Renewable Energy

Got some useful appointments in today.   Our first visit was with a couple of guys at the São Paulo Secretariat of Energy – renewable energy.  We were following up on a successful speaker visit and hoping to strengthen connections and contacts.  Our Brazilian friends were more than eager to do this to our mutual benefit.
Brazil is a leader in various sorts of renewable energy and they have a lot to share, especially in areas like biogas, ethanol, biomass & biodiesel.  Of course, the USA has a lot to share too in some of the same areas, but in addition in areas of storage and energy net coordination.  Mutual sharing means mutual benefit, since more brains are better and when we solve problems in diverse ways, we learn more than if we just have a few options.
Brazil, like the USA, is a continental country.  When talking about renewable power, this brings challenges and opportunity.  Brazil has a lot of wind power potential, for example, but it is poorly distributed, with the best wind power sites in the less populated areas of the Northeast.  Wind (and solar) are also inconsistent.  They need some sort of backup.
Hydroelectric power has been one of the best backups.  Energy can be brought on line (or taken off) easily. There are two developments that have been creating complications. One is that droughts have made hydropower less reliable, even has the capacity of hydropower is being reached.  A related problem is how dams have changed.  In the interests of protecting local ecology, new hydro projects tend to be “run of the river” rather than reservoir based.  A run of the river system, as the name implies, depends on the water running through the river.  River flow varies with the seasons and the weather and more importantly for power storage, it cannot be turned off and on.  The river flows as it wants.
A possible solution is natural gas.  São Paulo currently has no facilities to receive liquified natural gas, but there are three terminals in Brazil (Pecém, State of Ceará; Bahia LNG Regasification Terminal, Bay of All Saints, State of Bahia and Guanabara Bay, State of Rio de Janeiro). Brazil is potentially a big market for America LNG.  We are currently the Brazil’s third largest source of LNG, with great potential for more.  Natural gas is clean burning and gas fired plants can be turned on and off relatively easily.  Most natural gas is currently not renewable.  However, there is great potential for biogas, so building out a natural gas distribution network can transition seamlessly to carry biogas as that develops.
Another “storage” mechanism is the grid itself. A big grid means that power can be moved from places suffering shortages to those with surplus.  The wind may be inconsistent locally, but over a large area it tends to even out.  Couple that with a natural gas/hydro backup, and you have a fairly reliable “battery.”
Energy is something I have been interested in since I was in college.  This discussion was especially interesting for me and it was a joy to take part. It was very easy to see in this an area of mutually benefit. There is something even for those interested only in short term profit, since American LNG will find a good market in Brazil in the short term.  I am more interested in the exchange of ideas.
And I am constantly recalling what Thomas Jefferson said – “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”  If it is not too disrespectful to add to Jefferson, that light travels in both directions.

Fracking for the best reasons

I strongly in favor fracking for what I consider good environmental, economic and geopolitical reasons. Let me explain my trifecta.

Start with environmental. U.S. CO2 emissions are lower than they were ten years ago, in fact lower than any time since the mid-1990s. Gas replacing coal is a big factor. Natural gas is the cleanest of fossil fuels in almost every way. Renewable forms of energy are developing very rapidly. Inexpensive natural gas may slow its development a little, but not significantly. Using gas is reducing emissions faster than renewables could be developed and deployed to do the job. As prices come down and networks are built, renewables will replace most fossil fuels and the overall footprint will have been less. Recall that deploying technology is as important as developing it. Things take time.

Fracking has environmental costs, as do all forms of energy exploration. But those costs are lower than the alternative fuels – the real alternatives at this time and the next decade. Water problems can be addressed and mostly have been. The bigger problem with fracking comes with new roads and increased traffic in rural areas. This is serious, but – again – we have to compare to real world alternatives. I love forests and do not wish to see any destroyed. However, I also know that fracking has relatively small footprints and forests return. This is not forever.

Economically, there is no doubt fracking is great. It has pumped more money into the U.S. economy than all the fiscal stimulus and has been part of almost all the good new jobs created since the great recession. Inexpensive fuels is helping bring industry back to the heartland. Beyond that, gas is a feedstock for things like fertilizers and chemicals, so it goes even farther.

I saved the geopolitical part for last, since it also includes ecological and economic factors. As I wrote, I am confident that renewable alternative energy source will be dominant within a few decades. This means that much of the world’s fossil fuel resources will remain in the ground, unused and made much less valuable. If this happens, I want it to happen to not in America. Let the fossil fuels that lay under places like the Middle East or Russia stay unused and “wasted.” Let American sources be used while they still have value. Let’s use it like it’s going out of style, because it is and let others get stuck with the excess inventory.
This points to another geopolitical benefit. Much of the world’s exportable concentrated fossil fuels lays under unstable places, places often not friendly to us. With our American energy boom, they just do not matter as much anymore. Think of how much more acute would be the problems with Russia or Iran if they could much more effectively deploy the energy threat. It is bad enough as it is. It could be worse.

The great thing about fracking is that natural gas and oil it produces tend to be widely dispersed. This spreads the wealth and diversifies risk, instead of having it all under a few easily threatened places.

I am aware of the risks. There is no life w/o risk; I am also aware of the benefits.

If there were natural gas under my land, I would permit fracking. I would be very demanding in terms of where the pads should be located, how the roads should be maintained and how the natural communities should be respected and restored, but I would let it happen. I think this is the smart play for our country generally. Do it right; do it with a larger margin of error than we think we need. Spend the extra time and money to ensure protection. But do it – because the benefits far outweigh the costs. A century from now, when we have transitioned to a cleaner energy economy, we will look back and see that using fracking as a bridge was a smart idea. By that time, the forests we replanted will be vibrant. Some will be “old growth” and some plantation forests will have grown, been harvested and be growing again. Signs of fracking will be curiosities like those stone wall that once separated cultivated fields and now have forests on both sides.

New environmental solutions

It is amazing how fast America is switching over to natural gas.  I read today that railroads are considering changing from diesel to natural gas, which is cheaper and cleaner. Power plants are quickly substituting natural gas for coal.  All this is helping the U.S. reduce its carbon emissions while becoming less and less dependent on imported oil.  U.S. carbon emissions have been reduced by 13% in the last five years and we are down to 1994 levels.  If this goes on much longer, the U.S. will reach its Kyoto goals w/o having ratified the treaty thanks mostly to natural gas.

I have written about this natural gas boom many times before.   It is as close to a gift from God as it is possible to get in the energy world.  Natural gas is clean, abundant and American.  Better yet, it is widely distributed in the U.S., so the prosperity will be widely shared.

Another interesting permutation is genetically modified food.  They are also reducing CO2 emissions by improving land use.  And now investors are looking for ways to adapt to global warming and many environmentalists are embracing nuclear power as a sure way of delaying global warming.

I think it is very interesting that the solutions of many of our environmental problems come from sources that many of the traditionalists neither expect nor even much like.   CO2 emissions are reduced by the use of a fossil fuel extracted in a new and more efficient way.  Land use is improved by the use of genetically modified crops, the nemesis of many ostensibly green consumers.  Nuclear power may save the world and the free enterprise system will help us adapt to changes.

Trends don’t continue

All good things must come to an end; bad things too. Things seem to stay the same for a long time, then suddenly shift. Punctuated equilibrium. We didn’t notice the inflection point. I mentioned decline of Hispanic immigration and the unexpected reduction in U.S. CO2 emission elsewhere, things that seemed would never end. Now the prison boom is ending. Prisons are closing because there are fewer prisoners.

I think we are surprised when trends end “so fast” because we tend not to notice the trend at all until it is completely manifest in a mature stage. In other words, trends are often peaking and nearing decline by the time we see them.

There is the old and somewhat cliché story about a pond being covered by lily pads. I will repeat for those who have not heard it. People walk by a pond every day w/o noticing many lily pads. Finally, they notice some and then in a few days it seems that the whole pond is full. This seems like magic, but it is simply the result of normal growth, which under some conditions is essentially exponential. Here is the hypothetical. One lily pad covers 1/100. Two cover 2/100 four cover 4/100; 8 cover 8/100. 16 cover 16/100. This is when you might notice them. The next squaring gives us 64/100 and next the whole thing is covered in what seems no time at all. Trends can collapse just as fast. Extending our lily pad story, by the time we notice that half the pond is covered, they are beginning to shade each other out. The decline is started by the time we see the climax.

The Hispanic tsunami ran out of power because of rapidly falling birthrates in Mexico and better job prospects there. We COULD have seen that back in the 1990s. Dropping U.S. emission came from shifts to natural gas and higher prices for oil. We could have seen that back around 2000. The prison population follows the crime rate. Crime rates were growing until the early 1990s; then they fell. With some lag time, fewer criminals mean fewer inmates in prison. We could have seen this coming by around 2005. What is the next trend that will grow and collapse? If I knew things like that, I would be rich. In retrospect they are easy to see; not so easy in prospect.

What I can predict with near certainty is that many of the predictions that we are making today will look silly in five years and that many of you who believe them now will claim that you knew the changes were coming.

I have been reading an interesting book called “Anti-Fragile”. It is by the the same guy who wrote “Black Swan” & “Fooled by Randomness.” The main idea is that we cannot really assess risk and certainly cannot predict the future, so the best strategy is to create systems robust enough to absorb the shocks we know will come but cannot predict in sufficient detail to address or avoid. I think that makes sense.

Science wins for now

Scientists at FDA say that genetically engineered salmon would not have a significant impact (FONSI) on the U.S. environment and safe as food from conventional Atlantic salmon . This should clear the way for the fish to be farmed, adding a less expensive and healthier option to world diets. It will also take some pressure off badly stressed wild fisheries and generally make our environment better than it would have been. It is great that this report finally came out. 

There is lots of similar good news that is not well reported. For example, I think it is remarkable that U.S. CO2 emissions have dropped to twenty year lows and that we have become the world leader in reducing emissions. Few people seem to know these things and I find little in the media. There used to be a lot more when we were not doing as well. Of course, one of the best things in the environment in my lifetimes is the natural gas revolution.

More on fracking.

We are accustomed to bad environmental news and it is easy to provide. Much of it is just plain BS with scary images – like the tap water starting on fire in the pseudo-documentary “Gas Land.” A lot of it is based on fear of change. Most of it is true, however, but it is truth out of context. A natural environment is constantly changing, with some things coming and others going.

As trees in a forest grow bigger, the wildlife it supports changes. I remember the controversy on Isle Royale in Lake Superior. It is one of the most studied places in the U.S. because of the interaction of wolves and moose. The different animal populations and the forests are always changing. The wolves wiped out the coyotes and impacted the beaver population. If you wanted to document loss, here it is. On the other hand, the wolves at first prospered, by killing moose. Again, look at the moose herd and you can document loss. The decline of the moose numbers allowed forests to regrow, but you could document the loss of moose forage. You get the point. Change is constant. Change brings losses and gains. If you look at only one side of the equation, you can easily paint the picture you want.

For the U.S. in my lifetime, we have had mostly good ecological news. Lakes are cleaner today than when I was growing up. Forests are healthier. Wildlife is so robust some are even becoming nuisances. Of course, there have been losses. Our task is to judge the balance.

This balance goes for every choice we make. Choices should be informed by information, but there is rarely a choice with only a plus side. This salmon is a good thing, on balance. I like salmon, but it is a little expensive. I look forward to the being able to eat this new salmon.

NB – I posted this on a different site and included some comments that I think make the post better.

More on Biotech here & here, plus a little on bioenergy.

Unexpected Energy Future

I turned 18 the same year of the Arab oil embargo. Oil prices went way up and we thought the age of inexpensive energy was gone forever. What an unexpected change! The technology of fracking today has essentially created new energy that will last my lifetime and that of my children. And the natural gas is much cleaner than the coal or oil it replaces, a gift from God, with an assist from a stubborn American.

George Mitchell graduated from the Texas A&M as a petroleum engineer. His father was an illiterate Greek goat herder who had the good sense to move to America. George was so poor that he was almost kicked out of school for non-payment of tuition. One of his professors told him that if he wanted to drive a Chevy, he should work for Humble Oil (later Exxon) but if he wanted to drive a Cadillac, he should go into business for himself. George saw himself as more a Cadillac type of guy.

In 1982, Mitchell Energy was in danger of not having enough gas to supply its clients. In those days, experts thought gas would soon run out. Mitchell looked for new sources. He knew there was a lot of gas trapped in the Barrett shale in Texas, but nobody could get it out at a price anybody could pay. He invested $6million and had to put up with twenty years of ridicule from his friends for throwing money away on something that would not work.

It wasn’t until 1998 that Mitchell came up with a permutation of hydraulic fracturing that worked. (Fracking was not a new technology; it just had not been applied in this particular way before.) The way was open to the bright, happy future we now see before us.
Mitchell lived to see his dream work. He is still alive, now 93 years old.

You never know what’s going to work. Mitchell could have ended up wrong and ridiculed, as many dreamers do. Most big ideas fail. That is why we need lots of options and try lots of things.

Of course, this is not the work of only one man. Lots of researchers, investors and workers were involved. (BTW – Mitchell “gave back” contributing $44.5 million to A&M and $159 million to universities and research organizations.) Government provided incentives to unconventional energy. But I wonder if it would have happened w/o Mitchell. There is no such thing as destiny. Things do not have to happen the way they do. Fracking could have remained a “stupid and impractical” idea. That is what most experts thought at the time.

After the fact lots of things look obvious, but they could have gone other ways. There are myriad examples of people sitting on great opportunities w/o using them, ever. So thank you George. Well done.

The energy world turned upside down

I continue to be amazed at how different the energy future is today than it looked only a few years ago. The U.S. could soon become a net exporter of energy and we will almost certainly be the world’s biggest oil & gas producer by 2020. There is even good environmental news in this mix. Our CO2 emissions are dropping. We are beating all those people who gave us a hard time about rejecting Kyoto and doing it with none of the pain they told us we would have to accept.

Just about nobody predicted this happy outcome. (If you claim that you did, you must be very rich by now and if you are not you are lying.) Back in 2000, experts told us that we had around 11 years of natural gas reserves if we continued to use it at the current rate. Now we have a couple centuries of the stuff. There is no such thing as peak oil or peak gas except as a theoretical construction as useful as the number of angels that can dance on a pin head. .

The energy center of gravity is moving to the Americas. I look forward to the day, not far off, when a big Middle Eastern oil producer threatens our energy supply and we tell him to go F himself. I already take pleasure in the disorder and confusion of OPEC.

Americans are lucky people. It has been said that there was a special providence for drunkards, fools, and the United States of America. Maybe so. I have found that when people are especially lucky (or unlucky) over an extended period of time, it usually has something to do with their attitudes or behaviors. This energy bonanza is a good example. Although there are plenty of naysayers even in the U.S., Americans generally embrace the progress. We are “lucky” because we are flexible and take advantage of unexpected opportunities. May this national characteristic never change.

This is an unbelievably good situation. All we need do to take advantage of this is to say “yes” and ignore the troglodytes and luddites who want to proclaim the anti-scientific “precautionary principle.”

BTW – speaking of anti-scientific activities, did you hear about the pinheads in Italy who sentenced six scientists to prison terms for not predicting a deadly earthquake? You can rest assured that behavior like this makes you unlucky.

U.S. CO2 Emissions Drop to Twenty Year Low

Mostly as a result of the inexpensive American natural gas, U.S. CO2 emissions dropped to 1992 levels. We are also driving less. We reached “peak gasoline”in 2006 and from now on will use less. See the chart below.  I wrote about this here, here & here, among other places.

The interesting thing is that the U.S. is now the world leader in reducing emissions w/o those muscular measures called for in Kyoto. We are doing better than everybody else because of market forces. They really do work also in environmentalism.  

This is not really new news, but here probably is the first place you are reading about this. Back when the U.S. was the “word’s bigger polluter” we had updates every day.

There was an interesting paragraph in the report of the drop. Bold italic are mine. “Many of the world’s leading climate scientists didn’t see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.” 

Those international experts who claimed that the U.S. “had no plan” just don’t understand how planning works. We have the most superb, sublime and subtle planning mechanism in the world – the free market – and we have the we have the worlds most intelligent, involved and imaginative planners too – the American people. That is why we always beat the centralized planners in practice, if not in theory. 

One more thing from the AP article – “How much further the shift from coal to natural gas can go is unclear. Bentek says that power companies plan to retire 175 coal-fired plants over the next five years. That could bring coal’s CO2 emissions down to 1980 levels. “

We have achieved in environmentalism much more than I dreamed of when I was a bit of a radical environmentalist in the 1970s. We exceeded all the predictions. If anyone had told me back then of the U.S. in 2012, I would not have believed them. I was similiarly pleasantly surprised by how fast we brought down “acid rain” or closed the “ozone hole”. Now we are doing the same with CO2. It is easy to underestimate the imagination and power of freedom. I used to read the writings of the socialists of the early part of the last century. They made bold predictions about how good things could be if we abandoned the free market and went with planning. We have greatly exceeded their slow-moving dreams. We have the best planning system, even if it is too hard for some dreamers to understand.

U.S. New World Leader in Reducing CO2 Emissions

The U.S. has been criticized for not ratifying the Kyoto Treaty to limit greenhouse gas emissions. Yet according to the latest International Energy Agency (IEA) report CO2 emissions in the United States in 2011 fell by 92 Mt, or 1.7% … US emissions have now fallen by 430 Mt (7.7%) since 2006, the largest reduction of all countries or regions.

One of the biggest reasons for the relative the drop is the widespread substitution of cleaner natural gas for coal and oil. I have written before about the vast reserves of American natural gas made available by new technologies, which is the biggest single positive energy development in my lifetime. The mild winter helped this year, but previous winters were cold. The economic downturn meant less consumption, but the downturn hit our European friends harder, and their emissions increased, evidently w/o regard for their signing of the protocols.

Actually the facts are a little worse than that and demonstrate the unexpected results of rules aimed at making things greener. Some of our European friends are resisting the use of natural gas widely available on the old continent because of the same fracking techniques that are revolutionizing energy in the Americas. With gas unavailable at the very low prices we are currently enjoying in America, when harder economic times come, people turn to coal, which is still cheaper.

Germany is also trying to phase out nuclear energy and shuttered eight of its 17 reactors after the Japanese disaster in 2011. These plants had total 12.3 gigawatts (GW) of capacity. Coal will step into this breach too. How much? To put this in perspective, the increased average annual emissions are the equivalent of 2.8 million U.S. cars. German use of coal will rise 13.5% in 2012 . Ironically, carbon “caps” have served as a floor rather than a ceiling. As the recession slowed energy demand, German industries and utilities were free to increase their use of dirtier fuels essentially to compensate for the decline.

Meanwhile rising energy costs are biting German consumers. These are all self-inflicted wounds and there are fears that electricity could become a luxury in Germany. But I digress.

The bottom line is that detailed rules never can anticipate all the circumstances that could make them obsolete and even counterproductive. I doubt anybody thought that measures meant to decrease carbon use could end up encouraging its use while driving up energy prices. Meanwhile who would have suspected that the U.S. would be the country that most reduced its CO2 emissions despite (because of?) its failure to sign onto Kyoto?

An Environmental Reformation

The story is big the news, the retraction, not so much. Consider this news story – “The Environmental Protection Agency has dropped its claim that an energy company contaminated drinking water in Texas, the third time in recent months that the agency has backtracked on high-profile local allegations linking natural-gas drilling and water pollution.” reference  

I think that the unlocking of our vast natural gas reserves is the best ecological & environmental story in years. Yet it has drawn heavy criticism, sometimes justified, often ignorant, mostly based on outdated narratives. Consider the wildly inaccurate documentary “Gasland”. It won all kinds of awards and is very compelling. Scientists think it is bunk and research has disproved most of the claims, but – hey – it makes a better drama when you can light water on fire.

It seems to me that very much of the mythology centered on environmental extremism is based around the keystone myth that nature w/o humans is somehow clean, benign and perfect. It is not. Many toxins appear in the natural world. Arsenic is present in natural water in many areas. Gas and oil have seeped out of the ground since before the ancestors of men (although Chrissy informs me perhaps not women – no logic there) descended from trees.

The idea of perfect nature apart from man is not merely wrong; it is pernicious because it impedes decision making based on sound & practical ecological principles. The attack on gas is a good example. Natural gas extraction and use is more ecologically benign than any of the alternatives currently available at the scale that it could currently replace. Yet purists reject it because it is not perfect. They make the perfect the enemy of the good. Purists are pains in the ass.

This is not a new problem. A century ago, various revolutionaries argued the efficacy of reforming capitalism. Some radicals fought against measures that would improve life for ordinary people on the theory that conditions had to become so bad that they would provoke the world revolutions predicted in Marxist theology. When the Marxist nightmare ran out of steam, people with a puritan/revolutionary bent had to look for other causes. The environment was a perfect home for them.

One of the big weaknesses of Marxism was that they claimed to speak for the workers, but the workers could speak for themselves. What they said, usually contradicted Marxist mythology. The advantage of “speaking for nature” is that nobody can really ask trees, rocks or animals what they really think. Unlike Marxists, environmental revolutionaries have no ostensible constituency that can contradict them.

We don’t need an environmental revolution, but we could use a reformation. As with most things, real progress is achieved in the middle ground, where we can be pragmatic enough to make compromises. A sound environmental policy requires – not allows requires – that we sometimes kill animals, cut trees and even pave land. If done correctly, it can create benefits all around. And if we don’t make it possible for honest people to make a profit doing these things, the field will be left to dishonest operators acting outside the law.

There are a few things we need to understand in our reformed environmentalism.
– Sustainable does NOT mean preserved unchanged. It means reasonably predictable and beneficial change.
    o Sustainable is better than natural and many natural systems are not sustainable.
– Renewable is better than recyclable, although both have their place.
    o The cost for most things in environmental terms is usually mostly concentrated in the energy it takes to move it. If you use less paper, it doesn’t really “save trees” but it may save energy.
    o It may require more energy to recycle than to throw out and renew.
– Nothing lasts forever. Sometimes we just need to let go. Panda bears, for example, are doomed. They may survive in zoos, due to the kindness of humans, but they are not fit (in the Darwinian sense) to survive in the wild.
– There is no environment in the world that is not influenced by humans. If we think we can “return to nature” we are abdicating our responsibility to be good stewards.

One more thing – natural gas is as good as it currently gets as a fuel we need at the scale we need to use it. It is not THE answer, since there is never a final answer, but it is the one we should be using for the next decade at least. That would be good environmental policy and good economic policy too.