Nothing lasts forever, or in some cases, even a couple years. The race to displace current products and services of any stripe is rather obvious, except there will never be a replacement for the McDonald’s hamburger, and running shoes haven’t improved in 20 years. In recent weeks, I have seen perhaps a half dozen articles regarding growing threat to electric utilities. In the most recent article I’ve seen on the subject from The Wall Street Journal, Nick Akins, Chief Executive with AEP, sums it up cleverly and succinctly: “Am I going to just sit here and take it and ultimately be a caretaker of a museum, or am I going to be part of that business?”
The Wall Street Journal article describes the threat to electric utilities as numerous forms of distributed generation, or DG. Large and small companies, and even residential end users, are installing their own power generating equipment in many forms: photovoltaic, combined heat and power, and biogas power generation. Kroger, the giant supermarket chain sends their expired food to gasification plants to generate their own power. That is pretty radical. Food is distributed to supermarkets and on the trip back to the distribution center, fuel, in the form of dated donuts and unused fried chicken, powers their refrigerated warehouse.
Other articles published in Fierce Energy, authored by guys from E Source, and in Business Week, by NRG Energy Executive David Crane, explain the situation for utilities a little further. Utilities have their fixed cost in the form of rate base, discussed in Utilities - A Formula for Contraction. Rate base is the capital on which utilities are allowed a rate of return. This fixed cost is blended in the utility bills of hundreds of thousands of customers, enormous and tiny.
Once DG begins to erode sales, regulated utilities still have all the hardware for which they need to be paid, and so the reaction is, beg the regulators to raise rates to cover their costs. Result: tilts the financials to be even more in favor of DG. Result: more DG. As Mr. Crane calls it, a death spiral.
Not So Fast
There are distinct challenges and issues that must be addressed for any type of DG. First, consider renewable energy – photovoltaic (PV) and wind power. The sun doesn’t always shine, and the wind is erratic and unreliable. I don’t believe Walmart, with 65 MW of PV installed, will shutter its doors when the sun goes down. However, PV would have major implications since it tends to produce peak power when it is needed most, and thereby flattening the load shape for utilities during a significant portion of the day. On the third hand, as the sun sets at 7:00PM on warm September evenings, people are shopping like crazy, swilling beers, cooking, and washing clothes, while the television is blaring away and kids are running around the house with all the lights on. The impacts on peak grid demand may not be that significant, but it may shift an hour or two later in the day. Thus, there is a significant need for standby power.
Another issue with renewable energy is the massive cash incentives and tax favors that shower down on owners of this stuff; not to mention they pay nothing for standby power at this point. In a recent AESP newsletter, John Hargrove from NVEnergy (also Chairman of the AESP board), indicated a photovoltaic system to take care of his electric loads cost $28,000 and after a list of incentives, the remaining cost: $12,500. Well jeez man, if you gave me a 55% discount on a Toyota Prius I might buy one of those too.
Natural gas prices are making DG, and in particular combined heat and power, much more cost effective. But even so, I recently spoke with a major engineering firm that does a lot of DG design, and here in the upper Midwest, they indicated that it would be very difficult to install a natural-gas fired CHP plant with a simple payback under five years.
What may happen is the centralized utility business will convert to more of a standby power provider. Right now, early DG adopters have it easy peezy lemon squeezy. Except for major DG applications, customers pay little or nothing for these standby power supplier charges. Once millions of rickety DG plants are up and running, standby power will become much more expensive, and I would guess customers can either live like the Amish and pay nothing for standby charges because they don’t use it (won’t happen), or charges become very expensive eroding DG cost effectiveness, particularly when the massive subsidies go away.
Speaking of lemons, the opportunity for utilities is to get in the game and provide DG for customers, as Nick Akins implies. I would say utilities can ignore the threat and stick to their business model at the risk of becoming the next Blackberry – THE dominant smartphone player at one point that refused to acknowledge the changing landscape and is now on the brink of collapse.
Don’t shoot the messenger(s).
 Standby power is essentially backup power provided by the utility when DG is not available for any reason.
 A client wanted me to work this phrase into a post, so there you are. Customer service!
This will blow your mind. How many large power plants (500 MW) does it take to cook the thanksgiving turkey across the nation – just the ones cooked with electricity? Answer is provided below. Guess. Don’t be a loser. Guess.
I’ve seen perhaps 100 ads for dust collecting contraptions that everyone including the buyers know will end up under the bed, in the closet, or basement, and finally onto the garage sale to somebody else who will decycle it. These include the things like the Ab Buster 5000 (just made it up), junk you sit on, junk you rock on, junk you push/pull, slip/slide, squeeze or shake. They get body builders that spend 5 hours a day in the gym pumping real iron, doing real body building, to demonstrate the use of this crap with a voiceover of something like, “You will notice results in 5 days with just 15 minutes a day”, which is technically true. In 5 days the sedentary person’s gut, arms, or legs will be burning of lactic acid. The reality of course is, the schmo that buys this stuff is thinking they may look like the dudes and babes on TV if they buy the dust collector. I suppose that every once in a blue moon the stuff is actually used.
I’m more in favor of Rocky Balboa type training – simple stuff, like pulling a log through waste deep snow in Siberia. I run and the only weather or conditions not fit for running are those that might kill me or give me permanent brain damage. That would be limited to excessive heat. Everything else varies from great (minus -30F or 35F wind and rain in the dark or above 85F) to perfect (everything between 0F and 85F). There’s very rarely a legitimate excuse for not running. Real influenza, 103F body temperature, and barely being able to sit up in bed qualifies. I was there four years ago. There are practically no equipment requirements. Most requirements are provided by the state: that is roads, sidewalks, and when necessary bike trails (BORING). The roads are always open.
You really only need one pair but a couple of these are for ice and snow and the rest have varying degrees of mileage so I can bleed a thousand miles per pair by rotating new, old, new, old.
Compare this to the gym. And speaking of BORING, OMG, I was in Scottsdale at the Hotel Valley Ho a couple weeks ago; a fantastic 1950s retro hotel with a beautiful pool, patio area with immaculate greenery. As I was on my way out the door at O’Darkthirty to run, I noticed a row of treadmills on the second floor indoors overlooking the outdoor pool area. They were in use at least, but I was thinking what is wrong with those people? Why would you run in place staring at CNN with an iPod ruining your eardrums next to a stinky guy, in stale, stagnant air? I’d rather run laps in a Wal-Mart parking lot – or the Hotel parking lot, Interstate 5 in Southern California, or the tarmac at JFK in the rain. In this particular case, it was just above 50F and perfect outside, plenty of sidewalks and not much traffic.
Maybe people need an excuse (gym) to “work out”. I don’t get this. Treadmills are stupid (see above). Free weights cost not much compared to a few months of gym membership. Stationary biking can be had for a decent $100 doohickey attachment and a $50 tire for the bike you already have (no one does stationary biking unless they bike for real). There is nothing more brain damaging than riding a stationary bike. If you want to live forever, ride a stationary bike because an hour seems like 8 hours, like reverse dog years. Note THIS stuff is not dust collection material. Only obsessive hard core people use this stuff – triathletes, for example use it in Wisconsin winters. Nobody on TV sells stuff that actually works and gets used. No BS here.
In “Oh Behave” and “Biscuit Discipline” I attempted to make a point that information to save energy or to be healthy alone is not enough. Energy efficiency requires somebody, preferably multiple bodies if not all bodies being involved with constant favorable behavior to sustain savings over time. Both EE and fitness require persistence and activity over time. Grapefruit diets? Not so much.
Long term health and EE have this in common. Neither include simply buying your way to success. Ready?
Switching gears just a little, last week I came across this pyramid for energy efficiency in homes, which I thought was pretty cool. (Although as I type that, I’m thinking, wait a minute, the USDA food pyramids were complete flops, unless one rationalizes it was successful with the “created or saved” sort of government metric.) It seems its creator has prioritized things very well for a residence. It has renewable energy with the highest complexity and investment and I would add poor return on investment.
This spurred me to generate one of these for commercial buildings. The pyramid base – the best stuff – the raw vegetables, fiber, and omega 3 of energy efficiency is retrocommissioning, operations, maintenance, and discipline to stay with it. At the top: seven layer chocolate cake with chocolate drizzle and whipped cream – renewable energy. By the way, it takes just over 100 large power plants to cook the TG bird I mentioned above!
Payback ranges and percent of total facility savings potential are guessed for each category of measure. They are all wrong, so let’s just get that out of the way now. Misguided applications of practically any technology can have 200 year simple paybacks. Results can be all over the place and depend on many things possibly the greatest of which is, what is there now and how it is being used prior to implementation. The years noted of course represent a range of typical simple paybacks for the technology. The percentages represent the portion of TOTAL facility energy consumption the technology can achieve. Note for renewables I have a high of 100%, representing most likely a wind turbine. This can be done as Spirit Lake Schools (Iowa) had done many years ago. They were generating wind energy long before wind turbines sprouted like chia heads in the surrounding areas.
The chart is for commercial facilities only; NOT industrial and manufacturing facilities.
*Building envelope measures can have fast paybacks if the existing condition is terrible. For example, no roof or attic insulation – and in the case of flat roofs, the roof is pealed off anyway for replacement.
Some folks are proposing a switch to using lumens as the metric for selecting light bulbs for purchase at your favorite home improvement store. This would be in lieu of incandescent wattages or equivalents thereof. Uh huh. Around 1980 the US was going to be the last country on the globe to convert to metric units. You know – base 10 everything with common sense conversions like a milliliter equals a cubic centimeter. Fuggedaboutit! Not gonna happen. Funny thing is, by mid-engineering-school career, every engineer clamors to use metric only. Six months out of school they are polluted by old timers who like incomprehensible units like mass in units of grains – and so the insanity lingers perpetually.
Have you had your fill of Occupy Wall Street, (OWS) which has spilled over into dinky, surrounding, wannabe towns including one nearby with a population of a whopping 4,000? Apparently, these in-duh-viduals are protesting rich people and the fact that the rich keep getting richer and the poor, well, are the poor. My response: that’s life. Life isn’t fair. I don’t like the word “fair”. Rather, I like “not cheating”. “Fair” is too often used by whiners. Some of these OWSers are self described anarchists and communists. Oh yeah, there you go. That’s what we need is communism. There’s a model of equal outcomes. How is that Venezuela model working?
I have not a covetous cell in my body. Steve Jobs, or at least his widow, is a multi-gazillionaire having lead his company from the brink of collapse in the 1990s to the world’s most highly valued company, ahead of Wal-Mart, Exxon Mobil, and Microsoft. Speaking of Microsoft, as Steve Jobs once said, Bill Gates has never developed any innovative products in his life, but yet he is a billionaire because he was good at steeling ideas within the law, I guess, and developing a monopoly. Good for him!
The real problem and reason the OWS whiners are misguided is crony capitalism. The DOE and administrations dish out billions of dollars to crony campaign donors who in turn send a big chunk back for reelection campaigns, before or after their ill-conceived company fails and the executives walk away with millions. Or it’s egg before the chicken. The cronies donate a bunch of money and get their investment in government back 10 fold once their guy gets into power.
Let’s see… in the underground economy, there is a name for this: money laundering. So all OWSers should be marching on and petitioning Washington, the root of their grievances. You have to understand the problem to solve it. This is clearly a bipartisan activity and nothing new. However, I would say the recent fanning of the flames, pitting citizens against one another is a bit unprecedented and shameless. Watch the hand! You guys get in a food fight while we (Washington) continue to rip you off.
While I have not a covetous cell in my body, I have billions and billions of cells of rage against crony capitalism, money laundering, cheating, dishonesty, malfeasance, and vast wastes of money and resources.
As mentioned before, Washington should, like utilities have done in recent years, get back to their core business of protecting and defending its citizens against enemies, foreign and domestic. This is the only thing they do remarkably well, although I’m sure there are gobs of waste, but how many plots have been busted and bad guys destroyed in the past decade or so?
Washington is a horrible venture capitalist because (1) they make decisions based on politics and not favorable or acceptable risk/reward, which follows with (2) they are using other peoples’ money so they obviously do not care. It seems there are failed green energy, green jobs companies and/or scandals in the paper each day. Or take my favorite, ethanol. Many are concerned about our ability to feed ourselves as the planet takes on its 7 billionth human, this month or thereabouts. Meanwhile, over 4 billion bushels of high energy corn go to make a tiny dent in our fuel needs and negligible impact on our petroleum imports. That’s roughly 30 pounds of corn for every human on the planet, or maybe 50,000 calories – enough to keep an offensive (as in the team with the ball) lineman going for a couple hours. No. Really it’s enough human fuel for 20-30 days for a mortal human being.
Similar to OWSers, there are end users of energy that whine about high energy costs and hate their utility as a result. Isn’t it ironic that nobody seems to care about energy costs, as in the total cost of running a business, except when prices rise? And end users should consider what is driving prices upward: I would guess the vast majority of price increases is due to emission regulation and construction of wind farms. These things are legislated at state and federal levels. I, unlike the prima donnas (think JFK junior, hypocrite in chief) living in population centers and telling everyone else how to live, do not mind the sight of these behemoths on the landscape.
On a side note, other hypocrites for renewable energy and lower energy cost protest construction of transmission lines from where the wind blows to where people live and wind doesn’t blow. In addition to transporting renewable energy to population centers, it adds reliability and more supply options to the grid. More options mean lower prices. The solution is simple if you ask me. See I-90 in southern Minnesota. Just run the transmission lines down the damn ugly interstate highways where there is already immanent domain and land! It’s flat. It’s open. What? Would it mess up the beauty of billboards for Wisconsin Dells, gentlemen’s clubs, and truck stops? This is a no brainer. What for the love of Pete is all the hassle about? And there aren’t even any dairy cattle near the interstate to pick up the electromagnetic waves causing birth defects like four headed two legged calves.
Whining end users share a loser trait with the OWSers – they would be far better off taking control of their own well being rather than itching and moaning about something they have little control over. And by the way, the control they do have is mainly with their corrupt finaglers in Washington. Very few are accountable. These people represent the very few competitive congressional districts, states, or the entire country, while most are not accountable. The unaccountable include political appointees like Lisa Jackson running the EPA, or Bonnie Fwank and Charlie Rangel, each of whom would have to be caught live on national TV steeling an armored car and maybe running over a few pedestrians to not get reelected. I don’t think felons can be elected from their jail cell but who knows. Felons, dead people, pets and alternate personalities can and do all vote.
For-profit end users that howl about their energy costs are very likely to have more energy cost reduction opportunity than those who don’t. This is Jeff Ihnen’s untested hypothesis. Why? Because the howlers don’t like, and in some cases, detest their energy provider and do not trust them. Detestment (a new word) does not foster cooperation, which is extremely helpful, bordering on essential to control energy consumption and cost.
I have also yet to come across a for-profit, with a strong efficiency track record at the corporate level, howl about their evil energy providers. Well known EE champions with track records that fit this profile include 3M, Pepsico, General Mills, and Simplot.
The message to end users of all shapes and sizes is first control what you can best control – yourself and your organization, and second, pay attention to what’s going on in state and federal governments – each of which are big drivers of energy supply, regulation, and generation sources – the primary drivers of energy price.
I thought this was a great headline for an opinion piece in Saturday’s Wall Street Journal, by Holman Jenkins: “Hooray, A Financial Firm Fails”, describing of John Corzine’s MF Global collapse. What’s even more impressive is that Corzine, formerly of Goldman Sachs, formerly U.S. Senator, formerly New Jersey Governor, is in the admiral’s club of crony capitalists. Failure is progress. Eat your heart out.
I had a really bad week last week – nothing significant occurred to me in the world of EE, and nothing really enraged me or even made me snicker, although I could always rant about federal spending on EE and renewable energy. Actually, if you are so inclined, Kim Strassel from The Wall Street Journal takes it to Rick Perry and Mitt Romney, if you are interested. Who would name their kid “Mitt”? What kind of a name is that? Is that short for Mitchell? Mitt for short, with two ts? Or is it short for Mitten? Why are there baseball “gloves” and a catcher’s “mitt”? Because gloves have fingers and mitts, short for mittens, have none. Wow. I think I figured something out today, although Romney is still confusing as hell in more than one way.
In the end, I did come stumble onto this article regarding SAIC’s programs for Ameren Illinois. Specifically, I was looking at the photo, thinking, this isn’t where the savings are! The vegetables are pretty and attractive, although beware of listeria and e-coli. Who’s your farmer?
But the EE-buying public doesn’t know the bok choi and asparagus are harmless passive loads for the refrigeration system. The engineering nerd wants to see the guys standing in a room full of hunks of iron on steel racks with pipes and conduits perfectly aligned in harmonious symmetry and parallelism.
BTW, engineers cannot handle any abnormalities, curves, interesting angles, or asymmetry – in a word: art. If you want to get an engineer to sing like a canary, put them on a stool in an empty room lined with Picassos, Kandinskys, and Miros. This would be harsh psychological torture. Why are so many engineers obsessed with woodworking? In another word: square. I’m easy. If I were chemically influenced enough to create, say an entertainment center, I would purposely skip the squares, rulers, pencils and all that crap. Does the end result look like crap? No. It’s art.
Come to think of it, this could be why it is difficult for new graduates to transition into energy efficiency. We don’t solve problems like, “How much work does it take to empty a 16 gallon keg of beer with a hand pump?” (Wisconsin is the only state in the union that refers to this thing as a “half barrel”) That keg question was on my final exam for my first semester thermodynamics course, and that is no joke.
We never have complete information to analyze an energy project, even when we can get everything we can think of. One has to learn what matters and what doesn’t really matter. We are not solving problems like a 1000 Btu of heat is added to a cylinder with water blah blah, this, that, and the other. How far does the piston move?
Unlike design, and possibly any other profession engineers delve into, when calculating energy use/savings, we want it to be as accurate as possible with no safety factor. Most building design, especially new construction, is performed using cookbook methods and then multiplying by 4 because this building will be warm and it will be cool – dammit! Well, this may be fine but it costs the owner, in many cases, a fortune because stuff is grossly oversized to begin with and oversize isn’t like a quad artery bypass burger from Carl’s Junior. Come to think of it, it probably is. You pay more now and you will really pay the rest of its life.
Not all oversizing is created equal. Belt and suspenders design is especially costly as entire systems are virtually redundant with EXTRA equipment. For example, you DO NOT want belt and suspenders for an earthen heat exchanger for a heat pump system. That is costly. Installing an air conditioner or boiler that is 50% larger than it should be isn’t ideal but at least in most cases it isn’t going to proportionally increase the cost, like a couple dozen extra bores for heat pump well field would.
How do people think about EE for decision making and what did the designer have in mind when he designed this behemoth? These are the things that interest me most about EE and they are encapsulated in program evaluation and retrocommissioning. In program evaluation, we are asking, what good is this program anyway? That is a big question to be answered with responses and answers to a thousand other questions. Most of our work for evaluation includes determining gross savings – actual savings. Attributes of a good evaluator include those of a good referee, judge, investigator, interrogator, psychiatrist, dog trainer, social scientist, mathematician, philosopher, priest and engineer. To the square engineer, this seems boring, stupid, and frivolous. To the artful or person who can’t stand wasted money, unrealized or fake savings, it is great stuff.
In retrocommissioning, it helps enormously to figure out the profile of the designer or firm that designed the systems. Descriptions include:
- This must have been the first of this type of system these guys designed. It is designed with backup for everything, which for a nuclear power plant is good, but not for your building.
- These guys paint by numbers. There is no thought or creativity whatsoever. E.g., they put an equipment room on a central air handling system, which will waste energy like crazy.
- I have no idea what the hell this guy was thinking. This is the most bizarre thing I have ever seen.
- These guys actually did a pretty good job.
With retrocommissioning, like evaluation, one has to work with incomplete information and sometimes it requires psychoanalyst skills as well. Being a genius and having tons of experience to recognize the fingerprints of an energy hog are both highly valued, but one also needs the social skills required to act like a schmo or a fan of whatever football, baseball, hockey team, sport, politician or car the customer wants to yap about. Don’t worry about golf. If the guy wants to talk golf, it’s the wrong guy.
Japan, with its devastated tourism industry since the tsunami and Fukushima meltdown, may offer 10,000 free flights to revive tourism. Fukushima is keeping people away? It would be an attraction to me – like seeing a volcano spouting lava.
In the OMG department this week, Bernie Sanders, self-described socialist senator from Vermont, espouses on-bill financing of energy efficiency projects consistent with a key part of my plan a couple weeks ago. This could be described as a broken clock being right twice a day but Sanders has a digital clock. A better allegory would be, even the Minnesota Vikings franchise will win the Super Bowl at some point if the league survives a long time, maybe 10,000 years would do it?
Lastly, in the home improvement department, last week I took on a chore for which I am capable – running a drill and grinding paint and rust down to bare metal. Pictured nearby is the front door to our house. It was manufactured by Pella Windows and is probably 12 years old. It was rusting as shown around the fru fra plastic frame, which is removed as shown in the picture. Upon removing the fru fra, it was obvious why this was happening. Look at the gaping cavity with no insulation. Jeez man, I think they could use some better engineering, or possibly the assembly line guy was in the restroom when this one passed his station. For extra credit, why did this happen and why did it rust where it did?
The barrier to having a decent energy policy is very similar to the barriers of solving illegal immigration. Both the left and the right have their own vested interests in not fixing the problem. I see the political spectrum as a circle, not a line from far left to far right. It is a circle because when views get so extreme, they are supported by both the far left (e.g. Dennis Kucinich) and far right (e.g. Ron Paul). Personally, I respect both of these guys and I have no doubt they are sincere in their beliefs and want the best for the country. An example on which they agree is pulling out of Afghanistan, yesterday. Very few on the right agree and few on the left, including the President, agree.
The same dynamic is at work blocking decent energy policy. The left wants to stop the use of any fuel with a “C” in the molecular makeup but they also object to all realistic alternatives, including nukes and hydro. The right opposes any sort of standards whatsoever on the demand side – mileage standards, CFLs for a couple examples. The good folks in western Minnesota and Iowa are fine with building massive wind farms but neither left nor right want a transmission line from the La Crosse area to Madison to improve reliability by having more access to generation AND getting the renewable energy to where it can be used.
The Afghanistan equivalent in EE: smart meters. The far left doesn’t want them because they cause cancer. But then again, this is coming from California where organic vegan mother’s breast milk causes cancer. Everything causes cancer in CA. On the far right are the Glen Becks who think the government is going to spy to find out when you leave for work and commandoes will swoop in and secretly log the contents of your underwear drawer for blackmail material.
Last week I attended the Association of Energy Service Professionals (AESP) conference in Dallas that featured an overarching theme of consumer behavior and smart grid. First off, what is smart grid? If I polled 1,000 people I’d get 997 different answers. It is entirely nebulous. The other three wouldn’t have any idea.
I took a pre-conference class on evaluating programs that include elements of smart grid and behavior and my definition of a smart grid is two way communication with customers via the electric meter. That is the bare bones definition I think – but there is also grid design for reliability, so like if the Christmas, er I mean holiday light burns out they don’t all go out. But I know little about the grid reliability stuff.
As I was sitting there in the class, I developed my own framework for the energy future.
WHEREAS, consumers want reliable power at negligible cost.
WHEREAS, the hard left abhors any form of reasonable energy supply.
WHEREAS, the hard right abhors any form of restraint on consumption.
NOW, THEREFORE, A SOLUTION is offered by Jeff Ihnen that delivers the framework for the genius grid that everyone must agree with.
Electricity prices can skyrocket during peak periods as shown in the chart in this article, which is actual quasi-deregulated Texas pricing. Prices rise sharply the minute supply starts eating into the required spinning reserves, but it is capped at $3 per kWh right now – thus quasi deregulated in my book. They are talking about raising that to maybe $6 per kWh.
Genius grid solutions should be developed on both demand and supply for power. On the demand side, the genius grid would include a home area network with amperage meters and relays (cutout switches) on major appliances – central air conditioning, clothes dryer, maybe refrigerators and freezers, and water heaters. Over a year’s time the genius grid logs and builds a model for energy consumption based on time of day, weather conditions and day of the week for each meter. Now the utility has something to work with because they know exactly how much power the AC unit is pulling on Tuesday afternoon at 2:00 PM just before July 4 when it’s 96 degrees outside.
The genius grid, rather than giving price signals to consumers, e.g., it is going to cost you $26,000 to keep your house at 68 degrees the rest of the day, it would instead BUY your agreement to shut down your AC. This would come on your i-Phone/Android/Blackberry. “Shut down your AC for $20 this afternoon?” Accept? Decline? Hit accept and you get $20 credited to your bank account instantly. And so on. Homes become a source for increasing power available on the grid.
BTW, I see residential end users as the best applications for genius grid. Homes have many unneeded loads that can be shed during the day and loads that can easily be shifted to eight from six o’clock. I don’t mind my house at 80F but I couldn’t stand working with full garb in the office at 80F.
On the supply side, customers can put power on the grid for some of these high peak costs from renewable and other sources. Take photo-voltaic panels installed on houses. The panels are generating peak electricity while powering a number of things in the home and maybe selling the excess back to the grid at some ridiculously low price. (But I really don’t know how the current pricing works.) Why not have the utility send a buy message to your iPhone to shut down all major appliances for the afternoon and buy the 2kW from the PV for four hours at $3 per kWh? That’s $24 in the bank account for doing practically nothing. And you could do this while you are daydreaming in a sensitivity training session.
Readers of this blog know I’ve bashed all-electric vehicles numerous times because it is a plain stupendously idiotic idea. However – hybrids and plug-in hybrids even are great ideas. You drive to work and park your plug-in hybrid in the preferred spots next to the handicapped section and plug it into the charging station installed by General Electric with the assistance of obscene federal subsidies. Now the iPhone buzzes while you are nodding off in the sensitivity session and says, “Hey Bozo. We will buy from your car’s generator for $2 per kWh for three hours.” Let’s see… say 50 hp motor can generate 25 kW for three hours, that’s a $150! – enough for five fills of gasoline, or better yet, 20 fills of natural gas. It can start remotely. It can automatically shut down so you don’t go to leave work with a dead battery and empty tank.
Making money, I believe, is sexier and more attractive to consumers (versus saving) and everyone likes to mess with their phones 200 times a day. Just watch people when their hands aren’t on a computer keyboard. They are fiddling with their phones.
Everyone has a bad story or 20 about air travel but there are some things that are really bizarre to me. Have you ever seen passengers sit in an airplane after most everyone else has deplaned? I haven’t either. Yet it is a “privilege” to board first, as in first class. If I had my druthers, I’d like to sit in a recliner sipping a martini in the skyhigh club until the last second before entering the aluminum tube. The only reason I want to get in the tube as soon as I can is so I can fit my carry-on in the overhead compartment in cattle class – and get the hell out of the airport as fast as I can when it lands. If I were in first class, there’d be all kinds of space for my carry on, so what’s the rush?
Can first class customers not swill enough booze in three hours? Are they trying to get their money’s worth of “free stuff” in exchange for the $1,000 extra they paid? I almost forgot, first class customers get to board on the left aisle in the terminal past the ticket counter. They get a special blue rug to walk on – like the red carpet at the Oscars I guess. Oooooh. (I stepped on it once myself) A fellow passenger was snickering and throwing barbs at the blue carpet and staff as we boarded.
It seems my flights are served by smaller and smaller planes. On three hour rides I always had at least a six-across Airbus A-320 or a Boeing 757. Then it was crappy little MD-80s and DC-9s, and more recently four-across jets made by companies with names I forget or cannot pronounce. On these little planes, those in cattle class get to stumble over the first class passengers who had the privilege of sitting in the plane as long as possible. I don’t know about you, but I’d rather not have 80 people running over my toes, spilling my drink and watching what I’m doing, thinking, “What does that guy do? He must be the CEO’s nephew. He doesn’t look smart enough to manage a hotdog cart.” First class passengers never look at second class passengers (at all for that matter) and wonder, “What does that serf do for a living? That may have been the guy trying to wash my windshield when I was trapped by the red light. That one looks like a day-laborer. That one looks like a cab driver and that one probably washes dishes at a diner.”
As administrations and congresses come and go, one thing remains the same: “there is no clear energy policy”, and “we need to reduce our dependence on foreign oil”. Neither one is ever addressed.
First, what the heck is a clear energy policy anyway and are we sure we want one? When the government messes with any market, the result is always negative for consumers and in some cases bordering on catastrophe. The only exception I see is utilities, which lend themselves to monopolistic efficiency. You may need to lie down after that head-spinning oxymoron. But seriously, in order to have economies of scale, it makes sense to create giant, relatively efficient power plants where fuel can be hauled by the trainload of coal equivalent and power distributed inexpensively to end users. So the government regulates these monopolies I would say with success as energy costs are dirt cheap.
Most other government interventions I can think of result in disaster. Consider the current pathetically weak economy. First off, the reason for the deep, deep recession we fell into three years ago was fueled like monsoon rains fuel future wildfires in the deserts of AZ and CA – by the government. In the 1990s congress was pushing for home ownership for every American. Add to this Fannie Freddie Mae Mac, which socialized the risk (taxpayers) and privatized the benefit (home buyers). On top of this add politically motivated easy money by the federal reserve. The result was exactly as I say – a growing stock of fuel for a massive fire to crash and burn. Entities from the government, financial institutions, and individuals contributed to the massive bubble that popped with a horrific bang. We are in the third year of a housing hangover – imagine a three-day hangover from a bender you may have enjoyed in your wild and crazy youth.
WARNING: What you are about to read may cause severe brain damage. Position yourself to protect your head or don a helmet before reading.
From a resource preservation perspective, the “energy policy” we’ve had over the years has been good for energy conservation. Why? Because if there is one thing that motivates people more than anything, it’s money. Conservationists and greenies say our energy prices are artificially low because of government subsidy. I disagree, totally. 100%. If we REALLY wanted low energy prices, including electricity and petrol, we could have it by tomorrow afternoon, theoretically. We could collapse the oil prices immediately by passing bills and signing into law the domestic production of more oil in addition to importing from our friends, the Canadians. Last time increased domestic production was discussed the argument was that it wouldn’t have an impact for 10 years and then it would be minimal. Wrong! As I mentioned before, people are not rats. We prepare for, hedge and bet on future to reduce and take advantage of risk. Announcing future substantial domestic production increases would have an immediate effect. Conversely, the strategic oil reserve, if I remember correctly includes a month of US consumption and is not even worth talking about with regard to easing prices.
There are an estimated 3 trillion barrels of oil locked up in shale and a huge chunk of that is under mountain states of the United States. Incidentally, at today’s consumption rate, shale oil alone would last nearly 100 years (worldwide).
We could also go forward with the pipeline from the tar sands of Alberta, Canada. The tar sands hold an estimated 1.7 trillion barrels; enough to fuel the United States for over 200 years per my calculations. With roughly 300 years of oil supply along the Rocky Mountains of North America alone, I think I can skip the flood of offshore oil available in the Gulf and up and down the east and west coasts of the country. Peak oil? Sure. Sometime a few hundred years down the road. It depends on what you call reserves.
Similarly, we have glut of natural gas like we haven’t experienced in my lifetime due to: (1) hydraulic fracturing technology and (2) horizontal drilling technology. Without investigating exact numbers and areas, this vast trove runs from Ohio through Appalachia to New York with a bunch of states in between and around (as just one deposit). And we already know the U.S. is the “Saudi Arabia” of coal.
The North American Oil stocks discussed above are under federal government control. The oil shale in the west is mostly under U.S. government property. We could build the pipeline from the tar sands to refineries all over the country if Washington chose to do so.
I almost forgot. We are running low on oil from the North Slope of Alaska – that is, oil from the permitted area of the North Slope. Flows are becoming too low to maintain enough temperature for the oil to flow freely from Prudhoe Bay to Valdez. If more land isn’t opened for drilling, this fortune in assets, the pipeline, may need to be mothballed.
So we have an “energy policy”, consisting of greatly constrained domestic production in lieu of buying oil from the most volatile regions of the planet and in some cases, directly from dictators who will and do mow down their own people if they get out of line. The “subsidies” include tax deductions for depleting reserves, like depreciation every other business uses, plus gobs of military spending to keep the “peace” in these volatile regions. You may call that a big fat subsidy. I call it a choice.
We are paying dearly for this energy policy: Tax dollars for defense, policy-driven HIGH energy prices, human lives, higher prices for renewable energy, higher prices for alternate fuels, e.g., natural gas versus coal, higher food prices because 40% of our largest crop is used to make fuel – one of the stupidest policies imaginable, and so on.
It isn’t all bad although there are mistakes along the way and shortages of honesty and full disclosure. One positive byproduct is sustainability (except for ethanol) in reducing energy consumption today for use by future generations. That is a good thing. I most highly prefer to cut waste and not drill and mine willy nilly.
Ironically, it isn’t for altruism for future generations but out of selfishness that this is happening. It’s selfish because Americans want tolerably priced energy but they don’t want look at its production or transport in any way, shape, or form – literally. We therefore choose to go make messes in others’ countries. On top of this, in the US where renewable energy is generated on the Great Plains and nobody there complains about it, greenies in the cities don’t even want transmission lines through the country to charge their frivolous Nissan Leafs with it. We should force them to decide where they want their power from. They don’t want anything, except energy – by Merlin the magician.
If you have read many of these posts you would know I’m a blasphemous heretic with respect to climate change (or probably more of an out-of-the-closet loud mouth). For a few samples, you may be interested in seeing Green Jacket, Cigar, Gold Rings and Disneyland, This is not Tee-Ball, and Law of Gravity, Repealed. Without recapping any of that, this week I came across one more detail that screams don’t bother. Manmade CO2 emissions are three percent (3%) of total CO2 emissions with nature making up the other 97%. So if we spend a gazillion dollars and all sacrifice our firstborn we can reduce total CO2 emissions by maybe 1%. Also, according to recently released analysis of NASA data by Ph.D. climate scientists, climate computer sims, upon which all the hype is based, far underestimate re-irradiation of heat back to space. In English, the earth dumps heat through the atmosphere at much greater rates than the computers predict. I have 14 trillion reasons we should instead be focusing on a far more irrefutable, immanent disaster we can actually do something about.
This just in: The EPA, FDA and other sundry alphabet soup shills for business have declared the evil Bisphenol A (BPA) plastic is more or less harmless.
written by Jeffrey L. Ihnen, P.E., LEED AP
This was a dopey high school cheer of my older brother’s and sister’s sporting days in high school. “Go bananas. B-A-N-A-N-A-S. Go bananas!” How lame. What does it mean? I much preferred, “Watermelon. Watermelon. Watermelon rind. Look at the scoreboard and see who’s behind. You! You! You! You!” This was always led by the rowdy crowd after the opposing team’s cheerleaders would do a dopey skit, like the banana thing.
One of the first posts I wrote was Renewable NIMBY, that people purport to be in favor of renewable energy unless they have to look at it or pay for it. In case you’ve been cryogenically frozen since the 1950s, NIMBY means “not in my back yard”. People really like renewable energy so long as somebody else pays for it and it’s installed in North Dakota, where not so incidentally citizens are experiencing a booming economy by exploiting energy production, mostly on private land.
Last week I became mentally unglued upon reading about environmentalists blocking a paper mill in Port Angeles, Washington, from using wood waste for its strong appetite for thermal energy (steam). Nippon Paper has reduced its fossil fuel consumption by 88% and virtually eliminated the need for petroleum since 2000. What a smashing success. This is beyond President Obama’s wildest dreams for clean energy, reducing carbon dioxide emissions and dependence on imported energy. Yet environmental groups including the Sierra Club are fighting to shut it down and send 200-plus decent people to the unemployment lines.
Do you consider yourself an environmentalist? If you’re like me, the answer is, yes but I’m not in the whacko, nut-job category like these Port Angeles protesters are.
Port Angeles is of interest to me as I have visited there several times and I like it. It’s the last substantial town on the Olympic Peninsula on the way to the Pacific Ocean. It sits at the base of the Olympic Mountains and rain forests and other fantastic natural beauteous places abound all within an easy day-trip. It has a fair amount of tourism, but also industry as well and real people. Like many other industrial cities along the northern tier of states, it is struggling, and this sort of whacko “environmentalism” makes up a good share of the decay.
And consider sustainability, for which I recently read a good definition [paraphrasing]: leave the environment in as good or better condition than you found it, for future generations. This Nippon case seems to be a poster child for this. There is much logging on the Olympic Peninsula, from a renewable resource – trees. They plant seedlings by the square mile growing into beautiful new forests absorbing tons of carbon dioxide. Nippon uses the remains of local waste rather than fossil fuel to operate its paper plant.
One local whacko, a psychologist which seems to speak for itself, says the biomass plant is for pure greed at the expense of public health. News alert: she has no idea what she is talking about. What would she prefer? Close the plant and landfill the logging waste? I can all but promise you the emissions from wood waste will have less impact than using any other reasonable energy source. It will not be like burning a pile of wet twigs and leaves like we used to for roasting hotdogs and burning our eyes out. It will be clean. It’s carbon neutral. Emissions are regulated by the EPA. Do you think the EPA, which puts carbon dioxide you are producing right now and every minute of the day in the threat category, is going to allow this or any other manufacturer to emit one billionth of the hazardous emissions required to give a mouse a headache? I’ll let you know when I think the EPA is getting too slack. That will happen when I return to earth as a Labrador retriever.
Some carpers on the same side of the political spectrum whine about greedy corporations sending jobs overseas. Hmm. I wonder how these Nippon-protesting whackos and their ridiculous protests play into this? Consider how far into nutland this is. At the UW-Madison, we just spent millions of dollars to convert a district steam plant from burning coal to biomass – the same sort of thing these people on the Olympic Peninsula are protesting. If it’s good enough for Madisonians, trust me, it’s good enough anywhere.
NIMBY in some precincts is giving way to BANANA – “build absolutely nothing anywhere, near anything”… by whining halfwits and cretins killing our society – WHACKOS©.
written by Jeffrey L. Ihnen, P.E., LEED AP
An overarching theme of the Energy Rant is that much energy policy has a feel-good foundation of fluff. Last week I ranted about the feel-good dream of having plentiful, inexpensive renewable energy. This will take a miracle because conventional sources are still huge and growing. We have enough coal, natural gas, tar sands, oil shale, and offshore energy to last beyond our kids’ great grandchildren. Of course most readers of this are champions of energy efficiency, but energy efficiency also has too much feel-good fluff.
Consider compact fluorescent lights, which despite my rant about it’s mandate a few weeks ago has been a fantastically successful development from the private sector sped along with the aid of EE programs. That market has been pretty well transformed, especially in states with high rates and years of EE programs behind them. Here’s the “problem” – the program has been successful. The market is transformed. Programs can no longer take credit for it but they don’t want to let go of the “savings”. Well c’mon!
This guy’s letter from the National Resources Defense Council illustrates this. He is responding to a recent Wall Street Journal opinion piece describing the “ineffectiveness” of California CFL programs. An independent evaluation of the program demonstrated that savings were much less than claimed. Sounds familiar per our first hand evaluation of some similar programs. He says the op-ed is based on a “consultant report that makes arbitrary and unsubstantiated reductions to the benefits of the compact fluorescent lamp program”. Well if that isn’t the cat calling the kettle black. Talk about unsubstantiated. I’m sure there’s nothing in the report to back up its conclusions. The guy probably hasn’t even read the executive summary.
Per our experience, this hack’s comments are unfortunately not uncommon. Utilities, program administrators, and implementers do not want to be told their programs are saving less than they claim – as they almost always are. I’m not sure who did the above evaluation in California but I will bet my house that they did not underestimate savings because: (1) it jibes with results we see for similar programs and (2) evaluators do not hammer savings for fun because it can lead to confrontation. We tell it like it is; not how someone wishes it would be.
We’ve recently completed impact (savings) evaluations for programmable thermostats; let’s just say in a state with a temperate climate – a state that has been lampooned in this rant a couple times. A programmable thermostat is 98% a heating-energy-saving technology. In the referenced temperate climate, where you can heat the entire house with a toaster oven, or at most your basic kitchen oven, what do you expect? Even in states that need heating, the attributable impacts can be tiny. Reasons for poor attributable savings include customers not using their furnaces; they were the programmable thermostat, programmable thermostats replacing programmable thermostats, and programmable thermostats in permanent override.
Impact evaluation for residential end users is often done by billing regression, which is a sexy term for comparing the bills before implementation to the bills after implementation and making appropriate adjustments. Consider evaluation for programmable thermostats with the only gas-using device in the home being the furnace. Billing regression is the ONLY way to go. Any engineering analysis is going to have much lower precision and confidence. But noooo! The program people didn’t like the regression results. Can we “engineer” savings? NO!
The other thing I’m seeing is rules changes to capture more savings. Incentives are limited by total dollars per year per customer, minimum paybacks, and maximum percentage of measure cost. This of course protects against free riders. Then there is the incentive itself – how much incentive is there per kWh, kW, or therm saved? Some utilities are greatly increasing incentives, lowering payback limits, and increasing annual payout limits. Does this result in more attributable energy savings? Probably not much. Evaluations will probably show they are mainly making more projects eligible and thus claiming more savings. I estimate free ridership will go up a lot. Program evaluators walking into the evaluation of these “upgraded” programs should prepare for pushback and maybe a little firestorm in some cases.
Some utilities whine to regulators that they’ve already done a great job of saving energy and all the easy stuff is gone (hence the expanded pay out and slackening rules discussed above). I don’t buy it. First, their 20th century programs are running low on remaining opportunity. Could be, but there are alternatives if they AND the regulators would open up to program innovation. Second, opportunities are created every day by engineers, architects, contractors, building owners, tenants, the milkman, janitor, cooks… you name it.
I haven’t seen any studies yet but I would bet there is more opportunity for cost effective measures in NEW buildings – ones that are already built. You just need to be capable of seeing the hand in front of your face and know how to “read” – i.e., understand what you are looking at. Buildings are loaded with opportunities we find but rarely see coming out of programs. Why? Perhaps because in many cases there is no equipment to sell. Examples: grocery store has a main air handler maintaining 75F in the space and at the same time an adjacent one is struggling to maintain 70F. The little one is cooling like crazy in the summer and pumping cold outdoor air all winter to try to get to 70F while the main unit is burning gas like crazy to make up for it. Obviously, this is an incredible opportunity and a very simple concept. Somebody just has to LOOK. And THINK! This is far more common than a congressman would ever imagine.
Some weeks I struggle a little to decide on a topic. It isn’t for lack of topics for they are like natural gas reserves – at one time I wondered whether I’d be able to find a topic every week. But like natural gas reserves, as I “worry” about running out of topics, the topic list is vastly outstripping demand. This week it was easy.
I watched the state of the union address last week, or I should say I started watching the state of the union. It doesn’t matter who is president, from Reagan through Obama, I can only take about 20 minutes before I am forced to turn it off. I either get nauseous from the rosy talk or disgusted with vague speak of wrong-headed policy. Luckily, or maybe not so, President Obama talked about “clean energy” in the first twenty minutes – a topic I’m most interested in.
As he spoke about “investing in” clean energy, something like 80% “clean” by 2035, I kept asking my TV, “what is he talking about?” over and over. WHAT IS HE TALKING ABOUT? As I’ve written many times in this blog, the federal government should get out of picking winners and losers. Let’s examine an example of the federal government’s brilliance in promoting clean energy.
Energy Policy Act (EPACT) 2005 issued under 100% Republican power, mandated that 7.5 billion gallons of biofuel – which is essentially 100% corn-based ethanol – be produced annually by 2012, next year. Last year, the out-of-control EPA declared we should increase the ethanol content in gasoline from 10% to 15%.
Note what has happened since EPACT 2005. Due to a combination of easy money, Fannie and Freddie government-backed loans, wild-eyed psychotic institutional investors, hedge fund managers, home flippers, and crap like interest-only mortgages, we experienced a bubble and then a colossal collapse of the housing market but also commodities at the same time.
The government has a solid track record of screwing up markets and then when the poo hits the fan, there they are, lecturing the private sector and pointing fingers at everyone but themselves, the chief culprits. The housing collapse fits this model.
The commodity balloon including corn prices that grew in lock step with housing in 2007-2008 put a crushing load on dozens of new ethanol plants that sprouted on the heals of EPACT 2005. Many bankruptcies ensued.
As a result of the struggling ethanol industry, the government once again runs to the rescue. But STOP THE MUSIC! Think for just a minute. Let’s establish that ethanol producers are manufacturers. I think everyone agrees with this. Manufacturers take commodities, or raw materials like plate steel, bar, ore, grain, sugar, plastic resin and turn them into fasteners, heavy equipment, dipsticks, cereal, Pop Tarts, and ice cream buckets. They make scarce goods out of less scarce goods, a concept I learned in basic economics in college, or maybe in the third grade when I made cookies from scratch.
A whopping 40% of our 12 billion bushel annual corn crop goes to ethanol production. While The Wall Street Journal waxes about food inflation, which is all too real, what they don’t discuss is this issue of manufacturing the less scarce goods into more scarce and thus more valuable products.
For the love of Pete, wake up you dunces! The value of the gasoline the 2.5 gallons of ethanol displaces is worth barely more than the bushel of corn that produced it! HELLO! So what’s the response, let’s use even more of the more valuable feedstock for the same old demand of the end product. This is lunacy; monumentally, gallactically stupid!
According to the ethanol industry itself, a bushel of corn produces 2.8 gallons of ethanol, and I’m sure this is the latest, absolute greatest conversion to make ethanol look good. Current commodity cash prices include $2.40 per gallon of gasoline and $6.25 per bushel of corn. Do a little math. The ethanol leaving in tankers is worth barely more than the corn coming in, raw! This doesn’t include amortization of the plant itself, labor, or the massive amount of energy required to manufacture ethanol.
The price of corn is elastic. That is, it’s price changes a lot with demand, especially when the supply of the feedstock is tiny , teeny weeny, itty bitty, compared to the finished product it is displacing. I.e., if all 12 billion bushels of corn were manufactured into ethanol it would displace four percent (4%) of our petroleum demand! This is like feeding hogs fois gras so we can reduce our dependence on foreign lard.
Here is what is going to happen as a result of federal government brilliance pushing this renewable “clean” source of energy – I would say write it down and save it, but I’m doing that for you – the continued easy money, potentially devastating inflation (see Playing with Fire), and massive upward pressure on corn prices is going to ravage the ethanol industry. It doesn’t take a genius to see this is going to happen, but apparently it takes somebody smarter than a U.S. Senator.
Meanwhile, most people don’t realize it, but these completely government-induced artificial demands on commodities and resultant high prices are driving farmland prices to the stratosphere. An acre of decent farmland in Iowa fetches $8,000 and in some places considerably higher. Say hello to the same wild-eyed crazy speculation we had in the housing market two or three years ago. Only this is a lot wilder, and the hangover? It’s too serious to joke about.
The government’s intrusion into renewable fuels is going to bankrupt the ethanol industry. Once that happens, the house of cards crashes along with grain prices. Land prices will crash, and like the housing market, there will be a massive farm-country crisis that will make the mid-1980s crisis look like the failure of an eight-year old’s corner lemonade stand. Land prices will plummet below the principal on outstanding loans, much more so than homes. I estimate that land prices will crash by about two thirds or maybe only by half if we’re lucky, to somewhere near $3,000 per acre. When will this happen? I would say for sure in the next 10 years, probably in the next 5 years.
In a bitter case of irony, government “assistance” for states like Iowa is going to devastate the state. Thank you Chuck Grassley and Tom Harkin, and here goes any shred of credibility I would give Newt Gingrich (I actually wrote this whole thing before this last salvo went to press).
And on the way to this pandemonium, livestock growers are going to go broke on exorbitantly priced feed. Some already have per the above WSJ opinion piece. We’re all paying for soaring food prices but food prices don’t matter to the Ben Bernanke. It’s not part of “core inflation”, as though nobody eats!
After the bomb hits, all kinds of suppliers of farm equipment, goods and services are going to get whacked and there will be a swath of bankruptcies again, making 1984 (the year) seem like Little House on the Prairie. One “solution”, god forbid, is to throw more money at ethanol subsidies. What’s it going to take? – $2/gallon of federal subsidy? Is this the kind of “investment” we’re talking about?
So think about it. Do you really want the brilliant federal government driving us toward another cliff in renewable energy? I can’t think of a more devastating outcome than will happen with ethanol, but then I also couldn’t think of a crazy scenario of how saving energy results in greater consumption in ”Upside Down Consequence of EE“ but then within a week in ”The Delectable Light Bulb“ a bizarre real example dropped in my lap. The next government renewable energy drive may not be devastating, but I guarantee it will be a failure by any reasonable measure. Has the federal government driven the breakthroughs in lighting and other technologies? Not that I’m aware of. The private sector has. What happened to the Bush’s great government hydrogen solution for transportation? – and fuel cells cars? How about the synthetic fuel godsend from the Carter days? That was a winner, to be sure.
Renewable energy IS NOT like the development of space exploration leading to satellites for national defense then phones, TV, and GPS – or nuclear power. In these cases, the features and requirements of the end product were well defined. It was just a matter of physics and engineering to make it happen. All known renewable energy today has significant physical barriers to success – like there are only so many acres of tillable soil on the continent. The yet unknown successful, cost-effective, and plentiful source of renewable energy may be percolating in a lab somewhere or may only be a wild idea in someone’s mind or not even that yet. I don’t know what it will be, but we aren’t going to ride solar and wind energy to the renewable sunset.
Feds – just defend us from enemies, foreign and domestic, and provide equal opportunity for all. We will take care of the rest. And, funny how things like satellites, GPS, internet, lasers, compact discs, DVDs, sonar, and stuff like that are spin offs of what the government is supposed to be doing – protecting us from enemies!
In reply to “Amber Waves of Ethanol” from The Wall Street Journal above, the CEO of the Renewable Fuels Association, (lobby) states there is no food-ethanol trade off. Forty percent of the nation’s corn crop going through ethanol plants is no tradeoff? Nevermind. Put down your emotions and think about what he says. The supply of crops (production) hasn’t changed and “remember, farmers in the U.S. see less than 20 cents on every dollar spent on food.” What does either of these have to do with pouring 40% of the corn crop down the ethanol hole or changing supply or farmer’s share of the take? In fact, it actually bolsters the fact that supply isn’t changing while demand is rising and will continue to do so. You have to be smarter than that, man.
Lastly, I want to make it clear I am not ranting against the ethanol industry. As I’ve said before, everyone has to play the game by the rules government puts on us. However, once this bust happens, everyone involved should have to live with the consequences without bailout. People need to take responsibility for their own decisions. I chose not to pursue government ARRA handouts because I considered the red tape, competition for the money, types of clients that would use it, and that it’s a one-time deal, would make for a miserable ROI for us. If others want to land the money, and then hire us, I may consider it.
All is not lost for farmers and ethanol-plant owners. Sell! Farmers can sell their obscenely overpriced land and lease it back with long term contracts. When prices crash, take it off the hands of the sucker that bought it from you – at that point it will probably be the bank, but the bank will also be broke – maybe you can take it from bankruptcy court.
As you may have heard, this year China powered past (cheesy pun warning) the United States in total energy consumption. Apparently, back in 2007, they surpassed the US in carbon emissions. This makes sense as almost 70% of China’s electricity is derived from coal as compared to just under 50% in the United States. In the U.S., nuclear and natural gas make up most of the other 50%, roughly split evenly with renewable energy rounding out the 100%.
In recent years, or especially since President Obama moved into the White House, there have been multiple verbose incomprehensible cap and trade policies drafted, but they are dead for now. By the way, I maintain my position that substantial nationwide carbon limits are not going to happen in my lifetime. If it didn’t happen since Obama took office with a filibuster-proof senate and a large majority in the house, it ain’t going to happen anytime soon. Why? Democrat senators from Midwestern states where coal is still king (not that this is a good thing) and coal producing states like West Virginia result in filibuster, if not an outright minority. E.g., Jay Rockefeller will vote party line on everything but carbon caps.
There remains one possibility, however – that carbon caps may be legislated through the courts, which of course is not how things, especially major things like this, should become the law of the land. In one example, the EPA in 2007 was handed the power to regulate carbon dioxide because it is a “pollutant” per the clean air act. Again, this is like declaring water, another vital molecule that makes biological life possible, a pollutant because water kills. Recall, I wrote on the blog a few weeks ago you can die by drinking too much water. People drown, to the tune of 400,000 deaths worldwide each year. Floods devastate communities – at least $3 trillion per year. Water causes lightning, which kills about 24,000 per year. And heat wave deaths – always have a large component of high humidity. Aside from illegal activity (human smuggling), when was the last time you heard of heat related deaths in Arizona? You don’t. It’s Chicago, Memphis, New Orleans, Kansas City, Little Rock. Water is dangerous.
You may be thinking, there’s nothing we can do about water. Really? How about banning swimming in rivers, lakes, and oceans and slapping $1,000 fines on people for not WEARING their floatation devices? Move everything out of the 500 year floodplain. Mandate air conditioners for every household and if you can’t afford one the federal government will provide one. Sound familiar? Thousands of lives would be saved per year.
The bottom line is, 98% of legislators are too cowardly to vote for the right thing, or wrong thing I guess, if it threatens their political career.
Sorry. I got way off track. I can’t help but railing against the preposterous. Life has risk. Is there anything, ANYTHING, worth doing if there is no risk? There are costs and there are benefits.
Back to China. China’s energy consumption has DOUBLED in the past 10 years while the United States’ energy consumption has decreased slightly. For all intents and purposes, it’s been flat.
Here is something that will knock your socks off – since 1999, China has installed 416 gigawatts of coal-fired power plants. “So what?”, you may be thinking. A gigawatt is like a trillion dollars. To give that perspective, a trillion dollars in $100 bills wouldn’t fit in a three car garage, tightly packed and stacked to the rafters. Likewise 416 gigawatts can be generated by 832 large 500 megawatt power plants or 208,000 wind turbines by nameplate capacity. This is eighty giant coal-fired power plants per year!! And they have 330 more giant power plants on the drawing board. Over the same period, the United States has built coal plants totaling 12 GW, or a measly 24 giant power plants. China is averaging 80 per year, while the U.S. is averaging 2.4 per year. GET A GRIP!
This is like giving Lance Armstrong a two day lead in the Indy 500 with his bicycle (he would be the US) but China has just taken the lead with the typical 225 mph Indy car. It’s actually worse than that. It’s more like me running the Indy 500 versus the 225 mph Chinese Indy car passing me by.
In 2006, China generated as much electricity from coal as did the United States. At the time they had 484 GW of operational coal plants. Very roughly, they’re adding 10%, at least per year. This blistering pace will fade with time, but it is fair to say they will have double the coal-fired electricity generation compared to the U.S. within 5 years.
Conclusion: If we are truly concerned about carbon emissions and climate change, China has to do something. The reality however is that whatever the U.S. can stomach will be of zero consequence considering the Chinese Indy car. Unlike the floating continents of garbage that is choking the mighty three gorges dam and the 100 tons of benzene spilled in the Songhua River, carbon dioxide makes its way around the globe. It doesn’t matter where it comes from.
written by Jeffrey L. Ihnen, P.E., LEED AP← Older posts