Download a call to action - OurEnergyPolicy.org

Herschel Specter, President
RBR Consultants, Inc.
[email protected]
1







1.
2.
3.
4.
5.
6.
7.
The Problem
Oil and the Economy
Oil and the Environment
Multiple False Starts
This is Not Your Typical Recession
Towards a Bright Future
Policy Directive
2


The problem is that there are two energyrelated pathways to economic and
environmental catastrophe and we are on
both of them.
This challenge is displayed in Figure One, a
qualitative analysis first published 30 years
ago. We haven’t solved this problem yet.
3
4



Insufficient oil can lead to regional and even
global warfare.
Burning fossil fuels can lead to climate
change.
We must simultaneously solve both of these
environmental and human challenges; not
one at the sacrifice of the other.
We must do this now, but how?
5


Develop a long lasting, affordable, sufficient,
low carbon electric power system.
Develop long lasting, affordable, sufficient,
low carbon sources of liquid fuels.
OK…but how do we get there?
6



These long term solutions are within reach
of present technologies.
The challenges to implementation have
been mostly ideological, political, and
institutional.
The result of failing to overcome these
challenges is that we still do not have an
enduring national energy policy and this
has created enormous national risks. We
can not be a great nation without resolving
our energy dilemma.
7



Oil is both our leading energy-related
national security threat and our leading
source of greenhouse gas releases.
If oil is not phased out we may never:
a. Overcome high unemployment
b. Reduce our national debt
c. Protect the environment
d. Have national security
So let us examine oil more closely:
economically and environmentally.
8



Imported oil represents up to half of our
negative balance of payments.
Major oil shocks have disrupted world energy
markets five times since 1973.
Oak Ridge National Laboratory: “Most of the
oil shocks were followed by an economic
recession in the United States.”
9
10
11





Assume constant oil consumption at 18.8 MB/D,
average cost of $120/barrel in 2008 dollars over next
25 years.
Add in cost for non-combat national defense and cost
of health effects. Total national cost for next 25 years
for domestic and imported oil comes to at least $25
trillion (2008) dollars. About a trillion dollars per year.
About $35 trillion (2008) dollars when recessions are
included, based on ORNL data.
There may be little to no funds available for renewable
energy or for the prevention of climate change.
There may only be limited funds available to explore
and develop new sources of oil.
12



“Business as Usual”, with its steady supply
of oil, is optimistic. Supply interruptions of
critical resources are very expensive.
Example: The U.S. electric power system is
99% reliable. The 1% unavailability is due to
power outages and degraded voltage. The
National Renewable Energy Lab calculates
that this 1% decrease in reliability costs the
nation between $119 to $188 billion dollars
per year, far more than the cost of the
electricity, if it were available.
Oil disruptions are also very expensive.
13



OK… We agree that oil represents a huge
economic and national security issue. Should
we support the Keystone pipeline from Canada
and develop oil from tar sands, and/or oil from
the Arctic, and/or from offshore oil projects?
But how do we resolve national security issues
and simultaneously deal with climate change?
Without an energy policy and implementation
plan it is difficult to answer these questions in
a balanced and informed way.
14




Burning oil creates air pollution, causes
health effects.
Largest source of GHG in the U.S.
The International Panel on Climate Change
(IPCC) calls for the phasing out of all fossil
fuels by about 2050.
IPCC analyses were incorporated into H.R.
2454, the “American Clean Energy and
Security Act of 2009” (now dormant).
15




EPA was tasked with analyzing H.R. 2454
and it produced Figure 5.
EPA was only given a few weeks to complete
this very important analysis.
Because time was short, EPA relied on
energy projections from DOE which did not
show any significant decrease in oil use for
decades.
Almost 20% of the GHG releases do not
come from burning fossil fuels. To meet
H.R. 2454 limits for year 2050, almost all
fossil fuel use would have to end.
16
17



A review of the EPA analysis of H.R. 2454,using
DOE projections showed that H.R. 2454 won’t
achieve its goals by 2030, even if there were no
coal or natural gas. See Figure 6.
Note the wide disparity between GHG limits in H.R.
2454 and GHG releases estimated by the
Department of Energy in its Annual Energy
Outlooks.
Congress, EPA, and DOE are not on the same page.
18
19




There is plenty of oil if we just “Drill, Baby,
Drill”.
We could be an all renewable energy country
in just 10 years.
Let’s rely on DOE’s Annual Energy Outlook.
Let’s hope for a decrease in World Oil
Demand.
20



Despite a near tripling of world oil prices,
non-OPEC production, about 60% of the
world output, has not increased significantly
since 2004.
The largest oil discovery in the last 40 years,
about 8.5 billion barrels of oil off of Brazil,
would only be enough for about 100 days of
world consumption.
“Drill, Baby, Drill” won’t work…or will it? More
later.
21



The International Energy Agency’s 2010
world crude oil projection indicates that
conventional crude oil production has
already peaked.
Crude oil has to increasingly come from
discovered oil fields, which are not yet
developed and from oil fields that have not
even been discovered, let alone developed.
This is a very uncertain world oil future.
22
23

Examples: (1) Solar thermal energy electric
power plants are to increase by 3,300 in ten
years… but these power plants would be in
the desert and there is no water heat sink
there. (2) More wind power in 10 years than
what the American Wind Energy Association
says would take 23 years.(3) Wind power is
intermittent, the sun does not shine at
night and is only about half as strong in the
winter as in the summer.
24

DOE doesn’t promote extreme energy
scenarios like “Drill, Baby, Drill” or an all
renewable country in 10 years. They do
worse… they use a business as usual
model that neither addresses national
security issues nor climate change. In 2009
actual oil imports were 9.44 MB/D; DOE
projection for 2035: 9.11 MB/D in oil
imports. In 2009, 5447 million metric tons
of CO2 was actually released. DOE
projection for 2035: 6310 million metric
tons. Neither the left or the right side of
Figure One is addressed by DOE energy use
projections.
25
Country 2007
2010
Consumption Population, in
Barrels/day thousands
B/D per
person
USA
China
India
Brazil
Russia
Total
0.0668
0.0057
0.0023
0.0123
0.0201
0.0114
20,680,000
7,578,000
2,722,000
2,372,000
2,858,000
36,210,000
309,556
1,338,240
1,182, 487
193,117
141,927
3,165,327
26


If the average oil consumption in China
matched the average in the United States, it
would require more oil than the world now
produces.
The large oil consumption per person in the
United States is an indication of our great
vulnerability to oil prices and supply
interruptions.
27





With rising demand for oil and a flattening of oil
production, it was inevitable that the margin
between supply and demand would go to zero.
This happened in 2008, precipitating a world-wide
recession.
This latest recession created a temporary margin
between supply and demand.
Rising demand could cause another zero margin
recession. IEA estimate of world production in
2011 was ~90.0 MB/D, world consumption ~89.0
MB/D. Margin only ~1.0 MB/D.
Will there be another oil-related recession in the
next Presidential term?
28






Prior oil related recessions were largely politically initiated
(Oil embargo, Iranian revolution, Iran/Iraq war, Gulf war).
Recessions caused drop in oil demand and then lower oil
prices.
Lower oil prices acted like a stimulus package, without adding
to the national debt. As economy improved, oil demand and
prices went up, starting the cycle again. However, no “free”
stimulus package this time.
Recession in 2008 was started by a physical initiator;
essentially ZERO margin between oil demand and supply.
With growing demand and an uncertain oil supply, we face
future zero oil margin situations with severe economic and
national security consequences. Some predict another zero
margin situation in just a few years.
Physically initiated oil-related recessions start differently than
politically initiated ones and end differently.
29
30
31
32
33




We now have physically initiated oil
recessions, but
We still have possible politically initiated oil
recessions, e.g., the Strait of Hormuz
challenge.
We have been severely weakened by the
present recession. Back-to-back recessions
would be very harmful.
Hence a “Call to Action”.
34




We can achieve full employment by reindustrializing the United States, much of
which would be in energy related products
and lower energy bills.
We can have a positive balance of
payments, a much smaller national debt,
and secure sources of energy for many
generations to come.
Implementing a balanced energy plan could
lead to over 11 trillion (2008) dollars in oil
savings over the next 25 years.
We can have clean air and do our part to
prevent climate change.
35



Emphasize conservation.
1st generation conservation: Better insulation,
more efficient appliances and cars, district
heating, co-generation, etc.
2nd generation conservation: extract far more
electricity from present electric power system
by using energy storage systems to flatten
demand profile.
36






Shift coal out of electricity generation into making
methanol to displace gasoline.
Expand natural gas to make methanol.
All new LDVs should have flexfuel engines.
First, develop plug-in hybrid cars with flexfuel
engines, then develop plug-ins with high
compression methanol engines.
Build an onshore methanol infrastructure to
displace oil and to support a future “methanol
economy”.
Investigate biomass/nuclear hybrid technologies to
produce ethanol.
37




Build offshore platforms to convert
dissolved CO2 in seawater into methanol.
No net CO2 would be generated.
Methanol supply could last thousands of
years and supply platforms could be located
worldwide.
Use high temperature nuclear plants/
geothermal sources to provide energy for
the CO2/H2O to methanol conversion
process.
38
39






First- Use coal and natural gas to make
methanol.
Develop onshore methanol distribution system.
Make all vehicles, including plug-ins, with flexfuel engines.
Develop high compression methanol engines.
Second- Develop offshore methanol sources.
Third – Replace onshore fossil based sources of
methanol with offshore, sustainable methanol,
with no net GHG, worldwide locations.
40
41





Complete the phase out of fossil fuels by replacing
natural gas electric power plants with evolutionary
nuclear power plants and renewable energy.
Reduce costs for nuclear energy by using South
Korean and Chinese manufacturing and
construction practices. Nuclear manufacturing
factories located in the USA, using American
workers.
Expand nuclear power to be a source of hydrogen
and high temperature gases, including steam.
Investigate offshore geothermal energy to make
methanol.
Integrate ethanol and methanol sources,
distribution networks.
42
43



MIT natural gas study phases out fossil fuels by
around 2065.
MIT analysis would not meet 2050 fossil fuel GHG
release limit built into H.R. 2454. To do so would
require a more aggressive use of nuclear power
and renewable energy to meet 2050 limits.
Use of South Korean/Chinese manufacturing and
construction technology would slash nuclear costs
and make meeting the 2050 GHG date more likely.
Share costs/ technology with South Koreans/
Chinese and build “nuclear factories” in the US with
a fixed price per KWelectric.
44

Pull together and develop a new vibrant
America or continue our divisive ways and
spiral downward.
45

The President should convene a 4 to 6 month
task force to report on how to establish a
methanol economy as soon as possible.
46

Thank you. I hope that this has been useful to
you.
47





Additional slides covering:
The Environment
Economics
Politics
Oil Use in the USA
48
49
50
51



Once buried, nuclear wastes do not migrate
even over hundreds of millions of years.
See: “What does nature tell us about nuclear
waste disposal?”
http://www.nuclearfaq.ca/enf_section E.htm
See Section E.2
52
53



Severe accidents are very unlikely.
Consequences of nuclear accidents from
extreme natural phenomena (Tsunamis,
category 5 hurricanes, huge tornadoes,
massive earthquakes) are tiny compared to
the non-nuclear consequences of these
destructive forces.
Ongoing studies (SOARCA program) at the
Sandia Nat’l. Lab show that LWRs act like
large, passive filters during severe
accidents. Releases are far smaller, greatly
delayed.
54
55




Assume oil use similar to that in EPA,DOE, and NAS
“Business as Usual” type projections, calculate GHG
releases from oil, place on EPA plot of H.R. 2454.
Even with zero use of coal and natural gas, oil
alone defeats H.R. 2454 by around 2030. With 20%
of today’s coal and gas use, H.R. 2454 defeated 5
years sooner. (See Figure Four) With 50% of today’s
coal and natural gas use, H.R. 2454 defeated in
less than 10 years.
Climate change limits can not be achieved unless
oil use is phased out.
Coal and natural gas do not present significant
national security or economic challenges. Therefore
phase out oil use first. Use coal and natural gas as
transition fuels towards long term solutions.
56
57







Total petroleum consumption: 19.2 MB/D
Transportation = 69.7%, 13.4 MB/D
Cars and light trucks = 8.6 MB/D
Medium trucks = 0.5 MB/D
Heavy Duty Vehicles = 2.3 MB/D
Other transportation = 2.0 MB/D
Non-transportation uses = 5.8 MB/D
58

See: “Biofuels Done Right: Land Efficient
Animal Feeds Enable Large Environmental and
Energy Benefits”
B.F. Dale, et al, Environmental Science and
Technology, 2010, 44, pgs.8385-8389
Test this concept in a well constructed
demonstration program.
59