Hard Questions and Sustainable Solutions with Chris Nelder

Chris Nelder has been writing about the issues surrounding sustainability for over a decade and he makes a very important point that my blog also makes. It is that we have the solutions at hand. They are turning out to be cost effective. We can get on with it and solve our problems.

The fact remains that our leadership do not grasp solutions and lead their implementation. Instead they struggle to preserve position and avoid failure through real action. Much change has happened only in the face of crisis when the population itself is moving to a solution allowing the leader to merely jump in front.

This is the result of intellectual weakness among the leadership. It should be obvious to my readers that the best way to stimulate the economy out of its present malaise is to swiftly build out a national power grid and to supply finance guarantees for wind and geothermal in particular. We need them both and we need them now to supply the energy needed to supply power for the onslaught of electric cars. The arguments in favor of this course of action are compelling and easy.

Yet today our president is a man who cannot understand building wealth, or even be expected to understand compound interest particularly well let alone be handed a wrench to fix something. He must make decisions based on input from a flock of naturally risk adverse advisors. Reagan may not have known that star wars was twenty years early, but his advisors certainly told him, but he understood that the USA could afford an impossible mission while the USSR would be flummoxed.

The USA faces a building crisis in energy that is slowly taxing the American people into a poorer lifestyle. It must be fixed and it can be fixed. What are we waiting for? We are waiting for technically competent leadership. It is high time for show me because everyone is now confused as to where we are all headed. The leftist agenda has been allowed to float like a balloon but is naturally fading as the usual realities settle in.

We badly need to see the pragmatic side of this presidency.




Hard Questions and Sustainable Solutions

By Chris Nelder Friday, August 21st, 2009


The more I probe the hardest questions about the future of energy and our best shot at sustainability, the more I am convinced that the real questions are not about technology, but about human nature.

We have all the technology we need to make homes that produce their own energy. We know how to build high-efficiency rail and sailing ships. We know how to grow food organically and sustainably. We have the science to create economic systems that internalize all effects and operate in a beneficial manner. We've had the quantitative knowledge for decades that we would eventually go into resource and environmental overshoot.

We certainly have the technology to build an all-electric infrastructure entirely powered by renewables. We will crack the storage problem and all the other technical problems. I have no doubt that the technology also exists to build an all-nuclear solution, or even an all-hydrogen solution.

We have the technology to recycle all our water and reclaim all our waste. We could even control our population. . . if we had the will.

We also know what real sustainability means. I don't think I have ever seen it better put than by my friend Paul Hawken in his book, The Ecology of Commerce:

Sustainability is an economic state where the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations. It can also be expressed in the simple terms of an economic golden rule for the restorative economy: Leave the world better than you found it, take no more than you need, try not to harm life or the environment, make amends if you do.

The real problem is we don't want to act that way. Virtually no business in existence meets that standard.
Technology and knowledge simply aren't the issue.

We don't want to think about having to put CO2 back in the ground after we burn fuels. We don't want to worry about the waste from our consumption. We don't like to hear about limits to anything we want to do. We don't want to rearrange our stuff, our lifestyles, so that they are truly sustainable. And we certainly don't like anybody telling us we can't have more kids.

In fact we don't even like to think about it. . . so when the subject comes up, we dismiss it with a flip comment like, "So I suppose you want us all to be living in caves and working by candlelight?"

The upwelling of emotions that this topic inspires — especially fear — usually makes a neutral and scientific discussion out of the question.

And from fear, most people leap to faith: faith in the perfect wisdom of free markets, faith in technology, faith in human ingenuity. No rational discussion needed.

Nor is this aspect of human nature a news flash. ‘Twas ever so. At the suggestion of a smart hedge fund manager buddy, I recently put Thucydides' history of the Peloponnesian War in my reading queue for clues on how humanity actually performs when presented with serious fiscal and resource challenges.

I know some very smart people who are fully armed with the data on resource depletion and peak oil, and who still choose to believe in a cornucopian future where humanity acts wisely, humanely, justly, and in concert with a view toward long-term planning, solving all of our problems without any serious hardship.

This time, they contend, it will be different. After all, aren't we entering the Age of Aquarius, when humanity finally embraces unity and understanding?

Well, forgive me for being skeptical. The degree of cooperation they envisage has no precedent whatsoever in human history, and there are thousands of examples to the contrary.

In fact I was a bit shocked today when I looked back on my first opus on sustainability ("Envisioning a Sustainable Future"), published in my online magazine Better World 13 years ago, and realized that all of the problems are the same now as they were then, only worse: population, energy, water, extinction, environmental destruction, flawed economic theory, global warming, and humanity's problem with long-term planning.

It gave me pause. A long pause. Are all my efforts, and those of my fellow agitators for sustainability, simply battling human nature? And if so, what good is it?

Tantalizing Technologies and Hard Questions

At this point, 13 years later, the questions are even less tangible: How will people respond to the coming changes? Can the political support for truly sustainable solutions be marshaled? Will the economy hold out long enough to accomplish the transformation? And how will declining energy supply impede our efforts?

Certainly, in theory, we could replace 220 million light ICE cars and trucks with electric models, and heavy transport trucks with a combination of biofuels, natural gas, and hydraulic storage technologies. The technology exists. But will we have the investment and primary energy supply to build them, if we simply let the market and politics guide us?

Consider "Cash for Clunkers." Using data and estimates from the New York Times, I calculate that the program pays off in nine years at $70 oil, and in five years at $120 oil. In terms of effective investment in the future, that's really not too bad. (The photovoltaic systems I designed and sold in my previous career typically paid off in more like 20 years, before incentives.)

Even so, Cash for Clunkers was reviled for swapping out over a quarter-million cars for more efficient ones at a mere cost of $1 billion. What are the chances we'll have the political support to do 220 million vehicles that way? Especially if oil gets more expensive and we start having shortages and more heavy industry failures when oil goes into decline a mere two years from now?

Sure, we can run airplanes on "renewable" synthetic diesel fuel made from green waste such as yard clippings, and early investors in such technologies will make a bundle. Rentech's (AMEX:

RTK) recent announcement that it had signed a deal to provide as much as 1.5 million gallons per year of the stuff to eight major airlines sent the stock soaring over 360% in two weeks.

But 1.5 million gallons per year is nothing, and thanks to the transport and handling cost of green waste, it doesn't scale. If it requires transporting massive amounts of the feedstock with diesel-powered trucks, it isn't sustainable either. Need we even discuss recycled fryer oil?

Similar problems bedevil the alcohol fuels and biofuels, including algae. There are many interesting approaches to both in the lab, but for a long list of reasons (including water availability and the net energy of the processes), they don't scale well. I don't see any of the biofuels making more than a 50% gain from their current paltry levels for a good many years yet — and then we'll be having so many other problems with energy, water, food, and the economy, that the long-term outlook gets very murky.

Sure, we can try to turn to Canada's tar sands and deepwater heavy oil as the good cheap stuff runs out, but a cursory look at their net energy tells us that doing so is an attempt to play the oil game into overtime, not an attempt to do something sustainable. Thinking otherwise is simply

denial.

A straightforward analysis of the data suggest that once we take peak oil, peak gas, and peak coal into account, there may not be enough time left to use cheap fossil fuels for the decades it would take to accomplish a transformation to true sustainability, let alone the human will to do it. And the experience of the last year gives me no confidence at all that the world can smoothly transit this

inflection point in economics.

Yet I want to foster inspiration, not desperation. For most people, hope is as essential to survival as food, water, and air. And there is hope — not for business as usual, but for a much better kind of business. Not for endless growth, but for a more sustainable future.

But I am not one for false hope. I have endeavored to bring a dose of realism to this column for three years now, and I will soldier on. The opportunities to create sustainable solutions and profit from them are probably greater now than they have ever been. It's our task to find them, promote them, invest in them. . . and beyond that, hope for the best.

Until next time,

Chris

Energy and Capital

Rampaging Wind Power Bull

Sometimes it is necessary to go to the financial press to discover what is happening out in the field in maturing technologies. Wind is on a tear. The regulatory issues are long since mastered and the economic models are tested and a banker’s dream. And if you had been fully invested in wind based utilities, you could have ignored the bear market now rampaging across the globe.

What is happening though is that the wind industry is on its way to grabbing at least twenty percent of the global energy market. It is safe, it is reliable and it is deliverable. It is now the solution of choice for utilities needing to expand capacity and reduce reliance on carbon based fuels.

Geothermal will also share in this capital investment boom but it is still years away from developing anything like present wind industry capacity.

Technically, this will stiffen the drive for two other technologies. The first is industrial battery storage. Right now we are improving flexibility in load adjustment, but been able to simply dump all your surpluses into a battery farm means that you can expand from the present wind optimal of 20% of total capacity to close to 80% if thought desirable.

The second technology is the implementation of a national high voltage trunk system that permits power transfers on a continental scale. Wind, and geothermal cannot be planned and built adjacent to their markets. The power must be moved efficiently and cheaply.

We have already posted a bit on that, but the gimmes are from the West and North Texas into the Southeast and the Heartland. I would also see Nevada linked to California to jump start the geothermal industry.

Common sense suggests that the absolute best use of stimulus money is in this particular sector. It is getting financed at breakneck speed but can handle much greater demand and can be financed through government guarantees. This is a continental infrastructure project that will pay for itself and will also supply the necessary electricity for the onrushing electrical automotive age. It will also create the maximum industrial jobs. A lot of metal must be cut.

This is from the Energy and Capital newsletter which can be located through my links list.

It's hard to believe we're in a recession when you look at the recent performance of the wind industry.

And while I've seen numerous claims of "recession-busting profits," I'd have to say that crown belongs exclusively to the wind sector.

Last year -- in the face of the worst economic times in decades -- the wind industry delivered revenue well over $45 billion.

But that's not even the best part...

Even though $45 billion in revenue is impressive, it's nothing compared to wind's 28% growth rate last year.

I can think of several industries that contracted by 28% or more, but I can't think of one that grew that much.

Wind energy has truly been a safe haven in the face of recession... and the next few years will be even better.

The industry is expected to grow 27% annually through 2015. And annual revenues are slated to more than double in the same time.

If you want to take advantage of this easy profit opportunity, I've singled out three must-own wind stocks in the report below.

As you'll read in the report, I think following this advice could net you an easy double in the next 18 months.

Call it like you see it,
Nick
Dear Reader,
You just don't hear a story like this every day...
Late last year, as global markets spiraled downward, NACEL Energy Corporation - a little-known wind energy company based out of Denver - was approached by its former CEO - Dan Leach - with a very unusual proposition...

...To buy 1,250,000 shares of NACEL's common stock.

You see, before Mr. Leach left the company, he was instrumental to the startup of four wind energy projects for NACEL...

Two small projects in the Texas panhandle,
Another project in Kansas (for which a location hasn't even been secured yet), and
A proposed three-phase project in the Dominican Republic.

Now here's a guy who's made a career in wind energy, having served as senior wind energy development consultant for Duke Energy since 1995. So he knows the drill.

And although he left NACEL to pursue other interests, he wanted those four wind energy projects back.

He even made a formal proposal to have the rights to all four wind projects transferred back to his name - in exchange for 1,250,000 shares of the company's common stock.

Now, if that seems a bit strange, consider this:

This tiny wind company refused Mr. Leach's offer.

That's right. Rather than cash in on an outright purchase of over one million shares, NACEL decided to hold fast to their projects...

Why?

Because the offer Leach made will look like chump change... once those turbines start generating revenue!

$47.5 Billion In One Year

Actually, NACEL's decision isn't very shocking at all when you take a look at the facts:

* The global wind energy market has grown 482% over the last seven years.

* Global capacity will grow over 27% annually from 2000 to 2015.

* Wind-generated revenues exceeded $47.5 billion in 2008 alone.

That's right. In just one year, the wind energy industry generated more than $47 billion.

And in less than a decade - even as we head face first into a full-blown recession - that number is expected to reach nearly $90 billion in revenue. . . each and every year.

In a moment, I'll tell you exactly how you can get some of this early action with 3 very specific wind energy stocks.

But first, let me show why...

Wind Energy Just Got A Major Shot Of Steroids

Earlier this year, the Global Wind Energy Council released wind industry statistics for 2008--the most up-to-date and authoritative numbers available.

Despite a global recession, the wind industry turned in its best yearly performance ever. Over 27,000 megawatts of new wind installations were put in place. . .delivering an unheard-of 28.8% annual growth rate during the most uncertain market times in decades.

But here's where it really gets good.

According to the GWEC, "the global wind market for turbine installations in 2008 was worth $47.5 billion." With 27,000 megawatts installed, that works out to about $1.76 million per megawatt!

By 2015, global installed capacity is expected to grow to 294,221 MW for 143% growth in the next six short years. Put another way, there will be an additional 173,208 MW installed in the next five years.

At an average cost of $1.76 million per megawatt, you're looking at a $304.9 billion market-in just the next five years.

That's why we've already taken positions in three small wind energy stocks that are about to begin a very long and profitable ride.

In fact, we believe that all 3 of these stocks will deliver gains in excess of 28% by the end of the year, and are...


I'm completely serious.

Given wind's forecast momentum and the incentives given to the industry via the recently-passed stimulus, the three wind stocks I've hand-picked for you are going to deliver blockbuster gains over the next few years.

But Congress' love-affair with clean energy has only just begun . .

They've already extended the production tax credit for wind through 2012, and have loosened the restrictions on it so the cash can be claimed up front.

They are also making it easier to transport wind energy by investing billions in transmission lines and smart grid improvements.

And bills could be passed by the end of the year that would require a certain percentage of our electricity to come from renewable resources, like wind energy.

These stocks are going to explode when that happens, so you need to lock in a low price today, while they are still undervalued in the face of recession.

In fact, all three of the stocks are already on the rise in anticipation of the wind industry's future success.

So just imagine what's going to happen when the broader market rebounds and as billions of dollars continue to pour into the sector.

I'll tell you what's going to happen.

Alternative energy stocks are heading straight up - and wind energy stocks are going to lead the charge.

An easy double is certainly in the cards.

And the 3 wind stocks you'll read about in my report actually give you an opportunity to profit from every aspect of the industry.

From turbines to transmission, you can profit from every angle when the rest of Wall Street comes running.

And I'll show you how in my free report, Wind Energy: 3 Stocks To Own NOW.

In this report, you'll not only get the names of these 3 wind energy stocks, but you'll also see exactly why these are the most lucrative wind energy plays in the market. You'll even get very specific entry points so you can...

More Green than Dirty Power installed 2007

This change cannot go unnoted. A big part of this is a direct result of the reality that the permitting process for coal fired facilities is both expensive and laborious. In the meantime a single windmill, with no waste management problems is easily permitted as shown by the sheer volume going up globally.

I am expecting the same rapid build out of geothermal power in Nevada. A major facility is going on line this September, and it was green fields project as little as a couple of years ago.

It a continental high power line is run from California through Nevada to the East Coast, Nevada could build out geothermal power plants just as fast as we could find markets for the power. This would just as clearly employ thousands of people throughout the state.

The importance is that alternative power has allowed massive amounts of capital to be deployed quickly and that this will easily survive the present difficulties. The risk in building one of these is negligible and it easily supports a two decade payout.

Windmill and geothermal plants have a huge number of potential sites and the land aspect is trivial and will remain so. The regulatory cost is likewise small. Expect that the next twenty years that these systems will take their place with a maximum market share of energy generation.


More Clean than Dirty Power Installed in 2007

Written by Hank Green

Monday, 26 January 2009

http://www.ecogeek.org/content/view/2505/86/

For all we talk about solar and wind power, they still produce tiny amounts of the United States' (and the World's) electricity. But now we've finally got some numbers reflecting just how exciting renewables are. In 2007, the U.S. the majority of new power installed was wind power, and total production of coal-fired power actually shrunk!

A total of 8.6 gigawatts of new power were installed in 2007 with around 5 gigawatts of that coming from wind. Almost all of the rest of the power addition came from natural gas.

Two coal fired power plants went online in 2007 for a total addition of just over a gigawatt. However, reductions and retirements of coal fired power elsewhere actually resulted in a 200 MW decrease in coal-generated power during the year.

That's freaking awesome.

Sometimes it's hard to see long term when we're all focused so much on the day's big breakthrough. But it's important to note that 2007 was a breakthrough year even though no one noticed. We can't just shut down all the coal-fired power plants in America, but we can start installing clean power instead of dirty power.

The Department of Energy apparently takes a long time to get these reports together, they just released these 2007 numbers about a week ago. But, frankly, I'm already holding my breath for 2008's numbers. You can read the full report here.

http://www.eia.doe.gov/cneaf/electricity/epa/epa_sum.html

Nuclear Future

As my readers know, I do not lose much sleep over any likely shortage of grid power anytime soon. There is just too many ways to improve utilization and to produce this power load. Surprisingly, the least costly source of new power available to us will continue to be nuclear, provided we continue our perfection of process.

Fear of something has crippled the industry for thirty years. Yet the industry needs only to advance the engineering a little to make the technology bullet proof, permitting containable accidents only.

More importantly, the advent of breeder reactors will allow fuel to be reprocessed and essentially reused until the uranium itself is fully consumed. This will eliminate the spent fuel storage problem. (which is why the utilities keep the stuff) It is just that this whole cycle will take many decades to totally implement, but we will get there.

Again we have to struggle with the public relations problem presented by plutonium. And again the security protocols must be bullet proof. Engineering can do this.

We are now expecting a three fold increase in nuclear plants to take the place of non existent hydro plants. This inventory should be sufficient for the globe with additional grid power needs fulfilled by the range of alternates.

These alternates properly include volcanic geothermal. a little hydro,wind and tidal, and a lot of fossil fuel for decades to come.

I do not think that solar will ever be a good choice for grid power. It really wants to be operated off grid because of the space requirement. It really shines on the roof of a building suppling that building. On the other hand, it may become so much in surplus that we have to feed it into the grid.

My own sympathies are to take the excess solar energy and use it to harvest atmospheric water for the local trees. This will be a great choice in most places except the occasional rain forest.

My real point is that the advance of technology will put us in an ocean of electrical energy. Imagine the Sahara desert totally forested and watered through stand alone solar panel driven water collectors. The surpluses would be unbelievable. To say nothing of the likely surplus of water that will build up and develop drainages. Recall that the Sahara used to be covered with large lakes.

The difficulty is that electricity does not transport very well. It was the increase in transmission distances by several hundred miles that permitted the development of James Bay in Quebec. Any protocol that could eliminate the transmission by wire system we have with a truck friendly containment system would be a revolution in energy and would at least double our current available energy supply. It would also lead to a possible fix in transportation energy.

Right now, it is a possibility in theory only, with the implementing technology still too undeveloped. And if biodiesel from algae pans out, we will never really need to go there except as an intellectual exercise.

The progress of static grid power

I read recently that we will need to add another 900 nuclear reactors over the next fifty years to meet global demand. The current count is 435. That is a huge number. There will also be a lot of coal burners brought on line besides. The key point of all this, is that all our static grid power must be produced in this manner.

Here, we actually do not have a meaningful fuel supply problem for a century or two at least, although it is going to get more difficult. That is why uranium is at $75 a pound from $10.

As I have posted, the residential reliance on grid power is open to displacement by both geothermal systems or super efficient solar systems. I notice that a company has started producing solar shingles using silica wafers. What took so long?

This is all good, except that that is only a portion of grid power demand. The major portion is industrial and commercial. This sector has already done handstands over the past thirty years to minimize its reliance on grid power while the residential market is even now just beginning.

There is really no better way for them to generate power that they have not already put to work.

Of course, since stable grid power by way of nuclear and coal is available on demand, it will continue to be the supply of choice.

The two available major alternatives are tidal generation, very much in its infancy and deep geothermal, rapidly coming up to speed. There are a number of bit players such as wind power, while becoming economic have other drawbacks slowing their implementation on a similar scale.

I personally love deep geothermal which is quietly going from strength to strength as we discover the tricks of dealing with deep hot caustic environments. Our real strength, however, is the simple fact that one hundred years of drilling technology can take us into the type of geology we need. Our oil industry service industry is almost ready for this challenge.

Even sedimentary rocks are getting hot at fifteen thousand feet. We can reach twice that although from a oil industry perspective there is little point because costs are climbing on a power curve and it is eventually too hot for hydrocarbons. In other words, drilling below the hydrocarbon zone should put you into the geothermal zone. This is a bit of a simplification and a gross understatement of the difficulties that will prevent us from rushing out and actually doing it that way any time soon.

Iceland is at least teaching us how to do it. And we are currently focusing on the quiescent volcanoes. This is actually an unlimited source of power.

In the more difficult cooler hot zones, we still retain the option of using the good old Rankin cycle engine (reverse refrigeration) to generate brake horsepower.

Right now we are perfecting our knowledge.

Transportation Energy.

One thing that I have not addressed is the looming reconfiguration of the global transportation energy regime. This is something that we are all now feeling at the pumps.

First, however, the global demand for non-transportation energy is also huge. Suppling it is not technically difficult. Our failsafe and most reliable source will be simply tapping the heat of the earth and pumping that energy to the surface and putting it through a converter. It has not been cheap enough as yet, or more precisely, there have been plenty of cheaper sources to use such as dams, coal fired power plants and the like. Accessing that energy is simply a matter of drilling deep enough almost anywhere which the oil industry has plenty of experience doing.

In other words., as long as we are not demanding portability, we have absolutely nothing to worry about.

That is not true for the petroleum regime.We have burned one trillion barrels of oil and we may have three to four times that ultimately recoverable at great expense. In other words. unlike geothermal energy, the resource is truly finite and finite inside a human lifespan, now that all the human race is modernizing as fast as possible.

One third the global population is comfortably middle class, another third will be there in the next twenty years and the rest can be there in the next twenty depending on their political masters. And they all need some access to personal transportation at some level.

A huge amount of effort has gone into developing other energy storage technology with marginal success to date. We cannot today depend on a breakthrough to help us.

The best available energy storage device is still the hydrocarbon molecule. It is compact, fairly safe and very portable. That is why we use it. The next best alternative is the ethanol molecule which is alcohol from fermented sugar. And the cheapest source of that sugar is corn.

The point that I am making is that a global corn culture combined with carbon sequestration of the waste is capable of supplying the maximum bio available fuel. I do not know if that could be enough to exactly satisfy our actual needs.

On the other hand, it is trivial to re engineer our life ways to minimize the demand on transportation fuels. Simply ensure that personal use of a car is not the first or only option. Over time, price alone will largely do that with the application of a little common sense by the planners.

It would not be surprising to discover that we can easily live within our ethanol fuel budget even with a global population over ten billion.