Lester addresses U.S. governors on energy future, calls for Marshall Plan for energy innovation
Posted by Prof. Goose on July 20, 2008 - 10:00am
This is a transcript of a speech by Richard K. Lester, MIT professor of nuclear science and engineering and director of the Industrial Performance Center, who spoke on 14 JUL 2008 at the annual meeting of the National Governors Association. The prepared version of Lester's speech is below the fold.
Lester is a co-author of recent MIT reports on the future of nuclear energy and coal energy, and he has published widely on the management and control of nuclear technology. He is currently leading the Energy Innovation Pathways Project, an interdisciplinary MIT assessment of the capabilities of the U.S. energy innovation system.
I found the speech interesting, so I thought I would bring it to you. A quote that particularly caught my eye is the following: "And so, to conclude, it is long past time for serious federal leadership on energy innovation. But it is also time to move beyond the Manhattan/Apollo Project metaphor. A better metaphor might be a domestic Marshall Plan for energy innovation. The original Manhattan project involved a relatively small number of people working in secret. The original Marshall Plan took everyone, working together, to rebuild the broken European economy."
Energy Innovation: What’s Here and What’s Coming
Prof. Richard K. Lester Massachusetts Institute of Technology
remarks prepared for presentation to the National Governors Association Centennial Meeting Philadelphia, PA July 14, 2008
Governor Pawlenty, Governor Rendell, thank you for the privilege of speaking at this historic meeting.
I would like to discuss the role of technological innovation in solving our energy problem, and, especially, the important question of what role for policy – state as well as federal – in accelerating the innovation process.
I want to begin with three simple messages.
Recent progress in the clean technology field has been substantial. New kinds of generating capacity are being added --in some cases, notably wind, at an impressive rate. Costs are coming down, albeit sometimes more slowly than was promised.
Investment in next-generation technologies is increasing. The strong interest of the venture capital community is particularly welcome.
Ambitious targets are being set. Some of the most effective policy interventions are occurring at the state and local levels. California has been a leader. In my own state of Massachusetts, important clean energy legislation was enacted just this month. Other states are on a similar path.
That said --and here is my first message – these activities aren’t remotely close to the scale of effort that will be required to solve the problem.
My second message concerns the future of nuclear power and of coal-fired electricity with carbon capture and storage.
These two options won’t win any popularity contests, and some would fiercely dispute that they belong in the clean technology category at all. But without large-scale deployment of both, especially in the critical 2020 to 2050 timeframe, it is unlikely --to the point of implausibility --that the world will be able to avoid serious and perhaps even disastrous ecological and economic damage from climate change.
Coal is an abundant, relatively low-cost energy resource that is widely distributed around the world, and in the US we depend on it for half of our electricity. We cannot continue to burn it as we have, but we cannot afford to turn our back on it either. We must therefore find ways to capture carbon emissions from coal-fired power plants and to store the carbon dioxide safely underground, at reasonable cost.
Nuclear power is the only carbon-free energy source that is already contributing on a large scale and that is also expandable with few inherent limits. Public opinion has been gradually shifting in its favor, but the failure to demonstrate and implement an effective final disposal strategy for high-level waste remains a tremendous barrier to public acceptance, no matter how many expert panels and commissions opine that this is a technically feasible task.
The Yucca Mountain project may or may not meet the regulatory criteria that will eventually be applied to it. But there is no doubt that we can do better, and doing better should be a high priority.
No serious person would dispute the importance of these two innovation goals: affordable carbon capture and storage, and safe, implementable high-level nuclear waste disposal. But my basic message here is that in both cases current U.S. policies are putting our nation at least partly on the wrong track, and that this is almost certain to cause further delays in the availability of viable coal and nuclear power --delays that we can ill afford.
My third message is perhaps best conveyed by the poet Wallace Stevens, born not far from here in Reading, PA. Stevens wrote of ‘the lunatics of one idea . . . . in a world of ideas’. He was referring to ideologues and fanatics, who, blinded by their single idea, couldn’t see the world around them. But he might as well have been talking about the energy debate, where such lunacy has unfortunately been all too common.
The fact is that there is no single idea, no silver bullet, that will solve the problem. First and foremost, we need new ways to use energy more efficiently. But very likely also much bigger contributions from solar, wind, biomass, nuclear, and also advanced fossil fuel technologies. In our current circumstances, we can ill afford the self-indulgence of those who --however well-intentioned – like to tell the world that they are anti-this, or anti-that.
***
So far I’ve been talking about our energy problem. But this is incorrect. Because we really have three separate problems, each on its own very difficult to solve. And because the solutions to one will sometimes make the others worse, the overall difficulty is more than additive – the whole is greater than the sum of the parts.The first problem is the projected increase in the use of energy. Unless the world goes into a deep and prolonged recession, by the middle of this century global energy use will likely have doubled, and electricity use will have tripled, placing great pressure on energy supplies and prices.
And in case there is any doubt: whatever role speculators may be playing in the current oil price spike, the underlying issue here is growing demand.
This is an era in which hundreds of millions of people, perhaps even billions, are lifting themselves out of poverty into what we in this country might recognize as at least a way-station on the road to a middle-class standard of living, all within the span of a few decades. This is an economic accomplishment that has no precedent in all of human history, and we should celebrate it.
One of the consequences is sharply increased energy use. But in case anyone thinks that a tripling of electricity demand by mid-century implies irresponsible, profligate consumption, I point out that this would mean, roughly speaking, that the richest billion of the world’s population at that time would be using electricity at about the same rate that the average American uses it today, the middle 7 billion would be using it at a rate that the average Chinese is likely to reach in just a few years (or a bit more than a third of the average American’s usage today), and the poorest billion would still have no electricity at all. That is what a tripling of electricity demand by mid-century will mean.
The second problem is that for at least the next several decades the world will remain heavily dependent on the Persian Gulf for its premium fuels.
More oil and gas will certainly be found and produced in other parts of the world – though perhaps not at a rate sufficient to offset the decline in existing fields. In any case these new supplies will generally be more costly, and because of the twist of geological fate which led much of the world’s low-cost oil and gas resources to be deposited in the Gulf region, that volatile area will continue to dominate the global supply picture for the foreseeable future.
The third problem is of course that of climate change. This may or may not be the most serious problem of all, but it is certainly the most complex when we consider the scientific, technological, economic and political aspects together – as of course we must.
Much has now been learned about this problem, but many major uncertainties remain. So when the question is asked: how fast should we move to try to slow climate change? – the answer isn’t obvious.
Figuring it out will mean finding a strategy that strikes a balance between the increased economic cost of actions to reduce emissions, on the one hand, and the benefits of those actions (in terms of ecological and economic damage averted in the future), on the other. Unfortunately almost every element in that equation is uncertain. What is certain, though, is that the longer we wait to take action, the more costly the consequences will be. The clock is ticking, and it won’t stop ticking simply because we can’t or won’t decide what to do.
The best chance we have – perhaps the only chance --of solving these problems, of breaking out of this triple straitjacket of price, climate, and security pressures, is to accelerate the introduction of new technologies for energy supply and use and deploy them on a very large scale.
Accelerate relative to what? Relative to what would happen if we left innovation entirely to the forces of the marketplace. This may be an obvious point, but it is still worth emphasizing.
Energy innovation is different from other kinds of innovation for a very important reason. The major impetus for it comes from outside the marketplace. Two of our three big problems – energy security and climate change – are not now factored into the great majority of the millions of decisions made in the marketplace every day by suppliers and consumers of energy.
So, even if innovation can help solve those problems – and there is no doubt that it can --the economic incentives created by the play of market forces alone won’t be enough to bring it about. The question is not whether to augment these forces, but how.
Some are calling for a crash program by the federal government -a Manhattan Project or an Apollo Project for energy innovation.
These calls helpfully communicate the urgency and the scale of the challenge. But in another sense they are a distraction because, if we take them literally, we will end up solving the wrong problem.
In both the Apollo and Manhattan Projects there was a single, clearly-defined (though high-risk) technical goal. There was also just one customer – the federal government. Success meant achieving a single implementation of the new technology. In both cases this took just a few years to achieve. And cost was essentially no object.
Not one of these things applies to the case of energy. Here we have multiple and sometimes conflicting goals (lower prices, reduced carbon emissions, increased security). We have many different kinds of customers – from individual tenants and homeowners to giant industrial energy users. We have multiple time-scales, from a few years to many decades. Success will come not from a single implementation but only if the technology is adopted by many firms, or by many more individuals. And finally, energy is a commodity, so cost is crucial.
In this last sense, the upcoming energy revolution is not only not like the Manhattan project, it isn’t even like the digital revolution, to which it is sometimes also compared. It is actually much harder. Because energy innovations, unlike many digital technologies, usually must compete against an incumbent technology in an existing market, and this imposes tough, nonnegotiable requirements on cost competitiveness, on quality, and on reliability from the very beginning.
So, if we don’t need a Manhattan Project for energy innovation, what do we need?
One thing we surely need is a strategy for energy prices. Many experts argue that the greatest spur to innovation would be to make sure that the full costs of energy provision and use are incorporated in the market price paid by consumers, including the cost of mitigating greenhouse gas emissions or their consequences, and the full cost of ensuring uninterrupted flows of oil from the Middle East.
Some argue, in fact, that if only we could get the price right, the market will do the rest --that a properly adjusted energy price will call forth the necessary innovations by making new technologies more attractive in the marketplace.Price is very important, but it won’t be sufficient on its own.
Partly this is because we aren’t likely to ‘get the price right’ in that sense. For example, while the U.S. will probably have a carbon price at some point, perhaps even quite soon, this is sure to have escape ramps, exemptions for critical sectors, and other loopholes that will make it fall well short of what the economic models prescribe --that is, a uniform price across the economy which ramps up at the economically optimal rate. Even more elusive, of course, will be the ideal of a carbon price that is harmonized across the globe.
But equally important, a pricing approach won’t be sufficient because it won’t address the rest of the energy innovation system --by which I mean the entire complex of direct support, indirect incentives, regulations, public and private research and educational institutions, codes, standards, and markets within which new technologies are developed and taken up by energy suppliers and users.
In the coming decades this system will be called upon to deliver hundreds of billions of dollars of mostly private investment in innovative technologies, make hundreds of sites available for the construction of controversial new energy facilities, and every year train tens of thousands of young people with a strong background in energy systems engineering.
The evidence of the last three decades tells us that the current innovation system has fallen short. Yet the demands on it going forward will be much greater than anything we have yet seen. This system is in need of a major overhaul.
This effort must address the entire innovation process, including obstacles to commercial demonstration, to early adoption, and to large-scale deployment. This is not just about research and development.
There is no doubt that funding on a much larger scale will be needed for both fundamental research and technology development. Both government and private investment in energy R&D are far below where they should be.
But the whole point is to achieve scale in technology applications. And without attention to critical bottlenecks downstream of the R&D stage --including commercial technology demonstrations, which have often been poorly handled by the federal government --many of the potential benefits of more R&D funding won’t be realized.
In short, we must be as creative and rigorous in our thinking about how to redesign the institutions for innovation as we will need to be about the innovations themselves.
For example, we must find a way to overcome the obstacles to sound innovation strategies created by the annual government budgeting and appropriations process, by federal procurement regulations, and by shifting political winds.
Here is one idea: Suppose we adopted the principle that the public good part of the energy innovation system beyond basic research (which the Department of Energy manages quite well) should be directly funded by industry sales, rather than by general tax revenues.
Suppose that these funds were collected in the form of a small fee applied to all end-user sales in a given industry segment – electricity service, for example, or gas service --ifthe majority of the firms in that segment voted to do so (Congress would probably have to approve this.) A fee of less than three tenths of a cent per kilowatt hour – or about 60 cents per week for the average household – would generate an annual stream of revenue five times larger than the total annual DOE budget for applied energy research, development and demonstration.
Suppose, then, that the firms in this industry organized themselves into interest groups, or innovation boards, which would each be responsible for a different technological pathway – smart grid technologies, carbon capture and storage, next generation photovoltaics, and so on.
Each board would request proposals to fund work in its domain from businesses, public research laboratories, universities, and others. To qualify to receive these funds, bidders would have to agree to put the resulting intellectual property into the public domain – available to everyone.
At the beginning of each cycle, every firm in the industry would distribute the fees collected from its customers among these boards based on their work programs and its own priorities. If, say, a utility was particularly eager to see progress in carbon capture and sequestration, it might allocate funds to the carbon capture and sequestration board. Or, if it was concerned about skilled manpower shortages, it would allocate funds to the energy education and training board, which might have an ongoing scholarship program for power engineering students.If a utility was unhappy with the progress being made by one board, it could redirect its funding to another. Or it could itself decide to form a board in a new area and fund that, perhaps in conjunction with other firms. It would in any case have to commit all of its innovation fees to one board or another.
Such a scheme would create a guaranteed stream of revenues for energy innovation, while avoiding both the Federal appropriations process and the problem of underinvestment by private free riders. It would ensure that decisions on what to do and who should be funded to do it would be made by those closest to the energy marketplace. And by requiring IP to be shared, it would avoid unfair competitive advantage.
***
Another idea: There is great potential for small, entrepreneurial firms to contribute to innovation in the energy sector, as they do in other industries.But the energy industries are dominated by large incumbent providers who are often slow to embrace transformative or disruptive innovations. These firms typically have tightly integrated supply chains and close ties to government regulators, and they rely on highly-regulated pipelines or wires to deliver energy services to end users. This creates a formidable barrier between entrepreneurial newcomers and end users, and tends to force innovation towards the upstream end of the value chain.
But many opportunities for innovation lie right at the interface with the end-user. Most consumers are indifferent to energy itself – that is, to BTUs or kilowatt hours. What they care about are the services that energy enables: affordable comfort, mobility, lighting, and so on. The provision of energy is almost always just one part of a larger set-up in which a value-added service is delivered to the consumer.
Finding opportunities to combine energy services in creative new ways with other services and products is exactly where smaller entrepreneurial firms can be expected to shine. We need to find ways to let these firms compete and grow in this important innovation space.
***
What role for the states in all this?Decisive progress on the major energy issues will require decisive action at the federal level. It cannot be achieved by states alone. And the longer the delay in serious leadership at the federal level, the more difficult it will be to harmonize conflicting policies.
But many of the relevant authorities – to regulate utilities, to make land-use decisions, to set building codes and zoning requirements, to support public education, and so on – reside at the state and local levels. So the task will require a partnership of federal, state, and local governments.
There is more than enough to do here for everyone. Whole new industries are likely to develop in support of the energy transition, and state-level policies promoting innovation take-up and the development of a skilled workforce will be vital.
Jobs will be generated at every skill level – not just the top end of the range --and since many of these jobs must be located close to the point of energy use, they are at less risk of outsourcing to lower-wage economies.
Just as one example, let’s suppose that by the year 2030 the U.S. was generating 5% of its electricity from small-scale photovoltaic installations – an ambitious goal, though not as ambitious as some recent targets. A rough estimate is that this would create twenty years of steady local work for 45,000-50,000 installers – mostly electricians and construction workers – and perhaps double that number if we include indirect labor. About two hundred thousand additional jobs would be created upstream in the PV value chain – some of which would also be located here in the U.S. And of course this doesn’t include the other 95% of the power sector, where many more new jobs are also likely to be created.
***And so, to conclude, it is long past time for serious federal leadership on energy innovation. But it is also time to move beyond the Manhattan/Apollo Project metaphor. A better metaphor might be a domestic Marshall Plan for energy innovation. The original Manhattan project involved a relatively small number of people working in secret. The original Marshall Plan took everyone, working together, to rebuild the broken European economy.
Let us recapture that inspired exercise of American leadership at home. As we did once before on foreign soil, let us combine a vision of what can be with a command of hard facts and data to build an effective system for energy innovation in every one of our United States.
Thank you again for the honor of being with you this morning.
***
Richard K. Lester
Richard Lester is director of the Industrial Performance Center (IPC) and a professor of nuclear science and engineering at the Massachusetts Institute of Technology. His research focuses on industrial innovation and the public and private management of technology. In recent years he has led several major studies of national and regional productivity, competitiveness and innovation performance commissioned by governments and industrial groups around the world. His latest books include: Innovation – The Missing Dimension (Harvard University Press, 2005), co-authored with Michael J. Piore; Making Technology Work: Applications in Energy and the Environment (Cambridge University Press, 2004), co-authored with John M. Deutch; and The Productive Edge: A New Strategy for Economic Growth (W.W. Norton, 2000). His new book on the role of universities in local and regional innovation systems will be published by Princeton University Press next year.
Professor Lester is also active in research on energy technology innovation, and co-teaches a popular MIT course on “Applications of Technology in Energy and the Environment”. He is a co-author of the recent MIT reports on The Future of Nuclear Power (2003) and The Future of Coal (2007), and has published widely on the management and control of nuclear technology. He is currently leading the Energy Innovation Pathways Project, an interdisciplinary MIT assessment of the capabilities of the U.S. energy innovation system.
***
The original link to this transcript can be found here:
I like using the "Marshall Plan" name for the reasons cited. But regardless of what one calls it, we need to get started, and so far all I see being produced are words..
Video here:
http://www.c-spanarchives.org/library/index.php?main_page=product_video_...
There is a Q&A session with the governors after the talk.
How does an ant eat an elephant? Small bites, lots of friends. The Marshall Plan was more of a framework than a Plan. It is similar to the commercial framework that allowed retooling the communications since the 1984 de-monopolization of AT&T.
This graphic is intended to indicate the difference between Planning and a framework of Standards. Planning seeks consistency in HOW to do things. Standards incrementally push the state of the art in WHAT to do.
Government Planned our transportation and power generation infrastructures. We have better cars than Henry Ford, but we have not incremented beyond moving a ton to move a person.
Computer data storage and communication infrastructures are managed by Standards. In fits and leap, data storage has progressed from floppies, to HD floppies, Zip, hard drives, CD's, DVD's, etc..., a plethora of storage devices in a rich ecology that optimizes many niches.
Nice speech. I would agree that the Marshall Plan is a far more suitable analogy than either the Manhatten or Apollo projects for the reasons stated.
But when you get right down to it, it sounds like a sales pitch for creating some mega government agency that would tax energy users and then spread that money around to various R & D entities (such as MIT no doubt). Some appointed board would decide who is worthy of what funding, and I strongly suspect that Professor Lester sees himself sitting on such a board.
I have had direct experience with government-funded R & D in the environmental field, and, to a lesser extent, the energy field. Based on my direct observations, many of these efforts degenerate into self-serving boondoggles, and millions of dollars are pissed away on repetitive and pointless projects as if they were nickles. This is endemic to practically all major government undertakings. Just look at how effectively the Department of Homeland Security spends money.
I don't know what the answer is, but if we go this route, I fear the real outcome will be a lot of money spent by the well-connected, a lot of pretty but largely useless demo projects for which academics can produce an endless flow of papers to present at conferences, but little real progress in terms of putting commercial-scale stuff in place.
Then of course we have the question: Is the limiting factor in getting ourselves out of the hole we're digging a lack of technical innovation or a lack of will combined with a lack of capital investment in the right things in the right places at the right time?
To me, the plan sounds like a great way to generate funds to carry out innovation, and a smart approach would be to bypass the lethargic Federal bureaucracy. I agree that we need more entrepreneurs and more investment in the Energy sector. Its not like the oil will run out overnight. We can use partial substitution and innovation to carry us forward, but there has to be a drastic change in the way we utilize and deploy energy.
I don't think CCS is ever going to work.
The energy required and the volume of CO2 to store is huge.
I think goal gasification technologies should be improved as the cost of mining and transporting the coal will increase hugely.
Gasified coal could be mixed (dump load) hydrogen and / or bio/natural gas to create a low emission gas fuel which would work with current infrastructure.
Combined cycle gas plants combined with CSP could provide a semi flexible contribution to the grid, and help offset the cost of thermal storage.
The CO2 could be vented into a greenhouses growing fibrous plants to make building or insulation materials, or oil producing plants or algae making liquid fuel. The waste heat can also be used heating digesters or composters to deal with wastes.
Agreed - I think CCS is just a pipe dream that the coal industry is praying will save them.
Shame this guy is so fixated on coal and nuclear as the way "forward" - you'd think people would be starting to understand that generating our energy needs based on finite resources isn't going to work in the long term.
Gore's plan makes a lot more sense - switch to all renewables as quickly as possible - one problem solved.
Trying to grasp the clean coal and nuclear nettles just condemns us to 30-40 years of rolling problems before we have to adopt Gore's approach anyway - and the longer we wait the harder it becomes to make the switch.
Pipe dream, that's a good one Gav!
The biggest cost isn't likely to be in the energy required to separate, compress and pump the CO2 in resevoirs. More significant is the capital cost of the equipment and infrastructure.
However, CO2 needn't be sequestered directly post combustion (or partially pre combustion in the case of gassification tech), as long as it's offset for a long time it'll do. Mineral sequestration is quite permanent and environmentally benign, and doesn't require huge investments in infrastructure compared to CCS. But the status quo is behind CCS. Agrichar can help too but I see that more as an organic soil improvement with the side benefit of a bit of sequestration. Trees and plants are relatively poor carbon sequesters.
One thing I particularly like about Gore's plan is to 'tax what we burn, not what we earn'. That would really sort things out; with people having more income, they can buy more expensive electric vehicles, lowering CO2 emissions and reducing oil problems. The consumer doesn't suffer financially because costs and benefits of this fiscal system to the consumer largely cancel each other out. They will pay the same or less than in the current system of high income tax, low fuel tax.
Unfortunately even the Marshall Plan analogy is inadequate to describe the problems with which humanity is currently faced The Marshall plan was conceived and executed during a period of energy wealth. U.S. peak oil was decades away and the global peak even further. Rebuilding of infrastructure is not that tough a proposition if plentiful supplies of cheap energy are available. If we are going to be faced with an extended period of increasing energy costs, then the only sensible response is economic simplification by the OECD nations. We are going to have our hands full simply creating a non-fossil fuel based infrastructure which preserves our productivity in the areas which really matter: the production of food, clothing, shelter, sanitation, medical care, education. Composite growth of the overall economy should not be a goal. Attempts to preserve composite growth via efficiency will fail due to Jevon's paradox. No, I do not want to condemn the Bangladeshis, Ghanians, etc. to eternal poverty, but one of the best things that we could do for the poor of the world is to reduce our demand for resources.
I have almost hope that such a strategy will be voluntarily adopted. Economic simplification is another expression for negative economic growth and is therefore a blasphemy against the world's dominant religion. When very intelligent people such as professor Lester show themselves incapable of proposing any strategy that is conflict with the faith based tenets of this religion, then hope of truly intelligent action must be very low.
GOOD POST PROF. GOOSE!
There is a clear need to study energy policy and make recommendations to Congress
The best organization for such research is the National Academy of Sciences, whose mission is to advise the Congress on scientific matters.
Many interests wish to pursue alternative energies without carefully considering several important questions.
First, do the alternatives address the liquid fuels problem?
Second, how much total energy is consumed in developing, manufacturing, and maintaining alternative energies (this is a question that few studies have examined thoroughly)?
Third, does the development of alternative energies consume liquid energy and yield electric energy?
Finally, what risk management policies should the nation develop regarding Peak Oil impacts?
Because there are many ideological and business interests involved in answering these questions and in advising Congress, it is imperative that Congress to commission the NAS to objectively study these critical issues.
A Manhattan type approach assumes that alternative energies will yield much, instead of carefully examining that question. The NAS studied these questions carefully in 1977
http://books.nap.edu/openbook.php?record_id=11771&page=R1
The editors, contributers, and folks commenting on this site should read this document. It is the bible of energy policy.
A question I've been asking for a long time as well. Though I would modify it as follows:
"How much total energy is consumed in developing, manufacturing, and maintaining alternative energies when their contribution is scaled up by an order of magnitude or more?
For example, there is the factor of 'peak precious metals' when it comes to a massive expansion of PV solar. Technological progress and economies of scale may be nullified by the increasing scarcity of finite mineral resources. So there is no guarantee that the 'energy payback time' will decrease -- in fact, at some time in the future, it must increase.
Again, I'm not opposed to alternative energy, but unless these questions are answered, some degree of skeptisism is justified.
Hi Carolus,
Here tis some stuff from my report:
Alternative Energies and Net Energy Produced:
The planning, development, manufacture, and maintenance of alternative energies consumes fossil energies. Proponents of alternative energies provide an analysis of net energy produced over the life cycle of a project or device, known as a life-cycle-analysis (LCA).
Invariably, such assessments are incomplete in accounting for only a portion of the energy inputs. For example for the typical LCA of a solar panel, the energy input is usually confined to the energy required to produce and construct the panels, photovoltaic cells, glass, and pylons.
What analysts do not included is all of the energy used in all of the processes required to plan, develop, manufacture, transport, store, install, and maintain the panels, including: the energy used to mine the ores; process the ores; mine the silica for glass; transport the ores; mine the coal; manufacture various parts in diverse locations; transport those parts via ships and trucks from diverse global locations; build, heat, and provide electric power for the factories and offices where all of the components and parts are designed, constructed, marketed, stored, and delivered; install and maintain major solar panel installations with gasoline operated vehicles and petrochemical-based cleaners; and the salaries and stock dividends of all employees and stock holders for all of these processes that are then spent, thus consuming fossil energy in the products and services purchased.
Because there are many confounded energy input variables (for example the transport of solar panel components may be transported with unrelated products), it is difficult to quantify the real energy costs of solar panels. The high dollar cost of solar panels, however, is a rough economic estimate of these energy inputs. This explains why researchers in the industry
http://www.innovations-report.com/html/reports/studies/report-83108.html
conclude that “the initial costs [of solar panels are about 2.5 times the value of the electricity produced” over the 25 year lifespan of the panels. In sum, accounting for “all of the energy inputs” (AEI) is necessary for an accurate LCA. We can call this “complete energy returned on energy invested” or C-EROEI.
Warm regards,
Clifford J. Wirth
Peak Oil Associates International
cjwirth -
So, you really believe that The Answer is to be found in a 31-year-old study by the National Academy of Science - an organization which, as best I can tell, is a government-funded mutual admiration society of academic elites and whose main purpose appears to be the generation of scholary papers, the hosting and attending of conferences, and the handing out of awards?
Hi Joule,
I provided the link to the NAS study in the hopes that people would read this study as an example of how to undertake a policy analysis of energy policy.
Energy policy analysis cuts across all aspects of society, the economy, industry, health, the environment, global warming, and government. A basic method of this study is to have scientists from all fields working together to avoid biases as much as possible.
Your comment indicates that you have not read the study, nor examined who the scientists were/are who conducted the study, nor how the study was organized. The scientists represented industry, government and academics from all different fields. Mutual admiration would be the last thing to characterize these scientists and their work. And I doubt that their work lead to academic publications
The study was organized in panels of scientists who conducted studies and then a central committee used those studies to come to realistic conclusions regarding the direction the nation should take.
In addition, there is a section so that dissenting views of these scientists are presented.
The study does not answer questions for today. Interestingly, however, many of the problems are the same since the study was done, and it's predictions in terms of Peak Oil timing are on pretty much on target.
Improvements have been made in photovoltaic technology, for example, but the study focuses on the problems of finding liquid fuels and batteries that will be able hold as much energy as a tank full of gasoline or diesel --- these problems are the same today.
Moreover, energy scientists should read the study, as it educates everyone from different fields that many have little contact with.
600 pages of often technical material is a lot to read, but it is important if one wants to be a policy analyst with some understanding of all fields.
The NAS is the one organization that Congress can have confidence in.
As most readers on this site know, the hydrogen economy is the biggest hoax in the alternative energy field. Yet a recent MSNBC headline is:
HYDROGEN FUTURE DOABLE, EXPERTS TELL CONGRESS
http://www.msnbc.msn.com/id/25719194/
Congress does not have the technical staff to cut through such myths, nor do they have the staff to find and analyze the research studies by the NAS and U.S. Army Corps of Engineers that conclude that the hydrogen economy is not feasible.
http://www.nap.edu/catalog.php?record_id=10922#toc
http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTR...
The idea is to give Congress advice in one source that they can trust, rather than differing experts who will tell them what is best for their industry (so that they can get more government subsidies), rather than what is best for the nation.
Unless Congress alters how it decides on policy, however, it will continue to decide not on what is best for that nation, but what is best for narrow constituent and interest group preferences.
Cheers,
Clifford J. Wirth, Ph.D.
Peak Oil Associates International
The National Academy of Science was chartered during the Lincoln administration to give advice to the whole Federal Government, not just to Congress. The people in the White House know the telephone number to call to talk to NAS people, but prefer to get advice exclusively from VP cronies.
I agree, but I doubt the people in the White House even know the NAS exists, and they don't need any data, because they know what to do "from the gut:"
http://video.google.com/videoplay?docid=-869183917758574879
Congress needs to appropriate the funds, a tiny amount, and it is amazing that Congress has not commissioned an ongoing major NAS energy policy study.
But this "new energy crisis" will probably spur a new study.
In regard to the hydrogen economy, it might never be done, not because it is impossible, but because there is an alternative way of achieving the same goals that is much easier to develop. If it is abandoned because of a switch to an easier alternative, we will never know for sure whether or not it was possible.
The alternative is called, by its inventor, 'the methanol economy'. The inventor is George Olah, winner of Nobel Prize in Chemistry in 1994. Olah presents his idea in a book, "Beyond Oil and Gas: The Methanol Economy". Olah was elected to the National Academy of Science in 1976.
METHANOL ECONOMY disadvantages:
* high energy costs associated with generating hydrogen (when needed to synthesize methanol)
* depending on the feedstock the generation in itself can be not clean
* presently generated from syngas still dependent on fossil fuels (although in theory any energy source can be used).
* energy density (by weight or volume) one half of that of gasoline and 24% less than ethanol[5]
* corrosive to some metals including aluminum, zinc and manganese. Parts of the engine fuel-intake systems is made from aluminum. Similar to ethanol, compatible material for fuel tanks, gasket and engine intake have to be used.
* hydrophilic: attracts water: in mixture with gasoline this could lead to phase separation and difficulty to start the engine or make it run smoothly
* methanol, as an alcohol, increases the permeability of some plastics to fuel vapors (e.g. high-density polyethylene). [6] This property of methanol has the possibility of increasing emissions of volatile organic compounds (VOCs) from fuel, which contributes to increased tropospheric ozone and possibly human exposure.
* low volatity in cold weather: pure methanol-fueled engines can be difficult to start, and they run inefficiently until warmed up. This is why, a mixture containing 85% methanol and 15% gasoline called M85 is generally used in ICEs. The gasoline allows the engine to start even at lower temperatures.
* Methanol is generally considered toxic[7].Methanol is in fact toxic and eventually lethal when ingested in larger amounts (30 to 100 mL).[8] But so are most motor fuels, including gasoline (120 to 300 mL) and diesel fuel. Gasoline also contains many compounds known to be carcinogenic (e.g. benzene). Methanol is not a, nor contains any, carcinogens.
* methanol is a liquid: this creates a greater fire risk compared to hydrogen in open spaces. Methanol leaks do not dissipate. Compared to gasoline, however, methanol is much safer. It is more difficult to ignite and releases less heat when it burns. The EPA has estimated that switching fuels from gasoline to methanol would reduce the incidence of fuel related fires by 90%.[9]
* methanol accidentally released from leaking underground fuel storage tanks may undergo relatively rapid groundwater transport and contaminate well water, although this risk has not been thoroughly studied. The history of the fuel additive methyl t-butyl ether (MTBE) as a groundwater contaminant has highlighted the importance of assessing the potential impacts of fuel and fuel additives on multiple environmental media. [10]. An accidental release of methanol in the environment would, however, cause much less damage than a comparable gasoline or crude oil spill. Unlike these fuels, methanol, being totally soluble in water, would be rapidly diluted to a concentration low enough for microorganism to start biodegradation. Methanol is in fact used for denitrification in water treatment plant as a nutrient for bacterias.[11]
Source: http://en.wikipedia.org/wiki/Methanol_economy
HYDROGEN ECONOMY:
In 2004, the National Academy of Engineering identified significant problems with a hydrogen economy in, The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs:
“There are major hurdles on the path to achieving the vision of the hydrogen economy; the path will not be simple or straightforward. Many of the committee’s observations generalize across the entire hydrogen economy: the hydrogen system must be cost-competitive, it must be safe and appealing to the consumer and it would preferably offer advantages from the perspectives of energy security and CO2 emissions. Specifically for the transportation sector, dramatic progress in the development of fuel cells, storage devices, and distribution systems is especially critical. Widespread success is not certain. The committee believes that for hydrogen-fueled transportation, the four most fundamental technological and economic challenges are these:
1. To develop and introduce cost-effective, durable, safe, and environmentally desirable fuel cell systems and hydrogen storage systems. Current fuel cell lifetimes are much too short and fuel cell costs are at least an order of magnitude too high. An on-board vehicular hydrogen storage system that has an energy density approaching that of gasoline systems has not been developed. Thus, the resulting range of vehicles with existing hydrogen storage systems is much too short.
2. To develop the infrastructure to provide hydrogen for the light-duty-vehicle user. Hydrogen is currently produced in large quantities at reasonable costs for industrial purposes. The committee’s analysis indicates that at a future, mature stage of development, hydrogen (H2) can be produced and used in fuel cell vehicles at reasonable cost. The challenge, with today’s industrial hydrogen as well as tomorrow’s hydrogen, is the high cost of distributing H2 to dispersed locations. This challenge is especially severe during the early years of a transition, when demand is even more dispersed. The costs of a mature hydrogen pipeline system would be spread over many users, as the cost of the natural gas system is today. But the transition is difficult to imagine in detail. It requires many technological innovations related to the development of small-scale production units. Also, nontechnical factors such as financing, siting, security, environmental impact, and the perceived safety of hydrogen pipelines and dispensing systems will play a significant role. All of these hurdles must be overcome before there can be widespread use. An initial stage during which hydrogen is produced at small scale near the small user seems likely. In this case, production costs for small production units must be sharply reduced, which may be possible with expanded research.
3. To reduce sharply the costs of hydrogen production from renewable energy sources, over a time frame of decades. Tremendous progress has been made in reducing the cost of making electricity from renewable energy sources. But making hydrogen from renewable energy through the intermediate step of making electricity, a premium energy source, requires further breakthroughs in order to be competitive. Basically, these technology pathways for hydrogen production make electricity, which is converted to hydrogen, which is later converted by a fuel cell back to electricity. These steps add costs and energy losses that are particularly significant when the hydrogen competes as a commodity transportation fuel—leading the committee to believe that most current approaches—except possibly that of wind energy—need to be redirected. The committee believes that the required cost reductions can be achieved only by targeted fundamental and exploratory research on hydrogen production by photobiological, photochemical, and thin-film solar processes.
4. To capture and store (“sequester”) the carbon dioxide by-product of hydrogen production from coal. Coal is a massive domestic U.S. energy resource that has the potential for producing cost-competitive hydrogen. However, coal processing generates large amounts of CO2. In order to reduce CO2 emissions from coal processing in carbon-constrained future, massive amounts of CO2 would have to be captured and safely and reliably sequestered for hundreds of years. Key to the commercialization of a large-scale, coal-based hydrogen production option (and also for natural-gas-based options) is achieving broad public acceptance, along with additional technical development, for CO2 sequestration.
For a viable hydrogen transportation system to emerge, all four of these challenges must be addressed.” (Emphasis added)
http://www.nap.edu/catalog.php?record_id=10922#toc
Regarding the hydrogen economy, the U.S. Army Corps of Engineers (2005) concluded that “there are tremendous problems to overcome; once we have solved the production, transmission, and resource issues, then the switch to hydrogen may occur. This is a long term issue and the hydrogen economy is decades away. The tools to make it work, such as safe nuclear reactors, windmills, and fuel cells are still in the development or early adoption phases. To realize the potential benefits of a hydrogen economy – sustainability, increased energy security, a diverse energy supply, and reduced air pollution and greenhouse gas emissions – hydrogen must be produced cleanly, efficiently, and affordably from regionally available, renewable resources.”
http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTR...
Clifford J. Wirth
Peak Oil Associates International
OK, both 'economies' have serious problems. Perhaps we should divide the country into about thirty strips running north/south, each strip about 100 miles wide. Assign even strips to hydrogen and odd strips to methanol, and work on both. ;-)
Good idea, let's take the 2 worst ideas and work on them, and the heck with the others, and the heck with the possibility of putting the oil that would be used on these vague possibilities into risk management and planning for when there is not enough oil to support the highways and power grid.
By fundamental rules of entropy, the oppertunity costs of hydrogen energy carrier transportation (whether methanol or direct hydrogen) will always be substantially higher than storing electricity.
The problem about hydrogen is that it is in no way, and absolutely no way, superiour to direct electrical traction. Anyone who says otherwise doesn't know his/her engineering and entropy. Engineers that do work on it are favoritists not rationalists.
Methanol doesn't have to be synthesized with hydrogen though. Gassifying biomass, then turning it into methanol (eg via Hynol process) is very efficient. New methanol engines are being developed with 40% average efficiency, better peak and average efficiency than diesels. Such a BTL-ICE system could have an overall efficiency of 25-30% which is quite reasonable; biomass-EV system might get 35-40%.
This could work very well with plugin hybrids, and applications in which electric powering is almost impossible.
I think we are familiar now with the idea that demand equals supply -- if supply falls, then demand does too, by way of higher prices. It is also true the other way: demand can't fall below supply either. Prices fall enough that everything that is extracted is used. Thus, if you want to "conserve" on a global basis, you have to, at some point, reduce supply.
The Europeans have had great success with energy-related taxes. The higher prices have led to lower demand and the proliferation of less-energy-intensive alternatives. However, it is also the case that the Europeans' artificially depressed demand has led to lower prices, to clear the market, and the U.S. has picked up the slack. Thus, European planned "conservation" and US wastefulness are two sides of the same coin! For every BTU of FF not burned by the Europeans, someone else had to burn it, or the price had to fall so low that people wouldn't even bother to extract it in the first place (rising production figures show that this was never really the case except perhaps in the 1980s).
Thus, all the "conservation" measures in the world would only lead to prices low enough that people "conserved" less!
One solution would be to limit production in some way. Russia seems to be accomplishing this with their very high export tariffs on energy. Just as the only really effective limit to demand has been higher prices, the only really effective limit to supply (beyond pre-existing geological constraints) is .... lower prices.
While there are a number of creative ways to limit production, realistically these are not likely to be implemented in an effective way. So, the real challenge is, essentially, to prepare for higher prices caused by natural supply-rolloff from geological constraints. Most of these can be accomplished readily by individuals acting independently (aka the "free market), but some could use government assistance. Transportation is the biggie, since governments have something of a monopoly on this sphere -- roadways and train lines, especially at the metropolitan (rather than long-haul) level. Also, governments are very important in the process of reconstructing cities to be able to take advantage of train systems. It won't help if auto-dependent Suburbia is kept in stasis by zoning laws and other nonsense. Other things like mandating high levels of insulation for new construction might help.
But, other than that, most action taken will be motivated by higher prices. Otherwise, if you "conserve" in spite of affordable prices, then prices will simply fall lower until the market eventually uses everything that is supplied.
With this in mind, one of the best ways to "prepare" for lower FF availability in the future is to make FF use very discretionary. Thus, your basic use can be very low, for example by living close to work and having a superinsulated house. If need be, you could reduce your FF or energy use to very low levels. However, until such time comes, you can be very wanton with your use of energy, for example toting around an RV for summer or vacationing in distant lands. Why not? When the time comes, you just give it up.
In this sense, I think the Europeans and Japanese will do just fine, since they can just give up recreational driving and international vacations, and turn off the air conditioner, and reduce their already-low energy use by another 50% or so with hardly any effort, adjustment, or inconvenience. This is possible largely because they have very effective train systems, and cities whose design inherently is able to take advantage of these train systems.
Please notice that all three metaphors (Manhattan, Apollo, Marshall) refer to war-related projects.
Trying to transfer to other areas (War on Poverty, War on Drugs, etc.) has not been particularly successful. I fear the basic problem is one of religion and the US the commitment to the duo-theistic worship of Mammon and Mars is strong.
We need to ramp up the ramping down process.
I agree with Lester that what we need is not another Manhattan Project or another Apollo Project. And to some extent I agree that its OK to use Argument From Analogy.
Arguing from analogy does not support using the Marshall Plan as a guide. The Marshall Plan goal was to rebuild the industrial base of Europe. There was very little technological innovation in the Marshall Plan. Everything that was done was something that most knowledgeable technocrats already knew how to do, apart from cultural differences between different nationalities about the timing of the steps.
Where is our analogy for doing real innovation (i.e. something that has never been done before) on a truly massive scale?
I'm inclined to believe that the job is maybe not so hard as policy wonks would have us believe:
Abandon all hope of new technology. Use only technology for which there are already a few dozen professor-specialists in recognized engineering schools and universities.
Where the professors indicate that laboratory data is missing or unreliable, the government should pay for doing the laboratory experiments and publishing these data.
Also at government expense, development reference economic models of firms using each of the technologies. Publish these models.
Tax existing fossil energy sources at a rate that makes it profitable for a firm to enter the market using one of the reference model renewable technologies in competition against the highly taxed fossil technology. Use the revenue from this tax to pay for the government technology activity and to reduce the national debt.
Adjust the tax so that firms leave the fossil technology business at a rate that is socially acceptable in terms of job loss/unemployment.
Suppose though some Herculean effort we were able to cobble together an energy policy that, through conservation and the use of new technologies managed to create enough new sources of energy so that the world, such as it is, could continue. So what? Since population would still be growing the problem would reappear in short order. Given that energy is only one of many problems that the huge population pressure creates, I will say categorically, without even bothering to gather any numbers, that there is no technological solution unless it includes some reasonable method of reducing population.
Again, unless the world develops a workable plan to reduce population, nothing else will work. That should be obvious to everybody. What is more, since the middle and upper classes use far more resources than the poor, most of the horrible effects of allowing the market to decide who lives and who dies will not solve the problem. Vast numbers may starve, but they are not using much oil anyway. We need fewer middle and upper class people. Any solution that doesn't face this problem is bogus.
Thomas Jefferson worried about how "monied interests" would influence the politics of the the growing United States. There is so much money invested in the fossil fuel industries that replacements for fossil fuels have been difficult to implement. In some ways the subsidies for non-solutions like CCS, hydrogen, and corn ethanol make sense since they have little effect on the profitability of coal and oil. It is simply assumed even by academics like Richard Lester that the government would need to be the customer of last resort if any solution is to arise to the multiple challenges of PO, climate change, and the poverty most of the world's people live in. Energy conservation and renewables are labeled as part of the hated Liberal Agenda which seeks deny us the freedom of mobility God gave to Americans. I predict that next year that the Green Bonds plank of the Dem platform will be filibustered to the max by GOP senators like Inhofe and his ilk. Lester's idea of quasi governmental boards is an interesting concept both in its financing plan and in how the money raised will be used. Reminds me of the quasi governmental board that controls the Federal Reserve System. We all know how well that worked out.
These are two of the relatively few statements in the speech that make any sense. The rest of the speech mostly consists of platitudes for the consumption of the politicians he was addressing.
If there is a "Marshall Plan" in the above, it is one that gives hand-outs to the "clean coal" and nuclear industries which, (and it would surprise me to learn otherwise), have likely been quite generous in their hand-outs (grants) to MIT. It is quite obvious that, if left up to Prof. Lester and his team, the lion's share of in new electric generating capacity as well as R&D would go to these industries.
What Congress needs to do to counter this frightening prospect is pass laws as soon as possible banning construction of both coal-fired and nuclear-based electrical generating capacity. In lieu of this, a steep "carbon tax" and nuclear waste (decommissioning) tax should be imposed.
CCS is a ruse the coal companies have invented to keep mines in operation and postpone the day the world must ban the mining and use of coal. Otherwise, we will all be choked, starved or boiled to death (pick your poison). If CO2 storage were truly feasible, it would have been demonstrated by now using the plentiful supplies of CO2-rich gases emitted by existing hydrogen plants. It would truly surprise me if more than one percent of the carbon in any unit of coal ever to be mined in the future will wind up sequestered in a storage site.
The future supply of uranium and storage of nuclear waste problems aside, no entity will build a nuclear plant unless it is insured against future indemnities, and no private insurance company would be willing to do that. As in the cases of Fannae Mae and Freddy Mac, the public will be left holding the bag, or the injured parties will simply never be properly compensated (kind of like in the Exxon Valdez case).
Given the fact that the US is the world's greatest debtor nation, the pure capital investment required for Lester's Plan is beyond the range of our capacity to pay.
What to do then?
The ONLY way forward in the short term is to buy time by invoking extreme conservation measures, especially in the "developed" countries. These could, in turn, impose stiff tariffs on goods from countries that are extreme polluters. In short, we have to "deglobalize" the "economy", a term which I and others use rather loosely, because there is nothing in its present usage which implies "frugality".
Second, we have to identify and make a realistic scientific assessment of ALL of potential source of renewable energy that are available. Two of the most promising sources of renewable energy are currently being totally ignored by the Establishment. These widely available resources are waste heat and Convective Available Potential Energy (CAPE) renewed by the sun each day in the atmosphere.
A technology to harvest this energy has been developed by Louis M. Michaud, P.Eng., and named the Atmospheric Vortex Engine (AVE). (http://vortexengine.ca). Nobody has yet come forward and given a scientific reason why the technology would not or could not work, and I challenge Prof. Lester or any one of his team members to come forward with it, if he is aware of one.
Unfortunately, due to underfunding, the AVE still remains in the early stages of development. The exciting part of this concept is that it can be combined with other renewables or geothermal energy to nearly double the electrical output that would otherwise be obtained by these sources working alone. This would includes Concentrating Solar Power, for which it would also serve as a bottoming cycle, or even fields of Photovoltaic panels, which produce waste heat as 75% of their output, and the cooling medium for which could serve as feed.
The key to this increased efficiency is to utilize the upper troposphere as the ultimate heat sink, as opposed to the earth's surface. By reorganizing fields of convection and enclosing what otherwise would be individual convection currents into a larger and more efficient vortex, the AVE serves as a conveyor belt to this cold sink. It is projected that electricity costs from these sources would be far less than electricity from either nuclear or coal plants, not even counting the environmental damage they are likely to produce.
There is no doubt, after optimization of the surface facilities, that the AVE will function. The only question is how large (thermal capacity) must it have to function reliably, and what the possible side effects might be. The monetary investment to develop and test this technology would only be a tiny fraction of anything that is nuclear or coal-based. Once established, many possibilities could also open up for using it as a geo-engineering tool--extremely unlikely to occur by continued development of coal or nuclear technology.
We will be wasting both precious time and scarce resources if we attempt to fund either "clean coal" or nuclear electricity, both of which are "proven losers", simultaneously with renewables, including combinations of the various technologies which are included in this set.
Jerry Toman, ScM, ChE, MIT
Let's suppose for a moment, just for the sake of argument, that we give professor Lester a very generous benefit of the doubt and presume that his most wildly optimistic projections come to pass and the "energy problem" is solved, or at least the worst consequences are avoided.
Then what happens? Oops! Here comes the climate crisis, the food crisis, the overpopulation crisis, the water crisis, the topsoil crisis, the fisheries crisis... and the list goes on.
The utter and complete lack of systems thinking on display, and from the very people who should supposedly know better, is truly appalling.
Cheers,
Jerry
Dr. Lester goes part way to describing Keiretsu.
Most consumers are now owned by the banks, with more than half of their income going to mortgage, consumer debt, and public debt interest payments. There is no room left in their budgets to pay the proposed consumption taxes, so the plan as he describes it won't work.
Only the largest private banks have the revenue to provide the required investment. Group together universities, design firms, industries, and municipalities under the direction of their sponsor banks and you would have a pretty good reprise of the Marshall plan. Each "Ameretsu" can pursue its own best ideas.
I'm all for it. We could fare much worse than to emulate Japan's post-war success.
Congress should not be allowed to go home to campaign until they enact a comphrehensive energy plan to implement Al Gore's vision. This would need to be combined with an immediate cut in the defense budget by at least 50%. And forget bailing out anymore banks and other financial institutions. The money pumped into the economy by such a plan would more than make up for the decreased defense budget and the consequences of the bailout. Let's put people to work everywhere putting together the new economy, one based on strategic long term investments that pay back rather than pointless, corrupt, incredibly expensive attempts to shore up an economy based upon oil. The future is not oil and yet we are wasting billions to get there. If the oil companies cannot get on board for this new future, nationalize them.
Under the status quo, billions of dollars will be wasted on dry holes and in fruitless attempts to somehow reverse Hubbert's curve.
Let China have the Middle East. They are going to have it anyway. We cannot maintain the American empire. Any attempt to perpetuate that empire will just end badly and we will have nothing, including very little oil, to show for it.
Congress is a dangerous organization. Under pressure of public opinion, it can produce laws that are far worse than doing nothing.
I don't think there is any consensus as to what Gore's vision is. It is a good political speech because a lot of people think it proposes something very specific, but few check with the person to their left or right to see if their neighbor agrees on what that specific meaning actually is.
And, even if Congress agreed on a law that implements Gore's vision, would that law be understandable by technical people? There is a lot of political speech that is technically meaningless. Remember Reagan's call to build a shield that will make ICBMs ineffective and obsolete?