The Oil Drum | US Energy Tax: How Level Is the Playing Field?

81 comments on US Energy Tax: How Level Is the Playing Field?

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steve_piper on January 16, 2009 - 12:35pm

Interesting study; thank you for reporting on this. One finding in the table that jumps out at me is that coal gets effectively no subsidy. Abundant supply means it can keep on keepin' on despite many efforts to favor other technology, or otherwise 'kill coal'. Put another way, our coal addiction may be even tougher to break than our oil addiction.

The grid investment angle may be important as well. It seems to me we need to take these fossil-intensive sources on in stages, something like this: 1) invest in the grid and battery/electric transportation, allowing electric load to grow while oil usage shrinks, and 2) investing in renewable/zero emission generation, allowing coal to be eased out.

My estimates indicate that switching from gasoline to electricity reduces carbon dioxide emissions per mile by roughly 10%, if all the electricity is from coal (to the extent zero emission sources and natural gas get into the mix, the reduction is much better).

This seems like a plausible way forward. The only question is timing, i.e., do we have enough time in reducing carbon emissions before we devote more total energy to climate emergencies.

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Gail the Actuary on January 16, 2009 - 12:54pm

There actually was a subsidy for coal which expired in 2007, namely a subsidy of coal-to-liquids. It is not in the effective tax rate calculations I show, since it is not part of the current cost structure.

Coal to liquids seems like a particularly bad way of using coal. If I understand a table from the report correctly, the coal to liquids subsidy accounted for $2.4 billion out of the $10.4 billion in total energy-related subsidies spent in 2007. Renewables (which I understood is mostly ethanol, but would probably also include wind) accounted for about $4.0 billion out of the $10.4 billion spent in 2007. End use and conservation amounted to $0.8 billion in 2007.

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steve_piper on January 16, 2009 - 1:15pm

I agree on coal-to-liquids. The more I look at it the more it seems like a non-starter. My thought was if we go to electric vehicles we can keep our existing coal generation a bit longer, start reducing co2, and bridge over the renewables (also open to nuclear if we can reduce the cost).

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Cyril R. on January 16, 2009 - 1:47pm

Yeah. Long term might be better perspectives, with coal methanization and direct carbon fuel cells. However, alternatives are developing quickly (cost-wise) so the market for advanced coal in the future may not be big anyway.

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OMGlikeWTF on January 16, 2009 - 3:48pm

http://www.dpi.nsw.gov.au/__data/assets/pdf_file/0019/223831/CSIRO-NSW-c...

Its technically possible to micronise coal and use it as a fuel in compression ignition engines at around 50% thermal efficiency. If coal is going to be limited on run hours (such as the European Large Combustion Plant Directive) or emissions, it makes sense to use it at maximum thermal efficiency and only for peak times. The link above shows possible units sized from 10-500MW ideally suited to providing peak power or powering district heating.

Using coal to assist solar thermal power plants could also be an option increasing the capacity factor of the project and making use of the same plant equipment.

Of course the best option is to leave the stuff in the ground but I don't think thats going to happen, but if we are going to burn the stuff it would be good to get 50% more useful electricity per ton of CO2 released (50% thermal efficiency vs 35% in older coal plants with lower transmission losses) and make use of the massive amounts of 'waste' heat which goes up cooling towers globally.

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Cyril R. on January 17, 2009 - 8:57am

You could probably get almost 50% net effiency in a state of the art pulverized coal plant as well. Still increasing ~1%/year. Smaller size of the compression ignition engine could be an advantage though (easier transmission, CHP).

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majorian on January 16, 2009 - 2:04pm

My estimates indicate that switching from gasoline to electricity reduces carbon dioxide emissions per mile by roughly 10%, if all the electricity is from coal (to the extent zero emission sources and natural gas get into the mix, the reduction is much better).

No.

A Chevy Volt gets 40 miles from its 16 kwh battery or .4 kwh/mile.
Coal fired electricity produces 1.05 tons of carbon dioxide per 1000 kwh.
So a Chevy Volt produces .42 tons per 1000 miles.
The US electricity grid with nuclear and gas,etc. averages .712 tons of CO2 per 1000 kwh, so for average electricity a Volt would produce .284 tons of CO2 per 1000 miles.

A Toyota Prius hybrid gets 45 miles per gallon. Petroleum produces 9.08 tons of CO2 per 1000 gallons.
So a Toyota Prius produces .227 tons of CO2 per 1000 miles.The Prius is 20% greener than the plug-in.

In fact, a Chevy Volt running on coal electricity would be equal in carbon emissions to an ordinary car getting 21.7 miles per gallon while the national auto average is around 22 mpg.

9.08t CO2 per 1000 gal /1.05t CO2 per 1000 kwh x .4 kwh/mi= 21.7 miles per gallon car.

Plug-in are simply not greener and at the lower gas prices are almost as expensive to feed.

With gas prices at $2 per gallon, it would cost a Prius owner $44.44 to go 1000 miles. A Volt owner could take (25) 40 mile daily trips for $40 if electricity is 10 cents per kwh.

We need to look at electric plug-ins more skeptically IMO.
Natural gas hybrids look much more do-able.

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tstreet on January 16, 2009 - 2:52pm

Also, need to look at this state by state. PG&E of California estimates that they generate .524 pounds per kwh or 524 pounds per 1000 kwh which is .262 tons per 1000 kwh.

So, in California, the equivalent miles per gallon of a Volt would be 9.08/.262 times .4 = 86.64 mpg.

In California, at least, which is a big state obviously, the Volt appears to make sense from a CO2 standpoint. As other states reduce their carbon emissions then electric or part electric may begin to make sense.

This, of course, doesn't consider embodied energy and possible reductions in maintenance like oil changes.

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OMGlikeWTF on January 16, 2009 - 4:37pm

Natural gas hybrids look much more do-able.

I am waiting to see if Honda decide to create and IMA natural gas engine, use that to power the front wheels then stick a small electric motor on the rear axle with a battery pack to cover a short all electric range.

Make the rest of the car from aluminium with hemp composites and you have a winner.

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Neil1947 on January 16, 2009 - 7:27pm

Majorian,
You have made a (common)mistake in calculating Chevy Volt electricity consumption. The 16 kWh battery is only half discharged to give 40 miles range, works out at 0.13 kWh/km. When using gasoline is expected to be 45mpg.
In fact only half the electricity in US is from coal, so carbon use is considerably less than 1 tonne/kWh.

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david_in_ct on January 16, 2009 - 8:12pm

"A Chevy Volt gets 40 miles from its 16 kwh battery or .4 kwh/mile"

I believe this is an error and is off by a factor of 2. Although the Volt comes with a 16kwh battery the 40 miles electric range is on a draw of only 8kwh. The battery is kept in a range of 30 - 80% charged so as to increase its lifespan.

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majorian on January 16, 2009 - 9:26pm

Okay, they define a 40 mile 'full charge' as between 85% and 30% of the 16 kwh which is 8.8 kwh or .22 kwh per mi.
http://en.wikipedia.org/wiki/Chevrolet_Volt
This is rather vague and I would suspect that Volt's real world performance will be worse just like with the idealized EPA mpg ratings. Hard driving is bound to drive down the battery quickly.

1.05 t of CO2 per 1000 kwh(coal electricity) x .22 kwh/mi
becomes .231 ton per 1000 miles so the coal powered Volt still makes more CO2 per 1000 miles than a Prius hybrid at .227 t CO2 per 1000 miles.

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Neil1947 on January 16, 2009 - 10:09pm

Then again, if electricity is 100% from nuclear or wind energy you have 0.3-1Kg CO2/1000 miles( based on carbon intensity of wind and nuclear generated electricity), and more importantly have a way to travel post-peak oil. Without gasoline the Prius will still be in the driveway.

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kdolliso on January 16, 2009 - 10:32pm

Nah, they'll just make it "flex-fuel," like the Volt.

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majorian on January 16, 2009 - 11:08pm

Your premises are wildly delusional.

Non-fossil fuel amount to just 29% of our electricity.
We have 100 aging nuclear power plants most of which are approaching the end of their useful lives.

There are 2500000 tons of proven uranium in the entire world for LWR reactors assume that the US somehow gets control of 25% of that.

How long would that last if we got 50% of US electricity from LWR nukes--just 72 years!
OTH, how long that power would last if it were burnt in our current nuke plants?
162 years.

We have hydroelectric dams in every place where it makes sense.
We get 1% of US electricity from wind.
There is no unified national grid.
It's all a pipe dream.

OTH, using carbon capture and sequestration, the domestic proven reserves of coal alone could provide 50% electric power this country for at least 150 years at the current rates of power consumption.

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Cyril R. on January 17, 2009 - 9:13am

We get 0% of our electricity from coal with CCS. Ain't no infrastructure for it either on any scale that matters. Talking about pipedreams in a more literall sense of the word...

You were saying something about being delusional? Are you familiar with the saying "the pot calls the kettle black..."?

It's time for some self-evaluation, Majorian. Getting rid of some of your biases might actually do your analysis good.

If you think that coal CCS is any good, then giving it the same tax breaks as wind and electric infrastructure would be all that's required, no?

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majorian on January 17, 2009 - 2:18pm

It is delusional to think that nuclear wind and hydro will provide a low carbon electric grid. We are dependent coal for 50% of our electricity. So people who think plugin electric cars or electric trains (or any other electron base 'fix')are clean are deluding themselves.

The truth is fossil fuels are going provide most of our electricity for at least 50 years so the goal needs to be reducing our dependence on electricity.
Fancy gadgets like plug-in cars just make the problem worse.

I agree that CCS coal is starting from zero but there are marginal benefits in the form of EOR oil and recovered coalbed methane. Most importantly, coal can be gasified to methane with the process carbon dioxide being sequestered as at Weyburn. Natural gas produces 57% of the CO2 for the same amount energy in bituminous coal.

IGCC is a way to make electricity but also natural gas, methanol or hydrogen in the same plant and all these fuels can be stored as backup fuel for electric peaker plants to compensate for variable renewables like wind and solar. Another use for natural gas in particular is in cogeneration. Central station electric plants can't be used for that.

An Ultra supercrit. pulverized coal plan can only make baseload electricity and the low pressure carbon capture process is even more energy intensive than IGCC.

All fossil fuels will eventually decline. Electricity generations at 33% efficiency is the most wasteful use of fossil fuels or uranium and it needs to minimized.

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Cyril R. on January 17, 2009 - 3:11pm

It is delusional to pick specific technology winners and expect that to be an optimal solution. If you think clean enough IGCC CCS is really that good and more proven than wind, then giving it the same subsidies as wind (mostly PTC, ITC and some RD&D) will sort out that IGCC CCS will have a big market share.

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kdolliso on January 16, 2009 - 11:10pm

THIS brings water usage at an ethanol plant down to about Zero.

Didn't I read something about TVA having a few problems with their Coal Slurries, or something?

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81 comments on US Energy Tax: How Level Is the Playing Field?

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“If kindness and comfort are, as I suspect, the results of an energy surplus, then, as the supply contracts, we could be expected to start fighting once again like cats in a sack.”

—George Monbiot