Saturday, October 16, 2010

Setting the Context: Energy Challanges for 21st Century

A group of us at the Energy Futures Network and the Renaissance Innovation Network are developing a book Rethinking Energy - here is a working draft of the first chapter...


In 2010 the late Hew Crane of SRI International – originally known as the Stanford Research Institute – created a new unit of energy measurement. It is known as the cubic mile of oil . Imagine this: a cube of oil a mile long, a mile wide and a mile deep. Now imagine burning this cube of oil to get energy – whether for electrical power, fuels or other forms of energy. A cubic mile of oil, for those of you technically minded, is equivalent to 26 billion barrels of oil or 6.4 billion tons of coal. A barrel of oil is equivalent to two full tanks of fuel for an SUV.

The reason Crane developed this new measurement was to make clear just what global energy consumption looked like. Each year, the world uses some three cubic miles of oil – some of it with hydrocarbons, some with nuclear and some with wind and bioenergy. Crane is using this measure to capture just how much energy comes from each source, as the following table shows:

Source of Energy Shows as Cubic Miles of Oil per Year

Oil 1.06
Coal 0.81
Natural Gas 0.61
Biomass 0.19
Nuclear 0.15
Hydroelectric 0.17
Geothermal <0.01
Wind and Solar <0.005

Table 1: Sources of Energy (2006)

AS the population of the earth grows – it will exceed eight billion by 2025 – so demand for energy will increase. The best estimate we have is that global energy demand will rise from three cubic miles to six cubic miles by 2050 – energy demand is currently rising at a rate of 2.5% per year.

Meeting Future Energy Demands

The question this gives rise to is simple: how will this demand for energy be met?
Crane and his colleagues have explored this question in some depth. They suggest that a cubic mile of oil can be secured by one of the following:

• 52 nuclear plants developed every year to 2050 – each plant currently requires ten years to construct, has a lifespan of forty years, occupies some four square kilometres of land and costs (at current prices) some $5 billion to build. There is also the problem of disposing of hazardous waste and the growing threat of the use of this waste by terrorists. For each cubic mile of oil from this source, we would require 500 new surface uranium mines; 1,000 new underground uranium mines; and 2,280 nuclear reactor operations.

• 32,850 wind turbines built each year for the next fifty years. A large wind turbine requires a location with a reasonably constant and abundant flow of wind, requires some 0.16 km of land and costs around $2m to build. There are concerns about environmental footprints, aviation and damage to bird life.

• 91,250,000 rooftop solar panels developed and installed each year for the next fifty years. A 2.1killowat solar array requires technical skills for installation, needs a supply of sunshine, covers around 14 m2 and costs around $15,000. Such panels present few, if any, environmental problems.

• 104 coal fired power plants developed each year for the next fifty years. A 500 megawatt coal fired power plant occupies about 2 m2 of land, costs around $650 million and will last while the coal continues to be supplied or thirty five to forty years, depending on national regulations. New regulations in some countries – Canada and the UK included – require such plants to capture and store CO2 emitted by the burning of coal. This adds substantial additional costs. Such plants are major contributors to man-made climate change impacts, acid rain and they give rise to significant environmental land remediation issues.

• 4 Three Gorges Dams developed each year for fifty years. The Three Gorges dam is the world’s largest and it is in China – flooding 632 square kilometers, displacing 1.25 million people and costing $30 billion.

It is worth observing here that it took 200 years (1700 to 1900) for coal to replace wood as the world’s primary energy source. It then took almost 100 years (1870 to 1960) for oil to replace coal. And it took 100 years (1900 to 2000) for natural gas to equal coal in energy usage.

It is also more complicated than this. Take coal fired power plants. To increase the use of coal for energy by one cubic mile each year would require 1,300 new surface coal mines, 2,600 underground mines, some 300,000 new trucks and 2,600 more trains (each consisting of 130 coal cars drawn by three 3,500 horsepower trains. Each mine would leave behind some 750,000 tons of excavated materials sitting some fifty feet deep across twenty square miles.

Wind power is also problematic – it is not windy all the time. In fact, win turbines generally operate at 24-30% of their capacity (never look at installed capacity as a measure of the potential of wind-power – take one third of this capacity and see this as the likely output of a wind turbine). This means that, as wind capacity is increased, additional natural gas fired power plants are needed to “back up” the system so that energy supply meets demand or that ways have to be found of storing energy for use when the wind is low. Given that wind farms are distant from the geographic areas of high demand, there is a need for transmission systems which in turn have environmental consequences.

Biomass – producing energy from landfill waste, wood, alcohol fuels, agricultural crops (including crops grown specially to produce energy) – is also seen by many to have great promise. The global potential is estimated to be no more than 0.5 cubic miles (some suggest it could be as a high as 2 cubic miles), but there is a downside. Most of the biomass in use today is wood. Burning wood may not reduce greenhouse gas emissions – in fact, in some situations, burning biomass can produce more greenhouse gasses than the direct use of fossil fuels. Further, growing crops for energy use will significantly reduce the amount of fertile agricultural land available for food production, thius disrupting the food supply system. We have already seen this. When energy prices were high, farmers sold food crops for energy resulting in bread prices and other food prices rising significantly, causing protests in a number of countries.

Given these observations, it seems likely that the world will be dependent on fossil fuels – oil, gas and coal – for some considerable time.

The question then becomes – do we have enough reserves of carbon based fuels to meet demand?

Global Carbon Energy Reserves

According to several different sources, global conventional oil reserves based on current technologies and normative pricing are some 1,400 billion barrels – equivalent to 46 cubic miles of oil. Additional capacity would be found if the oil price was high – additional exploration and enhanced oil recovery occurs once prices exceed $100/barrel. The best estimate available here suggests that these “additional reserves” could amount to 94 cubic miles of oil. At the current rate of use, proven reserves would supply the worlds energy for some forty years, but at a cost. At the height of the oil boom in 2008 when a barrel of oil sold for $120, a cubic mile of oil would cost US$3 trillion – this is before we add the cost of mitigation the consequences of its use.

Most of this conventional oil (a term used to contrast this kind of oil from oil sands oil, which is seen as unconventional) resides in countries with no or limited democracies: Saudi Arabia (259 billion barrels), Iran (126 billion barrels ), Iraq (115 billion barrels), Kuwait (99 billion barrels ), Abu Dhabi (92 billion barrels), Venezuela (77 billion barrels), Russia (60 billion barrels), Libya (39 billion barrels), Nigeria (35 billion barrels), the USA (22 billion barrels) and Canada (4 billion barrels). Canada in fact currently ranks number nine in world oil production, but by 2015 is expected to be in the top five due to the increasing flow of oil from the oil sands.

The North American oil sands provide a substantial opportunity for energy supply. Colorado, Utah and Wyoming hold oil shale reserves estimated to contain 1.2 trillion to 1.8 trillion barrels of oil, according to the US Department of Energy, half of which is recoverable. Eastern Utah alone holds oil sands reserves estimated at 12 billion to 19 billion barrels. The Canadian oil sands region in Alberta contains recoverable oil reserves conservatively estimated at 175 billion barrels (the industry works on the assumption that there are an additional 125 billion of recoverable barrels in the Alberta oil sands for a total of 300 billion). In total, worldwide, these reserves total 400 cubic miles of oil.

Natural gas reserves are estimated at 42 cubic miles – sixty nine years of supply at current levels of gas consumption. New technologies which enable extraction of gas from shale are significantly adding to the estimates of reserves – an additional 66 cubic miles.

There are also other developments with respect to natural gas – gas hydrates. Gas hydrates represent a very large global reservoir of natural gas and they are estimated to contain more organic carbon than all other known fossil fuel sources combined. They bind immense amounts of methane within sea-floor or Arctic sediments; the breakdown of a unit volume of methane hydrate at a pressure of one atmosphere produces about 160 unit volumes of gas. Gas hydrates exist under large portions of the world's Arctic areas and on deep sea continental slopes in water depths greater than about 600m. All three Canadian continental margins contain gas hydrates. The Mackenzie River delta, in the NWT, contains some of the most concentrated deposits in the world. A number of other countries such as Russia, the United States, India, Japan and China also have substantial marine gas hydrate deposits. The worldwide amount of methane in gas hydrates is considered to contain at least 1x104 gigatons of carbon in a very conservative estimate. This is about twice the amount of carbon held in all fossil fuels on earth. Converting this into our cubic mile of oil measure, there are some 5,000 cubic miles of oil in gas hydrate fields worldwide.

One more observation about oil and gas. In the last few years oil and gas companies have developed a technique known generally as horizontal drilling – rather than drilling straight down, this method drills straight down for a while and then turns and goes sideways. In addition to going sideways, the method also fractures obstacles that get in the way (stubborn rock formations, for example). This combination of actions creates a technology known as horizontal drilling with hydraulic fracturing. According to the US Department of Energy, this is unleashing the ability of oil and gas companies to extract oil and gas hitherto inaccessible to drilling. One field alone - the Barnett Shale located in the Bend Arch-Fort Worth Basin - may have the largest producible reserves of any onshore natural gas field in the United States. The field is proven to have 2.5 trillion cubic feet of natural gas (455 square miles of oil), and is generally estimated to contain as much as 30 trillion cubic feet of natural gas resources (5,460 square miles of oil). Oil also has been found in lesser quantities, but sufficient (with oil prices above $90 a barrel) to be commercially viable. The use of this technology is changing our picture of the state of oil and gas reserves.

Coal is an abundant resource – there are 120 cubic miles of proven and accessible reserves. It is also estimated that and additional 1,500 cubic miles could be accessed by a combination of price attractiveness and new technology: coal remains one the most significant energy asset on the planet.

This brief summary – believe us, there is a lot more we could say – suggests that carbon based energy will be a substantial part of the way in which energy demands are met worldwide for at least a generation.

Some may be surprised at this observation. They will have read about “peak oil”. This is the idea, which has been around for some considerable time, that our ability to find and extract oil has peaked and that oil supplies are in decline. M. King Hubbert created and first used the models behind peak oil in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. Hubbert initially predicted in 1974 that peak oil would occur in 1995 "if current trends continue." However, in the late 1970s and early 1980s, global oil consumption actually dropped (due mainly to the shift to energy-efficient cars, the shift to electricity and natural gas for heating, and other factors), then rebounded to a lower level of growth in the mid 1980s. Thus oil production did not peak in 1995, and has climbed to more than double the rate initially projected. This underscores the fact that the only reliable way to identify the timing of peak oil will be in retrospect. Indeed, if you read the literature on peak oil, predictions include the possibilities that it has recently occurred, that it will occur shortly, or that a plateau of oil production will sustain supply for up to 100 years. None of these predictions dispute the peaking of oil production, but disagree only on when it will occur. Our observation is that it is not imminent.

The Consequences of Energy Use

Burning carbon based fuels for energy has consequences, not least for the environment and climate. There are three we should review here: climate change, water and land. But before we look at these, it is important to note that all forms of energy use have consequences, as we shall see throughout this book.

Climate Change

Roger Pielke Snr., a well-established scientist who has worked extensively on the climate change file, has suggested that there are basically three core hypothesis at play in the scientific community engaged in work on climate science. These are:

1. The Total Sceptic Position: Human influence on climate variability and change is of minimal importance, and natural causes dominate climate variations and changes on all time scales. In coming decades, the human influence will continue to be minimal. We should therefore not worry about our use of carbon energy sources. It will have little impact on the worlds climate.

2. The Emerging Position: Although the natural causes of climate variations and changes are undoubtedly important, the human influences are significant and involve a diverse range of first- order climate forcings, including, but not limited to, the human input of carbon dioxide (C02) through the use of fossil fuels and intensive agriculture. Most, if not all, of these human influences on regional and global climate will continue to be of concern during the coming decades. We therefore must reduce our use of carbon energy and seek alternative energy forms.

3. The UN’s International Panel on Climate Change Position: Although the natural causes of climate variations and changes are undoubtedly important, the human influences are significant and are dominated by the emissions into the atmosphere of greenhouse gases, the most important of which is C02. The adverse impact of these gases on regional and global climate constitutes the primary climate issue for the coming decades. We therefore must radically reduce our use of carbon energy – some suggest by 80% of higher by 2050 – so as to ensure that the climate does not warm beyond 2 degrees higher than at present.

Most of the peer reviewed scientific literature favours the emerging position over the IPCC position. It is also the case that very little of the literature favours the sceptic position. Scientific analysis therefore needs to take into account and give more serious consideration to the other factors that have a bearing on climate change. These include the role of oceans as “sinks” for CO2, the role of ocean currents, naturally occurring events (earthquakes, hurricanes, volcanic eruptions), the sun and sun spots, other greenhouse gasses (especially water vapour), the tilt of the earth and so on. All are known to have some impact on climate. Nonetheless, using oil, coal and natural gas will have an impact on climate.

Roger Pielke Jnr, Professor of ¬Environmental Studies at the University of Colorado, in his book the The Climate Fix: What Scientists and Politicians Won’t Tell You About Global Warming , shows clearly that he both agrees with this analysis (not surprisingly, since it his father who offers it) but also he adds a key point. In seeking to mitigate the impacts of the manmade component of climate change by reducing the use of CO2 emitting energy sources, there is a need to balance this change with economic growth. He observes that policymakers who find themselves conflicted, are not confused. They are conflicted because they express a desire to increase the costs of energy so as to reduce the impact of carbon energy use on climate. At the same time these same politicians express a desire to lower those costs so as to sustain economic growth. They are not confused, because when such a trade-off is made, it is inevitably made in the direction of sustaining economic growth. This is Pielke’s law rule of climate change: when environmental and economic objectives are placed into opposition with one another in public or political forums, the economic goals win out. In a recent Financial Post article, Pielke said:

“Countries worldwide have expressed a commitment to sustaining economic growth, and these commitments are not going to change any time soon, no matter how much activists, idealists, or dreamers complain to the contrary. People will pay some amount for environmental goals, but only so much before drawing the line. That is just the way it is, regardless of whether economic growth measures what matters most to a country's well-being, and regardless of other metrics that might better capture quality of life” .

This runs counter to the proposition by many climate campaigners, like Kevin Anderson of the Tyndall Center for Climate Change Research in the UK., who has argued that a "planned recession" would be necessary in the U.K. to reduce emissions in response to the threat of climate change. In practice, this would mean that "the building of new airports, petrol cars and dirty coal-fired power stations will have to be halted in the U.K. until new technology provides an alternative to burning fossil fuels." The UK provides an interesting case study. in coming years the U.K. faces the prospects of an energy shortage due to the closing both of coal plants (in turn due to laws governing their particulate emissions) and of nuclear power plants (as part of a long-term plan to reduce dependence on nuclear power), leaving few short-term options to meet expected demands for power. Possible measures to increase energy supply include building more gas-fired plants (which risks a greater dependence on Russian gas and all of the accompanying insecurities), building new nuclear plants or putting off closure of existing plants (despite significant public opposition), and building new, cleaner coal plants (despite their carbon footprints).

Of the choice, a U.K. government official explained in an interview in The Economist that in "a decision between building a new coal plant and letting the lights go out -- that's a no-brainer." The Economist interpreted that comment to signify that "something has to give, and it will probably be environmental targets."

In the UK At least 43 gigawatts of totally new electrical generation capacity, equivalent to half of Britain’s current total, will be needed by 2020, as all but one of its nuclear plants are retired and coal-fired power stations closed to meet EU air pollution standards. A staggering £200bn ($322 billion) of investment will be needed not only to maintain energy security against price spikes as North Sea oil and gas resources dwindle and energy imports grow, but also to deliver the largest single contribution to a low-carbon economy. Electricity output may need to double by 2020 as domestic heating, industry and transportation electrify, but there are very different ideas as to how this should be done, and the role of energy efficiency has been neglected. And it’s not only electricity that will be at a premium, the UK’s overall energy needs, including heating, transport and industrial processes are increasingly satisfied through importing oil and gas. There could be rolling black-outs in the UK unless a strategy for energy which balances economic growth and climate change can be found.


After agriculture, the energy sector is the largest consumer of water in the developed world. All systems of energy production use water. In the US alone, the energy sector withdraws some 200 billion gallons of freshwater and seawater each day – close to half of the nations water use. Most of this water is used for cooling and a great deal is returned, once cooled, after use. Only solar power and wind power use virtually no water at all.

Most alternative energies—whether renewables like solar thermal and biofuels, or unconventional sources like oil sands—use more water than conventional fossil fuels . For example, biofuels produced from irrigated corn use 650 times more water than oil-derived gasoline. For soybean-based biofuels, that number is around 1,000 . Fossil fuel plants that attempt to bury their CO2 using carbon sequestration will likely consume 40%–90% more water than those who do not .

The conventional generation of electricity uses water to turn turbines for hydropower or produce steam for thermoelectric power; it also uses cooling water to condense the steam produced by thermoelectric generation. For typical thermoelectric power plants used for energy production in the US, for example, the amount of water which evaporates and cannot be reused or returned to its source is 0.47 gal (1.8 L) of fresh water evaporated per kWh of end-use electricity. Hydroelectric power plants evaporated 18 gal (68 L) of fresh water per kWh consumed by the end user. Combined, these values give an aggregate total for the United States of 2.0 gal/kWh (7.6 L/kWh) .

Extracting oil from the oil sands – a significant energy opportunity – uses a lot of water. Surfaced mined bitumen – the basis for the oil– requires between 2 and 5 barrels of freshwater to produce one barrel of oil. Increasingly, producers are finding ways of recycling the water and reusing it. Some of the water used in mining operations (but not in-situ extraction of bitumen) ends up in what are known as “tailings” ponds – vast lakes of water filled with particles which, until recently, took some forty years to settle. Using synthetic biology, these tailings ponds can now be reclaimed much more rapidly (in months rather than years) and the water in these ponds can be cleaned and reused. Nonetheless, there is a challenge about water use for energy production.

Climate change and water are related and have an impact on energy production. In France in 2006, heat waves caused the temperature of river waters to rise significantly. Nuclear plants that used river water to cool their systems could not use the water since it was too ``hot`` and the plants had to be temporarly shut down . Spain also experienced this same challenge. A biorefinery built in Minnesota has been unable to operate, since insufficient water can be found to support it .

It is clear that energy use and water consumption cannot be seen to be distinct from one another, especially if we wish to push towards so-called ``green`` energy. Access to water and seeking methods to reduce water use and loss in energy production will be a key challenge.

Land Use

Extracting oil, coal, oil from the oil sands or increasing our use of biofuels or wind power all have major impacts on how we use land. Land use and the maintenance of the land together with the species that depend on the land is a key challenge for all engaged in the production of energy.

We saw, when looking at what it would take to replace one cubic mile of oil with other forms of energy, just how tough this will be. Look at pictures of oil sands mining and the tailings ponds mining (but not in-situ) create as a result of their process, and you can see the challenge. Remediation of land use from mining operations for oil sands, gas, oil, coal and other forms of extraction (in Canada the Province of Alberta, for example, has 45,000 disuses oil and gas wells that require remediation) is a major challenge. This is leading to many to seek an increase in protected or “set aside” lands which, though they contain oil or gas, cannot be exploited so as to preserve the land and biodiversity.

Wind turbines also occupy a great deal of land and, increasingly, development of wind-farms is being challenged on environmental grounds. Large industrial sized turbines which are installed together to form a wind farm will have a much larger footprint on the land. Depending on the local terrain, wind projects occupy anywhere from 28 – 83 acres per megawatt, but only 2 – 5% of the project area is needed for turbine foundations, roads or other infrastructure. It is in relation to these larger industrial sized wind turbines and wind farms that land use issues become a significant factor in considering the development of wind projects to generate electricity. Successful wind projects require open space and clear access to the wind. This makes them an ideal choice for agricultural areas, grazing lands and the coastline – thus creating a trade-off between different land use options .

Biofuels also create these trade-offs. Unless energy is being produced from landfills or other waste streams from existing processes, land is required to create the feedstock to fuel the energy production system. So as to reduce the impact on food production and biodiversity, those growing fibre for conversion to energy (crops, trees, grasses etc.) are increasingly making use of retired agricultural land or forests (e.g. pine beetle infected forest areas) rather than use quality agricultural land. However, to reach the volumes required for biofuels to begin to replace fossil fuels, a substantial constraint will be access to land.

The Big Challenges

In this chapter we have built the elements of a jig-saw puzzle. So, looking at all of these pieces of the jig saw, we can summarise the challenge for the future of energy as follows:

1. Demand for energy is likely to at least double between now and 2050 – just forty years away. From the history of energy systems, this is not a lot of time in which to change energy production practices. Oil, natural gas and coal will continue to power our energy systems for some time to come.

2. Supplies of energy are sufficient, especially given new technologies for extraction (e.g. horizontal drilling with hydraulic fracturing) and new sources of available energy (gas hydrates) as well as unconventional oil (e.g. Canada`s oil sands).

3. So called “green energy” – biomass, solar, wind – will grow but remain a small portion of the total energy system. Caution needs to be exercised as many of these options use more water than conventional systems and some also create more greenhouses gasses than conventional oil and gas.

4. Energy production uses a lot of water and, as climate change has increasing impacts, water will be a major challenge for energy production.

5. Climate change is impacted by human activity (but it is not the only “cause” of climate change). So as to reduce the threats to various nations of the impact of climate change, systematic attempts need to be made both to conserve energy and reduce emissions.

6. Producing sufficient energy to meet demand while managing environmental impacts on water, land and air will pose a challenge. The iron law is that, when faced with a trade-off between energy for economic growth or constraints to support environmental policy, economics wins.

7. Getting to double energy supply without constantly invoking the iron law will be a tough challenge for all.

The balance of this book will explore these issues in more depth, focusing on Canada as a case study. The challenge being addressed here is simple: how can we balance three competing forces – the need for energy, the need for economic development and growth and the need to be effective stewards of the environment. This we refer to as the new 3xE challenge for Canada and the developed world.

No comments: