Thursday, February 26, 2009

The Push for Increasing Energy Efficiencies in India

Scientists of the Petroleum Conservation Research Association (PCRA) and members of the Institution of Engineers India (IEI) recently urged India’s consumers, businesses and utility companies to save energy. They claimed that any conserved energy could be instead directed towards developing India’s infrastructure, which would ultimately help sustain the country’s growth.


So, what are some steps that India (and possibly other developing countries) can take to increase energy efficiencies/encourage citizens and businesses to conserve energy?

According to a report prepared by the McKinsey Global Institute, developing countries could give consumers and businesses loans or rebates to purchase higher-efficiency products/equipment, and also push government utilities and private companies to work together more closely.

Source (free registration required):

Another McKinsey Global Institute report states that countries can mandate certain energy efficiency standards for energy-intensive consumer appliances and business equipment.

Source (free registration required):

In fact, the Indian Energy Ministry recently embarked on a drive to replace around 400 million incandescent light bulbs with CFLs. This initiative could take up to three years, and according to the Indian power minister, could save the country 10,000 megawatts of energy per annum.


The IEI has also recommended that energy audits be conducted across India, and that consumers be made aware of the energy that can be saved if they turn-off their car during traffic stand-stills or use energy-efficient rice pressure cookers.


Encouraging energy efficiency can benefit countries such as India. For example, according to the first McKinsey Global Institute report sourced in this entry, developing countries can save around $600 million per annum by 2020 if they concentrate on increasing efficiencies in their existing energy technologies.

Source (free registration required):

The question remains – will developing countries such as India openly embrace such policies? Or will they continue treading on a business-as-usual pathway?

New York Times Energy/Environment Business Section

I'm sure some of us in Dr. Webber's course are aware of this, but The New York Times has recently added a new section that is devoted to the business aspects of energy and the environment.

Today's article in the section discussed the benefits of the recently passed stimulus with regard to energy efficiency and incentives for cities and municipalities that are looking to update old equipment and become more energy efficient. You can see it here.

What to Expect on the Energy Front from Congress in 2009

In his State of the Union address, President Obama identified energy above healthcare and education as one of the most critical areas to the future of the American economy. President Obama announced his support for increased domestic manufacturing of clean technologies such as solar panels and batteries along with more R&D spending and a cap-and-trade policy to incentivize corporations to implement these new technologies. Yet regardless of President Obama's popularity, congress has the ultimate say regarding if and how these policies will be written. Yesterday, Senate Majority Leader Harry Reid outlined his three step plan to turn President Obama’s goals into realities:

1) Congress will pass a bill establishing a renewable energy portfolio standard, among other increased efficiency requirements.

2) To help meet this portfolio, Congress will then pass a bill to support the development of "a highway to transmit electricity to where it's needed," which could bring the nation’s vast but isolated solar and wind resources to markets.

3) The first two bills will hopefully build enough political momentum to pass a cap-and-trade policy by the end of the year.

Perhaps 2009 could be the year the US government finally passes what could be considered a comprehensive energy policy: one that tries to manage both supply and demand with the same end-goal of reduced emissions. While details of the proposed bills are scarce and political gimmicks like corn ethanol or hydrogen may still find their way into the policy, at least the mention of a new electricity transmission infrastructure shows that Congress understands a fundamental obstacle to expanded clean energy generation capacity. Jeff Otto recently discussed the inherent contradiction between clean energy and “shovel-ready” projects. Additionally, while the stimulus bill does cover 30% of the costs of new wind and solar farms, that is not enough to make up for the disappearance of capital that once profitable banks invested in exchange for tax write-offs.

Despite the pervasive economic gloom, 2009 could be a seminal year for clean energy in the US.

Sunday, February 22, 2009

Not in my back yard: California’s aversion to wind and solar technology transportation

According to an article in The Washington Post, not only are Californian’s opposed to having wind turbines and solar panels in their back yard, they’re opposed to the very power lines bringing them this alternative energy. It also goes without saying that this is going to be a big problem for California in the years to come since they passed a government mandate back in 2006 that requires that California have 20 % alternative energy by 2010. Alternative energy, according to the article, means a group portfolio of wind, solar, and geothermal. In California, the best solar and wind energy is in the deserts, plains, and remote hilltops like where rancher and political activist Donna Tisdale lives. She has been fighting Sunrise Powerlink for three years against implementing a 123 mile transmission line from the Imperial Valley to San Diego[1]. She thinks that it will destroy the property value of her land, and that “No matter which way you look, you won’t be able to get away from it.”
[1] Peter Slevin and Steven Mufson, Alternative Energy Still Facing Headwinds, 2/17/09, Washington Post.

A new way to look at efficiency

With all the discussion of renewable energy we hear these days, we repeatedly hear how inefficient many of these energy conversion processes are. The real question is how important are these numbers and should we be looking at efficiency in a different manner?

Let us consider the case of solar power. Our very own Dr. Webber commented, in a lecture on Renewable Power, that solar has “lower efficiency than power plants”. It is safe to assume that he is referring to the ability to convert the suns radiation to electricity via photovoltaic converters or concentrated solar power systems (not solar thermal energy conversion). And of course the statement is not inaccurate; the energy out of these systems divided by the incident energy is less than many other forms of energy conversion. But of what significance is this comparison? I would argue that efficiencies of these sorts have no relevance when comparing energy conversion processes of different types. To abuse an overused phrase, it is like comparing apples and oranges. The maximum theoretical efficiency that a photovoltaic conversion process can achieve (assuming a band-gap of 1.1 eV from the sun with incident radiation of 1000 W/m^2) is 43% (Da Rosa 2005). Does this mean that we should not consider solar power as a vital part to our future energy portfolio? I think not, instead it means that we should compare PV cells to the maximum theoretical efficiency. Simply stating that the solar to electrical is not as good as a traditional method is the argument not the correct argument.

So how should we compare energy conversion processes? That is a difficult question to answer because many of the effects of energy conversion are difficult to quantify. For example we can quantify the kWh per dollar, kWh per lb CO2, or kWh per square meter, but those don’t accurately describe the entire picture. In my opinion we must attempt to compare “Gala” to “Granny Smith” apples or at least oranges to tangerines. For example when comparing a natural gas fired Rankine cycle power plant to a natural gas driven Brayton cycle plant thermodynamic efficiencies, cost, and emissions output are an accurate ways to compare the systems. Renewable energy conversion processes should be compared to other process that require the same basic inputs, for example, wind and solar energy conversion. These two energy conversion processes both require large amount of land, so doesn’t it make since to compare them on that basis. We should evaluate the power output per unit area available as compared to the traditional efficiencies of these processes.

In conclusion I hope that as we encounter quoted efficiencies of energy conversion processes that we search for a more meaningful comparisons.


Da Rosa, A.V. (2005). Fundamentals of Renewable Energy Processes. New York: Elsevier Academic Press.

Webber, M. (Speaker). (2009, February 12). Renewable Power. Austin: University of Texas at Austin.

Saving (not wasting) energy

This month's issue of National Geographic publishes a very interesting article about the journey of a family to save energy.  The article is very well written (as one would expect) and very articulately describes the necessary steps the couple took to save energy.

The article commences by describing the fact that average US household uses 150 pounds of CO2 every day.  Europe uses about half (I think it is useless comparing to other countries since developing countries have much different standards of living and climates).  The objective of this couple is to bring down its consumption to 30 pounds a day in just one month.

Needless to say it was not possible (I said needless because I did not expect them to be able to do it.  People can't just cut down commutes one day to another, or magically install efective and cheap  solar panels in their roofs).  After installing new lightbulbs, hiring an "environmental consultant" to help them learn about things like isolating the house so it is less afected by weather, they cut their emissions to about 70 pounds of CO2 a day.  That is a lot.

It seems the approach is not about saving energy.  We have grown used to a way of life that depends on energy.  Polluting is not a choice, is a byproduct of current standards of living.  Wasting, or not, is a choice.  I can decide to leave n products in standby or not.  To walk two blocks of to drive.  To use energy saving lightbulbs or the ones that came with the apartment.  To.. ok, I think I made my point.

pd.  The couple in the article sent its average back to 15o pounds a day because they needed to fly to Oregon (from Virginia).  I did not see that coming.

Vietnam's First Oil Refinery

Vietnam was facing a national security due to not being able to refine their own crude oil, but all that has changed. Vietnam built their first oil refinery in Dung Quat, Vietnam and is pumping out about 6.5 million tons of refined oil and planning to increase to 10 million tons of refined oil by 2013 [Herald Tribune]. For years Vietnam has depend on imported oil because they could not refine their own oil. This dependence was becoming a threat to the country and the communist leaders realized that an oil refinery was desperately needed. The refinery has created many job openings, but not for unskilled people around the area. Being one of "the most modern refinery in the world" (AFP) it will be hard for local people to find work at the refinery. Now that Vietnam has their first oil refinery, the economy will change and only a matter of time for other forms of energy. Then again everything will be regulated by the communist leaders of Vietnam and there is no telling when other forms of energy technology will spring up since it took them this long to have their first oil refinery.


China: Taking the Lead on Alternative Vehicle Technologies?

This past week, China’s largest independent automobile manufacturer, Chery Automobile, unveiled its first plug-in electric vehicle, called the S18. The S18 can go up to 93 miles on one charge with a maximum speed of 72 miles an hour. The battery can be fully charged within six hours using a standard 220 volt home outlet and 80 percent of the battery can be charged within 30 minutes. This car will not be available as a hybrid that can operate on petrol as well and it is unclear when it will be available. Chinese automaker BYD Auto has a more ambitious goal; to become the world leader in freeing the world from its dependence on oil. A series of electric and plug-in hybrids have been unveiled that they hope to enter the US and European markets by 2011. Next month it will begin delivering the F3DM which can go 63 miles on its battery or 360 miles when in hybrid mode with petrol.

This is only the latest in a series of innovative alternative energy vehicles coming out of China, a country whom many view as a laggard on clean energy technology adoption. China has a relatively young car industry that is developing at a strong pace. New car manufacturers in China see alternative vehicles as an opportunity to take advantage of a new and expanding global market. In April 2007 Chinese automakers showcased a diverse array of alternative vehicles at the Shanghai Auto Show. President Chen Hong of Shanghai Automotive Industries Corp. summed up the reason for China taking the lead on clean technologies saying that, “While foreign automakers have a lead in conventional technology, in new energy we're starting from almost the same line." During the 2008 Beijing Olympics hundreds of alternative vehicles were used by Olympic organizers to provide “zero-emission transportation” during the Olympic Games.

Chinese auto manufacturers continue to expand and are now looking to establish an international presence by exporting vehicles outside of China and producing vehicles in other countries. In 2007 China passed Japan as the world’s second largest vehicle market. It could pass the US in years to come. It appears that the global recession is not hitting the Chinese auto industry as hard as other auto industries in the world and it is anticipated that China could pass the US in unit sales this year (with 10.7 million vehicles sold). However, US and other international automakers account for a strong portion of these sales (GM accounted for 1.1 million vehicles in 2008). However, GM and other international automakers see China as an opportune market to develop alternative vehicles due to government support and public acceptance.

The Chinese government has recently supported alternative energy vehicles as a way to bring clean and affordable vehicles to account for the rising demand for vehicles and increasing amount of pollution around population centers. Vehicle sales from 2006 to 2007 jumped 25.1 percent. In January China (the world’s second biggest oil user, behind the US), revealed its plan to have 60,000 altnerative energy vehicles on the roads by 2012. Earlier this month the Chinese government issued a provisional measure on the management of subsidies for energy-saving and alternative energy automobiles (including hybrid, electric, and fuel cell vehicles).

With growing auto demand, a growing number of new emerging auto manufacturers, and a country supportive of alternative technologies China may emerge as the world’s leader in production and use of alternative vehicles.

Open Source Fuels?

Although many of us may be oblivious to it, there exists a large community of diesel-fueled car owners that enjoy using alternative fuels. Reasons for this change in fuel use range from simple economics to a sense of exploration, DIY, and the self-satisfaction that comes from using last night's cooking oil as fuel. The attention to detail and sense of community remind me of another community with certain similarities: the open source software community. These people strive to make something without dependence on big companies.

There are multiple types of biodiesel blends that can be used as fuels. Most come from animal fat or vegetable oil, which makes a big point for many people who want to experiment with using alternative fuels. Using waste vegetable oil and some processing, people are able to obtain fuel for their cars. In addition, this fuel can be mixed to different degrees with conventional diesel in order to reduce the changes in viscosity due to temperature that create problems for biodiesels.

In the case of waste vegetable oil (wvo), people that have tried to use it have had mixed results. Some have great success, while others damage their engines or worse. The New York Times published an article that talks about new diesel technology and how using home-brewed fuels could have an adverse effect. The article mentions that using high grades of biodiesel may void the warranty, and how policy such as the Magnusson-Moss Warranty Act may intervene. It would be interesting to see if there is enough support to develop policy that could coerce automakers in broadening their cars' fuel-usage capabilities.

In any case, it is positive to see there is a growing community of people who want to push the boundaries on biodiesel use. Their innovations today may help advance the technologies for tomorrow, just as open source software has been doing lately.


What's My (Reasonable) Share? Energy Consumption in a Brave New World

I absolutely accept the notion that the opportunity to access energy at an ever-increasing rate has created a standard of living that has become increasingly high for an increasing portion of the world population, and that in general this is a good thing.

That being said, we know that the U.S., with about 4.5% of the world population[1], consumes around 21%[2] of the world’s energy. With China and India on the rise and their populations comprising about 37%[1] of the world, the question presents itself: how much can each person on earth consume? While this is not a question to be arbited by any one nation or decision-making body, it seems to be presenting itself from many directions as developing countries seek to industrialize and the global community debates approaches to mitigating world pollution, resource depletion, and climate change.

As we investigate the future of energy production, including technology for conventional and renewable sources, we anticipate increased efficiency in production and delivery in conjunction with development of new technologies. However, if the ultimate goal is progress toward increasingly sustainable patterns (i.e. reliable supply; reduced pollution, environmental and human health damages), perhaps the exploration of how we can use increasingly less on a per capita basis is a critical part of the equation?

Because local patterns of industry, climate, and culture are unique and because changes in technology and the corresponding energy demands are impossible to predict, I ask this question in the spirit of exploring where we might identify and reduce “wasteful consumption.” This question is very much based on the premise that no one is specifically entitled to some amount of consumption, but that we all find ourselves in various states of fortune with regard to access, and perhaps we have an ethical obligation to consider this question. I wonder about this personally, and hope to explore it further in future work this semester (and I welcome any ideas about ways in which I might explore it!). For now, I present a few points of data.

In 2005, the per capita consumption of energy in high income countries was three times that of the world per capita rate. The North American per capita consumption was 4.5 times higher, and Europe consumed twice the average world per capita rate[3].

Figure 1 Per capita energy use for highest consuming countries, 2000.

Table 1 Per capita energy use for highest consuming countries, 2000.
We have seen the levels of reduction that are possible during crises: in April 2008, Juneau, Alaska lost hydroelectric generation capacity and in response reduced energy consumption by almost 1/3 within the span of a week. A drought in 2001 led Brazil to impose a 20% reduction in electricity use—a crisis with severe economic consequences for the country.

Just as there are those who disagree that the climate is changing due to anthropogenic impacts, many would argue against the need for lifestyle changes based on energy sustainability. Resistance to reducing waste is a complex issue of habit and cultural standard of living expectations. I am curious to explore what behaviors we might modify regarding our consumption and how much impact they might have, in addition to energy needs based on assumptions for per capita use of future populations of developed nations.

[1] CIA World Factbook (July 2008 data):
[2] International Energy Annual 2006:
[3] Nation Master website, which sites IEA as the source of this data:

China Flashes Its Cash to Build Its Oil Stash. Why the U.S. Shouldn't Be Rash in Reacting.

Flush with nearly $2 trillion in cash reserves, China has recently made some power plays as it attempts to secure long-term access to the petroleum it needs to power its economy.

China agreed last Thursday to make a $10 billion loan through the China Development Bank to the Brazilian national oil company Petrobras, to help the firm develop Brazil's promising deepwater oil reserves. In return, the Brazilians have agreed to export up to 160,000 barrels per day to the Chinese at market prices. While 160,000 bpd represents just north of two percent of China's 7.2 mbd of consumption, and a sliver of the 3.4 mbd that the Chinese import (both 2006 EIA estimates), the deal may produce greater dividends in the future if Chinese financing helps Brazil to recover a good amount of the 8 billion barrels believed to lie within its deepwater Tupi field. Tupi's reserves could boost Brazilian oil reserves by more than 60 percent. (By comparison, Norway's total oil reserves, the largest in Western Europe, are estimated to be around 7.7 billion barrels as of 2006.)

In addition, China has also recently agreed to loan a total of $25 billion to two Russian oil companies, Rosneft and Transneft, in exchange for Russia agreeing to export 300,000 bpd to China for the next 20 years. China has also lent $4 billion to Venezuela's PDVSA in exchange for exports of Venezuela's refined oil.

China's moves may appear to threaten America's energy security interests, as it attempts to secure the energy it needs continue its growth as an economic and military power. While American policymakers should take note of these trends, some of China's moves may actually benefit the United States. In order to access the oil within the Tupi field, for instance, Brazil will need to rely on the expertise and technology of American firms such as Halliburton and Transocean, a situation that provides the United States with leverage. Once production ramps up, some of the oil produced from the Tupi field could be exported to the United States. Also, despite the incendiary rhetoric of Venezuelan President Hugo Chavez, boosts in Venezuelan oil production financed with Chinese money may also lead to increased exports to the United States. As Stratfor asserts, Chavez wants to grab American cash "with both hands and make a stash" to finance his regime, as the United States remains Venezuela's most lucrative market.

Less People = Less Energy?

I have recently read Hot, Flat and Crowded, by Thomas Friedman, a book describing many of the problems arising in the twenty first century and how they are affecting the world, and specifically humans. Thomas Friedman sums this up in his own words early on in the book by saying:

“… it [is] obvious that it’s actually the convergence of global warming, global flattening, and global crowding that is the most important dynamic shaping the world we live in today.”(26)

Friedman believes these are “impacting our planet in fundamental ways” by altering everyone’s lives in a drastic, and potentially detrimental, fashion. From the literature I have read, and the focus of the media is on fixing the energy problem mainly by becoming more energy efficient and/or finding more sustainable methods of producing the energy that we require to function as we have become accustomed to living. Both platforms in the recent election had energy as one of the primary topics, and the New York Times reported “both acknowledge a need to encourage energy conservation and development of renewables” ( Later in Hot, Flat and Crowded, Friedman explains his views on saving the planet which focuses on “trying to change the climate system – to avoid the unmanageable and manage the unavoidable… [by] break[ing] a collective addiction to gasoline that is having not only profound climate effects, but also geopolitical ones.”(209)

Undoubtedly changing our current habits to habits of a sustainable energy environment is a daunting task for a conscious public with room to make sacrifices, much less a global population containing a significant percentage who have nothing to sacrifice.

Another major issue I feel is that everyone knows something needs to change, but no one has any idea where to begin changing. Paul Roberts in The End of Oil admits that “at present we have very little sense of what the ultimate climate solution will be” (129). The sense I get from Roberts section on the course of action is learn more about what we need to do before we begin to enact any sort of action because we would not want to invest in an action that was incorrect. As far as I can surmise, Roberts is not in favor of doing nothing; he understands that it is economically more intelligent to, and overall more effective “to go after the cheapest reductions first, regardless of where they are” citing China as a place where “a relatively small investment in energy efficiency would cut more emissions much faster than the same dollar investment in Europe or the United States” (130).

I believe we should start on every front, find the most effective and environmentally efficient, and use them to converge to a satisfactory result. I agree that many of the technologies need significant development to be effective and commercially deployable, but also have come across a topic no one is discussing as a factor that needs no development to help the situation: population reduction.

This factor of the equation seems pretty simple to me: more people = more energy. Less people = less energy. Jared Diamond cites human population as one of his 12 “most serious environmental problems facing past and present societies” (486) in Collapse, an insightful historical view of how a societies impact on the environment determined the collapse or success of that civilization. Of the success stories that Diamond includes, all have some form of population control. There is a fascinating account of Tikopia, a small Pacific island that has been occupied for 3000 years. Diamond names six forms of population control that have been used historically to keep this island’s society capable of supporting itself on the resources provided: contraception, abortion, infanticide, celibacy, suicide, and “virtual suicide” (which is described as going on dangerous expeditions with no real intent of surviving).

Now I am obviously not for killing our children (infanticide), nor killing ourselves (suicide) to control our own population. However, I do believe we have a moral obligation to regulate our population. I am definitely not under the impression we should have rules and regulation imposed upon us that prevent people from procreating, seeing as procreation is one of the few remaining instincts we still share with the animal kingdom. However, with no natural predators (other than ironically enough our own natural curiosity which builds unnatural killing agents), the human population is growing, and I fear beyond our capability to sustain it.

A question is will we be capable of seeing the peak of resources that marks the maximum sustainable population? Is it before we have a monumental collapse of civilization? This is why I propose that we begin to consider an individual responsibility of really thinking about our reproductive actions. Diamond found that “on Tikopia… people are explicit in saying that their motive for contraception and other regulatory behaviors is to prevent the island from becoming overpopulated… and prevent the family from having more children than the family’s land could support”(290). Although there is contraception in America, we also make celebrities out of Nadya Suleman (, and watch shows such as TLC’s “17 Children and Counting” (

Political enforcement may not be the right answer because that interferes with the mores and values that originally built America, however from an energy economical view, this many people per family just cannot be sustained. Suleman has recently started a website ( to accept donations to help support her new family of 14 children (she is the only parent), 8 of which were artificially conceived. The amount of energy those children consume is going to continue to perpetuate the problems we are already having, as well as, in my opinion, rob at least 14 children from impoverished areas of energy they would put to far better use in uplifting themselves to only a fraction of the wealth this woman’s children will get (at least because many people in Third World countries require far less energy). It is selfish and irresponsible. In addition, by supporting these types of actions, we give an economic advantage to the exact ignorance that is preventing our society from advancing away from the gluttonous uses of energy that is strangling us.

With all the talk of carbon taxes on industries and factories, I think maybe we should extend it to these baby making factories. This way the entire carbon cycle is taxed, and you cannot really lobby that the rules are unfair to any one sector. We could tax people who more than replace themselves, and then credit those who assume their replaces (in such cases as adoption; limit 1).

1. Friedman, Thomas. Hot, Flat and Crowded. New York: Farrar, Straus, and Giroux, 2008
2. Diamond, Jared. Collapse. New York: Penguin Group, 2005
3. Roberts, Paul. The End of Oil. New York: First Mariner Books, 2005

PHEV and Li-ion Batteries: Environmental Consequences of Mass Production

Many people would agree that plug-in hybrid (PHEV) and electric (EV) vehicles are the next big shift in the auto industry. They are certainly an attractive alternative to traditional automobiles, and have caught the eye of environmentalists and politicians alike. However, advancements in storage, weight, and cost of batteries are needed before these vehicles can truly be marketable. Lithium-ion batteries may hold the solution to the energy storage problem, and are already widely used in the portable electronics industry. Currently, lithium-ion batteries are also the preferred battery type by a handful of companies developing PHEV and EV systems. In 2010, General Motors expects to release two PHEV models that use lithium-ion batteries [1].

Lithium is extracted from deposits beneath brine pools, sometimes called “salt flats” [2]. According to the Handbook of Lithium and Natural Calcium, “lithium is a comparatively rare element…always in very low concentrations…[and] only comparatively a few of [the deposits] are of actual or potential commercial value” [3]. Like oil, lithium is a limited commodity and the same economic and political principals should apply. Unfortunately, this fact has gone largely overlooked, overshadowed by the enthusiasm for these “green cars.” Where we get our source of lithium and the environmental, political, and social impacts caused by a large increase in its demand are important policy issues that future PHEV and EV manufacturers will have to face.

In 2008, Meridian International Research conducted a study of the world’s existing and future lithium resources and what that means for the future market of PHEV and EV vehicles. The study resulted in four main conclusions. First, anticipated demands for lithium, from the PHEV and EV markets as well as the growing portable electronics industry, far exceed the existing and future reserves. Secondly, these recoverable reserves are significantly lower than previously estimated. Thirdly, substantial damage to the ecosystem will result from the mass production of lithium. And lastly, production of lithium will worsen the U.S.’s already strained relationship with Latin America, where the vast majority of lithium resources are located [3]. A recent NY Times article highlights the political concerns effecting future lithium production, calling Bolivia, home to half of the world’s lithium deposits, the “Saudi Arabia of lithium” [2].

While the availability and future demand for lithium can only be speculated, more research should be done into less harmful methods for lithium extraction and production. Similarly, more R&D dollars could be spent on improving other types of batteries that aren’t dependent on non-renewable resources. In fact, improving energy storage is also essential to making renewable energy technologies like solar and wind competitive with conventional technologies. Batteries that can store energy from the sun and wind, to be dispatched to the grid during peak demand, are critical if solar and wind technologies are ever going to surpass fossil fuels for power generation. The need for improved energy storage will only grow from here, and a sustainable source will need to be discovered. And while it’s easy to get caught up in the excitement of renewable energies and “green cars,” we cannot disregard the need for a comprehensive analysis of the long-term costs of their mass production.


Saturday, February 21, 2009

Stimulus Bill Constipation - How “Shovel Ready” Doesn’t Always Work for Clean Energy

In part, the 2009 stimulus bill was formulated by our legislative branch to get the deposit multiplier going through the grant funding of “shovel ready” infrastructure, healthcare and clean energy and efficiency projects. Since it is the current economic situation that needs to be jumpstarted, our politicians insisted that immediate economic effect was necessary. To this end, $43 billion dollars of grant money was allocated to clean energy and energy efficiency projects that were ready to start construction immediately.

Here is the rub. The lifecycle of large clean energy project is long (2-3 years for a decent size wind project). There are few clean energy developers that sit around with “shovel ready” projects waiting for the stimulus grant fairy to come and put a slug of grant money under their pillow. The time value of money prevents this tactic. By the time a project has become “shovel ready” the developer has already invested significant time, resources, and capital into getting it to that point. For example, it could take a year to negotiate and lock-up wind energy leases, and install meteorological towers to gather wind speed data on a site - next comes an arduous environmental assessment and permitting process. After that, a typical grid interconnection agreement can take 1.5-3 years to push through a PUC, and that is often needed BEFORE a power purchase agreement (PPA) can be negotiated with buyer! Finally, equipment procurement, wind turbine purchase agreements, and contractors must be lined up before you have a “bankable” project (i.e. before a tax equity investor will buy the project from you). A project is not “shovel ready” until it has all of these pieces in place. Morale of the story, this is not a fast process, and if there is no tax equity light at the end of the tunnel (i.e. September 2009 – through today) the process is often halted or delayed to preserve capital.

To be fair, there are the “lucky” distressed assets out there as a result of tax equity leaving the market in fall 2009. (Their wishes have come true, and projects that were ready to be scrapped as uneconomic are now looking very attractive). But for the most part, if a project was economic and “shovel-ready” without the grant money then it had already locked up its financing before being “shovel ready”.

The challenge for the Department of Energy and other governmental organization that are receiving these funds is to balance the pressure to get them out the door fast with the need to maximize the impact that they have. Not an easy task. Big projects that make the most sense take time.

Climatic and Environmental Regulations on the oil Industry: Their Implications for the oil industry and us.

Financial implications for the climate change policies on the oil industry have been studied and analyzed for some time now. Oil industry has shown at best a reluctant behavior in acceptance of these new climate change policies and incorporating them into their operating and financial structures. Companies have shown varied response to environmental regulations, for e.g., BP and Shell have instituted internal GHG (green house gas) trading programs to reduce operational emissions and to learn about emissions trading markets, while Exxon Mobil has been vocal in its opposition to climate change policies especially the Kyoto Protocol. Kyoto Protocol has not been able to achieve the desired results of reduced GHG emissions as US failed to ratify the Kyoto protocol in 2001. Fig. 1 shows the possible scenario whether or not US ratifies the Kyoto protocol. What ever the case, without balanced regulations, Oil industry might suffer financially which will have an adverse affect on economies world wide and particularly in the US. Understanding how the regulations or treaties such as Kyoto will affect the Oil industry, and then working a middle way out, will help achieve the target of reduced GHG emissions from Exploration and production industry.
Fig 1. The possible scenario if or if not US ratifies the Kyoto protocol.

No matter what the scenario is, stricter regulations on the oil industry will lead to decreased share holder values for the companies, thus adversely affecting them. This will be discussed later in the blog.
  1. The extent to which the climatic laws may impact the oil companies is dependent on the following;
    The percentage of oil and gas produced by the company. The greater the oil percentage in the energy mix, the more restrictions the company might face due to the high carbon density in the crude oil. Therefore crude oils with higher carbon density might need further processing in the refineries in order to meet the stricter new climatic policies.
  2. Upstream and downstream business activities. Upstream activities are likely to be impacted more as a policy change, as upstream activities are major source of green house gases and a large part of revenue for oil companies is derived from upstream activities. The risks for upstream and downstream activities are as follows.
    Increased refining costs
    Increased drilling costs
    A possibility for reduced demand for oil
    Refined products from refineries may be impacted in a significant way.
  3. The location of reserves which has shifted to more environmentally sensitive regions such as in the African region. Significant environmental regulations will lead to production from these assets being limited or even in the worst case companies may be denied access to these reserves. As traditional oil-producing regions mature, the industry is increasingly exploring and producing in new areas, where environmental and social controversies may be significant. Figure. 2 shows the distribution of revenues for various companies from environmentally sensitive areas.Fig 2. The distribution of revenues for various companies generated from environmentally sensitive areas.
    In a somewhat secret report drafted for The Department of Energy, Advanced Resources International analyzes the economic effects of the regulations recommended by various environmental groups. The salient regulations include
    · Oil and gas exploration and production (E&P) operations should report to the Toxic Release Inventory (TRI), which requires considerable expenditure in researching the toxicity of what is being produced from the well, and ultimately debating the legislations on such issues and modifying them to suite both the environmental agencies and the oil industry
    · Identifying the emissions of oil and gas E&P activities according to the National Emission Standards for Hazardous Air Pollutants (NESHAP) program, and pushing the U.S. Environmental Protection Agency (EPA) to review and update clean air regulations related to oil and gas E&P.
    · All wastes associated with oil and gas exploration and production are classified under Resource Conservation and Recovery Act (RCRA). This includes mandatory underground injection of produced water and other waste associated with enhancing oil and gas production meet the higher standards. Meeting higher standards on this can cause considerable cost increase on exploration and production for oil and gas.
    · The implementation of stricter Spill Prevention, Control, and Countermeasure (SPCC) requirements issued by EPA to improve such measures on any site where there is a risk of an oil and gas spill.
    · Pushing the oil industry to dispose all the fracturing fluids and materials used in hydraulic fracturing of oil and gas wells to be injected underground. This even might not be possible at some well sites.

    And the result of these regulations
    · Loss in royalties and taxes to the government due to decreased exploration or declining oil production
    · 183,000 barrels per day lost, or 7 percent of U.S. lower-48 onshore oil production in the first year alone.
    · 57 percent of producing onshore oil wells in the US could be shut in, and 35% of producing onshore gas wells.
    · Drilling for unconventional gas can be negatively impacted leading to supply issues in the future.
    · Loss of 245 billion cubic of gas in the initial first years of regulations
    · $10 billion first year, up to $75 billion over 25 years are the estimated compliance costs.

    Figure. 3 shows what will happen to the share values of the company if such kind of regulations are placed on the oil industry. This study was carried out by world energy institute on some prominent companies in the E&P industry. Therefore reduced value and earning of the companies can significantly affect national and local economies and one example is reduced jobs.

Fig 3. Impact of environmental regulations on the shareholder values of some of the major producers in the oil and gas industry.

1. The European Commission, “Green Paper on greenhouse gas emissions trading within the European Union,” COM (2000)87 (European Union, 2000).

2. Richard Rosenzweig et al., “The Emerging International Greenhouse Gas Market” (Arlington, Virginia: Pew Center on Climate Change, March 2002).

3. Intergovernmental Panel on Climate Change, “Climate Change 2001: The Scientific Basis—Summary for Policymakers: A Report of Working Group I of the Intergovernmental Panel on Climate Change” (Geneva, Switzerland: IPCC, 2001), p. 10.

4. Lans A. Bovenberg and Lawrence Goulder, “Neutralizing the Adverse Industry Impact of CO2 Abatement Policies: What Does It Cost,” C. Carraro and G.E. Metcalf, eds., Behavioral and Distributional Impacts of Environmental Policy (Chicago: University
of Chicago Press, 2001)

5. “Changing Oil”, a report published by World energy institute in 2008.

Electricity Generation - Learning About the Tradeoffs with TIPS

The Texas Interactive Power Simulator (TIPS) is an online tool that allows the user to compare the environmental and economic tradeoffs of different electricity technologies. The user can change the amount of generation from coal, natural gas, nuclear, hydroelectric, wind, and solar generation technologies and TIPS will calculate the economic costs and environmental impacts of these changes. These values are displayed graphically to allow for easy comparison of what the user chooses and the current generation mix in Texas. TIPS is a good information source and teaching tool for those wishing to explore the tradeoffs of different electricity generation technologies.

TIPS was developed in conjunction between the University of Texas at Austin's Webber Energy Group and Power Across Texas.

Friday, February 20, 2009

Lithium in Bolivia

For at least 5 years auto makers have been producing hybrid vehicles due to the recent rise in gas prices.  The rise in gas prices have made hybrid vehicles economically viable, but recent conflict in Bolivia, "the Saudi Arabia of lithium" (Quisbert), may cause hybrid prices to rise.  A recent article in the New York Times titled "In Bolivia, Untapped Bounty Meets Nationalism", talks about the growing need for lithium, a vital mineral needed for powering the hybrid vehicles.  According to NY Times almost half of the worlds lithium reserve is located in Bolivia.  What is this going to do for the US's push for foreign oil independence when we now have to rely on foreign lithium?  Bolivia's government is closely regulating the lithium export and "keeping foreigners at bay" (NY Times).  Japanese and European automakers are also pressuring Bolivia for their lithium, which is more competition for US automakers. 
Are hybrid vehicles the way of the future for our automobiles or are they going to be too expensive for automakers to continue to produce due to the shortage of lithium?

Contributions Unlimited

This is the time when CEOs of nation's top wind and solar trade organizations pass for celebrities (quoting Kent Garber, US News) and a teenager worries more about killing hundreds by consuming a glass of water and not about his allowance (

We have been hearing too much about renewables and in this wake, we can see big-shot companies contributing in whichever way they can. Now, we don't know whether its for publicity or true concern. Microsoft has come up with an add-on to their Dynamics AX business applications. This helps educate small and mid size companies collect and assess their energy usage statistics and convert them into environmental impact data ( On the other end, Google too has decided to launch another one of their free web services, called the Powermeter and this would assess the amount of energy (in terms of electricity) being used in workplaces and households (

We do not know how much help this is going to be. Are people going to start using less and conserving more because a certain application on the net helps them read their consumption and hence the environmental impact? We never know! Just a few years back, three to be precise, a survey by the MIT's Laboratory for Energy and the Environment showed that any change in the U.S. Climate Policy won't happen due to public opinion or intervention. People did not seem deterred or bothered about the changes their environment was undergoing and out of the 22 most important problems facing the U.S., the environment and climatic changes grabbed the 13th place ( It was then decided that the survey would be taken again after a span of two or three years and voila, after a matter of just a single year, Americans ranked Climate Change as the most pressing issues that their country is facing ( Hence, we can rest assure that the public is thinking the way it should and the opinion that the public gives out on any policy is going to be good enough. Now, the question is whether there is going to be a policy that is going to help the country and hence the Americans dismiss environmental concerns as something that they needn't worry about. Will there be such a day??!!! Well, on that note, there is a claim that sulfur di oxide is the primary cause of global warming and not our good ol' carbon di oxide ( Maybe there can be a 'full stop' in the near future after all. That's something we all need to ponder about! 



Tuesday, February 17, 2009

State of Fear or An Inconvenient Truth

I watched "An Inconvenient Truth"(a movie which shows the ill effects of greenhouse emissions) right after I read Michael Crichton's "State of Fear"(a book which calls greenhouse effect a hoax and everything around it a propaganda by the environmentalists).

It will be appropriate for me to share my experience with my class mates so that they can have a reasonable judgment on their part to decide if greenhouse is really affecting our lives or if its merely a hoax! The best way to decide on this is to watch the movie along with reading the book, as your mind tries to be fair in its judgement.

Three sentences which very well reflect the message of the book are:

  • The science that supports or does not support the theory behind global warming is so incomplete that no reasonable conclusions can be drawn on how to solve the "problem" (or if the "problem" even exists).
  • Elites in various fields use either real or artificial crises to maintain the existing social order, misusing the "science" behind global warming.
  • As a result of potential conflicts of interest, the scientists conducting research on topics related to global warming may subtly change their findings to bring them in line with their funding sources.
courtesy: Wikipedia

The strong conviction with which the author tries to relate his work to reality is quite interesting, like the following disclaimer:

"This is a work of fiction. Characters, corporations, institutions, and organizations in this novel are the product of the author's imagination, or, if real used fictitiously without intent to describe their actual conduct. However, references to real people, institutions and organizations that are documented in the footnotes are accurate. Footnotes are real."

Personally, I have grown up seeing images of effects of global warming on television and magazines. But I never tried to chase the relationship between, lets say, a devastating hurricane and increasing global temperature. There are a lot of other examples which reports tell us, that are related to global warming. I just took it for granted. After reading the book, which challenges everything with graphs and figures, you start questioning your basic line of thinking.

Here is what I thought, right after I read the book:

“State of fear” is about the idea or rather a perception we call “Global Warming”….did you notice the peculiar way I present this topic!!!!! Its all the effect of the book!!

Well Global Warming as I believe now is just an idea supported by facts. Its a tentative idea….No one’s sure about it. People are scared though.

Another thing…….what you get to learn from Newspapers or magazines….They write what we want to read like everyday you find an article on “Global Warming”…what will keep them in business

I was too biased in my mind regarding the concept of global warming after I finished the book, so, I had to watch Al gore's movie to get a fair picture. I did it. I cannot tell you how hard it is to believe who is right and who is not, even for an engineer like me who tries to trust only scientific data and facts.

I request all my classmates to do as I did or may be they have already had their experience with the book and the movie. I would like you guys to share your thoughts on this topic as comments to this particular blogpost. It will affect my judgement.

Monday, February 16, 2009

Austin Energy declines involvement in STP expansion

The South Texas Project (STP) is a two-unit, 2,725 MW nuclear facility located in Matagorda County, Texas. The City of Austin has a 16% (smallest) share of STP, along with CPS Energy and NRG Energy, Inc. According to the ownership/operation agreement between the three for STP, any owner may propose the construction of new generating units at the site. At least 50% of the plant ownership must participate in order for the construction to proceed. However, all owners have the right to decline involvement. This also represents the first application submitted to the NRC for a new nuclear plant in 29 years.

From Austin's perspective, analysis indicates that such participation could cost $2 billion or more over the next seven years, an amount and time frame that is likely to increase given the history of nuclear facility construction (particularly as Austin Energy and financial adviser on the matter WorleyParsons viewed the construction timetable as "overly optimistic"). The appealing factor would be an addition of 432 MW of clean, efficient baseload power.

However, this represents about double the amount of additional generation projected to be needed by 2020 for Austin Energy. Also, the amount of debt necessarily incurred from such a commitment
relative to their size "could result in a downgrade of its credit rating, leading to higher future borrowing costs." [1]

That final economic factor as well as Austin Energy's strong existing plans for generation through 2020 are the primary reason for the lack of involvement. "That proposed plan includes about 900 MW of additional capacity, including a 200 MW expansion of the utility's natural gas-fueled Sand Hill Energy Center, an additional 100 MW biomass plant, a doubling of the utility's wind-generation portfolio to about 1,000 MW as well as 100 MW of solar capacity."

Although Austin Energy's (AE) proposed generation plan through 2020 has yet to be finalized and approved by public review, it demonstrates a strong commitment to alternative energy sourcing. The largest portion being the very green and very Texas increase in projected wind power generation.

Transmission costs of this power to areas of East Texas, along with the availability of wood waste from logging and mill activity, among other reasons, have led to the approval of the $2.3 billion biomass plant. The plant burns waste wood to generate steam to produce electricity. Despite the apparent lack of technological "green-cred," the plant helps curb oncoming natural gas price hikes and carbon taxes, with the strong selling point of 24/7 on demand power that fits, legally speaking, within the goal of 30% renewables by 2020 [2].

CPS Energy, which is San Antonio's municipal utility and owner of 40% of the STP, quickly approved of the project; thus providing the necessary support for the project to proceed. The project is a part of NRG's initiative to provide "clean," cost-effective baseload power that does not contribute to global warming. The initiative is part of NRG's need to reduce carbon intensity due to it's large scale and strong dependence on North-East coal plants. Thus, they have resolved nuclear technology as the only large-scale, zero/low GHG or CO2 emissions capable of providing on-demand available power; and plan on building 10,000 MW of it within the next 20 years or so [3].

Such an aggressive move should be of concern to anyone aware of the unresolved issue of nuclear waste. Certainly the amount of energy supplied by such convenient baseload sources as coal and natural gas will need to be offset in the very near term (particularly coal), but do pending carbon restrictions force us into hasty financial and energy investments that we do not fully understand the environmental consequences of, particularly nuclear waste? This is the situation we have put utility companies in, and nuclear power is the clear solution for the time-being, or else wood-burning biomass plants. Is this what we want? Strong dedication to "alternative" sources that cleanly shirk their environmental responsibilities and reprecussions into areas other than CO2 emission? As ETP students are the main audience for this post and have been made aware of the lack of funding the utility industry puts into R&D, this decision is likely of little surprise.

To myself, these facts speak volumes to the public's need for conservation efforts. Usage studies, technology R & D, public education, and the necessary motivation - even if it comes in the form of government mandated financial motivation. Energy used should come with a clear monetary indication of the environmental impact had, whether emissions, waste, or resource depletion. Utility affiliated or not investment firms that will provide capital costs for home technologies to increase efficiency and reduce waste. I believe it is time to force the people to do what they know they need to, and make them aware that the answers to their hypocritical Utility Company demands can be solved in their own home.

1 - Austin Energy Press Release on STP Decision

2 - Austin Energy Press release on East Texas Biomass Plant

3 - NRG STP Proposal Press Release