The Oil Drum: Canada - Discussion of Energy and Canada's Future

In this house, we obey the laws of thermodynamics!

Paul Sears — Tue, 30 Dec 2008 15:11:07 +0000

Thermodynamics

When you use energy, the rules are very well defined. The first and second laws of thermodynamics have been well understood for well over a century, and the third for just over a century, but the subject is still viewed by most as being pretty arcane. This is a pity, both because these laws are of such importance, and because almost everyone has a fair understanding of the first and second laws, even if they think they don't. Understanding the implications of the laws is another matter.

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There are many facetious versions of the laws. The set I like best goes:

(zeroth law) You must play the game.
(first law) You can't win.
(second law) You can only break even on a very cold day.
(third law) It doesn't get that cold.

These are surprisingly accurate.

The actual laws are, it should be remembered, experimental in origin. The world has been found to work this way.

Zeroth Law

The zeroth law actually states that if two systems A and B are in equilibrium with each other, and systems B and C are also in equlibrium with each other, then systems A and C are also in equilibrium with each other. Another way of putting it is that situations like Escher's "Waterfall" don't occur in real life.

You must play the game.

First Law

The first law is the law of conservation of energy. It includes the equivalence of heat and work, but is more general than that, in that there are many forms of energy that are interconvertible, but with the total for an isolated system remaining constant over time. One point that is often misunderstood is the role of the equation E = mc². This is usually taken to refer to a conversion of matter into energy, but the reality is simpler. Energy has mass, and the equation tells you how much. No matter what conversions take place in a isolated system, its total energy (and hence mass) remains constant.

You can't win.

Second Law

The second law is the one that results from the observation that hot things lose heat to colder ones. It's a one-way process. Mechanical work can be turned into heat. Heat can be turned into mechanical work, but there are limitations. The implications of this are far-reaching, and a surprising amount can be deduced (and defined) from just this and a thought experiment.

If we have two reservoirs of heat (both conveniently infinite in capacity) at different temperatures, then devices can be constructed that take heat from the hotter reservoir, turn some of it into mechanical work and reject the rest to the colder reservoir. The rejection of part of the heat has been found to be unavoidable, but the amount of rejected heat becomes less as the temperature of the heat source is raised. Without at this stage defining what we mean by the numerical value of a temperature, let us suppose that the maximum possible efficiency of conversion is a definite function of the two temperatures. Engine efficiencies are usually defined as [work out/heat in], but in this case, I'll look at [heat out/heat in] or [1 - efficiency]. If the temperatures of the two reservoirs are T₁ and T₂ and the heat taken from the hotter is q₁, and the heat released to the colder is q₂, then we will say that:

q₂/q₁ = F(T₂,T₁) F is some as yet unknown function (an algebraic expression) of the two temperatures.

Maximum efficiency implies reversibility of the process. An example of this is that heat transfer from the hotter reservoir to the engine must be achieved without any temperature difference between the reservoir and the part of the engine that absorbs the heat. If there were any difference, the heat engine would operate at a lower efficiency (smaller temperature difference between hot and cold), and it would not be possible to run the process backwards (heat won't flow "uphill"). There can't be any friction either. The engine with maximum efficiency is thus reversible and can be used as a heat pump, pumping heat from the cooler reservoir to the hotter, and requiring mechanical work to do it. The values of q₁ and q₂ are the same as in the case of the engine, but the direction of flow is reversed and work is put into the system rather than being taken out. The absence of temperature differences between the engine/heat pump and its heat reservoirs also means that the processes will be infinitely slow, but that is the case for all these ideal machines.

Let's now suppose that we have a third heat reservoir at a still lower temperature, T₃, and that a second engine operates between the second and third reservoirs. If the heat taken from the second reservoir is q₂ (same as rejected by the first engine), and that rejected to the third is q₃, then:

q₃/q₂ = F(T₃,T₂)

But we could instead have used one engine directly between the first and third reservoirs. This engine must have the same overall efficiency as the combination of the other two, because if it didn't, then heat could be run continuously around the cycle of three engines, using the power from one or two engines to drive the other(s) backwards, leaving a net work output with heat being taken from one reservoir only. This would not be consistent with the way things work. So:

q₃/q₁ = F(T₃,T₁)

But: q₃/q₁ = (q₃/q₂) x (q₂/q₁)

So: F(T₃,T₁) = F(T₃,T₂) x F(T₂/T₁)

If you didn't switch off at the beginning of the algebra, it should be evident that this places a very severe restriction on the nature of the function F. In the last equation, T₂ disappears from the right hand side, simply as a result of the multiplication. This means that F(T₁,T₂) must be of the form f(T₁)/f(T₂), where f is some other function.

So: q₂/q₁ = f(T₂)/f(T₁)

You may remember that I started this argument without defining what exactly was meant by a temperature. This equation gives us an opportunity to define a temperature scale, by choosing the function f. This is what William Thomson (later Lord Kelvin) did in 1848. He chose f(T) to be as simple as possible:

f(T) = T

So: F(T₂,T₁) = T₂/T₁ and q₂/q₁ = T₂/T₁

In other words, an absolute temperature scale can be defined in terms of the behaviour of heat engines, independent of the properties of any particular substance. If an ideal heat engine has a conversion efficiency of 50% (half the input heat is turned into work and half to rejected heat), then the ratio of the heat source temperature to the heat sink temperature is 2 - by definition.

To complete the definition of such an absolute temperature scale, we need to set the size of a degree. If we set the degree size such that the difference between the freezing and boiling points of water is 100 degrees, we have a scale that can match the Celsius scale, but with an offset corresponding to the freezing point of water on the absolute scale. That offset turns out to be 273.15 degrees and we now have the Kelvin scale.

Entropy

The idea of entropy is associated in most people's minds with the ideas of order and disorder (higher entropy = more disorder). This is correct, but the origin of the idea comes from the movement of heat. If an amount of heat q enters a system at (absolute) temperature T, then the entropy of the system increases by q/T. This is the definition of entropy. If we look at the first heat engine above, the entropy of the hotter reservoir decreases by q₁/T₁, and that of the cooler increases by q₂/T₂. If the engine is reversible, q₂/q₁ = T₂/T₁, so the overall change in entropy is zero. This is a characteristic of reversible processes. In real processes, the change in total entropy is always positive. One example is the flow of heat from a hot body to a cooler one - the hot body loses entropy, but the cooler one gains more than the hotter one lost, since the T in the q/T expression is smaller and the q is the same.

Available work, or Exergy

The maximum amount of work that could possibly be extracted as a process proceeds (i.e., if it proceeds reversibly) can readily be calculated from energy and entropy changes between the starting and finishing states of the process. This is sometimes referred to as the exergy available at the start. Just how it may be derived may be the subject for another posting. Exergy, unlike energy, may be destroyed. The ideal amount of work is never realised of course, but it is reasonably straightforward to show that the exergy irretrievably lost when an irreversible change takes place is equal to the entropy increase associated with the irreversible change multiplied by the temperature of the environment in which the process takes place. That is the lowest temperature at which heat can be rejected by the process. It follows that if the temperature of the environment is absolute zero, there is no loss in exergy or available work, whatever happens.

You can only break even on a very cold day.

Third Law

There are two ways of stating the third law:

The entropy of every pure substance at absolute zero is zero.
It impossible to reach absolute zero in a finite number of steps.

The reason the second follows from the first is that any process that reduces the temperature of a substance must entail a step in which the entropy changes. If the entropy of everything is zero, then no changes of entropy are possible and there is no means of doing any cooling. In fact, the observed law is that the change in entropy is always zero. It is then convenient to declare all entropies zero at absolute zero and this matches the statistical interpretation of entropy. One can get very close (in degrees) to absolute zero - the current record is about 10^-10K, but the closer one gets, the more difficult it becomes to cool further.

It doesn't get that cold.

The Round-Up: October 24, 2008

Sam Foucher — Fri, 24 Oct 2008 14:41:44 +0000

Petro-Can may scrap Fort Hills upgrader to cut costs

...Petro-Canada's partner, UTS Energy, estimated deferring the upgrader would cut costs of Fort Hills by about half, to the $13-billion to $15-billion range.
"Due to several factors including costs, current commodity, equity and credit market conditions, the partners are considering deferral of any decision to construct the upgrader," UTS said in a statement.
Petro-Canada, the country's third-largest oil company, said in September that costs at Fort Hills, located roughly 90 kilometres north of Fort McMurray, Ab., had ballooned between 50% and 60% to more than $23-billion through the last year....

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Suncor could cut plans further if price slump persists

CALGARY -- Suncor Energy Inc. -- which axed capital spending plans by more than a third Thursday, delaying completion of its third oil sands upgrader -- could also hold back future expansion plans at its Firebag in-situ operations if the credit crisis and slumping oil prices stick around...
Suncor on Thursday cut its spending plans to $6-billion in 2009, down from its previous forecast of $9-billion to $10-billion. About $3.6-billion, or about 60%, of its 2009 spending will go into its planned $20.6-billion Voyageur expansion project, which includes its new upgrader. The upgrader will be delayed to sometime in 2012, pushed back from late 2011.

Quick Sand: Credit Crunch and Falling Oil Hit Oil-Sands Projects

It’s unclear whether the pullback owes more to the financial crisis or to falling oil prices, which make exotic oil fields such as tar sands less economically-appealing. Either way, it shows how oil-gathering efforts that were said to make sense a year ago no longer seem so economic...

OIL SANDS-PART 3: Biggest Customer Has Second Thoughts

Together, skyrocketing construction costs, falling crude prices, increasingly vocal opposition from some native groups, and a little known section of the 2007 U.S. Energy Independence and Security Act all threaten growth projections in northern Alberta.

"If I was an investor, I wouldn't want to take the risk of putting money into the tar sands right now," said Liz Barratt-Brown, a senior attorney at the Natural Resources Defence Council, an NGO leading U.S. lobbying efforts against Canada's heavy oil industry.

Les sables bitumineux (special report in French)

Il y a présentement 17 projets d'expansion de raffineries dans la région des Grands Lacs, dont 16 en territoire américain. Les chercheurs de l'Université de Toronto signalent que les promoteurs des raffineries sont attirés par les Grands Lacs car ils pourraient faire usage des grandes quantités d'eau disponibles dans la région.

Le rapport scientifique, qui doit être dévoilé ce mercredi, précise que la valeur des projets d'expansion des raffineries d'ici 2015 pourrait atteidre 31 milliards $ US afin qu'elles soient en mesure de traiter les sables albertains. Mis ensemble, ces projets risquent d'anéantir les gains de lutte à la pollution réalisés dans cette région depuis les années 70, selon les auteurs.

Compressed Air Energy Storage - How viable is it?

Paul Sears — Sun, 27 Jul 2008 14:00:19 +0000

Energy Storage - Compressed Air

One of the most critical aspects of the implementation of renewable electricity is the ability to store electricity. If a good solution existed right now, our situation would be a good deal easier. On the face of it, compressed air seems a likely candidate: relatively easy to make, store and use - so what is the problem? Why isn't it used routinely?

More Thermodynamics than You Ever Wanted to Know?

We usually speak of storing and using energy without being very precise about what we mean. That ends forever if you take a few chemistry or engineering courses. Thermodynamics rules everything.

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Let's start with the usual definition of work - using a force to push something a given distance (in the direction of the force). The amount of work is the force multiplied by the distance, and has units of energy. If we lift a 1 kg mass by 1 metre in the earth's gravitational field on the surface of the earth, then the work done on it is the force required: 1kg x 9.8 m/s² (9.8 Newtons), times 1 metre, or 9.8 Joules. Since a Watt is 1 Joule per second, then in principle (no friction), this lift could be carried out in 9.8 seconds by a 1 Watt electric motor. At the end of the process, the weight has acquired 9.8 Joules of gravitational potential energy.

We just constructed an energy storage device. The weight we lifted could now be allowed to descend, giving its potential energy back to an electrical generator and making electricity in the process. This is in fact the basis of possibly the most effective existing way of storing electricity. Water is pumped from a low reservoir to a high one at times when there is a surplus of electricity, and then allowed to flow back when there is a shortage. For useful amounts of energy storage using reservoirs that are not too large, one generally requires reservoir height differences of a hundred metres or more, which limits this to suitable terrain.

So what about compressed air? Surely a cylinder of compressed air contains energy that could be used to drive something?

This is where it all becomes a little strange. The energy content of compressed gas isn't very different from that of uncompressed gas at the same temperature. For an ideal gas, the energy contents are identical. How come we can get work from the compressed gas?

The answer is that compressed gas has a lower entropy than the uncompressed gas, and that the amount of useful work you can get out of something when it changes depends both on the change in energy content and the change in entropy. We usually focus so much on the energy side of things that we ignore the entropy side.

If the compressed gas has no more energy than the uncompressed gas, where did the energy used to compress it go? The answer can be found in the old bicycle pump experiment. When you compress a gas it becomes hot. In fact all the work put into an ideal gas to compress it is turned into heat. If that heat is thrown away, the same amount of energy as was in that work is thrown away with it.

To look at a definite example, if we take 1 cubic metre of air at 1 atmosphere pressure and 20C and compress it to 10 atmospheres pressure, its temperature will increase very considerably - to 293C. If we want to store this compressed air at 10 atmospheres pressure and 20C, then more compression will be needed as we cool the gas, or its pressure will drop as its temperature does. The total work done on the gas, and the total heat lost are both about 91.7 Watt-hours (Wh). (This assumes that the air is an ideal diatomic gas.)

This gas would now have a lower entropy than the same amount of uncompressed air. The entropy change is 796 J/K (Joules per degree Kelvin). Note the units are energy per degree. This gives a hint of how the entropy change is related to the work that can in principle be extracted from the compressed air. That work can be calculated by multiplying the entropy change by the temperature of the environment in degrees Kelvin. 20C is 293K, so the amount of work that can in principle be extracted is 233 kJ, or 64.8 Wh. If we compare this with the work done compressing the gas, we see that the efficiency of the process is about 71%, even if the compressor is perfectly efficient.

Looking at the expansion of the same air back to 1 atmosphere, using a motor to do work in the process, we can work out that the temperature will fall to -121C, and that the work that is done would be 47.5Wh. The efficiency of ths process is thus 47.5/64.8 = 73%, even with a perfect motor. The round-trip efficiency for energy storage and use would then be just 52%. With real compressors and motors it would clearly be considerably worse. These numbers above are for a compression ratio of 10. If we instead use a compression ratio of 100, things get worse still, with a round-trip efficiency of 27%.

This actually gives a clue as to how to improve the situation. The maximum efficiency of the cycle depends on the pressure ratio, and rises to 100% as that ratio approaches 1. The answer is to use staged compression, with cooling back to ambient temperature between the stages, and staged expansion, with reheat back to ambient temperature between stages. If we get the 100 times compression by two stages of times 10 each, then half the work goes into the first stage and half into the second, with efficiencies as for 10 times compression - a huge improvement. If we use four stages (ratio 3.17), then the maximum effficiency would be 72%. If we take into account that real compressors and engines are not perfect, and neither are coolers and reheaters, we can see that real overall efficiencies achieved are never likely to be very good, even with very complicated equipment.

Whether technology is useful depends, though, on comparison with the alternatives. The overall efficicency of a compessor train and a compressed air car may not look all that high, but an internal combustion vehicle engine can look pretty inefficient, even with North American fuel prices. This means that an air-powered car may make some sense. For more details on the MDI air car, see some MDI engine tests. Notice that in a conventional car you get free heating, but in a compressed air car you get free cooling.

Bulk power storage is another matter. Large reservoirs of compressed air can be and have been constructed, but they are not used simply to drive engines to regenerate power. Building large heat exchangers to warm the air in a power generating unit would be very costly and not very efficient, so the air is instead heated to a much higher temperature before the expansion turbine by burning natural gas in it. The whole installation is thus a sort of gas turbine, with the difference that the compressor and power turbines are run at different times instead of together. This is no longer a straightforward energy storage device.

Oil Megaproject Update (July 2008)

Sam Foucher — Sun, 06 Jul 2008 01:23:22 +0000

This is an update on the Wikipedia Oil Megaproject Database maintained by the Oil Megaprojects task force (Ace, Stuart Staniford, myself and many others). The database contains now more than 425 separate entries and is growing everyday. Despite the database growth, the outcome seems to become more pessimistic with time. The derived net new capacity (i.e. once depletion from existing production is included) is around 1 mbpd until 2010 with a jump at 2 mbpd in 2008 after which depletion may dominate.

Possible future supply capacity scenario for crude oil and NGL based on the Wikipedia Oil Megaproject database. The resource base post-2002 decline rate is a linearly increasing rate from 0% to 4.5% between 2003 and 2008 then constant at 4.5% afterward. The decline rate for each annual addition is 4.5% after first year.

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Below is the evolution of the new supply additions since the beginning of the project compiled by year of first oil:

December 2007	January 2008
February 2008	March 2008
May 2008	June 2008

We can clearly see the initial 2008 and 2009 peaks wearing out with time due mainly to delays. Now the situation does not look so good:

Possible new gross and net new supply additions compiled by year of first oil. Crude oil + NGL monthly production from the EIA. The resource base post-2002 decline is a linearly increasing rate from 0% to 4.5% between 2003 and 2008 then constant at 4,5% afterward. The decline rate for each annual addition is 4.5% after first year.

Below is a possible scenario for future supply assuming a 4.5% decline rate.

Possible future supply scenario for crude oil and NGL based on the Wikipedia Oil Megaproject database. The resource base post-2002 decline is a linearly increasing decline rate from 0% to 4.5% between 2003 and 2008 then constant at 4.5% afterward. The decline rate for each annual addition is 4.5% after first year.

This scenario seems to agree with this recent statement from Ray Leonard:

“By 2010, the production of the fuel that has driven the world’s economy will start to rapidly decline. This will conflict with the steadily increasing demand for oil. The collision of these two trends will lead to shortages and increased prices, providing a strong incentive to shift to alternative fuel resources…Due to unequal distribution through the world of oil and gas supply and consumption, [the upcoming] transition will result in significant shifts in global power and wealth.”

Many thanks to Ace who has diligently updated the data and put more than 500 separate contributions.

Finally, maintaining this database is a lot of work and it is crucial to track delays, project final approval, etc., so I'd like to repeat our appeal: the more folks in the TOD community head over to the Wikipage and help, the faster we'll know what's really going on here.

Related stories:

Update on Megaproject Megaproject
Help us List Megaprojects

Weekend Energy Listening: Wind Power with Paul Gipe

benk — Sun, 08 Jun 2008 15:00:00 +0000

The World Wind Energy Conference is just around the corner and happens to be in my home town. I was flipping through the conference program and noticed a familiar name pop up quite a lot: Paul Gipe. He's written a number of books on wind power and most recently has become involved in feed-in tariffs for wind power in North America. I spoke to him a while ago about how the industry has developed.

To listen to the show, you can either play it in the built in player, or download it directly via the link.

or download directly: Wind Power Conversation with Paul Gipe [break]

Transcript
Disclaimer: This transcript was provided by a 3rd party and may not be 100% accurate. Please refer to the audio as well.

Ben : I have spoken a lot on the show about wind power and how it is growing by leaps and bounds. Records for wind power installations are breaking every year now, so worldwide the wind power sector grew by 43% last year. US growth was a little under, Canada’s growth was a little over. Interestingly, India is coming on strong now. They just overtook Denmark for fourth spot in terms of total installed capacity, but nobody can really match Denmark in terms of wind power per capita. Joining me to talk about wind power from California is Paul Gipe. So, thank you so much for coming on the show, Paul.

Paul Gipe: Yeah, thank you Ben.

Ben : Just as a quick biography, Paul has been around the wind power industry since the 1970s and he has written a number of books and articles, which everybody can find on his website wind works.org. He was named Person of the Year in 1988 by the American Wind Energy Association. He was given pioneer status by the World Renewable Energy Congress. Paul, actually you were first described to me as the guy that David Suzuki goes to for wind power answers, so I just have this vision of David Suzuki having you on speed dial, calling you up in the middle of the night to talk about things like capacity factors. Does that ever happen?

Paul Gipe: I wish that was true, but no. David and I do talk and we do discuss this issue, but there are lots of wind power experts in the world and I have my own take on how renewable energy is being developed or should be developed.

Ben : For today, I am especially interested in, since you have all this experience, I am especially interested in getting some type of historical background of how wind power has been developed since the 1970s up until now. I know that Denmark back then had the state-of-the-art technology and the industry is going through record high oil prices all the way through record low oil prices and now we are again approaching record high oil prices. So, could you walk us through the developments of the wind power sector?

Paul Gipe: Well, the development of wind energy has often been connected to the availability, not just the price of oil and when oil has become abundant and very low cost it has set back wind power development a number of times. Wind generation of electricity really began in Denmark around the turn of the century where wind turbines were being developed to produce the direct current for charging batteries at the villages that had not received central station electricity in Denmark and during the war years, the First World War when oil supplies were cut off by the British blockade of Jutland, the Danes again turned to wind power and also as they are entering World War II when the German war machine needed oil, it was consuming all the oil available in the continent. The Danes again turned to wind power for generation of electricity in the villages of the Jutland Peninsula and then in the 1950s and 1960s, we saw a real bloom in the development of wind technology in Germany, in England, and in Denmark and with the abundant supply coming from the big giant, super giant, fields of Saudi Arabia that the bloom was taken off the flowering of wind energy at that period and that technology then lapsed for a number of years, but what was key was during the 1950s, for a decade, for 10 years there was a wind turbine operating commercially, but it is successfully producing electricity for over 10 years using a technology that today we would think is very crude, but contains the fundamental elements of what we call the Danish Wind Turbine Design and it is those fundamental elements that have brought us to the state of where wind energy is today and why it has become so successful. So, following the 1950s, the next great boom in wind energy development took place in early 1980s in California, from 1981 through 1985, before this next great collapse in the price of oil and the rise of Thatcherism and Reaganism killed renewable energy industry in the Anglophone world. Key happened. At that time, of course, California was the world center of renewable energy development, not just wind, but primarily wind, and that was…

Ben : That was in the 1980s? The early 1980s when California…

Paul Gipe: Yeah, early 1980s, yes. That is why I am in California; it is because I followed the wind to California and work in Tehachapi, which is still to this day one of the largest concentrations of wind turbines in the world. Tehachapi produces almost 2 terawatt hours a year or two billion terawatt hours a year, electricity from about 3500 wind turbines, so it is still a center of wind energy development to this day.

Ben : So, that was around the US oil crisis, the early 1980s?

Paul Gipe: That is correct, right, following the Iranian revolution in 1979 when there were gas lines and so on. It was really in response to a law that was passed in 1978 here in United States called the National Energy Act, which had a number of very important provisions. Key one was that you were allowed to build an alternative source of energy and sell that electricity to the grid, to the network. Now, in a typical American fashion, we made a major mistake in the law and we did not define the price that you would be paid. We only defined the mechanism to determine the price and of course we as Americans have a real affinity for attorneys and it has basically been in the hands of attorneys for over 20 years, but at the time we were able to succeed in getting a price, standard offer contract in California that enabled the boom of wind energy in California in the early 1980s and that is why the Danes became so successful, it is in part because they sold thousands of wind turbines to California.

Ben : So, that guaranteed price that was in terms of dollars per kilowatt or cents for kilowatt hour type of thing?

Paul Gipe: Correct. It was a fixed price for a number of years and then after those number of years, you still had a contract to sell your electricity, but the price fell to whatever was considered as the prevailing rate, but it guaranteed a fixed price for the first 10 years, which is necessary to pay for the capital cost of installing renewable energy. Solar and wind are very capital intensive technology. You got to pay for all the machinery.

Ben : Of course, since then the price of wind has fallen dramatically, of wind power.

Paul Gipe: The technology has advanced. It has made great strides, but these have been incremental improvement. There is no radical change of wind energy. It is still basically the same kind of windmill that we had in early 1980s. It looked pretty much the same. They typically had three blades that spin around a horizontal axis and are upwind to the tower. This is much, much bigger. We have gained economy as a scale and as a result of that the cost of energy that is produced by the wind turbines has fallen dramatically.

Ben : It must have been a pretty exciting time way back in the early 1980s when California was buying all of these wind turbines from Denmark. What about later on when the price of oil hit all time lows? How did the industry survive through that?

Paul Gipe: Well, first of all, I mean it was absolutely a terrific time to be in renewable energy. The old timers who are still around remember that period particularly with wind energy here in California. It was the Wild West. A number of books written about the period that talked about this are the Gold Rush, the Wind Rush at California. It was an amazing time and of course it did collapse. I am not sure that we could say that we did survive that period. We did survive. There are a number of us who still work in the field whether it is solar energy or biomass or in my case wind energy and we have continued to do that, but the renewable energy industry was set back, well it has set back to a decade. It was set back 20 years. It did take 20 years to recover that momentum that we had in early 1980s, but in the meantime the technology has greatly improved. We have developed the technology and we can attribute today the success of where we are is because unlike here in North America, the Europeans did not abandon the desire for renewable energy. They took a different approach and said we are going to need this technology, we are going to need renewable energy and they maintained a program for the development of renewable energy over these intervening two decades. Even though the price of oil collapsed, they maintained a program. They may not have been as dramatic as what we had in California, but they were as important, if not now looking back on it more important, because they built a different kind of industry and that different kind of industry gives us more possibilities, more ways to use renewable energy than the very nearly focused form that was developed in California and that gives me hope.

Ben : So, they basically built an industry that was not based on the price of oil.

Paul Gipe: Exactly. They built an industry that was based on the desire, a political desire, a sociable desire, to have renewable energy that was independent of the volatility in the price of fossil fuels, specifically oil. Denmark, for example, weaned itself off of oil. They began using more, say, Polish coal and also natural gas from its fields in the North Sea, but at the same time it made a national commitment to develop renewable energy for the direct benefit of its people, for the direct use by its people. They created the program at the request of farmers, renewable energy advocates, and community groups that they wanted to use renewable energy. They wanted to participate. They wanted to be a part of what we now called the Renewable Energy Revolution and that is different in what was done in California. It gives us a different model for how to develop renewable energy. It gives us another choice for ways in which we can develop renewable energy. We are hoping that this model will develop in Canada, in Ontario, for example, with what the government calls Standard Offer Contracts or what I call renewable energy tariffs.

Ben : Okay. Something that really surprised me when I read it on your website is that almost 5% of Denmark’s population owns a piece of a wind farm. That is amazing to me. Why is that?

Paul Gipe: Well, there are a number of reasons and actually books have been written about this, about the sociological phenomena that Danes are very community oriented. They are very cooperatively oriented. A lot of their big national businesses are cooperative, milk, dairy, cookies, pork, I mean pigs, and they are a powerful force in the cooperative movement in the world and this is in part a result of a philosophical movement, a religious movement, in the mid-19th century. Denmark did not have a violent revolution like we had in United States from Britain or the French Revolution. The Danes went through an agrarian reform that was based on enlightenment of its people, education and training of its people, to bring them up out of the mud, raise them up out of all the mud, through education, self-education, in small groups and this eventually led to the cooperative movement in Denmark. So, when the people there began looking at wind energy, even though their electric utilities are cooperative in a legal sense, the people said we do not want these guys doing developing wind energy because basically they have not done anything, we have asked them for years, but what do they do? They want to go build a nuclear power plant. We do not want a nuclear power plant. We want wind energy. So, we want to do this and the government in Denmark is responsive to that and said okay, we will provide a mechanism that will allow groups of people together or farmers to set up wind turbines and make money doing it, sell the electricity into the grid, and so wind power exist today in the world because of farmers and community groups in Denmark.

Ben : There is obviously a link between owning lands and putting up a wind farm, but North America has a ton of land and not that many wind farms.

Paul Gipe: Well, let me just say that they can be done in North America, this form of development that we saw in Denmark and we see now in Germany for the last 15 years, the same form of development in Germany. In North America, we will have both forms. We will have the traditional electric utility whether it is electricity to front or either of the back or OPG or Scottish power building wind farms, large central station power plants or private wind power companies like Vision Quest out of Alberta. They will be building wind farms. We have that kind of development in North America because we are blessed with so much land area, but we do have similar settlement patterns in Southern Ontario, like in Ontario, and in places in the Midwest United States where there are lots of farmers, lots of individual land holdings where the Danish model or the German model can be applied and I think that we are just at the beginning of a movement for this kind of development. There is a great interest among farmers and rural land owners in Quebec now and in Manitoba to do the same thing that Ontario is on the verge of doing.

Ben : The Department of Energy just published their 2006 Energy Outlook and they think that their best bet is that wind will only contribute 1% of the US’s primary energy needs by 2030. I mean that is nothing.

Paul Gipe: Are you talking about the US Department of Energy?

Ben : Yeah, yeah. Sorry, the US Department of Energy.

Paul Gipe: Oh, we still have a US Department of Energy? Oh, I have not taken anything from the US Department of Energy seriously since Ronald Reagan, I am sorry. They are still there, are they?

Ben : Yeah, they also said 88% of the increase will come from coal power.

Paul Gipe: Well, all I have to remind your Canadian listeners is who is the president of the United States and who runs our administrative structure in the United States does not tolerate any descent or any opposing points of view and once you understand that, you will dismiss any statement from the US Department of Energy as simply self-serving.

Ben : Okay. So, will the wind power growth continue to be at around 40% per year do you think?

Paul Gipe: Worldwide.

Ben : Worldwide.

Paul Gipe: Absolutely, yeah. All the signs are pointing to not just rapid growth of wind energy, but rapid growth of all forms of renewable energy. If you look at solar photovoltaic, solar cells for the generation of electricity, the growth is dramatic, if not more dramatic, than wind energy. If you look at what has happened in Germany… Let us take Canada, for example, let us say Canada has about 600 to 700 megawatts of wind power and wind power is much more cost effective than solar photovoltaic because of the nature of the technology. Germany has twice the amount of solar cells installed on people’s roofs, that is, homeowners, farmers, and businesses in Germany as all of the wind turbines in all of Canada. That are just solar cells and this has all just happened in the last three or four years, so the growth in solar photovoltaic is very dramatic and if we can get the prices right in Canada, we will see growth of solar cells, too. I mean the Premier of Ontario, Dalton McGuinty, would like to see solar panels on people’s homes in Ontario. He said that to David Suzuki and myself and we are going to take him at his word and try and make sure that happens.

Ben : What are your thoughts for things like offshore wind farms in North America? I mean the Cape Wind Project is having a lot of problems lately. Well, they have had a lot of problems since they have started, since they have proposed the Cape Wind Project. Do you think offshore will be a big player?

Paul Gipe: No, we do not need offshore in North America. Sure, we should not exclude offshore where offshore makes sense, we should not exclude it. Offshore Toronto, for example, certainly should not exclude it. Offshore Rochester, New York, offshore Detroit should not exclude, offshore Kingston should not exclude that, offshore of Queens University certainly should not exclude that, but we are land rich in North America and it is simply a lot easier to put the wind turbines on land and offshore. I have argued for many years, they are on record in my books and in my articles that offshore is not a panacea for what ails wind energy. The big issue with wind energy is will the people accept it? Will the public accept it? Some will, some will not, of course, unlike nuclear power, which can be shoved down people’s throat by some central decision making by some government whether it is in Toronto or Washington, DC. Wind energy has to be accepted by the people who live nearby and if it is not we will not do it and the early push for going offshore was the belief that going offshore was a panacea. They are out at sea, they cannot see them, nobody is going to care. Of course, that was bogus at the very beginning and you see in the Cape Wind case of course it is bogus because you do not want Canadiens and the mansions there they do not want to look at windmills. Even if they cannot see them, they know they are out there and well I mean would you want to go to [20:45 unintelligible] if you think there is a windmill offshore. Of course, you would, but maybe the Canadiens do not want to live with it. Those kinds of people have a lot of political influence.

Ben : Is that the biggest threat right now, NIMBism or not in my backyard-ism?

Paul Gipe: For wind energy, absolutely, absolutely. As I say, wind energy has to be acceptable to the people. It has to be done in an environmentally acceptable manner; otherwise, we should not do it. I mean that is the reason that I am an advocate of renewable energy, of wind energy in particular, is that it is preferable to other forms of energy development such as nuclear power or burning coal and it is only acceptable if wind energy is in fact environmentally superior, so you got to do a good job.

Ben : What about the intermittency of wind power? Is that not a big problem?

Paul Gipe: No, it is not a serious issue. It is often raised. Intuitively, we know that the wind does not blow all the time and when you look out at the wind turbines whether it is that one single turbine at the Pickering plant, did you ever notice how in Ontario you always have a token turbine by your nuclear plant? Some days it does not turn and some days it might turn kind of lazily while producing a lot of electricity, but when you have thousands of wind turbines scattered over a country the size of Canada or a province the size of Ontario, those wind turbines begin to balance out each other and study after study for the last 30 years, say, yes this is a technical issue and yes it has technical solutions and we just had another study, a study on a study, a study that in the Anglophone world evaluated 200 previous studies on intermittency of renewable not just wind but wind and solar and so on and I am sure they only looked that the English language studies, have not looked at the Germans or the French studies, and they said, yeah okay it is a technical problem, but everywhere it has been done, people just get on with the job and so as I say on my website and in one of my books, this has been beaten to death. I thought we put this question to bed 20 years ago. It is basically a red herring. It is a technical issue where people, for example, at Queens University engineers, that is why we train engineers to deal with these kinds of questions and it can be dealt with.

Ben : Actually, my next question is, are we going to start seeing any neat ways of storing wind energy?

Paul Gipe: Well, first of all, we do not need to store wind energy. One of message is you do not need storage because you already have storage in any large integrated electric utility system whether it is in Ontario or New York State or Denmark or Germany, you already have a lot of storage. Now, in the case of Ontario, you do not have a lot of hydro storage, you have a little bit, you do not have a lot because you are mostly run-off-the-river plants, they are not large reservoirs like you have in Quebec, but also you have fossil fuels and if you are offloading a generation of electricity, offloading fossil fuel generation, gas or coal, basically you are still storing that energy in the form of the fossil fuel that was not consumed and if, for example, if you have a hot water heater in your house and that hot water heater is still electric and you turn that electric heater on at night when the wind turbines are all generating electricity, you store new electricity in the form of heat and hot water, you can do the same thing at home. So, first of all, you do not need storage. Secondly, we did do a lot of storage already, it does exist. Third, okay, there are some technical things that might be of interest or looking like it could be of interest, compressed air storage.

Ben : Yeah.

Paul Gipe: Big project proposed for Iowa, which use several hundred megawatts of wind turbines on the order of all the wind turbines you have in Canada now, in Iowa, in connection with a pumped air storage project. Another interesting technical development, interesting to engineers, is new battery technologies. These are chemical batteries, not lead acid, but other process. In the long term, of course, electrolysis of water into hydrogen, very energy intensive, but in the long term that is a possibility of being able to store surplus wind energy in hydrogen and in the short term, plug in hybrids. Electric vehicles like the Prius, that is a hybrid gasoline-electric with additional battery packs, are being installed in a conversion company here in California. You plug your car in and you drive it at home, plug it in, the next day you go out, you have stored electricity in the batteries of the car, then you get over 100 miles of a gallon because you are not burning the gasoline and that electricity should come from… You are never going to have electric vehicles. That electricity has got to come from renewable.

Ben : Yeah. Yes.

Paul Gipe: It cannot come from coal.

Ben : Yeah. I just wanted to ask you quickly. This was a question that somebody else wanted me to ask you. Is there going to be any improvement on the technology? I know you said that the basic wind turbine design from the Danes does not really require that much improvement, but is anything on the horizon?

Paul Gipe: The technology, all renewable technologies, demands improvement. In fact, all human endeavors demand continual improvement. In the case of wind energy, we will continue to see and we will demand, it will be necessary to have continued incremental improvements in the technology, radical change in the way a wind turbine looks. No, I am an outspoken critic of ill fated, ill-conceived crackpot wind turbine inventions…

Ben : There has been a lot of talk about vertical axis wind turbines.

Paul Gipe: Well, particularly among Canadiens, this is very interesting in my lectures in Canada and I do not do this here south of the border, but north of the border I always put in my presentations one slide that shows vertical axis wind turbines, particularly the turbine at Cap-Chat in the Gaspé, which some Canadians are quite proud of as an example of Canadian engineering. Of course, it has not worked for almost a decade. I would consider that an embarrassment myself and I put a big X through this wind turbine and I said, “This is not a wind turbine.” It is a static sculpture. It is perfectly acceptable as a static sculpture if Canadians want to have this on their landscape. For me as an advocate of wind energy, my position is if the windmill does not work, get rid of it. Make most in beer cans out of… Okay, now having said that, Canadians have had an affinity for vertical axis wind turbines. Nothing wrong with that concept, the technology of vertical axis wind turbines can be made to work fairly efficiently in terms of the engineering term efficiently, but that technology has never been developed. It is the same level of technological development and economic development that we have of the conventional wind turbine looks like an airplane propeller and as a consequence I am an advocate of generating electricity with wind turbines. I am not just an advocate of building windmills. If we could have the electricity without the windmill that is the best world we could have. The state that we have today is if you want electricity from wind turbines, you are going to use conventional wind turbines that look like an airplane propeller. If engineers at Queens University or University of Toronto or at University of Windsor want to continue research in vertical axis wind turbines, that is fine, that is great, just do not spend much money on it because we need to spend the money on building the technology that produces electricity because Canada needs clean electricity. You do not get that from an R&D program. You only get that from installing real products that work.

Ben : All right. Well, thank you so much for coming on the show. Just before we end though, I just want to point out your latest book, Wind Power: Renewable Energy for Home, Farm and Business, and I have read through some of the reviews and it is the book to have on wind power.

Paul Gipe: Well, let me just mention, too, Ben, that the French language version, the Francophone version of the book will be available in June for any Francophone listeners, any listeners from Manitoba or Quebec, there will be a French language version of that book available in June.

Ben : Excellent. You can buy it on amazon.com, on that website.

Paul Gipe: Yes and I of course recommend that everybody buy it by the crate.

Ben : Okay, well thanks so much for coming on the show, Paul.

Paul Gipe: Thank you very much, Ben, and good luck with your podcast.

Ben : Thank you. Bye-bye.

Paul Gipe: Bye now.

Predictions for Canada’s Natural Gas Production

benk — Wed, 04 Jun 2008 14:00:45 +0000

Canadian natural gas is important in a number of ways: It provides 17% of total US NG consumption and today contributes roughly 11% [see calc at bottom] of the energy content in a barrel of tar sands oil (which will only increase with in-situ recovery growth). By no means (conventional or unconventional), can Canada be considered to have lots of natural gas, yet, we produce more than our fair share. Accurately predicting Canadian NG supply is, of course, important for all the usual North American energy security reasons and, among others: It would be nice to know if Canadians will have NG for things other than tar sands and exports to the US. Half of all Canadian homes are heated primarily by natural gas and about 6% of Canada's electricity sector relies on natural gas, a lot of which is used as peak electricity generation.

It’s well known that Canadian conventional gas peaked around 2001, but according to a continuing trends prediction case from the National Energy Board, it doesn’t appear as if unconventional gas will be playing a big part, at least compared against 2001 peak production levels. Below I summarize some predictions for future production of Canadian natural gas and try to estimate how much of Canada's natural gas will be left over for regular Canadian citizens.

[break]

Here is the EIA’s take on Canadian natural gas:

In 2004, Canada provided 85 percent of gross U.S. imports of natural gas. Although Canada’s unconventional and Arctic production both are expected to increase over the projection period, and LNG imports into Eastern Canada are expected to begin by the end of the decade, those supply increases are not expected to be sufficient to offset a decline in conventional production in Canada’s largest producing basin, the Western Sedimentary Basin. Gross U.S. imports of LNG are projected to exceed gross pipeline imports from Canada after 2015, and Canada’s share of gross U.S. imports is projected to decline to 25 percent in 2030.
...
In Canada, natural gas consumption in the residential and commercial sectors is expected to increase steadily at rates of 0.5 and 0.7 percent per year, respectively. Strong growth rates of 2.2 percent per year in Canada’s consumption of natural gas for electricity generation and 2.1 percent per year for industrial uses—including vast quantities of natural gas consumed in the mining of the country’s oil sands deposits—are the main contributors to Canada’s projected consumption growth.

In short, Canadian production decreases while consumption increases and LNG imports start while we’re still exporting. From an energy security stand point, this is not good and will be felt over a broad range of industries. Canada will become a net natural gas importer, which will require new LNG terminals, some new pipeline connections and maybe even a reversal of the flow of gas from east to west depending on where the LNG will be coming from.

As far as Canadian exports to the US go, this is linked to production through NAFTA. NAFTA requires that Canada continue to export about 60% of its gas production to the US, and based on the EIA’s predictions of Canadian NG imports, it seems as if the US will be holding Canada to this clause.

How much Canadian gas will be produced?

I’ve painstakingly dug up some good historical NG production data for Canada and compiled a small list of predictions from the NEB and EIA. I’ve put all of the data here for the world to enjoy (aside: why oh why don’t my Canadian tax dollars pay for a good centralized service like the EIA for energy stats?).

Fig 1. Past natural gas production in Canada (data points), predicted future gas production including unconventional sources, excluding imports (broken lines) and my Hubbert model for gas depletion (solid line).

Sources for the historical data are:

Stats Canada (two data sets: 1911-1980, 1970-2002 paid service thanks to TOD:C advertising revenue)
EIA (1980-2005)
NEB (2002-2008)
IEA (1999-2008)

Sources for the outlooks:

2007 EIA International Energy Outlook (NG section)
NEB energy futures to 2030
My own simple Hubbert model

Most of these predictions come from the National Energy Board of Canada (NEB). The NEB seems to be playing it pretty safe with their predictions, which makes it hard to find a take home message from their work: The difference between their “Fortified Islands” projection and their “Triple E” projection by 2030 is 14.3bcf/d, 37% more gas than what Canada exports to the US now at close to peak production and most of which would come from unconventional sources. The predictions in Fig 1 do include unconventional natural gas as well as any gas that may come online from the Mackenzie Valley pipeline (not expected until 2015 and produces at most 0.5 bcf/d) and any Arctic sources (not expected until 2022, if at all, and produces at most 1 bcf/d). These scenarios also have some rather optimistic price predictions for oil and gas. No scenario sees WTI oil going above $85/bbl by 2030 and the highest Henry Hub gas price prediction is $12/MMBtu.

Continuing Trends

This scenario is one of little change. In Continuing Trends, Canada experiences the most rapid economic growth and moderate oil and gas prices. As a result, energy demand, energy production and GHG emissions growth continue to be high.

WTI oil price: flatlines at $50 after 2010
NG Henry Hub price: flatlines at $6.65/MMBtu after 2010

Triple E

The scenario seeks a balance of economic, environmental, and energy (Triple E) objectives. This scenario is the mid-case for Canadian economic growth, has the lowest oil and gas commodity prices, and includes numerous energy demand management programs and policies. Consequently, energy demand growth flattens. This is the lowest energy production scenario and GHG emissions decline.

WTI oil price: flatlines at $35 after 2020
NG Henry Hub price: flatlines at $5.50/MMBtu after 2020

Fortified Islands

Fortified Islands is the scenario wherein national energy security concerns are emphasized. Geopolitical unrest, a lack of international cooperation and trust, and protectionist government policies characterize this scenario. Fortified Islands reflects the lowest Canadian economic growth and the highest oil and gas prices. This combination of factors ensures that this scenario has lower energy demand growth and lower GHG emissions growth than the Continuing Trends Scenario. It also results in the strongest domestic oil and gas production scenario.

WTI oil price: flatlines at $85 after 2010
NG Henry Hub price: $12/MMBtu

In reading these descriptions, it sounds as if the NEB is taking the approach of whatever the demand may be, production will keep up, not uncommon for these sorts of predictions although if you read through the report, they do focus on production. The Triple E scenario has the lowest production of NG and at the same time, the lowest commodity prices, as if somehow demand for NG will all of a sudden plummet. Fortified Islands has the most expensive commodity prices and as a result, it becomes viable to bring more unconventional gas online (64% of total 2030 production under this scenario is unconventional gas).

Natural gas usage by tar sands

The table below shows the predicted volumes of bitumen and SCO production (MMbbl/d):

Year	Continuing Trends	Triple E	Fortified Islands
2010	1.415	1.415	1.415
2015	1.827	1.757	1.972
2020	2.124	1.787	2.390
2025	2.415	1.764	2.782
2030	2.664	1.800	3.078

Using these tar sands production numbers, I’ve estimated how much gas the tar sands could be using, assuming: 1) the 2005 average natural gas usage of 638 cf/bbl (which falls between the high and low estimates of NG use by the strip mining process of the tar sands) and 2) a high estimate of natural gas usage by strip mining of 988 cf/bbl (in an attempt to account for increased in-situ tar sands development). The results are in the figure below.

Fig 2. Estimate of the natural gas consumption by the Canadian tar sands. Error bars represent the various scenarios of tar sands production from the NEB Outlook.

In short, full gas production from Mackenzie and Arctic sources (1.5bcf.d total by 2022) will not be enough to sustain tar sands production alone. Since most of Canada’s bitumen is only available by in-situ mining techniques, which are expected to consume anywhere between 900-1200 cf/bbl, I might be generous in using a tar sands NG utilization value of 988 cf/bbl for the high end of my calculation. There is always the possibility that other energy sources, such as coal or nuclear (starting 2017 at the earliest) will contribute to the mining of the bitumen though.

Natural gas exported to the US

Under NAFTA, Canada must export ~60% of total gas production to the US. The table below compares expected exports to the US based on my Hubbert model and the expected imports used in the EIA’s Energy Outlook.

Year	US imports of Canadian gas predicted by the EIA	Exports predicted by Hubbert model and 60% proportionality clause
2010	7.88	9.38
2015	7.33	7.91
2020	4.71	6.15
2025	3.78	4.57
2030	3.20	3.22

Interestingly, it seems as if the EIA is either more pessimistic about Canadian production than my Hubbert curve or they’re giving Canada a break from the proportionality agreement (perhaps so they can have more oil).

What’s left over for Canadians?

This is where a lot of assumptions accumulate and can stand to be refined with proper statistical techniques, but here's a rough go at it. First, I'm taking the Hubbert curve of Canadian NG production to be a rough estimate of how much gas will be produced. This production matches fairly closely with one of the NEB's predictions AND it appears as if the EIA has a scenario in which they predict less Canadian gas production (back calculated from the proportionality clause and their expected imports from Canada). Another assumption, probably a good one, is that the priority for Canada's natural gas will be the tar sands and exports to the US.

With this we can now estimate how much Canadian natural gas is actually left over for your average Canadian citizen (defined here as Canadian production - tar sands consumption - exports to US):

Fig 3. An estimate of Canadian gas left over for Canadian citizens (not including tar sands consumption)

Here I’ve compared two cases. The first, which I call the good case for Canadian citizens, uses the lowest NG consumption values that I’ve calculated from the tar sands as well as the lowest NG export numbers to the US. The bad case for Canadian citizens uses the highest NG consumption numbers from the tar sands and the highest NG consumption numbers for NG exports to the US.

As stated above, Canada’s residential sector is expected to increase its natural gas usage by 0.5% per year. By 2010, this corresponds to a residential NG use of ~~1.87bcf/d up to 4.97bcf/d~~ 1.55bcf/d up to 1.71bcf/d [thanks jorn] by 2030. Based only on residential use, tar sands production and exports to the US, Canada will need to become a LNG importer or ramp up unconventional gas production between ~~2015-2020~~ 2025-2030 (actually before this if we account for commercial NG use as well). The somewhat comforting news (if you we can say that becoming dependent on foreign LNG is comforting) is that 5.8bcf/d of LNG terminals is in the works and could be online by 2012 (the first will be online in 2009).

I'll end this post with a brief mention of some new unconventional gas finds in Canada. Within the last couple of month's there have been some new natural gas finds in British Columbia and in Quebec. The BC find could be 6 tcf of gas reserves and rival those of the Mackenzie Delta, and the one in Quebec could be 2.5tcf, but both quite expensive to develop.

Calc:
2005 bitumen production = 1.36 million bbl/d @ 6.1GJ/bbl
NG used by tar sands in 2005 ~ 0.87 bcf/d @ 1.1E6 GJ/bcf
NG energy content/upgraded bitumen energy content = 0.115
Average NG used per bbl tar sands oil: 18m³
Source: Alberta Energy and Utilities Board

The Round-Up: May 26, 2008

Sam Foucher — Mon, 26 May 2008 14:19:13 +0000

Oil shock: China and Mexico, not Exxon, stupid

Prices are soaring, in part, because oil is denominated in U.S. dollars and the dollar declines, thanks to Washington’s overspending on wars, trade, subsidies and government budgets. Investors have also abandoned credit markets, since the meltdown due to subprime scandals in August, and put their money into solid, real assets instead. But the biggest reason prices have been soaring is that investors are now understanding the future supply and demand reality.

[break]
CITIC Resources Announces Oil Discovery in Oseil Oilfield, Indonesia

CITIC Resources Holdings Limited announces the discovery of the Lower Nief and Manusela carbonate oil reservoirs at the Nief Utara A-1 drilling well located at Seram Island in Indonesia. Lower Nief oil reservoir is the first discovery in the region. The Original Oil in Place (OOIP) of the Nief Utara A-1 drilling well is over 60 million barrels. Thus, the current total Original Oil in Place exceeds 123.6 million barrels.

Oil rises towards US$133 on Monday

Oil rose towards US$133 a barrel on Monday, extending the previous session's gains on a supply outage at the Statfjord oilfield in the North Sea and a weak U.S. dollar.

StatoilHydro upgrader delayed

Blaming rising construction costs and policy uncertainty, StatoilHydro ASA, Norway's state-owned oil giant, is delaying by two years the startup of its oilsands upgrader near Edmonton, joining at least three other oilsands developers that are facing or recently announced delays in their oilsands strategies.

If Alberta can't thrive with this record oil, nobody can

Douglas Porter, deputy chief economist with BMO Capital Markets Corp., is among the country's most-respected economists, producing extensive analysis and research on all facets of the economy, investment and markets. Several years ago Porter distinguished himself by discovering a flaw in Statistics Canada's Consumer Price Index, arguably the most respected measure of consumer inflation in the world.

Oil price to average $115 this year: UBS

UBS AG knocked its oil forecasts higher Friday and it projected Canada's energy-heavy S&P/TSX Composite Index could climb all the way to 16,400 in the next 12 months.

The Switzerland-based parent of investment firm UBS Securities Canada Ltd. became the latest global financial player to revise oil projections in the wake of crude's surprising rally to record heights. Benchmark West Texas Intermediate will average $115 US a barrel this year, $120 US in 2009 and $116 US in 2010, UBS said. It marks increases from UBS's previous projection of 32 per cent, 54 per cent and 53 per cent, respectively.

Weekend Energy Listening: Ethanol's Energy Balance with Tad Patzek

benk — Sun, 25 May 2008 14:00:34 +0000

For a bit of weekend energy listening, here's a conversation that I had with Tad Patzek (who should need no introduction around here), talking about ethanol's energy balance. This was recorded 2 years ago now, but it still remains quite timely today. You can listen to the mp3 either by downloading the link or clicking play in the built in audio player.

or download mp3: Conversation with Tad Patzek (52min, 21MB)

A long transcript of this conversation is available below the fold.

This discussion is especially relevant in Canada now because of Bill C-33 which amends the Canadian Environmental Protection Act and is supposed to be debated in the House of Commons around May 28th, 2008:

Amendments to the Canadian Environmental Protection Act, 1999 proposed in this bill allow the federal government to implement regulations requiring 5% average renewable content in gasoline by 2010. Subsequent regulations will also require 2% average renewable content in diesel and heating oil by 2012 on successful demonstration of renewable diesel fuel use under the range of Canadian environmental conditions.

[break] Here are some links that I mention in the mp3:

Thermodynamics of the corn-ethanol biofuel cycle, Tad W. Patzek, Critical Reviews in Plant Sciences 23(6), 519-567, 2004 and The Real Biofuel Cycles

Transcript
Disclaimer: This conversation was transcribed by a third party and may not be 100% accurate.

Ben: Tad Patzek joins me over Skype to talk about the very important issue of the ethanol energy balance. Tad is a professor in the Civil and Environmental Engineering Department at the University of California, Berkeley and he is well known in the bio-fuels industry because he offers the viewpoints that ethanol and in particular ethanol from corn requires more fossil fuel energy to make than the energy that ethanol offers us in return by burning it and using it to fuel our cars. So, one pretty big consequence of this is that ethanol made from corn produces more CO2 than gasoline does. So Tad, thanks so much for taking the time to come on the show and talk to me today.

Tad Patzek: Thank you for having me.

Ben: The first thing that I want to do is direct everybody or all the listeners to your website so that they can read your reports, titled Thermodynamics of the Corn Ethanol Biofuel Cycle, because that goes into some pretty good detail about what is included in energy balances and what your reasoning was to include or exclude some things from the energy balance. So everybody listening, please I put up a link from thewattpodcast.com website so that you can read through Tad’s documents and I especially like the idea of having a document like that, which is continuously refined. Are those refinements based on reader comments, Tad?

Tad Patzek: Yes. I got a feedback from several people and I accounted for them but also some of them reflect my changing in thinking, for example, switching from the low heating value to the high heating value of fuels reflects the point of view that if you want to look at sustainability of an energy scheme, you want to account for the most you can get out of this regardless of how much you get in a given implementation, so that is just one example. The second example that was a big discussion about how much energy goes into steel making process, so I have added [02:19 unintelligible] on that and so it goes on, but I stopped updating this document. I think the version that is on the web was stopped in February. I wrote now a simpler and shorter document which is called The Real Biofuel Cycles, which is also on the web on my website and it does not go into the second law of thermodynamics which probably is sort of discouraging for some of the readers, although it makes most sense to use it. So, in the second document I just used the first law of thermodynamics, the energy balance and the mass balance to show the overall energy efficiency of the corn ethanol cycle.

Ben: Okay. Can you explain why the overall energy balance of ethanol is so important and what would be the impact to our society if we somehow manage to replace the 380 million gallons of gasoline that the US uses everyday with the biofuel like corn ethanol?

Tad Patzek: Okay. I think that we need to step back a little bit here.

Ben: Okay.

Tad Patzek: We need to talk about a somewhat different issue. You and I, as human beings continuously develop the power, that is, work over unit time of 100 watts. So you and I continuously are about equivalent to 1, 100 watt bulb switched on continuously. That is what we need. During the night we need less during the day we need more but on average it is about 100 watts. Okay? So, that is us as human beings. That is how are body is designed. If you are Lance Armstrong a super, a strong human being, you in fact can develop the power of 300 or a little bit more watts for some time and it bursts of 600 watts and that makes him the best cyclist ever, but we are not as strong so 100 watts is a good number and in fact in order for us to develop this power, we need to eat about 2025 kilocalories per day and so that is our diet. Of course we eat more in the United States, so that is why we become flabby and fat.

Ben: Yeah.

Tad Patzek: So, if you look at this a consumption for 300 million people living in the United States over one year, all of us consume about 1 exajoule of energy, that is what we eat. That is 1 followed by 18 zeros, okay? Now, as a country, as a society, we form a super organism of all of us together and then we become different beings and we use 105 exajoules per year of energy. In other words, we use 105 times more energy as a society than we need to live. So, if you compare a human heart as an individual you have to imagine let us say a V-Tec Honda engine, a 6 cylinder engine, as a member of our society so we are two different beings, one a biological human being and another one an industrialized member of a very large society that consumes a lot of energy at a very high rate. Okay? That is the most fundamental point that I would really like people to think of that you use 100 watts as a human being, but you use 11,000 watts continuously as an American.

Ben: Even Americans per capita use them most energy in the world. Well…

Tad Patzek: That is right.

Ben: Yeah. Well, actually Canadians use more energy than Americans.

Tad Patzek: Right, right, but it is very comparable. We are at the top there. The Canadians use a little bit more, but there is very few of them and they have huge landmass so they are not as dangerous to the earth as we are.

Ben: Yeah. One of the reasons why we do that is because we drive so much.

Tad Patzek: Right.

Ben: That is why we have to consume 380 million gallons of gasoline, so I guess that is why everybody is concerned right now about switching from gasoline or trying to find an alternative of gasoline.

Tad Patzek: Yes, right. I know I need to focus on that, but let me just add one more comment. So, in order for us to live the lifestyles we do, we need immense amounts of energy. This includes also the energy as you said correctly required for us to drive. So, now let us go back to nature. The energy we use comes from reservoirs from stock of ancient solar energy, crude oil, natural gas, coal which have been accumulated over the last 300 million years or so. They are accumulated at an incredibly low rate over an incredibly unimaginably long time. We are using them now at the rate we need to be users of 11,000 watts per person per year continuously, but now we are running out of some of them, well not so soon, but we are, okay. There is no doubt about it. So, become scared because we have gotten used to our lifestyles and now we are saying, “Okay, well if this resource is gone we’re going to replace them with biofuels.” That is the big issue of our times right now in the United States and also worldwide. The problem with this is that Mother Nature is absolutely unable to produce the fuels at the rate we want to use them. There is a fundamental incompatibility between us as biological beings using 100 watts and us as mechanized beings using 11 kilowatts. So, the whole question of replacing fossil fuels with biofuels is in fact ill-posed. You cannot do that. You cannot absolutely do that. That is the first lesson here.

Ben: Without some amount of conservation.

Tad Patzek: No. That is right.

Ben: Yeah.

Tad Patzek: Some is actually understatement, so let me just immediately jump to Brazil.

Ben: Okay.

Tad Patzek: Brazil is given as an example to us of a country that is successfully using bio fuels, right?

Ben: Uh-huh.

Tad Patzek: In fact, we are told that if we just behave like the Brazilians we will be okay, we will be supplying more than half of our fuel from biofuels. Well, there is a problem with this argument. There are 182 million Brazilians or so, there are 300 million Americans. The Brazilians use 6½ billion gallons of gasoline per year and the Americans use 140 billion gallons of gasoline per year. You do the ratios of the populations and the fuel used and it turns out that if you and I drive only once in two weeks, once in 14 days, so one day we drive, 13 days we walk or bike, then we become equivalent to the Brazilians. So, I just want listeners to understand that in order for us to talk about biofuels playing an important role we would have to very, very dramatically change our lifestyles and that is actually not something that any of the listeners I presume is ready to do.

Ben: We might be forced to do it one day.

Tad Patzek: Oh, yes. In fact, that forcing is coming and much of it actually can be achieved with relatively little pain if we just pay a little bit of attention. Let me give you another example. We now use 21 million barrels of oil per day, 21 million barrels of oil per day.

Ben: In the US, yes.

Tad Patzek: In the US. The transportation uses about 2/3 of it. Our cars, trucks, trains and planes use about 2/3 of it. So, if we were to double the efficiency of our transportation system, that is, double the mileage of the cars, put more trains and fewer trucks, drive fewer things around, and increase the efficiency of our planes, we would be saving 7 million barrels of oil per day. That is 7 million barrels of oil per day. Now, without introducing anything radically novel or ravaging the environment with these huge monocultures that we now use to fool ourselves into believing that biofuels will solve our problems, but that requires discipline and that also requires political leadership from our government, which simply does not exist.

Ben: Also just to bring you back to I guess ethanol in some fashion, ethanol is only 2/3 the energy density of gasoline.

Tad Patzek: Correct.

Ben: And so you are actually going to be reducing your fuel efficiency if you move to ethanol.

Tad Patzek: Well, right. I mean you will have to essentially burn more of it to achieve the same distance. That is correct, but again the main point I would like to sort of pass on to the listeners is this. The volume of fuel regardless of its calorific content, for ethanol it is less, that is being supplied from biofuels stands in no proportion to the volume we need to sustain our lifestyles. Okay?

Ben: Yeah.

Tad Patzek: That is sort of the crucial argument here, which we simply lost over because it is very difficult for us to understand the scale of the problem.

Ben: Well, that is why some people are looking at ethanol because I know that there has been some disagreement as to whether or not ethanol does in fact use more fossil fuel energy than what it does in return.

Tad Patzek: Right. Yes. Well, we are stuck on this little argument and it basically boils down to throwing numbers across fences that is how I call it. The listeners have to realize that in fact there is a little simplistic model of reality, which is called this net energy balance, which is not a balance at all, by the way. It is a manipulation of certain inputs and outputs to the corn ethanol cycle from which there comes a number called the net energy ratio. If you do sort of a more thorough job of balancing things and you could read this in this real biofuel cycles paper that is on the web on my website, you will find out that in fact it is not only the fossil fuels, but it is also the environment that we consume while we are producing these biofuels. Let us start from the agriculture because that is the first link here. The agriculture in Midwest is basically a desert paved with monocultures of greedy plants, which we bred to be standing in great crowds, very close to each other, and which need to survive. They need lots of fertilizer and lots of human intervention. Then these plants produce a lot of an industrial commodity, which is the #2 yellow corns while using the soil and polluting one-half of the area of the United States and the coastal waters and the rivers and what have you, okay? So, the whole notion of that agriculture is in fact completely unsustainable. That is a completely unsustainable transient state of agriculture supported by fossil fuels.

Ben: It is completely unsustainable because of the fact that you are actually removing the nutrients from the soil without replacing them right? Is that how…

Tad Patzek: Right. Well, in fact you have to replace them with fundamentally fossil fuels.

Ben: Yeah. Yeah.

Tad Patzek: The soil nitrogen, for example, cannot sustain these plants so you have to put a lot of fertilizers, let us say 200 kg of nitrogen per hectare of a cornfield. This nitrogen is actually methane pure and simple with added energy. You do that and you obtain your corn grain. Then that corn grain has inside starch. Starch is nowhere close to the desired product, which is ethanol, which chemically means you need to put a lot of energy to get from one to the other. If you look again what you can do to that starch, you can liquefy it with enzymes, then you can ferment it with yeast, and then you distill the beer that you obtain to obtain 96% spirit containing 96% of ethanol and then you exclude the last 4% with molecular sieves and then you add gasoline to it as a denaturant and that is your final product.

Ben: Yeah.

Tad Patzek: The problem with this is that if you as you go through this process you in fact use on average seven times more energy per unit input energy, which is your corn grain, than you would in a normal petroleum refinery and the reason actually is very simple, corn is not ethanol. Crude oil is very close to gasoline and diesel fuel. It takes in fact much less energy to transform crude oil into gasoline and diesel than corn into ethanol.

Ben: In converting corn into ethanol what is the most energy intensive step? I know that from reading your reports that the actually industrial process is more energy intensive than actually growing the corn, the agricultural step. Is that true?

Tad Patzek: Correct. Yes, correct. The single largest fossil fuel expenditure is in the distilleries, in the bio refineries.

Ben: And would that be natural gas required to…

Tad Patzek: Now, you are asking an interesting question, right? So, almost all of these bio refineries have been designed to work on natural gas and they use huge quantities of natural gas. In fact, they should be designed next to a major trunk not just a little pipeline, but a major pipeline, a gas pipeline. Natural gas, as we all know, kind of increase in price a couple of times. Three or four folds depending on where you started counting. It becomes increasingly difficult to run these factories on natural gas; therefore, they will be switching to coal and in fact they are.

Ben: Yeah. That has already started.

Tad Patzek: Yes. Now, think about this. All of these plants have designed to burn clean natural gas. They have no facilities to scrub and to flue gases from coal to dispose of coal ash and in fact they are also ill-designed to transport into them 300-400 tons of coal per day to each one of them. Remember because the corn raw material is low density, these factories in fact are relatively small and dispersed, right?

Ben: Yeah.

Tad Patzek: There is some 30 of them in Iowa and they are dispersed on a grid sort of circles of 30 mile radius so they collect corn from a circle around them, which is around 30 miles in radius, which means that if you want to deliver coal to them you are going to have some logistical problems.

Ben: I know that they are struggling right now just to produce 2% ethanol and gasoline so that they can be replaced with MTBE. I know that they are going to have be building a lot more ethanol refineries. Are those new ethanol refineries going to be easier on the environment? I mean…

Tad Patzek: No.

Ben: They are not going to be any better.

Tad Patzek: No. In fact, you remember that there is yet another bit of the story, which is not being told widely, the water used by these plants. A 40 million gallon per year plant uses about 750,000 gallons of water per day. That is so astronomical that I would like to encourage the users to compare this to their daily, I mean the listeners, to compare it to their daily water use. Some of this water is recycled, but a significant portion of it is evaporated and also they need very fresh and soft water for the boilers, so you have to redo chemical treatment of the water and you need to take fresh water. We are running out of water and especially in the western part of Midwest, there is a tremendous water shortage. In fact these plants will have to move out from Midwest. There is not enough environment for them to exist there anymore. So they will have to go to the coasts, to the east and the west coast, and that is the plan, right? People are trying to build these plants in Pennsylvania, New Jersey, Colorado, Oregon, Washington State, etc. So now, we are going to be faced with the problem of transporting gigantic quantities of corn from Midwest to the coast.

Ben: Yes.

Tad Patzek: Also the west of course does not have too much water as well, as we all know, and in particular in California, building ethanol plants in the Central Valley, let us say in Fresno, it is sort of an idea of adding another major source of pollution and water use to the already most polluted environment in the United States. That is kind of cute, but not for the people who live there.

Ben: Are there any technological improvements that can make a significant improvement to the production of ethanol?

Tad Patzek: Well, okay, again I would like to warn you, yes there are, but no they are not going to resolve our major problem of incompatibility of the energy flux from the system and the energy flux that we need in order to sustain our lifestyles. That cannot be removed. That is a law of nature. We can actually tweak sort of at the edges of the system and we have, make no mistake about it. The dry grind plant today to produce ethanol is much more efficient than the one that was in operation let us say 10 years ago. People have done several things. First of all, they try to buy to upgrade corn in a sense that they try to buy corn with the highest starch content.

Ben: Okay.

Tad Patzek: Still they use about 15% of the corn that is produced in the United States. They can upgrade the corn that they buy for the refineries vis-à-vis the starch content. The second thing they do, they try to in fact digest a higher percentage of the starch that is available there, not all starch is fermentable, so they try to increase that percentage. The next thing they want to do and they do it successfully is they increase the percent of ethanol in the beer. It used to be 8% now it is 10-12% and people say you can go as high as 14%, although I have my doubts because at that stage, fermentation really slows down and bacteria catching up and producing other byproduct, by the way which are incorporated into ethanol. So when you buy ethanol in fact it will also contain the butyl alcohol and isopropyl alcohol and probably some other substances that you do not know about, it is no longer pure ethanol. That is okay, you can burn butanol and isopropyl alcohol, your engine will not know. Your engine will know about other substances that may find their way. Improvements have been made, but again it does not change that the premise of the whole energy production system, an incredibly low-density, low-efficiency and low-yield energy supply scheme and this cannot be changed. This is how Mother Nature has designed it.

Ben: So, we have identified that the largest energy input is the actual industrial process. People are moving away from natural gas to coal power now because the price of natural gas is too volatile. What if we started burning biomass instead of coal because biomass, some types of biomass such as pelletized switchgrass for instance has a fairly good energy balance, does it not, when you burn it.

Tad Patzek: Right. So here we are running into another problem. The thing about agricultural production is that it requires a substrate. Plants need soil to grow on and that soil needs to be protected from the elements, wind and rain being the most important ones. So a prairie system with switchgrass let us say protects the soil very well because the soil is covered with plants all the time. Prairie in fact is a very good example of a system, which is enormously efficient and whose net productivity, that is, net mass production is zero. That is, everything that the prairie produces is recycled in it. The bison, the buffalo eat the grass. The coyotes and the lions, mountain lions, eat the buffalo, and the wolves and everybody dies on the prairie and their bodies are recycled and so it goes on, the nutrients, and in fact the prairie gets flooded every now and then from the rivers, which bring other nutrients and so it goes on, the nutrients are resupplited. Now we come, we the humans come into that system and we say, “Okay, grass, we are going to cut you every year, year after year. Remove everything that we cut and burn it elsewhere.” Unfortunately, when you do so not only do you remove carbon, but you remove nutrients with the grass and these nutrients are gradually depleted from the soil and of course the whole system stops producing. There is a fundamental problem with removing all biomass from an ecosystem because that ecosystem stops functioning and in order for you to make it function, you have to resupply it back with the nutrients and that of course takes an enormous amount of fossil fuels. So we are back to square one.

Ben: Okay. I am so interested in the overall energy balance though. Why is there so much confusion over the energy balance? Is there not some type of standards organization that says this is how you do an energy balance and this is how it should be done?

Tad Patzek: Yes. That is actually a very interesting question. Yes, there are standards and in fact these standards were arrived at a long time ago in 1975 and in 1976. There was then a great interest in energy prices caused by the first problems that we had and there was the International Federation of Institutes for Advanced Study, which in fact gathered twice in Sweden, in Stockholm, and that organization provided guidelines for how energy balance should be done. Of course these recommendations have all been forgotten by now. In fact, there are some simple things that can be done. Define your system clearly. Corn ethanol system is an open system in which mass can flow through the boundaries and it does flow, which takes inputs from the environment and excretes output into the environment and so it is kind of difficult to do the balance. First, we define the system and you can define the cornfields, the bio refineries and the machines that burn the ethanol, this can be done. You can then define the system boundaries to go as deeply into the society as you please and there are guidelines as to how to do it. This has not been followed by the studies, by most of the studies. Now, the second thing you do is once you have defined the system boundaries now you can define the fluxes, the flows that go across these boundaries. So, now you can balance mass which is #1 requirement in science and then once you have balanced the mass you can balance energy, that is #2 requirement. None of these requirements were fulfilled in this net energy balance, that is, this net energy balance do not close mass or energy balances. They violate both. Depending on how you violated the mass or energy balance of your system, you can come up with different numbers and that is fundamentally what has been happening here.

Ben: Is this also being done for gasoline as well because presumably it would be a good idea to compare the overall energy balance of corn ethanol for instance with gasoline?

Tad Patzek: Well, it has been done sort of, well sort of I would say more than sort of, there was a big study out of NREL, National Renewable Energy Lab, several years ago in 1997, which attempted to do such a study for the crude oil diesel system and gasoline and diesel are in fact within a couple of percent the same thing in terms of energy consumption. If you do this for the mixture of crude oil that comes here from the Middle East and as well on local supplies and you look at the mixture of refineries and the pipelines and what have you, you use on average 17% of the energy in the crude oil to get from the crude oil under the ground in the reservoir to gasoline in your pump, that is 17%. So 83% is left as the gasoline product on average.

Ben: Presumably that is dropping I mean in Canada.

Tad Patzek: Oh, yes.

Ben: In Canada we are big on the Alberta in tar sands and that requires a lot of natural gas right now.

Tad Patzek: Yes. In fact this is a very, very good point. As we go on depleting this very rich and energy dense oil reservoirs in the Middle East and elsewhere, we are now turning towards more and more difficult oil, which takes more and more energy to not only recover it but also to convert it into a usable product, gasoline or something else, and that oil is increasingly more difficult on the environment. Your Canadian example is a very good one. That tar sands will require in the end all the natural gas that Canada has and it will also require all the water that Alberta has. In the meantime, we are going to generate a lot of [32:42 unintelligible] to upgrading that oil. So the oil energy supply system becomes less and less environmentally friendly. Of course, it never was friendly. It was more and more unfriendly towards the environment. However, as we are on this sort of efficiency, so the overall efficiency going from crude oil in the ground to gasoline, let us say, is 83%, okay?

Ben: Okay.

Tad Patzek: If you want to go all the way from a corn seed to ethanol, the efficiency of that process, overall efficiency, is 20%.

Ben: Okay.

Tad Patzek: Well, plus-minus, that is 20 or 23 depending on how you do the calculation. Now the big increase in the efficiency of that process comes from accounting for the coproduct, okay?

Ben: Yes.

Tad Patzek: If you do the following reasoning, because from corn grain we not only produce ethanol, but we also produce what is called DDGS or Dried Distillers Grain and Soluble, that is basically a mash of everything that is left from the corn grain other than starch.

Ben: That is mostly used for feed, right, for the cattle feed?

Tad Patzek: Right. That is right. Then you can play games as to how you apportion fossil energy you have used in the refinery to that portion of the corn grain. This is kind of again a paper accounting because the fossil energy you expend on distillation is the energy you have expended, it is gone. You have burned the coal; you have burned the natural gas. In fact, if you look at the refinery, the stage at which you separate starch from the rest of the corn grain does not require much energy at all. You basically grind the corn grain and then you steep it in water and you put enzymes, Barley and alpha-amylase enzyme, to hydrolyze, to liquefy the starch. You could separate the rest of the corn grain at that stage and expend almost no energy on it.

Ben: Okay.

Tad Patzek: But you choose to in fact keep the two parts together and run them through the entire refinery, in the end you have to separate the solids from the distillation columns and you also have to dry them up and that takes an enormous amount of energy and then you say because I get a product out of this, I will apportion 30% to 50% of the fossil energy spent in the refinery to the coproduct and therefore my process looks better.

Ben: Yeah. I also have to wonder if this co-product is made at any larger scale? Can we actually use it?

Tad Patzek: No. That is another problem.

Ben: Yeah.

Tad Patzek: Now, we are going back to a larger societal problem; that is, because our farms produce so much of this industrial commodity, the #2 yellow corn, as I said, we cannot simply use it up. We have decided to do three things with it, right? The first thing is to feed, not this, but white corn to the people as cornflakes, cereals and what-not, but that takes care of only 2% of the corn. The second thing that we decided to do is to basically run the corn through wet milling process and split it into the simple chemicals. So, we get the snow white starch and we get dextrose, which is basically your cellulose and we can convert it into other sugars and we then produce the famous high fructose corn syrup and other chemicals, which show up on labels of almost any processed food product in the United States, that is the second use, but that takes care of about let us say 20% of the corn, okay? But then we are left with the remainder and so we feed the remainder to the animals that are not eaten by people and in fact every animal in the United States eats corn these days including salmon, but then we are left with yet another overflow of corn in the fields, right? So we burn it, we feed our cars. So now we have managed to feed people, animals and cars with corn. That is a huge victory for the corn. Nevertheless, some of the animals do not take kindly to that corn especially cows because cows have been designed to eat grass, cellulose, and in fact ferment the cellulose using bacteria in the rumen. When they eat starch, they become sick. Starch acidifies their stomachs. It makes them fat. It also destroys their livers. In order to avoid being killed too early in the process, they have to be fed antibiotics.

Ben: Okay, so that is even more energy intensive.

Tad Patzek: Right, but not only that, it is just that there are limits to how much corn you can sort of pass through all the societal systems without destroying some of it.

Ben: Okay, so that is corn ethanol. So, in summary, even if the overall energy balance looked okay, in summary, corn is an unsustainable crop because it depletes soil from all the nutrients. Is that right?

Tad Patzek: Right, but the overall energy balance does not look okay. It is 20%

Ben: Yeah. True.

Tad Patzek: Yes.

Ben: Okay. Now let us now move on to sugarcane for instance because sugarcane is sugar, sugar juices so it must be easier to produce ethanol from sugarcane than it is from corn grain.

Tad Patzek: Yes. In fact, both corn and sugarcane are grasses, are seafloor plants. Sugarcane is designed or by nature to live in moist and warm climate, which Brazil provides in large quantities. Sugarcane grows around the year so all year long and it is being harvested twice a year in different parts of Brazil, in fact, much of it is still harvested by hand employing about one million people. Now that is going away because these plantations are being mechanized right now.

Ben: So they are becoming less organic farming? Is that what you are saying?

Tad Patzek: Sugarcane has another feature that differentiates it from corn. It actually coexists with a bacterium, Rhizobium bacterium, to some extent, which sequestered nitrogen. So sugarcane needs less nitrogen fertilizer than corn. Also, it grows year around not 100 days per year as corn does in the United States. There are differences in the yield. Also, sugarcane in the past centuries was grown organically with no fertilizers and basically what was taken out of the plantation in the end was the sugar juice, the carbon, in terms of sugar, but the rest of it and some fiber from the bagasse, but the rest of it would be returned back to the plantation as malt and as fertilizer and that would actually allow these plantations to go on for three centuries in some places.

Ben: Okay.

Tad Patzek: In Asia and in South America, so very good so far. Now, we are now doing it slightly differently. Now, in order for us to drive the process with sugarcane only, we need to use the entire plant, that is, the bagasse, the leaves and everything else and essentially bury them in the ethanol plants. So now we are removing all biomass from the fields. Of course, that puts us in the quandary that no we will have to be replacing the nutrients just as we do with corn. In Brazil, this is not being done to the same extent yet. So they are essentially depleting the soil and unfortunately they will have to do more and more fertilization as they go on with the system.

Ben: Okay.

Tad Patzek: Sugarcane has two things going for it, higher yield than corn and of course what is inside the sugarcane, the stem, is essentially juice that contains the sugar so you avoid a couple of steps and then you burn the bagasse, the rest of the plant, as fossil fuel and you get your ethanol relatively cheaply. However, again, you are depleting the environment and the whole system, in the long run it has to be unsustainable.

Ben: But it is a much longer run for Brazil.

Tad Patzek: It is a longer run. Yes.

Ben: Okay. Now the last type of ethanol that I want to discuss just quickly is cellulose ethanol. Hilary Clinton and all the politicians seem to want to produce cellulose ethanol instead of corn ethanol. Why do they want to do that? Should they be focusing on cellulose ethanol at all?

Tad Patzek: Well, it is sort of like the next best thing in the horizon, right?

Ben: Yeah.

Tad Patzek: Remember you still forgot about the algae.

Ben: Algae, yes.

Tad Patzek: We will come back to it later on in some other program. So cellulose in ethanol is the next best thing. Now what I would like the listeners to understand is that all of these systems no matter what they are, sugarcane, corn, algae, and cellulose in ethanol, have about the same overall efficiency. In fact, one I might argue that cellulose in ethanol would have a lower efficiency if we have the technology to produce it. Let me sort of discuss this a little bit more. The problem with cellulose is that cellulose is about the most sturdy and chemically inert compound that nature has produced over the last 2 billion years or so to protect plants from the attacks by animals, by elements, by fungi, bacteria, and what-not. It is basically the substance that makes the plants last together with lignin, which provides it mechanical strength. So by the very nature of it, cellulose is very difficult to decompose chemically and we can do that, of course, and we have been doing it very efficiently for many years, it is called the paper craft process right?

Ben: Actually, there is a company in Canada just pretty close to me, Iogen, and they use a steam explosion method.

Tad Patzek: Right.

Ben: Sounds pretty energy intensive to me, steam explosion.

Tad Patzek: Yes. That is right. You put your finger right where it should be. In order for us to get to cellulose, we need two things, we need lots of energy and thermal energy and mechanical energy, and we need time. If we are very impatient then we need to put a lot of energy so what we do basically, we explode the plants by immersing them in steam or blowing steam through them.

Ben: But you can create that steam using the lignin, right?

Tad Patzek: Correct. That is what you do.

Ben: Yes.

Tad Patzek: But that is not the end of it. So, now basically you have achieved a sort of smaller particles by exploding the cells, right? Now you need to digest these particles and you can this, for example, by attacking them with strong acid like sulfuric acid or strong hydroxide like sodium hydroxide, but then again takes a lot of energy and in fact the overall process would take more energy than you get out of it as ethanol or you can be more patient and at that stage you can in fact try to use enzymes, but enzymes have a very difficult task at hand, they have to attack this inert particles, which are now more exposed by exploding them, but they are still very inert, so it takes time. When you spend enough time digesting cellulose, unfortunately the bacteria that exist on the biomass, you cannot disinfect the biomass altogether. Start recovering and start competing for the biomass. In the end you would produce methane and if you have access to air acids, but not sugar and ethanol. The problem with all of these schemes is the are very low efficiency, that is, the yield of ethanol per ton of biomass is in fact quite low and very high energy requirement so if you care to ask Iogen what is their yield efficiency, I have asked them by E-mail and I have also forwarded my E-mail to their Shell sponsors and I got no answer to that. That is one of the deeply held secrets as to how many tons of biomass do I need to put in to get the ethanol that I get out of such a plant?

Ben: I was always led to believe that cellulose ethanol has a quite good energy balance.

Tad Patzek: Well, again, it depends on how you do the balance, right?

Ben: Yes.

Tad Patzek: Again, one has to be very careful to define the system boundaries. The way it is done right now is that basically you get your biomass for free, you call it trash, which is okay, but then remember that the trash also has nutrients, which will remove from the parent ecosystem and at some point you will start to have to put them back into the ecosystem. That is one. The second one that people do is sort of this naïve scaling, that is, if I have a small plot of switch grass and I cut it once or twice and I get 10 tons per year, I will from that conclude that therefore I will obtain 10 tons of biomass from each hectare of switchgrass anywhere for any number of years and that is of course not true. As you go on, your yield in fact can decline from 10 to 2 tons or the switchgrass can die as they do very often in a couple of years. The question of yield is #1, the question of putting the nutrients back is #2, and the question of having a technology that would actually yield the ethanol from the biomass at certain efficiency without using too much energy is #3, and I do not think we have answered any of these questions with cellulose in ethanol.

Ben: Okay. Yeah, this is running a bit long now so you must be getting tired, but how can we make the world more sustainable? Of course, conservation is important, but what is the solution, then?

Tad Patzek: Well, there are not any solutions. Let me be very blunt about this. There are two fundamental solutions, one is to limit the human population, there is just too many of us. Again, many people will raise their eyes, but again talking about energy solutions without talking about the population problems is just like mopping the floor with the faucets running on. So that is #1 problem. The second problem is that we will have to start using much less energy per capita, but that will bring us way towards the societies from which we have differentiated ourselves, that is, to rule out Indian-ruled China, let us say, and that is not a very pleasant perspective. However, having said that, the earth is finite and the same rule of populations in China and India look at us, watch our TV, and want to live like us. The problem is that there is not enough of the world for all of us. Somehow we will either have to adjust to it or something really bad will happen to all of us.

Ben: But I know that you are a proponent of photovoltaic, right?

Tad Patzek: Yes.

Ben: Because they can capture much more of the sunlight.

Tad Patzek: That is right.

Ben: Okay.

Tad Patzek: That is right. Photovoltaic, again, do not get me wrong, within the confines of using less energy and modifying our lifestyles, there are things that we can do better, one of them would be to use photovoltaic to a much larger extent that we do now and a photocell is 200 times more efficient in terms of producing work than biomass. So, you have [50:28 unintelligible] of magnitude of advantage. We are not producing these solar cells in large enough quantities that is because of manufacturing problems, but that is a separate story. We need to go a lot more toward solar cells, but again if we do we will have to sleep at night, work during the day, take time off when it is cloudy, and just live different lifestyles.

Ben: Okay. Well, thank you so much, Tad, for coming on the show.

Tad Patzek: Alrighty.

Ben: Thanks a lot.

Tad Patzek: Bye-bye.

Ben: Bye.

Canada as an energy superpower

benk — Thu, 22 May 2008 16:00:09 +0000

Ed note from PG: I am happy to announce that TOD:C is up and running again (and I believe overdue thanks are in order to Stoneleigh and Ilargi, now over at The Automatic Earth, for their efforts here). One of the new editors is benk (and I believe you already know Khebab!).

Ben is completing his Ph.D. in Chemical Engineering in Canada. His research focuses on the fine details of solid oxide fuel cells, dealing with ceramics and long equations. He attributes his initial interest in energy to the documentary "The End of Suburbia," which he first saw about 4 years ago. Since then he has felt a duty to get the good word out. Ben has been the host of theWatt Podcast talking about various energy issues, a capacity we are exploring bringing the TOD. Welcome Ben!

To get TOD Canada rolling again, I've written a refresher on Canada's energy situation. Canada can't be ignored when it comes to energy. We are a land of plenty. Lots of land, lots of weather, lots of consumption, lots of production. Plenty can easily become scarce though and it has to be managed, and managed well. Management of our resources will be Canada's challenge in the years ahead. Unmanaged, Canada's energy consumption is close to the highest in the world and stands at 350 GJ/person, slightly more than in the U.S. and Canada's energy intensity is the worst in the G7 at 10.6 MJ per unit GDP.

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It's wrong to average Canada's energy situation though. Even neighboring provinces have vastly different stances: British Columbia has implemented North America's first consumer based carbon tax and is joining the Western Climate Initiative's cap-and-trade system while Alberta's Premier is still talking about bird kills by wind turbines. On the East Coast, New Brunswick has the largest Canadian refinery (288,400 bpd capacity) producing 45% of all U.S. reformulated gasoline imports, is building a new LNG terminal and has plans to become an energy hub for the Eastern U.S. by building a second 300,000 bpd refinery and a second nuclear reactor, both to be used exclusively for export to the US. Energy exports are a huge part of Canada's economy, accounting for 20% ($90 billion) of Canada's total exports in 2007.

From the federal perspective, Canada's government has publicly stated that they are positioning Canada as a "reliable energy superpower". This is the closest we have to a national energy policy. The wording here is important: By definition, energy superpower implies at least two things: 1) multiple customers 2) willingness to use energy supply as a negotiation tactic.

As far as energy superpowers are concerned, Canada still has a long way to go. Multiple customers are difficult to come by for a country with a single border. As far as "reliable energy superpowers" are concernerd, I recon Canada's just about there, we have no choice but to be reliable.

That being said, Canada is slowly gaining courage with respect to criteria #2 of an energy superpower: Our trade minister, David Emerson, recently suggested that he's willing to use the energy card after Hilary Clinton's and Barack Obama's talk of renegotiating NAFTA, Emerson let this out:

"Knowledgeable observers would have to take note of the fact that we are the largest supplier of energy to the U.S. and NAFTA has been the foundation for integrating the North American energy market," said Emerson.

So, what can Canada offer?

Canada's credentials:

Having energy resources isn't enough to be an energy superpower. Those resources have to be exported. The National Energy Board just released the Canadian Energy Overview 2007. From that document, I've put together a graph of Canada's average 2007 energy exports to the US:

Note: Here I assume all types of oil to have the same energy content

Even 30 TWh/year of electricity can be significant to small parts of North Eastern United States but obviously Canada's role as an energy supplier to the US is most important through natural gas and oil exports. The future of natural gas in Canada has been discussed on TOD before as well as Canada's tar sands. What makes Canada's energy situation so fascinating is the coupling between energy sources.

In the table below, I've ranked Canada's energy resources against the rest of the world and compared them with Russia's (a real energy superpower) using the latest stats from the BP Statistical review. It sheds some light on Canada's true situation:

	Canada's Rank	Russia's Rank
Oil Reserves	2 or 12*	7
Oil Production	7	2
Oil Consumption	8	4
Oil Exports	14	2



Natural Gas Reserves	21	1
Natural Gas Production	3	1
Natural Gas Consumption	4	2
Natural Gas Exports	2	1



Coal Reserves	13	2
Coal Production	15	5
Coal Consumption	14	5
Coal Exports	17	5



Uranium Reserves**	2	10
Uranium Production**	1	-

* BP Statistical Review only considers Canada's oil sands reserves to be those currently under development. Governments don't.
** Src: World Nuclear Association

Alone, Canada's energy resources, other than oil and uranium reserves, don't look to be particularly impressive. A large part of Canada's success as an energy superpower though is its ability to develop its resources. At any cost.

My first observation after compiling the above table was that Canada ranks 21st in the world in terms of natural gas reserves, but production, consumption and exports all rank in the top 4. Here lies the energy coupling challenge: In order to exploit our oil reserves, of which we have a lot, we are further depleting our natural gas reserves, of which we have few.

For each barrel of synthetic crude coming out of Canada from strip mining, 28 cubic meters of natural gas is used (this source claims 14-28 cubic meters). This means America is sacrificing roughly 1.14% of it's natural gas supply to import synthetic crude oil. For Canada though, converting NG into oil is economically a no brainer: at $125/bbl, we get $22/GJ for oil compared with the current going rate of $11/GJ for natural gas. Alternative methods like the nuclear option for upgrading bitumen do exist. In March, Bruce Power Alberta filed an application for a 4GW nuclear reactor for the tar sands, but if it goes through, would only come on-line by 2017.

To conclude, Canada is the most important energy supplier to the US. Canada has ambitions to become an energy superpower, which means that finding a second customer is likely a priority. But Canada's natural gas could quickly become a rate determining step in these ambitions and so resource management is the challenge that Canada will have to address if it is truly going to become a reliable energy superpower.

The Round-Up: May 22, 2008

Sam Foucher — Thu, 22 May 2008 15:33:40 +0000

Many thanks to "peakto" for his help.

Record oil here to stay: Scotiabank

The Bank of Nova Scotia says Canadians should get used to current record-high oil prices, because they'll be with us for the rest of the decade. The bank's commodities report suggests most commodities have hit or are headed to record prices, with the bank's commodity price index up 5.7 per cent over March.

Fuel costs hurting Air Canada

High fuel prices that are consuming a growing proportion of income at Air Canada will likely hurt demand for air travel, the airline's chief executive said yesterday. Montie Brewer, Air Canada's president and CEO, said the rapid rise and volatility of fuel prices was a concern at the country's biggest airline, which is pushing ahead with plans to use newer, more fuel-efficient aircraft."The severity of it will impact customer demand. We'll see how much the customer can absorb and still plan on travelling," he told reporters after the company's annual meeting.

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Denmark seeks Arctic peace on eve of Greenland summit

Denmark's foreign minister has made a plea for peace among Arctic nations, including Canada, on the eve of an international summit in Greenland aimed at easing territorial tensions in a region experiencing unprecedented melting and thought to contain a quarter of the world's remaining oil reserves. Per Stig Moller's appeal for countries to end the "rush" for control over the Arctic and the emerging competition over "who comes first or who plants their flag where" -- a clear reference to last summer's controversial Russian expedition to the North Pole -- coincides with a new prediction by U. S. scientists that, for the first time in recorded history, the pole itself could become ice-free at the height of this summer's thaw.

Canada’s Arctic mapping key to resource claims: Lunn

After returning from a trip to the polar cap where he visited a northern Canadian research outpost, Lunn said "I really think it's important that we have jurisdictional control to ensure that we decide what's in our nation's interest," Lunn said in a phone interview. "We (would) make the rules on ensuring that the environment remains protected not to mention the economic benefits of the natural resources as well."

Expect more hikes at the pumps: Harper

Gas prices will likely continue to rise for the next several years and there is little governments can do to lower them, the Prime Minister said Wednesday. "I don't think government should fool people into thinking it can control the price of gas. It - generally speaking - can't," Stephen Harper told reporters during an announcement at a fruit farm in Southern Ontario. "These prices are set internationally. We are seeing increased prices around the world."

Gas headed for up to $1.50 a litre, analysts say

"What we haven't seen yet is that seasonal rise in gas prices related to supply and demand," she said. In the early summer, prices usually jump along with demand, as drivers head out on vacation trips, Ms. Hay said. In most years, this adds about 10 to 15 cents to the price of a litre of gas. The price then tends to slip back as the summer progresses. Last year, the jump was as much as 25 cents a litre because gasoline inventories were low, but this spring "what will serve to moderate the spike is the fact that we are entering the peak gasoline demand season with inventories in quite good shape," she said. Others think prices could go even higher. Jason Toews, co-founder of the gasbuddy.com website, said he expects prices to hit $1.50 to $1.60 a litre in Canada this summer, and possibly more if crude oil continues to rise.