Ideally this piece should have been done no later than mid-October. Energy issues are crucially important to the USA, and anything which might have injected some reality-based 1 discussion into the pre-election politics could not have done anything but good. That opportunity is now gone, but I'm hoping it can still be of benefit.
It's obvious to a great many people that we are already involved in a war. Why not take the war beyond the spheres of military action and financial interdiction and attack the problem at its source, and (since You Cannot Do Just One Thing) a few others besides?
Further suppose that the US went on a war footing with regard to these issues, devoting about $100 billion per year initially. What would it buy, and how fast could we see change?
It would be helpful at this point to list the various energy sources we use, their quantities and efficiencies. US energy consumption for the calendar year 2003 was bit over 98 quadrillion BTU (henceforth "quads"). It was divided roughly as follows 4 :
|Fuel||Qty||Units||TBTU/day||Efficiency||Output, TBTU/day||Output, GW|
|Coal||22.31||Quads||62.2 tot / 54.7 elec||0.33 (elec)||18.2 (elec)||222.4|
Within the categories of petroleum and natural gas, the usage breaks down roughly as follows:
|Fuel||End use||Units||Qty||TBTU/day (est)|
|Natural gas||Total||1012 ft3/yr||22.89||62.22|
|Electric power||1012 ft3/yr||4.92||13.98|
Some facts about oil and gas bear thinking about:
The infrastructure would have to be financed, and the monetary incentives would have to back up the program rather than undermine it. (This contrasts it to corporate average fuel economy standards, which combined with relatively cheap fuel to spur a huge increase in vehicle miles travelled and defeat the express purpose of the program.) The biggest use of oil (66%) is for transporation, and taxes on motor fuel are one of the few changes which would not give foreign manufacturers and suppliers an inherent advantage over domestic industry. (The reluctance of Detroit to make economical vehicles is a different matter.) Let's assume the $100 billion/year for infrastructure and incentive programs is financed from motor fuel taxes.
If the US consumes ~170 billion gallons of motor fuel (gasoline and diesel) per year, a tax of about $0.60/gallon would provide the revenue. One purpose of the tax is to spur cuts in fuel consumption; so long as the the same level of investment was required, the tax would have to rise as fuel consumption fell. If fuel consumption fell to 60 billion gallons annually, a tax of about $1.70 would continue to supply $100 billion in annual revenue.
Attacking dependence on imported oil and gas means decreasing the need for those fuels or substituting other sources of energy. The second battle would be technical:
There are also things we should not do, such as ethanol from corn. This fuel should be strongly discouraged; it requires 1 BTU of fossil inputs to produce only 1.2 BTU of alcohol. 10% ethanol mixes qualify for forgiveness of the $.19/gallon Federal gasoline tax, amounting to a subsidy of roughly $11.40 per gallon of non-fossil energy. This ill-conceived farm subsidy program and others like it should be terminated immediately and the money rolled into programs which actually work. If we need to pay subsidies to farmers, it should go for programs like leases for wind turbine sites.
If we assume that there are 200 million personal vehicles in the USA and they are replaced at the rate of 10% per year (which would probably be accelerated if fuel prices doubled), that is 20 million vehicles per year. Current hybrids cost about $3500 more than conventional vehicles; if the plug-in option added $500 in batteries and other hardware, this is $4000 per new vehicle. If half of this is paid by subsidies from the fuel tax, it would cost $40 billion per year.
Old coal-fired steam plants can be repowered with IGCC systems ahead of the existing steam turbine and condensers; the changeover raises the output of the plant by about 190% (the Wabash River IGCC repowering raised plant output from 90 MW to 262 MW). Emissions of sulfur and particulates are nearly eliminated, NOx is greatly reduced, and it appears likely that activated-carbon scrubbing of the fuel gas could achieve mercury emission cuts at least as good as are possible with conventional powerplants. Last, the absorber step which removes hydrogen sulfide from the fuel gas also captures most of the carbon dioxide produced in the gasifier; this stream is ready for sequestration should that be desired.
Suppose that old steam plants can be repowered with IGCC for $1100/KW. If output increases by 190% in the process, each GW of old capacity creates another 1.9 GW after repowering. Powering America's cars means adding 18 GW of net capacity per year; this would require repowering about 10 GW of old plants at a cost of $32 billion/year. This leaves $28 billion per year out of the $100 billion in fuel tax revenue.
The conversion of coal to medium-BTU syngas composed of H2 and CO (approximately 300 BTU/ft3) creates many possibilities that do not exist today. Hydrogen could be tapped from the syngas for synthesis of ammonia; a hydrogen-enriched gas stream could be fed to a reactor to make methanol for motor fuel; the gas could be piped to nearby customers as a cheaper substitute for natural gas, and burned in cogenerators to replace the electricity it would otherwise generate (the benefits could be substantial); the syngas could be used to run solid-oxide or molten-carbonate fuel cells to further increase the efficiency of the system. However, such steps are beyond this simple analysis.
Unlike coal, gas has the advantage that it can be used in a variety of ways without processing. According to the EIA 10 , space heat accounted for 68% of all residential consumption of natural gas. In the year 2001 11 , residential space and water heating accounted for 4.47 quads of gas consumption; commercial space and water heating used another 3.05 12 quads. This consumption (low-grade heat) is ideally suited for conversion to cogeneration *. If furnaces and water heaters were converted to use small gas-fired engines instead of open flames, this 7.5 quads of natural gas could produce 1.5 quads of electricity, or an average of 50 GW (the diverted energy could be made up using insulation, solar heat, or syngas from coal-fired IGCC plants). Usage and generation would peak during the heating season, so the actual requirement might be closer to 3 times the average, or 150 GW. If the cogenerators cost $500 per kilowatt, adding 15 GW per year would cost $7.5 billion. This could easily be rolled into the normal installation and replacement cycle of furnaces and water heaters.
Industry uses a considerable amount of process heat, which is another place where cogeneration could skim off some electricity. Roughly 5.6 quads of gas was used for industrial boiler fuel and "direct uses" in 2002 (see figure 22). I do not have enough information on the actual end uses to be able to guess at the possible contribution of industrial cogeneration, so I will postulate no new generation from this sector.
So far the hypothetical program has added 29 GW of electrical demand per year, and has found ways to add 23 GW of average capacity each year with nothing more than improved efficiency. Another 6 GW is needed every year, and $20.5 billion per year remains in the budget. What can we get for it?
|Energy source or use|| Annual consumption
| Annual output
or equiv.), GW
| Tax revenue
| Net revenue,
I'm not a proponent of violence for its own sake, but this is one war I could get behind without reservations.
There are a great many things which just
require heat. Living space requires heat in the winter, boilers
require heat to boil water, bakeries require heat for their ovens.
Often the heat required for these purposes is at a temperature lower
than the heat which is rejected from heat engines. This creates a
possibility: instead of burning fuel for heat at point A, and then
burning more fuel to make power at point B and throwing the waste heat
into the air, why not make power at point A and use the engine's
rejected heat for the heat you needed anyway? Since you can't do
just one thing, why not make both of them count? That's
How does the combination of the furnace and generator stack up to the cogenerator? Not very well:
|| Fuel input
|| Heat output
|| Electric output
||. 95 KWH
|| 25% electric |
As you can see, the cogenerator can produce about the same useful output as the furnace/generator combination with approximately 1/3 less fuel; further, the cogenerator does not have to be as efficient as the stand-alone generator to yield savings, because the heat is going to a useful purpose. Cogeneration can save a great deal of energy by making use of heat which would otherwise be discarded; alternately, it can create much more useful energy from the same amount of fuel. Back
3 At the time of this writing, world prices for light sweet crude have been flickering back and forth around the value of USD 50/bbl and have peaked over USD 55. These prices, while not by themselves able to throw the economy back into recession, are projected to cost a substantial fraction of a percent of GNP growth per year. Back
4 The efficiencies and net use entries for natural gas and petroleum are unspecified in this table. This is because it is not possible to state meaningful numbers spanning the diverse end uses of these fuels. Back
9 US motor gasoline consumption in 2003 was 16.6 quads, or 556 GW thermal; at an efficiency of 20% the average power delivered is 111 GW. The corresponding figure for diesel (distillate fuel oil) is 5.42 quads or 181 GW thermal; if the average efficiency is 35% it delivers 63.4 GW average to the wheels. Back
Postscript: On Saturday 11/20 the New York Times published an article on the resurgence of coal on the front page of the business section. The question is not whether we will use more coal, but how it will be used and what else will happen as a consequence. As long as we are re-thinking our energy sources for electricity, why stop with electricity?
UPDATE: This piece is also posted at The Speculist.
Visits since 2006/05/11: