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OPEC Wants Certainty

First OPEC wanted to be compensated if climate change legislation costs them revenue, and now this:

OPEC: give us certainty to invest

You only get a small preview of the following story, but I found the bit that is accessible to be pretty humorous:

OPEC’S producers need greater certainty over long-term oil demand if they are to justify upstream investments to bring new production capacity on stream, says the group’s secretary-general. In an interview with Petroleum Economist, Abdalla El-Badri reiterated Opec’s message that greater clarity about demand is necessary if the world expects Opec’s exporters to continue investing in new output capacity.

Uncertainty over demand yields a startling gap in the group’s 10-year outlook. Opec says demand for its crude in 2020 could reach 37m barrels a day (b/d) – up from 28.8m b/d now – or remain almost flat, reaching just 29m b/d.

It’s a dilemma, because the additional investment needed to meet the higher figure amounts to $250bn, says El-Badri. “We could use that money somewhere else; in our infrastructure or for the welfare of our people.

Sorry, but that’s just not the way the world works. All businesses would like some certainty about demand. If GM had some certainty about demand, they would never have had to declare bankruptcy. They could have just built the cars that would be demanded. But the best you can do is try to estimate where demand will end up, and make your decisions accordingly.

However, I will give some free advice. I don’t believe the world will be able to build out enough crude oil capacity to keep up with demand. (Even if demand remains flat, new capacity has to come online to compensate for depleting fields). I don’t believe biofuels can scale up enough to displace more than a small fraction of our oil consumption. I believe demand from China and India will continue to grow. I believe that oil production will soon peak (if it hasn’t already). And I believe that a lot of projects have already been delayed or canceled, increasing the likelihood of a return of supply/demand imbalances within a few years. If my musings are correct, upward pressure will continue to be the trend in oil prices, and countries that have export capacity will make a lot of money.

So nobody is going to give you certainty on demand (in fact, most people are likely to be appalled at the idea), but if it were me I would make the investments in capacity. Even though many countries will continue to attempt to migrate away from oil, demand for oil will remain strong for many years to come.

February 12, 2010 Posted by | crude oil, oil prices, oil production, OPEC | Comments Off on OPEC Wants Certainty

Dueling Price Predictions

I have seen a flurry of recent predictions on oil and gas prices going forward, so I thought I would share some. Most of them support the thesis I recently put forward that we are setting the stage for another run on prices over the next 3-5 years. But with predictions all over the map, it’s no wonder that people are confused.

Miss $4 gas? It’s not coming back any time soon

“For retail prices, I expect we’ll see the national average for regular grade gasoline near $2.25 gallon by the May-June period, and about $2.25 to $2.35 a gallon for the July-August period,” said Brian Milne, refined fuels editor at DTN, an Omaha, Neb.-based commodity tracker.

Brace Yourself (and Your Portfolio) for an Oil Price Shock by 2012 Or Sooner

In his press conference last week, Obama said the country can’t afford to wait to tackle its oil addiction “until the next time that gas gets to $4 a gallon.” But noted consulting firm McKinsey & Co., Saudi oil minister Ali Al-Naimi, and “dean” of oil analysts Charles Maxwell of Weeden & Co. all say that an oil price shock that hits between 2010 and 2013 now appears all-but-inevitable.

So how high does Maxwell see prices going? By the “mid-teen years,” as he put it, the price of a barrel of oil could hit $200 to $300.


Oil May Fall to $28 a Barrel, SocGen Says: Technical Analysis

March 31 (Bloomberg) — Crude oil is set to drop to $28 a barrel in New York in the second quarter, according to technical analysis by Societe Generale SA.

Prices may rally until meeting resistance at $71 a barrel and then plunge to their lowest since 2003, Societe Generale analyst Stephanie Aymes said, using charts that make use of Elliott Wave theory.

Financier sees oil shock from credit crunch

“We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away — it will be much sooner,” Simmons told Reuters in London.

“These prices now are dangerously low. The lower prices fall, the less oil will be produced and the greater the chance of an oil spike,” he said.

Venezuela’s Chavez says $80/bbl fair oil price

Energy Minister Rafael Ramirez in recent weeks said he expected oil prices to stabilize at $70 a barrel, describing that price as the minimum necessary to maintain investments in oil production.

Bernstein Says Oil Will Be $50 in 2009, $80 in 2010

March 31 (Bloomberg) — Crude oil is likely to be $50 in 2009 before falling supply causes prices to increase to $80 next year, Sanford C. Bernstein & Co. analysts said.

“The combination of reduced OPEC volumes and non-OPEC production shut-ins and declines will result in a larger than anticipated reduction in global supply,” Bernstein analysts including Ben Dell said in a report today. That “should help to tighten the oil market in late 2009 and early 2010.”

Oil price is too low to ‘support investment’

Qatar’s Deputy Premier and Energy Minister HE Abdullah bin Hamad Al-Attiyah said the global economic downturn, its impact on a drop in demand and a slide in the price of oil and gas “represent the main challenges facing the oil and gas industry.”

“The slide in oil price for a prolonged period while the cost of projects is not dropping fast enough, will (negatively) affect the volume of investments and threaten stability of the markets in the long-term,” al-Attiyah said.

“The absence of investments in the oil sector and not being optimistic about the future will create a gap between demand and supply,” he added. Al-Attiyah has said that a price above $70 was necessary to encourage investment, a view shared by several other OPEC members.

OPEC president eyes $75 oil this year

LUANDA (Reuters) – Oil prices could reach $75 per barrel in 2009 despite a the economic crisis, OPEC president Angola said on Monday, adding that compliance by the 12-member group with the agreed cuts remained at around 80 percent.

Personally, I think the Elliot Wave guy is way off the mark with his $28 prediction (and I don’t rate technical analyses very highly anyway relative to fundamental analyses). OPEC is showing a fairly high level of compliance with respect to the announced cuts. When members have visions of $100+ oil prices dancing in their heads, it is probably a bit easier to get them to comply while oil is bouncing around $50. Combine that with lots of project cancellations, and higher prices are in the cards.

I think the Bernstein analyst hit closest to the mark. OPEC is likely to overshoot with their cuts (just as they did last time) and not react until prices are much higher. By the time they do start to react, project cancellations will start to become a factor, and supply will once again be pinched. I would personally put the odds of higher prices in 3 years at 90%, with a better than 50% chance that they will be back over $100.

April 1, 2009 Posted by | gas prices, investing, oil prices, OPEC | 21 Comments

OPEC Defends $100 Oil

I had a feeling we were going to see this pretty soon in response to falling oil prices. It seems that OPEC has grown fond of the idea of oil >$100/bbl. Iran and Venezuela have both been making noise about the need to cut production to defend that price, and today OPEC announced that they would indeed be cutting production by half a million barrels a day:

Oil Rises After OPEC President Calls for End to Overproduction

Sept. 10 (Bloomberg) — Crude oil jumped in New York as OPEC President Chakib Khelil called on members to stop producing more than the group’s set quota, a move that would reduce supplies by 520,000 barrels a day.

The Organization of Petroleum Exporting Countries agreed to cut daily output to their 28.8 million-barrel limit, Khelil said in Vienna today. The group kept its output quota unchanged after adjusting for the departure of Indonesia and including new members Angola and Ecuador.

“It’s definitely a defensive measure to keep prices above $100,” said Jonathan Kornafel, a director for Asia at Hudson Capital Energy. “They don’t want to see us go back to $140 or $150 but they want us over $100. It’s a bit of a shock to the market and that’s why we’re up.”

Just another ‘above ground’ factor that is going to keep oil from falling much below $100. OPEC has the pricing power to achieve this. In fact, a big part of the reason the price got there in the first place was that OPEC cut too much for too long a couple of years ago. Not only did this tighten up supplies, but it also led to a lot of speculation that OPEC oil production had peaked.

As far as not wanting us to go back to $140, I wouldn’t go that far. I think they want to maximize their long-term revenues. If they can get $140 without causing a recession and destroying demand, then I think they would be quite happy with $100 oil. In fact, I recall when some in OPEC were saying that $100 was too high.

September 10, 2008 Posted by | oil prices, oil production, OPEC | 42 Comments

The Fault of the Government

I have long maintained that the root of our energy problems in the U.S. stems from our failure to enact a consistent, long-term energy policy. Big energy projects generally take years to complete, and when there is an extra risk that the government will change the rules halfway through the project, companies are going to take a very cautious approach. So, we end up with less energy than we might have if there was more consistency.

For the first time, it seems that the public overwhelmingly thinks so as well:

Drivers blame D.C. for high gas prices

According to a Consumer Reports Auto Pulse Survey released Thursday, 77% of consumers said the root of high gas prices lies with the government’s failure to implement an effective energy policy. That compares with 75% of drivers who blamed oil companies, 70% who said foreign oil producers were at fault and 68% who thought the Middle East conflict was a leading cause for record fuel costs.

So, 152% of those polled thought it was either the government or Big Oil behind the problem. (Must have been a case of “Vote early and often.”)

One thing that was surprising to me was the number of people who favored off-shore drilling:

As a result, 90% of those surveyed support an increase in alternative energy development, and 81% want the U.S. government to allow more drilling on and off our nation’s shores. Americans also favored conservation measures, with 83% saying they supported tax incentives for alternate transportation.

Of course I know one person who voted for Big Oil as the culprit behind oil prices. He works for the government. Chuck Schumer, notorious demagogue when the topic is oil, had this to say following the recent congressional hearings into the impact of speculation on oil prices:

Schumer downplayed the role of speculators in driving up oil prices, and he placed blame on the oil industry and the Organization of Petroleum Exporting Countries.

“I think it is interesting that the big oil companies and OPEC are blaming speculators for out-of-control prices, when they may be much more of the cause,” said Schumer.

Attaboy, Chuck. Keep looking for that boogie man. But don’t be surprised if you spot him during your morning shave.

June 27, 2008 Posted by | Chuck Schumer, energy policy, oil prices, OPEC | 30 Comments

Oil Cracked $140 Today

Peak demand or not, oil prices show no signs of subsiding:

Oil Surges Above $140 to Record as Libya Warns of Output Cut

June 26 (Bloomberg) — Crude oil jumped above $140 a barrel to a record as Libya threatened to cut output, OPEC’s president said prices may reach $170 by the summer and the dollar weakened.

Libya may curb output because of a U.S. law that allows terror victims to seize assets of foreign governments as compensation. OPEC President Chakib Khelil said oil may surge on a European interest rate rise, France 24 reported. Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday.

Crude oil for August delivery rose $5.09, or 3.8 percent, to $139.64 a barrel at 2:59 p.m. on the New York Mercantile Exchange, a record settlement price. Futures touched $140.39 today, surpassing the previous intraday record of $139.89 reached on June 16.

I think you’re seeing a clear flight from equities into commodities, said Kyle Cooper, an analyst at IAF Advisors in Houston.

Record oil prices helped send U.S. stocks tumbling. The Standard & Poor’s 500 Index plunged 38.82, or 2.9 percent, to 1,283.15 in New York. The Dow decreased 358.41, or 3 percent, to 11,453.42.

I am starting to think Matt Simmons could win his $5,000 bet that oil will average $200 in 2010. (I still think he’s likely to lose, but at one time I thought he was sure to lose).

June 27, 2008 Posted by | Libya, Matt Simmons, oil prices, OPEC | 2 Comments

Oil to $250 a Barrel?

In case you missed it, there were several stories this week – and of particular note coming from OPEC – that suggested that much higher oil prices may be on the way:

Oil Price May Go Up to $250, Warn Experts

Crude prices continue to baffle analysts and pundits. With the $100-era a well established fact in our daily life, there is now a growing chatter within the energy fraternity that $200 a barrel may not be a far fetched idea altogether. Is another global oil shock now gathering pace?

With limited additional supplies, alternative fuel still some decades away and demand far from collapsing, Deutsche Bank is pointing to a “huge risk” that oil prices would continue to rise in the near to mid-term.

“There is a huge risk that the oil price simply continues to escalate until it gets to some level (possibly $250) when demand finally collapses because ordinary people can no longer afford to burn as much energy as they are burning now,” Adam Sieminski, Deutsche Bank’s chief energy economist, wrote in a report last Friday.

This is why I am still an oil company investor. I am invested in ConocoPhillips directly, and some others via mutual funds (including Brazil’s Petrobras). I have seen various analyses that suggest the oil companies are no longer good investments because they aren’t replacing their reserves. I disagree. As long as oil prices are rising faster than reserves are depleting, they will continue to reap increasing profits (until the government steps in – which I think they will do). This will also give them the cash to get into other energy businesses that look attractive. Who knows, the future may see Shell (for example) as the leading solar power firm in the world.

OPEC is suggesting that even $200 oil won’t cause them to boost production by much. I think you can read the writing on the wall there and know that they simply don’t have the production available. While production from OPEC has been rising – and Saudi’s production is back up to just over 9.2 million bpd (per the article), OPEC just doesn’t have the spare capacity they did a few years ago.

May 2, 2008 Posted by | ConocoPhillips, investing, oil prices, OPEC, Petrobras, Shell | 19 Comments

The AP on Oil and Gas Prices

The Associated Press takes a question on oil and gas prices, and does a pretty good job explaining the factors affecting prices:

Ask AP: Your News Questions, Answered

Q: Background (my numbers maybe a little off, but you will see my point): About five years ago, oil sold for around $20 per barrel and gasoline was around $2 a gallon. Now oil is about $100 per barrel and gasoline is $3.25ish per gallon. Over the past five years, no new significant oil wells have come into production and no new refineries have come on line. So…

How can oil go up in cost by a factor of five and the cost of gasoline go up by a factor of two? We can only get so much gasoline out of a barrel of oil and our refining efficiency has not improved significantly. The math just does not make sense.

Richard Driscoll

Winnsboro, S.C.

___

A: Oil and gasoline prices often move in the same direction, but aren’t tied at the hip.

Oil prices fluctuate with production decisions from the Organization of Petroleum Exporting Countries, or when conflict in the Middle East or Nigeria threatens supplies. Increases or decreases in crude inventories, which come from imports and domestic production, also affect crude prices.

Gasoline prices are more closely tied to demand from U.S. drivers and how well refineries are doing producing gasoline. Falling production and inventories often send prices skyrocketing.

Lately, though oil prices have been at records, gas prices haven’t kept pace, and refiners’ margins have been squeezed. Refiners are making a far smaller profit now than they were in the spring, when gas prices were at records and oil was in the mid-$60s.

The refiners are limited by market forces in their ability to raise prices to try to maintain big profits. So when crude prices go way up, that doesn’t necessarily mean they can raise the prices they charge.

And to clear up those numbers a bit: About 5 years ago — in 2002 and 2003 — gas prices averaged $1.345 and $1.561 a gallon, respectively. Oil averaged $26.15 a barrel in 2002 and $30.99 in 2003.

Gasoline is now at $3.061 a gallon — up 128 percent from 2002 — and the recent record oil price of $100.09 was up 283 percent from the 2002 figure.

John Wilen

AP Energy and Transportation Writer

Now if the public and our elected leaders possessed the same understanding, we might start to get somewhere with our energy policy. As it stands, it seems that most people think prices are moved by the whims of Big Oil. There are entire organizations built around the theme that high gas prices are a result of oil companies increasing their profit margins. As I have stated previously, this has cause and effect reversed. With such a poor understanding of the industry, it is no wonder that we are subjected to nonsensical political rhetoric coming from the presidential candidates*.

* Mike Huckabee says “…we will achieve energy independence by the end of my second term. The Huckabee Administration will be remembered as the time when we finally, finally achieved energy independence.” To that I say that he is either completely deluded, ignorant about how much energy the U.S. actually uses, or is simply telling people what they want to hear. Then again, which president since Nixon didn’t make this promise? And have we grown more or less dependent during each successive administration?

January 19, 2008 Posted by | energy policy, gas prices, oil companies, oil prices, OPEC, politics | 60 Comments

Guest Essay on Energy Independence

I am still traveling for a few days, and will be back in Scotland on January 13th. One of the e-mails I received while I was traveling was a guest submission. The author wrote:

Mr. Rapier

After reading a bit of your blog, I am sending this to you in the spirit of promoting a lively debate.

Please find attached a practical approach to achieving energy independence. It is a construction project rather than a research project. It does require some tinkering with the market; however, the energy market is not a free market today and the governments setting the price of oil are either overtly or covertly hostile to our interests.

The plan is simple and for the most part economic. It can not compete with $10 per barrel oil but OPEC is more likely to present us with $200 per barrel oil.

Use nuclear to produce electricity; use electricity rather than natural gas for heating; convert the saved natural gas to methanol, an excellent transportation fuel. 200 nuclear plants and 200 natural gas to methanol plants at a capital cost of about $400 billion can increase the supply of US transportation fuel on an energy equivalent basis by 40%.

Our first objective in the War on Terror should be to break OPEC’s control of oil prices. The West is transferring $1 trillion dollars per year to OPEC at $90 per barrel. This will not be as easy as in the 80’s. Significant increases in demand from China and India are almost certain to overwhelm US conservation efforts and Saudi Arabia appears opposed to the US role in Iraq (higher oil prices) just as they were opposed to the Russian presence in Afghanistan (lower oil prices).

Recent publications on this approach include “The Methanol Economy” by Dr. Olah, a Nobel prize winner, and “Energy Victory” by Dr. Zubrin.

Please feel free to make any use of this material that you deem appropriate. I am trying to put it into general circulation.

Stephen DuVal

I have read the essay a couple of times, and it touches on a lot of the issues that are discussed here frequently. There is a lot of it that I agree with, but some I disagree with. I also think some of the introduction is unnecessarily inflammatory. Nevertheless, I present the entire essay from Stephen DuVal unedited.

———————————————————–

Energy Independence
A Construction Project Rather than a Research Project

by

Stephen DuVal

WW2 didn’t have to turn out the way it did. Suppose Germany and Japan had the oil and we didn’t; suppose Germany and Japan held $3 trillion in US government debt at the start of the war and the US needed $500 billion per year in capital inflows to pay for its imports. Suppose the war started with them raising the price of oil at the rate of $30 per year and starting to insist upon payment in marks and yen. Suppose they started to sell their dollar holdings. Suppose they sold oil to China at $50 per barrel under long term contracts while they charged the West $200 per barrel.

Suppose instead of attacking Pearl Harbor, they built churches in the US, they sent religious leaders to recruit and train Special Forces, and the religious leaders said that they shouldn’t be blamed for the acts of terrorists who may have attended their church in the past. (reference 1, 2, 3). Suppose Hollywood didn’t make Casablanca and Why We Fight; but movies about Marines raping women and killing children. Suppose our journalists recruited sources (spies) within our government; and newspapers, and citing the public’s right to know, printed stories about how radar worked to detect enemy aircraft and how we had broken the German encryption codes.

The Saudi Wahabis have spent $45 billion around the world building mosques and 20,000 Madrasahs to teach young men their religion of hate and violence. They have built, staff, and fund the operation of 10% of the mosques in the US. During the Russian war in Afghanistan, Saudi overproduction of oil hurt the USSR financially since oil exports were its major source of foreign exchange (see reference 4). Since the US invaded Iraq, the price of oil has risen from $30 to $90 per barrel. This hurts the US financially and transfers $1 trillion (80 mbd * 40% OPEC share * $90 per barrel) from the West to OPEC every year.

Energy independence is not a pipe dream. The first step is a construction project rather than a research project; and the second step is based upon an engineer’s view of the Hydrogen Economy.

If we use nuclear to increase the supply of electricity, we could use electricity rather than natural gas for heating. The freed up natural gas can be easily converted to methanol which is an excellent transportation fuel. With minor modifications, cars can run on flexfuel which is a combination of gasoline, ethanol, and methanol. With minor modifications, the current gasoline distribution and storage system can be modified to support methanol/ethanol/gasoline mixes.

Natural gas supplies almost the same amount of energy to our economy as oil; if natural gas was converted to transportation fuel, our supply of transportation fuel would double. Almost all of our natural gas is used for heating; a need which can be satisfied with electricity, and the electricity produced by natural gas can be produced using nuclear power. Currently, there is no substitute for oil in the transportation sector; natural gas can break this monopoly.

France has a very successful nuclear program producing 80% of its low cost electricity. Brazil has implemented the other half of this program. In the last 3 years, Brazil went from 0% market share for flexfuel cars to 100% flexfuel cars. Three years after the US mandated production and importation of flexfuel vehicles, there would be 45 million flexfuel vehicles on the road in the US. This solves the chicken and egg problem: who wants a flexfuel car if you can’t purchase flexfuel, and who wants to build a flexfuel gas station if there are no flexfuel cars.

This entire program is economic. Nuclear electricity is competitive with coal and natural gas. Given today’s price of natural gas, nuclear electricity is competitive with natural gas for heating applications. Methanol costs 10 cents per gallon plus the cost of the natural gas; at $3 per thousand cubic feet (the price in 2000), methanol costs about 60 cents per gallon. Since methanol has 50% of the energy of gasoline, on an energy equivalent basis, methanol costs $1.20 per gallon plus 20 cents in taxes. An existing gas station pump can be converted to flexfuel for about $20,000. An extra $100 per automobile allows a car to run on flexfuel.

The Brazilian flexfuel program is for a mix of ethanol and gasoline; it does not include methanol. A sensor measures the oxygen content in the vehicle exhaust to determine whether the engine is running lean or rich. An engine management system adjusts the air/fuel ratio to balance performance, fuel efficiency, and emissions. This system does not need to know what the fuel is; it can run on a mix of methanol, ethanol, and gasoline.

The Brazilian approach is based upon an earlier effort by Ford to develop a methanol/gasoline flexfuel car for the California Energy Commission. The program involved 14,000 cars over 10 years in the 1990s. A summary report concluded “seamless vehicle operation using any combination of methanol and gasoline … engine durability can be expected to match gasoline vehicles … an incremental improvement in vehicle emissions … Health and safety related issues that had undergone long examination and debate with respect to methanol proved largely insignificant”.

Unlike gasoline, both methanol and ethanol are soluble in water and biodegradable by common bacteria. A methanol spill in the ocean would disperse quickly and not pose any long term environmental risk. Similarly a land spill or seepage does not pose any risk to groundwater. While methanol in quantity is toxic, the FDA allows a daily dose of 500mg. Since aspartame is converted to methanol via the digestive process; drinking a can of diet soda results in 10 times as much methanol intake as from potential inhalation while refueling.

Nuclear electricity combined with natural gas to methanol is the way to implement the first phase of the Hydrogen Economy. Methanol is the elusive Hydrogen Carrier. There is more hydrogen in a gallon of methanol at room temperature than in a gallon of liquid hydrogen at -400 degrees Fahrenheit.

The problem with the conventional view of the Hydrogen Economy is not the engine or even the fuel cell technology. The fundamental issue is hydrogen distribution and storage and secondarily the production of hydrogen economically.

The Distribution and Storage issue centers around the search for a Hydrogen Carrier. Methanol is an excellent hydrogen carrier which exceeds the 2015 research target of the DOE by a wide margin. The existing gasoline distribution and storage infrastructure can be utilized for methanol storage and distribution with minor modifications.

Hydrogen can not be produced economically by electrolysis; it takes 4 energy units of electricity to produce 1 energy unit of hydrogen. However, high temperature nuclear reactors should be able to produce hydrogen as a byproduct; but, that technology will not be available for commercial deployment much before 2020-2030.

Natural gas is an excellent initial source for hydrogen using methanol as the Hydrogen Carrier.

You may raise two objections to the use of natural gas as a transportation fuel. First, it is still a fossil fuel so how are we reducing funding for OPEC; and second where is the vast quantity of natural gas that will be needed for this approach?

The issue with OPEC is first to drive the price of oil and natural gas down and then second to totally eliminate fossil fuels from the American, European, and Japanese economy. By converting natural gas to methanol, we have the opportunity to double the supply of transportation fuel which will drive down the price of oil and gas. This should be the first objective in the transition from fossil fuels to nuclear.

When we can produce hydrogen economically from nuclear power, then we are ready to relegate fossil fuels to the dustbin of history. At that point, hydrogen can be combined with CO2 from the air to produce methanol and the distribution and storage infrastructure can continue to be used. When fuel cell technology becomes available for commercial development, the gasoline engines can be removed from hybrid cars leaving only an electric motor, a battery, and a hydrogen fuel cell and methanol reformer or a Direct Methanol Fuel Cell.

If China and India also adopt this approach, then OPEC will be marginalized within 10-20 years. Reducing the competition between the US and China over energy resources will go a long way towards improving the long term relationship between the current superpower and the emerging superpower.

The second issue is where do we get the natural gas. The answer is to convert from natural gas to nuclear electricity for heating and cooking. Furnaces are replaced on average every 16 years and stoves every 12 years. Over this time period the transition from natural gas to electricity could occur. We could also pass a law discouraging the use of natural gas to produce electricity similar to the law which discouraged the use of oil for the production of electricity.

Using very rough calculations, 200 nuclear plants at a cost of $300 billion would free up 40% of our natural gas consumption and 200 large natural gas to methanol plants at a cost of $80 billion would increase our supply of transportation fuel by 40%. In 1974 and 1975, we added 2 new nuclear plants in the US every month. This is a construction project; not a research project.

To make this program work, the following laws are required:
1) mandate production and importation of flexfuel vehicles within 3 years

2) automatically grant an operating license for a nuclear reactor if it is built on an existing site and it’s design has already been approved by the NRC

3) set a minimum price for a barrel of oil ($30-50) to prevent OPEC lowering the price of oil until our investments are made uneconomic (Saudi Arabia pumps oil at $2-5 per barrel)

4) some kind of incentive to transition from natural gas to electricity for heating applications

To those who say that this kind of intrusion into the market place is unwarranted, they are living in a dream world. The current market for oil is nothing like a free market. The US attempt to establish a free market in energy after WW2 started to break down in the 1970’s with the first oil embargo. Today, OPEC is a cartel with monopoly pricing power.

What is even worse, OPEC’s decision makers are not completely motivated by financial concerns. Profit maximization is not the only decision criteria. Decisions makers are now political players at the state level and these decision makers are growing increasingly hostile to the interests of the US.

At some point, our choice will not be to pay an extortionate price, but rather how to respond to an embargo. If Japan was willing to attack the US, a country 10 times its size, within 6 months of the US embargo in 1941, how long will it take the US to react militarily to an embargo?

Would the US invade if the price reached $300 per barrel; how about $500 per barrel? Would an invasion even be useful if the oil infrastructure was destroyed.

OPEC can claim that the market sets the price; it is a function of supply and demand they will say. Who can argue with that? That’s our position, market based pricing.

In reality, OPEC sets the price though its control of reserves and its investment decisions which determine the industry capacity. To maintain current price levels, OPEC does not have to cut production in response to US conservation as in the 1980s; OPEC only has to ensure that the growth in oil supply is less than the growth in demand from China and India less US conservation.

If you are concerned about CO2 emissions, then by 2050, 1000 nuclear plants will have solved the problem. The coal plants can be phased out as sufficient nuclear is available to satisfy heating (natural gas) and hydrogen requirements. Nuclear does not produce CO2 for electricity production; there will be no CO2 from heating when electricity replaces natural gas; and the net CO2 emissions from transportation will be zero when nuclear produces hydrogen, the hydrogen is combined with CO2 from the air to produce methanol, and methanol feeds a fuel cell which releases the same CO2 back into the atmosphere.

Nuclear energy is economic. 80% of the cost of nuclear electricity is capital costs; uranium accounts for about 10%, and operations and maintenance account for the rest. While current electricity production is competitive with coal and natural gas, two developments in nuclear plant design could significantly reduce the capital cost: assembly of 200MW reactors into larger reactors as demand increased and factory fabrication of large components for assembly at the construction site. The first creates a closer match between supply and demand while the second will reduce the length of the construction project.

Nuclear energy is clean . A cubic yard of uranium produces the same amount of electricity as 2 million tons of coal. A coal plant releases more radioactivity than a nuclear plant because of the trace amounts of radioactive material in the coal being burnt.

Nuclear energy is safe. Nuclear reactors have operated safely for 12,000 reactor years. Chernobyl does not count against the nuclear safety record; this Russian design would never be approved in the West. Three Mile Island was a success story; the release of radiation was minimal and no one was hurt. Even the recent earthquake which went right thru a Japanese nuclear plant had minimal effect. The new reactor designs which will be built are 1000 times safer than the current plants because they substitute safety systems based upon gravity and convection for safety systems based upon one or more extra sets of pumps and pipes. No only does removing all the extra pumps and pipes increase safety, it also reduces the cost by 30%.

Recycling nuclear waste reduces its volume by 96%; all of the waste produced to supply a person with electricity for their entire life would be the size of a golf ball. Spent fuel is stored in a water pool for 5-10 years and then moved to onsite dry cask storage for another 50 – 100 years. After 100 years the radioactivity of the waste has been reduced by 95%. The waste is then reprocessed to removed unenriched uranium, plutonium, other transuranic elements leaving only 4% of the original waste. The uranium is enriched and fed back into the reactor, the plutonium is mixed with enriched uranium and fed back into the reactor; the transuranic elements are fed into a breeder reactor. The remaining waste is encased in glass and stored underground. After 1000 years, the radioactivity level is the same as the original uranium dug out of the ground. Dealing with nuclear waste is a political problem, not a technical problem.

The US, Canada, and Australia have 70% of the world’s reserves of uranium. The US has sufficient supplies of coal for hundreds of years. OPEC has 70% of the world’s oil reserves. Russia, Qatar, and one of the “stans” have 70% of the world’s natural gas reserves. Russia has already proposed the formation of an OPEC like cartel for natural gas.

Russia, Iran, and Venezuela have proposed pricing oil in a basket of currencies and accepting payment in the same basket; Iran has implemented this policy. Russia sold Iran an air defense system and is selling arms to Venezuela. Iran is building a nuclear bomb and setting up a Hezbollah franchise in Venezuela. The Russian defense minister joked about setting up missiles in Venezuela. China’s puppet state, North Korea, has built a nuclear bomb and sent missiles flying over Japan. China has the capability to destroy the US satellite system which is essential to US military superiority; China recently surfaced an undetected submarine near a US aircraft carrier. OPEC and China hold about $3 trillion in US dollar reserves.

Al Qaeda is operating openly in sections of Pakistan; entire Pakistani Army units are surrendering to Al Qaeda without much of a fight; Sharif, who was deposed by Musharraf in 2000, has returned to Pakistan from exile in Saudi Arabia/Wahabiland. If Pakistan goes over to the dark side, Saudi Arabia will not be far behind.

If you believe in the Green Dream of wind and solar, just remember that your choices are not without consequences. Shutting down the nuclear industry in the 70’s created the CO2 problem of today. If we had 300 or 400 nuclear plants now instead of 100, most of the coal plants would already be phased out.

The people promoting Global Warming are proposing a carbon tax or a cap and trade system to reduce CO2 emissions. If this policy is implemented, the result will not be electricity generated by wind and solar; the main result will be the substitution of natural gas for coal in electricity generation.

We have already seen this in California. In 1985 the environmentalists convinced California that with conservation, there was no need for additional power plants. In 2001 when the air conditioners and lights started to turn off, there was a panic and the electric utilities were blamed for the crisis. The politicians scrambled and a large number of natural gas plants were built. When the chips were down, they didn’t turn to wind or solar, they used natural gas. A carbon tax will have the same effect.

In 20 years, we may be importing large quantities of natural gas from OPEC in the form of Liquefied Natural Gas. An exploding LNG tanker has the force of a hydrogen bomb. Shipment of methanol, after conversion from natural gas, has a risk similar to oil. Not only is there a risk of LNG explosion, but we will be dependent upon OPEC for our electricity as well as our oil. OPEC will be able to turn out our lights as well as stop our cars. A carbon tax takes us down the road of increased OPEC energy dependence rather than OPEC energy independence. Green Dreams have consequences.

Malaria kills 1 -2 million Africans per year and 300 million worldwide are afflicted with this disease which saps the victim’s energy. Spraying DDT on the walls of houses has reduced the incidence of malaria by 80% where it has been tried. If environmentalist did not oppose DDT, at least 1 million people per year would not die. The people responsible for malaria reduction prevent implementation of the technique used in the West to eliminate malaria. Why isn’t this considered genocide? This is more than one Rwanda every year; it is 15 – 30 million men, women, and children over the last 15 years. Green Dreams have consequences.

If environmentalists manage to prevent the introduction of genetically modified food citing the precautionary principle, and as a result millions die of starvation, will the environmentalists confess their guilt or will they accuse the West of greed and indifference.

A lot of environmentalists long for the good old days when food was grown organically, corporations didn’t exist, there was no commute, and technology didn’t dominate our lives. If this view wins the political battle in the US, there are a lot of people in the world who want to help us return to the 7th century. When we go bankrupt and can’t pay for the oil we need, the people preaching hate and intolerance just might turn their dreams of a caliphate into our reality. Green Dreams have consequences.

To those on the right who oppose nuclear electricity due to fears of proliferation, all I can say is North Korea, Pakistan, and soon Iran. Saudi Arabia will follow Iran. Brazil is talking about an enrichment program. The genie is out of the bottle. We should continue our attempt to contain enrichment programs but not by restraining our own nuclear development. Not only is it just as important, it is also possible to achieve OPEC energy independence.

A containment strategy against Islamofascism may be possible if we can achieve OPEC energy independence; without independence, containment is not possible and a military confrontation is almost inevitable. We are already in Iraq and Afghanistan and were recently threatening to bomb Iran. At what point do Russia and China become involved? If we didn’t have Saudi Arabia as an “ally”, it just might be easier to strengthen our relationship with democratic India.

Stephen C. DuVal
December 16, 2007

References:
1) The Role of Synthetic Fuel In World War II Germany; Dr. Peter W. Becker; http://www.airpower.maxwell.af.mil/airchronicles/aureview/1981/jul-aug/becker.htm
How oil affected the German war effort.

2) Energy Victory: Winning the war on terror by breaking free of oil; Dr. Robert Zubrin 2007
Describes the threat from Islamofascism, the effect of oil on WW2, why the Hydrogen Economy wont work, why methanol should be included in flexfuel, the Brazil experience with flexfuel, argues that methanol from biomass is the way to go. Describes using biofuels to promote development in third world countries and to provide substitute crops to farmers currently growing illegal drug crops.

3) Radicalization in the West: The Homegrown Threat, NYPD, 2007, http://www.nypdshield.org/public/SiteFiles/documents/NYPD_Report-Radicalization_in_the_West.pdf
How terrorists are recruited and trained based upon a review by the NYPD of terrorist activity around the world.

4) Grain and Oil By Yegor Gaidar, 2007
http://www.aei.org/publications/pubID.25991,filter.all/pub_detail.asp
How the price of oil impacted the fall of the Soviet Union. Yegor Gaidar was Prime Minister of Russia in the early 1990’s.

5) Beyond Oil and Gas: The Methanol Economy, Dr. George Olah 2006
Excellent review of all energy sources. Argues that the Methanol Economy makes much more sense than the Hydrogen Economy from a Chemistry and Physics perspective. Dr. Olah has a Nobel prize in Chemistry.

6) The Bottomless Well, Peter Huber 2005
Reviews the history of energy, shows that the supply of energy are almost limitless, shows that over time we use/waste more and more energy producing energy, shows that concentrated energy (laser) is much more valuable than diffuse energy (sunlight)

January 8, 2008 Posted by | electricity usage, methanol, nuclear energy, OPEC, reader submission | Comments Off on Guest Essay on Energy Independence

Guest Essay on Energy Independence

I am still traveling for a few days, and will be back in Scotland on January 13th. One of the e-mails I received while I was traveling was a guest submission. The author wrote:

Mr. Rapier

After reading a bit of your blog, I am sending this to you in the spirit of promoting a lively debate.

Please find attached a practical approach to achieving energy independence. It is a construction project rather than a research project. It does require some tinkering with the market; however, the energy market is not a free market today and the governments setting the price of oil are either overtly or covertly hostile to our interests.

The plan is simple and for the most part economic. It can not compete with $10 per barrel oil but OPEC is more likely to present us with $200 per barrel oil.

Use nuclear to produce electricity; use electricity rather than natural gas for heating; convert the saved natural gas to methanol, an excellent transportation fuel. 200 nuclear plants and 200 natural gas to methanol plants at a capital cost of about $400 billion can increase the supply of US transportation fuel on an energy equivalent basis by 40%.

Our first objective in the War on Terror should be to break OPEC’s control of oil prices. The West is transferring $1 trillion dollars per year to OPEC at $90 per barrel. This will not be as easy as in the 80’s. Significant increases in demand from China and India are almost certain to overwhelm US conservation efforts and Saudi Arabia appears opposed to the US role in Iraq (higher oil prices) just as they were opposed to the Russian presence in Afghanistan (lower oil prices).

Recent publications on this approach include “The Methanol Economy” by Dr. Olah, a Nobel prize winner, and “Energy Victory” by Dr. Zubrin.

Please feel free to make any use of this material that you deem appropriate. I am trying to put it into general circulation.

Stephen DuVal

I have read the essay a couple of times, and it touches on a lot of the issues that are discussed here frequently. There is a lot of it that I agree with, but some I disagree with. I also think some of the introduction is unnecessarily inflammatory. Nevertheless, I present the entire essay from Stephen DuVal unedited.

———————————————————–

Energy Independence
A Construction Project Rather than a Research Project

by

Stephen DuVal

WW2 didn’t have to turn out the way it did. Suppose Germany and Japan had the oil and we didn’t; suppose Germany and Japan held $3 trillion in US government debt at the start of the war and the US needed $500 billion per year in capital inflows to pay for its imports. Suppose the war started with them raising the price of oil at the rate of $30 per year and starting to insist upon payment in marks and yen. Suppose they started to sell their dollar holdings. Suppose they sold oil to China at $50 per barrel under long term contracts while they charged the West $200 per barrel.

Suppose instead of attacking Pearl Harbor, they built churches in the US, they sent religious leaders to recruit and train Special Forces, and the religious leaders said that they shouldn’t be blamed for the acts of terrorists who may have attended their church in the past. (reference 1, 2, 3). Suppose Hollywood didn’t make Casablanca and Why We Fight; but movies about Marines raping women and killing children. Suppose our journalists recruited sources (spies) within our government; and newspapers, and citing the public’s right to know, printed stories about how radar worked to detect enemy aircraft and how we had broken the German encryption codes.

The Saudi Wahabis have spent $45 billion around the world building mosques and 20,000 Madrasahs to teach young men their religion of hate and violence. They have built, staff, and fund the operation of 10% of the mosques in the US. During the Russian war in Afghanistan, Saudi overproduction of oil hurt the USSR financially since oil exports were its major source of foreign exchange (see reference 4). Since the US invaded Iraq, the price of oil has risen from $30 to $90 per barrel. This hurts the US financially and transfers $1 trillion (80 mbd * 40% OPEC share * $90 per barrel) from the West to OPEC every year.

Energy independence is not a pipe dream. The first step is a construction project rather than a research project; and the second step is based upon an engineer’s view of the Hydrogen Economy.

If we use nuclear to increase the supply of electricity, we could use electricity rather than natural gas for heating. The freed up natural gas can be easily converted to methanol which is an excellent transportation fuel. With minor modifications, cars can run on flexfuel which is a combination of gasoline, ethanol, and methanol. With minor modifications, the current gasoline distribution and storage system can be modified to support methanol/ethanol/gasoline mixes.

Natural gas supplies almost the same amount of energy to our economy as oil; if natural gas was converted to transportation fuel, our supply of transportation fuel would double. Almost all of our natural gas is used for heating; a need which can be satisfied with electricity, and the electricity produced by natural gas can be produced using nuclear power. Currently, there is no substitute for oil in the transportation sector; natural gas can break this monopoly.

France has a very successful nuclear program producing 80% of its low cost electricity. Brazil has implemented the other half of this program. In the last 3 years, Brazil went from 0% market share for flexfuel cars to 100% flexfuel cars. Three years after the US mandated production and importation of flexfuel vehicles, there would be 45 million flexfuel vehicles on the road in the US. This solves the chicken and egg problem: who wants a flexfuel car if you can’t purchase flexfuel, and who wants to build a flexfuel gas station if there are no flexfuel cars.

This entire program is economic. Nuclear electricity is competitive with coal and natural gas. Given today’s price of natural gas, nuclear electricity is competitive with natural gas for heating applications. Methanol costs 10 cents per gallon plus the cost of the natural gas; at $3 per thousand cubic feet (the price in 2000), methanol costs about 60 cents per gallon. Since methanol has 50% of the energy of gasoline, on an energy equivalent basis, methanol costs $1.20 per gallon plus 20 cents in taxes. An existing gas station pump can be converted to flexfuel for about $20,000. An extra $100 per automobile allows a car to run on flexfuel.

The Brazilian flexfuel program is for a mix of ethanol and gasoline; it does not include methanol. A sensor measures the oxygen content in the vehicle exhaust to determine whether the engine is running lean or rich. An engine management system adjusts the air/fuel ratio to balance performance, fuel efficiency, and emissions. This system does not need to know what the fuel is; it can run on a mix of methanol, ethanol, and gasoline.

The Brazilian approach is based upon an earlier effort by Ford to develop a methanol/gasoline flexfuel car for the California Energy Commission. The program involved 14,000 cars over 10 years in the 1990s. A summary report concluded “seamless vehicle operation using any combination of methanol and gasoline … engine durability can be expected to match gasoline vehicles … an incremental improvement in vehicle emissions … Health and safety related issues that had undergone long examination and debate with respect to methanol proved largely insignificant”.

Unlike gasoline, both methanol and ethanol are soluble in water and biodegradable by common bacteria. A methanol spill in the ocean would disperse quickly and not pose any long term environmental risk. Similarly a land spill or seepage does not pose any risk to groundwater. While methanol in quantity is toxic, the FDA allows a daily dose of 500mg. Since aspartame is converted to methanol via the digestive process; drinking a can of diet soda results in 10 times as much methanol intake as from potential inhalation while refueling.

Nuclear electricity combined with natural gas to methanol is the way to implement the first phase of the Hydrogen Economy. Methanol is the elusive Hydrogen Carrier. There is more hydrogen in a gallon of methanol at room temperature than in a gallon of liquid hydrogen at -400 degrees Fahrenheit.

The problem with the conventional view of the Hydrogen Economy is not the engine or even the fuel cell technology. The fundamental issue is hydrogen distribution and storage and secondarily the production of hydrogen economically.

The Distribution and Storage issue centers around the search for a Hydrogen Carrier. Methanol is an excellent hydrogen carrier which exceeds the 2015 research target of the DOE by a wide margin. The existing gasoline distribution and storage infrastructure can be utilized for methanol storage and distribution with minor modifications.

Hydrogen can not be produced economically by electrolysis; it takes 4 energy units of electricity to produce 1 energy unit of hydrogen. However, high temperature nuclear reactors should be able to produce hydrogen as a byproduct; but, that technology will not be available for commercial deployment much before 2020-2030.

Natural gas is an excellent initial source for hydrogen using methanol as the Hydrogen Carrier.

You may raise two objections to the use of natural gas as a transportation fuel. First, it is still a fossil fuel so how are we reducing funding for OPEC; and second where is the vast quantity of natural gas that will be needed for this approach?

The issue with OPEC is first to drive the price of oil and natural gas down and then second to totally eliminate fossil fuels from the American, European, and Japanese economy. By converting natural gas to methanol, we have the opportunity to double the supply of transportation fuel which will drive down the price of oil and gas. This should be the first objective in the transition from fossil fuels to nuclear.

When we can produce hydrogen economically from nuclear power, then we are ready to relegate fossil fuels to the dustbin of history. At that point, hydrogen can be combined with CO2 from the air to produce methanol and the distribution and storage infrastructure can continue to be used. When fuel cell technology becomes available for commercial development, the gasoline engines can be removed from hybrid cars leaving only an electric motor, a battery, and a hydrogen fuel cell and methanol reformer or a Direct Methanol Fuel Cell.

If China and India also adopt this approach, then OPEC will be marginalized within 10-20 years. Reducing the competition between the US and China over energy resources will go a long way towards improving the long term relationship between the current superpower and the emerging superpower.

The second issue is where do we get the natural gas. The answer is to convert from natural gas to nuclear electricity for heating and cooking. Furnaces are replaced on average every 16 years and stoves every 12 years. Over this time period the transition from natural gas to electricity could occur. We could also pass a law discouraging the use of natural gas to produce electricity similar to the law which discouraged the use of oil for the production of electricity.

Using very rough calculations, 200 nuclear plants at a cost of $300 billion would free up 40% of our natural gas consumption and 200 large natural gas to methanol plants at a cost of $80 billion would increase our supply of transportation fuel by 40%. In 1974 and 1975, we added 2 new nuclear plants in the US every month. This is a construction project; not a research project.

To make this program work, the following laws are required:
1) mandate production and importation of flexfuel vehicles within 3 years

2) automatically grant an operating license for a nuclear reactor if it is built on an existing site and it’s design has already been approved by the NRC

3) set a minimum price for a barrel of oil ($30-50) to prevent OPEC lowering the price of oil until our investments are made uneconomic (Saudi Arabia pumps oil at $2-5 per barrel)

4) some kind of incentive to transition from natural gas to electricity for heating applications

To those who say that this kind of intrusion into the market place is unwarranted, they are living in a dream world. The current market for oil is nothing like a free market. The US attempt to establish a free market in energy after WW2 started to break down in the 1970’s with the first oil embargo. Today, OPEC is a cartel with monopoly pricing power.

What is even worse, OPEC’s decision makers are not completely motivated by financial concerns. Profit maximization is not the only decision criteria. Decisions makers are now political players at the state level and these decision makers are growing increasingly hostile to the interests of the US.

At some point, our choice will not be to pay an extortionate price, but rather how to respond to an embargo. If Japan was willing to attack the US, a country 10 times its size, within 6 months of the US embargo in 1941, how long will it take the US to react militarily to an embargo?

Would the US invade if the price reached $300 per barrel; how about $500 per barrel? Would an invasion even be useful if the oil infrastructure was destroyed.

OPEC can claim that the market sets the price; it is a function of supply and demand they will say. Who can argue with that? That’s our position, market based pricing.

In reality, OPEC sets the price though its control of reserves and its investment decisions which determine the industry capacity. To maintain current price levels, OPEC does not have to cut production in response to US conservation as in the 1980s; OPEC only has to ensure that the growth in oil supply is less than the growth in demand from China and India less US conservation.

If you are concerned about CO2 emissions, then by 2050, 1000 nuclear plants will have solved the problem. The coal plants can be phased out as sufficient nuclear is available to satisfy heating (natural gas) and hydrogen requirements. Nuclear does not produce CO2 for electricity production; there will be no CO2 from heating when electricity replaces natural gas; and the net CO2 emissions from transportation will be zero when nuclear produces hydrogen, the hydrogen is combined with CO2 from the air to produce methanol, and methanol feeds a fuel cell which releases the same CO2 back into the atmosphere.

Nuclear energy is economic. 80% of the cost of nuclear electricity is capital costs; uranium accounts for about 10%, and operations and maintenance account for the rest. While current electricity production is competitive with coal and natural gas, two developments in nuclear plant design could significantly reduce the capital cost: assembly of 200MW reactors into larger reactors as demand increased and factory fabrication of large components for assembly at the construction site. The first creates a closer match between supply and demand while the second will reduce the length of the construction project.

Nuclear energy is clean . A cubic yard of uranium produces the same amount of electricity as 2 million tons of coal. A coal plant releases more radioactivity than a nuclear plant because of the trace amounts of radioactive material in the coal being burnt.

Nuclear energy is safe. Nuclear reactors have operated safely for 12,000 reactor years. Chernobyl does not count against the nuclear safety record; this Russian design would never be approved in the West. Three Mile Island was a success story; the release of radiation was minimal and no one was hurt. Even the recent earthquake which went right thru a Japanese nuclear plant had minimal effect. The new reactor designs which will be built are 1000 times safer than the current plants because they substitute safety systems based upon gravity and convection for safety systems based upon one or more extra sets of pumps and pipes. No only does removing all the extra pumps and pipes increase safety, it also reduces the cost by 30%.

Recycling nuclear waste reduces its volume by 96%; all of the waste produced to supply a person with electricity for their entire life would be the size of a golf ball. Spent fuel is stored in a water pool for 5-10 years and then moved to onsite dry cask storage for another 50 – 100 years. After 100 years the radioactivity of the waste has been reduced by 95%. The waste is then reprocessed to removed unenriched uranium, plutonium, other transuranic elements leaving only 4% of the original waste. The uranium is enriched and fed back into the reactor, the plutonium is mixed with enriched uranium and fed back into the reactor; the transuranic elements are fed into a breeder reactor. The remaining waste is encased in glass and stored underground. After 1000 years, the radioactivity level is the same as the original uranium dug out of the ground. Dealing with nuclear waste is a political problem, not a technical problem.

The US, Canada, and Australia have 70% of the world’s reserves of uranium. The US has sufficient supplies of coal for hundreds of years. OPEC has 70% of the world’s oil reserves. Russia, Qatar, and one of the “stans” have 70% of the world’s natural gas reserves. Russia has already proposed the formation of an OPEC like cartel for natural gas.

Russia, Iran, and Venezuela have proposed pricing oil in a basket of currencies and accepting payment in the same basket; Iran has implemented this policy. Russia sold Iran an air defense system and is selling arms to Venezuela. Iran is building a nuclear bomb and setting up a Hezbollah franchise in Venezuela. The Russian defense minister joked about setting up missiles in Venezuela. China’s puppet state, North Korea, has built a nuclear bomb and sent missiles flying over Japan. China has the capability to destroy the US satellite system which is essential to US military superiority; China recently surfaced an undetected submarine near a US aircraft carrier. OPEC and China hold about $3 trillion in US dollar reserves.

Al Qaeda is operating openly in sections of Pakistan; entire Pakistani Army units are surrendering to Al Qaeda without much of a fight; Sharif, who was deposed by Musharraf in 2000, has returned to Pakistan from exile in Saudi Arabia/Wahabiland. If Pakistan goes over to the dark side, Saudi Arabia will not be far behind.

If you believe in the Green Dream of wind and solar, just remember that your choices are not without consequences. Shutting down the nuclear industry in the 70’s created the CO2 problem of today. If we had 300 or 400 nuclear plants now instead of 100, most of the coal plants would already be phased out.

The people promoting Global Warming are proposing a carbon tax or a cap and trade system to reduce CO2 emissions. If this policy is implemented, the result will not be electricity generated by wind and solar; the main result will be the substitution of natural gas for coal in electricity generation.

We have already seen this in California. In 1985 the environmentalists convinced California that with conservation, there was no need for additional power plants. In 2001 when the air conditioners and lights started to turn off, there was a panic and the electric utilities were blamed for the crisis. The politicians scrambled and a large number of natural gas plants were built. When the chips were down, they didn’t turn to wind or solar, they used natural gas. A carbon tax will have the same effect.

In 20 years, we may be importing large quantities of natural gas from OPEC in the form of Liquefied Natural Gas. An exploding LNG tanker has the force of a hydrogen bomb. Shipment of methanol, after conversion from natural gas, has a risk similar to oil. Not only is there a risk of LNG explosion, but we will be dependent upon OPEC for our electricity as well as our oil. OPEC will be able to turn out our lights as well as stop our cars. A carbon tax takes us down the road of increased OPEC energy dependence rather than OPEC energy independence. Green Dreams have consequences.

Malaria kills 1 -2 million Africans per year and 300 million worldwide are afflicted with this disease which saps the victim’s energy. Spraying DDT on the walls of houses has reduced the incidence of malaria by 80% where it has been tried. If environmentalist did not oppose DDT, at least 1 million people per year would not die. The people responsible for malaria reduction prevent implementation of the technique used in the West to eliminate malaria. Why isn’t this considered genocide? This is more than one Rwanda every year; it is 15 – 30 million men, women, and children over the last 15 years. Green Dreams have consequences.

If environmentalists manage to prevent the introduction of genetically modified food citing the precautionary principle, and as a result millions die of starvation, will the environmentalists confess their guilt or will they accuse the West of greed and indifference.

A lot of environmentalists long for the good old days when food was grown organically, corporations didn’t exist, there was no commute, and technology didn’t dominate our lives. If this view wins the political battle in the US, there are a lot of people in the world who want to help us return to the 7th century. When we go bankrupt and can’t pay for the oil we need, the people preaching hate and intolerance just might turn their dreams of a caliphate into our reality. Green Dreams have consequences.

To those on the right who oppose nuclear electricity due to fears of proliferation, all I can say is North Korea, Pakistan, and soon Iran. Saudi Arabia will follow Iran. Brazil is talking about an enrichment program. The genie is out of the bottle. We should continue our attempt to contain enrichment programs but not by restraining our own nuclear development. Not only is it just as important, it is also possible to achieve OPEC energy independence.

A containment strategy against Islamofascism may be possible if we can achieve OPEC energy independence; without independence, containment is not possible and a military confrontation is almost inevitable. We are already in Iraq and Afghanistan and were recently threatening to bomb Iran. At what point do Russia and China become involved? If we didn’t have Saudi Arabia as an “ally”, it just might be easier to strengthen our relationship with democratic India.

Stephen C. DuVal
December 16, 2007

References:
1) The Role of Synthetic Fuel In World War II Germany; Dr. Peter W. Becker; http://www.airpower.maxwell.af.mil/airchronicles/aureview/1981/jul-aug/becker.htm
How oil affected the German war effort.

2) Energy Victory: Winning the war on terror by breaking free of oil; Dr. Robert Zubrin 2007
Describes the threat from Islamofascism, the effect of oil on WW2, why the Hydrogen Economy wont work, why methanol should be included in flexfuel, the Brazil experience with flexfuel, argues that methanol from biomass is the way to go. Describes using biofuels to promote development in third world countries and to provide substitute crops to farmers currently growing illegal drug crops.

3) Radicalization in the West: The Homegrown Threat, NYPD, 2007, http://www.nypdshield.org/public/SiteFiles/documents/NYPD_Report-Radicalization_in_the_West.pdf
How terrorists are recruited and trained based upon a review by the NYPD of terrorist activity around the world.

4) Grain and Oil By Yegor Gaidar, 2007
http://www.aei.org/publications/pubID.25991,filter.all/pub_detail.asp
How the price of oil impacted the fall of the Soviet Union. Yegor Gaidar was Prime Minister of Russia in the early 1990’s.

5) Beyond Oil and Gas: The Methanol Economy, Dr. George Olah 2006
Excellent review of all energy sources. Argues that the Methanol Economy makes much more sense than the Hydrogen Economy from a Chemistry and Physics perspective. Dr. Olah has a Nobel prize in Chemistry.

6) The Bottomless Well, Peter Huber 2005
Reviews the history of energy, shows that the supply of energy are almost limitless, shows that over time we use/waste more and more energy producing energy, shows that concentrated energy (laser) is much more valuable than diffuse energy (sunlight)

January 8, 2008 Posted by | electricity usage, methanol, nuclear energy, OPEC, reader submission | 102 Comments

Guest Essay on Energy Independence

I am still traveling for a few days, and will be back in Scotland on January 13th. One of the e-mails I received while I was traveling was a guest submission. The author wrote:

Mr. Rapier

After reading a bit of your blog, I am sending this to you in the spirit of promoting a lively debate.

Please find attached a practical approach to achieving energy independence. It is a construction project rather than a research project. It does require some tinkering with the market; however, the energy market is not a free market today and the governments setting the price of oil are either overtly or covertly hostile to our interests.

The plan is simple and for the most part economic. It can not compete with $10 per barrel oil but OPEC is more likely to present us with $200 per barrel oil.

Use nuclear to produce electricity; use electricity rather than natural gas for heating; convert the saved natural gas to methanol, an excellent transportation fuel. 200 nuclear plants and 200 natural gas to methanol plants at a capital cost of about $400 billion can increase the supply of US transportation fuel on an energy equivalent basis by 40%.

Our first objective in the War on Terror should be to break OPEC’s control of oil prices. The West is transferring $1 trillion dollars per year to OPEC at $90 per barrel. This will not be as easy as in the 80’s. Significant increases in demand from China and India are almost certain to overwhelm US conservation efforts and Saudi Arabia appears opposed to the US role in Iraq (higher oil prices) just as they were opposed to the Russian presence in Afghanistan (lower oil prices).

Recent publications on this approach include “The Methanol Economy” by Dr. Olah, a Nobel prize winner, and “Energy Victory” by Dr. Zubrin.

Please feel free to make any use of this material that you deem appropriate. I am trying to put it into general circulation.

Stephen DuVal

I have read the essay a couple of times, and it touches on a lot of the issues that are discussed here frequently. There is a lot of it that I agree with, but some I disagree with. I also think some of the introduction is unnecessarily inflammatory. Nevertheless, I present the entire essay from Stephen DuVal unedited.

———————————————————–

Energy Independence
A Construction Project Rather than a Research Project
by
Stephen DuVal

WW2 didn’t have to turn out the way it did. Suppose Germany and Japan had the oil and we didn’t; suppose Germany and Japan held $3 trillion in US government debt at the start of the war and the US needed $500 billion per year in capital inflows to pay for its imports. Suppose the war started with them raising the price of oil at the rate of $30 per year and starting to insist upon payment in marks and yen. Suppose they started to sell their dollar holdings. Suppose they sold oil to China at $50 per barrel under long term contracts while they charged the West $200 per barrel.

Suppose instead of attacking Pearl Harbor, they built churches in the US, they sent religious leaders to recruit and train Special Forces, and the religious leaders said that they shouldn’t be blamed for the acts of terrorists who may have attended their church in the past. (reference 1, 2, 3). Suppose Hollywood didn’t make Casablanca and Why We Fight; but movies about Marines raping women and killing children. Suppose our journalists recruited sources (spies) within our government; and newspapers, and citing the public’s right to know, printed stories about how radar worked to detect enemy aircraft and how we had broken the German encryption codes.

The Saudi Wahabis have spent $45 billion around the world building mosques and 20,000 Madrasahs to teach young men their religion of hate and violence. They have built, staff, and fund the operation of 10% of the mosques in the US. During the Russian war in Afghanistan, Saudi overproduction of oil hurt the USSR financially since oil exports were its major source of foreign exchange (see reference 4). Since the US invaded Iraq, the price of oil has risen from $30 to $90 per barrel. This hurts the US financially and transfers $1 trillion (80 mbd * 40% OPEC share * $90 per barrel) from the West to OPEC every year.

Energy independence is not a pipe dream. The first step is a construction project rather than a research project; and the second step is based upon an engineer’s view of the Hydrogen Economy.

If we use nuclear to increase the supply of electricity, we could use electricity rather than natural gas for heating. The freed up natural gas can be easily converted to methanol which is an excellent transportation fuel. With minor modifications, cars can run on flexfuel which is a combination of gasoline, ethanol, and methanol. With minor modifications, the current gasoline distribution and storage system can be modified to support methanol/ethanol/gasoline mixes.

Natural gas supplies almost the same amount of energy to our economy as oil; if natural gas was converted to transportation fuel, our supply of transportation fuel would double. Almost all of our natural gas is used for heating; a need which can be satisfied with electricity, and the electricity produced by natural gas can be produced using nuclear power. Currently, there is no substitute for oil in the transportation sector; natural gas can break this monopoly.

France has a very successful nuclear program producing 80% of its low cost electricity. Brazil has implemented the other half of this program. In the last 3 years, Brazil went from 0% market share for flexfuel cars to 100% flexfuel cars. Three years after the US mandated production and importation of flexfuel vehicles, there would be 45 million flexfuel vehicles on the road in the US. This solves the chicken and egg problem: who wants a flexfuel car if you can’t purchase flexfuel, and who wants to build a flexfuel gas station if there are no flexfuel cars.

This entire program is economic. Nuclear electricity is competitive with coal and natural gas. Given today’s price of natural gas, nuclear electricity is competitive with natural gas for heating applications. Methanol costs 10 cents per gallon plus the cost of the natural gas; at $3 per thousand cubic feet (the price in 2000), methanol costs about 60 cents per gallon. Since methanol has 50% of the energy of gasoline, on an energy equivalent basis, methanol costs $1.20 per gallon plus 20 cents in taxes. An existing gas station pump can be converted to flexfuel for about $20,000. An extra $100 per automobile allows a car to run on flexfuel.

The Brazilian flexfuel program is for a mix of ethanol and gasoline; it does not include methanol. A sensor measures the oxygen content in the vehicle exhaust to determine whether the engine is running lean or rich. An engine management system adjusts the air/fuel ratio to balance performance, fuel efficiency, and emissions. This system does not need to know what the fuel is; it can run on a mix of methanol, ethanol, and gasoline.

The Brazilian approach is based upon an earlier effort by Ford to develop a methanol/gasoline flexfuel car for the California Energy Commission. The program involved 14,000 cars over 10 years in the 1990s. A summary report concluded “seamless vehicle operation using any combination of methanol and gasoline … engine durability can be expected to match gasoline vehicles … an incremental improvement in vehicle emissions … Health and safety related issues that had undergone long examination and debate with respect to methanol proved largely insignificant”.

Unlike gasoline, both methanol and ethanol are soluble in water and biodegradable by common bacteria. A methanol spill in the ocean would disperse quickly and not pose any long term environmental risk. Similarly a land spill or seepage does not pose any risk to groundwater. While methanol in quantity is toxic, the FDA allows a daily dose of 500mg. Since aspartame is converted to methanol via the digestive process; drinking a can of diet soda results in 10 times as much methanol intake as from potential inhalation while refueling.

Nuclear electricity combined with natural gas to methanol is the way to implement the first phase of the Hydrogen Economy. Methanol is the elusive Hydrogen Carrier. There is more hydrogen in a gallon of methanol at room temperature than in a gallon of liquid hydrogen at -400 degrees Fahrenheit.

The problem with the conventional view of the Hydrogen Economy is not the engine or even the fuel cell technology. The fundamental issue is hydrogen distribution and storage and secondarily the production of hydrogen economically.

The Distribution and Storage issue centers around the search for a Hydrogen Carrier. Methanol is an excellent hydrogen carrier which exceeds the 2015 research target of the DOE by a wide margin. The existing gasoline distribution and storage infrastructure can be utilized for methanol storage and distribution with minor modifications.

Hydrogen can not be produced economically by electrolysis; it takes 4 energy units of electricity to produce 1 energy unit of hydrogen. However, high temperature nuclear reactors should be able to produce hydrogen as a byproduct; but, that technology will not be available for commercial deployment much before 2020-2030.

Natural gas is an excellent initial source for hydrogen using methanol as the Hydrogen Carrier.

You may raise two objections to the use of natural gas as a transportation fuel. First, it is still a fossil fuel so how are we reducing funding for OPEC; and second where is the vast quantity of natural gas that will be needed for this approach?

The issue with OPEC is first to drive the price of oil and natural gas down and then second to totally eliminate fossil fuels from the American, European, and Japanese economy. By converting natural gas to methanol, we have the opportunity to double the supply of transportation fuel which will drive down the price of oil and gas. This should be the first objective in the transition from fossil fuels to nuclear.

When we can produce hydrogen economically from nuclear power, then we are ready to relegate fossil fuels to the dustbin of history. At that point, hydrogen can be combined with CO2 from the air to produce methanol and the distribution and storage infrastructure can continue to be used. When fuel cell technology becomes available for commercial development, the gasoline engines can be removed from hybrid cars leaving only an electric motor, a battery, and a hydrogen fuel cell and methanol reformer or a Direct Methanol Fuel Cell.

If China and India also adopt this approach, then OPEC will be marginalized within 10-20 years. Reducing the competition between the US and China over energy resources will go a long way towards improving the long term relationship between the current superpower and the emerging superpower.

The second issue is where do we get the natural gas. The answer is to convert from natural gas to nuclear electricity for heating and cooking. Furnaces are replaced on average every 16 years and stoves every 12 years. Over this time period the transition from natural gas to electricity could occur. We could also pass a law discouraging the use of natural gas to produce electricity similar to the law which discouraged the use of oil for the production of electricity.

Using very rough calculations, 200 nuclear plants at a cost of $300 billion would free up 40% of our natural gas consumption and 200 large natural gas to methanol plants at a cost of $80 billion would increase our supply of transportation fuel by 40%. In 1974 and 1975, we added 2 new nuclear plants in the US every month. This is a construction project; not a research project.

To make this program work, the following laws are required:
1) mandate production and importation of flexfuel vehicles within 3 years

2) automatically grant an operating license for a nuclear reactor if it is built on an existing site and it’s design has already been approved by the NRC

3) set a minimum price for a barrel of oil ($30-50) to prevent OPEC lowering the price of oil until our investments are made uneconomic (Saudi Arabia pumps oil at $2-5 per barrel)

4) some kind of incentive to transition from natural gas to electricity for heating applications

To those who say that this kind of intrusion into the market place is unwarranted, they are living in a dream world. The current market for oil is nothing like a free market. The US attempt to establish a free market in energy after WW2 started to break down in the 1970’s with the first oil embargo. Today, OPEC is a cartel with monopoly pricing power.

What is even worse, OPEC’s decision makers are not completely motivated by financial concerns. Profit maximization is not the only decision criteria. Decisions makers are now political players at the state level and these decision makers are growing increasingly hostile to the interests of the US.

At some point, our choice will not be to pay an extortionate price, but rather how to respond to an embargo. If Japan was willing to attack the US, a country 10 times its size, within 6 months of the US embargo in 1941, how long will it take the US to react militarily to an embargo?

Would the US invade if the price reached $300 per barrel; how about $500 per barrel? Would an invasion even be useful if the oil infrastructure was destroyed.

OPEC can claim that the market sets the price; it is a function of supply and demand they will say. Who can argue with that? That’s our position, market based pricing.

In reality, OPEC sets the price though its control of reserves and its investment decisions which determine the industry capacity. To maintain current price levels, OPEC does not have to cut production in response to US conservation as in the 1980s; OPEC only has to ensure that the growth in oil supply is less than the growth in demand from China and India less US conservation.

If you are concerned about CO2 emissions, then by 2050, 1000 nuclear plants will have solved the problem. The coal plants can be phased out as sufficient nuclear is available to satisfy heating (natural gas) and hydrogen requirements. Nuclear does not produce CO2 for electricity production; there will be no CO2 from heating when electricity replaces natural gas; and the net CO2 emissions from transportation will be zero when nuclear produces hydrogen, the hydrogen is combined with CO2 from the air to produce methanol, and methanol feeds a fuel cell which releases the same CO2 back into the atmosphere.

Nuclear energy is economic. 80% of the cost of nuclear electricity is capital costs; uranium accounts for about 10%, and operations and maintenance account for the rest. While current electricity production is competitive with coal and natural gas, two developments in nuclear plant design could significantly reduce the capital cost: assembly of 200MW reactors into larger reactors as demand increased and factory fabrication of large components for assembly at the construction site. The first creates a closer match between supply and demand while the second will reduce the length of the construction project.

Nuclear energy is clean . A cubic yard of uranium produces the same amount of electricity as 2 million tons of coal. A coal plant releases more radioactivity than a nuclear plant because of the trace amounts of radioactive material in the coal being burnt.

Nuclear energy is safe. Nuclear reactors have operated safely for 12,000 reactor years. Chernobyl does not count against the nuclear safety record; this Russian design would never be approved in the West. Three Mile Island was a success story; the release of radiation was minimal and no one was hurt. Even the recent earthquake which went right thru a Japanese nuclear plant had minimal effect. The new reactor designs which will be built are 1000 times safer than the current plants because they substitute safety systems based upon gravity and convection for safety systems based upon one or more extra sets of pumps and pipes. No only does removing all the extra pumps and pipes increase safety, it also reduces the cost by 30%.

Recycling nuclear waste reduces its volume by 96%; all of the waste produced to supply a person with electricity for their entire life would be the size of a golf ball. Spent fuel is stored in a water pool for 5-10 years and then moved to onsite dry cask storage for another 50 – 100 years. After 100 years the radioactivity of the waste has been reduced by 95%. The waste is then reprocessed to removed unenriched uranium, plutonium, other transuranic elements leaving only 4% of the original waste. The uranium is enriched and fed back into the reactor, the plutonium is mixed with enriched uranium and fed back into the reactor; the transuranic elements are fed into a breeder reactor. The remaining waste is encased in glass and stored underground. After 1000 years, the radioactivity level is the same as the original uranium dug out of the ground. Dealing with nuclear waste is a political problem, not a technical problem.

The US, Canada, and Australia have 70% of the world’s reserves of uranium. The US has sufficient supplies of coal for hundreds of years. OPEC has 70% of the world’s oil reserves. Russia, Qatar, and one of the “stans” have 70% of the world’s natural gas reserves. Russia has already proposed the formation of an OPEC like cartel for natural gas.

Russia, Iran, and Venezuela have proposed pricing oil in a basket of currencies and accepting payment in the same basket; Iran has implemented this policy. Russia sold Iran an air defense system and is selling arms to Venezuela. Iran is building a nuclear bomb and setting up a Hezbollah franchise in Venezuela. The Russian defense minister joked about setting up missiles in Venezuela. China’s puppet state, North Korea, has built a nuclear bomb and sent missiles flying over Japan. China has the capability to destroy the US satellite system which is essential to US military superiority; China recently surfaced an undetected submarine near a US aircraft carrier. OPEC and China hold about $3 trillion in US dollar reserves.

Al Qaeda is operating openly in sections of Pakistan; entire Pakistani Army units are surrendering to Al Qaeda without much of a fight; Sharif, who was deposed by Musharraf in 2000, has returned to Pakistan from exile in Saudi Arabia/Wahabiland. If Pakistan goes over to the dark side, Saudi Arabia will not be far behind.

If you believe in the Green Dream of wind and solar, just remember that your choices are not without consequences. Shutting down the nuclear industry in the 70’s created the CO2 problem of today. If we had 300 or 400 nuclear plants now instead of 100, most of the coal plants would already be phased out.

The people promoting Global Warming are proposing a carbon tax or a cap and trade system to reduce CO2 emissions. If this policy is implemented, the result will not be electricity generated by wind and solar; the main result will be the substitution of natural gas for coal in electricity generation.

We have already seen this in California. In 1985 the environmentalists convinced California that with conservation, there was no need for additional power plants. In 2001 when the air conditioners and lights started to turn off, there was a panic and the electric utilities were blamed for the crisis. The politicians scrambled and a large number of natural gas plants were built. When the chips were down, they didn’t turn to wind or solar, they used natural gas. A carbon tax will have the same effect.

In 20 years, we may be importing large quantities of natural gas from OPEC in the form of Liquefied Natural Gas. An exploding LNG tanker has the force of a hydrogen bomb. Shipment of methanol, after conversion from natural gas, has a risk similar to oil. Not only is there a risk of LNG explosion, but we will be dependent upon OPEC for our electricity as well as our oil. OPEC will be able to turn out our lights as well as stop our cars. A carbon tax takes us down the road of increased OPEC energy dependence rather than OPEC energy independence. Green Dreams have consequences.

Malaria kills 1 -2 million Africans per year and 300 million worldwide are afflicted with this disease which saps the victim’s energy. Spraying DDT on the walls of houses has reduced the incidence of malaria by 80% where it has been tried. If environmentalist did not oppose DDT, at least 1 million people per year would not die. The people responsible for malaria reduction prevent implementation of the technique used in the West to eliminate malaria. Why isn’t this considered genocide? This is more than one Rwanda every year; it is 15 – 30 million men, women, and children over the last 15 years. Green Dreams have consequences.

If environmentalists manage to prevent the introduction of genetically modified food citing the precautionary principle, and as a result millions die of starvation, will the environmentalists confess their guilt or will they accuse the West of greed and indifference.

A lot of environmentalists long for the good old days when food was grown organically, corporations didn’t exist, there was no commute, and technology didn’t dominate our lives. If this view wins the political battle in the US, there are a lot of people in the world who want to help us return to the 7th century. When we go bankrupt and can’t pay for the oil we need, the people preaching hate and intolerance just might turn their dreams of a caliphate into our reality. Green Dreams have consequences.

To those on the right who oppose nuclear electricity due to fears of proliferation, all I can say is North Korea, Pakistan, and soon Iran. Saudi Arabia will follow Iran. Brazil is talking about an enrichment program. The genie is out of the bottle. We should continue our attempt to contain enrichment programs but not by restraining our own nuclear development. Not only is it just as important, it is also possible to achieve OPEC energy independence.

A containment strategy against Islamofascism may be possible if we can achieve OPEC energy independence; without independence, containment is not possible and a military confrontation is almost inevitable. We are already in Iraq and Afghanistan and were recently threatening to bomb Iran. At what point do Russia and China become involved? If we didn’t have Saudi Arabia as an “ally”, it just might be easier to strengthen our relationship with democratic India.

Stephen C. DuVal
December 16, 2007

References:
1) The Role of Synthetic Fuel In World War II Germany; Dr. Peter W. Becker; http://www.airpower.maxwell.af.mil/airchronicles/aureview/1981/jul-aug/becker.htm
How oil affected the German war effort.

2) Energy Victory: Winning the war on terror by breaking free of oil; Dr. Robert Zubrin 2007
Describes the threat from Islamofascism, the effect of oil on WW2, why the Hydrogen Economy wont work, why methanol should be included in flexfuel, the Brazil experience with flexfuel, argues that methanol from biomass is the way to go. Describes using biofuels to promote development in third world countries and to provide substitute crops to farmers currently growing illegal drug crops.

3) Radicalization in the West: The Homegrown Threat, NYPD, 2007, http://www.nypdshield.org/public/SiteFiles/documents/NYPD_Report-Radicalization_in_the_West.pdf
How terrorists are recruited and trained based upon a review by the NYPD of terrorist activity around the world.

4) Grain and Oil By Yegor Gaidar, 2007
http://www.aei.org/publications/pubID.25991,filter.all/pub_detail.asp
How the price of oil impacted the fall of the Soviet Union. Yegor Gaidar was Prime Minister of Russia in the early 1990’s.

5) Beyond Oil and Gas: The Methanol Economy, Dr. George Olah 2006
Excellent review of all energy sources. Argues that the Methanol Economy makes much more sense than the Hydrogen Economy from a Chemistry and Physics perspective. Dr. Olah has a Nobel prize in Chemistry.

6) The Bottomless Well, Peter Huber 2005
Reviews the history of energy, shows that the supply of energy are almost limitless, shows that over time we use/waste more and more energy producing energy, shows that concentrated energy (laser) is much more valuable than diffuse energy (sunlight)

January 8, 2008 Posted by | electricity usage, methanol, nuclear energy, OPEC, reader submission | 102 Comments