Alternative Energy, what is the logical next step for America Part III.

First of all, lets get one thing straight. If alternative energy sources are economical, they won't need subsidies and laws encouraging, or requiring, their adoption to exist. The fact is that they aren't economical. Burning coal, oil and gas to generate power or to run you automobile remains the most cost effective means of powering our society's energy needs. This is true despite $100/barrel oil and $4 a gallon gasoline. It'll remain largely true until oil gets to about $300~500 a barrel and gas prices top about $12 a gallon.

Let's take the state of California for an example. The state passed laws requiring that utilities obtain at least about 1/3 of their power from wind, solar or other renewable sources. The result is that Californians now pay about 14.5 cents per kWh. Compared to states like Indiana or Texas where it is about 8 cents and 7.5 cents respectively. This is expected to go up even more in the next few years as California's Cap and Trade racket kicks in. California responded by implementing a tiered system which -- very much like progressive taxation -- gives lower rates to users who do not use a lot of power while punishing heavy users. While this placates some home users who are willing to conserve, it essentially drives industry from the state faster than the bubonic plague.

Make no mistakes about it, "green technology" does not bring jobs, they chase them from our shores. America's economic success in the past century wasn't built on our environmental zeal, it was -- in part -- built on the fact that we have always had cheap and plentiful energy. Unfortunately, this is something we are trying to change in the earnest. That we refuse to explore and extract cheap and available fossil fuel domestically is scandalous and flat out stupid to say the least.

At some point, fossil fuel will become sufficiently scarce and expensive enough that alternatives start to make sense. That is inevitable, but that is not today or couple of decades from now. From a purely economic standpoint we should let the market decide when to make that transition – very much like we let economics transition us from coal and whale blubber to oil and gas. We should not try to artificially hurry that process when the economics – the supply and demand – simply do not compute. This leaves only one motivation to promote, subsidize and require alternatives today – the misguided believe that somehow androgynous CO2 output is something we should worry about. I personally do not believe in the Global Warming hypothesis -- the planet is not currently warming and all the warming (and cooling) in the last century is not the slightest bit abnormal in the history of the planet's climate. I also happen to believe that there simply isn’t enough fossil fuel reserve for us permanently or tangibly alter the planet’s climate even if we wanted to. But, this post is not about the climate change hoax; it is about alternative energy so I am not going to spend any more time debating this issue. Instead, I will simply talk about what the future will bring in terms of how we power our civilization. This future, IMHO, is inevitable even if I disagree with the policies, reasons and viability of trying to accelerate its arrival.

To put it simply, the future is in nuclear generation, electrical grid distribution and battery storage.

Why Nuclear generation? Because it is the only alternative source of energy with sufficient generation density to power out civilization’s power demands. Wind, Solar and the rest while attractive in their various niches wouldn’t generate enough power to provide for more than 20~25% of today’s power demands even when fully exploited. They have no chance of replacing fossil fuel as the dominant energy source. The geo-political supply situation is also quite favorable. The new “Middle East” in the era of Nuclear Powser will be Australia and that is a firm and stable US ally.

Why electrical grid distribution? Because it is a efficient, proven and practical way of moving power. It certainly beats hydrogen – a near absolute zero cryogenic liquid or the lowest density gas in the universe. Why do you want to produce hydrogen then move it in 5000 psi gas tanks or cryogenic containers then use a fuel cell to convert it to electric power to drive a motor? It also beats micro reactors in your garage simply because of safety and economies of scale in power production.

Why Battery Storage? Because, apart from costs, batteries are fully capable of powering a car with the kind of range and performance we demand. The current price of about $400 per kWh for Li-Ion batteries – about $20,000 for enough electric juice to move a midsize car 125 miles can be expected to half in the next decade and ultimately stabilize at roughly the price of lead acid power cells – roughly $100 per KWh. That means that $10,000 in storage cells can get you 250 miles. This is something we can live with even if it is slightly less convenient than gasoline or diesel. Batteries’ biggest downfall – its need to take hours to recharge compared to gas tank’s convenient 2 minute fill up – is also not unconquerable. Instead of plugging-in your car and waiting for the batteries to charge up, if we standardize the dimensions and specifications of battery packs we can have an infrastructure where by you simply swap packs at a gas station. We can have standardized packs very much like we have D sized batteries in flash lights. You drive up, a robotic sled goes under the car, pluck one or more packs off and replace them with fresh ones. You pay for the cost of electric charge and the depreciation of the packs (about 1/1000^th the cost of the batteries when new), they even credit you for remaining charge in the packs you left behind and you are on your way in a minute or two. You never buy new batteries the gas station does when it detects a pack that has run out of its useful life.

That is the future I see. I just don’t think we should be in a hurry to bring it about. What we need today is not dubiously green and exorbitantly priced energy. What we need is cheap and plentiful energy. So... yes... I'll say “Drill baby drill”!

Not just "Drill baby Drill!" but "refine baby refine" too. Refining capacity has not appreciably risen since the end of the 70s. There have been upgrades in what existing refineries do since then, but not in actual capacity. The real problem with renewable energy is energy density. There are only two sources of power that have great energy density without the need for massive subsidies: fossil fuels and nuclear. What we could use is a far simpler tax code that terminates all energy subsidies. Also, ending direct subsidies and loan guarantees would help too. For once, let other countries subsidize renewables because they can afford it while we wait for them to make it viable.

Not just "Drill baby Drill!" but "refine baby refine" too. Refining capacity has not appreciably risen since the end of the 70s. There have been upgrades in what existing refineries do since then, but not in actual capacity. The real problem with renewable energy is energy density. There are only two sources of power that have great energy density without the need for massive subsidies: fossil fuels and nuclear. What we could use is a far simpler tax code that terminates all energy subsidies. Also, ending direct subsidies and loan guarantees would help too. For once, let other countries subsidize renewables because they can afford it while we wait for them to make it viable.

Can we get a PUMP BABY PUMP?????

After all, Natural Gas is way cheaper, cleaner and except for making sure the supply has a good filtration so it is dry and any other natural contaminants from under ground are removed it would be a money maker with far easier delivery than petrol.

Just think of all the semi's you can take off the road when you are not having to deliver petrol as the gas lines just go right to the fast fill stations and then you have home users who do time fill.

"Let's take the state of California for an example. The state passed laws requiring that utilities obtain at least about 1/3 of their power from wind, solar or other renewable sources. The result is that Californians now pay about 14.5 cents per kWh. Compared to states like Indiana or Texas where it is about 8 cents and 7.5 cents respectively."

- Texas has a competitive power market with over 400 companies competing on price. California no longer has a competitive market, so you're not comparing apples to apples here.

"Wind, Solar and the rest while attractive in their various niches wouldn’t generate enough power to provide for more than 20~25% of today’s power demands even when fully exploited."

- Incorrect. The American Mid-West is the Saudi Arabia of wind energy. Additionally, there are newer wind turbine technologies that allow turbines to operate at lower wind speeds and double or triple output at the wind speeds current turbines typically run. New Jersey has already mitigated the need for new power plants by installing rooftop solar across the state. Germany is able to generate 50% of their energy needs via solar power during the summer. We have a much more southern and much sunnier climate than Germany.

"Why Nuclear generation? Because it is the only alternative source of energy with sufficient generation density to power out civilization’s power demands."

- I like nuclear as well, and it would be a great complimentary power source to wind and solar mentioned above.

"So... yes... I'll say “Drill baby drill”!"

- the longer that oil in our territory stays in the ground, the more valuable it becomes as other sources dry up.

Clearly, the guiding principle here should be the diversification of our energy supply. We should never again rely on a single source so heavily that it imperils our energy independence, our national security, and our economy.

That said, the most viable motor fuel to take us past oil is clearly CNG. It is abundant, cheap, domestic, and vastly cleaner than gasoline and diesel. No energy source is perfect, nor without compromise, but CNG is best positioned to take us to a much better place with minimal need for technological advances and monetary investment.

It would give us a century-long window in which to develop all of the other alternatives while vastly improving things right now.

On windy days in Germany, Poland and the Ukraine have to disconnect themselves from Germany's grid because their own grids can't handle the flood of power...

The biggest obstacle in the way of energy independence today, is the EPA itself.

That needs to be fixed.

T Boone Pickens posted this in his LinkedIn Blog:

We all know how high gasoline prices have continued to rise, year over year. Higher gasoline prices are largely based on higher crude oil prices – likely to bounce between $90 and $100 per barrel for the foreseeable future – plus refining costs, transportation, labor, taxes and (dare we mention it?) profit.

But there is a hidden cost in what we pay for the oil we import from the Middle East. That is the cost of protecting the well sites, pipelines, and shipping lanes. We currently have two carrier battle groups stationed in and around the Persian Gulf to protect the oil coming through the Strait of Hormuz. According to a report from the Government Accountability Office, the annualized cost of keeping a carrier battle group at sea is $2.93 billion. Two battle groups cost about $5.86 billion per year. And there are discussions about moving a third group on station to deal with potential issues between Iran and Israel.

About 17 million barrels of oil move through the Strait of Hormuz each day. Two million barrels of that comes to the United States. The other 15 million barrels goes to China, India, Europe and elsewhere across the oceans.

We get just over 10 percent of the oil, yet we pay 100 percent of the costs of protecting it.

Oil is a very small player in the production of electricity – about three percent. Most of the oil we import is used as gasoline to run our national fleet of 250 million passenger cars and light trucks. More of it is used as diesel to fuel our eight million heavy-duty trucks.

It is too complicated logistically to try and create a massive base of natural gas-powered cars. However, heavy trucks – those 18-wheelers – tend to run the same routes week in and week out, so it is a relatively simple matter put natural gas refueling stations at enough truck stops along Interstate highways to handle their fueling needs.

If we converted all of our heavy trucks to natural gas we would reduce our need for OPEC oil by 75 percent. Without the need for Middle East oil, we would reduce the cost of protecting it by 100 percent. If the Chinese or French still need it, they can pay to protect it.

We need to get off OPEC oil and onto domestic resources. It can be done in about five years and would have a positive impact on our economy, our environment, and our national security.