Zark's

Whispers of Peak Oil (Again)

The EIA's latest Short Term Energy Outlook - "China's apparent liquid fuels consumption in December increased by 0.9 million barrels per day (bbl/d), or 12 percent, above year-earlier levels, as China's economic stimulus package continued to help push up both oil usage and economic growth."  Remember, we are only exiting (or still in) the great recession. 

The chart below is complex - the dark blue line graph at the top shows total consumption.  Note that world petroleum consumption is about to exceed the consumption levels of 2007-2008, when oil soared above $120 a barrel.  The oil drums show the growth of U.S., China, and other consumption from the previous year.

 

Saudi Arabia Says Peak Demand for Oil is an 'Alarm' tells that the oil-rich kingdom is concerned about peak oil.  In order to boost production, it will begin injection carbon dioxide into the world's largest oilfield within two years.  The nation believes world oil production will peak at 100 to 105 million barrels of oil.  Crude oil for March delivery is trading at $74 a barrel.

Virgin's Richard Branson Takes on Peak Oil predicts 2015 as the time when all the pumps in the world will never pump as much again.

Mmm.  I think peak oil will occur prior to 2015 because there is no incentive for oil producers to maximize production.  It is in their economic and strategic interest to limit production and maximize prices.  The 2008 oil shock prices educated the producers -there are no scalable alternatives to petroleum energy.

The Nuclear Industry is Changing

People no longer think of Homer Simpson when nuclear power is mentioned. Instead, Blue Ribbon Commission on America's Nuclear Future to Hold First Meeting signals that a nuclear renaissance is beginning.  In the 1967 film, The Graduate, Mr. Maguire has one word, "Plastics".  Today it would be "Nuclear".

Ironically some of the industry believers who weathered the chill of public opinion and interest for over two decades, may not benefit from the renaissance.  Areva's High-End Bet on Nuclear Power explains that the French company made strategic acquisitions during the downturn for a moment like this.  But Areva is experiencing headwinds from: a) Korea is producing inexpensive nuclear power solutions, b) China and India want to develop their own nuclear industry, and c) the Evolutionary Pressurized Reactor (EPR) is a black hole for profits.

The prototype EPR being built in Finland is three years behind schedule, $3B overrun, and a fixed price contract.  This new design offers some flexibility in fueling, but its primary emphasis is protection from an attack.  The pressure dome is designed to withstand a direct hit from a commercial airline.

UAE Deal, Outlook Boost South Korea Nuclear Power Stocks tells that the Korea Electric Power Corporation consortium outbid French, German, and U.S. nuclear suppliers in a $40B project to construct four reactors.  South Korea executives boasted they would win another five to six projects in the U.S. and China during 2010.  Nuclear Power in Korea explains bigger ambitions - by 2030, South Korea plans on exporting 80 nuclear power plants a year.

China National Nuclear Mulls IPO to Finance Expansion explains China wants a piece of the 200GW of nuclear power projects on the books.  Human resources critical to Indian nuclear plans tells that India plans to increase nuclear power production five-fold by 2020.  It isn't just human resources that are going to be in short supply - expect a shortage of uranium.

Curiously, Canada has some of the world's largest and richest uranium deposits, but Kazkhstan will produce more uranium this year.  Canada uranium move could draw big players explains that a limitation on foreign mine ownership has discouraged investment in Canadian uranium mines.  Echoing a recent policy move by Australia, which also had a foreign ownership limitation, Canada is proposing reducing ownership rules.  Australia has the world's largest uranium reserves, but not as rich deposits - some of Canada's are 20 percent.

Generating Petroleum From Gas

Wiki explains gas-to-liquids (GTL) is a refinery process that converts shorter gas molecules into the longer-chained hydrocarbons of gasoline and diesel fuel.  There are several processes to produce his synthetic petroleum such as Fischer-Tropsch and the Mobil process.

Pearl GTL describes the world's largest GTL plant, using the Shell Middle Distillate Synthesis (SMDS) process.  It will produce up to 140,000 barrels of liquid transportation fuel a day, in addition to 120,000 barrels of natural gas liquids and ethane.  The huge plant in Qatar began construction in June 2006 and will being deliveries at the end of this year.

Shell Aims for ‘New Nigeria’ as Qatari Plant Starts explains the plant cost three times its original estimate, all the way to $19B.  It is very energy intensive and expensive to convert gas into petroleum, but the current and projected reserves of natural gas, make this a capitalist's dream, and an environmentalist's nightmare.  Shell should make $6B a year from this facility.  

Chevron is building a smaller facility in Nigeria that will convert 320 million cubic feet of natural gas into 34,000 barrels of liquids a day, primarily diesel fuel. 

The Department of Energy's website describes the benefits of GTL.  The primary benefit is that maintains the world's transportation infrastructure which is heavily dependent upon liquid petroleum fuels.  (A secondary benefit is that the liquid transportation fuels are 'cleaner' and do not have nitrogen oxide and sulfur in their emissions.)  Considered an 'alternative' fuel by the U.S., it also has the benefit that the U.S. has large natural gas reserves, making GTL an important strategic energy diversification.

Mmm.  The World Resources Institute explains that 45 percent of the input natural gas energy content is used to perform the chemistry of GTL.  The complete lifecycle of GTL-created transportation fuel results in 25 percent greater greenhouse gas emissions than conventional petroleum.

Right-Sizing Nuclear Reactors for Developing Countries

Western countries are procuring nuclear reactors in the bulk size of 1200 MW.  However, ORNL part of project to help power developing nations explains that size is not appropriate for developing countries.  Usually their national power grid is not sufficiently large or mature enough for a 1200 MW nuclear power generator.  Equally important is that nuclear reactors around 250 MW can be operational in half the time of the larger plants.  70 percent of the global growth in energy requirements will come from developing nations, hence, the need to quickly provide the proper reactor size for these nations.

But there is a problem - economy of scale.  Today's commercial offerings are only economically viable around 700 MW.  Financing, talent, risk, and the existing architectures, limit the product available to developing nations.  The International Atomic Energy Association has published a booklet, Considerations to Launch a Nuclear Programme.

Their recommendation is no single facility should provide more than 10 percent of the grid's capacity.  A typical staffing for a facility is between 200-1000 people.  Obviously the required expertise spans almost all of engineering disciplines, including chemistry.  History shows it takes 10-15 years from initial policy decision to an operational plant.

Sandia team developing right-sized reactor explains the new facilities will be approximately half the size of a large office building.  Instead of the traditional light-water design, the smaller reactor would be based upon a small uranium core submerged in a tank of liquid sodium.  With adequate demand, the plants could cost as little as $250M.  They are intended to produce their own fuel and thus designed for a much longer lifetime.  The goal is electricity at 5 cents per kW-hr. 

The Technology of Bloom Energy

Bloom Energy lifted the curtain on its products today by opening its website.  As a backgrounder, the company was founded by former university professor who had been contracted by NASA to produce hydrogen and oxygen from sunlight and water that the space agency hope to discover in abundance on Mars.  KR Sridhar discovered the product was reversible - not only could it produce oxygen and hydrogen, but the fuel cell could be reversed to produce energy.

Deciding this epiphany could be a commercial success, Sridhar has spent the last nine years perfecting the technology with venture capital funding. 

A short video explains that the electrolyte of their fuel cell is a ceramic composed of 'beach' sand.  The cathode and anode are essentially inked upon the opposite surfaces of the ceramic.  High temperature - almost 1500 degrees F hydrocarbon fuel such as natural gas is mixed with steam at the anode.  Air, or oxygen, enters through the cathode, and electrons are pulled away from the oxygen in the ceramic or electrolyte, which are collected on the anode.  This electrochemical reaction is what generates electricity.  

Some of the oxygen crosses the electrolyte to combine with carbon from the natural gas or other hydrocarbon, producing carbon dioxide.  Some of the oxygen combines with the hydrogen, producing water.  The heat released from the chemical bonding is sufficient to heat the natural gas, and also change the water into steam, producing a continuing reaction as long as there is fuel and oxygen.

Bloom Energy explains this process is much more efficient than a combustion engine. Their data sheet tells that it only produces 773 lbs/MW-hr of CO2 on natural gas. It produces 0.661 MMBtu/hr of natural gas.

Their initial product, the energy server is about the size of parking space and is sufficient to power a 30,000 square foot office building or about 100 residences.  Because the process is reversible, it can operate as a storage battery, taking power from the grid, and producing fuel for future consumption.  Although it produces carbon dioxide, the gas is very easily collected for carbon sequestration because CO2 is the only byproduct.  

Mmm.  While not nirvana because of its CO2, it does play into one of the strengths of the U.S. energy resources - natural gas.  Convenient carbon sequestration is another feature.  Perhaps the hype about Bloom Energy is deserved.

Is Bloom Energy for Real?

The Bloom Box: An Energy Breakthrough? explains several California corporations have been testing a mysterious fuel cell produced by Bloom Energy.  CBS quotes the Ebay CEO, "The five boxes are able to produce five times as much electricity as the 3,248 solar panels that E-bay installed on its campus roofs."  Before pulling out your credit card - these boxes cost $700K.

Bloom Energy Shifts Power via Fuel Cells provides additional information.  The genesis of the device was NASA.  The founder, K.R. Sridhar was asked by NASA to develop a hydrogen and oxygen generator powered by sunlight and water the space agency hoped to discover on Mars.  Along the way, he invented the energy equivalent of a heat pump - it can produce energy in one direction, but oxygen and hydrogen when operated in reverse.

The Business Week article explains Bloom's fuel cell is radically different than previous generations.  Instead of using hydrogen, this uses oxygen.  Instead of platinum or other precious metals, it uses a ceramic that can be mass-produced.  The chemistry is a hydrocarbon fuel at high temperature will pull oxygen ions through the ceramic, producing electricity.  So, this fuel cell really does use fuel, although it is said to be 50% more efficient than other generation devices today.

Is K.R. Sridhar’s 'magic box' ready for prime time? adds that Bloom has raised $400M in venture capital.  A bread-sized module is capable of generating 1 KW of electricity.  The Department of Energy contracted the University of Tennessee to test a Bloom box in 2006, with the conclusion that it was practical for home residences.  SInce that time, K.R. Sridhar has been busy developing the manufacturing technology necessary to make it economically viable.  His goal is to produce units priced for homeowners in ten years.

The Fortune article also explains other fuel cell manufacturers have a similar idea - stepping away from the hydrogen fuel cell originally developed by NASA for the Gemini spacecraft.  FuelCell Energy is another innovator.  Wiki explains direct methanol fuel cell technology has been speculated to almost be ready for laptop computers and other consumer devices.

Mmm.  This is not the zero carbon dioxide energy source that NASA developed almost 45 years ago.  Perhaps it is more practical.  For certain, it is generating considerable hype.  You can watch the countdown timer on Bloom Energy's site at which time they go public with their technology.

Yeah, I know, I keep thinking about Berkeley Breathed's Bloom County when I hear the name, Bloom Energy.  SIgh - I'm just wired that way.

Traveling Wave Reactor

The buzz of the day is, Bill Gates and the 'nuclear Renaissance'.  The last part sounds right, because the Three Mile Island accident did usher in the dark ages for nuclear power.  Mmm.  What are we calling this new decade?  The last one turned out to be the 'noughties', so is this the dekies?  I hope the tech phrase for 2010 will be the traveling wave reactor instead of the iPad. 

The University of California - Berkeley Department of Nuclear Engineering has a video and PowerPoint presentation on the traveling wave reactor.  The speaker is John Gilleland, of TerraPower, a venture company startup.  I watched the video, and was surprised at the emphasis on modeling.  A team of over 60 engineers and scientists have been generating a model of the traveling wave reaction.  I could not help but recall that Robert Oppenheimer achieved the first nuclear reaction without 1024 Xeon processors.  I think they used slide rules, but I digress. 

The major portion of the talk addresses how the traveling wave reactor reuses existing nuclear waste.  It is able to create additional fuel and energy by fission, essentially the chain reaction that has long been the concept of breeder reactors.  The reaction is U238 to plutonium and it proceeds in a wave-like, or incremental fashion through the fuel.  The twist in the concept is that reactor creates new fissionable fuel slightly spatially forward of the fuel in the cylinder that it is currently consuming.  Imagine a candle burning backwards, creating more wax as it burns.  The traveling wave advances less than 1 cm a month.  Although uranium is possible as a fissionable material, thorium is better.

The PowerPoint presentation shows a traveling wave reactor design with a core life of 100 years without reloading or reprocessing.  The reactor itself can be a traditional pressurized sodium fast breeder, or it could be a sodium-cooled pool-type reactor.  Recall sodium is preferred as a coolant because it saves the precious neutrons necessary for breeding new fuel.

Bill Gates is one of the primary investors in TerraPower, hence the title of the CNN article.  Mmm.  It looks difficult, but perhaps they can be successful.

Are Biofuels From Algae About to Bloom?

Algae to solve the Pentagon's jet fuel problem tells that the Defense Advanced Research Projects Agency (DARPA) believes comparable-cost biofuel from algae is only months away.  The objective is to produce aviation-quality jet fuel for $3 a gallon from pond scum.  The goal is much more ambitious - $1 a gallon fuel from algae.

Biofuels for the U.S. Military fact sheet tells that oil rich algal crops have been available for years, but the missing technology has been mass production processes.  The crops can be harvested from either tank-like bioreactors or large ponds.  The former produces higher-yielding algae, but is less scalable to mass production.  The Pentagon is interested in biofuels because it purchases 126 million barrels of oil per year.  At $73 a barrel, that costs $9.2B. 

The Guardian article explains that biofuels produced by algae are carbon dioxide neutral.  Photosynthesis converts CO2 into a hydrocarbon that is later oxidized in a jet or combustion engine, releasing that same CO2 back into the atmosphere.  General Atomics, SAIC to explore algae fuel for less explains that algae might be able to produce 5,000 gallons of biofuel per acre per year.  They plan to build a 30 to 50 acre demonstration facility.

Mmm.  I am still not convinced that even 5,000 gallons of fuel per acre per year is that scalable.

China's Energy Plans

Although the western world's demand for petroleum has substantially decreased in this great recession, China's need for energy is heating up.  The graphic below explains the different forms of energy consumed in China.

 

Credit: U.S. Energy Information Administration

The New York Times writes, Demand for Oil Set to Rise Anew, explaining that Chinese oil demand is rising quickly.  During the great recession, global oil demand decreased for two consecutive years, leaving OPEC with a six million barrel a day reserve capacity.  Analysts believe the western world peaked in early 2008 for oil demand, but the developing world is far from peaking.

That explains why China Invests Heavily in Energy-Rich States.  The Dawn Business Guide tells that China's oil imports were up 14 percent in 2009 from the previous year.  Last month, its oil imports were up an astonishing 33 percent higher than in 2009.  Their three largest suppliers were Saudi Arabia, Angola, and Iran. 

Iran is especially important to China, for they would like to construct a pipeline from Iran through Pakistan, to China.  That would keep their deliveries safe from the navies of the western world.  Of course to obtain that, they cannot offend Iran.  Any doubt about why China refuses United Nations sanctions for Iran?

The race for power: U.S., China compete for energy cautions that China is a far more formidable adversary than the Soviet Union during the cold war.  The Soviet Union always lagged in technology, but not this rising superpower.  Columnist Joel Connelly warns that China is developing a lead in alternative energy sources such as windmills.

Sure Bet for Alternative Energy Vehicles

The United States has a Qualified Plug-In Electric Drive Motor Vehicle Tax Credit for a minimum of $2,500 and maximum credit of $7,500.  There are a few qualifications, basically to keep someone from writing off a golf cart, and is in effect from 31 Dec 2009 through 31 Dec 2011.

For those that prefer hydrogen, Fuel Cell Motor Vehicle Tax Credit explains a tax credit of up to $4,000 is available for the purchase of light-duty fuel cell vehicles.  The tax credit expires on 31 Dec 2014.

I have another proposal.  Remember the National Maximum Speed Law?  The Emergency Highway Energy Conservation Act prohibited speeds greater than 55 mph in the interest of petroleum conservation.  It was changed in 1987 back to 65 mph.  My proposal is to return the national speed limit to 55 mph, but alternatively powered vehicles could speed to 65 mph.  What do you think?