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What do I think about Climate Change?

Five years ago, I would say that I completely accepted that Anthropogenic Global Warming (AGW), aka Climate Change, was happening and was disastrous.

My primary reason was awareness of the role of CO2 in reflecting infrared radiation back into the lower atmosphere. I would say that the physics supported the AGW claim, and I still think this is true.

Today I would say that the evidence for impending doom is less persuasive. Still, I have no doubt that AGW is happening, and that it would be desirable to reduce the use of fossil fuels, a transition which is already happening at an amazingly rapid pace.

Apparently my position would lead me to be called a “lukewarmer”.

And why am I still in the oil business?

So why am I in the oil business? Actually I viewed (and still view) the oil business as a dead end, both hopefully and practically. I even gave a lecture on Peak Oil. Many people think the Peak Oil idea has been discredited by the subsequent boom in US shale oil. However, what has really happened is that conventional oil production did hit a peak and is now past it. Shale oil drilling, which uses unconventional drilling technology, requires an enormous expenditure of financial and natural resources, and it is far from clear that it is truly profitable or even breaks even on the basis of energy expended versus energy invested. It is a tribute to the American financial system that it could throw so much money into such a questionable endeavor.

Secondly, I doubt that the actions of a company as small as Brandon will have any effect whatsoever on world oil consumption. Most economic activity still relies on fossil fuels, and will for some years to come. Moving away from that is a laudable goal but not feasible in the short term, at least not until energy storage technology makes substantial advances. So for now I am making money from the oil business, which I can then use to support my family and causes that I believe in.

And what about Climate Change?

Today, I am aware of a few additional facts. One is that the supposed scientific consensus on AGW is not as strong as advertised. Another is that the climate models being used to predict disaster are themselves subject to serious provisos, which aren’t always acknowledged in popular discussion.

Scientific Consensus

There is a claim that 97% of scientists agree that climate change is a crisis. However, this figure was derived by reviewing a set of published papers on climate, of which only a third actually made any assertion about AGW. Of that third, it is indeed true that 97% agreed that man-made global climate change was a serious problem, but reliance on this figure seems to be a reach.

Another consensus claim was apparently based on a questionnaire which asked the following two questions: 1) do you agree that global mean temperature has increased from pre-1800 levels? And 2) do you think that human action is a significant cause of this? Note that 1800 was still in what is called the “Little Ice Age”, so almost no scientists could or would dispute the first contention. Note also that “a significant cause” is not necessarily a crisis. So claiming consensus on the basis of this questionnaire is pretty meaningless.

Climate Models

The physics of atmosphere and climate is extremely complicated, nonlinear, and not solvable in a direct fashion (the Navier-Stokes equation). Thus it is subject to many approximations; even the best computer models are not yet capable of incorporating detailed simulation at distances less than several square kilometers. (For linear systems this might not be so bad, but nonlinear systems can encounter so-called butterfly effects, whereby small scale perturbations can cause major differences in outcomes).

Even the relative impact of different greenhouse gases is hard to quantify. For instance, CO2 is usually estimated to comprise about 20% of the total greenhouse effect, but the estimate varies from 9-26%. H2O (vapor) is usually considered to have the most impact, 36-72%, but it varies tremendously dependng on locality. Clouds are very significant but no climate model to date can incorporate clouds other than as a plugin parameter (also called a fudge factor).

Alternative Energy Sources

Ultimately, I think everyone would agree that we can’t keep pumping CO2 into the atmosphere. Therefore we need to move to alternative sources of energy.

The cleanest are solar and wind, ignoring fabrication and infrastructure. It seems clear that the developed world is moving to these at a really surprising and significant pace, especially considering the complexity and interdependency of any energy infrastructure.

The pace doesn’t seem satisfactory to those who are convinced of impending doom. However, intermittency is a huge problem. Without major breakthroughs in the technology of batteries and other energy storage systems, energy from solar and wind will be highly intermittent. Our ancestors for most of human history had to deal with the intermittency of sun and wind, but it would be a major adjustment for the modern economy.

Worse, building and/or maintaining an entire backup energy infrastructure is economically absurd. Essentially we would have to have either a duplicate shadow infrastructure or energy storage sufficient to ride through intermittency.

The US uses about 400,000 MWh of electricity per night hour, so 12 hours of backup storage would be just under 5,000 GWh of storage. For comparison, the state of California currently has about 150,000 MWh of energy storage, mostly pumped hydro (see Appendix). That is only about 3% of the storage required nationally, and the true backup requirement is much larger, since I am talking here about only solar; if some of the renewable source is wind, and the wind doesn’t blow, demand will have to be served from backup even during peak daylight hours.

This scenario also implies that generation capacity must be great enough to both supply daytime use and to top up storage; in other words, renewable generation capacity must be about double the capacity required by a source that is available around the clock.

The other side of intermittency is that when sun and wind are producing, they may well be producing too much. In the absence of adequate battery backup, that means you have to either shut down or dump energy. So now you are paying for expensive generation facilities, plus backup, with double the output capability of the existing infrastructure, and then quite often you are throwing power away! Insane.

If you really think doom is impending, there are only two alternatives. One is to go immediately and completely to sun and wind, regardless of energy storage capacity. This implies intermittent supply, with a radical impact on modern life and business; essentially, going back to the way of life prior to fossil fuels, when the rhythm of commerce was driven by the capricious availabilty of sun and wind.

The other option is nuclear. It is the only alternative energy source that can handle the energy needs of the economy without intermittency. If the alternative is doom, even a meltdown worse than any encountered to date would have to be considered tolerable.

If someone says to me that AGW is now a crisis, I expect them to also step up to one of these alternatives. Anything less says to me they don’t really think it’s a crisis.

Appendix: California Dreaming

by James Temple, MIT Technology Review July 27, 2018

There are issues California can’t afford to ignore for long. The state is already on track to get 50 percent of its electricity from clean sources by 2020, and in August 2018 the legislature passed a bill that would require it to reach 100 percent by 2045. To complicate things, regulators also voted in January of that year to close the state’s last nuclear plant, a carbon-free source that provides 24 percent of PG&E’s energy [note: according to another source, that is 9% of the total California energy mix]. That will leave California heavily reliant on renewable sources to meet its goals.

The Clean Air Task Force, a Boston-based energy policy think tank, found that reaching the 80 percent mark for renewables in California would mean massive amounts of surplus generation during the summer months, requiring 9.6 million megawatt-hours of energy storage. Achieving 100 percent would require 36.3 million.

The state currently has 150,000 megawatt-hours of energy storage in total. (That’s mainly pumped hydroelectric storage, with a small share of batteries.)

Building the level of renewable generation and storage necessary to reach the state’s goals would drive up costs exponentially, from $49 per megawatt-hour of generation at 50 percent to $1,612 at 100 percent.

And that’s assuming lithium-ion batteries will cost roughly a third what they do now.

Similarly, a 2018 study in Energy & Environmental Science found that meeting 80 percent of US electricity demand with wind and solar would require either a nationwide high-speed transmission system, which can balance renewable generation over hundreds of miles, or 12 hours of electricity storage for the whole system (see “Relying on renewables alone significantly inflates the cost of overhauling energy”).

At current prices, a battery storage system of that size would cost more than $2.5 trillion.

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Obama’s Oil Speech

Unfortunately, President Obama’s “Oil Speech” of April 22, 2011 was a rehash of the usual tired stuff:

  1. Every time, going back decades, that the gas price has risen to a relatively high level, a government task force has been appointed to investigate speculative fraud. There have been some dozen such investigations. They have never discovered anything actionable outside of a few mom and pop service-station operations. Nothing that would have any real effect on prices. The answer is simple: speculators can’t speculate on thin air. Without supply shortages, demand increases, or fears of such, prices just don’t increase. If speculation were risk-free, everyone would do it.
    (Since there is no way for an individual investor to store large enough amounts of oil to seriously affect world supply, I would like to hear some plausible scenario for how the speculators are actually making money!)
  2. When you think about it, and when all the rhetoric is stripped away, the only way alternative energy will ever be viable is if the price of oil stays high. Otherwise, people will continue to consume cheap fossil fuel energy. So lowering the oil price will have the effect of wiping out all those alternatives that Obama is supposedly trying to support. If you look at the history of alternative energy in the US since the 1970s, this is exactly what has happened. Obama is talking out of both sides of his mouth.
  3. The net profitability of the oil business in the US is 5.7% (2010), about average compared to all US business. It is way lower than pharmaceuticals, for instance, which earned 19.4%. When the oil business is losing money (such as 1980-2000), no one pays attention or cares. When prices rise, and the oil business is recouping some profit, everyone screams bloody murder.
  4. While the oil business does receive some tax breaks which could be questioned, it nevertheless pays tax at a rate higher than average for all US business – according to the Tax Foundation, “the average effective tax rate on the major integrated oil and gas industry is estimated to equal 38.3 percent. This exceeds the estimated average effective tax rate of 32.3 percent for the market as a whole”.
  5. The tax break which is usually cited is the percentage depletion allowance. However, while the use of a percentage calculation can be questioned, the accounting rationale for this is the same as that for any depreciation or amortization, and it’s hard to question that. Also, percentage depletion only applies to wells producing less that 1,000 bbl/day, so the major oil companies benefit relatively little from it.
  6. The other tax break usually cited is the writeoff of intangible drilling costs (“dry hole” costs). However, this represents cash spent, with quite possibly no return. Any business is allowed to write off a failed project. The only difference here is that the oil buiness gets the writeoff even for the 10% of wells which actually produce. So what’s the big deal?
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That ‘70s Energy Crisis

So you think you understand why the energy crisis of the 1970s occurred? That it was all due to the Iranian overthrow of the Shah?

Few people, even today, seem to understand some basic facts:

  • US domestic oil production peaked in 1971
  • US gasoline deliveries were subject to allocation controls which dated back to WW2. These controls favored farmers and rural areas over urban drivers, resulting in a situation where local shortages were likely to occur.
  • When drivers panicked and starting keeping their tanks topped off, the total amount of gasoline kept in those tanks increased dramatically, since in normal times people only keep their tanks about half full. This in itself exacerbated the situation – in other words, individual reactions to a feared shortage actually helped create the shortage.
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