Saturday, June 4, 2011

Sustainable energy when?

Notice anything weird about the weather? It is high time to reform our energy system.

Climate change is bringing is raging tornadoes, floods, wildfires, droughts, famine, and probably an active hurricane season, not to mention untold harm to the biosphere for millennia to come, especially via permanent extinctions. Putting aside the political and ideological battles, what do we need to address it? We have the technology. What we need is the economic and political will to use it. Truthfully, the only thing we really need is a price on fossil carbon.

Right now, a few cars are being run from electricity, and various carbon-free options exist for generating electricity, including nuclear, hydro, wind, and solar. The elephant in the room is cheap fossil fuels- coal and gas for electricity, and oil for transportation. If we avert our eyes from their various environmental costs, as is the wont of mainstream economics, they are very cheap, and as long as they remain cheap, carbon-free energy will not be economically viable.

They may not be cheap forever- oil is already hitting global peak production and higher prices. But coal and gas seem less supply-limited, with fracking all the rage. Coal is particularly noxious in this regard- incredibly dirty, and evidently endlessly plentiful, in the US, India, and China. Some existing regulations on coal pollution raise the effective price of coal-fired electricity, but not enough to make carbon-free sources economically viable, or as the aim should be, economically superior.

Prices of wind and solar energy have been trending downwards, however, so the state of affairs seems very close to tipping. Unfortunately, good information is very hard to come by, since each source pushes its story with various related costs put in or left out. I attempt to quote final electricity prices from various sources, in rough terms:
Source¢ per kWh
coal5 to 10
gas5 to 20
wind5 to 10
nuclear10 to 15
geothermal5 to 10
solar plant12 to 20
residential solar20 to 30

So we are certainly within striking distance of economic parity for several forms of non-fosssil energy production. Adding a carbon tax of $0.10 per kWh, summing over annual electricity production of 3,101 TWh gives a cost of $310 billion yearly. Is this a lot? Not in a $14 trillion dollar economy, especially when the entire amount stays in the system. It can be used to displace other, less efficient taxes, or pay off the debt, give back credits on income taxes, build parks, employ the unemployed, give more money to bankers, or whatever else we would like to do with it.

Adding in oil consumption with a comparable tax of roughly $1 per gallon, over 7.3 billion barrels consumed per year nets another $300 billion- another significant increment to all those who are concerned about the federal debt!

The point of all this isn't, of course, to make money for the federal government, but to put a proper price on all the harms flowing from our use of fossil fuels- which extend to foreign policy, our endless support of enemies like Iran, Venezuela, and Saudi Arabia (woops they are a friend ... a friend!), destruction of landscapes through mining, horrors of ash disposal, not to mention the emissions. The new normal should be concern for future generations and the environment, not for the easy guzzling of today.

A couple more issues come to mind- the role of nuclear power, and the intermittency of solar and wind power. Fukushima was an honest-to-goodness disaster, and will incidentally increase Japan's fossil energy consumption for a long time to come. But it was also a very old design. Future nuclear plants will have safer designs, benefitting from experience, including that at Fukushima. And there are also very interesting reprocessing schemes that could eventually make the nuclear fuel cycle far more benign and manageable than it is today. So nuclear shouldn't be counted out. But like fossil fuels, its costs, including enormous design margins, waste costs, and occasional catastrophic (or at least highly dramatic and disruptive, if not terribly lethal) events, need to be factored in.

Solar and wind power are inherently intermittent power sources, so current policy is reluctant to make them more than 10-20% of the mix on any grid. The solution is energy storage, in the form of water reservoirs, flywheels, compressed gas, or other mechanisms. Such mechanisms will become more efficient with a sufficient market, another important goal of carbon taxes. The situation is reminiscent of the key problem with the electric car- its battery. Indeed, these problems may connect through smart electricity grids that use the fleet of connected cars to stabilize and even out loads on the grid itself. The difficulty of storing energy at both small and large scales certainly highlights the amazing convenience of concentrated, reduced, fossil carbon.

Do electric utilities even care about fuel costs? Aren't they regulated monopolies that pass on all their costs to the consumer, whatever they are? Haven't they been given free passes to charge customers for the enormous and unforeseen costs of nuclear energy? Isn't direct regulation via mandates and rules the better path? I can't claim any expertise in this complicated area. California has accomplished a great deal with enlightened regulation of its electricity providers, keeping its electricity consumption far lower than other states. Nevertheless, all stakeholders need stronger incentives towards sustainable energy, from the householder and driver, up to the power generator, whether well-regulated or not. Simplicity alone argues for a blanket fee on fossil carbon that automatically reaches all of its uses.

Should we wait for China to act first or agree to act in concert? Obiviously, this is the most transparent stalling tactic. Peak oil is coming anyhow. The US has contributed the most to global warming to date, and despite falling behind China in the polluting race, has the greatest moral responsibility to act. The best way to pressure other countries to act is to act ourselves, rather than holding everyone hostage in a game of mutually assured environmental destruction.

I know it seems pollyannish to repeat this theme of carbon taxes in the current political environment of politicians racing to the bottom of demagogic "principles" of greed and corporate subservience, but someday, we will get our heads out of the sand and take responsibility for the future.

  • Gregor discusses overall energy usage in the US.
  • The Saudis want the addiction to go on as long as possible.
  • Putative centrist Michael Lind says ... no worries- let's keep smokin' the dope.
  • A commenter on the right says we have plenty of energy, no environmental worries, and "... we are in the midst of a Cold Civil War in which each election cycle offers another critical battle." That, at any rate, is true enough.
  • Economic benefits to California from green energy (pdf).
  • Where have all the fish gone?
  • Are we facing a domestic religious war?
  • What happened to rule of law?
  • There's someone in my head, but it's not me.
  • Working for free... has it come to this? Is labor completely neutered?
  • Krugman- apparently facts have a liberal bias. But facts never stopped anyone...
  • Economics quote of the week, from Paul Krugman via Bill Mitchell:
"So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility."
"... the IMF was blind to the developing crises. It even praised nations like Ireland during the run up to the crisis, missing the largest bubble (relative to GDP) of any nation, an epidemic of banking control fraud, and the destruction of any pretense to effective Irish banking regulation."

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