Energy, Technology, & Policy

Light Pollution Energy Waste

aealexander — Sat, 28 Jan 2012 01:03:49 +0000

I have been very interested in the topic of light pollution for several years now, and I think that it is totally relevant for us to talk about as a class learning about energy and policy. The article in the link below is about the topic of light pollution and how it is wasteful in terms of dollars, CO2 emisisons, fuels and so forth. This paper estimates an annual US cost of light pollution to be about $2 billion.

http://physics.fau.edu/observatory/lightpol-econ.html

I also researched a little bit about the Northeastern blackout in 2003. The link below estimates that this blackout resulted in “11 deaths and cost an estimated $6 billion.”

http://www.scientificamerican.com/article.cfm?id=2003-blackout-five-years-later

The blackout apparently did not last for a huge amount of time, but it was certainly problematic for everyone affected by it. I want to know where the $6 billion was spend or lost from the blackout, and if maybe perhaps the blackout saved money because of the limited energy usage in that part of the North American continent. Maybe the blackout was good for the country in that it showed us that we cannot keep up our wasteful energy habits. I think that is definately a need for limited usage of lighting, especially for empty parking lots and highways at night. Even though light pollution is not the biggest waste of energy, it certainly is a problem. The image shown in class of the earth at night that shows the ‘rich’ countries definately shows way too much light being used, especially since most human beings fall asleep for most of any given night. Why do we need so many street lights for no one being awake?

Also, below is another article that shows reasons why too much light is bad for people’s safety and security:

http://physics.fau.edu/observatory/lightpol-security.html

I would like to do more research on this topic, but it seems to me that wasteful light habits are a problem and are being ignored by most people in the world. Plus, I like to think that most people would enjoy walking out of their front door, looking up, and seeing the Milky Way and all its wonders. You don’t need to have a power outlet to enjoy that.

Mandated Use of Renewable Energy Sources

katpatcar — Sat, 28 Jan 2012 00:00:16 +0000

Renewable portfolio standards (RPSs) are used to increase renewable energy generation by requiring electric utility providers to supply a minimum amount of electricity from renewable energy sources* by a predetermined date. The figure below shows the states that have RPS requirements and goals as of March 2009 (33 states and the District of Columbia) [1]. The RPS requirements are all different but generally specify that 10-30% of the electricity sales in the state will be from renewable energy sources by the year 2015-2025.

Now, many people, without hesitation, will agree that getting more electricity from renewable sources, such as solar, wind, and tide, is a good, sound course of action for a variety of reasons. What people don’t agree on is whether RPSs should be used or not.

Currently, the coalition, Maine Citizens for Clean Energy, is getting signatures for a ballot initiative that will change Maine’s current RPS, 10% by 2017, to 14% by 2017 and 20% by 2020 [2]. They state that this will lower energy prices and increase the number of jobs [3].

The governor of Maine, Gov. Paul LePage, told a group on Thursday (January 26, 2012) that this ballot initiative “will destroy the state of Maine” [4]. Governor LePage stated that according to the Maine Public Utilities Commission, the group’s plan would increase electricity costs from $44 to $88 million per year [5]. Maine already has the 12^th highest electricity prices in the nation, and Gov. LePage says that the increased prices will hurt the economy and job growth [5]. In his own words, Gov. LePage believes consumers should have the “choice when it comes to energy decisions, rather than government imposing mandates on Maine people [5]”.

Now, the group’s new RPS proposal is not astonishing or sensational compared with other states’ RPSs (listed here in [1]). Furthermore, one study stated that the initiative would initially increase residential bills up to 84 cents a month but would then save $8.70 by 2030 [6]. A poll last October indicated that 76 percent of Maine favors the initiative with 17 percent opposed and 7 percent undecided [6, the comments from this source give an energetic representation of what some Mainers are thinking].

What would you vote if you were a Mainer? The answer is not simply whether you think your state should rely more on renewable sources but concerns who should make the decision of where your electricity comes from. Or is your answer based on balancing the short-term and long-term economic ramifications? Studies have shown that states with a binding RPS have electricity prices that are 39% higher [7]. Should your reasoning be based on the long-term environmental costs/benefits? Clearly, the difficulty is that there are different reasons why people will either support or oppose RPSs and it is challenging to quantify the economic/environmental effects.

Obviously, whatever happens in Maine will affect us here in Texas very little. However, while there currently is no federal RPS, the idea has been floating around, though each attempt has failed. For example, in 2009, President Obama proposed that 10% of U.S. electricity come from renewable sources by 2012 and 25% by 2025, a national standard that was to be incorporated into a comprehensive energy bill [8].

RPSs offer a solution to incorporate more renewable energy technologies. Many states already have RPSs, and in the future, a national RPS could become mandated. The issues surrounding RPSs are both economic and environmental, and there are many people that support or oppose RPSs. Mainers** are debating the issue now. What do you think?

*Note that different states have different requirements of what is considered a renewable source, as seen in the following figure [1].

**An interesting Maine side note: the DOE recently reported that Maine could potentially supply 10% of the nation’s tidal power energy (15 terrawatt-hours of electricity per year) [9].

1. http://www.epa.gov/chp/state-policy/renewable_fs.html

2. http://www.nawindpower.com/naw/e107_plugins/content/content.php?content.9292

3.http://www.cleanenergymaine.org/pdfs/Maine%20Citizens%20for%20Clean%20Energy%20factsheet.pdf

4. http://www.onlinesentinel.com/news/lepage-energy-bill-would-kill-jobs_2012-01-26.html

5. http://mdi.villagesoup.com/column/columnpost/energy-proposal-a-job-killer/480346

6. http://www.kjonline.com/opinion/renewable-energy-is-a-moral-imperative_2012-01-24.html

7. http://www.instituteforenergyresearch.org/pdf/statereport.pdf

8. http://green.blogs.nytimes.com/2009/02/20/next-up-a-renewable-portfolio-standard/

9. http://www.sustainablebusinessoregon.com/national/2012/01/maine-could-generate-10-percent-of.html

Keystone XL Pipeline Debate Outgrowing The Issue At Hand

mranderson0416 — Thu, 26 Jan 2012 19:41:37 +0000

The recent battle between Congress and the Obama Administration over the proposed Keystone XL pipeline expansion came to a head of sorts when the State Department rejected the TransCanada route proposal last week. The rhetoric has been amplified by environmental and energy pundits on both sides. An editorial in The Independent [1] has called the decision “…one of the bleakest chapters in our nation’s history” and stated that Canadian Prime Minister Stephen Harper “spoke directly with President Obama to express his ‘Profound Disappointment.’” The article continues to say:

“Jobs creation, our nation’s energy future, and the reputation of the United States as a safe place to invest capital will command attention in the coming presidential debates. President Obama has made a precarious choice.”

On the other side, environmental advocacy groups such as the National Wildlife Foundation have argued that the pipeline will be of no benefit to Americans anyway- the pipeline terminates at the Gulf of Mexico, and Big Oil is simply planning to sell the oil to other markets and reap substantial profits. Additionally, they state that there will likely be far fewer jobs created than estimated by TransCanada, so it’s not worth risking the environmental degradation that could result from a spill.

In reality, both sides are probably taking an extreme view of the matter, as a quick look at the facts seems to confirm. The proposed Keystone XL pipeline is an extension of an existing pipeline, and extends from Cushing, OK to the Texas Gulf Coast city of Nederland. Additionally, a new line will originate in Alberta and terminate in Cushing, OK (the current operational Keystone Pipeline, completed in 2011, travels from Alberta to Steele City, NE and then to Cushing). The link from Cushing to the coast is intended to transport crude for eventual export, although it is conceivable that oil could flow in reverse, from the gulf to Cushing, for redistribution to refineries if needed. The Keystone XL would roughly double the present amount of oil being exported through the Keystone Pipeline, from ~590,000 bbl/day to 1.1 million bbl/day [4].

The anti-Keystone XL argument that the pipeline won’t create very many jobs has some merit, although actual jobs numbers are likely between the 4000 and 200,000 figures cited in the media [3],[4] – the original Keystone project employed around 9000 people for 36 months, and TransCanada estimates that the Keystone XL project will employ around 20,000 total workers, when including the manufacturing of parts in other areas [5]. Nonetheless, pro-pipeline supporters note that these are jobs which can be filled relatively quickly and will at least provide some employment- a good thing in the current economy.

The Athabasca Tar Sands (the source of oil which the pipelines will transport) are being developed by a number of different interests, including companies from Canada, the US, China, France, Norway, Japan, and others [6]. These companies undoubtedly have significant say in where and to whom they sell their oil, and having additional transportation infrastructure will benefit all parties involved. In other words, some of the oil is going to be exported, and some will be burned here in the US. However, concerns that all of it is going to be sold overseas are likely unfounded.

In conclusion, the Keystone XL pipeline can probably be best thought of as a highway, which is going to benefit many different corporations and entities. It will not solve US energy security issues, as its capacity is quite small compared to the amounts of oil imported by the US- in other words, there are also a lot of other highways. Additionally, it is no magic bullet for the unemployment problem. We would do well to reach a decision quickly about the pipeline and move on. If it does not get constructed, the oil in the tar sands will still go to those who have the rights to it- one way or another.

[1] http://www.texasinsider.org/?p=57730

[2] http://www.downstreamtoday.com/news/article.aspx?a_id=11890&AspxAutoDetectCookieSupport=1

[3]: http://business.financialpost.com/2012/01/24/bad-statistics-on-the-clean-economy/?__lsa=346784ec

[4] http://www.tarsandsaction.org/spread-the-word/key-facts-keystone-xl/

[5] http://beta.fool.com/bobbiejohnson/2012/01/21/part-three-understanding-transcanada-and-keystone-/1082/

[6]http://web.archive.org/web/20080409105246/http://www.alberta-canada.com/energyCommodities/files/pdf/oilSandsUpdate_December_2007.pdf

How to use our money and resources

rvcrawford — Thu, 26 Jan 2012 16:25:00 +0000

Climate change is the greatest crisis of this century. Right? But that’s what Al Gore has been telling us.

While the Earth has warmed a few degrees over the past few centuries, we can slow this trend by cutting carbon emissions from the current 392 parts per million (ppm) to 350 ppm [1]. But at what cost?

The solution to climate change and global warming is rather simple in terms of the idea, cut carbon emissions, but the implementation will cost billions, if not trillions, of dollars and it is not something that will be solved in the next decade or two but rather over the century [2]. Our current technology in renewable energy cannot even sustain our country, let alone the world. The needed efficiencies have not been achieved and an effective transmission system isn’t in place.

Bjørn Lomborg, adjuct professor at the Copenhagen Business School and author of “Cool It: The Skeptical Environmentalist’s Guide to Global Warming” argues that we are devoting our money/resources to tackling the complex, challenging problem of climate change while ignoring the “low hanging fruit” of today’s problems which effect many more people [3].

In a 2007 interview, Lomborg asks if the money would not be better spent on treating the “15 million people who are going to die from easily curable infectious diseases next year” [3]. The solutions to problems such as HIV-AIDS, malaria and malnutrition are just as simple in theory to climate change but much more practical to implement. Lomborg contends that the solution for HIV-AIDS is information and condoms. For malaria, it’s mosquito nets, medicine and spraying to keep the mosquito population down. For malnutrition, bringing people’s blood iron count up to nominal levels is as simple as giving them an iron pot to cook with. In addition, it has been shown that iron deficiencies reduce IQ [4].

So we are let with some questions. What should we do, spend exurbanite amounts of money on slowing global warming a little bit and lowering carbon emissions or do we spend far less money on problems we already have the answers for? Would preventing an increase of a few tenth of a degree make a difference at a cost of trillions of dollars? How much would it cost to adapt to the climate of the future anyways?

Where did this money to fight climate change even come from? Yes, some countries have pledge to put up money through programs like the Kyoto Protocol but isn’t this a global problem? But then again, the now developed countries are the ones that were burning the carbon over the past two centuries as they were developing. Maybe they should pay for it. But then what about the counties with emerging middle classes like China and India who rely on the current, cheap, carbon producing technology to increase their quality of life. Should they just halt what they are doing because they got to the party too late?

But if we decide to use the money to save the sick, malnourished people, that means there are going to be more people. Those people are going to need to eat. They are also going to have a carbon footprint. Regardless, it cannot be justified that controlling the carbon in the atmosphere is more important than millions of lives.

Perhaps we should rely on what got us into the problem in the first place to get us out; human innovation and ingenuity. Over the past century we have made unbelievable strides in science, technology and medicine and at an increasing rate. Is it not safe to say that the next generation will have even more and better ideas than what we have now. Isn’t it more likely they will have a better, cheaper solution for global warming. In the mean time, we save the people we can and make smart decisions about energy usage and conserving resources.

“At the end of the day, we’ll end up worrying about the thing which we can do little about, and forgetting all the other problems we can solve right now.” – Bjørn Lomborg

[1] 350.org. 25 Jan. 2012. <www.350.org>.
[2] “Comparing Cost Estimates for the Kyoto Protocol.” 16 Jul. 2002. Department of Energy. 25 Jan. 2012. <www.eia.gov/oiaf/kyoto/cost.html>.
[3] Bjørn Lomborg. “Let’s Improve life in the present, and the future.” 5 Jul. 2007 Spiked. 25. Jan. 2012. <www.spiked-online.com/index.php/site/article/3568>.
[4] Johns Hopkins Children’s Center. “Functional Significance Of Iron Deficiency In Children.” 6 Jun. 1997. ScienceDaily. 26 Jan. 2012. <www.sciencedaily.com/releases/1997/06/970606121500.htm>

Newberry Volcano Project and Hydroshearing vs Hydraulic Fracturing

lbissey — Thu, 26 Jan 2012 01:45:55 +0000

The Newberry Volcano Article: http://www.huffingtonpost.com/2012/01/14/geothermal-newberry-volcano_n_1206867.html

I’ve kept up with a lot of the media about hydraulic fracturing, which has not been received well and continually gets bad/misinformed press (mostly from the environmental side). After taking a natural gas engineering course last semester and now starting out in a hydraulic fracturing design class, I think I could say that I have fairly good judgement on what has been blown out of proportion or presented falsely. That brings me to this article. There are a number of articles on the Newberry Volcano which are almost identical to this one, so I figured it didn’t matter too much which one I chose. The title caught my eye, and when I first started to read it, I had no idea that it was tied to hydraulic fracturing. The main thing I noticed was that the process that is used to capture this geothermal energy uses “hydroshearing” which they say is similar to hydraulic fracturing, but not the same. Some other articles go as far to say that they are completely different.

They’re not.

They are still pumping millions of gallons of water down to fracture the rock and using proppant to hold the rock open, allowing for (in this case) water vapor to escape. They say the difference between the two is that hydraulic fracturing uses “chemical-laden fluids”, which implies that hydroshearing does not. The chemicals in the hydraulic fracturing fluids (which usually make up less than 2% of total fluid volume) are added to ensure proper distribution of fluid in the fractures and more even proppant settling. Others are added based on the type of rock that is being fractured and the potential chemical interactions between the fluid and rock. Seems to me that similar amounts of chemicals would need to be added to the water used in hydroshearing that take in account rock chemistry and that ensure proper proppant settling. But they don’t say this. They want to distance the two processes as much as possible because hydraulic fracturing has been bashed for its environmental effects. I would say that hydroshearing poses the same threats (which, to mention, is really only from damaged well casings that protect water aquifers. The same problems would exist when drilling for oil, not just natural gas and not just hydraulic fracturing). There would also be the issue of treating the flowback water before re-injection (not to mention the amount of water usage to begin with, which is another slam point for hydraulic fracturing). Still, they want to avoid the connection between hydraulic fracturing and hydroshearing because they want this new process to seem more “green” and environmentally friendly. Hence the new name.

Outside of my view on how the media presents hydroshearing vs hydraulic fracturing, I actually think that using Enhanced Geothermal Systems and tapping that source of energy is a neat idea. It’s like what Dr. Webber said though – it won’t solve our energy problems or provide enough to offset other sources of energy, but its definitely a start.

Tidal power: A vast and untapped renewable energy source

ianclayman — Wed, 25 Jan 2012 22:09:12 +0000

As the need for new energy sources is becoming more evident, tidal power is proving to be a formidable contender in the energy race. Tidal power is generated via the motion of tidal waves that ebb and flow daily in the world’s oceans. Tidal power is a very plausible renewable energy source that has minimal impact on the environment and could prove to provide large quantities of energy in areas that were previously being overlooked.

The Rance Estuary is the largest tidal power station in the world. It is located in northern France and was built in 1966. This massive 24 Turbine, 750 foot barrage has a peak rating of 240 MW but supplies an average of 96 MW. This amounts to an anual 600GWh which is roughly 0.012% of the power demand of France [1, 2]. As with any energy source, there are advantages and disadvantages that come with their use. Some advantages of Tidal power are that it “produces no greenhouse gases or waste, requires no fuel, has predictable tides, and has little to no environmental impact” [2]. Some disadvantages are that tidal power plants can only provide power for 10 hours a day and the conditions for potential sites are very specific [2].

A diagram detailing how tidal power is collected through a turbine and generator setup is shown below [2]:

In Korea, a “considerable effort is going into alternative energy sources that will produce fewer greenhouse gas emissions and reduce the country’s dependence on oil” [3]. A massive tidal power plant (TPP) is under consideration at Garolim Bay.” The bay is 18km long and about 8 km wide. It is unique because of its width, which has arisen from the gourd-shaped bay that has a narrow mouth with a span of about 2 km” [3]. Also, due to the fact that the “rise and the fall of the tide is nearly 7–9 m while both ends of the bay are only 2 km long,” Garolim Bay meets the necessary conditions for a functional TPP and would have a capacity of 520 MW, which is more than twice that of the Rance Estuary in northern France [3].

“Enormous amounts of tidal energy are being dissipated twice a day, every day on the world’s ocean shelves;” however, a large amount of this energy is not being utilized. Ewout Van Walsum states that there is the potential to produce “288,133 GWh of tidal energy around the world” but this can only be accomplished once the “hurdles to environmentally sustainable tidal power have been cleared” [4]. In short, Walsum believes that economic policies have to reach an agreement with environmental policies to have any hope of accomplishing such a large scale generation of tidal energy that can be utilized worldwide.

A graph from [4] showing the potential tidal power generation of the world is shown below:

The ocean possesses massive amounts of tidal energy that have the possibility to solve future energy crises. In South American countries, renewable energy sources are becoming more and more prevalent. “Portugal gets 40 percent of its electricity from renewable sources” [5]. This large percentage shows just how much potential there is for TPP’s. 40 percent may seem like a small number, but much of the tidal power available in the world is untapped. “The European Energy Association estimates that, globally, the oceans could yield more than 100,000 terawatt hours per year, which is more than five times the electricity that the world uses in a year” [5], but this is under the assumption that the technology needed to harness said energy would be perfected. Such massive amounts of untapped energy lead us to believe that in future years, we can expect to see a large rise in the number of tidal power plants globally.

Links:

[1] http://www.darvill.clara.net/altenerg/tidal.htm

[2] http://en.wikipedia.org/wiki/Rance_Tidal_Power_Station

[3] http://www.sciencedirect.com/science/article/pii/S030142150900528X

[4] http://galenet.galegroup.com/servlet/BCRC?srchtp=adv&c=1&ste=31&tbst=tsVS&tab=2&aca=nwmg&bConts=2&RNN=A110919719&docNum=A110919719&locID=txshracd2598

[5] http://green.blogs.nytimes.com/2010/10/20/tidal-power-the-next-wave/

Policy following practice: possible political and social implications of Fukushima

stconover — Wed, 25 Jan 2012 20:35:50 +0000

In France, over 90% of electricity is generated from nuclear power. In France’s total energy mix, nuclear power supports 3/4ths of their total energy usage:

http://www.economist.com/node/21541833

In light of the Fukushima nuclear accident in March of 2011, the social image of nuclear power is changing. France has taken much pride historically in being at the forefront of nuclear power and research, but now nuclear energy has become a topic of debate for France’s upcoming presidential election. The United States political system went through this process, and the social paranoia associated with nuclear accidents decades ago. The effect has only been detrimental in developing new technology for nuclear power programs. The accident has caused a lot of uproar, and recently a popular Japanese news source, JiJi Press, reported that radiation has increased by 20% from the accident:

http://www.ritholtz.com/blog/2012/01/fukushima-operator-admits-20-increase-in-radiation/

In the following article the large-scale policy implications of Fukushima in Europe and Asia are evident. Taiwan’s Democratic Progressive Party candidate could unseat the incumbent president over this issue:

http://www.nytimes.com/2012/01/13/world/asia/nuclear-power-emerges-as-election-issue-in-taiwan.html?scp=6&sq=nuclear&st=cse

In my opinion nuclear development and technology, if implemented correctly, can be very successful in generating required amounts of power for electricity-hungry populations. It was an engineering error to place a large nuclear complex in such a seismically-vulnerable area as the Ring of Fire. France is much less prone to natural disasters which can cause the accident that occurred in Fukushima, but the technology can be dangerous if mismanaged (Chernobyl). Social pressure should not drive technological decisions such as this in policy-making, yet it has largely in the past and looks to guide it heavily in upcoming years.

New EIA Report Asks: What if the US Exported More LNG?

Chad Blevins — Tue, 24 Jan 2012 19:31:25 +0000

In a report recently released by the EIA, the Office of Energy Analysis (OEA) takes a stab at answering a question that was formally asked by the Department of Energy’s Office of Fossil Energy back in August 2011: What would be the “impact of increased domestic natural gas demand, as exports?”

OEA’s analysis considered four different scenarios consisting of a slow (1 Bcf/d/yr) or rapid (3 Bcf/d/yr) rate of “phasing-in” increased exports, and a low (6 Bcf/d) or high (12 Bcf/d) ultimate expected rate of export.^[1]

As one might expect, their results suggest that increased exports of natural gas (as liquefied natural gas, or LNG) would lead to upward pressure on domestic gas prices. This, in turn, would result in increased domestic production, and (to a lesser degree) upward pressure on electricity prices. The level of the impact on power generation would partly be a function of the difference between the rate of the increase in exports, and the rate of the increase in production.^[1]

This upward tick in natural gas production could reverse a recent trend that has seen companies moving away from dry gas plays. As an example, Chesapeake Energy just announced plans to reduce the number of its operating dry gas rigs by ~68%, a result of the currently low natural gas prices.^[2]

The current state of affairs in the domestic natural gas markets is significantly different than it was just a few years ago, prior to the rapid adoption of hydraulic fracturing and horizontal drilling, and prior to the recession. Several LNG regassification import terminals were permitted, financed, and built based on the expectation that the US would remain a net importer of natural gas for the foreseeable future.^[3][4]

Now, several of those import facilities are going through a similar process to get liquefaction facilities in place that will enable the exports being considered in this EIA report. Cheniere Energy is doing just this. The company has plans to construct a liquefaction facility at its Sabine Pass LNG import facility, which will have approximately a 2.6 Bcf/d export capacity. The company has already initiated FERC, NEPA and DOE permitting procedures and expects the facility to begin operations as early as 2015. They are also considering plans to construct an additional 1.8 Bcf/d export facility in Corpus Christi.^[5]

However, it is still not certain that companies like Cheniere Energy will be able to recognize a return on their investment with these export facilities. Just as the adoption of new drilling technologies reduced the need for US LNG imports, the spread of those technologies to other parts of the world may also reduce the US opportunity to export.

Very importantly, the authors of this EIA report note that the National Energy Modeling System (NEMS) used for their projections “is not a world energy model and does not address the interaction between the potential for additional U.S. natural gas exports and developments in world natural gas markets.”^[1]

End Notes:

[1] EIA Report, “Effect of Increased Natural Gas Exports on Domestic Energy Markets,” Dated 19 January 2012: http://www.eia.gov/analysis/requests/fe/pdf/fe_lng.pdf

[2] O&GJ, Chesapeake dry rig count cut: http://www.ogj.com/articles/2012/01/chesapeake-cuts-operated-dry-gas-drilling-rig-count.html

[3] FERC: Approved & Proposed (Potential) North American LNG Import/Export Terminals: http://ferc.gov/industries/gas/indus-act/lng.asp

[4] Market Watch, LNG Exports: http://www.marketwatch.com/story/shale-gas-opens-door-to-us-lng-exports-2011-12-05

[5] Market Watch, Cheniere: http://www.marketwatch.com/story/cheniere-plans-second-us-lng-export-terminal-2011-12-16

California Green vs. Texas Oil, or, States Rights vs. Interstate Commerce Clause

kylemcgaa — Fri, 28 May 2010 22:34:10 +0000

Californians Air Board 32 (AB 32) is legislation that caps carbon in California and mandates emission reductions. Green jobs in California have grown at a steady clip from 1995 – 2008, with green tech businesses growing by 45% and green employment by 36%. The state of California has sent such a positive and consistent message that California will help nurture green investments, that it attracts 60% of all clean-tech in vestments in the US. 5 of California’s cities are amongst the top 10 clean tech investment cities, while 7 of the nations top green firms are based out of California too.

Apparently TX oil is rumored to be trying to thwart AB32, but I wonder if State’s rights or the Interstate Commerce Clause trumps here. CO2 could be considered a toxic substance on a global scale, so I could see why California has the right to regulate it, but big oil is no cupcake, has put up some very nasty fights in the past, but I think this year is not looking to favorably on oil considering the oil spills and the endless tar sands ecological catastrophe (and consistent media attention off the tube). 2010 is a big year for a greener China, as it has just surpassed America this year in both total green investments ($34.6b to $18.6b) and smart grid investments at $7.3b / $7.2 billion. The Golden State is still recovering from a budget crisis, and it would be a shame if TX pushed California under the Green Chinese bus storming through town this year, by sending a signal to efficiency investors (that’s what green/clean tech. often is) that their money is more safely invested in China. TX legislature will be interesting to watch this year.

[i]

[i] Agence France-Presse. “China overtakes U.S. in green investment.” Reprinted by Mother Nature Network. http://www.mnn.com/eco-biz/money-green-jobs/stories/china-overtakes-us-in-green-investment Mar. 25th, 2010

[i] Siegel, RP. “China Now World Leader in Smart Grid Investment.” Triple Pundit- People Planet Profit http://www.triplepundit.com/2010/02/china-now-world-leader-in-smart-grid-investment/ February 8^th, 2010.

http://www.greentechmedia.com/articles/read/keeping-californias-clean-tech-advantage/

Recent Catastrophic Accidents in the Fossil Fuel Industry…

dmcp123 — Fri, 14 May 2010 21:39:12 +0000

What was up with April 2010?

The fossil fuel sector would love to forget this past month. During this one month alone, no less than three catastrophic accidents have significantly affected the image of each of the sector’s primary industries: petroleum, coal, and natural gas.

The Headline Stories:

Apr 21 – BP Offshore Oil Rig Explodes and Results in Enormous Gulf Oil Spill
o Potentially the worst environmental disaster in US history
o 11 presumed dead

Apr 5 – West Virginia Coal Mine Explosion
o Worst US coal mining disaster in forty years
o 29 people dead

Apr 18 – Natural Gas Well Hits Shallow Pocket, Contaminates Town’s Water Supply
o Over 135 homes evacuated in Caddo Parish, LA
o Told they cannot drink their water

While accidents have always been a part of the energy production story, it is strange how easily we forget how frequently and severely they can occur. Unfortunately it takes something significant and in rapid succession like what has happened in the past month to remind us of the true, hidden costs of our dependence on fossil fuels.

The British Petroleum Oil Spill

BP’s oil rig explosion and enormous gulf oil spill seriously threatens the future of deep water domestic offshore oil production. While the root cause is still being sorted out, what is clear is that after the well was drilled and about to be capped off, an oil/gas mixture accidentally shot up the mile long pipe and ignited into a fireball once it reached the surface rig. The ensuing fire killed 11 people, destroyed the rig, and caused it to collapse and sink, breaking the pipe as it sank into the ocean. But the wellhead at the sea floor could not and STILL cannot been shut off (now three weeks after the event) despite safety valves and attempts to use an improvised large metal “cap” to siphon off the leaking oil. BP is spending $6-7M per day to stop the leak and it is believed that the total cleanup costs will end up running anywhere from $2B to $14B[1]. To put that into perspective, BP’s net income for all of 2009 was $17B, and the company’s stock has already fallen almost 20% since the accident, wiping out $32B in equity value.

Here’s a time-lapse aerial movie of the spill:

Original estimates were that the oil leak was 1,000 bbls/day, but this was quickly raised to at least 5,000 bbls/day based on satellite images that showed a rapidly spreading oil slick. Recent estimates have put the leak as high as 70,000 bbls/day[2] based on analysis of a video made public of the leaking well. But the real problem is that it isn’t clear how long it will take to turn off the leak. The worst case scenario is that it will take 90 days to drill another well into the original one to shut it off. If this happens, this spill will easily eclipse the 1989 Exxon Valdez spill in Alaska, the largest ever in US waters with roughly 250k bbls spilled. Compared to the Valdez oil spill whose cleanup took a very long time due to the remote location, the Gulf Coast is much more accessible which should speed up cleanup efforts. The flip side is that a lot more people live around the Gulf and there are a lot more businesses and livelihoods that will be affected. There is also the concern that the spreading oil slick could enter the Gulf Stream and be swept around the tip of Florida and onto beaches of the East Coast.

Footage from the ocean floor:

One thing to keep in mind, however, is that while terrible, the amount of oil that has been spilled in accidents is actually very small relative to the amount we consume. If you total ALL of the oil spills that have been recorded in the world since the 1940s[3], you find that there have been a total of roughly 40M barrels of oil spilled over the last 70 years. Considering that the US currently uses ~20M barrels of oil and the world uses ~85M barrels every day, the average yearly amount that gets spilled is actually a very tiny fraction (0.002%) of what the world uses in a year. It’s almost a miracle that we don’t spill more, especially considering that 30,000 oil wells have been drilled in the Gulf with over 3000 producing today[4]. The problem, of course, is that even this tiny spilled fraction can wreak environmental havoc on the affected area and result in billions of dollars of direct and indirect damages – or worse, destroy ecosystems for generations.

The issue with BP is that they’ve had a string of accidents in the last few years, including a burst Alaskan oil pipeline and a fatal refinery explosion, and investigations have pointed to a culture of cost-cutting and a lack of safety measures that resulted in the accidents[5]. So far, there is evidence that a relatively inexpensive second-level wellhead shut off device was not installed that could have already stopped the leak. While this device is not legally required by the US (although it is required by the governments of Norway and Brazil), it certainly gives the appearance of a very bad gamble to cut corners. At the time of this writing BP (the overall well owner), Transocean (the rig owner), Haliburton (the well capping company), and the Mineral Management Service (the federal agency responsible for determining and enforcing regulations) are all pointing fingers at each other in an attempt to shift blame.

This is already affecting public policy: Obama has distanced himself from his previous willingness to pursue offshore drilling. Ironically, this oil spill could actually threaten action on a climate change bill. In order for the bill to have gotten as far as it did, environmentalists and conservatives had to compromise, and a plan was developed that called for more renewables, more nuclear, and offshore drilling. Now, the environmentalists are putting their foot down and are backing away from the table, while conservatives are still scrambling to shape a message. “California Gov. Arnold Schwarzenegger and Florida Gov. Charlie Crist have changed their minds about offshore drilling. Schwarzenegger went a step further and withdrew support for a plan to allow drilling offshore Santa Barbara County. Several senators, the latest being Democrat Jay Rockefeller, have refused to vote for any bill that expands offshore drilling.[6]” In some sense, this incident could polarize the debate and force a restart of the legislative/negotiation process.

The West Virginia Massey Energy Coal Mine Explosion

This accident is a sad reminder of just how dangerous coal mines are. Since 1970, 262 coal miners have died in the US and thousands have suffered from indirect, respiratory deaths over the years[7]. In the past 10 years, over 10,000 miners have died from black lung in the US alone[8]. Worldwide, thousands of workers die each year and undocumented tens of thousands more will die from respiratory problems. But these respiratory issues don’t just affect the miners. The particulates that are released into the atmosphere when coal is burned to generate electricity increase the risk of asthma attacks, and are estimated to cut short 30,000 lives each year in the US alone. Considering the direct and indirect deaths due to respiratory problems, and the environmental damage due to strip mining, mountain top removal mining, CO2 emissions, and the occasional coal ash tailing pond that collapses[9], it is clear that coal is one of our dirtiest fuel sources. None of these negative externalities are priced into the deceivingly rock bottom <$0.04/kWh price that we pay for wholesale electricity. Perhaps this latest tragedy that killed 29 miners – the highest number in the US since 1970 – will help us reconsider these hidden costs.

Exco Natural Gas Well Water Contamination

Finally, the natural gas fracking incident that occurred in Caddo Parish, Louisiana – in the heart of the Haynesville Shale discovery – is exactly what the shale gas industry does NOT want to happen. On April 18th, Exco Resources apparently hit a pocket of natural gas that was much closer to the surface than expected which caused the gas to be released into the atmosphere. Subsequent tests of the local water supply showed that the aquifer had unacceptably high levels of natural gas. This is PRECISELY the biggest concern that environmental groups have with the process of hydraulic fracturing, or “fracking” that natural gas companies use to extract shale gas from the geologic formations underground. Although fracking is a mature process that has been used tens of thousands of times over many years, and the gas is typically found far below surface aquifers, the potential to contaminate a region’s water supply perhaps permanently is there. Natural gas has clear benefits over coal, especially in terms of reduced CO2 emmisions, and it is gaining in popularity as a “transition fuel” toward renewables. But incidents of water contamination such as this one will only hurt the industry’s image. If enough large accidents were to happen in the near future, it could spell an abrupt halt to this promising domestic energy source.

The Hidden Costs

With all of these accidents happening, it got me thinking – how DO you come up with the costs of all the negative externalities associated with the entire fossil fuel industry? There’s CO2 emissions and the effects of global warming, direct environmental damage (air, water, land) due to daily operation as well as accidents, loss of life, health problems, the cost of securing access to oil through military projection, and national trade deficits with countries that aren’t friendly to us. This is a very important question because the fact is we ARE paying for it one way or the other – just not at the pump or the plug. If, for example, gasoline costs $2/gallon at the pump, but causes $10/gallon worth of negative external effects that are distributed over everyone at some point later in time, this Total Cost of Ownership is not only worth knowing, but not recognizing these costs are a failure in the marketplace. Getting these numbers right is important to truly compare energy sources on an apples-to-apples basis in order to set effective policy.

A new report from the National Research Council, called “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” has attempted to arrive at a number[10]. This report looked mainly at the effects on human health (and did not thoroughly look at the effects of climate change, rising food prices, or risks to national security). It found that the hidden cost of our current energy mix on human health alone was $120B in 2005, the last year for which data was available. When the other effects are taken into account, this number could exceed $500B each year – over $1500 per person per year.

I don’t know why all of these serious accidents happened in just one month, but if there is any silver lining to them, it is that the currently un-priced, negative externalities associated with our dependence on fossil fuels are suddenly and unavoidably put back into the spotlight. Hopefully this will galvanize the growing public support for alternative sources of energy and will provide a renewed commitment to their development.

Links
[1] http://www.nytimes.com/gwire/2010/05/03/03greenwire-bps-oil-spill-bill-could-dwarf-exxons-ivaldezi-91298.html

[2] http://politicalticker.blogs.cnn.com/2010/05/14/congressman-to-launch-inquiry-on-how-much-oil-is-gushing-into-gulf/?iref=allsearch&fbid=DfkwRVk7c6s

[3] http://en.wikipedia.org/wiki/List_of_oil_spills

[4] http://www.foxnews.com/politics/2010/05/03/obama-administration-press-bp-settle-oil-spill-cleanup-costs/

[5] http://www.msnbc.msn.com/id/36925027/ns/business-us_business/#storyContinued

[6] http://industry.bnet.com/energy/10004270/gulf-oil-spill-one-more-way-to-kill-a-climate-bill/?tag=shell;content

[7] http://www.msha.gov/MSHAINFO/FactSheets/MSHAFCT8.HTM

[8] http://en.wikipedia.org/wiki/Coalworker’s_pneumoconiosis

[9] http://www.nytimes.com/2008/12/25/us/25sludge.html?_r=2&pagewanted=1&ref=us

[10] http://www.nap.edu/catalog.php?record_id=12794