2006 Boston ASPO: Renewable Energy Sources

MY PREVIOUS ARTICLE on the 2006 ASPO-USA meeting in Boston, published Oct. 30, 2006, in Whiskey & Gunpowder, covered global warming. In this article, I will pick up on that issue and discuss what a number of people at the ASPO meeting said on the subject of renewable energy sources.

The Once and Future Planet Earth

In the past century or so, the industrial activities of mankind have added immense amounts of carbon dioxide (CO2) to the Earth’s atmosphere through the burning of carbon-based fossil fuels such as coal, oil, and natural gas, as well as through burning limestone to make cement. The pace of adding CO2 to the atmosphere is increasing due to worldwide industrial and other human activities.

Let me explain this in just a bit more detail. It required tens of millions of years, if not hundreds of millions of years, for the Earth’s natural, dynamic processes to remove almost incalculable quantities of CO2 from the atmosphere and sequester it underground in coal beds, other fossil fuels (oil, gas, tar sand, oil shale), and rocks like limestone (which is calcium carbonate). By digging up and releasing this buried carbon and CO2 at the present rapid pace, mankind is undoing in perhaps two centuries what Mother Nature required literally geologic ages to accomplish.

So in the course of two centuries, the one just past and the one upon which we are all about to embark, mankind may well force the Earth’s atmosphere to regress by about 30 million years from a post-Pleistocene (or “Holocene”) state of about 280 parts per million (ppm) of CO2, to an Eocene state of nearly 1,000 ppm CO2. What will happen? Nobody knows, and that’s the problem. Will CO2 buildup lead to global warming and severe climate changes? If we wait to find out, we might learn to our eventual sorrow that mankind has triggered atmospheric alterations that are beyond the ability of anyone or any technology to control. Whoops.

Controlling Carbon Emissions

What is the solution? Actually, there are many possible ways to address the problem, and people and nations across the globe ought to be trying most of them, if not all of them. Among the best policies is to control, and dramatically reduce, emissions of carbon into the atmosphere, particularly CO2 generated by burning fossil fuel. Reducing the carbon budget of energy and related industrial production is a critical first step.

The three major fossil fuels used worldwide are coal, oil, and natural gas. Each substance is produced by its own major industrial sector, and each tends toward certain historically evolved uses. At the risk of oversimplifying (and this concept is not simple by any means), most coal is used to generate electricity and to heat and power certain basic industries such as the coke and steel business. Most oil is used in the transportation sector as motor or engine fuel (including powering electrical generators in many locales), although much oil also goes into lubricants and petrochemicals, and the heavy fractions such as asphalt are used for road construction and the like. Most natural gas is used for space heating, with significant amounts also used for petrochemicals (including agricultural chemicals that enhance the production of food and fiber). And a not insignificant amount of natural gas is used for electricity generation. OK, for all of the purists out there, I know that it is more complicated than this. But this is a broad outline.

So controlling carbon and CO2 emissions requires, at root, finding some other way to generate electricity, to power vehicles, and to heat spaces. Fortunately for the future of mankind, there is a plethora of well-developed technologies in existence just waiting for mankind to start using them on a vast scale. The big problem is getting past the inertia of previous ways of doing things. Following the script of the ASPO-USA conference, I will discuss solar and solar photovoltaic electricity production, as well as wind power.


According to solar energy authority Steve Strong, solar power has the immediate ability to replace immense amounts of fossil fuel that is now being burned for electricity, heat, and transportation. Strong has been in the solar business for about 30 years, and has a very long list of accomplishments to back up his claims. “If something exists, it cannot be technically impossible to build it” he stated several times, usually as he flashed a slide on the screen of some solar-powered structure or another, often as not one that he or his company built.

According to Strong, if only the roof area of every shopping mall in the U.S. were used to gather photovoltaic electric power, it would be possible to provide electricity to every home in the country. As this implies, Strong’s focus is on harvesting the sunlight that falls on otherwise underutilized real estate. He does not advocate constructing massive, dedicated, stand-alone photovoltaic collection grids, particularly if such grids will cover otherwise arable land. Instead, his idea is to place solar collection technology atop existing foundations and structures, such as on rooftops and walls that have an exposure to sunlight.

Strong showed numerous examples of innovative solar collectors, both photovoltaic and solar-thermal, on home roofs and walls, on office buildings, and on industrial structures. These are coupled with highly adapted, environmentally responsive architectural design. Even the tops of the “sound walls” that line many highways can be used to collect sunlight. Strong showed parking lots and garages that currently support photovoltaic collection systems, and in the process keep the direct sunlight from fading the paint on peoples’ nice new SUVs. In Germany, the crash barriers along some stretches of the Autobahn support solar photovoltaic collector grids, as do many of the fences that line the German national railroad rights of way. Wherever there is sunlight falling on some structure or another, Strong advocates designing a system and capturing the energy.

By day, of course, solar photovoltaic power can power the house or office building or industrial structure beneath, and any electricity surplus feeds into the larger-scale power grid. But it is also possible to store this sunlight-generated electricity in batteries, for use at night or during periods of overcast weather. Strong showed many examples of structures that require no electrical power from the power grid (some are not even hooked up to the grid), and other examples of structures that are in fact “net-positive” contributors to the grid over given periods of time.

In recent years, as production of photovoltaic cells has increased, the costs have come down to where solar photovoltaic technology is cost competitive with coal-generated electricity. (In the event that “carbon taxes” become commonplace, photovoltaic systems will be among the relatively cheapest sources of electricity.) Yes, a photovoltaic system requires more upfront cost, but it should last for 25 years or more under normal service demands. So after a payback period of between four-six years, the subsequent electricity is “free” to the owner for the next 20 years or so, if it is not “sold” back into the grid at a profit to the owner.

Thus are both the technology and the market-based economics in place to support a growing switch away from the traditional, coal-fired (or oil- or gas-fired) electric generation paradigm to a solar photovoltaic paradigm. This would mark the beginning of the end, over the long term, of using large amounts of fossil fuel to generate electricity, with the reduction of the accompanying carbon load that is otherwise being added to the atmosphere. If you use the electricity to charge the batteries in an electric vehicle, this also reduces demand for liquid fuels. This will be the subject of another article.

But the status quo is the status quo because it works for somebody. So there is still quite a bit of legislative, regulatory, and market resistance to adopting an entirely different approach to generating electricity and heating spaces with solar systems. People know what they are used to using, and the coal-fired electric plant is simply part of the modern mind-set. So the future will be one of education and growing awareness of solar options, and of developing a level of public acceptance of the utility and safety of solar energy generation. At the same time, the installed base of solar photovoltaic systems is so low that even a relatively modest level of growth and market penetration will represent, for the foreseeable future, a significant business opportunity for those who are part of the industry.

Wind Power

Many of the speakers at the ASPO-USA conference made passing reference to wind power in their presentations, almost always meaning generating electricity via windmills. But only one speaker focused on a particular project for wind generation of electricity. That was Jim Gordon, whose EMI company is one of the most successful privately held independent power companies in the U.S.

Gordon is developing the Cape Wind project, off the coast of Martha’s Vineyard, Mass., just over the horizon as seen from shore. Upon shallow shoals about 12 miles offshore, Gordon is proposing to construct a set of large windmills to capture the very significant wind energy of the region. The site is among the best on the East Coast for potential wind generation of electricity. Similar offshore wind projects have been constructed in numerous locales in Europe and Asia.

If Gordon’s project is ever constructed, the shoals will still be accessible to boat traffic. In fact, the bases of the windmills will probably become excellent fishing spots, because the concrete and steel foundations act like reef structures, where fish come to feed. Offshore wind farms actually have become tourist magnets in Europe. And Gordon’s projection is that the Cape Wind project could supply as much as 70% of the electricity required in the Cape Cod region, thus displacing electric production by plants currently burning fossil fuel. So far, so good.

But every party needs a pooper, so a group of wealthy local residents (including you-know-who, D-Mass.) has fought the project with tooth and nail. This is a classic case of people saying, in essence, “not in my backyard” (NIMBY). Gordon estimates that the well-funded opposition group has raised and spent about $12 million to oppose the development of the offshore wind resource, despite the fact that most of the windmills would not even be visible to landlubbers. In addition, the opposition group has more employees that Gordon’s company. The latest NIMBY gimmick is to hold up the Cape Wind project for a review by the Department of Defense. (Kind of makes you hope that some DOD analyst-bubba will say that building the wind energy system would permit the U.S. Army to disengage from Iraq all that much faster.) Gordon’s rhetorical question is, “Where do these people think that electricity comes from when they flip the switch?” In my experience, the opponents really don’t care where it comes from as long as it is not from their backyard. That is why they are NIMBYs. Fish gotta swim. Birds gotta fly.

A Bit of Excitement

Jim Gordon’s presentation on the Cape Wind project was interrupted by a group of protesters who must have crashed the rope line of the ASPO-USA meeting. As Gordon was giving his talk, a serious-looking young fellow walked through the room, handing out leaflets that said some rather unflattering things about Gordon and his company (see below). Once the leaflets had been handed out, a group of rather loud, urban youths began to holler and chant from the second deck balcony of the lecture hall. “The people, united, shall never be defeated,” or something really original like that. Well, no, that’s not exactly what they said, but close. I mean, these protesters could not even chant their protests in unison. They were just shouting stuff and making a racket. I have seen protests, and as protesters go, these were a bunch of amateurs, all of them.

And there he was, Jim Gordon, standing at the podium with this stiff-upper-lip look to his face, trying to talk and being drowned out by the screamers. Almost every head in the room was twisted around, looking up toward the noisy intruders. A few people in the audience shouted at the protesters to pipe down and leave. The Boston University gendarmerie walked over to the protesters and sternly requested that they disperse and exit the premises. After a few more insipid chants, the last of the protesters were escorted away. It was very exciting.

What was the protest all about? According to Gordon (whom I do not know, and I am merely restating his explanation), EMI is developing, in addition to its windmills off the Cape, a state-of-the-art, diesel-powered electric generation facility in Chelsea, Mass. This facility is intended for use during periods of peak electric demand, such as in the depths of winter or on the hottest days of summer, when the air conditioners are sucking down every electron they can find. The estimate is that the Chelsea facility will be fired up about 400 hours per year, an average of 8 hours per week or so.

Currently, the regional power authority in Massachusetts has to keep a series of older, relatively inefficient power plants spinning at “idle” while awaiting the peak moments of demand. These plants take days to fire up, so they can never really be shut down. Thus, these plants are burning fuel, costing money, releasing pollution, and just keeping warm in anticipation of the peak points of demand. By incorporating the proposed Chelsea plant into the grid, these other, older plants will close down and stop polluting. (I.e., less net CO2 will go into the atmosphere.) When necessary, the Chelsea diesel facility will be able to switch on at short notice and be running at full power within 20-30 minutes, feeding power into the grid. The proposed plant will burn low-sulfur, No. 6 fuel oil and emit about as much pollution as a few extra city buses running up and down the street.

The Chelsea location is sandwiched between a Gulf Oil terminal, a set of railroad tracks, and a working paint factory. The Chelsea site is a designated “brown field,” due to past industrial activity, so is not suitable for most other forms of development. Down the street, there is a public middle school, which creates the hook for the Chelsea NIMBYs to ventilate their collective spleen. (“EMI is poisoning our children!” Yes, of course. You dudes really expect me to believe that a bunch of Massachusetts regulators would permit some new-construction power plant to “poison” your children? Gimme a break.)

Thus, just as the rich folk of Martha’s Vineyard do not want their peace and quiet interrupted by a bunch of windmills 12 miles offshore, the Chelsea crowd does not want a peak-demand electric generation plant in their fair community, running for maybe 8 hours per week on average. I guess that they would prefer that their children play soccer on the brown field site. So these latter citizens apparently go around defaming Jim Gordon and making trouble at ASPO conventions.

The Ironic Thing

The ironic thing about it is that this is the kind of trouble that we see from NIMBYs when people are actually trying to do things that will add both capacity and efficiency to the available energy supply. At the risk of sounding preachy, I guess these opponents of offshore windmills and state-of-the-art peak generation plants have never contemplated how low they will have to stoop and grovel for energy supply when we, as a society, if not as a world, jump down with both feet onto the backside of the Peak Oil curve. We are not quite there just yet, so enjoy the Indian Summer while it lasts.

And it is too bad that the protesters crashed one of the most intelligent discussions of future energy supply occurring anywhere on the planet last week but were too wrapped up in their own sanctimonious morality to know any better. They were too busy yelling and shouting smack to listen to anything that anybody else was saying. But like the late Frank Zappa once said, “The two most abundant elements in the universe are hydrogen and stupidity.”

Then again, nothing bad like Peak Oil will ever happen, right? It is just some kind of Internet conspiracy, right? We are Americans, and we deserve our creature comforts, right? And if those no-good oil companies would just uncap some of those wells down in Texas, we would have cheap gasoline, right? And aside from that, technology and the marketplace will save us, right? And our way of life is nonnegotiable, right?

Yes, kids, right. Until we meet again…
Byron W. King
November 1, 2006

The Daily Reckoning