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Yale 62

You Can Ignore Reality Only by Ignoring the Risk of Unacceptable Outcomes, Page 2 (Carbone)

Fossil Fuel versus Renewable Economics, Renewable Infrastructure Environmental Impact, Raw Material Dependency on China, Critical Petrochemical Applications

From the start, the administration has maintained that renewable energy will be lower-cost than fossil fuels at build-out. Current trends suggest quite the opposite, now and over the foreseeable future. The ignored reality here is that physics imposes limits on energy conversion that can’t be exceeded with current sources. The Manhattan Institute reports that the maximum rate the sun’s photons can be converted to electrons is about 33 percent. Our best solar technology is at 26 percent efficiency. For wind turbines, the maximum capture is 60 percent. Our best machines are at 45 percent. So, in both cases, we are at about 76 percent of theoretical limits. Battery technology limits are an exercise in who you believe, but using Tesla’s most advanced battery plant now under construction in Nevada is a good marker. Applying the known physical limits of batteries produced by this facility would require the plant to operate 24/7 for 500 years to produce enough batteries to store one day of energy usage in the U.S.

To further demonstrate the disinformation that floods the media on the cost advantages of green energy versus fossil fuels, consider the following. Currently, it costs about the same to drill an oil well as to build a wind turbine. However, an oil well produces 10 barrels of oil/hour, whereas a wind turbine generates the equivalent energy of 1 barrel of oil/hour. Additionally, a barrel of oil costs about 50 cents to store for use. In comparison, to store the oil energy equivalent, a wind turbine requires $200 worth of batteries. Doing the math, an equivalent amount of wind-produced energy would require 10 windmills and $200 times 10 in battery storage costs, or $2,000 in up-front costs.

I maintain that the public is being gas-lighted on these relative economics. What they hear is wind and solar energy are free and renewable, versus oil with an average cost of $58 per barrel to produce. But nobody talks about 10 times the capital to build a wind farm, and 400 times more in associated battery storage costs to match the usable energy from just one oil rig. The energy contained in wind and solar sources may be free; but to harness this energy, the capital investment costs certainly are not free. They greatly exceed an investment in equivalent oil and gas production. No wonder we are compelled to spend billions of dollars a year in subsidies and tax credits to encourage the build-out of renewables. Expect many more Solyndras ahead.

There are other undefined cost and schedule variables associated with delivering renewable energy efficiently throughout the U.S. The obvious locations for solar farms are in the sun belt states and lower California. For windmills, it’s the coastal U.S. and central Texas through the midwestern states to the Canadian border. However, the existing grid structure does not remotely resemble the hook-ups required to distribute renewable energy reliably and at a reasonable cost, especially to large population centers. The necessary grid enhancements will not only be costly, they will meet significant delays due to a “not in my back yard” sentiment against building collection farms, and litigation to block transmission rights-of-way. So, be skeptical when you hear big technology and cost breakthroughs are on the horizon with wind and solar energy sources. The learning curve is a lot steeper and more unpredictable than the administration is willing to admit.

Let’s shift gears now to the environmental impact of renewable infrastructure. If our motive is to protect the planet, we may want to go slow on wind, solar and batteries because, like all machines, they’re built from nonrenewable materials. Consider these sobering numbers. A single car battery in an EV weighs about half a ton, or 1,000 lbs. Fabricating one requires digging up, moving and processing more than 250 tons of earth somewhere on the planet. Building a single 100-megawatt wind farm, which can power 75,000 homes, requires some 30,000 tons of iron ore and 50,000 tons of concrete, as well as 900 tons of non-recyclable plastics for the huge wind blades. To get the same power from solar, the amount of cement, steel and glass needed is 150 percent greater. Then there are the other elements needed, including rare earth metals. With current plans, the world will need up to a 1,000-fold increase in mining for elements such as cobalt, lithium, nickel and dysprosium, to name just a few.

Where’s all of this stuff going to come from? The answer is massive new mining operations, almost none in the U.S. Most of these metals will be converted into finished products in countries hostile to the U.S. Analysts studying the geographical impact of these new supply chains conclude that it will shift Europe’s dominant energy dependency from Russia to China. Our environmentally limited, domestic mining industry will also cause the U.S. to accept almost total raw-material dependency on China. Already, China and its dependent countries control the majority of existing global sources of copper (45 percent), nickel (40 percent), cobalt (60 percent), lithium (55 percent), and rare earth metals (80 percent). It is unclear how we overcome this disadvantage. For example, to electrify half the cars and trucks Americans purchase by 2030, the Biden administration’s target, the U.S. will need to secure more than 650,000 tons of battery-grade nickel each year. Annual domestic nickel production amounts to about 18,000 tons. With respect to lithium, the U.S. is not even a player. We have one significant domestic supplier that amounts to about 2 percent of the global market. Of equal note, China’s dominant raw-material position has already solidified its position in the critical battery market. China’s largest battery manufacturer controls 35 percent of the global market. Likewise, the Chinese control 90 percent of the poly-silicone market, the key component in solar panels. Our increasing reliance on China can’t be good for our post-fossil-fuels energy security, as the EU has discovered from its dependence on Russian energy sources.

There is also very little anguish to date over the potential insult to the global environment caused by solar collectors, wind mills and battery storage devices. Australia’s Institute for a Sustainable Future cautions that the global rush for energy materials will take miners into “remote wilderness areas that have maintained a high level of biodiversity because they haven’t yet been disturbed.” Add to that an estimate that by 2050, worn-out solar panels, wind turbine blades and batteries will more than double the amount of non-recyclable waste destined for our landfills. Batteries, in particular, will require special attention to protect landfills from ground-water contamination by leaking toxic chemicals.

There is more really bad news in store for the myriad of global humanitarian agencies. The politicos’ well-worn phrase of “good paying union jobs” doesn’t apply here. The work force is going to look more like child labor and persecuted minorities in forced labor camps, especially in China and underdeveloped African nations, according to a recent report by Amnesty International.

So far, we have been focused on efforts to reduce fossil-fuel emissions in energy production. But not all oil and gas is consumed in combustible applications. Refer to the chart below that shows the percentage of derivatives produced from a refined barrel of crude oil. Focus on the 13 percent of the barrel processed into hydrocarbon gas liquids such as ethane, propane, butane and styrene.

Refined Oil Product Barrel Breakdown

Gasoline- 45%
Ultra-Low Sulfur Diesel- 25%
Hydrocarbon Gas Liquids- 13%
Kerosene/Jet Fuel- 9%
Other Distillates/Heating Oil- 4%
Residual Fuels- 2%
Other Products- 2%

These derivatives are basically the feedstocks needed to produce the great variety of plastic products that we take for granted in our daily lives. Some of the more obvious disposable plastic applications like water bottles, grocery and trash bags, drink cups and food wraps may not concern you if your family had to do without. But how about the non-household uses in medical applications like antibiotics and vaccines, surgical gloves, syringes, plastic respiratory apparatus, stents, and pace makers; construction materials like plastic insulation, pipe and flooring; fertilizer and pesticides; defense applications like ballistic protection for military vehicles, body armor, drones, and hand-held field weapons; or a variety of synthetic fibers for carpets, clothing and outer wear; automotive parts, tires and side panels; and plastic composites for structural aircraft parts and windmill blades as well as athletic equipment such as golf clubs and tennis rackets. The uninformed public has no clue that restricting oil derivatives in these non-combustible applications will have very serious price and availability implications in their daily lives. Ignoring this reality will most certainly mean big changes in our standard of living and the cost of everyday products and services.

Given the potentially unacceptable outcomes resulting from the current U.S. energy policy, it is imperative that the administration develop a Plan B (beyond bullying a skeptical oil and gas industry into producing more product). Several interested parties have attempted to engage the administration on this undertaking without success.

The next section of this article is a synthesis of several plans to slow global warming and mitigate the consequences of a politically driven and misdirected strategy in place today.

CLICK TO READ MORE (Part 3): A Five Step Energy Policy to Balance Energy Reliability with Climate Goals. Or Return to Part 1

(Classmate comments are invited at the end of Anthony’s commentary on page 3.)