Large agribusiness gets corporate welfare via illegal ethanol subsidies

What more proof is needed that the Energy Returned on Energy Invested of ethanol is negative?  They’re losing money and getting corporate welfare to keep the scam going, meanwhile destroying prime topsoil, poisoning the land with pesticides, and eutrophying the Gulf of Mexico (see Peak Soil for details).

This is only part of the article, see the rest here.

Updated: Bioenergy Program for Advanced Biofuels Fact Sheet. June 2014. Taxpayers for common sense.

Large Corn Biofuels Facilities Receiving Taxpayer Funding

The highest payments per project, by far, were awarded to large agribusinesses operating corn and soy biofuels facilities.

This is despite the fact that corn ethanol facilities are not even eligible for funding through this program or defined as an advanced biofuel in any current federal legislation.

Regardless, USDA is still funneling money to this mature industry, in addition to soy biodiesel facilities.

From 2009 to 2014, 21 corn ethanol facilities and three corn oil biodiesel facilities received $60 million in federal subsidies, an average of $2.5 million per project. See Table 2 for more information. The corn ethanol industry has already received more than its fair share of federal subsidies over the past 30 years, including energy and commodity subsidies in the farm bill, production tax credits, import tariffs, taxpayer-backed loans, and infrastructure support. In addition, corn ethanol production is mandated through the federal Renewable Fuel Standard (RFS); more specifically, the RFS mandate requires that 15 billion gallons of corn ethanol be used in U.S. motor gasoline by 2015.

Even though the Bioenergy Program for Advanced Biofuels was intended to spur production of advanced biofuels, as the program’s title suggests, its funding stream reveals a different story. Instead of assisting small, rural residents or small businesses obtain financing to help second-generation biofuels derived from non-food feedstocks get off the ground, the program is instead funneling taxpayer dollars to large, profitable, and well-known agribusinesses. Government funding is also spent on mature biofuels industries like corn ethanol and soy biodiesel, which have enjoyed taxpayer backing for more than 30 years. Now more than ever, taxpayers should not be forced to fund corporate welfare and mature technologies, so the BPAB program must not be renewed in the next farm bill and spending should be reined in until then.

Table 2:  Corn Biofuels Facilities Receiving Advanced Biofuels Payments, 2009-14

Facility Name (* notes the facility produces biodiesel) State Feedstock Total Payments
White Energy Inc TX corn/milo $10,442,369
Arkalon Ethanol LLC KS corn/milo $9,935,595
Western Plains Energy KS corn/milo $8,302,242
Kansas Ethanol LLC KS corn/milo $5,914,342
Pinal Energy LLC AZ corn $4,651,731
Prairie Horizon Agri-Energy LLC KS corn/milo $4,428,160
Levelland/Hockley Co. Ethanol (now Diamond Ethanol) TX corn/milo $3,308,326
Abengoa Bioenergy Corp. MO corn/milo $3,108,385
Bonanza Bioenergy LLC KS corn/milo $3,082,023
Chief Ethanol Fuel Inc NE corn/milo $2,308,795
Reeve Agri Energy Inc KS corn/milo $1,723,906
Nesika Energy LLC KS corn $771,812
Central Indiana Ethanol LLC IN corn $482,973
Corn Plus LP MN corn $311,081
Walsh Bio Fuels, LLC* WI corn $267,030
Trenton Agri Products LLC KS corn/milo $231,620
Nugen Energy LLC SD corn $98,591
East Kansas Agri-Energy LLC KS corn $58,834
Cornhusker Energy Lexington, LLC NE corn $14,871
Chippewa Valley Ethanol Coop MN corn $14,597
Best Biodiesel Cashton, LLC* WI corn/soy $10,487
Kappa Ethanol, LLC NE corn $8,693
Maple River Energy, LLC* IA corn/soy $7,845
TOTAL $59,618,433

Large Agribusinesses Receiving Subsidies for Biodiesel Production

Table 3 identifies several large agribusinesses receiving more than $1 million of taxpayer subsidies for biodiesel production. Biodiesel can be produced from corn oil, as noted above, or other feedstocks such as soy or other types of vegetable oil, animal fats, recycled cooking oil, etc. Notable companies receiving taxpayer support from 2009-2013 include the Renewable Energy Group, Louis Dreyfus, Ag Processing, Archer Daniels Midland, MN Soybean Processors, and Cargill Inc. Similar to the generous taxpayer supports corn ethanol has received over the past 30 years, biodiesel companies have also benefited from a $1 per gallon production tax credit for several years, on top of several other federal incentives.

Table 3:  Biodiesel Facilities Receiving Advanced Biofuels Payments, 2009-14

Facility Name State Feedstock Total Payment
Lake Erie Biofuels, LLC Dba Hero Bx PA multi $16,842,034
Renewable Energy Group, Inc. IA canola $15,308,992
Louis Dreyfus Agricultural Industries IN soy $12,468,872
High Plains Bioenergy, LLC OK animal fats $11,915,721
AG Processing Inc NE soy $11,221,637
Mid-America Biofuels, LLC MO soy $10,530,741
Paseo Cargill Energy, LLC MO soy $9,690,338
Archer Daniels Midland Company IL, ND canola $7,744,279
Deerfield Energy LLC MO multi $6,846,753
MN Soybean Processors MN soy $5,914,635
Owensboro Grain Company, LLC. KY soy $5,668,413
Cargill Inc. MN soy $5,562,689
Smarter Fuel, Inc. PA cooking oil $5,202,080
Incobrasa Industries, Ltd. IL soy $4,897,378
FutureFuels Chemical Company AR animal fats/soy $4,661,016
Imperium Grays Harbor LLC WA canola $3,849,794
Rbf Port Neches, LLC. TX multi $3,710,752
E Biofuels LLC IN animal fats/cooking oil $3,440,667
Western Iowa Energy IA multi $3,020,233
American Biodiesel, Inc CA multi $2,741,786
Crimson Renewable Energy LP CA multi $2,703,216
Western Dubuque Biodiesel, LLC IA canola $2,569,989
Sequential‐Pacific Biodiesel OR cooking oil $2,516,531
Jatrodiesel, Inc. OH multi $2,144,479
Midwest Biodiesel Product, LLC. IL soy $2,011,805
Green Earth Fuels Of Houston, LLC. TX multi $1,924,678
Environmental Energy Recycling Corp. PA cooking oil $1,758,853
Scott Petroleum Corporation MS multi $1,726,854
Imperial Western Products, Inc. CA animal fats/veg oil $1,654,933
Iowa Renewable Energy, LLC IA animal fats/veg oil $1,441,303

Other Feedstocks Receiving Taxpayer Subsidies

As Table 1 illustrated, projects receiving the last few million dollars of BPAB payments converted either woody biomass, sorghum, or seed waste into biofuels or used anaerobic digesters or landfill gas to power bioenergy facilities. On average, these payments were three to ten times smaller than the average checks sent to corn ethanol facilities. The remaining projects were filed in the unknown category since too little detail was provided by USDA to determine which types of feedstocks are used in the facilities.

For more information, contact Taxpayers for Common Sense at 202-546-8500.

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Ivanpah Biggest solar power plant ever – $2.2 billion for only 100 MW

The $2.2 billion dollar Ivanpah Solar power plant generates 100 MW of power when you take the 25% capacity into account (not 400 MW).  That’s enough power for 25,000 to 50,000 homes (not 140,000 as claimed).  There are 116,700,000 households in the USA (2010 census).  So we’d need 2,334 to 4,668 more $2.2 billion Ivanpahs for residential power alone.  That would cost $5 to $10 trillion dollars.  At the very bottom I’ve added a description of how Ivanpah works.

Huge US solar plant lags in early production

Nov 17, 2014 by Michael R. Blood at phys.org

The largest solar power plant of its type in the world—once promoted as a turning point in green energy—isn’t producing as much energy as planned.

The plant is producing about half of its expected annual output for 2014, according to calculations by the California Energy Commission.  Ivanpah sprawls over 5 miles of desert near the California-Nevada border.

How Efficient will the Ivanpah Solar Power Tower Really Be?    Reliability and Efficiency

by BasinAndRangeWatch.org

The $2.2 billion dollar Ivanpah Solar Electric Generating System (ISEGS) generates 400 megawatts (MW) of electricity during the sunniest part of the day, and uses natural gas to generate up to five percent of its capacity.  Without energy storage, the annual capacity factor of any solar technology is generally limited to about 25 percent of maximum according to the Renewable Energy Research Laboratory. ISEGS will not use storage technology.

Cost

Solar technologies in general remain too costly for grid-connected applications without heavy government subsidies (from Department of Energy).

A Combined Cycle Gas Turbine power plant today costs roughly $1,100/kW – $1,500/kW to build, one of the cheapest power plant options. The price of natural gas electricity costs 3.9 to 4.4 cents/kWh, according to Pure Energy Systems Wiki. The market cost for coal is around 2-3 cents/kwh. The levelized cost of coal is around 4-5.8 cents/kwh. Nuclear generation costs 11.1 to 14.5 cents/kWh.

Parabolic trough solar thermal costs for electricity run from 15 to 18 cents/kWh.

Costs for solar thermal plants: the Nevada One plant completed in 2007 was built for roughly $3,600/kW of capacity. (Source http://www.energybulletin.net/49878)

Add in the Transmission Costs

For remote solar plants like the Ivanpah project, built hundreds of miles from cities, the cost of upgrading and building new power lines needs to be factored in.

The costs of single-circuit alternating current transmission lines for 1989: for a 230 kilovolt line – $150,000 to 375,000 per mile, for a 500 kV line – $400,000 to 800,000 per mile. (Source: Electric Power Research Institute, Technical Assessment Guide: Electric Supply, 1989, Vol. 1, Revision 6, Golden, CO, November 1989, p. B-4)

This cost is passed onto ratepayers, a Southern California Edison representative told us. The Eldorado-Ivanpah Transmission line upgrade alone would make the rates of SCE go up about 5 to 10 cents per power bill per customer. Each additional project that would require an upgrade would also add to the power bills.

We disagree with the statement, “[ISEGS] would not create significant adverse effects on fossil fuel energy supplies or resources, would not require additional sources of energy supply, and would not consume fossil fuel energy in a wasteful or inefficient manner” (page 7.2-1). Fossil fuel would have to be burned elsewhere on the grid as baseload, mostly as coal, as solar energy is intermittent. The Ivanpah solar plant will not run during the night, during cloudy days, and on cold winter mornings the small on-site natural gas burners will have to run to heat the system up.

Efficiency in a power plant is a measure of the how much electricity is generated from a unit of energy put into the system (such as coal, natural gas, or photons). In a thermal power plant water is boiled to produce steam, the heat-energy of which is used to turn turbines. But much heat is lost in the process. Some typical efficiency values (From: Eike Roth, Why thermal power plants have a relatively low efficiency, www.sealnet.org; and Romero-Alvarez and Zarza 2007).

Coal – 45-48% efficiency, Natural gas – 58%, Nuclear – 35%, Hydro – 85%

Solar thermal – Central receiver (like ISEGS design): 12% annual net, 16% peak

Solar thermal – Parabolic trough: 14% annual net, 21.5% peak

Photovoltaic silicon – 15%

Trying to figure an efficiency calculation to use to compare the Ivanpah solar project future efficiency, CEC uses a proxy from existing natural gas power plants. They say, “As a proxy, we will use an average efficiency based on several recent baseload combined cycle power plant projects in the Energy Commission siting process. Baseload combined cycles were chosen because their intended dispatch most nearly mirrors the intended dispatch of solar plants, that is, operate at full load in a position high on the dispatch authority’s loading order” (page 7.2-15). The average of four natural gas combined cycle 565-696 MW power plants: 53.7% LHV (Lower Heating Value*). This does not seem to compare well with real-world measured efficiencies at existing central receiver solar thermal projects (above), but CEC ignores real-world numbers.

Using this proxy, CEC concludes that the Land Use Efficiency for ISEGS would be 238 MWh/acre-year (solar only, subtracting the natural gas burned for morning warm-up and cloud cover).

But why is CEC comparing ISEGS to a baseload plant, which is supposed to produce energy at a constant rate? Examples of baseload plants include nuclear and coal-fired plants. Baseload plants typically run at all times of the year, and all night. Clouds do not turn them off. They also have dispatchability, able to ramp up or down to generate power any time. Peaks or spikes in customer power demand are handled by smaller and more responsive types of power plants called peaking power plants. Peaking plants are typically powered with natural gas turbines. Baseload power plants do not change production to match power consumption demands since it is more economical to operate them at constant production levels. Natural gas is used in base load, intermediate cycle, and peaking units. In California, more than three-quarters of natural gas generation comes from combined cycle gas turbines (CCGT) operated as baseload and intermediate cycle units.

Solar thermal power is not dispatchable.

A load-following power plant gradually ramps up and down its power output to respond to scheduled changes in power demand over the course of a day. Gas, pulverized coal, and hydroelectric generators are commonly used to follow the load. “Solar photovoltaic or CSP [concentrated solar thermal, like ISEGS] without storage can approximately follow the load on sunny days, when peak demand is around mid-day” (From Solar Southwest Initiative).

The ISEGS solar thermal power plants should be compared to a load-following plant, not baseload. But not being dispatchable on command, it compares poorly. We have witnessed the summer monsoon season in Ivanpah Valley shade much of the area with tall thunderheads every afternoon for weeks.

Baseload vs. Peak.  Based on reports filed by the nation’s utilities with the Federal Energy Regulatory Commission, about 75% of electricity consumption is baseload and about 25% is intermediate or peak load. Demand is full-time, but wind and solar are part-time.   In the absence of electricity storage, there is no such thing as wind/solar by itself — there is only 30% wind/solar combined with 70% natural gas, or 30% wind/solar combined with 70% coal.

Real World Capacity.  Utility-scale renewable energy companies like to say how many thousands of houses their power plants will supply, and the newspapers slavishly print these numbers. But they neglect to tell us about capacity factors. The stated wattage, or ‘nameplate capacity,’ is when the sun is shining full-on on a cloudless day. It does not take into account night, short winter days with low sun angle, cloudy and rain days, windy days when the facility will be shuttered, or maintenance (if not done at night). Every generating plant has a capacity factor (the net capacity factor of a power plant is the ratio of the actual output of a power plant over a period of time and its output if it had operated at full nameplate capacity the entire time).

Typical capacity factors:

  • Thermal solar “Without energy storage, the annual capacity factor of any solar technology is generally limited to about 25 percent” – Sandia National Laboratories.
  • Thermal solar power tower 25%– Abengoa Solar’s large power tower PS10 in Spain, from their brochure pdf.
  • Thermal solar parabolic trough ca. 15% average (from Solar Millennium Andasol 1-3 parabolic trough plants in Spain, access date = 2009-05-14). They reported 28% capacity only in peak times.
  • Photovoltaic solar in Massachusetts 12-15% (from Renewable Energy Research Laboratory: “Wind Power: Capacity Factor, Intermittency, and what happens when the wind doesn’t blow?”>>PDF). Arizona 19% (from Carnegie Mellon Electricity Industry Center Working Paper CEIC-08-04, The Spectrum of Power from Utility-Scale Wind Farms and Solar Photovoltaic Arrays, by Jay Apt and Aimee Curtright).
  • Nuclear 60% to over 100%, U.S. average 92%. Worldwide average varied between about 81% to 87% between 1995 and 2005 (from Renewable Energy Research Laboratory cited above; “15 Years of Progress” PDF, World Association of Nuclear Operators, 2006, Retrieved 2008-10-20.).
  • Baseload coal 70-90% (from Renewable Energy Research Laboratory cited above).
  • Combined cycle natural gas about 60% (from Renewable Energy Research Laboratory cited above). “Load-following” natural gas plants are turned on only when needed during the higher-demand parts of the day and year, so may have a capacity factor of 42%. When demand for power drops to minimum levels, they are turned off because Baseload power plants designed to run all the time, are already running all the time to provide this minimum demand. Most baseload power plants are coal or nuclear plants.
  • Geothermal worldwide average 73%, demonstrated 90% (from Fridleifsson, Ingvar B.; Bertani, Ruggero; Huenges, Ernst; Lund, John W.; Ragnarsson, Arni; Rybach, Ladislaus (2008-02-11). O. Hohmeyer and T. Trittin. ed (pdf). The possible role and contribution of geothermal energy to the mitigation of climate change. Luebeck, Germany. pp. 59-80. Retrieved 2009-04-06).

Concentrating solar power needs a sharp sun image to be efficient. It is best done in deserts where there are no clouds or haze. Dust haze scatters light, and image efficiency plummets. Windstorms blow dust off Ivanpah playa frequently, and could lower efficiency for ISEGS. Cloud cover will force the plant to be turned off during winter and summer storms.

Will high winds whipping through the desert rip 20-foot wide heliostats off their bases like sails?

But what surprises us most is the location of the proposal directly below a large rain catchment basin on the slopes of Clark Mountain. Did the engineers in the city understand desert alluvial deposition processes, or surficial geology and hydrology?

Researchers measured “normal” rain runoff on a fan below the Providence Mountains, just 60 km south of Ivanpah Valley in Mojave National Preserve, from 2003 to 2006. They found that several winter and summer rainstorms delivered more than 10 mm per day of rain, enough to initiate runoff, and some intense summer storms were greater than 60 mm per hour. These redistributed sand, gravel, and organic debris. High-intensity summer rainfall could last an hour, often exceeding the infiltration rates of the soil (Miller et al. 2009).

This was just over three years. Over the 50-year proposed lifespan of the ISEGS larger storms will occur, possibly as damaging as the flood that hit Furnace Creek in Death Valley National Park, and Surprise Canyon in the Panamint Mountains, California.

This is an active sloping alluvial fan, not a stable flatland, seemingly not appropriate for a delicate heliostat array. In describing the engineering of a collector field, Romero-Alvarez and Zarza (2007:21-53) state: “Because of the large area of land required, complex algorithms are used to optimize the annual energy produced by unit of land, and heliostats mst be packed as close as possible so the receiver can be small and concentration high. However, the heliostats are individual tracking reflective Fresnel segments subject to complex performance factors, which must be optimized over the hours of daylight in the year, by minimizing the cosine effect, shadowing and blocking, and receiver [light] spillage.”

Tracking control mechanisms continuously move the heliostats so that they focus solar radiation on the tower receiver. “During cloud passages and transients the control system must defocus the field and react to prevent damage to the receiver and tower structure” (ibid: 21-52).

What if sediments from alluvial runoff tilt several heliostats in the field? Will operators be able to find and correct all heliostat deviations? How long will the plant be shut off while inspections are done after each storm and repairs are made? How much of a tilt would cause tower damage as reflected sun beams are aimed in the wrong direction?

An exacting science: Hot sunbeams reflected by heliostats onto the central receiver tower, solar influx on the receiver can get to 1000 degrees Celsius (ibid:21-51).

In an investment cost breakdown of building a central receiver solar thermal power plant the heliostat field is the single most expensive part of the project, 40% of total capital costs. The power block comes next, at 32% of total (ibid:21-53).

Yet, “Staff believes there are no special concerns with power plant functional reliability due to flooding (page 7.3-6).

Intermittent power: Real power output (kW) sampled with one minute resolution for a 4.6 MW solar photovoltaic array in northeastern Arizona for one week (from Carnegie Mellon Electricity Industry Center Working Paper CEIC-08-04, The Spectrum of Power from Utility-Scale Wind Farms and Solar Photovoltaic Arrays, by Jay Apt and Aimee Curtright).

REFERENCES:

Miller, David M., et al. 2009. Mapping Mojave Desert ecosystem properties with surficial geology. In, The Mojave Desert: Ecosystem Processes and Sustainability. Edited by Robert H. Webb, Lynn F. Fenstermaker, Jill S. Heaton, Debra L. Hughson, Eric V. McDonald, and David M. Miller. University of Nevada Press: Reno and Las Vegas.

Romero-Alvarez, Manuel and Eduardo Zarza. 2007. Concentrating Solar Thermal Power. In, Frank Kreith and D. Yogi Goswami (eds.), Handbook of Energy Efficiency and Renewable Energy. CRC Press: Boca Raton, London, New York.

[This is an article from power-eng.com on how Ivanpah works. I’ve shortened and reworded much of it ]

Springer, R. September 14, 2015.  Large-scale solar on the Rise.  Power Engineering. 

Solar has about 1 percent of the power generation market in the U.S.

There are a few clouds darkening the utility-scale solar market. The darkest being the possible sun setting of federal investment tax credits (ITC) at the end of 2016.

There are two main ways to generate solar power: photovoltaic cells or concentrated solar power (CSP). CSP uses mirrors to focus solar energy to create heat, which can then power a traditional steam turbine. Photovoltaic cells use an electronic process to convert sunlight into electricity.

The Ivanpah Solar Electric Generating System uses solar thermal technology to produce energy by:

  1. More than 300,000 computer-controlled mirrors track the sun and reflect it towards boilers that sit atop immense towers.
  2. Steam is created when the concentrated light hits the boilers.
  3. The steam is piped to a turbine where it creates electricity.

Ivanpah started up on January 1, 2014, with 3 units having a total generating capacity of 377 MW. Units 1 and 3 provide power for Pacific Gas & Electric while unit 2 sends electricity to Southern California Edison. The plant is in California’s Mojave Desert, 45 minutes southwest of Las Vegas. About 65 full-time operations and maintenance employees work at the plant.

The plant reaches full load during sunny days.

Google images of Ivanpah

The challenge producing the most electricity during partly cloudy weather. This is technically very challenging to do, according to Samuelian, “Because you’ve got clouds moving in and out and you’ve got a steam plant with thermal inertia and the parts and pieces move around,” he says.

In the early morning, virtually all of the mirrors are aimed at the tower, but as the day goes on some go into a standby position so the tower doesn’t overheat. The process is regulated by infrared cameras.

The boiler has three sections – super heat, reheat and evaporator – and multiple mirrors heat a different section of the boiler. Large supercomputers balance the energy on the three spots and give aiming signals to each unit every 10 seconds.

The plant uses recycled water.

Another challenge is the sheer size of the plant. A coal-fired plant of similar size would have a much smaller footprint. Ivanpah’s three units cover about 3,000 acres and is about five miles end to end. “So if I’ve got someone working in the solar field on one end of the plant and I need them to go look at something else on the other end of the plant, there’s restrictions on what speed you can drive onsite, for wildlife considerations, and creating dust, and so, the speed limits like 10 miles an hour,” says Samuelian. It takes about half an hour to go from one end of the plant to the other.

Groups of solar panels (or “strings”) run in a series and in parallel until they get the maximum voltage they’re designed for, and the electricity is taken to a combiner box, which is a group of fuses and switches that take the input from the strings and combine it into a single output, according to Stojanovic. “And that typically runs back to another larger combiner box, which is typically a bunch of breakers or large fuses that take the rest of these strings and combine it into one big DC input into an inverter,” he says. The DC power needs to be converted to AC to reduce losses and because that’s what the North American grid supports.

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The Scientific Consensus on Maintaining Humanity’s Life Support Systems in the 21st Century

May 21, 2013. the Scientific Consensus on Maintaining Humanity’s Life Support Systems in the 21st Century

In the one month since it was written, 520 global scientists have signed on to this statement. You can, too. There is more information, including ideas for solutions, at Stanford University’s Millenium Alliance for Humanity & the Biosphere website.

Earth is rapidly approaching a tipping point. Human impacts are causing alarming levels of harm to our planet. As scientists who study the interaction of people with the rest of the biosphere using a wide range of approaches, we agree that the evidence that humans are damaging their ecological life-support systems is overwhelming.We further agree that, based on the best scientific information available, human quality of life will suffer substantial degradation by the year 2050 if we continue on our current path.

Science unequivocally demonstrates the human impacts of key concern:

  • Climate disruption—more, faster climate change than since humans first became a species.
  • Extinctions—not since the dinosaurs went extinct have so many species and populations died out so fast, both on land and in the oceans.
  • Wholesale loss of diverse ecosystems—we have plowed, paved, or otherwise transformed more than 40% of Earth’s ice-free land, and no place on land or in the sea is free of our direct or indirect influences.
  • Pollution—environmental contaminants in the air, water and land are at record levels and increasing, seriously harming people and wildlife in unforeseen ways.
  • Human population growth and consumption patterns—seven billion people alive today will likely grow to 9.5 billion by 2050, and the pressures of heavy material consumption among the middle class and wealthy may well intensify.

By the time today’s children reach middle age, it is extremely likely that Earth’s life-support systems, critical for human prosperity and existence, will be irretrievably damaged by the magnitude, global extent, and combination of these human-caused environmental stressors, unless we take concrete, immediate actions to ensure a sustainable, high-quality future.

As members of the scientific community actively involved in assessing the biological and societal impacts of global change, we are sounding this alarm to the world. For humanity’s continued health and prosperity, we all—individuals, businesses, political leaders, religious leaders, scientists, and people in every walk of life—must work hard to solve these five global problems, starting today: 1. Climate Disruption 2. Extinctions 3. Loss of Ecosystem Diversity 4. Pollution 5. Human Population Growth and Resource Consumption.

The full statement has been signed by 520 global scientists from 44 countries. Those signatures were obtained within a month of completion of the statement, by direct email requests from the authors and their close colleagues to a targeted group of well-regarded global change scientists.   The signers include 2 Nobel Laureates, 33 members of the U.S. National Academy of Sciences,   42 members of the American Academy of Arts and Sciences, and several members of various European scientific academies.

Since about 1950, the world has been changing faster, and to a greater extent, than it has in the past 12,000 years. 

Changes, all interacting with each other, are leading humanity in dangerous directions: climate disruption, extinction of biodiversity, wholesale loss of vast ecosystems, pollution, and ever-increasing numbers of people competing for the planet’s resources. Until now, these have often been viewed as “necessary evils” for progress, or collateral damage that, while unfortunate, would not ultimately stand in the way of serving the needs of people. Several recent comprehensive reports by the scientific community, however, have now shown otherwise. Rather than simply being inconveniences, the accelerating trends of climate disruption, extinction, ecosystem loss, pollution, and human population growth in fact are threatening the life-support systems upon which we all depend for continuing the high quality of life that many people already enjoy and to which many others aspire.

The vast majority of scientists who study the interactions between people and the rest of the biosphere agree on a key conclusion: that the five interconnected dangerous trends listed above are having detrimental effects, and if continued, the already-apparent negative impacts on human quality of life will become much worse within a few decades. The multitude of sound scientific evidence to substantiate this has been summarized in many recent position papers and consensus statements (a few samples are listed on pp. 28-29), and documented in thousands of articles in the peer-reviewed scientific literature. However, the position papers and consensus statements typically focus only on a subset of the five key issues (for example, climate change, or biodiversity loss, or pollution), and access to the peer-reviewed literature is often difficult for non-scientists. As a result, policy makers faced with making critical decisions can find it cumbersome both to locate the pertinent information and to digest the thousands of pages through which it is distributed.

Here we provide a summary intended to Clearly voice the consensus of most scientists who study these issues that climate disruption, extinction, ecosystem loss, pollution, and population growth are serious threats to humanity’s well-being and societal stability; and these five major threats do not operate independently of each other.

People have basic needs for food, water, health, and a place to live, and additionally have to produce energy and other products from natural resources to maintain standards of living that each culture considers adequate. Fulfilling all of these needs for all people is not possible in the absence of a healthy, well-functioning global ecosystem. The “global ecosystem” is basically the complex ways that all life forms on Earth—including us—interact with each other and with their physical environment (water, soil, air, and so on). The total of all those myriad interactions compose the planet’s, and our, life support systems.

EXTINCTIONS

Humans have been an integral part of the global ecosystem since we first evolved; now we have become the dominant species in it. As such, we strongly influence how Earth’s life support systems work, in both positive and negative ways. A key challenge in the coming decades is to ensure that the negative influences do not outweigh the positive ones, which would make the world a worse place to live. Robust scientific evidence confirms that five interconnected negative trends of major concern have emerged over the past several decades:
• Disrupting the climate that we and other species depend upon.

• Triggering a mass extinction of biodiversity.

• Destroying diverse ecosystems in ways that damage our basic life support systems.

• Polluting our land, water, and air with harmful contaminants that undermine basic biological processes, impose severe health costs, and undermine our ability to deal with other problems.

• Increasing human population rapidly while relying on old patterns of production and consumption.

These five trends interact with and exacerbate each other, such that the total impact becomes worse than the simple sum of their parts. Ensuring a future for our children and grandchildren that is at least as desirable as the life we live now will require accepting that we have already inadvertently pushed the global ecosystem in dangerous directions, and that we have the knowledge and power to steer it back on course—if we act now. Waiting longer will only make it harder, if not impossible, to be successful, and will inflict substantial, escalating costs in both monetary terms and human suffering.

Background Information: Dangerous Trends in Our Life Support System

Biological extinctions cannot be reversed and therefore are a particularly destructive kind of global change. Even the most conservative analyses indicate that human-caused extinction of other species is now proceeding at rates that are 3-80 times faster than the extinction rate that prevailed before people were abundant on Earth28, and other estimates are much higher29-32. If the current rate of extinction is not slowed for species and their constituent populations, then within as little as three centuries the world would see the loss of 75% of vertebrate species (mammals, birds, reptiles, amphibians, and fish), as well as loss of many species of other kinds of animals and plants28. Earth has not seen that magnitude of extinction since an asteroid hit the planet 65 million years ago, killing the dinosaurs and many other species. Only five times in the 540 million years since complex life forms dominated Earth have mass extinctions occurred at the scale of what current extinction rates would produce; those mass extinctions killed an estimated 75%-96% of the species known to be living at the time. !

Currently, sound scientific criteria document that at least 23,000 species are threatened with extinction, including 22% of mammal species, 14% of birds, 29% of evaluated reptiles, as many as 43% of amphibians, 29% of evaluated fish, 26% of evaluated invertebrate animals, and 23% of plants33-35. Populations—groups of interacting individuals that are the building blocks of species—are dying off at an even faster rate than species. The extinction of local populations, in fact, represents the strongest pulse of contemporary biological extinction. For example, since 1970 some 30% of all vertebrate populations have died out36, and most species have experienced loss of connectivity between populations because of human-caused habitat fragmentation. Healthy species are composed of many, interconnected populations; rapid population loss, and loss of connectivity between populations, are thus early warning signs of eventual species extinction.

Ecosystem Transformation

As humans have become more abundant, we have transformed large parts of the Earth’s surface from their pre-human “natural” state into entirely different landscapes and seascapes58. Some of these transformations have been necessary to support basic human needs; others have been inadvertent and unanticipated$!! As of 2012, somewhat more than 41% of Earth’s ice-free lands (36% of total land surface) have been commandeered for farms, ranches, logging, cities, suburbs, roads, and other human constructs59-61. This equates to an average of a little less than 2 acres of transformed land for each person on Earth. Conversion for agriculture accounts for most of the landscape change, with crops covering about 12% and pastureland about 26% of ice-free land (the percentages are about 10% and 22%, respectively, for the proportion of all Earth’s land). Urban lands account for another 3%. On top of that are vast road networks that fragment habitats across some 50% of the entire land surface, dams that modify water flow in more than 60% of the world’s large rivers and in many smaller ones62, and continuing deforestation that has been proceeding at the rate of about 30,000 square kilometers (=11,000 square miles) per year for the past 16 years63. This per-year loss is roughly the equivalent of clear-cutting the entire country of Belgium or in the United States, the states of Massachusetts or Hawaii in one year.

Measuring the percentage of the oceans that have been transformed is much more challenging, but it is clear that pollution, trawling, and ship traffic and noise have caused major changes along most of the world’s coastlines64,65. For example, bottom trawling alone has been estimated to annually destroy an area of seabed equivalent to twice the area of the continental United States66. Human debris, particularly plastics, also is ubiquitous in ocean waters, even far offshore67. The human footprint extends even outside of the ecosystems that have been transformed wholesale by people. Nearly every terrestrial ecosystem in the world now integrates at least a few species that ultimately were introduced by human activities68-70, sometimes with devastating losses in ecosystem services71, and invasive species now number in the hundreds in most major marine ports72,73 and in the thousands on most continents70,74,75. All told, 83% of the entire land surface exhibits human impact defined as influenced by at least one of the following factors:
human population density greater than 1 person per square kilometer (=1 person per 0.4 square miles, or 247 acres); agricultural activity; built-up areas or settlements; being within 15 kilometers (9.3 miles) of a road or coastline; or nighttime light bright enough to be detected by satellites76,77. Adding in the effect of climate change, every place on Earth exhibits at least some human impact, even the most remote parts of the land and oceans78.

 

PEOPLE WISHING TO READ THE FULL SUMMARY OR THE ENTIRE REPORT CAN FIND THEM AT http://mahb.stanford.edu.

Posted in Scientists Warnings to Humanity | 2 Comments

Renewable incentives destabilize, harm electric grid

Wald, Matthew L.   7 Oct 2014. How Grid Efficiency Went South. New York times.

Summary:

1) society would be better off if homeowners faced their rooftop solar panels westward, the peak time more energy is needed, but they won’t because they won’t make as much money as south-facing panels

2) coal, natural gas and especially nuclear plants keep the grid stable by selling energy around the clock.  wind and solar energy can flood the market with power and push down the prices received by coal, natural gas, and nuclear power plants (low ghg).  Nuclear power plants can’t stop running (unlike natural gas), and are going out of business because wind is incentivized – they get money for generating (too much) power, but nuclear isn’t rewarded for providing grid stability and contribution of low ghg emissions.

3) Natural gas plants can cycle up and down, so capitalists would say this is great, we’ll build even more natural gas plants.  But this brief time of fracked natural gas will go downhill fast once the peak is reached sometime between 2015 and 2020, since fracked gas wells decline 60% after the first year.  Natural gas truck fleets are far more valuable than electricity given the role trucks play in our society (When trucks stop, America Stops).

Excerpts from article:

Almost every rooftop solar panel in the United States faces south, the direction that will catch the maximum energy when the sun rises in the southeast and sets in the southwest.  This was probably a mistake.  The panels are pointed that way because under the rules that govern the electric grid, panel owners are paid by the amount of energy they make. But they are not making the most energy at the hours when it is most needed.  Solar panels thus illustrate how the rules add cost and reduce environmental effectiveness, critics say, because they are out of step with what the power grid actually needs from intermittent renewables like wind and sun, and from zero-carbon nuclear power.

With the existing price structure, “we incentivize maximum power generation,” said James Tong, the vice president for strategy and government affairs at Clean Power Finance, an investment firm. But in most parts of the country, there is plenty of electricity available from other sources in the morning and midday. Crunch time is late afternoon, when temperatures are higher and air-conditioners are working hard, and inefficient plants running on natural gas or even coal are cranked up to the maximum.

“The needs of the grid may mean that they should be pointed west,” more toward the setting sun, said Mr. Tong. That way, a bigger portion of their production would come at the hours when electricity was most needed. But their total production would be a bit lower, and that would hurt panel owners, at least under current rules.

The debate is over how to pay contributors to the grid so the system has an adequate amount of both energy and power, crucial to maintaining the stability of the system.

Solar panels and especially wind turbines produce vast amounts of energy, but on their own schedule, when the sun is shining or the wind is blowing. The more conventional installations — coal, natural gas and especially nuclear plants — earn their keep by selling energy around the clock. Put enough wind and solar units on the grid during the hours when they are running and they flood the market and push down the hourly auction price of a megawatt-hour of energy.

Sometimes the price goes to zero. Oddly, it can go even lower. When demand is very low in the middle of the night and the wind is blowing hard, there may be too much electricity on the system and grid operators will charge generators that want to add more. Nuclear plants cannot quickly modulate their output so they are, in effect, fined for production.

But wind farms still make money because they earn a tax credit for each kilowatt-hour they generate.

The problem is especially acute for nuclear reactors because their costs for fuel are roughly the same whether they are running or not. They are refueled on a fixed schedule, not when the uranium is used up. Their labor costs, mortgage costs and maintenance costs are roughly the same, too. But if the hourly price for energy is suppressed by wind and sun, suddenly the nuclear plants can’t make enough money to keep running.

Thus some have already closed and more are threatened, even though carbon dioxide limits are unlikely to be met without them.

Even relatively clean natural gas plants are hurt; they are generally on the margin, the first to shut when new solar comes on line.

“We’ve moved to a system focused on resources that provide energy when they want to.

A system that must compensate for rising and falling wind and solar generation makes the flexible plants, like those using natural gas, more valuable

The homeowner with panels on the roof may think he or she is disconnected from the system, when in fact the connection has become stronger, making the household a supplier as well as a consumer of energy, and a consumer of all the grid’s other functions, like capacity, transmission and distribution.

 

Posted in Alternative Energy, Natural Gas, Nuclear Power Energy, Photovoltaic Solar | Comments Off on Renewable incentives destabilize, harm electric grid

LNG overview

Qatar LNG plant

Qatar LNG plant

 

 

 

 

 

 

 

 

 

 

 

Liquefied natural gas is natural gas chilled down to -260 F which reduces its volume by about 600 times.

Exports

2013 LNG Exports by Country & Incremental Change Relative to 2012 (in MTPA)

 

Share of Global LNG Exports by Country, 1990-2013

Share of Global LNG Exports by Country, 1990-2013

 

LNG Exports by Region, 1990-2013

LNG Exports by Region, 1990-2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imports

2013 LNG Imports by Country & Incremental Change Relative to 2012 (in MTPA

 

LNG Trade B etween Basins, 2013, MT

LNG Trade B etween Basins, 2013, MT

 

 

 

 

 

 

 

LNG Storage Tank Capacity by Country (mmcm) and % of Total, as of Q1 2014 Note: “Smaller Markets” include Argentina, Malaysia, Indonesia, the Dominican Republic, Pue rto Rico, Kuwait, Israel, Greece and the UAE. Each of these markets has under 0.3 mmcm of capacity

LNG Storage Tank Capacity by Country (mmcm) and % of Total, as of Q1 2014 Note: “Smaller Markets” include Argentina, Malaysia, Indonesia,
the Dominican Republic, Puerto Rico, Kuwait, Israel, Greece and the UAE. Each of these markets has under 0.3 mmcm of capacity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

IGU. 2014. World LNG report. International Gas Union.

Wiki LNG

DOE 2005  Liquid Natural Gas. Understanding the Basic Facts.

 

Posted in LNG Liquified Natural Gas | Tagged , , , | Comments Off on LNG overview

Wall Street Journal Gets it Wrong on “why peak oil predictions haven’t come true”

WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”

On Monday, September 29, the Wall Street Journal (WSJ) published a story called “Why Peak Oil Predictions Haven’t Come True.” The story is written as if there are only two possible outcomes:

  1. The Peak Oil version of what to expect from oil limits is correct, or
  2. Diminishing Returns can and are being put off by technological progress–the view of the WSJ.

It seems to me, though, that a third outcome is not only possible, but is what is actually happening.

3. Diminishing returns from oil limits are already beginning to hit, but the impacts and the expected shape of the down slope are quite different from those forecast by most Peak Oilers.

Area of Confusion

In many people’s way of thinking, the economy is separate from resources and the extraction of those resources. If we believe economists, the economy can grow indefinitely, with or without the use of resources. Clearly, with this view, the price of these resources doesn’t matter very much. If one kind of resource becomes more expensive, we can substitute other resources, once the scarce resource becomes sufficiently high-priced that the alternative makes financial sense. Incomes can rise arbitrarily high–all it takes is for each of us to pay the other higher wages. And we can fix any problem with the financial system with more money printing and more debt.

This wrong version of how our economy works has been handed down through the academic world, through our system of peer review, with each academic researcher following in the tracks of previous academic researchers. As long as new researchers follow the same wrong thinking as previous researchers, their articles will be published. Economists were especially involved in putting together this wrong world-view, but politicians helped as well. They liked the outcomes of the models the economists produced, since it made it look like the politicians, with the help of economists, were all-powerful. All the politicians needed to do was tweak the financial system, and the world economy would grow forever. There was not even a need for resources!

Peak Oilers’ Involvement 

The Peak Oilers walked into a situation with this wrong world view, and started trying to fix pieces of it. One piece that was clearly wrong as the relationship between resources and the economy.  Resources, especially energy resources, are needed to make any of the goods and services we buy. If those resources started reaching diminishing returns, it would be harder for the economy to grow. The economy might even shrink. Dr. Charles Hall, recently retired professor from SUNY-ESF, came up with one measure of diminishing returns–falling Energy Returned on Energy Invested (EROEI).

How would shrinkage occur? For this, Peak Oilers turned to the work of M. King Hubbert, who worked in an area of geology. He wrote about how supply of a resource might be expected to decline with diminishing returns.

Hubbert was not concerned about what effect diminishing returns would have on the economy–presumably because that was not his area of specialization. He avoided the issue by only modeling the special case where no economic impact could be expected–the special case where a perfect substitute could be found and be put in place, in advance of the decline caused by diminishing returns.

Figure 1. Figure from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels.

In the example shown above, Hubbert assumes cheap nuclear would take over, before the decline in fossil fuels started. Hubbert even talked about making cheap liquid fuels using the very abundant nuclear resources, so that the system could continue as before.

In this special case, Hubbert suggested that the decline in resources might follow a symmetric curve, slowly declining in a pattern similar to its original rise in consumption, since this is the pattern that often occurs in extracting a resource in nature. Many Peak Oilers seem to believe that this pattern will happen in the more general case, where no perfect substitute is available, as well. A perfect substitute would need to be cheap, abundant, and involve essentially no cost of transition.

In the special case Hubbert modeled, Hubbert indicated that production would start to decline when approximately 50% of reserves had been exhausted. Peak Oilers often used this approach to forecast future production, and the date oil production would “peak.” As technology improved, additional oil became accessible, raising reserves. Also, as prices rose, resources that had never been economically extractible became extractible. Production continued beyond forecast peak dates, again and again.

Peak Oilers got at least part of the story right–the fact that we are in fact reaching diminishing returns with respect to oil. For this they should be commended. What they didn’t figure out is, however, is (1) how the energy-economy system really works, and (2) which pieces of the system can be expected to break first. This issue is not really the Peak Oilers fault–it is the result of starting with a very bad model of the economy and not understanding which pieces of that model needed to be fixed.

How the Economic System Really Works 

We are dealing with a networked economy, one that is self-organized over time. I would represent it as a hollow network, built up of businesses, consumers, and governments.

Figure 2. Dome constructed using Leonardo Sticks

This economic system uses energy of various kinds plus resources of many kinds to make goods and services. There are many parts to the system, including laws, taxes, and international trade. The system gradually changes and expands, with new laws replacing old ones, new customers replacing old ones, and new products replacing old ones. Growth in the number of consumers tends to lead to a need for more goods and services of all kinds.

An important part of the economy is the financial system. It connects one part of the system with another and almost magically signals when shortages are occurring, so that more of a missing product can be made, or substitutes can be developed.

Debt is part of the system as well. With increasing debt, it is possible to make use of profits that will be earned in the future, or income that will be earned in the future, to fund current investments (such as factories) and current purchases (such as cars, homes, and advanced education). This approach works fine if an economy is growing sufficiently. The additional demand created through the use of debt tends to raise the prices of commodities like oil, metals, and water, giving an economic incentive for companies to extract these items and use them in products they make.

The economy really can’t shrink to any significant extent, for several reasons:

  1. With rising population, there is a need for more goods and services. There is also a need for more jobs. A growing networked economy provides increasing numbers of both jobs and goods and services. A shrinking economy leads to lay-offs and fewer goods and services produced. It looks like recession.
  2. The networked economy automatically deletes obsolete products and re-optimizes to produce the goods needed now. For example, buggy whip manufacturers are pretty rare today. Thus, we can’t quickly go back to using horse and buggy, even if should we want to, if oil becomes scarce. There aren’t enough horses and buggies, and there aren’t enough services for cleaning up horse manure.
  3. The use of debt for financing depends on ever-rising future output. If the economy does shrink, or even stops growing as quickly as in the past, there tends to be a problem with debt defaults.
  4. If debt does start shrinking, prices of commodities like oil, gold, and even food tend to drop (similar to the situation we are seeing now). These lower prices discourage  investment in creating these commodities. Ultimately, they lead to lower production and job layoffs. If deflation occurs, debt can become very difficult to repay.

Under what conditions can the economy grow? Clearly adding more people to the economy adds to growth. This can be done by adding more babies who live to maturity. It can also be done by globalization–adding groups of people who had previously only made goods and services for each other in limited quantity. As these groups get connected to the wider economy, their older, simpler ways of doing things tend to be replaced by more productive activities (involving more technology and more use of energy) and greater international trade. Of course, at some point, the number of new people who can be connected to the global economy gets to be pretty small. Growth in the world economy lessens, simply because of lessened ability to add “underdeveloped” countries to the networked economy.

Besides adding more people, it is also possible to make individual citizens “better off” by making workers more efficient at producing goods and services. Most people think of greater productivity as happening through technological changes, but to me, it really represents a combination of technological changes, plus a combination of inexpensive resources of various kinds. This combination often includes low-cost fossil fuels; abundant, cheap water supply; fertile soil; and easy to extract metal ores. Having these available makes possible the development of new tools (like new agricultural equipment, sewing machines, and vehicles), so that workers can become more productive.

Diminishing returns are what tend to “mess up” this per capita growth. With diminishing returns, fossil fuels become more expensive to extract. Water often needs to be obtained by desalination, or by much deeper wells. Soil needs more amendments, to be as fertile as in the past. Metal ores contain less and less ore, so more extraneous material needs to be extracted with the metal, and separated out. If population grows as well, there is a need for more agricultural output per acre, leading to a need for more technologically advanced techniques. Working around diminishing returns tends to make many kinds of goods and services more expensive, relative to wages.

Rising commodity prices would not be a problem, if wages would rise at the same time as the price of goods and services. The problem, though, is that in some sense diminishing returns makes workers less efficient. This happens because of the need to work around problems (such as digging deeper wells and removing more extraneous material from ores). For many years, technological changes may offset the effects of diminishing returns, but at some point, technological gains can no longer keep up. When this happens, instead of wages rising, they tend to stagnate, or even decline. Figure 3 shows that per capita wages have tended to grow in the United States when oil was below about $40 or $50 barrel, but have tended to stagnate when prices are above that level.

Figure 3. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

What Effects Should We Be Expecting from Diminishing Returns With Respect to Oil Supply?

There are several expected effects of diminishing returns:

  1. Rising cost of extraction for oil and for other commodities subject to diminishing returns.
  2. Stagnating or falling wages of all except the most elite workers.
  3. Ultra low interest rates to try to make goods more affordable for workers stressed by stagnating wages and high prices.
  4. Rising governmental debt, in an attempt to stimulate the economy and in order to provide programs for the many workers without good-paying jobs.
  5. Increasing concern about debt defaults, as the amount of debt outstanding becomes increasingly absurd relative to wages of workers, and as all of the stimulus debt runs its course, in countries such as China.
  6. A two-way problem with the price of oil. On one side is recession, when oil prices rise to unaffordable levels. Economist James Hamilton has shown that 10 out of 11 post-World War II recession were associated with oil price spikes. He has also shown that there is good reason to expect that the Great Recession was related to the run-up in oil prices prior to 2007. I have written a related paper–Oil Supply Limits and the Continuing Financial Crisis.
  7. The second problem with the price of oil is the reverse–price of oil too low relative to the cost of extraction, because wages are not high enough to permit workers to afford the full cost of goods made with high-priced oil. This is really a problem with inadequate affordability (called inadequate demand by economists).
  8. Eventual collapse of whole system.

There have been many studies of collapses of past economies. These collapses tended to occur when the economies hit diminishing returns after a long period of growth. The problems were often similar to ones we are seeing today: stagnating wages of common workers and growing debt. There were more and more demands on governments to fix the problems of workers, but governments found it increasingly difficult to collect enough taxes for all the needed programs.

Eventually, the economic systems have tended to collapse, over a period of years. The shape of resource use in collapses was definitely not symmetric. Figure 4 shows my view of the typical shape of the collapses in non-fossil fuel economies, based on the work of Peter Turchin and Surgey Nefedof.

Figure 4. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

In my view, the date of the drop in oil supply will be determined by what appear to on-lookers to be financial problems. One possible cause is that the oil price will be too low for producers (a condition that is occurring now). Governments will find it unpopular to raise oil prices, but at the same time, will be powerless to stop the adverse impacts the fall in price has on world oil supply.

Falling oil prices have especially adverse effects on oil exporters, because they depend on revenues from oil to fund their programs. We are already seeing this now, with the increased warfare in the Middle East, Russia’s increased belligerence, and the problems of Venezuela. These issues will tend to reduce globalization, leading to less world growth, and a greater tendency for the world economy to shrink.

Unfortunately, there are no obvious ways of fixing our problems. High-priced substitutes for oil (that is, substitutes costing more than $40 or $50 barrel) are likely to have as adverse an impact on the economy as high-priced oil. The idea that energy prices can rise and the economy can adapt to them is based on wishful thinking.

Our networked economy cannot shrink; it tends to break instead.

Even well-intentioned attempts to reduce oil usage are likely to backfire because they tend to reduce oil prices and have other unintended effects. Furthermore, a use of oil that one person would consider frivolous (such as a vacation in Greece) represents a needed job to another person.

Should Peak Oilers Be Blamed for Missing the “Real” Oil Limits Story?

No! Peak oilers have made an important contribution, in calling the general problem of diminishing returns in oil supply to our attention. One of their big difficulties was that they started out working with a story of the economy that was very distorted. They understood how to fix parts of the story, but fixing the whole story was beyond their ability. The following chart shows a summary of some ways their views and my views differ:

Figure 5. Author's summary of some differences in views.

One of the areas that Peak Oilers tended to miss was the fact that an oil substitute needs to be a perfect substitute–that is, be available in huge quantity, cheaply, without major substitution costs–in order not to adversely affect the economy and in order to permit the slow decline rate suggested by Hubbert’s models. Otherwise, the problems with diminishing returns remain, leading to declining wages and rising costs of making goods and services.

One temptation for Peak Oilers has been to jump on the academic bandwagon, looking for substitutes for oil. As long as Peak Oilers don’t make too many demands on substitutes–only EROEI comparisons–wind and solar PV look like they have promise.

But once a person realizes that our true need is to keep a networked economy growing, it becomes clear that such “solutions” are woefully inadequate.

We need a way of overcoming diminishing returns to keep the whole system operating. In other words, we need a way to make wages rise and the price of finished goods fall relative to wages; there is no chance that wind and solar PV are going to do this for us.

We have a much more basic problem than “new renewables” can solve.

If we can’t figure out a solution, our economy is likely to reach what looks like financial collapse in the near term. Of course, the real reason is diminishing returns from oil, and from other resources as well.

Posted in Gail Tverberg | Comments Off on Wall Street Journal Gets it Wrong on “why peak oil predictions haven’t come true”

Almost half of Rail Freight is Energy, increasingly Crude Oil

RR crude oil carriedSource: American Association of Railroads.

46% of all tonnage hauled by freight trains is Energy:

In 2014, crude oil will likely be 650,000 carloads — 2% of all carloads, 2.2% of tonnage.  In addition 2.6% of rail tonnage was refined petroleum & coke.

In 2013, coal was 5,950,000 carloads of coal (693.8 million tons), 20.6% of all carloads, 39.5% of rail tonnage, 20% of rail revenue.

In 2012, ethanol was 306,000 carloads, 1% of all carloads, 1.5% of rail tonnage 

It’s probably more than half if you count commodities derived from petroleum.  In 2002, the last time the U.S. Dept of Transportation (RITA) published “Table 12 – U.S. Rail Total Carload and Intermodal Commodity Shipments”, 2% of rail tonnage was fertilizer, 2% plastics and rubber, and some fraction of the 1% chemical products tonnage comes from the petrochemical industry (i.e. agrochemicals, methanol, etc).  In 2002, 47% of rail tonnage was coal, coal and petroleum products, fuel oils, gasoline and aviation turbine fuel, and crude petroleum.

Alice Friedemann October 8, 2014.

Nixon, R. Oct 8, 2014. As Trains Move Oil Bonanza, Delays Mount for Other Goods and Passengers. New York Times.

An energy boom that has created a sharp increase in rail freight traffic nationwide is causing major delays for vital consumer and industrial goods, including chemicals,  coal, and grain shipments for farmers, likely to grow worse since record harvests of corn, soybeans, and wheat are expected this year.

On the long-distance routes, aging tracks and a shortage of train cars, locomotives and crews have also caused delays.

Rail accounts for 40% of all goods moved in the country as measured in ton-miles (multiply cargo weight by distance shipped). Trucks are second at 28%.

Frittelli, J., et al. May 5, 2014. U.S. Rail Transportation of Crude Oil: Background and Issues for Congress. Congressoinal Research Service.

According to rail industry officials, U.S. freight railroads are estimated to have carried 434,000 carloads of crude oil in 2013 (roughly equivalent to 300 million barrels), compared to 9,500 carloads in 2008. In 2014, 650,000 carloads of crude oil are expected to be carried. Crude imports by rail from Canada have increased more than 20-fold since 2011.

The Assoc of American RR says that “crude oil accounted for 1.6 percent of total Class I originated carloads in the first half of 2014.

Assuming, for simplicity, that each rail tank car holds about 30,000 gallons (714 barrels) of crude oil, the 229,798 carloads of crude oil originated by U.S. Class I railroads in the first half of 2014 was equivalent to 900,000 barrels per day moving by rail. According to EIA data, total U.S. domestic crude oil production in the first half of 2014 was 8.2 million barrels per day, so the rail share was around 11 percent of the total.”

The volume of crude oil carried by rail increased 423% between 2011 and 2012, and the volume moving by barge, on inland waterways as well as along intracoastal routes, increased by 53%. The volume of crude oil shipped by truck rose 38% between 2011 and 2012.

Rail transportation cost is perhaps $5 to $10 per barrel higher than pipeline costs.

Given the uncertainty about the future value of the oil and the longevity of the deposits, it is not certain that investors will undertake construction of pipelines from the Bakken fields to the East Coast. In that case, large volumes of crude could be transported by rail well into the future.

Rail has also been critical to development of Canadian oil sands. Although the vast majority of crude oil imports from Canada are delivered via existing pipeline, imports by rail are estimated to have increased from 1.6 million barrels in 2011 to 40 million barrels in 2013.

A significant fall-off in railroad coal movements has increased railroads’ capacity to transport oil over some routes. In 2013, railroads carried about 395,000 more tank cars of crude than in 2005, but about 1.3 million fewer cars of coal. To put the increase in crude traffic in perspective, crude oil represented less than 1% of total rail carloads in 2012. In the first three quarters of 2013, crude carloads increased to 1.4% of total rail car loadings. While, on a national scale, increased rail car loadings of crude oil represent a relatively small percentage of total traffic, significant increases in traffic in a specific area can cause bottlenecks that can reverberate across the entire rail network.

The STB held a hearing in April 2014 to hear complaints from non-oil shippers concerning poor rail service in the upper Midwest due to oil traffic and the severe winter weather.   The STB ordered BNSF and CP railroads to report how they intended to ensure delivery of fertilizer to farmers in spring 2014. At the hearing, BNSF (the railroad most directly serving the Bakken region) noted that its car loadings in North Dakota had more than doubled from 2009 to 2013, and that in October 2013, crude oil and agricultural car loadings surged by more than it could manage.

One hindrance to the expansion of crude-by-rail has been the lack of tank cars and loading and unloading infrastructure. Much of this investment is being made by the oil industry or by rail equipment leasing companies, not railroads. As of April 2014, manufacturers had 50,000 crude oil tank cars on order, on top of an existing fleet of 43,000. (This is in addition to 30,000 tank cars that carry ethanol and 27,000 that carry other flammable liquids.

Tank trucks operating on U.S. roadways have been an important link in moving crude oil from domestic drilling sites to pipelines and rail terminals. A typical tank truck can hold 200 to 250 barrels of crude oil. Trucks readily serve the need for gathering product, as the hydraulic fracturing method of drilling employed in tight oil production involves multiple drilling sites in an area and the location of active wells is constantly in flux. A large volume of crude oil is being transported by truck between production areas and refineries in Texas because of the close proximity of the two.

While there are about 57,000 miles of crude oil pipeline in the United States, there are nearly 140,000 miles of railroad

The U.S. Dept of Transportation, Bureau of Transportation Statistics only goes up to 2009 in Table 1-61: Crude Oil and Petroleum Products Transported in the United States by Mode

2009 Combined crude and petroleum products by ton-mile, percent carried by:  Pipelines (70.2), ships and barges (23.1), trucks (4.2), railroads (2.6)

Pick Your Poison For Crude — Pipeline, Rail, Truck Or Boat
by James Conca   April 26, 2014  Forbes

In the U.S., 70% of crude oil and petroleum products are shipped by pipeline. 23% of oil shipments are on tankers and barges over water. Trucking only accounts for 4% of shipments, and rail for a mere 3%.

Amid a North American energy boom and a lack of pipeline capacity, crude oil shipping on rail is suddenly increasing. The trains are getting bigger and towing more and more tanker cars.

With the number of refineries decreasing, and capacity concentrating in fewer places, crude usually has to be moved some distance. There are 4 ways to move it over long distances: by pipeline, by boat, by truck, or by rail.

It’s cheaper and quicker to transport by pipeline than by rail or by truck. The difference in cost is about $50 billion a year for shipping via the Keystone pipeline versus rail.

A rail tank car carries about 30,000 gallons (÷ 42 gallons/barrel = about 700 barrels). A train of 100 cars carries about 3 million gallons (70,000 barrels) and takes over 3 days to travel from Alberta to the Gulf Coast, about a million gallons per day. The Keystone will carry about 35 million gallons per day (830,000 barrels).

The Congressional Research Service estimates that transporting crude oil by pipeline is cheaper than rail, about $5/barrel versus $10 to $15/barrel (NYTimes.com). But rail is more flexible and has 140,000 miles of track in the United States compared to 57,000 miles of crude oil pipelines. Building rail terminals to handle loading and unloading is a lot cheaper, and less of a hassle, than building and permitting pipelines.

Rail. If crude oil shipping on rail is becoming a preferred mode for oil producers in our North American energy boom, this trend is very disturbing. In 2011, crude rail capacity between southern Alberta and the northern U.S. Great Plains tripled to about 300,000 barrels per day, about a third of the Keystone XL capacity. U.S. railroads delivered 7 million barrels of crude in 2008, 46 million in 2011, 163 million in 2012, and 262 million in 2013 (almost as much as that anticipated by the Keystone XL alone). To replace the Keystone XL with rail shipments would mean another doubling of rail capacity, but that would be just another couple of years given this trend.

The Association of American Railroads points out that over 11 billion gallons of crude were shipped in 2013.

Truck. The issue with trucking is that it takes lots and lots of trucks to move billions of gallons of crude since a single tank trailer only holds about 9,000 gallons or 200 barrels, a little under a third of a rail car. Our present fleet only handles 4% of our needs, so shipping by truck instead of the Keystone XL would take another 1.5 million tanker trucks.

Refineries

Crude is a nasty material, very destructive when it spills into the environment, and very toxic when it contacts humans or animals. It’s not even useful for energy, or anything else, until it’s chemically processed, or refined, into suitable products like naphtha, gasoline, heating oil, kerosene, asphaltics, mineral spirits, natural gas liquids, and a host of others.
U.S. Refinery Capacity by PADD (Petroleum Administration for Defense Districts) in 2012.

U.S. Refinery Capacity by PADD (Petroleum Administration for Defense Districts) in 2012. Source: Congressional Research Service; Energy Information Administration

Every crude oil has different properties, such as sulfur content (sweet to sour) or density (light to heavy), and requires a specific chemical processing facility to handle it (Permian Basin Oil&Gas). Different crudes produce different amounts and types of products, sometimes leading to a glut in one or more of them, like too much natural gas liquids that drops their price dramatically, or not enough heating oil that raises their price.

As an example, the second largest refinery in the United States, Marathon Oil’s GaryVille Louisiana facility, can handle over 520,000 barrels a day (bpd) of heavy sour crude from places like Mexico and Canada but can’t handle sweet domestic crude from New Mexico.

Thus the reason for the Keystone Pipeline or increased rail transport – to get heavy tar sand crude to refineries along the Gulf Coast than can handle it.

The last entirely new petroleum refinery in the United States opened in 1976 (Congressional Research Service). Since then, the number of refineries has steadily declined while refining capacity has concentrated in ever-larger facilities. 25% of U.S. capacity is found in only eleven refineries. Recently, Shell’s Baytown refinery in Texas, the largest in the nation, was expanded to 600,000 bpd. Most of the big refineries can handle heavy crude, but many smaller refineries can process only light to intermediate crude oil, most of which originates within the U.S.

33 states have refineries, and most refineries can handle tens-of-thousands to hundreds-of-thousands of barrels per day, but the largest capacity sits around the Gulf Coast and in California where the oil boom in America began. However, in the 1990s after production of sweet domestic crude had significantly declined from mid-century highs, the big companies like Exxon, Shell, CITCO and Valero spent billions upon billion of dollars to retool their refineries to handle foreign heavy crudes.

What is important to note, however, is that regardless of the long-hauling mode, most petroleum eventually gets onto a truck for the short moves.

Ship

Ship transport is possible along coastal waters and along large rivers and is the method that is used for almost all foreign imports except from Canada.

 

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Conservation? Maybe not: Jevon’s Paradox & the Rebound Effect

Conservation? Maybe not: Jevon’s Paradox & the Rebound Effect

by Alice Friedemann, October 7, 2014

The rebound effect makes it much more difficult to solve our energy problems, because the full energy savings aren’t realized, and the energy savings can even be negative — see Jevons paradox (a.k.a. ‘back-fire’).

It’s simple to understand – if gasoline goes from $4 to $5 a gallon so I sell my 15 mpg car for a 45 mpg one, but drive it further, faster, and more often now that it’s cheaper, my 200% increase in fuel efficiency could be mostly wiped out.

This can be quantified:  if a 5% improvement in vehicle fuel efficiency results in only a 1% drop in fuel use, the rebound effect would be 80%  ((5-1)/5 = 80%).

The only way to stop energy decline from crashing civilization is to stay under the depletion curve, and that means cutting fossil fuel consumption in transportation (When Trucks Stop). If oil depletes at 5%, consumption has to drop 5% for any meaningful benefit to society, and a lot more than that if we want to stretch supplies out a bit longer for the truly essential diesel railroad, train, tractor, and infrastructure repairing vehicles.

Shellenberger, M. Oct 8, 2014. The Problem With Energy Efficiency. New York Times.

In announcing the award [for a more efficient form of lighting — the LED], the academy said, “Replacing light bulbs and fluorescent tubes with LEDs will lead to a drastic reduction of electricity requirements for lighting.” The president of the Institute of Physics noted: “With 20 percent of the world’s electricity used for lighting, it’s been calculated that optimal use of LED lighting could reduce this to 4 percent.”

But it would be a mistake to assume that LEDs will significantly reduce overall energy consumption.

The growing evidence that low-cost efficiency often leads to faster energy growth was recently considered by both the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA). They concluded that energy savings associated with new, more energy efficient technologies were likely to result in significant “rebounds,” or increases, in energy consumption. This means that very significant percentages of energy savings will be lost to increased energy consumption.

The I.E.A. and I.P.C.C. estimate that the rebound could be over 50 percent globally. Recent estimates and case studies have suggested that in many energy-intensive sectors of developing economies, energy-saving technologies may backfire, meaning that increased energy consumption associated with lower energy costs because of higher efficiency may in fact result in higher energy consumption than there would have been without those technologies.

 

 

 

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Super Rust Corrodes hundreds of ships and could sink the oil industry

Blame it on super-rust, a virulent form of corrosion that has destroyed hundreds of ships and could sink the oil industry.

By Richard Martin, June 2002. Wired Magazine.

Key points (see the full article at http://archive.wired.com/wired/archive/10.06/superrust.html):

Ships that cost hundreds of millions of dollars to build are rusting and falling apart, spilling millions of gallons of oil every year, many of them oil tankers. From 1995 and 2001, 2856 oil tankers broke apart at sea or barely escaped that fate, according to the International Association of Independent Tanker Owners. The main cause was collision, but nearly as many suffered from excessive corrosion.

The latest generation of oil tankers are more vulnerable to rust due to the mandate that all tankers operating in the US have double hulls by 2015. This innovation has inadvertently propelled corrosion to unheard-of levels. A 2000 Intertanko report concluded that excessive rust is afflicting double hulls within two years of launch. In double hulls, accelerated corrosion is engineered right into the ships themselves. The extra layer of steel gives rust many more square feet of surface area to attack, much of it hidden in cramped, inaccessible crawl spaces. What’s more, these crawl spaces form an insulating layer that keeps the internal temperature much higher than it would be in a single-hull tanker. Corrosion rates tend to double with each 20-degree Fahrenheit increase.

Manufacturing efficiencies have reduced the thickness of hulls and decks so now many shipbuilders trade corrosion-resistance for lower cost. Every ounce of steel saved in the construction of a ship translates into greater profits for the builder and reduced fuel bills for the owner. Between 1970 and 1990, the amount of steel used to construct a tanker declined by almost one-fifth. Modern tanker walls are only 14 to 16 millimeters thick, compared with 25 millimeters a generation ago. Assuming a microbial corrosion rate of 1.5 millimeters a year, rusted-out pits would reach halfway through those hulls in five years.

Lack of Maintenance

Rust attacks steel from the moment the metal encounters moisture. To keep that from happening, shipowners paint steel surfaces with corrosion-resistant coatings and are supposed to reapply them, but first-class ship maintenance has become increasingly rare in recent decades, as ships trade hands several times and new owners care more about maximizing their investment than maintenance.  When a ship is cited for corrosion, maintenance can be avoided by shifting to another flag.

How Rusting Happens

Rust arises from an intricate subatomic dance in which water’s oxygen and hydrogen atoms snatch electrons from atoms of iron. Because saltwater conducts electricity better than freshwater, the iron in steel oxidizes more quickly in seawater – up to 0.10 millimeter per year.

The way corrosion attacks the interior of a tanker, however, is more insidious. It can be seen most vividly in the cargo tanks, which line up along the ship’s backbone beneath the deck, and in the ballast tanks that cushion the cargo tanks along their outer edges. In these areas, steel deteriorates at five, ten, even thirty times the nominal rate. In the ballast tanks, which are normally filled with seawater when the cargo tanks are empty, water conducts electrons between plates on either side, and between separate areas of a single plate – that is, the tanks become huge, if weak, batteries. The increased electrical activity hastens the metal’s degradation.

At the top of the cargo tanks, the vapor space between the oil’s surface and the underside of the deck traps highly acidic gases – products of the reaction between petroleum, oxygen, and water – that condense against the metal. The deck flexes at sea, causing degraded steel to flake off the ceilings of the tanks, exposing more bare steel for the acid to attack.

At the bottoms of the tanks, in the water that settles under the oil, corrosive bacteria thrive. Consuming hydrocarbons, microbes like Desulfovibrio desulferican produce acids that dissolve the tanks’ floors and lower sides at rates as high as 2 millimeters per year. Some microorganisms even feed on the coatings that protect the tanks from rust. Essentially, a tanker is a gigantic floating petri dish for a peculiarly vicious sort of steel-eating sludge – the ultimate metallivore.

Enforcement is hard

In addition to switching to another nation, the tanker industry is overrun with so many holding companies, limited-liability partnerships, and owners-of-record that even determining who bears ultimate responsibility for a ship can be difficult.

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Moving oil by ship or barge to refineries

Frittelli, J., et al. May 5, 2014. U.S. Rail Transportation of Crude Oil: Background and Issues for Congress. Congressional Research Service.

Barge

One river barge can hold 10,000 to 30,000 barrels of oil. Two to three river barges are typically tied together in a single tow that carries 20,000 to 90,000 barrels, about the same load as a unit train. Coastal tank barges designed for open seas, known as articulated tug-barges, or ATBs, 22 can hold 50,000 to 185,000 barrels, although newer ATBs can carry as much as 340,000 barrels, comparable to the capacity of coastal tankers. ATBs are slower, less fuel-efficient, and more restricted by sea conditions, but nevertheless may have an economic advantage over tankers because Coast Guard crewing regulations allow them to sail with one-third to half the crew required on a tanker. Crude oil tankers used to move Alaska oil to West Coast refineries have capacities of 800,000 to over 1 million barrels.

An advantage of tankers over railroads is the greater amount of oil they can carry in a single voyage, which better matches the daily consumption rate of refineries. With the median capacity for U.S. refineries at about 160,000 barrels per day, a coastal tanker can carry a two-day supply of oil. In addition, while railroads must build and maintain tracks and pay property taxes on their rights-of-way, the ocean is free, and harbor channels are largely provided by the federal government. For these reasons, tankers can be much cheaper than railroads in moving oil, even though the railroad route may be much more direct. For instance, the distance between the Bakken region in North Dakota and refineries in the Northeast is approximately 1,800 miles, and the cost of railroad transport is $14 per barrel. 23 The distance from Texas ports near the Eagle Ford region to the same refineries is about 2,100 miles, and tanker rates are $5 to $6 per barrel. 24 Similarly, the overland distance from the Eagle Ford region to Los Angeles-area refineries is about 1,400 miles, and the estimated cost of railroad transport is $15 per barrel, while the water route through the Panama Canal is 5,200 miles and is estimated to cost $10 per barrel. 25

Although seemingly a circuitous route compared to rail, it is not inconceivable that tankers could play a role in moving Bakken oil to East or West Coast refineries. Significant amounts of Bakken oil are moved to Gulf Coast terminals by pipeline, railroad, barge, or combinations of these modes for refining within that region. From a Gulf Coast port, tankers could transport the oil to either East or West Coast refineries. Via existing rail and pipeline connections to Great Lakes ports, tankers could also move Bakken oil from there to Northeast refineries.

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