DrumBeat: September 26, 2006
Posted by threadbot on September 26, 2006 - 9:15am
Topic: Miscellaneous
WASHINGTON — There is no mystery or manipulation behind the recent fall in gasoline prices, analysts say. Try telling that to many. motorists.Almost half of Americans believe the plunge at the pump has more to do with politics and the November elections, than economics.
Retired farmer Jim Mohr of Lexington, Ill., rattled off a tankful of reasons why pump prices may be falling, including the end of the summer travel season and the fact that no major hurricanes have disrupted Gulf of Mexico output.
"But I think the big important reason is Republicans want to get elected," Mohr, 66, said while filling up for $2.17 a gallon. "They think getting the prices down is going to help get some more incumbents re-elected."
Cheap gas until the election?: Recent hype can't disprove peak oil.
Plunging oil prices put paid to 100-dollar forecast
Past the Peak: Actions everyone can take to prepare for the possible end of an era
Except for scores of cars abandoned on the shoulder, the eight-lane highway was nearly empty one Friday morning last September. Gas stations along the feeder roads were closed, with trash overflowing the bins and blowing across the pavement. Shopping center parking lots were empty; entry doors were blockaded. It was the day before the much-anticipated arrival of Hurricane Rita and the entire Houston area had evacuated. The highway, a virtual parking lot only the day before, now looked like a scene out of a sci-fi movie. It also looked eerily prescient of a day when people might no longer be able to afford to drive cars long distances along the extensive interstate highway system.
Indonesia: Residents of Medan protest blackouts during Ramadhan
Muslims in Medan are blaming state power company PLN for recurring power cuts, which they say are disrupting special activities during the fasting month of Ramadhan.The caretaker of Medan's main Al Ikwhan mosque, Asno Susanto, said the North Sumatra branch of PLN had broken its promise not to cut power during the month.
Coal-rich Zimbabwe faces acute shortages
HARARE - Drastic coal shortages despite massive natural deposits have had a ripple effect throughout Zimbabwe's economy and ruined a deal to renovate the country's biggest steelworks, the government has acknowledged.
Russia holds out olive branch to Shell: Minister says country is 'long way' from backing out of 1993 deal. US adds voice to concerns.
BP: Prudhoe Bay to resume full oil output end of October
Saudi Aramco to Open a 1.2m bpd Oil Field
Saudi-based international petroleum company, Aramco, signed two contracts for the development of the 1.2 million barrels per day (bpd) Khureis Increment Program (KIP)....According to Aramco's website, the KIP is the largest crude increment undertaken in the company's history, and is one of the largest industrial projects being executed in the world today. The program is slated for completion by mid-2009.
B.C. boosting natural gas production: New B.C. rigs are simpler and faster to operate than anything else in Western Canada.
Iraqi Govt Won't Recognize Kurdistan Oil Contracts
Iraqi Oil Minister Hussein al-Shahristani said in remarks published Sunday that the federal government in Baghdad won't recognize oil contracts signed recently by officials of the Kurdistan Regional Government.
Hyundai Heavy Wins World's Largest Oil-Facility Order
Hyundai Heavy Industries Co., the world's biggest shipyard, said it won a $1.6 billion contract from the United Arab Emirates to build offshore oil production facilities, the single-largest order ever.
Lower oil, gas prices hitting Canadian drilling companies
Raymond J. Learsy: The Potential Collapse of Oil Prices Makes Restraint of Gasoline Consumption Key to Controlling CO2 Emissions.
Global temperature highest in thousands of years
The planet's temperature has climbed to levels not seen in thousands of years, warming that has begun to affect plants and animals, researchers report in Tuesday's issue of Proceedings of the National Academy of Sciences.
- more here
you can even test this out.
Which allows us to ignore it in good conscience.
- more here
http://www.bom.gov.au/oceanography/projects/spslcmp/reports_6mths.shtml
Also:
http://www.bom.gov.au/pacificsealevel/tides.shtml
http://www.sopac.org/tiki/tiki-index.php?page=Pacific+Country+Reports
- more here
And people think the most imporatnt issues are Iraq and terrorism. How many people have terrorists killed? How many species have died and will die because of global warming?
Still, I agree with your concern. Climate change is disastrous. Why is 'green advocacy' failing to stop the disaster.
On the energy supply side, advocates for wind power should stop misrepresenting the potential benefits of this solar conversion technology by repeating misleading claims based on 'installed capacity', and begin to address the real issues of maximizing the recoverable energy from that installed capacity. Otherwise, the supply game will continue to favour coal for who-knows-how-long.
On the energy demand side, advocates for wind power make a huge mistake when they suggest that it is substitutable for nuclear or fossil fuel derived energy. This is an imagined reality. A solar income based economy - wind power, direct solar power, bio-fuels mostly in solid fuel applications - will not maintain the amerikun way of life. The facts belie claims that it can. That is why governments and capital favour the coal entrepeneurs. They can show, factually, how they can reproduce the status quo. It does require discounting climate change. But propagandists who will do this discounting are easily purchased and since investors and politicians are tied to the short term, they are receptive to the message.
Wind power, other solar advocates and climate realists in general (except perhaps those waiting anxiously for the Rapture), have to offer a vision of society in keeping with the real potential of the energy transformation technologies they advocate. Logic demands it. If you cannot meet peak demand, you have to redistribute demand over the time frame. If you cannot meet trough demand, you must reduce demand. This involves tough choices, which cannot be pretended out of existence as those who hold the substitutability notion do, nor easily and justly made by whatever market is in place. Nor is is likely that the existing structure of government is entirely suitable for making these choices, since the structure is predisposed to self reproduction.
Nonetheless, the choices have to be confronted. Until this confrontation takes place, market design and government structure appropriate to successfully making the choice cannot begin to emerge.
This is how I see the failure of 'green' advocacy to make a difference in Texas and elsewhere.
What makes you say this?
Supply? There's more than enough power available from wind and solar (many multiples of what's needed); intermittency? this can be solved through storage (PHEV's and EV's, pumped storage, flow batteries, etc, etc), demand management, geographical dispersion, balancing with multiple sources; diffuseness? wind and solar take no more space than fossil fuels, and produce electricity, which is not at all diffuse. E-ROI? wind is at 60, solar at 10-30. Cost? wind is $.04-.07, which is very competitive, and solar is about $.25 and falling by 7-10% per year (that's cost - prices are staying high to ration supplies during phenomenal demand growth); lack of applicability to transportation? batteries are now becoming cost-effective at gasoline at $3-4, and also dropping by 7-10% in cost per year.
I am a proponent of wind energy but that EROEI seems high. If oil is roughly 20 to 1 (minus refining) then it seems hard to believe that wind would be 60 to 1 and still be so small.
Do you (or anyone else) have suggested reading on wind EROEI? (preferably something peer reviewed and not marketing info from the manufacturer.)
Doing the comparative analysis helps in giving one a perspective on the vast difference between the 'renewables' and fossil fuel.
I've seen some analyses and my own seat-of-the-pants figuring has our society (USA) doing with about a 90% reduction in energy consumption in moving to total renewables. Is it something we can do? .....
Are you asking whether I confused financial ROI with Energy Return On Energy Investment (E-ROI)? The answer would be, no, I was talking about E-ROI.
Are you talking about the difference between a capital energy investment, versus an operating energy cost? By that I mean that you might spend a certain amount of energy drilling a well, and then you have to spend a certain amount pumping the oil, transporting it, etc. If so, you're certainly right that wind and solar are more capital intensive energy-wise - IOW, the energy investment is all up front, then you get essentially free energy for a long time.
OTOH, I don't see how that changes anything. Wind turbines pay back their energy investment in much less than a year, and then you get essentially free, high quality, ready to use electricity for 25-30 years. What's not to like?
How did you calculate a 90% reduction in energy consumption needed to rely on renewables? That doesn't fit with any calculation I've ever seen.
As I've posted elsewhere, a study by Stanford researchers for NASA found 72 terawatts of average electrical production potential for the world, which can be compared to total world electrical production currently of only about 1.7 TW. Total world energy consumption equals the equivalent of only about 4 TW.
see http://news-service.stanford.edu/news/2005/may25/wind-052505.html
The US has better wind resources than most of the rest of the world.
So, there's more than enough wind, and at a E-ROI of around 60 and a cost of about $.06/kwhr, it's energy and cost effective.
Same is more true for PV. People cite the zillions of gigawatts of solar hitting the earth as though this automatically makes solar power our obvious savior. I've seen exchanges on energyresources by techie PV advocates where they simply could not grasp why PV was still so expensive. Simple answer, low EROEI compared to fossil fuel.
Both beer, but one has all the extras that one could want.
Combining the two is the key to high % wind in a grid.
VERY nice when storage hydro is available in quantity. But we can build our own hydro with hydro pumped storage wherever mountains are nearby. And then there is pumped air storage (say in exhausted NG fields).
Miami is problematic in a renewable grid, but most of the rest of the US has viable options. Thus a handful of nukes in South Florida ??
And, as you have noted elsewhere, the Great Lakes work very well, as in Ludington, MI.
I would think that you could do the same thing on the coast of Florida, which I believe does have some very good off-shore wind resources, if you could find a way around the problem of pricey waterfront.
Well, it is in a stampede to use wind. The biggest barrier to even faster growth right now is that manufacturers can't build as fast as demand is rising.
To really answer your question: wind only became cost competitive recently, as turbines got cheaper, and nat gas rose in price. It would be cheaper than any other source if all external costs were figured in (GW, other pollution, security, etc), but people have only started figuring out those costs recently.
Sure, intermittency is a problem for wind. No one would suggest wind as our only power source, but it's perfectly clear that it could provide somewhere between 20% and 50% of our power. The rest would have to come from solar, nuclear, ocean (wave & tidal), biomass, geothermal.
"Same is more true for PV."
PV has a higher E-ROI than oil. PV is more expensive because of the expensive labor required at this point (same technology as computer chips). Still, solar is about $.25 per kwhr and falling by 7-10% per year (that's cost - prices are staying high to ration supplies during phenomenal demand growth), which is cheap enough to be competitive in some areas even without figuring in external costs, which is why PV growth is exploding.
oops - forgot hydro. Sorry Alan.
There are very likely other sources I've forgotten too.
Amazing!!! You have figures to back this up???
Robert Rapier (our resident source of the oil company employee perspective) estimates the E-ROI for oil as currently about 10 (if you include refining it's about 5).
Take your average stripper oil well today, which produces an average of 10bbl/day and has long ago amortized out its capital expenses.
10bbl * 57700btu/bbl = ~570,000 btu/day from a well that costs very little to maintain and whose early returns quickly paid off the original capital expense.
Go to Mr Solar
http://www.mrsolar.com/Merchant2/merchant.mvc?Screen=SFNT&Store_Code=MSOS&Affiliate=google
and see that a commercially available PV system that produces 12000 watts costs about $75000. You would need 2.3 of these systems in a ~6 hr solar day to equal the raw btu output of the stripper well with the PV system costing you around $175000.
I don't care how you work it, at an expected return rate of 6% for this money, the PV system will never pay for itself in comparison with FF generated electricity. I also don't care how you juggle the figures, there is no way in hell that a PV system is 1 to 6 times the Energy Return on Energy Invested as compared to crude oil. I think you are completely deluded.
At some point, high EROEI will be reflected in the commercially available price of this energy source. PV people have been saying for years that this will happen. IMO PV energy will never be substantially cheaper than it is today especially considering the heavy FF subsidy that PV is using for production.
No one is arguing that PV is the cheapest form of energy right now, or that PV electricity can compete with coal, or even natural gas generated electricity on a simple cost basis.
PV is expensive because of expensive labor, not because of the energy it takes to make it. Please remember that energy is only a small % of the cost of most manufactured items, and PV is no exception.
Why do you believe there is a heavy FF subsidy for PV production? I've heard such vague and general statements, and they seem to originate with writers like Kunstler who really know very little about renewables (and don't try to). I've provided some specific statements on PV's high E-ROI from reputable sources, like the National Renewable Energy Laboratory, and the IEA (certainly a conservative, pro FF source). Could you get some specific info, like what form this energy input is in, or what stage of production it is used in?
OTOH, PV may not be able to compete with coal or natural gas in most places, but it can compete with the cost of oil-generated electricity in Japan (at $.20+ per kwhr), where they tax electricity to capture some of the external costs of security of supply, pollution, etc, and where capital costs are low. It can also compete in parts of California, where they have a regulatory structure which raises the cost of electricity (for similar reasons), and where they refuse to use coal.
Nick,
I'm practically dumfounded at this question.
Go to any PV factory.
Where do they get their energy to operate?
Fossil fuels.
Go to the mines where the silicon comes from.
Where do they get their energy to operate?
Fossil fuels.
Go to the chemical factories that produce the chemicals necessary for the production process.
Where do they get their energy to operate?
Fossil fuels.
Aluminum, same thing.
Copper, same thing.
on and on and on.
You must live on a different planet.
Well, we certainly seem to be having difficulty speaking the same language.
When we talk about E-ROI, are we talking about the same thing? Do you not believe the NREL, and the IEA, when they say that PV pays off, energywise by between 10 and 30 to 1?
How do you know they get their energy from fossil fuels? A lot of aluminum is converted from bauxite with canadian hydro power. A lot of steel is smelted with cheap nuclear electricity at night. A lot of silicon is melted with cheap nuclear electricity at night.
what do you mean by "heavy subsidy"? Does 20 to 1 E-ROI seem heavy?
Sure, a lot of FF is used right now to operate industry. So what? That can change.
In one post you imply that wind is 6x better return than crude oil but then you say you realize wind and pv can't compete with fossil fuels. I'm not sure at all where you are coming from.
I believe the economics of a given energy source will ultimately reflect the energy return of the source. Right now our industrial infrastructure is mostly run on fossil fuels and it is difficult to get realistic figures on eroei for wind or pv because of what I'm calling a 'subsidy' of fossil fuels that build these renewable processes. The fact that hydro does some aluminum I don't see as changing anything, just shifting the 'subsidy' to a locally cheaper source.
I'd be surprised. Remember, crude oil still needs refining, and the BTU's from electricity from wind & PV are worth 2-3 times the BTU's from oil. Heck, electricity for transportation is about 7 times more powerful than liquid fuels.
I don't know why you think oil is so magical, or impossible to replace. Perhaps you've been reading Barton's or Hubbert's writings. IIRC most of their writings were in the 70's through 90's, when renewables were still inadequate. It's understandable that nuclear was the only replacement that Hubbert could think of, though I think it was a bit of a failure of imagination not to see a possibility in renewables at that time. Still, it's understandable. But, things have changed. Renewables are clearly up to the job now.
Remember, it doesn't matter if oil is better than renewables. It only matters if renewables are good enough. And, I've given you a lot of concrete info as to why they are. If you'd like more, please say so, I'll provide more. Another way of putting this is: it doesn't matter if wind is 50:1, and oil is 200:1; it only matters that an energy source is above roughly 5 or 10 - above that, it's a viable energy source.
"you imply that wind is 6x better return than crude oil but then you say you realize wind and pv can't compete with fossil fuels. "
No. I said wind is perfectly competitive (just not for 100% of the market), but that PV isn't economic in most places.
more later...
I wouldn't think so. The economics of energy sources generally reflects their overall cost, and their energy input is only a small portion of that cost.
Now, if an energy source has a negative E-ROI, then that's different, but that's not what we're talking about here.
Turn E-ROI on it's head, and look at the % of input to output. An E-ROI of 15 means an input of 6.7% of output, and one of 50 means an input of 2% of output. That's only a difference of 4.7%. The energy input is only part of the cost of an energy source: of it's 66% then the difference in cost between the two sources is only 3.2%, which is nothing.
" Right now our industrial infrastructure is mostly run on fossil fuels and it is difficult to get realistic figures on eroei for wind or pv because of what I'm calling a 'subsidy' of fossil fuels that build these renewable processes. "
But what do you mean by the subsidy? That suggests that there's something hidden. What would the people who have studied E-ROI have missed?
Remember, we're not talking about pricing, we're talking about energy inputs and energy outputs: they're the same things, more or less, and the only differences I'm aware of favor renewables, as they put out electricity BTU's, which are more valuable than heat BTU's.
I'm sure no URLs I can dredge up will sway you but I'd recomment reading Cutler Cleveland's work as he is one of the few who is doing reasonable comparative studies of energy sources. Ted Trainer is another. Try this one of Trainer's:
http://www.aie.org.au/material/trainer.htm
The total, absolute bottom line is, the 'renewables' are likely to always be several orders of magnitude more expensive than the 'easy to get' fossil fuels and this is simply because of much lower energy return on energy investment. Come back next year and the year after and tell me again that wind and PV are competitive.
This one previously posted on TOD is for small turbines - you can see that for turbines between 300KW and 750KW that E-ROI ranges from 20 to 40 (it would be higher for the larger turbines that are now standard):
http://www.theoildrum.com/uploads/244/EROI_of_wind_power_cleveland.jpg
Here's a reference to a study (#33, at bottom, also discussed in the text) which gives an E-ROI of 80-100:
http://www.oilcrash.com/articles/steps.htm
And here's a discussion from the the US wind trade organization which gives a payback of 3-8 months, or an E-ROI of roughly 50-60:
http://www.awea.org/faq/wwt_potential.html#What%20is%20the%20energy%20payback%20time%20for%20a%20win d%20turbine
Robert Rapier (our resident source of the oil company employee perspective) estimates the E-ROI for oil as currently about 10 (not including refining).
"it seems hard to believe that wind would be 60 to 1 and still be so small. "
It's not so small: In the US it's the single largest source of new generation construction. See the NEI report, page 8:
http://www.nei.org/documents/Energy%20Markets%20Report.pdf
You'll see that in 2007 wind is 44% of new generation, adjusted for capacity factor (please note that 2008 and beyond is beyond the planning window for wind, so it doesn't tell us much).
It makes sense to me that high EROEI sources will be exploited before lower ones. And from that assumption I would wonder why our economy is not 99% wind with oil and coal being the novelty items.
I will keep looking for more sources. Here is a presentation from ASPO but not the source:
http://www.aspoitalia.net/images/stories/aspo5presentations/Hall_ASPO5.pdf
This one has wind at about 40 to 1. And it places oil higher (but falling through time). There are some very interesting charts in here.
Their "Moore's Law" is not as quick as the one for computers, but it is fairly steep. I have followed the development of WTs and, even a dozen years ago, they were not that impressive (biggest 250 kW from memory) with much lower EROEI.
Projecting forward, one can see quite high levels of wind generation. But it will mever reach 99%. Too much hydro out there ! :-)
I simply think, after extensive review of the literature, and some analysis and discussion, that there is no reason to think that renewables can't do the job.
I hate to give a simple, one line objection when I write a reply to a post. So, instead I made a list of the most common objections with a brief response to each. It seems like a good way to move a discussion along to the heart of the problem, i.e., why the original poster feels that renewables are not a good solution to the replacement of fossil fuels.
Available wind power in the USA is ~1.2 TW; if 50% of this is captured, it comes to about 18 quads. There's an estimated 1.3 billion dry tons/year of waste biomass available in the USA; if this has 16 GJ/ton of energy, it comes to almost another 20 quads of raw energy; roughly half can be converted to charcoal for direct-carbon fuel cells at 80% efficiency (8 quads of electricity) and the rest might be converted to high-grad energy at 30% plus waste heat (3 quads electricity/work plus 6+ quads heat). So far we're up to 29 quads of electricity or equivalent, and we haven't even gotten into coastal wind power (0.9 TW potential) or high-yielding energy crops yet.
Note that the biomass, and charcoal derived from it, are storable and can yield energy on demand.
There are still issues with space heat, DHW and the like, but there are buildings out there which supply nearly 100% of needs from solar collectors.
Them's the facts as I know 'em. What makes you think the American Dream can't be green, clean and sustainable?
The hole-in-the-ground water recirculating cooler-dehumidifier worked great on less than 100 watts.
The wood stove stirling has made a couple of r