Monday, February 27, 2006

Signs of World Wide Energy Sector Transformation

"China, according to The Washington Post, soon will complete a $100 billion deal with Iran that would permit a Chinese government-owned energy company to lead the way in developing a huge oil field in Iran." (Feb 22, 2006)

"China, seeking oil and gas to fuel its booming economy amid stagnant production at home, has been snapping up energy resources in places as far flung as Venezuela, Kazakhstan, Nigeria and Australia." (Times Leader Feb 21, 2006)

Former CIA Director James Woolsey, a staunch neo-conservative who is pushing for military intervention in the Middle East, warned the conference of the "potential use of oil as a weapon to affect our security and our behavior." (source Brookings Institution, March 5, 2004)

Our Federal government began offering tax credits for solar water heating systems (30% tax credit and five-year accelerated depreciation) in 2006.

George Bush is grasping at the straws of hydrogen cars and cellusic ethanol fueled cars - to replace our oil addiction. (see previous post)

Procter and Gamble is making a cold water Tide laundry detergent.

GAGEX, the only mutual fund that mentions peak oil in its prospectus, was the 4th best performing US mutual fund in 2005.

Statements made at the Renewable Energy Finance forum in June of 2005 in New York City included: that renewable energy was the next big multi-billion dollar sector with significant growth potential.

All the Japanes firms are introducing mini cars - you will soon see the Honda Fit, the Nissan Versa and perhaps you have noticed the Toyota Scion line.

Kuwait recently announced that they have half as much oil as they thought they did. (Gulf Times Feb 26, 2006)

The Bush administration is working on making nuclear waste fuel reprocessing legal again. Carter made it illegal for fear of nuclear proliferation.

Stocks of railway companies have been doing really well. (And I thought about buying some a eight months ago - ah well.) Nuclear companies too.
State's around the country - are passing renewable portfolio standards (RPS). A RPS requires the utilities in each state to generate a specific share of their electricity sales from new renewable generation.

Chevron USA - has the "will you join us" campaign going. Where they say "It took us 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30." (Note experts estimate that there are two trillion barrels of conventional oil in the world.)

Governor Schwatznegger just got California to offer about $3 billion in incentives for solar electric systems.

China's worrying about energy. Here is one example from the Chinease Ministry of Construction (Feb 24 2006) "Bay windows, French windows, or any other designs which are too much energy-consuming, will be prohibited in Huhan, Hubei Province as of January this year."

Apparently Shell oil is thinking about buying the world's largest wind turbine manufacturer Vestas. Forbes online 2,23,2006

Russia is gaining new petro/gas- political power
"When Russia turned off the gas to Ukraine, it sent shivers across Europe where customers are increasingly dependent on Russia to keep warm." (BBC News, Moscow Feb 14, 2006)

Russia has stated that they hope to provide 10% of US natural gas use in the next decade.

Sunday, February 26, 2006

Fueling Transportation - Renewable fuels

Is President George Bush grasping at the straws of hydrogen cars and cellulosic ethanol fueled cars - to replace our oil addiction? Let’s take a look at energy options for transportation.

Today most ethanol is produced using by letting yeast have at corn sugars. That is a bit of a shame because those sugars also feed us humans.

To offset the USA's oil imports the quantity of corn need, to convert into the ethanol using current ethanol production technology, is simply staggering. American would need about 400 million acres of land in corn with all the corn going to ethanol production to replace all of our current oil imports. Currently there are about 325 million acres of cultivated land and about 80 million acres are in corn.

Also remember corn is fertilizer hungry- and fertilizer is mainly natural gas. The Haber-Bosch process is used world-wide to manufacture ammonia. The process reacts nitrogen (N), from the atmosphere, with hydrogen (H), typically from natural gas, to produce ammonia (NH3) over an iron catalyst under conditions of 200 atmospheres, 450°C. The chemical formula is:
N2(gas) + 3H2(gas) = 2NH3(gas)

Manufacturing 1 ton of anhydrous ammonia (which is 82% nitrogen) fertilizer requires 33,500 cubic feet of natural gas. Applying 80 lbs of nitrogen per acre get you about 135 bushes of corn in Kansas. In other words it takes 12 cubic feet of natural gas to grow one bushel of corn and it takes 1630 cubic feet of natural gas to produce the nitrogen fertilizer per acre of corn.

For that 400 million acres of land in corn - needed to displace our oil imports, it would take 6.5 trillion cubic feet of natural gas to make the fertilizer.

So corn based ethanol has two huge limitations
  1. There isn't enough land to grow the corn with out starving the nation (and other nations that depend on our corn and wheat exports), and
  2. it requires massive amounts of natural gas.

If ethanol is to supply a significant share of US's fuel needs the hope is that it can be based on cellulosic feedstocks. "Cellulosic" includes stuff like wood chips, grasses, leaves, that is found in agricultural and forest residues (e.g., the corn stock), and trees.

But it all hinges upon new bio-technologies, a.k.a. enzymes, being developed to break down cellulose and release the plants’ sugars for yeast fermentation into ethanol. Those enzymes do not exist yet - and they need to be able to break down many types of cellulosic feedstocks into sugars.

Other options

Biodiesel from soy. Basically this process squeezes the oil out of soy (hemp could also be used, or other oil seed crops). The soy oil is processed into diesel and the solid soy materials are used in food or feed. It is simple but requires lots of agricultural land, although soy needs much less fertilizer and corn.

Aqueous phase reforming (APR) hydrogen production. This is a hydrogen production method being developed by a start up here in Madison WI called Virent Energy Systems. The APR system generates hydrogen from aqueous sugar solutions such as ethylene glycol, biomass-derived glycerol, sugars and sugar-alcohols. It uses a catalyst (platinum coated beads) that under moderate temperature and pressure breaks the hydrogen off the aqueous sugars. That hydrogen is collected and is a fuel - like gasoline or ethanol.

To date the APR process only works on a few types of sugars, so they need purity in the aqueous solution... unlike the ethanol process that can use hundreds of sugars and be pretty messy. However Virent is just starting up and are working to expand the sugars, reduce the purity needs of the sugars, etc.

It does seem like the APR process is more energy efficient than the ethanol process.

Check out their presentation at:

Algal Hydrogen - has been in the news recently. Here is some information from Wired News of 25-February-2006 - (I edited it down)

Researchers at the University of California at Berkeley have engineered a strain of algae (known as C. reinhardtii), that with further refinements, produce vast amounts of hydrogen through photosynthesis. The work, led by plant physiologist Tasios Melis, if it proves correct, would mean a major breakthrough in using algae to produce a wide range of products, from biodiesel to cosmetics.

Melis figured out how to get hydrogen out of green algae by restricting sulfur from their diet. The plant cells flicked a long-dormant genetic switch to produce hydrogen instead of carbon dioxide. But the quantities of hydrogen they produced were nowhere near enough to scale up the process commercially and profitably.

The new strain of algae allows more sunlight deeper into an algal culture and therefore allows more cells to photosynthesize. Researchers hope to further boost hydrogen production, and reduce carbon dioxide production by using genetic engineering to close up pores that oxygen seeps through. "When we discovered the sulfur switch, we increased hydrogen production by a factor of 100,000" says Seibert. "But to make it a commercial technology, we still had to increase the efficiency of the process by another factor of 100."

Researchers are now trying to adjust the hydrogen-producing pathway so that it can produce hydrogen 100 percent of the time. A bigger challenge, and one that’s further down the road to solving, is improving the efficiency of getting hydrogen out of the "algal culture". Whether or not scientists can find solutions for those two problems will have a lot to do with realizing the vision of a hydrogen-powered economy based on algae farms in desert areas.

Some algae are also viewed as an ideal source for biodiesel because they can produce oils at a much higher rate than other plants. For all these applications, Melis’ antenna-truncated algae should be a major breakthrough.

Batteries - Plug in Hybrids Whatever the fuel, hybrids make sense. Basically hybrids are an energy efficiency improvement where:

  1. energy is taken when the car's breaks are applied,
  2. to spin a generator,
  3. producing electricity,
  4. storing the electricity in a battery
  5. using the electricity to drive a motor to power the wheels when power is needed.

For years this was known as regenerative braking. If I recall correctly they use it on locomotives and large cranes, and the electric generator and the electric motor can be the same component. With regenerative breaking cars get more miles per unit of fuel (gallon of gasoline to algal hydrogen).

Hybrids also get additional fuel savings, by turning the internal combustion IC) engine off when it is not needed (e.g., at a stop sign or when the electric engine is power the car) and by being able to use a small more efficient IC engine. Or course they tend to be small light and aerodyanmic as well.

Now add onto hybrids, plugging the car in and adding larger batteries. What this allows you to do is start the car off with a full tank of batteries even if you parked with an empty tank. The smart system would wait until electric power is "cheap" to fill batteries. Cheap power today is between midnight a six in the morning. But in the future it could be when the wind is blowing or the sun shining.

You could also have solar electric panels on your home's roof that help charge up the car's batteries. Simply adding panels on the car - charging the batteries whenever it is sunny could improve its efficiency a bit. This is a link to someone that has done it - created a solar prius. Now with charged and larger batteries the car would get even more miles per gallon of gasoline, biodiesel, hydrogen or ethonal.

If you plug your car in at your job downtown - and there is a power shortage spiking up the value of electricity (to where it is worth more than what is in your battery) the smart utility grid would drain your battery - and pay your for it.

Both of these technologies, hybrids and smart charging systems, are ready - all we have to do is implement them.

Also expect cars to get lighter and smaller. And people to drive less.

Wednesday, February 22, 2006

Politics and Oil

The Federal energy bill that our representatives cobbled together and finally passed last summer provided many billions in tax subsidies to the oil and gas industry.

President Bush had this to say about those subsidies: "I will tell you with $55 oil we don't need incentives to oil and gas companies to explore. There are plenty of incentives." quoted in the Washington Post, 4/19/2005

Regardless the Energy Bill was passed with the massive oil and gas subsidies. Good olde oil industry lobbyists had it their way. It seems they have more power than even George W!

Then with Rita, oil and gas prices shot up. Oil is a global commodity. Every nation that purchases crude oil on the global market pays the same price (in US dollars). Oils its price shot up not only in the US but also in India, Japan, Germany, Mexico, Iceland, etc.

Funny, Wisconsin's Governor Doyle had subpoenas issued to executives from the world’s five largest oil companies to come to "Milwaukee to testify under oath about how, following one of the largest natural disasters to hit America, they could justify reaping billions of dollars in profits from the pockets of Wisconsin’s working class families." (Quote from Governor Doyle's webpage)

Hello Mr. Governor, the oil industry big five does not set the price of oil. The world market place does. (And as we import more and more natural gas - the world market will soon determine its price for us too.) The oil production of the big five is tiny when compared to the oil production from OPEC.

If any oil producer controls the price of oil it is OPEC. But these days I believe that the primary price driver is simple supply and demand. With supply and demand delicately balanced any natural disasters or political tensions that effects real or perceived supply or demand, effects price.

In the months before those subpoenas the WI governor cut the funding to the State's energy efficiency and renewable energy program by half, put pro-utility regulators at the utility commission, and hired someone to head the State's division of energy that knows close to nothing about energy. Politics as usual - to find a scape goat in big oil.

Then in January 2006, the oil and gas industry had their highest profits ever in the history of oil and gas. While we the consumers paid high prices. That had many of the same representatives that had put those subsidies in the energy bill in a huff. Many called to enact a windfall profits tax.

(I like high energy prices - nothing else gets us to make the changes this country so desparetly needs. Changes like improving energy efficiency and increasing the use of renewable energy.)

In response, the oil and gas industry came out with full-page ads showing that their profits as a share of sales were actually low (mostly when compared to the pharmaceutical industry).

Oil and gas prices are back down. So the brush fire is out... for now. But what about next week?

Friday, February 03, 2006

Response to "We Are Addicted to Oil" - so sad

1) The Energy Department will begin laying off researchers at the National Renewable Energy Laboratory in the next week or two because of cuts to its budget. A veteran researcher said the staff had been told that the cuts would be concentrated among researchers in wind and biomass, which includes ethanol. Those are two of the technologies that Mr. Bush cited on Tuesday night as holding the promise to replace part of the nation's oil imports.

2) In an interview Wednesday, the Saudi ambassador to Washington, Prince Turki al-Faisal, said he would have to "seek an explanation" from Bush (source: the New York Times)

3) "The thing that they're really losing sleep about at the White House is the crude supply from Iran." (source: the New York Times)

4) The Organisation of the Petroleum Exporting Countries on Wednesday warned that President George W. Bush’s proposal to reduce US dependence on Middle Eastern oil could badly jeopardise needed investment in Gulf oil production and refining capacity. (source: Financial Times)

5) An Opec delegate said: “Comments like that are unrealistic. Everyone knows the world will continue to depend on Middle East imports.” (source: Financial Times)

6) Financial Times Headline "Bush misfires in drive to end 'oil addiction'"

7) "One day after President Bush vowed to reduce America's dependence on Middle East oil by cutting imports from there 75 percent by 2025, his energy secretary and national economic adviser said Wednesday that the president didn't mean it literally." (source: Knight Ridder Newspapers)

8) "Iran proposes to set up by March 2006 an “oil/energy bourse” for trading based on the euro, rather than the US dollar. While it may seem innocuous, this represents a grave threat to the continued global hegemony of the United States... Since the 1970s, the OPEC countries have agreed to sell oil for US dollars only. This means that every country needing to import oil must first acquire enough US dollars.... The net result is global hegemony of the US dollar. However, if Iran starts its own euro-denominated oil bourse and it takes off, the US dollar — already an ailing currency due to huge deficits in the US economy — will be marginalised as the global currency." (source: Daily Times of Pakistan).

note: The US dollar is kept strong in the world partly because countries need to buy dollars to buy oil. If the world oil trade switches to the Euro the value of the dollar (and international buying US treasury notes) will plummet.

Thursday, February 02, 2006

Climate Change: A Call to Action

(Note this was first published in the Sustainable Times newspaper, Dane County WI)

Ok, so you are sick of hearing about climate change. Well you, and the planet, will be getting only sicker. To feel better about climate – you must act! As Americans – who use 25% of the worlds energy with only 5% of its population - it is our duty to act. We believe that the best way for the world to solve the climate crisis is through energy efficiency, renewable energy and reforestation.

The average single family home in Wisconsin consumes about 10,000 kilowatts hours (kWh) of electricity. About 75% of Wisconsin’s electric power is from coal fired power plants, about 20% is from nuclear power plants and about 5% is from natural gas, hydroelectric plants and other sources. Our average home will require Wisconsin power plants to burn four tons of coal per year, evaporate over 4000 gallons of water each year and emit over 12 tons of carbon dioxide every year. The average single family home in Wisconsin consumes about 100,000 cubic of natural gas per year for heating needs. That gas firing releases another six tons of carbon dioxide each year.

Almost 50 acres of Wisconsin forest are required to absorb the carbon emitted to heat, cool and power the average Wisconsin single family homes. And that does not include the commercial, agricultural and industrial fossil energy usage needed to satisfy your needs for material goods and services, your workplace and travel.

A hopeful carbon dioxide reduction plan limits the increase in global temperatures by 3.6 oF. (This corresponds to a doubling of carbon dioxide levels compared to pre-industrial levels.) A 3.6 oF increase will result in the extinction of 25% the plant and animal species, increasing global sea levels and flooding millions of homes, rivers becoming too warm for trout, reduced farm production, etc. Less aggressive reductions of greenhouse gases result in increasingly catastrophic scenarios.

To limit global temperature increase to 3.6 oF the world must drastically reduce it use of fossil fuels (oil, natural gas and coal). Starting today, all new and renovated homes and buildings must reduce their fossil energy use by 50%. That reduction in fossil fuel emissions must be phased in so that by 2030 all new buildings and homes use no fossil fuels. Reducing fossil energy emissions from new buildings by 100% in 2030 sounds almost insane. Scientists, however, are now aware that the cost of not acting is not acceptable.

A few years ago most scientists believed that the Greenland ice sheet would get larger during the early stages of global warming. Unfortunately the recent data shows that overall temperature rise has won out, and the ice is shrinking significantly. See the map of Greenland showing the shrinkage of the ice melt cap (the red areas) between 1992 and 2002. Oceanographers are concerned that the cold winter Europe is experiencing is caused by the fresh water melting off the Greenland ice cap and shutting down the Gulf Stream – thereby cooling Europe.

It is easier to run away and hide from some of these issues. Where do you stand? We need the strength and courage to face up to the danger. The Federal Government has failed us on this issue. We need to start acting without them.

There are three safe strategies to reduce fossil energy use: 1) Massive implementation of energy efficiency – meaning doing tasks (like lighting and heating) with less energy. 2) Massive use of renewable energy sources such as solar, wind, wave, tidal, geothermal, biomass, and biogas. 3) Massive reforestation.

You and I must begin leading the way to the energy efficient and renewable future. First by becoming energy "conservers." Conservers use energy wisely, use energy efficient technologies (from lights to cars) and begin using renewable energy sources at our homes and businesses. Second we must work to stop deforestation and dramatically increase reforestation.

Reforestation is not something that we can each work on directly. We can start taking small actions. Consider letting part of your yard go natural. This will save gasoline and, in a very small way, allow more biomass to grow. If you own large areas of land consider managing them to absorb more greenhouse gasses. Also ensure that the goods you purchase are not directly or indirectly causing deforestation.

Consider investing the stock of companies that provide energy efficiency and renewable energy products and services. The better financed these companies are the larger their impact on the US economy and politics. Wall Street seems to have discovered that energy efficiency and renewable energy are good investments. If you look at the performance of these companies you will find that many of them have increased in value by 100% in the last year.

If US citizens can not take energy efficiency and renewable energy actions than no one can. Your investment in renewable energy will better ensure that the world and our children have a safe future. Global climate change is occurring. We must respond now. If not now, then when?

Mark Daugherty is a co-author of this post.

Wednesday, February 01, 2006

Bush - We are Addicated to Oil

Presidents since Jimmy Carter have called for reducing our reliance on foreign oil (particularly from the politically unstable Middle East). Now Bush joins that crowd with the strongest word yet "addicition". I do agree with him.

Addicition is not a good thing. We used to call it being dependent or reliant on foreign oil. Addicition is something you need to stop. So oil is a drug.

Does addicition mean the drug dealer can charge as much as they want?

Could Bush be looking a peak oil graphs - and see that in 20 years (2025) that oil production will be at 25% of current production.

Here is a recent example from the news on Middle East oil:

"LONDON, Jan 20 (Reuters) - OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW). "

Kuwait - used to say that they had about 10% of the world's oil reserves.

I was positively surprised that President Bush did not mention increasing drilling in the US. Maybe he accidently skipped a paragraph in his speach?

I was expecting to hear Bush say that he/the government wanted the authority to site liquified natural gas ports where he wanted them. But the administration may have realized that LNG ports mean the US will also become addicited to foreign sources of natural gas.

Do Americans understand the difference between oil and gas?

I am very very sad to hear the alternative energy and clean energy includes clean coal and nuclear. This is true contortion of what "alternative" and "clean" means. Clean coal is not clean - nor is nuclear. Perhaps we will need to use the pharse "renewable energy" when refering to solar, wind, hydro etc .

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