2.0a Past Energy Events Commodity Markets 1/12/06 1/7/2007 NYMEX Crude Oil Futures Henry Hub Natural Gas Futures NYMEX Heating Oil Future NYMEX Gasoline Futures Local Melbourne FL Hess gasoline Palo Verde Spot Electricity $64.55/bbl $9.26/mmBtu ?c/gal $175.93 ¢/gallon $2.32/gallon $58.28/MWh $56.17 $6.183 156.53 $170.00 $2.33 $48.43 http://money.cnn.com/data/commodities/ http://www.bloomberg.com/markets/commodities/energyprices.html Frank R. Leslie, Tidevann B. S. E. E., M. S. Space Technology, LS IEEE 1/5/2008, Rev. 1.7 fleslie @fit.edu; (321) 674-7377; Link Bldg. Rm. 104 www.fit.edu/~fleslie http://my.fit.edu/~fleslie/CourseRE/ClassPres/ClassHTM/RE020aCurrentEvents_files/frame.htm Energy News Headlines as of 1/11/2007 Toyota Highlander Florida Public Service Commission announces new rules to encourage RE (renewable energy) Frank Kepler of Max Planck Institute, Germany has found that plants (trees, etc.) give off ~30% of atmospheric methane 11 coal miners killed in West Virginia 1/4/2006 Russia’s Gazprom raises natural gas price for Ukraine four times to $230/m3, provoking protests 12/30/05; settled at $100 ~1/4/2007; caused western Europe shortages; ok on 1/11/2007 12:50 am US Production Tax Credit of 1.9 cents per kWh passed (helps windfarms) as part of Working Families Tax Relief Act; GE Energy going ahead with $1.3B wind More hybrid vehicles available to public Auto Show news of Plug-in Hybrid Electric Vehicles coming in 20082009 GM Volt sport car 070111 Selected Headlines as of 1/7/2007 Toyota Highlander 2007 Jan: Oil falls from mid-$60s to $53 – is all well with cheap oil? 2007 Jan: Iran to Turkey gas pipeline reopens 2007 Jan: “Wal-Mart goes Green” [WCCO, MN] “U.S. lawmakers unveiled a raft of energy-related bills in the early hours of the 110th Congress aimed at boosting fuel ethanol use, extracting liquid fuels from coal and tightening automobile fuel efficiency rules. “ [Reuters] For some current prices, see http://money.cnn.com/markets/commodities/ http://www.bloomberg.com/energy/ 070107 2a.1 Overview of Energy Issues Energy decisions are influenced by supply and demand, politics, public interest or protests, availability, fuel source commodity changes, and economics Ten-year construction time of a utility plant requires a reasonably stable market to justify construction loans Uncertainty of the energy commodity markets can destabilize the perception of future energy needs Proposed energy plants are usually met with opposition from potential neighbors (NIMBYs) or distant NGOs (nongovernmental organizations) What’s a “CAVE”? 070111 2a.2.1 Recent Energy-Related Events (within ~1 year) Still . . . : Pres. G.W. Bush still wants to drill for oil in Arctic National Wildlife Reserve (ANWR); environmentalists fighting potential pollution; estimates are that oil could satisfy US needs for six months to twelve years in only 10 years depending upon who estimates; could be held in reserve as part of SPR (Strategic Petroleum Reserve) House OK; Senate blocked 12/21/2005. Opened Bristol Bay, Alaska for drilling 1/10/07 Cape Wind still striving for first plant of Nantucket against much opposition www.capewind.org; Corps of Engineers EIS released; 1500 ft from navigation lanes mandated 12/2005; underwater power cable approved 12/06 $20B invested in renewable energy vs. $150B in all global power – Erin Martinot 060105 2a.2.2a The US Energy Policy The US Energy Policy of May 2001 set the structure for future energy approaches; updated by Energy Policy Act of 2005 & 2006 The Clean Coal Program is being researched to develop very low emissions after stack gas cleaning Renewables comprise a small part (~ 4%) of US energy sources, even including large hydro Hydro is indirect solar power and is renewable Advanced nuclear plants could supply H2 for “Hydrogen Economy” as an alternate to natural gas (depleting) 070111 2a.2.2b The US Energy Policy Act of 2005 PUHCA (Public Utility Holding Company Act of 1924) repealed 12/2005 Interstate utility mergers permitted now ConocoPhillips acquiring Burlington Resources for $37B Exelon buying New Jersey Public Service Enterprise Group Mergers reduce competition and increase market share Wind Production Tax Credit Act extends credit to 2007 Minerals Management Service now oversees offshore alternative energy development like offshore wind turbines Coastal states receive 27% of revenue 070110 2a.2.2c Arctic Nat’l Wildlife Refuge (ANWR) ANWR has a contentious past Potential oil and gas reserves of ~1 year 10 years from now “Equivalent to 30 years of Saudi Arabia imports” $10.4B reserves located in Northeastern Alaska Coastal plain with some development; no trees Drilling may interfere with wildlife migration Environmentalists fighting to preserve area for caribou Removed from Energy Policy Act to avoid blocking passage Added to Defense Dep’t. Budget Bill House passed, but Senate couldn’t get votes to overcome Democratic filibuster 12/21/2005; withdrawn for possible later action 051221 2a.2.3.1 US --- Misc. Details FPL merging with Constellation to be Constellation Energy? “Never mind”; cancelled Duke merging with Cinergy for $8.5B Exelon merging with New Jersey's Public Service Enterprise Group Inc. for $16 billion New York State Renewable Portfolio Standard mandates 25% RE by 2013; 19% now large hydro; to be wind, hydro, biomass Mild winter weather lowers fuel oil demand and heating oil future price falls to ~$1.72 per gallon; NG $10.88/MBtu; spot electricity, $53.70/MWh, 12/30/05 Seven governors in NE form Regional Greenhouse Gas Initiative (RGGI) to cut CO2 10% by 2019 US “green” power increased to 4500 GWh annually 060105 2a.2.3.2 US --- Energy Markets http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html 060106 Prices continue to trend upwards or fluctuate Natural gas is most volatile fuel 2a.3 Worldwide Markets Oil (and sub-products) and natural gas are marketed and shipped on the international commodity market A commodity is somewhat indistinguishable regardless of source (fungible) -- Crude oil futures $53.75 on 1/11/2007 12:05 Branding is sometimes used to attempt to get a better price -- like Florida orange juice vs. California Gasoline is often the same to the tank truck distribution point, where additives color the gasoline with dyes or provide cleaning solvents, but mostly enhance marketing content Volatile fuel prices, but trends higher with time Natural gas price shows winter demand cyclic peaks for Northern states heating 070111 2a.2.4.1 Coal The US has large coal reserves that are expected to last ~200 years Potential for building 40GW of new plants (for reference, St. Lucie nuclear plant ~1.7GW) “Clean Coal” with reduced emissions is heavily Federal-subsidized Coal mining kills 1000s of miners each year worldwide http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html 070111 2a.2.4.2 Petroleum (Crude Oil) Raw crude oil is a commodity traded in the world market The price fluctuates with worldwide demand $57/barrel on 12/21/2005; $62 on 12/4/06; $56 on 1/5/2007; $53.75 on 1/11/07 #2 fuel oil is widely used for home heating in the Northeast Homeowners compete with large utilities for fuel Mild 2006 winter meant more diesel available & less heating oil produced Cold weather now would use more and drive prices higher Multitude of products and materials such as gasoline, diesel, plastics feedstocks produced from petroleum TV stock pundit Jim Cramer, Street.com, observes that many oil fields now require more drilling of wells just to get the same production, so invest in drilling companies (disclaimer: I did FSESX) 070111 2a.2.4.2.1 Top Exporters Top World Oil Net Exporters, 2004* (OPEC members in italics) OPEC controls the prices of its members World market also controls by supply and demand The United States imports much of its foreign oil supply from Venezuela (12 to 15% of US needs) Politics and union strikes dominate Venezuela oil market Pres. Chavez is a socialist and antiUS, pro-Cuba; reelected 12/2006; inaugurated 1/10/07 070111 http://www.venezuelanalysis.com/articles.php?artno=1408 Country Net Oil Exports (million barrels per day) 1) Saudi Arabia 8.73 2) Russia 6.67 3) Norway 2.91 4) Iran 2.55 5) Venezuela 2.36 6) United Arab Emirates 2.33 7) Kuwait 2.20 8) Nigeria 2.19 9) Mexico 1.80 10) Algeria 1.68 11) Iraq 1.48 12) Libya 1.34 13) Kazakhstan 1.06 14) Qatar 1.02 http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html 2a.2.4.2.2 Iraq $1.3B-$18B oil smuggling was known to UN Security Council but was not stopped according to Paul Volcker [Seattle Post Intelligencer, 12/27/2004]; different from “oil-for-food” (or oil-for-palaces) program that the UN also mishandled Iraq has significant oil reserves (third) yet has a fraction of the World market Greatest price effect is from psychological impact of turmoil on markets Oil pipelines are readily sabotaged as they often are exposed above sand, isolated, and easy to bomb 061204 2a.2.4.2.3 Afghanistan Afghanistan could be a route to bring petroleum pipelines from Turkmenistan in the north to the Arabian Sea for ease of water export Turkmenistan has onshore and Caspian Sea oil fields Turmoil in Afghanistan prevents development; tribal chiefs (politically incorrect: warlords) control remote areas National government tenuous http://news.bbc.co.uk/olmedia/1585000/images/_1585 197_afghan_targets2_300.gif 051230 2a.2.4.3 Natural Gas (NG) Clean-burning NG is the utility fuel of choice because of low emissions Supplies are limited in N. America, and importation from overseas by liquefied natural gas (LNG) tankers will become necessary Environmentalists are fighting any new LNG terminals, saying that conservation and efficiency are all that is required to reduce need Natural gas is widely used for home heating in the Midwest Dow executive says 30 to 40 times current LNG terminals are needed to meet future demand LNG pipeline and terminal proposed for Fort Lauderdale FL 10 miles offshore; LNG gasified from seawater; reduces hazard See the huge LNG tanker attacked by terrorists in the closing moments of the oil intrigue thriller movie “Syriana” 070110 2a.2.4.3.1 Merchant Power Plants Merchant plants sell power to utilities on short notice (phone call), as they can be started and deliver in about 20 minutes The Oleander Plant near I-95 and FL 520 went online ~11/2002; 5 aeroderivative turbines (simple-cycle without HRSG); combinedcycle turbines would have been more efficient but would not qualify under PURPA (Public Utility Regulatory Policies Act) law defect. Clean NG plants can burn oil if cheaper that day Power is sold under “Power Purchase Agreements” in blocks of megawatt-hours at about $65 per megawatt-hour 070111 2a.2.4.4 Nuclear Iran talks resume, stop, resume, stop, etc. Power, or for weapons Some say oil-rich Iran doesn’t need nuclear power, but when oil becomes extremely expensive, they will want local power from other means so they can sell the oil Russia may host Iranian fuel processing World nuclear power cleanup means high expenses --- ~$1.7T Yucca Mt. divisive debate continues; Sen. Harry Reid (D-NV) is new majority leader and controls what bills go to the floor and which are ignored, so Yucca Mt. may languish More nuclear plants proposed for Florida to diversify energy sources, and the alternative is coal (I like renewables, but massive power is from conventional utilities) 070110 2a.2.4.4 Nuclear Uranium Depletion Uranium supplies diminish as more is mined; price will rise Time to peak varies, but may be 30 years 070107 2a.2.4.4.1 North Korean Nuclear Plants The US had been selling oil to North Korea to keep them from starting/continuing their nuclear program (possible weapons) A side effect of nuclear power plants is that the plutonium content of the fuel rods increases with age, and weapons might be made from the “spent fuel” through reprocessing When the US stopped oil sales because of North Korean missile sales, North Korea announced that it must again turn to nuclear power to get energy; US fears weapon development North Korea has now disconnected or blocked IDEA surveillance cameras at their power plants and pulled out of the Nuclear Nonproliferation Treaty They now claim to have reprocessed uranium to get plutonium for nuclear weapons 061204 2a.2.4.5 Hydropower China building 12.6GW Xiluodu dam; 22.4GW now at Three Gorges Dam Belize completed 7.3MW dam; earlier, build 25MW dam at Macal River; these are <30MW and are “small” hydro Primary power source in WA, OR, & AZ Smaller hydro in many other states Small dams often now being removed Methane and CO2 emissions from decaying organic matter in reservoir? Emissions are worse in tropical heat 070111 2a.2.4.6.1 Onshore Wind Energy Atlantic City NJ has 4 new turbines at a sewage treatment plant that will supply much of the power there FPL continues to develop and operate the majority (40%) of US windfarms More windfarms erected in the West and Great Plains of US Xcel Energy will add 775MW wind plant to 282MW in CO; sells to SCE & PG&E in CA --- AWEA Canada to install 7000MW by 2013 [Renewable Energy News] 051219 2a.2.4.6.2 Offshore Wind Energy Wind is strong and steady offshore, but installation is costly in seabed US has 900 GW offshore potential DOE, GE, and Univ Mass form Mass Tech Collaborative Galveston Offshore Wind to build 7 miles off Galv. Island; 50 wind turbines 150MW in 4 to 7 years Minerals Management Service, US DOI has offshore authority Floating Hywind 3MW turbines 80m above water; 90m diameter GE opening turbine plant near Raleigh NC GE makes blades in Pensacola FL 070107 2a.2.4.7 Solar Energy FPL introduced a “Sunshine Plan” where homeowners can sign up for $9.75 a month to fund solar panels that intertie with the grid The solar power doesn’t necessarily go to those paying this amount; 200kW array to be built at Sarasota Western US could install 8000MW by 2015 [RE News, 12/05] U. Colorado won Solar Decathlon; 18 colleges & universities built sustainable dwellings [RE News, 12/05] World Solar Challenge held in Australia; Dutch car won, but U Michigan was 3rd [RE News, 12/05] ECD Ovonics opening thin-film plant in China; 25MW/year San Diego buying power from Stirling dishes; 300MW 6000 units in 3 square miles NYC BIPV rated 210kWp at Stillwell Ave. Station As EU fails to meet Kyoto Protocol, more solar cells will go from US factories to Germany, etc. (For calibration, the St. Lucie Nuclear Plant is 2 cells x 850MW) 051221 2a.2.4.8 Geothermal Energy The Geysers CA (near Calistoga) continues to provide steam turbine power Air conditioning heat pumps can extract or reject heat using ground water, significantly increasing the efficiency Common with Florida 68-degree artesian water in 1960s Heated water was dumped 070111 2a.2.4.9.1 Ocean Current Energy New system to be deployed near Portugal Palatka-based Ocean Systems prototyped 10-ft diameter turbine Locations like Gulf Stream are limited Rivers might use similar designs 051230 2a.2.4.9.2 Ocean Wave Energy Pelamis pipeline-type prototype installed US Navy funding 1MW wave farm off Hawaii Linear generator installed in UK in 2005 (like shaker flashlights [not Shaker (;-) ]) SDE 40MW Sri Lanka plant Hydraulic piston motors drive generators Ocean Power Technology 1MW Oahu Hawaii Manchester “Bobber” scale model deployed 051230 2a.2.4.9.3 Ocean Tidal Energy 051230 Tidal power was used in US ~1700 for grain mills Test installations in North Sea near Scotland, Orkney “Total Delay” to be constructed about 2007/2008 Tidal energy varies greatly worldwide Tide range must exceed 5 meters to be useful Marine Current Turbine’s 300kW unit shown below left; others right http://www.hie.co.uk/aie/tidal_power.html 2a.2.4.9.4 Ocean Thermal Energy Ocean Thermal Energy Lab in Hawaii now supplies cooling water for buildings OTEC is too expensive for power production --- But, wait! There’s more! Japan is planning an OTEC installation at an atoll Source: SeaSolarPower.com http://www.nrel.gov/otec/what.html 060104 2a.2.4.10 Biomass Energy Brazil sugar production diverted to ethanol Major potential source of Florida renewable energy Protests starting over land use Ethanol pollutes claims More energy to produce than can be gotten out of it, or maybe the reverse 051221 2a.2.5.1 International United Nations Intergovernmental Panel on Climate Change (IPCC) Stated global warming exists and much is caused by humans Ice melting and sea level rise is a global warming concern It’s about 1 to 2 mm per year --- wear your boots! Kyoto protocol cuts carbon emissions below 1990 reference year Most countries can’t do it now UN Montreal COP11 meeting discussed further energy and emission policy US and China declined to join talks for binding limits due to economic constraints European Parliament wants 20 to 25% renewables [RE News] Berlin mandates new buildings have 75% solar power US greenhouse gases (GHG) rose 2% in 2004 [EIA] 070111 2a.2.5.1.1 Iran Iran is the second largest oil producer with a total of 3.5 MM bpd. [Source: AFP, http://www.gasandoil.com/goc/features/fex21800.htm ] Iran has extensive oil fields supplying 10% of World’s oil energy New agreements to supply China with oil Multibillion dollar pipelines are planned to India Iran has agreed to temporary halt to nuclear reprocessing capability (but continues?) China backs them for oil in the UN Security Council Difficult political problem Striving for nuclear capability 070111 2a.2.5.1.2 China China developing more hydro, wind, and solar energy Three Gorges dam will reach 26 turbines x 700MW = 18 000 GW and has 175 m height [Renewable Energy World, Nov/Dec 04] Greatly increased Chinese car and truck production demands more gasoline and diesel; they compete on the World market for oil Gains minority stake in Russia’s Yukos oil Tried to buy California SOCAL oil company but blocked by US government 070111 2a.2.5.1.3 India India developing more hydro, wind, and solar energy Deregulating coal to increase production 1/11/07 Greatly increased car and truck production demands more gasoline and diesel; they, too, compete on World market India’s population growing faster than China and will soon surpass China in population and energy demands 070111 2a.2.5.1.4 Other Russian Yukos oil company auctioned off due to tax bill; China gets minority interest that will reduce Western influence 050113 2a.2.5.1.5 US General Energy Costs Type Cost $ per kW to build plant Cost per kWh Wave $650,000 “very low” , <3 - 10¢? Coal $1500 3¢ Natural Gas $900 3.5¢ Solar $1500 12¢ Wind $3000 3.6¢ Geothermal $1300 - 2500 2.5 - 10¢ Ocean Thermal $1500 unknown Biomass $700-1800 unknown ON&T, 11/22/05 p.48 070111 2a.2.5.1.5 Other Areas of Interest Europe: Onshore and offshore wind turbines; High fuel taxes Greece: Solar, wind, geothermal, biomass = greatest use of renewable energy in Europe Bolivia: Socialist president elected 12/18/2005 Hydrogen can be electrolyzed for sale at $4 to $15 per kg PA 680MW solar Renewable Portfolio Standard (RPS) by 2020 0512221 2a.2.5.2 State of Florida Energy Florida Energy Forum (12/2005) was held to elicit opinions as to future energy sources and issues Florida has extensive biomass that could be used for thermal or electrical generation Sugar cane bagasse for ethanol or chip wood for “cellulosic methanol” Enviros fighting biofuels due to land, emissions, etc. Solar energy in Melbourne is approximately 4.7 equivalent sun hours per day due to rain storms, cloudiness, etc. while Arizona has 6 to 7 Florida is rated “marginal” or Class 2 for wind energy, though possibly offshore Jacksonville, it is much higher PSC 10-year outlook report 1990, 11% NG; 2005, 30%; 2014, 44% 2005, 10% nuclear; new plant in 2015? 070111 2a.3 Past Energy Events (older than ~1 year) 18 states file legal brief to Feds supporting local state control of energy --LNG ports 1/12/2005 Pres. Bush states advanced nuclear power is “renewable” (?!) and needed to replace natural gas 1/12/2005 http://www.newkerala.com/newsdaily/news/features.php?action=fullnews&id=59613 Spain and Algeria to be linked by 200 km MEDGAZ pipeline; construction company formed http://www.cepsa.com/corporativo/pages/c_4_6_1eng.htm 2004: Hurricane Katrina damaged Gulf oil rigs & refineries resulting in gasoline shortages; product “shut in” and can’t be flowed to market ~__/__ Pres. Clinton sold oil from Strategic Petroleum Reserve (SPR) to stabilize prices; Pres. Bush sold from SPR to help reduce shortages in 2005 (max is 115? day supply) ~2001: California electrical problems; short-sighted legislative problems; rolling blackouts; trading electricity contracts (Enron debacle) ~1973: US faces gasoline supply problems and long lines of cars at pumps 060113 2a.4.1 Energy Fiction Book Michael Crichton wrote “State of Fear” about tsunamis and climate change, finishing ~September 2004 Conspirators, media manipulation, killings, romance, adventure, eco-terrorists, shady orchestrators of environmental organizations, billionaire funding Characters in the story provide footnotes as references! Scientific uncertainty is discussed; graphs presented Crichton appendix states his feelings on science & bias Twenty-page bibliography Number 2 on New York Times best-seller list 1/11/2005 Crichton quotes Mark Twain: “There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact.” Book attacked by environmentalists 051219 2a.4.2 Energy Movies “Syriana” released in December 2005 Story of oil peak, intrigue, and manipulation in the Middle East; corrupt companies and individuals Starring George Clooney plays CIA agent, and is a Palestinian prime minister look-alike Alexander Siddig (Dr. Bashir of “Star Trek: Deep Space Nine”) plays an ethical good prince of Syriana who gets killed for wanting best interests for his country’s people http://syrianamovie.warnerbros.com/ “China Syndrome” atomic meltdown starring Jane Fonda “Cold Fusion” (it’s still fiction!) 070107 2a Conclusion: Recent Events The primary event has been the energy shortage caused by Hurricane Katrina Passage of the 2005 & 2006 Energy Policy Acts ANWR blocked again Winter temperatures drive price volatility in heating fuels, especially natural gas (NG) Energy plants NG use competes with home heating, and cost is rising with demand; 15% imported; needed LNG importation fought by environmentalists Oil was at $26.01 as of 12/12/2002; $34.31 on 1/9/2004; ~$43 on 12/31/2004, but reached $70; $59 on 12/30/2005; $62 on 12/4/2006; $56 on 1/5/07; $53 on 1/11/07 070107 2a References: Books Boyle, Godfrey. Renewable Energy: Power for a Sustainable Future, Second Ed. Oxford: Oxford Univ. Press, 452 pp., 2004. Brower, Michael. Cool Energy. Cambridge MA: The MIT Press, 1992. 0-262-02349-0, TJ807.9.U6B76, 333.79’4’0973. Sørensen, Bent. Renewable Energy, Second Edition. San Diego: Academic Press, 2000, 911 pp. ISBN 0-12656152-4. Crichton, Michael. State of Fear. NY: HarperCollins Publishers, Inc., 603pp., 2004.0-06-621413-0. 041231 2.a References: Websites, other www.iaea.or.at/ International Atomic Energy Agency http://www.eia.doe.gov/emeu/ipsr/contents.html Energy Information Agency NPR radio, CNN news, Fox News Channel, MSNBC News www.mms.gov/offshore/RenewableEnergy/RenewableEnergyMain.htm __________________________ awea-windnet@yahoogroups.com. Wind Energy elist awea-wind-home@yahoogroups.com. Wind energy home powersite elist geothermal.marin.org/ on geothermal energy www.dieoff.org. Site devoted to the decline of energy and effects upon population www.google.com/search?q=%22renewable+energy+course%22 solstice.crest.org/ dataweb.usbr.gov/html/powerplant_selection.html http://www.unc.edu/~rowlett/units/index.html -- a good units definition site http://www.cia.gov/cia/publications/factbook/geos/ir.html -- quick country guide http://syrianamovie.warnerbros.com/ http://www.CampusClimateChallenge.com 051230 Olin Engineering Complex 4 kW Solar PV Roof Array Questions? 070111