Increasing the US contribution of wind and solar power, geothermal energy, and even nuclear power would have virtually no effect on our oil imports or energy security, because we use so little oil for power. However, a pair of articles reminded me that this logic doesn’t necessarily apply elsewhere. On Monday the Financial Times described the rapid growth of electricity demand in the Middle East, much of it fueled by oil that might otherwise be exported. Saudi Arabia apparently burns up to a million barrels per day of oil for power generation in the summer. And last week Fast Company highlighted the potential of large fuel cells to replace the diesel engines that generate power aboard tankers and other ships. As oil prices again approach $100 per barrel, with the possibility of even higher prices ahead when the entire global economy has returned to normal growth, these situations represent golden opportunities to save large quantities of oil for other uses for which its nearest substitutes still cannot replace it at scale.
Based on Department of Energy data the US generated just 0.9% of our electricity from petroleum and its products in the last year, with more than a third of that fueled by petroleum coke, a low-value solid byproduct of oil refining. The 43.5 million barrels of petroleum liquids used in power generation in 2009 represented only 0.6% of the 6.9 billion barrels the US consumed that year. When you break that sliver down by location, much of it is used for either backup generation or on islands or other remote locations. In other words, the remaining potential to displace oil from power generation in the US is very small and not necessarily well-suited to the intermittent renewable energy technologies now in favor. (That should change as electric vehicles enter the fleet by the millions, but that prospect remains some years off, at least.)
That situation isn’t representative of the world as a whole, however, with oil accounting for almost 5% of global electricity generation in 2007. It was even higher on a regional basis, at 7% outside the countries of the OECD and 35% in the Middle East. Globally this amounted to 5 million bbl/day, or nearly 6% of total oil demand. That might not sound like much, until you consider that a drop in demand of around 3 million bbl/day from the first quarter of 2008 to the first quarter of 2009 contributed to a decline in oil prices–ignoring the mid-2008 spike to $145/bbl–of roughly $50/bbl. The price of oil is truly determined by the last few million bbl/day of supply and/or demand. You don’t need to be worried about Peak Oil to see the oil used globally for power generation as potentially low-hanging fruit for redeployment, and as a significant emissions-reduction opportunity.
The best candidates to displace that oil vary by country and region. For countries with a lot of natural gas, like the big producers of the Middle East, a switch to that fuel seems like an obvious choice. However, much of the world’s natural gas outside North America, including most LNG on long-term contracts, is priced based on oil, so the savings probably wouldn’t be as large as they would be here. Even for oil exporters like Saudi Arabia, it might still make more sense to burn the residual fuel from the country’s many large refineries, instead of importing LNG (or developing more of its own gas) and investing in the refining hardware to turn that residuum into gasoline, diesel and jet fuel. That might explain why the Kingdom is pursuing nuclear power to cover much of its future generating capacity growth. Renewables have also been capturing a foothold in the region, particularly in projects like Masdar City.
Finally, the large-scale marine fuel cell opportunity described in Fast Company would target a segment where oil has a near monopoly, outside of military fleets: shipboard power. And while these molten carbonate or solid-oxide high-temperature fuel cells would still consume fossil fuels to auto-generate the hydrogen they use, their high efficiencies would reduce overall oil consumption in shipping. If it proves possible eventually to use even larger fuel cells as the basis for electrifying vessel propulsion, as the article speculated, then oil savings would be much more substantial. Global consumption of bunker fuel by ships amounts to roughly 3.7 million bbl/day, or around 4% of total oil demand. And the environmental benefits of such a switch would go beyond greenhouse gases to include significant local air pollution benefits, particularly in ports.
None of this represents new thinking, but rather an extension of some of the strategies by which the developed world of the time adapted to the high oil prices of the twin oil crises in the 1970s. Still, it’s easy to forget that that the quantity of oil tied up in the sectors mentioned above exceeds the output of the entire North Sea at its peak. If oil prices hadn’t buckled under the weight of the financial crisis and recession a couple of years ago and instead remained on their previous trajectory, I imagine we’d already be well down the path of freeing up more of this oil. Recent price trends suggest that the primary motivation for doing so could be about to return.
Nuclear power can free up natural gas which can displace imported oil.Nuclear powered ships can save a lot of oil.
Bill,The difference between what I described above and your suggestion is the number of other things that have to happen in order for oil to be freed up for other uses. If you’re burning oil to produce electricity, as in the Middle East, you can replace it with another electricity source and have the oil back. However, if it requires not just the construction of a nuclear power plant (8-10 years or more in the US?) but also the manufacturing (and more importantly the mass adoption) of a fleet of natural gas vehicles and the construction of new refueling infrastructure, then the outcome becomes more contingent and uncertain. Natural gas vehicles are an obvious solution to reducing oil imports, but it’s not clear that that is currently our top priority. If the incremental gas from shale is used to back out coal from power plants to reduce emissions, then it’s not available to fuel millions of CNG cars and trucks. (In practice, the price of gas will rise as demand of all sorts ramps up, and some of that potential demand becomes uneconomic.)
There are a variety of ways in which nuclear displaces oil. People replace oil furnaces with heat pumps for home heating. (Modern heat pumps work quite well down to 0F).The heat pump is powered from a nuclear power plant. Or Nuclear displaces natural gas in electrical generation.The natural gas then powers enhanced oil recovery projects and/or unconventional oil development. Or People buy electric cars like the Leaf or the Volt.The charge them from a nuclear power plant. These are just a couple of ways. I could go on. It won’t make a night-and-day change, but it could play a big role. A lot of this is low lying fruit that can happen pretty quickly without a lot of infrastrucure.
pjc,I suspect you and I have different definitions of the word “quickly.” I support nuclear power but also recognize that in the regulatory environment we’ve created in the US, it is anything but a quick solution. Even a plant that had all permits and was something like 80% complete is taking six years to finish. As for EVs, when you do the math it turns out that the first million of them–due when?–will displace just 31,000 bbl/day of oil (0.1% of US oil demand)–and that’s assuming they replace 25 mpg average cars instead of taking market share from 50 mpg hybrids. At $7,500/EV in federal subsidies, I don’t think anyone would call that low-hanging fruit from a taxpayer perspective. Don’t get me wrong, we need all of this, although it will take decades, not years, to have a material impact. By contrast, upping the fuel economy of the 12-14 million new cars sold each year in the US by 5 mpg or so would have a much bigger impact, much sooner, particularly if the improvements are coming from bigger, less efficient SUVs and light trucks.
Wind and solar schemes are highly subsidized schemes. They are not “clean, affordable electricity.” That’s the missing breakthrough.We should promote the idea of a $1 billion PRIZE for a clean, affordable electricity BREAKTHROUGH. Until then, we’re just pretending that solar and wind will solve our energy problems – including our dependence on foreign oil. If we have clean, affordable electricity in abundance we can support electric transportation.DOE should do something effective: offer a prize. We’ll either find the breakthrough and pay $1 billion, or we’ll know it doesn’t exist yet. DOE spends +$30 billion a year. Let’s use a small amount to find a solution, instead of financing failed wind and solar development schemes.
Geoff – Interesting article. Of course, you are probably aware of the fact that a major reason that the US no longer uses oil for power production is that it was pushed out of the market by nuclear several decades ago. Before nuclear captured 20% of the market, oil supplied as much as 17% of the US electricity demand. As you note, it is now limited to places like Hawaii, Alaska, Puerto Rico, Guam and a few coastal islands.We do still use a fair amount of oil in a market that is pretty easy to displace with grid electricity, however, since heat pumps are often a more efficient way of producing heat than oil fired furnaces.We also have a fair amount of experience with electric powered trains – I think that technology has been around for about 100 years.My favorite market where nuclear can displace oil is in ocean shipping. Where else do people who are not oil producers burn distillate fuel in essentially baseloaded power plants? Why worry about a moderate improvement in efficiency like you can get from fuel cells when you can simply replace the oil burner with a power source that eliminates your emissions, reduces your need to refuel, and frees up a tremendous amount of additional cargo space compared to carrying fuel for a 20 day voyage?Again, no new technology is required; we have been pushing ships around the ocean for 50 years with fission.
Rod,We agree on most of that, including the potential of displacing heating oil. Still, a look at the US net generation statistics for the period when nuclear power was ramping up suggests a somewhat more complex interaction than a simple substitution of oil by nukes. Total fossil generation continued to grow during the 1970s, 80s and 90s, to meet demand that was growing by 2-4% per year. It looks like oil lost out to a combination of nuclear, coal and gas, particularly in the years right after the Iranian revolution, when oil prices reached record levels.
Geoffrey-Smart, interesting article and comments. Thanks for your straight-ahead thinking.– Robert Moen, http://www.energyplanUSA.com
People are soooo energy production minded that not enough attention is paid to energy efficiency. It will take decades, may be even the rest of the century, to reform the energy production infrastructure towards much lower CO2 emissions.Do energy efficiency first, because, regarding buildings, it will require almost NO research and almost all of the technology already exists.It is easy to build houses and apartment buildings (mostly oil or propane heated) that use just 10% of the energy of similar standard construction buildings. Add small PV solar systems and thermal solar systems and such buildings become energy-surplus buildings suitable for plug-in hybrids and all-electric vehicles.The Passivhaus standard was developed in Germany in 1988. The Passivhaus Institut was founded in Darmstadt, Germany, in 1996. Over 20,000 Passivhaus houses and apartment buildings have been built since the early 90s, mostly in Germany, Austria and Scandinavia. After some decades of experience in Germany, the cost of building to the Passivhaus standard is now only an additional 5% to 7% (a subsidy up to $15,000 should be given to a person who builds such a house). The walls and roofs are as much as possible built in the factory, shipped to the site, and are erected by certified builders. The insulation, plumbing, wiring, etc., are pre-installed as much as possible. Connections are made in the field. There are over 30 German suppliers of Passivhaus specified walls, roofs, windows, doors, heat exchangers, duct systems, etc. They are a part of Germany’s Efficient Buildings industry that provides market-tested products and services. Design Criteria: – Less than 15 kWh/sq m/yr, or 4,746 Btu/sq ft/yr for space heating – Less than 15 kWh/sq m/yr, or 4,746 Btu/sq ft/yr for space cooling – Less than 42 kWh/sq m/yr, or 13,289 Btu/sq ft/yr for space heating and cooling, hot water, electricity – Less than 120 kWh/sq m/yr, or 37,969 Btu/sq ft/yr as primary energy. This standard requires the use of energy efficient electrical appliances, heating and cooling systems, etc. – Insulation minimum for concrete basement or slab R-40, walls R-40 and roof R-60 – Windows are fiberglass-frame, triple-pane, argon or krypton-filled, low-e, U = 0.14 or less – ACH = 0.6 or less @ 50 Pa below atmospheric pressure, as measured in a standard blower door test. This requirement is about 12 times more strict than for the 2006 and 2009 IECC Reference Homes – Energy recovery ventilator, at least 80% efficient, to provide a constant, balanced fresh air supply via a duct system – Electric resistant heater element, a maximum of 10 W/sq m, or 0.93 W/sq ft, in the duct system to provide auxiliary heat on very cold days – HEPA filter (optional) to remove particulate 1 micron or larger, i.e., germs, dander, viruses, air pollutants, etc. Notes: 1. In Germany a “Niedrigenergiehaus” uses less than 50 kWh/sq m/yr, or 15,850 Btu/sq ft/yr for space heating. 2. In Switzerland a “Minenergiehaus” uses less than 42 kWh/sq m/yr, or 13,289 Btu/sq ft/yr for space heating. 3. Primary energy is unconverted energy; i.e., energy to make electricity, uncombusted fuel, etc. 4. Anderson, Marvin and Pella windows are wood-frame, double-pane, low-e, U = 0.32; they lose twice the heat lost of Passivhaus windows. 5. Thermatech windows, fiberglass-frame, triple-pane, argon-filled, low-e, U = 0.17. 6. Serious Windows, fiberglass-frame, triple films between two glass panes. U = 0.09 – 0.13, VT = 0.30 – 0.39, SHGC = 0.20 – 0.26 http://www.efficientwindows.org/factsheets/vermont.pdf 7. Therma-Tru fiberglass or steel doors, polyurethane core, R-10. 8. 1 atmosphere = 101,325 Pascals = 406.8 inches of water = 10,333 mm of water; thus 50 Pa = 5.1 mm of water = 0.2 inch of water.
Willem,The other dividend from efficiency is reducing the scale of the energy supply changes that will be necessary.