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On Oil Industry Meme Detected - 100 Years Is a Long Time; 2060 Would Be a Great Time For Rapid Nuclear Energy Development

Geoff - from a technical point of view, the following is absolutely correct and is probably the way that most engineers employed in both nuclear and oil think:

"The more oil saved in heavy-duty applications that nuclear can serve, the more oil available for other purposes.  Add to that the potential of nuclear process heat for enhanced oil recovery and oil sands/shale extraction, and you've got a great way to turn nuclear electrons into liquid fuel molecules that can go anywhere."

I have been dealing with traders, investors and businessmen far too long. They would  not think about "oil saved" but about sales not made. They do not like "oil available for other purposes" - they worry about overcapacity and competition.

Here is a quote that provides some food for thought from a recent entry on the Financial Times blog

"But whether Chevron’s actual results see a major rise depends on how commodities do. According to Fitch Ratings’ 2010 outlook for the global oil & gas sector, the oil & gas industry is stable as the rally in crude oil prices from the lows experienced during the first quarter of 2009 continue to provide considerable support to industry activity levels and financial profiles. It does note, however, that the key risk for upstream companies and integrateds in 2010 relates to the potential for weaker oil prices during the year. No matter how much production Chevron, or anyone else, has, if they are not getting a good price for it, investors will not be happy."
January 14, 2010    View Comment    

On Oil Industry Meme Detected - 100 Years Is a Long Time; 2060 Would Be a Great Time For Rapid Nuclear Energy Development

Geoff - if the off shore wind turbines had the potential to produce several thousand megawatts reliably and at a marginal cost that can allow high cash flow, I doubt that even the "rich and influential folks" would be able to stop the project. That is especially true if the project had far less visible impact than 350 foot tall turbines with blades that are longer than football fields.

I still cannot figure out why people talk about Cape Wind as if it is just about the view; off shore may seem like nobody's backyard to land lubbers, but the Kennedy's and some of their neighbors have always sailed and fished in the waters. The imposition is very real. There is also some indication that low frequency noises from off-shore turbines disturb wild life. Some fisheries off of the coast of Sweden have reported significant impacts from local turbines.

You were a businessman and a fuel trader. Do you really think that decision makers spend much of their time worrying about what will happen in 20 years when there are tens of billions in annual profits to be made in the meantime?

You focus on vehicle fuel, which is certainly an important product. However, even in the car crazy US a bit less than half of the petroleum produced and imported ends up begin consumed as motor gasoline. The rest is a diffuse mix of other products, at least some of which could be replaced by fission heat. 

There are still a lot of places in the world where oil is a primary electrical generation fuel. Of course, there is also that LNG that the majors are investing tens of billions in developing - though it CAN be used in vehicles, I bet that a lot of it will be burned to generate electrical power.
January 13, 2010    View Comment    

On Oil Industry Meme Detected - 100 Years Is a Long Time; 2060 Would Be a Great Time For Rapid Nuclear Energy Development

Geoff - we have already built more than 100 nukes in the United States. We know what kind of physical resources and labor are required. The big challenge for that construction process is the external impacts of legal and political challenges. Of course, those sometimes affect oil projects as well, but some extraction, transportation and refining processes simply too freaking hard from a physical resources point of view. 

I think you are selling fission short with regard to its fungibility with other heat sources. From many perspectives, heavy metal fission is a more capable heat source than hydrocarbon combustion.

Fission is well proven as a transportation heat source on board some very demanding platforms (subs, carriers, ice breakers, Arctic ore carriers). It is a great source of district heat (as is done in Switzerland) and as the electricity supply for heat pumps. It can supply transportation needs via electricity supply for rail roads and subways, and it competes with many grades of oil as the heat for industrial processes.

In the US electricity market OIL might be a niche supplier - unless you are in Hawaii, Alaska, Puerto Rico, Guam, or on Long Island - but natural gas certainly is no niche supplier. It has a 20% market share and the consumption of gas in electrical power plants represents about 1/3 of the gas market (about 7 TCF per year compared to a total market of 20 TCF). Around the globe, natural gas and LNG compete head on with nuclear in the electricity market.

I am really confused with your comment about storage and portability. A guy with a backpack can carry as much energy value of uranium as a supertanker.  When compared to the storage limitations on natural gas . . . 

A 1000 MWe nuclear plant only needs 20 tons of manufactured fuel per year. You can put that on a single over-the-road truck. A nuclear plant operator can store as much fuel on site as desired; it does not take up much space and does not cost very much compared to the value of the energy produced. (A ton of commercial nuclear fuel costs less than $2 million and can produce 15,000 MW-days of electricity - that's a fuel cost of about $5 per megawatt-hour.) 

WRT portability - the restrictions there are legal, not physical. NASA has developed trashcan sized reactors. The US Army built tiny little plants for Greenland, Alaska, Antarctica, and Wyoming.

Oil will remain a very useful commodity. I just know enough about the way that supply and demand works in that market to believe that the price will fall low enough to make it not worth the effort to try to recover some of the very remote and difficult oil. I see demand falling considerably below 80 million barrels per day as customers are offered cleaner, cheaper, more reliable sources for many needs that are currently supplied by oil and natural gas. What do you think the price would be if the world oil market dropped to 60 or 40 million barrels of oil per day?

Sorry if that disrupts some existing business models. The writing has been on the wall for 60 years and the people who run oil/gas (most majors are at least 50/50 in each product) companies are smart enough to read.
January 12, 2010    View Comment    

On Green China: Friend or foe?

Marc - can you help put numbers on the jobs that might result from this technology export deal? From what you have written, it seems to me that all of the real work is in China, not the US.

Also, I have to agree with Bill Woods - writing software to track the sun is not a terribly big challenge. However, even if it was, how difficult can it be to replicate software that has already been written?

I am old enough to remember the very first purchase that I ever made of something that was actually made in mainland China. I was about 11 years old and my family had taken a trip to Canada. It was a lot colder than we had planned, so I purchased a flannel shirt with a Made in China label. As I recall, it even had a little red flag on that label. I carefully put that shirt at the bottom of my luggage before we crossed the border back into the US - Communist Chinese goods were illegal in the US.

That was a few years before Nixon visited and opened up the flood gates for American jobs to flow outward.

I have a deep respect for the work ethic of Chinese people, but I do not trust their business ethics. I do not think their language even has a word for "intellectual property". Take a good look at the "great" deal that circle W has made; they sold 4 of their AP-1000s. The next two have been renamed CPR-1000s and China has announced that 80% of the content will be locally produced. My bet is that the next two will be 90-100% local products and the next ones after that will be sold to a third country as an export product. (As an aside - most of the R&D for the AP-1000 was paid for by US and UK tax payers. So was the license certification effort at the US NRC.)

When it comes to China trade is a two way street. Consumer money flows to China, low cost goods flow to the US. Jobs flow to China, low cost manufacturing of consumer goods results in heady profits - for a while - for US corporations and their stock holders.

Is this beneficial trade? I think not, but others might disagree.
January 11, 2010    View Comment    

On The Dependence of Renewables on Government

Stephen wrote:

"Maybe it is a Western Australian thing however linking sites is not such a hard thing to do if the benefits are clean reliable power."

Perhaps our communication challenge is one of perspective. I live in the crowded Mid-Atlantic region of the United States where building a transmission line means going through an awful lot of backyards owned by thousands to millions of individual land owners who do not like the idea of noisy, ugly towers on their property. Siting power lines here is a tremendous effort; I know of projects that have taken decades and still have not met their initial targets.

(This is an issue with a long history for me. My dad was employed for 35 years as a transmission substation engineer. One of the projects that consumed most of his time for my entire high school and college career was the construction of a "coal by wire" line from southern Georgia to south Florida. That line was about 500 km long and cost a couple of billion US dollars once all of the bills were tallied.)

I have also spent a good deal of time as a competitive sailor in the waters off of the Atlantic coast. Sometimes we had great wind, but the nickname for the Chesapeake Bay among sailors in the summer time is "The Dead Sea". We have something in the oceans east of the US called "The Bermuda High" which can lead to calm days for a week or two at a time in the heat of the summer. That is one of the reasons it gets so darned hot and humid - there is NO BREEZE.

Like I said - we see the world through different lenses. I see those tiny, reliable, emission free nuclear plants that powered my submarine and I see a world teeming with people who could use that kind of energy. You live on a vast, nearly empty continent sized island that is near some of the most consistent winds on the planet - the roaring 40s. Wind might just work for you, but it will not significantly reduce the amount of coal that is being burned to supply those billions of customers in China, India, Europe and the US.
January 11, 2010    View Comment    

On The Dependence of Renewables on Government

To Ed Reid:

Just so we are clear - you and I agree here. 

I was simply trying to show Stephen that even using his own source - one that I do not agree with - the minimum additional capacity for wind is "least a factor of 2.6" greater than a moderately reliable coal plant. That is only valid if the wind farms are separated by hundreds of kilometers AND if all of the wind farms are located in what Diesendorf describes as "windy" (I assume that means well above average) locations.

January 10, 2010    View Comment    

On The Dependence of Renewables on Government

Stephen Gloor's comment indicates some confusion.

Quoting Ed Reid: "Reliable wind power requires both multiples (4-6) of generating capacity (to compensate for intermittency) and storage equal to at least the required capacity."

Steven Gloor - No it doesn't.  Well dispersed wind requires between 1/3 and 1/5 of the average capacity of gas backup to equal the same amount of average capacity baseload."

Here is a quote directly from the Diesendorf paper that you linked to:

"To replace the electricity generated by a 1000 megawatt (MW) coal-fired power station, with annual average power output of about 850 MW, a group of wind farms with capacity (rated power) of about 2600 MW, located in windy sites, is required. The higher wind capacity allows for the variations in wind power and is taken into account in the economics of wind power.
. . .
"Although a single wind turbine is indeed intermittent, this is not generally true of a system of several wind farms, separated by several hundred kilometres and experiencing different wind regimes." (Emphasis added.)

So even the paper that you linked to - which has its problems, like asserting that hot rock geothermal, biofuels and solar thermal already qualify as base load generators - indicates at least a factor of 2.6 additional wind capacity is required (2600 MW wind versus 1000 MW coal) as long as the sites for the wind are distributed far enough apart so that they are in different weather patterns and as long as they are all in "windy" locations.

From a capital investment point of view, that means that you need to buy not only 2.6 times as much wind turbine capacity as you do steam turbine capacity, but you also are on the hook for a considerable investment in transmission infrastructure to hook those turbines into the grid. It is a reasonable rule of thumb that transmission lines cost about a million dollars (US) per kilometer to site and install. Coal plants can be built close to existing grids; wind farms have to be built where the wind is.

Aside - this statement from Diesendorf's paper still irks me "Even an optimal mix of fossil-fuelled power stations is not 100% reliable." Of course that is true, but in the developed world, we have a pretty high standard for the reliability requirements of a mix of electrical generators - most customers on the grid would be very unhappy with less than about two 9's of reliability. (That would mean that they would be powerless for an average of 86.7 hours per year. Here in the US, the vast majority of customer outages are caused in the distribution and transmission grids, not due to generator failures.)

Rod Adams
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
January 10, 2010    View Comment    

On The most important investment that we aren’t making to mitigate the climate crisis


Can you name me a single place on the planet that operates with the kind of renewable "baseload" that your peer reviewed studies advocate? Who are these "peers" anyway?

The data do not indicate anything close to a renewables "baseload" situation in any of the places that you mentioned.

Yes. I am rude. 
January 5, 2010    View Comment    

On My five New Year’s wishes

Marc - I agree with the items on your list. Sign me up in particular as a fan of the Cantwell-Collins cap and dividend proposal.

With regard to corporate governance, a contributing answer would be for business schools to teach students that there are more measures of effectiveness than just money. (Not that money is unimportant, but short term financial goals cannot be the only way to measure performance.)

Rod Adams
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
January 3, 2010    View Comment    

On Coal Plant Pollution - Sierra Club Endorses Jim Hansen Solutions With a Notable Exception; They Ignore Nuclear, He Does Not

Paul - I have read Lovins extensively for the past 20 years. You can find many of the articles that I have written about him and his work by going to my blog (Atomic Insights) and doing a search for "Lovins". You can find additional analysis of his works at NEI Nuclear Notes and Nuclear Green with the same search term.

BTW - Why are you such a fan of the work of a two time college dropout without any earned degrees? His integrity is so low that he loudly proclaims that he is RMI's Chief Scientist, but most of the scientists in the world have at least graduated from college. 

Lovins's only accurate prediction in his 1976 work was the part when he casually accepted that coal consumption would double. Here is a quote from that seminal work:

"Coal can fill the real gaps in our fuel economy with only a temporary and modest (less than twofold at peak) expansion of mining. . ."

(That part is almost exactly true in the US. In 1976 we were burning about 600 million tons per year, the rate now is about 1.2 billion tons per year. Part of that increase is due to the fact that we stopped building nuclear power plants, but our nuclear generated electricity is about 800 Billion kilowatt hours per year higher than Lovins predicted it would be.)
January 3, 2010    View Comment    

On Coal Plant Pollution - Sierra Club Endorses Jim Hansen Solutions With a Notable Exception; They Ignore Nuclear, He Does Not

Anne - I have an agenda, but it is not hidden. When a "renewable" energy source can supply reliable power by itself without being connected to a widely distributed grid of various power sources that include contributions from fossil fuel combustion or nuclear fission, then I will officially stand up and take any blows required and retract my statement.

I could not care less what a politically appointed lawyer has to say about the need for baseload power plants.

Sorry if you think the above is offensive. I was trained as a power plant engineer who was not allowed to sugar coat or make bad news sound better. We have a saying in my profession - bad news does not smell better with age.
January 1, 2010    View Comment    

On Areva targets Fresno, California, for new reactor

Margaret - I lived in CA for about 20 months in the mid 1980s, and I have visited on a number of occasions. The surface political discussion often revolves around conventional liberal versus conservative themes, with many people dismissing the liberals as "fruits and nuts". 

However, in real life, the state is full of consumers and people doing business in an effort to make money. There are huge freeways, swaths of suburban sprawl, and a fair amount of industry. 

My impression is that the state moved away from early support of nuclear energy based on some very hard working and well funded activists. Initially, the Sierra Club was quite supportive of nuclear energy - it even ran an "Atoms not damns" campaign. That ended when the organization decided to begin accepting corporate contributions in order to give it more heft and ability to participate in important campaigns. Interestingly enough, some of the people in the organization that worked their way to the top on the basis of their fundraising abilities had close ties to Gulf Oil and Standard Oil of California two of the largest and wealthiest companies in the state in the 1960s.  Those two companies merged in 1984 to become Chevron. 

They were not just oil companies but oil and gas companies. More than half of the electricity in California comes from burning natural gas. 

December 31, 2009    View Comment