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Tampilkan postingan dengan label consumption. Tampilkan semua postingan
Tampilkan postingan dengan label consumption. Tampilkan semua postingan

Kamis, 18 Februari 2010

The Challenge of Scale

This morning's Wall St. Journal featured a front-page article on small-scale nuclear power, highlighting how reactors a tenth the size of current commercial designs could significantly reduce the financial risks associated with these mega-projects. This is one example of the need to think in new ways about scale when addressing our energy challenges. In his talk at this year's TED conference in Long Beach, Bill Gates offered another surprising perspective on scale: "All the batteries we make now could store less than 10 minutes of all the energy [in the world]," he said. Framed between those two examples is the basic proposition that while solving our energy problems may require breaking them down into more manageable pieces, they must still add up to mind-numbingly stupendous sums.

According to figures from the Energy Information Agency of the Department of Energy, in 2008 the US consumed 99.3 quads of primary energy--oil, gas, coal, nuclear power, hydropower, biomass and other renewables--down from 101.6 quads the year before. A quad is one quadrillion times the quantity of energy required to raise the temperature of a pound of water by one degree Fahrenheit, where a quadrillion is 1 followed by 15 zeroes (US definition.) Can you picture that? I can't. If I convert that consumption to barrels of oil equivalent at the rate of 5.8 million BTUs each, we get a value of just over 17 billion barrels--a much more familiar unit, especially when we divide by 365 to get 47 million barrels per day. Millions are much closer to something we can grasp, and if we are familiar with energy data we know that's equivalent to a little more than half the amount of oil produced globally every day. It's still hard to picture, though, until you work out that if it were all put in one place in outer space, it would form a spherical blob roughly 800 ft. in diameter--over half as tall as the Empire State Building--and that's every day.

By comparison the daily output of a 3 MW wind turbine, converted to its energy-equivalent of oil (assuming it backs out natural gas from a gas turbine power plant) would form a ball about 7 ft. across. It would take 1,400,000 such balls to fill the big sphere. Of course we can't really compare the output of 1.4 million wind turbines to the total amount of energy we use each day, for many reasons, though it's a handy reminder of just how big the challenge is, and why building nuclear reactors in increments of 125 MW each might be a smart way to finesse this gap.

A 125 MW reactor, if it operated with the same reliability that large nuclear plants have achieved, would produce as much power every day as 125 of those 3 MW wind turbines. And while we doubtless couldn't build these reactors as fast as wind turbines, I'll bet we could add nuclear power capacity faster in these increments than with 1,200-1,500 MW reactors, because of the advantages of being able to manufacture more of each facility in a factory, rather than constructing them on-site. Even if that translated into total project timelines only half as long as for large-scale nuclear plants of the kind for which the administration just awarded federal loan guarantees, that could be worth a lot to the utilities and merchant generating companies building them. It would greatly reduce project risks of the kind that can ruin the economics of big investments--delays, cost over-runs, accidents--and that give companies' bankers and shareholder chills. These aren't the kind of risks the government is offering to defray, by the way.

Of course that doesn't make small nuclear an either/or proposition vs. large-scale nuclear, any more than wind and solar are an either/or proposition vs. oil & gas platforms or big gas-fired power plants that can operate efficiently 24/7. There's room--and need--in our national energy economy for all of these, as our energy diet shifts from a heavy reliance on fossil fuels to a lighter, more sustainable diet in the future. At the same time, it's clear that we can't fill the gap exclusively with small-scale energy sources, without a sizable contribution from sources at least as big as these small reactors. "Drill, baby, drill" only captured one aspect of this concern. More accurately, our energy policy must deliver "scale, baby, scale."

Selasa, 19 Agustus 2008

The Persistence of Change

Weakening demand appears to be the main oil market driver these days, with the US having just tallied its 12th consecutive monthly decline in gasoline demand, year-on-year. For the moment, at least, good old supply and demand have displaced imminent Peak Oil and a perceived commodity bubble as the dominant narrative. If we needed further evidence of that, the market's collective yawn at Russia's threat to the Caspian pipelines passing through Georgia ought to serve nicely. But how much of the recent decline in consumption is attributable to the price elasticity of demand, and how much to the weakening US economy? The answer is of more than passing interest, signifying whether we're likely to see a bounce in demand once the pump price catches up with the 20% decline in the price of West Texas Intermediate crude oil since the 4th of July.

The US average retail gasoline price has fallen for six weeks and currently stands at $3.74 per gallon. Barring an unexpected oil-price rally or a major refining problem, unleaded regular prices beginning with a "4" should soon disappear at all but the most expensive stations, even in California. Perhaps this is just a case of the August doldrums, but the price of oil is currently stuck in a range that defies the principal explanations for its behavior earlier this year. With the market clearly responding to fundamentals, its path from here will depend heavily on whether consumers continue to drive less, and that depends on the relative importance of the psychological impact of $4 gasoline, compared to a broad range of economic factors including falling home prices, tightening credit and surging inflation--some of which is attributable to high fuel prices.

The last stretch in which US gasoline demand declined for 12 consecutive months occurred in 1990-91, a period that also coincided with a spike in fuel prices--thanks to Saddam Hussein--and a recession. The Gulf Coast hurricanes of 2005, which gave the country its first taste of $3 gasoline, caused only a brief drop in demand. Within 3 months of Katrina's landfall monthly US gasoline demand had resumed its year-on-year growth, consistent with the robust economic growth (helped by the housing bubble) that we were experiencing at the time. Nor did the recession of 2000-2001 prevent gasoline demand from growing by 1.6%, with only a few months exhibiting declines versus the same month of the previous year. Of course, gasoline was well under $2 at the time.

It seems to require an unusual combination of low growth and high prices to overcome the inherent gasoline demand trend of the US economy and shock consumers into conservation mode. Since the economy seems unlikely to recover soon, the persistence of the recent changes in consumer behavior concerning fuel consumption and new car selection thus hinges on just how cheap $3.50 gas will seem to America's drivers after a couple of months over $4.00 per gallon. In the absence of more dramatic events, this could also determine the price of oil on Election Day, a parameter that could influence that contest's outcome.