NONRENEWABLE RESOURCES: Energy analyst predicts that oil could reach $300 in ten years. Can the GOP’s energy policy meet our future energy needs?

Posted on November 20, 2010 by Buck

Images via Grant Neufeld and pshab on Flickr.

How will the future economy of the United States respond to rising oil prices or to $300-a-barrel oil? Under the Obama Administration and a Democratic majority, we’ve seen the federal government attempt to stimulate renewable energy by investing into it, by contributing to energy-storage technology, and by recognizing the utility of alternative-fuel vehicles.

Despite fossil fuels contributing to climate change, national security concerns, and the pollution of the human environment, the GOP embraces an economy dependent on dirty, nonrenewable fossil fuels. Fossil fuels may seem cheap, but they’re not. The cheap cost of fossil fuels, paid at the pump for example, doesn’t reflect the true cost of fossil fuels, because the price at the pump doesn’t include costs that are a consequence of the negative externalities associated with burning fossil fuels. For example, it has been estimated by numerous studies that the negative externalities associated with burning fossil fuels cost governments and the public billions of dollars each year. This means that while fossil-fuel companies receive record profits, they’re not responsible for the consequences of doing dirty business or for the billions of dollars that governments and the public are forced to pick up. Additionally, the fossil-fuel industry receives government subsidies to pollute the human environment. These fossil-fuel subsidies must be eliminated to “enhance energy security, reduce emissions of greenhouse gases and air pollution, and bring economic benefits.”

Given the facts and consequences associated with a fossil fuel-based economy, it would seem that a prudent and progressive energy policy shouldn’t be a partisan issue, but the Republican Party isn’t exactly known for pushing clean, sustainable, or rational energy policy reforms. For example, the Republican Party’s energy policy focuses on “lifting restrictions on ANWR, the Outer Continental Shelf, and oil shale in the Mountain West.” Also, the Republican Party claims that “revenue generated by the sale of leases will be invested in renewable and alternative sources of energy.” However, what will the United States utilize after these nonrenewable resources are exhausted? Why drill here, drill now when these minerals are sold on an international market, so why is it necessary to invade protected wilderness areas to extract minerals, which aren’t necessarily consumed domestically. Also, considering greenhouse gases, global warming, and climate change, why is it necessary to add even more trapped carbon dioxide — a greenhouse gas — into the atmosphere? Basically, the short-term benefits of extracting and using these minerals are outweighed by the long-term damage caused by climate change and a failure to implement a prudent or sustainable energy policy.

Furthermore, the Republican Party believes that “the best way for utility companies to reduce carbon emissions is to increase their supply of nuclear energy.” However, nuclear power isn’t cheap, and the costs associated with constructing new nuclear power plants have skyrocketed. There are also substantial costs associated with decommissioning nuclear power plants (“it may cost $300 million or more to shut down and decommission a plant“). Other negatives associated with nuclear power production include the fact that the nuclear power industry depends solely on a nonrenewable energy source, and there’s the well-known problem of storing nuclear waste. Also, “the process of thermoelectric generation from fossil fuels such as coal, oil, and natural gas, as well as nuclear power, is water intensive. In fact, each kWh generated requires on average approximately 25 gallons of water to produce.” Therefore, drought could force nuclear power plants to shut down. What’s more, there are past and present safety concerns with nuclear power production. Recently, the nuclear power industry has been plagued by safety problems at the Vermont Yankee Nuclear Power Plant. Certainly, if the costs associated with decommissioning nuclear power plants, with the management of nuclear power plants, and with the disposal of nuclear waste are considered, then both solar and wind power are substantially cheaper than nuclear power.

The GOP’s talking points on energy also claim that Democrats tax energy, but the GOP makes no mention of the tax incentives and tax credits spurred under the Democratic majority and under the Obama Administration. Consequently, the Republican Party merely politicizes and trivializes the issue of energy. Why can’t the Republican Party aggressively pursue the development of renewables? Portugal is doing it. Denmark is doing it. Iceland is doing it. Even China understands the utility of developing its renewable energy sources.

Additionally, being a conservative political party, there are energy conservation strategies that the Republican Party should show open and strong support for but don’t. For example, there are the ideas of retrofitting buildings to conserve energy, adopting greener building standards to conserve energy, or even promoting the smart grid revolution to conserve energy. Also, instead of attacking it, the Republican Party should show strong support for science in order to spur innovation and technological development to meet our energy needs.

Given the Party’s energy policy positions, the new Republican majority in the House of Representatives threatens to stifle the progress made by the Democratic majority by resurrecting an energy policy focused too much on fossil fuels. For example, Representative Joe Barton, a Republican from Texas and BP apologist, is supposedly a contender for the chairmanship of the Energy and Commerce Committee. Another contender for the chairmanship of the Energy and Commerce Committee is John Shimkus, a Republican from Illinois. Shimkus is a climate-change denier, and once declared that “global warming isn’t something to worry about because God said he wouldn’t destroy the Earth after Noah’s flood.”

To summarize, the Republican energy policy lacks innovation and forward-thinking, and their energy policy merely utilizes old ideas, which don’t promote energy security. To put it another way, the Republican Party’s answer to our current energy crisis is to stick their heads in the sand. Also, the failure of the Republican Party to embrace prudent energy policies is the failure to recognize the connection between population growth, rising energy demand, natural resource unavailability, and rising energy and mineral prices. More on the future price of oil via Peak Oil News and Message Boards:

Ludwig: What is your oil price outlook as this whole new world order begins to take shape?

Maxwell: The supply and demand of oil in the world today are pretty close to each other, and there shouldn’t be too much deviation in 2010 and 2011. We think prices will stay within a band roughly between $67-$87 a barrel. When it gets up toward $87, it seems to retreat, and when it gets down toward $67, it seems to take off again. That’s because supply and demand are in rough balance.

But as the economic recovery continues, as more people use oil because there are more people in the world, and China and India continue to progress with rapid expansion of cars and the roads they are offering their people, demand for oil will continue to climb between 1 and 1.5 percent per year. That, combined with the depletion of these mature oil fields we’ve talked about, will bring us to a plateau by 2015-2017, where the rising production of newer oil fields will equal the falling production of old fields.

At that stage, prices will break through this $87 boundary—in about 2013, I’m thinking. And by 2015 we’ll be up to around $130-$150 a barrel. And then by 2020, when we have 1.5 percent increases in demand each year and 0.5 percent declines on the downside, then we’ll really be in a fix. At that time, I’m looking at $300 a barrel in money of the day. But remember, by then we will have the full effects of inflation over the prior 10 years, so it would probably be something like $200 a barrel in today’s terms, but it will have a nominal price of about $300 a barrel.

WIND ENERGY in the news

Posted on October 13, 2010 by Buck

Superhighway for wind power proposed for Mid-Atlantic Coast. Via the Philadelphia Inquirer:

Investors on Tuesday proposed to build an underwater electricity superhighway that would carry wind power generated off the Mid-Atlantic Coast to land.

The $5 billion transmission line, announced by backers including Google, would run about 15 to 20 miles offshore.

It would act like a spine, linking the offshore projects to land at four locations – North Jersey, South Jersey near Atlantic City, the coast of Delaware and the coast of Virginia south of Norfolk.

“This is a huge, bold project,” said Robert Mitchell, CEO of Trans-Elect, an independent transmission company operating nationwide, which is leading the project. “It’s going to result in thousands of megawatts of offshore wind being delivered to the East Coast” along with thousands of jobs.

“Instead of multiple connections, this will serve as a superhighway with on-ramps for wind farms,” said Rick Needham, director of green business operations at Google, a major investor.

It also would increase the reliability of wind, they said. By joining the projects together, the variability of wind at any one location is smoothed out, lulls in one place compensated for by gusts elsewhere.
Google backs ‘superhighway’ for wind power. Via the Washington Post:

Internet search engine giant Google announced Tuesday that it is investing in a mammoth project to build an underwater “superhighway for clean energy” that would be able to funnel power from offshore wind farms to 1.9 million homes without overtaxing the already congested mid-Atlantic power grid.

The project, dubbed the Atlantic Wind Connection, calls for spending as much as $5 billion to create a 350-mile network of underwater cables stretching from northern New Jersey to Virginia. It would eliminate the need for offshore wind developers to build transmission lines of their own, easing what can be a barrier for such projects.

Google is partnering with Good Energies, an environmentally focused international investment company based in New York, London and Switzerland, and Tokyo-based Marubeni to finance the project. The project is led by Trans-Elect, an electric transmission company in Chevy Chase.
Report Identifies Transmission Corridors to Deliver 8,600 MW of New Wind in the Upper Midwest. Via Renewable + Law:

[The Upper Midwest Transmission Development Initiative's] renewable transmission corridors are based on the Midwest ISO’s estimate that about 8,600 MW of new renewable capacity will be needed in the region by 2025 to serve the renewable energy standards and goals of these five states. The group identified twenty “wind zones” where it would be most efficient to develop wind power based on available wind resources, existing wind generation, existing interconnection queue requests, and local geography. The six transmission corridors were chosen as the best general areas for transmission lines to move wind energy from the wind zones to load centers in a cost-effective manner.
In 2009, 40% of new U.S. electricity generation came from wind. Via EERE News:

The U.S. Department of Energy has distributed the International Energy Agency’s (IEA) recently published IEA Wind Energy Annual Report 2009, which is now available for free download. The report presents the latest information on domestic and international wind generation capacity, national incentive programs, progress toward national objectives, benefits to national economies, research and development results, and issues affecting turbines, market growth, and costs of projects. The Executive Summary synthesizes the information presented from IEA’s member countries, cooperative research tasks, the European Commission, and the European Wind Energy Association. Read the Executive Summary.

Wind power is a fast-growing source of clean energy. In the United States 40% of new electricity generation came from wind last year, while in Europe, wind power installations accounted for 39% of new capacity. IEA Wind member countries added more than 20 gigawatts (GW) in 2009, for a total of more than 111 GW of wind generating capacity. Five countries added more than a gigawatt of net capacity: the United States (10 GW), Spain (2.5 GW), Germany (1.9 GW), Italy (1.1 GW), and the United Kingdom (1 GW). Additionally, wind power electrical generation capacity grew more than 32% worldwide in 2009. These and other statistics on wind energy development are highlighted in the report.

The IEA Wind member countries—located in Europe, North America, Asia, and the Pacific Region—contain 70% of worldwide wind generating capacity. These countries share information and research efforts to increase wind energy’s contribution to their electrical generation mix, and they reach out to other countries to join the IEA Wind cooperation.
Study: Offshore wind could generate all U.S. electricity (with graphics below). Via USA Today:

U.S. offshore winds, abundant off the coasts of 26 states, have the potential to generate four times as much power as the nation’s present electric capacity, a new Department of Energy report says.

Developing this resource would help the United States reduce air pollution, achieve 20% of its electricity (or about 54 gigawatts) from wind by 2030 and create more than 43,000 permanent, well-paid technical jobs, according to the 240-page study by DOE’s National Renewable Energy Laboratory.

Images via a report from the National Renewable Energy Laboratory

ELECTRIC VEHICLES: Lance Armstrong’s Nissan Leaf is badass

Posted on October 11, 2010 by Buck

The yellow wheel trim coupled with an all-black body transforms Lance Armstrong’s Nissan Leaf into an eye-catching, sporty-looking vehicle. Via Autoblog Green:

Lance’s Leaf is dazzling black with wheels striped in gold. The color combo works, transforming the Leaf from a bubbly-shaped blue electric vehicle that screams out, “hey, I’m a zero-emissions car” to, dare we say, a sporty compact primed to take on the gas-powered competition. Okay, maybe the transformation isn’t that dramatic, but aside from the “100% electric” labeling and the “zero emission” graphic, Lance’s Leaf looks like any other modern vehicle that you might stumble across on our roads.

Lance Armstrong’s Nissan Leaf commercial:

RENEWABLE ENERGY: Study: Six east coast states could replace dirty fossil fuels with clean energy derived from offshore wind

Posted on September 30, 2010 by Buck

Image of the Thanet Offshore Wind Farm by Nuon on Flickr.

As the United States struggles to do the right thing in terms of energy policy, the United Kingdom has just switched on the world’s largest offshore wind farm, which consists of “100 turbines spreading over 35 square kilometers, or 13.5 square miles, with a capacity to power more than 200,000 homes.” Also, Danish energy policy is pushing Denmark to be fossil fuel-free by 2050. China is also surpassing the United States in offshore wind development: “Chinese energy companies are expected to submit bids Friday for four offshore wind power projects with a total installed capacity of 1,000 megawatts, representing a combined investment of $3.06 billion.”

As the world population continues to grow and expand, energy demand and energy prices will continue to rise, as nonrenewable energy sources such as oil and coal are depleted. Rising energy prices helped trigger the economic downturn in the United States, so the United States government must protect its economy by aggressively implementing prudent energy policies, which are working in other countries.

More on the east coast’s renewable energy potential via the‎ International Business Times:

Oceana, compared the costs of offshore wind energy with oil and gas. The study focused primarily on the east coast and concluded an investment into wind energy would create jobs, reduce pollution and in many cases create just as much energy as fossil fuels.

All told, Oceana concluded wind energy could produce 30 percent more electricity than economically recoverable offshore oil and gas on the east coast. The group said the investment it proposed would supply nearly half of the current electricity generation of East Coast states. Oceana used conservative estimates of potential ocean spaces for wind farms.

. . .

In six states: Massachusetts, North Carolina, Delaware, New Jersey, Virginia and South Carolina, Oceana said wind energy could completely replace fossil fuels. In the first three states, it would completely reduce the need for any fossil fuels. In the latter three, it at least would replace the energy demand. In some states, energy is exported to other states.

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EXTERNALITIES: Coal isn’t cheaper: David Frum ignores the negative externalities associated with burning coal

Posted on May 16, 2010 by Buck

Image: The impacts of coal utilization. Illustration by Alan Morin via “Cradle to Grave: The Environmental Impacts from Coal.”

Recently, on HBO’s Real Time with Bill Maher (episode 183 that aired on May 7, 2010), David Frum claimed that “the cost of electricity from non-coal sources, is much, much greater than the cost of electricity from coal.” Bill Maher missed an important opportunity to correct Frum.

First, Frum ignored the externalities associated with burning coal for electricity, and if merely considering the price paid for electricity, he also ignored the fact that renewable energy will become competitive with energy derived from coal and other fossil-fuel sources (but if considering externalities associated with burning coal—a dirty energy source—renewable energy is much much cheaper than coal). Furthermore, coal, like other fossil fuels, is subsidized (i.e., governments and society pick up the tab for the environmental and health consequences associated with burning coal). To illustrate the externalities associated with burning coal, I recently investigated whether coal can be clean:

When coal is burned, dozens of hazardous or toxic substances⁵² in addition to “trapped” carbon dioxide⁵³—a greenhouse gas pollutant—are released.⁵⁴ Consequently, some of these substances released through coal combustion, such as mercury, disseminate by means of deposition throughout the landscape and into aquatic environments.⁵⁵ The hazardous substances not released directly into the atmosphere are present in combustion wastes such as fly ash.⁵⁶ The coal combustion wastes released into the atmosphere are a public health hazard, and the corresponding healthcare costs are passed off to the consumer and government entities. In fact, states are seeking to abate combustion from some coal-fired power plants over economic, environmental, and public health concerns.⁵⁷ Although the negative health impacts of burning coal may be not be readily recognized, healthcare costs have been estimated to be in the billions.⁵⁸ For example, “the National Research Council has estimated the external costs associated with emissions of nitrogen oxides, sulfur dioxide, and PM from coal-fired power plants in the U.S. at $62 billion in 2005.”⁵⁹ Another study released in 2010 found that “filthy air in California cost federal, state and private health insurers $193 million in hospital costs.”⁶⁰ That same study determined that “Medicare and MediCal, California’s Medicaid program, paid for more than two-thirds of the costs, while private insurers paid the rest.”⁶¹ Granted, coal-fired power plants are not the sole contributor of air pollution, but they are a significant producer of air pollution.⁶² In fact, coal-fired power plants are significant contributors of carbon dioxide, mercury emissions, nitrogen oxide emissions, ozone pollution or smog, and particulate matter pollution.⁶³ Furthermore, an EPA study found that “coal plants were found to release 67 different air toxics, many of which are known or probable human carcinogens and neurotoxins that can harm brain development and irritate the respiratory system.”⁶⁴

Mercury, in particular, negatively impacts the health of ecosystems and the health of humans. The EPA has estimated “that about one third of U.S. [anthropogenic mercury] emissions are deposited within the contiguous U.S. and the remainder enters the global cycle.”⁶⁵ Mercury emissions are problematic, because there is a connection between blood mercury levels and intellectual performance, and the costs to society over “lifelong diminution in intelligence” has been estimated to be $8.7 billion per year.⁶⁶ As a result, mercury is recognized as posing a public health threat,⁶⁷ since mercury is a neurotoxin.⁶⁸ The most dangerous form of mercury is the organic form of mercury or methylmercury,⁶⁹ which is produced by microbial activity in aquatic environments.⁷⁰ Methylmercury is the most dangerous form of mercury, because it is easily absorbed by the human body.⁷¹ Furthermore, methylmercury is a bioaccumulative environmental toxicant,⁷² and as a result, undergoes biomagnification within food chains.⁷³ As a result, seafood consumption is directly related to methylmercury intake by humans.⁷⁴ In fact, the Food and Drug Administration (FDA) and the EPA advise “women who may become pregnant, pregnant women, nursing mothers, and young children to avoid some types of fish and eat fish and shellfish that are lower in mercury.”⁷⁵ Despite warnings, according to the EPA, “it is estimated that more than 300,000 newborns each year may have increased risk of learning disabilities associated with in utero exposure to methylmercury.”⁷⁶

. . .

⁵²Alan H. Lockwood et al., Coal’s Assault on Human Health, (2009), available at http://www.psr.org/assets/pdfs/psr-coal-fullreport.pdf (Discussing that “coal combustion releases sulfur dioxide, particulate matter (Pm), nitrogen oxides, mercury, and dozens of other substances known to be hazardous to human health.”).

⁵³The problem is that the burning fossil fuels, such as coal, results in a release of carbon dioxide that has been trapped for millions of years. As a result, burning coal contributes an increase in concentrations of atmospheric carbon dioxide over time. This additional carbon dioxide is problematic due to carbon dioxide’s warming effect. For this reason, carbon dioxide is a greenhouse gas. See The Carbon Dioxide Greenhouse Effect, http://www.aip.org/history/climate/co2.htm (last visited February 17, 2010).

⁵⁴See American Institute of Physics, The Carbon Dioxide Greenhouse Effect, http://www.aip.org/history/climate/co2.htm (last visited March 1, 2010).

⁵⁵See U.S. Envtl Prot. Agency, Environmental Effects of Mercury, http://www.epa.gov/hg/eco.htm (last visited February 27, 2010).

⁵⁶See Tim Lucas, Toxic Coal Ash Threatens Health And Environment, Duke University, Aug. 18, 2009, http://news.duke.edu/2009/08/toxiccoal.html (Discussing how hazardous elements remain in fly ash and how toxic ash can leave storage ponds or spill sites by becoming “re-suspended in the air as dust [upon drying] and could have a severe health impact on local residents or workers who inhale them”).

⁵⁷See North Carolina ex rel. Cooper v. Tennessee Valley Authority, 515 F.3d 344 (4th Cir. 2008) (Due to impacts to human health and environmental quality, the State of North Carolina brought a public nuisance action against Tennessee Valley Authority seeking an injunction prohibiting it from operating its plants in a harmful manner.).

⁵⁸For the FY 2008, EPA estimates that its 10 largest civil enforcement actions against stationary source Clean Air Act violations of emissions of sulfur oxides, nitrogen oxides, and particulate matter resulted in annual health benefits valued at $35 billion. According to the EPA, some of these health benefits translated into thousands of avoided premature deaths, fewer emergency room visits, fewer cases of chronic and acute bronchitis, fewer nonfatal heart attacks, fewer cases of respiratory problems, and a reduction of days of people missing school or work. U.S. Environmental Protection Agency, EPA FY2008 Enforcement & Compliance Annual Results (2008), available at http://www.epa.gov/compliance/resources/reports/endofyear/eoy2008/fy2008results.pdf.

⁵⁹Alan H. Lockwood et al., Coal’s Assault on Human Health 10, (2009), available at http://www.psr.org/assets/pdfs/psr-coal-fullreport.pdf.

⁶⁰Kristina Shevory, Health Costs of California Air Pollution, New York Times, March 12, 2010, http://greeninc.blogs.nytimes.com/2010/03/12/health-costs-of-california-air-pollution.

⁶¹Id.

⁶²See Physicians for Social Responsibility, Coal-Fired Power Plants: Understanding the Health Costs of a Dirty Energy Source, available at http://action.psr.org/site/DocServer/Coal_Power_Fact_Sheet.pdf?docID=2821.

⁶³Id.

⁶⁴Id.

⁶⁵U.S. Envtl Prot. Agency, Human Exposure to Mercury, http://www.epa.gov/hg/exposure.htm (last visited February 27, 2010).

⁶⁶Physicians for Social Responsibility, Coal’s Effects on the Nervous System 32, available at http://www.psr.org/assets/pdfs/coals-assault-chapter-5.pdf.

⁶⁷See U.S. Envtl Prot. Agency, Former Mercury Mine Above Cottage Grove Reservoir Proposed for Federal Cleanup List, http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/d76a7f9d4c5368448525763a007f0099!OpenDocument (last visited February 27, 2010).

⁶⁸U.S. Envtl Prot. Agency, Human Health and Mercury, http://www.epa.gov/hg/health.htm (last visited February 27, 2010).

⁶⁹See U.S. Envtl Prot. Agency, Health Effects and Mercury, http://www.epa.gov/hg/effects.htm (last visited February 27, 2010).

⁷⁰U.S. Envtl Prot. Agency, Environmental Effects, http://www.epa.gov/hg/eco.htm (last visited on March 22, 2010).

⁷¹Laura Griesbauer, Methylmercury Contamination in Fish and Shellfish, http://www.csa.com/discoveryguides/mercury/review.pdf (last visited April 13, 2010).

⁷²Wikipedia, Methylmercury, http://en.wikipedia.org/wiki/Methylmercury (last visited on March 22, 2010).

⁷³Frances Solomon, Impacts of Metals on Aquatic Ecosystems and Human Health (2008), available at http://www.infomine.com/publications/docs/Mining.com/Apr2008c.pdf.

⁷⁴See Raquel Rutledge, Mercury in sushi can hit risky levels, Milwaukee Journal Sentinel, Jan. 11, 2008, http://www.jsonline.com/news/29548599.html (“But while sushi is packed with protein and essential omega-3 fatty acids, some types are also tainted with methyl mercury, a dangerous neurotoxin that causes brain damage in babies and other problems for adults who ingest too much. . . . Tests showed the two pieces of tuna had potentially dangerous, and nearly illegal, levels of mercury. Most of the other samples, such as shrimp, salmon and mackerel, contained only trace amounts.”).

⁷⁵U.S. Food and Drug Admin., Seafood, http://www.fda.gov/food/foodsafety/product-specificinformation/seafood/ (last visited on March 22, 2010).

⁷⁶U.S. Envtl Prot. Agency, Human Exposure to Mercury, http://www.epa.gov/hg/exposure.htm (last visited on March 22, 2010).