Blowout week 47

We lead off this week with a real blowout. It happened a couple of days ago about fifty miles south of where I live. Even Red Adair would have had trouble with this one:

Colima volcano, Mexico, November 21, 2014 (credit Oronegro)

This video catches the initial explosion.

In other news, the approach of winter –

ABC News: Ice forms on Lake Superior weeks ahead of schedule:

The first sightings of ice on Lake Superior and the Great Lakes overall usually occur during the beginning to middle of December. However, a perfect combination of last season’s record ice coverage, cooler summer temperatures, and an early blast of arctic air this fall has allowed for areas of ice to form earlier than normal for the second year in a row.

– once more focuses attention on the energy situation in Europe. More stories on this below the fold, along with problems at Scottish nuclear plants, setbacks at Hinkley Point, the EC sues Poland, shale gas in the US, an Iraq/Kurdistan oil deal, Australian coal to Ukraine, the world’s longest continuously-producing oil well and how climate change is killing chocolate.
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The two degrees C “dangerous interference” threshold – a meaningless metric

For some time now the world’s emissions-reduction strategies have been guided by the belief that global temperatures must not be allowed to exceed two degrees C above the pre-industrial mean (or slightly more than 1˚C above current temperatures) if we are to avoid “dangerous interference with the Earth’s climate system”.

Politicians are in general agreement that limiting warming to less than 2˚C is necessary to avoid redlining the Earth’s climate:

“The world (must) keep the global temperature increase from climate change below two degrees.” Ed Davey.

“Our joint goal (is) limiting global warming to under two degrees celsius.” German Environment Minister Barbara Hendricks.

“The U.S. continues to support the 2˚C goal.” Todd Stern, America’s top climate diplomat

And also that bad things are likely to happen if the climate does redline:

“experiencing global warming of as much as three or four degrees (could) lead to catastrophe, if not war.” François Hollande.

“A rise of 4˚C would be enough to wipe out hundreds of species, bring extreme food and water shortages in vulnerable countries and cause catastrophic floods that would displace hundreds of millions of people.” Ban Ki-moon

Clearly a lot depends on whether the world can keep global mean temperatures below the 2˚C “danger threshold”, assuming that 2˚C really is the danger threshold. Which raises the question, how good is the 2˚C estimate? Given the trillions of dollars that have already been spent trying to stay below it one imagines that it must be very good – a product of exhaustive research and the application of hard scientific principles.

But is it?

Unfortunately, it isn’t.

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European and UK Gas Security

In a recent post, A Beginners Guide to Blackouts, I drew attention to the fact that keeping the lights on in Britain was to a large extent dependent upon our ability to source sufficient gas to power the country’s large fleet of combined cycle gas turbines. The official view from the UK Government, National Grid and OFGEM (the regulator) is that the:

  • Gas market is well supplied and able to cover any cold spells.
  • Gas supplies, storage and network capacity well in excess of maximum expected demand.
  • Supply interruptions from Russia pose a low risk to UK energy security.

This seems rather optimistic for a number of reasons that include:

  • Global Liquefied Natural Gas (LNG) supplies have fallen for the last two years despite rampant demand and high prices
  • Competition for LNG supplies from Japan is fierce since that country closed down all of its nuclear power stations
  • Indigenous European gas supplies have been falling since 2004
  • Europe and the USA have decided to pick a fight with Russia, Europe’s closest, largest and most reliable supplier of natural gas

So, will the UK and the rest of Europe be able to source sufficient gas to keep the lights on this winter? This is quite a complex question to answer.

Figure 1 West European countries have diversified gas supplies while the East European countries tend to be totally dependent upon Russian gas. In the grander scheme, N Africa is not a significant supplier of gas to Europe, although a component of LNG also comes from N Africa.

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The Appalling Truth About Energy Subsidies

There’s nothing makes my blood boil more than to read reports about the international level of subsidies of the fossil fuel industries like this one in Bloomberg.

Fossil fuels are reaping $550 billion a year in subsidies and holding back investment in cleaner forms of energy, the International Energy Agency said.

Oil, coal and gas received more than four times the $120 billion paid out in incentives for renewables including wind, solar and biofuels, the Paris-based institution said today in its annual World Energy Outlook.

It makes you think that BP, ExxonMobil and Shell are receiving vast state handouts, doesn’t it? I’ve done a bit of sleuthing and it seems that nothing could be further from the truth. The map below from the IEA shows countries where the state pays energy subsides to its citizens, many who will be poor!

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Blowout week 46

Telegraph:  Oil price slump to trigger new US debt default crisis as Opec waits

Based on recent stress tests of subprime borrowers in the energy sector in the US produced by Deutsche Bank, should the price of US crude fall by a further 20pc to $60 per barrel, it could result in up to a 30pc default rate among B and CCC rated high-yield US borrowers in the industry. West Texas Intermediate crude is currently trading at multi-year lows of around $75 per barrel, down from $107 per barrel in June.

The main stream media is full of low oil price stories this week and is suitably alert to the risks this poses to the oil industry and global economy. Normally low oil price would be viewed as a positive thing, but on the back side of Hubbert’s peak things work differently. There is also a story on oil exploration in the Canary Islands and how this fits with their vision of sustainability. Also in the news is early harsh winter weather in N America and Siberia and some interesting sanction busting energy news from Russia. Roger’s focus is on the US-China climate deal. The Republican view:

“I read the agreement – requires the Chinese to do nothing at all for 16 years while these carbon emission regulations are creating havoc in my state and other states around the country”

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El Hierro – another model for a sustainable energy future

For many years El Hierro, the most westerly of the Canary Islands, obtained its electricity from an 11.36 MW diesel-fired plant that supplied erratic and expensive (€0.242/kWh) power to the 10,920 residents of this scenic tourist destination:

El Hierro landscape

Then on June 27th of this year, culminating a process that began in 1997, the island proudly inaugurated its new renewable energy system, which will replace the diesel-fired generation with hydro and wind and eliminate 8,700 tonnes of CO2 emissions and save €1.8 million in fuel costs each year. Renewable energy enthusiasts were predictably ecstatic. Even ENEL, Europe’s second largest utility, hailed El Hierro as an example of how sustainable development can be made to work:

El Hierro has realised its dream of achieving a sustainable ecosystem. The island, which was designated a UNESCO Biosphere Reserve in 2000, has actually become a global model of sustainable development in which technology, renewable energy and protection of the environment come together in a single project, one that is set to become a benchmark for the global energy market.

But will it?
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Ed Davey in Wonderland

On 6th November, UK Secretary of State for Energy and Climate Change, Ed Davey, delivered his Annual Energy Statement to the House of Commons. Ed Davey is part of the Conservative – Liberal Democrat coalition government that came to power in 2010 and belongs to the Liberal Democrat branch of that coalition. The achievements laid out in the Energy Statement need to be shared with his predecessor, Chris Huhne, who had to stand down in 2012 when he was sent to prison for perverting the course of justice.

Ed Davey:

Record investments of £45 billion in electricity generation and networks since 2010 have put us on target to meet our future low carbon power requirements.

Reality:

Record investments of £45 billion in electricity generation and networks since 2010 has seen UK electricity consumption fall from 361 to 337 TWh (6.7%) while electricity imports have risen from 2.7 to 14.4 TWh (5.3 fold).

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Zeroing in on the true value of climate sensitivity

Climate sensitivity, defined as the increase in the Earth’s surface air temperature caused by a doubling of atmospheric CO2, is a curious metric. It isn’t used as direct input for anything – it’s derived from the output of climate models or from observational analyses – but no other variable in all of climate science is so controversial. This is because it tells us, in one single number, how serious a problem CO2-induced warming might be. If climate sensitivity is down around 1.5C, the low end of the IPCC’s range, the impacts probably won’t be serious, maybe not even noticeable. But if it’s up around 4.5C, the high end of the range, watch out.

So what is the true value of climate sensitivity?

The first estimate – 5.5C – was made by Svante Arrhenius in 1896. Ten years later in 1906 he lowered it to 2.1C. Then came Hulbert in 1931 with 4C, Callendar in 1938 with 2C, Plass in 1956 with 3.8C, Möller in 1963 with 9.6C, Manabe & Wetherald in 1971 with 2.4C and Sellers in 1973 with 0.1C. Figure 1 plots these and a couple more contemporaneous estimates by year. Clearly scientists were having difficulty putting a value on climate sensitivity in the early days:

Figure 1: Early climate sensitivity estimates

But things are different now, right?

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Blowout week 45

By Roger Andrews

The US is the world’s largest economy, and what happens in the US has a significant impact on what happens in the rest of the world. So this week we lead off with the US mid-term elections and the potential impacts of the Republican landslide on U.S energy and climate policy.

Inside Climate News:  GOP Election Rout Delivers Blow to U.S. Leadership Role on Climate Change

The role of the United States in confronting the global climate crisis has been cast into serious doubt after an election that stacked the deck in Congress in favor of fossil fuel industries. Republicans seized firm control, and added several new senators who deny that climate change is a problem. A solid majority of voters who spoke to exit pollsters said they regarded climate change as a significant matter, but most were on the Democratic side. By a huge margin, Republican voters said the opposite. And in state after hotly contested state, they elected their own to the Senate.

23 more stories below the fold, including the pros and cons of low oil prices, lawsuits over German nuclear plants, rising energy bills, promising results from the Bowland Shale, a remarkable new car paint, dry fracking and how CO2 makes you sneeze.
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A Beginners Guide to Blackouts

Anticipating blackouts has become a new national sport in the UK. I can recall blackouts as a child. I’m guessing this was during the first 1974 oil shock when OPEC first flexed its muscles and Britain had a lot more oil fired power generation then than it does now. But a quick check shows that Britain was also in disarray because of strikes, especially striking coal miners. Blackouts were a time of excitement where whole towns went black, citizens reached for their candles and crooks reached for their crowbars.

Things have moved on in the intervening 40 years with a much more complex society today dependent upon electronic communications, a myriad electronic devices and economic growth that is founded on reliable supplies of electricity.

Figure 1 “100 crowbars were nicked during the last blackout”

So why does the UK find itself on the threshold of blackouts? Or does it?

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California public utilities vote no on energy storage

In 2002 California set itself an ambitious renewable energy target – a third of its electricity from renewables by 2020 – and according to Figure 1 of the California Public Utilities Commission second quarter 2014 report it’s going to meet it:

Whether it will meet it, however, remains an open question because the more intermittent renewable energy California adds the more difficult it becomes to integrate it with the grid. This problem in fact became evident fairly early on, and in an attempt to solve it California in 2010 passed legislation (AB 2514) to encourage its publicly owned utilities to install energy storage – batteries, thermal, flywheels, CAES, pumped hydro (not exceeding 50MW), whatever worked – requesting them to develop viable and cost-effective plans and submit end-2016 energy storage capacity targets by October 1, 2014. This deadline has now passed, the ballots are in and the submissions from 29 of 31 California publicly owned utilities (two of the links provided don’t work) have been published here (h/t Mark Miller for the link).

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Global Oil and Other Liquid Fuels Production Update

  • Global conventional crude oil + condensate production (C+C) attained a value of 73 million barrels per day (Mbpd) in May 2005. Since then conventional C+C has been bumping along a jagged plateau with the all time high of 73.3 reached in July 2008, immediately prior to the Chinese Olympic Games and the financial crash. It seems possible that the peak in global conventional oil production is behind us (Figure 1).
  • All of the growth in global liquid fuels has come from non-conventional sources, shale oil and tar sands, that currently are only produced in N America, and from “other liquids” such as biofuel and natural gas liquids. These liquids are inferior to conventional crude oil in a number of ways such as 1) requiring the use of more energy in their production, 2)  being less energy dense and 3) not usable as liquid transport fuel.

Figure 1 Conventional crude oil + condensate production has been on an undulating plateau just over 73 million barrels per day (Mbpd) since May 2005, that is for almost 10 years and despite record high oil prices! As the remainder of this post will show all of the growth in global liquid fuel supply has come from unconventional and low grade sources of supply. The periodic dips in C+C production reflect OPEC production cuts designed to support the oil price. The fact that OPEC has not cut production when faced with current price weakness has resulted in the recent oil price decline. Note that chart is not zero scaled in order to amplify details. Click chart for large version.

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Blowout week 44

With a continued focus on the possibility of power outages we lead off this week with the remarkable recovery of the Didcot B power station:

BBC Oxford: Didcot B power station generating again after fire

Part of Didcot B Power Station is generating electricity again after a switch-on operation likened to starting up the Starship Enterprise. It is understood the unit will produce about 350MW – roughly half its normal capacity of around 700MW. For the foreseeable future the plant is expected to provide about three quarters of its full power capacity. That is 1 to 1.1GW of power compared to its full capacity of just under 1.4GW.

Although the photo accompanying the article was a little less encouraging:

Caption: Smoke started gushing from the unit once it was fully switched on

We follow it up with a story which one hopes is not a sign of things to come:

Reuters: Power outage shuts down Bangladesh

Bangladesh was hit on Saturday by a major power outage that brought much of normal life to a standstill, forced hospitals and garment factories to rely on back-up generators and even plunged the prime minister’s official residence into darkness. The national grid collapsed so the whole country lost power,” said Mohammad Saiful Islam, a director of state-run Bangladesh Power Development Board. “Our repeated efforts to restore electricity across Bangladesh failed repeatedly.”

24 more stories below the fold, including drones overflying French nuclear plants, Ukrainian separatists to hold elections, Australia’s new climate policy, Russia claiming rights to Arctic oil & gas, inadequate subsidies killing UK offshore wind, solar in the Sahara, shale in the US, rocket fuel from asteroids, how global warming causes harsh winters and endangers US postal workers and how daylight saving causes cyberloafing.

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The Failure of Green Energy Policies

Whilst enjoying the good natured exchanges on this blog concerning the pros and cons of new renewable energy sources I decided to dig deeper into the success of Green energy policies to date. Roger Andrews produced this chart the other day and the low carbon energy trends caught my eye. It is important to recall that well over $1,700,000,000,000 ($1.7 trillion) has been spent on installing wind and solar devices in recent years with the sole objective of reducing global CO2 emissions. It transpires that since 1995 low carbon energy sources (nuclear, hydro and other renewables) share of global energy consumption has not changed at all (Figure 1). New renewables have not even replaced lost nuclear generating capacity since 1999 (Figure 2). ZERO CO2 has been abated and the world has done zilch to prepare itself for the expected declines (escalating costs) of fossil fuels in the decades ahead. If this is not total policy failure, what is?

Figure 1 Nuclear, Hydro and Other Renewables (mainly wind and solar) expressed as % of total global energy consumption. The combined low carbon share reached 13.1% in 1995. In 2013 it was 13.3%. From this chart it is easy to see that Other Renewables have simply compensated for the decline in nuclear power a point made more clear in Figure 2.

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Oil and Coal: trends in global energy substitution

Figure 1 shows annual percentage contributions to total global energy consumption by fuel type since 1965. I plotted it up to see if it contained any hidden messages about the world energy market that had escaped my attention (the data used to construct all the graphs presented in this post are from the BP 2014 Statistical Review):

Figure 1: Percent contribution to global energy consumption by fuel type

At first glance there was nothing new. Oil‘s contribution peaked in 1973 and has been trending down ever since. Coal’s contribution declined rapidly between 1965 and 1977, but then it flattened out and after 2002 began to stage a comeback. Gas slowly built market share before 2002 but has stabilized since then. Hydro’s contribution has hardly changed, nuclear forged ahead until 1985 but then flattened out before beginning to fall away, and other renewables (wind, solar etc.) have barely lifted off the zero line.

Then I noticed an interesting feature. The percentage contributions of oil and coal tend to move in opposite directions. Coal goes down, oil goes up. Oil goes down, coal goes up. Oil goes flat, so does coal. But neither oil nor coal show a clear overall relationship with the third major source of energy, natural gas. The suggestion is that oil and coal have been substituting for each other, with coal replacing oil or oil replacing coal depending presumably on market conditions at the time, but with gas remaining largely unaffected.

Let’s look at this a little more closely.

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Drilling Deeper – A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom

The Post Carbon Institute (PCI) has today published a comprehensive report on the history and future prospects of the US shale oil and gas industry.

Part 1: Executive Summary
Part 2: Tight Oil
Part 3: Shale Gas

Report author, geologist David Hughes, has a tremendous command of the US tight oil and shale gas statistics equalled only by his ability to present this data in clear charts and maps and for these reasons alone I can warmly recommend this report to anyone with an interest in understanding the history of US shale developments to date.

The report challenges the upbeat views of the US energy future presented by the US Energy Information Agency (EIA), and there are certainly grounds to be sceptical about US energy independence, US net oil exports and exports of Liquefied Natural Shale Gas (LNSG).

I do not share entirely the vision that PCI has of the future. Hughes closing statement from the Executive Summary:

Rather than planning for a future where domestic oil and natural gas production is maintained at current or higher levels, we would be wise to harness this temporary fossil fuel bounty to quickly develop a truly sustainable energy policy—one that is based on conservation, efficiency, and a rapid transition to distributed renewable energy production.

It is not clear to me if the PCI vision for cities like New York is to run on distributed renewable energy. Or whether conurbations like this do not figure in their future vision at all?

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Blowout week 43

We lead off this week with the Didcot B power plant fire and its potential impact on UK electricity supply:

Penn Energy:  Half of Didcot B shut down indefinitely

The blaze, which began in one of the station’s cooling towers and quickly spread to three others, has shut down half of the plant’s generating capacity indefinitely. The Didcot B combined cycle power station generates over 1.3 GW of electricity when fully operational. As a major supplier of energy to the National Grid, there are concerns that a prolonged partial outage at Didcot B could disrupt reliability as winter approaches in the UK.

Telegraph:  Didcot fire raises risk of winter blackouts and soaring prices

The fire at Didcot power station has raised the risk of Britain facing blackouts and soaring prices this winter, a leading energy analyst has warned. Just one or two more unexpected events – such as power plant closures – “could cause a serious security of supply event, and a probable surge in wholesale prices”, Peter Atherton of Liberum Capital said. “The loss of this plant would not normally be a cause for concern. But UK energy policy has managed to engineer historically low reserve margins as we head into winter. The odds are still that UK will escape a security of supply crunch this winter. But the mere fact that a security of supply crisis is a material possibility is in itself a sign of huge policy failure in our view.”

“I’ve been reassured by National Grid that there is no risk to electricity supplies,” said Ed Davey, secretary of state for energy and climate change.

21 more stories below the fold, including the EU’s new energy targets, stress tests to see whether Europe can survive a Russian gas cutoff, oil in sub-Saharan Africa, whether fracking in UK will ever get off the ground, problems with solar in Japan but no worries with coal in Australia, whether sodium can save nuclear power and how climate change is shrinking goats.

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Ed Davey, UK Energy Security and the US Chamber of Commerce

Two related articles appeared in Blowout Week last Sunday. In the first the Daily Express fulminated about how the UK government’s energy policies will send electricity bills skyrocketing and maybe snuff the lights out at the same time:

The green crusade of successive governments is set to double electricity bills for households and cost homes £26 billion a year by 2030, it was claimed yesterday. The cost of renewable energy and carbon taxes will put an extra £983 a year on household bills by then, compared to relying on a mix of nuclear and new gas-fired power stations, three experts told a Lords committee. The Scientific Alliance report highlights warnings by the regulator Ofgem that the margin for electricity production for the 2015-16 winter will be at an all-time low of 2 per cent compared to the pre-privatisation requirement of at least 20 per cent. It means that in times of high demand, such as during very cold weather, Britain would be at risk of power cuts.

The second article consisted of a rebuttal from Mr. Ed Davey, UK Energy and Climate Change Secretary, who clearly felt sufficiently exercised by the Express article to issue one, and it’s short enough to be reproduced in its entirety:
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Oil, economic growth and recessions revisited

Here I re-tread a well-trodden path, but with recent events in the oil market I thought a brief recap might be timely.

I begin with a photographic illustration of a typical US demand response to the tripling of oil prices that occurred during the first “oil shock” in 1974:

Demand response after a tripling of oil price, USA, 1974

Those long lines of gas-guzzlers were indeed a demand response, but not to the oil price increase. They were a reaction to the nationwide shortage of gasoline caused by the oil embargo that accompanied it. Americans, like George Patton’s tanks during the Normandy breakout, just gotta have gas. And still do.

Fluctuations in oil price, particularly “oil shocks” are nevertheless believed to have had a major impact not only on the US economy but on the global economy as a whole since 1974, and here we will revisit some basic macroeconomic data to see how well this contention holds up. Continue reading

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Blowout week 42

(Euan is taking a break this week. It’s also his birthday today, so Happy Birthday, Euan.)

Interest this week focuses on the budding oil price war between the US and Saudi Arabia, so we lead off with this story:

Marketwatch:  Can Saudi Arabia beat North Dakota in a price war?

Commodity strategists led by Seth Kleinman at Citi argue that the Saudis aren’t likely to throttle back output, in part because they apparently “think that they can win any price war” with U.S. shale producers. The bottom line, they said, is that the Saudis could conceivably win a price war, but it would be a “painful, pyrrhic and short-lived” victory as the price floor for shale continues to fall.

More stories below the fold, including a reported breakthrough in fusion technology, threats from Vladimir Putin and counterthreats from Tony Abbott, European car manufacturers begging the EU for mercy, anti-radiation pills for Canadians living near nuclear plants, a newly-discovered ocean methane sink, and to conclude, a pro-renewable energy rally that fell flat in every sense of the word. Continue reading

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