China's Nuclear Build-Fest

The NYT is running a cautionary article on China's plans to exponentially expand its nuclear fleet over the next 30 years. A number of inches are dedicated to a potential scandal involving bid-rigging and the president of China National Nuclear Corporation, later noting that "While none of Mr. Kang’s decisions publicly documented would have created hazardous conditions at nuclear plants, the case is a worrisome sign that nuclear executives in China may not always put safety first in their decision-making." Reading between the lines on that sentence, I'd say the NYT tried really hard to find a link from that scandal to safety, and finding none, decided to make everything hypothetical and run with it anyway.

Despite that segment, the article actually touches on an interesting trend in Chinese energy policy, which I happened to also hear about last night at a talk by Jeff Tolnar, the CTO of BPL Global. His talk focused on smart grid technology, but within that mentioned how China prefers to do things from a centralized perspective (big surprise there), so for smart grid that means focusing on the supply side first. This paradigm fits with its nuclear ambitions as well: China plans to build 391 GW of new nuclear capacity by 2050, 61 GW of that by 2020. It currently has 9 GW. In comparison, the US has 100 GW of nuclear capacity today. Even if China meets its nuclear goal, the IEA projects that its emissions will grow "72 to 88 percent by 2020" according to the same NYT article.

So this has gotten me thinking, is China focusing on its large energy infrastructure because that is how its government functions best? Or would China actually be a very effective implementer of demand response and energy efficiency? (After all, if a government can tell you how many kids to have it could probably also be able to tell you what kind of light bulbs to use as well as when to use them.)

Copenhagen: Christmas in December for Envirobloggers

Considering I've posted a few times on the lead up to Copenhagen, the rational blog reader would expect feverish updates right about now on all the goings-on of the summit. Unfortunately, PhD students during finals don't behave rationally, which is probably why I am updating right now in the first place.

I'm going to keep this short and sweet by just giving you some links to interesting articles I've been reading about Copenhagen for the past few weeks.

New York Times weighs in on costs.

Russia is an interesting story. If there ever were a country that could benefit from a warmer climate, it's Russia. Couple that with the fact that Russia's emissions tanked in the 1990's while the Soviet Bloc collapsed, making it look on paper like Russia has had the best success at curbing emissions, and you get a country that is very hesitant to agree to any terms now at Copenhagen.

The Economist always has a fresh take on events.

The Obama Administration is trying to bring some heft to the table with or without a climate bill: the EPA's rulemaking is a well-timed step in the right direction.

...and if you like pulling your hair out read Sarah Palin's most recent op-ed in the WaPo.

Climate Bill Update Update

Just another timely reminder of the link between the climate bill making its way through Congress and the potential for a meaningful agreement on climate change mitigation and adaptation strategies at Copenhagen next month:

It seems to me we have a chicken and egg dilemma here. The international community (especially developing countries) are weary of supporting a treaty at Copenhagen before the U.S. has proven its sincerity by passing a similar, but most importantly, legally binding, law at home. At the same time, the U.S. Congress doesn't want to be seen as bowing to international pressure by shaping our climate bill to match international requirements set at Copenhagen. What to do, what to do...

Climate Bill Update

It seems like just yesterday our intrepid energy bill passed the House 219-212 as Waxman-Markey, or H.R. 2454. Today, a similar bill recently skidded through the Senate Environment and Public Works Committee as S. 1733, without stopping for debate or even to greet the Republican members of the committee. While a strategic move by Chairwoman Senator Barbara Boxer (D-CA), this will no doubt leave a bad taste in the mouths of many Republicans when the bill finally screeches to a halt on the Senate floor for a full debate.

Now, ominously, Senator Lugar (R-IN) has emerged from a high profile meeting with UN Secretary General Ban Ki-moon, Sens. John Kerry (D-MA) and Joe Lieberman (I-CT) saying "I don't see any climate bill on the table right now that I can support," which is really bad news for Democrats, because Sen. Lugar is one of a handful of Republicans who the Democrats were hoping would support the bill, as well as an influential member of his own party.

I was curious to know why he might oppose the bill, and after reading a recent speech of his I have a theory. Out of concern for potential crop shortages in developing countries (and likely also his home constituency) as a result of climate change, he is a proponent of genetically modified (GM) crops for increased productivity, which does not play a part in S.1733. (As some areas become more arid due to climate change, one negative effect could be decreased crop productivity. GM crops are one adaptation option to keep food supply steady for a growing population.) So perhaps it's the lack of this potentially beneficial climate change adaptation technique in the bill that's keeping his support at bay. However, the Obama administration does not seem to be opposed to GM crops, keeping many former Bush policies on that matter in tact. So why would GM not find its way into S.1733 as a compromise?

One word: Copenhagen. Sen. Lugar even mentions it in his speech that the European Union is vehemently opposed to promoting GM crops, and the US wants to make a good impression when the UNFCCC convenes in December in Copenhagen to hash out a successor treaty to the Kyoto Protocol.

Well, that's probably part of the story, and just my theory. Why do you think Sen. Lugar is withholding support of S.1733? And with Copenhagen literally weeks away, the US doesn't have a hope of having a climate bill passed by then. Is it best for Obama to enter the UNFCCC arena with what we have now or do we need something more?

Obama loves the Aptera: an update

Alleged Aptera final design pics, Autoblog Green (click to expand)

A few weeks ago, TPG posted about how the Aptera e2 is our favorite electric car. We feel that the Aptera's electric drive, funky look, high mileage (250 mpg-equivalent), and low cost make it a car that will pick up eco-minded chicks. However, we mentioned that because the Aptera has 3 wheels, not 4, it was ineligible for grants from the $25 billion Advanced Technology Vehicle Manufacturing (ATVM) program at DOE.

Well, no longer. Last week President Obama signed into law a bill expanding the ATVM program to cover "any manufacturer of enclosed two- or three-wheeled vehicles that carry at least two people and get 75 miles per gallon ". The bill was originally sponsored by Rep. Brian Bilbray (R-Calif.) and Rep. Adam Schiff (D-Calif.), who hail from Aptera's neck of the woods. A little lobbying goes a long way!

Although the loans won't help Aptera meet their goal of selling cars this year (the loan probably won't be approved for 6 months), it will help them quickly ramp up production and get Apteras to all TPG readers!

On the Role of Nuclear Power in Climate Change Mitigation

Nuclear power has always been a contentious subject among parties in the climate debate. Pragmatists, among whom I count myself, expound the importance of nuclear power expansion to supply near-zero carbon baseload power. Idealists think we can achieve an 80% reduction in CO2 emissions by mid-century by using renewables, smart grid, and happy thoughts.*

An article today in the Washington Post illuminates how this debate is playing out on capitol hill, with Republicans weary of supporting any climate bill that leaves out significant incentives (such as federal loan guarantees and federal support for training workers at nuclear plants) for nuclear power. Interestingly, it seems the Senate's nuclear proponents are even more optimistic than those in the nuclear industry when it comes to the question of how many plants we can expect to build in the next 30-40 years: Senator Lamar Alexander (R-TN) wants 100 new plants (doubling the nation's current capacity), while nuclear industry finance experts place the most optimistic estimates at around 50 by 2035.

This leads to an interesting demand-side management problem: nuclear plants are designed to provide continuous baseload. With a much higher percentage of electricity coming from nuclear, utilities will need to find ways to utilize that power at night when demand is at its lowest. One option would be to install electric water heaters, a method France uses to absorb its electricity output at night (it uses upwards of 75% nuclear power). Another would be using that electricity to charge electric vehicles (more of a long term goal).

Another interesting snippet from this article is that for nuclear to be a more attractive option than gas-fired plants, the price of natural gas must be above $7 per 1000 cubic ft. Right now, the price is about half that. The volatility of this price point notwithstanding (see figure), I thought it would be interesting to see what sort of carbon tax would be needed to make nuclear and gas-fired plants break even. With natural gas having an emissions coefficient of 116 lbs CO2/1000 cubic ft (from the EIA) and a price of $3.5/1000 cubic ft, a carbon price of $60/ton would make nuclear the more attractive option for additional generating capacity development. And that includes a huge assumption about natural gas prices staying constant: accounting for the uncertainty in price would make nuclear the more attractive option with a much smaller (if any) carbon price.

*The author apologizes to anyone she's offended with her snarkiness.

Human rights today, climate change tomorrow

A recent editorial in the Wall Street Journal questions President Obama’s recent softening on human rights negotiations. Bret Stephens cites Obama’s refusal to meet with the Dalai Lama, softening positions on Sudan, Burma, and Iran as appeasement to China. Mr. Stephens feels the goal of these compromises is to get China at the table in Copenhagen for climate negotiations in December.

The claim is serious. Currently, there are nearly a million Sudanese refugees. Approximately 110,000 Tibetans live in exile. 50 million Burmese live under a brutally repressive regime.

However, Stephens never asks why Obama is making these sacrifices for climate change. He should have instead asked if preventing climate change is worth turning a blind eye to human rights abuses.

Climate change will have a disastrous impact on human welfare. The IPCC AR4 report states, “In the year 2000, climate change is estimated to have caused the loss of over 150,000 lives”. Impacts will be higher in the future: by 2050, the an estimated 133 million people will be at risk of hunger because of climate change. Decreased freshwater availability in Asia, due to melting glaciers, “could adversely affect more than a billion people by the 2050s”. And by the end of the 21st century, climate change will increase the number of people flooded in coastal populations by 80 million.

Enough of the scary forecasts. Bottom line: climate change is expected to increase the suffering of hundreds of millions of people. The real question is: how much are we willing to increase suffering today to reduce suffering tomorrow?

An easy answer is that we’re not willing to compromise at all on human rights. Human rights compromises lead to a slippery slope that undermines our moral character. Although this is a noble position for an individual to take, it is an impractical position for the U.S. government. International diplomacy requires compromise. Not compromising equals inaction, which will increase suffering from climate change.

Economists deal with this problem by discounting future lives, just as you discount the costs of future purchases because of inflation. OMB suggests federal agencies adopt a 3% discount rate on statistical lives for regulatory policies that impact human health.

A 3% discount rate means 15 million deaths in 2009 equal 50 million deaths in 2050 and 122 million in 2080. Are we willing to sacrifice the human rights of 15 million today to prevent the suffering of 50 million in 2050? How should we, as a society, value future human lives?

An End to Fossil Fuel Subsidies?

Simon writes each week on international issues relating to energy policy.

Among the most recent grand ideas to emerge in the pre-Copenhagen scrum is this from the US administration. President Obama has thrown his backing behind a plan to ban all government subsidies of fossil fuels, everywhere in the world.

It is a plan with considerable merit. New forms of electricity generation are constantly called on to prove themselves economically - a difficult enough task without their fossil fuel competition receiving both implicit and explicit subsidies in many countries.

However, fossil fuel subsidies are used to achieve a variety of policy objectives, and their removal will leave governments having to work out how to replace them. In the developing world, especially oil-producing countries, though they distort consumption patterns, they can be a more effective way of transferring wealth to the population. After all, in nations bedeviled by corruption, the choice is often not between cheap fuel and other government services, but between cheap fuel and embezzlement. In non-producing LDCs, subsidized fuel is not a perk for the very poorest, but can facilitate simple entrepreneurial activity - being able to run a tractor to improve land's productivity or have a generator so a factory no longer depends on unreliable municipal electrical utilities.

In the developed world, meanwhile, programs such as the Low Income Home Energy Assistance Program (LIHEAP) in the US or Britain's Winter Fuel Allowance program, fuel subsidies are a standard form of redistribution to the poor or elderly. Abandoning these programs risks leaving vulnerable communities bearing the brunt of switching to more efficient energy production.

Meanwhile, the tax breaks, competition protection and generous regulatory environments that western governments offer for a variety of industries, including oil and gas exploration and drilling, electricity generation and utilities could all come under pressure from the new agreement.

I think the idea is a good one - removing government subsidies for big business and polluting fuels is a necessary step towards leveling the marketplace for energy production and nurturing the next generation of energy solutions. However, as with almost all the big ideas in energy these days, the political obstacles are going to be large, with influential industry and citizen groups both being affected. Having resolved the question of what to do, it'll be interesting to see how to make it happen.

You have a nice day too, Mr. Friedman

I've been mulling over an Op-Ed by well-known economist Thomas Friedman for the past few days. To summarize, Mr. Friedman visits Applied Materials' Silicon Valley headquarters and bemoans the fact that all of their solar panel production facilities are located abroad (in Germany, Taiwan, Spain, Italy, Abu Dhabi, India, and China, to be precise) and therefore the U.S. is doomed to become an importer of solar panels from China, thus repeating the vicious cycle of being beholden to another area of the world for our energy needs for decades to come. Well, there it is. Global competitiveness: doomed. National security: doomed.

Fear not. As you may have gleaned from my tone, I don't entirely agree with Mr. Friedman's assessment of the situation and here's why:

One of his major points is that the solar industry needs clear and stable policy signals and he references Germany's feed-in tariff system as a way to do that. I completely agree but Mr. Friedman is putting his cart (solar PV) before his horse (the electricity grid). Any major policy effort to increase significantly the amount of variable electricity generation feeding into the grid will first require an overhaul of how the grid operates and interacts with external power sources. This needs to happen first. Even more challenging will be your average Joe Megawatt who wants to sell his excess power back to the grid: this isn't The Gap, people, returning electricity isn't free. It takes extra modifications and operational planning. If all of this isn't optimized then feeding in Mr. Friedman's "zero variable cost" renewable energy could cost more in terms of dollars and emissions than the "do nothing alternative."

Another problem I have with the article is his singular focus on solar PV and sometimes wind. He states, "The world is on track to add another 2.5 billion people by 2050, and many will be aspiring to live American-like, high-energy lifestyles. In such a world, renewable energy — where the variable cost of your fuel, sun or wind, is zero — will be in huge demand." Not true. Energy will be in high demand, and most people won't be thinking about whether it came from a solar panel or a nuclear power plant. So let's not lose focus on the big picture and all the other options (carbon capture, nuclear power, geothermal, hydro) out there for providing low-carbon reliable, baseload electricity. And let's not forget that many of these low-emissions alternatives to solar panels are being developed and built right here in the USofA.

The Hydrogen Challenger

A couple days ago I was cruising the internet and stumbled across something interesting: the Hydrogen Challenger.

The Hydrogen Challenger is a tanker ship that has been refitted with wind turbines and an electrolyzer to make hydrogen. The ship cruises out to the open sea where the wind blows the hardest, anchors for awhile and fills up with hydrogen, then cruises back to port and unloads the hydrogen.

At first I thought this was a weird idea cooked up by someone with too much money, or maybe another Rainbow Warrior. But at a second glance, I think it may be an idea ahead of its time. Compared to the most similar alternative, offshore wind turbines, it has several advantages.

Higher wind speeds: The best wind resources on land are about 9 m/s. A mile or two offshore, where offshore wind turbines are located, the wind blows at about 13 m/s. The Hydrogen Challenger can go further from the coast than offshore turbines, where wind speeds approach 20 m/s. The power delivered from a wind turbine increases by the wind speed cubed, so the same turbine could deliver almost four times the power if its on the Hydrogen Challenger instead of stationed offshore.

Higher Capacity Factor: A wind turbine only generates electricity when the wind blows, and when people want to buy its electricity. A lot of times, turbines generate power when it isn’t needed, such as at night, so the power is wasted. The Hydrogen Challenger stores energy in hydrogen, so the generated power is never wasted.

Storage and Markets: Unlike electricity, hydrogen can be stored in large quantities and for long periods of time. Storing energy in hydrogen allows the generator to sell power only when and where the price is highest. This means that every kWh of hydrogen energy is much more valuable than a kWh of electricity.

Transmission: Although it seems impractical to retrofit barges with wind turbines, I bet it is cheaper than running undersea electric lines to offshore power turbines. Undersea electric lines are very expensive, ranging from $20,000 - $80,000 /MW-km. Sources say transmission costs are 10% - 20% of total cost for offshore wind farms.

I think the Hydrogen Challenger is a good idea that we’ll see more of in the future, but there are some problems that will need to be addressed:

Electrolyzer cost / efficiency: Electrolyzers are expensive and inefficient (~70%).

Storage: To generate as much power as possible, the barge should stay at sea generating power as much as possible and minimize unloading trips. A barge may not have enough volume to store the amounts of hydrogen generated.

Wind Speed: Curiously, no commercial wind turbines today can handle the 20 m/s winds hydrogen barges would see…most max at 13 m/s.

Shipwreck!: The top heavy barge can't capsize in a storm.

An interesting concept. What do you think…will we see fleets of pirate turbine-barges trolling the open seas in the future?

Innovative idea of the day: space-based solar energy

While the idea of capturing solar energy in space and transmitting it back to earth has been around for decades, it seems the idea is gaining traction in Japan as well as within the U.S. government (see the topic mentioned on the change.gov website here and the 2007 National Security Space Office report here).

There are a lot of potentially interesting hurdles to explore with respect to this extremely nascent technology, but I'd like to focus on the contrast between the Japanese and U.S. approaches to space-based solar for a minute.

First, notice the dollar (or yen) figures involved. The U.S. has spent $80 million over three decades studying the feasibility of space-based solar (SBS). Japan has committed the equivalent of $21 billion (over 260 times what the U.S. has spent) to develop and build a SBS station over the next three decades. So it seems likely that if SBS ever becomes reality, the U.S. will be an importer (and whether that's bad is another discussion on global competitiveness I can save for a later date).

Also, Japan has immediately brought its heavy hitters to bat for this technology, while the U.S. allocated a study to DoD's obscure (but nonetheless effective and important) National Security Space Office. In sum, the U.S. ought to get its proverbial toe out of the water and decide whether to dive in with Japan or go find another pool to play in when it comes to advanced renewable energy ideas.

Sinn oder Unsinn...

Simon writes each week on international issues relating to energy policy.

Writing in the Financial Times this week, German professor Hans-Werner Sinn describes what he terms "the green paradox" ("a green paradox" might have been more suitable, but that's beside the point). By this, he means the unfortunate consequences of future policy to limit carbon emissions being to encourage producers to extract more oil, gas and coal today, before their costs are increased. His solutions: a perfect, "seamless" global emissions cap (easier said than done) or a punitive tax regime on producers (a Sinn Tax?).

How the latter is supposed to operate is a mystery. Who is going to be able to tell Saudi Arabia to hand over the $69 profit it makes on a $70 barrel of oil as a matter of international law? No organization that currently exists could do it, and can't image one that could without giving rise to very serious concerns about democratic accountability and liberty that would outweigh any environmental benefit. It is also worth noting that, with the price of oil in Sinn's vision still high, temptations to cheat would be rampant. From OPEC through the Iraqi Oil for Food program, history has shown attempts - even internationally sanctioned attempts - to compel countries to stop producing their only revenue source to be destined for failure.

The carbon cap, improbably, seems the more viable of Sinn's proposals. But the only way that it will work is the only way that any demand management strategy (most of which he appears to loath) works. The prices for substitutes have to come down. This straightforward observation is completely absent from his argument, but is crucial to it. Without functional and affordable alternative technologies, all the king's horses and all the king's men couldn't keep people from wanting energy products, and the countries that have them from supplying them. A cap changes the definition of what's affordable, moving the equilibrium from, nominally, the cost of producing oil to some other, policymaker-set value. But it doesn't change the fundamental; that unless there's some other way of powering the lights, that oil, coal and gas is going to be produced and combusted.

Climate Science, Politics and Kurt Vonnegut

"Here's what I think the truth is: We are all addicts of fossil fuels in a state of denial, about to face cold turkey." Kurt Vonnegut, Jr.

Research in the field of global climate change has made significant strides in the modern era. Paleontologists have used history to test and refine new concepts, advanced spatial and temporal models have allowed us to make long-term predictions, and socio-economic analysis of climate change impacts have all served to bring the issue into the political domain. The role of research (basic and applied) in bringing climate change to the political domain can not be understated. Without trust in the scientific method, climate change would have faltered as environmental propaganda from the get-go. Notice the emphasis on the scientific method and not simply the science or science-based results. More on this in a moment.

And so in time, climate change has been labeled environmental propaganda because the scientific arguments which at first held so much weight, have over-stayed their welcome and been uttered too many times by politicians. Politicians concluded more and new science was needed. In response, a portion of the scientific community and some politicians formed an unwritten agreement that science would attempt to advance a political agenda much as science originally placed the issue on the political agenda. To my mind, this has manifested itself most directly in the pursuit of climate proof, which often takes the form of tying weather events and climate trends to climate change.

Today we see a variety of researchers in the field of global climate change including honest brokers of climate policy alternatives, genuinely pure climate scientists, and issue advocates (both admitting and non-admitting) (see Roger Pielke, Jr. for more). I do not object to advocacy or politics in research as I believe the portrayal of science as objective is an illusion – no scientist operates in a vacuum free of values. What I do object to, and this is my motivation for contributing to this blog, is a failure to recognize the clout science holds lies less in its ability to generate new knowledge or even the purported objectivity of science, and more in the scientific method.

There is no process of truth-seeking more logical than the scientific method. A testable and falsifiable hypothesis is formed, the hypothesis is tested and subsequently refuted or upheld, and an independent researcher reproduces the results. In other words, hypotheses are to be disproved and never proved. To me, the scientific method is holy because it says humans can never know any aspect of nature in its entirety and this is fucking exciting. A scientist seeking to prove a hypothesis simply isn’t using the scientific method and does not have the power of the scientific method on his/her side.

I feel its time to draw some conclusions. 1 – At this stage in the game of climate politics, it seems like only proof will push the boulder over the hill. Don’t be fooled. 2 –The scientific method can’t generate proof, but it garners respect and is not to be ignored. So use it. 3 – Start listening to climate skeptics instead of always convincing them. Become a skeptic yourself on points that don’t sit well. 4 – Scientists and researchers should stop trying to build evidence and proof of climate change and instead cull and refine the hypotheses, models, and predictions already out there. Time should assist in re-evaluating past research, if only we make time (and funding) for it.

"Another flaw in the human character is that everybody wants to build and nobody wants to do maintenance." Kurt Vonnegut, Jr.

Can lithium aid Bolivia's depression?

Simon writes each week on international issues relating to energy policy.


Twice in the space of the past day, I encountered an energy story I'd never come across before. The story provides a glimpse of a potentially vast revenue stream for a highly impoverished country, but is accompanied by some warnings from history. It features a Latin American nation often overshadowed by its more truculent or troublesome neighbors to the north – Bolivia. It also features the lightest metal in existence, and perhaps the critical ingredient in the electric-car revolution – lithium.

Bolivia is home to the world’s largest salt flats, and these salt flats are in turn home to the world’s largest lithium deposits – by some accounts 50% of all the world’s lithium is located in the high, hot Uyumi plateau. And, as demand for the metal is driven up by battery makers, for use in laptops, longer life AAs, and increasingly by carmakers, the Bolivian government is looking to develop this heretofore-untapped resource. President Evo Morales’ Socialist government has determined that the state will take sole responsibility for the new mining operations, speaking in grandiose terms about being not just the “Saudi Arabia of lithium” – extracting the metal for wholesale – but of becoming the world’s leading battery manufacturer . Such ambitions are bold, but also risky, as many commodity-dependent economies can attest.

The historical record in such situations is not good. The concept of the “Resource Curse” is well established, as the likes of Jeffrey Sachs and Paul Collier have expounded. Excessive dependence on one industry can skew economic allocations, engender corruption and sometimes violence, and inhibits growth. Still, while the problems are well-known, solutions are hard to find. The alternative, ignoring – or at least underutilizing – natural resources won’t help growth either, and may be morally indefensible in a country where 60% of people already live below the poverty line. The jobs and income quality development would provide would be invaluable, especially among the indigenous communities who inhabit the salt flats, and whose income levels are markedly lower than people in other parts of the country.

As prices continue to rise, it is going to become harder to hold off developing these deposits. It seems inevitable that despite Morales’ ideological hostility, there will have to be some involvement from foreign companies. While he can maintain ownership of the resources and their rents, Bolivia simply lacks the expertise, not to mention the capital, to realize their prospects. The treatment of western oil and gas companies in the last few years, summarily nationalizing and expropriating their assets, will have done little to encourage involvement, though.

Of the possible solutions suggested here, one of the more interesting – and implementable – ideas may be one from close(ish) to home. Privatization is out for the time being, simply because it is incompatible with the current politics of the country. Whether or not it would have much success is also questionable, with instances such as the former USSR showing it to be easy to get devastatingly wrong. Creating a Norway- or Dubai-style sovereign wealth fund to take proceedings and invest them in other sectors, to provide a longer-term and diversified revenue stream. Such funds, though, are only as responsible as their governors, and it is hard to tell how accountable the Bolivian government would be. But the third, slightly familiar idea, that of establishing a revenue distribution fund, similar to Alaska’s program for distributing oil proceeds, may be the most preferable. It reduces the dangers of corruption by putting money in the hands of citizens rather than the government. It helps raise individual incomes, allowing for the expansion of other private enterprises. The risks of inflationary pressures exist, but are probably no worse than other forms of distribution of the revenues, and with this system would have the added advantage of helping less well-off parts of society rather than waiting for a trickle-down from elites (which would have the added risk of capital flight).

There are a lot of ifs to be addressed before we see this experiment take shape – at present prices this windfall is still minor, compared with the lucre that hydrocarbon fields provide (the value of Bolivia’s lithium amounts to about two thirds of its current GDP. By contrast, Saudi Arabia’s proven oil reserve are valued at around 40 times its current GDP, and Venezuela’s at around 20x). However, if electric cars expand their market share, and if lithium batteries remain the technology of choice to power them, the price of their commodity should continue to climb. Bolivia may well provide an interesting test case for a country trying to handle a new bounty of natural resources, using all the experience economists have learned from the previous century.

With energy resources having proven the most egregious contributors to the “resource curse” problem through the years, and with the desire to re-invent the sector potentially generating new demand spikes for previously neglected materials, it behooves policymakers to ensure that the mistakes of the past are not repeated in the present. Efficient development need not be irresponsible development, and the owners of such resources, be they public or private, can give extractive operations a better reputation in the this century than they had in the last one.

Moores Mill Road Follow-up

On Friday I promised an explanation for the strange behavior of the power lines on Moores Mill Rd. Basically what happened was a malfunction at a transformer substation that is in charge of stepping down the voltage from 34 kV to 14 or 7 kV. The smaller transformers that are hooked onto the telephone poles then perform the subsequent voltage drops before the electricity makes it to homes, where it is finally stepped down to 120/240 V. So rather than delivering electricity at 7 kV (around that) to the transformers, they were getting inputs at 34 kV, the highest voltage considered to be distribution-grade electricity (above that is transmission). One by one the transformers were overloading and exploding (partially due to the insulating oil that is used inside them), and then the electricity would reach the next transformer in sequence.

Friday YouTube Treat

Good morning energy blogosphere. My post today will be short and sweet. Yesterday I visited a BG&E distribution training center (where they train the people who go out into neighborhoods to put up or repair electric wires). Besides being a national leader in smart grid pilot programs, they have a really well-oiled training system. They show this video to all of their trainees to let them know what happens when multiple things go wrong:

I'll let you mull it over this weekend on what might have caused such a light show, and post an explanation on Monday.

Newsflash:

The world's running out of oil (tomorrow). Is your homestead ready? If you're a city person, probably not, but here's what you need to do.

We'll have a real post about Peak Oil sometime in the future, but you should get hopping now just in case!

Carbon Tariffs are not Terrific

For negotiators working on the Doha Round of world trade talks, and the Copenhagen Climate Conference , the links between climate change and trade policy are already apparent, not to mention problematic. In the US, the intersection of these policy areas has added a further political dilemma to the already convoluted Waxman-Markey bill’s progress, creating a further forum for lobbyists of all persuasions to pursue their agendas. At the official level, though, debates about the two issues have descended into trading accusations of protectionism.

The connection between the issues takes two main forms. The first is the more basic: the level of tariffs imposed on traded ‘environmental’ goods and technologies, including for example solar panels or windmill components. The second is more complex: the question of whether countries restricting carbon emissions have a right to charge compensatory tariffs on imports from countries that do not restrict emissions, and whether it is a good idea to do so.

Tariffs on environmental goods are a bad idea. Tariffs on any goods are a bad idea, but tariffs on technologies that can help lower emissions are particularly foolish. The principle value of such technologies (unless you’re an energy independence activist) is to help ameliorate the global issue of climate change. Just as we should be agnostic about where in the world emissions reductions are made, so long as they are made, we should be agnostic about where the technology to help us make those reductions comes from. Be they Korean solar panels, American car batteries or colossal German windmills , anything that encourages their use and transfer is welcome. Which is why removing government levies on their cross-border movement (which raise costs by up to 5.2% in the US, and by up to 35% in China ) should be an easy win. However, even here, domestic politics and interest groups can jam a stick in the spokes.

At the international level, a deal was being negotiated on the fringes of the UN Climate Conference in Bali in December 2007. Led by the Bush administration and with the backing of the EU, it proposed to eliminate such tariffs. It ran aground on the objections of Brazil and India, with Brazil’s complaints focusing on its omission of ethanol as a carbon-cutting technology. Brazil obviously has a great deal of interest in being able to reach new markets with one of its biggest growth sectors. But in one of those target markets – the US – the ethanol sector is already tied up in political favors and long-standing subsidies.

President Obama has lectured extensively on the advantages for job creation of a ‘green revolution’. Specifically, he has spoken of the creation of American green-collar jobs. And here we run into a problem. With the American public still reticent to support carbon-reduction measures for their own sake, the only route to winning the political argument has been to offer other benefits. In many cases he’ll be right – that American ideas and workmanship will lead the market. But in other cases, exposed to global competition, Americans might lose out. Ethanol, regardless of whether or not it is good technology, is one such area where open markets instill fear in the agricultural lobby. Does the White House (or for that matter the Planalto) have the will or the public backing to accomplish even a basic step like this? Because the steps involved in addressing the second trade-climate problem will be much more challenging.

One major fear for countries considering carbon constraints is that heavy industries will ‘leak’ overseas – failing to reduce net carbon emissions (and possibly even increasing them if the new producers’ regulatory systems are more lax), while taking jobs with them. To address this, some politicians have touted the idea of imposing a tariff at the border to bring the price of these goods to what it would/‘should’ be were the carbon generated in manufacture priced. Energy Secretary Steven Chu suggested it back in the spring, but was apparently speaking beyond his purview, since US Trade Representative Ron Kirk explained a few days later that carbon tariffs were not currently a preferred method of the administration. European leaders have also raised the issue, with French President Nicolas Sarkozy (who scarcely met a tariff he didn't like) in the vanguard . The idea was also rejected, by the European Trade Commissioner shortly thereafter.

While appealing from a strictly environmental perspective, carbon tariffs pose enormous problems. The first and most obvious is the likelihood of retaliatory tariffs leading to a trade war. Carbon tariffs have yet to be determined legal by the WTO (although evidence seems to indicate they would be permissible if they were completely non-discriminatory. How easy that benchmark would be to meet, I cannot speculate). If China, for example, began reinstating tariffs on US exports, the value to domestic industry of carbon tariffs could be limited. And, at a time of global recession, anything which serves to depress growth-generating trade is a highly risky proposition. It may also be an environmentally harmful one; after all, China is most likely to engage in carbon-reducing activity if its prosperity continues to increase – reductions in trade volumes would certainly restrict its development.

A second problem arises with the ability of carbon tariffs to impact on the intended sectors and manufacturers. The bulk of Chinese carbon intensive heavy industry produces for domestic consumption . It is not evident that carbon tariffs imposed by the developed world would have a significant effect on manufacturing cleanliness in the developing world.

For now, carbon tariffs are a problem for the future. With policymakers focusing on a worldwide deal at Copenhagen, they could well be made moot by progress in December. Of course, the economists around will have noticed there is nothing here that wouldn’t be solved by a worldwide carbon price. However, if the negotiations do not yield a deal that comprehensive, which seems doubtful, carbon tariff legislation could well make a comeback in the following year. It was a positive development that carbon tariff plans were trimmed from the Waxman-Markey Bill between the March discussion draft and the passed version from June . Those comments at that time were unnecessarily provocative in a fragile world economy and were already prompting diplomatic displeasure. But the politics of the issue, especially in the US, are such that their return has a grim inevitability to it.

Field Trip to Calvert Cliffs

Today I had the great opportunity to visit Calvert Cliffs Nuclear Power Facility on the Chesapeake Bay. Besides being a really interesting bit of engineering (the two pressurized water reactors use 2.3 million lbs/min of bay water for a heat sink, keeping temperature difference between intake and output below 10 F), it gave me pause to think about where baseload power in this country is headed.

Calvert Cliffs Units 1 and 2

Source: http://www.me.psu.ac.th/~smarn/pplant/Nuclear/NPP3.htm

The two reactors currently produce about 1750 MWe together (and with a capacity factor of over 100, they are producing at full capacity most of the time besides scheduled maintenance), and provide power to 20% of Maryland homes. Constellation and Areva are in the process of licensing a new unit which would produce 1600 MWe alone, a truly massive reactor. They even have land reserved for reactor #4 when it becomes economically feasible.

When I got home from the field trip, my dad sent me this article about the future of coal power and carbon capture and sequestration (CCS). One quote caught my eye: "Without a breakthrough on coal plants, it may be impossible to meet emission limits climatologists say are needed." Since I had just gotten back from standing on the working floor (it was about 115 F) of two massive turbine generators (one by Westinghouse and one by GE) powered by nuclear reactors, I thought the author had left out a rather important piece of the pie, that is, the fact that nuclear power provides 20% of electricity in the US virtually carbon-free, and that plant operators and residents near these plants are chomping at the bit for the NRC to let them build more.

So will it be coal with CCS or a nuclear renaissance that gets us out of trouble? Obviously the question is not that simple, and I believe that any real attempt to stem the tide of climate change will take large amounts of both. I'll end this post with some questions and see if I get some interesting comments:

• I saw the football-field sized area for dry cast storage for the spent fuel rods while I was there. Eventually it will fill up, but plant employees hope that Yucca Mountain will be open for business before it does. Harry Reid says over his dead body. So a permanent and central repository for spent fuel, necessary or not? Or is that point moot since it isn't going to happen?
• Will there be sufficient transmission lines in place to move electricity from new reactors to markets?
• Does CCS require a regulatory body similar to the NRC to ensure safe operation of storage sites?
• Does anyone seriously think that renewables alone could supply all baseload electricity to the US in the next 20 years? (Apparently John Edwards does)
• What are your impressions on President Obama's commitment to nuclear energy?

The Coolest Electric Car

Over the next couple of years, there will be several electric vehicles hitting the market. This is a good thing. The electricity that powers EVs can come from wind power, clean natural gas, or coal—options which are all cleaner than gasoline. Reducing our dependence on foreign petroleum will give the U.S. more flexibility in its approach to foreign policy. Politicians have been warming up to EVs for these reasons, and most of the major automakers have EVs planned. Of all the EVs planned, my favorite is the Aptera 2e.

Aptera Motors is a Silicon Valley startup that began as an experiment to design the most aerodynamic vehicle possible. That aerodynamics was the primary driver of the Aptera’s shape is, ahem, evident. The car looks like a raindrop, which is unsurprising because a raindrop is the most aerodynamic shape (Drag coefficient of 0.04).

The Aptera will have a Cd of 0.15, making it the most aerodynamic car in history (the EV1 holds the record now at 0.19) and almost twice as aerodynamic as the Prius and Chevy Volt (Cd’s of 0.25).

The entire body is one composite piece, making it very light and strong. The Aptera will weigh in at 1500 lb, less than half the weight of the Volt (3500 lb) and light enough to be manhandled by Dutch hooligans.

The result of the Aptera’s clever design is a car that will use almost FOUR TIMES less energy than a Chevy Volt. This means driving 100 miles will cost $1.13 in an Aptera, compared to $4.52 in a Volt and ~$10 in an average new car today (DC electricity prices).

This is in addition to lots of other cool features, like a PV panel roof that powers the AC so your car is cool when you get in, a built in computer named Eva that "likely has twice the computing power of any machine in your house", and the ability to sell electricity back to the grid when electricity price is high. The Aptera also isn’t as small inside as it looks, with more than twice the storage space of an Accord and more headroom than a Mini.

Unlike the Volt, the Aptera 2e does not have a range extender and will run out of juice after 100 miles. However, I don’t think this will be a problem since 95% of people drive less than 100 miles a day and over 50% of households have more than one car. I see the Aptera as a second family car, used mostly for commuting. (They're working on a range-extended version that will have a 650 mile range and get 300 mpg).

The Aptera will be going on sale later this year for ~$26,000. The Chevy Volt is expected to come in at around $40,000, but qualify for a $7,500 federal tax credit. The Aptera won’t qualify for this tax credit because it only has 3 wheels.

I think the Aptera represents a new paradigm in car design. The Aptera was designed with one purpose: get people from point A to point B as efficiently as possible. Form follows function, and results in a car that is unique and looks cool. This makes me wonder why cars today look the way they do, and why they all look basically the same. Maybe its what consumers are used to, and what car companies think will sell. Hopefully the Aptera will challenge our conceptions of how a car should look and be used.

So, what do you think? Is the Aptera just another silly venture capital idea that consumers will pan, or is there a market for it? Will people buy a car that looks like it’s from Trek and only goes 100 miles between charging? Is the Aptera represent a new era for how we approach the automobile? Jay Leno sure thinks so!

Purple Line Greener Future

Maryland Governor Martin O’Malley recently decided that the Purple Line, a planned transit corridor connecting towns in Montgomery and Prince George’s Counties in Maryland, would be light rail transit, rather than the bus rapid transit alternative. This announcement marked the culmination of years of deliberation, community activism, and analysis by residents, local politicians, and even a nationally-recognized environmental organization, the World Resources Institute. Interestingly, WRI submitted a detailed public comment that endorsed the Bus Rapid Transit (BRT) alternative rather than LRT. Let’s examine WRI’s assessment of the Purple Line’s Alternative Analysis/Draft Environmental Impact Statement (AA/DEIS) and why they favored BRT over LRT.

By doing a Monte Carlo sensitivity analysis on the AA/DEIS by creating a scenario where the AA/DEIS projections of ridership and cost are optimistic, WRI found that the LRT option carries more risk of not meeting cost-effectiveness goals, and the BRT option is more robust. In other words, for the expected value of benefits, ridership, and cost-effectiveness based on different scenarios of independent variables, BRT trumps LRT. However, WRI did not add a “pessimistic scenario” where the AA/DEIS actually under-predicts daily ridership. I found this curious, but then looked into projections more and found that Metro ridership projections in 1969 predicted 959000 daily trips in 2004, while the actual figure stood at only 653000 (“The Great Society Subway” by Zachary Schrag). Maybe there is something to Washington area transit planners being overly optimistic.

WRI goes on to analyze the greenhouse gas emissions projections of different scenarios. In the AA/DEIS scenario, the BRT alternatives are the only ones that produce decreases in CO₂ emissions. However, WRI points out that the AA/DEIS used an all-Maryland emissions factor for electricity, rather than the finer granularity offered through the EPA’s e-GRID database. They find that by looking at individual zip codes, the LRT alternative is less emissions-intensive but still positive. While WRI mentions potential changes in electricity generation emissions in Maryland through 2030, I think it is important to note that this is where the LRT alternative has a big advantage over the BRT alternative: if steps were taken to connect light rail to a carbon-free electricity source, such as a potential new nuclear reactor at Calvert Cliffs, the LRT option would become virtually emissions-free, while the BRT option would be locked into whatever type of vehicle (diesel or CNG) is chosen for operation.

For the last year I’ve lived very close to one of the planned future stops of the Purple Line in East Silver Spring. Nearly every day I see the purple “No Train on Wayne” signs planted in front yards interspersed with the less common purple and green “Purple Line/Greener Future” signs. If my condo association allowed signs in windows, I’d have put a few of the “Purple Line/Greener Future” ones there, because I’ve spent the last two years wishing there were a better way to traverse the criss-crossing boulevards connecting Silver Spring and the University of Maryland. A dedicated right-of-way transit route directly linking Silver Spring with Bethesda will be a boon for commuters who today need to bear the congestion on East-West Highway either in cars or on a J2/J4 MetroBus. Personally I’m happy with the governor’s decision because I think the LRT option will, over the lifetime of operation, yield higher emissions reductions and reduce road congestion more than the BRT alternative.