Casten on FutureGen: 'Maddeningly stupid'

Grist contributor bashes ‘clean coal’ 37

If you'd like to see our very own Sean Casten call the FutureGen clean coal project "maddeningly stupid" -- about the only part of this segment that isn't creepy and upsetting -- you can do so here.

David Roberts is staff writer for Grist. You can follow his Twitter feed at twitter.com/drgrist.

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  1. KojiroVance Posted 7:24 am
    18 Dec 2007

    Stupid?Hey I've got an idea. Why don't I take out an ad in the Mattoon, IL paper with Sean's quotes in it and invite everyone to comment at grist?
  2. Sean Casten's avatar

    Sean Casten Posted 8:50 am
    18 Dec 2007

    Creepy and upsetting?I can only assume you're referring to the implicit "if you like Santa, you'll love FutureGen" message throughout?
    In that case, yeah, I guess I agree.  And who knew that I'd be framed as the guy who hates Christmas?
  3. Michael Tobis's avatar

    Michael Tobis Posted 12:40 pm
    18 Dec 2007

    So, if it's stupid, why so?Sean, if there's a net positive energy return on investment and zero net emissions, I fail to see the problem. It's a way to have the coal have a net positive value to its owners and a net positive value to society, even in the most extreme case of carbon emissions controls.
    It seems like a huge win to me.
    Can you explain your opposition please?
    I found the Fox snippet very irritating because you are given room to make a statement but no room to defend it. Carbon Capture and Sequestration seems to me a crucial component of a non-catastrophic future.  What do you propose that I am missing?



    mt
  4. DarthPetrol Posted 2:27 pm
    18 Dec 2007

    CostI believe Sean's complaint is the cost. Currently estimated at $6,500 /kW and the Gov't putting up 2/3 of the price.  Illinois retail power prices is just 7.07 cents/kWh.  This virtually guarantees that FutureGen will lose money.
    If economics were the sole issue, then they should have picked the Odessa site. Wholesale power prices are higher in Texas, and there is a market for the CO2 and hydrogen.
    The idea is to demonstrate carbon sequestration technology. A demonstration plant is likely to be more expensive than a full-scale commercial plant.
  5. amazingdrx Posted 4:21 pm
    18 Dec 2007

    Discouraging?Yep, it would seem so.  But check out Joseph Romm on a recent history channel presentation on hydrogen vehicles.  They gave him quite a few sentences to describe all the problems with hydrogen.
    Don't give up Sean and DR.  You may only get short soundbites, and only on fauxnews now, but look out.  You'll be on Olbermann soon enough and actually get to explain instead of "bite".
    I don't even want to discuss "Futuregen".  It's future will probably end in a metal recycling blast furnace powered by renewable electricity in a decade or so.

    http://amazngdrx.blogharbor.com/blog
  6. Sean Casten's avatar

    Sean Casten Posted 10:56 pm
    18 Dec 2007

    MichaelWhere to begin?
    Presumably, we like Futuregen because of concerns about CO2, a belief that coal is so cheap it's inevitable and a belief that hydrogen is the fuel of the future.  Futuregen fails on all three counts.
    Re: CO2, there is first the question of whether it will stay sequestered.  But even if we concede that bit of science, we're still left with the question of cost per ton of CO2 abatement.  Cash supplies are finite, and if we preferentially direct resources towards the most expensive stuff, we are implicitly making a decision to minimize the amount of CO2 we reduce.  And you would be very hard pressed to find something more expensive than FutureGen.  (One of the quotes that did not make it into the final video was my observation that having just raised $500MM for a business dedicated to profitably reducing greenhouse gas emissions, I see no technologies here that would warrant consideration.  You ONLY build plants like this if you have the luxury of gambling with other people's money.)  Put simply, if we built FutureGen-type plants, costs for power would rise so dramatically that a flood of much more cost effective power technologies that reduce much more CO2 per dollar (wind, EE, CHP, etc.) enter the market, stranding the capital invested in FutureGen.  Rational, risk-averse investors know this and aren't putting any money in the technology.  But investors who can play with taxpayer money (i.e., DOE) or ratepayer guaranteed money (i.e., investor owned utilities) are all over it.  
    All of which ties into the whole inevitability of coal thing, which David has written about elsewhere.  But from a purely logical perspective, it makes no sense to me that we must build coal because it is so cheap, and therefore we must build FutureGen which is going to need 18 c/kWh retail rates to justify the capital.  Huh?  This is like the old schoolyard taunt "if you like billy so much why don't you marry him?"  Old, dirty coal is cheap.  New, Clean Air Act compliant coal is pretty expensive.  New, FutureGen type coal is massively expensive.  At those prices, it is far from inevitable, and yet we keep throwing money at it as if we can fundamentally change the economics of pollution control and carbon sequestration.  (This is not an R&D issue.  The baghouses, scrubbers, etc. that make Clean Air Act compliant coal ~10+ c/kWh are proven technologies.  And the parasitic load burden and additional capital for CO2 separation, compression and storage are inherently expensive.  It is inherently cheaper to not burn fossil fuel than it is to try and remove CO2 from exhaust gas, and it will ever be thus.  Ergo, there will always be cheaper energy efficiency and renewable strategies than "clean coal", going back to my first point.)
    Finally, re: hydrogen, my (much longer, but editted audio) comment was that the current market for hydrogen is dominated by (a) margarine production (b) desulphurization of crude oil and (c) rocket ship fuel.  Investing capital in a hydrogen production facility is implicitly a bet that these markets are going to grow (e.g., more margarine-eating astronauts).  Unless someone can convince me that this is less likely than the construction of an entire automotive fueling infrastructure and H2-powered cars by the time this plant is completed, that looks like an awfully dumb bet - and again, the kind you only make if you have the luxury of gambling with other people's money.
    Bottom line is that the plant is being built on environmental grounds, but it will actually distract resources from much cheaper, much nearer term and much lower risk carbon-mitigation approaches (many of which require only slight policy change, with no draw on public coffers).  If you care about GHG mitigation, that's the place we ought to focus instead of on massive gov't boondoggles that will not only do nothing material to reduce CO2 (rememeber: if the plant doesn't run because there are so many cheaper options, it ain't sequestering any CO2 - and even to get to that point, it has to be built which is at least 5 - 10 years out.)  Which ultimately makes this an economic issue.  The utilities and DOE backers aren't talking about that because they don't have any fiscal incentive to control costs.  And the enviros are unfortunately silent because to talk about the economic consequences of their policy suggestions is to call attention to their deficiencies (again, my unaired quote: "it would be like if I told you to watch me dunk.")
  7. DarthPetrol Posted 1:20 am
    19 Dec 2007

    SeanYou have some valid points. But you offer a false choice. There are cheaper alternatives for reducing GHG emissions, but enviros and politicians are equally against those too!  
    If you wanted to make a serious dent in GHG emissions, then convert pulverized coal plants that run at 25-30% efficiency with natural gas fired combined cycle at near 60% or with IGCC plants at 50% efficiency.  Permitting such a plant would seem to be a no brainer, but I would bet the farm that the enviro wackos will oppose it vigorously.
    Same with nuclear, it is our best shot at making significant GHG reductions.  I'm sure someone will post after me how I'm all wrong and nuclear is actually dirty - yada, yada.  Know nothing anti-nuke protestors are likely to show up at the hearings.  
    You complain that clean coal is expensive. We've had hyperinflation in the process industry for the last 2 years.  Costs are double what they were in 2005, so all new power, chemical, refineries, and E&P operations are more expensive.  In a regulated utility market used to 8 cents/ kWh retail power no alternative looks very good.  
    We could make demand side adjustments in efficiency, like the improvements your company makes, including more CHP.  But at 6-7 cents/kWh for commercial power, it will be hard to pay those off.  I pulled up some prices in the Appalachian Power pool,  3-4 cents/ kWh for wholesale power sales.  I can't build a power plant to extract waste heat for that, even given free energy! And I can't sell my excess power to NY or CT where I could get a decent price for it.
    The only way out of the problem is to structurally change the electric power industry.  Impose some kind of CO2 tax - or tier the power market where small consumers pay the regulated rates, but big users (like Al Gore before he made his home improvements) pay the much higher market rates.  
  8. DarthPetrol Posted 1:30 am
    19 Dec 2007

    AbsurdSomething just came to me.  It might actually be cheaper for FutureGen to buy natural gas and turn it into CO2 then buy power off the grid for treating and compression for sequestration. AEP might have to build a new power plant to accomodate the load, but the market cost of that power gets spread across all the rate payers in Illinois.  You could demonstrate that CCS technology without building the massively expensive, small scale IGCC.  
  9. Sean Casten's avatar

    Sean Casten Posted 1:39 am
    19 Dec 2007

    DarthSeveral disjointed responses:


    We vastly understate the consequences of higher energy costs.  Even ignoring the environmental consequences of inefficient coal combustion (remember, even when you get the CO2 out, you've still got lots of nasty upstream consequences from coal mining and transportation), energy economics argues strongly against "clean coal".  Bob Ayres at INSEAD has done some pretty compelling work over a lifetime as a practicing physicist and economist that shows that once you strip out one-off, non-repeatable events (industrialization, women entering the workforce, etc.), the single best predictor of long-term GDP growth is the declining delivered price of useful energy.  With the exception of the few years post OPEC in the early '80s, that value fell every year from 1900 - 2000.  It has risen every year since, and is a big - and largely unappreciated - contributor to the hollowing out of the US economy as energy-intensive businesses move overseas.  So arguing that clean coal is OK in spite of both it's expense and the presence of cheaper alternatives is economic suicide.
    It's more than hyperinflation driving up coal plant costs.  We haven't built any meaningful coal capacity since the clean air act was passed, in large part because we grandfathered the old stuff, and we had enough spare capacity in the system that we didn't have to.  We've now used up that capacity factor, and in the meantime the cost consequences of BACT compliance have risen ever upwards.  Yes, there is price pressure on scrubbers and other bits & pieces now, but this doesn't change the fact that the pollution control on a modern coal plant costs about as much as the rest of the facility.  Maybe prices ease back a bit once demand falls off, but we still are looking at a base cost that is roughly double the historic capital cost of coal.  And we are also looking at new coal being less efficient (because of pollution control parasitics) and unamortized (because it hasn't been amortized yet).  Which makes new coal way more expensive than old coal, regardless of whether or not the cost of generator windings is up or now in the economic cycle.
    There are many opportunities out there that look good - they're simply invisible to the traditional regulatory model.  And I'd beg to differ with your economics.  We're about to sign a long-term contract at $35/MWh in Appalachia.  This stuff will never get built by the regulated guys, but simple changes in regs will unleash a flood of it (as, I might add, we have accomplished in the newly-passed energy bill).  And those policy change are vastly cheaper than throwing cash at boondoggles.  Not to mention being more economically and environmentally responsible.

  10. GreenEngineer Posted 2:33 am
    19 Dec 2007

    energy billThis stuff will never get built by the regulated guys, but simple changes in regs will unleash a flood of it (as, I might add, we have accomplished in the newly-passed energy bill).
    Details please?  I'd love to think that there is something worthwhile in this new bill.  So far, everything I've heard has been depressing.
    Heh.  Speaking of the energy bill, this just comes to me: "Ethanol -- the FutureGen of liquid fuels."
  11. Sean Casten's avatar

    Sean Casten Posted 2:38 am
    19 Dec 2007

    GreenESee my post here.  Subtitle E passed, and while it's been totally under the radar, it is HUGE.
  12. DarthPetrol Posted 4:23 am
    19 Dec 2007

    Sean Redux

    I see lifecycle costs applied to conventional energy sources.  Seems like nobody likes to do the same for alternatives.  How much energy does it take to plow, plant, and fertilize the fields for growing biodiesel or ethanol.  Don't even mention sucking water out of aquifers.  Not very sustainable.  Have never seen the energy requirement for PV solar either. It takes a lot of juice to refine silicon into PV cells.
    True enough, pollution controls are expensive. That is why so many 1970s vintage power plants are burning Powder River Basin coal rather than install scrubbers. Our current regulated power model is akin to cities with rent control.  Paying below-market prices encourages neither conservation nor new construction or alternatives.  
    $35/Mwh?  At a heat rate of 5,700 (60%) efficiency and $7 gas, I'm generating at $40/Mwh just for the fuel.  If you can make some energy recovery scheme work at this price it implies a very low $/kwh cost.  I think what you are saying is that the way the system works is that energy recovery projects go head-to-head against the AVERAGE price of power, not against the most expensive generated power.  


    The problem I see is that we sell electricity using 19th century metering technology (mechanical meters) in a 20th century regulated market (cost of service model), trying to solve 22nd century problems (AGW).  You can't begin to solve the problems until you address how we buy,  sell, and generate electric power.  
  13. Tasermons Partner Posted 4:46 am
    19 Dec 2007

    Apparently, the DOE has second thoughts......on this little agreement set up for FutureGen.  Looks like there's goona be delays, at the very least.
    http://www.chron.com/disp/story.mpl/business/5389216.html ...
  14. Sean Casten's avatar

    Sean Casten Posted 4:56 am
    19 Dec 2007

    Darth - I think we agreeBut here are a few responses.


    Completely agree.  And the challenge is that so many of those costs are subsidized elsewhere.  But such is true for all energy paths, and intractable in the near term.  Ontario, for example calculated that the health costs alone from coal are in the range of 8 - 12 c/kWh.  And yet the coal plants are paying profits to their shareholders at prices closer to 4.  (And don't even get me started on the way that we massively subsidize their borrowing costs.)  So yeah, lifecycle matters, but if anything, those cross-subsidies tend to be higher for the status-quo technologies for the simple reason that they have bigger lobbying efforts.
    Yup.
    Yup.  It's the wonder of heat recovery and efficiency.  In this particular case, we're taking waste heat off a stack, and $35/MWh is to cover the capital recovery and a little bit of O&M.  But even with gas, one can do better than you suggest by chasing greater efficiency.  With cogen, one can achieve economic heat rates below 4000, and sometimes even below 3413, since the value of the recovered heat implies a greater value of displaced fuel.  Add to that the possibility in some locations to blend the natural gas with process wastes (e.g., anaerobic digesters or other waste-to-fuel conversion steps) and/or secure ancillary benefits to offset power costs and you can certainly make deals work even on fossil plays at <$60/MWh.  But none of that will ever get done by the regulated utilities who have no incentive to do so, and instead tell us how important it is to build big, dumb, expensive coal plants so that they can earn their return on equity.


    So to your last point, we really don't need 22nd century solutions.  We just need to stop ignoring the 20th century ones.  The electric sector after all was twice as energy efficient in 1910 as they are today.  Fixing that collapse is vastly more economically and environmentally urgent than figuring out where to have our next FutureGen money-fire.
  15. DarthPetrol Posted 2:22 pm
    19 Dec 2007

    So what to do?How was 1910 twice as efficient? Hydro?
    It seems to me that reducing CO2 can go nowhere until we fix the regulatory model. How can you set national standards for energy use when the states regulate the utilities?  Maybe a carbon tax - but that is politically very unpopular.
    Power market deregulation exposed buyers to the cold hard reality that they weren't paying close to replacement costs for the power they were using. Politicians responded by capping rates and rushing back towards regulation.
    I plugged the FutureGen numbers into an old power economic model. I was getting almost $200/Mwh.  YIKES! I don't think a full commercial scale plant will be that bad. But new clean coal is probably on par with PV solar (not accounting for backup power).
    I see us chipping away at the edges of the problem, with CHP, and energy recovery, but when the old cold fired plants finally go - we are in big trouble.
  16. Sean Casten's avatar

    Sean Casten Posted 11:22 pm
    19 Dec 2007

    Darth: Not hydro - cogenThomas Edison's first plant in 1886 was a cogen plant at 50% overall efficiency.  Westinghouse, Tesla & the rest tried to steal customers from him by offering a better deal and they steadily drove up both the power generation efficiency and the heat recovery efficiency.  Such is the way of markets, and by 1910, we were up to 65% overall efficiency.  Then we passed monopoly regulation on the power industry, such that revenues would henceforth be set as a "fair" return on equity, but based only on the power side.  Almost immediately, the power generators stopped recovering heat because there was more money in building expensive, inefficient power plants than more cost effective, local cogen.  (Not to mention using locally-available opportunity fuels that don't cost-effectively transport to remote plants.)  By 1957, we were down to 33% efficiency and haven't budged since.  There is no other industry that I am aware of that is not only less efficent today than it was in 1880, but drastically less efficient.  Factor in that it is the single biggest source of GHG emissions in the country (and the biggest overall industry in economic terms, with the possible exception of real estate) and you are looking at a massive economic and environmental cost that is the direct result of our regulatory model: one that quite literally charges us more for electricity so that we can over-emit CO2.
    Some have argued incorrectly that they still have an incentive to control costs, since revenues are based only on capital recovery, but this argument misses the fact that since the early 1900s, all opex has been a pass through: more costs = higher rate, lower costs = lower rates.  Compare this to the pre-1910 world where lower costs meant (at least temporarily) greater profit margins.  So it's not that utilities are incentivized to waste energy, but rather that they're agnostic to energy waste.  (One of the best economic observations I know is that "the greatest monopoly rent is a good nights sleep".)  Pre-1910, the Edison's of the world knew that if they didn't steadily reduce cost, they might not be able to make payroll.  Post-1910, any time spent controlling costs was time taken away from the way you make money: getting utility commissions to approve big capital projects.
    This, at core, is why we have FutureGen.  Not because it makes any economic sense but because - as you say - the regulatory model is a catastrophic failure.  Going back to 1910 efficiency levels would cut power prices by 30% and slash total US CO2 emissions by 20%.  It is as if we have been beating ourselves in the head with bricks for 100 years, and the FutureGen-o-philes of the world are trying to convince us that the solution is advanced helmet technology.  We have better options - but not until we are willing to confront the self-interests of our own personal brick industry.  And yeah, that's politically hard - but it's both environmentally and economically irresponsible to do otherwise.
    If you're interested, here's more on the history of power sector inefficiency.
  17. Sean Casten's avatar

    Sean Casten Posted 11:34 pm
    19 Dec 2007

    Sorry DarthOn the link, you'll have to scroll down to click the "Transforming Electricity" article.  Lots of other potentially interesting stuff there as well, but it may be a bit off topic to this discussion.
  18. DarthPetrol Posted 12:23 am
    20 Dec 2007

    Thanks Sean.Thanks for the links.  I don't work in the regulated side of the business.  But I see how that has screwed things up.
    One time we were looking to buy a natural gas storage facility from a utility. It had been shut down for 20 years but it looked brand new. Even the pickup that the manager was driving around was washed every day and didn't have a scratch on it.  One of my junior engineers commented in amazement.  I told him no worry - every bolt and piece of equipment here was making 8% rate of return whether it was running or not.  
    Deregulation has gotten a bad name because of Enron and the California botched deregulation scheme.  People fear profits as if it a bad word, but seem OK with the inefficiencies inherent in a regulated business.  
    In Texas generation and retail sales of electricity are deregulated, but dispatching and wholesale pricing is still set by ERCOT. Generators can't sell directly to end users.
  19. DarthPetrol Posted 1:46 am
    20 Dec 2007

    I think we largely agreeJust read your blog post in September on "a little karate".  We agree on most everything - even our distaste for Tyson Slocum.  
    In a rational market the cheapest power would get purchased first, and the most expensive last.  But it doesn't work that way - even in Texas.  Natural gas sets  the marginal price of power. If you are lucky enough to own an old dirty coal plant, you make out like a bandit. ERCOT dispatches generators to balance load and congestion with only a secondary regard to price.  
    I think the resistence to deregulation on Grist is because the enviros who post here tend to be pretty liberal.  They don't see a problem that can't be solved with a bigger government and more taxes.  
  20. Biodiversivist's avatar

    Biodiversivist Posted 2:48 am
    20 Dec 2007

    Well, DarthpetrolI think the resistence to deregulation on Grist is because the enviros who post here tend to be pretty liberal. They don't see a problem that can't be solved with a bigger government and more taxes.
    Three problems with that remark. First, your definition of the worddefinition of liberal:
    lib·er·al (lbr-l, lbrl)

    adj.

    1.

    a. Not limited to or by established, traditional, orthodox, or authoritarian attitudes, views, or dogmas; free from bigotry.

    b. Favoring proposals for reform, open to new ideas for progress, and tolerant of the ideas and behavior of others; broad-minded.

    c. Of, relating to, or characteristic of liberalism.

    d. Liberal Of, designating, or characteristic of a political party founded on or associated with principles of social and political liberalism, especially in Great Britain, Canada, and the United States.

    2.

    a. Tending to give freely; generous: a liberal benefactor.

    b. Generous in amount; ample: a liberal serving of potatoes.



    Not strict or literal; loose or approximate: a liberal translation.

    Of, relating to, or based on the traditional arts and sciences of a college or university curriculum: a liberal education.





    a. Archaic Permissible or appropriate for a person of free birth; befitting a lady or gentleman.

    b. Obsolete Morally unrestrained; licentious.

    n.



    A person with liberal ideas or opinions.

    Liberal A member of a Liberal political party.



    Next, your contention that "Grist" opposes deregulation, or does not for that matter.
    Finally, just what is an enviro?
    Consider downloading into your mind an updated version of your stereotypes.

    In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
  21. GreenEngineer Posted 5:23 am
    20 Dec 2007

    Factors driving the cost of electricitySean,
    So if I understand what you are saying (here and elsewhere) correctly, the cost paid by the utility customer is approximately the sum of:



    The cost of fuel, with no profit attached.

    Capital cost recovery on generation systems, with a regulated level of profit.

    Everything else, including T&D.  (side note: Is T&D a cost passthrough, like fuel, or a profit center, like generation?)


    Assuming I got that right: If the reforms you suggest we implemented, such that there was no longer a guaranteed profit on capital projects and thus the utilities were incentivized to make more efficient capital investment, then the cost of electricity would likely go down unless a cost-of-carbon policy was also implemented.  While this would be good in the short term for the utility customer, it would also remove one of the most effective drivers for conservation that we have, namely the rising cost of energy.  This seems likely to be a situation where a version of Jeavon's paradox would apply: electricity is produced with less financial waste, thus is cheaper, thus people use more of it because most problems can be solved either by careful design or by throwing energy at the problem.  Since design time is expensive, if energy is cheap, we get a continuation of (or return to) wasteful design.
    Comments?
  22. Sean Casten's avatar

    Sean Casten Posted 6:21 am
    20 Dec 2007

    GreenE - right question, wrong answerYour understanding of utility pricing is right.  T&D essentially works the same way, in the sense that the capital cost gets built into the asset base which is allowed to earn a fair return (but utilities become oddly agnostic to T&D losses, which have been rising pretty dramatically over the last couple decades).  And the incentives change slightly under the so-called deregulated states, where upstream wholesale generators can keep excess profits (thus, nuclear plant owners in gas-dominated, restructured states have become massive cash generators).  But on balance, you've got it right.
    And so yes - if we fixed the rules, you would see a massive reduction in energy costs, but would also see a massive reduction in GHG emissions because you would suddenly have an incentive to preferentially deploy lower cost generation.  (Again, look at the nuke experience as an example: nuke plants as a general rule stay on line much more often in restructured states; ergo, lower GHG emissions per kWh, regardless of what else you may think of nuclear power.)
    But the Jevon's paradox issue is consistently overstated, and is a case where economic theory proceeds blindly without regard for economic reality.  Gasoline prices have tripled in the last five years, but there's been damn little reduction in demand.  In light of that, Jevon's so-called paradox isn't.  (If gasoline prices fell by a factor of three why would you see any increase in gasoline use greater than what we were using 5 years ago?)
    You can draw similar conclusions on the electric side, where the geographical differences in electricity price - ranging from 5  - 20 cents retail in different states - doesn't appear to have any significant difference in people's predilection for plasma screen TVs or air conditioners.  So slashing electric rates by half is unlikely to suddenly cause people to use more energy.  In effect, the demand curve is vastly more inelastic than Jevon's paradox presumes.
    But that's only looking at the residential/commercial side, and lower electric prices do have noticeable impacts on industrials - but not in the way that Jevon's paradox suggests. One fairly consistently finds that lower price electric-cost regions attract electric-intensive industries (aluminum smelters, silicon factories, steel mills, etc.)  But that's quite different from causing demand to increase their projects - you're just encouraging them to move to your area.  (Indeed, many of the industries that have moved to China lately have done so in pursuit of cheap energy as much or more than cheap labor.)  So on a global level, getting rid of the utility bias towards expensive and inefficient electricity doesn't cause an increase in demand for electricity as a result of lower prices - it simply causes an increase in the use of low-carbon energy, and thus a net reduction in GHG emissions.  This is precisely where much of the climate debate gets it exactly wrong.  If you think that the opportunities to lower cost and lower GHG emissions don't exist, you conclude that putting a price on carbon is going to drive manufacturers overseas.  Once one understands the reality of the potential to profitably reduce GHG emissions, it becomes apparent that the result of a price on carbon is actually to bring about both lower energy prices and lower GHG emissions and pull mfrs back - with all sorts of job creation and economic development benefits along the way.
  23. GreenEngineer Posted 6:49 am
    20 Dec 2007

    ReponseI agree that Jeavon's paradox is widely overapplied.  Alot of doomers apply it everywhere, in order to prove that there's no point in trying because we're all just screwed.
    That said, I think you have to look at short-term vs. long-term energy/price elasticity.  In the short term, yes, higher/lower energy prices don't have a big impact on consumer choices.  Over the long term, however, I think you would see a different picture, because now infrastructure turnover comes into play.    The individual consumer or building owner doesn't have alot of options with regards to their energy use: they can tend towards the high side or the low side, but the actual range of their options is dictated by decisions made upstream, at the design table.  I know that in the building industry, the perception that energy is getting more expensive (and will continue to do so) is driving alot of attention towards energy efficient building design and retrocommissioning.  The impacts of this trend won't show up for awhile, but if the trend maintains, the impact over ~10 years is going to be very large.
    My concern is that the reverse effect will happen with cheap energy, and I think there is some historical basis for this.  If you look at alot of older buildings, as I do, you will see features like constant-volume air systems and bypass valves in heating/cooling hydronics that generally avoided in modern design.  Doing it the old way was easier and required less design effort (and thus less first cost), but wastes energy for the life of the building.  But when you're talking about a building built in 1960, that wasn't really a consideration.
    That said, I agree with your basic conclusion, as I understand it: more expensive energy is NOT the only way, or even the best way, to control GHG pollution.  However, my concern is about what happens if you get only half of what you're asking for: deregulation and an end to utility profit guarantees, but no price on carbon.  That's the scenario in which I see this long-term effect coming into play.  My point is simply that we need to make sure we push for both things together: a price on carbon, and a new utility regulation paradigm.
  24. GreenEngineer Posted 6:51 am
    20 Dec 2007

    questionsThese are side points, but I wanted to clarify what you meant for my own edification:
    (but utilities become oddly agnostic to T&D losses, which have been rising pretty dramatically over the last couple decades).


    Are you referring here to energy losses in transmission, or financial losses?
    (thus, nuclear plant owners in gas-dominated, restructured states have become massive cash generators).
    And this is because the per-kWh operating cost of nukes is very low, and the (very high) capital cost has already been paid in such a way it doesn't show up on the bottom line?
  25. enki Posted 7:10 am
    20 Dec 2007

    Why Clean Coal is Not A SolutionClean Coal in the form of FutureGen is good in some ways. It will eliminate the CO2 that is normally released by burning coal. But. It won't stop the coal that is burned from producing CO2, it will just "sweep it under the rug" by burying it underground. Even FutureGen proponents cant predict what the outcome of that will be because it has never been done before, at least not on that scale.
    Furthermore, it will be taking oxygen out of the atmosphere and "sequestering" that oxygen right along with the carbon as it is carbon from the coal and oxygen from the atmosphere which make up the CO2 molecule. Can the environment replenish that oxygen? That remains in doubt, especially when you consider that oxygen levels in the atmosphere are already falling.
    Story on oxygen depletion: http://blogcritics.org/archives/2007/12/14/205855.php
    Mike Johnston
  26. enki Posted 7:30 am
    20 Dec 2007

    Interesting FutureGen ThoughtActually FutureGen is a hydrogen fuel technology more than a coal technology. The chemistry behind FutureGen is to react steam with coal and produce a mix of H2 and CO (or CO2) gas. The fuel that runs the generation plant is then either the CO + H2 mix or straight H2 if you use the two step process and produce the CO2 during the reaction with coal. The whole Future gen thing is just a way to produce hydrogen more cheaply than via electrolysis.
    C + H2O ----1000 degrees---> CO + H2
    That is a single stage reaction. If you pass that gas through again with more steam the second stage reaction happens in which the carbon monoxide from the first stage is completely oxidized.
    CO + H2O ----1000 degrees ---> CO2 + H2
    If you use CO and H2 from the one stage reaction as your fuel then you are taking O2 from the environment to both form CO2 from the CO and to form water from the H2. If you use the two stage process then you are sequestering oxygen which used to be part of the water molecules that were consumed in the reaction as CO2 and using atmospheric oxygen to produce more water from the H2.
    Mike Johnston
  27. Sean Casten's avatar

    Sean Casten Posted 8:51 am
    20 Dec 2007

    GreenE Q&AAre you referring here to energy losses in transmission, or financial losses?
    Energy losses.  In 1975, the difference between total generation kWh and total retail sales kWh was about 5%, indicating 5% line losses.  Today, it's almost 10%.  The growth is - in hindsight - fairly predictable, since resistive losses increase with the square of the current unless you lower the resistance (e.g., increase the size/number of wires).  As T&D investment has consistently lagged behind load growth, we've got fewer and fewer wires distributing more and more power.  And as a result, we have to put more and more power into the upstream end of the wire (and therefore, burn more fuel) to deliver the same number of useful kWh at the point of demand.  We have, of course, also increased our susceptibility to blackouts, but that is another story...
    And this is because the per-kWh operating cost of nukes is very low, and the (very high) capital cost has already been paid in such a way it doesn't show up on the bottom line?.
    Yup.  Once any asset is built, it is the marginal cost that matters.  (Which is why coal is "cheap" - but why any one who wants to build a coal plant on the basis of it being cheap is being disingenuous, unless they are also in favor of earning crummy returns on capital given their high capex.)  Our nuclear fleet in this country is geting to be pretty old, and has largely paid off it's initial capital.  So whereas in a regulated environment that means that it contributes to a base of low cost power, in the restructured states, it suddenly becomes a way to make a lot of money.  Exelon in Illinois being an example of a utility that has massively profitted from restructuring.  From a economic theory perspective, sustained high profit margins are a sign of inefficiency, and many bemoan this result of restrucuturing.  But the flip side of that is that in restructured states, there is suddenly a prediliction to preferentially keep the cheap generation on line longer, which explains why the rates have actually increased more rapidly in the traditionally regulated states over the past decade than in the restructured ones.  (After all, it is one thing to say that someone is making too much money from their nuke plant, but something else to say that they are charging more than they would if they were instead running more expensive gas/coal assets.)
  28. DarthPetrol Posted 9:22 am
    20 Dec 2007

    StereotypeOk, I'll expand my horizons if you will give up on the all energy workers are evil and George Bush and the Republicans are both stupid and evil.
  29. GreenEngineer Posted 9:36 am
    20 Dec 2007

    DandyEnergy workers are not evil.  The CEO's of fossil fuel energy companies - yeah, they're mostly evil, some (Massey) more so than others.
    George Bush and the Republicans are both stupid and evil
    Agreed.  George Bush is stupid but sincere.  Cheney is evil through and through -- he knows exactly what he's doing.  The others, it's probably a mix.  I tend to assume stupid unless given a reason to think otherwise.
  30. David Roberts's avatar

    David Roberts Posted 9:38 am
    20 Dec 2007

    Darth,"I will correct my mistaken impressions if some other set of people will correct theirs."
    That is one strange epistemic principle.

    grist.org
  31. sunflower's avatar

    sunflower Posted 10:30 am
    20 Dec 2007

    CO2 + sunshine = COScienceDaily (Dec. 10, 2007) -- Using concentrated solar energy to reverse combustion, a research team from Sandia National Laboratories is building a prototype device intended to chemically "reenergize" carbon dioxide into carbon monoxide using concentrated solar power. The carbon monoxide could then be used to make hydrogen or serve as a building block to synthesize a liquid combustible fuel, such as methanol or even gasoline, diesel and jet fuel.

    http://www.sciencedaily.com/releases/2007/12/071208150135 ...
  32. amazingdrx Posted 2:58 pm
    20 Dec 2007

    PV CO2 conversionhttp://www.sciencedaily.com/releases/2007/04/070418091932 ...
    Using PV cells to convert CO2 to CO.
    I wonder how the concentrator works sunflower?  Does it create solar plasma?  I have always thought that a solar concentrator that boosted materials to the plasma state could recycle anything.
    Then the heat from condensation and cooling of the gases could be used for cogeneration.  The heat stored and used to run a closed cycle turbine to generate electric power on demand.
    Another way to tap the very high temperature heat right at the plasma source, from the ceramic enclosure is to use infrared PV cells.  They work on intense heat, instead of light.

    http://amazngdrx.blogharbor.com/blog
  33. DarthPetrol Posted 3:36 pm
    20 Dec 2007

    GreenCheney - evil? Really? Where do you get that? In January 2009 Mr. Cheney will happily return to his private life and his ranch in Wyoming. Doesn't sound like some power mad evil person to me.  Cheney isn't some mad dictator who jiggers the constitution to be elected for life (Hugo Chavez).  Or perhaps the guy who runs his wife for President so he can desperately get back into power.  
    CEOs evil? Do you know any?
    George Bush stupid?  Let's see, Yale grad, Harvard MBA, TX Air Nat'l Guard fighter pilot, Governor of Texas.  Must be some kind of idiot.
  34. David Roberts's avatar

    David Roberts Posted 3:47 pm
    20 Dec 2007

    Stick to the thread topic, guys.You both know this isn't going anywhere productive.

    grist.org
  35. amazingdrx Posted 1:07 am
    21 Dec 2007

    Sorry DRThis CO2 separation technology does seem to be pretty ridiculous.  Another diversion is my guess.   Maybe in response to Branson's CO2 removal prize?

    http://amazngdrx.blogharbor.com/blog
  36. DarthPetrol Posted 2:35 am
    21 Dec 2007

    Back on TopicOK, I just looked up a solar power kit at http://www.wholesalesolar.com at 5 hours/day the cost of a system works out to about $6,500 / kW roughly the same as FutureGen.  
    So is PV solar "maddeningly stupid"?  
    The point of FutureGen is to explore the technology and the costs. Sean is a big proponent of CHP systems.  I think this is one area that IGCCs may have a hope.  
    Currently a lot of natural gas, at $7.50 / mmBTu gets burned to make hydrogen, with the CO2 vented to the atmosphere. Hydrogen's biggest use is in refining and petrochemicals.  Hydrogen sells at a premium to natural gas on a BTU basis.  IGCCs like FutureGen, located near refining and petrochemical complexes could sell H2 as a co-product.  
    IGCCs need large amounts of pure oxygen. The air seperation untis at IGCCs could produce liquid nitrogen, and noble gases (argon, neon) as a coproduct.  FutureGen will generate a large amount of low quality steam.  They could pipe the steam into Mattoon for heating and cooling needs.  
    Branson's bet is for removing CO2 from the air, and is more of a gimmick.  It is a lot cheaper to remove CO2 from combustion streams than to fool with the 380 ppm present in the air.
  37. ids's avatar

    ids Posted 8:19 am
    23 Dec 2007

    F GenRe: Matoon, IL, where F Gen is heading:  

    Next generation talks about FutureGen

     . . .it could also help Mattoon grow as well and that could produce some changes at Mattoon High School.  "We could have more kids coming in," said Chase Louthan. . . . Covington said he feels confident the experts have weighed the potential risks. "They have had plenty of time to think about this. They're pretty smart and they've done their homework," he said confidently.  

    http://www.jg-tc.com/articles/2007/12/23/news/doc476c8d97 ...
    And the rest of IL:

    It is the commitment of the Illinois Congressional Delegation to maintain the scope of this project in Illinois and implement the independent recommendation of the FutureGen Alliance.

    Sincerely,

    Dick Durbin, U.S. Senator

    December 18, 2007

    Other members signing on to today's letter include Senator Barack Obama (D-IL), Representatives Bobby Rush (D-IL), Jesse Jackson, Jr. (D-IL), Dan Lipinski (D-IL), Luis Gutierrez (D-IL), Rahm Emanuel (D-IL), Peter Roskam (D-IL), Danny Davis (D-IL), Melissa Bean (D-IL), Jan Schakowsky (D-IL), Mark Kirk (R-IL), Jerry Weller (R-IL), Jerry Costello (R-IL), Judy Biggert (R-IL), Dennis Hastert (R-IL), Don Manzullo (R-IL), Phil Hare (D-IL), Ray LaHood (R-IL) and John Shimkus (R-IL).  http://www.allamericanpatriots.com/48739949_illinois-dele ...
    Re: The regulatory framework from 1880- Samuel Insull, Edison's business partner, referred to the corrupt pol's of Chicago as his model how industry would rule the regulatory roost.  Also interestingly to me, he used health concerns to sell centralized power (less soot from the home stove).  BTW, recently, ComEd joined the PJM grid, which is planning to arbitrarily raise prices to flush cash down the generating industry in hopes it creates more power generation, whatever kind the industry choses, to meet greater demand.  & the last ComEd Environmental Impact Disclosure I received revealed 0% of its known sources come from renewable energy, and it's unlikely any does.
    A rather absurd statment:

    American Clean Coal Fuels Director Stephen Johnson has planned for more than a year to build a coal-to-synthetic transportation fuel plant near Oakland. . . . Johnson said the plant will not compete with FutureGen for coal.

    http://www.jg-tc.com/articles/2007/12/23/news/doc476c861c ...
    Sean,
    How sick is it that dirty water is not mentioned along with clean coal?  And F-Gen's heirs won't be getting clean air, either.  
    See FutureGen plant won't be free of air pollution http://www.pantagraph.com/articles/2007/12/23/opinion/let ...  Sunday, December 23, 2007  . . . According to the Environmental Impact Statement, it will still be allowed to emit over 2,000 tons of health damaging air pollution every year. It will add to the number of asthma attacks, hospitalizations, strokes, heart attacks, early deaths and host of other ills.

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