Saturday, March 3, 2012

A Farewell to Fossil Fuels?

Amory B. Lovins has provided an article for Foreign Affairs: A Farewell to Fossil Fuels: Answering the Energy Challenge. Lovins makes some stunning—and exciting—claims.
"....a U.S. economy that has grown by 158 percent by 2050 could need no oil, no coal, no nuclear energy, and one-third less natural gas -- and cost $5 trillion less than business as usual, ignoring all hidden costs. Today’s fossil carbon emissions could also fall by more than four-fifths without even putting a price on them."

If that was not sufficient to attract your attention, how about this:

"This transition will require no technological miracles or social engineering -- only the systematic application of many available, straightforward techniques. It could be led by business for profit and sped up by revenue-neutral policies enacted by U.S. states or federal agencies, and it would need from Congress no new taxes, subsidies, mandates, or laws."

Lovins article is based on the findings provided in the book published by his Rocky Mountain Institute (RMI): Reinventing Fire: Bold business Solutions for the New Energy Era. This work supports his claims with 300 pages of facts, figures, charts, and references.

Lovins’ path to the future requires sufficient savings in energy consumption to allow renewable sources to provide most of our needs. The net decrease in energy use translates into a cost savings that will be sufficient to justify the necessary transition in techniques and technologies. Businesses, once they understand the issues, will see this transition as making good business sense. That is what allows the claim that massive government spending will not be required.

What Lovins is suggesting is merely a continuation of an existing trend. The prices of fossil fuels have been driving conservation measures for years.

"By 2010, the United States was using 60 percent less oil to make $1 of GDP than it had in 1975. Now, the other shoe is dropping: since its use in the United States peaked in 2005, coal has lost one-fourth of its share of the U.S. electric services market to renewable energy, natural gas, and efficient use."

"U.S. gasoline demand peaked in 2007; the oil use of the countries of the Organization for Economic Cooperation and Development peaked in 2005. With China and India pursuing efficient and electric vehicles, Deutsche Bank forecast in 2009 that world oil use could begin to decline after 2016. In fact, the world is nearing "peak oil" -- not in supply but in demand. Oil is simply becoming uncompetitive even at low prices before it becomes unavailable even at high prices."

The key to making this future a reality is to control the use of oil and electricity, which are mainly used in transportation and in running buildings of various kinds.

"In the United States, three-fourths of electricity powers buildings, three-fourths of oil fuels transportation, and the remaining oil and electricity run factories. So saving oil and electricity is chiefly about making buildings, vehicles, and factories far more efficient -- no small task."

The vehicles of the future would have to be ultra-light, aerodynamically efficient, and electrically driven. Manufacturers are already developing cars constructed of carbon-fiber composites rather than heavier metals. These lighter weights lessen the demand on the electric storage and propulsion systems, and will hasten the time when the vehicles will be price competitive with current technology.

"Autos powered by any mix of electricity, hydrogen fuel cells, and advanced biofuels could get the equivalent of 125 to 240 miles per gallon of gasoline and save trillions of dollars."

Government policy will have to encourage this transition. Lovins suggests "feebates," a system where rebates for purchasers of the new technology will be balanced by fees imposed on users of the old, inefficient technologies until costs become competitive. The government also has a role to play in encouraging more efficient use of vehicles.

"Autos could also be used more productively. If the government employed new methods to charge drivers for road infrastructure by the mile, its insolvent Highway Trust Fund would not need to rely on taxing dwindling gallons of fuel. Information technologies could smooth traffic flow, enhance public transit, and promote vehicle- and ridesharing. Better-designed layouts of communities could increase affordability, livability, and developers’ profits. Together, these proven innovations could get Americans to their destinations with half the driving (or less) and $0.4 trillion less cost."

Lovins’ projections of savings on retrofitting or designing new structures have already been recognized. For example, the Empire State Building upgraded its windows and cut energy consumption by about 40%. Savings at that level pay off the cost of the modifications in about three years. Similar savings have been attained by other owners of structures. In An Energy Initiative the Republicans Can’t Block, we discussed a business-driven plan to fund such makeovers on a large scale. There is so much money to be made from the ultimate energy savings that banks, contractors, and owners are collaborating to finance these changes with no upfront costs to the owner, and costs can be paid from the energy savings when they begin to accrue.

The potential is enormous. And there is no required role for the government.

"When RMI and its industrial partners recently redesigned existing factories valued at more than $30 billion, our designs cut predicted energy use by about 30–60 percent with payback times of a few years. In new facilities, our designs were expected to save around 40–90 percent of energy use while usually reducing capital costs. This is not rocket science -- just elegantly frugal whole-system thinking."

Lovins tells us that our current electricity generating capabilities will mostly have to be replaced by the year 2050 due to aging. He argues that renewable energy sources are now becoming competitive with new coal and nuclear facilities.

"The United States must replace its aging, dirty, and insecure electric system by 2050 just to offset the loss of power plants that are being retired. Any replacement will cost about $6 trillion in net present value, whether it is more of the same, new nuclear power plants and "clean coal," or centralized or distributed renewable sources."

He argues that renewable energy sources are now becoming competitive with new coal and nuclear facilities.

"New coal and nuclear plants are so uneconomical that official U.S. energy forecasts predict no new nuclear and few new coal projects will be launched. Investors are shunning their high costs and financial risks in favor of small, fast, modular renewable generators. These reduce the financial risk of building massive, slow, monolithic projects, and needing no fuel, they hedge against volatile gas prices. Already, wind and solar power’s falling costs are beating fossil-fueled power’s and nuclear power’s rising costs."

"In 2010, renewable sources, except for big hydropower dams, produced only three percent of the world’s electricity, but for the third year running, they were responsible for nearly half of all new capacity. That same year, they won $151 billion of private investment and surpassed the total generating capacity of nuclear plants worldwide by adding over 60 billion watts of capacity. The world can now manufacture that much new photovoltaic capacity every year, outpacing even wind power."

Lovins says electrical grids can be designed to handle the fluctuations from renewable sources.

"Just as it routinely backs up nonworking coal-fired and nuclear plants with working ones, it can back up becalmed wind turbines or darkened solar cells with flexible generators (renewable or not) in other places or of other kinds, or with systems that voluntarily modulate demand. Even with little or no bulk power storage, diversified, forecastable, and integrated renewables can prove highly reliable. Such integration into a larger, more diverse grid is how in 2010 Denmark had the capacity to produce 36 percent of its electricity from renewables, including 26 percent from wind (in an average wind year), and how four German states were 43–52 percent wind-powered. But U.S. and European studies have shown how whole continents could make 80 percent or more of their power renewably by operating existing assets differently within smarter grids, in markets that clear faster and serve larger areas."

Lovins tells a wonderful story. Let us hope it comes to pass. It boggles the mind to consider how many jobs would be created if it was decided to make each commercial structure as energy efficient as possible.

And—by the way—we might also be saving humanity from extinction.

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