Why the world is headed the way of Easter island

Petros Sekeris. 19 November 2014. Violence ahead as tragedies of the commons spread. NewScientist.

The world risks heading the way of Easter Island – a spiral into conflict as depleted natural resources are plundered.

There is a growing feeling that resources vital to sustain human life, such as fresh water, land and fossil fuels, are being used too fast to ensure our long-term presence on the planet. It seems obvious that nations should cooperate on this problem, and yet successful cross-border solutions and agreements are hard to find. Why don’t we act for the common good more often?

Look around the world and you can see instances of water-related inter-state tension and conflicts in many regions, including the Middle East (Jordan river basin, Tigris-Euphrates basin), Asia (Indus river), and Africa (the Nile).

“Fish wars” have erupted sporadically, such as Europe’s cod wars, and while these have been more contained, they could resurge amid decreasing stocks. In the same way, the shared resource of global climate continues to be threatened by the relentless burning of fossil fuels.

Our degradation of the environment is ominous and much evidence points to a clear link between the scarcity of vital resources and conflict. One wonders, then, why world leaders failed to reach a substantive agreement on climate change at the Copenhagen summit in 2009; or why fishing and hunting quotas for endangered species are so hard to implement; or why the use and pollution of river basins is not better regulated.

Explanations such as poor forecasting of resources, the short-term mindset of politicians, or simply the refusal to recognize the problem are usually given.

However, what if these are not the real reasons and something more fundamental is at work?

For example, imagine a depletable natural resource – such as a water basin – jointly owned by two countries. Both drain it for drinking, sanitation, irrigation and so on. Draining too quickly will result in it drying out. Most game theory work says that working for the common good is the optimum choice for both nations. But this does not square with conflicts we see, or the widely held view that more are inevitable.

To address this, I designed a simulation that allowed the use of violence to control resources (The Rand Journal of Economics, vol 45, p 521). In a world where force is a very real option and history suggests it is used or threatened more often than we might hope, this seemed reasonable.

The outcome offers an explanation for the gap between theory and reality. Having constructed a game-theoretical model, I found that when conflict is allowed it always occurred, but only when resources become heavily depleted.

And, crucially, the very expectation of impending conflict led to non-cooperation in the short term and sped up depletion of the common resource. I would argue that this resource-grabbing tallies with what we see in much of the world, be it disputes over fossil fuels, fresh water, land or marine resources.

Are there any historical examples that illustrate this effect of “conflict expectation” and more rapid resource use? Possibly. The demise of the first society on Easter Island is salient. It is thought Polynesians were first to colonize this isolated, 160-square-kilometre Pacific island around AD 900. At its peak, 30,000 people may have lived there.  Their society was organized in hierarchical clans, peacefully competing for supremacy by displaying vast stone statues. To move them, the tallest trees needed to be felled and used as rollers. Deforestation resulted, says Diamond. Instead of reaching agreements, the islanders rapidly devastated their lands, and by the time the first Europeans arrived in 1722, no tree taller than 3 meters stood there.

An ecological disaster and dramatic deprivation must have occurred. According to Diamond, a sort of military coup took place, sparking prolonged conflict. It is reasonable to imagine that the clans realized that trees – also vital for things like fishing boats – were in short supply, and so grabbed what they could before the inevitable violence.

The conclusions I’ve drawn on the impact of over-use of resources today on future conflict are purely theoretical. So with economists Giacomo De Luca and Dominic Spengler of the University of York, UK, I am designing a lab experiment to see whether humans in a controlled environment do deplete resources faster when given the possibility to use violent control. Our early findings point that way. Such evidence would shed new light on the failure of international cooperation over the preservation of the environment.

What’s next? I have not yet considered human ingenuity in adapting to a changing environment. Whether that will be sufficient to achieve a sustainable path depends on the rate of depletion versus adaptation.

Inevitable conflict and accelerated use of depleted resources may be more likely to become a reality within weak states and in the international arena, where weak institutions are more likely. For example, signing a carbon emissions treaty today does not commit a country beyond mild sanctions that the global community may or may not impose. In addition, a change in government in a powerful country is sufficient for a treaty to be revised, curbing the incentives of others to join.

All this reinforces the need for stronger institutions and international bodies if we are to avert a tragedy of the commons in a violent world. Sadly, this will require overcoming the very problem we are trying to solve: a lack of international cooperation.

Petros Sekeris is an economist at the University of Portsmouth, UK

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Ted Trainer criticizes Hatfield-Dodds CSIRO study in Nature that denies “Limits to Growth”

[This study denies “Limits To Growth”, and I’ve posted Ted Trainer’s objections below.  It is alarming Nature would publish such claptrap.  Has Rupert Murdoch secretly purchased them? Alice Friedemann www.energyskeptic.com]

Ted Trainer.  November 2015. A brief critical response to the CSIRO study:

Hatfield-Dodds, et al., (2015) Australia is ‘free to choose’ economic growth and falling environmental pressures, Nature, 5th Nov, 527, pp. 49 – 53. 1doi:10.1038/nature16065

http://www.nature.com/nature/journal/v527/n7576/full/nature16065.html#affil-auth

This study (by eighteen authors) concludes that Australia can achieve sustainable levels of resource use and environmental impact by 2050 without interfering with economic growth and without any radical change in values or behavior. About twenty scenarios are modeled, and reported in many detailed plots in the c. 25 page Nature article plus the Supplementary Information document. These credentials make it likely that the findings will be widely reported and accepted. There are however a number of problematic aspects of the study. Following are brief notes on some of these, supporting the view that the paper’s conclusions are mistaken. They contradict the now large “limits to growth” literature so it is very important that they should be considered carefully.

The problem with “scenarios”.

The study reports on scenarios, mostly in the form of plots of trends on a baseline extending to 2050. Scenarios are commonly used but are of no value unless they are accompanied by full information on the assumptions on which they are based and full presentation of derivations. In this case we are given neither, meaning that the paper is little more than a set of unsupported claims. These might be correct, but the exercise would only be of value if we were able to assess this.

It is possible to prove just about anything by feeding specific assumptions into models, especially when a number of optimistic assumptions are combined. This is not to say dishonesty is involved. Estimates of future efficiencies and costs typically vary greatly in fields like renewable energy, emissions analysis, carbon sequestration, the hydrogen economy, and biomass technologies. If a set of relatively optimistic plausible numbers is taken it can produce conclusions many times more favorable than a set of plausible pessimistic numbers. In the case of this study it seems to me from the conclusions given that some quite implausibly optimistic assumptions have been made.

In other words, the paper does not explain how its claimed 2050 figures can be achieved; it simply states that they can be. The claims might be valid, but we can’t evaluate them. What we want is to know is how/why it is thought that they can be achieved, to be able to rework the arithmetic to assess the validity of these conclusions, and to be able to consider whether the assumptions underlying them are plausible. If an analysis does not provide us with the information enabling us to do these things it is not far from worthless. There are a number of analyses of this kind in the renewable energy field. I take a dim view of Nature’s poor standards in accepting such a paper, especially when it provides strong support for a much contested and I believe erroneous position on what is probably the most important issue we face; viz. whether or not there are limits to growth.

“Decoupling”.

The study strongly accepts the “decoupling” thesis, i.e., that economic growth can be separated from increasing resource use and ecological impacts.

Reviews have found that at present there is virtually no satisfactory support for the claim that this is happening. (Burton, 2015.) Over the longer term energy use for instance has tracked almost exactly in parallel with GDP growth. It is not very helpful for this paper to say, “We find that substantial economic and physical decoupling is possible.” Even if substantial decoupling could be shown to be possible the important question is, could the magnitude of the effect be sufficient?

There are impressive reasons for thinking that the effect could not be sufficiently powerful to achieve the outcomes this paper envisages. According to these authors by 2050 Australian GDP can multiply by 2.7 while resource use falls 35%. That would leave a ratio of resource use to GDP that is around one-fifth of the present level. No evidence or reason is given to indicate why this is thought to be possible — in an era when just about all material, biological and ecological resource grades, costs, scarcities problems etc. are deteriorating rapidly. Add the cumulative global resource depletion that will occur in the next 35 years during which they estimate that GWP will multiply by 2.5.

There are numerous well known indices which show how enormous decoupling would have to be if economic growth could continue while resource and ecological impacts become sustainable. For instance ghe World Wildlife Fund’s “Footprint” analysis shows that the amount of productive land needed to provide an Australian with energy, food, water and shelter is about 7-8 ha. If 9.7 billion people were to live as we do then we’d need up to 78 billion ha of productive land … but that’s about ten times the amount there is on the planet. And if present loss rates continue we will have only half the present amount of cropland by 2050.

Similarly, if by 2050 all 9.7 billion people were to have risen to the GDP per capita Australians would have then given 3% p.a. economic growth, world economic output would be about 25 times as great every year as it is now. Is it plausible that “decoupling” could allow GWP, the amount of producing, purchasing and using up going on, to multiply by 20+ while rich world per capita resource use can be cut to one-tenth or one-twentieth of the present total? What is the case for thinking that anything like this could be done?

Given these kinds of multiples, a 35% reduction in materials demand (i.e., only 25% per capita given that the analysis envisages a 37 million population in 2050) would not get us far towards a global consumption rate that is sustainable and possible for all.

Presumably it is being assumed that the economy would be much more heavily centered on provision of services than at present rather than on producing resource-intensive commodities and goods, but services are remarkably energy and resource intensive, even when associated factors such as getting workers to offices, and training them in the first place, are not included. Again we would need to see assumptions and numbers.

I sent a draft of this critique to the main author. His only response regarding the decoupling issue was to say that a paper by Schandl et al. (2015) provides “more explanation.” But that paper does not provide any evidence or argument supporting the claim that decoupling is possible.  It isn’t even concerned with that question. What the paper does is make a basic assumption on carbon price and another on materials use efficiency, and then look at the effects on GDP etc. to 2050.

The Schandl et al. paper assumes that the efficiency of use of materials could improve at up to 4.5% p.a, compared with the historical rate said to be 1.5% p.a.  No reason is given for thinking that this extremely high rate is realistically achievable. If it was achieved then by 2050 materials used per unit of production would be around 4% of what it is now.  To put it mildly, we would need a very convincing case before we could take this expectation seriously.

But the biggest problem with the Schandl et al. paper is that it is pretty clearly saying that if we implement a high carbon price, and achieve an up to 4.5% p.a. improvement in materials efficiency, then by 2050 there will be significant decoupling, without affecting GDP.  But this only saying if we assume that significant decoupling takes place each year from now on, then by 2050 we will have significantly decoupled. (!) The paper is little more than an exploration of the effects of improving materials efficiency at the rates stated.

But the ultimate point about the Schandl et al. paper is that clearly and emphatically says that none of the scenarios they explore result in absolute decoupling.

On p. 5 they say,

“Our results show that while relative decoupling can be achieved in some scenarios, none would lead to an absolute reduction in energy or materials footprint.”  (They do say carbon would go down.)

“…even strong carbon abatement and large investment into resource efficiency would see global energy use growing from …(416 EJ/y to 1128 EJ/y in 2050.)

Note again the paper was the sole reference given to me when I asked the CSIRO authors what is the support for the decoupling thesis(!)

By the way, that energy growth figure is far higher than I have seen anyone predict, even the IEA. Energy demand more than doubles in all three of their scenarios, so to say the least, there is no absolute energy decoupling. To quote the paper again, “…energy use continues to be strongly coupled with economic activity in all three scenarios.” (p.5.) We are left with question, how sustainably could we find 2.7 times present world energy supply. The paper does not consider the difficulty of doing this via renewables. (I have published a number of papers arguing that this cannot be done affordably.)

Similarly they say that global materials use would increase markedly, from 79 billion tons/y to 183 billion tonnes/y. This would only be a small “relative” decoupling, but it would be 2.3 times the present burden on the planet due to resource extraction.

Thus it would seem that a) it is highly implausible that anything like the expected/assumed decoupling could be achieved, b) no reason is given to expect that it could, c) in fact even when Schandl et al. make very implausible assumptions they admit decoupling does not result, and d) even if the most optimistic CSIRO rate was achieved was it would leave Australian levels of resource and ecological impact far higher than those enabling a sustainable world (explained further below.)

Bio-sequestration

The second of the two big assumptions the paper’s optimism depends on is the assumed potential for bio-sequestration of carbon. It says that in 2050 large quantities of carbon based energy would still be being used and up to 59 million ha would be planted to take carbon from the atmosphere. (All our cropland is only c. 24 million ha and all our agricultural land is about 85 million ha.) The yield assumption does not seem to be stated; is it 15 t/ha, or the more like 5 t/ha likely from a very large area of more or less average land? The main problem with the use of land to soak up carbon via plant growth is that after about 60 years the trees are more or less fully grown and will not take up any more carbon; what then?

The implications of this do not seem to be considered. It means that in the second half of the century an amount of new planting would be needed each year that was big enough to take out the amount of carbon emitted that year. Given that the economy in 2050 is expected to be 2.7 times bigger than it is now, and still growing at a normal rate, the area to be planted each year would be substantial, and increasing.

Fig. 2 shows that in 2050 a net 200 million tonnes of CO2 would be being taken out of the atmosphere each year. That is, in addition to taking out the emissions generated by the large amount of fossil fuels still being used in 2050 (which seems to be around 1.825 EJ), another 220 million tonnes would be taken out (the amount from power plus transport), making a total in the region of 450 million tonnes/y. Assuming 10 tonnes/ha/y forest growth (it would be more like 5 t/y for a large area), taking out approximately 36 tonnes of CO2/ha/y, the additional area to be planted each year would be 12.5 million ha, and more when it is to cope with an economy that is growing.

How has the carbon embodied in the production and transport of imports been accounted? It would seem that the 2050 economy would have to be even more dependent on services than the present economy, meaning there would be heavy importation of goods no longer produced in Australia. The energy, carbon, resource and Third World justice effects of imports is only beginning to be attended to, and the picture is disturbing. For instance for a rich country the amount of carbon emissions due to imported goods is typically as great as or much greater than the amount released from energy production. (And it shows up on the books of the exporting country, not the rich country consuming the goods.) Has the amount of bio-sequestration needed to deal with this been included?

In a reply to my draft of this discussion the main author said that “… the carbon sequestered by plantings on currently cleared satiates after a period and does not provide a permanent flow.” This is difficult to understand because it would seem to contradict their entire case. Their defence of the possibility of growth and affluence depends heavily on the capacity of bio-sequestration to take out as much CO2 each year as we are putting in but this reply seems to be admitting that their strategy could only do that until around 2050.

Randers, one of the original Limits to Growth authors, doesn’t think we will run into limits problems by 2050, but he thinks by about 2070 they will be catastrophic. The time line isn’t crucial; the original book wasn’t concerned with when we will hit the wall; it was concerned that we are going to hit it. At the best the CSIRO paper provides some reason to think it will be later rather than sooner, but it doesn’t give us any good reason to think we won’t hit it. Yet the paper is being taken to mean there are no limits to growth to worry about.

What carbon price will do it?

The study seems to have assumed that power generators will find it economic to shift from carbon fuels to renewables when the price of carbon rises to about $50/tonne (i.e., rises at 4.5% p.a. from $15/t.) Lenzen’s soon to be published detailed study of Australian renewable potential is likely to indicate that the price needed to drive carbon out of the generating system is $500/tonne. His colleague working on the German situation says that there the price would be close to $1000/tonne. (The CSIRO paper does not assume close to compete elimination of carbon fuels.)

The study seems to have made the very common mistake of taking the cost of carbon that would make it more economic for a generator to shift the generation of 1 kWh from carbon fueled power station to a wind turbine. But this is not the right question. A power supply system with a large fraction of renewable input would have to have a very large amount of redundant generating capacity, most of it sitting idle most of the time, to be able to guarantee supply during periods of low wind or solar energy, or it would have to retain much carbon-fuelled capacity, sitting idle most of the time. Either way high capital costs are created for the system. The multiple for a 100% renewable system seems to be in the range of 4 to 10 times the amount of plant that would do the job if renewables worked to peak capacity all the time. So the price of carbon would have to be high before it became cheaper for power generators to shift to renewable technologies.

No analysis of renewables.

Renewable energy is claimed to provide a significant proportion of the power and transport energy but there is no reference to the many, difficult and unsettled associated problems of intermittency, redundant capacity, and storage, and the resulting total system capital costs. It is utterly impossible to derive conclusions about the viability and cost of sustainable alternative systems without carrying out detailed and convincing analyses of this field.

Conservation potential?

The plots show that it is being assumed that demand and impacts can be greatly reduced by conservation and efficiency effort. This is commonly assumed but few if any optimistic pronouncements take into account the significant energy, resource and environmental cost of saving energy, resources and environment. In other words claims are often only about gross reductions achievable and not net reductions.

Powerful examples of this are given by figures on housing and vehicles. Much attention is given to the German Passivhaus which it is said can reduce energy consumption by 75% or more. However this kind of claim usually refers only to energy consumed within the house, and does not take into account the energy used to install the typically elaborate insulation and heat transfer equipment. The issue seems to be unsettled but a recent study by Crawford and Stephen (2013) found that the total life-cycle energy cost for the Passivhaus is actually greater than for a normal German house.

Even more common is the claim that electric vehicles (assumed to make up 25% of transport energy use in this study) can reduce energy use by 75 – 80%, but this does not take into account the considerable energy costs in producing EVs. The State Government of Victoria’s trial of EVs found that they reduce emissions only if powered by renewable energy. (Carey, 2012.) Otherwise life-cycle emissions taking into account all factors in addition to fuel are actually 29% greater than those of petrol driven cars. Mateja (2003) finds that electric cars involve much higher embodied energy costs than normal cars. Bryce (2010) says 60% of the life cycle energy and environmental cost of these cars is to do with their production and disposal, not their on-road performance.

Again it would be important to see what assumptions are being made by these authors in arriving at the optimistic conservation and efficiency claims being made.

Water.

It is said that water extraction might increase 101%, but desalinization would be important. What are the energy implications of this? Also what would be the water implications of 59 million ha growing trees. There is reference to fact that this is an issue but the implications and the magnitudes are not made clear.

What would the cost be?

It is one thing to show that something could be done but it is another to show that it could be afforded. The paper claims that no significant cost to GDP would be involved. Even if the decoupling and sequestration assumptions were valid we would want to know the cost of doing those things, e.g., of maintaining and harvesting 59 million ha, and of producing half the power by renewables. My understanding of Lenzen’s current study is that it seems to be indicating that a fully renewable power supply system would result in a production cost around four or five times the present cost of fossil fuelled power. (The CSIRO paper does say the cost of power production could double.) This would be affordable, but would have major disruptive effects, especially on GDP as energy costs feed into everything and have multiplier effects.

The post GFC stagnation, and wild fluctuation in oil prices seem to have shown how surprisingly fragile and sensitive the global economy is to resource input factors. Tverberg (2015) argues persuasively that resource limits to do with the increasing difficulty of providing oil and its deteriorating EROI led to the recent spectacular rise in its price, which in turn depressed the economy, which led to the present low oil demand and prices. This suggests how disruptive a significant rise in electricity price might be. This paper adds questions to do with the probable costs for all that bio-sequestration, and especially regarding the EROI assumed for biofuels which are assumed to provide 25% of transport energy. (Various studies find that it is around 1.4 or less for corn based ethanol, which suggests that option is not worth bothering with.)

Would it scale to 9.7 billion people?

The amount of land planted for bio-sequestration would not. The area assumed for the optimistic scenario, up to 59 million ha forest plantation for sequestration plus 35 million ha for “biodiversity planting” would total 2.2 ha per person (assuming population will reach 37 million by 2050.) But Australia has much more potential forest area than most countries and the amount of forest on the planet now averages about only 0.45 ha per person, and is heading for .25 ha by 2050.

The expected 2050 consumption of petroleum and gas is considerable. Leaving aside whether there will be much of either left by then, the per capita use would be 35 GJ per person. Thus for 9.7 billion people demand would be 340 EJ which is about 1.7 times present world oil consumption … and therefore far from a plausible amount all could be consuming in 2050.

These numbers mean that even if the optimistic scenario could be achieved it would fall far short of one that could save the planet. It would still leave Australians living at per capita levels of resource use that were many times higher than all could share.

Conclusions.

As noted above, it would be difficult to suggest an issue that is more important than whether or not the limits to growth thesis is valid. The case for it has been accumulating weight for at least fifty years and in my opinion has long been beyond serious challenge. All resource stocks are being depleted at significantly unsustainable rates, summarized by the WWF conclusion that 1.5 planet Earth’s would be needed to provide them sustainably. And only about 2 billion are using them; what happens when 11 billion (the UN’s 2100 expectation) rise to our levels of consumption … let alone the levels we will have then given 3% growth … that is, levels that might be ten times as high as they are now.

This is the kind of arithmetic that is now leading considerable and increasing numbers of people to see the dominant obsession with affluence and growth and tech-fixes as absurd and suicidal, and to join the De-growth and associated movements such as Voluntary Simplicity, eco-villages and transition towns. We who are working in this area believe we know how to save the planet and we know the only way it can be saved. It is to shift to ways that do not create the problems now destroying the planet, depleting resources, condemning billions to deprivation, causing resource wars and damaging the quality of life in even the richest countries. Our “Simpler Way” vision (http://thesimplerway.info) would be easily and quickly achieved, if that was what people wanted to do. It isn’t and it will not be considered until the conditions presently devastating the lives of billions begin to impact supermarket shelves in the countries now living well on their grossly unfair proportion of world wealth. By which time it will probably be too late. The CSIRO paper is saying what just about everyone wants to hear, i.e., that there is no need to worry about any need to take The Simpler Way seriously.

References

Bryce, R., (2010), Power Hungry, Public Affairs, New York.

Burton, M., (2015), “The Decoupling Debate: Can Economic Growth Really Continue Without Emission Increases?”, The Leap, October 23.

Carey, A., 2012. Electric cars make more emissions unless green powered. The Age, 4th Dec.

Crawford, R., A. Stephan, (2013), “The significance of embodied energy in certified passive houses.”, World Academy of Science, Engineering and Technology, 78, 589 –595.

Mateja, D., (2000), ‘Hybrids aren’t so green after all’, www.usnews.com/usnews/biztech/articles/060331/31hybrids.htm

Schandl, H., et al., (2015), “Decoupling global environmental pressure and economic growth: Scenarios for energy use, materials use and carbon emissions.” J. of Cleaner Production, (In press.)

Tverberg, G., (2015) “Oops! Low oil prices are related to a debt bubble”, Our Finite World, November 3.

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The latest monster ships could be a disaster

Gray, W. 20 November 2013. Don’t abandon ship! A new generation of monster ships will be even harder to rescue. NewScientist.

Should any of the new monster-sized ships run aground or sink, the resulting chaos could block a major shipping lane and create an environmental disaster that could bankrupt ship owners and the insurance industry alike.

With vessels of this size conventional salvage will be all but impossible. 

Despite a steady rise in air and road transport, our reliance on shipping remains overwhelming: ships move roughly 90% of all global trade, carrying billions of tons of manufactured goods and raw materials.

To cope, ship designers are paying close attention to fuel efficiency. Along with better engines and new hull designs, they are chasing economies of scale by constructing ever larger vessels that burn less fuel for each tonne of cargo they carry.

These monsters are already plying the seas. There are 29 bulk carriers about 360 meters long (1181 feet). Designed to feed Brazilian iron ore to furnaces in China and Europe, each is capable of carrying up to 400,000 tons. More are on order.

The most rapid increase in size has come with container ships. In the 1990s the largest carried about 5000 shipping containers; the Maersk Mc-Kinney Møller can carry 18,000. Shipyards will soon begin work on the next generation, some 40 meters longer and capable of carrying 20,000 containers, and there are rumors of even larger vessels to come.

But with record-breaking size comes the risk of eye-watering costs should anything go wrong. Roughly 1000 serious shipping incidents occur each year, and according to a recent analysis by a group of maritime insurers, the costs of repair – or in the worst-case scenario, wreck salvage and clean-up – are set to rise rapidly. The value of a single mega-ship’s cargo, for instance, can easily exceed $1 billion, while stricter environmental legislation in many parts of the world means that should a wreck create pollution, those liable can expect to be hit with mammoth clean-up bills.

When the Costa Concordia ran aground, “The easiest and cheapest way of removing the Concordia would have been to cut her up in situ and take her away in pieces,” says Mark Hoddinott, from the International Salvage Union. However, the island of Giglio, where the Costa Concordia came to grief, is part of a marine park on one of Italy’s most environmentally sensitive coasts. As a result, the authorities insisted she be moved in one piece.  The location of the wreck was fortunate. 2380 tons of fuel were able to be removed rather than leak into the sensitive environment.

The site is close to some of the biggest shipyards in Europe, so the salvage equipment could reach the wreck quickly. It is also relatively sheltered, making the key step of fuel removal easier, and since the Costa Concordia was designed for short cruises, it only carried small amounts of fuel.

Had it been a mega-ship it would have been a different story, even in such sheltered waters, says Sloane. Such vessels carry more than 20,000 tonnes of fuel, so removing it is a major operation. And since fuel must be removed first, any delay will exacerbate the disaster. “I don’t think there’s many places in the world where you could do an operation on this sort of scale,” Sloane says.

In many ways removal of cargo containers is even harder, as these 6-meter-long boxes can be stacked up to nine deep above and below deck. The lower decks often include built-in metal guideways designed to speed up loading and unloading in harbour, but with the hull at an angle, these can jam containers together. Several recent salvage operations have sent a shuddering warning through the industry.

In 2007, for example, a container ship called Napoli ran aground in Lyme Bay on the UK’s south coast after her engine room flooded. The cold conditions meant the vessel’s 3500 tonnes of fuel had to be warmed before it could be pumped out, so almost three weeks passed before the salvage teams could begin to remove the 2300 cargo containers. Even then, salvors had to man-handle lifting chains around each cargo container before removal so it took three and a half months to recover them all. Still unable to refloat due to damage, the hull was eventually blown apart with explosives and removed for scrap.

Worse came in 2011, when the container ship Rena ran aground off the coast of New Zealand. It was 11 days before salvors could begin controlled oil removal and a further month before the first container was removed. Eventually a giant crane was brought in but it was still slow going – just six containers per day were salvaged. Hit by bad weather, the wreck eventually broke up and the stern sank.

Compared with the latest ships, the Rena was a tiddler capable of carrying just 3351 containers, yet only 1007 were recovered in an operation that lasted more than a year. “Offshore, in a remote location, when the ship has anything over a 5-degree list, it’s almost impossible,” says Sloane. “You have to have bigger and bigger cranes, on barges, and it’s very slow and very challenging. The big ones are going to be a nightmare.”

In fact the gigantic Emma Maersk container ship has already hit trouble. In February this year, the 397-metre-long vessel lost power off the Egyptian coast. Luckily it was brought safely to port where almost 13,500 containers were unloaded in a two-week-long shore-based operation while the hull was repaired. In less favorable weather conditions and in a more remote location, things could have been very different. Industry experts suggest that unloading the cargo of a mega-ship in the open sea could take up to three years to complete, if indeed it can be done at all.

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M. G. Salameh on oil wars in the past and future

by-the-wars-one-knows-where-oil-is[ Salameh explains why we will inevitably have oil wars in the future, perhaps wars over Iran’s nuclear program, between the U.S. and china, Iraq and Kurdistan, the UK and Argentina over the Falkland islands oil reserves,  and/or over the disputed South China Sea’s islands.  Salameh also lists 11 past oil wars from 1941 to 2014.  I’ve excerpted less than half of this paper and taken out the footnotes, read the full paper here.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”]

Salameh, M. G. April 2014. Oil Wars. ESCP Europe, research centre for energy management.

Dr Mamdouh G. Salameh, Director International Oil Economist, World Bank Consultant, UNIDO Technical Expert, World Bank Washington DC / Oil Market Consultancy Service

Abstract.  The 20th century was truly the century of oil whilst the 21st century would be the century of peak oil and the resulting oil wars. No other commodity has been so intimately intertwined with national strategies and global politics and power as oil.

The close connection between oil and conflict derives from three essential features of oil:

  1. its vital importance to the economy and military power of nations
  2. its irregular geographic distribution
  3. peak oil

Conventional oil production peaked in 2006. As a result, the world could face an energy gap probably during the first two decades of the 21st century. This gap will have to be filled with unconventional and renewable energy sources. However, it is very doubtful as to whether these resources could bridge the energy gap in time as to be able to create a sustainable future energy supply.

There is no doubt that oil is a leading cause of war. Oil fuels international conflict through four distinct mechanisms:

  1. resource wars, in which states try to acquire oil reserves by force;
  2. the externalization of civil wars in oil-producing nations (Libya as an example);
  3. conflicts triggered by the prospect of oil-market domination such as the United States’ war with Iraq over Kuwait in 1991; and
  4. clashes over control of oil transit routes such as shipping lanes and pipelines (closure of the Strait of Hormuz for example).

Between 1941 and 2014, at least ten wars have been fought over oil, prominent among them the 21st century’s first oil war, the invasion of Iraq in 2003. At present, there are at least five major conflicts that could potentially flare up over oil and gas resources in the next three decades of the twenty-first century. The most dangerous among them are a war over Iran’s nuclear program and a conflict between China and the United States that has the potential to escalate to war over dwindling oil resources or over Taiwan or over the disputed Islands in the South China Sea claimed by both China and Japan with the US coming to the defense of Japan. As in the 20th century, oil will continue in the 21st century to fuel the global struggles for political and economic primacy. Much blood will continue to be spilled in its name. The fierce and sometimes violent quest for oil and for the riches and power it represents will surely continue as long as oil holds a central place in the global economy.

Introduction. Though the modern history of oil begins in the latter half of the 19th century, it is the 20th century that has been completely transformed by the advent of oil. Oil has a unique position in the global economic system. No other commodity has been so intimately intertwined with national strategies and global politics and power as oil. Oil was central to the course and outcome of World War II in both the Far East and Europe. One of the allied powers’ strategic advantages in World War II was that they controlled 86% of the world’s oil reserves.   The Japanese attack on Pearl Harbor was about oil security. Among Hitler’s most cherished strategic objectives in the invasion of the Soviet Union was the capture of the oilfields in the Caucasus. In the Cold War years, the battle for the control of oil resources between international oil companies and developing countries was a major incentive and inspiration behind the great drama of de-colonization and emergent nationalism.

During the 20th century, oil emerged as an effective instrument of power. The emergence of the United States as the world’s leading power during the 20th century coincided with the discovery of oil in America and the replacement of coal by oil as the main energy source. As the age of coal gave way to oil, Great Britain, the world’s first coal superpower, gave way to the United States, the world’s first oil superpower.

Since its discovery, it has bedeviled the Middle East and the world at large with conflicts and wars. Oil was at the very heart of the first post-Cold War crisis of the 1990s – the Gulf War. The Soviet Union – the world’s second largest oil exporter – squandered its enormous oil earnings in the 1970s and 1980s in a futile military race with the United States. And the United States, once the largest oil producer and still its largest consumer, must import 58% of its oil needs, weakening its overall strategic position and adding greatly to its huge outstanding debts – a precarious position for the only superpower in the world.

Military Significance. Oil is a vital factor in the military strength of nations in that it supplies most of the energy used to power tanks, planes, missiles, ships, armored vehicles and other instruments of war. During the 1991 Gulf war, for example, US and allied forces consumed an average 452,000 barrels of oil a day (b/d) – equivalent to the current daily consumption of Kuwait.  Because oil is so vital to the conduct of warfare, its possession has been termed a “national security” issue by the United States and other countries, meaning something that may require the use of military force to protect.

Oil Geography. The global distribution of oil is another factor. Oil does not occur randomly across the globe but is highly concentrated in a few reservoirs. The largest of these, containing approximately two-thirds of the world’s proven conventional oil, are located in the Gulf region, comprised of Saudi Arabia, Iran, Iraq, Qatar and the United Arab Emirates (UAE). As a result, the center of gravity of world oil is the Gulf region. This has great economic and geopolitical implications because many of these producers are chronically unstable, harbor strong anti-Western sentiments or lie in war-torn neighborhoods.

Peak Oil. Global conventional oil production peaked in 2006 and has been in decline since then. Moreover, nine of the top oil producers in the world have already peaked: USA, Canada, Iran, Indonesia, Russia, UK, Norway, Mexico and Saudi Arabia. Also three of the world’s largest oilfields have already peaked: Kuwait’s Burgan, the world’s second largest (2005), Mexico’s giant Cantarell (2006) and Saudi Arabia’s Ghawar, the world’s largest oilfield (2006). Peak oil is not only a reality but is already impacting on oil prices, the world economy and the global energy security. Moreover, the days of inexpensive, convenient and abundant energy sources are virtually over.

We won’t “run out of oil” because, simply, we’ll never get it all, but peak oil is here, the world’s largest and best reserves are still in the Middle East, and the major powers in the world, which run on oil, know this. For all of these reasons, the risk of armed conflict over valuable oil supplies is likely to grow in the years to come.

Geopolitics in a World of Dwindling Energy Supplies.  As nations compete for currency advantages, they are also eyeing the world’s diminishing resources—fossil fuels, minerals, agricultural land, and water. Resource wars have been fought since the dawn of history, but today the competition is entering a new phase. Nations need increasing amounts of energy and materials to produce economic growth, but the costs of supplying new increments of energy and materials are increasing. In many cases all that remains are lower-quality resources that have high extraction costs. Meanwhile the struggle for the control of resources is re-aligning political power balances throughout the world.

The US as the world’s superpower has the most to lose from a reshuffling of alliances and resource flows. The nation’s leaders continue to play the game of geopolitics by 20th century rules: They are still obsessed with the Carter Doctrine and focused on oil as the world’s foremost resource prize (a situation largely necessitated by the country’s continuing dependence on oil imports.

The United States maintains a globe-spanning network of over 800 military bases that formerly represented tokens of security to regimes throughout the world but that now increasingly only provoke resentment among the locals. This enormous military machine is becoming too expensive for the United States to maintain. Indeed, the nation’s budget deficit largely stems from its trillion-dollar-per-year cost. In short, the United States remains an enormously powerful nation militarily, yet it suffers from declining strategic flexibility.

The European Union, traditionally allied with the US is increasingly mapping its priorities independently, partly because of increased energy dependence on Russia, and partly because of economic rivalries and currency conflicts with America. Germany’s economy is one of the few to have emerged from the 2008 crisis relatively unscathed, but the country is faced with the problem of having to bail out more and more of its neighbors.

China is the rising power of the 21st century with a surging military and lots of cash with which to buy access to resources (oil, coal, minerals, and farmland) around the planet. Its emergence as an economic superpower and competition with the United States for dwindling oil reserves could potentially lead to an oil war in coming years.

Japan, with the world’s third-largest economy, is wary of China and increasingly uncertain of its protector, the US. The country is tentatively rebuilding its military so as to be able to defend its interests independently. Disputes with China over oil and gas deposits in the South China Sea are likely to worsen, as Japan has almost no domestic fossil fuel resources and needs secure access to supplies.

Russia is a resource powerhouse. With a residual military force at the ready, it vies with China and the US for control of Caspian and Central Asian energy and mineral wealth through alliances with former Soviet states. It tends to strike tentative deals with China to counter American interests, but ultimately Beijing may be as much of a rival as Washington. Moscow uses its gas exports as a bargaining chip for influence in Europe.

Africa is an area of fast-growing U.S. investment in oil and other mineral extraction projects as evidenced by the establishment in 2009 of AFRICOM (a military strategic command intended to confront China’s deep involvement in Africa). Proxy conflicts there between and among these powers may intensify in the years ahead in most instances to the sad detriment of African peoples.

The Middle East maintains a vast oil wealth, but is characterized by extreme economic inequality, high population growth rates, political instability, and the need for importation of non-energy resources (including food and water). The revolutions and protests in Tunisia, Egypt, Libya, Bahrain, and Yemen in early 2011 were interpreted by many observers as a refusal by common people to tolerate sharply rising food, water, and energy prices. As economic conditions worsen, many more nations could become destabilized.

Oil Wars in Recent History.  Prior to the 1990 Gulf War, The American energy company Halliburton’s president and later US vice president Dick Cheney revealed, “We’re there because that part of the world controls the world supply of oil, and whoever controls the supply of oil would have a stranglehold on the world economy.” So there you have it. All this bloodshed is over dwindling oil reserves. Meanwhile, war has become the largest business on Earth, worth trillions of dollars every year.

1-Nazi Germany’s Invasion of the Soviet Union (June 1941)

Desperate for fuel, Germany entered North Africa and Russia in 1941 to reach the Middle East oilfields and Baku oilfields in the Caspian. German War Production Minister, Albert Speer, conceded in his post war interrogation that oil “was a prime motive” for these invasions. Predicting victory at Baku, Hitler declared, “Now I have oil! Proceed to India!” But Hitler’s army literally ran out of gas. German supply trucks got half their normal fuel mileage in the road-less, muddy terrain. Rommel abandoned empty, fuel- gobbling tanks in the Egyptian desert west of El Alamein. “We have the bravest men,” he declared, “but they are useless without enough petrol.

Oil proved to be the primary strategic resource during World War II. During the war, the US built the world’s longest pipeline – from Texas to the Atlantic – and produced about 6. 3 billion barrels (bb) of oil. By comparison, Germany produced a mere 200 million barrels, about 3% of US production, much of it from expensive “synthetic oil” produced from coal.

2-The Attack on Pearl Harbour & US Entry into World War II (1941)

Oil has been central to Japan’s decision to attack Pearl Harbor thus bringing the United States into World War II. History might conclude that the Japanese attack on Pearl Harbor might have been provoked by the oil embargo imposed by the United States on Japan on July 25, 1941 as a result of Japanese military aggression in Asia. Increasingly worried about a cut-off of oil supplies from the United States, Tokyo instituted a policy to try to eliminate dependence on US oil supplies. In 1940-1941, it was energy security that led Japan to occupy the Dutch East Indies and take control of its oilfields. Indeed, the US oil embargo was the pivotal factor leading Japan to attack Pearl Harbor, bringing the United States into World War II.

3-The Biafra – Nigeria Oil War (1967)

Oil was a major issue in the Nigerian civil war forty-seven years ago. Nigeria is a country that was created artificially by British colonialism. It has a complex ethnic mixture of groups, with a division between the North inhabited by Muslim Fulani-Hausas with a rigid feudal system, and the South with its largely Christian population.

In 1966, a group of northern officers headed by a young British-trained officer, General Gowon, staged a coup and took control of the government. Three months after Gowon’s takeover a large scale massacre of Southerners was reported from the Northern region. Southern army officers then decided to lead the South-East to secession and war. On 30 May 1967, they proclaimed the independent Republic of Biafra and declared war on Nigeria. The actual fighting lasted for 24 months and led to the death of 2 million innocent Nigerians who did not know anything about politics nor the oil in their region. A major factor precipitating the war was oil. Biafra sits on huge oilfields. Approximately 30% of these fields lie in Nigeria with the remaining 70% in Biafra.

4-The1973 Arab-Israeli War

Although oil was not directly the cause of the 1973 Arab- Israeli War, using the oil weapon was a central part of the planning for the war. History will judge if the war could have gone ahead without the assurance of the oil weapon and the oil financial resources. On October 17, 1973, eleven days into the Arab Israeli War of the 6th of October, the Arab oil-producing countries wielded the oil weapon and imposed an oil embargo against the United States and other countries friendly to Israel. The embargo led to a quadrupling of crude oil prices and precipitated a severe recession, economies of the industrialized nations. The US gross domestic product (GDP) plunged 6% unemployment doubled to 9%. Japan’s GDP declined by 7% for the first time since the end of World War II and Europe’s by 2.5%.

5-The Iran-Iraq War (1980-1988)

The Iran–Iraq War began when Iraq invaded Iran on 22 September 1980. It followed a long history of border disputes and was motivated by fears that the Iranian Revolution in 1979 would inspire insurgency among Iraq’s Shia population. However, the real factor behind the Iran-Iraq war was a simmering rivalry between these two oil-producing nations underpinned by each one’s aspiration for strategic primacy in the gulf region and supremacy inside OPEC. The war was a precursor for the invasion in Kuwait and the first Gulf War. Started by Iraq in September 1980, the war was marked by indiscriminate ballistic-missile attacks, extensive use of chemical weapons and attacks on third-country oil tankers in the Gulf. The end came in July 20, 1988 with the acceptance by Iran of UN Ceasefire Resolution 598. During the eight years between Iraq’s formal declaration of war on September 22, 1980, and Iran’s acceptance of ceasefire, thousands of troops were killed on both sides and some $500 billion of damage suffered by each of the warring countries (mostly to oil facilities). In addition, economic development stalled and oil exports were disrupted.

6- The Iraq-Kuwait War (1990)

The invasion of Kuwait, also known as the Iraq–Kuwait War, was a major conflict which resulted in the seven-month long Iraqi occupation of Kuwait and subsequently the first Gulf War. In 1990 Iraq accused Kuwait of stealing Iraqi oil through slant drilling in the Rumaila oilfield which straddles the borders between the two countries. There were several reasons for the Iraqi move, including Iraq’s inability to pay more than $80 bn that had been borrowed to finance the Iran-Iraq war and Kuwaiti overproduction of oil which kept revenues down for Iraq. The invasion started on 2 August 1990, and within two days of intense combat, most of the Kuwaiti Armed forces were either overrun by the Iraqi Republican Guard or escaped to neighboring Saudi Arabia and Bahrain. The state of Kuwait was annexed, and Saddam Hussein announced a few days later that it had become the 19th province of Iraq.

By the time the Iran–Iraq war ended, Iraq was not in a financial position to repay the US$14 billion it borrowed from Kuwait to finance its war with Iran and requested Kuwait to forgive the debt. Iraq argued that the war had thwarted the rise of Iranian influence that could have threatened the Arab Gulf regimes. However, Kuwait’s reluctance to pardon the debt created strains in the relationship between the two Arab countries. During late 1989, several official meetings were held between the Kuwaiti and Iraqi leaders but they were unable to break the deadlock between the two countries. In 1988 Iraq’s Oil Minister, Issam al-Chalabi, requested a further reduction in the crude oil production quota of the Organization of the Petroleum Exporting Countries (OPEC) members so as to end the 1980s oil glut. 12 Chalabi argued that higher oil prices would help Iraq increase its revenues and pay back its outstanding debts. Instead, Kuwait requested OPEC in 1989 to increase its oil production quota by 50% to 1.35 mbd. Throughout much of the 1980s, Kuwait’s oil production was considerably above its mandatory OPEC quota and this had prevented a further increase in crude oil prices. A lack of consensus among OPEC members undermined Iraq’s efforts to end the oil glut and consequently prevented the recovery of its war-crippled economy. According to former Iraqi Foreign Minister Tariq Aziz, “every $1 drop in the price of a barrel of oil caused a $1 billion drop in Iraq’s annual revenues triggering an acute financial crisis in Baghdad”.  It was estimated that between 1985 and 1989, Iraq lost US$14 billion a year due to Kuwait’s oil price strategy.  Kuwait’s refusal to decrease its oil production was viewed by Iraq as an act of aggression against it. The increasingly tense relations between Iraq and Kuwait were further aggravated when Iraq alleged that Kuwait was slant-drilling across the international border into Iraq’s Rumaila oilfield. During the Iran–Iraq War, Iraqi oil drilling operations in Rumaila declined while Kuwait’s operations increased. In 1989, Iraq accused Kuwait of using “advanced drilling techniques” to exploit oil from its share of the Rumaila field. Iraq estimated that $2.4 billion worth of Iraqi oil was “stolen” by Kuwait and demanded compensation.  Kuwait dismissed the accusations as a false Iraqi ploy to justify military action against it. More than 600 Kuwaiti oil wells were set on fire by withdrawing Iraqi forces causing massive environmental and economic damage to Kuwait.

7-The War on Iraq (2003)

The war on Iraq was undoubtedly about oil. This was the 21st century’s first oil war. The prize was Iraq’s spectacular oil wealth estimated at 330 billion barrels of proven, semi-proven and probable oil reserves. Even Alan Greenspan, the former chairman of the US Federal Reserve Bank for seventeen years, agrees that the Iraq war was largely about oil.  The war cost the US economy an estimated $6.65 trillion in running costs and also in oil price differences. It also cost the global economy (including the US) some $14.13 trillion and was instrumental in precipitating the recent global financial and economic crisis and the economic recession from which the global economy has not yet fully recovered.  It is estimated that the Iraq war may have increased energy costs worldwide by a staggering $6 trillion.  The former US vice president, Dick Cheney made Iraqi’s oil fields a national security priority before 9/11. Five months before 9/11, the United States started calling for the use of force against Iraq to secure control of its oil.

8-The Sudan Oil War

On April 10th 2013 forces from the newly independent state of South Sudan occupied the oil center of Heglig, a town granted to North Sudan as part of a peace settlement that allowed the southerners to secede in 2011. North Sudan then mobilized their own forces and drove the South Sudanese out of Heglig. Fighting has then erupted all along the contested border between the two countries, accompanied by air strikes on towns in South Sudan. Although the fighting has not yet reached the level of a full-scale war, international efforts to negotiate a cease-fire and a peaceful resolution to the dispute have yet to meet with success. The conflict between South Sudan and the North is being fueled by many factors, including economic disparities between the two Sudans and an abiding animosity between the southerners (who are mostly black Africans and Christians) and the northerners (mostly Arabs and Muslims). But oil and the revenues produced by it remain at the heart of the matter.

When Sudan was divided in 2011, most of the oilfields wound up in the south, while the only pipeline capable of transporting the South’s oil to international markets (and thus generating revenue) remained in the hands of the northerners. They have been demanding exceptionally high “transit fees” — $32-$36 per barrel compared to the common rate of $1 per barrel — for the privilege of bringing the South’s oil to market. When the southerners refused to accept such rates, the northerners confiscated money they had already collected from the South’s oil exports, its only significant source of funds. In response, the southerners stopped producing oil altogether and launched their military action against the north. The situation remains explosive. Oil is the main natural resource for the North and South economies. The dispute over oil-rich boundary as well as the overlapping of oil blocks will continue to be a source of tension between both the North and South Sudan.

Sudan has been exporting crude oil since 1999 with oil production rising dramatically to 490, 000 b/d. As mentioned, oil remains crucial to economic development of both the North and South and the basic resource to mitigate the endemic problem of poverty of the whole of Sudan. Oil accounts for 60%-70% of revenue in the North and 98% in the South. Furthermore, about 75% of Sudanese oil is produced in the South. North-South tension is complicated further by the intervention of foreign powers, namely the US and China and their rivalry over African oil. North Sudan and South Sudan could become proxies to these two ‘heavyweights’ and their geopolitical maneuvering in their quest for African oil.

9- Syria’s Civil War

The civil war and the massacres of civilians in Syria since 2011 are being exploited for narrow geopolitical competition to control Mideast oil and gas pipelines. Whatever the case, few recall that US agitation against Syria began long before the civil war with the main objective of weakening Iranian influence across the Middle East. These strategic concerns, motivated by fear of expanding Iranian influence, impacted Syria primarily in relation to pipeline geopolitics. In 2009 President Bashar Assad of Syria refused to sign a proposed agreement with Qatar that would run a pipeline from the latter’s North gasfield, contiguous with Iran’s South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets thus competing with Russian gas exports to Europe. Assad’s rationale was to protect the interests of his Russian ally, which is Europe’s top supplier of natural gas.

Instead, the following year Assad is said to have pursued negotiations for an alternative $10-billion pipeline with Iran, across Iraq to Syria, that would also potentially allow Iran to export gas from its South Pars field shared with Qatar. The Memorandum of Understanding (MoU) for the project was signed in July 2012 – just as Syria’s civil war was spreading – and earlier in 2013 Iraq signed a framework agreement for the construction of the gas pipeline.  The proposed Iran-Iraq-Syria pipeline was a “slap in the face” for Qatar’s plans.

Syria’s Assad is being targeted because he is not considered a reliable “player”. Specifically, Turkey and the US want an assured flow of Qatari gas through Syria, and don’t want a Syrian regime which is not unquestionably loyal to those two countries to stand in the way of the pipeline or to demand too big a royalty. So yes, regime change was planned against Syria (as well as Iraq, Libya, Lebanon, and Iran) 20 years ago. And yes, attacking Syria weakens its close allies Iran and Russia allies and indirectly China.

10- The War on Libya in 2011

The war on Libya was portrayed as a humanitarian effort by the US and NATO to protect civilians. Far from it, it was oil they were after. Three underpinning factors were behind the war on Libya: Libya’s future endeavor to replace the US Dollar by the Libyan Dinar for payment for Libyan oil exports, the international oil companies’ unhappiness with the terms Libya was offering them to operate in the country and the fact that Libya was instrumental in creating the African Union’s financial institutions to provide financial independence for African countries. Libya has been one of the last nations in the world that had its own state-run banking system and control over its own money supply. By having this system in place, Libya could demand payment for its oil exports in Libyan Dinar or any other currency instead of the US Dollar thus weakening the American currency.

The attack on Libya is very reminiscent of one of the reasons why the United States attacked Iraq in 2003. Six months before the US moved into Iraq, Saddam Hussein took the decision to accept Euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the world’s reserve currency and as a petrodollar. The dollar is only strong because everyone uses it. It has been America’s blank check for the past nine decades. It acted as a form of control and still does today. If many countries in the world decide to move away from the dollar as a reserve currency and petrodollar, there could be a glut of dollars in the world resulting in huge loss of its value. All wars have economic motives.

Another underpinning factor for the attack is that international oil companies were not happy with Libya’s terms for operating in Libya. With 48 billion barrels (bb) of proven oil reserves, Libya has the biggest reserves in Africa and the 9th biggest in the world. Interests at stake emerged from an article in the Wall Street Journal entitled: “For West’s Oil Firms, No Love Lost in Libya”. After the lifting of sanctions in 2003, Western oil companies flocked to Libya with high expectations; they have been disappointed by the results. The Libyan government, under a system known as EPSA-4, granted operating licenses to foreign companies that left the Libyan state-run National Oil Corporation of Libya (NOC) with 90% of the extracted oil. “The EPSA-4 contracts contained the toughest terms in the world,” says Bob Fryklund, former president of the U. S.-based ConocoPhillips in Libya.

It is apparent, then, the reason why with an operation decided not in Bengazi, but in Washington, London and Paris, the National Libyan Transitional Council has created the “Libyan Oil Company” to replace the NOC. Its task will be to grant licenses on terms highly favorable to US, British and French companies. On the other hand, companies that before the war were the main producers of oil in Libya: first of all the Italian firm ENI, which in 2007 paid a billion dollars to obtain concessions until 2042, and Germany’s Wintershall which came in second place, will be made to suffer. It would make Chinese and Russian companies suffer even more, those to which on March 14, 2011 Gaddafi promised he would transfer the oil concessions held by European and U.S. companies.

A third reason for the war on Libya was to sink the African Union’s financial institutions, whose birth was made possible largely by Libyan investment. These include the African Investment Bank, based in Tripoli, Libya; the African Central Bank, based in Abuja, Nigeria; the African Monetary Fund, based in Yaoundé, Cameroon. The latter, with a programmed capital of more than 40 billion dollars, could supplant the International Monetary Fund (IMF) in Africa. Up to now the IMF has dominated the African economy, paving the way for U.S. and European multinationals and investment banks. By attacking Libya, the US & NATO are trying to sink the bodies that could one day make the financial independence of Africa possible.

11- The Annexation of the Crimea

The annexation of the Crimea signals to the world that oil and natural gas are once again being used as a weapon of war. This isn’t the first time. When the Ukraine refused to pay higher prices for Russian natural gas supplies, Russia cut off gas supplies in 2009 to Ukraine thus affecting supplies to six other European countries in the middle of winter and leaving millions in the cold until they paid Russia’s ransom in the form of higher prices. It was a stark example how vulnerable Europe had become to Russia’s control over energy resources.

Russia is the world’s largest supplier of oil and gas and has thus tremendous power over the market. The European Union (EU) depends on Russian oil and gas supplies for 30% of its needs.

Russia’s intrusion into the Ukraine in February 2014 has been prompted by energy and geopolitical factors. The oil and gas factors are that 50% of Russia’s gas and oil supplies to the EU are piped through the Ukraine. Moreover, revenues from these supplies are extremely important for the Russian economy. It is in Russia’s energy interests to make sure that the gas pipelines transiting the Ukraine are well defended not only against sabotage but also against the Ukraine making use of the gas without paying for it. Ensuring that there is a pro-Russian government in the Ukraine becomes a very important Russian national interest.

There is, however, a geopolitical dimension. The Ukraine has become like a chess pawn in a grand chess game being played by the United States and the EU with Russia. At the heart of the Ukraine-Russia crisis is the EU’s attempts incited and abetted by the United States to draw the Ukraine away from Russia into the EU and eventually into NATO, thus bringing NATO to the borders of Russia. Having failed to achieve their aim, the EU supported by the US instigated internal strife in the Ukraine which ended with the ousting of the legally-elected president and eventually led to the annexation of the Crimea.

Potential Future Oil Wars

At present, there are at least five major conflicts that could potentially flare up over oil and gas resources in the next three decades of the twenty-first century.

1-Conflict over Iran’s Nuclear Program

Oil is at the heart of Iran’s nuclear program. Iran needs nuclear energy to replace the crude oil and natural gas currently being used to generate electricity, thus allowing more oil and gas to be exported. Without nuclear power, Iran could cease to remain a major crude oil exporter and could be relegated to the ranks of small exporters as early as 2015 with catastrophic implications for its economy and also the price of oil.  Iran would doubtless not be averse to possessing nuclear weapons. There is an element of security and also logic involved with Iran’s quest for nuclear weapons. Even direct negotiations between the United States and Iran will not shift Iran an iota from its determination to acquire nuclear weapons. Their logic is that if Israel, India, Pakistan and North Korea can defy the world and get away with it, why not Iran.

Neither sanctions nor threat of war against Iran will force it to relinquish its nuclear program and its pursuit of nuclear weapons. If attacked, Iran could plunge the world in the biggest oil crisis in its history. Iran is determined to acquire nuclear weapons and will face down the United States, the European Union, Israel and the world community and will get away with acquiring nuclear weapons. The US and its allies can do nothing militarily, economically or with sanctions.

The US and its allies including Israel will eventually end up acquiescing to a nuclear Iran and who knows, they might end up forming an unholy alliance made up of the US, Israel and Iran to siphon off the oil and energy resources of the Arab gulf countries, something reminiscent of the US invasion of Iraq.

There is an element of security and also logic involved with Iran’s quest for nuclear weapons. Even direct negotiations between the United States and Iran will not shift Iran an iota from its determination to acquire nuclear weapons. Their logic is that if Israel, India, Pakistan and North Korea can defy the world and get away with it, why not Iran. Neither sanctions nor threat of war against Iran will force it to relinquish its nuclear program and its pursuit of nuclear weapons. If attacked, Iran could plunge the world in the biggest oil crisis in its history. Iran is determined to acquire nuclear weapons and will face down the United States, the European Union, Israel and the world community and will get away with acquiring nuclear weapons. The US and its allies can do nothing militarily, economically or with sanctions. The US and its allies including Israel will eventually end up acquiescing to a nuclear Iran and who knows, they might end up forming an unholy alliance made up of the US, Israel and Iran to siphon off the oil and energy resources of the Arab gulf countries, something reminiscent of the US invasion of Iraq. In

When the Shah started Iran’s nuclear energy program in 1974, nuclear power could not be justified economically as Iran’s population was less than half its present 70 million, oil production was 6 mbd, far more than the present production of 3.20 mbd and energy consumption was less than a quarter of consumption today, and unlike now, Iran’s oil reservoirs were not in decline. The question is: since the United States strongly encouraged the Shah to build nuclear power plants in 1974, why is it objecting now to Iran pursuing a nuclear program? The answer is that in 1974 the Shah of Iran was a great friend of Israel while in the first decade of the twenty-first century, Iran is no longer friendly with Israel. Nuclear power may have an important role in restricting the consumption of hydrocarbons in Iran and allowing more oil and gas to be exported. In 2012, Iran used the equivalent of 610,000 b/d of oil and natural gas to generate electricity. By 2015, Iran will need to use some 770,000 b/d of oil and gas for electricity generation.

Generating nuclear electricity will enable Iran to replace at least 93% of the oil and gas used in electricity generation in 2020, thus adding some 1.00 mbd to its oil and gas exports and earning an extra $46 bn. Based on these figures, Iran’s quest for nuclear energy seems justifiable.

Although the threat of War between the United States and Israel on the one hand and Iran on the other has recently abated, there is nothing to stop a reckless Israeli government from ordering an attack on Iran’s nuclear installations thus precipitating a war between Israel and Iran and bringing the United States into it.

2-Oil War between the United States & China?

The great rivalry between the United States and China will shape the 21st century. It is a truth universally acknowledged that a great power will never voluntarily surrender pride of place to a challenger. The United States is the pre-eminent great power. China is now its potential challenger.

Though a terrifying possibility, a war between the oil titans could be triggered by a race to secure a share of dwindling reserves of oil or over Taiwan or over the disputed Islands in the South China Sea claimed by both China and Japan with the US coming to the defense of Japan. In such conflicts, the United States would try to starve China of oil by blocking any oil supplies from the Middle East passing through the Strait of Hormuz or the Strait of Malacca.

China’s robust economic growth and its emergence as an economic superpower would falter without oil, particularly from the Middle East. China’s global oil diplomacy is, therefore, geared towards ensuring that this never happens.

As Chinese state-owned companies scour the globe for oil and gas to fuel their country’s rapid economic growth, criticism of China for supporting despotic, oil-rich regimes, for driving up U.S. oil prices, and for worsening global warming has grown more strident. Some Washington hard-liners say the United States should prepare for future energy conflict with China by strengthening alliances with key oil producers while denying China access to strategic oil supplies. Such policies would increase Chinese concern about the security of oil supplies, encourage China to lock in oil resources from unsavory regimes, and undermine moderates in Beijing. Hard-line policies on oil could even become a self-fulfilling prophecy, fostering a new Cold War between the United States and China and possibly a hot one.

China’s economic boom, fueled by its massive supply of coal, has begun to overwhelm its domestic energy resources. While coal still meets 68% of China’s primary energy needs, the percentage filled by imported oil is growing. A net oil exporter in 1993, China today is the world’s largest importer and the second-largest consumer of oil. Over the next 15 years, its demand is expected to roughly double. By 2020, China will likely import 70% of the oil it consumes, compared to 65% today. 29 China’s leaders worry that this dependence on imported oil leaves them vulnerable, since long-term global energy “scarcity” that undermines economic growth and increases unemployment could bring social instability.

The growing dependence on oil imports particularly from the Middle East has created an increasing sense of ‘energy insecurity’ among Chinese leaders. Some Chinese analysts even refer to the possibility that the US is practicing an ‘energy containment’ policy toward China, or could implement one in the future. Chinese leaders tend to believe that dependence on imported oil leads to great ‘strategic vulnerability’. The war on Iraq and growing US hegemony in the Middle East have made it even more urgent for China to reduce its dependence on the Arab Gulf. 30 Much of China’s imported oil from the Middle East must pass through a major chokepoint: the Strait of Hormuz which is guarded by the US navy

Another chokepoint is the Strait of Malacca between Malaysia and Indonesia, through which 80% of China’s imported oil pass. The channel is 625 miles long, and less than two miles wide at its narrowest point (see Figure 2). With the Indian navy guarding the northern end of the Strait, and the US navy the southern end, China feels sandwiched in and strategically vulnerable. The former president of China, Hu Jintao, has referred a number of times to what he describes as the ‘Malacca dilemma’. 31

3-Conflict between Iraq and Kurdistan

Like in many conflicts around the world, the presence of oil is raising the stakes and the tensions between Iraq and the Kurdistan Regional government (KRG) in Iraqi Kurdistan. Long before the toppling of Saddam Hussein’s regime, the Kurds have been angling for independence. Baghdad currently disputes KRG control over Iraq’s northern oil fields. The Kurdish security forces are patrolling the loosely defined border, with strict orders from the KRG to block the entrance of Iraqi military forces. The KRG relies heavily on revenue from these oil fields to support its growing autonomy from Baghdad. Earlier this year, a Kurdish truck delivered crude oil to the Turkish port of Mursin, marking the first time the KRG has exported oil directly to world markets. This dispute was exacerbated by the US administration during the Iraq War, which pushed for an independent Kurdish State for the benefit of multinational oil companies.

Iraq considers a Kurdish declaration of independence as part of a plan to dismember Iraq with the support of the United States. Any conflict over Kurdistan could involve Iran, the United States and Turkey. It will amount to creating a new Israel in the Arab Gulf region. Turkey hopes that by expanding its oil transactions with Iraqi Kurdistan, it will eventually be able to settle its own Kurdish question.

War Between the UK & Argentina over Falkland Islands Oil Reserves The next war between the UK and Argentina could be over the Falklands Islands potential oil Reserves If the reserves were significant and proven.

On November 28, 2013, Argentina’s Congress passed a law imposing criminal sanctions on what it described as any “illegal exploration around the Falklands Islands (or as Argentina calls them the Las Malvinas)”. The move by Buenos Aeries is a major ratcheting of the tension in the region and has triggered a furious response by Britain reminding Argentina that the Falklands are British sovereign territory. The UK government unequivocally supports the right of the Falkland Islanders to develop their natural resources for their own economic benefit. While Argentina and the UK have already warred over the Falklands, in 2010 they fell out when the British began drilling for oil off the coast of the island. And tensions are continuing to rise. Argentina which is already burdened by debt and is facing an energy crisis might be raising opposition now not just because it wants to regain sovereignty of the islands, but because it wants access to its oil reserves.

Tensions over the Disputed South China Sea’s Islands

The recent rise in tensions over the disputed South China Sea islands has drawn attention to the possibility that the conflict is really about natural resources. The ongoing territorial disputes in the South China Sea are really about oil. China has been involved in territorial disputes with Japan and Taiwan over the Senkaku islands, and with Vietnam over the Spratly islands off the coast of Vietnam. China has even ramped up its naval presence in the South China Sea making its neighbors agitated. China’s claims of the islands are based on maps drawn out centuries ago when the Chinese empire laid claim to most of the South China Sea. Growing tensions between Japan and China over the Senkaku islands could escalate into armed conflict and could potentially bring the United States into it. The commander of US Marine Corps Forces in Japan claimed that if the Chinese invaded the Senkaku Islands, the US Navy and Marines could recapture them. China recently attempted to prevent the resupply of Philippines’ armed forces stationed on a disputed shoal in the South China Sea. It is but one example of creeping Chinese coerciveness that so unnerves the region. The Chinese defense minister also stridently asserted that Beijing will never compromise on disputed territory, raising fears that words will increasingly become assertive action.

The United States remains an energy glutton, a country where energy-efficiency and conservation measures result from private-sector reactions to the market rather than from comprehensive public policy.

Dr Mamdouh G. Salameh is an international oil economist, a consultant to the World Bank in Washington DC on oil & energy and a technical expert of the United Nations Industrial Development Organization (UNIDO) in Vienna. He is director of the Oil Market Consultancy Service in the UK and a member of both the International Institute for Strategic Studies in London and the Royal Institute of International Affairs. He is also a member of the Energy Institute in London.

Posted in Caused by Scarce Resources, Other Experts | Tagged , , | Leave a comment

Taxpayers are paying for a concentrated solar project — Ivanpah– that doesn’t work

Ivanpah in the news:

Dvorsky, G. May 21, 2016. The World’s Largest Solar Plant Just Torched Itself. Gizmodo (Australia). Misaligned mirrors are being blamed for a fire that broke out yesterday at the world’s largest solar power plant, leaving the high-tech facility crippled for the time being.

David Kreutzer. March 29, 2016. Taxpayers Are Footing Bill for Solar Project That Doesn’t Work. dailysignal.com

The latest example is the $2.2 billion Ivanpah solar thermal plant in California. (Note: Solar thermal, also known as Concentrated Solar Power plants, do not use solar panels to directly convert sunshine to electricity; they use sunshine to boil water that then drives conventional turbines to create electricity.)  Here’s the story so far. Ivanpah:

  • is owned by Google, NRG Energy, and Brightsource, who have a market cap in excess of $500 billion.
  • received $1.6 billion in loan guarantees from the Department of Energy.
  • is paid four to five times as much per megawatt-hour as natural gas-powered plants.
  • is paid two to three times as much per megawatt-hour as other solar power producers.
  • has burned thousands of birds to death.
  • has delayed loan repayments.
  • is seeking over $500 million in grants to help pay off the guaranteed loans.
  • burns natural gas for 4.5 hours each morning to get its mojo going.

Brightsource, which is privately held, is owned by a virtual who’s who of those who don’t need subsidies from taxpayers and ratepayers.

In spite of all this, Ivanpah has fallen woefully short of its production targets. The managers’ explanation for why production came up 32% below expected output is the weather. In addition to raising questions about planning for uncertainty, it is not all that clear how a 9% drop in sunshine causes a 32% drop in production.

More bizarrely, the natural gas used to get the plant all warmed up and ready each day would be enough to generate over one quarter of the power actually produced from the solar energy. 

The problem for Ivanpah’s customers (California power utilities) is that they planned on all those solar watt-hours to meet California’s renewable power mandates, which require that renewables produce a large and rising fraction of California’s electricity. That is why they pay so much more for Ivanpah’s output than for conventionally powered electricity.

Breaching their contracts with these California utilities threatened to shut down Ivanpah.  But this would have been bothersome for Ivanpah’s investors and the Department of Energy’s ridiculous Section 1703 Loan Program, so the California Public Utilities Commission saved the day (for the fat-cat owners, of course, not for actual the electricity consumers) by granting the company an extension to meet the production targets.  The best part of the ruling is the section on the cost—it’s pretty succinct.  Here it is in its entirety:

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

 

 

 

Posted in Concentrated Solar Power, Corporate Welfare | Tagged , , , | Leave a comment

Over and under-cooked oil — tar sands, “fracked” tight oil & gas, oil shale

[ This article discusses why it’s so hard and expensive to extract difficult oils like tar sands, oil shale, and tight “fracked” oil, for reasons such as:

  • These are at the bottom of the resource pyramid, so there may be a lot of it, but it’s poor quality and expensive to extract.
  • The tar sands in Canada and Venezuela were once super-giant fields of light oil. But over millions of years it’s been “overcooked” — bacteria swallowed most of the hydrogen atoms, degrading and converting the light oil into a nasty tar requiring expensive upgrading 
  • Shale gas and tight oil are in rocks where hydrocarbons may have been overcooked or haven’t made it into porous reservoirs yet.  Robert Skinner says that getting them out “…amounts to giving the rocks an enema” with high pressure water, sand, and chemicals.
  • Kerogen shale is undercooked. Millions of years from now it will turn into oil, but trying to accelerate this process takes too much energy
  • Accelerating or reversing geology to get these difficult oils takes enormous amounts of cash, and energy, which in the end leads to huge amounts of GHG emissions.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

Nikiforuk, A. 22 May 2013. Difficult Truths about ‘Difficult Oil’. As we work down the hydrocarbon pyramid, energy gets messier and much more costly. TheTyee.ca  

As the global economy switches to heavier, messier and costlier hydrocarbons, Robert Skinner is getting a bit worried about the future of his three grandchildren.  It’s all about the story of “difficult oil,” a term the highly respected energy expert and geologist first coined nearly a decade ago.

Now, Skinner, a 67-year energy veteran, has seen it all. He has not only worked extensively for industry and government (Energy Mines & Resources) but even for think tanks such as the prestigious Oxford Institute for Energy Studies. He also served as the policy director for the International Energy Agency in the early 90s as climate change and post-Soviet Europe seized the agency’s attention.

When not writing or thinking about difficult oil, Skinner now advises governments, universities and companies on strategy, whether for research, regulations or investment.

Skinner first saw the oil sands in 1966 as a student geologist. At the time it consisted of just one construction project for the first Suncor mine.

He has returned every decade since, first as a federal energy official, and then as an employee for the French oil giant, Total. In his last stint he served as senior vice president for Statoil Canada.

“I first saw the oil sands as a sideline, out-of-sight activity that governments were reluctant to approve — because it would compete with output from the string of discoveries after Leduc that governments were lobbying the U.S. to import. Today it is a burgeoning boomtown, world-scale industry that governments are again lobbying the U.S. to import.”

But his experiences working with bitumen over the last 45 years confirmed Skinner’s deepest suspicions: difficult oil is, well, difficult and really is a shift from business as usual. It is all about burning money to reverse or speed up geology. Moreover, technological breakthroughs to speed up or slow down geological forces are slow if not ponderous.

Skinner first dug up the important concept of “difficult oil” in 1998.

Difficult hydrocarbons, he explained, generally lie at the bottom of the resource pyramid. They might be massive in volume but high in cost, and often poor in quality.

Difficult oil has either been cooked too much, too little, or not at all. In some cases it has been degraded by bacteria. To accelerate or reverse geology generally requires ungainly amounts of energy along with clouds of GHG emissions.

The right degree of cooking over time, of course, produces light oil, notes Skinner, but much of the world’s conventional sources are now in steep decline.

Little or no cooking results in stuff like the massive resources of kerogen shale in Colorado and Wyoming. Although the U.S. government spent nearly $7-billion on trying to develop this extreme resource in the 1970s, it found that accelerating geology came with too many energy and environmental costs to make a commercial project. 

That leaves over cooking or too much heat, which produces the so-called “wet gas fields,” now being pursued in the Eagle Ford field in western Texas.

The bitumen in Venezuela’s Orinoco basin and northern Alberta also requires massive geological tinkering, says Skinner.

How heavy oil got so heavy

Both heavy oil deposits actually began as super-giant fields of light oil. But over millions of years bacteria chewed up most of the hydrogen atoms degrading the resource into a thick heavy molasses-like tar. This goo can’t be turned into a commercial fuel stock without extensive upgrading to restore the ratio of hydrogen to carbon atoms.

To do so, hydrogen must be added to the bitumen or (more commonly) carbon must be subtracted, by “coking.” Coking creates mountains of petroleum coke, a coal-like substance.

Reversing geology, adds Skinner, “requires huge amounts of energy, labor, water, steel and capital. It’s all about the Second Law of Thermodynamics.”

Shale gas and tight oil, also belong to the difficult camp. They exist in source rocks where hydrocarbons may have been overcooked or not yet migrated up into porous reservoirs. As a consequence it requires some fiddling to wrestle them out of the shale. “To be graphic, it amounts to giving the rocks an enema,” says Skinner.

The cracking of these source rocks with high pressured volumes of water, sand and chemicals, a modern business frenzy, is all about accelerating geology “to speed up the migration” and release of these hydrocarbons.

But to Skinner reversing or accelerating geology ultimately adds up to one reality: spending big piles of cash.

“Difficult oil is by definition costly. And the costs are not coming down all that much.”

Bitumen remains the world’s most capital-intensive hydrocarbon. According to RSK Limited, an independent analysis firm, it takes $8 billion to develop a conventional oil field pumping one million barrels a day in the Middle East, while it takes $45 billion to produce the same result in the tar sands. (Venezuelan heavy oil is about $10 billion cheaper to produce than Canada’s bitumen.)

And that doesn’t include upgrading.

Moreover, the three biggest tight oil producers in the Bakken and Eagle Ford plays “have increased their long-term debt by over 300 per cent in the last three years. We’ve seen this over-leveraged train wreck before,” says Skinner.

The consultant also doesn’t think the capital intensity of difficult hydrocarbons gets enough attention among policy makers.

If interest rates increase and/or the price of oil sags, new production in the shale oil and oil sands becomes uneconomic, explains Skinner.

But as supply drops off, prices eventually increase again making for more volatility. The volatility of difficult oil in turn “compounds the inherent and ever-present instability caused by geopolitical factors.”

Reversing geology is not so easy

Another challenge plaguing difficult oil is the slowness and sheer difficulty of technological innovation. Reversing geology requires great complexity; progress is often incremental and disappointments are common.

“Every company, big and small, attempts to create a mystique around some ‘unique’ or ‘special’ black box or technique in particular or the firm’s technological prowess,” explains Skinner. “They do this to attract investors or to placate their environmental critics, or even to convince themselves that this business is for them.”

While new techniques and technologies, for example using solvents, are being tested, the oil sands is still running on technology several decades old. The steam plants, which boil water to make steam to melt deep underground bitumen, account for half of oil sands production. But the technologies that promised 20 years ago to produce more bitumen with less steam, still hasn’t delivered.

Instead of reducing the volume of steam needed to produce a barrel from 2.5 barrels to one barrel, most projects have increased their steam volumes (an average of 3.2 barrels now) along with energy and water costs due to the increasingly poor quality of deep reservoirs.

As Skinner notes “the ‘future’ of oil sands never seems to come; since SAGD was demonstrated nearly 20 years ago, actual industry performance has never come close to meeting projections even five let alone 10 years out.”

Nor is it just about the technology; “it’s the sheer difficulty of moving dozens of megaprojects through an overburdened regulatory process, construction and local infrastructure with an inadequate and ill-trained labor force.”

University of Calgary petroleum engineer Steve Larter has offered the same reality check: “Steam-Oil Ratios have tended to get worse with time as more difficult reservoirs are developed.” Moreover, “revolutionary technologies that lead to major downward shifts of the invested energy (e.g. steam) and emissions versus oil produced have not yet appeared.”

Skinner adds that most industry and government claims about getting cleaner are problematic at the moment: “Any company that claims its technology program will yield efficiency gains/emissions reductions beyond a modest, few percentage points within ten years — and they have yet to put steel in the ground to test their technologies — is simply naive or attempting to mislead someone. It can take more than three years just to get regulatory approval, two to build, one to three to ramp up, monitor and measure, and perhaps a couple more to analyze — and that is only for a pilot, not a full-scale commercial project: that can take another four to six years to produce initial results.”

Nevertheless Skinner believes that difficult oils such as bitumen will have a future “but it is not as bullish as some expect…. Oil sands’ future will be like their past… bumpy.” He believes that extreme, unconventional hydrocarbons will be hard-pressed to make up more than 10 per cent of global supply by 2035.

Posted in Oil & Gas Fracked, Oil Sands, Oil Shale | Tagged , , , , , , | 2 Comments

Heavy-duty hydrogen fuel cell trucks a waste of energy and money

FCEV Heavy truck: PEM hydrogen fuel cell on-board reforming. U.S. Department of Energy Vehicle Technologies Program, Estimated for 2020. Source (DOE 2011).

Figure 1. FCEV Heavy truck: PEM hydrogen fuel cell on-board reforming. U.S. Department of Energy Vehicle Technologies Program, Estimated for 2020. Source (DOE 2011).

[ Fuel cells are seen as an alternative to batteries, because batteries may always be too heavy to move trucks:

Battery electric trucks (BEV) may never work out. Even if 5 to 10 times as much battery energy density (Wh/kg) were achieved and other technical issues solved, they’d still weigh too much: 2 to 4 tonnes (4400 to 8800 pounds) in a 40 tonne truck.  Today’s batteries are 5 to 10 times heavier than 2 to 4 tonnes (ICCT 2013).  This is why the Ports of Los Angeles and Long Beach ruled out Battery-electric (BEV) trucks, which need a 7,700 pound battery that cuts too much into payload, and only goes 100 miles, half as far as required, and are out of service too long and too often, recharging for 4 hours every 120 miles (Calstart 2013).

Turning hydrogen back into electricity with a fuel cell is only 24.7 % efficient (.84 * .67 * .54 * .84 * .97). There are multiple stages where energy is lost due to inefficiencies at each step: Natural gas upstream and liquefaction, hydrogen on-board reforming, fuel cell efficiency, electric motor and drivetrain losses, and aerodynamic/rolling resistance (Figure 1).

Since fuel cell electric trucks are terrible at acceleration, they always have a second propulsion system, usually a battery, making them orders of magnitude more expensive than an equivalent diesel truck, $1,300,000 versus $100,000 respectively.

Batteries and fuel cells both have reached technical hurdles to overcome that may never be, given the little time left before energy decline, and how long both have been around with little improvement — batteries for 210 years and fuel cells for 180 years.

Hydrogen is not a renewable, since 96% of hydrogen is made from natural gas.  The four percent that isn’t is so expensive it is only made for applications that require extremely pure hydrogen.  Since impurities gum up fuel cells over time and lower their efficiency, clearly hydrogen from water would be a great idea – both renewable and enabling fuel cells to last longer.  But we are far from that. For a full discussion of why hydrogen will not solve our problems, see my post Hydrogen, the Homeopathic Energy Crisis Remedy.

Absent hydrogen pipelines, delivery requires a $250,000 canister truck weighing 40,000 kg delivering a paltry 400 kg of fuel, enough for 60 cars. The same truck can carry 10,000 gallons of gas, enough to fill 800 cars. The hydrogen delivery truck will eat a lot of energy itself: over a distance of 150 miles, it will burn the equivalent of 20% of the usable energy in the hydrogen it is delivering (Romm 2005).

Trucks don’t use hydrogen tanks because they take up 10% of payload weight (DOE 2011), or fuel cells, because the best only last 2500 hours but need to keep on going at least 14,560 hours in long-haul trucks and 10,400 in distribution trucks (den Boer 2013).

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts:  KunstlerCast 253, KunstlerCast278, Peak Prosperity]

ARB. November 2015. Medium- and heavy-duty fuel cell electric vehicles. Air Resources Board, California Environmental Protection Agency.

Medium- and heavy-duty Fuel Cell Electric Vehicles (FCEV) are primarily in demonstration stages in walk-in delivery vans, refuse, and semi-tractor drayage trucks.

Medium duty FCEV’s are mainly used to extend the range of battery electric trucks (BEVs).

Hydrogen is typically dispensed at 35 MPa for medium- and heavy-duty FCEVs; pressures greater than this can be achieved and maintained at a greater cost. To compress hydrogen to 35 MPa requires 2 to 4 kilowatt hours per kg (kWh/kg)

Barriers to FCEV for medium and heavy-duty trucks:

  1. Vehicle cost bus: $1,300,000 versus $500,000 for a diesel bus.
  2. Vehicle cost (truck): even higher due to heavier payloads
  3. Cost of hydrogen fuel
  4. Cost of fuel cell power plant. At $3,000/kW for a 150 kW fuel cell system, the power plant cost is $450,000
  5. Cost of 40-50 kg fuel tank, frame, and mounting system is $100,000
  6. Service station costs of $5,000,000 and O&M costs of $200,000/year
  7. Distribution of hydrogen fuel (corrodes pipes, distributed by diesel-burning trucks now)
  8. More frequent fueling (the fueling infrastructure for FCEV medium and heavy-duty trucks is not known since there aren’t any commercial MD/HD trucks yet)
  9. Lack of hydrogen service stations
  10. Significantly higher costs for FCEV than diesel trucks
  11. Hydrogen tanks weigh a lot
  12. Hydrogen tanks take up a lot of space
  13. Their weight and size reduce range
  14. Hydrogen is more expensive than diesel fuel
  15. The only public hydrogen stations in California are for light duty cars. Because of the high pressure at which they dispense hydrogen, as well as different fueling protocols and nozzles, they are not compatible for use with current fueling protocols for medium- or heavy-duty vehicles.
  16. FCEV can’t handle acceleration well so there is always a 2nd propulsion system like batteries, which adds to their cost
  17. Tanks can go on the roof of buses, but trucks do not have enough space for a tank (though there is room for the fuel cell which is roughly equal to a conventional diesel engine with a similar power rating
  18. Only PEM fuel cells with low operating temperatures, high power density, and so on are suitable, but they are too fragile to endure the rough ride of a truck
  19. FCEV use too much platinum metal group elements which are limited and expensive

What is an FCEV? A FCEV is a vehicle with a fuel cell system that generates electricity to propel the vehicle and to power auxiliary equipment. Hydrogen fuel is consumed in the fuel cell stack to produce electricity, heat, and water vapor—no harmful pollutants are emitted from the vehicle. FCEVs are typically configured in a series hybrid design where the fuel cell is paired with a battery storage system. Together, the fuel cell and battery systems work to meet performance, range, efficiency, and other vehicle manufacturer goals. FCEVs have higher efficiencies, quieter operation, comparable range between fill-up, and similar performance to conventional vehicles.

Most suitable applications.  Vehicles that are centrally fueled, operated, and maintained, returning to the same base at the end of the day.

References

Calstart. 2013. I-710 project zero-emission truck commercialization study. Calstart for Los Angeles County Metropolitan Transportation Authority. 4.7.

den Boer, E. et al. 2013. Zero emissions trucks. Delft.

DOE. 2011. Advanced technologies for high efficiency clean vehicles. Vehicle Technologies Program. Washington DC: United States Department of Energy.

ICCT. July 2013. Zero emissions trucks. An overview of state-of-the-art technologies and their potential. International Council for Clean Transportation.

Romm, J. J. 2005. The Hype About Hydrogen: Fact and Fiction in the Race to Save the Climate. Island Press.

Posted in Batteries, Electric Trucks, Hydrogen | Tagged , , , | Leave a comment

Escape to Mars to solve our problems? How absurd

find-another-planet-climate-change

 

 

 

 

 

 

 

 

 

 

 

[ Go to Mars?  Really?  We tried that already, in the three acre sealed Biosphere complex, which is far larger than anything we could hope to construct on Mars.   And there are dozens more reasons to be found in the highly amusing “Packing for Mars” by Mary Roach.

Even if we figure out how to make a Mars Biosphere, by then we won’t have enough fossil fuels for more than a handful people to get to there. Rocket propulsion still depends on fossil fuels. 

Ugo Bardi points out in his book Extracted: How the Quest for Mineral Wealth Is Plundering the Planet. that we already have gone to another planet by exploiting Earth so ruthlessly that we have already changed our planet into another place:

“The planet has been “plundered to the utmost limit, and what we will be left with are only the ashes of a gigantic fire. We are leaving to our descendants a heavy legacy in terms of radioactive waste, heavy metals dispersed all over the planet, and greenhouse gases—mainly CO2—accumulated in the atmosphere and absorbed in the oceans.

It appears that we found a way to travel to another planet without the need for building spaceships.  It is not obvious that we’ll like the place, but there is no way back; we’ll have to adapt to the new conditions. It will not be easy, and we can speculate that it will lead to the collapse of the structure we call civilization, or even the extinction of the human species”.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”]

Biosphere is a 3.14 acre closed environment of several sealed greenhouses north of Tucson, Arizona that cost $250 million to build.

It was meant to show how colonists could survive on Mars and other space colonization.

Eight people sealed themselves inside in 1991, planning to live on the food they grew, recycled water, and the oxygen made by plants.

But it didn’t work out. Some of the reasons the Biosphere failed are:

  • Oxygen fell from 20.9% to 14.5%, the equivalent of 13,400 feet elevation
  • Wildly fluctuating carbon dioxide levels
  • Pests ran riot, especially crazy ants, cockroaches, and katydids
  • Not enough food could be grown
  • It cost $600,000 a year to keep it cool
  • Extinction: The projected started out with 25 small vertebrates but only 6 species survived   (including those expected to pollinate plants)
  • water systems polluted with too many nutrients
  • morning glories smothered other plants
  • The level of dinitrogen oxide became dangerously high, which can cause brain damage due to a lowered ability to synthesize vitamin B12

For more information see the 2013 NewScientist article “Biosphere 2: saving the world within the world” and Wiki.

Posted in Far Out, Where to Be or Not to Be | Tagged , , , | 2 Comments

How a pandemic could bring down civilization

[ Some of my favorite sections of this article:

“The fact is that the best way for people to avoid the virus will be to stay home. But if everyone does this – or if too many people try to stockpile supplies after a crisis begins – the impact of even a relatively minor pandemic could quickly multiply.

Especially vital are “hubs” – the people whose actions link all the rest. Take truck drivers. When a strike blocked petrol deliveries from the UK’s oil refineries for 10 days in 2000, nearly a third of motorists ran out of fuel, some train and bus services were cancelled, shops began to run out of food, hospitals were reduced to running minimal services, hazardous waste piled up, and bodies went unburied. Afterwards, a study by Alan McKinnon of Heriot-Watt University in Edinburgh, UK, predicted huge economic losses and a rapid deterioration in living conditions if all road haulage in the UK shut down for just a week.

What would happen in a pandemic when many truckers are sick, dead or too scared to work?  Even a small impact on road haulage would quickly have severe knock-on effects [because of] just-in-time delivery. Over the past few decades, people who use or sell commodities from coal to aspirin have stopped keeping large stocks, because to do so is expensive. They rely instead on frequent small deliveries.

Cities typically have only three days’ worth of food, and the old saying about civilizations being just three or four meals away from anarchy is taken seriously by security agencies such as MI5 in the UK.

Interdependencies: Coal mines need electricity to keep working. Pumping oil through pipelines and water through mains also requires electricity. Making electricity depends largely on coal; getting coal depends on electricity; they all need refineries and key people; the people need transport, food and clean water. If one part of the system starts to fail, the whole lot could go. Hydro and nuclear power are less vulnerable to disruptions in supply, but they still depend on highly trained staff. With no electricity, shops will be unable to keep food refrigerated even if they get deliveries. Their tills won’t work either. Many consumers won’t be able to cook what food they do have. With no chlorine, water-borne diseases could strike just as it becomes hard to boil water. Communications could start to break down as radio and TV broadcasters, phone systems and the internet fall victim to power cuts and absent staff. This could cripple the global financial system, right down to local cash machines, and will greatly complicate attempts to maintain order and get systems up and running again.”

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”]

MacKenzie, D. April 5, 2008. Will a pandemic bring down civilization? NewScientist.

For years we have been warned that a pandemic is coming. It could be flu, it could be something else. We know that lots of people will die. As terrible as this will be, on an ever more crowded planet, you can’t help wondering whether the survivors might be better off in some ways. Wouldn’t it be easier to rebuild modern society into something more sustainable if, perish the thought, there were fewer of us.

Yet would life ever return to something resembling normal after a devastating pandemic? Virologists sometimes talk about their nightmare scenarios – a plague like ebola or smallpox – as “civilization ending”. Surely they are exaggerating. Aren’t they?

Many people dismiss any talk of collapse as akin to the street-corner prophet warning that the end is nigh. In the past couple of centuries, humanity has innovated its way past so many predicted plagues, famines and wars – from Malthus to Dr Strangelove – that anyone who takes such ideas seriously tends to be labeled a doom-monger.

There is a widespread belief that our society has achieved a scale, complexity and level of innovation that make it immune from collapse. “It’s an argument so ingrained both in our subconscious and in public discourse that it has assumed the status of objective reality,” writes biologist and geographer Jared Diamond of the University of California, Los Angeles, author of the 2005 book Collapse. “We think we are different.”
Ever more vulnerable

A growing number of researchers, however, are coming to the conclusion that far from becoming ever more resilient, our society is becoming ever more vulnerable. In a severe pandemic, the disease might only be the start of our problems.

No scientific study has looked at whether a pandemic with a high mortality could cause social collapse – at least none that has been made public. The vast majority of plans for weathering a pandemic all fail even to acknowledge that crucial systems might collapse, let alone take it into account.

There have been many pandemics before, of course. In 1348, the Black Death killed about a third of Europe’s population. Its impact was huge, but European civilization did not collapse. After the Roman empire was hit by a plague with a similar death rate around AD 170, however, the empire tipped into a downward spiral towards collapse. Why the difference? In a word: complexity.

In the 14th century, Europe was a feudal hierarchy in which more than 80% of the population were peasant farmers. Each death removed a food producer, but also a consumer, so there was little net effect. “In a hierarchy, no one is so vital that they can’t be easily replaced,” says Yaneer Bar-Yam, head of the New England Complex Systems Institute in Cambridge, Massachusetts. “Monarchs died, but life went on.”
Individuals matter

The Roman empire was also a hierarchy, but with a difference: it had a huge urban population – not equaled in Europe until modern times – which depended on peasants for grain, taxes and soldiers. “Population decline affected agriculture, which affected the empire’s ability to pay for the military, which made the empire less able to keep invaders out,” says anthropologist and historian Joseph Tainter at Utah State University in Logan. “Invaders in turn further weakened peasants and agriculture.”

A high-mortality pandemic could trigger a similar result now, Tainter says. “Fewer consumers mean the economy would contract, meaning fewer jobs, meaning even fewer consumers. Loss of personnel in key industries would hurt too.”

Bar-Yam thinks the loss of key people would be crucial. “Losing pieces indiscriminately from a highly complex system is very dangerous,” he says. “One of the most profound results of complex systems research is that when systems are highly complex, individuals matter.”

The same conclusion has emerged from a completely different source: tabletop “simulations” in which political and economic leaders work through what would happen as a hypothetical flu pandemic plays out. “One of the big ‘Aha!’ moments is always when company leaders realize how much they need key people,” says Paula Scalingi, who runs pandemic simulations for the Pacific Northwest economic region of the US. “People are the critical infrastructure.”
Vital hubs

Especially vital are “hubs” – the people whose actions link all the rest. Take truck drivers. When a strike blocked petrol deliveries from the UK’s oil refineries for 10 days in 2000, nearly a third of motorists ran out of fuel, some train and bus services were cancelled, shops began to run out of food, hospitals were reduced to running minimal services, hazardous waste piled up, and bodies went unburied. Afterwards, a study by Alan McKinnon of Heriot-Watt University in Edinburgh, UK, predicted huge economic losses and a rapid deterioration in living conditions if all road haulage in the UK shut down for just a week.

What would happen in a pandemic when many truckers are sick, dead or too scared to work? Even if a pandemic is relatively mild, many might have to stay home to care for sick family or look after children whose schools are closed. Even a small impact on road haulage would quickly have severe knock-on effects.

One reason is just-in-time delivery. Over the past few decades, people who use or sell commodities from coal to aspirin have stopped keeping large stocks, because to do so is expensive. They rely instead on frequent small deliveries.

Cities typically have only three days’ worth of food, and the old saying about civilizations being just three or four meals away from anarchy is taken seriously by security agencies such as MI5 in the UK.

In the US, plans for dealing with a pandemic call for people to keep three weeks’ worth of food and water stockpiled. Some planners think everyone should have at least 10 weeks’ worth. [My comment: I have never heard from any agency this length of time. Here in earthquake prone California, the recommendation is 3 DAY, and I’ve written local, state, and federal government officials that this is not long enough.  On the anniversary of the 1906 earthquake, the newspapers poll people on how many days of food and water they have stored, and less than half have 3 days worth].

How long would your stocks last if shops emptied and your water supply dried up? Even if everyone were willing, US officials warn that many people might not be able to afford to stockpile enough food.
Two-day supply

Hospitals rely on daily deliveries of drugs, blood and gases. “Hospital pandemic plans fixate on having enough ventilators,” says public health specialist Michael Osterholm at the University of Minnesota in Minneapolis, who has been calling for broader preparation for a pandemic. “But they’ll run out of oxygen to put through them first. No hospital has more than a two-day supply.” Equally critical is chlorine for water purification plants.

It’s not only absentee truck drivers that could cripple the transport system; new drivers can be drafted in and trained fairly quickly, after all. Trucks need fuel, too. What if staff at the refineries that produce it don’t show up for work?

Some models suggest absenteeism sparked by a 1918-type pandemic could cut the workforce by half at the peak of a pandemic wave.
Critical infrastructure

All the companies that provide the critical infrastructure of modern society – energy, transport, food, water, telecoms – face similar problems if key workers fail to turn up. According to US industry sources, one electricity supplier in Texas is teaching its employees “virus avoidance techniques” in the hope that they will then “experience a lower rate of flu onset and mortality” than the general population.

The fact is that the best way for people to avoid the virus will be to stay home. But if everyone does this – or if too many people try to stockpile supplies after a crisis begins – the impact of even a relatively minor pandemic could quickly multiply.

Planners for pandemics tend to overlook the fact that modern societies are becoming ever more tightly connected, which means any disturbance can cascade rapidly through many sectors. For instance, many businesses have contingency plans that count on some people working online from home. Models show there won’t be enough bandwidth to meet demand.

And what if the power goes off? This is where the complex interdependencies could prove disastrous. Refineries make diesel fuel not only for trucks but also for the trains that deliver coal to electricity generators, which now usually have only 20 days’ reserve supply, Osterholm notes. Coal-fired plants supply 30 per cent of the UK’s electricity, 50 per cent of the US’s and 85 per cent of Australia’s.
Powerless

The coal mines need electricity to keep working. Pumping oil through pipelines and water through mains also requires electricity. Making electricity depends largely on coal; getting coal depends on electricity; they all need refineries and key people; the people need transport, food and clean water. If one part of the system starts to fail, the whole lot could go. Hydro and nuclear power are less vulnerable to disruptions in supply, but they still depend on highly trained staff.

With no electricity, shops will be unable to keep food refrigerated even if they get deliveries. Their tills won’t work either. Many consumers won’t be able to cook what food they do have. With no chlorine, water-borne diseases could strike just as it becomes hard to boil water. Communications could start to break down as radio and TV broadcasters, phone systems and the internet fall victim to power cuts and absent staff. This could cripple the global financial system, right down to local cash machines, and will greatly complicate attempts to maintain order and get systems up and running again.

Even if we manage to struggle through the first few weeks of a pandemic, long-term problems could build up without essential maintenance and supplies. Many of these problems could take years to work their way through the system. For instance, with no fuel and markets in disarray, how do farmers get the next harvest in and distributed?
Closing borders

As a plague takes hold, some countries may be tempted to close their borders. But quarantine is not an option any more. “These days, no country is self-sufficient for everything,” says Lay. “The worst mistake governments could make is to isolate themselves.” The port of Singapore, a crucial shipping hub, plans to close in a pandemic only as a last resort, he says. Yet action like this might not be enough to prevent international trade being paralysed as other ports close for fear of contagion or for lack of workers, as ships’ crews sicken and exporters’ assembly lines grind to a halt without their own staff, power, transport or fuel and supplies.

Osterholm warns that most medical equipment and 85% of US pharmaceuticals are made abroad, and this is just the start. Consider food packaging. Milk might be delivered to dairies if the cows get milked and there is fuel for the trucks and power for refrigeration, but it will be of little use if milk carton factories have ground to a halt or the cartons are an ocean away.

“No one in pandemic planning thinks enough about supply chains,” says Osterholm. “They are long and thin, and they can break.” When Toronto was hit by SARS in 2003, the major surgical mask manufacturers sent everything they had, he says. “If it had gone on much longer they would have run out.”

The trend is for supply chains to get ever longer, to take advantage of economies of scale and the availability of cheap labour. Big factories produce goods more cheaply than small ones, and they can do so even more cheaply in countries where labor is cheap.
Flawed assumptions

Disaster planners usually focus on single-point events of this kind: industrial accidents, hurricanes or even a nuclear attack. But a pandemic happens everywhere at the same time, rendering many such plans useless.

The main assumption is how serious a pandemic could be. Many national plans are based on mortality rates from the mild 1957 and 1968 pandemics. “No government pandemic plans consider the possibility that the death rate might be higher than in 1918,” says Tim Sly of Ryerson University in Toronto, Canada.
Death rate

This scenario assumes around 3% of those who fall ill die. Of all the people known to have caught H5N1 bird flu so far, 63% have died. “It seems negligent to assume that H5N1, if it goes pandemic, will necessarily become less deadly,” says Sly. And flu is far from the only viral threat we face.

The ultimate question is this: what if a pandemic does have huge knock-on effects? What if many key people die, and many global balancing acts are disrupted? Could we get things up and running again? “Much would depend on the extent of the population decline,” says Tainter. “Possibilities range from little effect to a mild recession to a major depression to a collapse.”

Posted in 3) Fast Crash, Interdependencies, Pandemic | Tagged , , | 2 Comments

Net metering and the death of US rooftop solar

April 22, 2016 by Roger Andrews at euanmearns.com

“Net metering” allows anyone with a solar installation to sell surplus solar power to the grid when the sun is shining and to purchase power back from the grid when it isn’t. Net metering has been described as the lifeblood of solar in America, and it’s probably true to state that without it there would be few, if any domestic rooftop solar installations anywhere in the country. However, the program is now coming under attack, with Hawaii and Nevada recently rolling back net metering benefits and with a number of other states also considering changes. What happens if enough states impose similar rollbacks, or maybe do away with net metering altogether? This post reviews this question and concludes that domestic solar in the US will slowly wither and die.

The Nevada decision

On December 23, 2015, the Nevada State Legislature passed Senate Bill 374, following which the state Public Utilities Commission cut the rate payable to owners of domestic solar installations who sell surplus power to Nevada Energy. The rationale was that intermittent solar power sold to the NV Energy grid “differs from” the dispatchable power the grid sells back and that domestic solar owners were getting paid too much for the former and not paying enough for the latter:

The order separates the prices of energy and related services provided by NV Energy, and the intermittent renewable energy provided to NV Energy by net metering customers. This approach is fair because it recognizes that the energy and suite of energy services provided by NV Energy to net metering customers differs from the intermittent excess energy delivered to NV Energy’s system.

This decision will be welcomed by all who recognize that solar is incapable of providing more than a small fraction of total electricity supply because of prohibitive storage requirements and that it’s presently getting a free ride on the back of grid generation that substitutes for storage. Certainly my rooftop solar panels would be totally uneconomic if I couldn’t use grid power at night and had to use storage batteries instead.

The Nevada solar industry, however, was not amused. Three solar companies – SolarCity, Sunrun and Vivint – announced they would have to cease operations in the state and local installers have been forced to cut staff. Also not amused were Nevada’s 18,000 existing rooftop solar array owners, who thought they were “grandfathered” but found that they weren’t. Their response was to launch a class action lawsuit against NV Energy alleging the utility “conspired to unlawfully reduce incentives” and NV Energy caved in, announcing that it would file a proposal to keep existing customers on the old rates, recognizing the desire for a “stable and predictable cost environment.”

“A potentially worrisome precedent”

But still the outcome in Nevada sets a potentially worrisome precedent for the US solar industry, with roughly half of all U.S. states currently studying or changing their net metering policies. States are taking action now because domestic solar in the US has grown so fast that several of them are now approaching or have already reached their net-metering caps. (A net metering cap is a target set by state authorities and it’s usually related to some fraction of peak demand or to capacity. But each state uses different criteria and some of them are extremely complicated. Details for anyone who might want more information are available here and here).

Two states other than Nevada have already revisited the question of how much intermittent solar power is really worth and how much of it their state can really use. The first was Hawaii, where some of Hawaii Electric Company’s grids were getting swamped by rooftop solar to the point where solar generation exceeded total demand at daytime solar peak. An example is given in Figure 1, which shows “backfeed” conditions between 10.30am and 2pm on August 8, 2013:

Figure 1: Average transformer load showing “backfeed” conditions, Hawaii utilities

Because of growing problems of this type the Hawaii Public Utilities Commission shut the net metering program down for new participants in October last year. As was the case in Nevada this shutdown was also accompanied by weeping, wailing and lawsuits from the local solar industry and rooftop solar owners, but the situation was obviously unsustainable. And it arose with less than 1% overall annual solar penetration in the state, not the 10% commonly assumed. More about this later.

Another state on a collision course with net metering is California, the home of the “Duck Curve”: (The Hawaii curve is known as the “Nessie Curve”, although the resemblance is less obvious.)

Figure 2: The California “Duck Curve”

At expected rates of solar growth California will also have a potential overgeneration problem by 2020, and the ramp rates needed to cover the period between about 5pm and peak load at 9pm reach potentially alarming levels. California’s solution has been to mandate the installation of 1.3GW of storage capacity (again no “h” given) by 2020, but this is just a drop in the bucket by California standards.

Current Status of the US solar industry:

One of the remarkable things about the US solar industry is how insignificant it is. Figure 3 plots percent solar penetration in the 36 states for which solar data are available (estimated as total solar generation divided by total generation using 2015 data from the EIA detailed state generation data base). The average level of penetration in 2015 was only 0.6%, and many states generated effectively no solar at all:

Figure 3: Solar generation by state as a percentage of total generation.

Only California is anywhere close to 10% solar penetration. Solar penetration in Nevada is less than 5% and in Hawaii less than 1%. (I checked this number and found that according to Hawaii Electric Company it’s correct). The implication is that solar may begin to stress grids at levels of penetration much lower than 10%, particularly at the local level.

Discussion

What we are seeing here is a conflict between on the one hand the utilities and grid operators, who view solar as a threat to their bottom line and to grid stability, and on the other the green lobby plus the residential owners, installers and PV panel salesmen who are now benefiting from the proceeds of subsidized solar and the existence of net metering. The surprising thing, however, is that this conflict has broken out even though solar still contributes a negligible percentage of the US generation mix. Why should this be? I think partly because the hundreds of thousands of homeowners who have installed solar arrays are dependent on a continuation of net metering to recoup their investment, partly because 200,000 people are now employed in the US solar industry, partly because solar can in some cases destabilize grids even at low levels of penetration (viz. Hawaii) and partly because of the claims made by some scientific organizations as to the percentage of US electricity generation solar could ultimately fill, such as:

  • US National Renewable Energy Laboratory: 39% with rooftop solar PV alone
  • Stanford University: 38% by 2050
  • US Department of Energy: 27% by 2050
  • International Energy Agency: 36% by 2050 (with solar thermal)

Numbers like this, which assume an approximate sixty-fold expansion of US solar capacity over present levels, can only be described as wishful thinking. Yet in the minds of many they are realistic targets.

But what happens if net metering benefits are rolled back? I picked an example which should be fairly close to reality – a household in Southern Nevada that consumes 11,000 kWh/year, the US average, with a 5kW solar array on the roof. I constructed a crude daily demand curve to show a peak around the breakfast hour and a larger one in the evening when everyone is at home watching large-screen TV or playing computer games and all the lights have been left on. Figure 4A shows hourly consumption and solar generation for the household during an average day (which assumes 12 hours of sunshine and a capacity factor of 19%, which is about right for Southern Nevada.) When the sun isn’t shining the household gets all its power from the grid, but for about 7 hours it gets all its power from the 3kW solar array. And over this period the array generates a healthy surplus that gets fed back to the grid, sending the electricity meter into reverse and causing it to wind rapidly backwards:

Figure 4: Demand, solar generation and consumption for a “typical” Southern Nevada household with net metering in place

Figure 4B shows the cumulative impacts. At the end of the day the household has consumed 30.3kWh, but because of the surplus solar power sent to the grid it gets charged for only 6.7kWh of grid power, which at current Nevada retail rates of $0.11/kWh works out to the princely sum of 74 cents, or an annual bill of about $270. Compared to what the bill would have been without solar (about $1,200) this gives the owner something like a ten-year payback on his or her solar investment after federal and state tax credits, which is not too bad when one considers that the solar array adds value to the house and that the PV panels will, one assumes, continue to generate electricity after payback is reached.

Nevada’s net metering rollback will, however, ultimately reduce the payment homeowners receive for solar electricity sent to the grid by 75% . How much difference will this make? Instead of saving almost $1,000/year on electricity bills the homeowner will now save only about $250/year. Even allowing for federal and state tax credits this will make domestic solar totally uneconomic in Nevada. And if other states follow Nevada’s lead it will eventually become uneconomic in those states as well.

And the problem doesn’t stop there. US utilities, with some justification, are also angling for increased charges to cover the costs of integrating growing amounts of solar power with their grids. (Nevada’s “grid connection charge” is scheduled to triple over the next five years). The end of the net metering road will of course be reached when the grids can’t physically accept any more solar, or no one will be able to afford the grid connection charge, whereupon Figure 4A will look like this:

Figure 5: Demand, solar generation and consumption for a “typical” Southern Nevada household with no net metering in place. The household is capable of powering itself for only about 8 hours.

Yet some believe that net metering rollbacks will provide a new opportunity for US solar. This article (which describes net metering as solar’s “junk food”) proposes a “value-of-solar tariff” where “solar customers are paid for the value of the electricity they produce at the specific time and place they put it on the grid.” This seems fair, but it too would probably kill rooftop solar. The California duck curve shown in Figure 2 shows how. The solar power produced in the middle of the day exceeds grid requirements and would therefore have to be sold at a low price if not wasted altogether, and at the nine o’clock peak, when power is in greatest demand, the sun has set or in in the process of setting. Another article views net metering rollbacks as an opportunity for domestic solar producers to go off-grid entirely and fill demand from energy storage, either in a utility-owned or domestic storage facility. But “to make the storage option appealing to customers … it would need to be offered using a low capital expenditures (CAPEX) business model.” “Energy storage” and “low CAPEX” are, however, mutually-exclusive terms, so that won’t work either.

It therefore appears that the future of domestic US solar depends on how far the states that are currently considering or reconsidering their positions roll back net metering benefits. And they probably wouldn’t have to roll them back very far before rooftop solar becomes uneconomic – unless of course the government jumps in with yet more subsidies. But hope springs eternal, particularly in the breast of the US solar industry.

 

Posted in Other Experts, Photovoltaic Solar | Tagged , , , | 9 Comments