All Power Grids are Vulnerable -- Not Just India's

Power has been restored to blacked-out portions of North and East India. But the danger is far from passed.

A series of failures and excessive demand on the national grid knocked out power for 640 million people in northern and central India on July 31, a day after a separate blackout left 360 million in seven states without lights. A three-member committee appointed by India’s government is investigating.

“Blackouts like that and cascading failures can occur and we have seen them occur in other countries,” Carl Hansen, chief executive of New Zealand’s Electricity Authority, said in an interview. “It is something that is constantly on the mind of grid planners.” _Business Week

When grid planners neglect basic issues of supply and demand, they leave the grid open to catastrophic cascading failures. This is what happened in India, where the vulnerability remains.

India can only meet its growing demand for power via coal or nuclear. All the happy talk about "green energy" is nothing but hot air -- dangerously irresponsible hot air.

Ominously, the same type of neglectful attitude toward growing reliable and affordable power supplies, can be seen in governments of Europe, Australia, and the US. When such governments turn away from reliable and affordable sources of power such as coal and nuclear, and gamble their economies on intermittent unreliables such as big wind and big solar, they are placing their people in the same vulnerable position as the people of India.

Coal Will Be Thriving Long After Obama Is Gone

This article was previously published on Al Fin Energy blog

The National Coal Council delivered a report to the US DOE which points to increasing uses of coal -- to generate electric power, to produce large quantities of liquid fuels via CTL, and to expedite enhanced oil recovery (EOR) using CO2 recovered from coal gasification (both IGCC and CTL).

• By 2035, the combination of coal-based EOR and CTL technology could provide up to 30 percent of U.S. liquid fuel demand and ensure America's energy security for decades....
• Use of ... CTL could generate $200 billion in economic activity, more than 1 million skilled jobs and $60 billion in tax revenues.
• At least 100 gigawatts of advanced coal generating capacity could be built or retrofitted over the next two decades. These advanced plants would use an additional 300 million tons of coal annually.
• CTL plants with carbon capture could convert coal into more than 2.5 million barrels a day of additional oil. An additional 450 million tons of coal would be used annually in these operations.
• Capturing a high volume of CO2 for commercial purposes, coupled with CTL operations, would increase coal use to 1.75 billion tons annually. This production level is well within the capability of the United States, home to 30 percent of the world's coal reserves.

_Nat.Coal Council Report to US DOE

Obama's misguided war against coal -- along with his war against all other forms of viable energy -- mark him as a political activist rather than a true leader. Obama's war against energy and against the US private sector has led to a stagnant economy with very slow job creation.

Meanwhile, Primus Green Energy is pushing ahead with a shale gas - to - liquids project which hopes to produce 100 million gallons of gasoline from shale oil per year.

The allure of cheap nature gas has altered the course of a New Jersey biofuel start-up’s path to commercialization. Shale gas will serve as Primus Green Energy’s (PGE) bridge fuel until it shifts to biomass feedstocks.

PGE today held a dedication ceremony for a demo plant at its Hillsborough, NJ headquarters. Local luminaries and a swarm of politicians, including former governor Jim Florio, Representative Leonard Lance, and an Obama administration agricultural official, were in attendance.

The plant will create up to 5 barrels of fuels per day, which will be used for customer certification testing and approvals. It is also a proof of concept for technology that PGE says can scale to upwards of 100 million gallons per year at a significantly higher yield (35 percent) than the industry average.

The company is hoping to raise US$150 million to build a facility next year that would produce 20 million gallons of fuel annually. In comparison, the Pearl GTL (gas to liquids) facility in Qatar has cost over $19 billion to build. _SP

The Pearl GTL plant in Qatar expects to yield profits of $6 billion a year, for as long as the price of crude oil (Brent) remains above $80 a barrel.

Primus Green Energy had intended to be a biomass-to-liquids (BTL) company rather than a GTL company, but basic economics dictated Primus' decision to go with shale gas rather than biomass -- at least in the beginning.

Meanwhile, commodities prices remain well above 2007 levels, suggesting that without big government stimulus from the US, Europe, and China, there is still significant deleveraging and deflating of bubbles that could occur.

The billions which Obama spent on his green energy crusade created almost no jobs, and has had a negligible effect on the nation's energy supplies. Most of the $billions went to political cronies of the president, and that money is long gone. Several of Obama's startups have gone bankrupt, with others in very deep financial trouble. Mr. Obama's great green crusade is turning out to have been a grand political gesture to get elected. What will he do for an encore?

The Obama government has injected about $1.5 trillion per year of fiat stimulus into the US economy, with very little positive effect to show for it -- except a rapidly growing debt which could destroy the economy if interest rates should be forced upward.

The energy world does not exist apart from the political and economic worlds, but is rather inextricably enmeshed within both.

Obama has attempted to re-shape the energy worlds, the political worlds, and the economic worlds -- as a legacy to his own unique greatness. Time will tell what lasting impact Obama's policies have had on those worlds -- if any.

See also: The Slow Sinking of Obama's Green Energy Policy

BP Review 2012: Coal Use Expanding Faster than Crude Oil

The 2012 BP Statistical Review of World Energy is now available for download. It reveals that worldwide demand for coal is growing significantly faster than worldwide demand for crude oil. And that is just the beginning.

BP via GCC

Oil demand grew by less than 1%—the slowest rate amongst fossil fuels—while gas grew by 2.2%, and coal was the only fossil fuel with above average annual consumption growth at 5.4% globally, and 8.4% in the emerging economies.

...Emerging economies accounted for all of the net growth, with OECD demand falling for the third time in the last four years, led by a sharp decline in Japan. China alone accounted for 71% of energy consumption growth.

...Fossil fuels still dominated energy consumption with 87% market share, while renewables rose fastest but are still only 2% of the global total. The fossil fuel mix continues to change with oil, the world’s leading fuel at 33.1% of global energy use, losing share for 12 consecutive years. _GCC

In North America, natural gas is increasingly replacing coal for purposes of electrical power generation. As global natural gas prices decline, the same type of substitution should be seen in other areas which benefit from large scale tight gas deposits.

Worldwide, however, coal should continue to be in high demand for power generation and other industrial uses.

Renewables such as big wind and big solar continue to be less than impressive, as predicted. Intermittent unreliable sources of energy cannot be depended upon. No wonder a significant part of China's installed wind power capacity continues to lack connections to any power grid. I suppose the capacity looks good on paper, even if it isn't doing anything but sit and rust.

BP Statistical Review of Energy 2012 Download PDF

The Cost of Energy: Comparison per Million BTUs

Chemical engineer Robert Rapier has provided a comparison of costs per million BTUs for various energy sources. It is an interesting beginning point for discussion.

Current Energy Prices per Million BTU

Powder River Basin Coal - $0.56
Northern Appalachia Coal - $2.08
Natural gas - $5.67
Ethanol subsidy - $5.92
Petroleum - $13.56
Propane - $13.92
#2 Heating Oil - $15.33
Jet fuel - $16.01
Diesel - $16.21
Gasoline - $18.16
Wood pellets - $18.57
Ethanol - $24.74
Electricity - $34.03 _Source, Sources, and Conversion Factors

This is the type of comparison that the Obama - Pelosi crusade for energy starvation does not want you to see. But there it is, stark and plain.  It is important to separate issues of cost from peripheral issues such as "carbon climate catastrophe" and "peak oil."  

The only way that Powder Basin coal can be used cleanly is via gasification -- preferably using Integrated Combined Cycle Gasification with Combined Heat and Power production (IGCC with CHP).  IGCC extracts more energy from the fuel, using both gas and steam turbine cycles.  CHP makes productive use of the "waste" heat, making the entire enterprise above 80% efficiency.  Powder Basin coal is cheap and dirty, but it can be used cheap and clean using IGCC plus CHP.    If you want liquid fuels, you can convert cheap, dirty coal to cheap clean liquids using gasification plus Fischer Tropsch catalysis etc.

Forget the carbon sequestration, unless you have an algae farm or other productive use for the CO2 you are sequestering.   Carbon sequestration is a horrific waste of resources.  It virtually eliminates the advantages of IGCC while doing nothing for the environment except necessitating the use of even more fuel.

When the people understand the issues behind the grand crusade of the Obama - Pelosi Revolutionary Reich for redistribution, energy starvation, economic depression, and social justice, they tend to vote against it.

United States Has More Fossil Fuels

Image via Robert RapierAccording to this Congressional Research Service PDF report (via Robert Rapier), the US has more total fossil fuels resources proved reserves than any other nation. Russia is a close second, China is a distant third, and Saudi Arabia and Iran are an even more distant fourth and fifth, respectively.

Because proved reserves are, by definition, economically recoverable, the proportion of the oil inthe ground that qualifies as proved reserves grows when prices are high, and shrinks when prices are low. That is, even without new discoveries, oil that may be sub-economic at $30 per barrel becomes economic at $60 per barrel and so the total proved reserves increase simply because price increases. In addition to the volumes of proved reserves are deposits of oil and gas that have not yet been discovered, and those are called undiscovered resources.2 _PDFCongResServreport

Robert Rapier remarks how eventual oil production can be several times as high as "proved reserves" for any given oil field.

In 1982, U.S. reserves were 27.9 billion barrels. In 2005, U.S. reserves were 21.8 billion barrels. But over the course of that 24-year period we produced 57 billion barrels of oil and pulled our reserves down by only 6 billion barrels. _RobertRapier

Over a period of time, proved reserves can actually grow despite pumping large volumes of oil from a field -- due to new discoveries, new technologies for recovery, and natural repletion of fields mistakenly believed to be near exhaustion.

As noted in the report, the price of energy also helps determine recoverable reserves, since the higher the price, the farther energy companies are willing to drill, dig, and explore to find new resources.  Peak oil doomsters are not intelligent enough to comprehend the complexity of the energy picture.  They often mistake increases in the price of oil that are due to a collapsing dollar, for shortages of oil from global depletion.  They are not a meaningful threat to a smooth transition into a post-fossil energy age.

The really good news? The report essentially ignores the trillions of barrels of shale oil and heavy oils known to exist in the western US. It also underestimates the quantity of oil, coal, and gas reserves known to exist in large new finds. In other words, the US is tops in fossil reserves without even trying. The really bad news? Obama is president, Pelosi is Speaker of the House, and both of them intend to starve the US into economic coma, for reasons and agendas of their own.

Cross-posted to Al Fin Energy