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A Billion Dollars and Counting in Smart Meter Applications

The deadline for grant applications to the government smart grid investment program was last week, on Aug. 6. About two fifths of program funding is earmarked for small grants, from $300,000 to $20 million, and three fifths for grants of $20-200 million. Three energy companies applied for $200 million grants to deploy smart meters: CenterPoint Energy, Houston; Dominion Virgina Power, Richmond; and Florida Power & Light, Miami. Oncor, Dallas, filed for $317 million for smart meter deployment and network improvement, and Commonwealth Edison, Chicago, for $175 million for smart meters.

Announcement of the filings raises in this blogger's mind an issue analogous to what's called "additionality" in the context of carbon trading: are some of the energy companies obtaining government money to do things they already were intending to do anyway, relying wholly on their own resources? According to a Spectrum compilation published earlier this year, even before the adoption of the U.S. stimulus bill energy companies around the country had announced plans to spend billions of dollars installing smart meters. Companies in California and Texas alone had plans to spend $6 billion.

So will this part of the stimulus bill actually make anything truly new happen? So far, like the car battery grants program, it has been surprisingly uncontroversial.

Times Too Wonders about Chu and Hydrogen

In an editorial today, Aug. 9, the New York Times agrees that President Bush over-emphasized hydrogen and that Secretary Chu is right to downplay it, but it joins this blogger in suggesting he might nonetheless want to restore $100 million in research funding to hedge against the possibility of breakthroughs. The $100 million "is not a lot of amount to invest to keep this promise alive," opines the newspaper.

Schwarze Pumpe Hits a Bump

Vattenfall's oxyfuel pilot plantLocal concerns about the safety of carbon sequestration are blocking European power giant Vattenfall's plan to close the loop on greenhouse gas emissions from its coal-fired carbon capture and storage (CCS) pilot plant in Schwarze Pumpe, Germany. The 'oxyfuel' plant has been burning coal in pure oxygen since starting up last fall, making its CO2 exhaust easy to capture. But burial of the CO2, set to begin this spring, is now on hold according to the U.K.'s Guardian newspaper. Staffan Gortz, Vattenfall's CCS spokesperson, told the paper that, "people are very, very skeptical."

This is a point I've been stressing of late. My feature story Germany's Green Energy Gap in the July issue of Spectrum ends with the anxieties of Brunsbüttel resident  Stephan Klose, who raises the specter of sequestered CO2 from coal plants escaping to the surface and causing mass asphyxiation. "If there’s a leak and you have a 1- to 2-meter-high level of CO2 , every animal, every human being within this zone will die,” says Klose.

And my Data page Where Europe Buries Carbon in this month's issue of Spectrum highlights both the extent of the European Union's carbon capture plans and the public acceptance challenge they face. "The EU must ... convince a wary public that buried CO2 will stay buried for good, protecting the densely populated communities above it," is how we put it.

But a mea culpa is in order: I underestimated the vehemency and immediacy of those concerns. The Data page shows Vattenfall's chosen sequestration site in central Germany as green or "operating". Alas even this relatively small-scale CO2 injection -- over an order of magnitude smaller than the CO2 volume that a full-scale coal power plant generates -- appears to be on hold until at least next spring.

Is Energy Secretary Chu Too Smart?

Long long ago in a time far far away, when the SATs were still called the Coillege Boards, I remember taking one such exam in which the reading comprehension section featured a short essay arguing that people of average intelligence often make better managers than super-smart people. The general idea was that average people are better at listening, weighing off competing views, and deciding judiciously.

Energy Secretary Chu reportedly is trying to kill federal funding for hydrogen-fueled cars, a feature you may recall of President Bush's vaunted "hydrogen economy" (which momentarily helped kill the electric car). Chu also is expressing skepticism about a House bill that would have the energy deartment spend $30 million annually to promote conversion of cars to natural gas, in line with the Pickens Plan that would substitute wind for natural gas in generation and have the freed up methane power vehicles.

Personally, I share Chu’s skepticism about hydrogen cars, and I'm inclined to think that natural gas would be better used as a substitute for coal in electricity generation. But then I may be wrong. Since I recognize that, perhaps I'm better qualified to be energy secretary than the famous Nobelist? It seems to follow logically: People of average intellect make better managers; I'm of average intellect; therefore I should be energy secretary.

Chu also has been getting a lot of play in the blogosphere for eloquent statements he's made of late in support of white roofs and roads, in speeches and most recently on Comedy Central’s Daily Show. I was very taken with the idea myself when I watched the Jon Stewart interview. But then I thought: white roofs in New York City, where the air isn't exactly clean? And white roads, with gasoline-powered cars spewing out dirty and noxious exhaust? I don't think we'll have white roads, actually, until we have hydrogen-powered cars emitting water vapor as their exhaust.


Environmental Costliness of Advanced Natural Gas Extraction

A recent post took note of a column by Robert F. Kennedy Jr, in which the environmental activist and Kennedy family scion proposed to change U.S. electricity dispatch rules to encourage rapid replacement of coal generation by natural gas. The basis for his argument is the discovery in recent years of "vast supplies of deep shale gas in the United States, along with advanced extraction methods," as he put it. But not every environmentalist will sign onto that kind of plan—not without serious reservations, anyway.

In a column in today's New York Times, editorial writer Verlyn Klinkenborg expresses alarm about the impact advanced gas extraction could have in the Marcellus Shale, a geologic formation running from New York State’s Catskill Mountains to southwestern Pennsylvania and eastern Ohio.  Imagining what the future could look like, Klinkenborg pauses at a clearing on a gravel road in rural upstate New York: "If the state gives the go-ahead, that subtle opening will be replaced by an industrial-sized clearing to make space for a drilling rig and all the machinery needed to fracture the shale and extract and pump the gas. All that equipment will travel on the gravel road we had just walked, which runs along a stream bank."

Juxtaposing Kennedy and Klinkenborg points up the fact that when it comes to the hard trade-offs and choices regarding future electricity generation, there is no single environmental position. Personally, I have disagreed with Robert Kennedy's campaign to close the Indian Point nuclear plant north of New York City and with the Kennedy family's opposition to construction of an offshore wind farm near Martha's Vineyard; Klinkenborg looks to be parting ways on natural gas. There will be many such partings.

Robert F. Kennedy Favors Green Gas

That's natural gas the environmental leader is talking about, not petrol. In a striking column that Robert F. Kennedy Jr. had in the Financial Times this week, he advocates a simple regulatory change that would quickly result in the United States relying much more heavily on gas for electricity, and less on coal—an undesirable fuel not only because of its very high carbon emissions but also because of ozone, particulate and neurotoxic mercury emissions, and acid rain. By comparison with coal, Kennedy argues trenchantly, gas is green.

"Since 2007," Kennedy observes, "the discovery of vast supplies of deep shale gas in the United States, along with advanced extraction methods, have created stable supply and predictably low prices for most of the next century." Surprisingly, he continues, America has more gas generation capacity--450 gigawatts--than coal capacity.

Why, then does the United States produce half of its electricity from coal, which accounts for about a third of its greenhouse gas emissions? Because, says Kennedy, "public regulators generally require utilities to dispatch coal-generated power in preference to gas. For that reason, high-efficiency gas plants are in operation only 36 percent of the time." If that rule were changed, "in an instant" three quarters of the country’s coal-generated electricity could be replaced with gas, cutting the country’s greenhouse gas emissions an estimated 20 percent.

Kennedy does not discuss the reasons for the current seemingly bizarre dispatch rules. Presumably, large coal plants are generally classified like nuclear reactors as baseload generation, to run as much of the time as possible. Smaller gas fired plants, which can be much more readily ramped up or down, often are reserved for peaking. Taking economies associated with that distinction into account, it may be that suddenly giving gas preference would be more costly than Kennedy implies. Even so, however, he seems to be putting his finger on a policy lever that could induce rapid fuel switching more economically (and more rapidly) than we could hope from cap-and-trade or carbon taxation, which likely would drive up electricity rates considerably more.

Kennedy, besides being the son of the late senator and presidential contender, has been well known in New York State for many years as an effective and ardent environmental activist. Time magazine designated him a "hero of the planet" for his efforts to restore the Hudson River. This year Rolling Stone magazine named him one of its "100 agents of change." Several years ago Kennedy had national prominence with an article in Rolling Stone that argued, rather persuasively, that the Republicans stole the 2004 presidential election with vote rigging in the crucial state of Ohio.

Bioengineering Algae for Fuels

Last week, the New York Times reported that Exxon Mobil had teamed up with Craig Venter's Synthetic Genomics to work on the production of algae-based biofuels. As president and founder of Celera Genomics, Venter became a powerhouse of the biotech world in the 1990s, having spearheaded that company's effort to sequence the human genome in direct competition with the public Human Genome Project.

Venter and Synthetic Genomics, along with Exxon Mobil, could add a much-needed boost to the prospect of using algae instead of more conventional feedstocks for the production of biofuels. Indeed, the possibility that algae can be harnessed in this way is about the only reason to hold out much hope that biofuels will ever provide the world with large amounts of renewable transportation fuel that is environmentally benign to produce.

Let me try to defend that brash statement. For argument's sake, consider the production of biodiesel, a gallon of which can run a car virtually the same distance as a gallon of petroleum diesel. To keep things concrete, let's also say that the target is to have all of the diesel used as transportation fuel in the United States be biodiesel--according the Energy Information Administration, that's about 45 billion gallons a year. (Keep in the back of your mind, too, that this is but a small fraction of the gasoline Americans use: some 141 billion gallons a year.) 

If you made all that biodiesel from, say, rapeseed oil, how much land would it take? For that you need to know that an acre of rapeseed can generate about 100 gallons of biodiesel a year. So the math is simple: It would take 450 million acres--about a fifth of the all the land area in the United States. This is roughly equal to all the cropland in this country (406 million acres, according to the U.S. Department of Agriculture).

And that just satisfies the need for diesel fuel; it does nothing to put a dent in the petroleum used to make gasoline.

How environmentally friendly would it be, after all, to double the area under cultivation? Replacing vast areas of fallow farmland and forests with monoculture would be a high price to pay for making the use of diesel in our cars and trucks be carbon neutral.

And it probably wouldn't even do that, if you account for the carbon released from the soil in process. This argument is well quantified by Joseph Fargione of the Nature Conservancy and four colleagues in a report last year in the journal Science.

So what's an environmentally conscious biofuel advocate to do? One answer is to look for a feedstock that provides many more gallons per acre.

Which brings us back to the possibility of using algae. These single-celled organisms grow much, much faster than more familiar plants, allowing perhaps several thousand gallons of biodiesel to be produced from each acre. That's almost two orders of magnitude better than rapeseed. So, in theory, it would be possible to satisfy U.S. needs for diesel fuel using a reasonable amount of real estate. Indeed, you can even imaging displacing the petroleum used for gas this way without sacrificing too great a fraction of U.S. land. 

The problem is that nobody has yet figured out how to turn algae into fuel economically. 

Closed bioreactors, in which you can control the growing conditions, would be terribly costly at the scale required. Shallow open ponds are a lot cheaper, but they are susceptible to being taken over by algal species other than the one was intended to be grown. Researchers ran into this problem in the 1980s when they set up demonstration facilities for growing algae as part of the U.S. Department of Energy's Algal Species Program.

Here's where I suspect that modern biotechnology can give this enterprise a real boost. Maybe molecular biologists will be able to engineer an oil-rich algal species that grows happily under conditions that would kill off the competition--say, a Monsanto-approved "Roundup Ready" species of algae that can thrive in water laced with this herbicide. Okay, maybe Roundup is too nasty to want to spread over an area the size of a small state. But perhaps some other tactic can be used, say, the absence of a key nutrient that only the genetically engineered species can compensate for. 

I don't claim to know what plant genetic engineers might pull out of their sleeves in the quest to make algae into a practical feedstock for biofuels, but I suspect that their contribution will prove larger than what the mechanical engineers working on closed bioreactors can come up with. That's why I'm excited to hear that Venter has this problem in his sights. Maybe, just maybe, he or others like him will finally figure out how to produce vast amounts of biofuel without doing great harm to the environment. Until then, though, it'll be strictly petroleum-based fuels for me.

Photo of algal bioreactor by Umberto Salvagnin, used under Creative Commons Attribution 2.0 license.

Hillary Clinton Advances Nuclear Sales to India

It was announced today, July 21, that India has promised the visiting U.S. secretary of state that two nuclear power plant sites will be reserved exclusively for U.S. bidders. It’s the payoff resulting from the immensely controversial U.S.-India nuclear deal that was finalized during the final year of George W. Bush’s administration, ending decades of nuclear embargo. And as such it’s being hailed as a small victory for U.S. diplomacy and an opportunity for hard-pressed U.S. business. Yet it’s a strange world in which a country, described until just the day before yesterday as a defiant nuclear outcast, suddenly is being welcomed into a nuclear club in which few restrictions apply.

Consider the history: following a nuclear weapons test in 1974, which the Indians disingenuously characterized as the demonstration of a "peaceful nuclear explosive" (as if such radioactive bombs were going to be used in civil engineering projects), nuclear suppliers strictly limited sales to India; India had used material in the test that had been produced in a Canada-supplied reactor, circumventing international safeguards. During the next decades, India refrained from further testing but also refused to endorse the principle of non-proliferation on grounds that it "disarmed the armed while leaving the unarmed free to keep arming." Why, asked Indian nuclear strategists, taking their cues from French theorists, would an Indian nuclear bomb increase the risk of war when, as all could see, U.S. and Soviet nuclear arsenals were deterring the two superpowers from going to war?

In the aftermath of the Indian and Pakistani nuclear tests of 1998, which resulted in both countries' openly becoming nuclear weapons states, efforts to maintain restrictions on nuclear trade with India gradually lost steam. Naturally companies that stood to make sales to India urged their governments to lift restrictions: they made that argument loud and clear, and it was hard to resist. But there was also a second argument, hardly if ever made explicitly, but perhaps in the back of some policymakers' minds--an argument not considered respectable in the United States during the previous decades, but now quietly gaining ground.

During the 24 years separating the first and second Indian tests--years in which, by the way, opportunities to keep the subcontinent nuclear-free were squandered--nobody in the United States wanted to indulge India's notion that possession of nuclear weapons would make the world more peaceful, not more violent. Pushed to its logical limit, a world in which every Tom, Dick or Harry had a nuclear arsenal, the idea seemed utterly insane. But ask yourself, confining your attention to the subcontinent, whether war between Pakistan and India is more or less likely now that both have nuclear arsenals. To judge from many recent events, notably the way both countries handled the terrorist attack in Mumbai last year, the honest answer would seem to be that their going nuclear has reduced the likelihood of war between them.

To look ahead, will the Iran story play out along essentially the same lines? Once it has acquired all the wherewithal needed to make an atomic bomb and actually makes one, will Israel then come out of the closet and openly declare itself a nuclear weapons state too? Will war between Israel and Iran then become absolutely unthinkable? And will that soon imply that U.S. companies can sell Iran anything they want?



Immelt ist Verschimmelt

To borrow a Yiddish expression with roots in German, the CEO of General Electric is confused. Writing in the July 9 issue of the Financial Times, Jeffrey Immelt argues that the U.S. government should adopt “an industrial strategy built around helping companies to succeed with investment that will drive innovation and support high-technology manufacturing and exports.”  Immelt seems to have forgotten that the U.S. government has already adopted that strategy: the stimulus bill provides more than 10 billion dollars in funding and loan guarantees for smart grid and green technology (among other things), of which GE undoubtedly will be the Number One beneficiary.

Not bothering to acknowledge that, Immelt proceeds to argue that the U.S. government should also subsidize companies like GE not just to make U.S. workers more competitive globally but also to make its workers in China, India and UK (to name the countries he happens to name) more competitive. In other words, the U.S. government should pay General Electric to undermine the fundamental objective of the stimulus bill and other economic legislation, which is to improve U.S. competitiveness vis-a-vis other countries, not reduce it.

Either Immelt is verschimmelt or, even by the standards of corporate barons, he has a lot of chutzpah.


ExxonMobil and Venter Team Up to Develop Algal Biofuels

At the beginning of 2007, at a conference in La Jolla, Calif., dedicated to biotechnology and biofuels, I was privileged to hear a banquet address by C. Craig Venter, the biotechnologist who cracked the human genome, beating the U.S. government. He made, I felt, a highly schizoid impression: on the one hand, charismatic, all-encompassing, omniscient; on the other . . . megalomaniacal mad scientist.

Perhaps ExxonMobil executives have been mulling over similar impressions, as they contemplate the potential of biofuels and biotechnology. But this week, as  the fortieth anniversary of the moon landing approaches, the company announced it is partnering with Venter’s Synthetic Genomics to develop liquid fuels from bioengineered algae. The $600 million that ExxonMobil is investing may be but a pittance for a company that earned $45 billion last year, but if Venter turns out to be of sound mind and delivers on his promises, this may someday be seen as another huge leap for humankind.


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