Dan Kammen: On Climate Change and Renewable Energy

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.

cleantech renewable energy conservation jobs chart
(source: Political Economy Research Institute, University of Massachusetts Amherst)

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.

Recommended Reading

Climate Change



TEDxRainier 2011 Conference

I just got back from the TEDxRainier 2011 conference in Seattle. Curator Phil Klein and an extraordinary band of volunteers and professionals put together a fantastic thought-provoking day of guest speakers, thought-leaders, and visionaries. The theme for the conference was “Gained In Translation: Ideas Crossing Frontiers” – How do ideas spread in our modern, socially networked world? And how will we, the listeners, receive those ideas and translate them forward?

Singer/Songwriter Daria Musk offered up a live example of social media powered musical events. Using Google+, she introduced a selection of fans from around the world, projected on the ubiquitous TED presentation screen. Daria then kicked off her hit song You Move Me and proceeded to rock the house.

Daria Musk, at TEDxRainier 2011, Seattle
Daria Musk performing at TEDxRainier 2011, Seattle

Using social media tools like Google+ and YouTube Live, Daria has performed live concerts to over 200,000 online fans.  To put that in perspective, Wembley Stadium holds about 90,000 people. So Daria is rocking 2+ Wembley Stadiums, distributed throughout the world, all from the quiet of her studio.

Though I enjoyed most of the speakers, a few of the highlights included:

  • Rick Steves‘ frank talk about how global travel brings us together, saying “Fear is for people that don’t get out much.” Rick is a world traveler and author of over 80 very readable helpful books on travel.
  • Amory Lovins on Reinventing Fire – how to transition to zero carbon clean renewable energy by 2050. Commenting on political gridlock fostered by fossil fuel special interests, the best quote: “Not all the fossils are in the fuel.”
  • Peter Blomquist on being humbled in his encounters with the kindness of simple traditional cultures. Peter is principal of Blomquist International, focused on organizational development, philanthropy, and global engagement. Best quote: Enter humbly, stay for tea, listen and learn.
  • ITGirl librarian Chrystie Hill on how libraries are transforming and evolving in the new world. When kids were asked what they would like in a library where everything is allowed, one replied – “To hear the sounds of the forest as I approach the books about trees.” Chrystie’s presentation was very beautiful and inspiring. Librarians rock!
  • Joe Justice, founder of WikiSpeed, describing the webspeed development of a revolutionary new electric car, using a distributed network of volunteer engineers, designers, manufacturing specialists, to develop the cars of the future.
  • Leroy Hood on how insights from the human Genome project are bringing fundamental advances in early diagnosis and treatment of disease.
  • Pediatrician Dimitri Christakis on how focusing on the first year of a childs development can have stunning effects on the potential of the child, for the rest of life. Dr. Christakis is author of The Elephant in the Living Room: Make Television Work for Your Children.
  • Jenn Lim on happiness. Jenn Lim is the CEO and Chief Happiness Officer of Delivering Happiness, a company that she and Tony Hsieh (CEO of Zappos) co-created in 2010 to inspire happiness in work, community and everyday life.
  • Adnan Mahmud on “Climbing the ladder that matters.” Adnan tells his story about how he came to create Jolkona, a nonprofit that helps people raise large amounts of money through small donation, and receive proof of how the donations helped make a difference for those in need.
  • The three  Interfaith Amigos, Pastor Don McKenzie, Rabbi Ted Falcon, and Imam Jamal Rahman on religious discord, and how to get along. Their presentation received a standing ovation. It was at once funny and touching and brimming with promise and hope. The three Interfaith Amigos are authors of a new book – Religion Gone Astray.

For me, the most powerful talk was given by photographic artist Chris Jordan. Jordan, a former corporate lawyer, explores the detritus of mass culture, using photographs and images to, at a gut level, convey the impact we are having on the earth. I will post a video of his talk as soon as TEDxRanier posts it. For more on his work, see this link for some notes from a recent trip to University of Oregon’s Jordan Schnitzer Museum of Art in  Eugene, OR.

While the presenters spoke, my wife Sue, author and artist at travelsketchwrite.com, sketched presenter core messages and ideas in a visual stream of consciousness. Here are her notes…

TEDxRainier 2011, Seattle, TED talks
Notes from TEDxRainier 2011, by Sue at travelsketchwrite.com (click for larger image)
TEDxRainier 2011, TED talks, Seattle, University of Washington
Notes from TEDxRainier 2011, by Sue at travelsketchwrite.com (click for larger image)

Looking for an idea for taking your sweetie out on a date? Go to a TED conference. Ideas are hot! Follow up the conference with a nice dinner, in a quiet romantic place, and prepare to have some great conversation. TED talks will inspire, enlighten, and fill you with hope.

Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production

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.

The Ouroboros

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).

This week, a team of researchers published a detailed analysis of the EROI for oil and gas industry. The report, A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production, is authored by researchers at State University of New York and Boston University.

From the abstract:

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.

eroi eroei discovery for US oil and gas
(source: Guilford, Hall, Connor, Cleveland "A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production." Sustainability 2011, 3, 1866-1887)

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.

eroi eroei production for US oil and gas
(source: Guilford, Hall, Connor, Cleveland "A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production." Sustainability 2011, 3, 1866-1887)

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.

expenditures per barrel of reserve additions, 1975 to 2008, cost per barrel of oil, chart
COE (crude oil equivalent) measures the cost of adding 5.8 million BTUs regardless of whether the resource is oil, natural gas, or natural gas liquids. (source: EIA, 2011 Annual Energy Review)

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?

Fires burn around the site of the BP Deepwater Horizon rig site in the Gulf of Mexico, June 19, 2010. (source: LA Times)

Carpe Diem

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.

eroei for oil, gas, coal, wind power, solar energy

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!

Recommended Reading

Common Wealth: Economics for a Crowded Planet by Jeffrey D. Sachs

Small is Beautiful by E.F. Schumacher

Congress Releases Report on Toxic Chemicals Used In Fracking by Jay Kimball

WikiLeaks on Peak Oil by Jay Kimball

The Price of Civilization: Reawakening American Virtue and Prosperity by Jeffrey D. Sachs

Wind Power In Iowa: The New Super Crop

I am on a road trip across America, interviewing sustainable business leaders for a new book I am working on. Entering Iowa from the Northwest corner, hundreds of wind turbines rise majestically from the endless corn and soybean fields that are a staple of the Iowa landscape.

GE wind turbine and clouds

GE wind turbine in corn fieldPulling into an access road, I drive up to a newly installed wind turbine that looks like it is ready to be commissioned. It is a GE 1.6 megawatt (MW) wind turbine. The GE on-site engineer has obvious pride as he describes the wind turbine specs, design, and geology of the area that makes this site so amenable to wind power generation.

This wind turbine is located on the Coteau des Prairies, sometimes referred to as Buffalo Ridge. The ridge is composed of thick glacial deposits that gently rise to about 900 feet, from the surrounding prairie flatlands.  The ridge runs eastward, from eastern South Dakota, through southwestern Minnesota, and northwestern Iowa. Numerous wind farms have been built along the ridge to take advantage of the high average wind speeds.

Iowa wind power accounts for about 20% of the electricity generated in the state – about 4 billion watts of power (4 GW). Iowa leads the US in percentage of electrical power generated by wind. Wind turbines will produce from 12 to 16 times more revenue per acre than corn or soybeans. And farmers can plant crops around the wind turbine, reaping the benefits of both. In addition, in the winter, winds are stronger, generating much needed revenue while the fields lay fallow.

GE wind turbine and power lines

Coincidentally, I saw this news today, about farmers in the UK ramping up their investment in renewable energy:

More than one third of UK farmers want to install renewable energy projects on their farmland, most of them within the next year, and hope to generate average returns of 25,000 pounds ($40,565) per year, UK bank Barclays said.

The bank’s business arm on Tuesday launched a 100-million pound fund to help farmers finance renewable energy projects, including solar panels, wind farms, hydro plants and organic waste power as a growing number of agricultural businesses seek to benefit from government support tariffs.

We want to signal very clearly to the market that we consider this to be a big future industry, a big opportunity for agricultural businesses and also a big opportunity for the renewables,” said Barclays Business’ Product and Marketing Director, Travers Clarke-Walker, whose team will be managing the fund.

This is a quickly emerging industry.

A Barclays survey of 300 agricultural customers also showed four out of five farmers recognize renewable energy can save costs and 60 percent see it as a source of additional income.

The use of renewable energy on farmland has been brought to public attention in Britain by Michael Eavis, farmer and founder of the Glastonbury music festival, who installed over one thousand solar panels on his land.

The cost of installing renewable energy projects can be recovered after around 10 years, Clarke-Walker said.

The UK government slashed state support for large-scale solar plants earlier this month as it was concerned a few huge commercial projects would scoop up money intended for household and community projects.

Nevertheless, Clarke-Walker expects around 80-90 percent of projects will be solar and wind farms as they are cheapest to build and their costs are forecast to drop by up to 50 percent in the next three to five years as demand rises and technology improves.

Britain aims to generate 15 percent of energy from renewable sources by 2020, compared with 7.4 percent reached in 2010.

The fund’s loan budget is unlimited and the first 100 million pounds could support well over 100 projects as the average cost varies between 250,000-700,000 pounds, Clarke-Walker said.

Suffolk-based farmer Mike Porter, who plants crops such as wheat and oil seed rape, received a 130,000 pound loan from Barclays to install solar panels on a grain store last month and is expected to make 20,000 pounds per year by exporting power to the national grid.

Recommended Reading

Farming Wind Versus Farming Corn by Jay Kimball

20% Wind Energy by 2030 – Increasing Wind Energy’s Contribution to U.S. Electricity Supply by US Department of Energy (DOE)

Which Energy Industries Would You Subsidize?

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.

energy subsidies fossil fuel, oil, coal, wind, solar, ethanol
Source: Internal Revenue Service, U.S. Department of Energy (Energy Information Administration), Congressional Joint Committee on Taxation, Office of Management and Budget, & U.S. Department of Agriculture

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.

What would you like to see your politicians do?

[polldaddy poll=”4447501″]

Recommended Reading

Top Business Leaders Deliver Clean Energy Plan by Jay Kimball