energy security: the implications of future energy scenarios professor anthony clayton institute for...
TRANSCRIPT
Energy security:Energy security:The implications of future energy scenariosThe implications of future energy scenarios
Professor Anthony Clayton Institute Professor Anthony Clayton Institute for Sustainable Developmentfor Sustainable DevelopmentUniversity of the West Indies University of the West Indies
October 30October 30thth-31-31stst
Buenos AiresBuenos AiresRepública ArgentinaRepública Argentina
Inter-American Network of Academies of Science Inter-American Network of Academies of Science ConferenceConference
Toward a sustainable energy futureToward a sustainable energy future
Roundtable 1: Energy needs of low-income populationsRoundtable 1: Energy needs of low-income populations
What are the energy needs of low-income What are the energy needs of low-income populations?populations?In most key respects, the same as everyone
else’s energy needs:Reliable, stable supplies of affordable power,
generated and distributed without excessive environmental or social cost.
Why is this hard to achieve?Why is this hard to achieve?
Case study: JamaicaCase study: JamaicaJamaica is a heavily-indebted middle-income country.Domestic demand (not including bauxite/alumina sector)
is ~800 megawatts, will increase by 210 megawatts by 2012.
93% energy demand met with imported crude oil.Import bill peaked at nearly US$2bn.This was equivalent to entire value of exports.Developed countries have become less sensitive to price
of oil as GDP/oil ratio has risen.Jamaica’s energy productivity in mid-1980’s was ~3.5
barrels of oil per US$100 of GDP, in real terms; it now takes about 5 barrels of oil to generate the same output. Reasons: low growth and repeated recessions, plus increases in energy-intensive consumption (rising imports of cars and air-conditioning).
What has gone wrong?
Energy policy:How to get it slightly wrong…In March 1999 The Economist published an article that suggested that the price of oil, which had fallen to $10/barrel, could fall as low as $5/barrel, largely because of sluggish demand*.This article marked the bottom of the trend, which then rapidly reversed; in July 2008 crude futures went to $147/barrel.The financial crisis then trigged an even sharper fall in the price of oil; on 29th October 2008 the price was $64/barrel. On 17th October Merrill Lynch analysts predicted that oil would go back to $150/barrel.
* The Economist March 4th 1999 ‘Why cheap oil may be bad’
Why is prediction so difficult?An attempt to estimate the future price of oil requires an
assessment of trends in supply and demand, remaining reserves, refinery and supply-chain capacity, the rate of development of new technologies and infrastructure, of efficiency gains, alternative technological solutions and rates of substitution, changes in the regulatory and policy environment, geopolitics, hedge-fund investment strategies, and the possible impact of terrorism and counter-terrorism measures.
This cannot be adequately addressed by any one discipline. The analysis therefore requires a number of individual assessments, all of which must then be integrated into a single decision-making process. All this complexity will, typically, have to be resolved into a single decision, such as to invest or not invest in a particular project.
How close are we to peak oil?Why estimates are dynamic
Resource scarcity reflects four main factors:Total physical quantity in available form/location.Technology available to find, extract, process and
transport the resource; extraction and processing efficiency, cost of extraction
Pattern of demand/use (also partly determined by available technology).
Economics: (anticipated) demand, supply, competition from other suppliers, alternatives, substitution by other materials.
These factors vary over time, so it is difficult to be sure how long a resource will last.
Technological advances can change outcomes
Technological advance makes it possible to extract previously unrecoverable deposits.
In September 2006 Chevron set a new record; they drilled 28,000 feet (5.3 miles) below the sea, the last 20,000 feet under the sea floor (for comparison, Mount Everest is 29,035 feet high). This allowed them to access lower-tertiary formations that could hold up to 15 billion barrels of oil and gas reserves. That could increase US oil reserves by as much as 50%, according to The Wall Street Journal.
Insecurity is one of the main drivers – but this is particularly difficult to predict
Kuwaiti oil wells burn in the first Gulf War, 1991
The impact of uncertaintyThe impact of uncertaintyVolatility creates uncertainty as to future energy
prices.
Theory: “The key is stability so we can plan. Oil investments take a long time to come to fruition.”
Abdallah Jumah, CEO of AramcoPractice: “Where the oil price goes, nobody knows.”
Abdallah Jumah, CEO of Aramco
A Swiss company, Flisom, has developed a polymer foil, thin a sheet of paper, which can be mass-produced in cheap rolls and stuck to the sides of buildings. It contains a semiconductor compound that absorbs light by freeing electrons. It will be ready commercially in 2009.
The tipping point will arrive when the cost of solar power falls below $1/watt, the cost of carbon power.
Solar power today costs $3-$4/watt (down from $100 in the late 1970s). Flisom’s product will cut this to 80 cents/watt within 5 years, and to 50 cents/watt within a decade.
The US semiconductor group, Applied Materials, has a comparable product which will cut the cost down to 70 cents/watt by 2010, and to 30-40 cents/watt by 2017.
Daily Telegraph 18/02/2007Daily Telegraph 18/02/2007
Substitution effects could transform markets
Is biofuel an option for Jamaica?We have a moribund sugar industry; high-
cost and uncompetitive.Could this be converted into a viable ethanol
industry?
Biofuels (G1 and G2)Biofuels (G1 and G2)Generation 1: sugar from cane/corn fermented ->
ethanol. Energy balance ratio for corn = 1.3/1, sugar cane = 8/1.
Generation 2: cellulose (a polymer - long chain of sugars), broken down with steam or acid into component sugars, which can then be fermented. Potential EBR for cellulose = 12/1 to 16/1. Problem: cost
Problems with ethanol:•The energy density is ~1/3rd less than gasoline.•It absorbs water from the atmosphere; gives 3 month life.Options: butanol. Also made from sugar, but bacterial rather than yeast fermentation (4 carbon atoms, ethanol has 2) – has 85% energy of petrol and lower tendency to absorb water, or octanol (8 carbon atoms).
Biofuels (G3 and G4)Biofuels (G3 and G4)Generation 3: Generation 3: Algae can produce 10-15,000 gallons of fuel per
acre per year, so 85 billion gallons (sufficient for all US transport, or all air travel) could be produced on approximately 15,000 square miles (4.5 million acres) = the State of Maryland.
The US farms 938 million acres; algal fuel would take 0.47%.
Generation 4:Generation 4:Synthetic biology/genomics.The J Craig Venter Institute has applied for patents
for synthetic organisms to make hydrogen or ethanol.
Microalgae can double their mass several times per day, produce 15-30 times more oil/acre than oil plants. Inputs: sunlight, CO² and nutrients (from e.g. sewage). Absorb atmospheric CO² while growing (although released again when fuel is burnt).
Production is continuous; mature algae skimmed every day (unlike oil plants). Oil is high in triglycerides, can be mixed with alcohol (e.g. ethanol) to produce biodiesel and glycerol (transesterification).
Algae in high-density vertical bioreactorsAlgae in high-density vertical bioreactors
Picture from Vertigro Global Green Solutions
From N Hodge Algae Biofuel in Energy and Capital 2007-04-02
Algal biodiesel
Estimates: 15-30 times more oil/acre
UK announces world's largest algal biofuel project
The UK wants algal biofuels to make a significant contribution to transport by 2020, and has made an initial investment of £26m to allow scientists to develop better strains. Transport accounts for 25% of UK's carbon emissions, so carbon-neutral fuels are crucial to the government target of reducing emissions by 80% by 2050.
At present, it is possible to make algae with a high oil content, or algae that grows quickly. The goal is to combine these qualities. Research will also develop the optimal designs for culture and production. Plants will then be scaled up. Most of the UK’s investment will be located in countries with year-round sunshine to maximize production.
Thursday October 23 2008
The next stage?US-based Sapphire Energy uses algae to produce ‘green
crude’, which can be refined into high-octane gasoline. This is compatible with the current infrastructure of refineries, filling stations and cars, and does not have contaminants such as sulphur, nitrogen and benzene. The process uses non-arable land and non-potable water and delivers 10-100 times more energy per acre than cropland biofuels. The company believes the cost will be price-competitive with fossil fuels in 3-5 years.
Sapphire is believed to be using genetically-modified cyanobacteria to synthesise long-chain hydrocarbons within their cells. They can grow quickly (some can double their mass in just an hour), and some strains can even fix nitrogen from the air to make their own fertilisers. Sapphire claim they can now engineer all of these desired properties into algae.
The next stage depends on developing the engineering and cultivation systems to go to commercial scale.
Thursday July 31 2008
A time of change It is important to develop a more robust basis for
energy policy, and to reduce dependence on fossil fuels. But technological advances are changing the balance of costs and benefits for decision-makers. For example, investments in first-generation biofuels might be less attractive if more advanced biofuels become available in the near future. This makes the decision-making process more complex.
Jamaica’s decision?Only conventional sources seen as being able
to contribute 210 megawatts by 2012. Initially, LNG: but would need 600 megawatts
capacity to be economically viable (i.e. would have to switch entire system to LNG).
Now: coal. Initially 100-150 megawatts capacity.
Renewables: wind turbines, marginal.
Thank you !Thank you !Thank you !Thank you !