At a recent Crossroads Lecture, energy policy expert Daniel Kammen spoke about Energizing the Low-Carbon Future. His presentation is timely – climate change has been on the public mind as hurricane superstorm Sandy devastated New York, New Jersey, and beyond. Though we would all agree that energy is an essential part of our daily life, Americans spend more money on potato chips than on energy research and development. Dan has a deep nuanced understanding of where we are at, and where we need to go, to build a clean, sustainable energy future.
In the presentation below, Dr. Kammen explores innovations in, and barriers to, building renewable energy systems worldwide – from villages to large regional economies. He discusses tools already available, and others needed, to speed the transition to a sustainable planet. Daniel Kammen is Professor in the Energy and Resources Group (ERG), Professor of Public Policy in the Goldman School of Public Policy at the University of California, Berkeley. He is also the founding Director of the Renewable and Appropriate Energy Laboratory (RAEL). Kammen advises the World Bank, and the Presidents Committee on Science and Technology (PCAST), and is a member of the Intergovernmental Panel on Climate Change (Working Group III and the Special Report on Technology Transfer).
Dan spoke for about an hour, followed by a 35 minute question and answer session. The Q&A session has some great questions and discussion.
Dan talked about cleantech jobs, the economic benefits of transitioning to renewable energy, climate change, coal, natural gas, arctic sea ice loss, peak oil, the real cost of coal and other high-carbon sources of energy, solar energy, and energy storage. One of my favorite quotes:
When you are spending your funds buying fuels as a fraction of the cost of the technology, it’s a very different equation than when you are investing in people, training, new companies, and intellectual capital. [And so, for example] if you buy a gas turbine, 70 percent of the money that will go in to that, over its lifetime, is not going to be for human resources and hardware, it’s to buy fuel. If you buy renewable energy and energy efficiency, while we have a problem of needing to find ways to amortize up-front costs, you are investing in people, companies, and innovation.
Jobs created, per dollar invested, are consistently higher for cleantech jobs versus old fossil fuel based energy sources. Economist Robert Solow, in his Nobel prize winning work on the drivers of economic growth, demonstrated that about 75 to 80 percent of the growth in US output per worker was attributable to technical progress and innovation. Transitioning to renewable forms of energy will provide strong stimulus to our economy, while reducing public health and environmental costs associated with dirty coal and oil pollution.
After Dan Kammen finished overviewing climate change and energy issues, he highlighted several case studies that featured renewable energy and low-carbon energy production implementations for small (personal), medium (community) and large (national) installations. Watch the video above for more.
Oil production in the US peaked in 1970. The easy “sweeter” stuff has been extracted. What remains is deeper in the ground or farther off-shore, requires much more energy to extract, and is more toxic to produce. It takes energy to make energy. Energy Return on Investment (EROI) also known as ERoEI (Energy Returned on Energy Invested), is a common way of expressing the efficiency of the energy production process. The EROI for oil and gas, as well as other fossil fuels, has been falling for decades (see chart below). If it was a financial stock, you would have sold it years ago.
It is important to track EROI. Producing a barrel of oil consumes more and more energy, thus exponentially accelerating the consumption of the oil. It is like the mythic Ouroboros – a snake eating its own tail. A high EROI is better than low EROI. As we approach an EROI of 1:1 (e.g. consuming 1 barrel of oil to produce 1 barrel of oil), it’s game over – why bother. Prudent nations would want to have a comprehensive plan for transitioning to alternative fuels and renewable energy, well before we hit peak oil. Oh well… More on that in a minute (see The Hirsch Report, below).
Oil and gas are the main sources of energy in the United States. Part of their appeal is the high Energy Return on Energy Investment (EROI) when procuring them. We assessed data from the United States Bureau of the Census of Mineral Industries, the Energy Information Administration (EIA), the Oil and Gas Journal for the years 1919–2007 and from oil analyst Jean Laherrere to derive EROI for both finding and producing oil and gas. We found two general patterns in the relation of energy gains compared to energy costs: a gradual secular decrease in EROI and an inverse relation to drilling effort. EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007. The EROI for production of the oil and gas industry was about 20:1 from 1919 to 1972, declined to about 8:1 in 1982 when peak drilling occurred, recovered to about 17:1 from 1986–2002 and declined sharply to about 11:1 in the mid to late 2000s. The slowly declining secular trend has been partly masked by changing effort: the lower the intensity of drilling, the higher the EROI compared to the secular trend. Fuel consumption within the oil and gas industry grew continuously from 1919 through the early 1980s, declined in the mid-1990s, and has increased recently, not surprisingly linked to the increased cost of finding and extracting oil.
As we deplete the earths global oil reserves, we need to dig deeper and deeper – typically drilling over 100 million feet of well per year. It takes enormous amounts of energy and resources to do that, not to mention the energy consumed just to figure out where to drill. The next two charts show the EROI for oil and gas discovery and production.
For the Discovery chart above, note that in the early days of oil exploration, the stuff was practically bubbling out of the ground, so it was much easier to figure out where to drill – hence the EROI over 1,200 in 1920. As the US industrial age found its legs, oil consumption accelerated. Demand for more and more oil quickly consumed the easy stuff, and the EROI fell rapidly. As we hit peak oil production in 1970, the EROI fell below 10:1. I inset a blowup of the chart, from 1950 to 2010, so that we can see how EROI has since remained firmly in the single digits.
The EROI for Production is trending lower too. Variations in any given year are largely dependent on how much drilling it takes to produce the oil. Typically about 2 barrels of oil equivalent are consumed per foot of well drilled. In years where there was a lot of drilling, the EROI would be lower.
A more intuitive way to look at this trend is as dollars per barrel of oil. The chart below is from the Energy Information Administration (EIA) Annual Energy Review for 2011. It shows the cost to add each additional barrel of oil to US reserves.
As I mentioned above, the easy oil has been extracted. What remains is increasingly difficult to get to and refine (ultra-deep, off-shore, tar sands, shale-rock fracking, etc). We should expect these prices to continue their trend higher.
The Hirsch Report
In 2005, the US Department of Energy published Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, which came to be known as the Hirsch Report, named for the reports lead author, Robert Hirsch. It examined the time frame for the occurrence of peak oil, the necessary mitigating actions, and the likely impacts based on the timeliness of those actions. From the report:
The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
The report estimated that oil production would peak in about 2015. It laid out three possible scenarios:
A scenario analysis was performed, based on crash program implementation worldwide – the fastest humanly possible. Three starting dates were considered: 1. When peaking occurs; 2. Ten years before peaking occurs; and 3. Twenty years before peaking.
The timing of oil peaking was left open because of the considerable differences of opinion among experts. Consideration of a number of implementation scenarios provided some fundamental insights, as follows:
Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
Initiating a mitigation crash program 20 years before peaking offers the possibility of avoiding a world liquid fuels shortfall for the forecast period.
The reason why such long lead times are required is that the worldwide scale of oil consumption is enormous – a fact often lost in a world where oil abundance has been taken for granted for so long. If mitigation is too little, too late, world supply/demand balance will have to be achieved through massive demand destruction (shortages), which would translate to extreme economic hardship. On the other hand, with timely mitigation, economic damage can be minimized.
We are on a short fuse. As we ride along the top of peak oil production, spikes in demand, or disruptions in supply, will cause rapid fluctuations in the price of oil. With no ability to provide alternatives, the economy will stutter, usually in the form of a recession, which has the side effect of reducing demand. Until we transition to alternative forms of energy, we will repeat the cycle of growth, followed by hitting the peak oil wall, followed by recession.
Small is Beautiful
And as the legendary economist E.F. Schumacher points out in his seminal book Small is Beautiful, to understand the true cost of an product or initiative, we must tally both the direct costs as well as the indirect costs. When we talk about oil and gas, what is the cost of CO2 spewing into our atmosphere? What is the cost of toxic chemicals leaking into our water systems? What is the cost to public health? What is the cost of each oil war? What is the cost of funding petro-dictatorships? What is the cost to the common wealth?
What is the cost?
While the EROI of fossil fuels such as oil, gas, and coal plummet, the EROI for renewables such as wind and solar are trending strongly up, with EROIs five to twenty times higher than their fossil fuel counterparts.
Can the nation that pioneered the computer, telecommunications, the internet, medical technology, oil exploration, landed on the moon, etc. muster the will to do it again with alternative energy? Carpe Diem!
Subsidies and tax breaks are a tried and true way of helping a developing industry get up on its feet.
One of the strategies to accelerate a transition to cleaner greener renewable energy sources is to subsidize research development, and production of renewable energy sources, such as wind power, solar power, geothermal, etc.
Free market advocates often say that the emerging renewable energy industry should not be subsidized. What is not widely know though, is that subsidies for well established fossil fuels exceed renewables by almost six to one.
Research by the Woodrow Wilson International Center for Scholars and the Environmental Law Institute reveals that the lion’s share of energy subsidies supported energy sources that emit high levels of greenhouse gases (GHGs). The study, which reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008, showed that the federal government spent about $70 billion on the fossil fuel industry, and about $12 billion on renewables. As the report points out:
Moreover, just a handful of tax breaks make up the largest portion of subsidies for fossil fuels, with the most significant of these, the Foreign Tax Credit, supporting the overseas production of oil. More than half of the subsidies for renewables are attributable to corn-based ethanol, the use of which, while decreasing American reliance on foreign oil, has generated concern about climate effects.These figures raise the question of whether scarce government funds might be better allocated to move the United States towards a low-carbon economy.
N.B. Carbon capture and storage is a developing technology that would allow coal-burning utilities to capture and store their carbon dioxide emissions. Although this technology does not make coal a renewable fuel, if successful it would reduce greenhouse gas emissions compared to coal plants that do not use this technology. The production and use of corn ethanol can generate significant greenhouse gas emissions. Recognizing that the production and use of corn-based ethanol may generate significant greenhouse gas emissions, the data depict renewable subsidies both with and without ethanol subsidies.
Fossil fuel extraction is increasingly toxic (e.g. fracking poisons public water systems) and environmentally destructive (e.g. gulf oil “spill”). And fossil fuel production seems to be hitting a Peak Oil wall. As production lags demand, we should expect oil and gas prices to rise precipitously. Subsidizing oil keeps us addicted to it.
Three of the top 5 biggest companies in the world are oil companies (Exxon, BP, Royal Dutch Shell). Rather than subsidize Big Oil profits and foreign oil nations, we should be taxing fossil fuels to reduce their use. Tax what we want to reduce, and subsidize what we want to increase. Tax what harms us, and subsidize what helps us. Use the taxes to fund R&D and development of a world class alternative energy industry.
Obviously, that means politicians will need to resist the monied special interests of the Big Oil lobby.
If a farmer has 1,000 acres of land, and he/she planted it with corn for making ethanol and erected wind turbines for generating electricity, how much energy will the farmer produce and what are the economics?
A typical wind farm will have about 15 wind turbines per 1,00o acres. Each wind turbine will generate about 500 kW of power (assuming 33% capacity factor). Electricity retails at about 12¢ per kW hour. So 1,000 acres will produce 15 x 500 x .12 = $900 of electricity per hour, which equates to about $8,000,000 per year, representing about 224 trillion BTUs of energy.
Corn Ethanol Power
A typical 1,000 acre corn farm will produce about 7,500 pounds of corn, yielding about 340,000 gallons of ethanol. Ethanol retails at about $1.80 per gallon. So 1,000 acres will produce 340,000 x 1.8 = $612,000 per year, representing about 26 billion BTUs of energy.
Energy Returned on Energy Invested
It takes energy to produce energy. The Energy Returned on Energy Invested (ERoEI) for wind turbines is an impressive, state of the art wind turbines are providing ERoEI of over 50:1.
Side-effects of Wind Power and Corn Ethanol Production
Wind turbines are often perceived as an eyesore, marring the land with imposing manmade structures. Flying creatures such as hawks and bats are often killed as they pass through the turbine blades. Wind turbines are noisy, and are best located in rural areas, or at sea. Wind power needs to be located near power transmission resources, it that infrastructure will need to be built.
Corn ethanol yields just a bit more energy than it takes to produce it. It takes about 1,700 gallons of water to produce each gallon of corn ethanol. Corn used for ethanol production is corn not used for food production. As food corn supply is reduced, corn-based food prices rise.
Given 1,000 acres of land, planted with corn and a typical density of wind turbines, the table below summarizes the annual economic and energy value of corn ethanol fuel and wind turbine electricity.
When you see three mainstream media (Vanity Fair, HBO, and Bloomberg) covering the esoteric practice of hydraulic-fracturing (also know as “fracking”), pay attention. Vanity Fair’s report, A Colossal Fracking Mess; HBO’s report, Gasland; and Bloomberg’s report, Shale Game, all detail the nasty practice of fracking – a process used to release natural gas and oil from the earth.
How nasty is fracking? Watch this amazing video of a homeowner demonstrating one of the toxic side effects of Fracking taking place on land near this man’s home.
This video was posted a year ago, and has had about 130,000 views. Though it took a year for the story to hit the mainstream media – the cats out of the bag.
Burning water is just one of the side effects of fracking. Tests of fracking runoff show presence of benzene, ethylbenzene, toluene, boric acid, monoethanolamine, xylene, diesel-range organics, methanol, formaldehyde, hydrochloric acid, ammonium bisulfite, 2-butoxyethanol, and 5-chloro-2-methyl-4-isothiazotin-3-one. (Recently, in congressional testimony, drilling companies have confirmed the presence of many of these chemicals.) In the Vanity Fair article, Theo Colborn, a noted expert on water issues and endocrine disruptors, said that at least half of the chemicals known to be present in Fracking fluid are toxic; many of them are carcinogens, neurotoxins, endocrine disruptors, and mutagens.
HBO’s Gasland is a detailed journey around America, visiting the various communities where shale gas exploration is having an impact on health and wellbeing of the community. Special attention is given to the Marcellus Shale, which poses high risk to ground water for residents of Pennsylvania and New York. All three reports detail this.
Each well needs 82 tons of assorted chemicals to get it producing. New York has banned shale gas drilling statewide until it adopts new rules. “We firmly believe, based on the best available science and current industry and technological practices, that drilling cannot be permitted in the city’s watershed,” Mayor Michael Bloomberg said in an April.
While the Vanity Fair and Bloomberg reports provide for gripping reading, Gasland’s use of video and narrative delivers a powerful compelling punch. After watching, I was thinking how grateful I was to not live in any of the numerous communities exposed to the toxic side effects of shale gas exploration.
Dimock Township in Pennsylvania is one of the towns that features in all three reports. The Bloomberg report says:
Victoria Switzer, who moved to Dimock Township, Pennsylvania, to build a $350,000 dream home with her husband, Jimmy, in 2004, had no idea how shale gas would consume her village of 1,400.
She says she found so much methane in her well that her water bubbled like Alka-Seltzer. Neighbor Norma Fiorentino says methane in her well blew an 8-inch-thick (20-centimeter-thick) concrete slab off the top. The $180 bonus Cabot paid to drill on Switzer’s 7.2 acres (2.9 hectares) and the $900 in royalties she gets each month don’t compensate, she says.
To paraphrase Ronald Reagan, “The 10 most terrifying words in the English language are ‘I’m from the oil company an I’m here to help.’”
Transitioning from Fossil Fuels to Renewable Clean Energy
Gas/Oil production is peaking. The easy oil and gas has been consumed. What remains will increasingly be harder to get to and more complicated to extract. Witness the BP Deepwater Horizon debacle in the Gulf. The business of oil/gas extraction will get increasingly messy and rife with political and legal risk.
In 1950 we could produce 100 barrels of oil using the energy of 1 barrel of oil. So the Energy Returned on Energy Invested (ERoEI) was about 100:1. Today that ratio has fallen below 10:1. Similar low ERoEI can be found for other fossil fuels. The chart below shows the ERoEI for various forms of energy. The highest ROI is in wind and solar. This is where we are seeing double-digit growth.
The oil/gas industry has 100 years of inertia propelling it forward. The golden days of fossil fuels are behind us. The industry is a dinosaur now – kept alive by our addiction to fossil fuels. Renewable energy is our future. The faster we can make the transition, the less damage will be done as the beast staggers to its rotten end.
Bryan Walsh, one of my favorite environmental reporters, just published this evenhanded video that looks at some specific examples of toxic fracking related events in Pennsylvania, the heart of east coast gas extraction. The devastating impact on homeowners and communities is tragic.