Last week when I laid out seven misconceptions about energy shared by the public and policymakers, the pushback I received had little to do with the actual data I used to demonstrate my point. This is probably because the data are from official public sources and available to anyone with an Internet connection to inspect and verify. Most of the pushback bore the sentiment, "Well, you are right about the data. But, just you wait. There are big things that are going to happen in the future with (fill in your favorite fossil fuel) because of (fill in your favorite technology and/or name of supposedly large fossil fuel deposit)."
This is what I refer to as the "wonders-yet-to-come argument." It's an argument that ought to be familiar (and tiresome) to most everyone. It's been used frequently since the oil price hit a long-term low of $10.72 a barrel in December 1998. Even as prices rose ten-fold and supplies advanced only at a snail's pace from 2005 onward, we were treated to frequent pronouncements about how the wonders of technology would deliver cheap, abundant oil soon. Though technology has failed to provide cheap oil, the wonders-yet-to-come argument is still being used to great effect on unsuspecting minds.
We've actually had a good test of this argument since 1998 in the oil markets. Around that time it was deepwater drilling that was going to keep the world awash in cheap oil for decades to come. Check out how many times both the International Energy Outlook 2000 produced by the U.S. Energy Information Administration (EIA) and the World Energy Outlook 2000 produced by the International Energy Agency (IEA) mentioned the key role deepwater oil development was expected to play in raising world production and keeping prices low. ( Continue… )
While environmental regulations and cheap natural gas have worked together to kill off coal in the United States, coal is not dead yet. The rapidly unfolding shale gas revolution brought prices down so significantly in recent years that natural gas began to capture market share from coal in a meaningful way. In particular, coal’s share dropped from 42% in 2011 to 37% in 2012. There were even moments in time in 2012 when both fuels were making up equal percentages of the electric power sector.
Environmental regulations also are steering utilities away from coal. However, although some of the most biting regulations – limits on mercury pollution and greenhouse gases – will force the closure of dozens of coal-fired power plants over the next few years, they have yet to take effect.
That means that the recent rise in natural gas prices has made coal economically viable again, at least for the short-term. Coal took back some lost ground from natural gas in 2013, rising to 39% of electric power generation, while natural gas fell from 30% to 28%. That trend will likely continue into 2014 with natural gas prices now higher than they have been at any time in over two years. The Energy Information Administration predicts that coal’s share of the electricity market will add another percentage point this year, hitting 40%. Meanwhile, natural gas could fall further behind as it is projected to fall to 26.8% in 2014. (Related article: Four More Reasons to Bet on Coal in 2014) ( Continue… )
Internationally, 2013 was the year when any doubts about shale energy potential evaporated in the face of production of both natural gas and oil in the US achieved levels that were simply prodigious. The shale “bubble” theory was beloved not only by hybocarbondhriac shale antis, but also by many in the financial community, especially in Europe. Friends of the Earth and Co may have reputational capital at stake in the energy debate, but it was the financial capital invested in not only renewable technologies but elsewhere in energy that was felt to be at risk. Thus proponents of any number of expensive energy projects fear the emergence of a world where oil and gas were not running out. Whether shale lowers prices or not is both open to question and besides the point. What shale certainly proves is that prices will not be going up.
Among other things, the shale revolution is starting to put an end to “big” energy. Nuclear, Nabucco, Shtokman, Severn Barrage and Desertec are some examples, but 2014 will start to see the unwinding of positions in other mega projects. Even some major offshore projects, and the LNG projects attached, are likely to be disrupted or postponed this year. The lesson from the USA is simple: There are hydrocarbons almost everywhere and we no longer need to go to the ends of the earth to chase them. The new energy paradigm is a world where the most attractive projects are those closest to markets. In the older “conventional” model costs and geology were paramount, and Big Oil would consider undertaking any resource project anywhere. Today, in natural gas at least, local markets are key and oil is going to go feel some of that effect. OPEC oil and Russian gas will never be unimportant, but they do have to cast off some outdated concepts around resource scarcity that they shared, often unwittingly, with Big Green. A world where oil is abundant under not only the US, but in the UK, France, Germany, Argentina and Australian sub-surface as well, makes several new off-shore projects look expensive. West of Shetland, Arctic Oil and offshore Brazil suddenly don’t seem so important anymore. Mature provinces in the North Sea and Gulf of Mexico will thrive because they have both existing take away capacity and will be able to use some tight oil technology to produce more, but gone are the days when Big Oil was desperate enough to show up in the back of beyond producing expensive oil in habitats that were environmentally fragile and politically dubious. ( Continue… )
2013 was an exciting and inspiring year in many regards. And we’re not just talking the arrival of Prince George or the fact that the new Pope rides an electric bicycle. There were many remarkable clean energy developments that are helping to bring us closer to a clean, prosperous, and secure energy future. Here we list our top ten:
1. Renewables become cheapest option for many utilities
Multiple U.S. utilities added renewable energy to their mix in 2013, because it’s the cheapest option, with no state renewable portfolio standard (RPS) requirement calculated in. For example, Georgia Power joined Alabama power in buying wind energy from Oklahoma, and Xcel of Colorado filed a petition to the public utility commission stating that utility-scale solar is its cheapest peaking option. Xcel now plans to triple the amount of utility-scale solar it generates. (At the beginning of this year, a Minnesota judge likewise ruled that solar power offers Xcel ratepayers a better deal than natural gas.)
2. Utilities look toward new business models
One of Europe’s largest utilities, RWE, announced it is shedding its old business model and transforming itself into a renewable energy service provider. Their so-called “prosumer” business strategy states, “Based on funds sourced largely from third parties, we will position ourselves as a project enabler, operator and system integrator of renewables.” Other utilities are also taking distributed renewables and business model transformation seriously as indicated by the oft-referenced Disruptive Challenges paper by Peter Kind of the Edison Electric Institute (EEI). ( Continue… )
A West Virginia chemical spill into the Charleston-area Elk River Thursday has closed schools, businesses, and left up to 300,000 people without water in nine counties across the state. President Obama issued an emergency declaration for the state of West Virginia, and officials are urging West Virginians of affected areas not to use tap water, which has been contaminated with a chemical used to clean coal.
"Due to the nature of the contamination, it is not safe to use the water for any purpose," West Virginia American Water (WVAW) said in a notice posted online. "Alternative sources of water should be used for all purposes. Bottled water or water from another, safe source should be used for drinking, making ice, brushing teeth, washing dishes, bathing, food and baby formula preparation and all other purposes until further notice." ( Continue… )
As Americans enjoyed the cheapest average gas prices last year since 2010, the prognosis is that prices at the pump will decrease further or remain flat for 2014 and beyond.
According to AAA’s year-end report, American drivers paid $3.49 per gallon of regular, on average for 2013, down about 12 cents from the record-high price in 2012 and slightly less than in 2011.
How can we bottle the sun and wind for when we really need it?
Scientists across the globe are working to answer that question, with the hope it will unlock the full potential of energy sources that are theoretically limitless, but notoriously inconsistent. A group at Harvard University's School of Engineering and Applied Sciences (SEAS) believes they have taken a step forward, developing a new battery that inexpensively stores wind and solar energy.
The group's work, published Thursday in the scientific journal Nature, will undergo years of additional research and development to determine the battery's ultimate potential. But early results are promising, says lead researcher Michael Aziz, and help address renewable energy's greatest challenge.
"If we want to produce a large fraction of electricity from solar and wind ... we need to be able to do something when the wind isn't blowing and the sun isn’t shining," Professor Aziz, who teaches materials and energy technologies at SEAS, says in a telephone interview. "Right now we burn fossil fuels – so if we could store that [wind and solar] energy when the wind isn't blowing, the sun isn't shining, we could consume a lot less fossil fuels." ( Continue… )
A trip to Varese Ligure, Italy, will bring you face to face with a charming town of pastel-colored houses and a plethora of restaurants serving dishes with organic porcini mushrooms and chestnuts. Stop at the bustling markets and you will see Italians who have traveled from far and wide to purchase the locally produced organic meats, cheeses, and honey. It’s a far cry from just 20 years ago, when this town in the Liguria region of northwest Italy was fading away due to a lack of jobs, no industry, decaying properties, and a lack of essential services.
At the end of the 1980s, Varese Ligure, a small town (pop: 2,400) located in the Vara valley in the province of La Spezia, had gone from a population of 6,000 to 2,250. However, the mayor at the time, Maurizio Caranza, refused to give up hope for his dying town. He decided to take what others thought of as Varese Ligure’s weaknesses—geographical isolation, lack of modern industry, antiquated farming practices—and turn them into strengths. He realized the valley’s clean air and unspoiled land were assets and opportunities. What better way to capitalize on those attributes than by becoming a sustainable tourist destination through renewable energy and organic farming? “We realized the only thing to do to prevent the village from dying was to protect the environment and rehabilitate the agriculture sector," Caranza told Italian news agency Adnkronos International. ( Continue… )
A train derailment spilled crude oil and propane into a sparsely populated part of Canada late Tuesday, sparking a blaze that forced about 150 people from their homes. No injuries or fatalities have been reported.
Tuesday's train derailment is the latest in a series of oil-train accidents that have fueled a debate over how to safely transport crude oil and refined petroleum products. North American oil and gas production is rising faster than pipeline capacity, forcing bottlenecks at key energy transit points.
Companies have turned increasingly to rail to move oil from shale-rock formations in North Dakota, Pennsylvania, and elsewhere, to markets at home and abroad.
The latest train derailment involved five cars containing crude oil and four containing propane destined for an Irving Oil refinery in Saint John, New Brunswick. The conductor and engineer were the only people on board, and neither was injured, according to Canadian National Railway spokesman Jim Feeny. Some cars caught fire and continued burning through Wednesday. ( Continue… )
What happens when much of the nation simultaneously reaches for the thermostat and turns up the heat? Energy prices rise.
With Americans shivering through a "polar vortex," utilities and grid operators are scrambling to meet demand amid record low temperatures. A stressed power grid and constrained natural gas pipelines are already pushing up the price of electricity and natural gas on wholesale markets.
The good news is that consumers are relatively insulated from the polar vortex's temporary price shocks (besides the obvious cost increase of turning the heat up for a prolonged period). The bad news is that if this is the first polar vortex of many to come, that prolonged grid strain and need for new infrastructure will almost certainly make its way into the bottom line of your monthly utility bill.
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"Most retail customers are set up through regulated natural gas rates for this reason – so that short-term spikes in the spot price don’t automatically flow through," says M. Tyson Brown, statistician at the US Energy Information Administration (EIA). "To the extent that this is a long-term trend – that really affects the price people pay." ( Continue… )