Energy policy (warning:long)

[billvon 2,471]

Since the issue of global warming/energy usage/oil dependence comes up pretty often here, I figured I'd post "Bill's Plan" for starting to solve our oil-dependence, CO2 and pollution problems.

Introduction

Over the past 30 years there has been a lot of talk about national energy policies, but very few comprehensive energy policies have been proposed, much less implemented. Energy and the environment are two critical and inextricably linked issues that will become much more important in the upcoming years. Presented below is a plan that should keep our supply of energy growing even as conventional sources run dry and as we start facing more environmental dangers from our energy usage.

Basics

I believe in the principle of leaving the world no worse than we left it. The Iroquois call this planning for the next seven generations, as in any decision their leaders make should take into account the next seven generations, or the next 140 years. I realize that many people plan no farther than the next election, or the expected cashout date of their mutual funds - and indeed many people profit by such short term planning. This plan necessarily represents longer-term planning than that.

The earth's climate has changed before; it will change again no matter what we do. We can affect the speed at which this happens in many ways, including emissions of greenhouse gases, removal of forests, alteration of ocean ecologies, removal of open areas etc. We do not know with great certainty what impact these changes will have on us. It therefore makes sense to not try to change the climate as rapidly as possible, as those changes could well be disastrous for us.

We now know that pollution has direct costs in terms of human lives, quality of life and costs such as cleanup efforts, damage to our infrastructure and changes in our weather. Mitigation of pollution also has costs, and these costs must be balanced.

We will continue to use more energy as we advance. Any plan we come up with should allow for sustainable increases in energy usage for the forseeable future.

Our oil will run out soon. We hit the Hubbert peak in the US in the 1970's; since then oil production has steadily declined. We will hit the peak for production in the rest of the world between 2010 and 2050. When we hit it depends on variables such as how quickly we increase our usage and how real currently surveyed reserves turn out to be.

Any plan we implement should rely on the free market as much as possible. Market pressures are much more flexible and effective than government regulation; the best regulations set up market forces to achieve the desired result, rather than just mandate the desired result.

My plan has four parts:
1. Increased automotive and light truck efficiency improvements
2. Increased fuel diversity for road vehicles
3. Electrical generation mix change incentives
4. Electrical consumption incentives for improved competition, efficiency and alternative generation

Part one of the plan involves increasing the efficiency of our vehicles. Car and light trucks take over 40 percent of the oil used in the US. Increasing vehicular efficiency is the single biggest step we can take to increase the amount of energy available to us. The technology to do this is here; there are mid-sized cars that get 50mpg with no loss in performance, and hybrid diesels in the planning stages will push 100mpg, increase reliability and have emissions comparable to today’s LEV’s.

To do this, the federal government should:

-Remove the SUV loophole. Require all vehicles to meet CAFE, safety and EPA requirements no matter what their size. This will increase fuel efficiency by around 8-10% within 5 years. (Interestingly, the reason that average fuel economy has been going down even though fuel efficiencies have been going up is the SUV loophole.) It will also drive down the prices of lower-end vehicles, making efficient cars more affordable to low-income drivers and encouraging the abandonment of high emissions, low efficiency 20 year old cars.

-Continue tax breaks on high efficiency vehicles. There is currently a tax credit for people buying hybrids; continue this by providing a tax credit for people buying vehicles rated in the top 5% of fuel efficiency.

-Gradually increase CAFE standards. CAFE is an eminently fair system of enforcing a certain average gas mileage; car companies can sell whatever cars they want and consumers can buy whatever cars they want, provided each manufacturer’s “fleet” averages a certain MPG. Thus a car company can meet their CAFE requirements by pricing their most efficient cars lower than their fuel-wasters, or they can meet it by improving the efficiency of all the vehicles in their fleet.

The second part of the plan is to increase energy diversity for vehicles. As oil starts to run out, we can allow the free market to select the replacement fuel as long as those options are open to consumers. To do this, we have to ensure that alternate-energy vehicles are available. These include alcohol, biodiesel, natural gas, electric and compressed gas vehicles. We can ensure this happens by providing tax credits for people who purchase “alternate” vehicles. Since these credits would be intended to increase fuel diversity, not choose any one vehicle over any other, they would expire once a given technology (say, diesel) reached a 5-10% market penetration.

Again, these vehicles are pretty much all available today. Ford, GM and Chrysler make a large line of Flexible Fuel Vehicles that will run on any mixture of ethanol, methanol or gasoline. Toyota and GM have both fielded consumer electric vehicles. VW sells diesel cars, and most American manufacturers offer diesel options for their large consumer trucks. Honda makes a natural gas car.

There are also several technologies out there that can use a wide variety of fuels. External-combustion engines such as steam and Stirling can burn nearly anything, and turboshaft engines are also being made in much smaller, more efficient packages. Any vehicle that can run on a wide variety of fuel sources will be eligible for the same tax credit.

The program shown above will also encourage usage of renewable fuels. Several of the vehicles listed above can run on either renewable fuels or petroleum based fuels. An unmodified diesel engine can run on biodiesel or petroleum diesel equally well; a slightly modified diesel (basically just a regular diesel with fuel heaters) can run on straight vegetable oil. FFV’s can run on ethanol from farm waste; natural gas vehicles can run from any methane source including biogas and methane digesters.

The third part of the plan involves electrical power generation. Generation of electrical power is the second largest use of energy in the US. Currently, our generation is broken down like this:

Coal 48%
Oil 4%
Natural gas 13%
Hydro 15%
Nuclear 18%
Solar/wind/geothermal 2%

We should be moving toward a balance that looks like:

Coal 10%
Natural gas 20%
Wind/solar/geothermal 20%
Hydro 15%
Nuclear 35%


Coal is going to be part of our energy future for a while, but it is the most polluting and most damaging source of energy we have. A large coal plant that meets all EPA standards puts about 100 pounds of uranium and thorium into the air every year; this sort of pollution kills about 30,000 Americans every year through emphysema, lung cancer, COPD and heart disease. We have to start reducing our usage of it as other sources become available. The death toll is just too high.

Natural gas, on the other hand, is the cleanest source of fossil-fuel power we have. Burning it in a modern power plant produces very little besides water and carbon dioxide (and it produces about ¼ the CO2 per megawatt-hour as a coal plant does.) We also have pretty large reserves of natural gas. It will not last forever, but there are replacement sources like digesters and biogas, and methane clathrates have the potential to supply any conceivable need for a few hundred years if we can figure out how to mine them safely.

The big source of power we should be looking towards in the future is nuclear power. It’s the cleanest source of power we have (provided the spent fuel is handled well, of course.) We don’t even need any new technologies; the technologies we have right now, like the Westinghouse AP600 and the Canadian CANDU, are plenty sufficient for near-term power. We should open Yucca Mountain as soon as possible, and also begin work on fuel remixing and reprocessing plants. Degraded weapons-grade plutonium can be mixed with spent fuel to produce MOX fuel, thus quadrupling the energy you can get out of a kilo of partially-enriched uranium. Fuel reprocessing plants can essentially recycle spent fuel forever and eliminate much of the nuclear waste that we have to deal with now. Note that, in years past, fuel reprocessing was frowned upon because it was thought that the technology would leak to third-world countries and enable them to enrich reactor-grade uranium to weapons-grade uranium. Nowadays, as they say, the cat is out of the bag – there are around a dozen fuel-reprocessing plants around the world. Preventing a thirteenth one from opening in Nevada will not have any appreciable effect on nuclear proliferation.

Hydro will continue to supply fairly clean power, but we’ve dammed most of the rivers we can.

Wind and solar will gradually come into their own as costs for both go down. Right now, wind costs are equivalent to gas power plants in terms of cost per megawatt-hour, but siting problems are slowing it down (it’s hard to run power lines up mountain ridges to where the wind is really good.) New technologies, like HVDC power transmission, are helping ameliorate this.

It should also be noted that wind and solar are “unreliable” sources in that their output cannot be increased if needed. If it’s night and the wind’s not blowing, then you can’t get any more power out of either one. Any reasonable energy system combines baseload generation (nuclear plants) with unreliable clean/cheap generation (like wind) and peaker plants (like natural gas.) The natural gas plants can be throttled quickly to make up for changes in demand and supply; the nuclear plants run continuously at close to max power output to generate the baseline power we always need.

Another thing we should work on is power distribution. The national power grid is bizarre, with power being shunted all over the place in odd patterns, but not transmissible at all in some areas. For example, during the summer, Canada supplies hydro power as far south as LA; in the winter, power plants in northern California supply power to Canada. However, Texas is essentially isolated from any other power grid; they can neither help nearby states nor get help when their demand spikes. Effort put into both increasing transmission capability and improving switchgear (which lets more power travel over the same lines) will let us supply more power with the same number of power plants, and also use a more diverse network of power sources (like distributed solar.)

The fourth part of the plan involves consumer and commercial energy usage. To improve our efficiency when it comes to use of energy, we should make two changes. One, we should start a true deregulation program. Allow consumers to shop for power vendors on a month-by-month basis the way people shop for cellular plans now. Have it be web-based, with real time reading of power meters and consumption, and on-site ability to do load shedding (i.e. allow generators to offer cheaper plans that include shedding of A/C compressor loads and hot water heater loads at times of peak demand.) Keep local utilities regulated; like roads, they provide the transportation for services (in this case power) to move to the consumer.

Two, institute a nationwide net-metering program with cost-plus buyback. Basically require all utilities to average power generated from small renewable sources (like wind and solar) over the year, and then bill only for net power. If a homeowner generates more than they use, require utilities to pay for them on a cost-plus basis (i.e. their cost plus five cents a kwhr.) Cap this amount in every region so utilities don’t go out of business if everyone installs solar. This will encourage alternative power generation without having to pay out money for the installation themselves, as some programs now do.

To make all this happen, the federal government should:

1. Create a tax structure for utilities that reflects true costs to government. If a utility runs a lot of coal power plants, and thus causes a lot of damage to buildings, roadways and the health of the general population, they are taxed in proportion to the cost of that damage. If they choose a technology that incurs fewer costs, then they are taxed less.

2. Renew the Price-Anderson act to allow new nuclear power plants to be built.

3. Encourage, through tax incentives, construction and operation of fuel reprocessing and remixing facilities to reduce the amount of nuclear waste and increase fuel availability.

4. Complete the Yucca Mountain facility.

5. Put in place clearer rules for siting of natural gas terminals so natural gas can be transported from wellheads to generation facilities.

6. Set up the regulatory structure for utility power deregulation.

7. Implement nationwide net metering with cost-plus buyback.

8. Cancel current solar and wind financial incentives (not needed if 7 is implemented.)

Environmental issues concerning electrical power generation

This one is simple. End the New Source Review fiasco. Within five years, every power plant in the US meets EPA emissions standards. Period.

Specific issues

"The hydrogen economy" is simply not viable. It's a nice idea but we don't have any hydrogen, and can't make any without using lots of energy, which makes it a liability to any energy plan. If there is a desire for a very clean, low-CO2, gaseous fuel, methane works a lot better - and is available from natural gas wells. It can be used in everything hydrogen can be used in, and is easier and safer to transport.

ANWR - ANWR represents our last big reserve of oil. We will eventually have to use it, but to drain it when oil is plentiful makes no sense. I would put a 'gate' on drilling in ANWR - say, $200 a barrel (adjusted for inflation.) Once we hit that gate, start drilling. That way we have a future reserve of oil when we need it.

Paying for all of this

In the end, it always comes down to cost. Oil isn’t used because it’s a great fuel (it’s not) but because it’s cheap, and alternatives have to be paid for somehow. To be specific:

1. Energy efficiency and diversity tax cuts for vehicles. There’s no direct cost here, but the loss of tax revenue has to be made up for somehow. The easiest source of funding to replace this is to eliminate the roughly $2 billion a year in tax breaks the government gives to oil companies. In essence we’d shift the tax breaks from oil companies to car companies that make efficient vehicles.

2. CAFE standards. This is actually revenue neutral from the government’s and car manufacturer’s perspective. From the consumer’s perspective, the most expensive cars (the big SUV’s) get more expensive and some less expensive cars (like Honda Insights) get even less expensive, so it’s a wash that way too (unless you can’t do without a big SUV, that is.)

3. New tax structure for power generators. Neutral for the government and consumers. Initially expensive to power companies until they convert to the more cost-effective forms of power.

4. Funding for Yucca Mountain and Price-Anderson. This is already paid for by various taxes on nuclear energy.

5. Funding of fuel reprocessing plants. The objective here would be to provide some ‘seed’ money and tax incentives for private industry to take over this function, so this would have to come out of the government’s budget.

6. Electrical power deregulation. Cost neutral aside from new equipment needed; this would be paid for by utilities and the cost passed on to consumers. There would also be a cost benefit to consumers from deregulation. This would act to offset the additional cost of any equipment required to implement functions like load shedding.

7. Net metering. Cost savings in the short term by eliminating subsidies of solar installations. Midterm cost to utilities as they have to pay for cost-plus buyback; buyback limits will prevent this from becoming excessive, and utilities will save some money by not having to build new power lines or generators to support more customers in the long run.

8. Elimination of new source review. This would cost utilities money in the short run and save them money in the long run (since their oldest, least efficient plants would have to be upgraded.)


Conclusion

The problem we have today really isn’t energy availability. Just taking the amount of sunlight that falls on the US every day, we have far more energy available to us that we will ever need. The trick is getting away from oil, a source that harms the environment, is going to run out, and causes political instability wherever it is in good supply. It’s not even that hard to do if we are willing to put in the effort to do it. But that effort has to start now, not after we have hit the Hubbert peak and our economy is collapsing as its oil-based foundation is pulled out from beneath it. At that point it will be far too late.

[dreamsville 0]

Without going into all the points:

1) I still think we should look into drilling in ANWR sooner rather than later, since there is a relatively small area they want to develop and it will help.

2) SUVs. I can't believe we are back in this situation again after past oil shocks. I agree with you. People are buying large vehicles with no incentives to conserve other than the increasing price of oil. Now we've got this fleet of big vehicles that's going to be out there for a while in the market. Now is the time to start with ending the CAFE exemption, since there will be a lead time in development of technology and getting more efficient vehicles in the pipeline (a pun?).

I don't drink during the day, so I don't know what it is about this airline. I keep falling out the door of the plane.

Harry, FB #4143

[lawrocket 3]

Quote

We should be moving toward a balance that looks like:

Coal 10%
Natural gas 20%
Wind/solar/geothermal 20%
Hydro 15%
Nuclear 35%

I like this, but how would it work? Can we really build nuclear power plants, anymore? Didn't the China Syndrome fearmongering put an end to nuclear power as a viable alternative?

My wife is hotter than your wife.

[PhreeZone 15]

I was EXTREMELY happy to see that after years of allowing the loop hole to remain open, that Bush finally closed the tax write off for SUV's. Previously there was a clause that allowed a buisness owner to write off the complete expense of a vechile over 4000 lbs in a single year. It was designed to allow companies needing fleet trucks to be able to have write offs, too bad that the larger SUV's fell into that same group recently. You were basically able to write off a SUV up to $100000 per year as a fleet vechile. It was great when only farmers and things like refridgerated trucks and panel vans could get it since they rarely were that expensive and no one would buy a refridgerated truck unless they needed it. The heavier SUV's allowed people like Dr's, Lawyer's, and any other buisness owner to buy a gas hog of an SUV and expense it like a fleet truck. It encouraged people that were going to spend $40k+ on a car to get one that could be wrote off as a business expense instead of one that they were not able to claim. Hummers and the large SUV's were all write offs...

Luckly they closed that loophole last month by sneaking it into the Job Creation act of 2004 Democrats placed that admendment in there and it passed.

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

[Nightingale 0]

I'd love to own an alternative fuel vehicle, but it's not practical at this point in time, as you can't buy the fuel at the local service station, so you couldn't go too far from your known fuel supply, unless you've got a solar car or something.

[PhreeZone 15]

There are currently plans for 3 new nuke sites under review with the Department of Energy. All three involve building additional reactors on pre-existing Nuke sites. One in IL, one in MS, and I think the other one is in PA. That will provide a huge boost to the Northeast and Southern power grids. DoE has pledged $500million over the next 5 years to studies and relationship building to facilitate the construction of the plants by end of 2008. They are hoping to start construction in as early as late 2007 in at least one of the sites and all 3 by 2010. Current estimates are that any where from 3-5 Coal plants will reach their end of life by 2015 and need replacements or suppluments.

GE, Westinghouse and Canada all have new turbine and reactor designs that boost the effecency and performance well over older designs. The best feature is that they no longer are having the water drain pipes under the water retaining basin and moved them to pumps above. This will prevent the risk of pipe corrosion accidently draining the tanks and overloading the reactor.

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

[billvon 2,471]

>Didn't the China Syndrome fearmongering put an end to nuclear power
>as a viable alternative?

Well:

1. That was a long time ago
2. It's not so much that people are more accepting of nuclear plants, but that they are less accepting of _any_ plants. There has been tremendous resistance to even the cleanest natural gas powered plants. So there may not be much advantage in trying to build a gas fired plant over a nuclear plant in today's climate.

[billvon 2,471]

>as you can't buy the fuel at the local service station . . .

Depends where you live. Many midwest states have E85 available (ethanol) and a lot of stations out here have B20 (biodiesel.) And of course you don't need a filling station for electric vehicles; you just need a socket. Unfortunately neither GM nor Toyota makes their EV's any more.

[ChasingBlueSky 0]

Quote

>as you can't buy the fuel at the local service station . . .

Depends where you live. Many midwest states have E85 available (ethanol) and a lot of stations out here have B20 (biodiesel.) And of course you don't need a filling station for electric vehicles; you just need a socket. Unfortunately neither GM nor Toyota makes their EV's any more.

In Iowa 89 Octane is cheaper than 87 due to the amount of ethanol in it.

_________________________________________
you can burn the land and boil the sea, but you can't take the sky from me....
I WILL fly again.....

[lawrocket 3]

I understand this all pretty well. But, the issue is the surrounding population. Heck, we can't even store nuclear waste in the middle of nowhere under a mountain without people worried.

Despite the evidence that flying is such a safe mode of transportation, people are still afraid of it, and people are afraid of nuclear power. I'm concerned whether NIMBY-ism will allow the contstruction of ANY new sites. I know that we in California sure could use a couple more reactors.

My wife is hotter than your wife.