Posted on January 31st, 2016 No comments
I have had the great fortune to meet another student of the Non-Science of Economics who believes most strongly that Energy is only a sub-sector of the Holy Economy, instead of one of its foundations, and doesn’t understand why issues with the flow of commodities (which include energy resources) into the system is critical to the survival of the global economy, and that the growth in the Services Industries and Knowledge Economy cannot compensate for the depletion of freshwater, fossil fuels and other raw resources.
This person believes in Technology, as if it can fly by itself, without seeming to understand how Technological Innovation is really advanced by state investment – a democracy of focus. This otherwise intelligent learner has also failed to grasp, apparently, that the only way that the Economy can grow in future is through investment in things with real value, such as Energy, especially where this investment is essential owing to decades of under-investment precipitated by privatisation – such as in Energy – investment in both networks of grids or pipes, and raw resources. And this from somebody who understands that developing countries are being held back by land grab and natural resource privatisation – for example ground water; and that there is no more money to be made from property investment, as the market has boomed and blown.
How to burst these over-expanded false value bubbles in the mind ? When I try to talk about the depletion of natural resources, and planetary boundaries, people often break eye contact and stare vacantly out of the nearest window, or accept the facts, but don’t see the significance of them. Now this may be because I’m not the best of communicators, or it may be due to the heavy weight of propaganda leading to belief in the Magical Unrealism always taught in Economics and at Business Schools.
Whatever. This is where I’m stuck in trying to design a way to talk about the necessity of energy transition – the move from digging up minerals to catching the wind, sunlight and recycling gases. If I say, “Look, ladies and laddies, fossil fuels are depleting”, the audience will respond with “where there’s a drill, there’s a way”. As if somehow the free market (not that a free market actually exists), will somehow step up and provide new production and new resources, conjuring them from somewhere.
What are arguments that connect the dots for people ? How to demonstrate the potential for a real peak in oil, gas, coal and uranium production ? I think I need to start with a basic flow analysis. On the one side of the commodity delivery pipeline, major discoveries have decreased, and the costs of discovery have increased. The hidden underbelly of this is that tapping into reservoirs and seams has a timeline to depletion – the point at which the richness of the seam is degraded significantly, and the initial pressure in the well or reservoir is reduced to unexploitable levels – regardless of the technology deployed. On the other end of the commodities pipeline is the measure of consumption – and most authorities agree that the demand for energy will remain strong. All these factors add up to a time-limited game.
Oh, you can choose to believe that everything will continue as it always seems to have. But the Golden Age of Plenty is drawing to a close, my friend.Academic Freedom, Advancing Africa, Assets not Liabilities, Babykillers, Bad Science, Big Society, Carbon Commodities, Change Management, Dead End, Delay and Deny, Demoticratica, Dreamworld Economics, Economic Implosion, Energy Autonomy, Energy Calculation, Energy Change, Energy Crunch, Energy Denial, Energy Insecurity, Energy Revival, Energy Socialism, Engineering Marvel, Foreign Interference, Foreign Investment, Fossilised Fuels, Freak Science, Freemarketeering, Freshwater Stress, Grid Netmare, Growth Paradigm, Hydrocarbon Hegemony, Insulation, Mad Mad World, Mass Propaganda, Modern Myths, Money Sings, No Pressure, Optimistic Generation, Paradigm Shapeshifter, Peak Coal, Peak Energy, Peak Natural Gas, Peak Nuclear, Peak Oil, Peak Uranium, Realistic Models, Renewable Resource, Resource Curse, Resource Wards, Science Rules, Scientific Fallacy, Social Democracy, Solar Sunrise, Solution City, Stirring Stuff, Technofix, Technological Fallacy, The Data, The Myth of Innovation, The Right Chemistry, The Science of Communitagion, The War on Error, Unutterably Useless, Utter Futility, Vain Hope, Water Wars, Western Hedge, Wind of Fortune, Zero Net
Posted on November 26th, 2015 No comments
For once, I agree with George Osborne.
Well, for twice, actually.
In his Autumn Statement of the state budget, he reversed a painful austerity measure aimed at the lowest paid workers, by performing a U-turn on removing tax credits.
And, perhaps more importantly, not in the Autumn Statement, he cancelled the Carbon Capture and Storage demonstration subsidy. I completely applaud this decision. Apart from the speed at which it was enacted.
George Osborne did a number of other things in his Autumn Statement that I definitely do not agree with – such as converting student nurse grants into loans – which shows the most appalling lack of judgement, as it will deter just the trainees the National Health Service really needs.
Without more nursing staff on the front line of hospital health care, nothing will improve, no matter how many middle managers you employ. But anyway, back to energy…
For some reason, the news that the Carbon Capture and Storage (CCS) “competition” money, formerly ringfenced, had been axed, was not included in the Autumn Statement. It was “snuck out” on the London Stock Exchange website, and I cannot find a mention of it yet on the Department of Energy and Climate Change website. Curious.
What’s not curious in the slightest is the racket of the complaints against this decision. Which is to be expected, as a great many engineers and researchers have been relying on this very cash injection for their careers in carbon capture.
Many politicos have been “captured” by CCS along the way, and their resentment is shrill today. Caroline Flint, in particular, should know better than to support CCS – she should look at the numbers, the history, and follow the money…
There is an almost desperate misunderstanding about exactly how poor “value for money” the current CCS technologies are. This is because they are being applied to power generation plant, where the thermodynamics are against the efficient capture of carbon dioxide, because capture would need to be done behind combustion in most configurations.
What is really needed is to go back to basics – chemistry and physics basics – and go back in time to the research done by earlier industrial gas engineers, terminated in the 1980s because of the discoveries of abundant (but not infinite) Natural Gas.
Carbon capture in industrial gas processing has options that are relatively efficient compared to capturing carbon dioxide at low temperatures and low pressures in a venting stack on the back of a power plant.
As one colleague of mine said (to paraphrase slightly), “The government have been pushing carbon capture in the power sector – but this is exactly the wrong place for it to be done. We in the gas industry, we want carbon capture back, please.”
However, carbon capture in gas-related industries, in order to make it truly efficient, both energy-efficient and resource-efficient, and also carbon-efficient too, it needs to be CCU, not CCS, in other words Carbon Capture and Utilisation.
Carbon recycling in integrated gas systems will allow us to manufacture very low carbon and sustainable Renewable Gas, even as fossil fuels deplete or become too chemically complex to permit us to burn them.
Posted on November 10th, 2015 No comments
Last week’s Energy Live News conference on 5th November 2015 was an opportunity to hear Andrea Leadsom, Minister of State for Energy at the UK Government’s Department of Energy and Climate Change (DECC) speak without notes, and she did a fine job of it. She must really believe what she said, or have been well-conditioned to rehearse what I considered to be a mix of practical reality and nonsense. The nonsense ? Well, for one thing, it appears that the UK Government still adheres to the crazy notion that nuclear power can rescue the country from blackouts.
After commenting on the previous day’s events in connection with the power grid, Andrea Leadom went on to discuss electricity transmission and demand side reduction measures. “Our policy mix is diversity.”, she said, “There is also the issue of transmission networks.” She didn’t say the word “electricity” before the word “transmission”, but that’s what she meant. She is clearly infected with the “energy is electricity” virus – a disease that makes most civil servants and government officials believe that the only energy worth talking about is electricity. Whereas, primary electricity providing energy for the UK amounts to less than 9% of the total. Compare this to the contribution of petroleum oil to the UK economy – at over 36% of primary input energy, and Natural Gas at 33%, and coal at just over 15.5%.
Andrea Leadsom admitted that – as regards electricity transmission networks went – “it was built for two generations ago, when you had a few [centralised] generators. Today, this has massively changed and [the grid] needs to continue to change, to enable local[ised] electricity generation. The other bit that’s vital is to look at our demand side. We’re not going to solve the energy problem by generating more power. Measures that the Government put in place very early to meet needs – demand reduction as well as energy efficiency…” I don’t know which government she was talking about, because the current Conservative Government have promised to support large industrial users of electricity with generous special assistance and the current organogram of DECC doesn’t even mention efficiency. The previous Coalition Government axed very successful home insulation schemes, and adopted the badly-formulated Green Deal, probably the worst policy for energy efficiency. Perhaps the Minister is referring to the efficiency of energy in use, rather than the reduction of energy use by efficiency ? There, I’d have to say that the government has done little to impact energy efficiency, as most of the initiatives that have been taken have been industry-led – commercial companies taking on projects like converting all their lighting. It is true however, that some public sector organisations have pursued energy efficiency, as, for example, the Government departments themselves have to show they are acting on energy use.
Andrea Leadsom continued, “The potential for domestic battery systems, and smart [meters], where it will be changes for you [the consumer]. We want technologies to be able to stand on their own two feet as soon as possible. Development policy needs to make sure that renewable energies succeed but at the lowest cost to consumers.” And here’s where the quadrilemma comes into focus : you need to spend capital, in other words, invest, in order to deploy new technologies. You can’t expect anything new to take off without support – whether that support comes from government subsidies or private or sovereign wealth funds or large independent investor funds. People talk about choice : if people want green energy, then green energy will be supplied. Most end users of energy say they want renewable energy, so you’d be forgiven for thinking that the choice has been makde, and that renewable energy technologies will roll out without any market intervention. The problem is that if you keep thinking that the “consumer” in the new energies market is the end user of power, heat and fuel, you’re missing the investment point. The “consumers” of new energies in the economy are the energy distributors. And they won’t buy new technologies with their own capital if they can avoid it. The reason is they need to keep their bargain with their shareholders and provide the highest returns in the form of dividends as possible. Capital investment is set at a low priority. And with any capital invested, there is the downside that, for a while at least, that capital is locked up in development of new energy plant, so almost inevitably, energy prices for consumers will rise to compensate the shareholders. You don’t get something for nothing. The enabler of last resort in energy has been assumed to be the government – who have offered a range of subsidies for renewable energy technologies. This has essentially been a bailout of the energy companies, but it seems clear that, apart from the new nuclear power programme, subsidies are now to be terminated. What, one might be tempted to ask, will precipitate new renewable energy investment, now that the subsidy programme for green power is being abandoned (and the potential for a green gas programme has been contracted) ?
Andrea Leadsom answered critics next, “There hasn’t been a U-turn on onshore wind [power development]. There was a level of concern regarding onshore development – we want[ed] to let local communities decide.”, although they didn’t like it when people in communities protested shale gas development, “We can’t simply say that onshore wind is the lowest cost – or put the cost onto consumers.” Leadsom clearly hasn’t understood the lack of capital investment from the privatised energy industry. Any correction to unpick that lack of investment will inevitably raise energy prices for British consumers – and Brits already pay the highest amount for electricity in Europe. She continued, “The trilemma poses huge issues, but offers huge opportunities.”
Then it was time for questions from the floor : “[Question] : Do you get the impression that some feel let down – [by your government] cutting green energy support ? [Answer] : We’ve been completely clear about de-carbonisation at the lowest cost. In May 2015 there was the decision about the Levy Control Framework,” [the instrument that caps the total amount added to consumer bills arising from the impact of government policy in any one year – expected to be held to ransom by new nuclear power subsidies over the next decade or so], “Those policy costs must paid by consumers, and they were expected to significantly exceed the limits by 2020,” [due to new nuclear power development, rather than new renewable energy projects], “We had to act. We remain committed to de-carbonisation – but it must be at the lowest cost.”
“[Question] : Your government was part of putting in place sweeteners to the energy industry for the purpose of incentivising investment for the last four years. The evidence is this [has worked] to stimulate investment, and they are now being withdrawn from renewable energy. Do you understand the frustration ? [Answer] : You can’t simply take the view that because industry says ‘we’re almost there’ that you need to unfairly burden the consumer. Deployment has exceeded projections…” and this is where Andrea Leadsom demonstrated that she had failed to understand. The projections of renewable energy development required to meet decarbonisation targets were partly based on projections of new nuclear power development. Assumption were made about the growth of new nuclear, within the context of the Levy Control Framework, and so the projections for renewable energies were made to be dependent on that, and consequently, the ambitions for renewable energy deployment were arbitrarily low. There was no “Path B” calculated, which would have taken into account the failure, or problems with the new nuclear power programme and given another level of projection for renewable energy.
Andrea Leadsom continued answering, “We’ve had lots of constructive discussion with industry,” but one wonders which parts of the renewable energy industry she means, and whether that only includes the very large players – as she certainly hasn’t consulted voters or consumers, “looking at other ways rather than throwing money at it [renewable energy]. [Question] : At the start your government colleagues said ‘there will be no subsidies for nuclear’. Now, clearly, there are [loan guarantee payments, Contracts for Difference and so on]. [Answer] : No, there’s been no U-turn on that. Hinkley Point C is a private investment, being funded by partners,” [ignoring the financial ill-health of EdF and Areva], “There will be no cost to the British billpayer until it generates”, [which is not quite accurate, because if the project fails, the government will reimburse the financiers], “You don’t want project risk.” And it is here that I nearly left the room. The design of Hinkley Point C is inherently risky, from safety and construction points of view. And the permission for the project to go ahead should never have been given, as the design is unproven. For the project to never even get built, or if it does get built, never be able to generator power, is the ultimate in project risk ! We need to increase British energy security, not risk it with big new nuclear power plant projects !
Questionners in the room continued, “[Question] : Does Her Majesty’s Treasury now control DECC ? [Answer] : No. It’s fantastic to have a Conservative-led DECC…[for policy direction] I would say demand-led subsidies without cost to the consumer.” Well ? Wouldn’t a “demand-led subsidy without cost to the consumer” amount to a return to the original Renewables Obligation ? Where electricity suppliers had to guarantee that a certain proportion of their supply was green power, and provide the certificates to prove it ? And there was no subsidy support to get this done ?
“[Questionner hammering the point] : Are you [in DECC] saying this is what we want, and George [Osborne, Chancellor of the Exchequer in the Treasury] says no ? [Answer] : All departments have to take cuts in public spending in order to get the economy back on track. We’re working constructively with the Treasury. [As far as past policies go it was a case of] if you throw money at it it will solve it – [but this is] not necessarily [so].” One of the reasons that subsidies for energy companies is a failed policy is because the situation has become one where the energy companies compete not to spend capital by blackmailing the government for subsidies. Nothing changes without subsidy, because the government has not stood firm and ordered mandated regulatory compliance with decarbonisation. In addition, it would need an agreement throughout the European Union to get change on this front – because energy companies would refuse to invest in the UK if the UK stop handing out subsidy candy for renewables.
“[Question from LSE] : Our students are considering careers in renewable energy. [Your government is] handing out £26 billion of fossil fuel subsidies. How will government develop at transition to renewables ? [Answer] : I disagree with you that the renewable energy section of the energy industry is cutting back. There is a massive pipeline of projects including offshore projects [in wind power”, [but smaller scale community and onshore projects have been rejected, which amounts to big energy companies winning all the rights to develop renewables], “What I would really like to see is [the development of] people moving between sectors. [The oil and gas industry has majored in] Aberdeen, [where there is also a] burgeoning offshore wind sector [so people could retrain].”
Then, Andrea Leadsom took a question about the costs of nuclear power, “[Question] : Hinkley Point C – when it finally operates – will be getting £92.50 per MWh [indexed with inflation]. Is this too much ? [Answer] : No. [Nuclear power is] absolutely reliable”, [not it isn’t – I’d recommend a look at performance of the current fleet of nuclear power plants in the UK], “It’s vital to the economy to have reliable sources of baseload power. It’s cheaper than offshore wind. Nuclear is absolutely key to it. France and our old fleets are now producing very, very cheap electricity…” Andrea Leadsom was clearly in a state of spiritual trance, because these are highly contestable factoids. The French government has just had to bail out their nuclear electricity industry, and their policy has turned away from nuclear for future power needs. Andrea Leadsom obviously doesn’t include the costs of decommissioning nuclear power plants and the disposal of the last 60 years of radioactive nuclear waste and radioactive waste nuclear fuel when she talks about the costs of nuclear power. This is a public subsidy that will need to be continued, because nobody else will handle this as there is no profit to be made from it. Well, some companies have tried to make a profit from nuclear waste and waste nuclear fuel in the UK, but it has always ended badly. We cannot just leave radioactive waste on the beach to burn away. We need to actively manage it. And that costs money that isn’t even an investment.Academic Freedom, Energy Insecurity, Energy Revival, Green Investment, Green Power, Grid Netmare, Growth Paradigm, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Policy Warfare, Political Nightmare, Regulatory Ultimatum, Renewable Resource, Technological Fallacy, The Power of Intention, The War on Error, Toxic Hazard, Wind of Fortune, Zero Net
Posted on November 10th, 2015 No comments
The energy “trilemma” is the dilemma of three dimensions : how to decarbonise the energy system, whilst continuing to provide affordable energy to consumers, at a high security of supply. The unspoken fourth dimension is that of investment : just who is going to invest in British energy, particularly if green energy booster subsidies and regulatory measures are binned ? The UK Government have in the past few years believed that they need to support new investment in new technologies, but it looks likely that this drive is about to lose all its incentives.
Today, Amber Rudd, Secretary of State for Energy and Climate Change, faces an inquiry into Department of Energy and Climate Change (DECC) accounts and budgetary spending, and some say this could be a prelude for the closure or severe contraction of the whole department. If all Climate Change measures were put into abeyance, or passed over to the new Infrastructure Commission, the only remaining function of DECC could be nuclear power plant and nuclear waste decommissioning. It might have to change its name, even.
At last week’s Energy Live News conference, Andrea Leadsom, Minister of State for Energy at the UK Government’s Department of Energy and Climate Change (DECC), headed up the morning, with a bit of a lead in from ELN Editor Sumit Bose. He said that continuing challenges arose from the optimisation of balancing reserves and demand side management in electricity generation. He said that policy had perhaps swung away from the projection of 100% electrification of British energy, as this would require at least 15% more committed capital expenditure – although there would be savings to be had in operational expenditure. He also said that there is an ongoing budgetary conflict going on in government departments about the public money available to spend on investment in infrastructure (including that for energy). Obviously, the announcement of the Infrastructure Commission is going to help in a number of areas – including reaching for full electrification of the railways – a vital project. Then he introduced the Minister.
Andrea Leadsom said, “This government is determined to resolve the energy trilemma, decarbonising at the lowest cost to the consumer whilst keeping the lights on. In the past we did tend to have crazes on different technologies….”. At this point I wondered if she included nuclear power in that set of crazes, but her later remarks confirmed she is still entrenched in that fad.
Leadsom said, “There’s been a big move to renewable energy technologies, and quite rightly too. We need a wide diversity of electricity sources. We need to try and improve the new nuclear programme…”, at which point I thought to myself, “Good luck with that !”. She said, “Renewable energy has trebled. We need [to fund] that transition from unabated coal, [turn on to] gas and renewables. [But] as we saw yesterday – there is an intermittency of renewables.”
Andrea Leadsom was referring to the previous day, when National Grid has issued their first call for surplus top-up power generation since 2012. Owing to a confluence of weather systems over the UK, the atmosphere was becalmed, and wind power output was close to zero. However, this had already been predicted to happen. The lack of wind power was not the problem.
The problem lay in two other areas. Of the completely inflexible nuclear power plants, three generators were out of action for scheduled maintenance (Hunterston B, Reactor 3; Heysham 1, Reactor 1 and Hartlepool Reactor 1). And so when two coal-fired power plants which normally would have been operational were out of action, and one failed apparently between 12:45pm and 12:51pm (Eggborough, Fiddlers and Rugeley according to various sources) dropping approximately 640 megawatts (MW) out of the system (according to BM Reports data), National Grid had to resort to elements of their balancing “toolkit” that they would not normally use.
The operators generating for the National Grid were able to ramp up Combined Cycle Gas Turbine (CCGT), and various large electricity users with special arrangements with National Grid were stopped using power. By around 18:00 6pm the emergency was over, with peak demand for the evening levelling off at around 48 gigawatts (GW).
Although National Grid handled the problem well, there was a serious risk of blackouts, but again, not because of wind power.
If during the period of supply stress, one of the nuclear power plants had suddered an outage, that would have created the “nightmare scenario”, according to Peter Atherton, from Jefferies, quoted in The Guardian newspaper. The reason for this is that the nuclear power plants are large generators, or “baseload” generators. They have suffered from problems of unreliability over the recent years, and whenever they shutdown, either in a planned or an unplanned manner, they cause the power grid a massive headache. The amount of power lost is large, and there’s sometimes no guarantee of when the nuclear generation can be restored. In addition, it takes several hours to ramp up replacement gas-fired power plants to compensate for the power lost from nuclear.
Yes, Andrea Leadsom, more renewable energy is essential to meet decarbonisation goals. Yes, Andrea Leadsom, renewable energy technologies have an inherent intermittency or variability in their output. No, Andrea Leadsom, National Grid’s problems with power generation during the winter months is not caused by wind power on the system – wind power is providing some of the cheapest resources of electricity. No, Andrea Leadsom, insecurity in Britain’s power supply is being caused by ageing nuclear and coal power plants, and the only way to fix that is to create incentives to develop a plethora of differently-scaled generation facilities, including many more decentralised renewable energy utilities, flexible top-up backup gas-fired power plants, including Combined Heat and Power town-scale plants, and Renewable Gas production and storage facilities.Academic Freedom, Assets not Liabilities, Baseload is History, Be Prepared, British Biogas, Burning Money, Change Management, Climate Change, Energy Change, Energy Crunch, Energy Insecurity, Energy Revival, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Wind of Fortune
Posted on July 14th, 2015 No comments
Out of the blue, I got an invitation to a meeting in Whitehall.
I was to join industrial developers and academic researchers at the Department of Energy and Climate Change (DECC) in a meeting of the “Green Hydrogen Standard Working Group”.
The date was 12th June 2015. The weather was sunny and hot and merited a fine Italian lemonade, fizzing with carbon dioxide. The venue was an air-conditioned grey bunker, but it wasn’t an unfriendly dungeon, particularly as I already knew about half the people in the room.
The subject of the get-together was Green Hydrogen, and the work of the group is to formulate a policy for a Green Hydrogen standard, navigating a number of issues, including the intersection with other policy, and drawing in a very wide range of chemical engineers in the private sector.
My reputation for not putting up with any piffle clearly preceded me, as somebody at the meeting said he expected I would be quite critical. I said that I would not be saying anything, but that I would be listening carefully. Having said I wouldn’t speak, I must admit I laughed at all the right places in the discussion, and wrote copious notes, and participated frequently in the way of non-verbal communication, so as usual, I was very present. At the end I was asked for my opinion about the group’s work and I was politely congratulational on progress.
So, good. I behaved myself. And I got invited back for the next meeting. But what was it all about ?
Most of what it is necessary to communicate is that at the current time, most hydrogen production is either accidental output from the chemical industry, or made from fossil fuels – the main two being coal and Natural Gas.
Hydrogen is used extensively in the petroleum refinery industry, but there are bold plans to bring hydrogen to transport mobility through a variety of applications, for example, hydrogen for fuel cell vehicles.
Clearly, the Green Hydrogen standard has to be such that it lowers the bar on carbon dioxide (CO2) emissions – and it could turn out that the consensus converges on any technologies that have a net CO2 emissions profile lower than steam methane reforming (SMR), or the steam reforming of methane (SRM), of Natural Gas.
[ It’s at this very moment that I need to point out the “acronym conflict” in the use of “SMR” – which is confusingly being also used for “Small Modular Reactors” of the nuclear fission kind. In the context of what I am writing here, though, it is used in the context of turning methane into syngas – a product high in hydrogen content. ]
Some numbers about Carbon Capture and Storage (CCS) used in the manufacture of hydrogen were presented in the meeting, including the impact this would have on CO2 emissions, and these were very intriguing.
I had some good and useful conversations with people before and after the meeting, and left thinking that this process is going to be very useful to engage with – a kind of dragnet pulling key players into low carbon gas production.
Here follow my notes from the meeting. They are, of course, not to be taken verbatim. I have permission to recount aspects of the discussion, in gist, as it was an industrial liaison group, not an internal DECC meeting. However, I should not say who said what, or which companies or organisations they are working with or for.Academic Freedom, Alchemical, Assets not Liabilities, Baseload is History, Big Number, Big Picture, Bioeffigy, Biofools, Biomess, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Change Management, Corporate Pressure, Demoticratica, Direction of Travel, Efficiency is King, Electrificandum, Energy Autonomy, Energy Calculation, Energy Change, Energy Revival, Engineering Marvel, Fossilised Fuels, Gamechanger, Green Gas, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Major Shift, Marvellous Wonderful, Methane Management, National Energy, National Power, Natural Gas, Nuclear Nuisance, Nuclear Shambles, Oil Change, Optimistic Generation, Peak Emissions, Peak Natural Gas, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Revolving Door, Social Capital, Social Change, Social Democracy, Solution City, Tarred Sands, Technofix, The Data, The Myth of Innovation, The Power of Intention, The Price of Gas, The Right Chemistry, Transport of Delight, Tree Family, Ungreen Development, Unnatural Gas, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on June 3rd, 2015 No comments
Shell, BP and some of their confederates in the European oil and gas industry have inched, or perhaps “centimetred”, forward in their narrative on climate change. Previously, the major oil and gas companies were regularly outed as deniers of climate change science; either because of their own public statements, or because of secretive support of organisations active in denying climate change science. It does seem, finally, that Shell in particular has decided to drop this counter-productive “playing of both sides”. Not that there are any “sides” to climate change science. The science on climate change is unequivocal : changes are taking place across the world, and recent global warming is unprecedented, and has almost definitely been attributed to the burning of fossil fuels and land use change.
So Shell and BP have finally realised that they need to shed the mantle of subtle or not-so-subtle denial, although they cling to the shreds of dispute when they utter doubts about the actual numbers or impacts of global warming (for example : http://www.joabbess.com/2015/06/01/shells-public-relations-offensive/). However, we have to grant them a little leeway on that, because although petrogeologists need to understand the science of global warming in order to know where to prospect for oil and gas, their corporate superiors in the organisation may not be scientists at all, and have no understanding of the global carbon cycle and why it’s so disruptive to dig up all that oil and gas hydrocarbon and burn it into the sky. So we should cut the CEOs of Shell and BP a little slack on where they plump for in the spectrum of climate change narrative – from “utter outright doom” to “trifling perturbation”. The central point is that they have stopped denying climate change. In fact, they’re being open that climate change is happening. It’s a miracle ! They have seen the light !
But not that much light, though. Shell and BP’s former position of “scepticism” of the gravity and actuality of global warming and climate change was deployed to great effect in delaying any major change in their business strategies. Obviously, it would have been unseemly to attempt to transmogrify into renewable energy businesses, which is why anybody in the executive branches who showed signs of becoming pro-green has been shunted. There are a number of fairly decent scalps on the fortress pikes, much to their shame. Shell and BP have a continuing duty to their shareholders – to make a profit from selling dirt – and this has shelved any intention to transition to lower carbon energy producers. Granted, both Shell and BP have attempted to reform their internal businesses by applying an actual or virtual price on carbon dioxide emissions, and in some aspects have cleaned up and tidied up their mining and chemical processing. The worsening chemistry of the cheaper fossil fuel resources they have started to use has had implications on their own internal emissions control, but you have to give them credit for trying to do better than they used to do. However, despite their internal adjustments, their external-facing position of denial of the seriousness of climate change has supported them in delaying major change.
With these recent public admissions of accepting climate change as a fact (although CEOs without appropriate science degrees irritatingly disagree with some of the numbers on global warming), it seems possible that Shell and BP have moved from an outright “delay and deny” position, which is to be applauded.
However, they might have moved from “delay and deny” to “delay and distract”. Since the commencement of the global climate talks, from about the 1980s, Shell and BP have said the equivalent of “if the world is serious about acting on global warming (if global warming exists, and global warming is caused by fossil fuels), then the world should agree policy for a framework, and then we will work within that framework.” This is in effect nothing more than the United Nations Framework Convention on Climate Change (UNFCCC) has put forward, so nobody has noticed that Shell and BP are avoiding taking any action themselves here, by making action somebody else’s responsibility.
Shell and BP have known that it would take some considerable time to get unanimity between governments on the reality and severity of climate change. Shell and BP knew that it would take even longer to set up a market in carbon, or a system of carbon dioxide emissions taxation. Shell and BP knew right from the outset that if they kept pushing the ball back to the United Nations, nothing would transpire. The proof of the success of this strategy was the Copenhagen conference in 2009. The next proof of the durability of this delaying tactic will be the outcomes of the Paris 2015 conference. The most that can come out of Paris is another set of slightly improved targets from governments, but no mechanism for translating these into real change.
Shell and BP and the other oil and gas companies have pushed the argument towards a price on carbon, and a market in carbon, and expensive Carbon Capture and Storage technologies. Not that a price on carbon is likely to be anywhere near high enough to pay for Carbon Capture and Storage. But anyway, the point is that these are all distractions. What really needs to happen is that Shell and BP and the rest need to change their products from high carbon to low carbon. They’ve delayed long enough. Now is the time for the United Nations to demand that the fossil fuel companies change their products.
This demand is not just about protecting the survival of the human race, or indeed, the whole biome. Everybody is basically on the same page on this : the Earth should remain liveable-inable. This demand for change is about the survival of Shell and BP as energy companies. They have already started to talk about moving their businesses away from oil to gas. There are high profile companies developing gas-powered cars, trains, ships and possibly even planes. But this will only be a first step. Natural Gas needs to be a bridge to a fully zero carbon world. The oil and gas companies need to transition from oil to gas, and then they need to transition to low carbon gas.
Renewable Gas is not merely “vapourware” – the techniques and technologies for making low carbon gas are available, and have been for decades, or in some cases, centuries. Shell and BP know they can manufacture gas instead of digging it up. They know they can do the chemistry because they already have to do much of the same chemistry in processing fossil hydrocarbons now to meet environmental and performance criteria. BP has known since the 1970s or before that it can recycle carbon in energy systems. Shell is currently producing hydrogen from biomass, and they could do more. A price on carbon is not going to make this transition to low carbon gas. While Shell and BP are delaying the low carbon transition by placing focus on the price of carbon, they could lose a lot of shareholders who shy away from the “carbon bubble” risk of hydrocarbon investment. Shell and BP need to decide for themselves that they want to survive as energy companies, and go public with their plans to transition to low carbon gas, instead of continuing to distract attention away from themselves.Academic Freedom, Alchemical, Assets not Liabilities, Bad Science, Bait & Switch, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Carbon Taxatious, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Cost Effective, Deal Breakers, Delay and Deny, Delay and Distract, Divest and Survive, Divide & Rule, Emissions Impossible, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Engineering Marvel, Extreme Energy, Extreme Weather, Fair Balance, Fossilised Fuels, Freak Science, Freemarketeering, Gamechanger, Geogingerneering, Global Warming, Green Gas, Green Investment, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Marvellous Wonderful, Mass Propaganda, Modern Myths, Orwells, Paradigm Shapeshifter, Peak Emissions, Pet Peeves, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Social Capital, Solution City, Stirring Stuff, The Myth of Innovation, The Power of Intention, The Right Chemistry, The Science of Communitagion, Wasted Resource, Western Hedge, Zero Net
Posted on June 2nd, 2015 No comments
So, some people do not understand why I am opposed to the proposal for a price on carbon put forward by Royal Dutch Shell and their oil and gas company confederates.
Those who have been following developments in climate change policy and the energy sector know that the oil and gas companies have been proposing a price on carbon for decades; and yet little has been achieved in cutting carbon dioxide emissions, even though carbon markets and taxes have been instituted in several regions.
Supporters of pricing carbon dioxide emissions urge the “give it time” approach, believing that continuing down the road of tweaking the price of energy in the global economy will cause a significant change in the types of resources being extracted.
My view is that economic policy and the strengthening of carbon markets and cross-border carbon taxes cannot provide a framework for timely and major shifts in the carbon intensity of energy resources, and here’s a brief analysis of why.
1. A price on carbon shifts the locus of action on to the energy consumer and investor
A price on carbon could be expected to alter the profitability of certain fossil fuel mining, drilling and processing operations. For example, the carbon dioxide emissions of a “tank of gas” from a well-to-wheel or mine-to-wheel perspective, could be made to show up in the price on the fuel station forecourt pump. Leaving aside the question of how the carbon tax or unit price would be applied and redistributed for the moment, a price on carbon dioxide emissions could result in fuel A being more expensive than fuel B at the point of sale. Fuel A could expect to fall in popularity, and its sales could falter, and this could filter its effect back up the chain of production, and have implications on the capital expenditure on the production of Fuel A, and the confidence of the investors in investing in Fuel A, and so the oil and gas company would pull out of Fuel A.
However, the business decisions of the oil and gas company are assumed to be dependent on the consumer and the investor. By bowing to the might god of unit price, Shell and its confederates are essentially arguing that they will act only when the energy consumers and energy investors act. There are problems with this declaration of “we only do what we are told by the market” position. What if the unit price of Fuel A is only marginally affected by the price on carbon ? What if Fuel A is regarded as a superior product because of its premium price or other marketing factors ? This situation actually exists – the sales of petroleum oil-based gasoline and diesel are very healthy, despite the fact that running a car on Natural Gas, biogas or electricity could be far cheaper. Apart from the fact that so many motor cars in the global fleet have liquid fuel-oriented engines, what else is keeping people purchasing oil-based fuels when they are frequently more costly than the alternative options ?
And what about investment ? Fuel A might become more costly to produce with a price on carbon, but it will also be more expensive when it is sold, and this could create an extra margin of profit for the producers of Fuel A, and they could then return higher dividends to their shareholders. Why should investors stop holding stocks in Fuel A when their rates of return are higher ?
If neither consumers nor investors are going to change their practice because Fuel A becomes more costly than Fuel B because of a price on carbon, then the oil and gas company are not going to transition out of Fuel A resources.
For Shell to urge a price on carbon therefore, is a delegation of responsibility for change to other actors. This is irresponsible. Shell needs to lead on emissions reduction, not insist that other people change.
2. A price on carbon will not change overall prices or purchasing decsions
In economic theory, choices about products, goods and services are based on key factors such as trust in the supplier, confidence in the product, availability and sustainability of the service, and, of course, the price. Price is a major determinant in most markets, and artificially altering the price of a vital commodity will certainly alter purchasing decisions – unless, that is, the price of the commodity in question increases across the board. If all the players in the field start offering a more expensive product, for example, because of supply chain issues felt across the market, then consumers will not change their choices.
Now consider the global markets in energy. Upwards of 80% of all energy consumed in the global economy is fossil fuel-based. Putting a price on carbon will raise the prices of energy pretty much universally. There will not be enough cleaner, greener product to purchase, so most purchasing decisions will remain the same. Price differentiation in the energy market will not be established by asserting a price on carbon.
A key part of Shell’s argument is that price differentiation will occur because of a price on carbon, and that this will drive behaviour change, and yet there is nothing to suggest it could do that effectively.
3. A price on carbon will not enable Carbon Capture and Storage
Athough a key part of Shell’s argument about a price on carbon is the rationale that it would stimulate the growth in Carbon Capture and Storage (CCS), it seems unlikely that the world will ever agree to a price on carbon that would be sufficient to stimulate significant levels of CCS. A price on carbon will be deemed to be high enough when it creates a difference in the marginal extra production cost of a unit of one energy resource compared to another. A carbon price can only be argued for on the basis of this optimisation process – after all – a carbon price will be expected to be cost-efficient, and not punitive to markets. In other words, carbon prices will be tolerated if they tickle the final cost of energy, but not if they mangle with it. However, CCS could imply the use of 20% to 45% extra energy consumption at a facility or plant. In other words, CCS would create a parasitic load on energy resources that is not slim enough to be supported by a cost-optimal carbon price.
Some argue that the technology for CCS is improving, and that the parasitic load of CCS at installations could be reduced to around 10% to 15% extra energy consumption. However, it is hard to imagine a price on carbon that would pay even for this. And additionally, CCS will continue to require higher levels of energy consumption which is highly inefficient in the use of resources.
Shell’s argument that CCS is vital, and that a price on carbon can support CCS, is invalidated by this simple analysis.
4. Shell needs to be fully engaged in energy transition
Calling for a price on carbon diverts attention from the fact that Shell itself needs to transition out of fossil fuels in order for the world to decarbonise its energy.
Shell rightly says that they should stick to their “core capabilities” – in other words geology and chemistry, instead of wind power and solar power. However, they need to demonstrate that they are willing to act within their central business activities.
Prior to the explosion in the exploitation of deep geological hydrocarbon resources for liquid and gas fuels, there was an energy economy that used coal and chemistry to manufacture gas and liquid fuels. Manufactured gas could still replace Natural Gas, if there are climate, economic or technological limits to how much Natural Gas can be resourced or safely deployed. Of course, to meet climate policy goals, coal chemistry would need to be replaced by biomass chemistry, and significant development of Renewable Hydrogen technologies.
Within its own production facilities, Shell has the answers to meet this challenge. Instead of telling the rest of the world to change its economy and its behaviour, Shell should take up the baton of transition, and perfect its production of low carbon manufactured gas.Academic Freedom, Alchemical, Assets not Liabilities, Bait & Switch, Be Prepared, Behaviour Changeling, Big Picture, Big Society, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Carbon Taxatious, Change Management, Climate Change, Coal Hell, Conflict of Interest, Corporate Pressure, Cost Effective, Dead End, Dead Zone, Delay and Deny, Design Matters, Direction of Travel, Divest and Survive, Dreamworld Economics, Emissions Impossible, Energy Change, Energy Revival, Engineering Marvel, Extreme Energy, Fossilised Fuels, Freemarketeering, Gamechanger, Geogingerneering, Green Gas, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Mad Mad World, Major Shift, Marvellous Wonderful, Mass Propaganda, Modern Myths, Money Sings, Natural Gas, Nudge & Budge, Oil Change, Orwells, Paradigm Shapeshifter, Peak Coal, Peak Emissions, Peak Energy, Peak Natural Gas, Peak Oil, Pet Peeves, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Curse, Solar Sunrise, Solution City, Sustainable Deferment, Technofix, The Myth of Innovation, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, The Science of Communitagion, The War on Error, Wind of Fortune
Posted on June 1st, 2015 No comments
And so it has begun – Shell’s public relations offensive ahead of the 2015 Paris climate talks. The substance of their “advocacy” – and for a heavyweight corporation, it’s less lobbying than badgering – is that the rest of the world should adapt. Policymakers should set a price on carbon, according to Shell. A price on carbon might make some dirty, polluting energy projects unprofitable, and there’s some value in that. A price on carbon might also stimulate a certain amount of Carbon Capture and Storage, or CCS, the capturing and permanent underground sequestration of carbon dioxide at large mines, industrial plant and power stations. But how much CCS could be incentivised by pricing carbon is still unclear. Egging on the rest of the world to price carbon would give Shell the room to carry on digging up carbon and burning it and then capturing it and burying it – because energy prices would inevitably rise to cover this cost. Shell continues with the line that they started in the 1990s – that they should continue to dig up carbon and burn it, or sell it to other people to burn, and that the rest of the world should continue to pay for the carbon to be captured and buried – but Shell has not answered a basic problem. As any physicist could tell you, CCS is incredibly energy-inefficient, which makes it cost-inefficient. A price on carbon wouldn’t solve that. It would be far more energy-efficient, and therefore cost-efficient, to either not dig up the carbon in the first place, or, failing that, recycle carbon dioxide into new energy. Shell have the chemical prowess to recycle carbon dioxide into Renewable Gas, but they are still not planning to do it. They are continuing to offer us the worst of all possible worlds. They are absolutely right to stick to their “core capabilities” – other corporations can ramp up renewable electricity such as wind and solar farms – but Shell does chemistry, so it is appropriate for them to manufacture Renewable Gas. They are already using most of the basic process steps in their production of synthetic crude in Canada, and their processing of coal and biomass in The Netherlands. They need to join the dots and aim for Renewable Gas. This will be far less expensive, and much more efficient, than Carbon Capture and Storage. The world does not need to shoulder the expense and effort of setting a price on carbon. Shell and its fellow fossil fuel companies need to transition out to Renewable Gas.Academic Freedom, Alchemical, Assets not Liabilities, Be Prepared, Big Number, Big Picture, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Climate Change, Coal Hell, Conflict of Interest, Corporate Pressure, Delay and Deny, Demoticratica, Divest and Survive, Dreamworld Economics, Efficiency is King, Emissions Impossible, Energy Calculation, Energy Change, Energy Denial, Energy Revival, Engineering Marvel, Environmental Howzat, Extreme Energy, Financiers of the Apocalypse, Fossilised Fuels, Freemarketeering, Gamechanger, Geogingerneering, Green Gas, Green Investment, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Mass Propaganda, Modern Myths, Natural Gas, Not In My Name, Nudge & Budge, Paradigm Shapeshifter, Peak Emissions, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Pure Hollywood, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Social Capital, Solar Sunrise, Solution City, Sustainable Deferment, Tarred Sands, Technofix, Technological Sideshow, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, The Science of Communitagion, Unconventional Foul, Ungreen Development, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on May 29th, 2015 No comments
As if to provide proof for the sneaking suspicion that Great Britain is run by the wealthy, rather than by the people, and that energy policy is decided by a close-knit circle of privileged dynasties, up bubbles Amber Rudd MP’s first whirl of skirmish as Secretary of State for Energy and Climate Change : her brother Roland is chairperson of a lobbying firm, Finsbury, which is seeking to get state approval for a controversial gas storage scheme at Preesall, near Fleetwood, on behalf of the developers, Halite Energy of Preston, Lancashire.
Whilst some claim there is a starkly obvious conflict of interest for Rudd to take part in the decision-making process, the Department of Energy and Climate Change (DECC) could have denied it, but have instead confirmed that the potential reversal of a 2013 decision will be made, not by Rudd, but by Lord Bourne.
New gas storage in the United Kingdom is a crucial piece of the energy infrastructure provision, as recognised by successive governments. Developments have been ongoing, such as the opening of the Holford facility at Byley in Cheshire. Besides new gas storage, there are anticipated improvements for interconnectors with mainland Europe. These are needed for raising the volume of Natural Gas available to the British market, and for optimising Natural Gas flows and sales in the European regional context – a part of the EC’s “Energy Union”.
An underlying issue not much aired is that increased gas infrastructure is necessary not just to improve competition in the energy markets – it is also to compensate for Peak Natural Gas in the North Sea – something many commentators regularly strive to deny. The new Conservative Government policy on energy is not fit to meet this challenge. The new Secretary of State has gone public about the UK Government’s continued commitment to the exploitation of shale gas – a resource that even her own experts can tell her is unlikely to produce more than a footnote to annual gas supplies for several decades. In addition, should David Cameron be forced to usher in a Referendum on Europe, and the voters petulantly pull out of the Europe project, Britain’s control over Natural Gas imports is likely to suffer, either because of the failure of the “Energy Union” in markets and infrastructure, or because of cost perturbations.
Amber Rudd MP is sitting on a mountain of trouble, undergirded by energy policy vapourware : the promotion of shale gas is not going to solve Britain’s gas import surge; the devotion to new nuclear power is not going to bring new atomic electrons to the grid for decades, and the UK Continental Shelf is going to be expensive for the Treasury to incentivise to mine. What Amber needs is a proper energy policy, based on focused support for low carbon technologies, such as wind power, solar power and Renewable Gas to back up renewable electricity when the sun is not shining and wind is not blowing.Academic Freedom, Assets not Liabilities, Be Prepared, Big Picture, British Biogas, Burning Money, Carbon Commodities, Conflict of Interest, Corporate Pressure, Dead End, Demoticratica, Direction of Travel, Disturbing Trends, Energy Autonomy, Energy Change, Energy Insecurity, Energy Revival, Extreme Energy, Fossilised Fuels, Freemarketeering, Green Gas, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Low Carbon Life, Mad Mad World, Major Shift, National Energy, National Power, Natural Gas, No Pressure, Nuclear Nuisance, Nuclear Shambles, Oil Change, Paradigm Shapeshifter, Peak Energy, Peak Natural Gas, Peak Oil, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Renewable Gas, Renewable Resource, Resource Curse, Resource Wards, Revolving Door, Shale Game, Social Chaos, Social Democracy, Solar Sunrise, Solution City, The Data, The Price of Gas, The Price of Oil, The Right Chemistry, The War on Error, Unconventional Foul, Ungreen Development, Unnatural Gas, Utter Futility, Vain Hope, Wasted Resource, Wind of Fortune
Posted on April 8th, 2015 No comments
Hello, hello; what have we here then ? Royal Dutch Shell buying out BG Group (formerly known as British Gas). Is this the start of the great transition out of petroleum oil into gas fuels ?
Volatile crude petroleum oil commodity prices over the last decade have played some undoubted havoc with oil and gas company strategy. High crude prices have pushed the choice of refinery feedstocks towards cheap heavy and immature gunk; influenced decisions about the choices for new petrorefineries and caused ripples of panic amongst trade and transport chiefs : you can’t keep the engine of globalisation ticking over if the key fuel is getting considerably more expensive, and you can’t meet your carbon budgets without restricting supplies.
Low crude commodity prices have surely caused oil and gas corporation leaders to break out into the proverbial sweat. Heavy oil, deep oil, and complicated oil suddenly become unprofitable to mine, drill and pump. Because the economic balance of refinery shifts. Because low commodity prices must translate into low end user refined product prices.
There maybe isn’t an ideal commodity price for crude oil. All the while, as crude oil commodity prices jump around like a medieval flea, the price of Natural Gas, and the gassy “light ends” of slightly unconventional and deep crude oil, stay quite cheap to produce and cheap to use. It’s a shame that there are so many vehicles on the road/sea/rails that use liquid fuels…all this is very likely to change.
Shell appear to be consolidating their future gas business by buying out the competition. Hurrah for common sense ! The next stage of their evolution, after the transition of all oil applications to gas, will be to ramp up Renewable Gas production : low carbon gas supplies will decarbonise every part of the economy, from power generation, to transport, to heating, to industrial chemistry.
This is a viable low carbon solution – to accelerate the use of renewable electricity – wind power and solar principally – and at the same time, transition the oil and gas companies to become gas companies, and thence to Renewable Gas companies.Academic Freedom, Be Prepared, Big Picture, Carbon Commodities, Change Management, Corporate Pressure, Design Matters, Direction of Travel, Energy Change, Energy Crunch, Energy Insecurity, Energy Revival, Extreme Energy, Feel Gooder, Fossilised Fuels, Fuel Poverty, Green Gas, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Marine Gas, Marvellous Wonderful, Methane Management, Money Sings, Natural Gas, No Blood For Oil, Oil Change, Paradigm Shapeshifter, Peak Emissions, Peak Oil, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Wards, Solar Sunrise, Solution City, Tarred Sands, Technofix, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, Transport of Delight, Unconventional Foul, Unnatural Gas, Western Hedge, Wind of Fortune, Zero Net
Posted on March 5th, 2015 1 comment
There are many ways to make a living, but there appear to be zero careers in plainspeaking.
I mean, who could I justify working with, or for ? And would any of them be prepared to accept me speaking my mind ?
Much of what I’ve been saying over the last ten years has been along the lines of “that will never work”, but people generally don’t get consulted or hired for picking holes in an organisation’s pet projects or business models.
Could I imagine myself taking on a role in the British Government ? Short answer : no.
The slightly longer answer : The British Government Department of Energy and Climate Change (DECC) ? No, they’re still hooked on the failed technology of nuclear power, the stupendously expensive and out-of-reach Carbon Capture and Storage (CCS), and the mythical beast of shale gas. OK, so they have a regular “coffee club” about Green Hydrogen (whatever that turns out to be according to their collective ruminations), and they’ve commissioned reports on synthetic methane, but I just couldn’t imagine they’re ever going to work up a serious plan on Renewable Gas. The British Government Department for Transport ? No, they still haven’t adopted a clear vision of the transition of the transport sector to low carbon energy. They’re still chipping away at things instead of coming up with a strategy.
Could I imagine myself taking on a role with a British oil and gas multinational ? Short and very terse and emphatic answer : no.
The extended answer : The oil and gas companies have had generous support and understanding from the world’s governments, and are respected and acclaimed. Yet they are in denial about “unburnable carbon” assets, and have dismissed the need for Energy Change that is the outcome of Peak Oil (whether on the supply or the demand side). Sneakily, they have also played both sides on Climate Change. Several major oil and gas companies have funded or in other ways supported Climate Change science denial. Additionally, the policy recommendations coming from the oil and gas companies are what I call a “delayer’s game”. For example, BP continues to recommend the adoption of a strong price on carbon, yet they know this would be politically unpalatable and take decades (if ever) to bring into effect. Shell continues to argue for extensive public subsidy support for Carbon Capture and Storage (CCS), knowing this would involve such huge sums of money, so it’s never going to happen, at least not for several decades. How on Earth could I work on any project with these corporations unless they adopt, from the centre, a genuine plan for transition out of fossil fuels ? I’m willing to accept that transition necessitates the continued use of Natural Gas and some petroleum for some decades, but BP and Royal Dutch Shell do need to have an actual plan for a transition to Renewable Gas and renewable power, otherwise I would be compromising everything I know by working with them.
Could I imagine myself taking on a role with a large engineering firm, such as Siemens, GE, or Alstom, taking part in a project on manufactured low carbon gas ? I suppose so. I mean, I’ve done an IT project with Siemens before. However, they would need to demonstrate that they are driving for a Renewable Gas transition before I could join a gas project with them. They might not want to be so bold and up-front about it, because they could risk the wrath of the oil and gas companies, whose business model would be destroyed by engineered gas and fuel solutions.
Could I imagine myself building fuel cells, or designing methanation catalysts, or improving hydrogen production, biocoke/biocoal manufacture or carbon dioxide capture from the oceans… with a university project ? Yes, but the research would need to be funded by companies (because all applied academic research is funded by companies) with a clear picture on Energy Change and their own published strategy on transition out of fossil fuels.
Could I imagine myself working on rolling out gas cars, buses and trucks ? Yes. The transition of the transport sector is the most difficult problem in Energy Change. However, apart from projects that are jumping straight to new vehicles running entirely on Hydrogen or Natural Gas, the good options for transition involve converting existing diesel engine vehicles to running mostly on Natural Gas, such as “dual fuel”, still needing roughly 20% of liquid diesel fuel for ignition purposes. So I would need to be involved with a project that aims to supply biodiesel, and have a plan to transition from Natural Gas to Renewable Gas.
Could I imagine myself working with a team that has extensive computing capabilities to model carbon dioxide recycling in power generation plant ? Yes.
Could I imagine myself modelling the use of hydrogen in petroleum refinery, and making technological recommendations for the oil and gas industry to manufacture Renewable Hydrogen ? Possibly. But I would need to be clear that I’m doing it to enable Energy Change, and not to prop up the fossil fuel paradigm – a game that is actually already bust and needs helping towards transition.
Could I imagine myself continuing to research the growth in Renewable Gas – both Renewable Hydrogen and Renewable Methane – in various countries and sectors ? Possibly. It’s my kind of fun, talking to engineers.
But whatever future work I consider myself doing, repeatedly I come up against this problem – whoever asked me to work with them would need to be aware that I do not tolerate non-solutions. I will continue to say what doesn’t work, and what cannot work.
If people want to pay me to tell them that what they’re doing isn’t working, and won’t work, then fine, I’ll take the role.
I’d much rather stay positive, though, and forge a role where I can promote the things that do work, can work and will work.
The project that I’m suitable for doesn’t exist yet, I feel. I’m probably going to continue in one way or another in research, and after that, since I cannot see a role that I could fit easily or ethically, I can see I’m going to have to write my own job description.Academic Freedom, Acid Ocean, Alchemical, Assets not Liabilities, Be Prepared, Big Picture, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Delay and Deny, Direction of Travel, Energy Autonomy, Energy Change, Energy Denial, Energy Revival, Engineering Marvel, Fossilised Fuels, Gas Storage, Green Gas, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Methane Management, Modern Myths, National Energy, National Power, Natural Gas, No Blood For Oil, Non-Science, Nuclear Nuisance, Nuclear Shambles, Oil Change, Optimistic Generation, Paradigm Shapeshifter, Policy Warfare, Political Nightmare, Protest & Survive, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Science Rules, Shale Game, Solution City, Stirring Stuff, Sustainable Deferment, Technofix, The Data, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, Vote Loser, Wasted Resource, Zero Net
Posted on February 8th, 2015 No comments
In the last couple of years I have researched and written a book about the technologies and systems of Renewable Gas – gas energy fuels that are low in net carbon dioxide emissions. From what I have learned so far, it seems that another energy world is possible, and that the transition is already happening. The forces that are shaping this change are not just climate or environmental policy, or concerns about energy security. Renewable Gas is inevitable because of a range of geological, economic and industrial reasons.
I didn’t train as a chemist or chemical process engineer, and I haven’t had a background in the fossil fuel energy industry, so I’ve had to look at a number of very basic areas of engineering, for example, the distillation and fractionation of crude petroleum oil, petroleum refinery, gas processing, and the thermodynamics of gas chemistry in industrial-scale reactors. Why did I need to look at the fossil fuel industry and the petrochemical industry when I was researching Renewable Gas ? Because that’s where a lot of the change can come from. Renewable Gas is partly about biogas, but it’s also about industrial gas processes, and a lot of them are used in the petrorefinery and chemicals sectors.
In addition, I researched energy system technologies. Whilst assessing the potential for efficiency gains in energy systems through the use of Renewable Electricity and Renewable Gas, I rekindled an interest in fuel cells. For the first time in a long time, I began to want to build something – a solid oxide fuel cell which switches mode to an electrolysis unit that produces hydrogen from water. Whether I ever get to do that is still a question, but it shows how involved I’m feeling that I want to roll up my sleeves and get my hands dirty.
Even though I have covered a lot of ground, I feel I’m only just getting started, as there is a lot more that I need to research and document. At the same time, I feel that I don’t have enough data, and that it will be hard to get the data I need, partly because of proprietary issues, where energy and engineering companies are protective of developments, particularly as regards actual numbers. Merely being a university researcher is probably not going to be sufficient. I would probably need to be an official within a government agency, or an industry institute, in order to be permitted to reach in to more detail about the potential for Renewable Gas. But there are problems with these possible avenues.
You see, having done the research I have conducted so far, I am even more scornful of government energy policy than I was previously, especially because of industrial tampering. In addition, I am even more scathing about the energy industry “playing both sides” on climate change. Even though there are some smart and competent people in them, the governments do not appear to be intelligent enough to see through expensive diversions in technology or unworkable proposals for economic tweaking. These non-solutions are embraced and promoted by the energy industry, and make progress difficult. No, carbon dioxide emissions taxation or pricing, or a market in carbon, are not going to make the kind of changes we need on climate change; and in addition they are going to be extremely difficult and slow to implement. No, Carbon Capture and Storage, or CCS, is never going to become relatively affordable in any economic scenario. No, nuclear power is too cumbersome, slow and dodgy – a technical term – to ever make a genuine impact on the total of carbon emissons. No, it’s not energy users who need to reduce their consumption of energy, it’s the energy companies who need to reduce the levels of fossil fuels they utilise in the energy they sell. No, unconventional fossil fuels, such as shale gas, are not the answer to high emissions from coal. No, biofuels added to petrofuels for vehicles won’t stem total vehicle emissions without reducing fuel consumption and limiting the number of vehicles in use.
I think that the fossil fuel companies know these proposals cannot bring about significant change, which is precisely why they lobby for them. They used to deny climate change outright, because it spelled the end of their industry. Now they promote scepticism about the risks of climate change, whilst at the same time putting their name to things that can’t work to suppress major amounts of emissions. This is a delayer’s game.
Because I find the UK Government energy and climate policy ridiculous on many counts, I doubt they will ever want me to lead with Renewable Gas on one of their projects. And because I think the energy industry needs to accept and admit that they need to undergo a major change, and yet they spend most of their public relations euros telling the world they don’t need to, and that other people need to make change instead, I doubt the energy industry will ever invite me to consult with them on how to make the Energy Transition.
I suppose there is an outside chance that the major engineering firms might work with me, after all, I have been an engineer, and many of these companies are already working in the Renewable Gas field, although they’re normally “third party” players for the most part – providing engineering solutions to energy companies.
Because I’ve had to drag myself through the equivalent of a “petro degree”, learning about the geology and chemistry of oil and gas, I can see more clearly than before that the fossil fuel industry contains within it the seeds of positive change, with its use of technologies appropriate for manufacturing low carbon “surface gas”. I have learned that Renewable Gas would be a logical progression for the oil and gas industry, and also essential to rein in their own carbon emissions from processing cheaper crude oils. If they weren’t so busy telling governments how to tamper with energy markets, pushing the blame for emissions on others, and begging for subsidies for CCS projects, they could instead be planning for a future where they get to stay in business.
The oil and gas companies, especially the vertically integrated tranche, could become producers and retailers of low carbon gas, and take part in a programme for decentralised and efficient energy provision, and maintain their valued contribution to society. At the moment, however, they’re still stuck in the 20th Century.
I’m a positive person, so I’m not going to dwell too much on how stuck-in-the-fossilised-mud the governments and petroindustry are. What I’m aiming to do is start the conversation on how the development of Renewable Gas could displace dirty fossil fuels, and eventually replace the cleaner-but-still-fossil Natural Gas as well.Academic Freedom, Advertise Freely, Alchemical, Assets not Liabilities, Be Prepared, Behaviour Changeling, Big Number, Biofools, British Biogas, Burning Money, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Cost Effective, Dead End, Delay and Deny, Divest and Survive, Divide & Rule, Dreamworld Economics, Drive Train, Economic Implosion, Efficiency is King, Emissions Impossible, Energy Calculation, Energy Change, Energy Crunch, Energy Denial, Energy Insecurity, Energy Revival, Engineering Marvel, Evil Opposition, Extreme Energy, Financiers of the Apocalypse, Fossilised Fuels, Freemarketeering, Gamechanger, Geogingerneering, Global Warming, Green Gas, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Insulation, Low Carbon Life, Mad Mad World, Major Shift, Mass Propaganda, Methane Management, Money Sings, National Energy, National Power, Natural Gas, Nuclear Shambles, Oil Change, Optimistic Generation, Orwells, Paradigm Shapeshifter, Peak Coal, Peak Emissions, Policy Warfare, Political Nightmare, Price Control, Public Relations, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Revolving Door, Shale Game, Solution City, Stirring Stuff, The Data, The Power of Intention, The Right Chemistry, The Science of Communitagion, The War on Error, Unnatural Gas, Unutterably Useless, Utter Futility, Vain Hope, Voluntary Behaviour Change, Vote Loser, Western Hedge
Posted on November 23rd, 2014 2 comments
In an interesting article by two Google engineers, Ross Koningstein and David Fork, "What It Would Really Take to Reverse Climate Change : Today’s renewable energy technologies won’t save us. So what will?", the authors concluded from their modelling scenarios that :-
"While a large emissions cut sure sounded good, this scenario still showed substantial use of natural gas in the electricity sector. That’s because today’s renewable energy sources are limited by suitable geography and their own intermittent power production."
Erm. Yes. Renewable electricity is variable and sometimes not available, because, well, the wind doesn’t always blow and the sun doesn’t always shine, you know. This has been known for quite some time, actually. It’s not exactly news. Natural Gas is an excellent complement to renewable electricity, and that’s why major industrialised country grid networks rely on the pairing of gas and power, and will do so for some time to come. Thus far, no stunner.
What is astonishing is that these brain-the-size-of-a-planet guys do not appear to have asked the awkwardly obvious question of : "so, can we decarbonise the gas supply, then ?" Because the answer is "yes, very largely, yes."
And if you have Renewable Gas backing up Renewable Power, all of a sudden, shazam !, kabam ! and kapoom !, you have An Answer. You can use excess wind power and excess solar power to make gas, and you can store the gas to use when there’s a still, cold period on a wintry night. And at other times of low renewable power, too. And besides using spare green power to make green gas, you can make Renewable Gas in other ways, too.
The Google engineers write :-
"Now, [Research and Development] dollars must go to inventors who are tackling the daunting energy challenge so they can boldly try out their crazy ideas. We can’t yet imagine which of these technologies will ultimately work and usher in a new era of prosperity – but the people of this prosperous future won’t be able to imagine how we lived without them."
Actually, Renewable Gas is completely non-crazy. It’s already being done all over the world in a variety of locations – with a variety of raw resources. We just need to replace the fossil fuel resources with biomass – that’s all.
And there’s more – practically all the technology is over a century old – it just needs refining.
I wonder why the Google boys seem to have been so unaware of this. Maybe they didn’t study the thermodynamics of gas-to-gas reactions at kindergarten, or something.
Thanks to the deliberate misinterpretation of the Google "brothers" article, The Register, James Delingpole’s Breitbart News and Joanne Nova are not exactly helping move the Technological Debate forward, but that’s par for the course. They rubbished climate change science. Now they’ve been shown to be wrong, they’ve moved on, it seems, to rubbishing renewable energy systems. And they’re wrong there, too.
Onwards, my green engineering friends, and upwards.Academic Freedom, Alchemical, Assets not Liabilities, Bait & Switch, British Biogas, Change Management, Climate Change, Delay and Deny, Direction of Travel, Energy Change, Energy Revival, Fossilised Fuels, Gas Storage, Green Gas, Green Investment, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Media, Modern Myths, Natural Gas, Orwells, Protest & Survive, Pure Hollywood, Realistic Models, Renewable Gas, Renewable Resource, Solar Sunrise, Solution City, Stirring Stuff, Sustainable Deferment, Technofix, The Myth of Innovation, The Power of Intention, The Right Chemistry, The War on Error, Wind of Fortune, Zero Net
Posted on November 14th, 2014 No comments
This week, I had the opportunity to join the launch of the UKERC’s latest research into the future of gas. The esteemed delegates included members of a Russian Trade Delegation and several people from the US Embassy. Clearly, the future of gas is an international thing.
[continued from Gas by Design ]
Mike Bradshaw, Warwick Business School = [MB]
[MB] I’m somewhat daunted by this audience – the report is aimed perhaps for informed public audience. The media [ambushed us on the question of shale gas, shale gas attracted more attention] but things we didn’t cover much about there we can cover here. It’s been a real rollercoaster ride in the gas industry. Any flights of fancy (in the report) are our faults and not theirs [reference to work of colleagues, such as Jonathan Stern at Oxford Institute for Energy Studies]. A set of shortcomings dealing with the issue of Energy Security. There is a tendency to think that oil and gas are the same. They’re not. The framework, the actors and the networks, trade statistics, policies [much different for gas than for oil]. [In the UK for example we are seeing] a rapid increase in import dependence [and in other countries]. Need to [pay] particular understanding on what will happen in far-flung places. Today, the US-China agreement could influence gas demand. [In the literature on gas, some anomalies, perhaps]. Academics may not understand markets. [What we are seeing here is] the globalisation of UK gas security – primarily Europeanisation. There is growing uncertainty [about] the material flow of gas. [Threshold] balance in three sectors – strong seasonality, impact of climate and temperature [on gas demand]. The Russian agreement with Ukraine [and Europe] – the one thing everybody was hoping for was a warm winter. While the gas market is important [industrial use and energy use], domestic/residential demand is still very significant [proportion of total demand], so we need to look at energy efficiency [building insulation rates] and ask will people rip out their gas boilers ? For the UK, we are some way across the gas bridge – gas has enabled us to meet [most of] our Kyoto Protocol commitments. Not long until we’ve crossed it. Our coal – gone. With coal gone, what fills the gaps ? Renewable electricity – but there is much intermittency already. We’re not saying that import dependency is necessarily a problem. Physical security is not really the problem – but the [dependence on] the interconnectors, the LNG (Liquefied Natural Gas) imports – these create uncertainties. The UK also plays a role as a gas exporter – and in landing Norwegian gas [bringing it into the European market]. I’m a geographer – have to have at least one map – of gas flows [in and out of the country]. The NTS (National Transmission System – the high pressure Natural Gas-carrying pipeline network – the “backbone” of the gas transmission and distribution system of National Grid] has responded to change – for example in the increasing sources of LNG [and “backflow” and “crossflow” requirements]. There are 9 points of entry for gas into the UK at the moment. If the Bowland Shale is exploited, there could be 100s of new points of entry [the injection of biogas as biomethane into the gas grid would also create new entry points]. A new challenge to the system. [The gas network has had some time to react in the past, for example] LNG imports – the decision to ramp up the capacity was taken a long time ago. [Evolution of] prices in Asia have tracked the gas away [from the European markets] after the Fukushima Dai-ichi disaster. And recently, we have decided to “fill up the tanks” again [LNG imports have risen in the last 24 or so months]. Very little LNG is “firm” – it needs to follow the market. It’s not good to simply say that “the LNG will come” [without modelling this market]. The literature over-emphasises the physical security of the upstream supplies of gas. [The projections have] unconventional gas growing [and growing amounts of biogas]. But it’s far too early to know about shale gas – far too early to make promises about money when we don’t even have a market [yet]. Policy cannot influence the upstream especially in a privatised market. The interconnectors into the European Union means we have to pay much more attention to the Third EU Energy Package. Colleagues in Oxford are tracking that. The thorny question of storage. We have less than 5 bcm (billion cubic metres). We’d like 10% perhaps [of the winter period demand ?] Who should pay for it ? [A very large proportion of our storage is in one place] the Rough. We know what happens – we had a fire at the Rough in 2006… Everyone worries about geopolitics, but there are other potential sources of problems – our ageing infrastructure […] if there is a technical problem and high demand [at the same time]. Resilience [of our gas system is demonstrated by the fact that we have] gas-on-gas competition [in the markets] – “liquid” gas hub trading – setting the NBP (National Balancing Point). [There are actually 3 kinds of gas security to consider] (a) Security of Supply – not really a problem; (b) Security of Transport (Transit) – this depends on markets and (c) Security of Demand – [which strongly depends on whether there is a] different role for gas in the future. But we need to design enough capacity even though we may not use all of it [or not all of the time]. We have mothballed gas-fired power plants already, for reasons you all know about. We already see the failure of the ETS (European Union Emissions Trading Scheme) [but if this can be reformed, as as the Industrial Emissions Directive bites] there will be a return to gas as coal closes. The role of Carbon Capture and Storage (CCS) becomes critical in retaining gas. CCS however doesn’t answer issues of [physical energy security, since CCS requires higher levels of fuel use].
[Question from the floor] Gas has a role to play in transition. But how do we need to manage that role ? Too much focus on building Renewable Energy system. What is the impact on the current infrastructure ? For managing that decline in the incumbent system – gas is there to help – gas by design rather than gas by default.
[Question from the floor, Jonathan Stern] [In your graphs/diagrams] the Middle East is a major contributor to gas trade. We see it differently. The Qataris [could/may/will] hold back [with expanding production] until 2030. Iran – our study [sees it as] a substitute contributor. Oil-indexed gas under threat and under challenge. If you could focus more on the global gas price… [New resources of gas could be very dispersed.]Very difficult to get UK people to understand [these] impacts on the gas prices [will] come from different places than they can think of.
[Question from the floor] Availability of CCS capacity ? When ? How much ? Assumptions of cost ?
[Question from the floor : Tony Bosworth, Friends of the Earth] Gas as a bridge – how much gas do we need for [this process] ? What about unburnable carbon ? Do we need more gas to meet demands ?
[Answer – to Jonathan Stern – from Christophe McGlade ?] The model doesn’t represent particularly well political probabilities. Iran has a lot of gas – some can come online. It will bring it online if it wants to export it. Some simplifications… might be over optimistic. Your work is helpful to clarify.
On gas prices – indexation versus global gas price – all the later scenarios assumed a globalised gas price. More reasonable assumptions.
On CCS : first [coming onstream] 2025 – initially quite a low level, then increasing by 10% a year. The capital costs are approximately 60% greater than other options and causes a drop in around 10% on efficiency [because making CCS work costs you in extra fuel consumed]. If the prices of energy [including gas] increase, then CCS will have a lesser relative value [?].
On availability of gas : under the 2 degrees Celsius scenario, we could consume 5 tcm (trillion cubic metres) of gas – and this can come from reserves and resources. There are a lot of resources of Natural Gas, but some of it will be at a higher price. In the model we assume development of some new resources, with a growth in shale gas, and other unconventional gas. Because of the climate deal, we need to leave some gas underground.
[Answer from the panel] Indexation of gas prices to oil… Further gas demand is in Asia – it’s a question of whose gas gets burnt. [Something like] 70% of all Natural Gas gets burned indigenously [within the country in which it is produced]. When we talk about “unburnable gas”, we get the response “you’re dreaming” from some oil companies, “it won’t be our fossil fuels that get stranded”. LNG models envisage a different demand profile [in the future, compared to now]. When China [really gets] concerned about air quality [for example]. Different implications.
[Question from the floor, from Centrica ?] What’s in the model for the globalised gas price – Henry Hub plus a bit ? There is not a standard one price.
[Question from the floor] On the question of bridging – the long-term bridge. What issues do you see when you get to 2030 for investment ? [We can see] only for the next few years. What will investors think about that ?
[Question from the floor] [With reference to the Sankey diagram of gas use in the UK] How would that change in a scenario of [electrification – heat and transport being converted to run on electrical power] ?
[Question from the floor] Stranded assets. How the markets might react ? Can you put any numbers on it – especially in the non-CCS scenario ? When do we need to decide [major strategy] for example, [whether we could or should be] shutting off the gas grid ? How would we fund that ? Where are the pinch points ?
[Answer from the panel] On the global gas price – the model does not assume a single price – [it will differ over each] region. [The price is allowed to change regionally [but is assumed to arise from global gas trading without reference to oil prices.] Asian basin will always be more expensive. There will be a temperature differential between different hubs [since consumption is strongly correlated with seasonal change]. On stranded assets – I think you mean gas power plants ? The model is socially-optimal – all regions working towards the 2 degrees Celsius global warming target. The model doesn’t limit stranded assets – and do get in the non-CCS scenario. Build gas plants to 2025 – then used at very low load factors. Coal plants need to reduce [to zero] given that the 2 degrees Celsius targets are demanding. Will need gas for grid balancing – [new gas-fired power generation assets will be] built and not used at high load factors.
[Answer from the panel] Our report – we have assume a whole system question for transition. How successful will the Capacity Mechanism be ? UKERC looking at electrification of heating – but they have not considered the impact on gas (gas-to-power). Will the incentives in place be effective ? The Carbon Budget – what are the implications ? Need to use whole system analysis to understand the impact on gas. Issue of stranded assets : increasingly important now [not at some point in the future]. On pinch point : do we need to wait another three years [for more research] ? Researchers have looked more at what to spend – what to build – and less on how to manage the transition. UKERC have started to explore heat options. It’s a live issue. Referenced in the report.
[Question from the floor, from Richard Sverrisson, News Editor of Montel] Will reform to the EU ETS – the Market Stability Reserve (MSR) – will that be enough to bring gas plant into service ?
[Question from the floor] On oil indexation and the recent crash in the crude price – what if it keeps continuing [downwards] ? It takes gas prices down to be competitive with hub prices. [What about the impact on the economic profitability of] shale oil – where gas driving related prices ? Are there some pricing [functions/variables] in the modelling – or is it merely a physical construct ?
[Question from the floor, from Rob Gross of UCL] On intermittency and the flexibility of low carbon capacity. The geographical units in the modelling are large – the role of gas depends on how the model is constrained vis-a-vis intermittency.
[Answer from the panel, from Christophe McGlade] On carbon dioxide pricing : in the 2 degrees Celsius scenario, the price is assumed to be $200 per tonne. In the non-CCS scenario, the price is in the region of $400 – $500 per tonne [?] From 2020 : carbon price rises steeply – higher than the Carbon Floor Price. How is the the 2 degrees Celsius target introduced ? If you place a temperature constraint on the energy system, the model converts that into carbon emissions. The latest IPCC report shows that there remains an almost linear trend between carbon budget and temperature rise – or should I say a greenhouse gas budget instead : carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The emissions pledges of the [European Union ?] have been adopted by this model – also the development of renewable energy and fuel standards. No exogenous assumptions on carbon pricing. On intermittency – the seasonality is represented by summer, winter and intermediate; and time day generalised as morning, night, evening and peak (morning peak). [Tighter modelling would provide more] certainty which would remove ~40% of effective demand [?] Each technology has a contribution to make to peak load. Although, we assume nothing from wind power – cannot capture hour to hour market. The model does build capacity that then it doesn’t use.
[Answer from the panel] On carbon pricing and the EU ETS reform : I wouldn’t hold my breath [that this will happen, or that it will have a major impact]. We have a new commission and their priority is Poland – nothing serious will happen on carbon pricing until 2020. Their emphasis is much more on Central European issues. I don’t expect [us] to have a strong carbon price since policy [will probably be] more focussed on social democracy issues. Moving to a relatively lower price on oil : Asia will hedge. Other explorters currently sticking to indexation with oil. The low price of wet gas (condensate) in the USA is a result of the over-supply, which followed an over-supply in NGLs (Natural Gas Liquids) – a bumpy road. Implications from USA experience ? Again, comes back to watching what is happening in Asia.
[to be continued…]Academic Freedom, Big Picture, Big Society, Carbon Capture, Carbon Pricing, Climate Change, Coal Hell, Emissions Impossible, Freemarketeering, Gamechanger, Global Warming, Green Gas, Hydrocarbon Hegemony, Natural Gas, Oil Change, Paradigm Shapeshifter, Peak Coal, Peak Emissions, Peak Energy, Peak Natural Gas, Peak Oil, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Wards, Shale Game, The Price of Gas, The Price of Oil, Unnatural Gas, Western Hedge, Wind of Fortune
Posted on November 10th, 2014 No comments
The UK Government’s Electricity Market Reform (EMR) is a moving feast, or “trough”, if you are of the opinion that any state subsidy is a subsidy too far. My, how people complained and complained about the Renewables Obligation (RO), perhaps one of the world’s best stimuli for pushing forward wind power development. Yes, some rich engineering firms and rich landowners got richer on the back of the RO. What do you expect ? The wealthy always leverage their capital. But at least the RO has produced some exceptional wind power generation numbers. In the period 2017 to 2018 however, the RO is set to be staged down and replaced by several elements in the EMR, most notably, the CfD or Contracts for Difference, otherwise affectionately and quite inaccurately described as the FiT CfD – Feed-in Tariff Contracts for Difference.
The basic plan for the CfD is to guarantee to new electricity generators, or old generators building new plant, a definite price on power sold, in order to ensure they can get debt and equity invested in their projects. However, this is a huge state intervention and potentially entirely scuppers the efforts to create a market in electricity. More dangerously, although the CfD is supposed to encourage the freeing up of capital to support new energy investment, it might fail in that, at least in the short-term, and it may even fail to make capital cheaper. This is due to the new kinds of risk associated with the CfD – particularly because of the long lead time from auction to allocation, and the cap on allocations. The CfD is designed to create project failures, it seems.
I recently attended an event hosted at the Queen Elizabeth II Conference Centre in Westminster in London, called Energy4PowerLive 2014 and managed by GMP. The first session I attended was in the RenewablesLive 2014 stream, and featured a panel discussion between Andrew Buglass from Royal Bank of Scotland (RBS), Philip Bazin of Triodos and Steve Hunter, Investment Director of Low Carbon.
What follows is not verbatim, and is based on my handwritten notes, and my handwriting is appalling, so that sometimes, even I cannot read it.
[ Andrew Buglass, Managing Director and Head of Energy, Royal Bank of Scotland (RBS) : “Financing CfD projects – initial impressions from a lender” ]
[You may have an interest in the actions of] RBS [heckle from the audience, “We own it !”]. We built our first renewable energy project in 1991 – an onshore wind turbine. Now we [have helped] finance 9 gigawatts of renewable energy. I have 15 minutes – only possible to scratch the surface of CfDs [Contracts for Difference – a subsidy under the UK Government Department of Energy and Climate Change (DECC) Electricity Market Reform (EMR))]. The EMR journey has been a very long one – four years. We have offered advice to the government – about the bankability of the policy. DECC have a different policy perspective – they are going over here [in this direction] whether or not… [Their aim was to] encourage new sources of investment debt and equity, [currently] not here in the UK. […] Matt Hancock, new [energy] minister […] £115 [billion ?] […]. Half of £100 billion needed by end of decade. The EMR framework is [intended] to bring in new sources of debt and equity – its ability to track that into the market. I’m not going to review whether the EMR will be successful. It’s a “Nought to Sixty” question [reference to how quickly it takes for cars to accelerate], how quickly is capital going to be delivered [getting up and running]. There will be a big step up in terms of work […] how are different counterparties [countersigning parties in the CfD contracts] responding ? Now is the time to deliver on the [practical economics] for those to decide whether to invest or not. Need to engage the ratings agencies – getting debt from bond markets – to convince Standard and Poor etc to convince […] The first projects are going to take a long time – cutting their teeth. Cost, availability, terms of debt. The risks that will [come into play] :
A. OFFTAKE RISK – BASIS RISK
[At the start of the EMR discussions] we highlighted that small generators found it hard to get PPAS [Power Purchase Agreements]. With the CfDs “lender of last resort” “offtaker of last resort” […] may support less strong balance sheets for PPAs. Great – because we need a lot more liquidity in PPAs. [However] the basis risks on the strike price compared to the reference price – if this is [changed, different] – a concern about whether they might be matching in the middle [and so conferring no benefit to having arranged the CfD]].
B. WHOLESALE PRICE RISK
In offshore wind – wild – the economics of generating. In onshore wind power, the wholesale price has less of a way to fall [because of many years of learning and maturing of supply chains etc].
C. INDEX INFLATION RISK
The CfDs are to be linked to CPI [Consumer Price Index] rather than the RPI [Retail Price Index]. This may seem like a not very important difference – but at the moment you cannot hedge against the CPI. […] we recommend RPI – linked to lock in. Can’t do that with CPI.
D. FORCE MAJEURE RISK
[Risk] especially during construction. The CfD does not pick up during construction – need to see [how this pans out].
E. CHANGE IN LAW (CIL) RISK
Twenty pages of the CIL clause – doesn’t seem to give you much protection – what is a “foreseeable change in law” ? Unless you’re a big utility you will not have been tracking [policy and legislation] for the last ten years. Big risk ? In the RO [Renewables Obligation], CIL risk was set to the offtaker. Law firms are going to really agonise [over this in the CfD].
F. LIFETIME MANAGEMENT RISK
Risk relating to managing CfD contract during its lifetime. There is a risk from the termination of a CfD – more than in the RO. May need to do more work to keep lender involved to manage termination risk.
Leads to a gloomy approach – in banking paying back on time is good – anything else is bad.
The EMR has cross-party support, but this is the most interventionist approach since the CEGB (Central Electricity Generating Board market). The politicians are saying “no, no, we’d never change anything” – from three parties. It would help if there were a public statement on that (I get calls about “too many turbines”). Initial projects will probably take longer to start than [under] RO. Collectively fund pragmatic solutions.
[ Philip Bazin, Head Project Finance Team, Triodos Bank : “Financing CfD projects – initial impressions from a different bank” ]
Triodos was established in 1980, and started in the UK in 1995 with the acquisition of Mercury […] Our portfolio in the UK is still relatively small. Over a third of the £500 million is in renewable energy. Our investment […] basis of positive social and environmental outcomes. […] Core lending of £1 to £15 million finance […] construction […] and up to 15 years [on loan repayment]. Smaller developers – best fit. The bank is almost becoming part of the supply chain in the bidding process. Give a forward fixed rate of interest. We’ve had to think about how we provide this derivative. Discussions with PPA providers. Feeling that most a lot of new players. The whole rush around CfD was quite unhelpful. We haven’t been engaging with any bidders for this round [of CfDs]. Our customers are small generators or community groups. Smaller projects are risk-averse and would [probably] use the RO instead of the CfD [for now]. These markets are going to find this new structure [offputting]. Not ideal if you’re a professional investor. [Andrew has explained the risks well] The biggest one for me is the risk of failing to achieve your LONGSTOP DATE [failure to start electricity generation by an agreed date], which would risk a termination [of the CfD subsidy agreement. This would destroy the economics of the whole project and therefore the investment]. What protections do you have as a sub-contractor ? Another point is about wayleaves. [If you can’t get your wayleaves in time…] Fundamentally, the [CfD] mechanism is bankable. [However] in trying to fix a problem it [may] have created a total mess. Don’t know if more capital will be going into projects.
[ Steve Hunter, Investment Director, Low Carbon : “CfDs from an equity perspective” ]
[Our business is in] Solar PV, Onshore wind, CSP in the Mediterranean area. We get there when project developer is doing land deals. We have a cradle-to-grave perspective. Land planning and grid access are major risks [and the guarantee of biomass feedstock for a biomass project]. The WHOLESALE POWER PRICE RISK – someone needs to take it. Your view depends on your equity horizon. For us, the two big changes [from the RO] are the introduction of the ALLOCATION RISK and the removal of the power price risk. Don’t know the budget for allocation. Only know one month before the [CfD] auction ! The government has not released [a budget] for “emerging technology”. Timing : doesn’t really work for solar. The idea of CfD versus RO for solar will not work. [It’s all down to the project lifecycle] – you could be waiting 14 or 15 months for a CfD allocation after making a bid, but grid connection deals are now closing in [at around 12 months – if you do not take up your grid connection permission, you will lose it]. At the moment there is no competition between technologies. Is there enough CfD set aside for offshore wind projects ? Yes. If CfDs are intended to deliver technology-neutral [energy mix] – it doesn’t yet. The REFERENCE PRICES for me are the significant risk. This is entirely new for CfDs. Because the CfD intended to bring lower cost of capital – there is an implication for return [on investment] to the investor. Government will set [the reference prices]. Government just released [for some technologies] – decreased [in a forward period]. The Government may have a very different view on forward power prices… These reference prices come out of the air [there seems to be no basis for them]. When is final not final ? When it comes from DECC. If consider 2018/2019 September, the tightest budget, you could afford 1,000 MW of offshore, [if there is a change in the reference price] you could only afford 700 MW. In the TEC Register from National Grid – download this – there is 1,000 to 1,200 MG in the pipeline onshore. If I was a wind developer with [grid] connection dates after the end of the RO, you can bet I’ve already bid [for a CfD allocation] already. The political risk of changing the RO. May be a small amount of solar – but anyway it’s too expensive. If the CfD is only to support onshore wind power – is it achieving its goals ? There will almost certainly be some modification [to the CfD or the reference prices ?]. Transparency ? Oversupply ? [Oversight ?] of setting reference prices. Increase in frequency of the CfD auction would be helpful. Would give developers more time to bid. Technologies like solar PV that could deliver large savings… If no large solar is built… They could put a minimum in [for the subsidy allocated to each technology] – more positive. CfD represents long-term support. If the industry drives down the cost of renewable energy, CfD gives us an infill fix on revenue. It will give that certainty to get debt [and equity] in. It may be the support mechanism we need in the long-term. It could be the support mechanism we need for renewable energy…Baseload is History, Big Picture, Burning Money, Carbon Army, Change Management, Conflict of Interest, Corporate Pressure, Cost Effective, Design Matters, Direction of Travel, Disturbing Trends, Dreamworld Economics, Economic Implosion, Efficiency is King, Electrificandum, Energy Change, Energy Crunch, Energy Revival, Financiers of the Apocalypse, Freemarketeering, Gamechanger, Green Investment, Green Power, Growth Paradigm, Insulation, Optimistic Generation, Policy Warfare, Political Nightmare, Price Control, Regulatory Ultimatum, Renewable Resource, Revolving Door, Solar Sunrise, Solution City, Stirring Stuff, The Myth of Innovation, Western Hedge, Wind of Fortune
Posted on May 30th, 2014 No comments
First, Christian Figueres speaks at St Paul’s Cathedral, and then there’s a debate, and questions, and somebody says Capitalism needs to be reformed or we’re not going to get any proper change. Half the people in the room sigh. “The last thing we need now is an obsessive compulsive revolutionary Marxist”, I hear somebody thinking.
Then, no surprise, Prince Charles comes out in favour of compassionate capitalism. That’s kind of like asking people to be nice to puppies, and about as realistic call for change as wanting the Moon to be actually made of cheese. As if focusing all our efforts and energy on repairing an already-breaking machine of trade with its destructive exploitation of resources and labour is going to stop climate change. Really. What actually needs to happen is that we address carbon emissions. If we cannot measure a reduction in carbon dioxide emissions, or count new trees, we are getting nowhere, fast. The Holy Economy can go hang if we don’t address Climate Change, and it will, because Climate Change is already sucking the lifeblood out of production and trade.
The non-governmental organisations – the charities, aid and development agencies and the like, do not know how to deal with climate change. They cannot simply utilise their tools of guilt to prise coins from peoples’ clenched hands and put the money towards something helpful. Well, they can, and they do, and you better watch out for more poor, starving African type campaigning, because programmes for adaptation to climate change are important, and I’ve never said they’re not, but they don’t address mitigation – the preventing of climate change. Well, some can, such as the project for smokeless, efficient ovens, but that’s not the point here. The point is that Christian Aid, for example, calling on us all to be “Hungry for Justice” isn’t addressing the central problem – the mass use of fossil fuels and deforestation in the name of economic development.
People are talking in hushed, reverential tones about Make Climate History. The way that Make Poverty History worked was a bunch of parliamentary people, and government people, sat down together and worked out how to get shows of public support for the government’s calls to the G8. The appeal to the masses was principally divided into two kinds – messages calling for people to support the government, and messages calling for people to urge, shout, rail, demonstrate to the government that they wanted these things. So, if you were in the first group you were showing support for what you thought was a good thing, and if you were in the second group, you were using all your righteous anger to force the government to take up the cause of the poor. The NGOs merely repeated these messages out on the wires. People spent a lot of time and energy on taking these messages out to various communities, who then spent a lot of time and energy on public meetings, letter writing, postcard signing, rallying, marching, talking to their democratic representatives. But all of that activity was actually useless. The relationships that counted were the relationships between the governments, not between the governments and their NGOs. The NGOs were used to propagate a government initiative.
And now, they’re doing it again with climate change. Various parts of government, who have actually understood the science, and the economics, can see how it is in the best interests of the United Kingdom, and the European Union, of which we are a closely-connected part, to adopt strong carbon control policies. But they’re not content just to get on with it. No, they want all the politically active types to make a show of support. And so the communications begin. Apparently open consultative meetings are convened, but the agenda is already decided, and the messaging already written for you.
It reminds me of what happened with the Climate Marches. A truly independent strongly critical movement centred around the Campaign against Climate Change organised a demonstration of protest every year in London, leading people either from or to the American Embassy, as the USA was the most recalcitrant on taking action to control greenhouse gas emissions. This was an effective display of public feeling, as it irritated and scratched and annoyed. So it had to go. So, I Count was born, a project of Stop Climate Chaos. They organised events sometimes on the very same day as the Campaign against Climate Change, and their inclusive hippy message was all lovehearts and flowers and we wouldn’t hurt a fly type calls for change. In the run up to the Copenhagen Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC) Kyoto Protocol in late 2009, all the NGOs were pushing for energy to be concentrated on its outcome, but nobody who joined in the vigils, the pilgrimages or the marches had any chance to make a real input. We were just the feather boa on the cake. We were even ejected from the building.
All this energy expended was a complete waste of time. With climate change, the relationships that count are between the governments and the energy industry. The NGOs may rant and rail in their toothless, fangless, clawless way about energy industry infelicity, ignominy, ignorance and inflexibility, but the energy industry only cares about NGOs if they show any sign of rebellious insubordination, which might upset their shareholders.
The governments know what they need to do – they need to improve their relationships with their energy industries to come to an agreement about decarbonising the energy supply – ask them in the most non-nonsense, unavoidable, sisterly/brotherly way to diversify out of fossil fuels. It really doesn’t matter what the NGOs say or do.
Current climate change campaigning to the masses is analagous to walking into a student party and shouting above the noise, sorry, music, “Hands up, who likes beer ?” You might get some token drunken waves out of that, but nothing more.
People, I predict, are less likely to join in with a hunger strike than they are to like beer. And even if I did join the Climate Fast, it wouldn’t make a blind bit of difference to energy company behaviour or government policy.
Look, I’ve done my share of climate change actions. I’ve cut my personal energy use, I’ve given up ironing and vacuuming, for example. I’ve installed solar panels. I use the bus. I’ve taken part in the Great Scheme of Voluntary Behaviour Change – I, the energy consumer have shown my willingness to consume less and produce less greenhouse gas emissions. Now it’s time for other people to act.
Given half a chance, most of the British people would vote for climate – a decent, hardworking, sunshine-and-rain and rather moderate climate – and none of this extremist storms, floods and droughts scenario we’ve been suffering recently.
Yes, and more British people want renewable energy than voted in their Local Elections.
So why doesn’t the UK Government just get on with it – institute the proper Carbon Budget at home, continue to ask for decent decarbonisation targets abroad, and leave all the compassionate caring people to devote themselves to causes that they stand a chance of impacting ?Academic Freedom, Advancing Africa, Bait & Switch, Behaviour Changeling, Big Society, Change Management, Climate Change, Climate Chaos, Climate Damages, Conflict of Interest, Corporate Pressure, Dead End, Deal Breakers, Demoticratica, Design Matters, Direction of Travel, Disturbing Trends, Divide & Rule, Dreamworld Economics, Economic Implosion, Emissions Impossible, Energy Calculation, Energy Change, Energy Disenfranchisement, Energy Revival, Evil Opposition, Extreme Energy, Extreme Weather, Feed the World, Feel Gooder, Freemarketeering, Gamechanger, Global Heating, Global Singeing, Global Warming, Green Investment, Green Power, Growth Paradigm, Hide the Incline, Human Nurture, Hydrocarbon Hegemony, Incalculable Disaster, Insulation, Libertarian Liberalism, Low Carbon Life, Mad Mad World, Mass Propaganda, Media, Meltdown, National Energy, National Power, National Socialism, Neverending Disaster, Not In My Name, Nudge & Budge, Optimistic Generation, Orwells, Paradigm Shapeshifter, Pet Peeves, Petrolheads, Policy Warfare, Political Nightmare, Protest & Survive, Public Relations, Pure Hollywood, Regulatory Ultimatum, Renewable Resource, Revolving Door, Science Rules, Screaming Panic, Social Capital, Social Change, Social Chaos, Social Democracy, Stirring Stuff, The Myth of Innovation, The Power of Intention, The Science of Communitagion, Tsunami, Unqualified Opinion, Unsolicited Advice & Guidance, Unutterably Useless, Utter Futility, Vain Hope, Voluntary Behaviour Change, Vote Loser, Wasted Resource
Posted on May 28th, 2014 2 comments
Information Rights Unit
Department for Business, Innovation & Skills
1 Victoria Street
28th May 2014
Request to the Department of Energy and Climate Change
Re : Policy and Strategy for North Sea Natural Gas Fields Depletion
Previous Freedom of Information Request Reference : 14/0672
Previous Freedom of Information Request Dated : 27th April 2014
Dear Madam / Sir,
Thank you for your reply to my previous Freedom of Information Request, which has prompted me to ask for further information in order to fully comprehend the prospects for manufactured gas in British energy policy.
1. The Potential for Synthetic Natural Gas (SNG)
In the reply to my previous Freedom of Information Request of 27th April 2014, with the reference number 14/0672, the following statement was offered :-
“Furthermore, we have doubts that synthetic natural gas production under current technologies could meet any significant shortfall of gas supply either economically or in sufficient quantity.”
Under the Freedom of Information Act of 2000, please could you send me documentation such as interim and final reports, reviews and feasibility studies on which you base your lack of confidence in the potential of the current technologies for Synthetic Natural Gas to meet any significant shortfall of gas supply either economically or in terms of quantity.
In particular, as the production of Renewable Hydrogen is a key element of several suggested “Power to Gas” Synthetic Natural Gas system designs, I would like to have copies of final reports, reviews and studies in relation to the GridGas project, a feasibility study for which was funded by the Department of Energy and Climate Change (DECC), and which had partners in ITM Power, (Royal Dutch) Shell, Kiwa (GASTEC), National Grid and The Scottish Hydrogen and Fuel Cell Association (SHFCA).
I should also especially like to have copies of interim and final reports and reviews from the feasibility study into the Production of Synthetic Methane, conducted by ITM Power, as funded by DECC under the Carbon Capture and Storage Innovation Competition, in a consortium with Scottish and Southern Energy (SSE), Scotia Gas Networks, Logan Energy Ltd and Kiwa GASTEC at CRE.
I should also like to know which designs for Synthetic Natural Gas systems you have considered, which will entail you furnishing me with diagrams and other engineering information for process elements and plant equipment, to allow me to understand which gas processing configurations you have considered, and which you have dismissed.
I would also like to know what your estimates are for “spare” wind and solar power hours of generation by 2025 in the UK. This excess generation, whereby power demand does not meet power supply from variable renewable electricity, is crucial to anticipate as this is a key input for “Power to Gas” designs.
I should also like to see your assessment of the German Energy Agency (dena) “Power to Gas” Strategy and your analysis of how this compares to the British situation and prospects.
As regards relative economic values of different sources of gas energy fuel, I would like to receive information about your analyses of the near-term gas market, and the likelihood of price rises in Natural Gas, and competition in the market from new Natural Gas customers, especially in light of the imminent closure of coal-fired power plants due to the European Community’s Large Combustion Plant Directive (LPCD) and the Industrial Emissions Directive (IED).
2. The Potential for Natural Gas Supply Shocks
In the reply to my previous Freedom of Information Request of 27th April 2014, given the reference number 14/0672, the following statements were made :-
“It is the government’s stance that developments in the gas industry should be market-led, underpinned by robust price signals. This is a model which has ensured that UK domestic and small business consumers have never faced gas shortages and even industry-level warnings are rare. This approach has also delivered significant investment in gas infrastructure, in response to declining production from the UK Continental Shelf, and we are well placed to absorb supply shocks, with a diverse range of suppliers, routes and sources. Discounting our indigenous production, which is still responsible for around half of our annual gas demand, UK import infrastructure can meet 189% of annual demand. This resilience to supply shocks is demonstrated by Ofgem’s 2012 Gas Security of Supply report which found that in a normal winter we would have to lose 50% of non-storage supplies for there to be an interruption to gas supplies to large industrial users and/or the power sector, and between 60% and 70% of all gas sources for there to be an interruption of supplies to domestic customers – equivalent to losing all LNG supply, all imports from the Continent and 50% of our production at the same time.”
Under the Freedom of Information Act 2000, please can you supply me copies of, or links to, documents that specify analysis of what kinds of “robust price signals” you are referring to, and how these are achieved. In particular, I should like to know if you mean the ebb and flow of gas prices under market conditions, or whether you consider regulatory instruments, for example, carbon pricing, or economic policy, such as tax breaks or subsidies for gas producers, to be at least part of the source of the “robust price signals” you expect.
In particular, I should like to know from your internal reports how you view the impact of the Capacity Mechanism on the price of Natural Gas in the UK – the Capacity Mechanism having been proposed to keep gas-fired power plants from closure, in order to be available to balance electrical grid fluctuations.
I should also like you to supply me with copies of your internal reviews of the impact on imported Natural Gas prices from events unrelated to market conditions, such as the outcomes of warfare, or political manoeuvres, and whether these price shocks could contribute to “supply shocks”.
I should also like to have sight of reports or other documentation that outlines analysis of risks of “supply shock” in gas supply, for instance, what circumstances are considered capable of causing a 50%, 60% or 70% drop in non-domestic gas supplies, causing a loss of imported Liquified Natural Gas, or imported pipeline Natural Gas. Please can you also provide me with reports, or links to reports, that show the analysis of circumstances that would cause a loss of 50% of Natural Gas from the North Sea and other production areas in the United Kingdom; including an analysis of risks of a trade war between a putative newly-independent Scotland and its gas customer England, given that most Natural Gas consumption is south of the border.
Please may I also have information that details your analyses of the decline in Natural Gas production from the North Sea, including from territorial waters outside the UK, a calculation of depletion rates in reserves, and the projection for decline in production.
I should also like to have sight of the documents on which you base your calculations of depletion of Natural Gas reserves across Eurasia, Asia, North Africa and the Middle East, and the risks to production levels according [to] the passage of time.
As a corollary, I would like to have sight of the documents on which you base your analysis of future changes in market demand for Natural Gas across Eurasia, Asia, North Africa and the Middle East, especially considering new trade relationships between China and Russia, and China and the Middle East.
Thank you for your attention to my request for information.
Posted on May 24th, 2014 4 comments
How to organise a political campaign around Climate Change : ask a group of well-fed, well-meaning, Guardian-reading, philanthropic do-gooders into the room to adopt the lowest common denominator action plan. Now, as a well-fed, well-meaning, Guardian-reading (well, sometimes), philanthropic do-gooder myself, I can expect to be invited to attend such meetings on a regular basis. And always, I find myself frustrated by the outcomes : the same insipid (but with well-designed artwork) calls to our publics and networks to support something with an email registration, a signed postcard, a fistful of dollars, a visit to a public meeting of no consequence, or a letter to our democratic representative. No output except maybe some numbers. Numbers to support a government decision, perhaps, or numbers to indicate what kind of messaging people need in future.
I mean, with the Fair Trade campaign, at least there was some kind of real outcome. Trade Justice advocates manned stall tables at churches, local venues, public events, and got money flowing to the international co-operatives, building up the trade, making the projects happen, providing schooling and health and aspirations in the target countries. But compare that to the Make Poverty History campaign which was largely run to support a vain top-level political attempt to garner international funding promises for social, health and economic development. Too big to succeed. No direct line between supporting the campaign and actually supporting the targets. Passing round the hat to developed, industrialised countries for a fund to support change in developing, over-exploited countries just isn’t going to work. Lord Nicholas Stern tried to ask for $100 billion a year by 2020 for Climate Change adaptation. This has skidded to a halt, as far as I know. The economic upheavals, don’t you know ?
And here we are again. The United Nations Framework Convention on Climate Change (UNFCCC), which launched the Intergovernmental Panel on Climate Change (IPCC) reports on climate change, oh, so, long, ago, through the person of its most charismatic and approachable Executive Secretary, Christiana Figueres, is calling for support for a global Climate Change treaty in 2015. Elements of this treaty, being drafted this year, will, no doubt, use the policy memes of the past – passing round the titfer begging for a couple of billion squid for poor, hungry people suffering from floods and droughts; proposing some kind of carbon pricing/taxing/trading scheme to conjure accounting bean solutions; trying to implement an agreement around parts per million by volume of atmospheric carbon dioxide; trying to divide the carbon cake between the rich and the poor.
Somehow, we believe, that being united around this proposed treaty, few of which have any control over the contents of, will bring us progress.
What can any of us do to really have input into the building of a viable future ? Christiana – for she is now known frequently only by her first name – has called for numbers – a measure of support for the United Nations process. She has also let it be known that if there is a substantial number of people who, with their organisations, take their investments out of fossil fuels, then this could contribute to the mood of the moment. Those who are advocating divestment are yet small in number, and I fear that they will continue to be marginal, partly because of the language that is being used.
First of all, there are the Carbon Disclosers. Their approach is to conjure a spectre of the “Carbon Bubble” – making a case that investments in carbon dioxide-rich enterprises could well end up being stranded by their assets, either because of wrong assumptions about viable remaining resources of fossil fuels, or because of wrong assumptions about the inability of governments to institute carbon pricing. Well, obviously, governments will find it hard to implement effective carbon pricing, because governments are in bed with the energy industry. Politically, governments need to keep big industry sweet. No surprise there. And it’s in everybody’s interests if Emperor Oil and Prince Regent Natural Gas are still wearing clothes. In the minds of the energy industry, we still have a good four decades of healthy fossil fuel assets. Royal Dutch Shell’s CEO can therefore confidently say at a public AGM that There Is No Carbon Bubble. The Carbon Discloser language is not working, it seems, as any kind of convincer, except to a small core of the concerned.
And then there are the Carbon Voices. These are the people reached by email campaigns who have no real idea how to do anything practical to affect change on carbon dioxide emissions, but they have been touched by the message of the risks of climate change and they want to be seen to be supporting action, although it’s not clear what action will, or indeed can, be taken. Well-designed brochures printed on stiff recycled paper with non-toxic inks will pour through their doors and Inboxes. Tick it. Send it back. Sign it. Send it on. Maybe even send some cash to support the campaign. This language is not achieving anything except guilt.
And then there are the Carbon Divestors. These are extremely small marginal voices who are taking a firm stand on where their organisations invest their capital. The language is utterly dated. The fossil fuel industry are evil, apparently, and investing in fossil fuels is immoral. It is negative campaigning, and I don’t think it stands a chance of making real change. It will not achieve its goal of being prophetic in nature – bearing witness to the future – because of the non-inclusive language. Carbon Voices reached by Carbon Divestor messages will in the main refuse to respond, I feel.
Political action on Climate Change, and by that I mean real action based on solid decisions, often taken by individuals or small groups, has so far been under-the-radar, under-the-counter, much like the Fair Trade campaign was until it burst forth into the glorious day of social acceptability and supermarket supply chains. You have the cyclists, the Transition Towners, the solar power enthusiasts. Yet to get real, significant, economic-scale transition, you need Energy Change – that is, a total transformation of the energy supply and use systems. It’s all very well for a small group of Methodist churches to pull their pension funds from investments in BP and Shell, but it’s another thing entirely to engage BP and Shell in an action plan to diversify out of petroleum oil and Natural Gas.
Here below are my email words in my feeble attempt to challenge the brain of Britain’s charitable campaigns on what exactly is intended for the rallying cry leading up to Paris 2015. I can pretty much guarantee you won’t like it – but you have to remember – I’m not breaking ranks, I’m trying to get beyond the Climate Change campaigning and lobbying that is currently in play, which I regard as ineffective. I don’t expect a miraculous breakthrough in communication, the least I can do is sow the seed of an alternative. I expect I could be dis-invited from the NGO party, but it doesn’t appear to be a really open forum, merely a token consultation to build up energy for a plan already decided. If so, there are probably more important things I could be doing with my time than wasting hours and hours and so much effort on somebody else’s insipid and vapid agenda.
I expect people might find that attitude upsetting. If so, you know, I still love you all, but you need to do better.
A lot of campaigning over the last 30 years has been very negative and divisive, and frequently ends in psychological stalemate. Those who are cast as the Bad Guys cannot respond to the campaigning because they cannot admit to their supporters/employees/shareholders that the campaigners are “right”. Joe Average cannot support a negative campaign as there is no apparent way to make change happen by being so oppositional, and because the ask is too difficult, impractical, insupportable. [Or there is simply too much confusion or cognitive dissonance.]
One of the things that was brought back from the […] working group breakout on […] to the plenary feedback session was that there should be some positive things about this campaign on future-appropriate investment. I think […] mentioned the obvious one of saying effectively “we are backing out of these investments in order to invest in things that are more in line with our values” – with the implicit encouragement for fossil fuel companies to demonstrate that they can be in line with our values and that they are moving towards that. There was some discussion that there are no bulk Good Guy investment funds, that people couldn’t move investments in bulk, although some said there are. […] mentioned Ethex.
Clearly fossil fuel production companies are going to find it hard to switch from oil and gas to renewable electricity, so that’s not a doable we can ask them for. Several large fossil fuel companies, such as BP, have tried doing wind and solar power, but they have either shuttered those business units, or not let them replace their fossil fuel activities.
[…] asked if the [divestment] campaign included a call for CCS – Carbon Capture and Storage – and […] referred to […] which showed where CCS is listed in a box on indicators of a “good” fossil fuel energy company.
I questioned whether the fossil fuel companies really want to do CCS – and that they have simply been waiting for government subsidies or demonstration funds to do it. (And anyway, you can’t do CCS on a car.)
I think I said in the meeting that fossil fuel producer companies can save themselves and save the planet by adopting Renewable Gas – so methods for Carbon Capture and Utilisation (CCU) or “carbon recycling”. Plus, they could be making low carbon gas by using biomass inputs. Most of the kit they need is already widely installed at petrorefineries. So – they get to keep producing gas and oil, but it’s renewably and sustainably sourced with low net carbon dioxide emissions. That could be turned into a positive, collaborative ask, I reckon, because we could all invest in that, the fossil fuel companies and their shareholders.
Anyway, I hope you did record something urging a call to positive action and positive engagement, because we need the co-operation of the fossil fuel companies to make appropriate levels of change to the energy system. Either that, or they go out of business and we face social turmoil.
If you don’t understand why this is relevant, that’s OK. If you don’t understand why a straight negative campaign is a turn-off to many people (including those in the fossil fuel industry), well, I could role play that with you. If you don’t understand what I’m talking about when I talk about Renewable Gas, come and talk to me about it again in 5 years, when it should be common knowledge. If you don’t understand why I am encouraging positive collaboration, when negative campaigning is so popular and marketable to your core segments, then I will resort to the definition of insanity – which is to keep doing the same things, expecting a different result.
I’m sick and tired of negative campaigning. Isn’t there a more productive thing to be doing ?
There are no enemies. There are no enemies. There are no enemies.
As far as I understand the situation, both the […] and […] campaigns are negative. They don’t appear to offer any positive routes out of the problem that could engage the fossil fuel companies in taking up the baton of Energy Change. If that is indeed the main focus of […] and […] efforts, then I fear they will fail. Their work will simply be a repeat of the negative campaigning of the last 30 years – a small niche group will take up now-digital placards and deploy righteous, holy social media anger, and that will be all.
Since you understand this problem, then I would suggest you could spend more time and trouble helping them to see a new way. You are, after all, a communications expert. And so you know that even Adolf Hitler used positive, convening, gathering techniques of propaganda to create power – and reserved the negative campaigning for easily-marginalised vulnerable groups to pile the bile and blame on.
Have a nicer day,
The important thing as far as I understand it is that the “campaigning” organisations need to offer well-researched alternatives, instead of just complaining about the way things are. And these well-researched alternatives should not just be the token sops flung at the NGOs and UN by the fossil fuel companies. What do I mean ?
Well, let’s take Carbon Capture and Storage (CCS). The injection of carbon dioxide into old oil and gas caverns was originally proposed for Enhanced Oil Recovery (EOR) – that is – getting more oil and gas out the ground by pumping gas down there – a bit like fracking, but with gas instead of liquid. The idea was that the expense of CCS would be compensated for by the new production of oil and gas – however, the CCS EOR effect has shown to be only temporary. So now the major oil and gas companies say they support carbon pricing (either by taxation or trading), to make CCS move forward. States and federations have given them money to do it. I think the evidence shows that carbon pricing cannot be implemented at a sufficiently high level to incentivise CCS, therefore CCS is a non-answer. Why has […] not investigated this ? CCS is a meme, but not necessarily part of the carbon dioxide solution. Not even the UNFCCC IPCC reports reckon that much CCS can be done before 2040. So, why does CCS appear in the […] criteria for a “good” fossil fuel company ? Because it’s sufficiently weak as a proposal, and sufficiently far enough ahead that the fossil fuel companies can claim they are “capture ready”, and in the Good Book, but in reality are doing nothing.
Non-starters don’t just appear from fossil fuel companies. From my point of view, another example of running at and latching on to things that cannot help was the support of the GDR – Greenhouse Development Rights, of which there has been severe critique in policy circles, but the NGOs just wrote it into their policy proposals without thinking about it. There is no way that the emissions budgets set out in the GDR policy could ever get put into practice. For a start, there is no real economic reason to divide the world into developing and developed nations (Kyoto [Protocol]’s Annex I and Annex II).
If you give me some links, I’m going to look over your […] and think about it.
I think that if a campaign really wants to get anywhere with fossil fuel companies, instead of being shunted into a siding, it needs to know properly what the zero carbon transition pathways really are. Unequal partners do not make for a productive engagement, I reckon.
I’m sorry to say that this still appears to be negative campaigning – fossil fuel companies are “bad”; and we need to pull our money out of fossil fuel companies and put it in other “good” companies. Where’s the collective, co-operative effort undertaken with the fossil fuel companies ? What’s your proposal for helping to support them in evolving ? Do you know how they can technologically transition from using fossil fuels to non-fossil fuels ? And how are you communicating that with them ?
They call me the “Paradigm Buster”. I’m not sure if “the group” is open to even just peeking into that kind of approach, let alone “exploring” it. The action points on the corporate agenda could so easily slip back into the methods and styles of the past. Identify a suffering group. Build a theory of justice. Demand reparation. Make Poverty History clearly had its victims and its saviours. Climate change, in my view, requires a far different treatment. Polar bears cannot substitute for starving African children. And not even when climate change makes African children starve, can they inspire the kind of action that climate change demands. A boycott campaign without a genuine alternative will only touch a small demographic. Whatever “the group” agrees to do, I want it to succeed, but by rehashing the campaigning strategies and psychology of the past, I fear it will fail. Even by adopting the most recent thinking on change, such as Common Cause, [it] is not going to surmount the difficulties of trying to base calls to action on the basis of us-and-them thinking – polar thinking – the good guys versus the bad guys – the body politic David versus the fossil fuel company Goliath. By challenging this, I risk alienation, but I am bound to adhere to what I see as the truth. Climate change is not like any other disaster, aid or emergency campaign. You can’t just put your money in the [collecting tin] and pray the problem will go away with the help of the right agencies. Complaining about the “Carbon Bubble” and pulling your savings from fossil fuels is not going to re-orient the oil and gas companies. The routes to effective change require a much more comprehensive structure of actions. And far more engagement that agreeing to be a flag waver for whichever Government policy is on the table. I suppose it’s too much to ask to see some representation from the energy industry in “the group”, or at least […] leaders who still believe in the fossil fuel narratives, to take into account their agenda and their perspective, and a readiness to try positive collaborative change with all the relevant stakeholders ?
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Posted on May 2nd, 2014 No comments
Amongst the chink-clink of wine glasses at yesterday evening’s Open Cities Green Sky Thinking Max Fordham event, I find myself supping a high ball orange juice with an engineer who does energy retrofits – more precisely – heat retrofits. “Yeah. Drilling holes in Grade I Listed walls for the District Heating pipework is quite nervewracking, as you can imagine. When they said they wanted to put an energy centre deep underneath the building, I asked them, “Where are you going to put the flue ?””
Our attention turns to heat metering. We discuss cases we know of where people have installed metering underground on new developments and fitted them with Internet gateways and then found that as the rest of the buildings get completed, the meter can no longer speak to the world. The problems of radio-meets-thick-concrete and radio-in-a-steel-cage. We agree that anybody installing a remote wifi type communications system on metering should be obliged in the contract to re-commission it every year.
And then we move on to shale gas. “The United States of America could become fuel-independent within ten years”, says my correspondent. I fake yawn. It really is tragic how some people believe lies that big. “There’s no way that’s going to happen !”, I assert.
“Look,” I say, (jumping over the thorny question of Albertan syncrude, which is technically Canadian, not American), “The only reason there’s been strong growth in shale gas production is because there was a huge burst in shale gas drilling, and now it’s been shown to be uneconomic, the boom has busted. Even the Energy Information Administration is not predicting strong growth in shale gas. They’re looking at growth in coalbed methane, after some years. And the Arctic.” “The Arctic ?”, chimes in Party Number 3. “Yes,” I clarify, “Brought to you in association with Canada. Shale gas is a non-starter in Europe. I always think back to the USGS. They estimate that the total resource in the whole of Europe is a whole order of magnitude, that is, ten times smaller than it is in Northern America.” “And I should have thought you couldn’t have the same kind of drilling in Europe because of the population density ?”, chips in Party Number 3. “They’re going to be drilling a lot of empty holes,” I add, “the “sweet spot” problem means they’re only likely to have good production in a few areas. And I’m not a geologist, but there’s the stratigraphy and the kind of shale we have here – it’s just not the same as in the USA.” Parties Number 2 and 3 look vaguely amenable to this line of argument. “And the problems that we think we know about are not the real problems,” I out-on-a-limbed. “The shale gas drillers will probably give up on hydraulic fracturing of low density shale formations, which will appease the environmentalists, but then they will go for drilling coal lenses and seams inside and alongside the shales, where there’s potential for high volumes of free gas just waiting to pop out. And that could cause serious problems if the pressures are high – subsidence, and so on. Even then, I cannot see how production could be very high, and it’s going to take some time for it to come on-stream…” “…about 10 years,” says Party Number 2.
“Just think about who is going for shale gas in the UK,” I ventured, “Not the big boys. They’ve stood back and let the little guys come in to drill for shale gas. I mean, BP did a bunch of onshore seismic surveys in the 1950s, after which they went drilling offshore in the North Sea, so I think that says it all, really. They know there’s not much gas on land.” There were some raised eyebrows, as if to say, well, perhaps seismic surveys are better these days, but there was agreement that shale gas will come on slowly.
“I don’t think shale gas can contribute to energy security for at least a decade,” I claimed, “even if there’s anything really there. Shale gas is not going to answer the problems of the loss of nuclear generation, or the problems of gas-fired generation becoming uneconomic because of the strong growth in renewables.” There was a nodding of heads.
“I think,” I said, “We should forget subsidies. UK plc ought to purchase a couple of CCGTS [Combined Cycle Gas Turbine electricity generation units]. That will guarantee they stay running to load balance the power grid when we need them to. Although the UK’s Capacity Mechanism plan is in line with the European Union’s plans for supporting gas-fired generation, it’s not achieving anything yet.” I added that we needed to continue building as much wind power as possible, as it’s quick to put in place. I quite liked my radical little proposal for energy security, and the people I was talking with did not object.
There was some discussion about Green Party policy on the ownership of energy utilities, and how energy and transport networks are basically in the hands of the State, but then Party Number 2 said, “What we really need is consistency of policy. We need an Energy Bill that doesn’t get gutted by a change of administration. I might need to vote Conservative, because Labour would mess around with policy.” “I don’t know,” I said, “it’s going to get messed with whoever is in power. All those people at DECC working on the Electricity Market Reform – they all disappeared. Says something, doesn’t it ?”
I spoke to Parties Number 2 and 3 about my research into the potential for low carbon gas. “Basically, making gas as a kind of energy storage ?”, queried Party Number 2. I agreed, but omitted to tell him about Germany’s Power-to-Gas Strategy. We agreed that it would be at least a decade before much could come of these technologies, so it wouldn’t contribute immediately to energy security. “But then,” I said, “We have to look at the other end of this transition, and how the big gas producers are going to move towards Renewable Gas. They could be making decisions now that make more of the gas they get out of the ground. They have all the know-how to build kit to make use of the carbon dioxide that is often present in sour conventional reserves, and turn it into fuel, by reacting it with Renewable Hydrogen. If they did that, they could be building sustainability into their business models, as they could transition to making Renewable Gas as the Natural Gas runs down.”
I asked Parties Number 2 and 3 who they thought would be the first movers on Renewable Gas. We agreed that companies such as GE, Siemens, Alstom, the big engineering groups, who are building gas turbines that are tolerant to a mix of gases, are in prime position to develop closed-loop Renewable Gas systems for power generation – recycling the carbon dioxide. But it will probably take the influence of the shareholders of companies like BP, who will be arguing for evidence that BP are not going to go out of business owing to fossil fuel depletion, to roll out Renewable Gas widely. “We’ve all got our pensions invested in them”, admitted Party Number 2, arguing for BP to gain the ability to sustain itself as well as the planet.Academic Freedom, Alchemical, Assets not Liabilities, Baseload is History, Be Prepared, Big Picture, Carbon Recycling, Change Management, Corporate Pressure, Demoticratica, Design Matters, Direction of Travel, Economic Implosion, Energy Autonomy, Energy Calculation, Energy Change, Energy Insecurity, Engineering Marvel, Environmental Howzat, Extreme Energy, Fossilised Fuels, Freemarketeering, Fuel Poverty, Gamechanger, Gas Storage, Green Gas, Green Investment, Green Power, Major Shift, National Power, Optimistic Generation, Paradigm Shapeshifter, Peak Natural Gas, Petrolheads, Policy Warfare, Political Nightmare, Protest & Survive, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Shale Game, Social Democracy, Solution City, Technofix, Technological Sideshow, The Power of Intention, The Right Chemistry, The War on Error, Unconventional Foul, Unnatural Gas, Western Hedge, Wind of Fortune
Posted on May 2nd, 2014 No comments
I took some notes from remarks made by Professor David MacKay, the UK Government’s Chief Scientific Advisor, yesterday, 1st May 2014, at an event entitled “How Will We Heat London ?”, held by Max Fordhams as part of the Green Sky Thinking, Open City week. I don’t claim to have recorded his words perfectly, but I hope I’ve captured the gist.
[David MacKay] : [Agreeing with others on the panel – energy] demand reduction is really important. [We have to compensate for the] “rebound effect”, though [where people start spending money on new energy services if they reduce their demand for their current energy services].
SAP is an inaccurate tool and not suitable for the uses we put it too :-
Things seem to be under-performing [for example, Combined Heat and Power and District Heating schemes]. It would be great to have data. A need for engineering expertise to get in.
I’m not a Chartered Engineer, but I’m able to talk to engineers. I know a kilowatt from a kilowatt hour [ (Laughter from the room) ]. We’ve [squeezed] a number of engineers into DECC [the Department of Energy and Climate Change].
I’m an advocate of Heat Pumps, but the data [we have received from demonstration projects] didn’t look very good. We hired two engineers and asked them to do the forensic analysis. The heat pumps were fine, but the systems were being wrongly installed or used.
Now we have a Heat Network team in DECC – led by an engineer. We’ve published a Heat Strategy. I got to write the first three pages and included an exergy graph.
[I say to colleagues] please don’t confuse electricity with energy – heat is different. We need not just a green fluffy solution, not just roll out CHP [Combined Heat and Power] [without guidance on design and operation].
Sources of optimism ? Hopefully some of the examples will be available – but they’re not in the shop at the moment.
For example, the SunUp Heat Battery – works by having a series of chambers of Phase Change Materials, about the size of a fridge that you would use to store heat, made by electricity during the day, for use at night, and meet the demand of one home. [Comment from Paul Clegg, Senior Partner at Feilden Clegg Bradley Studios : I first heard about Phase Change Materials back in the 1940s ? 1950s ? And nothing’s come of it yet. ] Why is that a good idea ? Well, if you have a heat pump and a good control system, you can use electricity when it’s cheapest… This is being trialled in 10 homes.
Micro-CHP – [of those already trialled] definitely some are hopeless, with low temperature and low electricity production they are just glorified boilers with a figleaf of power.
Maybe Fuel Cells are going to deliver – power at 50% efficiency [of conversion] – maybe we’ll see a Fuel Cell Micro-Combined Heat and Power unit ?
Maybe there will be hybrid systems – like the combination of a heat pump and a gas boiler – with suitable controls could lop off peaks of demand (both in power and gas).
We have designed the 2050 Pathways Calculator as a tool in DECC. It was to see how to meet the Carbon Budget. You can use it as an energy security calculator if you want. We have helped China, Korea and others to write their own calculators.
A lot of people think CHP is green and fluffy as it is decentralised, but if you’re using Natural Gas, that’s still a Fossil Fuel. If you want to run CHP on biomass, you will need laaaaaarge amounts of land. You can’t make it all add up with CHP. You would need many Wales’-worth of bioenergy or similar ways to make it work.
Maybe we should carry on using boilers and power with low carbon gas – perhaps with electrolysis [A “yay !” from the audience. Well, me, actually]. Hydrogen – the the 2050 Calculator there is no way to put it back into the beginning of the diagram – but it could provide low carbon heat, industry and transport. At the moment we can only put Hydrogen into Transport [in the 2050 Calculator. If we had staff in DECC to do that… It’s Open Source, so if any of you would like to volunteer…
Plan A of DECC was to convert the UK to using lots of electricity [from nuclear power and other low carbon technologies, to move to a low carbon economy], using heat pumps at the consumer end, but there’s a problem in winter [Bill Watts of Max Fordham had already shown a National Grid or Ofgem chart of electricity demand and gas demand over the year, day by day. Electricity demand (in blue) fluctuates a little, but it pretty regular over the year. Gas demand (in red) however, fluctuates a lot, and is perhaps 6 to 10 times larger in winter than in summer.]
If [you abandon Plan A – “electrification of everything”] and do it the other way, you will need a large amount of Hydrogen, and a large Hydrogen store. Electrolysers are expensive, but we are doing/have done a feasibility study with ITM Power – to show the cost of electrolysers versus the cost of your wind turbines [My comment : but you’re going to need your wind turbines to run your electrolysers with their “spare” or “curtailed” kilowatt hours.]
[David Mackay, in questions from the floor] We can glue together [some elements]. Maybe the coming smart controls will help…can help save a load of energy. PassivSystems – control such things as your return temperature [in your Communal or District Heating]…instead of suing your heat provider [a reference to James Gallagher who has problems with his communal heating system at Parkside SE10], maybe you could use smart controls…
[Question] Isn’t using smart controls like putting a Pirelli tyre on a Ford Cortina ? Legacy of poor CHP/DH systems…
[David MacKay in response to the question of insulation] If insulation were enormously expensve, we wouldn’t have to be so enthusastic about it…We need a well-targeted research programme looking at deep retrofitting, instead of letting it all [heat] out.
[Adrian Gault, Committee on Climate Change] We need an effective Government programme to deliver that. Don’t have it in the Green Deal. We did have it [in the previous programmes of CERT and CESP], but since they were cancelled in favour of the Green Deal, it’s gone off a cliff [levels of insulation installations]. We would like to see an initiative on low cost insulation expanded. The Green Deal is not producing a response.
[Bill Watts, Max Fordham] Agree that energy efficiency won’t run on its own. But it’s difficult to do. Not talking about automatons/automation. Need a lot of pressure on this.
[Adrian Gault] Maybe a street-by-street approach…
[Michael Trousdell, Arup] Maybe a rule like you can’t sell a house unless you’ve had the insulation done…
[Peter Clegg] … We can do heat recovery – scavenging the heat from power stations, but we must also de-carbonise the energy supply – this is a key part of the jigsaw.Academic Freedom, Alchemical, Artistic Licence, Baseload is History, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Big Society, Bioeffigy, Biofools, Biomess, British Biogas, Burning Money, Carbon Army, Change Management, Climate Change, Cool Poverty, Cost Effective, Deal Breakers, Design Matters, Efficiency is King, Electrificandum, Emissions Impossible, Energy Change, Energy Insecurity, Fossilised Fuels, Fuel Poverty, Gamechanger, Global Heating, Green Gas, Green Power, Heatwave, Human Nurture, Hydrogen Economy, Insulation, Major Shift, National Energy, Nudge & Budge, Optimistic Generation, Paradigm Shapeshifter, Peak Emissions, Policy Warfare, Political Nightmare, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Social Capital, Solution City, Technofix, The Data, The Power of Intention, The Right Chemistry, Voluntary Behaviour Change, Wasted Resource, Wind of Fortune
Posted on April 27th, 2014 1 comment
Sigh. I think I’m going to need to start sending out Freedom of Information requests… Several cups of tea later…
To: Information Rights Unit, Department for Business, Innovation & Skills, 5th Floor, Victoria 3, 1 Victoria Street, London SW1H OET
28th April 2014
Request to the Department of Energy and Climate Change
Re: Policy and Strategy for North Sea Natural Gas Fields Depletion
Dear Madam / Sir,
I researching the history of the development of the gas industry in the United Kingdom, and some of the parallel evolution of the industry in the United States of America and mainland Europe.
In looking at the period of the mid- to late- 1960s, and the British decision to transition from manufactured gas to Natural Gas supplies, I have been able to answer some of my questions, but not all of them, so far.
From a variety of sources, I have been able to determine that there were contingency plans to provide substitutes for Natural Gas, either to solve technical problems in the grid conversion away from town gas, or to compensate should North Sea Natural Gas production growth be sluggish, or demand growth higher than anticipated.
Technologies included the enriching of “lean” hydrogen-rich synthesis gas (reformed from a range of light hydrocarbons, by-products of the petroleum refining industry); Synthetic Natural Gas (SNG) and methane-“rich” gas making processes; and simple mixtures of light hydrocarbons with air.
In the National Archives Cmd/Cmnd/Command document 3438 “Fuel Policy. Presented to Parliament by the Minister of Power Nov 1967”, I found discussion on how North Sea gas fields could best be exploited, and about expected depletion rates, and that this could promote further exploration and discovery.
In a range of books and papers of the time, I have found some discussion about options to increase imports of Natural Gas, either by the shipping of Liquified Natural Gas (LNG) or by pipeline from The Netherlands.
Current British policy in respect of Natural Gas supplies appears to rest on “pipeline diplomacy”, ensuring imports through continued co-operation with partner supplier countries and international organisations.
I remain unclear about what official technological or structural strategy may exist to bridge the gap between depleting North Sea Natural Gas supplies and continued strong demand, in the event of failure of this policy.
It is clear from my research into early gas field development that depletion is inevitable, and that although some production can be restored with various techniques, that eventually wells become uneconomic, no matter what the size of the original gas field.
To my mind, it seems unthinkable that the depletion of the North Sea gas fields was unanticipated, and yet I have yet to find comprehensive policy statements that cover this eventuality and answer its needs.
Under the Freedom of Information Act (2000), I am requesting information to answer the following questions :-
1. At the time of European exploration for Natural Gas in the period 1948 to 1965, and the British conversion from manufactured gas to Natural Gas, in the period 1966 to 1977, what was HM Government’s policy to compensate for the eventual depletion of the North Sea gas fields ?
2. What negotiations and agreements were made between HM Government and the nationalised gas industry between 1948 and 1986; and between HM Government and the privatised gas industry between 1986 and today regarding the projections of decline in gas production from the UK Continental Shelf, and any compensating strategy, such as the development of unconventional gas resources, such as shale gas ?
3. Is there any policy or strategy to restore the SNG (Synthetic Natural Gas) production capacity of the UK in the event of a longstanding crisis emerging, for example from a sharp rise in imported Natural Gas costs or geopolitical upheaval ?
4. Has HM Government any plan to acquire the Intellectual Property rights to SNG production technology, whether from British Gas/Centrica or any other private enterprise, especially for the slagging version of the Lurgi gasifier technology ?
5. Has HM Government any stated policy intention to launch new research and development into, or pilot demonstrations of, SNG ?
6. Does HM Government have any clearly-defined policy on the production and use of manufactured gas of any type ? If so, please can I know references for the documents ?
7. Does HM Government anticipate that manufactured gas production could need to increase in order to support the production of synthetic liquid vehicle fuels; and if so, which technologies are to be considered ?
Thank you for your attention to my request for information.
jo.Academic Freedom, Assets not Liabilities, Be Prepared, Big Number, Big Picture, British Biogas, Carbon Commodities, Change Management, Corporate Pressure, Demoticratica, Design Matters, Disturbing Trends, Energy Autonomy, Energy Change, Energy Crunch, Energy Denial, Energy Insecurity, Energy Revival, Engineering Marvel, Fossilised Fuels, Fuel Poverty, Gamechanger, Gas Storage, Green Gas, Green Investment, Green Power, Growth Paradigm, Hide the Incline, Hydrocarbon Hegemony, Hydrogen Economy, Insulation, Major Shift, Marine Gas, Methane Management, Money Sings, National Energy, Paradigm Shapeshifter, Peak Natural Gas, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Curse, Resource Wards, Shale Game, Solution City, Technofix, Technological Sideshow, The Power of Intention, The Price of Gas, The Right Chemistry, Unconventional Foul, Unnatural Gas, Western Hedge
Posted on February 24th, 2014 No comments
Here is further email exchange with Professor Richard Sears, following on from a previous web log post.
From: Richard A. Sears
Date: 24 February 2014
To: Jo Abbess
Subject: Question from your TED talk
I was looking back over older emails and saw that I had never responded to your note. It arrived as I was headed to MIT to teach for a week and then it got lost. Sorry about that.
Some interesting questions. I don’t know anybody working specifically on wind power to gas options. At one time Shell had a project in Iceland using geothermal to make hydrogen. Don’t know what its status is but if you search on hydrogen and Iceland on the Shell website I’m sure there’s something. If the Germans have power to gas as a real policy option I’d poke around the web for information on who their research partners are for this.
Here are a couple of high level thoughts. Not to discourage you because real progress comes from asking new questions, but there are some physical fundamentals that are important.
Direct air capture of anything using current technology is prohibitively expensive to do at scale for energy. More energy will be expended in capture and synthesis than the fuels would yield.
Gaseous fuels are problematic on their own. Gas doesn’t travel well and is difficult to contain at high energy densities as that means compressing or liquefying it. That doesn’t make anything impossible, but it raises many questions about infrastructure and energy balance. If we take the energy content of a barrel of oil as 1.0, then a barrel of liquefied natural gas is about 0.6, compressed natural gas which is typically at about 3600psi is around 0.3, and a barrel (as a measure of volume equal to 42 US gallons) of natural gas at room temperature and pressure is about 0.0015 (+/-). Also there’s a real challenge in storing and transporting gasses as fuel at scale, particularly motor fuel to replace gasoline and diesel.
While there is some spare wind power potential that doesn’t get utilized because of how the grid must be managed, I expect it is a modest amount of energy compared to what we use today in liquid fuels. I think what that means is that while possible, it’s more likely to happen in niche local markets and applications rather than at national or global scales.
If you haven’t seen it, a nice reference on the potential of various forms of sustainable energy is available free and online here. http://www.withouthotair.com/
Hope some of this helps.
Richard A. Sears
Department of Energy Resources Engineering
From: Jo Abbess
Date: 24 February 2014
To: Richard A. Sears
Many thanks for getting back to me. Responses are nice – even if they
are months late. As they say – better late than never, although with
climate change, late action will definitely be unwise, according to an
increasing number of people.
I have indeed seen the website, and bought and spilled coffee on the
book of Professor David MacKay’s “Sustainable Energy Without The Hot
Air” project. It is legendary. However, I have checked and he has only
covered alternative gas in a couple of paragraphs – in notes. By
contrast, he spent a long chapter discussing how to filter uranium out
of seawater and other nuclear pursuits.
Yet as a colleague of mine, who knows David better than I do, said to
me this morning, his fascination with nuclear power is rather naive,
and his belief in the success of Generation III and Generation IV
lacks evidence. Plus, if we get several large carbon dioxide
sequestration projects working in the UK – Carbon Capture and Storage
(CCS) – such as the Drax pipeline (which other companies will also
join) and the Shell Peterhead demonstration, announced today, then we
won’t need new nuclear power to meet our 4th Carbon Budget – and maybe
not even the 5th, either (to be negotiated in 2016, I hear) :-
We don’t need to bury this carbon, however; we just need to recycle
it. And the number of ways to make Renewable Hydrogen, and
energy-efficiently methanate carbon monoxide and carbon dioxide with
hydrogen, is increasing. People are already making calculations on how
much “curtailed” or spare wind power is likely to be available for
making gas in 10 years’ time, and if solar power in the UK is
cranked/ramped up, then there will be lots of juicy cost-free power
ours for the taking – especially during summer nights.
Direct Air Capture of carbon dioxide is a nonsensical proposition.
Besides being wrong in terms of the arrow of entropy, it also has the
knock-on effect of causing carbon dioxide to come back out of the
ocean to re-equilibrate. I recently read a paper by climate scientists
that estimated that whatever carbon dioxide you take out of the air,
you will need to do almost all of it again.
Instead of uranium, we should be harvesting carbon dioxide from the
oceans, and using it to make gaseous and liquid fuels.
Gaseous fuels and electricity complement each other very well –
particularly in storage and grid balancing terms – there are many
provisions for the twins of gas and power in standards, laws, policies
and elsewhere. Regardless of the limitations of gas, there is a huge
infrastructure already in place that can store, pipe and use it, plus
it is multi-functional – you can make power, heat, other fuels and
chemicals from gas. In addition, you can make gas from a range of
resources and feedstocks and processing streams – the key quartet of
chemical gas species keep turning up : hydrogen, methane, carbon
monoxide and carbon dioxide – whether you are looking at the exhaust
from combustion, Natural Gas, industrial furnace producer gas,
biological decomposition, just about everywhere – the same four gases.
Energy transition must include large amounts of renewable electricity
– because wind and solar power are quick to build yet long nuclear
power lead times might get extended in poor economic conditions. The
sun does not always shine and the wind does not always blow (and the
tide is not always in high flux). Since demand profiles will never be
able to match supply profiles exactly, there will always be spare
power capacity that grids cannot use. So Power to Gas becomes the
optimal solution. At least until there are ways to produce Renewable
Hydrogen at plants that use process heat from other parts of the
Renewable Gas toolkit. So the aims are to recycle carbon dioxide from
gas combustion to make more gas, and recycle gas production process
heat to make hydrogen to use in the gas production process, and make
the whole lot as thermally balanced as possible. Yes. We can do that.
Lower the inputs of fresh carbon of any form, and lower the energy
requirements to make manufactured gas.
I met somebody working with Jacobs who was involved in the Carbon
Recycling project in Iceland. Intriguing, but an order of magnitude
smaller than I think is possible.
ITM Power in the UK are doing a Hydrogen-to-gas-grid and methanation
project in Germany with one of the regions. They have done several
projects with Kiwa and Shell on gas options in Europe. I know of the
existence of feasibility reports on the production of synthetic
methane, but I have not had the opportunity to read them yet…
I feel quite encouraged that Renewable Gas is already happening. It’s
a bit patchy, but it’s inevitable, because the narrative of
unconventional fossil fuels has many flaws. I have been looking at
issues with reserves growth and unconventionals are not really
commensurate with conventional resources. There may be a lot of shale
gas in the ground, but getting it out could be a long process, so
production volumes might never be very good. In the USA you’ve had
lots of shale gas – but that’s only been supported by massive drilling
programmes – is this sustainable ?
BP have just finished building lots of dollars of kit at Whiting to
process sour Natural Gas. If they had installed Renewable Gas kit
instead of the usual acid gas and sulfur processing, they could have
been preparing for the future. As I understand it, it is possible to
methanate carbon dioxide without first removing it from the rest of
the gas it comes in – so methanating sour gas to uprate it is a viable
option as far as I can see. The hydrogen sulfide would still need to
be washed out, but the carbon dioxide needn’t be wasted – it can be
made part of the fuel. And when the sour gas eventually thins out,
those now methanating sour gas can instead start manufacturing gas
from low carbon emissions feedstocks and recycled carbon.
I’m thinking very big.
jo.Academic Freedom, Assets not Liabilities, Baseload is History, Carbon Capture, Carbon Commodities, Carbon Recycling, Climate Change, Climate Damages, Corporate Pressure, Design Matters, Energy Crunch, Energy Insecurity, Energy Revival, Engineering Marvel, Feel Gooder, Gamechanger, Gas Storage, Geogingerneering, Green Power, Hydrogen Economy, Low Carbon Life, Major Shift, Marine Gas, Marvellous Wonderful, Methane Management, Military Invention, National Energy, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Paradigm Shapeshifter, Peak Natural Gas, Realistic Models, Renewable Gas, Renewable Resource, Solar Sunrise, Solution City, Stirring Stuff, Technofix, The Power of Intention, The Price of Gas, The Right Chemistry, Transport of Delight, Unconventional Foul, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on January 23rd, 2014 No comments
Dr Paul Elsner of Birkbeck College at the University of London gave up some of his valuable time for me today at his little bijou garret-style office in Bloomsbury in Central London, with an excellent, redeeming view of the British Telecom Tower. Leader of the Energy and Climate Change module on Birkbeck’s Climate Change Management programme, he offered me tea and topical information on Renewable Energy, and some advice on discipline in authorship.
He unpacked the recent whirlwind of optimism surrounding the exploitation of Shale Gas and Shale Oil, and how Climate Change policy is perhaps taking a step back. He said that we have to accept that this is the way the world is at the moment.
I indicated that I don’t have much confidence in the “Shale Bubble”. I consider it mostly as a public relations exercise – and that there are special conditions in the United States of America where all this propaganda comes from. I said that there are several factors that mean the progress with low carbon fuels continues to be essential, and that Renewable Gas is likely to be key.
1. First of all, the major energy companies, the oil and gas companies, are not in a healthy financial state to make huge investment. For example, BP has just had the legal ruling that there will be no limit to the amount of compensation claims they will have to face over the Deepwater Horizon disaster. Royal Dutch Shell meanwhile has just had a serious quarterly profit warning – and if that is mostly due to constrained sales (“Peak Oil Demand”) because of economic collapse, that doesn’t help them with the kind of aggressive “discovery” they need to continue with to keep up their Reserves to Production ratio (the amount of proven resources they have on their books). These are not the only problems being faced in the industry. This problem with future anticipated capitalisation means that Big Oil and Gas cannot possibly look at major transitions into Renewable Electricity, so it would be pointless to ask, or try to construct a Carbon Market to force it to happen.
2. Secondly, despite claims of large reserves of Shale Gas and Shale Oil, ripe for the exploitation of, even major bodies are not anticipating that Peak Oil and Peak Natural Gas will be delayed by many years by the “Shale Gale”. The reservoir characteristics of unconventional fossil fuel fields do not mature in the same way as conventional ones. This means that depletion scenarios for fossil fuels are still as relevant to consider as the decades prior to horizontal drilling and hydraulic fracturing (“fracking”).
3. Thirdly, the reservoir characteristics of conventional fossil fuel fields yet to exploit, especially in terms of chemical composition, are drifting towards increasingly “sour” conditions – with sigificant levels of hydrogen sulfide and carbon dioxide in them. The sulphur must be removed for a variety of reasons, but the carbon dioxide remains an issue. The answer until recently from policy people would have been Carbon Capture and Storage or CCS. Carbon dioxide should be washed from acid Natural Gas and sequestered under the ocean in salt caverns that previously held fossil hydrocarbons. It was hoped that Carbon Markets and other forms of carbon pricing would have assisted with the payment for CCS. However, recently there has been reduced confidence that this will be significant.
Renewable Gas is an answer to all three of these issues. It can easily be pursued by the big players in the current energy provision system, with far less investment than wholesale change would demand. It can address concerns of gas resource depletion at a global scale, the onset of which could occur within 20 to 25 years. And it can be deployed to bring poor conventional fossil fuels into consideration for exploitation in the current time – answering regional gas resource depletion.
Outside, daffodils were blooming in Tavistock Square. In January, yes. The “freaky” weather continues…Academic Freedom, Assets not Liabilities, Be Prepared, Big Picture, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Taxatious, Change Management, Climate Change, Corporate Pressure, Cost Effective, Design Matters, Direction of Travel, Energy Autonomy, Energy Change, Energy Insecurity, Energy Revival, Environmental Howzat, Extreme Energy, Extreme Weather, Fossilised Fuels, Fuel Poverty, Gamechanger, Green Investment, Hydrocarbon Hegemony, Low Carbon Life, Major Shift, National Energy, Nudge & Budge, Optimistic Generation, Orwells, Paradigm Shapeshifter, Peak Emissions, Peak Energy, Peak Natural Gas, Peak Oil, Price Control, Public Relations, Pure Hollywood, Realistic Models, Renewable Gas, Renewable Resource, Resource Wards, Shale Game, Solution City, Sustainable Deferment, Technofix, Technological Sideshow, The Price of Gas, The Price of Oil, Unconventional Foul, Unnatural Gas, Wasted Resource, Western Hedge
Posted on January 1st, 2014 No comments
In the long view, some things are inevitable, and I don’t just mean death and taxes. Within the lifetime of children born today, there must be a complete transformation in energy. The future is renewable, and carefully deployed renewable energy systems can be reliable, sustainable and low cost, besides being low in carbon dioxide emissions to air. This climate safety response is also the answer to a degradation and decline in high quality mineral hydrocarbons – the so-called “fossil” fuels. Over the course of 2014 I shall be writing about Renewable Gas – sustainable, low emissions gas fuels made on the surface of the earth without recourse to mining for energy. Renewable Gas can store the energy from currently underused Renewable Electricity from major producers such as wind and solar farms, and help to balance out power we capture from the variable wind and sun. Key chemical players in these fuels : hydrogen, methane, carbon monoxide and carbon dioxide. Key chemistry : how to use hydrogen to recycle the carbon oxides to methane. How we get from here to there is incredibly important, and interestingly, methods and techniques for increasing the production volumes of Renewable Gas will be useful for the gradually fading fossil fuel industry. Much of the world’s remaining easily accessible Natural Gas is “sour” – laced with high concentrations of hydrogen sulfide and carbon dioxide. Hydrogen sulfide needs to be removed from the gas, but carbon dioxide can be recycled into methane, raising the quality of the gas. We can preserve the Arctic from fossil gas exploitation, and save ourselves from this economic burden and ecological risk, by employing relatively cheap ways to upgrade sour Natural Gas, from Iran, for example, while we are on the decades-long road of transitioning to Renewable Gas. The new burn is coming.Academic Freedom, Alchemical, Arctic Amplification, Assets not Liabilities, Baseload is History, Big Picture, Carbon Recycling, Climate Change, Cost Effective, Direction of Travel, Energy Autonomy, Energy Change, Energy Insecurity, Energy Revival, Extreme Energy, Feel Gooder, Fossilised Fuels, Gamechanger, Gas Storage, Green Investment, Hydrocarbon Hegemony, Hydrogen Economy, Insulation, Low Carbon Life, Major Shift, Marine Gas, Methane Management, Optimistic Generation, Paradigm Shapeshifter, Peak Emissions, Peak Natural Gas, Price Control, Realistic Models, Renewable Gas, Renewable Resource, Solar Sunrise, Solution City, Stirring Stuff, The Power of Intention, The Price of Gas, The Right Chemistry, The Science of Communitagion, Unnatural Gas, Wind of Fortune
Posted on October 29th, 2013 No comments
This evening I was at a very interesting meeting hosted by BiofuelWatch in the fabulous Lumen Centre near King’s Cross, London.
The new report “Biomass : Chain of Destruction” was launched with public Skype interviews with colleagues in Brazil and the United States. All very 2013, but the biomass combustion technologies of concern are mostly all so last century.
Ordinary combustion of any biological material, whether ancient trees, such as coal, or modern trees, in the form of compressed wood pellets, is generally inefficient. But to burn biomass to create heat to vapourise water to make steam to turn electrical turbines to make power is scandalously wasteful.
“1. Largescale industrial bioenergy to be removed
from definitions of “renewable energy”. The term
“renewable” must be formalized to reflect the real
costs to the environment and public health.”
“2. An end to subsidies, including targets and other
state incentives, for industrial bioenergy.”
“3. A major policy shift away from largescale energy
generation through combustion, towards our energy
needs being satisfied through a combination of
genuinely climatefriendly renewable energy and a
substantial reduction in both energy generation and
A discussion arose in my corner of the room about where we should draw the line between “good” biomass applications, and “bad” biomass applications. It was generally agreed that burning local biomass for local heat in an efficient machine, would limit particulate emissions and be very energy efficient and sustainable.
And at the other end of the scale, I am looking at the potential for the highly-efficient gasification of biomass to make Renewable Gas – the higher temperatures mean that less carbon particulates, tars and poisons remain. For centralised Renewable Gas plants, air quality management would be necessary, through the capture and filtering of particulates and other unwanted by-products, but the cost of this is manageable at this scale.
If ordinary incineration or combustion is being done at the medium to large scale, this is likely to be the cause of major problems, in the event of sharply rising levels of biomass burning for electricity production. The inefficiency of the energy conversion will mean that full air quality protection may be too expensive to apply to the exhaust, and it will be simply vented to air.