Energy – CleanSpeak

Conventional wisdom: real and manufactured

Even as winds of change sweep through the media landscape, it remains a truth that the first audience for any pitch is the reporter. Without a compelling pitch that resonates with the reporter, your story will not get written and therefore will not influence the end-reader audience.

It’s interesting, then, to see a campaign succeed with that initial target audience even as it butts up against a reality that could torpedo it.

This past Memorial Day Weekend, I happened upon an article in The Boston Globe (yes, I still have dead tree media delivered to my door, daily) assuring readers that the price of gasoline this summer would not be as expensive as last summer. Why the lower price? Well, according to article author Erin Ailworth, “The main reason is the boom in US production of crude oil, which accounts for about two-thirds of the price of gas. As a result of the controversial drilling process known as “fracking” that frees oil from shale formations, US crude is flooding global markets and holding down prices.”

That line has become conventional wisdom in the media, as well it should. As I’ve blogged in the past, vested fossil energy interests have expended a lot of effort to create it. A steady wave of research papers from institutes, investment houses, agencies and academics with ties to the energy industry have received breathless uptake in the media. Those who have taken critical views of those papers have been largely ignored. Not really a surprise because people prefer information that assures them the world they’ve known will continue on untroubled. The media, like corporations, is made up of people and the message they’ve been receiving on a regular basis from fossil-fueled sources is that all is well.

The problem with this manufactured conventional wisdom is reality. If you make it to the bottom of that Globe article you come across this paragraph:

In the meantime, gas prices remain historically high and may convince some people to stay close to home, said Mary Maguire, spokeswoman for AAA Southern New England. The auto association estimates that 34.8 million Americans will journey 50 miles or more from home during the holiday, a decline of about 1 percent from last year, when 35.1 million people traveled.

So, yeah, reality. Fracking for oil is expensive, both in terms of labor and materials. Those sustained high prices are tamping demand in the US, especially among those who remain among the ranks of the unemployed. Faced with a dearth of summer jobs and low wages, teens, too, appear to be less interested in dropping $60 or$100 in the tank every week to cruise around.

Meanwhile in what are still called “the emerging economies” of countries such as China, India, Indonesia and Vietnam, demand for refined petroleum products continues to climb. That rising demand will more than make up for declining demand here in the US. That trend will ensure both high gasoline prices and that fracking for oil remains a profitable endeavor. But, profitable or not, it’s unlikely to result in production rates that can replace that lost from depleting conventional wells and this trend will also help ensure prices for crude stay high enough to keep frackers in business.

And as the fracked oil flows, the conventional wisdom will as well, while people at the pump bump into the underlying reality of a world no longer awash in cheap fossil energy.

Export Land Model – the Saudi update

A quick update on the export land issue that I blogged about previously. In short, the problem is petroleum-producing countries becoming wealthy exporting oil and then finding their rising domestic oil use significantly cutting into what’s available for export even as their oil fields become less productive due to age. The ramifications are manifold – from unrest at home as shrinking revenues reduce subsidies and push up prices on things like food and gasoline, to turmoil on international markets as shrinking surplus capacity makes it easier for traders to drive price swings through speculation.

With this in mind, a few recent stories involving Saudi Arabia caught my eye. The first is a pretty straightforward endorsement of the export land model theory. In this story, Abdel Salam al-Yamani, head of the Saudi Electricity Company, is quoted as saying that, if left unchecked, Saudi Arabia’s current domestic oil consumption rates will deplete the country’s reserves by 2030. The second story involves the Saudi’s ramping up a nuclear energy program to the tune of at least $100 billion dollars. This story on the Saudi oil export and energy issue in the Wall Street Journal has a nice graph charting rising Saudi oil consumption. Finally, this story pulls in the previous points and also notes that the Saudi’s are going full bore into an energy source they’re likely to have in abundance for a long time to come: solar. Who knows, maybe one day they’ll be exporting that energy, too. In the meantime, the Middle East, in general, seems interested in conservation to ensure exports of their main revenue source remains high.

Global investors pour money into green energy

Nothing like cool, refreshing facts to support the desperate hope for a renewable energy revolution.

New investment in green energy was up nearly one-third globally in 2010 to a record US$211 billion. That’s 32 percent above the 2009 level and more than five times that of 2004, says the United Nations Environment Programme (UNEP).

Other facts from UNEP’s new report:

Wind farms in China and rooftop solar panels in Europe were key drivers in the investment increase.
China was the world leader in “financial new investment” – i.e., investment in utility-scale renewable projects and equity capital for renewable energy companies. The nation’s tally was US$48.9 billion, up 28 percent this year.
Developing economies (which invested US$72 billion this year) overtook developed ones (US$70 billion) in financial new investment.
Investments in small distributed capacity, e.g., rooftop solar, rose 132 percent in Germany to US$34 billion.
Costs for renewable technologies are falling.
Wind dominated financial new investment in large-scale renewable energy.
Biggest percentage jumps in overall investment were in small-scale projects, up 91 percent to US$60 billion, and in government funded R&D, up 121 percent to US$5.3 billion.

“The finance industry is still recovering from the recent financial crisis,” Udo Steffens, president of the Frankfurt School of Finance and Management, said in a UNEP news release. “The fact that the industry remains heavily committed to renewables demonstrates its strong belief in the prospects of sustainable energy investments.”

So there’s hope. And now facts.

More here.

The Oil Curse (domestic version)

The Oil Curse is a subset of the Resource Curse, describing an apparent paradox in developing countries “blessed with” large reserves of petroleum. The term refers to the political repression, corruption and violence that seem to accompany the development of oil resources in places like Nigeria.

But that definition might need to stretch because we in the United States – still a top three global oil producer – are living our own Oil Curse. It’s the curse of addiction.

Our transportation system and its supporting infrastructure are the lifeblood of the American lifestyle (which I’m told is not negotiable) and they’re built from the ground up around oil: the roadside stations that keep cars and light trucks fueled, the tanker trucks that keep the stations supplied, the roads the tanker trucks travel on to and from the tank farms, the refineries that keep those tank farms filled, the pipelines snaking cross-country and tanker ships docking at specialized ports. Deeply woven over the past 100-plus years, it’s a blessing that’s evolving into a curse.

As we bump along the plateau of Peak Oil, supply becomes more difficult to maintain at a flow rate demanded by a constant-growth economic model. There is a clear need to move beyond petroleum. However, the influence of stakeholders heavily invested in, and greatly benefitting from, the current energy model creates a drag on innovation and transition. And to be clear, the stakeholders aren’t simply the major oil companies and the firms focused on exploration, extraction, refinement and delivery. They’re also us. And that’s our version of the Oil Curse.

Addiction creates dependence. From strip mall to skyscraper, cul-de-sac to office park, we all have an enormous personal stake in a business-as-usual energy model. There’s a reason that “drill, baby drill” made it onto bumper stickers nationwide. Adopting a new energy infrastructure is not as simple, or easy, as ditching a laptop for a tablet. It’s a big part of the reason that the current administration has placed its weight not only behind innovation in alternative and renewable energy sources, but also in a lot more drilling.

History shows that transitions from one type of energy infrastructure – say wood to coal or coal to oil – takes decades. With the peak of conventional crude oil apparently already in our rearview mirror, the challenge in front of us is to reverse the curse. Hey, the Red Sox managed it. But we don’t have 86 years to figure it out.

Corner-store energy, or ‘yes please, in my backyard!’

Pro- and anti-nuclear activists hit each other with everything short of chains and broken bottles during construction of the Seabrook Station nuclear power plant back in the mid-’70s. The Clamshell Alliance opposition group occupied the construction site and waged a nonstop PR campaign against Seabrook right up to 1986, when the beleaguered plant finally went online. The consortium that built the plant countered with its own multimedia PR campaign, including one television spot featuring a woman who owned a backyard hydroelectric plant. The ad sticks in my mind because almost 30 years later, it raises a relevant issue in renewable energy and how to make it work best.

The ad depicted the hydro plant owner, an elderly woman wearing a trench coat with a scarf around her neck, standing in front of her hydro plant, which looked like a tool shed perched over a brook near her home. She was one of those redoubtable New England doyennes you see making long, detailed comments at town meetings and staffing the coffee pots at church suppers. Her message, delivered in clipped, no-nonsense Yankee diction, was that New England needed every energy source it could get, and not just “my little hydro plant” but Seabrook Station too.

I doubt I would have contradicted this formidable grande dame in person, but I wasn’t completely buying what she said. Why does electricity have to be created in huge, centralized power plants? The idea of getting my electricity from a network of neighborhood and backyard power sources tickled my imagination. Given a choice of buying my wattage from a nuclear plant perched upwind from the most heavily populated region in the U.S., or buying the same wattage from the nice old lady down the street, I’ll take “B” any day. Or maybe I could plug into the dairy farm two towns over that uses cow manure to power a small-scale methane plant, or the school bus company that put two wind turbines in their parking lot.

It seems odd to think of energy as a mom-and-pop industry like your local corner store, but with the way renewable technologies are developing, it’s not that far fetched. Think of it for a minute. How often can you read the news and NOT happen upon another idea for generating electricity, ranging from the familiar to the exotic? Energy from the sun, energy from the wind, energy from waves, energy from tides. Energy from garbage, energy from cow poop, energy from holes in the ground. Energy from waste water broken down into hydrogen atoms. Energy from fusing atoms together. Energy from weeds and algae. They all have the potential to make generating power as much a local business as the post office and the hardware store.

Consider concentrated solar photovoltaic (CPV) technology as an example. CPV modules pack more generating capacity into a smaller footprint than conventional solar photovoltaic (PV) modules. That means property that might not have produced economically practical amounts of electricity with PV modules now can. Picture your local storage space company, with all those acres of flat roofs. The owner makes most of his/her money on fees, but what if putting CPV modules on the roof turned into a profitable side business?

There’s an electrical production and distribution model called wholesale distributed generation (WDC) that’s gaining favor among renewable power advocates. WDC replaces large, remote power plants attached to the grid through long-distance transmission lines with smaller facilities hooked directly into local grids. It saves the land and cost of building new transmission lines to connect large facilities to local grids. The smaller facilities that thrive in WDC infrastructures will also require less permitting and face fewer regulatory obstacles. It’s a natural fit for local renewable energy sources, and a long-term sustainable power production model.

Allowing that renewable technologies were too immature 30 years ago to sustain the economy, I’ll concede the point made by the lady in the Seabrook commercial. Back then, facilities like her little hydro plant couldn’t carry the load, and realistically they still can’t today. In a few years though, don’t be surprised if you go to your local farmer’s market to shop for fresh local voltage along with fresh local produce. Technology writer Alex Steffen of Worldchanging.com predicted this movement four years ago, and his vision seems to be playing out.

“I think the things that would really blow us away if we could jump forward 20 years would not be the giant fields of windmills, but the 1,000 changes in daily life that have taken place in order to save energy,” he said in a Forbes interview. Power sources, he predicted, will move closer to home. “I think we’re going to see a lot more local energy, especially in places that are gifted with lots of sunshine, or wind, or strong rivers. As houses and small communities produce their own energy, it will flow back and forth on ‘smart infrastructure’ two-way power grids that deliver from as well as to the home.”

A green job jewel in the spending bill dust heap

A little-known provision in the compromise spending bill signed into law this weekend will help some threatened Recovery Act-funded clean technology projects breathe a sigh of relief and move forward in bringing green jobs to their respective regions.

You’d think that cleantech projects that received loan guarantees, tax breaks and other funding from the DOE would be churning along nicely by now. But an arcane rule in the Energy Policy Act – and how narrowly the DOE interprets it – cast a cold chill on many DOE award recipients.

To put it simply, cleantech companies that receive DOE loan guarantees must first pay a risk-based credit subsidy fee, which can amount to a whopping 20% or more of the loan amount… unless their projects actively generate renewable energy or produce biofuels.

In other words, solar, wind and hydro energy companies get a free pass, while energy efficiency and waste heat recovery companies get stuck holding the bill. Section 1705 of the Energy Policy Act waives subsidy fees for companies that manufacture renewable energy products that generate electricity or thermal energy. The loosely defined criteria in the bill provided the DOE broad flexibility to extend fee relief to many more loan recipients. But they didn’t, and as a result some projects were suddenly in jeopardy.

At a time when the Obama administration is strongly promoting energy efficiency technologies as the fastest, most cost-effective path to U.S. energy independence, this rule is not only counterintuitive, it is economically stifling for many of our most promising new cleantech companies. You can’t float them a loan guarantee, charging them tens of millions in subsidy fees for the “honor,” and then expect them to become the new engines of our green economy. Some award recipients have already withdrawn from the loan program, and countless potential applicants have chosen not to apply for participation in the program.

The good news is that, despite all the cuts to energy efficiency programs in the compromise spending bill, the bad policy was upended. Thanks to hard-fought negotiations by Minnesota’s legislative delegation in particular, the spending bill now includes terms that allow energy efficiency technology companies to avoid payment of those subsidy fees.

A smart policy rewards – not penalizes – our best entrepreneurial cleantech companies, which are those that will help us reduce reliance on fossil fuels, increase the use of renewable energy, cut carbon emissions and generate urgently needed jobs.

{DISCLOSURE: A Brodeur/Beaupre client benefited from the spending bill provision}

So, are we done with nuclear?

As we pray for Japan – and their food and their water – nuclear power’s renaissance is halted in its tracks. Can the world continue to believe nuclear is cleaner than coal and more reliable than renewables?

Seven in 10 Americans have become more concerned since the earthquake about a nuclear disaster occurring in the United States, according to a Gallup poll taken four days after the catastrophe. Thirty-nine percent are now “a lot” more concerned.

It was just a year ago that support for nuclear power reached new high, with 62 percent of Americans surveyed favoring the use of nuclear energy for electricity. Last week, amid the specter of “meltdown” at Fukushima Daiichi, a mere 44 percent favored the construction of nuclear power plants in the US.

Quick caveat: this is a clean-tech communications blog, and for the purposes of this post, we’re going to remain neutral on whether nuclear is a clean technology or a blight on the planet. The label doesn’t matter. Maybe it’s both.

What is certain is that electricity demand is high. As you can see, per capita electricity use has tripled since 1960.

I don’t know anyone who loves nuclear power. Accidents are potentially cataclysmic, nuclear waste is a big issue, and now we’re hearing about tainted water in Tokyo. But I do know folks who are attached to their TVs, microwaves, stoves, refrigerators, battery chargers, toasters, and that creature comfort we call electric light. Mobile phones and computers are necessary evils, and the Internet, where we see some of the shrillest anti-nuke rants, generally works best when plugged in.

So let’s admit nuclear power is here for a reason that we consumers have created. Now let’s ask ourselves, do we really want to kill nuclear? And to what extent are we scapegoating nuclear out of sympathy for Japan’s suffering, in reaction to the wall-to-wall coverage, and in light of the potential for a nightmare?

More importantly, how many of us have the tools, time and analytical power to evaluate the risk objectively? What should be the yardstick?

Looking at the risk

The smartest comment I’ve heard on this subject comes from James Acton, a physicist with the Carnegie Endowment’s nuclear policy program: “[Y]ou’ve got to realize that all forms of energy generation carry risk,” he said on CNN last week. “Nuclear carries risk as we have dramatically seen in the last couple of days. But fossil fuels also carry risk: The risk of catastrophic climate change. Renewables, which I absolutely support a lot of research and development and funding for, right now carry the risk of not being able to produce enough energy.”

Acton expounds on his comments in this even-handed opinion piece on the Foreign Policy website. Despite increasingly robust plant designs, he says the nuclear industry needs to reassess to earn the public’s trust.

“Even after the ongoing disaster in Japan, the nuclear industry is unlikely to welcome such an exercise,” he writes. “It is almost certain to argue that a whole-scale reassessment is unnecessary because existing standards are adequate. But after two earthquakes in less than four years shook Japanese reactors beyond their design limits, this argument is simply not credible. It is also self-defeating.”

The unfolding story in Japan notwithstanding, nuclear is relatively safe if history and the Next Big Future website are to be believed. Nuclear power generation kills 0.004 persons per terawatt-hour (TWh) compared with 161 for coal, according to the site’s quasi-viral March 13 post. Citing a variety of sources, it goes on to say rooftop solar (!) is 11 times more dangerous than nuclear (again, measured by the death per TWh) because roofing is one of the top 10 most dangerous occupations. Here’s Seth Godin’s chart on the Next Big Future data.

The flyspeck on the far left is nuclear. Slate offers similarly lopsided figures, saying “you’d need 500 Chernobyls” to match a year’s worth of premature deaths caused by fossil fuel-related air pollution. (But visit Huffington Post and read that Chernobyl’s horror has been vastly underplayed.)

Could it be that nuclear power is being scapegoated because of the recency of Japan’s troubles but simultaneously embraced because, well, Chernobyl is so last century? Is there something about death by nuclear that’s more fearsome than slow death by coal-related air pollution?

I don’t know. I do know I don’t want to shill for the nuclear industry. I’d prefer not to have a plant down the road in Seabrook, N.H., looking for all the world like it’s floating in the estuary. I can certainly relate to James Carroll’s poignant observation in Monday’s Boston Globe: “More than 500 nuclear power plants are in operation or under construction around the world today, with every one of them being viewed with new skepticism,” he writes. “What have we done to ourselves?”

But what if the sheer complexity of nuclear ends up quashing a worthy component of our energy mix? I guess I come down on the side of CNN’s Fareed Zakaria: Don’t rush to judgment. At least not before we unplug.

Insulating against revolution?

insulated cooler In New England where I’m writing this, insulation is typically thought of as a way to keep the cold out and heating costs down. In hot climates, however, it’s a way to keep the air conditioned cold in and the hot out. Think of your beach cooler keeping the ice from melting and, in turn, your beer cold. Same concept.

A recent Reuters story notes that the Saudi government is undertaking an ambitious program to cut energy use by some 40 percent, “largely by enforcing investment in insulation”. So, why the Saudi push to insulate? They need the money – specifically, the money made selling oil. The Reuters story quotes a Saudi official noting that 70-80 percent of their energy use goes to air conditioning and they use oil to generate the majority of their electricity. With a growing population and an extreme dependence on fossil fuels to subsidize the amenities of a comfortable life (cheap electricity, plentiful food, cars, roads, etc), the Saudis are staring at a classic export land problem.

Almost half of Saudi Arabia’s GDP is directly related to oil exports. Some 75 percent of its government revenue comes from the oil industry. The more oil the Saudis use, the less is available for export, even as production from their aging oil fields slowly declines. The reduction in exports helps push up prices on the open market, increasing cash flow which encourages domestic economic growth and energy use. Eventually, this domestic demand increases enough to materially reduce revenue from oil exports, squeezing subsidies that support things like cheap and plentiful food and fuel. Exposing the national population to unsubsidized prices is politically perilous. Hello Cairo.

Saudi market Iran is caught in a similar rock-and-a-hard-place bind. Indonesia dropped out of OPEC in 2008 when declining production and increasing consumption pushed it from being a net exporter to net importer of petroleum.

So, what does the export land issue mean to us, the oil importers? We don’t generate much electricity in the United States with oil these days, but it certainly is vital to our transportation system. Whether by car, truck, train or plane, our consumer lifestyle is powered by petroleum. Gasoline, diesel and kerosene move everything from people, food and building materials to toys, toothpaste and auto parts. As oil prices rise, transportation costs increase, putting a drag on an already weak recovery. Hard to insulate our way out of that.

Sustainability knows no age limits

Sprinting across a Portsmouth street to feed my parking meter before our ever-diligent meter officers presented me with another $10 love note, I had to stop short to let a car pass. At first it looked like any other car, albeit in a screaming shade of fluorescent green, but as it rolled toward me over the Memorial Bridge I saw it was one of those two-seat Smart Pure Coupes.

You’ve probably seen a Smart car. They’re about the size of your average household appliance and they look like they should have big wind-up keys sticking out of their butt ends. You could park one in the bed of a Ford Ranger pickup without touching either side. They’re popular as delivery cars in urban areas, so long as you’re delivering something small. Say a pack of Life Savers. One at a time.

It wasn’t the car itself that made me stop and take notice, though. It was who was driving it. The gent behind the wheel and woman sitting next to him appeared to be well into their seventies, with gray hair and glasses and clothes that, at least from the chest up, didn’t match their vehicle’s Skittle-lime, ultra-hip image. They appeared to be the kind of people who, if you’re schooled on your stereotypes, should be driving a Detroit dreadnought with the left blinker on. They did not look like a couple who should be driving a motorized Tonka truck that gets 33 mpg city and 41 highway, yet there they were tooling toward downtown Portsmouth in what could have been their living room Barcaloungers lashed side-by-side.

For most of my life (I’m 46) “tree hugging” has been mainly (and unfairly) associated with the younger set. If we’re going to build a sustainable society, however, it won’t be by waiting for the current generation of schoolchildren to start running the world. We have to change minds and behaviors now. That’s why the sight of that older couple in the Smart car gave me a pleasant jolt. It also brought back an unlikely “green” conversation I had with a city councilor when I was a reporter covering Marlboro, Massachusetts.

The councilor’s name was Herman, and from all outward appearances he was about as environmentally conscious as a Norwegian whale hunter. He was a conservative Republican, an Army veteran, and the retired owner of his own welding business. He was long on gruff and short on tact, though he had a deceptively good heart. He was the kind of guy who would make derogatory comments about an ethnic group but be a good neighbor to a family of that group who moved in next door.

Good heart or no, you would not tab Herman as an environmental maverick, which is why the talk we had in 1991 is so clear in my mind to this day. We were killing a few minutes outside city hall so Herman could have a smoke break before the next council session. I liked talking to Herman because he was completely uncensored, and told me a lot of stuff he later wished he hadn’t. That evening though, the conversation was about an article he read on plug-in cars. Not the glorified golf carts that passed as electric cars in the ‘70s, but real road vehicles. The concept fascinated him.

“I’d do that, have one of them little cars for around town and save the Pontiac for long trips,” he said between drags on a filtered Merit. “You’d pay for the electricity, but think of all the gasoline you wouldn’t burn.”

If Herman could be open minded about alternative transport, there’s hope for the world. Herman and the couple in the Smart car are proof that if you can make a good enough case and supply reasonable alternatives, even generations supposedly set in their ways will make the environmental choice.

Of course, when Herman was done educating me about plug-in cars, he snubbed out his cigarette on city hall’s granite staircase then flipped the butt onto the sidewalk. I guess we’ll have to take progress where we can get it, in small doses.

Mind the Gap

Just this year, government agencies around the globe, from the United States to Germany to New Zealand, have generated studies warning that world oil production is within a few years of peaking. Projections for peak world oil demand, however, don’t match up with the projected peak in production.

That mismatch is a problem which only gets worse once past the peak. Current world oil production models see a bumpy plateau that lasts a few years and then a decline rate of about five percent a year sets in as a lack of new discoveries fails to make up the difference. The gap between supply and demand quickly becomes a chasm.
Renewables – wind, solar, biofuels – are seen as a way to erase that gap, but practical realities intrude. Take wind and solar. They really aren’t drop-in replacements for most oil uses; most notably in transportation where some 70 percent of oil gets used. Electric cars are still in their Model T era (fancy dashboard electronics aside) and lack the nationwide infrastructure for refueling, maintenance and repair that took decades to build out for gasoline and diesel vehicles. Biofuels also have a number of shortcomings as petroleum replacements, starting with their lower energy density per unit and moving on to their small scale of production that will limit their ability to make any significant contribution to closing the gap.

So, how best to narrow the gap? Well, at the outset, peak oil largely presents a liquid fuels and transportation problem. A real focus on driving efficiencies into the transportation sector would be a good place to start. We’ve lived large for decades because energy has been cheap. That needs to change and the good news is that it can. Trains, for instance, are far more efficient for long haul freight, even if it’s a diesel locomotive doing the pulling. Shorter distance delivery can be done by electrified trucks. On the gasoline passenger car front, 40 miles per gallon is becoming the new 30 mpg here in the United States. And, of course, getting more people on better trains that go more places would be a big help.

The real gap, ultimately, might better be seen as the one between our current scale of living and the one that our current mastery of physics can support. Fortunately, work continues apace on that front, too.