David McClellan's Climate Chronicles

Friday, in Part 1 of this post, I distilled the recent findings of the MIT study, On the Road in 2035 (pdf), and explained why a significant reduction in US fleet fuel use is still decades away: for even with aggressive market penetration of new technologies, the fleet turnover rate will be slow. I then predicted the energy impact of America's new CAFE standards: by 2037, gas consumption should be about 33% lower than it was in 2007 from the change.

Today, in Part 2, I size up Barack Obama's plan to get a million PHEVs on the road by 2015 and Andy Grove's idea to convert existing light duty trucks to plug-in hybrids.

Barack Obama: 1 Million Plug-In Hybrid Cars by 2015

Part of the Obama-Biden New Energy for Ameria plan is a proposal to put one million PHEVs on the road by 2015. To motivate purchasers, it includes a $7,000 tax credit. But how much impact would one million PHEVs really have on our gas consumption? Truth is, almost none. Given that one million PHEVs would be somewhat less than one half of one percent of the 240 million car fleet, at best it will reduce gas consumption by, well, one half of one percent.

And yet, while the immediate gas savings are minimal, this is still a worthy idea.

Will electric cars and tougher fuel economy standards put America on the super-fast track to oil independence? Not necessarily, says MIT in its recent report, On the Road in 2035 (pdf):

Transitioning from our current situation onto a path with declining fuel consumption and emissions, even in the developed world, will take several decades -- much longer than we hope or realize.

The delay, says researchers, is not for lack of technology but for the time involved -- the time to make a radical new technology ready for mass market, the time for such advances to become pervasive and the long wait for old cars hit the scrap heap.

In fact, even with aggressive market penetration rates of new technologies, it will be difficult to reduce the 2035 fleet fuel use by more than 10 percent below fuel use in 2000.

So, as strategies and policies abound for a more fuel-efficient US fleet, it’s time to assess their worth. Here are three of the latest:

Take a look at John McCain’s energy platform and you’ll see that it still includes the $300 million prize for a new super battery for cars that he announced in June. It was a dud of an idea back then and a cynical gimmick. It still is.

Why? Crunch the numbers, as I did, and you’ll see that $300 million for the battery maker who brings the electric car to mass market is peanuts when you consider that the actual marketplace reward will be closer to $18 billion. That’s pure profit -- not sales -- every year. Believe it or not, that’s a low-ball estimate. It might actually be as high as $85 billion.

That, Senator McCain, is the real prize. And it’s no secret.

We think we could make about 19 to 20 percent of U.S. electricity with heat that is currently thrown away by industry.

Tom Casten, chairman, Recycled Energy Development

There are different types of co-generation, but the concept is simply this: take energy that is being wasted on an industrial scale and find a way to put it to use. Do that, and co-generation could provide up to 20% of the nation's electrical generation, replacing a large number of our coal plants at a lower cost and with roughly the same reliability.

Another name for co-generation is combined heat and power (CHP). We have enough potential CHP to replace 40% of coal-fired generation. Producing 20% of our electricity from CHP would put it on par with our fleet of nuclear reactors, which also produce about 20%. CHP is also as clean as wind power, reliable enough to use as base-load power and has the lowest construction cost of any power source.

The DOE and EPA in 2001 put together a road map to double the amount of CHP. It said,

Vast deposits of oil shale in the American west are being eyed for development to reduce reliance on foreign sources of oil and bring down the price of fuel. A recent report Dr. Adam Brandt at the University of California Berkeley, as reported by greencarcongress, tallies the environmental cost.

Here's the bottom line: oil shale releases 21% to 47% more greenhouse gases (GHG) than conventional oil production, consumes scarce water resources and threatens grounwater flow and quality.

The analysis assumes the oil is extracted from shale using the in-situ conversion process (ICP) developed by Royal Dutch Shell. The process works by literally heating the Earth to depths of 1000 feet for two or more years with massive electric heaters inserted into the ground. The extraction process is so energy intensive that it produces only 1.2 to 1.6 times more energy than it consumes, so it might be thought of as energy conversion as much as it is energy production.

Despite these questionable trade-offs and environmental risks, Dick Kempthorne, Secretary of the Interior Department, recently announced proposed regulations for developing shale in three western states and has given oil companies six leases for demonstration projects.

The US has bountiful supplies of oil shale, 60% to 70% of the world's deposits. It's estimated that our shale holds three times as much oil as all of Saudi Arabia and for that reason has long been considered a potentially enormous oil supply waiting for the right time, the right technology and the right price. A recent Rand study says extraction isn't profitable unless oil is selling for $70 to $95 per barrel although Shell has said it could be competitive at $30/bbl. With oil around $120/bbl now, it should be economically competitive and with Americans very unhappy about the price of gasoline, expect increasing political pressure to tap the shale reserves. The current battle over offshore drilling is a precursor of a much bigger fight.

Dr. Martin Weitzman is considered one of the world's top economists. He has degrees in Math, Physics, Statistics and Economics from Stanford and MIT, among others places, and is a Professor of Economics at Harvard. His area of expertise is Environmental Economics, and he says there’s a chance, roughly around 1%, that the temperature of the Earth will rise by 36 degrees fahrenheit in around 200 years.

In other words, there’s a small chance that global warming will lead to a mass extinction comparable to others that have happened before on Earth. For context, the "small chance" is 10,000 times more likely than the asteroid strike which wiped out the dinosaurs, a once in a hundred million year occurrence.

Dr. Weitzman is not an alarmist by any stretch of the imagination. Look at his paper -- On Modeling and Interpreting the Economics of Catastrophic Climate Change -- and you'll see for yourself. It's light reading only if you have an advanced degree in Economics or Statistics. He talks a lot about "fat-tailed probability distributions" and calculus. He also spells out the worst case in plainer English:

Because these hypothetical temperature changes would be geologically instantaneous, they would effectively destroy planet Earth as we know it.

The point of the paper is to explore an important question: given that the probability of catastrophic climate change might be about 1% in 200 years, what's the most rational way to place our bets?

People opposed to action on global warming use three arguments most often: global warming is not caused by human activities, reducing CO2 will slow economic growth and really it's just an excuse for eco-liberals to create a neo-fascist nanny state to run everyone's life in an irritating and politically correct fashion.

There isn't much I can add to the debate on the first issue, but let's talk about the other two, with the help of the graph above which I found at the Canadian Green Party website.

We'll see that reducing CO2 by increasing energy efficiency improves the economy and that 'nanny' laws work when the free market doesn't.

That blue line going down shows the dramatic improvement in the energy efficiency of refrigerators in the US since 1973. That pinkish line rising tells an opposite story -- of the dramatic rise in standby power over the same period.

Together they tell a couple stories: one about vampires, the other about nannies.

Cement is at the heart of increasing global warming emissions. It's production releases large amounts of CO2 -- both from the chemical process that creates it and the energy consumed in manufacturing. China alone makes 45% of the world's cement, and globally the industry is booming.

That's why two promising new developments related to the production of cement - an ancient and mundane material -- are drawing attention. Reducing CO2 from making cement isn't as sexy as electric cars, but it's the third largest US CO2 producer so there’s an opportunity to make a real contribution.

You've heard about Al Gore's challenge to remodel the U.S. electrical industry in 10 years to eliminate all CO2 emissions. Some commentators say the job is too big, some say it isn't, but everyone, including Al, agrees it's a big, big job.

But exactly how big? What are we up against here? How much new wind, solar, geothermal power do we need to replace the CO2 producing plants? What else might be needed to make such a system work?

A detailed cost comparison of nuclear versus wind energy shows that nuclear energy will soon no longer be cost competitive with wind energy if present trends continue.

While nuclear energy is regarded as one of the cheapest sources of power available -- given the enormous amount of energy released from the splitting of atoms -- and wind is considered relatively expensive, analysis of a number of current projects using publicly available data indicates that wind energy has closed the gap in price per kilowatt.

Furthermore, price trends are much less favorable for nuclear projects -- cost estimates of new nuclear plants have doubled and tripled in some instances in just one or two years. Prices for wind power are also rising, but at more pedestrian rates closer to 10% annually.

This is something well worth considering before welcoming a nuclear renaissance -- as ratepayers may be saddled with unaffordable bills and the nation may also end up with a large, unanticipated bill for the hidden cost of nuclear waste disposal.

I've reached this conclusion by crunching the numbers on one recent contract to build a nuclear plant in South Carolina, two proposed nuclear plants in Florida and new vendor estimates of the cost of nuclear construction going forward. I compared that data with a wind farm that would produce a comparable output of energy, relying on cost data from a Department of Energy report published this year.

The prevailing mantra on America's energy future is "let's keep all options on the table." I put two of them on the table and here's what I found. Put your wonk hat on as I take you through the numbers.