Category: Economics

Matters of money

Personal experiences with coal

Willa Johnson has written an interesting post about her personal experience with coal, an industry which her family works in but which she now opposes.

Much of it focuses on the apparent tension between dealing with climate change and addressing unemployment:

People say that I am ungrateful and that I don’t understand, but I do. I grew up with my house shaking from the explosions blowing the mountainside off. I know what it feels like not to be able to breathe the air on certain days because it is so thick with dust.

But layoffs are spreading across the region, and local activists like me are feeling the heat. Summer barbecues are tense when the person sitting across the table from you just lost the mining job that you spend a great amount of time speaking against. It’s not easy feeling like you’re fighting the people you love.

What makes the emotional situation here so unbalanced is the contrast between the powerfully immediate (though ambiguous) physical and economic impacts of coal mining, and the distant but invisible consequences of the emissions being generated. The former has a much greater capacity to engage human emotions than the latter, despite how the latter is a consequence on a much larger scale. Also, the sheer wretchedness of the local destruction caused by coal mining somewhat tempers the tendency to accuse the people in these communities of being gross abusers of the rights of innocent people around the world, and in future generations. While there is some truth to that perspective, people in coal mining communities are clearly victims too.

In any event, it highlights how pragmatic approaches to escaping fossil fuel dependence will require special assistance for those most directly affected by the transition.

Incidentally, it would be wonderful if some people with personal experience with the coal industry could contribute some posts to BuryCoal.com. The site would surely be enriched by the addition of some less distant perspectives.

Emerging energy related technologies

The Economist’s latest Technology Quarterly contains a number of articles with climatic significance:

These sorts of innovations (aside from the oil and gas extraction story) would surely be driven forward if carbon pricing made people care more about the consequences of their greenhouse gas emissions.

After the Ice

Having already read a great deal about climate change and the Arctic, I expected Alun Anderson’s After the Ice: Life, Death, and Geopolitics in the New Arctic to provide only a moderate quantity of new information. I was quite surprised by just how much novel, relevant, and important content he was able to fit into the 263 pages. The book discusses the historical and current relations between governments and Arctic indigenous peoples; ice flow dynamics and exploration; the changing nature of Arctic ecosystems and species, along with information on what climate change may do to them; international law and the geopolitical implications of a melting Arctic; oil, gas, and other natural resources, and how their availability is likely and unlikely to change in coming decades; the rising tide of Arctic shipping, and the special safety and environmental considerations that accompany it; and the feedback effects that exist between a changing Arctic and a changing climate.

Ecosystems

Some of the best information on the book is about biology and Arctic ecosystems. It describes them from the level of microscopic photosynthetic organisms up to the level of the megafauna that gets so much attention. Anderson argues that most of the large marine mammals (seals, walruses, whales, etc) are threatened to some extent or another by the loss of sea ice. This is for several reasons. First, it could disrupt the lowest levels of the food web they rely upon. Second, it could permit the influx of invasive species that could out-compete, starve, or attack existing Arctic species. Third, the lifecycles of Arctic animals are slow and deliberate, and thus liable to disruption from faster-breeding competitors. Disappearing sea ice off Svalbard has already completely wiped out what was once “one of the best areas for ringed seal reproduction.” Arctic species, argues Anderson, will need to “move, adapt, or die.” Generalists like beluga whales have promise, while the narwhal and polar bear may be the most vulnerable large creature in the ecosystem.

One consequence of the loss of multi-year sea ice that I had not anticipated is the potential for a massive migration of species between the Pacific and Atlantic oceans, with invasive species potentially seriously altering the composition of ecosystems on both sides. Melting ice could therefore produce major changes in much of the world’s ocean. Even before that, expanded range for orcas could have a significant effect on life in northern waters. Where ice used to provide safety, by obstructing their pectoral fins, these powerful predators increasingly have free reign.

Resources, shipping, and tourism

Anderson makes an effective argument that most of the oil, gas, and resources in the Arctic will be effectively locked away for some time yet. There will always be ice in the winters, glacial ice calving off Greenland and other Arctic islands poses a significant risk due to its extreme hardness, and very high commodity prices are necessary to justify the risk and capital investment required to operate in the region. (See this post on the the Shtokman gas field.) He expects that, even if there is a boom, it will be short-lived and of limited benefit to those living in the region. In particular, he cautions people living in the north not to abandon traditional ways of life sustained by things other than oil and gas. Living for a couple of rich decades and then being left with nothing would be a tragic outcome.

The book also downplays fears about a scramble for resources and sovereign control. Anderson argues that the United Nations Convention on the Law of the Sea (UNCLOS) already provides a clear legal framework and that negotiated outcomes are probable. That should provide some comfort to those concerned about diplomatic or even armed conflicts in the changing north. One danger Anderson does highlight is how the risk of collision with ice, increasing shipping and tourist traffic, and the absence of emergency response capabilities could combine. He describes plausible scenarios where major oil spills or massive loss of life could result, due to a problem with a tanker or a cruise ship (disproportionately full of elderly people susceptible to cold, as they are).

While Anderson does an excellent job of explaining some of the risks to species and human beings from a changing Arctic, he doesn’t take seriously the possibility of truly radical or catastrophic change, of the kind highlighted as possible by James Hansen. Anderson also completely fails to describe how the incremental emissions from burning oil and gas in the Arctic would inevitably increase the degree of climate change experienced by humans and natural systems. It is cumulative emissions that matter most, and extracting hydrocarbons from the far north can only increase those.

For anyone with an interest in what is happening to the Arctic and what the medium- and long-term implications of that might be, this book is enthusiastically recommended.

Ontario could phase out coal in 2010

That is the message from the Ontario Clean Air Alliance, expressed in a post on BuryCoal.com. They argue that Ontario has enough non-coal electricity generating capacity to put its four remaining coal plants on “standby reserve” between now and their legislated closure in 2014.

It is an initiative worth applauding. In contrast to targets so far off in the future as to be politically irrelevant, this is something that could be done right away. That is important, given the degree to which every year that passes before emissions peak means more drastic cuts will be required around the world afterward.

Another option worth considering is converting Nanticoke, North America’s largest coal-fired power plant, to burn biomass instead. From a health and environmental perspective, that’s not as appealing as shutting it down, but it would definitely be an improvement upon the status quo.

Renewable energy and the budget

Tim Weis, from the Pembina Institute, does a good job of showing why Canada’s most recent budget is not well aligned with the government’s target on renewable energy, namely to move from generating 77% of our energy from non-emitting sources now (mostly hydro and nuclear) to generating over 90% that way by 2020. It’s a laudable goal, but one hardly advanced by the investment of a mere $25 million in renewable energy in the forestry sector, or continued inaction on the regulation of greenhouse gases.

If Canada is serious about becoming a “clean energy superpower,” we need to do better than this.

2010 SFT – climate and energy

Here are the sections from today’s Speech from the Throne (SFT) that relate to climate and energy:

  • “Our energy resource endowment provides Canada with an unparalleled economic advantage that we must leverage to secure our place as a clean energy superpower and a leader in green job creation. We are the world’s seventh largest crude oil producer with the second largest proven reserves. We are the third largest natural gas producer, the third largest hydroelectric generator, the largest producer of uranium, and by far the largest supplier of energy resources to the world’s largest marketplace. To support responsible development of Canada’s energy and mineral resources, our Government will untangle the daunting maze of regulations that needlessly complicates project approvals, replacing it with simpler, clearer processes that offer improved environmental protection and greater certainty to industry.”
  • “Our Government will continue to invest in clean energy technologies. It will review energy efficiency and emissions-reduction programs to ensure they are effective. And it will position Canada’s nuclear industry to capitalize on the opportunities of the global nuclear renaissance – beginning with the restructuring of Atomic Energy of Canada Limited.”
  • “The Joint Review Panel on the Mackenzie Gas Project has completed its report. Our Government will reform the northern regulatory regime to ensure that the region’s resource potential can be developed where commercially viable while ensuring a better process for protecting our environment.”
  • “Nowhere is a commitment to principled policy, backed by action, needed more than in addressing climate change. Our Government has advocated for an agreement that includes all the world’s major greenhouse gas emitters, for that is the only way to actually reduce global emissions. And it has pursued a balanced approach to emissions reduction that recognizes the importance of greening the economy for tomorrow and protecting jobs today.”
  • “The Copenhagen Accord reflects these principles and is fully supported by the Government of Canada. Together with other industrialized countries, Canada will provide funding to help developing economies reduce their emissions and adapt to climate change. Here at home, our Government will continue to take steps to fight climate change by leading the world in clean electricity generation. And recognizing our integrated continental economic links, our Government will work to reduce emissions through the Canada-U.S. Clean Energy Dialogue launched last year with President Obama’s administration.”

None of this is very encouraging. Rather than celebrating our huge fossil fuel reserves, we should be recognizing the risks associated with burning them. Similarly, brushing aside regulations that reduce the pace of fossil fuel exploitation will hardly help us avert catastrophic climate change.

The pledge to “review energy efficiency and emissions-reduction programs to ensure they are effective” is also discouraging. Canada still hasn’t deployed any sort of carbon price: a vital component of an overall climate change response.

How not to use feed-in tariffs

As I mentioned when expressing doubt about Bloom Boxes, many environmentalists assume that distributed generation of electricity is inherently preferable to large-scale generation and transmission. As I have argued in the past, there are good reasons to argue the converse. Micro wind turbines are especially dubious, given that the energy output from turbines increases with the diameter of the blades. Those little rooftop turbines some people install just don’t make sense, unless they live in very remote and windy areas. In a place as northern and cloudy as Britain, home solar photovoltaic arrays may make even less sense, especially if investments in more cost-effective options like improving efficiency of energy use have not yet been made. Saving many kilowatt-hours a day through better insulation beats producing a trickle of electricity, especially given that it is less costly.

In a recent essay, George Monbiot argues that feed-in tariffs for small scale renewables are regressive and a waste of money:

[The government] expects this scheme to save 7m tonnes of carbon dioxide by 2020(5). Assuming, generously, that the rate of installation keeps accelerating, this suggests a saving of around 20m tonnes of CO2 by 2030. The estimated price by then is £8.6bn. This means it’ll cost around £430 to save one tonne of carbon dioxide.

Indeed, if the government is going to provide feed-in tariffs for renewable projects, they must be the sort that can actually make a difference: multi-megawatt run-of-river hydro projects, concentrating solar stations that can put out baseload power, and the like. If the government wants a sound climate policy for homes, it should be tightening building standards, encouraging retrofits, and the like.

Bill Gates on nuclear power

Bill Gates has brushed up against climate issues before. First, he apparently considered investing in the oil sands. Later, he invested $4.5 million of his own money in geoengineering research.

Most recently, he gave a talk at the TED conference advocating that developed countries and China cut greenhouse gas emissions to zero by 2050 (producing an 80% overall reduction), and do so largely on the basis of nuclear power. He thinks fast breeder reactors capable of using U-238 are the way forward, given how much more fuel would be available. His favoured version of breeder reactor is the traveling wave reactor, which is theoretically capable of using little or no enriched uranium.

Emissions equation

Gates argues that the key equation is: (population) X (services) X (energy use for services) X (greenhouse gas intensity of energy). To get down to zero, one of these elements needs to be reduced to that level. He argues that more services are important, especially for the world’s poor. Efficiency, he argues, can be improved quite substantially – perhaps increased three to sixfold, overall. The real work, he argues, needs to be done by cutting the GHG emissions associated with energy production to near zero.

Energy options

Gates argues that the energy systems of the future will need massive scale and high reliability. He singles out five he sees as especially promising, though with significant challenges:

  • Carbon capture and storage (CCS) – hampered by cost, access to suitable sites for injection, and long-term stability of stored gases (the toughest part)
  • Nuclear – with its cost, safety, proliferation, and waste issues
  • Wind
  • Solar photovoltaic
  • Solar thermal – all three limited by land use, cost, transmission requirements, and the need for energy storage to modulate fluctuations in output

Four others he describes as potentially able to make a contribution but decidedly secondary in importance:

  • Tide
  • Geothermal
  • Biomass
  • Fusion

I agree that fusion is a long shot that we cannot count on. I am more optimistic than Gates about the other three. Pumped tidal power could provide some of the energy storage he sees as so important. Enhanced geothermal looks like it has a lot of promise. Finally, combined with CCS, burning biomass offers us a mechanism to actually draw carbon dioxide out of the atmosphere and bury it.

The big picture

Cutting from the world’s current global emissions of about 26 billion tonnes (gigatonnes) of CO2 down to zero will require enormous activity. Quite possibly, nuclear will need to be part of that, despite its many flaws. That said, we need to be hedging all of our bets. One big accident could put people off nuclear, or fast breeder designs could continue to prove impractical. We need to be deploying options like huge concentrating solar farms in deserts and massive wind installations at the same time.

It is also worth noting that Gates’ assumptions about the rate at which emissions must be reduced are more lenient than those like James Hansen who are more concerned about when massive positive feedbacks will be kicked off. If the people who say we need to stabilize at 350 ppm are correct, Gates’ prescription of a 20% cut by 2020 and an 80% cut by 2050 will be inadequate to prevent catastrophic or runaway climate change.

Gates talks about this a bit during the questions. There are two risks: that his assumptions about the speed with which emissions must be cut are too lenient, or that his beliefs about the pace of technological development and deployment are overly optimistic. He thinks geoengineering could “buy us twenty or thirty years to get our act together.” Here’s hoping we never have to test whether that view is accurate.

Those much-hyped ‘Bloom Boxes’

Now that some figures are on their website, it is possible to comment a bit more meaningfully on Bloom Energy (beyond noting that they can attract a lot of heavyweights to their press events).

They seem to have deployed 3 megawatts of fuel cells in seven installations. That’s twice as much power as is provided by Grouse Mountain’s solitary wind turbine. Of these, two installations (with an output of 900 kW) are running on methane from renewable sources. According to Wikipedia, the fuel cells cost $7,000 to $8,000 per kilowatt. That is extremely high. An open cycle gas turbine power plant costs about $398 per kilowatt. Wind turbines cost something like $1,000 per kilowatt. Nuclear is probably over $2,000 and even solar photovoltaic is cheaper than $5,000. From an economic perspective, natural gas also isn’t the most appealing fuel for electricity production. It has significantly higher price volatility than coal.

Without more statistics, it is impossible to know how the efficiency of these fuel cells compares to conventional natural gas power plants, either before or after transmission losses are factored in. Bloom’s literature says that, when they are using conventional natural gas, emissions from their fuel cells are 60% lower than those from a coal power plant. Frankly, that isn’t terribly impressive. Coal plants generate massive amounts of CO2, relative to their power output. It also isn’t clear whether methane from renewable sources would be more efficiently used in these distributed fuel cells than in larger facilities based around turbines and combustion.

Many environmentalists assume that distributed power is the future, but there are definitely advantages to large centralized facilities. They can take advantage of economies of scale and concentrated expertise. They may also find it easier to maintain the temperature differential that establishes carnot efficiency.

It will be interesting to see how Bloom’s products stack up, when more comparative data is available.

Past lives of climate deniers

My friend Antonia sent me a nice article by Jeffrey Sachs, describing what today’s most prominent climate change deniers were doing, before they took up this cause:

Today’s campaigners against action on climate change are in many cases backed by the same lobbies, individuals, and organisations that sided with the tobacco industry to discredit the science linking smoking and lung cancer. Later, they fought the scientific evidence that sulphur oxides from coal-fired power plants were causing “acid rain.” Then, when it was discovered that certain chemicals called chlorofluorocarbons (CFCs) were causing the depletion of ozone in the atmosphere, the same groups launched a nasty campaign to discredit that science, too.

Later still, the group defended the tobacco giants against charges that second-hand smoke causes cancer and other diseases. And then, starting mainly in the 1980s, this same group took on the battle against climate change.

What this reinforces is how artificial the climate change denial movement is. Status quo actors, from Duke Energy to Saudi Arabia to Canada’s oil-sands-funded politicians, want to avoid climate change legislation. They have found some shills happy to spread confusion, in order to advance that aim. What is sad is how many ordinary people have lined up to be duped.