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On Brace Yourself for Election Year Energy Rhetoric
JR: I realize that all companies get to take the captial equipment deduction, but from my understanding and I'm far from an expert in taxation, the depletion allowance is one that is practically limited to companies that exstract a mineral resource??? If I'm right, renewable energy companies can't take this deduction because by definition, they aren't "depleting" anything??
Regarding the profitability of the oil industry, the devil is in the details! Due to the complexity and scope of the business, oil companies (and others) can hide or redistribute profits to subsidiaries and closely alligned companies, as well as playing tax games with things such as the depletion allowance.
One way or the other, oil companies aren't hurting right now! In 2011 they spent approximately $38,000,000,000.00 to repurchase their own stock, as well as spending 65.7 Million dollars in lobbying efforts and another 1.6 million in campaign contributions (which doesn't count grapt and corruption such as spouses of politicians getting high paying jobs in the industry, etc.). In 2011, Exxon increased it's compensation to it's CEO by 17% to approximately $25.2 million (http://www.huffingtonpost.com/2012/05/30/exxon-ceo-rex-w-tillerson-pay_n...)
All that said, I'm a capitalist and don't have a problem with the oil industry doing what it is bad enough to do! What I do have a problem with though is our politicians delivering subsidies to a highly profitable and mature industry that really doesn't need them other than to boester their bottom lines.
Bob "The Clean Energy Guy" Mitchell
On Shale gas helping reduce carbon & overall emissions – but by how much?
I'll be very upfront, I think that fracking is STUPID! I think that the huge amounts of water that is used in the process and lost to us forever (in practical terms) is, in the long run, a much more valuable resource than the gas that is being produced.
When you factor in the low EROEI that fracked natural gas comes with, it makes me wonder if it's really worth the effort. By the time you truck the 5,000,000 gallons of water and the 10,000 gallons of fracking chemicals (averages per well), run the giant diesel engines to produce the pressure required to "fracture" the rock formations, collect what you can of the now hazardous fracking fluid (that used to be water), truck that waste away, intern the waste into injection wells, condition the gas, and then transport the gas, the energy companies may be able to make money off of it, but is it really worth it to the rest of us? Especially with the dangers of aquifer and well contamination, not to mention increased seismic activity?
Also, while some predictions (wildly over optimistic, in my opinion) give us a 500 year supply of natural gas due to these "enhanced" recovery methods, that is at CURRENT consumption levels. Your article shows that many utilities are switching their base load power generation from coal to natural gas. From my understanding, one of the reasons that they are switching to natural gas is it's current low cost.
Well, how long will Natural Gas stay cheap with these utilities making the switch? How about if we do as some are suggesting and start switching our transportation fleet to natural gas? And Wait! Aren't they converting those Liquefied Natural Gas importation stations to "exportation" stations?
My gut level is that natural gas isn't going to stay cheap for long! I also think that when you factor in the increased usage due to base load power generation, increased usage in the transportation sector and the fact that we are going to start exporting the gas to a energy hungry world, that we'll be lucky if there really is even a 100 year supply left in the ground.
Lastly, I've read that approximately 7% of the natural gas that is recovered via fracking is lost to the atmosphere and that NG is something like 40 times more potent a greenhouse gas than CO2. If this is true, are we really doing ourselves any favors by switching to Natural Gas? At least in terms of greenhouse gas emissions?
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
lol, I'm glad that emotionally, at least, you're on the renewable energy side! So that you know, I did have an opportunity to hang out at the northern terminal of the West Coast DC Intertie and spend some time with the engineers there and they did confirm to me that it was a pain integrating the wind energy into at least that part of the grid. So, I can appreciate the difficulty of your job.
That said, I'm confident that we'll get better at it, especially as we upgrade and beef up the grid. It will definately be interesting to see how things in the energy world shake out. It reminds me of that old, I think that it was Yiddish, curse..."May you be blessed to live in interesting times!"
For those of us in the energy industry, it is definitely "interesting times"!
Bob "The Clean Energy Guy" Mitchell
P.S. Thank you for being so pleasant in our exchange!
On Brace Yourself for Election Year Energy Rhetoric
Jr: While I would love to be able to site my sources every time in these forums, the truth of the matter is that I already spend WAY too much time on them! That said, the 120 billion dollar figure came from the United States National Acadamy of Sciences report (http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12794).
Some of the other figures that I site are ones that I've read, examined and concluded are valid. Most, if not all can be found by doing a google search of the question at hand. I realize that my word alone might not be enough for some people to accept, but if they are open to the possibility of what I have to say, then they can read up on the subject matter on their own. Does that make sense?
Regarding the article that you site, frankly, it's not all that objective! For example, it mentions that the depletion allowance is open to all companies, but really? A tax benefit that considers a resource in the ground as "capital equipment" really wouldn't benefit anybody who doesn't have oil or gas or a mineral deposit that they are harvesting. Now, if you followed the logic in that tax break, Wind Companies should be able to write off the air that they harvest! ;-)
There is also a thing called a, "Master Limted Partnership" that from my understanding renewable energy companies have specifically been excluded from. I understand that this is suppose to change, but it is an example of the sort of favorable tax treatment that the fossil fuel industry enjoys.
The one that particularly stuck in my crawl was the 10 billion dollar tax credit that BP received for the cleanup of the gulf after the Deep Water Horizon sprouted that tiny little leak! (http://articles.marketwatch.com/2010-07-27/industries/30740136_1_tax-cre...)
Both the direct subsidies and the favorable tax treatment pale in comparison to the indirect subsidies that the fossil fuel industry receives such as the 120 billion dollar figure from the National Academy of Sciences mentioned above. There is also work done by the US government such as geological surveys and the like that while there are technically available to anybody, are only really of use to the fossil fuel industry. True, the government does provide similar services that the renewable energy industry uses such as meteorological work, these services tend to be useful to a wider range of users than a geological survey that shows where oil, gas or coal is located!
Also, you have to be careful when accepting some of these numbers at face value. For example, you sited Exxon paying 41% of it's income in taxes. Well that all depends upon what taxes that you are figuring? If you look at only federal income taxes, Exxon only paid 17.2% in federal income taxes. The 41% number came when they figured in ALL of the taxes that they paid including payroll and sales taxes (http://articles.marketwatch.com/2010-07-27/industries/30740136_1_tax-cre...).
If you take that approach, that 41% number pales in comparison to a poor or middle class person who might not pay that high a federal income tax rate, but that when you look at the percentage of that person's income that they pay out by the time they pay income taxes, sales taxes, fica taxes, excise taxes, disposal fees, use taxes, etc. far exceeds 41%.
I appreciate your desire to stay politically neutral, which what I think that our national energy policy should be, but I find it very hard when one party seems to be all about looking out for the rich and well connected. In terms of energy, while there are a few Republican's who seem to accept that we won't have a choice but to move forward with renewable energy, most of them seem to be more in favor of maintaining the status quo or worse.
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
Aggie: I guess this is where we will have to agree to disagree. I'm not an engineer, but have spent the last three years studying our energy situation and from what I can see, we're quickly headed towards a giant cliff. One that if we don't make some major changes, that we are going to drive right off ala Thelma and Louise!
Climate change is for real and actually carry's with it the possibility of disrupting global food supplies which can lead to political unrest and mass starvation's. If you examine the worst case scenario, it might even be capable of leading to our extinction as a species.
Ocean Acidification is also a very real phenomina that has the potential for wiping us out or at least making things turn very ugly as people fight over food.
Lastly, there is Peak Oil, which as I pointed out above, nobody truly knows how close that we are to the 1/2 way point in consuming the world's economically available oil, but we do know that day will come eventually. And even if it's 100 years from now (I believe that we are there now, btw), our global energy demand is HUGE and totally intertwined with our food production system (see the example of the tomato that I gave above), so we need to start NOW in making the switch.
The question at this point becomes, "The switch to what?"
We've got nuclear energy, but the current light water reactors create a fair amount of waste that nobody seems to want to deal with and even if we were to find a safe place to store it, has to be transported to that/those facility(s). Plus, uranium is also a finite resource that to a large extent is controlled by countries that don't necessarily like us. Oh! There is also the fact that no matter how hard we try, we can't see to get a good handle on the whole safety thing in regards to these reactors and when they mess up, they mess up big!
Other nuclear technologies are close to being able to come on line, such as breeder reactors, as well as Thorium reactors, but we can't be sure when they will be available and what kinds of problems, such as the danger of nuclear proliferation and expense that they will bring with them.
And that leaves renewable energy sources such as solar and wind. Now, as you pointed out, these sources come with some downsides of their own. The wind is fickle and the sun disappears over the horizon every night, as well as experiences cloudy days from time to time.
They are also, as you pointed out, not as energy dense as what we have become accustomed to. For the first time in human history we are faced with the prospect of moving from a higher density fuel source to a lower density fuel source and undeniably this fact leads us to some issues that need to be addressed before renewable energy can step up to become a major source of energy for our species.
The first step in addressing our energy future is to grab the low hanging fruit. That fruit is conservation. Now, I take a little bit of a different tack on this issue than most other "green" business people. I like my toys! I don't think that we have to do without in order to be responsible caretakers of our planet. But in order to do that we need to stop being out right wasteful! And right now, that's what we are being, wasteful! From our consumer packaging to the way that we get to work, we could make major strides in using energy more wisely without major disruption to our lives.
The second step would be utilizing renewable energy where we can to lessen our dependence upon fossil fuels. Solar Thermal technologies are wonderful examples of this. Aggie, while you say that solar energy isn't energy dense enough to make a major contribution, solar thermal is a case in point as to why you are wrong!
Each year approximately 8.2 quad-btus of solar energy hits the planet which is about 20,000 times the amount of energy that humans consume each year. While not all of this energy can be captured due to it hitting out of the way places such as the middle of the ocean, etc., most of this energy is wasted.
With a solar thermal system installed in the right set of circumstances, a company or a family can reduce it's consumption of fossil fuels by more than 60% (one could theortically replace 100%, but the payback period generally goes out too far for most people to consider it to be economically a viable option). Now, not every property or situation is suitable for a solar thermal system, but for the ones that are, the economic payback period can be less than 2 years!
So, while solar energy isn't as energy dense as fossil fuels, the fact that these systems can replace such a high percentage of fossil fuels being burned is proof that solar energy is energy dense enough to be usable. Earlier I teased you about putting your tongue to the wires coming out of a wind turbine if you didn't think that renewable energy was energy dense enough. Now, I would challenge you to take a shower that has the water heated via the sun. I'm willing to bet that you would mix in some cool water in order to make it bearable!
If you did nothing else other than install solar thermal systems in 1/2 of the homes and businesses where it made economic sense, we could shut down a good percentage of the coal fired power plants that are currently killing us!
Solar Photovoltaic (PV) is another way of harvesting power from renewables sources. I know that you don't think that solar is energy dense enough to make a major difference, but I have installed solar PV systems on to some modest sized homes and then watched the electric meter spin backwards! To those homeowner's, solar PV was definitely able to make a difference! One lady that I knew in California actually subsidized her mortgage payment by selling her excess electricity to SDG&E.
So again, here is proof that solar energy can displace fossil fuels and when you consider the number of roof tops that are indeed suitable for solar panels, we could displace all of our electrical generation needs in theory. Practically, we will always have a need for base load generation, but the fact that distributed generation "could" take on such loads is an indication that solar energy is and is going to only grow as a source of power for our society!
So, while I respect your training and experience, I think that you're dead wrong when you say that, "renewable energy won't amount to much in the energy mix". Will it be a hassle for you EE guys? Yeah, at first, but I'm confident that you are and will continue to rise to the occasion and make it work!
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
Aggie: Regarding your point about the "enhanced" recovery methods that are currently being hailed as our energy saviour...While it's true that they have unlocked a substantial amount of gas and oil, this release has come with some pretty significant costs. The biggest and possibly the most costly is the HUGE amounts of water that fracking requires; up to 5,000,000 gallons PER WELL!
Of this 5 million gallons, only between 20 and 80% is recovered meaning that as much as 4 million gallons of what is now considered hazardous waste is lost. Which would be bad enough, but the sad truth is that eventually this fracking fluid will migrate to the surface. If it does so slowly, we may never be able to use it again, but the earth will filter out the particulate matter and the dissolved toxins will eventually settle out. However, if the fluid finds a route to the surface too quickly, it can contaminate aquifers and wells.
In New York State alone there have been over 600 reported cases of well water contamination and in Wyoming there is at least one aquifer that has been identified by the EPA as having likely been contaminated from fracking activities.
The fluid that is recovered is interned in injection wells that are meant to contain the hazardous waste, but has the problem of causing increased seismic activity. As I mentioned in another comment here, do you really think that the fossil fuel industry is going to step up and take responsibility if fracking causes an earthquake in a major metropolitan area such as Dallas/Fort Worth or Atlanta?
Now here's the pisser. Even if you discount the dangers involved in fracking, it's really not going to make that big a difference! This is because while fracking has increased the estimated amount of economically recoverable gas here in the US, there is already a movement afoot to switch a large portion of our transportation fleet to natural gas. So, while there are organizations that have estimated that we now have a 500 year supply of natural gas that is recoverable, that is at CURRENT consumption levels. If you switch even a small portion of our transportation fleet to NG, that (overly optimistic) estimate drops substantially.
Factor in the fact that we are switching at least two LNG importation stations to exporting LNG and that increase is reduced even further. I've seen estimates that with 10% of our transportation fleet being switched to NG and two LNG exporting stations operating at 80% of capacity, that a more realistic expectation of our domestic Natural Gas supply drops to as little as 50 years!
Here's another pisser for you and this goes for the tar sands of North Dakota and Canada too. That is that the energy payback ratio for these resources really isn't that high. By the time you factor in the additional energy inputs required to obtain the resource, which in terms of fracked natural gas include trucking all that water to the well head, producing the pressures required to "frack" the rock, conditioning the gas, delivering it to the market, trucking the recovered fracking fluid away and reprocessing it or interning it (which is what they are doing now) and the EROEI ratio starts to look pretty dismal. On NG I've seen as low as a factor of 2 and on tar sands I've seen a factor of 1.5. At these levels the cost in water alone makes it not worth it for society!
Regarding your point about the name plate rating of wind turbines, you are absolutely correct that wind turbines operate only at a percentage of their name plate value due to the variations in wind speed and the intermittent nature of wind itself. When accessing a site for a wind farm, a 25% capacity factor is the general rule of thumb before a farm makes economic sense. Some wind farms do better with a capacity factor in the high forties.
Even at 49% these capacity factors pale in comparison to a coal or natural gas plant that can have a capacity factor into the 90's. What you're failing to calculate in though is that the fuel is for all practical purposes, "FREE"! This means that a wind farm can have a lower capacity factor than a fossil fuel plant, yet still be able to operate economically with a net gain to society.
Also, while still not quite ready for prime time yet, utility scale storage works especially well with wind. This is because a wind turbine's power curve doesn't match up very well with the demand curve; the wind tends to blow at night whereas the demand curve peaks in the late afternoon. At night, when the winds are blowing at there most economical levels, demand is low. This means that the power being generated by the wind farms at night can be used to pump hydro into storage ponds or into compressed air holding vessels thereby making the wind power "dispatchable".
In the future we will also be able to beef up the grid so that power can be shipped to where it is needed. For example, an offshore wind farm here in North Carolina could be producing power that is being utilized during a heatwave in California or Arizona. True, there will be transmission losses, but remember...the fuel is free! So, all we have to do is build more turbines!
I don't mean to be argumentative, but the facts of the matter are that fossil fuels are dirty and the greenhouse effect is real. And while nobody truly knows for sure how much oil, gas and coal there is left in the ground, we do know that it's a finite amount. We also know that these substances can be used for a lot better things that burning for heat. So, even if we have a 100 year supply of fossil fuels, that's at today's level of consumption. With the Chinese and the Indians quickly developing a middle class, as well as a more "western" lifestyle (i.e. they want to have cars too), the demand side of our energy equation is going in the wrong direction and we're going to run out sooner than we expect. Before that happens, the competition for these resources is going to get really ugly!
All that added up, we need you engineers to step away from the AM radio and concentrate your efforts on figuring out the ways to make our less dense energy sources work better for us. It's not only possible, barring some unforeseen technological breakthrough, it's totally necessary!
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
If I misinterpreted your meaning, I apologize. I read your comment again and it did seem to me that you were saying that the reason that we don't have the IFR is because liberals killed it. And that is simply not true.
Regarding the liberals being on "their high horse" and not talking to the conservatives is nonsense! While the liberals are partially to blame for our current political gridlock, the conservatives deserve at least as much blame and probably more!
That said, I don't think that energy policy should be a conservative or a liberal thing. Unfortunately, with the big moneyed interests involved and the Citizens United Supreme Court ruling the fossil fuel industry is undeniably muddying the waters and making it very difficult to have a serious conversation.
Finally, I don't know if I'm arrogant or not, but I do know that I'm a terible speler myself and find the spell checker to be a wonderful tool. Seeing the misspelling in your comment made me think that you possibly weren't aware that these dialog boxes on this site have the spell checker. I didn't mean any offense!
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
Aggie: If you think that wind and solar isn't energy dense enough, try sticking your tongue to the wires coming out of a 4 MW wind turbine! I'm being facetious, but the truth of the matter is that there wouldn't be much of you left if you were to do that!
But, you're right to a certain extent. The "simpliest" way to get a lot of energy fast is indeed burning something. But that is where the problem with fossil fuels comes in. When you "burn" something you get a lot more than just energy. You get mercury, fly ash, even uranium and more being emitted into the atmosphere. Plus, you have to mine or grow the things that you're going to burn and that takes energy, as well as also having unintended consequences.
On top of that we're starting (maybe more than just starting) to run out of the high density fuels that we've "powered" the industrial revolution with. If you think about it, it's a lot like inheriting a house from your grandparents and finding a giant chest full of money in the attic (this would be our fossil fuel reserves).
Like any good American you used this new found wealth to build your lifestyle. Maybe you put an addition on to the house and went out and spent some of the money on a fancy new car, new clothes, a few trips, etc. In terms of our society, we used the resource to grow our population and to build a culture where a tomato that contains about 100 calories of energy when consumed has about 1000 calories of energy inputs and yet costs as little as a couple of bucks per pound.
There is no argument that the wealth that was contained in that chest improved our lifestyles or that the wealth embedded in our fossil fuel reserves has led to many great things such as longer life expectancies, etc.. But what happens when one day you go up to that chest in order to get some money out and you notice for the first time that you've made a significant dent in the amount of money that is still in the chest?
How do you react? Do you feel as "rich"? At first, it might not bother you that much. It might be something that you think about, but that you push to the back of your mind because it's not something that you "want" to think about, but as the amount in that chest gets closer and closer to being 1/2 gone you reach a point when you can't ignore it anymore.
And that's where we're at in terms of fossil fuels. Combine that with the external costs of burning the fossil fuels and our society is now at a point where we need to move beyond the paradigm that, "We're rich, bitxh!"
That's not to say that we have to give up our toys. We don't have to quit driving or even zooming around in our 50 foot speed boats that are powered by three 500 cubic inch V8 gasoline engines, but we are going to have to be smarter about how we power our society in order to accomplish this.
We've already figured out how to harvest "power" from the wind and the sun and while you're right that they aren't as energy dense as fossil fuels, that issue has been engineered around. As I mentioned above, the fact that a wind turbine that has a footprint of about .25 acres can generate enough energy to power as many as 500 homes is proof of this.
Yeah, we also have to deal with the fact that the sun isn't always shining or the wind isn't always blowing in one particular location, but those issues too can be engineered around. In the short run by utilizing a hybrid approach (generally natural gas powered peaker plants), in the mid-term by building utility scale storage such as pumped hydro and compressed air and in the long run by beefing up the grid to where energy that is being generated in one part of the country where the wind is blowing or the sun is shining or the waves are still rolling can be used in another part of the country where it's dark or the wind isn't blowing.
All of that said, we also have the ability to use the energy that we generate, no matter from what source, more efficiently.
As a side note, I had this exact same conversation with a guy who was a petroleum engineer who was also a Texas A&M graduate at a buddy's apartment in Garden Grove, California. You wouldn't be that guy would you?;-)
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
Hi Paul: First, thanks for bringing this technology to my attention. While I had heard of "breeder reactors", I had never really dug into researching them pro and con. While I still have quite a bit of reading to do on the subject, I think that I have enough information to answer your question.
It was during the Clinton administration that the IFR project was killed. That said, I think that you're barking up the wrong tree in your attempt to paint this as a liberal vs conservative argument. I say that because while it was during the Clinton administration that the project was killed, ole George W apparently didn't make any major efforts to reanimate it during his eight years in office.
Again, I'm not done with my reading on the subject, but the major objections against the technologies appear to be the cost of researching and building these reactors and concerns about the technology making it easier to divert some of the fuel and/or it's components towards weapons development.
In the limited amount of reading that I've done so far, it seems like those that are in favor of this technology gloss over these concerns and that those opposed seem to be overly quick in demonizing it. At this present time I don't have enough information to have an informed opinion one way or the other.
What I can say is that I'm in favor of continuing to research the technology, but I don't think that the IFR reactor is going to be a magic bullet in solving our energy problems. For one, they are going to be very expensive to build and operate, as well as prone to shutdowns. In short, while the technology holds great promise, it's not ready for prime time quite yet.
Even if it was, we would need to build about 400 of these plants in order to replace our current light water nuclear plants (which do need to be either replaced for safety reasons) and to replace coal fired power plants (which need to be replaced for environmental and health reasons). This large a building project would be extremely expensive and would take decades.
So, while research in the field should continue, wind, solar and other renewable energy technologies are ready to go now and the bird in the bush that IFR represent shouldn't stand in the way of our developing these resources. If IFR technology proves itself and the proliferations issues can be dealt with, I see no reason that this technology can't start to be implemented while complementing renewable sources of energy such as the sun and the wind are exploited.
Again thanks for giving me the nudge to read up on this issue!
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
Here. Here! Excellent comment!
Bob "The Clean Energy Guy" Mitchell
On Brace Yourself for Election Year Energy Rhetoric
Paul: it wasn't the liberals who killed the nuclear industry, it was economics and a really bad safety record!
I'm not totally against nuclear power and am actually starting to get excited about the possibility of a thorium reactor, but the track record of the industry speaks for itself; people, all kinds of people...liberals, conservatives, gay people, straight people, white,black, pink with purple polka dot people, are afraid of it and it costs too much!
Also, there is a spell checker in the upper right corner of these dialog boxes...
Bob "The Clean Energy Guy" Mitchell
On Shale gas helping reduce carbon & overall emissions – but by how much?
Hi Jim: Honestly, I don't think that you even have to go as far as, "if it can be done safely" because, as I mentioned in my previous comment, in the long haul the water that they are consuming and is for all practical purposes being removed from the hydrological cycle, is more valuable than the natural gas that they are collecting.
Energy can be derived from other sources. Fresh, clean water can't be. To put the 5,000,000 gallon per well figure in context, I opened my water bill just yesterday and last month my wife and I went through about 3,000 gallons of water. At that rate, it would take us about 138 years to equal the water consumption of one fracked well! Plus, what I and my wife use eventually makes it back into the hydrological cycle to be used again. The 5 million gallons per well that fracking uses is either lost 9,000 feet underground where it is either trapped (if we're lucky) or migrates back to the surface and is able to contaminate aquifers and wells along it's way.
Between 20% and 80% of that water is recovered by the driller, but is then trucked away to be interned in injection wells where it is not only not able to be reused, it has been shown to increase seismic activity. It's at this point that we have to do the math to determine if it is possible to frack "safely".
Personally, I don't think so based upon the already demonstrated failure rate of fracked wells. But, as I pointed out, it's just a matter of effort on our behalves to replace the energy that the fracked natural gas would bring to the market. Due to the fact that fracked NG has a fairly low EROEI, this really wouldn't be that difficult to do.
But, you're right when you say that jobs usually trump environmental concerns and as long as the industry can push the risks off onto the public, I don't see the industry stopping or our politicians standing up to them.
Bob "The Clean Energy Guy" Mitchell