Hitting the Wall: A Vision of a Secure Energy Future

Hitting the Wall

A Vision of a Secure Energy Future

Copyright © 2009 by Morgan & Claypool

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in

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Hitting the Wall: A Vision of a Secure Energy Future

Richard Caputo

www.morganclaypool.com

ISBN: 9781598293340 paperback

ISBN: 9781598293357 ebook

DOI: 10.2200/S00124ED1V01Y200805EGY003

A Publication in the Morgan & Claypool Publishers series

SYNTHESIS LECTURES ON ENERGY AND THE ENVIRONMENT: TECHNOLOGY, SCIENCE, AND

SOCIETY #3

Lecture #3

Series Editor: Frank Kreith, Professor Emeritus, University of Colorado

Series ISSN

ISSN 1940-851X print

ISSN 1942-4361 electronic

Hitting the Wall

A Vision of a Secure Energy Future

Richard Caputo

SYNTHESIS LECTURES ON ENERGY AND THE ENVIRONMENT: TECHNOLOGY,

SCIENCE, AND SOCIETY #3

ABSTRACT

Hitting the Wall examines the combination of two intractable energy problems of our age—the

peaking of global oil production and the overloading of the atmosphere with greenhouse gases.

Both emerge from the overconsumption of fossil fuels and solving one problem helps solve the

other. The misinformation campaign about climate change is discussed as is the role that noncarbon

energy solutions can play. There are nine major components in the proposed noncarbon strategy

including energy efficiency and renewable energy. Economics and realistic restraints are considered

and the total carbon reduction by 2030 is evaluated, and the results show that this strategy will

reduce the carbon emission in the United States to be on track to an 80% reduction in 2050. The

prospects for “clean” coal and “acceptable” nuclear are considered, and there is some hope that they

would be used in an interim role. Although there are significant technical challenges to assembling

these new energy systems, the primary difficulty lies in the political arena. A multigenerational

strategy is needed to guide our actions over the next century. Garnering long-term multiadminis￾tration coherent policies to put the elements of any proposed strategy in place, is a relatively rare

occurrence in the United States. More common is the reversal of one policy by the next administra￾tion with counterproductive results. A framework for politically stable action is developed using the

framework of “energy tribes” where all the disparate voices in the energy debate are included and

considered in a “messy process.” This book provides hope that our descendants in the next century

will live in a world that would be familiar to us. This can only be achieved if the United States plays

an active leadership role in maintaining climatic balance.

iv

Keywords

peak oil, climate change, global warming, energy efficiency, renewable energy, solar, geothermal,

wind, biomass, bioliquids, photovoltaics, distributed solar, national grid, pluggable hybrid electric

vehicle, energy policy, concentration solar, energy tribes, acceptable nuclear, clean coal, policy,

U.S. leadership, transportation efficiency, building efficiency, industrial efficiency

Acknowledgments

Without Frank Kreith’s support and encouragement, not a word would have been written. Joel

Claypool continued this support until there was a final draft. This book would not be technically

possible with such a depth of comprehension without the permission of the American Solar En￾ergy Society via Brad Collins, executive director, to liberally use the material in their vital report,

“Tackling Climate Change in the U.S.” [Charles F. Kutscher (ed.), ASES, January 2007], This key

report is the brainchild of Charles Kutscher, who used the National ASES Conference in 2006 in

Denver to generate the nine key papers that are at the core of noncarbon approaches part of this

report. These conference papers were turned into the vetted Tackling Climate Change report. The

individuals who are responsible for these nine definitive sections are Joel N. Swisher, who devel￾oped the overall energy efficiency section; Marilyn A. Brown, Therese K. Stovall, and Patrick J.

Hughes, who generated the building energy section; Peter Lilienthal and Howard Brown, for con￾sidering the plug-in hybrid electric vehicle; Mark S. Mehos and David W. Kearney, who displayed

the concentrating solar power situation; Paul Denholm, Robert M. Margolis, and Ken Zweibel,

who contributed the photovoltaic power section; Michael Milligan, for developing the wind power

story; Ralph P. Overend and Anelia Milbrandt, for their insights into the biomass opportuni￾ties; John J. Sheehan, who laid out the likely contribution from biofuels; and Martin Vorum and

Jefferson W. Tester, who exposed the possibilities of geothermal power. Besides designing the ap￾proach to properly consider these noncarbon solutions to the climate change problem and engaging

these talented researchers to contribute in their areas of expertise, Chuck Kutscher pulled together

the results and placed them in the framework of the climate change problem. I owe a deep debt to

this team for developing the energy efficiency and six renewable opportunities in a comprehensive

and consistent manner.

I am in debt to several other researchers who developed substantial analysis of key areas that

I depended on heavily. Lisbeth Gronlund, David Lochbaum, and Edwin Lyman gave me clear in￾sight into the nuclear industry and what needs to be done before seriously considering using nuclear

power as part of our energy future. I relied on Kenneth Deffeyes and C. J. Campbell who gave me

insights into the current global oil situation. I depended on Jeff Goodell for his work in the coal in￾dustry. Carl Baker was generous with his insights on long-distance transmission issues. The gained

insights into the different “energy tribes” and how to base policy on these concepts were provided

by Marco Verweig and Michael Thompson.

v

vi hitting the wall: a vision of a secure energy future

I gained much from the review of early drafts by Kenneth Deffeyes, Jeff Severinghaus, Peter

Lilienthal, Mark Mehos, Anelia Milbrandt, Lisbeth Gronlund, John Sheehan, Anelia Milbrandt,

Marco Verweig, Carl Barker, Simon Shackley, and Celia Orona. Finally, Carol Jacklin provided

daily support in a host of tangible and not so tangible ways. I am deeply indebted to her.

All of the brilliant insights in this book are to be credited to all those cited above. All the

inappropriate interpretations and errors of judgment must be laid at my feet.

vii

Dedication

To Carol, who found the space to let me have my space.

1. Introduction .......................................................................................................1

2. The End of Cheap Oil.........................................................................................3

2.1 Global Oil Peak Production—When?.................................................................. 3

2.2 Alternative Schools of Thought to Alternatives................................................... 6

2.2.1 Neocon Insight........................................................................................ 6

2.2.2 The Market Will Signal .......................................................................... 9

2.2.3 Switch to Alternatives ........................................................................... 11

3. Carbon—Too Much of a Good Thing ................................................................ 13

3.1 Climate Change Parallels Tobacco Industry “Science”....................................... 13

3.2 What Is Wrong With 5 Degrees Fahrenheit?.................................................... 17

4. Carbonless Energy Options............................................................................... 33

4.1 Energy Efficiency............................................................................................... 36

4.1.1 Energy Efficiency in Vehicles................................................................ 38

4.1.2 Energy Efficiency in Buildings.................................................................... 44

4.1.2.1 Residential and Small Business Buildings.................................... 47

4.1.2.2 Large Commercial and Industrial Buildings................................ 48

4.1.2.3 Combining Building Sector Measures......................................... 49

4.1.3 Energy Efficiency in the Industrial Sector............................................. 51

4.1.4 Energy Efficiency Savings........................................................................... 51

4.1.4.1 Electric Utility Cost of Energy Savings....................................... 52

4.1.4.2 Natural Gas Cost of Energy Savings ........................................... 52

4.1.4.3 Petroleum Cost of Energy Savings .............................................. 53

4.1.4.4 Overall Energy Efficiency Savings............................................... 54

4.2 Renewable Energy Options................................................................................ 56

4.2.1 Wind Power........................................................................................... 57

4.2.2 Concentrated Solar Power..................................................................... 65

Contents

ix

x hitting the wall: a vision of a secure energy future

4.2.3 Photovoltaics ......................................................................................... 73

4.2.4 Geothermal............................................................................................ 81

4.2.5 Biomass Power....................................................................................... 86

4.2.5.1 Biomass Resource ........................................................................ 88

4.2.5.2 Biomass Electricity ...................................................................... 89

4.2.5.3 Carbon Sequestration .................................................................. 92

4.2.6 Biofuels.................................................................................................. 94

4.2.7 National Transmission System .............................................................. 98

4.2.8 Summary of Carbonless Energy Options............................................ 101

4.2.8.1 Carbon Emission Reduction...................................................... 102

4.2.8.2 Cost of Carbonless Energy Options.......................................... 107

4.2.9 Green Jobs........................................................................................... 108

5. Conventional Energy ...................................................................................... 113

5.1 “Clean” Coal ..................................................................................................... 113

5.1.1 Tons of Coal ........................................................................................ 114

5.1.2 How Dirty Is Dirty?............................................................................ 115

5.1.3 New Coal Plant Designs ..................................................................... 118

5.1.3.1 Integrated Gasified Combined Cycle ........................................ 118

5.1.3.2 Oxygen-Fired Pulverized Coal Combustion ............................. 120

5.1.4 Sequestration....................................................................................... 122

5.1.5 “Clean” Coal Strategy .......................................................................... 126

5.2 “Acceptable” Nuclear ........................................................................................ 129

5.2.1 How Expensive Is Expensive?............................................................. 130

5.2.2 How Risky Is Risky?............................................................................ 132

5.2.3 New Reactor Designs to the Rescue.................................................... 135

5.2.4 How Long Is Long Enough? .............................................................. 138

5.2.5 Making Electricity Generation Into a Nuclear Weapon...................... 139

5.2.6 The NRC as Risk ................................................................................ 140

5.2.7 What Is “Acceptable”?......................................................................... 143

6. Policy for Whom?............................................................................................ 147

6.1 Tilted Playing Field.......................................................................................... 148

6.2 Unique Difficulties With Climate Change ...................................................... 149

6.3 A Start.............................................................................................................. 151

6.4 Energy Tribes................................................................................................... 152

6.5 Basis for Stable Policy ...................................................................................... 156

contents xi

6.6 Cap and Trade .................................................................................................. 158

6.7 Revenue-Neutral Carbon Dumping Fee .......................................................... 164

6.8 Parallel Policies................................................................................................. 166

6.8.1 Research Investment............................................................................ 167

6.8.2 National Electric Transmission Grid................................................... 169

6.8.3 Energy Efficiency Market Failure ....................................................... 171

6.8.4 Energy Structure Blocks Renewables.................................................. 174

6.8.5 Conservation: Green Spirituality or Common Sense .......................... 175

6.9 What To Do With Coal Plants........................................................................ 176

7. Call to Arms.................................................................................................... 181

References............................................................................................................... 183

Bibliography............................................................................................................ 195

Index ....................................................................................................................... 197

1

What could have a more severe impact on Americans than any terrorist’s action? Two greater threats

to the United States are examined to scope their magnitude and identify approaches aimed at reduc￾ing their impact. Challenging technical, economic, and political dimensions remain.

The current peaking in global oil production coupled with strong demand will have a dra￾matic impact on the U.S. economy given its heavy reliance on oil. The obvious result will be sharply

rising oil prices with massive economic impacts. Because of the relative inelasticity of oil consump￾tion in the United States, the only short-term mechanism left to match stagnating supply with

increased demand is a sharp economic downturn. This is characterized as hitting the oil price wall.

Simultaneous with this pending economic disaster is the overloading of the atmosphere with

excess carbon and other greenhouse gases. Unless stringent measures are taken, human activities

will drive carbon dioxide (CO2

) levels to exceed 500 ppm in the next few decades and cause the tem￾perature to rise beyond anything know in the recent geological past. This human-caused “consump￾tion” of the atmosphere’s ability to absorb CO2

over the past 200 years comes at a high temperature

point of the interglacial period and will drive the planet’s climate behavior into unknown territory.

A sober estimate of the economic consequences of this climate-altering future will cost 5% to 20%

of global GNP (Stern Report). This phenomenon is called hitting the CO2

wall. Taken together,

these significant events can simply be called hitting the wall.

Dealing with these events is probably the most difficult challenge our species has faced since

our inception 200,000 years ago. The difficulties are technical and economic, but most of all, politi￾cal. Although a significant challenge, technical opportunities do exist to move beyond the use of

carbon as a fuel. These extend from a host of energy efficiency prospects that give the same service

at a fraction of the energy now used to a wide range of renewable energy opportunities. There may

also be occasions to use “acceptable” nuclear power and even “clean” coal as interim energy sources.

However, the real difficulty lies in the political realm.

At the level of individuals, there are such grossly different views on these global issues that

it almost defies understanding. The very same events (peaking of global oil production and out-of￾control carbon emissions) elicit a response that ranges from “these are not problems, they are op￾portunities” to “these are the most significant problems ever faced by humankind.”

chapter 1

Introduction

2 Hitting the wall: a vision of a secure energy future

On the national level, you have the most significant historic polluter (United States) as the

only county that has not adopted the climate change treaty (Kyoto) and the two emerging signifi￾cant polluters (China and India) refusing to take action until the United States does. Beyond this

current stalemate, there is the intractable-appearing conflict between the people and the planet. We

have come to rely on “cheap” and abundant carbon as a fuel to power us from a preindustrial exis￾tence to the giddy heights of our highly industrialized societies. The use of carbon is almost solely

responsible for raising the standard of living for almost all of the industrialized world. However, this

is less than 15% of the world’s population. This small number of people has used up the common

atmosphere and have left it overburdened with CO2

and other greenhouse gases. The other 85%

have no hope of also using fossil fuels to raise themselves out of poverty without further destruc￾tion of the planet. To limit the damage to the planet, we all have to reduce our carbon emissions by

about 50% by the year 2050. How can this be arranged while giving 85% of the world’s population

a chance at a decent future?

The difficulty with this problem is marked by the stark differences in perceptions at the

individual level of what is a problem and what is a solution, and the inequities in the consumption

of the planet’s atmosphere among nations that have yet to demonstrate much skill at arriving at

equitable solutions.

This book examines the magnitude of the oil peak and carbon emission problems and exam￾ines technical and economic solutions. Policy opportunities are laid out and examined in light of the

different individual perceptions, and the minimum requirements for a satisfactory political solution

are noted. Policies are suggested to address the massive inequities that exist and yet limit carbon

emissions to avoid the worse of the expected impacts.

• • • •

3

2.1 GLOBAL OIL PEAK PRODUCTION—WHEN?

The United States is still a major oil producer (third largest in the world) and has supplied its own

oil from the start of production at the Drake well in Pennsylvania in 1859 until 1946 when the

United States started importing more oil than it exported. In 1970, our domestic production peaked

after 111 years of production. Because our use of oil was still growing, the shortfall was made up by

importing 40% of our oil use. A politically induced supply slowdown by the Organization of the Pe￾troleum Exporting Countries (OPEC) in 1973 (Yom Kippur War oil embargo) caused significant

price increase and exposed the vulnerability of the United States to importing oil from a politically

unstable region. After several false starts to achieve energy independence beginning with Richard

Nixon, we now import 60% of our oil.

OPEC (the Middle East-based oil cartel) normally attempted to keep oil price in the $22 to

$28/bbl range [1] to reap large profits since the cost to actually produce Middle East oil was only a

few dollars per barrel. This price level was also designed to block the introduction of oil substitutes.

Although the average world price of oil was in this range in 2006 dollars, it varied wildly from $10

to $70 per barrel (see Figure 2.1).

There was a reversal of policy starting with the Reagan administration, and the United States

was supportive of this OPEC attempt to moderate oil pricing and abandoned the attempts to

achieve energy independence. The United States was indifferent to its longer-term interests and

cooperated with oil priced too low or too variable for alternatives to enter the market. The United

States put off the day when we would have to develop our own energy policy to better meet our

long-term needs.

In the United States, oil production has steadily dropped since the 1970 peak even with

new oil fields being found and developed such as the large Alaskan fields and new technology

being used. The oil extraction rate followed a “bell-shaped” curve around the 1970 peak. This oil

production peak was predicted in 1956 by M. King Hubbert (a geologist at the Shell research labo￾ratory in Houston who taught at Stanford and UC Berkeley, worked at the U.S. Geological Survey,

and was a member of the National Academy of Sciences). At the time, there was controversy about

chapter 2

The End of Cheap Oil