NewEnergyNews: NEW ENERGY AND RECESSION, OPPOSING FORCES

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge: To make every day Earth Day.

YESTERDAY

  • THE STUDY: WHERE U.S. OFFSHORE WIND WILL CONNECT
  • QUICK NEWS, Oct. 21: SOLARCITY TO CROWDFUND WITH $1,000 BONDS; NEW JERSEY LOOKS AT OCEAN WIND; SMART LED LIGHTING MRKT TO DOUBLE
  • THE DAY BEFORE

  • THE STUDY: NEW OPPORTUNITIES IN TRANSMISSION
  • QUICK NEWS, Oct. 20: ELEVEN GOOD THINGS ABOUT SOLAR ENERGY; YAHOO BUYS WIND; SMART THERMOSTATS’ BILLION DOLLAR FUTURE
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    THE DAY BEFORE THE DAY BEFORE

  • Weekend Video: The Ocean Speaks Out
  • Weekend Video: Adapting To The Inevitable
  • Weekend Video: The Joy Of Driving EVs Powered By The Sun
  • THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-HOTTEST SEPTEMBER EVER; WORLD’S HOTTEST MONTHS STREAK AT SIX
  • FRIDAY WORLD HEADLINE-EU WIND BEATS FOSSIL, NUKE ENERGY PRICES
  • FRIDAY WORLD HEADLINE-DESERTEC SUCCUMBS TO MIDEAST TURMOIL
  • FRIDAY WORLD HEADLINE-JAPAN UPS PUSH FOR GEOTHERMAL
  • AND THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, Oct. 16:

  • TTTA Thursday-THE MILITARY FALLS FOR THE HOAX
  • TTTA Thursday-FORTUNE 100 BUSINESSES BOOST SUN
  • TTTA Thursday-IOWA UTILITY BUYS WIND TO CUT COSTS
  • TTTA Thursday-GETTING ENERGY EFFICIENCY FROM THE CLOUD
  • THE LAST DAY UP HERE

  • THE STUDY: NEW ENERGY BECOMES PRICE COMPETITIVE
  • QUICK NEWS, Oct. 15: NEW NUMBERS SHOW BIG OCEAN WIND POWER; SOLAR TURNS IN A NEW DIRECTION; FUEL CELL MARKETS TO VARY, GROW
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • Tuesday, March 31, 2009

    NEW ENERGY AND RECESSION, OPPOSING FORCES

    Cost Works Against Alternative and Renewable Energy Sources in Time of Recession
    Matthew L. Wald, March 28, 2009 (NY Times)

    SUMMARY
    Economic circumstances may significantly impact Congressional willingness to act (spend) on New Energy and climate change.

    Some authorities believe spending to build New Energy and spending to cut greenhouse gas emissions (GhGs) will drive electricity prices up, not a favored political strategy during a long, deep recession.

    The Obama administration, however, is committed to climate change action. It’s EPA has begun to move on cutting GhGs. (See EPA TO MAKE BIG MOVE ON EMISSIONS IN MID-APRIL )

    Democrats in Congress remain committed to legislation that institutes a U.S. cap&trade system and legislation creating a national Renewable Electricity Standard (RES) requiring utilities to obtain 10% of their power from New Energy sources by 2012 and 25% by 2025.

    The assumptions working against New Energy are that (1) making GhGs more expensive will make the cost of burning coal higher and, at least in the short term, lead to higher electricity prices; and (2) even if climate change legislation makes coal more costly and leads to price parity among energy sources, New Energy will still be expensive and therefore the RES will play in role in higher electricity prices.

    The fallacy in these assumptions is the implicit assumption that coal-generated electricity is cheap when in fact it is already costing ratepayers severely in human health and environmental degradation. Calculating such costs is problematic because coal companies, feeling growing pressure, conceal much.

    One set of comparative costs puts the electricity generation per-kilowatt-hour costs at 7.8 cents for modern coal, 10.6 cents for natural gas and 10.8 cents for contemporary nuclear power. Wind is 9.9 cents per-kilowatt-hour. If the calculation for wind includes extra natural gas generation to compensate for wind’s intermittency – a rather bizarre way to do the calculation – wind’s cost could be put at 12 cents.

    The Electric Power Research Institute (EPRI), a utility-sponsored nonprofit, predicted in November 2008 that by 2015 wind would cost nearly 1/3 more than coal and ~14% more than natural gas. EPRI said solar power plant costs would be 3 times coal and 2 times natural gas.

    These estimates may be more accurate. (click to enlarge)

    COMMENTARY
    The price of fossil fuels and nuclear power is much higher than the retail price ratepayers see on their bills but that cost is folded into their health insurance, property insurance and taxes. It is really impossible to have a complete discussion about comparative prices without taking those "external" costs into consideration. Nevertheless, the article suggests some parameters. It is not especially accurate.

    The piece suggests power price estimates vary in favor of whatever energy source is preferred. The truth is, there are a wide variety of factors that figure into the per-kilowatt-hour price of power generation. These figures (7.8 cents for coal, 10.6 cents for natural gas, 10.8 cents for nuclear, 9.9 cents or 12 cents for wind) are not unreasonable but are also not in any way fair or final, though the article suggests they are.

    One of the biggest mistakes made in comparing prices is to take the cost of EXISTING coal and nuclear plants against the cost of building NEW wind, solar and geothermal. While the numbers put forward may have validity, it is an incontrovertible fact that the marketplace has, for the last 2 years, chosen NEW wind and natural gas over NEW coal and nuclear.

    click to enlarge

    It is particularly odd to add the cost of building new natural gas plants to the cost of building new wind. It sounds sort of logical the way it is presented: Intermittency requires extra generation. But why not more wind? Studies show wind spread over a wide enough region and connected by adequate transmission can eliminate problems of intermittency. And why not add the cost of the back up built for nuclear plants (for when safety-oriented incidents trip them offline)? And the cost of building back up for coal (for when ranmping causes delays in bringing them up to grid demand)?

    Another set of price estimates belying the Times' figures. (click to enlarge)

    Speaking of intermittency, how about the intermittent dependability of natural gas prices? Last summer they were through the ceiling. Now they are affordable. How long will that last? Wind, by comparison, is solid is a rock.

    Also, it is worthwhile to consider which way the proffered prices are going. While wind, solar and geothermal are just barely beginning to achieve the economies of scale that will drive costs down, coal and natural gas will soon be forced to incorporate the price of GhG emissions or the price of emissions-capture (if it ever becomes workable) into their costs, a stipend that will continue to rise. Nuclear at present offers no solution for the disposal of radioactive waste, an expensive proposition that apparently will take at least as long to deal with as the threats of weapons proliferation and security.

    Finally, New Energies generally require modest, if any, water resources for operation, while fossil fuels plants and nuclear plants put a tremendous strain on ever more precious and therefore expensive water supplies.

    Bottom line: On those EPRI costs for 2015, how will the prices compare in 2020? 2025? Because most nuclear plants begun now won’t come on line until nearly 2020. And most coal plants begun now won’t come on line until there is a way to capture and store GhGs safely at commercial scale, something that may not happen before 2030.

    The longer an investment takes to pay off, the more expensive the capital is. (click to enlarge)

    QUOTES
    - Barry Moline, executive director, Florida Municipal Electric Association: “Consumers right now are extremely price-sensitive…”

    click to enlarge

    - Jonathan Mir, co-head of North American utilities, Lazard investment bank: “There are great benefits to the use of alternative energy…If it is deployed in an uneconomic way…it is quite regressive in nature.”

    3 Comments:

    At 8:15 AM, Anonymous Vancouver Real Estate Agent said...

    Nice article. I've read an article somewhere (unfortunately don't remember where) that talked about the geothermal energy. Apparently the world is capable of producing enormous amounts of energy from the geothermal spots all over the globe and the whole human race could produce 100 times more energy than it really uses if harvesting some of the geothermal energy. I don't understand why it doesn't get more attention, everyone talks about the wind and solar power but those are always reliable on wind/sun. I think Geothermal energy is the way to go here, it's not ridiculously expansive, it's present almost anywhere we look and could provide electricity 24/7.

    Take care, Jay

     
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