Interesting Times

by Gordon Ringoen, March 04, 2010

Third of four parts

Two years ago, 77% of the United States thought that climate change was a major problem.  Today, only 55% think that to be true.

It is ironic that deniers that fossil fuel burning has caused a major threat to our environment have grown while the Intergovernmental Panel on Climate Change (IPCC) issued their latest report, "Climate Change 2007."  The report was produced by 620 scientists and editors from 40 countries and reviewed by more than 600 experts and governments.  The summary was reviewed line-by-line by representatives from 113 governments.  The summary report said:

"Warming of the climate system is unequivocal."

"Most of the observed increase in global average temperature since the mid-20th century is very likely (between 90-99% probabilities) due to the observed increase in anthropogenic (man-made) greenhouse gas concentrations."

Yet, deniers are winning the public opinion game.  The religious zealots, who believe that God has given "dominion" over the earth to humans and has reportedly promised that He will "provide" – along with the political ideology that claims that climate change is a government plot to take away individual freedoms, and the special-interest utilities and energy companies – have persuaded much of the population. 

For those that are unsure, but are seeking a rationale answer, they could read the IPPC report and the denier's claims and make their own judgment.  For those who wish to be told what to believe, they have numerous preachers, politicians, and Political Action Committees to tell them what to believe.

One thing is undisputable, if the scientists are right, and nothing is done to mitigate greenhouse gasses, the human friendly environment on earth is in for a world of hurt.

Alternative energy

Again, oil is our most important source of energy.  Approximately half of the available oil, and that which is most easily captured, has been consumed. And, half of that consumed has occurred in the last 20 years.  We are already tardy in actively developing new sources of energy.

Our politicians and special interest groups have deceived us about efficient sources of new energy.  In the past 10 years we have been wooed with the promise of hydrogen powered cars, ethanol, "drill baby drill," switch grass, vast solar power, "250 years of coal," and now, battery powered cars.  This demagoguery has spiked intelligent analysis of the issues and the ultimate development of a sound energy and environmental plan.

To begin a rationale discussion of these issues lets go back to simple fundamentals.  With a few exceptions, like nuclear and geo-thermal, nearly all of our energy comes from the sun.  It is the sun's current rays that sculpts our weather, heats the earth, and enables plants to grow. We generally refer to this as "renewable energy" sources.  We also are able to tap the sun's energy from the past in the form of fossil fuels.  These are non-renewable sources of energy and as they burn they alter the composition of our atmosphere and oceans.

As we know, available fossil fuels are limited and are diminishing rapidly.  While fossil supplies are declining, our dependence is increasing from 10% in 1850, to 70% in 1950, to 85% dependence today.

The need for alternative energy sources is clear.  But, how do you evaluate which alternatives are efficient and environmentally friendly?  Currently, our information overwhelmingly comes from special interest groups like the coal industry that wants to increase consumption while lowering environmental restrictions, oil companies that want to drill more, and the car industry that wants to convert major portions of the fleet to battery powered.

Their influence is profound through their use of advertising, media, and politicians acting on behalf of pay to play lobbyists.

Beyond the hype, it is assumed that the market will make the ultimate judgment on the efficacy of an approach to alternate energy by looking at its financial profitability.  Although this view works in many short-term industries, it has major shortcomings in developing a long-term energy policy.

First, much of the pricing in alternative energy is distorted by government action including corn subsidies, mandated ethanol in fuel, tax credits for solar installations, and even indirect subsidies by China in production of solar panels shipped to the U.S.

Secondly, the price of energy in the profit equation is based on the current cost of production, not on the value added benefit, nor on its long-term availability.  Profit, as we view it, is about short-term benefits, not long term.  For example, during the oil shock in the 1970's, we became acutely concerned about our energy supplies.  We spent heavily on Big Physics and actively developed nuclear facilities.  Then, in 1982, with the North Slope oil discoveries, combined with Reagan free market economics, we essentially stopped major efforts to develop new energy sources.  We have not brought a new nuclear plant on line since 1978.  And now, with the North Slope in rapid decline, we have no major alternative sources.

And, finally when you view energy only in terms of money, it is easy to delude yourself and fall back to our recent history, which is to attempt to solve any economic problem by printing money or creating more credit.

Energy supply is our issue, not money.  An illustration of the weakness in evaluating alternative energy sources only in terms of money is the following example:  California law, sensibly, encourages energy efficiency through their rate structure.  Heavy users of electricity, like me, pay $.435 per kilowatt-hour at the incremental unit.  So, when a renewable alternative energy source, like solar, costs substantially less, it seems sensible to exploit it.  The city of San Francisco, despite budget constraints, is proposing to pay up to $7,000 for installation of home solar systems.  The San Francisco Chronicle recently posted the following costs per megawatt of power:

So, from an economic standpoint, it would make sense for large users like me, to install a solar system.  In fact, with the tax benefits and subsidies offered, solar installation proposals indicated that it would be slightly profitable.  And, most importantly, to assuage my embarrassment for using so much power and adding to the pollution, it would provide me with the politically correct opportunity to create pollution free renewable energy!  A win-win situation for all! 

It almost seems too good to be true.  It is.  Even though good data is hard to come by, I was able to estimate that the energy necessary to build, install, and maintain the solar system was probably similar to the energy it would produce over its expected life.  And, since the solar panels were to be manufactured in China, where their energy is predominately high pollution coal, it would likely produce more pollution than simply using electricity produced from natural gas.

Simply using cost and profit for measurement of alternative energy efficacy can be misleading, because energy and pollution are the issues and not money.

So, if profit and money are weak in evaluating the efficacy of alternative energy solutions, how should we evaluate them?  From what we have discussed, we must go back to the fundamental driving force of our economy, energy itself.  Instead of evaluating efficacy in terms of money, measure its efficiency in terms of energy.  In other words, how much energy does it take to create useable alternative energy?  This can be expressed by the simple formulae, EROEI (Energy Returned on Energy Invested).  In the 1930s, when oil was easy to extract, the EROIE was probably near 100.  That is to say, it took only 1% of the oil being pumped to provide the energy necessary to pump and deliver the oil.  By the 1950's the EROEI had dropped to about 30.  Today it's about 20, or it takes about 5% of our energy produced from all sources to get the energy we need. The EROEI continues to drop as we begin to tap more problematic sources.  For example, offshore drilling is energy intense, as indicated by the North Sea deposits with an EROEI of about 5.  The latest offshore discoveries in Brazil at 32,000 feet may have such a low EROEI that they may not be practical to develop.  Oil shale has an EROEI of about 1.7.

Today our energy takes about 4.7% of our GDP.  At an EROEI of 3, it would take 25% of our GDP.  Andy Lees, an astute analyst at UBS, estimates it will take 17% in 10 years.

By looking at energy efficiency through this lens, it becomes obvious that as the efficiency of our energy sources declines, its demands on our total work product begins to increase rapidly or, to put it more bluntly, it lowers our discretionary income.  Also, with declining EROEI, ever-increasing amounts of our precious energy reserves are needed to meet even level energy demands.  And finally, this view tells us which techniques of alternative energy with high EROEI we should pursue.  As EROEI approaches 1 there is no economic point in development.

There are many other considerations. Does it not make sense that any alternative energy strategy, whether it is hydrogen or battery powered cars, ethanol, deep water drilling, or solar power be measured and considered by this EROEI test of energy efficacy?  Yet, they are not.  Any alternative energy proposals must be required to meet this initial hurdle of a favorable EROEI or be eliminated from consideration.  We cannot afford the distraction of frivolous energy programs.

Beyond EROEI we must also weigh the environmental consequences of alternative energy development.  We must not only consider the atmospheric and ocean pollution of our use of energy, which is described in great detail in many studies, but also the decline of other resources such as fresh water.

For example, it takes 787 gallons of water to produce one gallon of ethanol.  Much of this water comes from the Ogallala Aquifer in the mid-west.  It provides 30% of the irrigation in the U.S., and 82% of the drinking water for those who live over the aquifer.  This aquifer has been forming for the last 2 to 6 million years, but it is being depleted at a volume greater than the drainage of the Colorado River. Since it replenishes at about one-half inch per year, some experts forecast that the aquifer will be dry within 25 years.  It is unconscionable that we use this water today for fuel without considering the consequences to our future food supply.

Another limited but important resource is topsoil.  The average depth of topsoil of our agricultural rich mid-west has declined from 18" to 10" in the past 50 years.  It takes 6" to grow crops efficiently.  Any biomass feedstock for alternative energy, or silage (which uses the whole plant rather than just the seed), is simply mining the topsoil.  Comparing the verdant cradle of civilization in Mesopotamia to today's deserts of the Middle East show the effects of the destruction of forests and subsequent loss of topsoil. 

Or, closer to home, both Haiti and the Dominican Republic on the Island of Hispaniola are poor, but the per capita income of the Dominican Republic is five times that of Haiti.  The Dominican Republic has been more careful with its topsoil and has 28% of their area forested, while Haiti has lost its topsoil and only has 1% forests.  There are also social and political reasons for Haiti's decline from the richest colony in the world to its current sorry state.

Japan, with top down forest management for over four centuries, has the highest forest density of developed countries (74%) while having one of the highest population densities.   Japan demonstrates that good environmentally sensitive government can be effective.

Alternative Energy Silliness

The economic politics has given us a false sense of progress and has resulted in misallocation of our precious resources.  The following are some stupefying examples:

Corn Ethanol:  The EROEI of corn-based ethanol is between .2 and 1.5 depending on whether you include indirect energy costs. It requires huge amounts energy in the form of fertilizer, water pumping, harvesting and the manufacture of the ethanol. Also, it uses extravagant amounts of water and topsoil.  In the refining process, it causes immense pollution.  Its primary political purpose was to provide a subsidy for the politically powerful agro-industry.   And, it is, at best, a marginally effective fuel that has the energy density of only 60% of gasoline.  The ethanol can cause severe damage to some automobile engines. Further, it uses human food for transportation while more than a billion people go hungry every day.  Yet, there is a strong lobbying effort, led by General Wesley Clark, to increase the mandated ethanol content of fuel from 10% to 15%.  Crazy!
 
"Drill Baby Drill":  This and its companion slogan, "Energy Independence," are simply political spin to further the interests of the oil industry by increasing drilling in the U.S.  Seventy per-cent of the world's oil has been nationalized which means that oil companies are paid only for their value added services.  In the U.S., they are compensated by the value of the oil, which is much greater.  In any event, the total remaining reserves in the lower 48 states is about 2/12 years of our consumption.  The environmentally sensitive Anwar oil reserves in Alaska would, at peak production in 20 years, provide about 20% of our consumption before declining.

Switch Grass:  This very low energy density biomass simply mines the topsoil.  It is not a renewable source of energy.  If the scientists were to determine its future as a source of energy, it would have none.  The politically motivated DOE (Department of Energy) forecast that 30% of our transportation fuel will come from biomass by 2030 is absurd, and is in direct conflict with IEA forecasts.

Hydrogen Powered Cars:  Oh, how enticing.  The most common element in the universe, with high energy content, and its residue is water.  The most important problem is that it takes a huge amount of energy to free those pesky atoms so that they can be burned.  It has a serious negative EROEI.

Battery Powered Cars:  This is the latest political and media hype.  Ford has announced that 25% of its cars will be battery powered within the next few years.  GM has splashed their intent for major programs as well.

Toyota, who leads the industry in hybrid technology, has been largely silent.  Hybrid technology has a significant benefit in that its electrical power is "free" from the standpoint the electricity is created without the use of additional energy.  It comes from the otherwise wasted energy from the gasoline engine in braking. Perhaps they think that total electric cars are not energy efficient and not environmentally friendly.

Tesla Motors manufactures battery-powered automobiles exclusively.  The cars use the same, state of the art, Lithium-ion batteries that are used in our lap top computers.  As we know, these batteries, like those in our cell phones and computers are expensive.  They are costly because of the high-energy content and rare earths in their manufacture.  There are few known sources and limited supply of lithium.  Even though the cars sell for more than $100,000, the retail price of the batteries in the car exceeds the cars sales price.  

They claim that the car will get 100,000 miles out of a set of computer batteries.  This is suspect since our experience is that our computer and cell-phone batteries last about 3 years if we are careful with them.

Tesla claims that they are more environmentally friendly by comparing the pollution from natural gas produced electricity to gasoline-powered cars.  Unfortunately, only 15% of our electricity comes from natural gas and 50% comes from heavily polluting coal.

The government has recently granted loans to Ford of $5.9 billion for the development of battery power cars, and $368 million to Tesla Motors as well.

We would know a lot more about the efficacy of electric cars, and the prudence of our loans if we were informed about the EROEI over the projected useful life of these cars.

250 Years of Coal:  This claim by George W. Bush must have assumed a mass human extinction that he neglected to mention.  Although we still have large coal reserves, their quality is rapidly declining.  Most of the anthracite is gone and we are rapidly moving from bituminous to sub-bituminous.  Bituminous coal has 21% more energy density than sub-bituminous and 75% more than low quality lignite.  Because of the deterioration in the quality, the EIA forecasts that we must increase our coal burning capacity by 80% by 2030 to only generate current levels of energy.

Coal causes much pollution.  Low-grade coal causes even greater levels of pollution per unit of energy produced.  To sequester the pollutants would require an additional 40% of coal burning.

Solar Power:  Solar power is not silly, but it is not very helpful in solving our energy needs.  The solar panel production is very energy intense.  The silicon base of the panels need be fired to more than 2,000 C.  Its EROEI is very low.  Currently, despite its hype, it produces .02% of the world's energy needs.  Even Germany, which has 50% of the world's solar capacity, produces only about .5% of its energy consumption. 

Without significant tax credits and subsidizing of solar panels by China, which appears about to end, there is marginal or no energy benefit in solar panels on houses. 

Let us assume that my skepticism of "renewable energy" efficacy is ill founded.  Germany projects that reducing the power produced by fossil fuels from the current 62.5% to 50% through renewable energy (ethanol, wind, solar) would require 11% of the land.  Or, to put it into perspective, it would take nearly all of the land in Germany to meet their total power consumption.  In the U.S., it would take land, the area of Nebraska, to meet our already legislated renewable energy requirements set for 2030.   It is imperative that governments take off their blinders and come up with a rational and achievable energy policy!

Nuclear Energy:  Though we have not brought on stream a new nuclear plant in more than 30 years, nuclear fission power has maintained about 20% of our electricity production because of continuous upgrade programs.  Our existing plants are about at maximum capacity and many are reaching the end of their useful life.  We need to rapidly ramp up development of new plants simply to maintain our current production.  Unfortunately, we do not have the technical skills---engineers, welders, electricians, and plumbers currently available to build these complicated plants even if we had the political will.

The likely ultimate solution to our future energy needs is to generate energy the same way that our sun develops it – through nuclear fusion. We know that it is possible, but we don't have the technology today to implement it.  Incredibly, we are spending practically nothing on R&D on this potential energy silver bullet.

Alternative energy summary

Today, there are no alternative energy techniques or rational plans to replace our declining fossil fuel energy and pollution objectives.

The IEA forecasts that the only economically feasible (i.e. ...energy efficient) renewable energy sources from now through 2030 are hydroelectric and wind. 

The hydroelectric potential lies outside of the developed countries, primarily in Asia and Latin America.

Wind energy is relatively inconsequential and will remain so.  It provides less than 1% of our electricity and will be less than 3% in 2030.  One of the most ambitious programs discussed is a $3 billion program of wind farms and distribution system in Hawaii, which would provide the equivalent power to serve about 400,000 people.  This program would result in power costs much higher than today.

The EIA forecasts that non-fossil and nuclear sources of energy will meet about 8% of the world's energy needs by 2030.

It is irresponsible and detrimental to our understanding for respected publications like "National Geographic" and "Scientific American" to publish "feel good" articles that are not substantiated by analysis on how alternative fuels can solve our energy deficits.
 
In spite of the hype regarding alternative energy, we are ever increasing our dependence on high polluting fossil fuels that are in limited supply.

Tomorrow's conclusion: An action plan