Three recent news items remind us that energy transitions take time, a lot of time--far too much time to be shrunk down into a television special, a few talking points, or the next big energy idea.
For example, the complex management task of putting together the international fusion research project called the International Thermonuclear Experimental Reactor (ITER) has resulted in estimated final costs that have tripled since the 2006 launch. Fusion could theoretically offer clean and abundant energy almost indefinitely because it uses ubiquitous hydrogen* as fuel and creates helium in the process. (Water you'll recall is two hydrogen atoms and one oxygen atom and is therefore the most abundant source of hydrogen.) Related: Coal Facing Worst Year Yet in 2015
Despite nine years of effort, ITER has yet to carry out a single experiment; and, the project is not expected to do so for another four years. The idea for such an international project was hatched in 1985 during a summit between U.S. President Ronald Reagan and Mikhail Gorbachev, the leader of what was then still called the Soviet Union. Thirty years later fusion is still receding into the horizon of our energy future.
While there are certainly issues that are managerial rather than merely technical, the technical challenges remain enormous. After decades of experimentation, no laboratory has ever produced more energy from a fusion reaction than it took to create it. One of the most promising tests was performed last year at the National Ignition Facility of the Lawrence Livermore National Laboratory in California. This test produced about 17 kilojoules which was more energy than was used to create the fuel. Problem is, the lasers that initiated the fusion consumed about 2 megajoules or 118 times the amount of energy created by the test.
Keep in mind that this test is still considered one of the most promising. That tells you how far away we are from nuclear fusion as a method for producing electricity.
Also, just recently the U.S. Environmental Protection Agency (EPA) announced that it will be reducing industry production quotas enacted by Congress for renewable liquid fuels such as ethanol and biodiesel. The EPA has the statutory authority under the 2007 law to adjust such quotas. But few back then anticipated that the quotas would be adjusted downward so severely. The law set the quota at 20.5 billion gallons for 2015. The EPA has reduced the quota to 15 billion gallons. The Bloomberg piece cited above notes that "[t]he agency also set levels for 2014 at the level produced by the industry."
The nation's corn growers--who provide the feedstock for most of the ethanol produced in the United States--say they may sue because the EPA is ignoring the law. But the corn growers and the nation will likely find out in the course of such a suit that the EPA is merely bowing to the laws of chemistry and the dictates of economics. The previously hailed quick advances in what is called cellulosic ethanol--which can be made from practically anything containing cellulose such as wood chips and plant waste--have not materialized. A few commercial-sized cellulosic ethanol facilities now exist, but nowhere near the number expected by now back in 2007. And, the jury is out on whether such operations will be viable.
Finally, energy maven Vaclav Smil wrote a piece for Politico discussing the difficulties in making an energy transition from one kind of dominant fuel to another. Despite all the hype from technology gurus touting an imminent takeover by solar, wind and biofuels, historically such transitions have taken decades. The technologies for energy production are simply not analogous to the technologies behind advances in computer chips.
Inventor and futurist Ray Kurweil's prediction that solar energy will become practically the only source of power in just 16 years illustrates the failure of technology-oriented minds to understand the constraints on energy transitions. He predicts a doubling every two years. That will sound familiar to those in the computer industry where a doubling in the computing power of microchips has occurred about every 18 months.
Energy transitions, however, move slowly--egregiously slowly--compared to advances in such fields as biotechnology and integrated circuits. Smil recounts the climb from 5 percent market share to 25 percent market share for oil and natural gas:
After crude oil claimed 5 percent of the total American energy supply in 1905, it took 28 years to reach 25 percent, and the rise was even slower for natural gas, 33 years from 1924 to 1957. Today, despite the attention lavished on solar cells and wind, those up-and-coming renewables have yet to reach even the 5 percent mark.
Globally, energy transitions have been even slower than in the U.S., with crude oil taking 40 years to go from 5 percent to 25 percent of the global primary energy supply, and it looks as though natural gas will take 60 years to do the same.
On a percentage basis renewables are growing rapidly, but from a very small base. Smil comments:
Electricity generation by new renewables has been growing fastest, but it is far from taking over: at 7 percent in 2014 it was still only about a third of all electricity generated by the aging nuclear stations. And because electricity is only a part of the overall energy supply, the contribution of new renewables (wind and solar) to the country’s total primary energy consumption (including all industrial and transportation fuels) remains very modest: it rose from just 0.1 percent in the year 2000 to 1 percent in 2010 and to 2.2 percent in 2014.
What those who map the rapid increase in computer power onto our current energy transition miss is the infrastructure problem. Consumers and businesses seem to have little concern over junking computers that are only a few years old in favor of the newest models. The turnover in the computer infrastructure is quite rapid. Related: Investors Turning Away From Green Energy
Not so with energy infrastructure. Power plants are made to last decades. And, they are often upgraded rather than replaced. Currently, fossil fuels produce the bulk of the world's electricity, some 67 percent in 2012, according to the latest figures available from the U.S. Energy Information Administration. Nuclear power plants produce almost 11 percent. Hydroelectric produces almost 17 percent. All other renewable electricity production accounts for just under 5 percent. Very little of the existing electricity generation infrastructure is coming down soon.
What this means is that far from replacing existing fossil fuel generating plants, renewables are simply going to add to total electricity generation as demand grows. That's a good thing. But renewable energy expansion as it is currently structured is going to do little to reduce greenhouse gases. In fact, in the United States the decline in carbon dioxide emissions from the peak in 2005 to a level 12.8 percent lower in 2012 was due almost entirely to the substitution of natural gas-fired electricity generation for coal-fired generation. But emissions resumed their upward march in 2013 and 2014 as the most polluting of the coal-fired plants had already shut down.
As for liquid fuels, decades of trying have only resulted in marginal inroads from non-petroleum substitutes. Petroleum-based fuels still account for 95 percent of all transportation fuel in the United States as of 2014. World numbers are hard to come by. The World Petroleum Council states that the global share for petroleum in transportation fuels is 80 percent, but cites no source.
So what does all this imply? Is there anything we can do to speed up the transition?
Of course, we could all sit back and simply hope for technical breakthroughs that will make it irresistable--in other words, highly profitable--to adopt low-carbon energy technologies on a massive scale quickly. But, history recommends against this passive course.
While some decry subsidies given to wind, solar and biomass technologies, there is an almost immutable law of economics which justifies these, to wit: If you subsidize something, you will get more of it. And, that's what policymakers behind the subsidies want. What the critics of such subsidies fail to note is that governments worldwide currently pay out $550 billion in subsidies annually for the production of oil, coal, and natural gas, more than four times the subsidies for renewables including wind, solar and biomass--which again proves that when you subsidize something, you get more of it. And, we have gotten a lot of fossil fuel production.
Why not just take that $550 billion and devote it to research on and production and deployment of renewable energy? That would be okay. But a much better use of that money would be spending it on known technologies that drastically reduce our consumption of energy. If, as Vaclav Smil contends, we are in for a long, slow slog on the path to a renewable energy economy, then the course with the least risk and probably the greatest return would be to reduce our energy use.
We have the technology to reduce building heating and cooling energy use by 80 to 90 percent. It's called passive house technology though it is now also being applied to apartment, commercial and industrial buildings. The cost for this in new buildings is about 15 percent more and typically lower. The energy savings over the life of building far outweigh the initial cost. We still need to figure out how to do cost-effective retrofits for similar deep energy reductions in existing buildings. But there are many smaller cost-effective steps currently available to homeowners and businesses. Some of these are already being subsidized, and subsidizing them more would be a good idea. Related: Terawatt Solar Farms By 2050?
When it comes to transportation, the advent of ridesharing and car-sharing is rapidly changing the public's view about automobiles. No longer do people need to own a car so much as have access to it. Combine this with an expansion of hybrid vehicles and efficiencies can quickly build in the transportation sector.
There is much more that we can do and that we know how to do to reduce energy use, especially energy produced by fossil fuels. But a corollary to the above mentioned "law" of economics concerning subsidies is one concerning taxes, namely, if you want less of something, tax it. A high and rising carbon tax would go a long way toward speeding the energy transition. It would incentivize households, businesses, nonprofit organizations and government, that is, everybody, to reduce fossil fuel use and to choose renewables instead.
Even with these efforts our current and increasingly urgent energy transition would still take a long time. But we would have more assurance of a positive outcome with regard to climate change if we choose now to start on a course toward dramatic reductions in energy use. And, coincidentally, this would make it much easier for renewable energy to replace fossil fuels since we would ultimately need far less energy production to replace them. The renewable energy economy could then arrive sooner and with far less direct investment than previously imagined.
By Kurt Cobb
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But in a fossil fuel-oriented publication such as this, how did such a plan land on these pages? Most investors are looking to make MORE money off burning fossil fuel, not less.
Until recently, investors and consumers were mesmerized by steadily growing volumes of petroleum. New unconventional technology and techniques made it all possible. This new bounty, "was different." But then came our market's reminder about production COST. Variations in market price are nature's way of reminding us to look at the cost for producing a previously happy volume. Today, the pages of Oil Price and Houston's Fuel Fix are all about cost containment, praying for more and better technology, and looking for promising signs of a rising market.
Now that we pay close attention to petroleum production and delivery cost, the next step is paying for the aftermath of consumption . . . the contaminated air and water, leaks, explosions, degraded health and safety, and the world instability of oil producing and transporting areas.
At some point, we will admit that we should probably start paying more attention to fossil fuel "aftermath" cost. We keep kicking the can down the road. As energy consumers, we need accurate price signals to guide us. America is all about consumption, in addition to production. We need to get both right.
We face a real cost -- "somebody" pays the price -- for the aftermath of fossil fuel extraction, processing, transport, disposal/decommissioning and world instability. The question is, who exactly pays the freight, and when?
Is the answer anything other than, "we pay the freight, starting now?"
To Mr. Cobb's emphasis on using less energy overall, I would like to add that pricing carbon -- using a national revenue-neutral carbon tax -- is something that has a pretty good chance of acceptance in a politically divided Congress. What would be more agreeable than to, first: remind and inform what a product really costs, and second: get back all of the earlier reminder fee, within a year's time? Such a rebated fee would inform energy consumption while helping to grow America's clean-energy industry, including jobs that have a future.
Energy efficiency -- and its boost to the success of renewable energy -- is a great bipartisan way to go. Accelerate the process by showing true energy product cost. Let the marketplace do the rest.
Make a Democrat... and a Republican, happy.
Even if there is obviously no objection reasonably to be made - as the author proposes to do, instead of chasing the elusive pie in the sky - to reduce energy consumption - provided, I would add, there are no perverse effects on the supply of abundant but most noxious fuels - that still begs the question: are there no dynamics to be had on the supply side by advances in alternative resources? Do we know what the dynamics really are? Being a convinced scenariothinker (but not in the present 'telling you' Shell way), I thoroughly believe in the impressive results 'backcasting' i.l.o. forecasting can produce. Put yourselves in a 'we/they did it'-position in 2030 ( or wjatever chellenging date you dare to take) and use all your creativity and imagination to explain how that was possible, against all the wise judgements we wisely had in 2015. Most probably, many of the breakthrough 'explanations' will then not be found in the linear physical field, but in disruptive socio-economic dynamics. NB A decentralized electrical energydistribution scheme might book 30% reductions in present power loss due to far too long distances.