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Eamon Keane

 
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  • Should $10 a Barrel Be the Real Price of Oil? [View article]
    I'd be interested to see your numbers on oil consumption slashed by electric vehicles. Here's what I come up with on the back of an envelope:

    The breakdown of the 85mb/d oil consumption is approximately [1]:
    50% Road Transport
    8% Sea
    8% Air
    18% Heat and Power
    16% Non Fuel

    Of the road transport figure, freight makes up 30-40% of global consumption [2]. This leaves the addressable fraction for EVs as about 65% of 50%, or 32.5% of global liquid consumption. EVs can thus abate, currently, 28mb/d (85*0.325).

    For many countries, including the US, most oil is consumed by people who travel long distances. The share of US passenger-kilometres based on trips under 30km is only 50% [3]. If we use this as the acceptable range for EV journeys, and ignore differences in city vs. highway fuel economy, then the share reduces to 50% of 28mb/d or 14mb/d.

    There are around 600 million passenger cars on the road in the world, with over 20% of those in the US [4]. 40% of cars on the road are under 5 years old [4]. There were 52m cars produced last year [4], with 1/4 of those sold in China [5]. EV market share 2009: 0%. 2009 HEV sales were 0.75m, with market share of 1.5% [6].

    With a young car fleet, a 0% EV market share, and an addressable fraction of approximately 16% of current oil consumption, I struggle to see how this makes peak oil irrelevant. EVs could well slow the pace of demand growth, but whether they can do so fast enough is the question. There are other solutions. For example, the 18% of oil that goes to heat and power can and should be changed to natural gas and nuclear.

    [1] Industry Taskforce on Peak Oil & Energy Security, 2010, (peakoiltaskforce.net/d.../)
    [2] Energy Information Administration, International Energy Outlook, 2010, (www.eia.doe.gov/oiaf/ieo/)
    [3] Will Smith, Journal of Energy, "Can EVs address Ireland's CO2 emissions from transport", (2010, In Press), (www.sciencedirect.com/...)
    [4] Worldometer, "Cars", (www.worldometers.info/.../)
    [5] The Truth About Cars, 2010, "Horrors! China might only sell 20m cars in 2012!" (www.thetruthaboutcars..../)
    [6] Marklines Automotive Information Platform, (www.marklines.com/en/n...)
    Sep 8 08:29 PM | 25 Likes Like |Link to Comment
  • The Price of Oil in August [View article]
    Just realised I made a couple mistakes. Should be 4 times the US' total (0.45/0.117), not three, so that's 128bcf (32*4). Also, I forgot an Mcf is only 1,000 cubic feet and not a million.

    So there are 0.1724boe/Mcf (1/5.8). 1 bcf is therefore equal to 172,414boe (0.1724*1,000,000). 128bcf is equal to 22,068,965boe (172414*128), or 22mboe saved per year. (22/26674)*100=0.082% of oil saved by Chinese NGVs per year, or one 12,000th. That's more respectable, I guess!
    Sep 1 01:35 PM | 1 Like Like |Link to Comment
  • The Price of Oil in August [View article]
    Chinese stats are dubious at the best of times, but here's what I came up with:

    Chinese NGVs as of end 2009: 0.45m [1]
    Total cars in China end 2009: 76m [2]
    NGVs as % of total cars: 0.6%

    Total Chinese car sales in 2009: 13.64m [3]
    Total Chinese NGV sales in 2009: 0.05m [1]
    NGV sales as % of total: 0.37%

    NGV Refuelling Stations: 870 [1]
    Gas Stations: 96,000 [4]
    NGVs as % of total: 0.9%

    Beijing Taxis: 0.06m [5]
    Beijing Cars: 4m [6]
    Taxis as % of car fleet: 1.5%

    In 2009, America's fleet of 0.114m CNG and 0.003m LNG vehicles used 32bcf/year of natural gas [7]. Applying the same intensity to China's vehicles, they might have consumed 3 times that at 96bcf/year. Based on 1 barrel of oil equivalent (boe) equal to 5.8mcf, and the same fuel economy as regular vehicles, some number juggling reveals China's oil reduction from NGVs: 0.016mboe/year. The world produced 72.26mb/d of crude in 2009 [7]. That's 26,674 mboe/year. So Chinese NGVs displaced 0.00006% of global crude.

    [1] International Association of Natural Gas Vehicles, 2010, (www.iangv.org/tools-re...)
    [2] The Truth About Cars, 2010, "Heavens, 16.7 million cars sold in China" (www.thetruthaboutcars..../)
    [3] The Truth About Cars, 2010, "Horrors! China might only sell 20m cars in 2012!"
    [4] Daily Finance, 2009, "Reportlinker adds China gas station industry report" (www.dailyfinance.com/r.../)
    [5] Beijing Visitor Essentials: Taxi, 2006, (www.beijing-visitor.co...)
    [6] The Truth About Cars, 2010, "The Chinese Car Syndrome: 50 million cars a year", (www.thetruthaboutcars..../)
    [7] Energy Information Administration, 2010, "Annual Energy Review 2009", Table 6.5, Figure 10.5, Table 11.5, (www.eia.doe.gov/aer/)
    Sep 1 08:52 AM | 3 Likes Like |Link to Comment
  • Taking Stock of Phosphorus and Biofuels [View article]
    Thanks John! Good insight. Although the carbon is not needed, is there any harm in putting on the soil?

    Also, given your stellar chemistry credentials, you wouldn't have any insight on how much phosphorus reacts with the water?

    "As I understand it, some of the phosphorus reacts with the dissolved metals in the water, so it isn't all bioavailable. I'm not sure what proportion of introduced phosphorus is bioavailable."
    Aug 27 06:46 PM | Likes Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part II [View article]
    That probably should be $280m: 14E12*0.00002.
    Aug 27 05:10 AM | Likes Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part II [View article]
    Not sure if you guys have seen the IEA and OECD's joint report on energy subsidies released in June this year. Here's the link (www.iea.org/weo/docs/G...). Here are the parts relevant to the US.

    "Favourable tax deduction for depletion of oil and gas fields and coal deposits.

    Normally businesses can only deduct actual expenses and depreciation from the corporate income tax base. But in the United States, a special rule allows fossil-fuel and mineral producers to deduct a fixed percentage of gross revenue instead of the value of the actual depletion. This is a highly favourable tax provision and can even continue after the expenses to acquire and develop a field or mine have been recovered. For fossil-fuel producers alone, this tax expenditure is estimated at 0.002-0.004% of GDP. The US administration‘s 2011 budget proposal would end this and a number of other fossil-fuel-related tax expenditures."

    If the US' GDP is $14trn, 0.002% is $28bn.

    "Tax exemption for fossil-fuel producers’ own energy use.

    Most OECD countries have excise-tax exemptions for fossil fuels used in the production process in coal mining, oil extraction, refineries, etc. The magnitude of this tax expenditure will depend on the volume of energy production in each country."

    If US biofuels targets are met, it could amount to a cumulative $1trn subsidy over the next two decades.

    "The United States‘ Low-Income Home Energy Assistance Program (LIHEAP), for example, provides grants (up to US$ 5.1 billion in FY2010) to vulnerable households to help them pay their heating bills. Such targeted assistance programs — which arguably do not encourage ―wasteful‖ consumption (see Chapter 4) — exist in a number of other countries, but have not yet been quantified."
    Aug 27 04:52 AM | Likes Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part II [View article]
    I actually couldn't tell you the numerical methods used to estimate it, because the primary source is behind a paywall. One estimate is that there's 200-400 billion birds on earth (www.springerlink.com/c.../). Britain has 0.16% of global land mass, so a ballpark could be 500 million (300*1000*0.0016). Also, 22 million birds are shot each year for sport (www.independent.co.uk/...).

    @ Joseph

    That's ok then. It's amazing how many authors of critical wind articles discover their inner ornithologist. Thankfully that hasn't happened here.
    Aug 23 07:30 PM | 2 Likes Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part II [View article]
    Thanks Joseph. Now you have it. The natgas outlook for the US in the medium term could be $6-$8/MMbtu as some of the current shale is only being drilled to hold acreage. That supply glut should ease off at the end of 2011 as leases expire and prices could rebound a bit. At $6 wind will not be economic without subsidies. At $8 it should be marginal. That said, many states have 2020 renewable electricity targets... but they can always be walked back!
    Aug 23 05:54 PM | 3 Likes Like |Link to Comment
  • What is Driving Natural Gas Pricing and Continued Drilling? [View instapost]
    Great article. I had read about the leasing stuff previously on SA but the detail and numbers you add clarifies it, thanks.
    Aug 23 05:37 PM | Likes Like |Link to Comment
  • Shale Gas E&P Players: Challenges Appear to Be Nearing an End [View article]
    Good stuff, keep these articles coming.

    A bit of a mixed signal coming from Range Resources. Their cost per well went up, but that was offset by the augmented recovery of nat gas. Could this increase in costs foretell an increased breakeven point if producers eventually have to stray outside of the talked about "sweet spots" of high recovery per well?.. just a thought.
    Aug 23 09:44 AM | 1 Like Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part II [View article]
    I don't disagree with your general thrust, but let's at least get the technical aspects right.

    Wind turbine availability: Based on an analysis of 30,000 turbine years of data over 15 years, 50% of turbines had an availability greater than 97.5% and 90% had an availability greater than 92.5% [1]. That is, the turbines were down for maintenance 2.5% and 7.5% of the year, respectively. For comparison, South African coal plants operate at 86.8% availability and German plants at 90% [2]. You chose three wind farms installed in the 1980s as your examples; not exactly representative.

    Power systems have long capably responded to a 1,000 MW coal plant tripping off the system at a given instant, and they can do so for wind generation. Wind generation only rarely decreases or increases suddenly, limiting the need to have 35% efficient open cycle gas turbines (OCGTs) ready to respond to their ups and downs. You can now fairly accurately forecast the wind. Ireland has live wind output and forecast data by 15 minute interval. For today, as of 13:00 GMT, the output and forecast have had an r^2 of 0.989 [3]. With an accurate forecast you can then use 58% efficient combined cycle gas turbines (CCGTs). If you have a 400 MW CCGT operating at 200MW, its efficiency will drop to something like 52% [4]. So your CO2 emissions from the natural gas plant will increase from about 350gCO2/kWh to about 400gCO2/kWh. Wind has 0gCO2/kWh, so it's still a net CO2 benefit.

    As regards birds, a bit of perspective is in order. In Britain in 2001 [5]:
    30,000 birds were killed by wind turbines
    1,000,000 birds were killed by cars
    55,000,000 birds were killed by cats

    Economics is the biggest hurdle, and depends to a large extent on the natural gas price. Current wind turbines cost about €1m/MW and at a 30% capacity factor can cover their all in costs if they receive an average €50/MWh over the course of 15 years. In 2008, in Ireland, where most generation is gas fired, the average electricity wholesale price was €80/MWh. In 2009, after the nose dive in gas prices, the average electricity price was €43/MWh. This year so far it has averaged €48/MWh [6-7]. So the viability of (Irish, onshore) wind depends on your 15 year forecast of natural gas prices.

    [1] Garrad Hassan, 2008, "Availability Trends Observed at Operating Wind Farms" (.ppt, slide 4) (www.ewec2008proceeding...)
    [2] RWE, 2010, "RWE Assessment Increases Availability for Eskom Power Plants", (pdf) (www.rwe.com/web/cms/me...)
    [3] Eirgrid, Wind Generation, (www.eirgrid.com/operat.../)
    [4] Siemens, 2005, slide 17 "Part-load efficiency" (www.authorstream.com/P.../)
    [5] David MacKay, Sustainable Energy Without the Hot Air, Figure 10.6, (www.withouthotair.com/...)
    [6] Energy Dispatches, "The ill wind of low natural gas prices", (energydispatches.com/2.../)
    [7] Energy Dispatches, "Wind and the SMP", (energydispatches.com/2.../)
    Aug 23 09:02 AM | 13 Likes Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part I [View article]
    Good explanation, Alejandro.

    Robert, I agree footnote [2] was not helpful, but there you go. The tone of the article rubbed me the wrong way and as for the Daily Mail, it is well known for its terminological inexactitude and biases.

    I derived the capacity factor for last year from table 8.2a Electricity Net Generation Total (3,925.1 TWh) and table 8.11a Electric Net Summer Capacity (1.0276 TW). If you put the Net Summer Capacity flat out, you would generate: 1.0276*24*365 = 9,002 TWh per year. (3925.1/9002)*100 = 43.6% capacity factor.
    Aug 23 05:14 AM | 2 Likes Like |Link to Comment
  • Wind Energy: Freedom From Fossil Fuels or Tempest in a Teapot? Part I [View article]
    Ok, I'll bite. With respect, this paragraph leads me to question your knowledge of the electricity sector:

    "According to a recent article in Britain’s Daily Mail, more than half of Britain’s wind farms are operating at less than 25% capacity – and the figure rises to nearly 3 out of 4 onshore developments! 70% of the land-based wind farms / power plants on land only get enough wind to power a turbine 25% of the time. You don't build a church to handle every worshipper who comes once a year on Easter Sunday and is 3/4 empty the rest of the year; why would you build a power source that follows just that model?"

    You seem surprised that wind farms don't operate at a 100% capacity factor. The best wind sites will give you 40%. The typical range is 20-40%. Last year Irish wind turbines operated at a roughly 30% capacity factor. Solar has a 12-15% capacity factor. The total US generation fleet operated at a 44% capacity factor in 2009 [1]. Capacity factor is not efficiency. Get over it [2].

    [1] EIA 2009 Annual Energy Review (www.eia.doe.gov/aer/)
    [2] Seriously
    Aug 22 09:14 PM | 4 Likes Like |Link to Comment
  • Transportation, Emissions, Biofuels and Whiskey [View article]
    Good article, thanks.

    The guardian article talks of 'copious' amounts of waste and the good Scottish professor argues that "it could contribute significantly to targets set by the EU for biofuels to account for 10% of total fuel sales by 2020." Firstly, the 10% fuel sales target has actually been walked back to now specify that 10% of energy used in transport is from renewable energy (e.g. energy used in EVs counts towards target) [1].

    Each year the whiskey industry produces "1,600 million litres of pot ale and 187,000 tonnes of draff" [2]. Pot ale contains 17 MJ per litre [3]. Some numerical footwork reveals the energy content of pot ale to be 0.65 mtoe/year [4]. Draff energy content varies, but is likely around 12MJ/kg [5]. So draff contains 0.05 mtoe/year.

    UK 2008 transport energy consumption is estimated at 51.7 mtoe [6]. So if all the waste energy is used it would provide 1.4% (0.7/51/7) of 2008 UK transport energy. Nothing to be sniffed at. However the waste products are already used as nutritious animal feed. Hence whiskey byproducts are part of the global food chain. Anyone making biofuels from these will hence be subject to uncorrelated commodity price risks (animal feed vs. oil).

    Diversion of distillers grains from feed to biofuel may thus involve indirect land use change (ILUC) carbon emissions. There will also be direct carbon emissions from processing the ale and draff. Whether they pass the EU biofuel criterion of 60% reduced emissions compared to petrol and diesel by 2018 [7] remains to be seen. Then there's the other important question of the breakeven price with oil in $/bbl.


    [1] Directive 2009/28/EC (eur-lex.europa.eu/LexU...)
    [2] BBC, "Whisky 'petrol' for cars developed by university", 17 August 2010 (www.bbc.co.uk/news/uk-...)
    [3] BOCM Pauls, Technical Information Pot Ale Syrup (pdf) (www.bocmpauls.co.uk/co...)
    [4] IEA Energy Conversion Calculator (www.iea.org/stats/unit...)
    [5] Manor Farm Feeds (www.manorfarmfeeds.co....)
    [6] UK Department for Transport, 2009 (www.dft.gov.uk/pgr/sta.../)
    [7] EU Commission, 2010 (ec.europa.eu/delegatio...)
    Aug 22 01:47 PM | 1 Like Like |Link to Comment
  • The Largest Ever Natural Gas Discovery in U.S. History...And the Company Set to Dominate [View article]
    "It’s an enormous shale deposit that contains 500 trillion cubic feet of natural gas – enough energy to power the U.S. for 200 years."

    2009 US Primary Energy Consumption: 92 tcf [1]. 500/92 = 5.4 years.
    2009 Natural Gas Consumption: 22.8 tcf [1]. 500/22.8 = 22 years.

    [1] EIA 2009 Annual Energy Review (www.eia.doe.gov/aer/pe...)
    Aug 20 09:32 AM | 7 Likes Like |Link to Comment
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