Tuesday, April 22, 2014

Earth Day Venting - Put You Money Where Your Mouth Is

Here is a tale of a world class wind turbine manufacturer (now located in Vermont) who now makes one of the highest quality small (100 kw) turbines in the world. They decided to design (and with lots of US Government money, too via various grants) a commercial scale product. But, the PTC expiration happened, among other things, and so the company is for sale. It’s a really amazing unit - fearless, permanent magnet generator, quiet, and there are two of these operating in Michigan for almost 3 years. Can I have one for Christmas….?

So, in order to make these big boys they need a bigger set of factories other than this tiny town just south of Montpilier, Vt. And this is the Earth Day riddle for environmentalists. To go green means manufacturing, job creation and rich enviros are going to have to pony up some of those trust dollars or other stashed money from music, movies and lucky business deals and actually make things.

NY will need about 45 MW of newly installed wind turbine capacity in the next one to two decades to go “all renewable”.  That would be around 20,000 wind turbines equivalent to the NPS2.3 units. And $100 billion or so is 1.54 million job-years of labor (mostly manufacturing) or about 77,000 new jobs for NY State, plus all the “multiplier effect jobs”. Somebody has to create conditions where this $100 billion plus investment could make money/be reasonably profitable, and then stand back and let the good times roll, UNLESS no capitalists will step up and make these within NY State. If that happens, maybe the state of cities should just step up and do it themselves. And one of the benefits is that the many billions of dollars now exported or many tens  of billions when the price of natural gas finally achieves a price needed to make fracking profitable in neighboring Fracksylvania that would be exported are no longer exported from NY State, we will be a LOT better off. Shedding that fossil fuel economic parasite would be good for NY’s people. Instead of shoveling part of our income and wealth down the drain/out of state/out of the country, it would get recycled, and in the process of recirculating, lots of jobs - all kinds of jobs - get created. At its core, that is what renewable energy from commercial scale wind turbines could do for this state. NO OTHER renewable or non-renewable energy technology can do anywhere as much and yet still provide affordable electricity. That’s one of the reasons why the Cuomo administration and its Republiican backers must feel such joy at the fact that there will be no significant wind turbine installations in the next two years AT LEAST in NY State.

Nationwide, the wind industry should be doing $200 billion per year in sales, almost all of them for domestic customers. That is the equivalent of where the US auto industry is now. This would be 1 million direct and another 4 million indirect jobs. Given our nations wind resource and our potential to store electricity for short and medium terms via pumped hydro, it is quite the crime upon the world that this is not happening right now. There is no technological reason we could not do this. And there are TRILLIONS of dollars just owned by US citizens looking for a decent home for investment.

But, only about $3 billion worth were installed in 2013, $25 billion worth in 2012, and looks like $20 billion worth in 2014. But it is really sad that so few are being installed compared to the need. So maybe on this Earth Day you need to find solace in serious mental oblivion, the kind that drinking way too much which is done to try and put out of your mind something horrific, the kind that leaves you feeling really bad for days. The kind that takes your mind off of the immense failure that is Earth Day 2014. We are at least $180 billion  PER YEAR shy in wind turbine sales this year, close to 4.5 million fewer employed people thanks to what passes for our wimped out attempt to live in some kind of harmony with our planet. That’s a LOT of FAIL. And pretending a neighborhood cleanup or a beach front trash picking session is anywhere up to the task - well, that ALSO should be enough to drive any human being in America with cognitive skills to drink. Lots of oblivion inducing drink.

After all, if we carry on in this country with the “LACK of business as the usual state of affairs” arrangement, oblivion will be a fate that comes a knocking a lot sooner than “is expected”. The CO2 pollution caused by all that fossil fuel combustion will induce the ice equivalent of a landslide in Greenland. And when that slides into the Atlantic and melts within a few years, ocean levels will rise by 20 feet. That will pretty much toast the viability of NY City, and without that sugar daddy, there goes the state. Unless, of course, we start a massive wind turbine instillation program. And if private industry either won’t do it or is going to gouge us too much for it, we could have NYPA do almost all of it. Maybe this way they can at least attempt to make up for the evil they did when they bought 2 nukes (FitzPatrick and Indian Point 3) for such a long time. 

So, buying NPS and bring a lot of the manufacturing to NY State - that would be a good thing to do. But, goodness is in really short supply in this state these days, even if it could make lots of money and employ lots pif people and less our CO2 pollution rate something fierce.

NY state has more billionaires wandering around than any other state in our country. And that may also be true of millionaires, or close enough. A common theme is nowhere to invest the money, even at crappy yields. Part of the reason for the regional "hotel bubble", too. The amount of money needed to buy NPS and to do actual manufacturing in NY State is not that great, and it is ONLY a rich persons game.

Like Elliott Spitzer, an inheritor of a $500 plus million real estate fortune. But he is just one small example of this....

In order to go green, NY needs around $100 billion worth of wind turbines installed as long as they are MOSTLY onshore (more money if a higher percentage of offshore are done). And the response of most enviro organizations and their rich people backers is....


Too bad there is no App for that. Oh, there is - it's called the status quo. Because expecting corporate America to remedy things and get on with the making the hundreds of billions in profits from a few trillion in sales as it exists now is just not adequate, nor up to the task required.

Picture from http://www.northernpower.com/products/nps2x/. If you are interested in buying these, or buying the company, here is the website: http://www.northernpower.com . Maybe you'll get there before the Chinese or Indians do so.

Wednesday, April 2, 2014

Why NY State Need Wind in Big Way

For the last 3 months, we have seen the highest priced electricity in WNY’s Bulk market (NYISO) since Hurricane Katrina trashed our country’s natural gas supply in 2005. That was also the year of record profits for any power company running on coal or nukes in NY. It turns out that low production costs for old coal burners and paid off (but still really dangerous) nukes coupled to high methane prices is a recipe for printing money by the Megabuck then, and in 2008, and evidently in 2014, too. But with methane prices still in the proverbial pits and selling for less than what it often costs to produce it from expensive fracking based wells, well, what could be the reason for the big price spikes of late? Here are the gory details in a graph:

It turns out that when NRG mothballed most of its Dunkirk and about half of the Huntley facilities, WNY had to now IMPORT more than a third of the electricity consumed in this region, most likely from Homer City, Pa (a 2200 MW coal burning facility). But when the recent cold weather came and power demands in Pennsylvania used up the former’s “excess”, well we in WNY had to fend for ourselves. And this meant we had to use expensive methane based electricity from local and regional producers who were able to charge some pretty outrageous spot market prices (sometimes more than 50 c/kw-hr for some short periods of time). And because of the way the NYISO system prices things, even coal burners with a production cost near 3 c/kw-hr got to charge 50 c/kw-hr for that hour. What a neat racket, eh? Well, like they say, nice money if you can get it…

The net result is average prices that have been running at 3 to 4 c/kw-hr have for January through March from 2009 to 2013 now averaged near 9 c/kw-hr in Zones A and B (West and Genessee). But methane only averaged around $5/MBtu, and it should only cost around 6 c/kw-hr to make electricity for those periods of time that it was needed (which is not that often), before adding the profit  But did a 46c/kw-hr profit really have to be added?. This is what happens when an oligopy morphs into a de-facto monopoly – monopolists can get really high prices and some seriously large profits, because there effectively is NO COMPETITION. Which is fine for the corporations concerned, as they hate competition in the market for the product they make, but they love it for their suppliers…

Anyway, if you want to get reasonable electricity prices, this is where wind turbines could and should come in in a huge way. Wind turbines can tame monopoly prices in NYISO like markets like nothing else can, and there is a just history and mass of empirical data wrapped up in a concept called the “Merit Order Effect”. Wind sourced electricity has clobbered the rip-off profits obtained by coal burning power companies in Europe, and they could do it here, too. The reason is due to the fuel cost of wind turbines – which is zero. And we also have a pretty massive capability to store any excess electricity made via pumped hydro, (and to deliver 1680 MW from the two instate PH units plus 560 MW from some nearby across the border facilities). So buffering variable wind to variable demand is not a problem, and that does not even include tapping our hydro units or Quebec as needed in a pinch.

If we don’t start installing some competition to those incestuous fossil fuel twins – natural gas and coal – for our regional electricity supply, we are going to get royally screwed by some de-facto monopolies that supply some of our electricity. We will be paying prices over twice what Long Island averaged last year. Part of this is because both NRG and AES decided that they no longer want to “play the ponies” – gamble on future electricity prices – and that they will go where they can be assured of predictable future prices. Heck, as long as they get power purchase agreements that cover their costs and allow them to hit their profit targets, they will install (and have installed) PV (California) and especially wind turbines (Texas). They don’t care how they make electricity, just that they get a power purchase agreement so that they can sell this electricity at a known and knowable price. After all, lost they a lot of money or barely broke even in the last four years in a really competitive electricity market, even but definitely missed their profit targets. And they are not charities.

The present high prices are what happens when fossil fuels and nuke sourced power generators have no competition, and that gets coupled to fluctuating methane prices. But with a lot more wind turbine electricity installed not only we could provide that competition and get lower average wholesale prices, but we can recycle money locally that is now exported to pay for out of state sourced fuels, or exported to Entergy and Constellation for their inherently dangerous nukes that were bought on the cheap and have been long since paid for. That export of money makes all of us POORER, and that is really something most of us could do without in these trying Austerity driven economic times. And with wind turbines, there is the possibility of new job creation in both the installation and manufacturing of them, especially if we in NY own these turbine installations. Oh, by the way, there no chance of a Fukushima or Chernobyl style epic disaster repeat if wind is used as our major electricity source, and we won’t trash out planet’s climate control system via the CO2 pollution that comes from leaking methane and CO2 emanations, either.

So what is needed to get around the major hosing we are experiencing from pollution sourced electricity that provides next to nothing in the way of jobs for the over $350 million spent in just the last 3 months for our electricity? Actually, we just need long term price security for local and regional renewable electricity supplier owners – the local transmission monopolies need to offer up lots of long term Power Purchase Agreements (PPAs), as is done in states like Iowa, where Warren Buffet owns the local electric monopoly. And if neither Iberdola (NYSEG, RGE) nor National Grid will do it, maybe we can have the Peoples Power Company of NY (NYPA) put their (= OUR!) money where their mouth is. And whether those PPA’s are provided by Feed-In Tariffs or just long term contracts, well, getting the installations up and running is what is important. And that is not happening now, nor will it for AT LEAST the next two years unless we get some change for the better, soon.

So, it’s an election year. Time to squeeze some political hopefuls, perhaps, as this IS the best time to do it. If you also want reasonable and predictable electricity prices upon which we base our civilization, we have to move away from the Casino and 3 card Monty game that is NYISO and variable natural gas prices coupled to old, paid off coal burners and nukes. The actual cost to deliver wind based electricity in WNY WITHOUT SUBSIDIES is less than 9 c/kw-hr, as long as a reasonable and PREDICTABLE prices can be had for the delivered product. And it gets that way because wind turbine owners (and that could also be municipalities and NYPA, too) can lower the cost of borrowing money significantly if they could just know what their future cash flow was going to be. Variable pricing is meaningless with wind turbines, because the cost of production is set on the first day of operations. The money cost (reasonable rates for bank loans/bonds/investors or loan shark rates when future prices are always a gamble) is a really big deal for renewable energy. For the wind biz, varying fuel prices are irrelevant, as is the situation when the wells and mines deplete and do not get replaced. Fixed electricity prices - it’s such a 21st century thing. So when does WNY wake up and join the 21st century?

Sunday, March 30, 2014

A More Sensible NY Liquid Fuels Policy

Top image of Vette's at Watkins Glen Raceway from http://www.corvetteblogger.com/images/content/2012/070212_1.jpg. Race cars need  high compression engines to deliver maximum power per pound of weight, and ethanol delivers in a way that even pure and ultra toxic benzene can’t do. But of course, ethanol is best placed in the fuel tank, and not used to get the driver tanked. See also http://rtec-rtp.org/2012/09/08/high-octane/, http://www.americanenergyindependence.com/alcoholengines.aspx and http://www.edn.com/electronics-news/4372860/Indy-engines-still-pack-a-700-HP-punch. Getting 700 hp out of a 2.2 liter engine ONLY comes using high compression ratios, made possible via ethanol’s 113 octane and its greater cooling capacity due to it higher latent heat of vaporization that for hydrocarbons. See also http://www.epa.gov/otaq/presentations/sae-2002-01-2743-v2.pdf for an awesome article…..

It turns out that NY State residents, governments (we have lots of them, plus “quasi-governments" like the Port Authority of NY and NJ, too) and corporations collectively now spend around $25 billion per year for petroleum fuels. Since all of that comes from “elsewhere”, that means we import unemployment INTO NY State and export income and wealth in return for getting our fix of liquid fuels, which are almost exclusively used for transportation energy. And whether that is to Pennsylvania or North Dakota or a wretched kleptocracy like Nigeria or Equatorial Guinea, it really does not matter. Money and wealth go out, and we don’t get much of it back unless people and companies in those places are dumb enough to take that oil money and try their luck in “gambling” on Wall Street. Like WC Fields said when asked if that was a game of chance (he was playing cards with some others at the time), WC said “not the way I play it”, but after people and institutions get taken to the cleaners by the likes of Goldman Sachs and JP Morgan Chase and lots of others for decades, how long will they continue to play? Besides, an increasingly smaller portion of the “Golden Crumbs” are escaping the NY City metro region and more importantly, from the high rollers whose salary and bonuses are contingent of new or the same old suckers coming back for a further financial extraction - so what really does that benefit MOST NY’ers? We shovel out increasingly large amounts of money out of state, and some of that comes back and is extracted by a tiny portion of really rich people and some less rich people who worker for the owners of these “Gaming Houses”.

Now, you may want to rail on about the evils of liquid fuels, but it is tough to argue against their usefulness as a transportation fuel. Whether non-toxic (biodiesel, ethanol) or bad to the bone stuff made from that evil swill from the Alberta Tar Sands Sludge, it is liquid fuels as an energy storage system that now seems universal, available in most every place, and there are so many APPS for them….. This is energy easy to store, easy to use, easy to meter, easy to buy, and its a lot easier to deal with an empty tank than the horror that Frank Zappa described of when the batteries fail ....

And since the average price that oil is going up is 14%/yr on a long term basis (doubling every 5 years), few of us can keep up with that rate. This scheme to hoover up money from the vast majority of NY’ers (especially the bottom 80% of income earners) and shove it into the already stuffed to the gills bank accounts of the upper 1% is not only unsustainable and economically ruinous, it is also bad news for our climate. About 58% of the CO2 and CO2 equiv pollution (10.45 tons CO2 equivalent per NY resident - which is MOSTLY from burning fossil fuels) is petroleum based (2011 statistics - see http://www.nyserda.ny.gov/BusinessAreas/Energy-Data-and-Prices-Planning-and-Policy/Energy-Prices-Data-and-Reports/Energy-Statistics-and-Weather-Data/Energy-Statistics.aspx). For the 127.7 billion vehicle miles traveled using 168.7 million bbls of diesel oil and gasoline, our statewide average is 18 mpg, which is really pathetic (weighed down by trucks that get low fuel mileage).

So all this money (and in 5 years from now, likely to be $50 billion/yr) going out the exhaust pipe and down the proverbial drain has a double whammy - it fuels Global Warming related disasters like Frankenstorm Sandy and it makes us poorer. But hey, some of us do get to drive around in a car, and quite often experience the joys of traffic jams (too many cars, too few roads, even when we can’t really afford any new roads). And some of us might even get lucky in the car or via the car, so that’s got to make it all worthwhile, right? But can’t we get “lucky” without going broke and trashing the climate system of our planet in the process?

Well, perhaps we can. Worldwide, we are at a situation called “Peak Oil” - where the world can no longer pump out crude oil at faster rate. And the supplies are now coming from increasingly depleted oil fields, or from new ones that are costly (often in more ways than just money) to exploit. Right now about 85 million bbls/day are pumped out worldwide, but only around 35 mvd are available for export from countries producing more than they consume. The world experienced “Peak Net Oil Exports” of 40 mvd in 2006. This is important because the world oil price is not set by the total amount of oil pumped but by the total available for export. More buyers and less oil for export means higher prices. And it means we can pay $100/bbl for oil that costs $80/bbl to extract in North Dakota, $70/bbl for “Canadian Crud” tar sludge sands stuff or $15/bbl crude from the seriously depleted North Slope of Alaska oil. All oil is more or less priced at the same level (with some quality related variations) - but guess which is the most profitable?

But in NY State, we make no crude oil and we don’t even refine crude oil any more. We use around 138 million bbls/yr (mby) of gasoline, 31 mby of diesel, 17 mby of jet fuel (= kerosene) and 5 mby of “Bunker C” (mostly for ships), or 191 mby (8 billion gallons/yr). We do make about 165 million gal/yr of ethanol, but that is not quite 4 mby. Anyway, $25 billion/yr down the drain now, $50 billion/yr in 5 years, $100 billion/yr in a decade form now - that’s going from around 2.5% of state GDP to around 9% of state GDP a decade from now. Talk about Stupid on Steroids….. And it might just work out to be economically better off to pay a bit more for fuel if it happens to be renewable AND made in our state, too. It's that recycling of money effect..... so if you're looking to create more businesses and jobs WITHIN NY, this might be a promising way to go...

One way around this  predicament of our woeful liquid fuels state in NY would be a concerted effort to both get more transit out of what we use and also make what we use from renewable sources - mostly plants and trees grown in NY State. Given the way our society in NY has evolved (or devolved - and both can occur at the same time), we are not getting away from liquid fueled transport any time in the near future. And since a huge percentage of what used to be agricultural land is no longer that, growing energy crops at a much larger rate than is now done is quite possible in NY. This would also help reverse or at least slow the “population bleed” trend from rural to metro regions, and that now happens largely because there is no legal (and “meth growing” does not count) way to earn a  decent living in rural areas.

Actually, there is a way to “staunch the economic bleeding” that is the import of crude oil products into NY in return for ever larger quantities of money, and it is not as hard as it is made is made out to be. First there has to be a will to do this, and than there are lots of ways, some which may be less palatable than others, some that are job creation, and others that are continued Austerity for the bottom 80% of NY’s income pyramid.

One approach to do this is the “50% x 50%” approach, which would reduce liquid fuels consumption to 25% of present levels. In this, fuel mileage would be doubled (combined average of cars and trucks from 18 mpg to 36 mpg) and the number of vehicle miles traveled per year by fuel consuming vehicles would drop by 50% (to around 64 billion vehicle-miles/yr). And it is basic math that 50% x 50% = 25%. Raising the mileage is pretty easy and much of it means less truck traffic/more car diesel traffic. As it turns out, a lot of truck vehicle miles traveled are on long distance (especially Interstates), and it makes more sense to put the truck trailers on railroad cars, and then use trucks for local deliveries. It turns out that trains (especially freight trains) can be electrified (a diesel locomotive uses a diesel engine to power an electric generator that in turn powers an electric motor, so converting trains to non-pollution based wind turbine/hydroelectricity is easy. And it is also massively job creating, too. On the people transport aspect, the metro NY City region already has around 3.5 million train riders per day. That system needs not only expansion but other cities need to regain what they used to have - trolleys or “light rail” systems, ones subsidized seriously by state income tax (= mostly on rich people) monies. After all, a lot more people will ride public transit if a ride only costs 50 cents and a round trip is $1 and not $2 for a oneway and $4 for round trip. Odds are, most of that money would be recouped as economic gain because of who it is that uses public transit - poor and middle class people. Money not spent of public transit fares is money spent on food and beer (among other things) which gets recycled back up the money change but stimulates the economy just like an increase in the minimum wage would do. Eventually, as higher fuel prices collide with stagnant incomes, people will tend to more next to transit lines, or will do things like walk, ride bikes or just not drive/go anywhere. And more intercity rail means less airplane usage, which is a GOOD THING, fuel-wise. More people could also use electric cars, which also means less  fuel usage, though those tend to be expensive and are only good for zipping around in a local metro region.

So that could crunch the fuel DEMAND for cars and trucks down from 6 billion to around 2 billion gallons/yr or to 42 million barrels per year (mby), of which 4 mby is already “homegrown” (1.9% of present demand, versus around 10% nationally). So we might now need 38 mby of fuel to be supplied from NY’s farms. Can we do it, and quickly? Yes we COULD…. though remember, fuel prices are still likely to be set by oil prices, prices that will likely be a LOT higher in the future, and which bear little resemblance to the actual cost that it takes to get it out of the ground and refine it/deliver it. There really are no bargains in the fuels business any more….

For example, if we had ethanol plants producing in NY at the “national per capita level” (45 gal/person-yr), about half of our reduced demand could be supplied using modified existing corn to EtOH technology. The one change needed would be to use corn stover as the heat source to run these facilities, instead of natural gas (the current arrangement). EtOH has an octane rating of 113, and it can be used in high compression engines by itself or with “crap grade gasoline”. By using engines with 19:1 compression ratios instead of 9.5:1 ratios (limited by the octane rating of gasoline), engine efficiency can be close to doubled. Well, that solves THAT problem… We would only need 6.5  more EtOH facilities like the large one (110 mgy) we have. Of course, they would need a raw material supply - the present 2 EtOH plants use 57 million bushels/yr of corn, and to make 880 million gal/yr, 304 million bushels/yr would be needed. That means NY’s corn (or sorghum, or sugar beets, etc) crop would have to rise from ~ 325,000 acres (508 sq miles) to 1.73 million acres (2708 sq miles), which is around 5.8% of the area of NY’s land. In addition, if the CO2  by-product of this was hydrogenated/converted to EtOH (using wind turbines and water to make the H2 for the hydrogenation), another 360 million gal/yr of EtOH could be made. That means 70% of NY’s “future” liquid fuels are homegrown, and renewable. That would also be a serious stimulus to NY’s agricultural sector. And the extractable corn oil from these EtOH facilities would be worth roughly 1 million barrels of biodiesel/yr, especially if it was in its “ethyl” ester form.

Anyway, efficiency, conversion to electric powered transportation (especially freight trains and inter-city rail to minimize jet plane usage and lastly a lot more mass transit (electric) in urban areas) plus 6 large and one medium EtOH facility get us to a 70 % renewable fuels usage. The remaining fuel can be obtained from cellulose, probably via some mix of pyrolysis and/or pyrolysis-hydrogenation or else via cellulosic alcohols. On promising way to “loosen up” cellulose has been found via heating biomass (stover, hay, wood) in a slightly acidified glycerol-water mix. This process separates the protective lignin and hemicellulose from the cellulose part of wood. As it turns out, “unprotected” cellulose is then easily hydrolyzed into glucose with the cellulase enzyme. And glucose is easy to ferment into EtOH.

A strong push for biofuels would also create a demand for oil producing plants, such as canola an northern peanuts, soybeans and other oil-seed crops. These are really easy to convert into ethyl biodiesel, and the non-oil portion tends to be a high protein high notional value food, now made into a “lite” less fatty form. These allow more of a mix of crops to be grown and sold, and lots of food products and/or animal feeds can be made from them. And that is really great for NY’s economy and its rural areas. All of that food grown would also require fertilizer plants, and so maybe NY could get a “renewable ammonia” facility, where wind and hydropower plus water would supply the hydrogen for the ammonia. In that way we could free a lot of farmers from the addiction to petroleum - biodiesel and ethanol for tractors, wind power sourced ammonia for the fixed nitrogen fertilizer, electrified trains to haul crops to markets, lots of fuel crops to boost agricultural demand, wind power sourced hydrogen to reduce the CO2 by-product from fermentation, and corn stover powered EtOH facilities. Who knows, maybe some biomass to electricity co-gen facilities to balance out fluctuations in wind based electricity that can’t be easily accommodated by pumped hydro energy storage - especially in the summer.

Oh well, that’s a plan. And just remember, compared to gasoline (with its SIGNIFICANT benzene content) and diesel, EtOH and biodiesel are health food, Or compared to Tar Sands sludge based “dilbit”, even gasoline is pretty mild by comparison, and benzene containing gasoline is most definitely a proven carcinogen. But, if you have a better plan, lets us know, and don’t keep it a secret. And please, none of that jive about coal based syngas to fuels, or methane from natural gas made into liquid fuels or worse yet, using methane as a direct fuel. The only thing that makes less sense is the use of hydrogen gas as a fuel. If you want to go that route, why not just use ammonia, the “other” hydrogen fuel, but the one that gets no respect. But anyway, before NY is spending 10% of its GDP on imports of oil from hostile nations like in the Middle East or Texas, we’d sure like to hear a plan, man…..

End pictures from http://www.statoil.com/en/newsandmedia/multimedia/features/pages/hydrogensociety.aspx. This H2 and wind system on an island has been going since 2004.... And a fine source for the hydrogen needed to hydrogenate CO2 into EtOH.....


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