract that resource. From the point of view of the licensed operator (an oil company) it makes perfect sense to extract as much oil as possible quickly, regardless of price, and then go off to another location. Its called maximizing profits in the interest of share holders (and politicians who want to remain in power). Not so to an owner, who has no other location to go to and is not interested in power or other motives.
In the case of OPEC members, who are owners (and also operators), they should have a further consideration because the oil belongs to the people and governments are merely their agents, supposedly acting on their behalf and for their benefit. That other consideration is the absorptive capacity of the country (that is, the rate and level of efficiency of the economic system to convert the liquid foreign exchange received from the sale of its oil into productive resources, meassured in terms of economic, social and political growth and well-being).
Lastly, a further consideration to have in mind is the so-called "resource curse", which affects all oil producing countries and limits their capacity to make good use of their oil revenues. In this case, the more insane the country the worse the results and the sicker it gets. A never-ending circle of misery and defeat.
Juan Pablo Perez Castillo
Randy Park 11.7.06
Thanks, Ferdinand. Any well written article such as this dealing with Peak Oil is helpful.
As a professional speaker and author who speaks on how people think and make decisions, as well as energy trends, I certainly understand the challenge of getting people to consider, let alone accept, the geological reality. One technique I use is humor; here is a short satire from my presentation on YouTube: http://www.youtube.com/watch?v=FWdbpHDT75g You will see in the video that I don't put much faith in technology. As a physicist who worked in technology for many years, I don't see how we have time to come up with some totally new energy technology.
Of course predicting what price oil will reach and what oil price will lead to collapse of the economy is impossible. But here's another piece of input into that speculation: on my web site at www.EnergyPredicament.com, there is a Gasoline Price Calculator. It calculates, based on numbers people enter for their vehicle, their trip, transit alternatives, and the value of their time, what they will pay for gasoline - based on the comfort, convenience, and time savings. Early results suggest people will pay 8 times current gas prices. Of course, not everyone would be able to afford that, but when it comes to gasoline I believe it will take much more than a simple doubling of the price to put any dent in consumption.
So what is the solution? Simple and obvious - use less. Not an attractive solution in a "more, more" economy. But consider - if the U.S. were to use oil at the same per capita rate as the U.K., the U.S. could meet 78% of consumption with domestic oil supply, instead of only 31%. "But the U.K. is different, they have good transit, their cities are more compact, they drive very small cars, ..." - precisely. Time to start working on those things.
Finally, for all the electrical utility people, here is the nightmare scenario. Since natural gas in North America is already in decline, and LNG is not ready yet, supplies will continue to get tighter. Prices will rise - look at last winter before the warm spell. Forget about increased generation costs - what happens when it becomes cheaper to heat your house with electricity than NG? It came awfully close here in Ontario last winter, before the price drop. What will the average household do? Run to their hardware store, buy four electric heaters, and double their consumption overnight. Unlike switching to NG where you have to buy and install a furnace, there is a very low price of entry for electric heat.
It really is time to get serious about all this stuff.
Randy Park www.randypark.com
Ferdinand E. Banks 11.8.06
A few comments on the last two comments might be in order here. The use of the word "insanity" by myself and I believe Malcolm Rawlingson was directed at persons who for one reason or another should know better. Let me give you an example: when the previous Swedish prime minister called nuclear power obsolete, this was both insane and ignorant - insanely ignorant to be precise. Of course, he didn't really believe that nuclear power was obsolete, and the only thing that he is insane about is/was spending as much time as possible hob-nobbing with the movers and shakers in Brussels, while ignoring the welfare of his constituents, but this is besides the point. He should have expressed himself differently, since by calling nuclear obsolete he reinforced the unenlightenment of the know-nothings.
Randy Park wants a reduction in energy use, and particularly the consumption of motor fuel. In the short to medium run I don't see how this can be brought about except by higher prices, along with more intelligent economic and energy policies. Unfortunately the higher prices required to reduce e.g. oil consumption might result in a macroeconomic meltdown. As for more intelligent economic and energy policies, at this moment I'm afraid that I don't know exactly what these should be, although there is a great deal of talk about solving the energy problem with a 'portfolio' of measures, running from more nuclear to more solar. Intuitively I go along with this, since the key issue is not a new technology, but getting started as soon as possible, with maximum help from governments.
Graham Cowan 11.8.06
Speed limit enforcement would be part of an intelligent energy policy. The degree to which roadway speed limits are in fact enforced provides a strong clue, I think, that governments' interest in maximizing fossil fuel tax revenue receipts guarantees they will do all they deniably can to blocksavings in oil consumption.
Therefore, proposals to reduce fossil carbon tax rates are helpful, and proposals to increase it are not.
"Nuclear power would also wind down since fresh nuclear fuel rods are transported by diesel trucks. "
This is one of the silliest statements I've ever heard. Energy costs of fuel shipping roughly scale with the mass of the fuel, and nuclear fuel has almost a million times the energy density of any other fuel. The energy input for shipping coal would be tens of thousands of times higher, as would those of oil or gas. Nuclear has very low overall energy inputs, and shipping fuel is by far the lowest one of these. The energy inputs for hydrogen are far higher.
With respect to using renewable sources to make hydrogen, those sources have overall energy inputs that are equal to or larger than nuclear's overall energy inputs, and are orders of magnitude larger than the energy cost of shipping nuclear fuel. The energy cost of merely shipping solar panels or windmills to the site of use, let alone fabricating the solar panels or windmills, would be orders of magnitude larger than the energy cost for shipping nuclear fuel.
As far as what WOULD occur in response to $15-$20 gallon fuel costs, the answer is pretty clear. We would rapidly develop, and pay the extra intial cost for, plug-in hybrid or pure electric cars. We would use electric power to power our vehicles, at an overall well-to-wheel efficiency much higher than we ever had with gasoline/diesel vehicles. This transition would take much less time than any swith to a hydrogen economy, as the infrastructure needs are relatively minimal. And yes, we will be able to use PHEV or pure electric trucks to deliver nuclear fuel to the power plants. The shipment will use less than 0.01% of the electricity that will be produced by the shipped fuel.
BTW, $15-$20 gallon fuel costs will never occur, as there are ample, sustainable, domestic means for producing liquid fuel at a far smaller cost than that.
Warren Reynolds 11.8.06
Arvid: Yes, 2021 was the correct year. A "typo"
As far as coal gasification over a catalyst, it takes 1.2 kg of coal to heat the catalyst bed to convert 1 kg of coal to gases. A > 50% energy intensive process. The price of coal would cerainly spiral upward.
Since the Chinese have a lot more coal than oil, they are "forced" into converting coal into liquified products.
Jim Beyer 11.8.06
I have to agree with James Hopf about Warren's comment on the fuel rods:
"Nuclear power would also wind down since fresh nuclear fuel rods are transported by diesel trucks. "
If I ever say anything like that, please be sure to tell me!
But he MAY have been trying to state a viewpoint of how vulnerable we may be to a sudden sustained, shut-off of oil. I don't know exactly what our reserves are (I heard it is crummy stuff in the SPR, lots of sulphur, so hard to refine) but suppose it is 60 days, and we are suddenly cut off. We could well reach $20/gallon, as we'd have no time to institute liquid fuel alternatives or any other alternatives, in that period of time. We'd probably institute rationing before that would occur, so that would more likely represent black market prices.
What scares me is if too much of our society is wrapped around cheap oil such that this sort of disruption succeeded in "breaking" society. Perhaps it is too expensive for people to get to work. Shipments get delayed. Martial law is difficult to enforce due to a lack of fuel provided to the military forces (okay, maybe that's a dumb statement on MY part).
I'm thinking it would be possible (but painful) to curtail oil use by 20% with rationing, car pools, etc., but if much more than that is needed to get through the shortage we might have some real problems. Heating oil shortages in the NorthEast could freeze some folks. Timely shipments of critical products would become much more expensive. Lots of businesses would fail. People would lost their jobs. And yes, nuclear power would have to pay more to get their fuel rods to their plants.
I guess I was shocked at how quickly New Orleans went feral, so to speak, after only a few days without power and water. I'm not being critical of the people stuck in that situation, only how tightly intertwined our society seems to be. What Prof. Banks and to some extent Dr. Reynolds are saying is how fragile our society might be, so some insurance to reduce the risks associated with a cut off of oil seems wise.
Or to paraphrase some previous posters, it would be insanity NOT to reduce these risks.
Bruce Cavender 11.8.06
"India will soon be supplying an important part of its oil requirements from domestic resources, which is impossible, and the firm ‘Apache Energy’ is revitalizing a stretch of the UK North Sea with “new recovery techniques”. The latter claim can be classified as preposterous, because if there were substantial reserves to be obtained from the UK North Sea, they would be the object of exploitation by one or more of the oil majors with greater experience in the region. "
Enerplus (ERF:NYSE www.enerplus.com) and a several dozen Canadian Oil Producer Trusts have been harvesting significant amounts of oil (20% of Canadian Production) from fields cast off by the Majors (with 50% or higher OOIP 'original oil in place')...for 10 to 20 years. Providing quite nice returns to investors (... until the conservative party bureaucrats mucked it up this Halloween with new taxes).
I beleive we need to keep in mind that snide academic elites, incompetent corp board members, dishonest executives, politicans and bureaucrats have never personally contributed one joule of energy to our needs ... though they all lap at the consumption trough daily. Scientific elites have had 60 years worth of research time and money to produce an energy miracle that can economically compete ... but the unvarnished truth is that we are still burning 1800's oil, gas and coal in vast majority of our homes.
With hundreds of Billions spent, why has no competitive, replacement technology been pervasively deployed in our nation for Joe and Jane Sixpack? Based on the lack of results ... this investment appears to be an abject failure. And now ... putting hundreds of millions of dollars per day in the hands of Wahbabi partisans ... is a sharp stick in the other eye.
Come on smart people, make something really work economically ... I would gladly eat my words with squid sauced broccoli on national TV ... if this could be true for our country.
With all thy getting...
Warren Reynolds 11.8.06
James: I think you missed my point about nuclear power and coal. I was making everyone aware how very dependent we are on oil supplies. It is not a matter of comparing energy per kg but of logistics of supply. What if tomorrow there were no more gasoline/oil ? There are only 5 coal fired locomotives actively left with another 6 in museums. An insufficient number to bring coal to all the power stations.
As far as domestic oil supply is concerned, remember the U.S. oil production peaked in 1970 and has been declining ever since. Thus, IF we were to depend entirely on domestic production, we would have to cut back on gasoline/oil consumption by 50-60% since that is the amount we import. The price might rise to $15-20/gallon.
You enthusiasm for nuclear power is not shared by everyone. You forget, nuclear power is NOT a renewable resource since there is a limited supply of uranium left. However, with windpower-electrical generation for hydrogen electrolysis, we do have a renewable resource. As you are aware, a North Dakota Energy Cooperative is constructing a wind-to-hydrogen power system. Talking about energy inputs for nuclear vs. hydrogen. You need to review the facts. GE analysts have done the numbers on what it takes to mine the uranium, process it to UO2, then convert to UF6, then isotope enrichment, then convert back to UO2, then nuclear rod production, then transport to the nuclear power plant. The chemical and isotope enrichment processes alone are very energy intensive. The massive amounts of fluorine gas necessary is made by another chemical process which is energy intensive. The nuclear power rods have a finite lifetime due to "contamination" with by-products. This is about 5-9 years. Then, the rods must be removed and sent for fuel recycling which is another energy intensive process. I know, I worked on the GE nuclear fuel rod recycling program. Compare that with the solar energy (free)-to-wind-to-electric-power to hydrogen electrolysis. The hydrogen route requires so much less energy input.
Todd McKissick 11.8.06
Bruce, your comment hits the nail on the head:
"With hundreds of Billions spent, why has no competitive, replacement technology been pervasively deployed in our nation for Joe and Jane Sixpack? Based on the lack of results ... this investment appears to be an abject failure. And now ... putting hundreds of millions of dollars per day in the hands of Wahbabi partisans ... is a sharp stick in the other eye."
The reason as I see it, is that no one with the money to support such an endeavor wants to do it for the right reasons. The short term investors out there today all want a suffocating piece of the pie AND controlling interest "to make sure the business flourishes". Joe inventor can't afford the legal support to safeguard his interests in that cut throat market.
Oh, and don't look to government help. For starters, it either has to be commercially available or have a $1M bond and insurance behind it. Then you have to share all patent rights. Public research is nothing more than open-ended backdoor university support. Take a look at how Microsoft, Amazon, Ebay, Google, etc. all started. A 'friend' financed initial development with very few strings, leaving less burden on precious cash flow. Then the entrepreneur ran the business outside the box. If you can find such a friend, I'll get you all the broccoli you can eat.
Ferdinand E. Banks 11.8.06
Sorry Bruce, but I'm afraid that I'll have to stick with my terminology - you know, preposterous. This harvesting from 'marginal deposits' that you are talking about in Canada is also taking place in the U.S: I think that I saw 22 billion dollars mentioned as the amount racked up during 2005. This is wonderful for investors, but it wont mean much if a big shooting match starts in the Gulf - or even if one doesn't for that matter. Let me also mention that the North Sea is on the downward side of its depletion curve, and if the present rate of economic growth continues in India, that country will be a big importer. No, we need a lot of oil or a replacement for oil, and we need it soon, and so I'm afraid that you'll have to tell us who can get it for us rather than who cant.
Jim Beyer 11.8.06
"Looking for Westinghouse"
I agree with Todd.
Rather than spend billions on a Manhattan Project of energy, why not spend a few tens of millions on entrepeneurs struggling to make things happen? It has been my experience that ALL interesting work in new energy seems to be being performed by individuals. Not companies, Not Universities. Tiny groups of 1 or two people.
I don't know why this is, exactly. I know major universities have to toe the line to keep their federal monies secure. That's why you don't hear any of them mouthing off about the idiocy of the hydrogen economy, even though it makes no sense whatsoever. Big business, especially with respect to energy businesses are simply sluggish and moribund. Try talking to a electrical utility about demand pricing and they will whine about the price of meters or some other hyper immediate concern. Not great places to look for visionaries. So without companies or universities, you are left with individuals. Electricity (DC) was basically developed by A GUY (Edision). A more refined version (AC) was developed by A GUY (Tesla). So, I wouldn't be surprised is some solutions out of this energy mess will come from A GUY or A GAL.
So, to anyone listening who is interested making high risk, high return investments that could actually also SAVE THE WORLD, consider contacting:
Todd McKissick Len Gould F. David Doty John Wilson (for advice) Me :) (and some others I can't remember right now)
[No permission was granted to me citing these names, so perhaps bad things will happen to me....]
Failing that, I at least urge you to AVOID investing in:
Hydrogen or Fuel Cell (possible exception of electrolyzers, but I'm feeling generous today...) Any NG to Hydrogen systems (ridiculous -utterly) ethanol (just as ridiculous as hydrogen, though perhaps more subtly so) biodiesel (makes ethanol look like Berkshire Hathaway) PV Anything promoted by Stan O. (the Leroy Neiman of alternative energy) Most things advocated by CARB (with the exception of PHEVs)
I know many of these ideas have received public and private funding in recent times, so I KNOW there are plenty of stupid, foolish investors out there. Given your ability to throw away money, why not contact some individual efforts first? Their requirements are likely to be much more modest, and their returns likely much higher.
And we can find enough broccoli for everyone.
Ferdinand E. Banks 11.9.06
Jim, you will have to help me on this one. When you say no hydrogen, fuel cells, biodiesel, ethanol and so on, do you mean none of them now, or none of them until later? Or what?
James Hopf 11.9.06
In the unlikely event of a total cut off of foreign oil, we won't be able to make any significant changes in our energy production or distribution system, at least over the short term. In such a case, we would be left with the ~1/3 of the oil we produce domestically. In that case, the oil will definitely have to be rationed, either by govt. or through the market price mechanism. If the price mechanism is used, fuel costs of $15-$20 per gallon are certainly possible over the short term.
Even at that price (or under any govt. rationing policy), however, shipments of fuel to power plants are not likely to stop. Nuclear fuel, of course, is the clearest example. A single commercial (18-wheeler) truck shipment of fuel is enough to supply a large reactor for ~2 years. Reactors will also be able to run for at least a year, on average, on the fuel already in the reactor or currently on site. They are far better than any other plant type in this regard. We will be able to continue to supply fuel to reactors under any scenario. We could draw the shipments by horse if we had to. We could also just use electric motors. In reality, we will be able to buy the diesel fuel necessary, at any price. Coal plants, which by themselves account for ~40% of all rail traffic just to ship their fuel, would be much more vulnerable.
In any event, although power plants would still be supplied, any such situation is extremely ugly. Thus, we definitely should work towards reducing our vulnerability to a foreign oil cutoff. This will take time, however. Solutions that involve electric or PHEV vehicles and make use of domestic sources like coal and nuclear will take much less time (and money) than solutions that try to use hydrogen and/or insist that only renewable sources be used. I don't dispute the fact that this vulnerability is a serious issue. On the contrary, I believe that if people really believe that this is a serious issue, than they support the development of all non-oil/gas options, including coal and nuclear.
Warren seemed to be trying to have it both ways, and to deliberately confuse the issue. He discusses how traditional sources would fare, in the short term, after a sudden, total oil cutoff, and then proposes (insists on) the development of a renewable/hydrogen solution to the cut off problem. He fails to mention that we could also, over time, remove our dependence on foreign oil by other means, including coal and nuclear, and PHEVs. He seems to be arguing that these other means are not the answer, in the long term, because they would have trouble, right now, if there were a sudden oil cutoff. This is specious. We need time to develop either solution. Once we do, neither solution would be vulnerable to an oil cutoff (as we would no longer be using oil).
James Hopf 11.9.06
The supply of uranium is, for all intents and purposes, infininte. We will have enough uranium to go for well over a hundred years, even assuming a once-through cycle and substantial nuclear growth. By that time, breeders and/or fusion will have been developed, which will render the fuel reserves effectively infinite. More on this at:
Nuclear's energy inputs are as low or lower than renewable sources like wind and solar, as shown by many studies. There have been a lot of studies on net CO2 emissions from various sources, including the indirect emissions from non-fossil sources like nuclear and renewables. Net CO2 emissions are a good measure of the overall energy inputs for non-fossil sources, since we still use fossil fuel for most of our energy, and most such energy inputs are fossil based. Studies show that nuclear's net CO2 emissions are similar to or lower than those of renewable sources, and are only ~1-2% those of coal (and ~5% of gas). one such study is at:
Specifically concerning the example of uranium enrichment, the old enrichment plants used ~1 GW of power (from two coal plants) to provide fuel for ~100 GW of nuclear power plants. Thus, the energy input was on the order of 1% of output. The new enrichment plants being built in New Mexico and Kentucky (?), which will replace the older plants, will use less than one tenth the electricity. Thus, the energy input/output ratio related to enrichment will fall to less than 0.1%.
Not only are the energy inputs no lower than nuclear for sources like solar and wind, but when you then couple them with using hydrogen as an energy carrier, the overall efficiency goes way down. If one takes electric power (from solar, wind, or any other source), converts it to H2 using electrolysis, and then converts the H2 back to power in a fuel cell, ~60-67% of the initial electrical energy is lost. Thus, with the hydrogen economy approach, one needs ~2-3 times as much initial primary energy to perform the same final task. This will increase any energy inputs associated with the initial primary energy source by a factor of 2-3.
To summarize. In terms of energy inputs for power generation, nuclear is no worse than renewable sources, and its fuel is ample for the foreseeable future. In terms of energy carriers, using electric or PHEVs is vastly superior to any scheme using hydrogen, not only in terms of indirect energy inputs required, but also in terms of cost, environmental impact, and direct primary energy input (i.e., fuel usage, for the non-renewable sources). Schemes using traditional sources and/or electric/PHEV vehicles will also be able to implemented far more quickly (on large scale) than options that use renewable sources and/or H2.
Jim Beyer 11.9.06
What I meant by avoiding these strategies is that they have no long term prospects for investment, except perhaps in niche markets.
Hydrogen Fuel Cells - There just isn't a place for them, for either stationary or vehicular applications. Their only real benefit is that the avoid CO2 emissions at their use point. But CO2 is much more easily (and inexpensively) controlled by other means (carbons swaps, carbon-neutral fuel sources, etc.) It is possible that other types of fuel cells, such as solid oxide fuel cells (SOFCs) may have a place somewhere, but that's because they can burn a wider variety of fuels. Ulf Bossel and the European Fuel Cell Forum have discarded PEM Fuel Cells from further discussion in their conferences. To quote Bossel: "The Hydrogen Economy has no past, no present, and no future."
Natural Gas (NG) to hydrogen systems - I've actually seen a lot of these out there. Completely ridiculous. Although today the low cost way of producing hydrogen, this will change as the price of NG rises. And the proposed users of the H2, fuel cells, are not yet commercially viable, and probably never will be. Compare this with simply burning NG in an engine or a solid oxide fuel cell. Yes, you are emitting CO2, but so is the NG-to-H2 converter, but no one seems to care about that!
Ethanol - It seems to be commerically viable in Brazil, but I'm not sure it is 100% agriculturally sustainable there. Even so, it's quite energy intensive, as they have to burn the bagasse remaining from the sugarcane to fuel ethanol processing. This amounts to burning biomass, like burning wood, to fuel their process. Very hard to see how this could make sense in a more moderate climate like the U.S., which also fertilizes the crop of choice, corn. Lots of energy is needed for the fertilizer itself. Instead, a better path would be to anaerobically digest biomass to produce methane, and return the nitrogen rich bi-products to the soil to reduce fertilzation requirements.
Biodiesel - This is even more problematic than ethanol, as long-chain esters are needed to produce it (the fats found in nuts and seeds). Way too expensive to grow. Some people are processing restaurant waste to make biodiesel. That's fine, but there isn't very much of it to make a difference. [Also, on a mass basis, diesel is not much more efficient than gasoline. A gallon of diesel may take you farther than a gallon of gasoline, but a kilogram of diesel won't take you much farther than a kilogram of gasoline.]
Photovoltaics - These may have a niche market, but barring some breakthrough, are most likely to always be more expensive than other solar-electric technologies, such as Stirling engines. But they are selling like hotcakes now...
The viable strategies I see for renewable energy are wind, solar heating, solar-electric via Stirling or similar technology, and biomass to methane or methanol.
Fuel choices are either methane or methanol (or batteries, if you count them).
Todd McKissick 11.9.06
I shudder with great fear at the very thought of our oil supply being abruptly limited... even by 20%. The ramifications would be farther reaching than all of mankind has ever experienced. It took what... 4 days after Katrina production was cut (not a permanent 20%) to have the government begin talks of martial law and fuel distribution rules? First, it has to hit home with the public which will take 1-2 days. Prices both at the pump and on the market will ramp up with additional spikes for seemingly unjustified reasons. This will cause a massive 'beat the rush' demand spike. Regardless of warnings this will exaggerate the short term need to release from the strategic storage tanks. If this covers it, hoarding will take place. Depending on the perception of the permanance of the crisis, small businesses will defer the energy use they can. This should put us out to around day 7 and gas prices will definitely bo over the $10-15 range. Political posturing and allegations will delay any non-executive government action for at least 1-2 weeks. By that time the fuels that can, will be switched to coal. Rail transport will become cost prohibitive for consumer goods. This will shift that demand to truck. You can see where this is going.
When the dust clears, the grid will only be economically viable to be ran at 50-60% capacity. All kinds of unforseen problems will crop up like unmanageable voltage sags indirectly causing chain reaction trips. Now just think of what the people will do without any form of communication.
Sorry, but I don't think we have time to react even in the slightest. With the production peak estimated to be anywhere from last year to 5 years from now coupled with public fear of the crisis driving the bus like sheep, we definitely need a large generation excess as soon as possible.
Ferdinand E. Banks 11.9.06
Under no circumstances do I intend to claim that I know even a small fraction as much about ethanol, biodiesel hydrogen, etc, etc as most of the persons supplying comments above, but one thing I do know: we are going to see more and more of these things in the future because for most decision makers, at the present time, sub-optimal departures are preferable to going to war for energy resources.
And personally I feel very comfortable with seeing more ethanol, biodiesel, hydrogen etc etc as soon as possible, as long as we dont see too much of it. The reason is that I dont have any desire at all to experience anything approaching the kind of oil production peak that Todd McKissick mentions above. And yes, I would like to see more nuclear because I picture the electricity from nuclear as providing options that will make POSSIBLE some of the things pictured above as IMPOSSIBLE. Why do I feel this way? It's because I understand perfectly what Sweden has lost by closing two of its nuclear reactors. And why do I understand this - well, its because I can add and subtract, while apparently the decision makers and some of their more influential foot soldiers have a problem performing these operations.
Warren Reynolds 11.9.06
James: Do not count on Nuclear Fusion. Controlled nuclear fusion, i.e. hydrogen fusion, is also not an option. In 1950, Dr. Edward Teller theorized the existence of nuclear fusion. However, even with heavy Government research subsidy in the past 40-50 years, there has not been any demonstrated sustainable controlled nuclear fusion power source. Nuclear fusion is now waiting on advances in superconducting magnets and new alloys for high temperature containment. Both of these are large technical obstacles. In addition, there is only a 100 years supply of the lititum-tritium fuel. These problems are not expected to be overcome in the forseeable future. Government funding for nuclear fusion has declined over the past 5 years and is expected to decline in the future:(see: D. Markevich, DOE Energy Office.) Even with massive Government funding, nuclear fusion would not expected to be commercialized until after 2065 if at all.
Graham Cowan 11.9.06
And personally I feel very comfortable with seeing more ethanol, biodiesel, hydrogen etc etc as soon as possible, as long as we dont see too much of it. The reason is that I dont have any desire at all to experience anything approaching the kind of oil production peak that Todd McKissick mentions above. And yes, I would like to see more nuclear because I picture the electricity from nuclear as providing options that will make POSSIBLE some of the things pictured above as IMPOSSIBLE...
Lots of things are possible. Cars can run on ethanol and on pure hydrogen; in the latter case, they've been doing it for many years.No-one ever buys such cars. Nuclear plants could make either chemical from carbon dioxide and water. "Most decision makers" have no intention of personally riding in a vehicle with either fuel, though, and therefore the greater significance of nuclear fission plants is that if need be, they can make oil.
Graham, I buy bus tickets instead of cars, because I can't drive. But I buy a lot of electricity from nuclear plants, and would like to buy more. Unfortunately I won't be able to because the dumb decision makers concluded that electricity generated from wind or gas or whatever makes more economic sense than electricity generated from nuclear, which happens to be completely wrong.
About hydrogen, ethanol and the rest of it. I would feel very comfortable riding in a car driven by my wife, and featuring these items. I wouldn't feel comfortable though if the decision makers came to the conclusion that all vehicles should be so equipped, because this doesn't sound right to me. What does sound right is that a very large amount of inexpensive electricity (and a high quality educational system) gave this country options that countries without these things were unable to enjoy.
As for nuclear fission plants making oil, you are absolutely right there, because the optimal operation of these plants helps make it possible to buy more oil, or even to get out of oil and into that devilish hydrogen and ethanol.
Arvid Hallén 11.10.06
"I shudder with great fear at the very thought of our oil supply being abruptly limited... even by 20%."
So do I. The awfulness during the 70's were caused by a 3 % supply reduction (IIRC) that lasted only for a rather short time.
Peak Oil will last for ever.
Arvid Hallén 11.10.06
I agree with pretty much everything you say. My personal bet is on batteries, fueled by nuclear reactors. Those things already do work. The Tesla sports car is excellent and an order of magnitude cheaper than fuel cell cars. Still to expensive for the average laborer though. But so is an ordinary sports car too.
Furtermore, I have great experience with battery electric vehicle as I drive an electric scooter myself.
Or being a bit more radical than just changing fuel in our cars, maybe we should change much transportation work from cars to electric trains and trams.
Arvid Hallén 11.10.06
With "great experience" I don't mean I am a battery engineer, but that I have extensive experience in driving my electric scooter.
Graham Cowan 11.10.06
As for nuclear fission plants making oil, you are absolutely right there, because the optimal operation of these plants helps make it possible to buy more oil, or even to get out of oil and into that devilish hydrogen and ethanol.
It sounds as though Banks isn't getting, or maybe disagrees with, my message: if need be, nuclear plants can make, in the plainest sense of the word make, oil. Burning, as they do, fuel that costs US$1.50 per thermal barrel-of-oil equivalent, they don't have to be very efficient in collecting CO2 and getting hydrogen out of water and reacting them to beat mined-oil prices several tens of times higher.
James: O.K. you are advocating nuclear power and electric cars. In the post oil era, let us explore that and develop the scenario of "well to wheel" efficiency, i.e. uranium mine to electric vehicle wheel efficiency. If one calculates the energy input required from the uranium mine through all the previous mentioned steps to nuclear power rods at the door of a BWR nuclear reactor, one gets approximately 54 kw input per 100 kw output of the rods. Therefore, there are 46 kw available (100-56) at the door of the reactor after deducting the energy required to get the uranium and produce the rods. The nuclear heat from those rods to electric conversion is about 30%(.3 x 46kw = 13.8 kw) Further, taking into consideration transmission line losses, loss for AC/DC battery charging, electric vehicle motor efficiency, one gets:
Uranium mine-to-electric-wheels efficiency = 8.8% Natural-gas-well-hydrogen-FC vechicle efficiency = 22% (see Argonne Rept 2004-01-1302 by A. Rouseau and www.efcf.com)
Thus, the hydrogen auto is almost 3 times more energy efficient. I think the best approach is the new Ford V-10/ hydrogen ICE engine that is being used in mini-buses in Florida and California.
As for breeder nuclear reactors, I was part of GE's Breeder R&D program. After 4 years of R & D, they dropped the program. Correct me if I am wrong, but the Government is no longer funding the breeder nuclear program. Although, the breeder nuclear approach held out a lot of hope, it has been discarded.
Len Gould 11.10.06
"approximately 54 kw input per 100 kw output of the rods. "
Wow, that's REALLY approximate. How about "input estimate high by a factor of approximately infinite."
James Hopf 11.10.06
Warren's "data" suggests that it takes 54 kW of energy input to produce ~33 kW of nuclear plant electric output (from 100 kW thermal from the uranium). If he meant 54 KW electric, then the nukes produce less electricity than went in. If he means thermal, then that same thermal energy input (from oil or gas, let's assume) could produce almost 30 kW if simply used directly in a combined-cycle plant. If any of this were even close to true, the nuclear plant would have to pay as much or more for its fuel than it could sell its electricity for.
It's known fact that fuel accounts for a very small fraction of nuclear power's cost. The "fuel cost" for nuclear power (i.e., fully finished and fabricated fuel assemblies) is only ~0.5 cents/kW-hr. This is clearly documented. By contrast, at todays prices, the fuel (gas or oil) cost of CCGT power is ~4 cents/kW-hr. If you could generate almost the same amount of power by simply using the nuclear fuels indirect energy inputs directly in a CCGT plant, then it would follow that nuclear fuel would "have to" cost at least 4 cents/kW-hr, because that is the cost of the energy inputs alone. But alas it is only 1/8 of that. In fact the energy inputs are a whole lot less than 1/8, as its known that the great majority of fuel assemblies' cost are for things other than energy inputs (labor, etc..).
The links I gave in my last post to studies on net (indirect) CO2 emissions for various energy sources make it very clear that the total overall energy inputs to the entire nuclear power process are only a few percent of the energy output, and that solar or winds energy inputs are roughly similar.
We need to break this problem into two separate pieces. One issue is what's the best method to generate the initial electricity. The other is how best to use that electricity for vehicle applications (i.e., use it to make H2 for fuel cell cars or use it directly to power PHEVs or electric cars). The answers to the two issues are independent of each other.
With respect to the 2nd question, the answer is clear in tems of process efficiency. In the electric car process, one loses at most ~10% in the batteries. I'm not factoring in electric motor efficiencies in this comparison because fuel cell cars use them as well. Thus the total process efficiency (electric power to the motors, over the intitial electric power in). Using the fuel cells with H2 from electrolysis, the overall efficicency is closer to ~40% (~50% for the fuel cell and at best ~80% for electrolysis). For any central H2 generation scheme, such as natural gas reformation, the overall efficiency for a vehicle application is even lower due to the huge losses getting the H2 to the (small residential) user. Thus, the direct electric car approach is at least twice as efficient as the fuel cell car approach in terms of its use of the initial input electricity.
With respect to the first issue, i.e., what's the best method to generate power, it simply comes down to cost, with additional bonus points thrown in for being a domestic source or not emitting CO2. Under a valid CO2 limit policy, of course, any CO2 effects would already be reflected in the price. As stated above, nuclear's energy inputs are minimal. It's true that its low 33% thermal efficiency is unfortunate. HTGRs would solve this problem, as their thermal efficiency is ~50-60%. However, a low thermal efficiency is not necessarily a big problem (with respect to economics, pollution, CO2 emissions, or energy security). That is, it doesn't matter much if you have a very cheap, domestic fuel that won't run out...., basically ever. It's only an issue to the extent water usage (and hot water discharge) is a problem.
Ferdinand E. Banks 11.11.06
No, no Graham. I think that I get your message, and I definitely don't disagree with it insofar as I understand it, but I do have a problem with the expression "make oil". I don't like that expression, it's inelegant, and in addition thermall equivalents by themselves don't tell enough of the story.
There is a private or semi-private or maybe even public discussion now going on between Jim Beyer and Tam Hunt, in which thermal equivalents have been set aside, and capital costs moved into the spotlight. Tam has used some work on capital costs by Daniel Kammen and his crew to 'prove' that nuclear is more expensive than various other energy sources. Needless to say, this can't be proved except in crank congresses or unread economics journals, however it's a good thing to move beyond thermal equivalents.
Unless I'm mistaken, this same message can be found in the last post by James Hopf. Am I right or wrong, James?
Warren Reynolds 11.11.06
Len: That is 54 kw +/- 10% not infinite.
Ferdinand: Tam is correct. Nuclear is more expensive than other energy sources. GE analysts (1970 classified memo) had done the numbers on captial costs and operational costs. Taking into account all the factors from uranium mine to electric output including amortization of the capital costs without Government subsidies, one finds that it costs $0.076/kwh (extrapolated to todays $) to sell at 0.08/kwhr or less than 5% return on the dollar. Not an attractive investment but the Government subsidies improved the investment return.
James: Where did you get 33 kw ? I wrote 54 kw. Evidently, you did not understand what I had written and tried to "muddy" the waters. No, all the numbers are electric equivalent and not thermal. Yes, it takes more energy to generate the hydrogen from natural gas and hence the "well to wheels" efficiency is 22% as shown by a number of experts but it is still better than nuclear power to electric auto.
The efficiency for water electrolysis to wheels efficiency is around 40% as you have noted and I have stated in my earlier articles. That makes it about 4.5 times more efficient than the electric auto/nuclear route.
James said: "It is a known fact that fuel costs account for a very small fraction of the nuclear power's cost". Sure, with Government subsidy. Take out the Government subsidy numbers and then see what the true cost is.
No Warren, Tam is NOT correct. Norway has/had about 95% hydro, while Sweden has/had 45% nuclear, with most of the rest hydro. But the cost of power is approximately the same in both countries. Using the kind of algebra that I learned in one of the less renown secondary schools on the South Side of Chicao, that tells me just about all that I need to know about what is and what isn't expensive. Moreover Tam like to insist that the 'life' of nuclear plants is about 25 years. The plant being constructed in Finland should be around for 70 years. Using the algebra in Kammen's 'document' that tells me the rest of what I need to know.
Graham, I was at one of the great dance-jazz clubs in the world last night. In case you're in Stockholm it's called NALEN. Most people there speak excellent English and I suspect that using expressions like "make oil" or "make water" would result in a suggestion to find a less elegant venue for carrying out your business.
Graham Cowan 11.12.06
So I should say "synthesise liquid hydrocarbon"? I can use lots more syllables if you're willing to pay me on that basis.
James Hopf 11.13.06
Thermal equivalents are good metric if one is comparing various energy carriers, or storage/distribution options. If a given initial primary source is assumed (which is thermal), it is a good way of comparing the overall efficiencies of different approaches, which is likely to be some indication of relative costs.
For instance, if one is comparing the H2/fuel cell approach with the electric car approach, one could assume that either coal, gas or oil were the initial input and then compare the fossil fuel thermal energy that would have to be used, per mile driven. Of course, if one assumes that electrolysis would be used for the H2 option, an even simpler approach would be to use electricity as the initial input, and simply see which approach requires more of it. How the initial electricity is generated is irrelevant to such an analysis, which is one of the points I was trying to make.
On the other hand, if one is comparing the merits of different primary energy sources, e.g., different ways of generating electricity, then comparing thermal equivalents (i.e., overall thermal efficiency) is not necessarily a good figure of merit. A natural gas plant may be 50% efficient, vs. 33% for a nuke, but its fuel is vastly more expensive, is in limited/declining supply, must be imported from Russia or the Middle East, and emits pollution and CO2, etc.. In other words, one thermal BTU from natural gas is infinitely more expensive than one thermal BTU from uranium (which is dirt cheap, domestic, has no other use, is in ample long-term supply, doesn't pollute and emits negligible CO2).
As far as choosing the best power generation option, it just comes down to cost, especially if one has good public policy that places a cost on pollution, CO2 emissions and foreign energy dependence. If we simply had such policies, we could just rely on the free market to answer all of these questions.
Ferdinand E. Banks 11.14.06
James, I refer to thermal equivalents all the time, but when large capital costs are in the picture, thermal equivalents dont say enough. For power generation I use screening curves, which correspond (to some extent) to the cost curves in microeconomic textbooks. Of course this may create some problem when talking with economists, since they go to a great deal of trouble to avoid understanding anything that they have not been paid to understand.
Let me also note to anyone who is interested that if there are subsidies to the existing Swedish nuclear inventory, they are negative subsidies. I wouldn't however try to explain this to the ladies and gentlemen in the faculty of economics, because although this is something that they should understand perfectly, they generally come up looking puzzled.
Len Gould 11.14.06
Warren: Love it. Appeal to authority, then state that the referred authority is a "(1970 classified memo)", one which no-one but you and a friend have access to. I thought that tactic in debate had been banned for anyone out of primary school. If things are as you claim, then I (and a lot of others) will want to start calling for parliamentary investigations immediately, so please, provide us the evidence.
Len Gould 11.14.06
Warren: I would also point out that, IF things were as you say (and presuming your supposed high costs are in the enrichment process since the [very low] price of un-enriched uranium is widely quoted on many metals exchanges), THEN the CANDU 6 type reactor using simple unenriched natural uranium as mined, would have an unbeatable economic advantage over the competing designs which need enriched fuel. Instead, AECL is moving toward enriched fuel itself with the ACR design.
Jim Beyer 11.14.06
Synthesizing hydrocarbons. Ugh. This is a tough task.
Given 1 unit of electrical energy, about .8 remains as H2 bond potential after electrolysis (This is a bit generous). To get to Methane (CH4), you have another 80% yield, so you are down to .64. (I'm throwing in the CO2 acquistion for free, because I am again, generous).
Now to get to what? octane? We need to combine methanes (maybe some CO or CO2) until we have C8H18. I am not sure, but I'd say that's at least 2 more merges .8 x .8, so we are left with a maximum theoretical 41% of the kWe energy originally input to the process. That doesn't include all the equipment costs, maintenance, etc.
And then when you use the gasoline, you are only going to make use of about 30% of that, so of the 1 unit of energy put into the process, only about 12% actually makes it to turning the drive shaft of the engine, let alone the wheels of a vehicle. This a factor of 8x! In reality, it would probably more like 10X or worse.
A gallon of gasoline contains about 35 kW-hr of energy in it, of which only about 7-10 kW-hr is actually used by the vehicle, due to the efficiency of the engine and other components in the drive train. So if retail electricity is 5 cents per kW-hr, then it will cost at least 5x10x(7-10) or $3.50 or $5.00 for that gallon of gasoline. Again, this is completely ignoring the costs of all the synthesizing equipment, or any profit. A realistic price would likely be twice that.
This is totally, completely, utterly impractical. And there is no way around it, because you can't change the energy shifts due to chemical binding. The best one can due with catalysts is to approach the theoretical energy levels involved, which I am citing in this note.
One could argue that lower input electrical costs could lower the final cost of the synthesized fuel. But one could not argue that others won't critically examine the energy losses of the synthesis chain and not try to figure out something better.
I've noticed the nuclear adherents tended to come from a practical angle, arguing hard facts and common sense. This is NOT such a practical angle.
If one wishes to synthesize fuel purely from water and carbon dioxide (biomass is left off the table here, as it should be, as there is not enough of it around anyway) then one needs to:
1. Use the input electricity as much as possible (i.e., PHEVs)
2. Use the smallest hydrocarbon practical (i.e, methane, ethane, propane, or thereabouts). This lowers the cost of synthesis, and preserves more of the input energy.
If you are going to whine "gaseous fuel is inconvenient" or "batteries are expensive", or "hybrid-fueled cars are inconvenient" well, that's just too damn bad. What you are proposing is even more expensive, more impractical, and more inconvenient.
If the goal of all of this is to preserve our way of life in the face on oncoming shortages, we need to pick carefully those aspects of our lifestyle to change accommodate this new reality. We must also be open to the notion of change, and understand the costs of preserving some of our ways, despite how dear to our hearts they may seem to be.
Graham Cowan 11.14.06
Beyer sounds as if he had never, until two minutes before posting, thought about making oil (sorry, but that is the sensible way to phrase it). However, the matter has been discussed here before.
Supposing one has ample supplies of water and CO2, it is, from water by non-electrical means to elemental hydrogen and elemental oxygen, the latter released into the atmosphere, one step.
Reacting the hydrogen with the CO2 to make methanol and water is another step, and polymerizing methanol to gasoline and water is a third step.
I understand coal-to-liquids plants use a somewhat different Fischer-Tropsch process that turns CO and H2 into gasoline. If one is starting from CO2 rather than coal, there are still two steps from hydrogen to gasoline, because the CO must first be made by reaction of H2 and CO2, just as the methanol was.
In any case, turning nuclear hydrogen and CO2 into nuclear gasoline and water is a fairly efficient two-step operation whose two steps, either pair, have been practiced on an industrial scale. Beyer sets up a strawman. Perhaps he approves of the wishful sentiment Don Hirschberg expresses at the end of that other article. I do not. Nuclear gasoline and/or solar gasoline competes with my pet scheme, linked below but this does, in my view, mean the impracticability of nuclear/solar gasoline is a fact for which supportive arguments must be found.
You recent post regarding declining research funding into nuclear fusion puzzles me very much. Like much of what you have said about nuclear energy it is completely factually incorrect. The Governments of Japan, France and the EEC, China, Korea the US have recently agreed on the construction of the Internatiional Thermonuclear Experimental Reactor (ITER). It is being constructed now at Cadarache in France. It's purpose is to demonstrate the continuous productioon of energy from thermonuclear fusion and will be the precursor of the first fusion power plants. How then do you conclude that reasearch funding is being cut????
Yes controlled nuclear is a difficult technological problem. But it is not insurmountable. The Joint European Torus (JET) at Culham laboratory in England has successfully and repeatedly demonstrated that controlled fusion reactions are possible with the Tokamak type of toroidal reactor and huge advances have been made in this technology over the last 20 years.
As for you assertion that there is only enough lithium for 100 years - total bunk.It completely ignores the potential for D-D and D-H reactions that do not use tritium at all. Where DO you get your data. I an beginning to think it is made up on the spot.
Jim Beyer 11.14.06
I have thought about the synthesis of oil from electricity for more than two minutes. Whether these thoughts are VALID and REASONABLE, of course, is another matter, and no doubt, a possible area of debate.
I appreciate your better understanding of the synthetic fuel making process. But you left out the overall efficiency of the process. Well, what is it? Even roughly? It is clear that it is possible to do it, but some notion of the efficiency of the processes is needed to clarify the practicality of it.
I don't quite understand your last paragraph. Too many qualifers, negations, and I don't see much wishful sentiment in Hirschberg's comment at all. More doom and gloom to me. Perhaps you meant to be sarcastic, but I just can't follow what you mean.
If you are saying I have to PROVE that nuclear/solar gasoline is impractical, then I guess I can do so by saying, who is making and selling it now? BP? Exxon? Shell? Is there a 1-800-NUKEGAS I can call? I think the onus is the advocates to prove that it is practical, and not the other way around.
If a liquid fuel costs 10X the amount of its electrical equivalent, then batteries will be given a closer look. PHEVs are already being examined carefully, even without nuke/solar gasoline, so it seems likely that they will play a significant role. I do think some synthetic fuel will be necessary, from nuclear or other sources, but it is the last resort, and it will be expensive to use.
Finally, I have viewed your Boron scheme and simply put, carrying around pure oxygen simply is not practical, nor is returning all the Boron goo for recycling at some point. It is not disimilar (enough) from the Borohydride storage schemes that people have proposed to carry around hydrogen. It will never happen. Millenium cell was advocating it for awhile until they got wise and are now pursuing something else. Ulf Bossel did a pretty good job of tearing apart Boron-based hydrogen carrying schemes. I appreciate you are advocating something different, but you are substuting one problem (the energetically costly creation of Borohydride) with another (carrying around pure oxygen). Ain't alternative energy a bitch?
Much better economic and practical cases can be made for methane, methanol, or ammonia. It is easier to let your carrier float away in the breeze, rather than carry it around. Also, there is another name for a system that carries around both its fuel and its oxydizer. It's called a BATTERY.
Graham Cowan 11.14.06
Malcolm, what you are beginning to think, I thought from about the third word I read. Maybe it was the apparently deceitful nature of the first two that tipped me off...
I don't propose to carry much oxygen around, because extracting it from air as the vehicle goes is energetically cheap enough, and in the current state of air oxygen separator art, just barely light and compact enough. Yes, it's a bitch. But when they get the chance, people will buy boron cars. Whoever sells the first one will be in a very good position to sell the first three billion. Cars that stay efficiently in labs are, in my opinion, a poor substitute for ones that inefficiently carry multitudes by those multitudes' own choice.
If you don't think prophets of doom and gloom get a huge kick out of prophesying as they do, I guess we'll just have to agree to disagree on that.
"If you don't think prophets of doom and gloom get a huge kick out of prophesying as they do, I guess we'll just have to agree to disagree on that."
Oh, we can agree on that!
I'd like to think that I am taking a neutral viewpoint. I believe that there is enough energy available from nuclear and other sources to provide for our needs. This would be excluding fossil fuels, including all coal. All 6.5 Billion of us. But, that's it. I'm not vouching for 7 Billion, 8 Billion, etc.
If technology can bend over backwards and crack the tough nut of oil depletion and global warming, then we darn well better learn to control our numbers.
I'd work on how to extract CO2 from the waste stream of an engine, and it too is cumbersome. It makes one want to hate Nitrogen, eh? But it's good to have around. Less explosions. horrible fires and what not.
Graham Cowan 11.15.06
Nothing makes me want to hate Nitrogen. I would hate hating Nitrogen. I Hate using bucolic Capitalization, it Scares me.
Do you think extracting CO2 from the waste stream of an engine that produces it is not significantly more cumbersome than removing nitrogen from the air coming into it?
Please gentlemen, let's adopt a slightly more conciliatory tone. Remember, we not only want the decision-makers to see these contributions (i.e. articles and posts), but also to learn something. Save the take-no-prisoners approach for the academic energy economics conferences, where you can spend days waiting for someone to make an intelligent statement.
Jim Beyer 11.15.06
I think an issue raised here is whether any purely synthetic fuel (no biomass or fossil fuel used) would be created in a future alternative energy setting. Since it would be expensive (probably) it would be harder to disincentivize further fossil fuel use (such as coal-to-liquids), so perhaps a product or a market would never be established.
Oddly, this was never brought up by hydrogen proponents, who at least gave some lip service making hydrogen via electrolysis.
Since there is plenty of coal around, would coal-to-liquids make more sense, with some kind of carbon sequestration? (My own view of carbon sequestration is that the cheapest way to do this is to leave unburned coal in the ground....)
I think a case can be made pretty strongly that biomass is insufficient to meet our fuel needs, even with enhanced battery presence, both in our vehicles and the grid.
Arvid Hallén 11.15.06
When it comes to biofuels someone (don't ask) told me that the total biofuel potential of Europe can meet 10 % of our liquid fuel needs. And then there won't be anything left for marking paper, or food.
Instead, PWR and TGV. They already exist, they work, they are profitable and the potential is unlimited. What's not to love?
Graham Cowan 11.15.06
Every breath you exhale spreads around the world in, I don't recall exactly, a few years. Mixing across the equator is slow and that's one way we know the rise in atmospheric CO2 is due to our motors and furnaces: since the majority of those combustors are in the northern hemisphere, southern hemisphere [CO2] lags by a few years.
This means CO2 sequestration doesn't have to be done at the top of thousands of flues or the ends of a billion tailpipes; it can be done in large central installations, and these can be anywhere in the world. The carbon dioxide will come to them. This is the most practical way to sequester CO2, and in my opinion it is the most practical way to ease the atmosphere's CO2 level back down to where it was in 1900.
That is to say, gross CO2 emissions from tailpipes and stacks do not need to decline. They can increase rapidly for many years -- not that I want them to, but they can -- and the net emissions can easily enough be made negative by an industry of anywhere-on-Earth CO2 capture regions, with total area equal to that of a circle no more than ~120 km in diameter, funded as public works.
Malcolm: D. Markevich (Energy Office, DOE) in an email to me concerning the nuclear fusion budget as follows: 1970-$270 million; 1997-$224 million; 1998-$224 million; 1999-$216 million, 2005-$130 million. Since lithium tritide is used in the fusion research, they were concerned there was only about 100 years supply. Litium as you know is non-renewable source. They were also concerned about the need for new high temperature alloys and for improved super-conducting magnets to reach their goal. These are difficult technical hurdles and are not expected to be solved for a long time maybe 2040 or '50. By 2040 or 2050, the solar hydrogen economy would be sufficient such that we would not need nuclear fusion. If England's JET nuclear fusion project was so successful, why haven't we adopted it in the U.S. nuclear fusion program ? And if so, why has the U.S. Government's nuclear fusion budget being reduced and phased out ? Nowhere has anyone demonstrated a sustainable nuclear fusion power source for more than a fraction of a second. No, my friend, nuclear fusion is too far off. As for a joint international nuclear fusion venture, I am glad to see others pouring money down a rathole.
Warren Reynolds 11.15.06
Malcolm: I would like to add that the $130 million for 2005 was an earlier projection. What the actual budget for the Nuclear Fusion research was $11.1 miillion in 2003. The DOE planned termination of all nuclear fusion R&D by Sept., 2004, but a 1 year extension was requested. The money is to be used for "orderly close-out" of the the Fusion Technolgy Programs in FY2004. The reference can be found below:
see http://aries.ucsd.edu article: "DOE Plans Termination of All Fusion Technology Efforts" FPN04-17 (see also Fusion Power Associates at http://fusionpower.org).
I would assume by 2006, that the nuclear fusion R&D program is dead.
James Hopf 11.15.06
I concur fully with the points you made in your first 11/14 post. Well said. The lesson to be taken from your process efficiency calculations is that, it's very hard (inefficient/costly) to turn carbon back into a fuel once its been oxidized into CO2. Better to avoid burning it in the first place, and try to turn it into a fuel while it is still carbon.
With this in mind, I would suggest the following. Use our coal reserves as a carbon feedstock for synthesized, liquid hydrocarbon fuels. Any carbon/hydrocarbons that can be practically taken from biomass sources would be used as well. Then use nuclear or renewable sources to produce the H2 that is added to the above carbon feedstocks to make liquid hydrocarbon fuels. To maximize the energy content from the nuclear/renewable sources (which minimizes pollution and net CO2 emissions), as much H2 as possible is added to the carbon, while retaining a liquid fuel form. The resulting fuels would be used sparingly in PHEVs, where 85% of the miles traveled are powered by using the electricity directly (which is infinitely more efficient and cost effective).
Coal would be used as a fuel feedstock in lieu of it being used for power generation (for the most part, at least). Nuclear and renewable sources would be used instead, with a little bit of gas generation to fill in the peaks or gaps. This will, once again, minimize air pollution and CO2 emissions, and will preserve our coal reserves for many centuries.
To those who would complain that this process still uses some fossil fuels, and still emits some pollution/CO2, I say that this is an example of letting the perfect get in the way of the very very good. If we were to do what I suggest above, air pollution would be negligible and CO2 emissions would be a small fraction of today's. This could be done at a small fraction of the cost of using non-fossil sources to generate H2 and trying to use that to power our vehicles (just to remove the last traces of carbon). Even if one only looks at environmental impact,given the much lower efficiency of these non-carbon processes, the resulting increase in primary energy source use will likely offset the small carbon effects.
Have you done a similar efficiency analysis on using a non-fossil thermal source (nuclear, geothermal or solar thermal) to generate H2 and combining that H2 with a carbon feedstock (such as coal) to make hydrocarbon fuels? I've read that such thermal H2 generation processes will be able to attain an efficiency of ~55-60% (input thermal energy over H2 chemical energy). Such an analysis could then look at two scenarios, one where this fuel is simply used directly in a "normal" car, and another where the resulting fuel is used in PHEVs. In the 2nd case, one would use another thermal source to make the electricity for the PHEVs. I'm pretty sure the 2nd approach requires less overall thermal (energy) input. I'm also pretty sure that either one is far better than trying to re-split CO2.
Ferdinand E. Banks 11.16.06
Jim B. and colleagues, it's not fuel needs that biomass (and coal) must meet, but MARGINAL fuel needs. Our (average) fuel needs can continue to be satisfied by our friends in the oil (and perhaps gas) exporting countries, because they want to continue to see those dollars rolling in as passionately as we take the opposite point of view.
Peter Boisen 11.16.06
Having read all of the dialogue above there seems to be no disagreement concerning peak oil, eventually also peak natural gas. Thus we need not discuss these issues further. I believe there are several other points that could also be taken out of the discussion:
The use of hybrid technology will save energy consumption except in steady state engine applications (it does not in this regard matter whether the vehicles rely on batteries, fuel cells or combustion engines). Hybrid solutions will thus be used regardless of the type of energy supply. The actual solutions will depend on technological developments and cost efficiency.
The use of energy in a vehicle will in the longer term be determined by total (pollutants and greenhouse gases) emission levels on a 'well-to-wheels' basis. Variations in emissions levels either in the 'well-to-tank' or the 'tank-to-wheels' stage will be handled via substantial globally agreed economic penalties on all of these emissions.
The choice of onboard energy carriers will depend on overall ownership costs (vehicle amortization, energy costs, maintenance and repairs).
Looking at synthetic hydrocarbon fuels simple hydrocarbons like methane will have a clear efficiency advantage over complex liquid hydrocarbons (meaning a lower cost per energy content), but a marginal disadvantage concerning fuel storage costs. If fuel supply is seen as a critical limited resource, efficency will become more important than fuel storage costs.
With increasing energy costs the payback will increase when using more efficient powertrains, lower weight vehicles, reduced aerodynamic drag and reduced friction losses. Weight penalties will put a limit to the use of batteries.
Substantial annual vehicle road tax based on tailpipe CO2 emissions provides an efficient short term instrument supporting reduced oil use.
Debottlenecked traffic systems which improve flow (avoiding alternating acceleration and retardation) provides huge energy saving potentials (a conventional vehicle today consume roughly twice as much fuel in town traffic as in unrestricted highway traffic). Somewhat paradoxically the value of hybrid solutions will drop in line with traffic flow improvements. Debottlenecking may prove to be very profitable. In addition to huge energy consumption reductions it will also save time, increase traffic safety, and contribute to an improved air quality.
The recycling of all kinds of biological waste in order to supply fuels and fertilizers is hardly a controversial matter. Opinions may differ concerning the actual potentials and production costs, but nobody in his right mind would object to the basic idea.
The two issues which continue to be controversial are the use of nuclear fission power, and the use of land resources for supply of biomass used for fuel production.
I belong to those that will not under any circumstances support the use of fission power as long as the waste problem remains unsolved. Burying highly radiactive waste underground is, in my opinion, completely irresponsible. It does not matter how cheap this solution may be.
Concerning the use of land for production of energy I am less adamant. I believe that substantial potentials may exist in some parts of the world, but also that great care must be taken not to introduce practises which e.g. would mean increased GHG emissions.
Jim Beyer 11.16.06
I agree that the marginal fuel needs are the key concern, at least with respect to oil. In general, I guess I'm a Yerginite with respect to oil economics. My interpretation of Daniel Yergin's view is: 1) A supply shortage causes an oil crisis of some sort 2) The economy reacts and alters it's oil use 3) Supply and Demand re-align and the system sails on as before, at least until the next crisis.
I know that something like this occurred in the 70's. If you don't believe me, go to a auto junk yard and try to pick up a front fender of any vehicle made in the 60's. They are extremely heavy, hard to even lift. Then pick up a fender from a contemporary vehicle and you can almost throw it like a frisbee. The market reacts. A lighter car uses less oil.
It remains to be seen how many times the market can alter some aspect of its oil use in a way the consumer does not really care about. (The consumer didn't care if their cars no longer used 100 lb fenders.) There is probably a few more of these innovation energy-relief-breathers left, but I assume, akin to finding huge oil fields, the big efficiency wins will be harder to find as time goes on. The rise in developing economies and their demands also may throw Yergin's view into disarray to some extent.
I don't think biofuels can make enough of an impact to even affect supply shortages on the margin. They are really just window dressing at this point. Hybrid and plug-in hybrid technology have a chance of taking a big bite (a big enough bite) out of oil demand to give us another breather. But that technology is more difficult than making some car parts lighter, and the developing countries seem to be waiting in the wings to gobble up and additional supply. So things do seem to be harder at this point.
But the use of coal and its affect on climate change does not function on the margin. (climate change and CO2 emissions are basically all about coal use. If we fix everything except coal, we will still have excessive GHG emissions. If we ONLY fix coal, then we will be fine, as oil and natural gas will burn themselves out before things get much worse.) It is a problem that is linearly proportional to coal use, and we are already far beyond what can be absorbed naturally, that's why the CO2 levels continue to rise in our atmosphere (and in our oceans). Moreover, there are no natural economic incentives to avoid coal use. Also, even if carbon caps are mandated, it would be frightfully easy to cheat on them. Finally, even if a lower cost technology could be developed, it would have to fight the ingrained coal businesses and infrastructure. So, another tough nut to crack.
I think James Hopf is breathing a bit of reason into this debate. Use synthetic H2 as feedstock for petroleum refining (instead of NG). Another possible use is for feedstock for ammonia production. Since that needs pure H2 anyway, that's apparently the lowest hanging fruit for electrolyzed H2. (According to F. David Doty.) But I can't let this one go by:
"Use our coal reserves as a carbon feedstock for synthesized, liquid hydrocarbon fuels."
In this case coal is the ENERGY feedstock for liquid hydrocarbon fuels. The problem with using any coal at all is that the marginal CO2 emissions are higher, so that it's hard to justify any use if GHG emission reduction is a goal. If we just want carbon (GHG neutral carbon) we can use the plumes of it that come out of every ethanol production plant. If we are to be concerned about GHG emissions, then coal is no longer so cheap. It might not even be cheapest fuel available.
Jim Beyer 11.16.06
Concerning your final paragraph of 11.15.06:
As in the previous post, I'm not a huge fan of coal as an input feedstock. If you are doing that, why not drop the pretenses and just burn the darn coal?
CO2 is 4 H-H bonds away from becoming methane. Biomass (CH2O) is 2 H-H bonds away from becoming methane, so it might be a good compromise. And practically, there is plenty of it around, at least for now to use.
If you want to go to methanol instead, you just don't go quite as far. It's a bit less efficient in terms of CO2 emitted per energy used, but as a liquid, has obvious attractive qualities.
There are apparently several ways to make hydrogen efficiently with nuclear power. The one that seems to get a lot of discussion is the Sulfur-Iodine (S-I) cycle reaction. It's hard to justify high temperature electrolysis (or even any electrolysis) from intermittent sources like solar or wind. The plant costs are way too high to have them idle so much.
Graham Cowan 11.16.06
Burying highly radiactive waste underground is, in my opinion, completely irresponsible ...
That is an unfortunate opinion, except perhaps for those who justify living off oil and gas tax revenue by holding it, because the total amount of radioactivity to be buried is small compared to that which naturally exists underground. That is why nuclear waste has never been a genuine issue, and no-one ever pretended it could be until nuclear energy began rapidly taking market share from petroleum in the early 1970s.
If spent nuclear fuel had ever harmed anyone, this harm would be analogous to the carbon monoxide poisonings and deaths which I am sure the person quoted above would agree will occur in significant numbers in the coming heating season.
I do not see nuclear energy and oil (petroleum) being directly competitive, do you? One makes electricity, and the other largely runs cars or is used for industrial processes. Oil-fired power plants are only started up as a last resort.
So I don't see how nuclear took any market share from petroleum. Maybe it did. Maybe back then, oil was cheap enough to burn for electricity. (Those were the days....)
You seem to be implying that Jane Fonda and the like were covertly in bed with big oil in an effort to discredit nuclear power. I don't think this was the case.
Ferdinand E. Banks 11.16.06
I believe you about the l970s Jim Beyer, and as you say the market will react again. The problem will be the speed of reaction. In the l970s there was still plenty of oil to find in the crust of the earth, relative to demand, and I think also fairly close offshore. In addition, the heavy demand of China (and soon India) hadn't hit the market. Things are different now, and so the reaction of the market may not be something you will feel like citing on the posts you offer in 2050 or therabouts.
Let me also say that I don't see how it's possible to be a Yerginite in this matter. The concept of an undulating global production plateau - ex-ante - doesn't make any sense at all to me. My reason for saying that is the fact that we may already have an undulating plateau in Saudi Arabia , and that should be quite sufficient to cause global production to turn down and stay down, although I cant say when. Murray Duffin wrote me the other day, however, and he thinks the peak is close. Moreover, even if it turns out that there is an undulating plateau ex-post, I can't possibly conceive of any theory or model or anything else that could predict one ex-ante (i.e. before the fact). I can conceive of a model predicting a peak.
As for biofuels not being able to provide some motor fuels etc on the margin, I'll take your word on that, but something has got to provide them. It can't be considered acceptable that if a couple of million barrels of oil per day suddenly disappears from the market, we might find outselves looking at oil costing ninety or a hundred dollars per barrel, and a recession in the US, Europe and Japan.
Jim Beyer 11.16.06
I guess that economics models work really well, until they don't. Yergin seems to assume that there is enough spare capacity (and perhaps, enough 'frivolous' demand) that an adjustment is not horribly painful. Note that the 70's oil crunches were painful enough.
There seems to be quite a bit of evidence that the spare oil production capacity has decreased to a very small amount, less than 2 million barrels per day, and most of that from the questionable Saudi Arabian fields. I'm not sure Yergin is accounting for that. I can't comment on the frivolous demand, but it is certainly less so now than in the 70's.
It's also possible that NG played a big role in easing oil use in the 70's, at least for electricity production. But not only has that card been played, but we face shortages of NG itself as well.
Arvid Hallén 11.16.06
While we are talking about burying spent nuclear fuel underground, I'd like to point you to an article I wrote about the Swedish spent fuel program, probably the most advanced spent fuel program for the once-through cycle in the world.
Or if you do not have the time to read it, the short of it is that adequate technology exists today to deal with the spent fuel. The only thing blocking implementation in places like the US is lack of political will.
James Hopf 11.16.06
Well, there are two issues, global warming and the need to move away from oil and gas, due to the production peak as well as the geopolitical costs of foreign energy dependence. The reason for suggesting coal as a feedstock is that we need some domestic carbon source to create a domestic, liquid hydrocarbon fuel to replace oil/gas for our vehicles. If you believe (as I do) that we need to move away from oil & gas, and that powering vehicles with gaseous H2 is impractical, then some way of creating a synthetic liquid hydrocarbon fuel must be found.
I would have suggested biomass (as the fuel source or at least as a partial feedstock), but you've stated that such sources would not be sufficient. If not biomass, then what? I think you were alluding to some other options in your last post, but I'm afraid I didn't quite follow you. Could you give more details on what you would favor?
Using coal this way is not the same as "just burning the darn coal" directly. First of all, there's no practical way to burn coal directly to power our vehicles, which is the subject I was talking about. As I said, I do not favor burning it directly for power generation (unless some economic way to sequester the CO2 can be found). I instead favor nuclear, renewables, plus a little gas. With this proposal, coal is being used in lieu of foreign oil to power our cars, i.e., it is replacing something just as bad. Better on the economics and energy independence front, and no worse on the environmental front.
In fact, under what I proposed, the overall CO2 emissions would be much lower. If we combine coal w/ H2 generated from non-fossil sources, and then burn the resulting hydrocarbon, a large fraction of the energy released by the hydrocarbon will have come from the non-fossil sources. Does anyone know what fraction of the heat of combustion comes from the carbon (vs. the hydrogen) if one burns, say, an infinite CH2 chain? Furthermore, if we are really concerned about reducing pollution and CO2, as well as the consumption of primary energy sources, that's where the PHEVs come in. Once again, ~85% of the miles would come directly from the electric power generated by those non-fossil sources.
The carbon would only contribute a fraction of the energy of the fuel, which in turn is only a fraction of the energy powering the car. The overall "carbon fraction" would be somewhere between 5% and 10%. If we removed coal from power generation, only used it as the source of carbon for liquid hydrocarbon fuel, and then used that fuel in PHEVs, the overall CO2 emissions from the electric power and transport sectors would be reduced by more than 80%.
Don't let the perfect get in the way of what is good enough (by a wide margin). If we can use biomass for the 5%-10% transportation energy fraction mentioned above, great. If there is some other, better source you know of, great. If it has to be coal, that's fine too.
James Hopf 11.16.06
Some other points....
We did burn oil to generate a significant fraction of our electricity in the 70s and before. I've heard that oil used to generate a fraction similar to what nuclear does now (~20%). Over the following decades, nuclear went from nil to 20%, and oil went from 20% to ~2-3%. Thus, some view nuclear as having "replaced oil".
As far as the present and future is concerned, more nuclear would not replace oil (at least until PHEVs or electric cars become a significant factor), but it would replace gas. Till now, this continent has been self-sufficient in gas, but this situation is rapidly changing. As time goes on, we will have to import an ever larger fraction of our gas from overseas, and the great majority of remaining gas reserves lie in Russia and the Middle East. Thus, our gas situation will soon resemble our oil situation, and nuclear would definitely displace that "oil". All the same benefits as displacing oil, basically.
Concerning the "morality" of burying nuclear waste, the very-long-term risks of all our other waste streams (e.g., toxic chemical waste, fossil plant wastes (ash) and even landfill garbage) will greatly exceed that posed by nuclear waste. All these waste streams are vastly greater in volume, have a much more dispersible form, and will be much less well contained than nuclear waste. Many will remain toxic as long or even longer than nuclear waste.
Not only that, but these long-term risks of buried fossil plant wastes are tiny compared to the immediate damage caused by air pollution (i.e., those wastes that are directly emitted into the air). That's why we don't hear much about the buried waste issue. Fossil plants cause ~25,000 deaths in the US alone, every single year, under normal operation. Nuclear plants, and nuclear waste (which is generated in tiny volumes and has always been fully contained) have not killed anyone (i.e., have had no measurable effect on public health). Using nuclear power is not immoral. Continuing to use fossil plants (particularly non-IGCC coal) when the nuclear alternative is available; now that's immoral!
Jim Beyer 11.17.06
It's always scary when I try to type out chemical equations. Basically, when converting biomass (actually cellulose, the lignin isn't used) to methane, methanol or ethanol, there is quite a bit of CO2 byproduct produced. The main value of this CO2 is that it is already concentrated, no need to pull it out of the atmosphere. If we view the equations for methane and ethanol:
C6H12O6 -> 3CH4 + 3CO2
C6H12O6 -> 2CH3CH2OH + 2CO2
We can see that for each molecule of methane or ethanol produced, we also produce a molecule of CO2. So if, for example, we can use biomass to provide 6% of our fuels, then we can also use it to provide the carbon carrier for another 6%, if we want it to. This is what I meant about the plumes of CO2 coming out of the ethanol plants.
Unlike coal, the CO2 has no potential energy in it's bonds, so all the energy has to come from the H2 that is combined with it. But it is carbon neutral atmospherically, and probably easier to work with than coal dust.
If you wanted to do something like this, a good place to start would be North Dakota, or wherever they have a bunch of wind and little demand for it. They probably have some ethanol plants there asw ell. Use the wind generated electricity to fire up some electrolyzers. Go ahead and use inefficient, cheap electrolyzers, because you need quite a bit of heat for the ethanol distillation process. Combine the H2 with the CO2 byproduct to produce methane or other hydrocarbons. Process the lignins to obtain fixed nitrogen and reduce our fertilizer requirements. See? Nothing is wasted but the squeal!
If you produced methane instead, the process is much more efficient. The separation is less energy intensive as well, as you just need to separate CH4 from CO2, instead of ethanol from water.
Warren Reynolds 11.20.06
Comparing nuclear waste to toxic and residential waste is comparing apples to oranges. Apparently, you do not know your biochemistry. With few exceptions, the soil bacteria metabolizes the chemical waste to harmless compounds, i.e. carbon dioxide, water and protein in a lot less time than nuclear waste decay. With the exception of a few plastics, residential wastes are also metabolized to methane, water, hydrogen, carbon dioxide and protein
Ferdinand E. Banks 11.20.06
I don't really know where to go any longer. My new energy economics textbook is intended for the first or second year in the university. Maybe I should be thinking in terms of the first or second year in primary school.
Todd McKissick 11.20.06
I recently had an interesting conversation with some local farm types. They said that corn prices have already risen to the point where a large percentage of beef ranchers are planning on giving up next year. (we feed them lots of corn in the beef states) Some of them guessed at butcher prices rising from $2.50 to nearly $8 per pound.
Save my steak, guys!
James Hopf 11.20.06
Note that I said some (not all) of the waste streams are as long-lived as nuclear waste. And you just gave an example yourself (i.e., some plastics, such as styrofoam perhaps?). There are also elemental toxins, like arsenic and mercury, which clearly last forever. Coal plant emissions and (buried) sludge/ash contains large quantities of both. How long does it take these toxins to migrate back down out of the biosphere, until they are as much out of contact with humanity as they were in the coal seam? Geologic timescales.
Len Gould 11.21.06
Todd: An interesting question in economics. Perhaps professor Banks could help. eg. given that beef production is essentially the business of converting (corn / maise) at $3/bu ($0.10 / kg) into beef at 40% efficiency and 55% yield using one $500 400 lb (182 kg) feeder animal per 660 lb (300 kg) of added gross production, what value does ethanol fuel production at 2.525 gallons per bushel (.377 litres per kg) need to reach to out-compete the barbeque pit, eg. beef at $8/lb or $17.60 / kg? or the hamburger joint, eg. beef at $4/lb or $8.80 / kg?
Len Gould 11.21.06
Todd: Seems clear from above that cost of feed inputs to a feeder operation are almost negligable (eg. $75 worth of corn to add 660 lb or approc. $600 liveweight to a feeder.) Ethanol at any price should never threaten your steaks, I'd think.
Todd McKissick 11.21.06
Len, where did you get the 40% efficiency or the $75 worth of corn used in the process. This is something that I couldn't glean from that conversation. By their tone, I would guess it's much higher.
The other factor not considered is that they were referring to the small time operations getting out of the business. I couldn't guess if a 50% increase in a $75 food bill is enough to kill the economics. Just trying to come up with all the far reaching effects of massivly using corn in ethanol is getting pretty complicated.
What's to come? Well, if I remember right, we have 7 ethanol plants running now, 12 in construction and another 19 being approved. What happens when corn prices increase more than the current 50% to say 150%? I'm guessing if the steak doesn't break me, I'll have to eat it rare to afford it.
Warren Reynolds 11.21.06
Prof. Banks You had made the statement on 11-12 as follows: “Norway has/had about 95% hydro, while Sweden has/had 45% nuclear, with the rest hydro. But most of the cost of the power is approximately the same in both countries. . . . . that tells me just about all that I need to know about what is and what isn’t expensive.” You are implying that the cost of the nuclear power is equal to hydro power ? I believe you mean selling price and not cost. In no way can you get an exact cost from just the selling price alone. One does not know the profitability Please clarify.
Warren Reynolds 11.21.06
Glad you brought up North Dakota. As you know, in Minot, ND there is already a wind-power-to-hydrogen facility being built for the N.Dakota Basin Electric Power Cooperative. The sporadic wind is ideal for the electrolysis of water to hydrogen.
see: www.beyondfossilfuel.com and www.hydrogennow.org
Denmark, on the other hand, did not have adequate planning. They have several thousands of wind power generators. In 2004, they were forced to export 85% of the wind-energy often at a loss. "Because power systems demand a steady, balanced power source at all times, utilities must carefully monitor and regulate the grid-often with energy from fossil fuel plants-to counter the wind's fickleness". Denmark needs to build water electrolysis/hydrogen storage units. Then they could have stored the excess wind power as hydrogen instead of exporting it and upsetting the load-balancing of Norway, Sweden, Germany, etc.
see: McClatchy-Tribune Business News, Oct. 30: "Study takes air out of wind power's sails: Finds windmill generators in Europe have problems with creating electricity when needed".
Ferdinand E. Banks 11.21.06
Dr Reynolds, looked at over an (arbitrary) ten year horizon, Sweden and Norway have had the lowest cost for electricity production in the world . Eastern Canada is/was also pretty high in that league. Where the price of electricity is concerned, this has increased drastically in both Sweden and Norway due to electric deregulation, and in particular the setting of price on NORDPOOL.
Imagine a crazy situation where an increase in demand in e.g. Denmark can (and does) cause an increase in price in Sweden and Norway to households, small businesses and industries. Among other things this boost in prices radically increases the profits of the generators in Sweden: they are at a record level !Incidentally, these profits are explained by longer lives and greater capacity factors for nuclear facilities, as well as higher prices for electricity and higher returns from investments made by the generators in coal based power in Germany and Poland. The down side of all this is an increase in unemployment in this country, but the government doesn't care as long as they continue to receive from the generators a portion of the money needed to finance their membership in the EU. It was also the practice in this country to charge different prices to industrial users and households, and while this may still be true to a certain extent, the energy intensive industries are now crying bloody murder, and threatening to move everything that can be moved out of the country.
As you may or may not know, nuclear research is largely forbidden by law in Sweden. If it wasn't, the Swedish nuclear sector would probably be even more efficient: after all, ten reactors now produce as much as the twelve that existed a few years ago. Ideally - ideally - that could change with the new government: the two closed reactors would be opened, and an installation of the same size as the new facility in Finland would be constructed. This would make all the economic sense in the world, which is probably why it won't be done.
Let me repeat: if the Swedish nuclear sector was allowed to reach its full potential, most of the talk of solar, wind etc would - FOR THIS COUNTRY - be recognized for the crank babbling that it is. This does not mean that it is crank for other countries, however I neither know nor care about these other countries, because I dont pay electric bills in other countries. And it also does not mean that there is no room for a modest expansion of wind and perhaps solar in Sweden.
Arvid Hallén 11.22.06
As a matter of fact, the ban on nuclear research was lifted on July 1st this year.
Also, according to Ny Teknik, the current uprates will be taken even farther than has earlier been said. The uprates were supposed to be 1550 MW (of which 700 MW has already been implemented), in 2012 they will reach 2000 MW.
This means that the Swedish reactor fleet* in 2012 will generate almost 25 % (!) more than it when the reactors were brand new.