Friday, July 1, 2016

The Energy Disconnect (Pun Intended): People Don't Seem to Understand Energy Issues So We Should Try to Figure Out Why and Fix These Problems



The Energy Disconnect (Pun Intended): People Don’t Seem to Understand Energy Issues So We Should Try to Figure Out Why and Fix These Problems

The recent pledge by the presidents of the U.S., Canada, and Mexico to get North America to 50% “clean energy” for electricity by 2025, a mere 8.5 years from now, underscores the need for politicians, policy-makers, the government, and the public as a whole to understand energy issues better. The energy industry is the largest industry in the world. It is the industry that runs industry and the economies of the world. It makes available the stuff that feeds our machines. U.S. president Jimmy Carter created the Energy Information Administration (EIA). This body keeps very good and very accessible statistics on energy production, consumption, supply, demand, trends, and happenings. Globally, there is the International Energy Agency (IEA) that performs a similar function for the world. There are other sources as well. State agencies in the U.S. also keep good records. There are also several major energy market analysis groups that provide useful information. There are people like me who write blogs about energy. The information is there. Anyone developing and purporting an opinion about which energy sources to promote or demote should become cognizant of this freely available information. Otherwise they should keep quiet. I originally read the headline incorrectly - that 50% total renewable energy was the goal rather than 50% of electricity. This is of course a more reasonable goal but it still will be difficult to attain.

Below I will list what I think are some serious energy misconceptions and attempt to explain them.

The  (at first) Perplexing Clean Energy Pledge of the “Three Amigos”

Since the U.S. consumes about 75% of North American energy the recent clean energy pledge is mainly a U.S. pledge. While President Obama has made some reasonable energy and environmental/climate goals in the past this one will not be easy and may fall short. The Clean Power Plan is implementable mainly due to the reduction in greenhouse gas emissions and the improvement in air quality due to fracking which made possible widespread switching from coal to gas in U.S. power generation. The goals in the Clean Power Plan allow states to implement it with a significant amount of flexibility. Yes, it is more a less a death knell to coal usage since coal is the most carbon intensive and most polluting energy by a significant margin. It will likely be a boost to natural gas production as gas is the most sensible replacement for coal in the near-term. The National Ambient Air Quality Standards (NAAQS) and Mercury and Air Toxics Standards (MATs) will also be easier to improve to desired levels in combination with the Clean Power Plan. The CPP is not just about climate, it is about improved air quality and improved health. President Obama’s climate pledge at the Paris summit and his willingness to negotiate and promote shared climate goals with the two biggest developing countries, India and China, are laudable. The federal methane leakage goals from oil and gas systems, also shared by Canada and Mexico are also quite achievable and reasonable. However, in seemingly seeking a positive legacy in regards to climate change policy some of his more recent proposals have been off the mark. His proposal for a $10 per barrel oil tax at a time of historically low oil prices was laughable and insulting to many. I was disappointed. And now this difficult to attain clean energy pledge is also going to be challenging. One problem I see with this pledge and particularly if it had been for 50% total renewable energy (I am revising the article now) is that it would lend legitimacy to other unreasonable points of view and movements. It would lend legitimacy to radical environmentalists and climate justice advocates. It would lend legitimacy to anti-fossil fuel advocates. It would lend legitimacy to those who do not understand energy realities. It is one thing to say you want something and quite another to make it happen. These world leaders have capable energy advisors. They should consult them and other knowledgeable sources about feasibility before they make pledges. Please bear in mind that the tone of this article is as if they made the 50% total renewables pledge. Fossil fuels in the 2014 EIA U.S. total energy consumption data made up 81.5% of total energy consumed for that year. The EIA also predicts that without any major policy changes the amount of total energy consumed in 2040 would consist of 76.6% fossil fuels. In 2025 the predicted fossil fuel percentage of total U.S. energy consumption is likely to be about 78.5%. If the pledge were for 50% total renewables that would be be at least 20-25% off of the pledge. Since the U.S. is the 2nd largest energy consumer in the world after China that does not seem at all likely. It would require some major changes in our energy systems and this is not in any way in the works on such a scale. Even though I wrote this whole article with an incorrect assumption I think the energy disconnects listed below are still quite valid.
    
Disconnect #1: “Clean Energy” Can Be Ramped Up Now to Take Up a Much Greater Share of Production

There are some serious limitations to how much clean energy we can use in the short-term and in the mid-term. Hydro is considered to be mature: there are not many more places we can build dams to generate energy. In addition, around the world where such projects have been proposed there has been strong resistance on environmental grounds. New additions from hydro will be minimal. Nuclear energy, while potentially feasible in the mid-term and long-term pictures will be minimal in the short-term. There has not been a new nuclear power plant built in the U.S. for 20 years although a handful are in various planning and construction phases. Costs, safety, waste, and public backlash will limit nuclear unless and until feasible new designs appear. Geothermal, biomass, and biogas also have limitations that will keep their contributions to the total energy picture very small. That leaves wind and solar. Both wind and solar require large land footprints and large government subsidies. That will continue to be the case for some time. In 2014 wind and solar combined to make up 2.2 % of the total U.S. energy consumed. Now (mid-2016) that number may be closer to 3%. Renewable energy sources made up 18% of the 2014 total U.S. energy consumed. Now that number may be closer to 19%. In Germany, a country that has promoted renewable energy on a truly massive scale and offers electricity prices nearly three times those of the U.S. they have made it up to about 23% of energy produced from wind and solar. Now they are increasingly faced with difficulties in grid integration due to the intermittency and unpredictability of both solar and wind generation. At a certain level of renewables penetration on the grid the costs to integrate them into the grid rise with more need for battery storage and management of massive amounts of distributed generation sources. Renewables overgeneration has resulted in wasted generation during peak generation times where supply exceeds demand. Other countries and states routinely curtail renewables during overgeneration times. California does it. While such peak generation can be integrated the current costs may exceed the benefits. Massive ramping of wind and solar would also require massively more direct subsidies and especially in the case of wind many more large infrastructure build-outs in the form of high voltage transmission wires to bring the energy from the wind production areas to the places that need the energy. Other massive buildouts would be required on the distribution end to balance the grids. Utility business models would need to be adjusted. Smart grid technologies would need to be implemented on a big scale. Implementation and management costs would be very high. All of these very considerable logistical problems make those who call for “100% renewable now” sound magnitudes more ridiculous since 50% renewables would be an incredibly daunting task that will take decades rather than years.

Disconnect #2: Fracking Can Be Banned

This may be a larger energy disconnect than number 1. Fracking now makes up 67% of U.S. natural gas production and 50% of U.S. oil production. Natural gas makes up about 34% of U.S. electricity production so fracking makes up about 23% of U.S. electricity production. These numbers are set to grow in the years to come as gas replaces coal in power generation. Fracking made up 37% of total U.S. energy consumption in 2014. It achieved this energy source dominance mainly in about 7 years’ time, quite a phenomenal achievement. It is also quite possible that it saved the U.S. economy as it ramped up during the economic downturn and prevented the U.S. from having to import gas from countries like Qatar and Russia. It also undoubtedly improved air quality and reduced greenhouse gas emissions so that U.S. GHG emissions reductions led the world by far. Arguable fracking saved both the economy and the climate, while improving the environment significantly and giving the U.S. virtual energy independence far into the future. In these senses one might say that fracking is a god! However, if one reads the news, particularly the far left liberal media and climate justice advocates news, but also much of mainstream media, one might conclude that fracking is a devil! Once when passing through Ithaca, NY around 2010 I saw spray-painted in large letters on a wall the words, “Fracking is Hell.” While there are no doubt some environmental issues with fracking they have been overhyped, in some cases in extreme ways. The fact that banning fracking is even being considered and debated by a major political party can be seen as an energy disconnect. No doubt the bans in New York, some Canadian provinces, France, Bulgaria, Germany, and a few other countries lend credence to the ban fracking movements. There are significant reasons to think fracking would be problematic from a logistical standpoint in places with no infrastructure, dense populations, and poor water resources and inadequate wastewater disposal possibilities. This is not the case in the U.S. and Canada. There have been over 1.6 million wells drilled in the U.S. and over 100,000 wells have been fracked. While there have been cases of water contamination from spills, leaky pits and impoundments, and migrating naturally occurring methane, there has yet to be a documented case of water contamination from the hydraulic fracturing process itself. The EPA has concluded that what some call an “environmental nightmare” has not led to widespread water contamination. Numerous studies have supported this statement. Charges of methane leakage, radioactive waste, noise, explosions, spills, volatile organic compound emissions, and land disturbance have all been investigated and mitigated where applicable and continue to be. New technologies are arising to help mitigate these problems. Hundreds, maybe thousands of local groups have arisen to oppose fracking. They are often very organized and very vocal. They have been able to distort the facts very effectively. They may hate fracking but they benefit from it daily in many ways. Hatred of fracking is unifying some towns as they seek to change their forms of government just to ban the process. Anti-corporatism has become a political rallying cry. While there are some legitimate issues with current corporatism such as income inequality, the issue of fracking has really galvanized the anti-corporatism movement. Curiously, there has been little emphasis on making fracking safer or on developing reasonable regulations. New regulations continue to advance and be implemented. Clearly, a ban on the source of 37% (and possibly up to 50% or more in the future) of the total energy consumption of the country would be catastrophic. We would have to ramp up coal use, import gas and oil from unfair countries, give away our energy independence, pay much higher prices for electricity, gasoline, oil, plastics, rubber, many other hydrocarbon products, and many other manufactured products. Some of our many industries that rely on inexpensive natural gas would be shuttered and their product prices would go up. It would be an economic nightmare. It would take decades to ramp up and integrate clean energy solutions. It is really a bit insane to even consider it. It is a huge energy disconnect. Even in places where fracking is banned they still use its products extensively and consumption has been rising. 

Disconnect #3: Fossil Fuels Don’t Benefit Society but Clean Energy Does

It is cheap available energy that benefits society regardless of its source. Energy use is directly associated with both health and wealth. Alex Epstein covers this in his book, The Moral Case for Fossil Fuels. Other sensible energy and environmental writers like Robert Bryce, Dieter Helm, Michael Shellenberger, Ted Nordhaus, Stewart Brand, Vaclav Smil, and even James Lovelock have corroborated that energy use leads to wealth, health, and in turn better overall treatment of the environment. Fossil fuels and those who benefit from them on the production end have been vilified. We all benefit from them on the consumption end. It’s like ordering a drink and shooting the bar tender. Fossil fuels have enabled economic and population growth. They have fueled agriculture. They are used to make fertilizer which has enabled us to feed the world. Fossil fuels are the source and/or a major component of many of our raw materials and products including plastic, rubber, nylon, polyester, PVC, and many other things. Fossil fuels are refrigerant replacements for CFCs and HFCs in air conditioners and refrigerators. They are key parts of our technological society in many forms and ways. Plastics are increasingly used in auto parts as light-weight replacements for metals, which improves fuel economy. Oil and gas and products derived from them are a cornerstone of our society.

Disconnect #4: Renewable Energy is Environmentally Benign

While renewable energy is more environmentally benign than fossil fuels it is not entirely benign. Sand is mined to make solar panels. Mined metals, forged steel, and plastics made from oil and gas are used in solar panels and parts and in wind turbines. Lithium, nickel, cadmium, cobalt, graphite, and copper are all mined and drilled to make batteries. Rare earth elements are mined and in some cases extracted en masse in dangerous acids to be used in batteries, cell phones, wind turbines, and solar panels. Solar panel production creates some toxic waste that must be disposed. Wind turbines require a significant amount of oil to lubricate them during their lifetimes. The wind towers are set in the ground with large cement bases and cement production is fossil fuel energy intensive. The glass for Chinese solar panels is often melted with coal burnt without adequate pollution controls. Deep geothermal plants require wells to be drilled and cased and in some cases hydraulically fractured. Hydro dams can be massive cement structures. Wind turbines kill migratory birds, raptors, and are currently the largest killer of bats. Wind turbines make noise that some people may have sensitivities toward. Batteries sometimes catch fire, especially if used improperly. Biomass from solid waste can be very polluting even with pollution controls and produces greenhouse gases. Biomass from wood produces both GHGs and significant pollution. It may be carbon-lean but it significantly speeds up the rate at which carbon enters the atmosphere. Biogas from anaerobic digestion is typically 40% CO2 which is vented into the atmosphere and 60% methane which has the same carbon footprint as fossil methane. Digesters increase the rate and efficiency at which it enters the atmosphere although they reduce its carbon footprint since it is burned instead of vented. Fuel cells use natural gas to make hydrogen. Solar thermal or concentrated solar power plants use natural gas for heat at night. Another significant issue is that renewables require back-up because their generation is intermittent and often unpredictable. Natural gas is the best back-up power but often the natural gas peaker plants that backup renewables are forced to run inefficiently. This necessary backup power can be costly, produces some wear-and-tear on the gas turbines, and most significantly – has both a carbon and pollution footprint. Since it is necessary in order integrate renewables it should definitely be counted as part of the renewable energy system and its emissions measured as such. To not do so would be dishonest and misleading.

Disconnect #5: Fossil Fuel Subsidies Exceed Clean Energy Subsidies and are Less Beneficial and Less Fair

This is a huge misconception. Renewable energy subsidies are typically direct, which means the beneficiaries are paid directly, typically through tax credits and in the case of wind through production credits. They must be subsidized since they are poor investments with slow returns. Fossil fuel subsidies are typically tax deferrals or discounts from losses. There are also things like energy subsidies for the poor which are often counted as fossil fuel subsidies. Some count the societal carbon and pollution “costs” as fossil fuel subsidies. These can be valued in different ways and are not direct payments. Many have pointed out that carbon taxes and pollution taxes disproportionately affect the poor by making energy costs go up. Less pollution certainly has health benefits. Carbon benefits are basically future benefits. Renewable energy subsidies disproportionately benefit the wealthy, those who can afford rooftop solar, electric vehicles, geothermal heat pumps, and battery systems. At the same time those heat and energy assistance programs are based on income so they benefit the poor entirely and are likely nearly entirely fossil fuel sourced. Some renewable energy subsidies available to rural businesses from the USDA amount up to 62% subsidization, free money which gives them an unfair advantage and is unfair to tax payers.  
   
Disconnect #6: Natural Gas is Not a Bridge to a Transition to Renewable Energy

I often see articles touting natural gas as a ‘bridge to nowhere.’ Climate hawk Joe Romm is big into discounting this role of natural gas. Others often try to point out that cheap natural gas is preventing and slowing a transition to renewables simply by being cheap and that renewables would be more competitive if natural gas were more expensive. However, last time I checked no one likes high costs, especially poor people. Another thing they like to point out is that methane leakage from oil and gas systems negates the climate benefits of natural gas over coal. Even if this were true and it most certainly is not even close to being true, the very significant pollution benefits of natural gas over coal would still make it more desirable. The radical environmentalist crowd uses this as their go-to argument against fracking based on the faulty and debunked work of a few scientists that also happen to be very outspoken anti-drilling activists. While there have been many studies attempting to get a widespread assessment of ‘fugitive’ methane leakage from oil and gas systems they rely only on that one main faulty study and any other that seems to support it in any way. This is a clear case of cognitive bias. The fact is that natural gas has been an available bridge to renewables for some time and continues to be. The low price of natural gas can be said to free up more money for those with the means to install renewable energy systems – by the same logic as expensive natural gas forcing people and businesses to install renewable energy because it is more cost competitive. In the first case they can save the money from cheap gas for a period of time to buy a renewable system. In the second case they are losing money for a period of time even before they buy the same system. Natural gas is also a natural complement for renewable energy, providing baseload, peaking, and backup power for renewables by virtue of quick-start capabilities, efficient operation, and ability to size for the system. Natural gas is the lightest and cleanest hydrocarbon fossil fuel and increasing its use relative to heavier hydrocarbons also has carbon and pollution benefits. Thus, it is also a bridge to a transition to lighter hydrocarbons in the form of fuel for long haul trucks, trains, ships, fleet vehicles, and other engines. This is happening now and is set to grow moderately into the future.

Disconnect #7: Energy Cost Accounting is Often Deceptive

Formulas for ideas like ‘levelized cost of energy’ (LCOE) can be misleading and leave out or add things that should not be left out or added. To say that renewables are competitive with fossil energy is a statement that must be qualified. How much direct subsidization, the cost of carbon, and whole system accounting (rather than just the renewable parts of a system that requires fossil backup that is forced to be inefficient) need to be known for LCOEs to be fairly compared. Such deceptive accounting is really a form of shystering and those who play that game should be outed. While it is one thing to be willing to pay money to reduce one’s carbon footprint and feel good about promoting renewable energy it is quite another to lie and say that it is cost competitive and try to entice or shame others into what is economically a poor investment compared to other available investments. In many communities such overzealous green energy advocates are treated in a heroic fashion when they should be called out on deceptive behavior.

Conclusions

That is all I can think of at present but that should be quite enough. People are generally not very informed about energy issues so misconceptions and manipulations can go long ways. While I like renewable energy and encourage others to like it I also like fossil energy and would also encourage others to like it. Anti-fossil fuel advocates tend to be loud and where I live they can be pervasive. They suffer from several classic cognitive biases which I have written about elsewhere. If the ‘three amigos’ did make a pledge for 50% total energy from renewables by 2025 I would have been quite disappointed by the absurdity of it, not because it is not a laudable aspiration (for a date further into the future) but because it would have been an unreasonable one that lends legitimacy to those who continue to badmouth fossil fuels and those who work hard to make them inexpensively available, increase their safety, and reduce their carbon, pollution, and overall environmental footprints. People at all levels need to be adequately informed and this is especially true for those at the highest levels. In that vein I am quite glad I misread the pledge and it was revised (in my mind) to 50% of renewables for electricity generation. Right now clean energy in the U.S. which includes both nuclear and renewables makes up about 33.5% of electricity. Since Canada has very good hydro sources and a lower population than the U.S. it is able to source a much higher percentage of electricity from renewable hydro. That should help the possibility considerably of achieving the pledge. I do not know Mexico's fuel mix. OK so I guess the three amigos are off my shit list - for now!

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