Frank R. Leslie, 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

2.0a Past Energy Events

http://my.fit.edu/~fleslie/CourseRE/ClassPres/ClassHTM/RE020aCurrentEvents_files/frame.htm

Tidevann

Commodity Markets 1/12/06 1/7/2007

NYMEX Crude Oil Futures $64.55/bbl $56.17Henry Hub Natural Gas Futures $9.26/mmBtu $6.183NYMEX Heating Oil Future ?c/gal 156.53NYMEX Gasoline Futures $175.93 ¢/gallon $170.00Local Melbourne FL Hess gasoline $2.32/gallon $2.33Palo Verde Spot Electricity $58.28/MWh $48.43http://money.cnn.com/data/commodities/ http://www.bloomberg.com/markets/commodities/energyprices.html

Energy News Headlines as of 1/11/2007

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 2008-2009GM Volt sport car

070111

Toyota Highlander

Selected Headlines as of 1/7/2007

2007 Jan: Oil falls from mid-$60s to $53 – is all well with cheap oil?

2007 Jan: Iran to Turkey gas pipeline reopens2007 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

Toyota Highlander

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

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

(within ~1 year)

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 hydroHydro 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 turbinesCoastal states receive 27% of revenue

070110

2a.2.2c Arctic Nat’l Wildlife Refuge (ANWR)

ANWR has a contentious pastPotential 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 AlaskaCoastal plain with some development; no trees

Drilling may interfere with wildlife migrationEnvironmentalists 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

http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html

Prices continue to trend upwards or fluctuate

Natural gas is most volatile fuel

2a.2.3.2 US --- Energy Markets

060106

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 timeNatural gas price shows winter demand cyclic

peaks for Northern states heating

070111

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

2a.2.4.1 Coal

070111

http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html

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

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 anti-US, pro-Cuba; reelected 12/2006; inaugurated 1/10/07

070111

Top World Oil Net Exporters, 2004*(OPEC members in italics)

 

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.htmlhttp://www.venezuelanalysis.com/articles.php?artno=1408

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 marketGreatest 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

051230

http://news.bbc.co.uk/olmedia/1585000/images/_1585197_afghan_targets2_300.gif

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 necessaryEnvironmentalists 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); combined-cycle 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 potentialDOE, GE, and Univ Mass form Mass Tech

CollaborativeGalveston Offshore Wind to build 7 miles off Galv.

Island; 50 wind turbines 150MW in 4 to 7 yearsMinerals Management Service, US DOI has offshore

authorityFloating Hywind 3MW turbines 80m above water;

90m diameterGE 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 gridThe 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 1960sHeated 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

turbineLocations like Gulf Stream are limitedRivers 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

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

051230 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

060104

http://www.nrel.gov/otec/what.html

Source: SeaSolarPower.com

2a.2.4.10 Biomass Energy

Brazil sugar production diverted to ethanol Major potential source of Florida renewable energy

Protests starting over land useEthanol pollutes claimsMore 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 yearMost countries can’t do it now

UN Montreal COP11 meeting discussed further energy and emission policyUS 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 energyNew agreements to supply China with oil

Multibillion dollar pipelines are planned to IndiaIran has agreed to temporary halt to nuclear

reprocessing capability (but continues?)China backs them for oil in the UN Security

CouncilDifficult political problemStriving 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 oilTried 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

070111

Type Cost $ per kWto 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

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

2a.2.5.1.5 Other Areas of Interest

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 generationSugar 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

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/news-daily/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_1-eng.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

(older than ~1 year)

2a.4.1 Energy Fiction Book

Michael Crichton wrote “State of Fear” about tsunamis and climate change, finishing ~September 2004Conspirators, 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 & biasTwenty-page bibliographyNumber 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 2005Story of oil peak, intrigue, and manipulation in the

Middle East; corrupt companies and individualsStarring George Clooney plays CIA agent, and is a

Palestinian prime minister look-alikeAlexander 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 ActsANWR blocked againWinter 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 0-12-656152-4.

Crichton, Michael. State of Fear. NY: HarperCollins Publishers, Inc., 603pp., 2004.0-06-621413-0.

041231

2.a References: Websites, other

051230

www.iaea.or.at/ International Atomic Energy Agencyhttp://www.eia.doe.gov/emeu/ipsr/contents.html Energy Information AgencyNPR radio, CNN news, Fox News Channel, MSNBC Newswww.mms.gov/offshore/RenewableEnergy/RenewableEnergyMain.htm__________________________awea-windnet@yahoogroups.com. Wind Energy elistawea-wind-home@yahoogroups.com. Wind energy home powersite elistgeothermal.marin.org/ on geothermal energywww.dieoff.org. Site devoted to the decline of energy and effects upon populationwww.google.com/search?q=%22renewable+energy+course%22solstice.crest.org/dataweb.usbr.gov/html/powerplant_selection.htmlhttp://www.unc.edu/~rowlett/units/index.html -- a good units definition sitehttp://www.cia.gov/cia/publications/factbook/geos/ir.html -- quick country guidehttp://syrianamovie.warnerbros.com/http://www.CampusClimateChallenge.com

Olin Engineering Complex 4 kW Solar PV Roof Array

070111

Questions?