Having said that, I think it’s imperative to ensure we never lose sight of the dangers. To that end, I call attention to the fact that the federal government is warning residents in a small Wyoming town with extensive natural gas development not to drink their water, and to use fans and ventilation when showering or washing clothes in order to avoid the risk of an explosion. It seems that EPA researchers found benzene, metals, naphthalene, phenols and methane in wells and in groundwater.

Introduction

Although this paper has been written primarily to deal with energy concerns in the United States of America, much of the information will be useful for other countries also.

Regardless of whether we are concerned about global warming, we know that burning  fossil fuels damages the environment and causes health problems.  Therefore, we should be working diligently to develop alternative energy sources to end our dependence on fossil fuels.  Moreover, we should be sure that those alternative energy sources are capable of ending our dependence on fossil fuels and not simply reducing the amount of fossil fuels which we use.  To do so, they must be capable of providing continuous power 24 hours per day, 365 days per year.

The proposed alternatives to fossil fuels include wind energy, solar energy, and nuclear energy.  Hydroelectric power is also useful, but I am excluding that because we have already developed practically all of our available hydroelectric sites here in the United States.  When considering alterative sources of energy, we should also consider what would be practical in countries outside of the United States since sources of power which would be practical in the United States may not be practical elsewhere.

To be able to understand adequately the challenges of developing alternative sources of energy, we must have an adequate understanding of how our current sources of energy operate.  Accordingly, I shall begin by explaining some of the operational details of coal, gas, hydroelectric, and nuclear power plants.  After that, I will explain the advantages and disadvantages of wind and solar power.  That will facilitate a better understanding of the challenges of integrating wind and solar power with the existing sources of power.  Then, I will explain why nuclear power is probably the only source of energy that can economically and reliably provide the large amounts of power required by an industrialized world.  Last, I shall address the problems of eliminating the use of petroleum to power our transportation system.

Current  Sources  of  Electricity

Currently, we get  about 10% of our electricity from hydropower, 20% from nuclear power, 20% from natural gas, and 50% from coal.  Although that adds up to 100%, we do get very small amounts from other sources.

The demand for energy is constantly fluctuating according to the time of day, day of the week, season, and weather.  For example, during the summer, the peak load occurs early in the afternoon because of the operation of air conditioning systems.  On weekends, when many businesses and offices are closed, there is less demand for power.  Because there currently is no provision to store electrical power, the various sources of power have to be adjusted constantly so that the supply exactly equals the demand.  Doing so is quite challenging, especially if demand changes quickly.

Power companies in some areas can, to a certain degree, control the demand for power.  For example, in Albuquerque NM, U.S.A., they have the capability to shut of some air conditioners if the demand for power temporarily exceeds the supply.  In some places, but not in New Mexico, power companies charge more for power which is used when demand is high thus inducing users to use less power at those times.

Most coal burning and nuclear power plants are designed as base load plants, i.e., they are designed to run at 100% capacity at all times.  Their output cannot be frequently changed without greatly shortening the life of the equipment.

Some coal burning, natural gas burning, and nuclear power plants are designed as load following plants, i.e., their output can be continuously, although very slowly, adjusted as the demand for power changes.  However, they are most efficient when operating at full power and continually changing output does shorten the life of the equipment.

Peaking plants are gas turbines which are similar to aircraft jet engines.  They are the least efficient power plants and costly to operate.  For peaking plants, the cost of the fuel is a major expense, so power companies prefer to operate them as little as possible.  However, they can change output quickly when there are sudden changes in the demand for power.

Some small countries depend heavily on Diesel power plants.  Unfortunately, Diesel power plants are expensive to operate but they do have advantages:  1)  They are available in small sizes, and  2)  their output can be quickly adjusted to meet sudden changes in the demand for power.

The output of hydroelectric generators can be changed quickly without affecting the life of the equipment.  However, when they are not run at full capacity, the investment is not fully utilized.

Spinning reserve consists of sources of power the output of which can be quickly changed as the demand for power varies.  It is provided by power plants that are operating at only part load.  With the exception of hydroelectric plants, having a considerable amount of spinning reserve greatly increases fuel consumption.  It also reduces return on the investment because the facilities are not being fully utilized.  Therefore, grid operators prefer to keep spinning reserve as low as possible and minimize their reserve capacity.

When there are intermittent sources of power connected to the grid, the amount of spinning reserve has to be increased to allow for changes in the amount of intermittent power available.  That, of course, results in reducing the efficiency of the fossil fuel power plants which are not running at full capacity and requires that inefficient peaking plants be kept on line.

Often, the main cost of generating electricity is not in the fuel, although the cost of the fuel varies considerably depending on whether it is natural gas, coal, or nuclear.  For nuclear power, the cost of the nuclear fuel is only about 5% of the cost of generating electricity.  The cost of coal varies greatly depending on location.  With an interest rate of 5%, in New Mexico, the cost of fuel when generating power from coal is about 39%.  In South Africa, it is only about 10%; in Turkey, it is greater than 50%  However, usually the interest rate is higher than 5% in which case the cost of coal is relatively less.  In any case, the cost of coal usually represents less than half the cost of generating power.  For peaking plants, the cost of gas is a major operational expense, so peaking plants are used as little as possible.  The rest of the cost is in the required return on the investment, labor, and other operating expenses, including the expenses of distributing the power.  Thus, if an alternative source of power is connected to the grid thereby reducing the amount of power provided by the existing utility companies, the overall cost seen by the utility companies is affected less than one might suppose.  If the alternative source of power varies rapidly and greatly, then utility companies have to operate their peaking plants to compensate for the rapid changes, and peaking plants are very expensive to operate.

Now that we have a basic understanding of the challenges of continually adjusting the power provided to meet the demand exactly, we will be better able to understand the challenges of integrating alternative sources of power into the grid.  Without that understanding, the challenges of utilizing alternative sources of energy could not be adequately understood.

Wind  Power

By now, most of us have seen wind farms with wind turbines slowly turning while generating power from the wind.  Without carefully examining the details, it would seem that wind is a wonderful source of power; it generates power without burning fuel and generates no pollution.  But, as others have said, the devil is in the details.  So, let us examine some of the devilish details.

We know that the wind does not always blow and that wind generators cannot generate power when the wind is not blowing.  So, what happens when the wind stops blowing?

For days or weeks, the wind velocity can be too low to generate adequate power.  In fact, wind generators over the long term generate only about 20% to 30% of the power they would generate if the wind were blowing continuously.  We cannot simply stop using power when the wind stops blowing, so there are basically three choices:

Have widely scattered wind farms interconnected.

1. Store power so that we can use the stored power when the wind stops blowing.
2. Switch to other sources of power when the wind stops blowing.

Some may argue that if there are enough wind farms, when the wind is not blowing in one place it will be blowing in another place so we would always have wind power available.  It is very easy to make statements without data to back them up.  I know of no studies which support the idea that interconnecting widely scattered wind farms would guarantee a reliable source of power.  Surely it would be unwise to spend billions of dollars on the unverified assumption that the wind could provide steady power.

Some argue that power can be stored for use when the wind is not blowing.  However, the technology does not exist to do that at an acceptable cost.  Pumped storage has been suggested.  That can work well, though at considerable cost, but it requires two huge reservoirs at greatly different heights.  Thus, pumped storage can be utilized only in a few geographic areas.  Using rechargeable batteries is far too expensive.  Compressing air into natural underground caverns would work in theory, but it is very expensive.

We could also revert to fossil fuels when the wind is not blowing.  However, that means that wind generators would be built IN ADDITION to fossil fuel plants, rather than INSTEAD of fossil fuel plants, thereby greatly increasing the cost of power.

It’s also not clear that wind generators would actually reduce the amount of fossil fuel burned.  Because the wind velocity is constantly changing, even when the wind is blowing utility companies would have to maintain enough spinning reserve to compensate for the constantly changing wind velocity.  Because spinning reserve is fuel inefficient, it may be that even when the wind is blowing the amount of fossil fuel burned would not be reduced.  Experience in Europe has shown that there are serious problems when wind generated power exceeds 20% of the total power generated.

Another problem is that the existing grid has been set up to accept power only from existing power plants.  Extending and modifying the grid to accept power from widely scattered wind farms would be an enormous expense.  The cost of installing wind generators, apart form extending the grid, has been roughly determined, but the problems associated with wind power are so enormous that there is little point in even examining the cost of the wind generators.

For each megawatt of capacity, wind power requires approximately 460 tons of steel and 870 cubic meters of concrete.  By comparison, coal power requires 98 tons of steel and 160 cubic meters of concrete while nuclear power requires 40 tons of steel and 190 cubic meters of concrete.

Even with these problems, wind power does have a rôle to play.  Some people live in places so remote that connecting to the grid would be impractical.  If solar power is impractical because the weather is frequently cloudy, wind power with battery storage and a small Diesel generator for back-up power may be a good choice.  Also, in small countries with hydro power, wind generators can reduce the amount of water used by the hydro system thereby reducing the need to burn fossil fuels when the water runs low.  But as a major source of power for a large country, wind power is not practical.

Solar  Power

There are two basic types of solar power:  Photovoltaic panels, and solar thermal electric.  The type of solar power with which most people are familiar is photovoltaic panels (PV panels).  Like wind power, solar power is also intermittent, but it is much more predictable and much less subject to the sudden variations in output that make wind power exceedingly difficult to integrate into the grid.

PV  Panels

PV panels can easily be installed on roof tops or almost any place where there is adequate sun and where they won’t be in the way, subject to damage, or create environmental problems.  They also have the advantage of being effective when power is most in demand, i.e., in the early afternoon when the air conditioning load is high.  However, they are not without problems.

Although the power output from PV panels is more predictable than the power output from wind generators, they still do not provide continuous power.  Even so, many people find that they come out ahead by installing PV panels on their roofs.  Let us see how this is possible.

Installing PV panels is encouraged by heavy subsidies and by requiring power companies to buy power from PV panel owners when the PV panels produce more power than the owner is using.  If there were no subsidies and if power companies were not required to buy excess power from the PV panel owners, then the PV panels could not be economically justified; the interest on the installation would exceed the amount saved on the power bill.

As we have seen in the chapter “Current Sources of Electricity,” the cost of fossil fuel to generate electricity is only about 10% to 20% of the cost, with the possible exception of Diesel power.  Therefore, when surplus PV power is sent to the grid, the saving to the power company is very small.  In fact, the saving is less than they are required to pay the owners of the PV panels.  And, because of the intermittent nature of PV power, power companies still have to maintain as much generating capacity as if there were no PV panels.  So, although PV panels can reduce the amount of fossil fuel burned, they can never eliminate the burning of fossil fuel.

PV panels generally have a useful life of from 20 to 30 years after which they have to be replaced.  Unfortunately, current PV panels contain toxic materials which complicate recycling.

Recently, California senator Diane Feinstein opposed a large PV panel project in the Mojave Desert of California; it would have required 70 square miles and she deemed it environmentally unacceptable.  Also, the water required to wash the dust off of such a large collecting area would also have been a problem when the scarcity of water in desert areas is considered.

Even with the limitation of PV panels, they are still quite useful where connecting to the grid is not practical.   In third world countries, they are used to provide power to pump water in which case the intermittent availability of power can easily be worked around.  They are also used to power school crossing signals which require very little power.  However, because of the huge area they require and because of the intermittent nature of the power provided, they are not suitable as a major source of power for a country with high energy needs.  That is especially true of countries with a high population density, such as China and India, and countries where the weather is often cloudy.

Solar  Thermal  Electric  Power

Solar thermal electric power can be more practical than PV power.  Solar thermal electric plants use heat from the sun to boil water and drive turbines.  There are two basic types:  the trough type, and the power tower type.  The trough type uses long trough-shaped reflectors which concentrate heat from the sun onto long pipes which contain a fluid which is used to boil water to generate steam.  The power tower type uses a field full of mirrors which, using electronic controls, track the sun to direct heat onto the top of a tower which collects the heat.  With either type, excess heat can be used to heat tanks containing a fused mixture of potassium nitrate and sodium nitrate to store heat so that power can be generated when the sun is not shining.  However, there is no guarantee that enough heat can be stored so that power can be generated if the weather is cloudy for several days in a row.  Therefore, even solar thermal electric power cannot replace other sources of power unless the risk of being without power is acceptable.

Because the power tower type can generate higher temperatures, it is more efficient than the trough type.  The greater efficiency means that for the same power, less collector area is required, the steam turbines can be smaller, and the condensers require less cooling water.

Regardless of the type of solar power used, huge land areas are required to generate sufficient power.  Environmental groups would be certain to object to any installation in areas which they consider to be environmentally important.  Also, because power would be generated where the grid is not designed to accept it, very costly changes to the grid would be required to utilize solar power.

Nuclear  Power

Introduction

There are many possible designs for nuclear reactors and many possible fuel cycles; that may not be obvious from the popular media.  Therefore many people are not aware of the multiplicity of available designs and fuel cycles.  Nuclear reactors have even been designed that use thorium for fuel instead of uranium and at least one thorium reactor has been successfully tested.

I cannot cover all possible designs of nuclear reactors and all possible fuel cycles.  Doing so would require thousands of pages.  Moreover, it would also require considerably more knowledge than I have.  Therefore, I have written only enough to provide an extremely basic understanding of a few types of reactors.

In 1954, Lewis L. Strauss stated in a speech that eventually electricity would be too cheap to meter.  That statement has been used for decades to ridicule proponents of nuclear power.  However, that statement has been taken out of context.  No one qualified in the field of nuclear power has ever believed that nuclear power would be to cheap to meter.  Moreover, the distribution costs alone are a major portion of the cost of electricity.  However, especially when considering externalities, nuclear power probably is already cheaper than power generated from coal and is likely to become even cheaper as progress continues.

Most  Common  Reactor  Type (PWR)

Currently the most common reactor type is the pressurized water reactor (PWR).  Here in the U.S., our 104 PWRs generate 20% of our electricity.

Natural uranium contains 0.7% U235 with the rest being U238.  Unfortunately, our PWRs cannot operate on natural uranium; they require uranium which has been enriched to approximately 5% U235.  The enrichment process requires removing enough U238 from natural uranium so that what is left is 5% U235 and 95% U238 with the excess U238 being treated as waste, a process which is very costly.  In addition, when enrichment process is extended, it can enrich uramium to the 90% U235 which is required for nuclear weapons.  Thus, PWRs can create the risk of nuclear weapon proliferation.

Also, PWRs create significant waste and the amount of waste is increased by the material used to make the fuel rods.  However, most of the waste consists of unused fuel which, by reprocessing, can be removed and reused, thereby greatly reducing the actual amount of waste.  Although France and some other countries are reprocessing nuclear waste, we are not doing so here in the U.S.

PWRs also require a large pressure vessel which is commonly about 15 feet in diameter.  To keep the water in it in liquid state at high temperatures, a pressure of about 2500 psi must be maintained.  To prevent corrosion, the vessel must be made of stainless steel.  Thus, the pressure vessel is extremely expensive and represents a significant portion of the cost of a nuclear power plant.

In spite of their problems, PWRs are capable of providing safe, reliable, and economical power.  Power plants using PWRs have an anticipated useful life of from 40 to 60 years.  Thus, they will be around for a long time.  Also, we can expect that more will be built until they are superceded by other reactor designs.

The matter of escalating costs of PWRs has been raised.  A major factor in the cost is licensing delays resulting from changes in safety requirements after the license to begin construction has been issued and construction is either complete or almost complete.  The lack of a unified design has also contributed to escalating costs.  These problems can be eliminated thereby significantly reducing the cost of nuclear power.

CANadian  Deuterium  Uranium  reactors  (CANDU)

CANDU reactors have advantages over PWRs:

They can use natural unenriched uranium as fuel thereby reducing operating costs and reducing the risk of nuclear weapon proliferation.

1. They do not require a large pressure vessel.
2. They produce less nuclear waste
3. They are capable of using, as fuel, the waste from PWRs.

Many CANDU reactors are used for power generation in Canada and some are exported to other countries, to the benefit of the economy of Canada.  However, even though they have a good safety records, they are not licensed for use in the U.S.

Liquid  Fluoride  Thorium  Reactors  (LFTR, pronounced “lifter”)

The LFTR was originally designed to power military airplanes but, at least partly because of the development of missiles, was never used for that purpose.  However, at least one LFTR was built and successfully tested.

The fuel for a LFTR is thorium tetrafluoride, a salt which is a crystaline solid at room temperature and a liquid at the temperatures at which reactors operate.  Among the advantages of the LFTR are the following:

Because the fuel is a liquid, a meltdown is impossible.

1. Because the fuel is a liquid, no additional coolant liquid is needed.
2. Because the fuel is a liquid, fuel reprocessing can be done continuously.
3. Because a LFTR can operate at very high temperatures, thermal efficiency is high.
4. The risk of nuclear weapon proliferation is virtually eliminated.
5. The cost of fabricating fuel into rods is eliminated.
6. A LFTR need not be shut down for refueling.
7. There is much less waste, and the waste decays to a safe level within 500 years.
8. Thorium is about four times as abundant as uranium.
9. No expensive pressure vessel is required.
10. If overheating occurs, the reactor will automatically shut down.
11. A LFTR can burn existing nuclear waste as fuel.
12. The projected cost of LFTRs is significantly less than the cost of PWRs.
13. The LFTR has a totally fool-proof shut down method.

The reactor vessel itself is nothing more than a vessel designed to contain the fuel, i.e., molten thorium tetrafluoride.  In the bottom of the vessel is a drain which, during operation, is plugged by frozen fuel.  The plug is kept frozen by circulating a coolant around it.  When the coolant flow is stopped, the plug melts causing the fuel to drain into a holding tank configured so that there cannot be a critical mass.  Thus, in case of a malfunction, the reactor can be shut down simply by stopping the coolant flow to the plug.  No emergency cooling system is required.

Over the last several years, the awareness of the economic and safety advantages of LFTRs has become more widespread.  Their advantages over other reactor types is sufficient that it is likely that eventually they will become the predominate reactor type where moderate to large amounts of power must be generated.

Small  Maintenance-Free  Nuclear  Reactors

In some small countries and in remote areas, there is a need for small maintenance-free nuclear reactors.  Accordingly, work is being done to develop them.  They would be designed to run, without refueling, for about thirty years after which they would be exchanged by the manufacturer for new reactors.  They would provide small countries and remote areas with a badly needed source of economical and reliable electricity and would greatly enhance the quality of life for the people living in those areas.

With reasonably priced electricity available, cooking with electricity would become economical thereby eliminating the need to cut down trees for firewood or import fuel.  Electric lights would be a big improvement over fuel-burning lights.  Electricity for refrigerators would improve the quality of food available.  It would also keep medications and vaccines from spoiling.

Vehicle  Power

Economical nuclear power could be used to eliminate the need for fossil fuels to power vehicles.  There are two ways in which this could be done:

Use nuclear-generated electricity to recharge battery electric vehicles.

1. Use nuclear energy to manufacture fuel which could be burned in conventional engines.

Battery electric vehicles are already practical except for long distance trips.  The problem of long distance trips could be solved by advanced battery technology or battery exchange systems.  Also, we can expect (hope?) battery costs to come down as production increases and production techniques are refined.

Nuclear power could be used to make either ammonia or dimethyl ether to be used as vehicle engine fuel.  Both can be liquefied at readily available pressures, so an adequate quantity could be stored in a vehicle tank.  However, a conventional gasoline engine cannot be converted to run well on ammonia, but an engine designed from the ground up to run on ammonia could work well.  The fact that ammonia is toxic is also a disadvantage.

Like ammonia, dimethyl ether can be liquefied at readily available pressures.  Engines can easily be converted to run on it and unlike ammonia, it is not very toxic.  However, it does contain carbon so, for it to be carbon neutral, a the carbon used to manufacture it would have to be extracted from the air or from some other carbon source other than a fossil fuel.

In any case, it is essential for us to transition away from using fossil fuels to power vehicles.

Conclusion

As we have seen, there are alternatives to using fossil fuels.  Probably it will be much easier to eliminate the use of coal than to eliminate the use of petroleum because the most obvious replacement for coal power plants is unclear power plants.  Even if we continue to use uranium for nuclear power plants, we would be better off generating power with nuclear plants instead of coal plants.  However, the development of lithium fluoride thorium reactors (LFTRs) can make nuclear power even more attractive.

Eliminating the use of petroleum to fuel vehicles will probably be more difficult, at least in part because of the extremely large number of vehicles.  Currently limited battery capacity and high battery prices, although not making battery electric vehicles totally impractical, are challenging.  Using nuclear power to manufacture artificial motor fuels may turn out to be a better path away from petroleum, or the technologies may coexist for many years.

In any case, we must end our dependence on fossil fuels as quickly as it is practical to do so both because the cost of petroleum is certain to rise and because of environmental considerations.

When anyone advocates wind and solar power, please remember to ask, “From where will the power come when the wind is not blowing and the sun is not shining?”  Also ask, “We want to end dependence on fossil fuels.  Will wind and solar power end our dependence on fossil fuels, or simply reduce the amount of fossil fuel we use?”  Also, ask whether there is any economically acceptable and proven method to store adequate power for when the wind is not blowing and the sun is not shining.

For pretty-much everyone associated with this industry — and certainly for me — it’s clear that there are indeed Tough Realities faced by those working to drive the migration to clean energy. Nobody who studies this with any level of depth could possibly see this as a walk in the park, where the key players in energy are saying to one another, “May the best man win.” This is a complex story of big money, back-room politics, secrecy, and betrayal. You don’t find multi-trillion dollar industries unfolding without a heavy dose of the worst of cheesey human misbehavior. Now add in the disruptive element, i.e., the fact that “new energy” is a direct threat to “old energy.” For every kiloWatt-hour of solar, we need one fewer kiloWatt-hour from oil and coal.

Hold on to your hats. Sorry to say it, but we haven’t even begun to see the tough realities hit those battling it out in the energy industry.

Here’s the first in a series of interview snipets that I conducted with Paul Scott, vice president and co-founder of Plug-In America. Here, we discuss the concept of “internalizing the externalities” associated with fossil fuels, i.e., requiring producers and consumers of oil, coal, etc. to pay the true and comprehensive costs associated with these ecologically harmful forms of energy.

Pundits in the US natural gas industry have revised supply estimates in last few years. In effect, some companies claim to be able to increase sustainable production over the long term.

Exxon is a big player in energy by any standards and the company’s halo effect is likely to bring about the positive change for the market participants including natural gas explorers, producers and transporters. The deal has overnight changed the sentiments for shale natural gas. In a recent deal, Carrizo Oil & Gas sold some of its stake in a Texas shale project to Sumitomo Corporation for US$15.7 million.
Onshore produced shale gas with lower transportation costs is likely to be used in electricity generating plants (replacing coal), heating and cooling our homes and power automobiles. However, it would be wrong to conclude that natural gas is the sure shot remedy to all our energy issues. ExxonMobil has some synergies to justify a 25 percent premium on XTO Energy. Besides being an oil giant, ExxonMobil has a chemical business and thus can use the feedstock in any of its chemical facilities.

In the US, shale gas resources are very large and relatively evenly distributed over several states unlike oil. Some analysts claim that the shale gas could contribute up to half of the US total gas production by 2020. Such a scenario would be highly satisfying for US with reduced dependence on not just foreign oil, but also from greener sources which are highly dependent on specific countries for key components (Read rare earth metals in China and lithium supplies in Bolivia).

A recent run-up in the stock prices of shale gas companies warrants for a caution. Like other times, it appears that Wall Street has underestimated the real cost of shale gas, and overestimated how fast its production can be expanded. Some studies point towards the overestimation of shale gas supplies by some companies. Also, there are some concerns regarding the long term viability of shale gas extraction in a lucrative manner.

Empirical data tells us that the production in shale formations drops off rapidly after two to three years of high production. However, it will be too early to write off this option only on the basis of high price, that also when a lot of other energy sources are getting federal grants for relatively expensive technologies. The competitive landscape is expected to become clear in next two to five years after the production of shale gas starts on a mass scale. In due course of time, we’ll come to know if all this hype is real or just fizz.

Needless to say, renewables aren’t trouble-free. Two of the major renewable sources, wind and solar both cost more than gas or coal. Prices are coming down with advances in technology, but intermittent nature of the energy production from renewable sources adds another dimension to the problem and puts the total cost of generating one unit of energy way compared with the fossil fuels. Wind speed becomes optimum for operating turbines at the height of around 800 meters, but creating a tower that high isn’t feasible. Furthermore, current wind turbine installations require around ten times concrete and steel that is required for generating the same amount of nuclear power.

Similarly, solar energy isn’t always available and the solar energy to electricity conversion ratio is just around 25 percent in most efficient crystalline silicon technology. Thus, instead of just focusing on renewables, options including a blend of fossil fuels with renewable sources or less polluting fossil fuels are being considered.

And good-old fossils aren’t letting us down. Although considered most benign of the pack, natural gas only emits around half as much as coal. On a grid level, probably it makes more sense to promote natural gas instead of counting on renewable as instruments to knock coal. Natural gas turbines can accommodate round the clock electricity generation unlike renewable thus helping in bridging the supply and demand gaps.
Last year witnessed a rare confluence of triggers resulting in a year with one of the lowest economic activity since Second World War. Quite predictably (in the hindsight), manufacturers ran high inventory levels with significantly less demand. As it turned out, Solar panel prices nosedived and so did the prices of natural gas. Natural gas prices are still depressed with futures currently trading at around 60 percent below last year’s high in US.

However, looks like the sector is in for a makeover. Apparently, ExxonMobil is betting big on natural gas. The oil giant has made a US$31 billion bid to acquire US natural gas player XTO Energy in an all stock deal. In addition, the company will assume debts amounting to US$10 billion. XTO Energy is an unconventional natural gas play. XTO has rights to large reserves of natural gas in shale, coal bed methane and tightly compressed sands. Shale gas is natural gas contained in shales, a type of sedimentary rock with low porosities and permeability.
But the extraction of gas is both difficult and costly. The extraction process includes drilling of several thousand feet and horizontally drilling through the shale. The process also involves large quantities of water up to 2 -4 million gallon along with sand and chemicals to break open the rock and release the gas.

However, technological advancements such as formation fracturing and horizontal drilling have made it possible to extract gas in an economic manner. The market’s first brush with new technology came in 2004 when natural gas giant Range Resources drilled the first modern well in the Marcellus Shale, spread across Pennsylvania, Ohio and West Virginia.

More on this soon.

The US Supreme Court announced this morning that it has found major provisions of campaign finance reform to be unconstitutional, paving the way for corporate and union money to mute the voices of individual citizens like you and me.

Corporations, defined under law as “fictitious persons,” are given enormous power to achieve their only goal: making profit. Human beings on the other hand, i.e., voters, are given no special powers outside of life, liberty and the pursuit of happiness, and have a multitude of interests and duties. We’ve now granted corporations, on which the law has conferred these unnatural profit-making powers, the right to exert extreme pressure on the political process — at the expense of human voters.

ExxonMobil made $85 billion last year. I wonder if they’ll be able to use some of that money to influence legislation in a way that further tilts the playing field in the direction of fossil fuels. Hmmm. Let me think about that one….

Unemployed people looking for work with skills appropriate to (or who could be easily trained for) designing and building renewable energy systems: 3 million

Highschool and college graduates entering the workforce over the coming five years with these skills who will find it hard to find work given the current and foreseeable economic climate: 12 million

People working in fossil fuel industries, e.g., coal miners, who may be well advised to look for work elsewhere as the world moves — at whatever pace — to clean energy: 2 million

Total of above: 17 million

Now, let me offer this high-level summary of the subsidies bestowed onto Big Energy in the US. It is estimated that the US oil and gas industry receives anywhere from $1 billion to $35 billion a year in subsidies from taxpayers. What, you ask? Don’t we know that number with any greater degree of accuracy? No. The exact number is extremely hard to nail down — even for those who try to do it honestly and objectively — given the 10-or-so different programs (loans, deliberately lax legislation and enforcement, tax breaks at many different levels, etc.) that could be referred to as subsidies for fossil fuels. But it’s substantial by any account.

And in some cases it’s more egregious than others. For example, we taxpayers pay up to 90% of the cost of building nuclear power plants; the nuclear industry couldn’t stand on its own for a nano-second. And to me, the mega-billion dollar subsidy for corn ethanol is even more galling. As I’ve written abundantly elsewhere, corn ethanol will down in history as one of the biggest rip-offs ever perpetrated on the American public.

So here’s a simple suggestion: if we’re going to subsidize something, why can’t it be something that contributes to the public good? Why does it have to cause cancer, jeopardize national security, promote terrorism, stimulate global warming, or cause a dangerous waste situation that will last hundreds of thousands of years?

Why not consider this: PULL the subsidies for oil, coal, corn ethanol and nuclear. Create a level playing field, and see how long fossil fuel businesses last in a fair, competitive environment (about 10 minutes).

Or, if you want to do something progressive, direct that money to renewable energy. Where do you think we’d be right now in the maturation of — you pick it — solar thermal, hydrokinetics, wind, etc. – if we had had the wisdom and the courage to send that money into research and development of those technologies, as opposed to merely making Big Energy even Bigger?

Let’s make a change here. Per the numbers above, there are 17 million people who will thank us immediately — not to mention the billions of other people on earth today — and those of future generations — who will be beneficiaries as well.

CO2 is a problem and a huge one, but it doesn’t compare with chemical pollution. From 1973 to 1999 childhood cancers increased 26 percent. Acute childhood lymphcytic cancer is up 61 percent, brain cancer up 50 percent and bone cancer is up 39 percent. this does not include the problems caused by the chemicals leaching into food and water from containers causing dramatically reduced numbers of male babies along with reproductive issues.

Chip: Thanks very much for this. I’m reminded of some of my previous posts on the externalities associated with fossil fuels and how to quantify them. Ironically, it’s far easier to find numbers for the things that carry nowhere near the level of tragic impact as the things you’re talking about here. For example, we add up the cost of treating a case of lung cancer, but ignore the suffering of the victim and his family.

I believe that in 50 years the energy companies will be subjected to the aggression that the tobacco industry is receiving today in terms of class-action lawsuits and broad societal condemnation. We see it starting already, with pieces like 60 Minutes treatment of coal ash a couple of months ago.  (This was the quintissential 60 Minutes hatchet job — but it’s a good sample of the scorn that’s coming down the pike — both fair and unfair.)

I point out to Chevron and its shareholders that the average wrongful death award in the US is in measured in seven figures; that adds up fast, people.

People talk about the high cost of PV, wind, geothermal, etc. But that’s only because most of the true cost of coal and oil is passed along to the family of some anonymous eight-year old kid slowly dying in a hospital bed. Given any even remotely fair-minded treatment of renewables, clean energy is the bargain of the century.

Thanks again for writing.

The most obvious candidates for inclusion in this list of costs are healthcare, global climate change, and ocean acidification.   While no one suggests that quantifying the cost of the damage in any of these categories is easy, I call readers’ attention to this recent article in the New York Times that opens a discussion on the subject, quoting a report from the National Academy of Sciences. The article concentrates on the healthcare issues, and points to a cost of about $120 billion a year in US alone (less than 5% of the world’s population), due largely to the thousands of premature deaths caused by air pollution.

Of course, these figures don’t put a price on the enormity of the human misery associated with these premature deaths — most of which are cancer.  It’s ironic that we’re talking about the cost of treating people who are slowly succumbing to agonizing deaths, while not even mentioning the suffering of the patients — and that of their loved ones. 

To be fair, these costs are even harder to quantify. In a way, one could argue that these are all cases of “wrongful death,” insofar as we actually have the technology at hand to make the move to renewables, but we find it politically infeasible to stop mining coal and pumping oil.  It certain makes one wonder if the energy industry will be facing the same type of class-action lawsuits (not to mention public loathing) that has greeted the tobacco industry over the last half century. 

In any case, articles like this New York Times piece indicate that we’re starting to ask ourselves the right questions.  And as always, that’s a prerequisite to finding the right answers.