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Building a New Energy Industry in Ohio

Building a New Energy Industry in Ohio. Richard T. Stuebi BP Fellow for Energy and Environmental Advancement The Cleveland Foundation. June 5, 2009. Supplying the American energy diet by human power would require 58 slaves working hard 24/7/365 for each citizen

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Building a New Energy Industry in Ohio

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  1. Building a New Energy Industry in Ohio Richard T. StuebiBP Fellow for Energy and Environmental AdvancementThe Cleveland Foundation June 5, 2009

  2. Supplying the American energy diet by human power would require 58 slaves working hard 24/7/365 for each citizen At a wage of $5.00/hour, the human energy equivalent of a barrel of oil would cost $45,000 Each second, the world consumes 1000 barrels of oil Try living without electricity or gasoline for a week! We Take Energy For Granted

  3. Supplying the American energy diet by human power would require 58 slaves working hard 24/7/365 for each citizen At a wage of $5.00/hour, the human energy equivalent of a barrel of oil would cost $45,000 Each second, the world consumes 1000 barrels of oil Try living without electricity or gasoline for a week! We Take Energy For Granted

  4. Oil: Where will it come from? How much is left? What will be its price? What can replace it? CO2 emissions: How much/quickly are emissions changing the climate? How much/quickly do we need to reduce? Two Major Challenges

  5. Tight Linkage: Oil Transportation Most oil for transportation Virtually all transport from oil Source: EIA

  6. Most Remaining Oil in Middle East 100% = 1292.6 billion barrels • Saudi Arabia • Iran • Iraq • Kuwait • UAE • Qatar 56% Source: Oil & Gas Journal, Vol. 102, No. 47 (Dec. 10, 2004), from U.S. EIA

  7. Declining Global Oil Discoveries Source: Durango Bill Energy Analysis

  8. Oil Production Peaking? Source: www.romaenergia.org

  9. Oil Production: 1/04-3/09 Only down <5%

  10. Energy Use Per Capita million Btu, 2004 20x 8.7x 4.9x World average Source: International Energy Annual, Energy Information Administration

  11. $/barrel Oil Prices (Brent) At $68/barrel (June 1, 2009) • Half of its peak in mid-2008 • Almost double its low in early-2009 • Still considerably higher than average of last 20 years

  12. What Should Oil Cost? Current demand Source: CERA

  13. The Age of Oil Oil Production Ref. Colin J. Campbell 0 2500 500 1000 1500 2000 Anno Domini . Source: J.E Naber and F. Goudriaan

  14. The Age of Climate Change • “The vast majority of observers that are: • competent in the field of climatology, and • not financially supported by parties interested in preserving the status quo • are confident that climate change is: • occurring, • being driven significantly by human activity, and • likely to result in effects on the planet’s ecosystems that within decades will generate significant economic costs and environmental degradation.” - Richard Stuebi

  15. Increasing CO2 Concentrations Source: Climate Central

  16. Increasing Temperatures Source: Encyclopedia of Earth

  17. Clear Linkage

  18. Melting Polar Ice Caps Source: “Impacts of a Warming Arctic: Arctic Climate Impact Assessment”, Cambridge University Press. 2004.

  19. Future Demand Growth ~50%

  20. Future CO2 Emissions Growth Million metric tons World total under “business as usual” +75% China Europe U.S. Source: EIA International Energy Outlook

  21. Increasing Global Temperatures Remember: Temperature increases greater than average at the poles Temperature lags CO2 concentrations by about 50 years CO2 emissions remain in the atmosphere for about 100 years Source: Wikipedia

  22. -54%

  23. Oil supply uncertainty: Virtually 100% of all transportation needs met by petroleum-fuels Developing economies (e.g., China, India) rapidly seeking mobility levels of U.S. Increasing evidence of arrival of “peak oil” production, beyond which….? ~2% of remaining resources in U.S., vast majority in countries of questionable allegiance Climate change: Strong evidence and consensus of expert community that humans having impact on climate, with uncertain long-term effects on planet Fossil fuel consumption: main contributor to climate change Major reduction in greenhouse gas emissions to avoid possible “tipping point” into global climate chaos Twin Energy Challenges

  24. Opportunity: Advanced Energy • Multi-trillion dollar “conventional” energy paradigm increasingly unlikely to meet the twin challenges of increasing oil scarcity and climate change • To cope with these challenges, enormous “advanced” energy industry will need to be built in coming decades • Increasing investment – private and public sector – targeted to building the advanced energy industry • Accelerating the transition to advanced energy locally not only represents economic opportunity, but also prospect for improving local performance on energy and environmental metrics

  25. Investments: 2007-2030 100% = $26.3 trillion Delivery To meet global energy supply and environmental challenges Exploration & production Generation Refining Transmission & distribution Exploration & production Source: International Energy Agency World Energy Outlook 2008

  26. Increasing Energy VC Activity

  27. 2008 Cleantech VC Activity Through Oct. 9, 2008 Source: Cleantech Group, LLC

  28. American Recovery and Reinvestment Act Tax reductions Grant programs Loan guarantees Climate change Waxman-Markey bill to impose cap-and-trade on carbon emissions December negotiations in Copenhagen on international treaty to supersede Kyoto Federal renewable portfolio standard (RPS): Tighter fuel efficiency standards for vehicles Etc. Federal Action on Energy

  29. Materials science leadership Significant manufacturing resources Geographic location  distribution advantages Research institutions and universities Water Ohio market requirements Why Ohio for Advanced Energy?

  30. Government agencies: set policies and enforce laws that promote technology development/adoption and market structures (e.g., electricity/gas regulation) Universities/research institutions: conduct basic research (often with private sector partners) for future commercialization of technologies and products Industry/trade groups: self-organize to shape the emergence/growth/structure of the market and supply chain Facilitating organizations: help the parties in various targeted ways to promote the health of the market Building Advanced Energy Industry “The Market” Technology developers Product suppliers Energy providers End-use customers Outside forces shaping “The Market”

  31. Respected convener of parties Funder of not-for-profit activities No concerns about profitability or popularity Keeper and speaker of the general interest (no special interests) Role of Foundation Government agencies Private sector companies The Cleveland Foundation Non-profit organizations (NGOs) Academia

  32. Ohio legislation: New Ohio energy law, including significant requirements for energy efficiency and renewable energy adoption Significant grant program for advanced energy Regional efforts in Northeast Ohio: Significant activities to attract and expand manufacturing of products for wind, solar and fuel cell sectors $1 million feasibility study to investigate demonstration project and research center for offshore wind in Lake Erie Cleveland-Toledo collaboration to establish “green energy corridor” for Northern Ohio Numerous energy efficiency, waste-to-energy and renewable energy projects by various developers and hosts New energy research centers at Case Western Reserve University and University of Akron Technology development underway at many corporations, ventures, universities, colleges, research institutions Developments in Last 12 Months

  33. Ohio utilities must obtain 25% of power from advanced energy sources by 2025: At least ½ (12.5%) from renewables (of which 0.5% must be solar) At least ½ from plants installed in Ohio Renewable requirements begin by end of 2009, ramp-up to 2025: 4,500 estimated MW wind installed 450 estimated MW solar installed 22% reduction in electricity demand also required by 2025 Ohio Advanced Energy Market

  34. $150 million (grants and low-interest loans) over next 3 years to deploy advanced energy projects in Ohio $66 million for advanced coal $84 million for other $24 million in technology development grants in 2009 for advanced energy $11 million for fuel cells $13 million for other $3000 per student intern per year to support workforce development Other Ohio Financial Support Many local (city/municipal and county) incentives also available

  35. Fuel cells: recognized as a leader in fuel cell technology development Wind: strong industrial/supply chain base, good wind resource (especially in Lake Erie) Solar photovoltaics: world leader in thin-film technologies Primary Examples of Advanced Energy in Ohio

  36. Energy industry in crisis: oil supply scarcity and climate change New energy industry must be built in coming decades, massive investment required Accelerating transition to advanced energy in our region represents major economic opportunity, and will improve performance on key energy and environmental metrics Each of you can play a role in inventing the advanced energy economy Closing Comments

  37. Contact Information Richard T. Stuebi BP Fellow for Economic and Environmental Advancement The Cleveland Foundation 1422 Euclid Avenue, Suite 1300 Cleveland, OH 44115-2001 Phone: 216.685.2011 Fax: 216.861.1729 rstuebi@clevefdn.org

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