Climate-Proofing Infrastructure

Even in an election year, it's hard to make infrastructure repair sound glamorous. Perhaps that helps explain why the latest annual report card on the condition of US infrastructure from the American Society of Civil Engineers was so dismal, a "D" overall. In any given year, there are usually more exciting things to spend our money on, until we realize we haven't spent enough on these necessary props for our civilization for decades. The president's latest proposal to improve roads, rails and runways could help, though it faces skepticism from those who thought such fixes were already covered by last year's federal stimulus package. Perhaps what's missing is a green angle, and I don't mean that cynically.

If there are any aspects of infrastructure that have acquired a hint of glamour, lately, it's the ones that deal with making energy more sustainable or reducing emissions. The "smart grid" comes to mind, along with renewable power generation. As I was reading a recent New York Times op-ed concerning whether this year's bizarre weather is attributable to global warming--it's not, but it could be a taste of things to come--it occurred to me that climate-proofing our roads, power lines, train tracks, sewers, and other basic infrastructure could be at least as important as much more controversial policies addressing whether and how to reduce greenhouse gas emissions. In fact, whether climate change is caused in whole, partly, or not at all by humanity, we must still deal with its consequences. And even if all greenhouse gas emissions ended tomorrow--an impossibility--the climate is predicted to continue warming for a long time. That makes adapting our infrastructure to withstand climate change a suitably green endeavor.

However we explain this year's odd weather, including massive floods, heat waves and the fires in Russia--which incidentally contributed to a spike in US ethanol prices by driving up corn prices--scientists expect our future climate to include more such events. A few years ago, "adaptation" was taboo to some environmentalists, signaling defeatism. They bet everything on "mitigation"--reducing emissions. Since mitigation may not happen soon enough, on a large enough scale globally to make a difference, nothing we do can avert the need for adaptation to a world of less benign weather. In that respect any jobs created by a concerted effort to shore up our infrastructure to cope with more frequent weather events would be just as green as those associated with building and installing wind turbines and solar panels.

What might this entail? Well, most of the detail is outside my area of expertise, but if a bridge needs to be replaced, perhaps the new one should be designed to provide more clearance between the river and the roadway, with higher floodwaters in mind. Similarly, should highways be built (or rebuilt) with better drainage where flooding is a growing risk, or using concrete or asphalt formulated to withstand more extreme heat and cold? And having spent more than a decade living in regions subject to high winds and ice storms, putting utility lines underground makes lots of sense even without climate change, and it could become indispensable with it. In some respects this merely boils down to widening the routine assumptions that engineers make concerning the conditions that a piece of infrastructure must withstand during its lifetime, in order to cope with more uncertainty.

All of this costs money and competes with other priorities. The more resilient (and expensive) we make each project, the fewer of them we're going to do, unless we make upgrading our infrastructure--and not just the semi-glamorous parts--a much higher priority than it has been. That would require a different mindset, and not just with regard to the risks of climate change. Nor are the political rewards likely to be quick, because if anything, it involves the antithesis of the "shovel-ready" projects the stimulus targeted, since much will need to be rethought first. That wouldn't have deterred the generations of Americans that built the systems that must now be replaced; it shouldn't deter us, either, particularly if we recognize the connection to what many see as the greatest challenge of our century.

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Diesel Hybrids Arrive

Regular readers know I'm a fan of diesel cars, having test-driven some terrific models at recent car shows, as well as renting them on past trips to Europe. For drivers who travel mainly highway miles, the fuel economy benefits of dieselization can approach those of hybrids at a much lower initial cost premium. However, at least in the US, combining the two technologies to achieve even greater fuel savings has been cost-prohibitive, while in Europe, where fuel prices are much higher, interest in hybrids languished until fairly recently. Now, two auto makers have announced they will take that step and launch European hybrid-diesel models next year, with impressive fuel economy and emissions results.

Carmakers have known about the efficiency potential of diesel hybrids for a long time. This was the architecture chosen by the Clinton-era Partnership for a New Generation of Vehicles, a US government/industry consortium pursuing the goal of an 80 mpg car. As both Mercedes and Peugeot have determined, there is no technical barrier to building such a car, and the two models announced, although falling somewhat short of the old PNGV goal, are expected to deliver the equivalent of 62 mpg and 57 mpg. That would be respectable for small hybrid sedans competing with the Prius, but it's remarkable for a small crossover SUV and an E-series sedan, respectively. And in addition to fuel efficiency, Peugeot claims its diesel hybrid will emit just under 100 g/km of CO2, roughly matching the lifecycle emissions of an EV recharged on average US grid electricity. I'm also intrigued by the potential for highly-efficient four-wheel drive it creates.

The problem with this configuration, and a primary reason it has faced resistance in the US, results from the combination of relatively low US fuel prices and the diminishing returns to increasing fuel economy. Converting a gasoline model to either a hybrid or a diesel captures the largest, most valuable increment of fuel savings, leaving less fuel--and less money--to be saved by the other technology. As the article in Technology Review notes, achieving an attractive return on the pairing of powertrain technologies requires fuel prices much higher than the roughly $3 per gallon we pay here. So it shouldn't surprise anyone that the first place we'd see this configuration is in Europe, where diesel cars are already well-established--to a much higher degree than hybrids are here. With the average retail price in the EU currently around $6.06/gal. for gasoline (with a range of $5.00-7.11/gal.) and $5.53/gal. for diesel, the incremental savings for going from 40 mpg to 60 mpg still amount to over $500 per year, compared to less than $300 in the US.

The New York Times recently quoted research from the University of Michigan suggesting that cars could achieve 74 mpg by 2035 without drawing energy from the electric grid. With the US new car fleet struggling to reach 35 mpg within a few years, that sounds fanciful, until you see real cars like the Mercedes and Peugeot diesel hybrids. However, unless fuel prices end up rising significantly between now and then--which many expect but is far from certain--the biggest obstacle won't be technology, but justifying the cost, as the performance of baseline vehicles continues to move down the curve.

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Oil Rig Rorschach Test

Yesterday's fire on Mariner Energy's Vermilion 380 production platform in the Gulf of Mexico thankfully resulted in neither loss of life nor another big oil spill. However, the timing of this event seems likely to complicate the debate over the drilling moratorium that has been in place since the Deepwater Horizon accident, and that the government had been showing signs of relaxing or ending early. Based on the reactions so far, this latest accident also provides a Rorschach test on attitudes concerning offshore oil. Those convinced that the risks of offshore drilling outweigh its benefits are citing it as further evidence, while supporters of drilling are likelier to see it as proof that accidents offshore needn't be catastrophic. In reality, the two situations were so different that I'm not sure how much light one sheds on the other.

Although information on Vermilion 380 has been somewhat sketchy, we know from statements by the company and Coast Guard that unlike Deepwater Horizon, which was a floating deepwater drilling vessel, this facility is a fixed production platform in relatively shallow water, tapping a smallish oil and gas field with proved reserves of 33.2 billion equivalent cubic feet of gas--the equivalent of about 5.7 million barrels of oil, with more than half of that consisting of natural gas. The platform had recently undergone restoration work after having been damaged by Hurricane Ike in 2008. It was not engaged in exploration or any other kind of drilling, but instead producing oil and gas from previously-drilled wells. A company press release indicated that production in August averaged 9.4 million cubic feet per day of gas and 1,400 bbl/day of oil and condensate. This is orders of magnitude smaller than the Macondo field and its blown-out exploration well. In its particulars, Vermilion is more typical of the thousands of oil & gas platforms in the Gulf than the big, complex drilling rigs like Deepwater Horizon that we've been focused on since April.

Under the circumstances, another distinction between Vermilion and Deepwater Horizon is even more important than the ones above. While every accident is one too many, the outcome of yesterday's was precisely what the designers of such facilities work hard to enable and offshore oil & gas workers undergo intensive training to be able to execute: The wells were apparently secured, the crew evacuated safely, and damage was limited to the surface hardware.

This accident will be investigated, and I'm sure its lessons will find their way into the ongoing reassessment of offshore oil & gas practices and regulations. But without jumping to conclusions about its causes, yesterday's incident provides no proof at all for the argument that every offshore oil & gas well is a potential Macondo-style blowout, and every facility a potential Deepwater Horizon calamity waiting to happen.

Meanwhile, as my US readers head off for Labor Day weekend I suggest reading Technology Review's assessment of the energy aspects of the US economic stimulus, about which I had originally planned to write today. It raises important questions concerning the impact and effectiveness of the stimulus, including on employment, as well as the sustainability of efforts begun with its impetus. Expect to hear a lot more about this later this year, as eligibility for the Treasury renewable energy grants and other stimulus programs draws to a close, and recipients and their advocates call for temporary or permanent extensions.

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Grading Cars on the Curve

By now you may have seen some prototypes of the new-car fuel economy stickers on which the EPA is seeking public comment. The versions that prominently display letter grades for overall fuel economy performance are certainly eye-catching, rising above the potentially confusing mix of numbers and graphics in the body of the sticker. Yet although the current stickers are clearly inadequate to illuminate the choices and consequences associated with buying vehicles powered by an increasingly diverse array of fuels, devising a similarly simple summary page may be beyond the skills of even the cleverest engineers and graphic designers. And in the hyper-connected world in which we now live, the necessity of presenting all this information in one place deserves at least as much thought as the proposed new stickers themselves.


I don't envy the EPA its assigned task of coming up with a useful replacement for the venerable fuel economy stickers that adorn the windows of all new cars at every dealership in America. It should be obvious that the current stickers, displaying city, highway and assumed average fuel economy--a subject for discussion in itself--along with estimated annual fuel expenditures, are not up to the task of informing consumers faced with a choice of vehicles running on gasoline, diesel, natural gas, ethanol, electricity, or a mix of several of these. Whether you consider it necessary to attempt to do so probably depends as much on your personal philosophy as on the inherent complexity of the situation, so for the purposes of this posting, I will accept it as a given and focus on evaluating the range of sticker options furnished by the EPA.

Start with the prototype shown above, for a plug-in hybrid car (PHEV) capable of running on both gasoline and electricity. A larger image of this sticker is available on page 4 of the PDF file on EPA's site. The two features that stand out in this design are the letter grade, which compares the fuel economy of the stickered vehicle to all others on a scale running from A+ to D (further conveyed in a green to amber color range) and the estimated 5-year fuel cost savings compared to the average new car. I've seen comments elsewhere suggesting that the graded comparison should be based only on comparable vehicles, rather than all cars, and there's some merit to that. There might be a few folks out there looking to replace a Chevy Suburban with a Nissan Leaf, but I'll bet they're in the minority. At the same time, the goal of the program is to reduce fuel consumption and emissions, and people are generally smart enough to figure out that if the vehicles that meet their needs only range from B- to a D, the B- choice will probably cost less to run and be better for the environment.

Of course that raises questions about whether the letter-grade system dumbs-down the whole process and diverts attention from details that actually matter a great deal, including the assumptions underlying the system, many of which are displayed in the fine print. One of the biggest of those is that only emissions from the tailpipe count. That sounds like a technicality, but when the result is that vehicles powered directly by electricity are guaranteed to get most of the A's in the class, it has serious consequences. For example, it would skew the comparison between an only-moderately efficient PHEV and an extremely efficient conventional hybrid (non-plug-in.) The latter might produce fewer lifecycle GHG emissions than a plug-in running on the electricity mix of the applicable regional grid, but because its emissions mainly come out of the tailpipe, it would be at a disadvantage. This kind of comparison is only one aspect of the emerging transportation energy market for which any static, national-level representation such as a sticker plastered on a car window seems likely to be wrong more than right.

The new stickers also introduce several new concepts to motorists, including the MPGe, or mile per gallon equivalent--a worthy evolution of mpg. This provides a handy way to compare the energy content of different fuels, including electricity, to the standard energy content of a gallon of petroleum gasoline, approximately 115,000 BTUs. The problem is that in the case of electricity, the stated conversion rate of 33.7 kWh per gallon-equivalent ("eGallons in the stickers' parlance) grossly understates the energy required to produce most of the kWhs on the grid. It's only accurate for the 31% of our national electricity mix attributable to nuclear, hydro or other renewables. In the case of electricity from natural gas turbines, it can understate the fuel requirement by much more than half--and thus overstate electricity-based fuel efficiency by more than double. In other words, an accurate comparison of the equivalent fuel economy of an electric vehicle requires more information about the source of electricity for each consumer than any sticker could conceivably collect. I'd prefer to see a more conservative conversion rate for electricity, such as 14.4 kWh/gallon (based on a typical gas turbine heat rate), but at a minimum the CO2 grams per mile figure on all such stickers should be asterisked along the lines of, "Your emissions will vary depending on your local electricity source."

Another new concept incorporated in the sticker for PHEVs is the notion of "Blended Electric + Gas" fuel economy. Unfortunately, while it provides a basis of comparison among similar vehicles, its accuracy is limited to the precise combination of electric and non-electric miles that went into the EPA's calculation, accentuated by the kWh/eGallon problem described above. Drive mostly electric miles and just a few on gasoline, and you'll get a result like what I saw when I drove the Chevrolet Volt last winter. I much prefer the alternative sticker shown on page 12 of the PDF, in which consumers are given the fuel economy on gas only and electricity only and allowed to work out the likely result for their specific circumstances. I also like the range graphic on this PHEV sticker and the electric vehicle sticker on page 11, allowing an easy comparison between those two vehicle types.

Yet while the EPA is clearly working hard to provide consumers with more information about the performance of vehicles that can use combinations of electricity and liquid fuels, I find it inexplicable that their proposed sticker (page 15) for flexible fuel vehicles (FFVs) would display the fuel economy only for gasoline, rather than for both gasoline and E85 ethanol, since the latter tends to be a quarter to a third less, based on the EPA's own results for actual FFVs.

The last issue I want to raise relates to the assumptions underlying the annual fuel costs and savings shown on all the stickers. When the first stickers were introduced in the 1970s, there was no easy way to convey to consumers up-to-date information on current and expected future fuel prices. That's certainly no longer true, and posting cost estimates relying on the assumption that we all pay the same price for gasoline and electricity and will do so for the life of a car makes little sense. Why not omit this information and replace it with a link to an interactive website that, with the input of just a zip code, could determine local fuel and electricity prices and calculate future savings based on those and the latest forecasts from the Department of Energy?

While I commend the EPA for its effort to make alternative fuel vehicle characteristics more understandable and for making these proposed stickers public now, I believe the agency is attempting to over-simplify a truly complex set of parameters and relationships, at the risk of inadvertently misleading a significant number of purchasers. Consumers would get more reliable value from stickers that provided them with just a few clear metrics, plus access to the information needed to work out how the vehicles among which they are choosing would be likely to perform in their circumstances of where and how they drive. And unless the basis of the letter grades can be expanded to include lifecycle emissions, rather than just those from the tailpipe, they should be jettisoned as fundamentally flawed. It will be very interesting to see what emerges from the next 60 days of public comment, and I encourage my readers to put in their two-cents worth.

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Germany's Nuclear Bridge

Since I've been taking potshots at German energy policy recently, I was pleased to see that it appears the country's government is nearing a reasonable compromise concerning nuclear power, which accounts for 22% of the electricity generated in Germany. The Financial Times reported yesterday that the CDU/FDP coalition is likely to propose extending the life of the country's reactors by 12-15 years, in order to give renewable energy sources more time to ramp up. Yet while the extension makes enormous sense from the perspective of emissions and energy security, I'm puzzled by the plan's implicit assumption that nuclear power is valuable only as a bridge to more renewable energy, rather than as a key part of any future, low-emission energy mix.

In 2007 Germany's 17 reactors generated 140 billion kWh of electricity. By comparison, all renewable sources amounted to just over 100 billion kWh, with only 3 billion of that coming from the country's highly-subsidized solar photovoltaic (PV) installations. All of these reactors will reach the limits of the their currently-allowed 30-year service lifetimes by 2020, when they are required by existing law to be shut down, and all have provisional shutdown dates within the next few years. The problem is that the incremental growth in renewable electricity required to replace all of these plants does not seem feasible within that timeframe, despite its impressive expansion so far.

Replacing just the net output of those reactors would require total renewable generation to expand by roughly 150%, though much of that expansion would by necessity depend on a much smaller fraction of the renewable power base. Wind currently supplies 6.5% of generation and continues to grow steadily. PV capacity has more than doubled since 2007, from 4,000 MW to 9,800 MW last year, though that still results in a contribution of only around 1% of generation, partly due to scale and partly to Germany's low solar insolation. Wind and solar output would have to quadruple to fill the kWhs supplied by nuclear power, plus their current part of the mix. This challenge is compounded by the problems of intermittency and low output vs. nameplate capacity of both of these sources. In 2007 the calculated capacity factor for Germany's wind turbines was just 21%, while PV was under 10%. So not only would these sources have to expand by a multiple of the capacity lost from idled nuclear reactors, but much of the incremental output would have to be stored, in order to time-shift it to match demand--combined with time-shifting demand to match the variable and cyclical output from these sources. Power from other renewable sources such as biomass, waste and hydro is much more compatible with normal demand patterns, but more difficult to expand quickly and overcome resource limitations.

Most Germans are intensely practical. That German practicality is in my genes and upbringing, part of which was spent in Germany. I speak the language and know the people fairly well, yet it remains a mystery to me that Germans would choose to pit these two complementary categories of electricity generation against each other, rather than aligning them cooperatively to replace high-carbon coal and natural gas that is largely imported from Russia--hardly the world's most reliable supplier. The answer appears to reside in coalition politics (in both major groupings) and green ideology, the price of which seems likely to rise sharply. German households already pay more than twice as much for electricity as US households, while German industry pays about 250% what its US counterparts pay, and I can only guess at the comparison to Chinese energy costs. Taking large, fully-depreciated baseload power sources out of the national mix will only amplify those disparities. I'd be very surprised if Germany didn't choose a course that hews back towards practicality in the long run.

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The Pitfalls of Feed-In Tariffs

I recently ran across a story indicating that regulators in Arizona are considering implementing a feed-in tariff (FIT) for solar power in that state. This is somewhat ironic, coming as it does amidst a wave of hotly-debated reductions in European solar FITs, in response to the burden they've imposed on electricity customers and the unintended consequences they've created. With Germany, Spain, and now apparently France all slashing their FITs, it's worth taking a look at how these policies differ from the US federal and typical state incentives for solar power, and why they might not be the best choice for promoting solar power here, particularly in places with solar resources as inherently attractive as Arizona's.

As I've noted before, an FIT is effectively a tax, although imposed by utilities on ratepayers rather than by governments on taxpayers. It guarantees developers of renewable energy projects--usually for solar power--a predictable price for their output and thus a predetermined potential return on their projects, barring other project risks. Because these rates are normally fixed for long intervals, and only adjusted after much consultation and debate, they don't make allowance for the kind of significant cost reductions they're often intended to stimulate in the technologies to which they apply.

The price of solar photovoltaic (PV) modules has fallen sharply in the last two years, partly due to the classic experience-curve effects that the industry likes to tout, but also because of events such as the recession and alleviation of a global bottleneck in the production of polysilicon, the basic feedstock for most silicon-based solar cells. But module costs have also come down for another reason more directly related to the generous FITs that have been in place in Germany, Spain, France and elsewhere. They were so generous, in fact, that they attracted new entrants from low-cost manufacturing centers like China that were able to undercut local suppliers significantly and gain market share. In other words, instead of just helping to grow local solar industries--a clear example of industrial policy--high FITs can also spur new imports from foreign competitors with potentially sustainable cost advantages over domestic manufacturers.

In this regard, at least, the prevailing US federal policy of providing a substantial investment tax credit, or more recently the option of taking that ITC as an up-front cash grant, has important advantages. Because it is calculated based on the cost of each project, it automatically adjusts downward as technology and project prices fall--as we are frequently told they will continue to do for PV. Most of the state solar incentives I've seen take a similar form, providing consumers and businesses tax relief based on the cost of the solar systems they install, or cash rebates that decline rapidly based on cumulative capacity. Again, these are self-correcting, compared to Europe's FITs. That's beneficial for taxpayers, but also for the domestic solar industry, by forcing it to remain competitive.

Because the global solar industry has grown to a level of scale and sophistication such that it can quickly shift a large number of projects to the countries with the most attractive policies--as for example when developers decamped from Spain to France once the former's solar capacity threshold was reached in 2008--the cost of a FIT policy can mount quickly and unexpectedly. According to the Financial Times, solar incentives last year accounted for half the €6 billion annual tab for Spanish renewable energy subsidies, even though total solar capacity in Spain at year-end was just 18% that of wind, according to the Renewables 2010 Global Status Report of REN21. That's a lot to pay for installations that collectively displace the equivalent of just one medium-sized coal-fired power plant. States such as Arizona that are considering feed-in tariffs should think carefully, not just about the laudable goal of promoting solar power, but about the accompanying financial burden they're imposing on ratepayers, as well as the potential for unintended consequences.

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Looking Back to Look Ahead

Last week the Energy Information Agency of the US Department of Energy released its Annual Energy Review for 2009. Although it doesn't offer predictions concerning the energy transition that was the subject of last Wednesday's posting, it does include a wealth of charts and graphs visualizing the remarkable energy shifts that have already occurred in the last several decades. Understanding these could help calibrate our expectations concerning the pace of the hoped-for clean energy revolution, while shedding light on characteristics that could move some technologies into the market faster than others. For energy the past isn't necessarily prologue, but it's certainly relevant.

Start with the US primary energy overview for the last 60 years, which shows the steady growth of our energy consumption, interrupted only by two sets of events: the oil shocks of the 1970s and the recent financial crisis and recession (accompanied by a demand-driven oil shock.) Since the early '70s much of that growth was fueled by imported energy, led by oil. This is the part of the story we know best, because its impact on energy security has kept us focused on it for my entire adult life, no matter how ineffective our responses have seemed at times. However, other aspects of our energy situation reflect big, but less obvious changes over that interval, particularly with regard to the production of electricity, the supply and uses of natural gas, and the growth of nuclear power.

We've recently heard a lot about the significance of shale gas, which for many parts of the country could bring the sources of our natural gas much closer to where it's used. Yet this is only the latest aspect of a broader shift that has turned gas from a mainly Gulf Coast and mid-continent resource into a truly national one. In 1970 Texas, Louisiana and Oklahoma accounted for more than 80% of US gas production, while last year they supplied well under half. In the intervening period, production outside these three states more than tripled. At the same time, the ways we use gas have also been transformed. Gas for electricity generation has outstripped residential gas consumption and is about to eclipse industrial gas demand, which has fallen steadily since the mid-'90s, due to volatile prices and the offshoring of manufacturing. The marriage of gas to electricity was driven by a major technology change, in the form of aero-derivative gas turbines for power generation. A chart I could only find in the report's Energy Perspectives section and have reproduced below indicates how much more natural gas-fired capacity has been added in the US in the last 20 years than all other generation technologies combined. Natural gas was more expensive than coal for that entire period, yet no other technology could match its combination of low capital cost, infrastructure efficiency, low emissions, and capability to deliver power when and where needed. Can renewables succeed without matching at least a majority of those attributes?


The report puts the recent upsurge of biofuels, wind, solar and geothermal power into the context of a larger renewable energy sector that still meets just 8% of our total energy needs, mainly from mature sources such as hydroelectricity and wood. I can't help wondering whether the development of the US nuclear power sector holds any relevant analogies for the new renewables. Nuclear grew from nothing to 8% of US primary energy and 20% of electricity generation between the mid-'60s and 2000, and in the process helped displace most oil from power generation. Essentially all our current nuclear capacity was built in two waves that rose quickly, peaked in the mid-'70s and again in the mid-'80s, and then subsided to little more than capacity optimization since then. Renewables and nuclear could not be more different, other than sharing a low emissions profile, but the former face enough real-world constraints--including concerns about the environment in its broadest sense--that a scenario in which they, too, stall well short of their full potential isn't so hard to imagine. When you consider a rise as steep as that exhibited by ethanol, or the asymptotic growth of photovoltaic module shipments, it's hard to look at these graphs and not wonder what the rest of the curve will look like: continued rapid growth, plateau (and at what level?), or decay.

I found numerous other charts, graphs and tables offering insights into topics as diverse as the population of alternative fuel vehicles and their energy consumption, the breakdown of electricity consumption in commercial buildings, and the steady drop in energy consumption for space-heating by households, particularly from oil--despite a 35% increase in US population--offset by a near-doubling of household electricity consumption within a generation. And I can't close without mentioning the positive trends in the energy intensity of the US economy--a steady decline for 40 years in BTUs per dollar of GDP--and more recently in per-capita energy consumption. We've accomplished that without a full-court press on energy efficiency, beyond what was incentivized by volatile market prices. What could we accomplish on this front if we put our minds to it?

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