European Grid 10 Year Development Plan

Sep 27 2014

Dii (Desertec industrial initiative) discusses the latest 10 year plan for developing the European electricity grid of 2014.

They note that some of the projects for connecting Europe to Northern Africa that were included in the last 2012 plan have been dropped. The latest edition aims for one (in numbers 1) interconnection of 0.6 GW, to be ready by 2030.

And they call on ENTSO-E, the European network of transmission system operators for electricity, to reverse these steps in the wrong direction.

They note correctly that Northern Africa has better solar and wind resources than Europe and that therefore it makes even more sense to produce solar electricity there than in Germany.

I agree with that.

And the best way to get those power lines built: Just go ahead and build the capacity in Northern Africa anyway. There is a domestic market for the first couple of decades. Proceed to build the power lines once there is a clear price advantage that makes it profitable to have them.

And while the power lines are not in place, there is always the options of using quicklime for transporting solar energy from Africa to Europe, of using the energy right in the desert to suck up CO2, or to make some silicon.

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Book Review: Don’t Even Think About It, by George Marshall

Sep 25 2014

Don’t Even Think About It – Why Our Brains Are Wired to Ignore Climate Change, by George Marshall, link to the Kindle edition.

This review is in the “Global Warming Fiction” section, though it is not fiction. But I recommend reading it for anyone writing global warming fiction.

And anyone concerned about how to improve the impact of global warming campaigning.

I started writing global warming science fiction novels in the first place because Bruce Schneier pointed out what George Marshall did in this book. Again, here is a link to the Youtube video of Schneier’s talk:

The Security Mirage

In that talk, Schneier explains that the ability to accurately assess risks is important for survival in evolution. He uses the example of a rabbit who hears a predator approaching. If he bolts to soon, he will starve. If he bolts to late, he will be eaten.

Humans have evolved in the same environment. That means that visible, present, individual risks with a face and a name like a large predator will impress humans.  In contrast, abstract, slow changes in the environment will not.

I have not found any reference to Schneier in Marshall’s book, but he makes the same point in much more detail and backed up with opinions from many noted experts in related fields like psychology.

So I find confirmed what I already knew. But there is much more.

For starters, Marshall fictionally attributes global warming to the North Koreans. I discussed this yesterday, and he wrote that at the Guardian as well:

The discovery that North Korea has been secretly pumping climate-altering chemicals into the atmosphere in an attempt to destroy agricultural production across the US has sparked an international crisis.

This is an excellent way to show the basic point. Global warming is a problem without the face of an enemy. If this really was some plot to intentionally inflict damage by a clearly defined bad actor, the reaction would be much more decisive than the lukewarm response global warming got until now.

Next up: Marshall shows that some of the symbols used in connection with global warming campaigns are not chosen very well.

For one, the idea of turning of lights for one “Earth Hour” is actually exactly what denial campaigners like to use. They want to paint global warming activism as turning the lights off.

Next, the polar bear symbol. That makes as much sense in the context of global warming as choosing a camel if you were concerned about global cooling.

Marshall doesn’t try to find better alternatives. I will do so right now.

The “Earth Hour” event should be one hour of fun with electrical vehicles and solar panels. People getting together to celebrate all the technology we already have. I don’t have time to elaborate in this post, but the basic idea would be to get a community experience and to turn the lights on brightly and have a party, instead of turning them off.

I don’t know what to do about the polar bear yet. (Update: I propose the desert fox as an alternative).

The most interesting part of this book for me was Chapter 32, titled “Wellhead and Tailpipe”.

He notes that most solutions (like the European Emission Trade System) are concerned with the consumer side, the tailpipe, the gas emissions. In contrast, there is not much discussion about what could be done at the producer’s end, the wellhead.

That’s interesting, because my favorite solution (phaseout profit theory) is addressing the wellhead. I think the owners of fossil fuel could make enormous extra profits by reducing their production voluntarily and see prices shoot up because of reduced supply. I have a category on this blog with over 50 posts discussing that basic idea.

And I learn from that chapter that wellhead solutions are much easier than tailpipe solutions. That’s because there are only very few producers involved. Marshall says only about ten major oil producers. They can all easily fit around one medium sized table and figure out how to reduce production in the most profitable way.

And the next Chapter 33 is titled “The Black Gooey Stuff – Why Oil Companies Await Our Permission to Go Out of Business”.

That was also rather interesting. He cites someone from Shell like this:

The oil industry is not given the permission to make a transition out of fossil fuels. The main reason is that the international agenda is driven by people with political agendas that are unrelated to solving the problem.

After thinking about the issue for about 0.5 seconds, I have decided to give the oil industry the permission to make that transition.

And I think we should give them a permission that is actually worth a lot of money. That is an antitrust exception allowing a coordinated phaseout.

As discussed earlier, the famous Standard Oil antitrust case decided by the American Supreme Court a hundred years ago gives these reasons for antitrust law:

1. The power which the monopoly gave to the one who enjoyed it to fix the price and thereby injure the public; 2. The power which it engendered of enabling a limitation on production; and, 3. The danger of deterioration in quality of the monopolized article which it was deemed was the inevitable resultant of the monopolistic control over its production and sale. (Emphasis mine).

“Enabling a limitation on production” is not a “danger” right now. It is exactly what we need to make happen.

They should love this antitrust exception so much that they might even accept a moderate carbon price of $50 a ton in exchange.


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North Korea Behind Global Warming

Sep 24 2014

Just revealed in the Guardian:

The discovery that North Korea has been secretly pumping climate-altering chemicals into the atmosphere in an attempt to destroy agricultural production across the US has sparked an international crisis.

This is not true. I know better. Global warming, or global meltdown as it should be called more realistically, is caused by the evil alien hypnotist Khalmorot. He hypnotized humanity into burning all that fossil fuel. We couldn’t possibly be so stupid all by ourselves. If we were, we wouldn’t have been smart enough to develop civilization in the first place.

He did that because he needs us in his TV show “Heat Games”. We are heating up the planet so that his alien audience can have a good laugh about us, and the TV program can sell some commercials. I hear that “Heat Games” has excellent ratings, with billions of alien viewers. They need to be entertained, even if it ruins our planet beyond recovery.

This is a secret, so don’t tell anyone. I was able to find it out two years ago and wrote about it here.

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California Desert Plans

Sep 24 2014

Good news from California. AP reports that they have designated 2 million desert acres as appropriate sites for renewable energy projects. Thanks again to Chris Nelder for the link.

That’s 2 million acres out of a total of 22.5 million, or less than 10 percent. There is plenty of desert left for endangered turtles.

I also learned that Google and other operators of the newly opened Ivanpah thermal solar project had a $20 million budget to collect these turtles and locate them elsewhere.

Of course it makes sense to locate renewable energy projects in areas of the desert where there are less turtles in the first place. If they are an endangered species, one would expect them not to show up all over the desert area, leaving some areas more suitable for renewable energy projects than others. And it makes sense to identify those areas, so the developers can save the cost of relocation.

Of course there will be some conservationists who insist that not one acre of desert may be used for renewable energy. They are misguided. Ivanpah will contribute around 1 TWh of clean energy each year, displacing fossil fuel and saving 400,000 tons of CO2 emissions. That is an important contribution to fight global warming, which will lead to massive species extinction on a global scale.


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You Can’t Make Plastic From a Solar Panel

Sep 23 2014

But you certainly can run cars in India and China in the next couple of decades on solar electricity.

This post is a preliminary discussion of a new report by Mark C. Lewis titled “Toil for oil spells danger for majors“. Thanks to this tweet by Chris Nelder for the link.

I have only read the executive summary until now, though I am looking forward to reading more.

Lewis looks at the “energy return for capital investment”, especially for driving cars and trucks.

And he reports that $100 billion invested in oil buys between 1,694 and 2250 TWh, depending on the cost of the development project in question ($75 a barrel or $100), while onshore wind will deliver 2,336, solar 704, and offshore wind 1,246. That makes onshore wind already competitive for gross energy.

But when looking at cars, only 25% of the energy in the oil gets delivered to the wheel (the rest is lost in the inefficiency of the engine). In contrast, electrical vehicles deliver 70% of the energy to the wheels.

That dramatically changes the numbers above. Oil delivers only between 424 and 563 TWh for $100 billion investment, while solar gets 475, wind 1,518 onshore and 779 offshore.

And that’s assuming $3000 per kW of cost for solar. I recall that solar in Germany has been installed for less than 1000 euros already over a year ago.

Anyway, Lewis says that the oil industry faces a risk of “stranded assets” not only because demand may go down because of global warming regulation. He says that they also face the risk of losing out to the competition of electric vehicles because oil prices go up too high.

I certainly hope that happens. People need to stop driving stinking gasoline cars. That’s one of the big factors when pumping CO2 into the atmosphere.

And eventually it will. Already now fuel costs for electrical vehicles are much lower than for stinking gasoline cars. The only thing saving gasoline as an option is the fact that batteries are still expensive, making the electrical vehicles’ purchasing prices higher.

But I agree that this may be a problem for the oil industry. They certainly should not rely on cars and trucks staying with the gasoline option.

So what should they do? There is no way to win in the competition against electric fuel in the long run. And if the price of oil goes up and the price for renewable energy goes down even more, as Lewis thinks it will, then the above figures will look even worse for oil.

I think they should face the inevitable fact that the world is going to use less oil sooner or later. And compensate for that fact with much higher prices.

Let’s take ExxonMobil as an example case. As Wikipedia tells us, they had revenue of $420.836 billion and an operating income of $40.301 billion in 2013, selling around 3.921 million of barrels a day.

Take that number down by 80 percent to 0.782 million a day over the next couple of decades. That would result in revenue of $84.167 billion, all things equal.

Now get the price up by a factor of three, to $300 a barrel, and take revenue up as well to $252.50 billion. Operating income should go up massively, even with revenue down, since they would get a margin of around $200 instead of one of around $20.

The higher price would in turn accelerate the transition away from stinking gasoline cars. And leave ExxonMobil without a market in the transport sector. Stinking gasoline cars would become as rare as steam locomotives are now, something for the occasional tourist attraction.

As well they should, of course. And as they will sooner or later anyway.

But the market for non-fuel use of oil will always remain. You can’t make plastic from a solar panel. You can make it from oil. That non-fuel use is about 10 percent of all oil use right now. Add in another ten percent for air traffic (not suited for batteries) and other niche markets to get your goal of about 20 percent of present oil use.

All the oil companies need to do to stay profitable is accept that they will need to sell less, at higher prices.

To come back to the report by Lewis, I agree with his conclusion: Cars will move to electric vehicles.

But I don’t necessarily agree with the idea that this is bad for the oil industry, or that this will lead to “stranded assets”. I think that if the oil industry handles the challenge from the transition to renewable energy correctly, this will be a large opportunity to increase their profits.

Update: Lewis kindly answers over Twitter:

yes, nice piece KF, but note that the oil majors are vulnerable to stranding b/c of their position on cost curve.

IOW just because world will still need oil for plastic and other uses doesn’t mean it will need the majors.

I am not sure I understand this correctly. I treated the whole oil industry as a block above. Maybe “the majors” will face some competition from cheaper producers.

But in my scenario (phaseout profit), the oil industry takes care to always starve the market, so as to raise prices. That in turn should leave ample margins for everyone in the industry.

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Book Review: “Nature’s Confession” by J.L. Morin

Sep 23 2014

This was not for me. I struggled to keep reading to the end. I eventually made it. That’s because this is global warming fiction. Any book from that category gets a large advance bonus from me for even trying. And the fact that the author kindly sent me an advance review copy, which made me feel somewhat obligated to finish it.

The first thing that irritated me was the lack of a name for the main character. He is called “boy” over most of the book. That’s because in the world of that book, boys don’t get a name before they are fifteen.

That doesn’t make any sense. You would end up with everybody called “boy”, leading to a lot of confusion when grading end of term tests in school.

I am not actually sure that this “boy” was supposed to be the main character. The novel zaps around aimlessly between lots of characters. That works great for me in the “Song of Ice and Fire” series, which I read immediately before this book. It didn’t work for me here.

Around page seventy I asked myself if eventually there would be some kind of plot I could understand. I failed to understand what is supposed to happen right to the end.

The treatment of the global warming problem is, like much of the book, hyperbole and caricature. That may work as humor for some people. It just served to irritate me more reading about “CO2 smog” and one head of one evil corporation ruling the world. None of that has any base in reality.

I divide global warming fiction into two categories. Those that try to propose a solution and those that just try to show the problem or use global warming as a world building element.

I am not sure in which category this should belong. There is a solution at the end, which is taking your energy from the souls of dead people. At the end of the book, they fuel some space ships with that energy.

I have been writing about energy issues for some time, but that is the first time I heard someone propose this. It reminds me of James Altucher’s proposal:

I don’t know why nobody has thought of this yet. Just look at the words “Global. Warming.” i.e. The surface of the planet is getting hotter. That means it’s giving off energy. Use photovoltaic strips to harness the energy coming off the planet to reduce our need for carbon-based energy. BAM! Problem solved. 

That one I can at least understand, though I don’t think it would work.

I still don’t know who that “Nature” character is and what evil deed she is supposed to be confessing.

This may work for readers who enjoy satire like Swift’s “Modest Proposal” (which I hate). Just don’t expect a normal novel with well developed plot, characters, and some kind of base in global warming reality.

Link to Amazon page (not yet released).

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How Much For 10 Million Barrels Oil Each Day?

Sep 19 2014

A group of 347 investors holding assets of $24 trillion has called for introducing world wide “carbon pricing”. They want effective climate policy.

I agree with their position.

But there already is a price on carbon. That is the price the market sets for oil (I am restricting my discussion here to oil, but the same is true for coal, lignite, and gas).

That price is changing all the time. But let’s just set it to $100 a barrel for this post.

That means if these investors started buying 10 million barrels a day, they would need to find $1 billion each day for such an investment fund. With $24,000 billion in their portfolios, that looks quite possible.

So, if they start taking 10 million barrels a day off the market, what would happen to the price of oil? World consumption is estimated to be around 92.4 million barrels a day right now. Taking 10 million barrels a day off the market, equal to about one third of OPEC production and over 10% of demand would bring prices up.

Which would be good news for the investors who bought that oil. They can sell their position with a profit, if they are after short term gains.

Anyway, this just shows that a small amount like $1 billion a day may be enough to get phaseout profit going.

And this could be done tomorrow. If these rich investors want higher prices for oil, all they need to do is buy some.




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Bitcoin 10 Years After

Sep 18 2014

My talk on “Bitcoin 10 Years After” of June this year will be published in our Journal at the end of this month. Here is a PDF file (still with some kanji use errors, this is before the final check):


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Do It Again, OPEC

Sep 17 2014

OPEC is expected to reduce their production next year from 30 million to 29.5 million barrels a day at their next meeting in November, says Reuters. They cite OPEC Secretary General Abdallah Salem el-Badri for this expectation.

Already the news of a possible reduction in production has sent up oil prices to S99.05, from a previous 26 month low of $96.21. That’s an increase of $2.84.

Multiply with the 1.3 trillion barrels of world wide oil reserves, and we  understand that this announcement of a possible reduction next year made the oil owners richer by $3.692 trillion (the increase in the value of their reserves).

So what would happen if they did that again next year, and then for every year until 2020? Announce that they will reduce production by 500.000 barrels each year from 2015 to 2020.

How many trillions of dollars would the worth of their oil reserves go up with such a simple announcement?

The only way to find out would be to do it.



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“Germans Have Been Buying Price Decline”

Sep 16 2014

From this article by Justin Gillis at the New York Times on the transition to renewable energy in Germany.

The whole quote would be “The Germans were not really buying power – they were buying price decline”, attributed to Hal Harvey, CEO of the “Energy Innovation” think tank.

I agree with the sentiment that the price decline was the more important result of installing all that renewable energy in Germany. But clearly Germany has also bought some power in the deal, and some price declines in the long term and in the short term wholesale markets.

My way of saying that is that the ebbing tide lifts all the boats.

The article closes with another quote, this time from Markus Steigenberger of Agora Energiewende. “Indeed, the German people are paying significant money. But in Germany, we can afford this – we are a rich country. It’s a gift to the world.”

Exactly. And it is not only a gift, but also payback for the fact that Germany as one of the early industrialized countries has profited most from the irresponsible use of fossil fuel over the last two centuries. Germans have a moral obligation to help with the solution of this problem.

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