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Several years ago I published a paper in Geopolitics of Energy with the title ‘Some aspects of Nuclear Energy and the Kyoto Protocol’ (2000). On the first page of that issue, the editor of the publication at that time, Vincent Lauerman, asked the following very relevant question: “Is ‘Kyoto’ a lost cause without the mass deployment of nuclear power plants?"
He added that “the current debate on this topic is long on ideology and short on reason.”
That almost sums it up. ‘Almost’ because basically what we are dealing with here is a shortage of the kind of information that would encourage not the “mass” but the optimal employment of nuclear facilities. (Optimal is a very important term in mainstream economics. It means choosing the best patterns of affordable consumption or production, given the presence of adequate information about available choices, and enough rationality to distinguish between different (e.g. good and bad) outcomes. In the real world, where inter-temporal considerations dominate, this is asking for a great deal.) In any event, in theory, the general public’s uncertainty where nuclear safety and waste disposal are concerned must be respected, while at the same time recognizing that a majority of this same public desires inexpensive and reliable electricity, as well as the absence of a potentially dangerous accumulation of greenhouse gases. In particular, an excessive output of carbon dioxide (CO2) is to be avoided. When all restraints are taken into consideration, we have an optimization problem that is analogous to those in e.g. your favourite intermediate level microeconomics textbook.
Ordinarily my approach to this quandary would begin with a reference to the greatest of all scientists, William Shakespeare: “Time’s glory is to calm contending kings, to unmask falsehoods, and to bring truth to light.” The riddle here is whether we will have time to bask in the truth and its raptures before we take to the roof tops. My research has often focused on the ugly things that could happen due to e.g. electricity deregulation and an unexpected shortage of oil, but these are trivial as compared to a global warming calamity. It has been said that in confronting the problem of global (or greenhouse) warming, “the choice is between action and delay”, and as far as I am concerned, “action” means giving more weight to the nuclear option, beginning immediately.
Not everybody is prepared to entertain this kind of language or reasoning. Several years ago the presiding European Union (EU) environmental minister, Ms Margot Wallström, stated that it would be possible to fulfil the stipulations of the Kyoto Protocol without resorting to nuclear energy. She was in some sense echoing the twisted beliefs of her previous colleague the Swedish prime minister, who on several occasions referred to nuclear energy as “obsolete”. It would appear that an investigation of some sort had been published which Ms Wallström and/or her staff scrutinized, and in this document it was claimed that a carefully selected combination of carbon taxes and emissions trading can prevent such inconveniences as floods and excessive temperatures. Unless I am mistaken, at least one version of this idea originated with a gentleman to whom I taught mathematical economics many years ago, however regardless of its source, the only thing that it has to recommend it is that it has caught the attention of some movers and shakers in Brussels.
What is the main shortcoming of this new proposal? My answer is that suppression programs for greenhouse gases that exclude or downgrade nuclear energy, and also an urgent, extensive and direct regulation and/or elimination of these ‘pollutants’ by whatever means are necessary, are little more than an elaborate lottery: the kind of lottery for which innocent bystanders own a ticket whether they know it or not – at least until the water starts rising on the Reeperbahn or Canal Street. The basic problem is that well-meaning persons like Ms Wallström and her advisors have grossly overestimated the practical value of various pollution suppression schemes that are featured in the speeches of politicians or for that matter the learned journals of economics. These digressions offer very little that is applicable to the real world.
I often discuss this subject in terms of the situation in Finland. For the last forty years the school children of that country have been at or close to the top of the OECD in academic achievement, and in 2006 they were first of all the children in all the world according to a UN survey. This tells me that the government of that country is less likely to make a mistake in the matter of choosing the correct energy inputs than e.g. the bureaucrats and voters in some principality on the rim of the Kalihari. In addition, two major natural gas suppliers can be found close to the western and eastern borders of Finland, but they were ruled out on economic and perhaps environmental grounds. As for nuclear energy being obsolete, many scientists have called the nuclear reactor the most important scientific discovery of the 20th century, but regardless of its distinction, it is clear that an enormous degree of upgrading will eventually be possible on nuclear equipment in regard to the processing of fuel and nuclear waste. It might also be useful to mention that the reactor that is under construction in Finland, which is the largest in the world, should have a life of at least 70 years. In 70 years natural gas in quantities large enough to keep the people of that country warm during those long sensual Finnish nights could be selling for the same price as gold and diamonds.
Returning to the first paragraph of this section, we are entitled to ask if an increased deployment of nuclear assets can ‘save’ ‘Kyoto’ – or more correctly, the United Nations Framework Convention on Climate Change that was broached at Kyoto, Japan, in December, 1997. The conclusion presented in my new textbook is that nothing can save ‘Kyoto’ except its (formal or informal) abandonment, and replacement by a more realistic alternative. As I pointed out elsewhere, “finding compromises that can satisfy all participants in the environmental wars must be as frustrating as the search for the Holy Grail (or the Fountain of Youth), but had the delegates at Kyoto genuinely believed that global warming (due to increasing atmospheric concentrations of greenhouse gases) constitutes a clear and imminent danger, they would also have realized that the final document served up to them was inadequate, and unless a radical extension of its provisions can be adopted (and implemented) in the very near future, greenhouse gases will continue their build-up in the same way that they have during the past few decades” (2000c).
(Something else those delegates would have done if they had been serious persons capable of comprehending the subtler aspects of global warming, was to insist on the immediate adoption – if only in a token sense – of measures that were absolutely and without any doubt capable of reducing atmospheric pollution. As bad luck would have it,, most of them were too busy trying to ensure that they qualified for a ticket to the l998 climate warming get-together in Buenos Aires to become heavily involved with theoretical niceties.)
Will the present or an accelerated build-up of greenhouse gases be instrumental in bringing about a collapse of our civilization and the destitution of coming generations? A large majority of our scientific elite say that many ugly realities and surprises might have to be accommodated unless there are some drastic alterations in our outlook and behaviour. Once again I would like to emphasize that to me this means doing something about the uncertainty mentioned earlier, which in turn calls for a greater reliance on nuclear energy. With nuclear energy we know what we are getting. We are not investing in a CO2 lottery! Most of the other approaches – and particularly playing games with emissions permits – maintain or increase uncertainty via the fabrication and retailing of unproved hypotheses and/or conclusions.
In the very long run, of course, we are moving toward what could be an exciting panorama of renewables and quasi-renewables. Whether this will turn out to be a comprehensive or even fragmentary paradise on earth remains to be seen, although I for one have some problem believing that on a global scale, the corpus of economic and social losers will greatly diminish in size. The thing to remember is that according to the OECD, two-thirds of the increase in energy demand between 2000 and 2020 will come from developing countries, where as already mentioned several billion persons lack an adequate or reliable supply of electricity. Some question should then be asked whether the persons experiencing this shortage prefer their future well-being to depend on renewables or traditional sources of energy – where traditional in the present context means uranium or fossil fuels. If they choose the latter, then we might be talking about irreparable damage to the environment – and this could happen even if fossil fuels are quickly exhausted. (See Goodstein (2004) for an elementary examination of some aspects of this quandary.) But if that happens, then we are worse off than ever because of the steady increase in global population.
In a short article in The Spectator (2004), Rod Liddle said that according to the UK Royal Academy of Engineering, nuclear is the least expensive way to generate a unit of electricty: on average, it is one-half the cost of coal, and about 40% less than the cost of gas.
A similar conclusion was arrived at in France, where a former prime minister, Lionel Jospin, organized a study to clarify the competitiveness of gas with respect to nuclear energy. Jospin’s instructions were to take all costs into consideration, to include those of an external nature (e.g. environmental costs). The verdict was that there would not be great cost differences between gas and nuclear as long as there was no escalation in gas prices. As things turned out though, not long after the contents of the report had been fully digested by anxious readers, the price of gas almost doubled. Thus, another potential controversy involving ‘greens’ and their adversaries could be removed from the government’s table, although those persons with a “no thanks” approach to nuclear power continued to be unimpressed or for that matter uninterested in arguments with a pronounced reliance on facts and figures.
Almost everywhere in the world, the life of existing nuclear installations are being extended, and new facilities are being planned. For instance, life extensions are also almost certain for the bulk of the UK’s nuclear capacity, especially since the outgoing prime minister, Tony Blair, has said that “if you are serious about climate change, then it’s wrong to close the door on new nuclear development.” A group in Sweden called “Environmentalists in favour of nuclear energy” would almost certainly agree with this evaluation, even if the sheep-like passivity of Swedish consumers allowed misfortunes like electricity deregulation and the dismantling of the nuclear sector to begin.. Another item that is relevant in this context is that natural gas not only contains CO2 (though not nearly as much as oil), but methane, and some researchers say that if very large quantities are involved, methane can pose environmental dangers on the order of excessive CO2 .
At the 1998 European Nuclear Conference, Dr Hans Blix – who later became heavily occupied in the search for ‘weapons of mass destruction’ in Iraq – provided delegates with a series of highly relevant queries and observations. These included or should have included a number of facts, where one of the most interesting was that in France, which generates close to 80 percent of its electricity in nuclear installations, the emissions of CO2 per kilowatt hour were about 64 grams, while in the UK, which had a much smaller amount of nuclear, and as a result uses a considerable gas and coal, emissions were 10 times larger. Similarly, in Sweden, where nuclear and hydro generated most of the electricity, the figure was 58 grams/kilowatt-hour, as compared to Denmark – which even at that time had a large inventory of wind turbines, but relied for the most part on coal – the figure was 917 grams/kilowatt-hour.
What is not generally understood is that the Danish resort to wind-power can be justified by the high cost and pollution that characterizes their dependence on coal. This situation does not apply to neighbouring countries, and in particular Sweden and Norway. It is also interesting to note that the use of wind-power appears to be peaking at the present time, which may be due to the inability to fit it into the deregulated Danish electricity market – which, like most deregulated electricity markets on the face of the earth has encountered considerable difficulty in honouring its promises to the households and firms of that country. This might also be the place to inform coal intensive Denmark that a 1000 MWe coal-fired power plant releases almost 100 times as much radioactivity into the environment as a comparable nuclear plant. In addition, as the World Nuclear Association pointed out, “if all the world’s nuclear power were replaced by coal fired power, electricity’s carbon dioxide emissions would rise by a third”.
While on this subject it can be noted that according to Liddell, 18 million tonnes per year of CO2 is avoided because of the presence of the UK’s nuclear energy, which he states is equivalent to five car-free days per month. For Europe as a whole, Dr Blix says that nuclear power helps to avoid the emission of approximately 700 million tonnes of carbon dioxide a year. This is a very large number, and one would like to think that had it been circulated to the several thousand delegates at Kyoto, or the 60,000 at Capetown for the so-called ‘World Summit’, enough of them would have been sufficiently motivated to abstain from their eating and drinking long enough to realize that there were passages to environmental sanity that did not involve the uncertainties implicit in the ‘green message’.
EMISSIONS TRADING BLUES
In a recent article in the Financial Times (June 1, 2007), Phillip Stephens states that according to IPCC studies, the economic costs of curbs on carbon dioxide are relatively small when weighed against the danger of inaction. This was certainly true at the time of the Kyoto burlesque, and it may be true today. He also says that the answer is to fix a “realistic international price for carbon through a cap-and-trade system.” President Bush has rejected this harebrained solution, although unfortunately he may change his mind when enough journalists, economists and pollsters insist that this bogus setup has some scientific merit and/or political merit. Here we are dealing with exactly the same kind of naiveté, ignorance, greed and/or hypocrisy that preceded the deregulation of electricity in California and Sweden, and which in Sweden (and probably elsewhere) is still tormenting ratepayers.
At the Kyoto meeting, nuclear energy was by and large overlooked, and probably was not even on the agenda, however it was decided that a market would be established for the trading of emission permits. For some reason this crazy concept has roused the enthusiasm of the low-and-powerless as well as the high-and-mighty, and once this emissions bazaar is fleshed out with confused buyers and sellers of permits, as well as bright-eyed young people functioning as market makers and/or brokers, it will take its place in the cavalcade of serviceable falsehoods. In many respects it will likely be similar to the uniformly inefficient establishments and schemes that were introduced to enable the risk associated with electricity deregulation to be hedged.
I hope that I am not revealing my basic frame of mind in this matter when I say that emission permits are one of the worst ideas ever formulated, and the cost – both in dollars and millions of tons of CO2 propelled into the atmosphere – would make it a distinguished non-starter if there had not been a small group of academic economists, and a large group of finance professionals, who expected to gain personally from their introduction.
I doubt whether all readers of this exposition will appreciate merely being told that emissions trading is a silly misadventure. Rather than ignore these ladies and gentlemen, let me suggest that they should ask their favourite economics teacher for a deeper insight into the interior logic of this undertaking, and given the high probability that he or she won’t have a clue, they should also consult the superb microeconomics textbooks that are now available, or better examine the easy-to-read articles of David Victor (2000) and Ruth Greenspan Bell (2006), and the short note of Taylor and VanDoren (2006). Like myself and Professor William Nordhaus, Jerry Taylor is “sceptical of emissions trading regimes that might result from international agreements”, and prefers a global carbon tax. It is also my happy obligation to inform readers of this paper that all the pages in all the textbooks and articles that have been written since Adam and Eve will not provide them or anyone else with the expertise required to convince intelligent persons that emissions trading has any genuine merit. As President Putin was summarily informed by one of his experts, “it’s a scheme to make money, and has nothing to do with suppressing pollution.” Let’s put this another way: by adopting emissions trading instead of a direct and systematic program for reducing greenhouse emissions (via e.g. nuclear energy, and carbon taxes and perhaps subsidies), we have another situation in which we express our preference for a lottery instead of a sure or near-sure thing.
“The environment is not a machine. It is full of surprises.”
- Professor Bert Bolin
If the rationality mentioned in the first sentence of this paper prevailed, that pretentious ‘outfit’ for relentlessly bilking the unwary, the Nordic Electric Exchange (NORDPOOL), would have had its doors closed and nailed shut years ago, and not only electricity but emissions trading would strictly be a topic for term papers at storefront universities in Boston and New York. But sadly that would not have alleviated all of our electric and environmental worries.
In Ross Gelbspan’s book ‘The heat is on’ (Addison-Wesley, 1997), he makes the following brilliant remark: ”Scientists do not know what hidden thresholds lie ahead. They do not know what feedbacks will take effect, or when. They do not know at what point an unstable climate will become a cascade down a steep slope. They cannot yet predict whether or when the rate of warming will accelerate. So those who are trying to avert the crisis are left groping in the dark, forced to choose arbitrary emissions-reduction targets that are determined more by their political viability than by their correspondence to the actual situation.”
He is talking about non-linearities here, so what does he want done? One option is to convene another elephantine talk-shop, and keep it in session until it gives the impression that significant progress can be made in reducing environmental hazards if the right signatures are affixed to this-or-that document. The opinion here however is that decisions having to do with liquidating the global warming threat should be made by heads of state – where these decisions include actions that should be taken in the event of non-compliance. By actions I am not thinking of gunboats, but economic restrictions. The thing to appreciate is that we are not dealing with brownouts or irksome increases in motor fuel prices, but if things go wrong, possible disasters that in earthquake terminology belong at or above the top of the Richter scale. Of course, if you believe the recent statement by President Vaclav Havel (of the Czech Republic), none of this is relevant, because in his words Al Gore is “insane”. What Mr Gore is – according to his own contention – is a bad dancer. Insanity describes the persons who have advised President Havel on this subject.
An extension of the topics discussed above can be found in the work of Barry Naughten of the Australian National University ( Barry.Naughten@anu.edu.com). His recent work (e.g. 2007) contains some useful observations about the position of Australian prime minister John Howard in the climate debate. In the interests of himself and his party, Mr Howard’s stance will almost certainly have to be reassessed now that President Bush has found his denial of global warming a political encumbrance. There is also a very strong possibility that the men and women in the president’s temporary and permanent social circle have expressed some alarm about recent weather patterns.
One of the most brilliant and influential physicists of the 20th century, Niels Bohr, once said that ”true expertise comes only after making all possible mistakes.” By way of contrast, I think it wise to accept that in the matter of global warming it might be a good thing if we avoid certain types of mistakes, since this expertise might have to be demonstrated in a world with a new and disagreeable economic and political structure – a structure that is not particularly responsive to the application of traditional know-how, behaviour and aspirations, but is punctuated by the sounds of gun-ships and assault rifles.
All of the above and a great deal more should be taken specific note of by those persons who have become receptive to the arguments of the small but strident group of dissidents who allege that global warming is a hoax, or the deregulation buffs who insist that showy but impotent departures like emissions trading have a serious role to play in slowing climate change.
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For information on purchasing reprints of this article, contact sales. Copyright 2013 CyberTech, Inc.
I too, prefer a carbon tax as the better option, given a choice between that and a cap-and-trade emissions program. However, just as you would give appropriate attention to the concerns of the anti-nuclear, you will have to face the concerns of the socialist v. capitalist mindsets at the top political levels everywhere.
President "W" does not have any kind of a problem with what you characterize as hare-brained cap-and-trade schemes - in fact he has endorsed the adoption of yet another one here in the States, for control of mercury emissions from power plants. Again - they HAVE been successful in reducing NOx and SOx emissions, and those very successes give credence to the idea of using them for CO2.
If implemented, it will be an imperfect system, in an imperfect world, exercised in an imperfect market. But the proof of its success of failure will not be in its inefficiencies or inequites, but in its ability to acheive the desired results - a large net reduction in CO2 emissions.
As an example of how such a system could succeed, and still benefit your beloved nuclear option: A US utility could choose to build a nuclear power plant, and to supplement its income, be allowed to sell a $5 per tonne carbon credit for each tonne of CO2 it DIDN'T create, for each and every 2MwHr it generated. In the meantime, as caps tightened, the rest of industry would be required to reduce their CO2 output, or pony up for (i.e. buy) the credits.
See the "Results" section of this article from the US-EPA: http://www.epa.gov/airmarkets/cap-trade/docs/nox.pdf
The US Clear Skies program (2005) is modelled on the "highly successful" Acid Rain Program, and as such, both will be found to be cap-and-trade-based programs. http://www.epa.gov/interstateairquality/
I have long been a staunch proponent of the Nuclear Option for Power, and was formerly a member the American Nuclear Society - so it is fair to say I would be fine with at least 1/3 to 1/2 of our power, world wide, to come from nuclear.
Ferdinand E. Banks 8.15.07
Once again, Richard: cap- and- trade is NOT going to work on the international level! This is the bottom line, non-negotiable, and if paid enough I should be able to produce the economic and some of the political logic leading to that conclusion. "Should", although it's impossible to be certain about these things. But if you want to talk about oil, well....
However the present contribution is not really about cap-and-trade, nuclear, or whatever. It's about being confronted with the worst kind of nonsense about crucial issues. I don't know know whether global warming is the real deal, and in fact I'm unqualified to speculate on the physics of that issue, but I don't want to hear about ANY aspect of it from ladies and gentlemen working the denial side of the street who fall into the category of recognizable cranks and phonies.
In an article in 'Newsweek' a week or so ago, Professor Fred Singer was identified as the denial club's 'main man'. Almost every week I get some information from the good Fred, and in his last communiqué he grandiosly classified a couple of journalists as global warming experts. Experts mind you! In the latest Spectator the journalist Ross Clark informed the faithful about the global warming "scam". How would he know? And how did the editors of a first-class publication come to the conclusion that Clark's half-baked opinion was useful and interesting?
For me the interesting thing about the cap-an-trade schemes introduced in the US is that they were not preceded by a Kyoto-type burlesque. And here I can repeat what I said in other publications, which is that if the jet-setters attending the Kyoto talkathon had been interested in something other than obtaining an invitation to the next circus, we might have an optimal solution to this warming quandary. Perhaps even one that you "would be fine with".
Len Gould 8.15.07
A flat carbon tax is the most logical, simple and cheap way to limit or reduce CO2 emissions. This "Cap and Trade" nonsense is simply a scam which is designed to benefit incumbent actors in the energy business and enrich brokers and traders. With Cap and Trade, there must apparently be an "allocation" of something called "emissions credits" which are created from whole cloth and instantly become extremely valuable. None of this, of course, is unusual in the present economy. The interesting part however, is the effect of this on emerging new-technology systems which may not be participating in the market at the time the "emissions credits" are issued. Take an example. Suppose that tomorrow the "Cap and Trade" emissions are allocated essentially free to all incumbents, then the following day a scientist makes a breakthrough discovery in a zero-emissions electricity generating technology which can produce electricity on command from solar at exactly the same cost as large central coal-fired generation. His licensee's rapidly set up and manufacture eg. 10 GW / year of the new product, and sell it to individual homeowners and businesses for installation in the USA. How would "Cap and Trade" deal equitably with that situation?
Would the individual customers be allocated $15 worth of credits each which they can freely trade if they pay a broker $15 / yr for an account?
Assuming the original credits allocation to incumbents was sufficient to provide electricity generation to service the entire market demand, what happens when the new and unanticipated 10 GW of generation suddenly appears on the market? Are a new 10 GW of credits just printed from nothing? Does some entity (read government) go around and buy up sufficient credits to cover the 10 GW from incumbents who are forced out of business? Why should they be allowed to sell back credits which they were originally issued free?
It's a scam designed to entrench incumbents and discourage potential disruptive new competition, especially small-scale distributed.
Edward Reid, Jr. 8.15.07
The argument regarding "cap & trade" vs. "carbon tax" is as meaningful, in the big picture, as the "less filling" vs. "tastes great" argument. Further discussion of the Kyoto Accords is less meaningful still, as Professor Banks has suggested.
If the global warming which has been occurring is being caused exclusively, primarily or even partially by anthropogenic carbon emissions accumulating in the atmosphere; and, if further accumulations of CO2 in the atmosphere risk imminent danger of passing a "tipping point" and triggering a more rapid rise in global temperatures, followed by global cataclysm; then, the only approach to avoiding further global warming is the immediate cessation of all anthropogenic carbon emissions globally. If an atmospheric CO2 concentration of ~270 ppmv is "ideal"; and if current atmospheric concentrations of CO2 are ~380 ppmv; then, after anthropogenic carbon emissions have ceased globally, it will be necessary to remove the incremental ~110 ppmv of CO2 already in the atmosphere, plus any additional CO2 emitted prior to global cessation of emissions, to return the global atmosphere to its prior idyllic state.
If the above is true, then there will be nothing to "cap" or "tax" and even less to "trade" in a very short period of time, in the US or anywhere else. Also, if the above is true, then we're not talking about a 7% solution, we're talking about a 100% solution, globally; and, there is no possibility of developing country exclusions.
If the situation is somewhat less dire, and an increase in atmospheric CO2 concentrations to between 450-500 ppmv is sustainable in the short term, then the 100% reduction in anthropogenic carbon emissions can occur between now and ~2050. This would imply an absolute global anthropogenic carbon emissions cap, at the current emissions level, reduced globally by 2.5% of the current level each year, until anthropogenic carbon emissions globally fall to zero, in about 2050. The process of removing the CO2 in excess of 270 ppmv can begin as soon as the required technology is available for implementation.
Regardless of which scenario you accept, anything less than an absolute global cap is doomed to failure. The US, Canada, Australia and the EU could not reasonably reduce anthropogenic carbon emissions rapidly enough to offset the planned increases from China and India; and, they would be criminally insane (and economically suicidal) to try to do so.
Len Gould 8.15.07
So according to Ed, as long as there's even one little principality somewhere which refuses to join in an effort to reduce GHG emissions, no-one should try? I know, just poking you, Ed. Seriously though, what's your response to the quite valid argument from eg. China or India "Well, you North Americans went ahead and added 17 ton's / year / person for 100 years, or let's say perhaps 1700 T CO2 per current capita. We'll promise to stop also, once we've reached a cumulative emissions level of 1700 T CO2 per currrent capita." ?
Edward Reid, Jr. 8.15.07
What atmospheric concentration does that result in; and, is it sustainable, even in the short run?
Enquiring minds want to know.
Edward Reid, Jr. 8.15.07
My response would be: "We'll wait for you to start."
Then, we'll "trust but verify".
Malcolm Rawlingson 8.15.07
It is interesting to read intelligent persons speak of CO2 as if it was some poisonous gas.
If I am not mistaken all the hot air and bafflegab expended at Kyoto was accompanied by a significant amount of carbon dioxide - that is the gas that is breathed out by every individual person on the planet every second of every single day until the day they die. So Ed ....without wiping out every single mammal on the face of this dear planet "anthropogenic CO2" is unavoidable". If we don't produce it we are by definition quite dead. Anthropogenic CO2 is simply an unavoidable by product of living and cannot be reduced to nil without wiping us all out.
Professor Banks, my respect for whom grows with every article I read, mentioned the effects of methane gas on the climate of the earth. If one supposes that this is a significantly greater contributor to the problem than CO2 then one would start at that point (and not CO2) since curbing methane gas emmissions has a much greater effect than curbing the same volume of CO2 emissions. A bigger bang for ones buck I propose.
Being a simple minded nuclear engineer (all I understand are neutrons) means I have but a smattering of knowledge of economics and rely wholly on my good friend and ally the Professor here to set me straight. But if you start with the premise that a variety gases are the cause of global warming and some are worse at it than others then one would pick the gas that does the most damage and curb its discharge first. That makes the most economic sense to me. Since methane gas is markedly more damaging than CO2 then (about 10 times worse I am told) then every cubic meter of methane discharge avoided is the equivalent of 10 cubic meters of CO2. However this is not even mentioned in IPCC which I find disturbingly strange....could it be that fossil fuelled power plants (coal and oil) do not produce it?
Of course when one looks at the non industrial production of methane one is drawn to the inescapable fact that vast quantities of it are prduced in the digestive systems of mammals (particularly bovines). Included in the mammalian category are the intestinal gases of the humanoid species which discharge the gas on average 13 times per day producing about 2 cubic feet of methane. Multiply that by 6 billion people and you have a methane gas production system of twelve billion cubic feet per day or 4380 billion cubic feet annually. For the metric minded that is 124 biillion cubic meters every year. That of course is without the billions of other animals on the planet who are capable of even better production numbers than us mere humans. Having been in the presence of one such bovine during an unexpected discharge I can assure you the volume is quite large from this source....substantially better than the puny efforts of most humanoids.
So following the lead of the Kyoto hot air balloonists I recommend that we introduce a cap and trade scheme for anthropogenic methane. Those that are partial to foodstuffs that are known to create the problem ( baked beans for me) should pay those who produce less. Sounds fair to me and would have an immediate effect on lowering methane production which is about 10 times worse than CO2 supposedly.
Monitoring this might present a problem but I am sure the genius minds at the IPCC can solve that.
Of course I must admit that nuclear power is not able to solve this methane problem but as Professor Banks correctly points out it is the only possible solution to reducing CO2 emissions from power plants.
CO2 production from fossil fuels will of course end because the supply of coal and oil to burn will end. Nuclear energy will be all that is left for us to use and in the meantime we will have burnt up all of our hydrocarbon feedstock.
And that my friends is the real inconvenient truth.
As a fairly shrewd investor and a great disbeliever in CO2 induced problems I think I will be purchasing coastal properties at a discount on the dollar because it is most unlikely that the worlds oceans are going to rise by any appreciable degree. And hopefully I will have the beach to myself while the rest are hiding in the mountains somewhere with dear old Al G waiting for the sea level to rise 10 feet.
Len Gould 8.15.07
Malcolm: "However this is not even mentioned in IPCC which I find disturbingly strange" wrong. Everything IPCC does used "CO2 equivalents" which include methane, NOx, etc. as understood. The precise conversion factors are widely available to anyone who really cares.
Len Gould 8.15.07
Hand up anyone who had actually reaf the "Kyoto accord". None? I thought so. It shows in the commentary.
Len Gould 8.15.07
Ferdinand E. Banks 8.16.07
Governor Schwarzenegger has signed a bill committing California to an extensive program of greenhouse-gas reductions.
I can't see anything wrong with this, as long as he doesn't intend to massacre any nuclear capacity. In fact, I can't see anything wrong with it even if it turns out that global warming is bunkum. After all, if properly crafted, a program of this nature could be an important step in obtaining an optimal energy portfolio for his state. Where the precise configuration of this "optimal" portfolio is concerned, somebody else will have to figure this out, although on a gut level I would like to see at least 25-30% nuclear. As I point out somewhere else, with nuclear we more or less know what we are getting. For instance we know - or should know - that the price of gas might be very unappetizing in just a few decades, while a properly maintained nuclear facility could be producing at rated capacity for at least seventy years..
As is obvious in this contribution, I've got a 'thing' about emissions trading (ET). If push comes to shove I suppose that I will have to attempt to extend Len Gould's comment about this scam, but I can mention that I was teaching finance when the talk about ET surfaced, and thus was able to immediately interpret the expectations of the splendid financial communities in Europe and North America. They saw themselves as being in line for a lovely payoff, and did not try to conceal this sentiment.
One more thing - the expression "gentlepersons". What's wrong with ladies and gentlemen, since gentlemen just might be the finest word in the English language.
Edward Reid, Jr. 8.16.07
Gentlemen (and any "lurking" Gentlewomen),
Please note that my first post was a set of conditional statements. So far, nobody has questioned the "truth" of those statements.
Malcolm, as I am sure you are aware, there are some who would happily see roughly half (or perhaps more) of the existing humanoids disappear in the interest of saving Gaia. I am not one of them. Perhaps, if the "Branson Challenge" is won, we will have the technology to extract the CO2 resulting from our respiration from the atmosphere, should that be necessary.
Fred, the "Governator" has committed CA to a "wish". ("A goal without a plan is just a wish.", Antoine de St. Exupery.) He has already acknowledged that CA cannot succeed unless the rest of the US makes the same commitment. Therefore, if CA "fails" to achieve the "wished" reductions, it has an "out".
The key questions regarding AGW remain: 1) What MUST we accomplish to avoid intolerable adverse effects? 2) Over what timeframe MUST these things be accomplished? I would not suggest that I know the answers to those questions. I remain unconvinced that anyone else does either. However, I can say with near absolute certainty that a "7% reduction of CO2 emissions below 1990 levels" ain't it.
"You've got to be careful, if you don't know where you're going, because you might end up someplace else.", Yogi Berra, American philosopher.
Malcolm Rawlingson 8.17.07
Len you're right. Have not read the whole document - just bits of it. I am too busy producing emissions free nuclear electricity to have the time!!
However you missed the point which was a follow on to the good professors statement that if the people who wrote the Kyoto Accors were really serious they would be actively promoting nuclear. They are not promoting nuclear and Kyoto has nothing to do with CO2 emissions. That is why the faults in the science are of no concern to them.
My point was that if they were really serious they would have set up a priority system of greenhouse gas reduction and CO2 would NOT be on the top of the list. It would likely be methane first. Why is there repeated reference to "CO2 caps" and none to "methane caps". Perhaps as an avid reader you could enlighten me on why that is or isn't there.
One does not need to read it to understand that the motives behind it have nothing to do with CO2 reduction.
Malcolm Rawlingson 8.17.07
You are most correct also. I am quite sure that there are many who would prefer the elimination of large numbers of people from the planet.
Regarding your first post. If we have no idea what the ideal level of CO2 in the atmosphere is we have no idea whether increasing it or decresing it is the right thing to do. Don't you have to establish that target first?
Maybe increasing it has benefits. I totally agree with Yogi Berra. If you don't know what the "ideal" level of CO2 is then any action to increase it or decrease it means you have no idea where you are going and you might end up in a place where you don't want to be.
Maybe 1990 levels of CO2 are ideal. Maybe 1800 levels are better. No one seems able to say what the best number is. Therefore trying to get to some arbitrarily established place is folly.
Jim Beyer 8.17.07
I think others have said that there is reference made to CO2 equivalence. And there has been some work done, for example, with altering feed so that cows burp less methane (they usually burp it, not the other thing...) and more of the food value goes to producing meat.
Also, over time, methane decays into CO2 in the atmosphere, so in the long run, an emitted molecule of methane becomes an emitted molecule of CO2.
Len Gould 8.18.07
Malcolm: You're also letting the fact that a certain group of environmental activists or economic activists support the move against increasing atmospheric IR blockers colour your judgement. Is that any basis to make a scientific secision on? You simply arbitrarily refuse to support any initiative which they also support?
Ferdinand E. Banks 8.19.07
Nobody believes in single-mindedness - even fanaticism - more than I do, Malcolm, but Len has a good point here. We have to do what we can to keep the nuclear sectors intact, and to prevent the decision makers from being made fools of by supporting cap-and-trade scams and similar nonsense. I'm also partial to bad-mouthing Kyoto. But as for getting upset about environmental and similar activists, I don't see any profit/benefit in it.
John K. Sutherland 8.20.07
I go away to teach for three weeks and look what happens! I still have two weeks to go so I will not participate as I would like. However, Malcolm, keep up the good skeptical work, and Ed too. Of course everyone knows of the sterling work of Anthony Watts revealing that most of the weather stations in the US are neglected beyond belief (good photographs showing air conditioning units, asphalt, building vents etc. close by, movements of stations). There are some very good articles on this and other excellent topics at this address by both Jaworowski and Hecht, including one that shows that carbon dioxide has been much higher than today (actual atmospheric chemical measurements) and just less than 150 years ago, before there could be any meaningful bleating about anthropogenic carbon dioxide.
For the record, I do believe in climate change. It is happening all of the time. And Malcolm is correct about NASA having egg all over Hansen's face with the four of the last ten hottest years now being in the '30's (again) and only three of them in the 90's, and its been uncertain ever since. Damn cool where I live. Why do we still seem to ignore the biggest weather effects we have: El Nino and La Nina? I still think the clincher is that the basic premise of Gore et al (al Gore?) that carbon dioxide precedes temperature changes is wrong by 180 degrees. Warming precedes rises in carbon dioxide and cooling precedes its reduction (as Carl Wunsch authoritatively stated on the Great Global Warming Swindle). Even after objecting to the program, (after he was leaned on by colleagues), I doubt that even Wunsch can unsay that, and be convincing.
I'll be back in a week or two. Will follow this with interest. Now let's get on with building another 6,000 nuclear plants (as an article in 21st century proposes).
John K. Sutherland.
Len Gould 8.20.07
John: Thanks for the pointer to 21st Century "Science". Hilarious.
Ferdinand E. Banks 8.20.07
6000 nuclear plants you say, John. Well, some of the smartest people in this country (Sweden) can't convince them to construct one more - or for that matter reopen the two that they foolishly closed. As for your favorite publication, as long as they are against electric deregulation they are A-OK with me.
Ferdinand E. Banks 8.20.07
Just a few words directed to the good Richard Vesel. Only amateurs pay attention to what the futures markets say about the future price of e.g. oil. (Apparently one of these amateurs is the present boss of the Fed.) That market has inadequate liquidity for contract maturities over 6 months, and often over 3 months. Of course, even if it did have sufficient liquidity for longer maturities, I would still argue - and be correct - that while that particular market is OK for risk management, it doesn't have much to offer for pricing.
Malcolm Rawlingson 8.20.07
Jim, I do absolutely assure you that cows do both - believe me - I have been there. Maybe it was a bad day for that particular animal. An isolated data point perhaps.
But is does not detract from the solid argument that if you want to have the greatest and fastest effect on gases (purported to increase the temperature of the earth) then you would start with Methane first. That is the engineering approach not the political approach of course. And if Methane converts to CO2 then all the more reason to control it first then you do 2 things.
I am honoured to have been recognised for my single mindedness in supporting nuclear energy. That comes from the following news items this week and I could get you a list for the last 20 years that looked the same.
180 miners dead in a mine flood in China. Three rescuers dead trying to find 6 other miners in the US....and on and on and on. In just one week more miners have been killed than in the entire history of nuclear energy....but that's OK - it's coal not uranium. Any one who accepts that logic is a complete hypocrite.
And people on this website tell me seriously and with great knowledge (having never set foot inside a nuclear power plant) that nuclear is not safe.
I really don't care much whether you like nuclear power or not and you can write all the words you want....the fact is that it is the ONLY energy source that can sustain 6 billion people. Politicians and so-called environmentalists can ignore the facts as long as they want - it does not change them.
As John said we need about 6000 nuclear plants around the world. Then we can all have a decent standard of living.
It is just a matter of time. Oppose it all you want.
Todd McKissick 8.20.07
Would someone please tell me authoritatively what it would take worldwide to add 6000 more nuclear plants to the what, 700 or so we're currently running? Please include plant personnel, regulatory oversight personnel, security personnel, transmission maintenance personnel, plant land use, processing plant land use, transmission land use, mine land use , storage land use, mining water use, cooling tower water use, concrete use and concrete sourced CO2 generation. I began to hunt this information and found it way too scary to post here.
Is the plant-only land use really as high as the couple enviro sources I found which put it at 400 kw/acre? How about the $4k / kw price tag? Some solar thermal systems can top those without even going to the desert. :)
How is the customer ever going to see the much touted 1.7 cents/kwh in light of regulations and inflation?
What will the odds be of a major regional extended outage? Who compensates the customer's losses (all types) when there is a loss?
In 50 years of nuclear's limited worldwide use, we've used up over 100 mines and still have more than that in use. I can't see any justification for increasing that ten fold and expecting it to last more than a shortsighted dozen decades. Factor in the lowest hanging fruit scenerio and you're gonna be tearing up some serious land.
Another thought, how many people want nuclear safety entrusted to the weakest link person in a 2-5 million person nuclear workforce?
After years of discussion, it would be nice to see the nuclear advocates put the above issues on the table for scrutiny instead of dismissing them.
Jim Beyer 8.20.07
I think more than 183-189 people died from Chernobyl, but I think your overall point is valid. I never said I was against nuclear power. I might be tentative, a bit wary, but not against it. I think the newer reactor designs are much safer, and that design that just uses up most all of the radioactive material (IFR?) sounds like a great idea. I even like the CANDU heavy water reactor, which can use unprocessed ore for fuel. When I was visited the Naval Academy as a teenager, I held a Plutonium-laden neutron source in my bare hand. Nuclear power doesn't scare me. Big, bureaucratic things scare me. Nuclear power is only scary (to me) in that it tends to be big and bureaucratic. Chernobyl happened because a single guy (Dyatlov) performed a rather risky test of the reactor's capabilities.
I don't think the approach of chasing down methane sources first makes sense compared with CO2 sources. Even with the elevated IR reflectivity per molecule of methane, compared with CO2, CO2 is still overall a larger burden on the atmosphere compared with methane. (I'm not sure methane is even 21x worse than CO2, given its limited lifetime before breaking down into CO2 and water. It may only be 7x worse, but I am not sure on this.) Major CO2 sources, such as coal-fired power plants, also have long lifetimes, so it makes sense to avoid building more of those now rather than ask for them to be shut down 10-20 years in the future. I don't know of any major, concentrated sources of methane emissions. (if they existed, someone would tap them and sell them to the NG industry...)
John K. Sutherland 8.20.07
Todd, Try reading my 6 papers here (or at least the last five):
and 8 others here which have more technical detail: http://www.energycentral.com/site/search/site_search.cfm?maxrows=8&term=edutech%20Enterprises§ions=reports&abstracts=0
Rather than me doing the work, I'll let you do it. All you have to do is read.
Then you can download and read Bernard Cohens book - The Nuclear Option from his site easily found with an MSN search.
Then you could go to WNA, and read all of their relevant and accurate stuff.
Of course, you could also read Jim Muckerheide's article on 21st Century, about the 6,000 Nukes by 2050, about 40 years off, or the length for which we have had the 442 we stuck at for the last 20 years. It's doo-able. Its the data that counts not the politics, although Len might disagree.
John K. Sutherland.
Malcolm Rawlingson 8.20.07
I appreciate your comments as I always do but the scale of energy required to support the nearly 7 billion souls on this planet and still growing is vast. It simply cannot be done with solar power. I am not against solar power or wind - on the contrary they do have their place - but the scale of it just is not there even with my most optimistic calculator in hand.
If you want most of the world to live in poverty while the west lives in luxury then maybe you could. But powering the needs of that number of people and making their life better can only be done one way and that is with a massive expansion of nuclear energy.
Surely you have seen the energy that is now being consumed by China and India and they are only together one third of the worlds population and most there still live in poverty.China is adding the total power system of the United Kingdom every two years (mostly coal - hence the 5-6000 miners that die there every year).
New reactor designs of 1700 Megawatts are quite feasible and unfortunately it is only power plants of this scale that can meet this very large demand.
Yes people did die at Chernobyl - the number varies with the reports that one reads but I am sure Jim has done his homework - so I'll accept his number of about 190. I am sure every one of those people is sadly missed as are the hundreds of miners killed weekly mining coal in China so we can buy cheap plastic dolls for our kids and shop at dollar stores. That is a heavy price to pay for such necessities.
I can understand the "big buearacratic" concerns of Jim Beyer but do remember that the guys on the controls (of which I was one) have families too as do I. I can assure you safety is my absolute number one priority all day and every day. Nothing is left to chance.
The public needs to demand high standards of us and we do not take their trust lightly.
Nuclear power plants have one of the largest power densities of any form of electricity generation and take up the least space including mining operations. If the Uranium is extracted from the sea as Japan is contemplating already then the power density is even better.
So John has it about right 6000 plants to get all of us out of poverty and stop killing miners.
On a final note I went down a coal mine in England once - and that once was quite enough. Give me a scrupulously clean highly efficient 95% capacity factor, totally reliable, on-demand, professionally operated nuclear power plant any day of the week. In fact give me 6000 of them so we can all live a good life.
Richard Vesel 8.21.07
A few comments:
1 - 6000 nukes would not be needed if as much of our work in energy were devoted to efficient use of the power we do generate, eliminating as much as possible of the ways in which it is wasted. Then, choosing renewable sources for 50% of the solution - and we might instead face a number in the low 1000's
Ways in which electrical energy is foolishly squandered: - Serious: absence of efficiency enforced standards for most forms of generation and consumption - Silly: air-conditioning of rooftop open-air restaurants in Lebanon - Silly: artifical ski slopes with man made snow in some middle eastern resort (Oman?)
I'm sure this list could contain several hundred such silly items...
2 - We already have the technology required to extract CO2 from the atmosphere, should we get to the point where we decide to really do so - that is called reforestation. Stopping net deforestation would be a good first step.
3 - It will not become necessary to capture the CO2 we exhale - that is carbon which is recycled from the atmosphere as part of creation of food. The only carbon we need to eliminate is the kind what comes from deep underground, or from combustion of vegetation from net deforestation, i.e. CO2 which has already been trapped.
4 - Climatological models exist which now appear to be accurate, and show what the 20th century was like, and would have been like, with and without man-made GHG's as part of the picture. (see Scientific American - August 2007 "The Physical Science Behind Climate Change") The doubts about our contibutions towards the warming of the climate are disappearing day by day - when will the "mainstream" become confident enough in this conclusion that action to correct the problem will not only be demanded, but it will be commonly understood as responsible and reasonable to eliminate every possible contribution to the problem with an efficient alternative?
I suggest that there is no "one solution fits all" approach, and the result of a restructring of our energy economy will have a result just as diverse, or perhaps even more diverse, than the current one. 6000 nukes simply will not solve the problem, but some large number of them will make a significant contribution to solving it.
Side note: One technology that I am intrigued by is a microturbine which can burn (waste) gas with a BTU content as low as 150BTU per cubic foot (a few percent of that of pure methane). I am only partly joking when I say that such a technology might allow us to raise all our livestock indoors, and extract energy from their effluent and waste, with such a farm most likely being a net producer of electrical energy. Yet another contributor in the renewable energy portion of the "big picture"...
I'm definitely in favour of nuclear power. However I cannot see how it reduces carbon emissions, or precludes a world “punctuated by the sounds of gun-ships and assault rifles.”
Agreed, if the US builds more reactors it will not want so many oil tankers arriving at its ports. But then the tankers will simply go elsewhere, and they will receive their new sailing orders that very day. Of course those alternative customers will burn the oil as fast as possible (how DARE we racists challenge this religious brotherliness!) and perform the same service for the world’s coal freighters too.
How on earth can we stop an oil tanker from moving about, without using a gunship as the means of persuasion?
Ferdinand E. Banks 8.21.07
Well Andrew, this business of assault rifles and gun-ships seems pretty clear to me. You may have heard the expression that 'love makes the world go round', but actually it's energy that 'they' meant' to say, and if lovers dont have energy they are subject to taking drastic steps to obtain it. For instance, as I explained to a dumb energy expert in Rome a few years ago, in l974 I obtained a copy of a map showing landing zones for marines and paratroopers in the gulf when it appeared that our Volvos and Cadillacs would have to be garaged for lack of fuel. Where did that map come from - why, it was a US government publication. I believe that Douglas Reynolds at the University of Alaska also saw it.
As for reducing carbon emissions, check out the carbon content of the air above Stockholm as compared to that above Copenhagen. I mean, even old Tony Blair said that if you want to bring carbon emissions under control, then you can't turn your back on nuclear. I think that I'll let Malcolm straighten you out on this matter.
Todd McKissick 8.21.07
John, I am astounded. I ask for some specific numbers and you send me towards hundreds of pages of propaganda and misinformaiton. While much of it was interesting from a historical POV, I stopped reading after the first hundred pages when I found my first answer - the land use.
Your second paper stated that nuclear requires 10 sq km to generate 40 mw and then stated that PV required 650 sq km for the same amount. Of course it depends on location and PV cell efficiency, but you seem to have quoted 40 year old cells (derated for 40 years of use) on a site located in Seattle. Also interesting is how you avoid comparing solar thermal statistics. I suspect it has something to do with it using less than one tenth nuclear's land use, which even I don't fully believe.
I also found where you stated that solar power is so inefficient that people are uninstalling them. You showed a table of state's data for the 90's (prior to PV's boom) but that table was for solar heating. Solar heating has nothing whatsoever to do with PV. Let's try a little less bias, shall we?
Malcolm, I find your incessant repetition of "If you want most of the world to live in poverty while the west lives in luxury..." to be insulting. No one in this group wants that so I fail to see the relevance of such provocations. All ideas promoted here are done under the assumption that everybody wins. In fact, that is the very basis for my latest post. I fail to see how the current mess surrounding the nuclear industry can be increased ten fold without catastrophe. Make no mistake about it, there are very serious concerns about scaling nuclear power up. New Mexico is fighting over permanent contamination of their aquifers from in-situ mining. The nuclear poster child, France, is shutting reactors down, and yes, causing brown-outs, for lack of cooling water on hot days. They recently began allowing discharge water over the previous limit of 82 deg into rivers. What will happen to other regions with less water than they have? Any way you look at it, you don't generate 1700 mw at 30% efficiency without dumping 4 gw of heat somewhere local.
Why will no one quantify the land used in open pit mines? ...or the water used or CO2 created?
Why won't the nuclear advocates admit that as long as there's any fossil fuel power, nuclear power will be sold at the marginal price and the premium over it's supposed 1.7 cents/kwh is just more profit for utility companies? Why do they continually say that renewables, and most specifically wind, gets the highest subsidy, when just today, they're pushing for a 1.8 cent/kwh production tax credit?
If either of you two care to try again, please address the specific questions above since I selected each of them because they are not easily researched. I've not really been against nuclear energy before, but I'm sure having second thoughts if the entire industry is unwilling to keep things scientific like they accuse the 'environmental wacos' of. I really find it hard to make scientific judgements based on Malcolm's most optimistic calculator.
Jim Beyer 8.21.07
Oil (or natural gas for that matter) aren't huge sources of CO2 when burned. Well, they kind of are, but we will run out of them before they add that much more to the CO2 concentration in the atmosphere. Recall that industry has really only been using these two fuels for about 125 years or so.
The real problem is coal. It produces a lot of CO2 per BTU burned (because of all the C-C bonds; it is poorly hydrogenated). There is also a lot of it around, so we can burn it for centuries. THAT is the huge risk to the atmosphere, not coal or oil.
The the question is not how we keep oil tankers from moving about, but how we keep the Chinese from burning up all of their coal. The answer would be to find an alternative energy strategy that would be cheaper to deploy than a coal-fired plant. Not easy, but also (perhaps) not impossible.
Edward Reid, Jr. 8.21.07
Accepting your assumption that the oil, natural gas and coal will merely be consumed in other countries, there is no reason for the US to do anything to reduce carbon emissions which is not dictated by economics. That makes the decision process far simpler and eliminates any need for government intervention, whether through carbon taxes or "cap & trade". Voila!
Mark Svoboda 8.21.07
Ladies and Gentlemen, To the government-mandated cap-and-traders, mercury, NOx and SOx are not CO2. I support increased nuclear energy, but McKissick's concerns cause pause. I would hope newer nuclear technologies would address some of these concerns. I also support energy alternatives away from oil and natural gas, such as wind, solar, tidal wave, etc., by virture that they are different and additional, and not merely less contributive to CO2 emissions. As for man-made "global warming," I don't have to "deny" anything, except in criminal accusations for public relations purposes, that has not be proven. The fact is that oil and natural gas will be readily available worldwide for at least the next one hundred years, and will be used at any price, including bloodshed, just as sure as coal will be railroaded from Wyoming for at least double that time. New technologies and market opportunities will emerge, evolve, and actually help, given any current political mood, if they are allowed to happen, rather than mandated to happen, which, if we are informed by history, have unintended negative consequences. Just ask the millions of souls lost to malaria since DDT was banned.
Ferdinand E. Banks 8.22.07
According to Mark, "The fact is that oil and natural gas will be readily available worldwide for at least the next one hundred years..."
I really don't care for statements like that, but then he adds "...and will be used at any price, including bloodshed.."
Which brings us to this matter of assault rifles and gunships that worried Andrew so. Anybody who feels like it can fill in the gaps, but they ain't likely to be something nice.
Len Gould 8.22.07
"The earth receives more energy from the sun in just one hour than the world uses in a whole year."
"Two billion people in the world have no access to electricity."
"World energy consumption is projected to increase by 59% from 1999 to 2020. Much of the growth in worldwide energy use is expected in the developing world"
"Renewable energy use is expected to increaes 53% between 1999 and 2020. Much of the growth is attributable to large scale hydroelectricity projects in the developing world. Renewable Energy currently accounts for 9% of total energy consumption and is projected to decline to 8%."
And I thought the above discussion was depressing!
Andrew Gill 8.22.07
Thanks everyone for reassuring worried little me. Perhaps I should have said that I rather like gunships!
Property rights only exist while they are defended with heavy metal, and those rights then lead to international trade, industry, economists and cash in the bank. If we hobble our defenders the whole superstructure could collapse pretty soon, and the consequences of that make gunships look good.
Every solution to global warming boils down to one simple instruction to the owners of oil, gas and coal deposits: leave it in the ground. As Ferdinand often points out, those owners prefer more money to less, and so some will refuse in ever less diplomatic ways until we send in the Marines. Only then will they accept that their property rights have been redrafted and look all grateful and friendly again.
And no, we cannot offer them an “economically viable alternative” to being the wealthiest men on Earth. I mean come on, think about it!
I see a parallel here with the successful suppression of slavery in the 19th century. The Royal Navy did this by attacking solely the international traders on the open sea. Slaving ports fell into decay and were then easy to shut down in mopping up operations, and inland trade died off after that. RN kept up a very efficient policing of the trade until 1956, when they were kicked into touch by the USN. Decisive policing ended, and that is why the African slave trade is far greater today than it was in the 18th century.
I have to ask you, will America police the international energy trade with equal success? I really want to know, because I think that all our engineering and economic ideas for climate control are simply a superstructure built on that heavy metal. I hope that’s not too depressing.
Jim Beyer 8.22.07
The flip side of this coin is the decline and fall of the Roman Empire. It's decline was mostly due to the higher and higher cost of obtaining resources from outside its borders. Instead of fighting the ultimately lost cause of securing outside oil, why not work towards greater energy independence? This technology could then be an export for US.
People who own coal deposits (oil and gas won't be a problem) also own the CO2 that then is floated over my head. So whose property rights are being violated there?
Len Gould 8.22.07
From a submission to the Ontario Energy Board (Regulator) by a resaerch organization.
"The stunted development of distributed generation sites in Ontario is largely based on three factors: the absence of transparent pricing signals to make projects bankable; the confusion in public policy regarding regulation and guidelines; and, the effectiveness of local distribution companies in making interconnection requirements either impossible to understand or to implement. ... Additionally, it is recommended that the OEB apply a more enlightened test on Hydro One and the LDC companies in determining the technical validity of prospective projects: put the onus on LDC’s to verify why a DG project plan will threaten system stability rather than putting the onus on DG proponents to verify why their projects will not."
It's a start, though very narrowly focused on farm anearobic digester systems. The concepts recommended should be broadly applied to all DG interconnections. Regulators really need to get out in front of this one.
Andrew Gill 8.22.07
Jim Indeed the fall of the Roman Empire is fascinating, not least because the Roman elite had relied largely on German tribal leaders to police the Empire’s borders – against their own tribes! They had offered to work for less than the heavily taxed citizens could live on you see. It made financial sense at the time; sort of like thinking that the UN would police the third world on the cheap for us...
Why fight to secure outside oil? Only to deny a monopoly on this vital military asset to an unfriendly power. Do unfriendly powers advocate energy market non-aggression for Americans but NOT for themselves? The Caliphate for one gets my vote.
“Work towards greater energy independence?” Yes I agree and I think nuclear power is the essential ingredient, which is the thrust of the main article.
“Coal owner’s CO2 floating over my head... violating my property rights...” Yes I agree, it’s a property crime against you, and you should call the cops. I wonder how they can deal with the miscreants most efficiently. I looked for an answer in the history books, as you can see.
Paul Stevens 8.22.07
Dr. Banks, here's one for you.
"Why not tie carbon taxes to actual levels of warming? Both skeptics and alarmists should expect their wishes to be answered" National Post
Thank you Ross McKitrick (the statistician who discovered the flaws with the IPCC hockey stick model)
Make the carbon tax move in synch with the three year moving average "of the RSS and UAH estimates of the mean tropical tropospheric temperature anomaly" and it will send exactly the correct signals to the worlds countries.
Temperature goes up, carbon tax goes up, temperature plateaus, so does the tax. I suppose if the temperature goes down, we will have to subsidize carbon producing industries.
Len Gould 8.22.07
"Temperature goes up, carbon tax goes up" . Ridiculous. Given earth's huge ocean heat sinks, by the time the effects of an increase in IR blockers is measurable, it's already way too late.
Ferdinand E. Banks 8.23.07
Carbon taxes: if William Nordhaus says that they make more sense than emissions trading, that's good enough for me. By the same token, since emissions trading is a scam, I wouldn't be impressed if Albert Einstein had put in a good word for them. As President Putin was informed, emissions trading is about money and not CO2.
The hockey stick diagram. According to Fred Singer, it was a journalist who discovered its flaws, which was enough to convince me that I didn't want to hear anything about that construction. I do remember however seeing a note on it by Professor McKitrick, who is undoubtedly a very competent man. Unfortunately the persons joining him in that note - one of whom was Nigel Lawson - were quite the other thing, and so I tuned out without bothering to tune in. I suspect that the problem here is the use of the expression 'hockey stick' in order to get some prime-time exposure.
Andrew, you say that you like gunships. You don't like them any better than I do, but I cant think of one time that they entered into a discussion of property rights that I took part in - unless it was after the cognac had gone around the table a couple of times. Of course, where "sending in the marines" is concerned, you should perhaps refer to the work of General Smedley Butler (USMC). He didn't think much of using the Corps to protect property rights.
Jim Beyer 8.23.07
The adjusted graph still shows an upward trend in temperature. Maybe not so much a hockey stick now. It better takes into account the little ice age, it looks more like the blade of a scythe, I guess.
Edward Reid, Jr. 8.23.07
I understand how carbon taxes would increase the cost of fossil energy and, thus, of products and services produced using fossil fuels. I also understand that, in the short term, carbon taxes would increase government revenue. However, what I do not understand is how carbon taxes would reduce carbon emissions, except by forcing consumers to choose between: using less fossil energy and products and services produced using fossil energy; and, otherwise reducing their standard of living to offset increased energy costs.
I recognize that there are investments consumers could make to reduce their need for fossil energy and prodicts and services produced using fossil energy. However, their ability to make these investments would be reduced by the increased costs of the products and services they consume, reducing their ability to finance the required investments.
Energy companies and manufacturers would collect the carbon tax, but would not "pay" it; their customers would pay it. Thus, the companies would have little incentive to invest in efficiency improvements or fuel switching, unless those investments offered the opportunity to increase profits as the result of competitive advantage.
I believe that, ultimately, reducing carbon emissions would require the application of a "cap" which was reduced on a published schedule, combined with the tax which was increased as required, until the total quantity of annual carbon emissions was reduced to the extent required to halt AGW, or perhaps reverse it. I also believe that the combination of "cap & tax" would ultimately be more onerous than "cap & trade", since it would effectively preclude or penalize the potential to "trade" between those positioned to reduce carbon emissions at relatively low cost and those for whom the costs would be quite high.
James Hopf 8.23.07
I don’t know where this 6000 reactor figure is coming from. According to EIA, nuclear provides 6.2% of current total world primary energy (coal provides ~25%). World nuclear capacity is 368 GW. Coal generates ~2.8 times as much electricity as nuclear, worldwide. Coal is responsible for ~33% of world CO2 emissions. Almost all coal use is for power production (over 92% in the US – couldn’t find world figure). Thus, we could replace all world coal by adding ~1000 GW of new nuclear capacity (~800 reactors). This would reduce world emissions by ~30%. Even if you assume that power demand doubles by ~2050, we’re still only talking about ~1600 new reactors (or ~2000 total, counting replacing the current ones). 6000 reactors (i.e., 15 times the current number) would increase nuclear’s share of current world primary energy from 6.2% to over 90%!! Around 2050 this would still mean nuclear providing ~half or more of total primary energy. Who is proposing that?!
The transport sector currently consumes about the same primary energy as the power sector. However, if one wants to tackle the transport sector by using nuclear to power PHEV or electric cars, this doesn’t mean the number of reactors has to double (e.g., from ~2000 to ~4000). Due to the much higher well-to-wheel efficiency of electric cars vs. standard cars (at least double), the number of additional reactor required would be ~1000, or even less. Going with the electric car approach constitutes destruction of energy demand more than anything else (i.e., as opposed to a switch to another energy source).
All we (most nuclear advocates) are saying is that significant new baseload capacity will be needed in the future (due to demand growth and retirements), and given all of coal’s environmental issues, and gas’ supply/geopolitical issues, nuclear is the better choice. We advocate increasing nuclear’s share of total electricity production somewhat (over decades), while reducing the use of coal and gas.
In terms of land use, what’s clear is that nuclear uses less than coal, with the power plant land use being similar (a negligible term in the equation anyway) and mining/fuel transport land use being much less. I would have to question any analysis that doesn’t show the land use for any (non rooftop) renewable source being much higher than that of traditional sources (this is one of renewables’ main weak areas). I also question the 10 sq km per 40 MW number for nuclear. If this were true, the US is currently devoting a plot of land 100 miles on a side (i.e., 10,000 sq miles) to nuclear power (mostly mines, presumably). Don’t believe it. The solar number would be 400 miles square. Don’t believe that either. Did you mean 40 GW as opposed to 40 MW? The real point is that nuclear’s land use is small enough that it is not an important factor, and that this would remain true even if we replaced all US coal w/ nuclear (total land use would decrease, actually, under that scenario, as nuclear is better than coal).
Edward Reid, Jr. 8.23.07
If you assume that the only source of CO2 which must be dealt with is coal, I can understand your concern. However, if all CO2 sources must be addressed, the requirement for alternative energy sources is much greater.
Also, China and India are planning to double electric output every 10 years for the forseeable future. Therefore, a doubling by 2050 is a gross underestimation.
James Hopf 8.23.07
According to IEA projections (http://www.worldenergyoutlook.org/graphs/Slide5.gif) total world energy demand will increase by ~50% by 2030, and by less than 100% by 2050 (extrapolating the curve). And this is under the business as usual scenario, with no significant conservation efforts, or reductions in demand that may occur as a result of high energy prices (such as those shown in the graph for the alternative scenario). I would say assuming a doubling in traditional energy demand is conservative.
I focus on replacing coal because it is the most effective way to reduce emissions, and it is what nuclear does best. In reality, nuclear will be only one of many measures, but this (replacing coal for baseload generation) will be nuclear’s nitche. I also discussed using nuclear along with PHEV/electric cars for the transport sector. In the US, coal used in power plants and oil used for cars is responsible for ~75% of overall CO2 emissions. If nuclear replaced all the power sector coal and most of the transport sector oil, it could reduce emissions by over 2/3. So, once again, if we replace all world coal by 2050, using ~2000 reactors, we reduce emissions by ~33%. For another ~1000 reactors, we can eliminate most transport sector emissions, raising the level of reduction to over 50%.
As for the effects of a carbon tax, it would reduce emissions by increasing the competitiveness of all alternatives, including conservation, nuclear, renewables, and sequestration. For a given market power price (set by an incremental gas generator, including the associated tax), utilities would have an incentive to choose non-fossil sources for new generation, as it would reduce their production cost (through reduced carbon tax payments) and therefore increase their profits. Under the rate base system, their direct incentive is less (as they could pass all fossil costs/taxes along) but then the ratepayers (and PUCs) would demand that they go with non-fossil sources if they were less expensive. They wouldn’t resist much, because for them it is at most neutral. I do believe that most utilities would choose to minimize their customer costs if there was no impact either way on profits, if for no other reason than the fact that it would help retain customers.
A carbon tax would be effective in reducing emissions no matter what the govt. did with the money (even if they flushed it down the toilet) for the reasons given above. It makes the market reflect the real costs of using fossil fuels, and makes them more expensive than non-fossil options. Then the market decides the most cost-effective way to reduce emissions. I’d be perfectly fine with just using the money for the general fund. Or to reduce other taxes. This may be better than using it to fund some govt. initiative, as this amounts to picking winners to some extent, and will likely be inefficient (as you point out). Just let the tax do its work, and let the market respond.
Another idea is the revenue-neutral approach (which even addresses Mr. Cowan’s concerns about tax addition). Take the utility industry and tax each ton of CO2 emissions. Use all the proceeds to fund a tax credit for each kW-hr of electricity produced. Higher emitting sources get taxed and lower-emitting sources get credited. The net effect on power prices is zero, in theory, but it results in each producer having the full incentive to reduce emissions intensity. The govt. gets no (net) money. No tax addiction, and no issue as to where or how to spend the money. Conservation advocates wouldn’t like it, but hey, nothing’s perfect.
Todd McKissick 8.23.07
Oh good, numbers. I love numbers. I sounds like at least the land use numbers I've found are in question. My conversion of 40 mw per 10 sq km into kw/acre comes to around 400 which is what I found online. If that's incorrect, maybe we could better define that. Anybody?
To compare to the most viable renewables for large scale generation, one needs to define which kind of RE we're discussing. There seems to be some room for clarification there. If I might, allow me to itemize a few of the nearer term ones that I'm aware of.
We're all aware of wind in backyard and utility scale versions but my personal favorite for 'the future' is the arrays of turbines flying at 35,000 ft in the jet stream. Certainly possible and capable of 90% capacity but a ways off. They are also mostly viable in the northern central US and Canada away from coasts and high sun.
Geothermal seems very large scale if and when they ever get the 3,000 ft deep wells down enough in cost.
Tidal and wave have coastal niche potential but NIMBY issues may be of most concern.
PV has yet to show that it will increase it's efficiency and lifetime without costing too much. You can have two of the three, but not all yet.
Solar thermal to hydrogen shows great promise with European dish systems attaining 69% energy efficiency for sale yet this year. The first systems plan to take this H2 product directly back to electricity with a 64% efficient fuel cell for a total of 44%. One would think that delaying that FC step makes it dispatchable on demand. I'm guessing that won't be far off.
Concentrated solar power (via a steam transition) is getting 29% with hopes of over 40% near term.
Smaller scale solar thermal is just becoming available this year but promises the largest benefits. These systems are currently being designed to top the other solars on electricity only, but they also offset heating costs for any nearby need. Overall efficiencies of 85% are very doable if you can put the waste heat to use.
When considering between RE systems and nuclear for what portions of the final mix we want, we should include all factors that society considers important. Not that it should be, but cost seems to come at the top with environmental concerns closely following. The problem is that there are many other factors and since they vary so much for the different technologies, they get lost in the discussions. Then when we just get it all figured out, we have to decide how to pursuade everyone to cooperate the right amount. I'm of the opinion that the cooperation will simply happen if all factors are taken into account by everyone down to the consumer.
With all this in mind, I like Ed and James' ideas of just progressively capping emissions. Then fine the offenders, but just call it a tax. ;) Use that money as an across the board production tax credit for anything green until it runs out. No winner picking, and phased subsidies only as much as they're needed.
I see this plan resulting mostly in wind along the northern half of the country, large solar plants in the southwest, geothermal in the west central, hydro in the north west, small scale solar scattered over every place except the nw and great lakes areas, water based systems on the coasts and nuclear mostly in higher population density areas. Any 'opportunity' sources will end up where it can be stored or compensated. Any area without enough small or medium scale energy will justify large projects by locally rising prices that didn't respond to the market.
Since almost all of the above systems promise a less than 20 year payback, the smaller scale systems should have a higher market penetration due to less risk.
Jim Beyer 8.24.07
The was an article about Cap and Trade vs. Carbon Tax on CO2 emissions in the Wall Street Journal yesterday (8/23/07). The author came out in favor of a tax.
I think land usage might be one of those measurements, like EROEI, that has limited benefits. How much land do our rooftops already cover?
James Hopf 8.24.07
Todd (RE: solar thermal):
You got me thinking about solar hydrogen. I still don't believe that using hydrogen as a direct fuel for vehicles or storing it for peak power generation is a good idea, but hydrogen generation will play a significant role in the future, as it will be used to turn heavy carbon feedstocks (coal, biomass, or heavy crude) into light (maximum H/C ratio) hydrocarbon fuels. Also, thermochemical generation of H2 is more efficient (~60%) and more economic than electrolysis, as long as you have a major demand center nearby (such as a refinery) and you don't have to ship the H2 all over the place. Add to this the fact that solar thermal is more economic than solar PV in the first place.
Thinking about all this, I came up with an idea. We're already hearing about how we're running out of light crude and that most remaining crude is very heavy (e.g., the massive Orinoco field). We're also hearing (in articles here at EnergyPulse) that the Middle Eastern producers are starting to get into the petrochemical industry, and are doing the refining themselves, and just shipping the higher value, finished product. This makes sense because it saves on shipping cost (per unit value) and they have a lot of low-cost gas reserves right there, to be used as the energy input for these processes (i.e., saves on gas shipping as well). It is also true that the Arabs have a whole lot of empty desert; low-cost and relatively worthless, with high solar insolation and few clouds.
So, the idea is as follows. Put a bunch of solar thermal plants in the desert and use this heat source, as opposed to natural gas, to make H2 via efficient thermochemical cracking. Then use the H2 (along with some of the heat as well) as inputs to the process of making light fuels, and other petro products, out of increasingly heavy crude. These guys are also swimming in capital (from current high price oil sales) and are looking for ways to invest it, from what I hear. Perhaps Mr. Chavez would also be interested, for use with his Orinoco heavy crude field. It's sunny in equatorial Venezuela too.
If large scale solar thermal succeeds anywhere, it should succeed here first. My impression is that this makes more sense than using solar thermal in the Sahara to make electricity and then trying to ship the electricity to Europe.
Todd McKissick 8.25.07
James, That's the type of thinking we need. As you've noted, there are many combinations of various technologies that can be used and each area of the world has some that best suit it. For right now, since these various individual technologies are just emerging, they are going for the best way to get their businesses sustainable, i.e. that low hanging fruit. We just have to ensure that they all have a level playing field to compete on.
I haven't checked in a year, but I know there are two merging proposals to supply as much as 40% of Europe's electrical power from CSP plants in Northern Africa. The consumer cost was estimated at 6 cents/kwh delivered, but I don't remember the differences. I do know they considered shipping electrolized H2 via pipeline and dismissed that. Maybe with solar cracking, they will consider alternate uses for such H2 generation such as yours. I still somewhat question something that 'supports' the fossil industry though. Perhaps Branson's contest for an atmosphere CO2 capture machine will materialize and they can put the H2 and CO2 together to make methane and pipe that.
You phrase, "...and you don't have to ship the H2 all over the place" got me to wondering if the solar dish hydrogen cracking can produce higher pressure product. If so, I have heard talks of an engine that can make use of the pressure, temperature drop and btu value in pressurized H2 to obtain very high efficiencies. I'm not sold yet that safe H2 storage is cheap enough, but that would be all that's missing for a self sustaining residential system to supply H2 to a PHEV. We can hope, can't we?
Ferdinand E. Banks 8.26.07
The (UK) Financial Times has cited some UN estimates of what it will take to avert a "climate catastrophe" (August 23, 2007, Page 6). I don't advise paying a lot of attention to their calculations, unless there have been some drastic changes in the kind of people carrying out this work from those I worked with in Geneva a few centuries ago..
Of more interest is the contention that "chemicals companies in China and India, and brokers buying and selling credits generated from such projects, had been the main beneficiaries of the Kyoto protocol." The situation with chemicals (and other companies) in China and India and elsewhere is unknown to me, but the windfalls devolving on brokers can hardly be denied. Anyone familiar with quasi-scientific financial publications can hardly avoid realizing that for financial intermediaries, emissions trading is wish fulfillment.
Todd McKissick 8.26.07
Bingo Professor Banks. The lack of an intellingents consensus on how much of what needs to be done has led to the entrepreneurs of the day changing tactics. Many are simply finding fully clean and economically cheaper solutions for every consumer. These solutions, while making surprising progress in the last 2-4 years, seem to be destined to fall short by some percentage. That percentage, however, now seems to be of an amount that nuclear can easily make up.
Of note is that these solutions are generally leaning towards avoiding interaction with Kyoto, RPSs, taxes, caps and trades. In a purely technical sense, none of those are needed so why allow them to drain so much money from the industry and mess up the future, when brokers stand to benefit most.
Roger Arnold 8.29.07
'Scuse me for parachuting in late in the discussion, but I have a basic question for Professor Banks--or anyone else who can enlighten me. The question is, just what is it that's so bad about a "cap and trade" approach to reduction of CO2 emissions? To me it seems a pretty rational approach.
Bear with me. Perhaps I don't understand what others mean when they talk about a "cap and trade" system. So here's what I think it means: at the time the system is instituted, every business that emits CO2 is "grandfathered in" to the system by being issued emission entitlements in amount equal to their current emissions. The amount of CO2 that can be emitted under an entitlement each year declines at a know rate that is set according to the rate at which overall emissions are intended to decline. Entitlements can be traded, but trading does not reset the clock of declining emissions allowance.
An entitlement is not the same as an emissions allowance; rather, it generates emissions allowances at a set annual rate. The only other way to generate an emissions allowance is through carbon sequestration. Any company that emits CO2, or that sells a fuel whose combustion will generate CO2, must file annual emissions allowances matching the emissions for which it is responsible. How it gets them and the price it pays for them is up to the market.
One advantage of the approach is that there is no discontinuity or sudden jump in prices, but total emissions decline at a predictable rate. But the big advantage is that the cost of emissions is set--as it logically should be--by the market cost of sequestration. It doesn't arbitrarily specify how sequestration is achieved, not attempt to estimate a one-time fixed cost for sequestration imposed through a carbon tax. All the appropriate incentives for economic efficiency are present and operational. Or so it seems to this perhaps naive observer.
As to the problem of getting all nations on board, and the supposed economic advantages to non-participating countries, that seems easy to deal with. The participating countries simply impose import tarrifs on goods from the non-participats whose total amount exceeds what the non-participants would pay to participate.
So where, in my understanding of "cap and trade", have I gone horribly wrong?
Ferdinand E. Banks 8.30.07
No, Roger, you have NOT gone wrong - horribly or otherwise; and cap and trade IS a rational approach - IN A TEXTBOOK ECONOMY.
But unfortunately there is a difference between a textbook world and the real world. The tariffs that you mention above - how large are they going to be, and how do they fit into the general tariff structure (if there is one)? Does it really make economic and political sense to issue permits the way you suggest in your second paragraph? What is the role of intermediates/brokers, and who is going to regulate them? Is it really true that people like David Victor and Ruth Greenspan Bell are wrong when they say that emissions trading will not work internationally, because there are always cheats, hustlers, spoilsports etc who will keep the wheels of market progress from grinding smoothly and - incidentally - they can't/won't be accused openly of being cheats, hustlers and spoilsports? And so on and so forth.
Please excuse my skepticism, but the arguments for cap and trade remind me of the arguments for electric deregulation, where textbook 'exchanges' would in theory provide auction markets where 'scarcity' (i.e. textbook or free market) prices are formed and made visible (i.e. transparent) to buyers and sellers, but which in reality meant that the rich and the intermediaries get richer or rich but, as US Senator Byron Dorgan said - "THE REST OF THE PEOPLE LOSE THEIR SHIRTS". And I'm not completely convinced that if prices are necessary in your system (which would have to be the case if "markets" are present), they would turn out to be 'scarcity' prices (involving the preferences of consumers and the capabilities/technology of producers in the long as well as the short run).
THE REST OF THE PEOPLE LOSE THEIR SHIRTS! Why, that could easily turn out to be me.
Len Gould 8.30.07
Roger: Cap and Trade amounts to politicians picking winners. How does your ideal description above deal with a circumstance such as eg. nuclear energy reaching an unforseen tipping point where suddenly it becomes more economical to build / operate than coal, either sequestered or not? The politicians determine on some fixed day that "from now on, we're prepared to allow 100 million tons per year of CO2 emissions, with a ?2%? / yr decline from then on". Trade away, guys. Then abruptly nuclear becomes the new-build fashion, coal plants are retired as uneconomic, and all the market really wants is 80% of the prior emissions. No reductions over what the business-as-ususal scenario without the Cap-and-Trade system will happen for the next ten years, whereas with a unit carbon tax on fuel, even if coal abruptly constitutes 80% less of the mix than in prior, there is STILL a strong incentive to reduce it's use. Ditto eg. a new breakthrough in eg. Solar PV or Solar Thermal, etc.
For Cap-and-Trade to work at all, the people setting the Cap need to be perfectly prescient about long-range future technology development, market demand, and relative competitiveness of all possible means of providing electricity. It's just not going to happen, witness the shambles of the European trading markets.
Todd McKissick 8.30.07
Roger, Fred and Len have listed the two big ticket problems but my personal hangup with them is the path of the money going into motion.
If my small utility company can't afford to make the investments to go cleaner this year and we try to budget for next year, how does it help us get there if we ended up paying a chunk of that in emissions trading? On the tail end of the money path is the brokers (gamers?) doing the trading stand to make millions for no contribution to physical emissions reductions. That money could be saved if a tax was levied against those who don't make the reasonable reductions and that tax became the carrot enticing more to take the plunge.
Now take the potential for underhanded or slightly less than honorable transactions and put it on a global playingfield.
Malcolm Rawlingson 8.30.07
Todd, You asked "Would someone please tell me authoritatively what it would take worldwide to add 6000 more nuclear plants to the what, 700 or so we're currently running? Please include plant personnel, regulatory oversight personnel, security personnel, transmission maintenance personnel, plant land use, processing plant land use, transmission land use, mine land use , storage land use, mining water use, cooling tower water use, concrete use and concrete sourced CO2 generation"
It is 60/7 about 9 times more than we use now....assuming we do not get more efficient...which we will and assuming we don't recycle the fuel.....which we will.
Current large plants are 1700 Megawatts more than double the power density we have now for the same land use. So by simply placing new plants on existing sites we could quite easily double or triple the current capacity with no additional land use.
However it is a rhetorical question that one could ask of any power source. So I would ask you the question how much of the worlds would the equivalent amount of solar energy consume? Can you provide those numbers in detail? All energy production uses the worlds resources. Solar, wind, geothermal - all of these use the worlds resources. Nuclear is just more efficient at it because the pwoer density is higher. Diffuse energy sources are less efficient at using the worlds resources because you require many many more units to produce the same amount of power.
But I will dig up the data for you if you will dig up the same data for...let's say solar power.
If you are upset at the fact that two thirds of the woprld has an abysmal standard of living - well so am I. I do something about it by investing in business in those countires through Kiva.org
Take a look at that website and see if you can help poor people instead of criticising me for caring about them.
Edward Reid, Jr. 8.30.07
"If my small utility company can't afford to make the investments to go cleaner this year and we try to budget for next year, how does it help us get there if we ended up paying a chunk of that in emissions trading? On the tail end of the money path is the brokers (gamers?) doing the trading stand to make millions for no contribution to physical emissions reductions. That money could be saved if a tax was levied against those who don't make the reasonable reductions and that tax became the carrot enticing more to take the plunge."
Under current EPA regulation, any effort to improve efficiency triggers New Source Review, which can involve tremendous cost, particularly for older plants. Therefore, the only approach to marginal CO2 reduction through efficiency improvements can result in massive costs beyond the implementation of the efficiency improvements.
Beyond modest efficiency improvements, CO2 reductions can be accomplished only through fuel switching (eg., coal to NG) or carbon capture and permanent fixation or sequestration. Fuel switching results in a one time, fixed percentage change in emissions per mmbtu consumed. Carbon sequestration results in a one time, virtually complete elimination of carbon emissions. I am unaware of any way to "sneak up on" carbon emissions reductions at 5% per year, except by reducing plant energy consumption and thus electricity production.
If your utility can't fund reduction today, how is it helped by paying a tax for failing to do so. You are concerned about the potential profits to brokers, but seem unconcerned about the inefficiency of government use of tax revenue, which would probably be greater. Remember, also, that government makes "no contribution to physical emissions reductions".
Under cap & trade, someone must make reductions. Those who can make them most inexpensively would be expected to make them first. They could benefit by making greater reductions than necessary to meet their obligations and selling the excess reductions to those for whom the reductions would be substantially less costly. The seller would charge more than its cost; and, the buyer would pay less than its cost to achieve actual reductions.
I agree with Professor Banks, however, that international emissions trading is a massive scale "CO2 for money" (oil for palaces, payoffs and payloads) scandal waiting to happen.
Jim Beyer 8.30.07
There was a pretty good article on Cap and Trade vs. Carbon Tax in the WSJ not long ago. In the opinions section, 8/23/07. The author came out in favor of a Carbon Tax.
I will admit the issue is a little hard to grasp, and but I think some thought is worthwhile in this area. I thought they were fine too, but I am persuaded to at least be very wary of them for now.
One issue that the WSJ article mentions is that an existing, dirty source which would've have been decommissioned anyway now becomes an "asset" because its emissions are high and it is unwanted. So someone could buy the asset (worth nothing cuz it is old, out of date, etc. anyway) shut it down, and then claim the CO2 emission bonus. Apparently, Germany did a lot of this with parts of old East Germany to comply with Kyoto, even though they really didn't "DO" much of anything at all, other than shut down some old, crappy plants. So, quite a bit of gaming could occur that doesn't really accomplish anything more than what would've have been done without the cap and trade. (Feel Good vs. Real Good)
A carbon tax is a bit more universal, though it suffers from the problem of who gets the money, and how it is spent by government officials that solicit men in public restrooms, but who "are not gay".
Todd McKissick 8.30.07
Jim, You caught me completely off guard with your last half sentence. Good one. You and Ed make good points about how the money moves.
In answer to Ed, I should have emphasized more the phrase, " a tax was levied against those who don't make the reasonable reductions". This is an idea that was promoted by others in these forums over the last few weeks and I think it's the most fair I've heard of so far. Basically, you get grandfathered in for all or most of your current emissions, but no 'credit' for taking them offline as Jim expressed concern over. Then the acceptable about gradually drops each year in a predictable and forcastable manner. Any actual change to the clean side is rewarded only if you generate clean power since the full taxed amount is redistributed back to the clean producers. This helps repay them for their investment. It punishes those that didn't make the switch when it was 'reasonable' by a tax. Those that are attempting to switch get a little time to put their money in order because they don't get taxed too hard in the beginning. The pitfall in this whole proposal is who decides what is reasonable for each user. Anyone have any ideas on that one?
Malcolm, Sure. I'd love to trade numbers with you. I just have two conditions since I've offered my numbers before without response. Each attribute gets compared equally and individually and some unbiased opinion does said evaluating. Any volunteers?
Roger Arnold 8.31.07
Len, we must be making different assumptions somewhere, because it seems to me your arguments are 180 degrees backward. Having politicians picking winners, or making prescient judgements about future technology developments is exactly what a cap and trade system--per my understanding above--is designed to avoid. It amounts to a variable carbon tax, where the amount of the tax is whatever the market determines to be needed to achieve the mandated rate of total emission reductions.
You're right that if developments cause a carbon-free power source to become more economical than coal, then the price of carbon allowances will plummet. The outstanding entitlements will generate a supply of allowances that exceeds demand, and the bottom will drop out of the sequestration market. But that's assuming that the new technology can be ramped up fast enough to reduce carbon emissions faster than the mandated decline rate. Otherwise, it won't matter how cheap its power is to produce; there won't be enough new capacity to meet demand, and the market for carbon allowances will remain. And if the new technology really can be ramped that quickly, then killing the market for carbon allowances is just what should happen.
Two plausible objections that I can see to the scheme are: 1) that it's unforgiving, and could harm the economy if the mandated rate of reductions can only be achieved by "demand destruction"; and 2) the uncertainty about future prices for emission allowances makes financial planning difficult--especially for new providers.
As to 1), nothing actually requires that the decline rate be carved in stone at the start of the program. It could be set up to allow a chartered commission to periodically review progress and adjust the decline rate if the economic impact was felt to warrant it. That would be a political football, of course, but it's at least as workable as the GATT commission.
For point 2), well, that's what futures trading is all about, isn't it? Providing some predictability and hedging positions? There is already a lot of volatility and uncertainty in future fuel prices that suppliers must deal with. The variable tax from a cap and trade system simply says that the cost of fossil fuel must ultimately cover its external costs. It hits all suppliers of fossil-fueled power equally.
I won't try to address issues of gaming the market just now, but I don't see any reasin why a cap and trade system is particularly vulnerable. I'll try to address that in a followup.
By now, readers have the answer to Todd's statement on the second day of comments under this article: "Jose Antonio, I'm curious of your hangup with Len."
Reality: everyone should be curious of Len's hangup with EWPC.
I am really asking for help. Is Len and/or Fred, working for some vested interest or are they just simple skeptics or just good guys trying to find the truth? Does anyone have info to that respect? I could supply a post about Fred being a skeptic, that somehow he run away from two times earlier.
EWPC market architecture and design is better than vertical integration (Model 1) which has outlived its useful life. EWPC is better than incomplete and/or no-functional markets, based on transmission open access (Model 2) and its extension which costs more than Model 1 when for example capacity markets are added.
Thanks Fred for your timely response. I guess you are right that "no tinkering with the demand side can compensate for gaming and lack of investment on the supply side" is highly likely under Model 2 and its piecemeal extensions.
To face gaming and lack of investment under EWPC there is an ultraquality requirement to be performed by a system engineering institution. The commercial activities of generation, and wholesale and retail of electricity to end-customers need to operate under a no-nonsense prudential regulation.
If the expert to the authorities in China is pushing Model 2 and its extensions, I also agree that your "anti-electric deregulation performance" statement is very likely to occur. If vertical integration – Model 1 – becomes the default solution, the little guy is bound to pay more for the investments than he should. The development of the resources of the demand side equity criterion - Market 3 - should lead to the effective development of the Chinese market at the bottom of the pyramid, which is the largest in the world.
Unless Northamerican, Chinesse and European leaders listen very closely to the first and second part of these comments, discussions, debates, and dialogues, they will certainly be playing with fire. My humble recommendation is that they retain a system architect expert on EWPC to help them coordinate a generative dialogue to come up with a new vision and develop a transition to EWPC. An expert on gas without price controls (GWPC) should no be difficult to develop in a parallel generative dialogue.
As the readers can attests, I gave the benefit of the doubt to IMEUC as a market design and architecture, but as his author was unable to produce a synthesis, nor resolve its internal contradicitions, it is now very clear that it is not such thing. In electric power systems, optimization is done for the whole, no by optimizing the parts as IMEUC does. If anyone needs the post on wholes and parts, I will be happy to post it.
Fred, as Len does not have one, what's your market design and architecture?
If anyone has a real market architecture and design, please by all means, proceed to make a synthesis like the one I have done in Solving the Tough Electric Power Market Problem for everyone to see. Meanwhile, EWPC is the winning market design and architecture.
Ferdinand E. Banks 8.31.07
"No tinkering with the demand side can compensate for gaming and the lack of investment on the supply side."
Was I really smart enought to say that? If so, wake the town and tell the people, because the prosecution rests its case.
Joseph Rosenthal 8.31.07
Fred doesn't have a vested interest, Jose Antonio, at least I doubt that he does. As soon as the hyper-technological approaches that you advocate (and I don't bother trying to absorb) prove that they can compete with the coal-based electricity pricing in Utah or the nuclear-based electricity pricing in France, I'll be interested. I am in government, and I represent ordinary folks. They don't want to think about electricity all day long. They want to watch TV at night and have toast and coffee in the morning. If you find someone to implement your scheme and you reach lower prices for the average Joe than what the average Jacques pays in France, please let me know. Until then, I'm going to try to get Connecticut to be more like France, 'cause that sure looks like the obvious answer.
Roger Arnold 8.31.07
OK, I recant. Sort of. I should know better than to write posts on complex issues in the wee hours of the morning after staying up late. It really does affect one's brainpower.
Jim Beyer's mention of old East German coal plants is what broke through the fog when I reread it this morning. However, it's not really so much a problem of gaming the system; it's that the "grandfathering" of incumbent emitters is an unfair government-created windfall to established players.
The example that Len should have used is not a cheap nuclear power plant, which uses no fossil fuels, but rather a new and substantially more efficient fossil-fueled plant. Because it's new, its operators would be forced to pay the full price of fuel + allowances. Meanwhile, their established competitors are holding entitlements that generate all or most of the allowances they need to stay in business.
One could argue that that doesn't really matter; the old technology is not being subsidized, in that the entitlements held by the incumbents have the same value for them, whether the allowances they generate are used for to cover their own operations or sold to others. So it's still in their interests to adopt the new technology and reduce their own use of carbon. But as a matter of principle, the government should not be involved in handing out windfalls to selected groups of players--however much those groups may be in favor of the idea.
I suppose there are ways to address that problem. What I've called "entitlements" could all be held by the government, and the set number of carbon allowances periodically auctioned, in a similar manner to T-bills. But that sounds like an invitation to mischief. I'll have to think about that a bit more.
Jeff Presley 8.31.07
Roger et al,
Those in favor of cap and trade from a logical perspective are joined by those in favor from a purely avaricious stance. The fact of whether "we" can somehow legislate "honesty" in the US is irrelevant on a world scale, where Putin and his cronies are already gaming the system for their ill gotten gains pile. And if Putin is bad, there are others many, many times worse.
Jeff Presley 8.31.07
As usual your articles are both thought-provoking (plus other kinds of provoking) and stimulating. Although on balance I agree with your thoughts about nuclear, there is an elephant in the room no one has mentioned. What about nuclear in the hands of rogue states like Iran and North Korea, who claim it is for peaceful purposes and then (one of them anyway) set off nuclear explosions? In the same manner that we can't trust "politicians" out "there" to not cheat at cap and trade, we can't trust them to not cheat at nuclear arms.
I'd like to hear your reasoned thoughts on how nuclear gets deployed worldwide AND we aren't blown to smithereens by crackpots in the process? Or as Andrew GIll might say, there is heavy metal and there is heavy metal.
Of course you know my opinions on AGW already, so naturally I'm far more concerned about the fallout from, well fallout, than I am from CO2 hot air.
Ferdinand E. Banks 9.1.07
Jeff, North and South Korea will eventually do an East and West Germany. All it takes is the right boss-man in the North, and they may already have him. As for Iran, I seem to remember something someone said to me at Fort Belvoir: the difficult we do immediately, the impossible takes slightly longer.
Ferdinand E. Banks 9.1.07
Joseph, there ARE two topics that I have a 'vested' interest in, and these are oil and electric deregulation. I'm referring of course to mental rather than monetary satisfaction. I'm simply unable to nod my head or tune out when I hear nonsense about these two things. Electric deregulation was introduced with the aid of a barrage of lies and misunderstandings; and what I remember of macroeconomics (and financial history and theory) tells me that this oil thing could become very nasty.
As I mentioned somewhere in this forum, on the subject of global warming I am not even a dilettante, but as Tony Blair once said, if you are serious about doing something about global warming, you can't turn your back on nuclear energy. You also can't turn your back on it if you prefer more money to less, because a careful study of the Swedish experience makes it clear that an OPTIMAL nuclear commitment is unbeatable. Here I can mention once again that if the Finns had thought that any other choice made economic sense, they would NEVER have commenced building the largest nuclear facility in the world.
About Jose's approach to deregulation, and perhaps a few other things. He would have been a wonderful speaker at the conference in Portugal where several well-known and very intelligent academics (such as the late Fred Schweppe) helped to put the deregulation show on the road. Had I been an engineer on that occasion I might have bought at least a part of it, but unfortunately what they were saying was (as is) out of the question in terms of mainstream economic theory. Moreover, as Larry Chow said in Hong Kong when I was on my soapbox there, the situation today is that most engineers think that deregulation is loony tune, although as a gentleman from New Zealand once confided to me, he doesn't 'think' that it is crazy, he knows it - but that is precisely what his employer does NOT want to hear, and so he makes a point of keeping his mouth shut.
Len Gould 9.1.07
Jeff: "What about nuclear in the hands of rogue states like Iran and North Korea, who claim it is for peaceful purposes and then (one of them anyway) set off nuclear explosions? " It is logically difficult for me to see how a citizen of the USA can take that position, given the USA's huge arsenals of nuclear weaponry, delivery systems which can reach anyone worldwide, long history of setting of test explosions, long history of militarily invading other sovereign countries, yadda yadda yadda. Now, please be clear, I am not at all criticising here (though I have been vocally against the Iraq adventure from before it's beginning), I am trying to address the issue of "legitimacy" which IMHO is an absolutely critical pre-requisite to such actions, and often completely ignored by US thinkers. US diplomacy, rhetoric, etc. needs to stop operating from the position that "you less important citizens of the world need to do what we tell you, though we can simply do anything we want".
For the past few decades (eg since WWII), US has been strong enough economically to get away with that attitude, but has made some very dedicated and nasty enemies in the process. Point is, how much longer will you have that economic advantage? Don't get me wrong. I think that the world would likely be better off generally if Iran doesn't develop a strong nuclear weapon capability. It's just that statements such as "I can have whatever I want, but you can only have what I say" simply make the problem worse rather than better.
What will make the problem better is more difficult to say. I think it absolutely involves broad international co-operation of all peoples who agree to a set of ideals, all acting as equals. I realize that's going to be a difficult transition for citizens, but likely required in future.
Len Gould 9.1.07
"a difficult transition for US citizens"
Jeff Presley 9.1.07
The more critical element here is that the US has had so many nukes for so long, and has ALWAYS refrained from using them, AND has fail-safes in place to keep any rogue psycho from setting one off. There are leaders in North Korea and Iran and elsewhere who are certified nutcases by ANYONE'S definition (except their own of course). Leaders who kill their own people with impunity will not hesitate to kill YOU with even less impunity. I don't even have to get into the cult of death surrounding Islamic nutcases, it is self-evident. You want them to be equal with YOU, that's your right, but there is NO WAY I want them equal with ME.
Statistically, the odds you're going to die a horrible death from a nuclear weapon is vastly greater than the odds you're going to die from anthropogenic global warming, hands down. However, since the only known permanent cure for a psychotic nutcase is a bullet to the brain, perhaps AGW is the easier task even if it isn't as real a threat... :)
Joseph Rosenthal writes "I have noticed that places like France rely heavily on nuclear power and have real good rates. I am not aware of any place that relies heavily on renewable power having decent rates...."
France gets 38.9% of its primary energy from nuclear but also gets 5.3% of its primary energy from hydro (BP statistical review 2007).
French electricity rates are not that good compared to other countries in the EU;
French electricity rates would be much higher if they could not spill their surplus generation into the rest of Europe outside of peak demand;
French nuclear and hydro plant were built at a time when the EU (then the Common Market) permitted state subsidies to the power industry. The rates would be higher otherwise
Successive French governments justified the subsidies on the grounds of security of supply, as France has very little in the way of economically exploitable fossil fuels.
Ferdinand E. Banks 9.2.07
What was it that Mr Nietzche (sic) said: "The future is as important for the present as the past." The future here is improved and more efficient nuclear, and a drying up of gas and oil, and eventually high quality coal. That justifies the employment of nuclear at the present time, by which I mean that nuclear belongs in the energy portfolio together with renewables, although I am NOT claiming that it should dominate that portfolio. On that topic I have no opinion
Jose Antonio Vanderhorst-Silverio 9.2.07
I will take into consideration your apparent difference in perspective from that of Joseph, which may mean that you are not perfectly like minded. Maybe you are the leader, and he is the follower.
In my ongoing research to my response to you, I perceived that you didn't go back to Jay's article, where I have recent questions also pending for you. For me Ohio's re/regulation is very important from a global perspective, for entities as diversed like greenpeace and the WTO. My comment went as follows:
Jose Antonio Vanderhorst-Silverio wrote on 8.30.07:
A flash from toledoblade.com by Jim Provance --- OHIO re-regulation update to Fred Banks... ... in a speech before lobbyists representing heavy industry, utilities, environmentalists, and consumer and business groups, Mr. Strickland held out the possibility that a competitive electricity marketplace could yet develop.
But until it does, the generation of power would be subjected to renewed regulation by the Public Utilities Commission of Ohio.
"This is not a plan for the utilities,'' he said. "It's not a plan for manufacturers. It's a plan for Ohio. It's a plan to protect existing jobs and to attract new jobs.''
[So far... it is not about electricity, but jobs...]
Mr. Strickland wants to slow Ohio's march toward an open electricity market that has not generated true competition for most customers and has resulted in rate shock in some states. Maryland customers' rates spiked as high as 72 percent.
"We now face a choice,'' he said. "We can embrace unchecked monopolies presented under the guise of a deregulated marketplace, a false marketplace that would stifle our economy, and leave to chance the development of innovation.
"Or we can embrace a carefully crafted hybrid approach that recognizes [that] how we generate, distribute, and price electricity affects every one of us every day,'' he said.
[Now he is tallking about a false marketplace that has not generated true competion.... Yes Fred, all deregulation done in the US is about a false marketplace. But, do you believe on a carefully crafted hybrid approach is the way to go...]
By including nuclear power in his "advanced energy'' mix, Mr. Strickland agreed a utility like FirstEnergy, already a heavier producer of nuclear power than its Ohio counterparts, will have a built-in advantage in meeting the new standard.
[WOW Fred... a key question: Is FirstEnergy the reason that competition has not developed in Ohio? A carefully crafted approach is available and can be done with EWPC, the winning market architecture and design as can be understood from all of the above comments.
There are only two stable states: vertical integration and EWPC. But vertical integration is very, very costly. A hybrid approach will result - as the August 26 "Debate about to begin on electric deregulation," by Mr. Provance - in " a caotic, intolerable set of circunstances that will lead to a lack of predicatbility."
Yes Fred "somewhere out there is a scheme [EWPC] that if introduced and implemented will save the day." First Energy, for example, as one of the impediment to competition, will need to decide in which space it will play: retailing or transportation or generation. The scheme, however, requires a lot of leadership to get implemented.
Jose Antonio Vanderhorst-Silverio 9.2.07
Please also take into account this and the following post; 1) one recent yours, and 2) an old written by myself to help you in your research. Please consider responding as peaaple should do in a generative dialogue, where you are not your opinion and which is what is required to learn from the emerging future. Read under Jay's article for an introduction.
The problem with the Amory Lovins approach is it assumes that only the best, most useful, conservation/efficiency/distributed generation/renewable measures will be implemented.
Based on my experience in CT, that won't happen. Instead, we'll subsidize everybody's crony in the ethanol, fuel cell or smart metering business, etc. When you break open the electric system in a place like Connecticut, a lot of bugs hire a lobbyist and crawl in for a handout. It is better to just do one big thing, in my view, like build a nuclear plant, and then do your best to regulate the cost using traditional rate principles. If you try to do 10 good small things, you'll wind up doing 90 bad small things for campaign contributors.
That's the reality check.
Jose Antonio Vanderhorst-Silverio 9.2.07
The original comment, written more than two years ago, seems to be right on the topic of this set of two articles, which I am reading today to catch up. This was the reference:
Nicholas Kristof wrote an article today in the NewYork Times entitled "Nukes are Green". The headline was "The biggest environmental threat we face is global warming, not nuclear power."
The argument that nuclear power is green needs to consider nuclear waste costs to be complete. Natural Capitalism, the book written by Hawken, Lovins and Hunter Lovings, has enough insights about waste reduction to develop different and solid arguments, even without considering nuclear power.
Performing whole-systems engineering of the electric power system will lead to the preservation of ecosystem services through the integration Energy Efficiency (EE) and Demand Response (DR) to other existing technologies to sharply increase economic efficiency. The book recommends starting to solve the problem from the demand side with EE, in such an aggressive way as to avoid capital investments, in generation, transmission, distribution and utilization, by what they name as "tunneling through the cost barrier".
DR is a risk management tool, based on information technology and advanced metering, which leads to fully functioning, and the integration of, wholesale and retail markets. DR is like the glue to integrate distributed generation and storage resources, and the means to mitigate short run price volatility, and long run boom-bust behavior. Just as the DC-3 designers had to integrate 5 technologies, to ushered in the era of commercial air travel (see The Fifth Discipline of Senge), the last of which was wind flaps, so are DR and EE the needed technologies to start the era of reliable and cost effective commercial electric power system.
Jose Antonio Vanderhorst-Silverio 9.2.07
"peaaple" in the first of the two posts was an inintended typo for "people."
David Smith 9.2.07
I hate to throw some cold water vapor on this discussion, but following Malcolm's logic of regulating the "worst" greenhouse gases in priority of each gases' potential greenhouse impact, then it would not be methane that would be the first to be capped and traded et al. It would be water vapor. May I remind you all that it is water vapor in the first 30 to 50 meters off the earth's surface by which the most prevalent greenhouse effect occurs. In this zone water vapor is up to 1000 times more impactful than CO2.
And in a perfect twist of irony, isn't surface-prone water vapor the main emission from nuclear power plants? I've said it many times before and it bears worth repeating - Once the environmental nazis have successfully restricted our CO2 emissions via ill-concieved legislation and/or brain-dead judicial activism, we will see the day when water vapor becomes classified as a "pollutant". Of course, by that time the Western World will have gone the way of the Greek and Roman empires.........
One other thing. I work for an investor-owned utility. Yep, the corporate management has decided to embrace the global warming hysteria, and for reasons not so noble - Since we are in a regulated market, with a 10% mark-up on the electricity we sell to consumers, they've decided that they can now get away with implementing an energy generation portfolio based on premium pricing, aka more so-called "renewables" which cost two to three times that of coal-fired generation. Hey, why not? 10% of $10/mwh brings in over three times the revenues of coal's $3/mwh! This global warming hysteria, although probably killing off the merchant energy market, will result in a gravy train for investor-owned utilities, albeit at the expense of those poor electricity consumers.
In other words, the days of "lowest cost electricity generation" are over thanks to the fraudmongers and psuedo-scientists of the environmental movement.
Dave Smith Moscow, ID USA
Jeff Presley 9.2.07
Hear hear! Sounds so good let's just repeat it again here: In other words, the days of "lowest cost electricity generation" are over thanks to the fraudmongers and psuedo-scientists of the environmental movement.
Glad to know you work for a utility and aren't the Dave Smith of the world's biggest Dodge dealership fame. That guy, (or his sons now) would be far too wealthy to worry about things like the price of electricity, or gas. :)
Ferdinand E. Banks 9.3.07
Why is Ferdinand E. Banks (aka Fred Banks) such a great teacher of economics? Answer: because he doesn't waste time with irrelevancies!
If you want to know about coal (relative to nuclear) read THE NEED FOR NUCLEAR POWER by Richard Rhodes and Denis Beller (Foreign Affairs, January-February, 2000) - or, as I say to my students, read it and learn it PERFECTLY, or risk getting a failing grade.
As for low cost electricity, I almost think that the environmental people are a help there, because as Tony Blair and the delightful Angela Merkel have both said, CO2 suppression isn't going anywhere without nuclear. The more chatter about the environment, the sooner (I hope) we get the optimal amount of nuclear - whatever that turns out to be. I dont know the situation in the Big PX (or 'The World') these days, but in Sweden more nuclear would mean that the price of electricity could - COULD - be lower.
Going the way of the Roman empire. Hmm, how did porn and dope get into this discussion? Fraudmongers and pseudo-scientists? Whenever I deal with this topic I mention a few of those. Of course, there are some of those working the other side of the street too, but at least they are not luring naive economists and the like to Copenhagen and filling them full of beer in the Tivoli.
I'm CERTAIN that I know less about this environmental thing that most of the people contributing comments and articles on global warming to this forum, but I just can't see anything wrong with the desire to do something about global warming - whether AGW is a reality or not. With luck, we could (eventually) end up with the energy economy that we deserve - which is NOT, incidentally, the one that the environmental movement wants.
Malcolm Rawlingson 9.3.07
Dave, A very astute observation. Yes indeed if you were to follow my logic water vapour would be first "gas" on the list to control. Problem is - not that easy to do since mother nature has a big hand in water vapour production. Mind you mother nature also produces lots and lots of methane - much more than us poor humans can release.
You are correct that using current thermal turbine cycles releases heat to bodies of water and therefore raises the temperature of the water. but I think to cause evaporatyion on the scale to affect the amount of water vapour in the air the energy discharge would have to be much greater.
I think to raise the temperature of the Great Lakes by one degree would take a enourmous amounts of energy (tens of thousands of power stations I would guess) but it is just that - a guess so would need to do some calculations.
Most newer plants discharge into the cooler water at the bottom of the lake or river or sea so the effects on surface temperature are negligible. There is a slight warming effect locally (that is why the fishermen like the outfalls of power plants as that is where they get the big fish. In our case we have a regulatory limit of the delta "T" across the plant and we never exceed it even on the hottest lake temperature days.
Good point though. Direct conversion of nuclear energy to electricity would be the ideal and is one of the aims of fusion power research. That technology holds the promise of direct vonversion of the energy to electricity - cutting out the thermal cycle altogether. But even I will admit that is a long way off.
Malcolm Rawlingson 9.3.07
Yes Fred isn't it just pure irony that the net result of all this environmental/climate change hoo hah is that we get exactly the right energy economy not based on fossil fuels but based on very controllable and plentiful nuclear energy. The very direction we needed to go anyway but couldn't because of a few enviornmental lunatics.
I too have concluded that I know nothing about climate change and that I need to know nothing about it. The corruption of science bothers me as you know but if Kyoto is right we build more nuclear and if it is wrong we build more nuclear. And the more we build the cheaper they will be so nothing else can compete on price .....so we build more nuclear.
You have really got to like that. I do.
So Prof. Banks you have now dethroned Professor D.C. Leslie (who taught me the ins and outs of nuclear engineering many years ago) as my favorite professor of all time. Your logic is humorously flawless. Professor Leslie's logic on Nuclear Energy was flawless but he was not nearly so humorous.
Jose Antonio Vanderhorst-Silverio 9.3.07
To all readers, Part I
I will write 3 posts which are interrelated, complement my post above and respond to the comments of Fred and Joseph, and address a misunderstanding by Jeff.
So far, nobody has really responded with a market model to my statement “If anyone has a real market architecture and design, please by all means, proceed to make a synthesis like the one I have done in Solving the Tough Electric Power Market Problem for everyone to see. Meanwhile, EWPC is the winning market design and architecture.”
Fred said: "No tinkering with the demand side can compensate for gaming and the lack of investment on the supply side." Was I really smart enought to say that? If so, wake the town and tell the people, because the prosecution rests its case.
In addition to my first post under this article, I responded to Fred’s tinkering before in the post Playing With Fire and Collapse Part 12, from which I select “There was one way for one person to know too much and get stuck in debates: learning from the past. There is another way to learn: several people learning from the emergent future in a generative dialogue. The electric power industry is being exposed to new realities that were thought out by late Prof. Fred Charles Schweppe in the decade 1978-1988. That research he led is only recently being flesh out in what is a creative destruction – not tinkering.”
But a more down to earth response is that it is evident that tinkering is not a serious way to go about anything. This means that any fool could have written that. So, Fred you were not smart enough, have flunked the test, and are losing the case.
As I wrote above, instead of tinkering, professionals “Performing whole-systems engineering of the electric power system will lead to the preservation of ecosystem services through the integration Energy Efficiency (EE) and Demand Response (DR) to other existing technologies to sharply increase economic efficiency.” To break down existing barriers to allow the integration of EE and DR, a new electric power market architecture and design – such as EWPC – is required. Fred must have seen “Nukes vs Energy Efficiency and Demand Response,” but refrain to comment.
Later Fred added “About Jose's approach to deregulation, and perhaps a few other things…,’ I am very happy to tell everybody that the emergent EWPC is not about deregulation, but re-regulation. EWPC has a controlled market and a non-real time open market. [More in the next post.]
Jose Antonio Vanderhorst-Silverio 9.3.07
To all readers, Part II
So far, nobody has really responded with a market model… continued.
Joseph then said: “As soon as the hyper-technological approaches that you advocate (and I don't bother trying to absorb) prove that they can compete with the coal-based electricity pricing in Utah or the nuclear-based electricity pricing in France, I'll be interested. I am in government, and I represent ordinary folks. They don't want to think about electricity all day long. They want to watch TV at night and have toast and coffee in the morning. If you find someone to implement your scheme and you reach lower prices for the average Joe than what the average Jacques pays in France, please let me know. Until then, I'm going to try to get Connecticut to be more like France, 'cause that sure looks like the obvious answer.”
It is very easy to show (see Part III) that in any system with base load coal and/or nuclear generation, EWPC will “avoid capital investments, in generation, transmission, distribution and utilization, by what they name as ‘tunneling through the cost barrier’". EWPC is not a hyper-technological approach (just an approach) and so it is evident that, with your lack of leadership, you are doing a very bad service to the customers you seem to represent. No wonder that Lee Iaccoca thinks “we’ve lost the connection between politics and public service.” I believe you should be very interested to absorb EWPC to keep your job.
Customers want affordable and reliable electricity (again see Part III). They don’t need to know what generation mix is. In fact, for many reasons, it is not advisable to have too much of one kind of generation capacity. Under vertical integration expansion planning and stable certain future with a fairly accurate demand forecast there is an optimal mix that resulted in the least cost. Customers don’t need to know what the mix is.
But now, we are facing a transition and a lot of uncertainties as expressed by the different opinions above. The old planning tools are no longer useful and the planning assumptions no longer hold. There is a lot of uncertainty and long run demand forecasts are only bets. Investing in a generation unit that might be obsolete in a few years is really very risky proposition.
I don’t care whether coal, nuclear, hydro, renewables are installed in the generation mix. All I care is that private developers compete and assume all the risks, under robust, complete and fully functional markets. Markets where there is neither lack of investments on the supply side nor lack on investment on the demand side (all barriers are taken down), and where generators and retailers operate under no-nonsense prudential regulations, is what is needed. [This responds to more in the next post.]
So I repeat once again, …”EWPC is the winning market design and architecture.”
Jose Antonio Vanderhorst-Silverio 9.3.07
To all readers Part III
"Lowest cost electricity generation" is a good statement to get many readers on the same page. It is also good for Joseph, because his "reality check" that I quoted above is mistaken and it also stresses even more that he might not be representing ordinary folks well. I repeat, Joseph Rosenthal said before: "It is better to just do one big thing, in my view, like build a nuclear plant, and then do your best to regulate the cost using traditional rate principles. If you try to do 10 good small things, you'll wind up doing 90 bad small things for campaign contributors. That's the reality check."
The idea of a system with just one big thing is very, very costly, because the parts are unreliable and the load is variable. That is why peaking units are required and they are the marginal units.
Lowest cost electricity generation does not make any sense to a system engineer, nor to the end customers that pay for it. As an old system planner, I will tell facts and the origin of the idea.
Under vertical integration, systems engineers made long run least cost expansion plans and as a result came up with a generation mix adapted to the forecasted long term demand. Such optimization was to minimize the costs of investments, operation, maintenance and outages to produce reliable electricity.
To produce reliable electricity is a property of the whole system not of the parts. To have 24 hours of loss of load probability - as many systems were designed - generation reserves of 20 or 25 percent resulted for many systems.
I read that PJM had recently more than 30 percent reserves. That is one of the main reasons that demand response is not attractive, because it makes obsolete a lot of generating units.
That is also why retail customers get rates which are way above the cost of base load generation. They have a lot of coal units, but ask what is the retail rate residential customers are paying for.
Hydro and nuclear seems a good mix. However, with a very uncertain future demand and with a lot of climate changes working out, I would not bet on it and have some gas installed. Or better yet, I would develop the resources of the demand side to integrate it as active demand, or said in other words develop an effective rationing system or still in another way change demand from inelastic to elastic.
Sorry for the class. But I fell it was needed for some of the people posting their ideas without sufficient understanding of electric power system planning.
Don Giegler 9.3.07
Seems like a pretty close-minded lecture, Jose....
Jose Antonio Vanderhorst-Silverio 9.4.07
Don and anybody else that might perceive my Part III post as closed-minded.
It seems, but the post is not closed/minded. It is just that a power system is a very complex system that cannot be planned and designed by debate, among stakeholders groups. The system should be design by a system planner leading to ultraquality transportation.
Some highly respected professionals in the IEEE said that an electric power system is the most complex machine ever built. One of the greatest mistakes done in deregulation was the lack of leadership that the engineering community had at the outset of deregulation. Any one that needs more details please read EWPC: People Coordinating and Cooperating with Electrons Part 2.
The conclusion is that since market architecture and design, like EWPC, was not considered in the decade old debate, a lot of value destruction has resulted. With EWPC the deregulation debate should be over. Ohio's re-regulation process is great opportunity for the whole world, because the utilities already recovered deregulation costs. European Union authorities might also be very interested in looking deeply into the issue, as the July 1st deadline is over.
Joseph Rosenthal 9.4.07
I have a hard time finding European electricity prices (I know how to find U.S. prices well), but here is what the folks at power engineering recently came up with for 2007 electricity prices in Europe (in U.S. cents per kwh):
Denmark 22.89 Italy 15.74 Germany 13.16 Netherlands 12.62 Belgium 11.43 UK 11.16 Spain 10.35 France 8.54 Finland 6.95 Sweden 6.60
Now, I understand from our mutual friend Fred Banks that Sweden, Finland and France are all heavily invested in nuclear, though he has lamented that Sweden has squandered this advantage.
For comparison's sake, Power Engineering lists the U.S. average as 9.28. That is because of the smart places that rely on central station power run by a utility, and not because of the dumb places that expected something called the "market" to build their power plants and give them a bunch of fancy meters and whiz bang renewables.
Electricity is or should not be a playground for anyone's theories and notions. It is a service essential to modern life. We know a way to provide that service at reasonable rates--central station power. If you are not concerned about the environment, use coal to provide that power. If you are concerned about the environment, use nuclear to provide that power (and yes, build some reserves, apparently they're not too costly or else France would be choking from them.)
The burden of proof is on anyone else if they think they have come up with something better, and I'm not interested in Connecticut being the guinea pig. We've suffered enough from theories and platitudes.
Jose Antonio Vanderhorst-Silverio 9.4.07
To all readers,
I see that you learned a little bit from the above posts. I feel you want to dis "Connect" i "Cut," Connecticut from being the ginea pig to go back to good old days of vertical integration. My advise is to help the costumers you represent be better served.
Your Connecticut reality seems different from what the ABACUS report ranks the state. Conneticut is shown as having made "Medium Progress," on place 10 right after Pennsylvania and even better than Ontario, and way above the states that have made no progress at all, like Vermont, Wisconsin, Florida, Lousiana, Nevada, North-Carolina and Washington.
So I am sure from that information, that Connecticut has the opportunity to go forward, rather than backwards, to get away from the scam of deregulation and into EWPC, instead of returning to vertical integration as you suggest. As Fred would say, please take a failing grade.
Notice that our mutual friend Fred is keeping quiet so far. By default, that is a very strong message.
Joseph Rosenthal 9.4.07
I checked the link you gave. You tout the Texas Electricity market. Texas' residents pay far more for electricity than their neighbors, and far more than the neighbors of those neighbors. Far more. Retail choice for residents is not just a bad policy, but it is not policy at all. If you are going to tout what I view FROM A PRICE PERSPECTIVE AS WELL AS THE NUMEROUS SLAMMING ISSUES, the disastrous Texas effort regarding retail choice, then there really is no point in our discussing electricity matters. We have no overlap of concerns or goals.
Ferdinand E. Banks 9.4.07
Are you sure that the figures in your comment are prices, and not costs? If so, I'm absolutely amazed that people are willing to pay higher prices for electricity than we pay in Sweden without taking to the streets. Also, I seem to remember telling the good Jose and/or a few other persons several years ago that the situation in Texas was nothing to write home about. I pointed that out after some hypocrite claimed that Texas had the best deregulation experience in the universe.
So I'm your favorite teacher, am I Malcolm? The last time I heard that was at a huge party in the Uppsala castle, and the person rendering the judgement was a potential Miss Universe. Fortunately my wife was standing nearby, which kept me from making a fool of myself - or perhaps I should say a bigger fool than I appeared with the talk that I gave earlier in the evening.
Jose, I don't understand what you are after, although this might be a good place to cite one of those wonderful aphorisms from the US navy: ON EVERY SHIP THERE IS SOMEONE WHO DOESN'T GET THE MESSAGE. Deregulation is a catastrophe: that's the bottom line, no matter what schemes you've dreamed up to make the impossible possible. If I wasn't so soft-hearted I would get back up on my soapbox and you would really see/hear some non-academic language. It's no less than amazing how the lectures I gave in Hong Kong were right on the money, which seems to have infuriated many of the ladies and gentlemen who heard them. They were so desperate to see deregulation succeed that even honest citizens turned into blatant liars. Put another way, 'HELL HATH NO FURY LIKE AN ACADEMIC SCORNED'.
Jose Antonio Vanderhorst-Silverio 9.4.07
To all readers, Part I
While Fred and Joseph worship the obsolete vertical integration, their observations have some merits.
Yes Fred, deregulation is a [global] catastrophe.
No Joseph, as can be seen by any impartial observer, I don't tout the Texas market at all. You are most probably right about a Texas scam, but you are completely wrong about retail competition, as it is the key to make demand elastic at lower costs, which is what you should be most concerned about for the customers you now missrepresent.
No Fred, your rhetoric won't erase "a more down to earth response is that it is evident that tinkering is not a serious way to go about anything. This means that any fool could have written that. So, Fred you were not smart enough, have flunked the test, and are losing the case."
Fred: my goal seems quixotic to a casual observer. Time will tell. I found my purpose on what has now become the emerging EWPC. I started in 1996 telling others the aim to place the Dominican Republic in the electricity map. However, from 2003 on, I found that there was a conspiracy, not to extend the deregulation scam worldwide, which occurred, but to stop competition altogether to extend the useful life of the inefficient vertical integrated utility, which both of you defend for some unknown reasons.
The whole debate - an uneven match of two evils - was limited on purpose between deregulation and vertical integration. A superior third way has been emerging since the 80s, which with my effort now makes the debate a waste of time and a value destruction of large worldwide proportions.
Joseph, I agree: the ABACUS system was designed to show progress in competition, not to show lower prices. So, even though vertical integrated systems are not competitive, they are much better deals than the deregulated scams. California IOUs were the mastermind of the failure of deregulation as they designed it. Enron’s greed just made the job easier. A well designed and perfectly executed, public relations campaign destroyed deregulation forever. Now I am in the job of destroying vertical integration as David, beat Golliath. A hint: the judicial system of the US should look very closely at the issues.
When Jim Bayer wrote his hint on 8.28.07 ”THERE ARE NO CONSPIRACIES” and Malcolm agree, they missed a great opportunity to understand what is really going on. As can be seen from the post A Generative Dialogue Without Illusions Part 5, “According to Eamonn Kelly in his book “Powerful Times: Rising to the Challenge of our Uncertain World,” page 35, Winston Churchill said: “A lie gets halfway around the world before the truth has a chance to get its coat on.” On page 36, Kelly says that “Conspiracy theories can, ironically, provide an ordered framework with which to understand chaotic events.”…
Jose Antonio Vanderhorst-Silverio 9.4.07
To all readers, Part II
Picture yourself in the year 2000, and as a practical analyst that knew about the protection inherent in utility regulation and also knew what had happen in the US Midwest in the summers of 1998 and 1999. … “The debate in California has changed remarkably over the past year or two. Discussion now focuses not on whether retail competition or direct access is possible, but on how to make it happen. The three California investor-owned utilities affected by the commission's decision convened an industry working group, called the Western Power Exchange (Wepex) to address the issues related to implementing the new competitive retail market.” Please answer, to the best of your knowledge, if there might be some ground for a complot theory on which Enron was a just a casualty.
Now, to show that I don’t tout the Texas Market, in the link it is very clear that while the authors ABACUS system shows Texas in the “first place,” it lack all of the essential elements of EWPC as is found in the synthesis post Solving the Tough Electric Power Market Problem.” See now selected paragraphs:
I strongly agree with your statement that regulated pricing (also for Len) is a key barrier to retail electricity choice. This is phrased on slides 14, 16 and 43 as the “native load” barrier.
The dawn of electricity competition in Texas is about eliminating price controls on competitive activities. Difficulties experienced last year, because of lack of demand response, meant that there is not enough integration between retail and wholesale electricity markets. The Texas market is just immature.
Texas is not a Pure-Disco state either – competitive retailers should be able to replace 100% of the old monolithic regulated incumbent’s retailers [of Texas] to reach 0% overhead -, so there is a space available to reach the End-State. No nonsense competitive retailers (also for Len) business model innovations [just in EWPC] are at the center of market development (slide 21).
… The generative dialogue should approach altogether the difficulties in the interaction between regulated and competitive affiliates to get to wires-only (pure-disco). There is another argument under EWPC to support a pure-disco arrangement: transportation (transmission and distribution) should be kept whole (integrated) to manage efficiently and effectively short and long run systemic risk (slide 17).
Don Giegler 9.4.07
Let's see if this poor pilgrim can understand this tremendously complex system that only system planners can deal with. It has a time response, possibly the price of a kilowatt-hour, that should not be limited. However, your system planner will shape the forcing function for the system, possibly demand for a kilowatt-hour, so that "ultraquality transportation" results. And since "Lowest cost electricity generation does not make sense to a system engineer, nor to the end customers that pay for it.", your system planner will give you a kilowatt-hour you can afford when he thinks you need it.
A phrase I picked up 30 years ago while trying to help Bechtel Espana get the Sayago plant launched was, "Aqui hay gato encerrado!" Yours truly, Fred, Joseph and possibly others probably agree that EWPC deserves such an accolade.
Ferdinand E. Banks 9.4.07
You use the expression "a superior third way", Jose. That was one of the themes in Graham Greene's 'The Ugly American', wasn't it? And regardless of what was intended it turned out to be just another scam. Or, as Greene said "Such naivité is a form of madness."
If you didn't know, the business model of vertical integrated IOUs is to win cases to the regulators, which are their customer and partner. As regulators are easily taken, customers, especially residential and small and medium size businesses have been taken for ride for many, many years. Just a great scam.
This is how it worked at PG&E in the 80s. "PG&E was right in the middle of pitched analytical battles over nuclear power, environmental protection, and utility deregulation." So far small customers have lost 20 years in the low signal to noise ratio debate!
"The primary focus of PG&E's management attention was therefore not on customers, but on formal public hearings before the CPUC. Fittingly, eight of the nine members of the company's executive Management Committee were lawyers." Everybody knows the similitude between lawyers ant cats. No, los gatos no están encerrados. We need the justice departments to lock them up.
The quotes were made by Adam Kahane, which was the Corporate Planning Coordinator, and tells in his book “solving tough problems,” of a PG&E retreat in his second year that "was a profound letdown. I watched the business sections in stupefied disbelief. The executives ignored the analytical material, played power games, ganged up on each other, pretended to misunderstand (as Don is doing), settled old scores. I was deeply disillusioned and felt my commitment to the company slipping away. This was not the brilliant, informed, rational decision making that I had been trained to expect..."
Vertical integration is just about price controls, which has been known as inefficient (read corruption) in many industries. That is why, Electricty Without Price Controls (EWPC) for the end customer is what is urgently needed.
I suggest everyone to read Lee Iacocca’s “Where Have all the Leaders Gone?” His book covers 4 parts, with the title as the first. Where have all our friends gone? Is capitalism letting us down? Can America be great again? Those questions are not just for America, they are for the global world.
Don Giegler 9.5.07
Lock who up, Jose? The IOU Execs, the CPUC or Lee Iacocca ? Down in our neck of the woods, Steve Peace seems a likely candidate. Or perhaps Loretta Lynch, S. David Freeman, Gray Davis or some of the other unsullied Enron "co-conspirators".
Don Giegler 9.5.07
Speaking of signal-to-noise ratio, your schtick is at least in need of some good Wiener or Kalman filtering.
Jim Beyer 9.5.07
Fred, I think you mean "The Quiet American". I think your (Freudian) slip is showing!! But anyone who read Graham Greene is okay in my book.