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2.0a Past Energy Events. Commodity Markets 1/12/06 1/7/2007
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2.0a Past Energy Events Commodity Markets 1/12/06 1/7/2007 NYMEX Crude Oil Futures $64.55/bbl $56.17 Henry Hub Natural Gas Futures $9.26/mmBtu $6.183 NYMEX Heating Oil Future ?c/gal 156.53NYMEX Gasoline Futures $175.93 ¢/gallon $170.00 Local Melbourne FL Hess gasoline $2.32/gallon $2.33 Palo Verde Spot Electricity $58.28/MWh $48.43http://money.cnn.com/data/commodities/http://www.bloomberg.com/markets/commodities/energyprices.html 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 Tidevann 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 2008-2009 • 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 • Prices continue to trend upwards or fluctuate • Natural gas is most volatile fuel http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html 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 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 • 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 http://www.venezuelanalysis.com/articles.php?artno=1408 http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html 070111
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/_1585197_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); 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 Xiluodudam; 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 • 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 051230
Source: SeaSolarPower.com 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 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 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/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
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 0-12-656152-4. • 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