Learning from comments

Great example of the value of rapid collective dialogue in a comments section, started by Felix Salmon's post on vehicle-to-grid:

This is a fantastic idea, and it’s a no-brainer, really, that all electric cars should have the ability to power the grid, rather than just drawing power from it. The number and size of power plants is a function of peak electricity demand; if electric-car owners collectively can help meet peak demand, then that means we need fewer power plants. And, the revenue from selling that electricity would help offset the extra cost of buying an electric car in the first place.

The comments point out two things. First, constant charging and discharging of a car battery would significantly decrease its useful life. Second (by yours truly), in most states, regulations prevent utilities from charging residential customers different prices for electricity at different times of day, so the financial benefits or charging off-peak wouldn’t be be captured by users.

Then Dan Ferber, the author of the original article that was the subject of Felix's original post, clarifies that the vehicle-grid interaction is mainly frequency regulation, not bulk power - very helpful!

The problem with comments, though, is that people lose interest or stop checking. So my final question - "if the main vehicle-to-grid interaction is frequency regulation, rather than bulk power transfer, then it’s unlikely to lead to the type of load-shifting and peak-shaving that Felix suggests, correct?" - has, as of now, gone unanswered.

NYTimes weekend round-up

I don't often read the full NYTimes, but I happened to this Sunday, and since I haven't posted in over a month, and it's almost the end of June, and my blogging progress seems eerily paused at 666 posts and 7,777 hits, I figured I'd throw out a few links with brief commentary:

• Insiders Sound Alarm Amid Natural Gas Rush: an interesting article seriously examining the claim that shale gas isn't profitable and is a big bubble. There's certainly some truth to that idea that many shale gas investments aren't making very good returns at $4.30/mmbtu gas; that said, the article would have really benefitted from some actual numbers (even ranges) comparing production costs to current and potential future gas prices. Without those, it's a qualitative discussion of a problem with a largely knowable quantitative answer.
  
  The one thing I did find intriguing (and again, would love to see real numbers on) is the steep decline in productivity of shale gas wells over the first few years. I would assume that since the technology is not new, this performance has been built into business cases for individual wells, but you never know...
  
  There's also a fundamental difference between a gas "bubble" (if there is one) and the typical bubble (e.g. internet) in media parlance, which is that North American gas prices have already crashed. This article would be analogous to calling the internet a bubble in 2003, not 1999, and that limits the usefulness of the analogy.


• Chevy Volt and Future of Electric Cars: A feel-good article from Joe Nocera after he test-drives a Chevy Volt; made me want to try one too. The “it’s like playing a video game that is constantly giving you back your score” comment particularly resonated with me. The lack of that type of feedback is a common motif across consumer energy usage (think about the current opacity of household electric power) and a thematic area for substantial change and impact.


• Power Drain From Cable Boxes: Striking; I had no idea that "some typical home entertainment configurations eating more power than a new refrigerator and even some central air-conditioning systems." Once again, greater feedback in home energy consumption could help move the needle on consumer behavior here.


• Ethanol Production Wastes Corn: Steve Rattner is right, but has nothing new to say

6/30 addendum: A colleague told me that Chevy loses $18,000 per Volt it sells. So we are still a ways away from the economic tipping point.

Whoa

So apparently crude fell ~10% today. I've heard poor economic data, OPEC raising output limits and even "sudden realization of the impact of CNG and EVs" (not joking), but that is still a whopper of a one-day move.

Decoupling of oil price and renewables

Geoff Styles has a post titled "Will $100 oil help renewables?", in which he argues the counterintuitive answer that, "no, not that much." Worth reading in full, but since I like to practice synthesis:

Today, gas predominantly sets the marginal price of power generation, and gas prices have decoupled from oil due to abundant shale gas supply. Transport is minimally electrified, so renewable power cannot yet substitute oil in that sphere. And prices for commodity input often rise along with oil, increasing renewable costs (a.k.a. the "receding horizon").

The first, I totally agree with. The second is broadly speaking true, although paths like CNG, gas-to-liquids and coal-to-liquids become economically viable with high oil prices and could re-strengthen the link between transport and electric power (as could increasing EV penetration over the longer term). The third is directionally true, but not absolute (and not entirely causal). Many second-gen biofuels use waste inputs which are not otherwise traded, so higher oil prices are an unmitigated boon for them. The prices of silicon and corn are often correlated with crude, but probably more because of overall economic growth than because crude drives their price. It will be interesting to see if corn starts to price off of its value as ethanol, as it did back in 2008. Not good for food security, if it does.

Moon shots and electric vehicles

Thomas Friedman on "moon shots":

China is doing moon shots. Yes, that’s plural. When I say “moon shots” I mean big, multibillion-dollar, 25-year-horizon, game-changing investments. China has at least four going now: one is building a network of ultramodern airports; another is building a web of high-speed trains connecting major cities; a third is in bioscience…; and, finally, Beijing just announced that it was providing $15 billion in seed money for the country’s leading auto and battery companies to create an electric car industry...

Not to worry. America today also has its own multibillion-dollar, 25-year-horizon, game-changing moon shot: fixing Afghanistan.

I'm not the biggest Friedman fan - he too often glances over important nuances - but he has a gift for stating core ideas in powerful ways, like the above. He devolves into simplicity here too:

The country that replaces gasoline-powered vehicles with electric-powered vehicles — in an age of steadily rising oil prices and steadily falling battery prices — will have a huge cost advantage and independence from imported oil.

If the economics were such a home run, it wouldn't take so much publicly funded start-up R&D to get this going - in fact, while I agree the prices of oil and batteries are moving in different directions, they're starting from such divergent places that they may well not cross any time soon. Batteries currently cost ~3x what they'd need to to be competitive, and Exxon - not the world's likeliest electric car revolutionary - has the world's best technology for the thin-film plastic separators that are the main components.

Especially given China's latest rare earths antics, we should also be worried about trading strategic energy dependency on one commodity (oil) for dependency on others.

That said, I believe Friedman's overall point on moon shots is spot on. My father (a scientist) and I disagree over the extent to which publicly funded basic science research enabled the technological boom of recent decades (think computers, the Internet, cell phones, biotechnology, etc.), but it certainly played some part, and skimping on this type of investment is a short-term decision with unpleasant long-term implications.

Hat tip Chris Blattman.

How long to fill up an EV?

Geoff Styles on a potential Achilles heel of the electric vehicle (emphasis is mine):

To understand why recharging EVs is such a tough problem, let's take a look at your last visit to the gas pump in terms that would never occur to most people. Gas pumps in the US are limited by EPA regulations to deliver a maximum of 10 gallons per minute. Half that is probably more typical. But even at 5 gallons per minute, the gas pump is "recharging" your car at the power equivalent of 10 megawatts (MW), effectively delivering the entire daily power consumption of the average US household every 12 seconds. Even if you discount that figure by the lower conversion efficiency of an internal combustion engine, it's still the equivalent of a couple of megawatts. Matching that for an EV would require either stupendous voltages or currents well above most designers' comfort level. For example, a car recharger drawing 100 amps would have to operate at 25,000 Volts--more than ten time the voltage of the electric chair--to deliver a comparable charge in the same interval. At the 240 V of your home's appliance circuit, you'd need about 10,000 amps--similar to what a transit train draws from the "third rail." Almost inevitably, the safe recharging of EV batteries must take longer--hours longer--than refueling your gasoline vehicle, or entail clever-but-costly workarounds such as the battery-swapping scheme of Better Place and other firms.

I wouldn't rule out clever workarounds, but this is a legitimate and substantial barrier to EV adoption until one comes around.

Turning Oil Into Salt (6): Batteries are the crux

Anyone plugging PHEVs has to address the issue of vehicle cost, and the authors own up to the fact that the battery is currently the critical bottleneck. They cite Ford that a lithium ion battery for a PHEV costs $8,000-15,000 (~$1,000 kWh), a number which needs to come down to ~$300/kWh for PHEVs to be cost-competitive.

One very interesting fact I did not know before was that the most costly element of a lithium ion battery is not the lithium or rare earth metals that get so much press, but rather “hair thin sheets of plastic called separators.” It turns out Exxon has the world’s best separator technology, and the authors hope a prize can inspire others to match it. I wish they had broken out in one place the cost of a battery by its different components, since without that it’s tough to infer more.

All the same, the question of raw material availability looms. The authors cite the well-known predominance of Bolivia’s lithium reserves and China’s rare earth metals reserves and point out known reserves elsewhere in the world. They also cite recycling and extending battery life as mitigating strategies for the West. But while they squarely name this challenge and address it head-on, I come away unconvinced that an electric car revolution wouldn’t be trading strategic energy dependency on one commodity (oil) for dependency on a host of others.

Ultimately, the authors also have the right, open attitude toward technology and avoid the “picking winners” trap:

As the backdrop of all of the above activities, it is important to remain open-minded about other battery chemistries and realize that advanced battery technology is only at the beginning of its upward trajectory. While significant progress is made toward mass production of advanced LiIon batteries, it would be imprudent for the government to crown one battery chemistry “the winner,” particularly in light of its questionable track record of picking R&D winners. With all their potential, the race is not over.

Yet despite that attitude and the optimism it engenders, in the end they do not illuminate a line of sight to the day that PHEVs will be cost-competitive with normal cars. And without that, their OFS story is basically a biofuels (or other hydrocarbon-to-liquids fuels) story... and is that really that revolutionary?

Turning Oil Into Salt (2): Fuel choice via the Open Fuel Standard

The heart Turning Oil Into Salt’s thesis is the idea fuel choice via the Open Fuel Standard (OFS). This basically means turning car engines into flexible platforms that can use a wide variety of energy sources, incentivizing competition and reducing the strategic predominance of oil. One attraction is that it avoids the picking winners syndrome/game that seldom ends well.

One major pillar is flex-fuel vehicles, a la Brazil. I didn’t realize it cost only $100/car, for corrosion-resistant fuel line and a different fuel sensor, to make a car flex-fuel, and if this is true I think the argument for flex-fuel vehicles is strong (although of course consumers will be the ultimate arbiters). The authors’ other push is for flex-fuel vehicles to be certified for a wide range of alcohols (e.g. methanol, their favorite case study), which certainly makes sense if it is similarly inexpensive (is it?).

The other pillar is electric vehicles – unsurprisingly – but more specifically plug-in hybrid electric vehicles (PHEVs), to overcome the issue of limited range which plagues pure EVs. This is also not a new idea, but for me it gains new life in the context of a broader push for an Open Fuel Standard.

Flex-fuel PHEVs could get 500 mpgg (miles per gallons of gasoline, as the authors say) – note that this is not a measure of energy efficiency, but rather of lessening strategic dependence on oil. That said, it is also easy to see this resulting in higher systemic efficiency (using braking energy and charging on off-peak hours) and lower GHG emissions (if electricity generation is clean and if biofuels are environmentally friendly).

The other tiny obstacle, of course, is making flex-fuel PHEVs economical. More on this here.

Electric cars and rare earths

This is a bit hysterical.

If in fact the massive onset of electrical vehicles will lead to some sort of apocalypse, Colorado’s monster ~$42,000 tax break isn’t helping.

Plenty of lithium after all?

Nissan recently announced that the 24 kWh battery for the LEAF, its electric car, would use approximately 4 kg of lithium. Some industry observers were concerned that lithium availability would be a bottleneck for the budding electric car industry, but via Green Sheet, an expert contributor to the Gerson Lehrman Group runs an analysis based on the Nissan announcement and concludes that there may be plenty of lithium after all:

Lithium supplies from exisiting and expanded operations are therefore more than sufficient to meet potential demand for 500,000 lithium-ion battery powered vehicles in 2015 and could potentially meet demand for up to 2 million lithium-ion battery powered HEV and EV vehicles in that same period... Oversupply might be a more pressing question than lithium availability.

This is great news for companies planning to make electric cars, promoters of electric cars in general (e.g. some major cities), and probably the overall fight against climate change. It is not such good news for Evo Morales and Bolivia, who possess about half of the world's known lithium reserves and had grandiose dreams of major companies and country governments begging for minority stakes in lithium extraction operations.

If it's any consolation to them, resource wealth is often a curse and doesn't have a great track record of bringing long-term prosperity anywhere else...

Cap-and-trade, U.S. refiners and carbon leakage

Good post and comments discussion over at Energy Outlook on the effect of cap-and-trade on U.S. oil refiners, of which I'll attempt a brief synopsis:


- Geoff judges as reasonable the scenario described by the new API-funded study on Waxman-Markey, which says that U.S. refiners will suffer under the Waxman-Markey bill because they will bear more costs than foreign refineries, becoming less competitive and losing volumes to imports.

- Commenter bartman points out that this loophole could be closed by requiring import terminals to also buy permits, and that the real danger to refineries is falling domestic consumption due to higher CAFE standards, higher gas prices and electric vehicles.

- Geoff responds that yes, but importers probably wouldn't be required to have permits for upstream and refining emissions, just combustion emissions, and that the 2% permit allocation in W-M will not cover all of U.S. refiners' direct emissions.

- bartman agrees that refiners in non-carbon-pricing jurisdictions would have a slight advantage, but most U.S. refined product imports come from Canada or Europe, which have or will soon have carbon pricing. (he also opines that climate legislation won't pass this year)

- PelinoC then adds that Canada energy firms will be worse-off (e.g. oil sands have more upstream emissions) and predicts that carbon tariffs will quickly be imposed.


I don't mind that Waxman-Markey is a back-handed gasoline tax, because I think a higher U.S. gas tax is probably a good thing and there's no way one would pass through the front door. The more I think about it, though, the more I fret about the unappealing choice between protectionism on one hand and carbon leakage on the other. A global trade war would be disastrous, but examples like this in refining show increasingly plainly that most of the benefits of cap-and-trade (not to mention many industrial jobs) could leak away if the system has holes and other countries don't follow. There's been encouraging news from China and India lately, but we are still a long way from anything that looks like a globally consistent and enforceable price on GHG emissions.

Efficiency is the best transition fuel

Geoff Styles runs the back-of-the-envelope numbers and surprises himself with the conclusion:

To my surprise, it doesn't require very aggressive assumptions concerning improvements in fuel economy, reductions in vehicle miles traveled, and additional oil supplies to cover the needs of a significantly larger number of cars in the world.

The bulk of the improvement appears to come from improved mileage standards (he imagines 40 mpg in 2020) - with an additional boost from reducing vehicle miles traveled to 9,000/year (versus I'm not sure what today).

As he rightly points out, this should not lull us into complacency with regard to developing new technologies:

So while our transportation energy mix in the next couple of decades is still likely to include a much greater variety of fuels and an increasing penetration of electricity, we should not lose sight of the potential for realistically-achievable fuel economy improvements and non-efficiency conservation--driving personal cars less and relying more on mass transit and electronic trip substitution--to be the most important "transition fuel" in our arsenal, as we reduce our present reliance on oil as we tackle energy security and climate change.

I think this conclusion is spot-on, and kudos to Geoff for running the numbers and his even-handed, open-minded reaction to the results.

Quote of the Day: Our Sacred Rights (Rites?)

In modern times, one of our sacred rights (or rites?) is the ability to drive a 1-2 ton vehicle up to a fuel station, fill it up without spending a fortune or more than a few minutes of time, and then drive around at 70 miles per hour without worrying about needing more fuel for awhile.

That's JoulesBurn at The Oil Drum. He is plugging EEStor's EESU (Electrical Energy Storage Unit) for electric vehicles, which appears to be a capacitor instead of a battery and apparently confers some advantages in terms of weight/range/charging speed. I'm not a qualified judge of the science (technical specs and safety), so I'll file away the idea and believe it when I see it hit commercial scale.