Thursday, October 8, 2009

Climate Progress

Climate Progress



Energy and Global Warming News for October 8: Over 90% of Americans support solar power development

Posted: 08 Oct 2009 09:17 AM PDT

http://greenernews.files.wordpress.com/2009/07/solar_power_molten_salt.jpg

92% of Americans support solar power development, study says

The vast majority — 92% — of Americans think it's important for the country to develop and use solar power, according to a study released today, making the alternative energy option potentially one of the most popular things since puppies or ice cream.

The sentiment was echoed almost evenly across political parties, with 89% of Republicans, 94% of Democrats and 93% of Independents agreeing that solar energy is an important aim.

The 2009 Schott Solar Barometer, conducted by independent polling firm Kelton Research, found that 77% of respondents also believe the federal government should make solar power development a national priority. Nearly half are considering solar power options for their home or business, while 70% of those hope to make the switch in the next five years. Only 3% already use the sun for energy.

If, as president of the U.S., they had to choose one energy source to fund, 43% of respondents would chose solar, followed by the 17% who picked wind, the 12% who settled on natural gas and the 10% who selected nuclear.

And yet only 12% of those polled could say that they were extremely informed about solar power while 74% said they wished they knew more about solar power options.

The study, conducted from Aug. 31 to Sept. 8, was commissioned by German photovoltaic company Schott Solar.

A Strong Climate Treaty Could Mean More Jobs Than If We Continue Using Coal

The world stands to gain 6.9 million jobs by 2030 in the clean energy sector if a strong deal is reached in Copenhagen, according to a report released recently by Greenpeace International and the European Renewable Energy Council (EREC).

A switch from coal to renewable electricity generation will not just avoid 10 billion tons of CO2 emissions, but will create 2.7 million more jobs by 2030 than if we continue business as usual. Conversely, the global coal industry – which currently supports about 4.7 million employees worldwide – is likely to contract by more than 1.4 million jobs by 2030, due to rationalization measures in existing coal mines.

"Global leaders can tackle the twin crises of global economic recession and climate change head on by investing in renewable energy," said Damon Moglen, Greenpeace USA global arming campaign director. "For each job lost in the coal industry our green energy scenario, known as the Energy [R]evolution, creates three new jobs in the renewable power industry. We can choose green jobs and growth or unemployment, ecological and social collapse."

Greenpeace's latest research provides a model for cutting emissions while achieving economic growth, illustrates how the transition to clean energy will provide more jobs by 2030 in the power sector than would be available if it stays on the current carbon-intensive path. However, leaders and governments must act on this information as soon as possible to provide necessary jobs and retraining.

Midwest govs. see clean energy cooperation need

Governors from across the Midwest are working together to promote clean energy industry and infrastructure in the region despite heated competition between their states for new investment and jobs.

Michigan Gov. Jennifer Granholm and Wisconsin Gov. Jim Doyle said Wednesday that recent agreements by members of the 11-state Midwestern Governors Association aim to help make the region a center for clean energy.

"You have a lot of these little battles … that go back and forth," Doyle said. "But I think one of the things we've worked hard on as Midwest governors is to understand that our bigger picture is that we're competing as a region."

The association's two-day Jobs and Energy Forum in Detroit that started Tuesday was focused on efforts to leverage the Midwest's natural resources, manufacturing expertise and skilled work force for an economy based on clean energy, such as wind, solar and other renewable resources.

Agreements include the Midwestern Energy Infrastructure Accord, which focuses on coordinating the development of improved electricity transmission across the region, a pipeline for biofuel, and technology capturing the emission of carbon dioxide from burning coal for underground storage.

A jobs platform lays the groundwork for training workers to handle jobs a clean-energy economy would create. But the cooperation only goes so far, especially among industrial Great Lakes states that have massive amounts of manufacturing capacity in the wake of decades of plant closings.

Climate a Bigger Challenge Than Recession, China Says

China, the world's biggest polluter, said climate change is a challenge that it shares with the world and is a more formidable one than the global recession.

The world's third-largest economy is committed to helping fight climate change and has taken "responsible" steps, Vice Minister of Science and Technology Liu Yanhua said at a conference in Hong Kong today, reiterating the stance of President Hu Jintao.

Industrialized economies such as the U.S. and developing countries led by China are deadlocked on how much rich nations should help poor ones deal with climate change and how much wealthy countries should cut emissions. President Hu said last month China will cut emissions in proportion to economic growth, without giving specific targets or goals.

"High-ranking members of the government are now publicly saying before the Copenhagen climate-change summit what China is doing to tackle the problem and that it's prepared to do more," Yang Ailun, a spokeswoman at environmental group Greenpeace, said by phone from Beijing. "The aim is also to put pressure on countries like the U.S. to make greater commitments to reduce emissions and to counter arguments China's not doing enough."

California green push to staunch job losses -study

California's plan to slow climate change will boost the state economy and save hundreds of thousands of jobs at risk from rising energy costs, a study by a University of California economist said on Wednesday.

The most populous U.S. state leads the nation with its plan to cut carbon dioxide emissions to 1990 levels by 2020 with measures from encouraging energy efficiency to getting a third of state electricity from renewable sources such as wind and solar. But the plan is under attack from businesses and some academics who say the costs of going green will bankrupt many enterprises.

The state's decisions are also likely to affect the country at large, since federal policy often follows California's lead on environmental issues, from vehicle standards to plans passed in the state and being debated in the U.S. Congress to cap emissions and let companies trade credits to pollute.

Rising fossil fuel prices would cut state economic output by $84 billion and slash 626,000 jobs from state payrolls in 2020, if U.S. Department of Energy fuel forecasts are used instead of the outlook by the state energy commission, according to the study by economist David Roland-Holst of the University of California, Berkeley.

But the move to get a third of state electricity from renewables and become more efficient would reverse the decline, the study added. Instead, 2020 economic output would rise $20 billion from current projections and 112,000 jobs would be created.

Executives urge lawmakers to pass climate bill

Executives from about 150 companies, many involved in renewable energy technologies, heard a pep talk at the White House and then combed the halls of Congress on Wednesday to argue for passage of a climate bill that is facing an uphill fight in the Senate..

The executives in scores of meetings with senators and their staffs sought to counter opponents' arguments that the climate bill, which will force a shift away from fossil fuels, also will lead to much higher energy prices and cost American jobs.

The business executives from more than 30 states argued that climate legislation and a shift of energy priorities away from fossil fuels could lead to a new industrial revolution and create 1.7 million jobs related to clean energy technologies — from developing new batteries to building windmills and the next generation of solar panels.

The climate legislation is needed to create markets and jobs, said John Doerr, a partner in Kleiner Perkins Caulfield & Byers, a leading venture capital firm on Wall Street. Otherwise, he cautioned, these technologies will be developed and commercially produced elsewhere and "we will be working for the Chinese."

The executives said they wanted to bring a message to senators: that the successes of their companies shows the viability of the clean energy development and that limits on greenhouse gases, mainly carbon dioxide from burning fossil fuels, will lead to the creation of new companies and industries.

But, they argued, without action in Congress, these same technologies will be produced elsewhere, likely in China.

"That's the issue, jobs. What's at question is who's going to build the batteries and who's going to get the jobs," said David Vieau, president of A123Systems Inc., a Massachusetts-based company that makes high-power lithium ion batteries for hybrid cars and other uses.

"If we don't act (on climate legislation) it's absolutely certain we're going to get a minimal piece of that pie."

The same theme was heard earlier in the day as the executives gathered at the White House to hear from Energy Secretary Steven Chu and Commerce Secretary Gary Locke.

Econ 350: Can we still afford to save the climate?

Posted: 08 Oct 2009 07:29 AM PDT

This is a guest post from economist Eban Goodstein, Director of the Bard Center for Environmental Policy.  It is partially excerpted from this Grist piece.  He and his colleagues at the E3 Network have just released a detailed study on The Economics of 350.  The figure compares cumulative emissions for a 350 ppm CO2 trajectory.

cumulative emissions graph


Recently, many climate scientists have doubled down on the "safe" level for atmospheric CO2.  To avoid global warming catastrophe-collapse of the continental ice-sheets and sea level rise of dozens of feet — prominent voices led by NASA's James Hansen are now telling us we have to get down to 350 ppm, and quickly.

Game over?

No. Instead, time to adjust our thinking about what is possible.

Several co-authors and I recently completed a report for Economics for Equity and the Environment Network (E3), surveying the economic studies informed by recent science. The report  found that quicker action aimed at 350 makes good economic sense.. With likely investments of about 1-3% of global GDP, we could rewire the planet with clean energy, rebuild global forests to trap billions of tons of carbon, create jobs, and stabilize the climate. And depending on the price of oil, these investments might actually save us money.

Is 350 Possible?

Hansen et al. (here, see Figure 1) described a detailed scenario for reducing greenhouse gas emissions with the goal of reaching 350 ppm CO2 by 2100. It included phasing out coal completely (or achieving 100% carbon capture) by 2030, along with a combination of large-scale reforestation, avoided deforestation and carbon capture and storage to withdraw huge quantities of CO2 from the atmosphere. To reach the 350 target by 2100, the world would have to quickly go beyond reductions to achieve net negative emissions-removing more greenhouse gases from the atmosphere than are emitted each year.

Our report contrasts Hansen's scenario with a less demanding but still quite ambitious trajectory which does not require the world to achieve negative net emissions. In this scenario, the world reaches 350 ppm CO2 by 2200. Emissions are reduced to 54 percent of 1990 emissions by 2020 and 3 percent by 2050, and then zero out, but do not go negative.

The bottom-line on the technical side: Decarbonizing by 2050 is possible with, roughly, the suite of technologies now available or on the near-term horizon. Very aggressive policy, however, will still be required very soon to drive down the costs of renewables, to redesign cities, reimagine transport and agricultural systems, and insure that all efficiencies are captured. Doing all this gets the world to 350 by 2200. Taking the additional steps to achieve negative emissions (and 350 by 2100) would require the development of large-scale, cost-effective sequestration technologies that go well beyond reforestation.

Economics, 350 and Politics

At least four research groups have modeled global scenarios that lead to 350 ppm CO2. One finds that in a world with unemployed labor and other resources, the stimulus from new climate investments might accelerate economic growth. The other three groups find net annual costs that are generally between 1 percent and 3 percent of world output.. These studies are consistent with the Stern Review, the reports by McKinsey, and others, suggesting that achieving 450 ppm would cost around 1% or less of global GDP.

Both of these targets, 350 or 450, become a lot cheaper if oil prices return soon to $150 a barrel. If peak oil drives prices that high in the coming decade, then decarbonizing at a pace to hit 350 could lead to economic gains.

Dropping the global climate target from 450 ppm to 350 ppm of atmospheric CO2 may appear to present an impossible task. In fact, it leaves us with qualitatively the same challenge. Achieving 350 simply requires accelerating a global technology revolution that will yield many benefits- in terms of climate stability, energy security, and economic payback. And estimates of the scale of the investment needed to complete that revolution-and complete it on time-are affordable.

In Europe, the US and China, the politics of 450 ppm are beginning, just beginning, to come into view. Our new study sets the stage for a longer-term discussion.  The obstacles to achieving 350 are not technical nor are they economic.

JR:  For the science behind 350 ppm, see "Stabilize at 350 ppm or risk ice-free planet, warn NASA, Yale, Sheffield, Versailles, Boston et al." Since the science is preliminary and it is not not yet politically possible to get to 450 ppm, let alone 350, my basic view, as expressed in that post, is Let's start working now toward stabilizing below 450 ppm, while climate scientists figure out if in fact we need to ultimately get below 350.  Either way, this is what needs to be done technology-wise:  "How the world can (and will) stabilize at 350 to 450 ppm: The full global warming solution."  The difference between the two targets is that for 450 ppm, you need to do the 12-14 wedges in four decades.  For 350 ppm, you (roughly) need 8 wedges in about two decades plus another 10 wedges over the next three decades (and then have the world go carbon negative as soon as possible after that), which requires a global WWII-style and WWII-scale strategy as discussed here.  I would like to get back to 350 ppm by 2100, but I tend to think that 2150 is "more likely."  Either way, the cost of doing so is certainly far cheaper than the cost of failing to do so (see "Intro to climate economics: Why even strong climate action has such a low total cost — one tenth of a penny on the dollar").

Comparing cumulative emissions for a 350 ppm CO2 trajectory

Lindsay Graham (R-SC): "If you had a bill that would allow for responsible offshore drilling, a robust nuclear power title, I think you could get some Republican votes for a cap-and-trade system."

Posted: 08 Oct 2009 06:38 AM PDT

"I think the planet is heating up," Graham said. "I think CO2 emissions are damaging the environment and this dependence on foreign oil is a natural disaster in the making. Let's do something about it. I'd like to solve a problem, and if it's on President Obama's watch, it doesn't bother me one bit if it makes the country better off."

The good news is the chances of passing a comprehensive climate and clean energy bill are rising, as these quotes from a key swing GOP vote make clear.  The other good news is that most of the annoying things that progressives may have to swallow to get that bill smell worse than they taste.  E&E News reports:

Key Senate Democrats signaled yesterday they are willing to negotiate with Republicans on nuclear power and expanded domestic oil and gas development if it helps in nailing down the 60 votes necessary for floor passage on a comprehensive global warming and energy bill.

"Every idea is on the table," said Foreign Relations Chairman John Kerry (D-Mass.), the lead sponsor of Senate climate legislation. "We're going to work in a bona fide way with everybody to see how to bridge a gap here. We've got to get a 60-vote margin. That means you've got to legislate, which means you have to compromise."

Several moderate Senate Republicans, including John McCain of Arizona and Lindsey Graham of South Carolina, said they are in talks with Kerry and Sen. Joe Lieberman (I-Conn.) on the nuclear language, as well as other key issues.

"A guy like Senator Kerry is looking for coalitions," Graham said.

The notion of a nuclear title is not news — that was always going to happen.  While I wouldn't be thrilled with all conceivable provisions such a title might have, the overwhelming majority are unlikely to have a significant impact or even cost the taxpayers much money, as long as nuclear power plants remain so damn expensive (see "Nuclear Bombshell: $26 Billion cost — $10,800 per kilowatt! — killed Ontario nuclear bid").

If the nuclear industry could ever get its act together and come up with one or two standardized, modular, affordable designs, they might become a major climate solution.  And that wouldn't be a terrible thing, given just how much clean energy we are going to need to stabilize near 2°C warming.  But I'm not expecting any major design improvements or big cost drops for a decade or more in this country.

What exactly do the pro-nuke folk want?

Graham said he is pushing for language in the Senate bill that puts nuclear power on par with wind and solar power in terms of tax credits and inclusion in a nationwide renewable electricity standard.

"Also to deal with the waste stream," Graham added. "You've got to have a disposition plan to deal with the waste."

McCain said he brings four major demands to the negotiation table: a commitment to construction of new nuclear power plants, loan guarantees, and solutions for both nuclear waste storage and recycling.

And I'd like to be a judge on American Idol.  Seriously, though, my guess is a deal can be had — and will.

The final deal is not going to call nuclear power "renewable" and stick it in the existing too-weak renewable standard, I think, but rather may tack on a low carbon electricity standard that includes nuclear, carbon capture and storage, and maybe combined cycle natural gas.

As for McCain, I just don't know what he means by "a commitment to construction."  You can't force people to build nukes — especially at current staggering prices:

So we'll throw money at nukes, just like the bill does for CCS, and a few plants will be built and the overwhelming majority of the emissions reductions will be achieved through the low-cost solutions — efficiency and conservation, natural gas fuel switching, and wind, solar thermal, and biomass.

What about drilling?

Graham suggested Kerry look to the tentative agreement reached last year among roughly 20 Senate moderates — Democrat and Republican — that would open up large swaths of new federal acreage to oil and gas development in the eastern Gulf of Mexico and along the coasts of Virginia, North and South Carolina, and Georgia.

Well, this will need to be crafted in a way that does not lose votes, such as Sen. Bill Nelson of Florida, but fundamentally, most of the potential drilling provisions bother me less than the nuclear ones for two fundamental reasons:

  1. When oil prices soar in the coming years, Democrats are not going to be able to resist the demand for opening more area to drilling anyway — so they might as well get a climate deal in return now.  Oil is likely to blow past $100 a barrel in Obama's first term — and could well blow past $150 a barrel in what will hopefully be his second term (see "Deutsche Bank: Oil to hit $175 a barrel by 2016)."  Opening more federal acreage is inevitable.
  2. Opening more federal acreage probably won't lead to any significant extra drilling for at least another decade.  I had a long analysis of this last year — "The cruel offshore-drilling hoax."  The oil companies already have access to some 34 billion barrels of offshore oil they haven't even developed yet, but ending the federal moratorium on offshore drilling would probably add only another several billion barrels, generating under 100,000 barrels a day in new supply — maybe 0.1% of world production — sometime after 2020.  A leading EIA analyst told me in 2008 that ending the entire federal moratorium is "certainly not going to make a difference in the next 10 years."  My 2008 analysis discusses why.  If this deal ripens, I'll do another post.

We need to keep our eye on the prize — a shrinking economy-wide cap, coupled with major provisions to boost energy efficiency and and other clean technologies.  This is what we need to complete the transformation to a clean energy economy begun in the stimulus, generating $100 billion a year in new U.S. investment in clean energy, sufficient to compete with the Europeans and Asians who want to eat our lunch in this most rapidly growing industry of the century.  And, of course, it is what we need to achieve an international deal that gives us a fighting chance to stabilize anywhere near 2°C total warming and avert catastrophic impacts.

Publicize or perish: The scientific community is failing miserably in communicating the potential catastrophe of climate change.

Posted: 07 Oct 2009 07:20 PM PDT

Physics World asked me to write for a special issue on Energy, Sustainability and Climate Change.  The article, "Publicize or perish," is online and reposted below with links.

Scientists must get better at messaging about climate change before it is too late. (Credit: Photolibrary)

The fate of the next 50 generations may well be determined in the next few months and years. Will the US Congress agree to a shrinking cap on greenhouse-gas emissions and legislation to achieve the transformation to clean energy? If not, you can forget about a global climate deal. But even if the bill passes and a global deal is achieved, both will need to be continuously strengthened in coming years, as the increasingly worrisome science continues to inform the policy, just as in the case of the Montreal Protocol on ozone-depleting substances.

The International Scientific Congress on climate change held in Copenhagen in March, which was attended by 2000 scientists, concluded that "Recent observations confirm that, given high rates of observed emissions, the worst-case Intergovernmental Panel on Climate Change (IPCC) scenario trajectories (or even worse) are being realized." That would mean that by 2100 there would be atmospheric concentrations of carbon dioxide of more than 1000 ppm, total planetary warming of 5 °C and sea-level rises probably on the high end of recent projections of 1–2 m followed by a rise of as much as 2 cm per year or more for centuries. We would also see one-third of inhabited land reaching dust bowl levels of aridity, half or more of all species becoming extinct, and the oceans increasingly becoming hot, acidic, dead zones. And if we do not change course quickly, the latest science predicts that these impacts may be irreversible for 1000 years.  [See "Intro to global warming impacts: Hell and High Water.]

In short, the fate of perhaps the next 100 billion people to walk the Earth rests with scientists (and those who understand the science) trying to communicate the dire nature of the climate problem (and the myriad solutions available now) as well as the ability of the media, the public, opinion-makers and political leaders to understand and deal with that science.

Disinformation and scientific illiteracy

So far, we are failing miserably. Neither the US nor the world as a whole has taken any consequential action to reverse emissions trends. And if the scientific community does not help lead the way in reversing emissions, then we will justifiably bear serious blame from future generations, who will no doubt become increasingly bitter about the havoc our ignorance and myopia has brought them. Nobody will be writing books calling us "the greatest generation."

As one example of how bad scientific messaging has been, let me go through Gallup polling over the past decade as discussed in a 2008 article in Environment magazine entitled "A widening gap: Republican and Democratic views on climate change".

The article reported that in 1997 some 52% of Democrats said that the effects of global warming had already begun and 52% said most scientists believe global warming is occurring. In 2008 some 76% said warming had begun and 75% said most scientists believe warming is occurring. It would appear that Democrats believe most scientists.

Few leading climate scientists or major scientific bodies would disagree that the scientific case that the planet is warming – and that humans are the dominant cause of recent temperature rises – has become stronger in the past 10 years. That is clearly seen in the scientific literature – as summarized in the IPCC reports.

And yet for Republicans, in 1997 some 48% said warming had begun and 42% said most scientists believe warming is occurring – a modest six-point differential. By 2008, the percentage of Republicans saying the effects of global warming had already begun had dropped to a mere 42% (an amazing statistic in its own right given the painfully obvious evidence to the contrary). But the percentage saying most scientists believe global warming is occurring had risen to 54% – a stunning 12-point differential.

In short, a significant and growing number of Republicans – one in eight as of 2008 – simply do not believe what they know most scientists believe. That is quite alarming news, given that it is inconceivable that the US will take the very strong action needed to avert catastrophe unless it comes to believe what most scientists believe, namely that we are in big, big trouble and can delay no further.

Here is the lesson for scientists: in the last decade, we have apparently become less convincing to Republicans than the deniers have been. They have apparently become better at messaging, while we have perhaps become worse.

[For more poll details, see "The Deniers are winning, but only with the GOP".]

In part, this has occurred because there is an organized disinformation campaign promoted by conservative think tanks like the Competitive Enterprise Institute and well funded by fossil-fuel companies like ExxonMobil, with key messages repeated by conservative pundits and politicians like George Will, Rush Limbaugh and Republican Senator James Inhofe. At the same time, the media have treated this more as a political issue than a scientific one, thereby necessitating in their view a "balanced" presentation of both sides, notwithstanding the fact that the overwhelming majority of scientists understand humans are warming the planet and dangerously so. Also, increasingly profit-driven media have been abdicating their role in science education. Science writer Chris Mooney and scientist Sheril Kirshenbaum offer these grim statistics in their recent book Unscientific America: How Scientific Illiteracy Threatens our Future (2009, Basic Books):

  • For every five hours of cable news, one minute is devoted to science;
  • Some 46% of Americans believe that the Earth is less than 10,000 years old;
  • The number of US newspapers with science sections has shrunk by two-thirds in the last 20 years;
  • Just 18% of Americans know a scientist personally;
  • The overwhelming majority of Americans polled in late 2007 either could not name a scientific role model or named "people who are either not scientists or not alive".

The lack of scientific messaging

Yet just when the media are abandoning science coverage, many scientists are increasingly reluctant to address politicized issues like global warming.

Scientists who are also great public communicators, like Carl Sagan or Richard Feynman, have grown scarcer as science has become increasingly specialized. Moreover, the media like the glib and the dramatic, which is a style that most scientists deliberately avoid. Scientists like to focus on the things that they do not know, since that is the cutting edge of scientific research. So they do not keep repeating the things that they do know, which is one reason that the public and the media often do not hear from scientists about the strong areas of consensus on global warming. And as the physicist Mark Bowen writes in Thin Ice (2006, Holt), his book about glaciologist Lonnie Thompson, "Scientists have an annoying habit of backing off when they're asked to make a plain statement, and climatologists tend to be worse than most."

As scientist and writer Jared Diamond wrote in a 1997 article in Discover magazine on scientific messaging (or the lack thereof), "Scientists who do communicate effectively with the public often find their colleagues responding with scorn, and even punishing them in ways that affect their careers." After Sagan became famous, he was rejected for membership of the National Academy of Sciences in a special vote. This became widely known, and, as Diamond writes, "Every scientist is capable of recognizing the obvious implications for his or her self-interest."

Scientists who have been outspoken about global warming have been repeatedly attacked as having a "political agenda". As a 2006 article in the Bulletin of the American Meteorological Society explained (87 1025), "For a scientist whose reputation is largely invested in peer-reviewed publications and the citations thereof, there is little professional pay-off for getting involved in debates that mix science and politics."

The scientific community must figure out how to effectively engage the public on this crucial issue. The physics community in particular must help lead the way. After all, it was effective at warning the public and policymakers about the dangers of that other existential threat to the human race – nuclear weapons. We appear to have walked back from the precipice of global nuclear war only to face an equally grave threat from our unbridled consumption of fossil fuels.

I believe that the major scientific bodies and leading scientists in the US must come together immediately to develop and quickly implement a serious communication strategy. We are again at the precipice. Indeed, it is, as the current Presidential Science Advisor and physicist John Holdren has said many times, too late to avoid dangerous anthropogenic warming of the planet. Now the only question is whether we can avoid unmitigated catastrophe.

One final point. If the scientific community is unable to help persuade the public, opinion-makers and political leaders to take the necessary action now, then the entire relationship of science to the broader world will change forever. When the US and the world do get desperate about global warming in the next decade or two, then the entire focus of society, of scientists and engineers, and of academia will be directed toward a Second-World-War-scale effort to mitigate what we can and adapting to the myriad miseries that our myopic dawdling has made inevitable. I do not think that the scientific community has even begun to think about that.

Related Post:

Deutsche Bank: Oil to hit $175 a barrel by 2016, which "will drive a final stake into long-term oil demand," spurred by a "disruptive technology" — "the hybrid and electric car, that will very likely have a far greater positive impact on oil efficiency than the market currently expects"

Posted: 07 Oct 2009 03:30 PM PDT

peak_oil2.jpg

Deutsche Bank's important new report, The Peak Oil Market: Price dynamics at the end of the oil age begins with a quote that is one of my pet peeves:

"The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil."  Sheikh Yamani, Saudi Oil Minister, 1962-1986.

Great quote in a peak oil report except for one tiny point — we still use a lot of stones.  In fact, given that we have 6.7 billion people on the planet, I'm quite certain that we use a lot more stones than we did in the Stone Age.  I'm almost as certain that, as the DB report says, we will be using a lot less total oil in a few decades.  So the quote doesn't work, and the report, while dead on in many parts, is still a tad off.

SUPPLY:  We expect increasingly chronic under-investment in new oil supply capacity. We believe that concentration of remaining oil reserves into OPEC government hands will lead to under-investment in new supply and higher volatility in regulatory and fiscal regimes, and more volatile pricing. Consumer governments are adding to uncertainty with total lack of clarity on environmental legislation/regulation outcomes. That deep uncertainty in supply and demand will likely disincentivise private sector oil supply investment, exacerbating overall oil under-investment, and leading to peak oil supply within the next six years. We see market maximum capacity at 90mb/d in 2016 – just 5% above 2009….

After a final price peak implied at $175/bbl in 2016….

Hmm.  The price spike sounds right.  But I don't think the ultimate reason will be inherently chronic underinvestment — there's simply too much money to be made at projected oil prices for producers.  And I don't think the reason will be uncertainty surrounding regulation — again, there's simply too much money to be made of projected oil prices and, over at least the next decade, climate regulations will focus more on coal than oil.

The reason for the price jump is that we're running out of the easy supply.  That's certainly the view of all the peakers I know.  And it's the view of the International Energy Agency (IEA) and its chief economist, Dr. Fatih Birol (see World's top energy economist warns peak oil threatens recovery, urges immediate action: "We have to leave oil before oil leaves us"):

Dr. Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

The IEA's work makes clear that for oil to stay significantly below $200 a barrel (and U.S. gasoline to be significantly below $5 a gallon) by 2020 would take a miracle — or rather 6 miracles see "Science/IEA: World oil crunch looming? Not if we can find six Saudi Arabias!"  See also "Merrill: Non-OPEC production has likely peaked, oil output could fall by 30 million bpd by 2015," which noted,

Steep falls in oil production means the world now needed to replace an amount of oil output equivalent to Saudi Arabia's production every two years, Merrill Lynch said in a research report.

I agree with DB report that hybrids and battery-powered cars are the big game changer (see "Climate and hydrogen car advocate gets almost everything wrong about plug-in cars"):

DEMAND:  We now have a "disruptive technology" in the shape of the hybrid and electric car, that will very likely have a far greater positive impact on oil efficiency than the market currently expects. There are two major issues that lead us to believe that oil demand peaks with lack of available supply within six years:

1. With reasonable assumptions, we find that by 2020 the global average MPG of newly purchased light vehicles will have increased by a bit more than 50% compared to 2009, from roughly 29 mpg to about 44 mpg. The impact will be concentrated in US gasoline, the largest single element of global oil demand (12%), and will be dramatic enough in its own right to cause the peak of global oil demand around 2016. We forecast US gasoline demand to fall to 4.9mb/d – about 46% from its 2009 level – by 2030.

2. Also undermining oil demand is a switch to $30/boe natural gas. Unlike oil, natgas is abundant, accessible, and cheap to develop; huge current price discounts caused by OPEC and under-investment will cause major switching away from oil.

That seems plausible.  Certainly, I have been arguing that natural gas supply appears to be much larger than people realized, and quite separate from petroleum supplies (see "Game Changer Part 1:  There appears to be a lot more natural gas than previously thought").

But natural gas doesn't substitute straightforwardly for oil in most applications, whereas it does substitute directly for coal, so I expect most demand growth to go into the electric sector.  Even DB writes (their headline, not mine):

Why no natgas vehicles? A dinosaur invents a meteorite?

Quite simply, our auto team, reflecting auto industry trends, see little significant penetration of natgas vehicles over the forecast period. The infrastructure required is excessively costly and time consuming to construct, the cost of that construction falls to energy supply companies who cannot develop the cars to use it, and the benefits in terms of efficiency are too little to attract consumers. Natgas vehicles are a red herring, in our opinion.

Similarly, electricity doesn't substitute straightforwardly for oil in most applications.  It can substitute for oil in one or two relatively specific, albeit large, applications — short and perhaps medium-distance transportation.

So these DB conclusions are a bit puzzling:

PRICE DYNAMICS: as oil supply peaks, so oil demand will peak. But the fundamental mismatch in elasticities of supply & demand, time cycles of supply & demand and price mechanics of supply & demand will likely require a final upward price spiral that will serve to break US oil consumption short term, and shift it long term toward greater efficiency. US demand is the key. It is the last market-priced, oil inefficient, major oil consumer. We believe Obama's environmental agenda, the bankruptcy of the US auto industry, the war in Iraq, and global oil supply challenges have dovetailed to spell the end
of the oil era.

After a final price peak implied at $175/bbl in 2016, we forecast oil prices will be under fundamental long-term downward pressure. This pressure will be potentially exacerbated by a reversal in OPEC strategy, away from supply limits, towards market share gains. We suggest $70/bbl oil in 2030 in a market that has shrunk to around 79mb/d – 8% lower than its current level, and 40% below consensus (IEA/ExxonMobil/NPC) forecasts.

While I think this scenario is possible, it just doesn't strike me as likely.  The notion "as oil supply peaks, so oil demand will peak" is clever, but I think mostly a tautology.  There simply are far too many uses for oil and far too much growth in the developing world for latent demand to crash as fast as supply — in the absence of a steadily rising price.  I do expect peaks and valleys, with higher highs and higher lows, and the lows could certainly reach current levels again if we had another major economic crash in a decade.  But this forecast seems downright perverse:

DB price

I'd be happy to bet with anybody at DB the price trajectory after 2017 doesn't look anything like that.

I agree with DB that technology will change the price point at which efficiency and alternative technologies make sense:

Right now hybrids make sense economically when oil is at about $100/bbl, or gasoline at about $2.75.  By 2020, those numbers will fall to $85/bbl, $2.30/gal

And I agree that the elasticity for demand will change as a result of technology in repeated price shocks:

In the future, lower oil prices will not encourage demand

A key conclusion from our estimated elasticities is that the line of demand growth becomes increasingly steep over time, essentially implying that there is increasingly little price elasticity of demand at low prices. This is a fundamental concept related to "disruptive technology," whereby a move to a superior (more efficient) product is not reversed by the collapse in price of the former product. We believe that hybrid cars will be superior to combustion-only vehicles and consumers will be reluctant to switch back because of price volatility – i.e., they will fear, even if prices are low, that prices will rise again in the future….

The point here is that when the oil market breaks, the downward pressure on prices from a realisation that the market is contracting regardless of price, and abundant undeveloped oil preserves in major oil dependent producer economies, will exert further downward pressure on oil prices as the market contracts.

But hybrids and plug ins still use oil — as do jet planes and lots of other parts of the economy.  I'd love to believe, as DB projects, that new light duty vehicle MPG hits 95 (!) in this country, 106 in China, and 88 globally in 2030.  But that'll only happen if the whole planet gets very serious about global warming  — which DB tends to dismiss, writing "We believe that CO2 limitations will be too economically challenging to fully progress globally" — not because oil peaks just once more in price and then spends the entire 2020s declining back to current levels.

Let me end, where I began, with our tremendous use of stones even though the stone age is long gone.  DB offers this flawed analogy early on its report:

DB Whale

The problem with this analogy is that kerosene was a terrific, versatile, abundant and direct substitute for whale oil in pretty much every major application.  Neither electricity nor natural gas have that kind of substitutability for oil

Perhaps oil prices won't hit, say, $300 a barrel (in 2008 dollars), for a long, long time.  But they are far more likely to spend the 2020s well above $100 a barrel than below it.

Climate Progress is the second* ranked science blog

Posted: 07 Oct 2009 11:47 AM PDT

*third if you count anti-scientific websites like WattsUpWithThat, as Wikio does.

But should I put their little widget near the top of CP as Watts does?  It would, of course, say '3′ on it (for now).

I had not heard of these Wikio rankings, but I periodically check WattsUpWithThat for the latest in denier talking points — yes, it's a dirty job, but somebody has to do it, and it shouldn't have to be you!  What do I see but yet another website recognizing WattsUp as a science blog, when it is the exact opposite, as evidenced by his reprinting and endorsing a broad-based attack on the integrity of the entire scientific community and by his generally pushing disinformation [see "Diagnosing a victim of anti-science syndrome (ASS)" and links below].

Still, notwithstanding Wikio's refusal to draw a distinction between science and antiscience, the ranking is a relatively objective, as described here:

The position of a blog in the Wikio ranking depends on the number and weight of the incoming links from other blogs. These links are dynamic, which means that they are backlinks or links found within articles.

Only links found in the RSS feed are included. Blogrolls are not taken into account, and the weight of any given link increases according to how recently it was published. We thus hope to provide a classification that is more representative of the current influence levels of the blogs therein.

Moreover, the weight of a link depends on the linking blog's position in the Wikio ranking. With our algorithm, the weight of a link from a blog that is more highly ranked is greater than that of a link from a blog that is less well ranked.

Our rankings are updated on a monthly basis and also include Top Blogs for several categories: Technology, Politics, etc. New categories will be added on a regular basis.

The rankings seem a tad strange.  Not sure how I do so much better than Grist, since I'm sure they get two or three times as many readers each day.  RealClimate would do a LOT better if they posted MORE — hint, hint, RC folks!

Anyway, I am interested in your thoughts as to whether this is worth sticking on CP's front page near the top.  One thing is certain — it doesn't take up much space.

Related Posts:

Energy and Global Warming News for October 7: IEA says "China will be able to slow the growth of its emissions much faster than commonly assumed"; EIA's forecasted CO2 drop "justifies tough carbon caps"

Posted: 07 Oct 2009 10:37 AM PDT

The IEA report is here.  Photo is of wind turbines in Xinjiang, China.

International Energy Agency Sees Gains in China

Little good can be said about the worst economic slump since the 1930s, but it has produced at least one piece of positive news: the downturn will make it a bit easier to slow the rise in emissions responsible for climate change.

The International Energy Agency made that prediction in a report Tuesday on global greenhouse gas emissions. Because of slower economic growth, the agency slashed, by 5 percent, its estimate of how much greenhouse gas emissions will be produced in 2020.

But the energy agency also cautioned against complacency, stressing that reaching a deal in climate talks to be held in Copenhagen at the end of the year is crucial to limiting the rise in global temperatures.

Another reason for cautious optimism, the report said, is that China will be able to slow the growth of its emissions much faster than commonly assumed because of its rising investment in wind and nuclear energy and its newfound emphasis on energy efficiency.

But avoiding some of the worst consequences of climate change will still require significant and rapid investments in clean technology, and more meaningful cuts in carbon emissions, the report said.

"This gives us a chance to make real progress toward a clean-energy future, but only if the right policies are put in place promptly," said the agency's executive director, Nobuo Tanaka.

As a result of the economic slump, global emissions of carbon dioxide, the main greenhouse gas, are expected to decline by 3 percent this year, the steepest drop in the 45 years according to figures compiled by the agency. That compares with an average growth of 3 percent a year over the last decade.

The report outlines how governments can achieve additional cuts through energy efficiency and investments in clean technologies. The goal is to keep global temperatures from rising more than 3.6 degrees Fahrenheit. Meeting that target will require reducing emissions by 23 percent in 2030 compared with what they would otherwise be, the agency said.

"The message is simple and stark: if the world continues on the basis of today's energy and climate policies, the consequences of climate change will be severe," Mr. Tanaka said.

And while it may not be news to CP readers — see EIA stunner: By year's end, we'll be 8.5% below 2005 levels of CO2 — halfway to climate bill's 2020 target – I'm glad to see Bloomberg pick up this story:

Drop in CO2 Justifies Tough Carbon Caps

A drop in carbon dioxide levels due to the recession and use of cleaner fuels to produce electricity means Democrats should stand firm on a 20 percent cut in U.S. emissions proposed last week, environmental groups said.

The Energy Information Administration today forecast a 5.9 percent drop in energy-related carbon dioxide emissions this year, less than a week after Senate Democrats John Kerry of Massachusetts and Barbara Boxer of California unveiled "cap- and-trade" legislation to cut U.S. emissions 20 percent below 2005 levels by 2020.

The EIA projects carbon dioxide emissions from coal, oil and natural gas use at 5.45 billion metric tons, which would be 8.8 percent below the 2005 level of 5.97 billion tons.

"It reinforces our view that the 20 percent target that's in the Kerry-Boxer bill is certainly achievable," Dan Lashof, director of the climate center at the Natural Resources Defense Council, said in a telephone interview. "The level of effort required to achieve a 20 percent reduction is much more modest than had been anticipated."

With emissions already below the 2005 levels used as a baseline for the House, Senate and White House cap-and-trade proposals, Kerry and Boxer shouldn't negotiate away their 20 percent reduction target, Courtney Abrams, a global warming associate for Environment America, said in a telephone interview.

Business Coalitions Form to Back Climate Change Bill

A delegation of more than 150 businesses supporting the bill, which is sponsored by Sens. John Kerry, D-Mass., and Barbara Boxer, D-Calif., arrived in Washington yesterday and will flood senators' offices today to urge movement on the legislation. They range from companies that would directly benefit — such as solar panel makers — to ones that just want consistent federal guidance on carbon emissions.

Some of them, including computer giant Apple, have left the U.S. Chamber of Commerce because of the organization's opposition to the House of Representatives climate bill, which passed in June.

"The fact that [Apple is] saying, 'We have to do this' is something that other industries and people who stand in opposition to this bill in the Senate and the House really need to start paying attention to," Mr. McNeil said.

Representatives from the diverse group of businesses attended a reception last night with Ken Salazar, secretary of the U.S. Department of the Interior, and will hold a news conference today. They are part of a group called We Can Lead, sponsored by business coalitions Ceres and Clean Economy Network.

Commerce Secretary: Clean Energy Key to Midwest

U.S. Commerce Secretary Gary Locke told representatives of Midwest states on Tuesday that the growth of clean energy industries is key to the region's economic recovery and future.

Locke said new federal efforts such as a one-stop office in the Detroit area to make his department's services more accessible to businesses are part of a broader push to jumpstart job creation.

"Our fight to build a new, clean energy economy is just getting started and it is a fight that we simply must win," Locke said. His remarks kicked off a two-day Midwestern Governors Association's Jobs and Energy Forum in Detroit.

Locke said the CommerceConnect pilot program, if it's successful, could be expanded to other areas around the country. A ribbon cutting was held Tuesday at the office in Plymouth, about 20 miles west of Detroit. Staff will act as case workers for individual businesses that seek assistance.

The governors association estimates that the Midwest has lost more than 1.2 million manufacturing jobs alone since 2000. Michigan's unemployment rate in August was more than 15 percent, the highest in the nation, while Ohio's was nearly 11 percent and Indiana and Illinois both had rates of about 10 percent.

Green Group says Climate Bill Won't Hurt Farms

Global warming poses more of a threat to U.S. farm incomes than does the climate change bill passed by the U.S. House, which will have a "negligible" impact on American agriculture's bottom line, an environmental group said on Wednesday.

"A more careful examination of the facts shows that climate change itself, not climate legislation, is the real threat to American agriculture, and that climate-induced crop losses will cost US taxpayers and farmers far more than could ever be caused by the (House) bill," the Environmental Working Group (EWG) said in its report.

Legislation introduced last week in the Senate aims for a 20 percent reduction in smokestack emissions by 2020 from 2005 levels. A bill that narrowly passed the House in June calls for a 17 percent cut by 2020 in pollution from utilities, manufacturers and oil refineries — industries blamed for global warming.

The American Farm Bureau Federation has warned that the House and Senate bills will drive up sharply the cost of farm fuel, fertilizer and pesticides.

But the EWG report said cost increases — such as higher expenses to produce crops — resulting from the climate change bill passed "are so small they would be lost in the background noise" of changes to farm income caused by routine fluctuations in yield, crop prices and input costs.

Furthermore, EWG said farmers stand to lose more from weather patterns, such as flooding, drought or higher temperatures, caused by global warming.

Report Highlights Deforestation

A new bipartisan coalition of business, government and environmental leaders is asking the Senate to make deforestation a centerpiece of the climate bill by allocating billions to fund tropical forest preservation programs in developing nations.

In a new report released to POLITICO, the Commission on Climate and Tropical Forests argues that paying developing tropical countries to preserve their forests would provide economic incentives to stop deforestation, a major driver of global warming.

Tropical deforestation accounts for roughly 17 percent of global greenhouse gas emissions, a rate that makes Brazil one of the top emitters of greenhouse gases, along with far richer nations like the United States and China.

"It is truly time for America to launch a comprehensive response to this manageable threat," writes former Rhode Island Sen. Lincoln Chafee. "Protecting the planet's climate forests and fighting climate change can be the defining bipartisan issue of our time, but so far that bipartisanship has been largely absent."

But deforestation has long been a thorny issue for domestic and international climate policy.

Previous efforts to curb deforestation have largely failed because of difficulties in verifying and monitoring the programs and reporting on them. Environmental groups have also criticized some of the programs as open to abuse by corrupt politicians in poorer countries and by illegal logging companies.

Now the commission is saying the time is finally right to ink some serious forestry provisions — and action must start at home.

"This will be a big topic of discussion in Copenhagen, and clearly Copenhagen can be more successful to the degree the U.S. has a good program," said Nature Conservancy President and CEO Mark Tercek, referring to the U.N. Climate Change Conference in Denmark this December.

E.U. Plan to Curb CO2 to Favor Solar Power

The European Commission is expected to introduce a plan to reduce greenhouse gas emissions that directs the largest slices of €50 billion available for research and development to solar power and capturing and burying emissions from coal plants.

The plan, to be released on Wednesday, is partly intended to show that the European Union is taking the additional steps needed to meet ambitious goals to cut greenhouse gases before a summitmeeting in Copenhagen in December on reaching a new global agreement to curb climate change.

But the plan also signals the need for a reordering of the bloc's industrial priorities by requiring governments to spend significantly greater sums of money on clean energy even as the world emerges from a deep financial crisis.

"Markets and energy companies acting on their own are unlikely to be able to deliver the needed technological breakthroughs within a sufficiently short time span to meet the E.U.'s energy and climate policy goals," the commission said in a draft of the plan obtained by the International Herald Tribune.

Introducing low-carbon technologies also "represents a major challenge in the context of the financial crisis, where risk-aversion is higher and investment in new, riskier technologies is not high in investors' priorities," the draft said.

European Union commissioners are expected to seek agreement on the final sums to be allocated to low-carbon power industries at a meeting on Wednesday. The recommendation is from the European Commission, the E.U.'s executive arm.

Another winner under the draft plan would be a "Smart Cities" initiative focused on enhancing urban efficiency. The draft foresees €11 billion to develop a new generation of buildings and transport systems. The draft plan also would allocate €9 billion for bioenergy industries that produce electricity or fuels from plants or organic waste materials.

The commission said directing €7 billion to developing nuclear fission would aim to improve reactors' safety, produce less radioactive waste, minimize proliferation and extend the range of what nuclear plants do.

Activists Sue Texas to Restrict Greenhouse Gases

Environmental activists sued the Texas environmental agency Tuesday in an effort to force the state to regulate greenhouse gases, asking that coal-fired power plant projects be halted until that happens.

The Texas Commission on Environmental Quality issues air pollution permits that set limits on toxic releases, but the agency says there is no need to regulate carbon dioxide. Texas emits more greenhouse gases, made up mostly of CO2 emissions, than any other state.

The lawsuit by Public Citizen – which describes itself as a consumer advocacy organization – calls for greenhouse gas limits to be imposed as part of the permitting process, based on a 2007 decision by the U.S. Supreme Court that classified carbon dioxide as an air pollutant under the Clean Air Act.

"The time has come for the TCEQ to take its head out of the sand and begin the process to regulate CO2 emission from Texas sources," Tom "Smitty" Smith, director of Public Citizen's Texas office, said in a statement announcing the suit.