My Top 10 Energy Related Stories of 2009

Here are my choices for the Top 10 energy related stories of 2009. Previously I listed how I voted in Platt’s Top 10 poll, but my list is a bit different from theirs. I have a couple of stories here that they didn’t list, and I combined some topics. And don’t get too hung up on the relative rankings. You can make arguments that some stories should be higher than others, but I gave less consideration to whether 6 should be ahead of 7 (for example) than just making sure the important stories were listed.

1. Volatility in the oil markets

My top choice for this year is the same as my top choice from last year. While not as dramatic as last year’s action when oil prices ran from $100 to $147 and then collapsed back to $30, oil prices still more than doubled from where they began 2009. That happened without the benefit of an economic recovery, so I continue to wonder how long it will take to come out of recession when oil prices are at recession-inducing levels. Further, coming out of recession will spur demand, which will keep upward pressure on oil prices. That’s why I say we may be in The Long Recession.

2. The year of natural gas

This could have easily been my top story, because there were so many natural gas-related stories this year. There were stories of shale gas in such abundance that it would make peak oil irrelevant, stories of shale gas skeptics, and stories of big companies making major investments into converting their fleets to natural gas.

Whether the abundance ultimately pans out, the appearance of abundance is certainly helping to keep a lid on natural gas prices. By failing to keep up with rising oil prices, an unprecedented oil price/natural gas price ratio developed. If you look at prices on the NYMEX in the years ahead, the markets are anticipating that this ratio will continue to be high. And as I write this, you can pick up a natural gas contract in 2019 for under $5/MMBtu.

3. U.S. demand for oil continues to decline

As crude oil prices skyrocketed in 2008, demand for crude oil and petroleum products fell from 20.7 million barrels per day in 2007 to 19.5 million bpd in 2008 (Source: EIA). Through September 2009, year-to-date demand is averaging 18.6 million bpd – the lowest level since 1997. Globally, demand was on a downward trend as well, but at a less dramatic pace partially due to demand growth in both China and India.

4. Shifting fortunes for refiners

The Jamnagar Refinery Complex in India became the biggest in the world, China brought several new refineries online, and several U.S. refiners shut down facilities. This is a trend that I expect to continue as refining moves closer to the source of the crude oil and to cheap labor. This does not bode well for a U.S. refining industry with a capacity to refine 17.7 million barrels per day when total North American production is only 10.5 million bpd (crude plus condensate).

5. China

China was everywhere in 2009. They were making deals to develop oil fields in Iraq, signing contracts with Hugo Chavez, and they got into a bidding war with ExxonMobil in Ghana. My own opinion is that China will be the single-biggest driver of oil prices over at least the next 5-10 years.

6. U.S. oil companies losing access to reserves

As China increases their global presence in the oil markets, one casualty has been U.S. access to reserves. Shut out of Iraq during the recent oil field auctions there, U.S. oil companies continue to lose ground against the major national oil companies. But no worries. Many of my friends e-mailed to tell me that the Bakken has enough crude to fuel the U.S. for the next 41 years

7. EU slaps tariffs on U.S. biodiesel

With the aid of generous government subsidies, U.S. biodiesel producers had been able to put their product into the EU for cheaper than local producers could make it. The EU put the brakes on this practice by imposing five-year tariffs on U.S. biodiesel – a big blow to U.S. biodiesel producers.

8. Big Oil buys Big Ethanol

I find it amusing when people suggest that the ethanol industry is a threat to the oil industry. I don’t think those people appreciate the difference in the scale of the two industries.

As I have argued many times before, the oil industry could easily buy up all of the assets of ethanol producers if they thought the business outlook for ethanol was good. It would make sense that the first to take an interest would be the pure refiners, because they are the ones with the most to lose from ethanol mandates. They already have to buy their feedstock (oil), so if they make ethanol they just buy a different feedstock, corn, and they get to sell a mandated product.

In February, Valero became the first major refiner to buy up assets of an ethanol company; bankrupt ethanol producer Verasun. Following the Valero purchase, Sunoco picked up the assets of another bankrupt ethanol company. If ExxonMobil ever decides to get involved, they could buy out the entire industry.

9. The climate wars heat up

There were several big climate-related stories in the news this year, so I decided to lump them all into a single category. First was the EPA decision to declare CO2 a pollutant that endangers public health, opening the door for regulation of CO2 for the first time in the U.S.

Then came Climategate, which gave the skeptics even more reason to be skeptical. A number of people have suggested to me that this story will just fade away, but I don’t think so. This is one that the skeptics can rally around for years to come. The number of Americans who believe that humans are causing climate change was already on the decline, and the injection of Climategate into the issue will make it that much harder to get any meaningful legislation passed.

Closing out the year was the United Nations Climate Change Conference in Copenhagen. All I can say is that I expected a circus, and we got a circus. It just goes to show the difficulty of getting countries to agree on issues when the stakes are high and the issues complex. Just wait until they try to get together to figure out a plan for peak oil mitigation.

10. Exxon buys XTO for $41 billion

In a move that signaled ExxonMobil’s expectation that the future for shale gas is promising, XOM shelled out $41 billion for shale gas specialist XTO. The deal means XOM is picking up XTO’s proved reserves for around $3 per thousand cubic feet, which is less than half of what ConocoPhillips paid for the reserves of Burlington Resources in 2005.

Honorable Mention

There were a number of stories that I considered putting in my Top 10, and some of these stories will likely end up on other Top 10 lists. A few of the stories that almost made the final cut:

The IEA puts a date on peak oil production

The statement they made was that barring any major new discoveries “the output of conventional oil will peak in 2020 if oil demand grows on a business-as-usual basis.”

AltaRock Energy Shuts Down

Turns out that deep geothermal, which the Obama administration had hoped “could be quickly tapped as a clean and almost limitless energy source” – triggers earthquakes. Who knew? I thought these were interesting comments from the story: “Some of these startup companies got out in front and convinced some venture capitalists that they were very close to commercial deployment” and “What we’ve discovered is that it’s harder to make those improvements than some people believed.” I am still waiting to see a bonafide success story from some of these VCs.

The biggest energy bill in history was passed

In total, $80 billion in the stimulus bill earmarked for energy was a big story, but I don’t know how much of that money was actually utilized.

The Pickens Plan derails

The website is still there, but the hype of 2008 turned into a big disappointment in 2009 after oil prices failed to remain high enough to make the project economical. Pickens lost about 2/3rds of his net worth as oil prices unwound, he took a beating in the press, and he announced in July that we would probably abandon the plan.

So what did I miss? And what are early predictions for 2010’s top stories? I think China’s moves are going to continue to make waves, there will be more delays (and excuses) from those attempting to produce fuel from algae and cellulose, and there will be little relief from oil prices.

53 thoughts on “My Top 10 Energy Related Stories of 2009”

  1. There is oil there, and people have been trying to economically extract it for over 50 years. There is some production there today, but the amount of commercially recoverable oil is far lower than many of the wild numbers that are often thrown around.

    RR

  2. Robert,

    Probably a sub-bullet to your item on EPA's Endangerment Finding, but I would have added that regulation limits have been proposed for light-duty vehicle CO2 emissions. The way this is happening is pretty interesting. CAFE, the existing vehicle mileage standard, will remain and be enforced by the National Highway Traffic Saftey Administration, as a Mile/Gallon standard. However, in addition EPA will have a standard for CO2 in Grams/Mile.

    These both come with their own reporting requirements of course. Regulatory efficiency at its best.

    This may seem like engineering details related to the Endangerment Finding, but it will certaiinly affect what consumers will be able to purchase and at what price.

  3. Good list, RR.

    I wonder if, when people look back in about 10 years time, the long-term important story of 2009 will turn out to have been the rumblings through the financial world, basically caused by excessive government spending around the world. Greece goes bust. Credit agencies warn about downgrading UK sovereign debt, etc.

    If this continues (and there is every reason to think it will), it may have a long-term impact on demand. And it may put an end to expensive follies like Alleged Anthropogenic Global Warming, with all its regulatory impediments.

    We live in interesting times!

    Here's wishing you & yours all the best for 2010.

  4. Story number 11 : Robert Rapier's blogging stays excellent.

    Merry Christmas Mr Rapier. Many thanks for your great blogging.

  5. Closing out the year was the United Nations Climate Change Conference in Copenhagen. All I can say is that I expected a circus, and we got a circus. It just goes to show the difficulty of getting countries to agree on issues when the stakes are high and the issues complex…

    Whatever they did in Copenhagen it must have worked. I spent a couple of hours last night cleaning snow off my driveway and as I look out the window, it needs it again. Plus I've got about two feet of snow on the roof and big icicles hanging off the eaves.

    Message to Al Gore: How about sending a little of that global warming my way?

  6. The Bakken is a pretty big deal, but probably not the panacea that a lot of people think.

    For a Bakken proxy, see North Dakota production profile below.

    http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPND1&f=M

    North Dakota production has just about tripled in the last 5 years (data only goes through July), and has increased by well over 100,000 bopd in the last few years. Very good… but that 100,000 barrel growth is still under 1% of US consumption. I think if this had potential to wean us away from OPEC, we'd see much bigger numbers than these and more dramatic growth.

    Still, it takes a while to build a strong lease position and secure funding, and the downturn late last year probably deferred a lot of drilling, so we can expect some pretty impressive numbers ahead.

  7. “And as I write this, you can pick up a natural gas contract in 2019 for under $5/MMBTU.”

    That is an incredibly misleading statement. One price just popped up for $4.35/MMBTU for October 2019 delivery. This October is was $2.50/MMBTU and now it is $5.59/MMBTU. It is more interesting to know what the price of something when demand is high.

    NG is only a cheap fuel compared to oil.

  8. Pretty good list, RR! Some minor comments:
    That's why I say we may be in The Long Recession.
    I just don't see it. The higher oil prices go, the less we'll use. As is already happening.

    China is much more vulnerable to high oil prices, as it a) does a lot of heavy manufacturing and b) has a government that tries to do the impossible in setting the prices for refined products.

    To the US economy, high oil prices present this major economic risk: instability due to a Chinese meltdown. Stay tuned.

    China was everywhere in 2009. They were making deals to develop oil fields in Iraq, signing contracts with Hugo Chavez, and they got into a bidding war with ExxonMobil in Ghana. My own opinion is that China will be the single-biggest driver of oil prices over at least the next 5-10 years.
    Right. But no mention of Sudan? China's support allows the Sudanese government to keep killing all non-Arabs (read: blacks), while the China keeps the UN neutered. Can't be racism, at least, because there are no whites involved.

    Big Oil buys Big Ethanol
    More significantly, if biofuels ever take off we'd be buying it from Big Oil. To be honest, that's better than Big Ag.

    Closing out the year was the United Nations Climate Change Conference in Copenhagen. All I can say is that I expected a circus, and we got a circus. It just goes to show the difficulty of getting countries to agree on issues when the stakes are high and the issues complex. Just wait until they try to get together to figure out a plan for peak oil mitigation.
    Copenhagen just served to illustrate that you can't trust the government to solve the really big problems. And it you involve more governments, well, as you say, get the popcorn and enjoy the circus.

    Peak Oil? Leave that to the free markets (or what's left of the the free markets). That's why Peak Oil has the potential to kill China and seriously hurt India.

    We'll see.

    Merry Christmas, everybody!

  9. Relative to #8 – Big Oil buys Big Ethanol – this bitter-sweet (for ethanol enthusiasts) investment recommendation showed up in my inbox today:

    "Biofuels:
    Why do we suggest this dubious investment play?
    Because your profits are guaranteed by the government.

    "I won't mince words. Biofuels are a marginal idea. Founded on a politically correct wish list . . . paid for by your tax dollars . . . and propelled by a Federal juggernaut that is impervious to facts.

    "… So, yes, we have severe doubts about the wisdom of letting senators play the role of farm gods, badly distorting markets by paying farmers to raise nothing but soybeans or corn.

    "… The Energy Bill of 2005 mandates that by 2012, 30% of U.S. corn must go to ethanol, and the use of biofuels like ethanol must double. Even more startling, the blend rate for gasoline spiked with ethanol is likely to rise from 10% to 15%. If all this is not a governmental guarantee of profits, we don't know what is.

    "That's why we're pushing such a dumb investment idea: We expect obscene returns– like Las Vegas on a good day. We expect biofuel profits in the range of 30-50% in the next 12 months. …"

    "THE ENERGY LETTER is a bi-weekly e-zine written by Elliott H. Gue and published by KCI Investing."

  10. That is an incredibly misleading statement. One price just popped up for $4.35/MMBTU for October 2019 delivery.

    You know Kit, these games of yours have gotten incredibly tiresome. You are on the verge of becoming only the 2nd person I have ever banned – and the other person was a certifiable nut job. And when I do it, you won't ever be allowed to post "Hello" on here again.

    There was nothing misleading about the statement. That contract was for December 2019, exactly 10 years from now. The price right now – I just checked – for December 2019 delivery is $4.47. So you better get your facts in order before you come on here accusing someone of making misleading statements.

    That is my final warning to you.

    RR

  11. “You know Kit, these games of yours have gotten incredibly tiresome.”

    No, I do not know, my crystal ball is a little cloudy on natural gas futures. It seems to be a very volatile commodity. To be fair to RR, I do not think all the people in the NG industry who were trying to mislead people with predictions to years ago, but they were sure wrong.

    I am however 100% certain of my motives. I stand by my original statement. If you are going to think every time I disagree with you that it is a personal attack, get over it. I am questioning your analyses not your honesty.

    If it makes you feel better to ban me because you think I an a dishonest SOB, that is okay I have a thick skin.

  12. I am however 100% certain of my motives. I stand by my original statement.

    Then congratulations. You are banned. If you want to accuse me of misleading my audience – when the statement I made was backed up any way you can slice it – then you are no longer welcome here.

    If you are going to think every time I disagree with you that it is a personal attack, get over it. I am questioning your analyses not your honesty.

    You accused me of making a misleading statement, when I made a crystal clear statement backed up by the facts. My statement was "And as I write this, you can pick up a natural gas contract in 2019 for under $5/MMBtu."

    Now, if you want to disagree with that, you need to show how it is wrong. Or, you could have shown that this was a summer contract, in which case your misleading comment might have been true. But given that it was December 2019, your complaint has no basis in fact, and once again I am wasting time babysitting someone who can't seem to understand that groundless accusations are not proper forum decor.

    So you can find another place to hang out. You are banned not because of your opinion, but because you don't know how to behave. You were issued numerous warnings, but did not have the sense to heed them.

    RR

  13. I believe we will be in a long recession for several years or even decades, just based on the world's unsound banking systems. We are still close to the cliff, regardless of what the MSM may say. We could have an oil glut for the next 20 years and it wouldn't matter. JMO.

    OD

  14. 9. China was everywhere in 2009

    Not just in oil, but in energy in general.

    In 2009 China installed 10 GW of wind power, passing the US to become the top installer of wind power. Several years ago China used to import most of the wind turbines they installed. Now they build most of them in China.

    In 2009 China's polysilicon industry has gained market share from about 30% in 2008 to about 40% in 2009, though most of it gets exported.

    China is currently planning an 11,950 MW renewable energy park, the Ordos New Energy Industry Demonstration Zone (NEIDZ), including 6,950 MW of wind energy, 3,900 MW of PV, 720 MW of concentrating solar power plants, 310 MW of biomass and 70 MW of hydro storage.
    http://www.renewableenergyworld.com/rea/news/article/2009/10/companies-see-shining-opportunities-in-china

    China has 13 nuclear power units under construction, more than any other country, with 11 more planned.

    China continues to build coal plants at a fast rate, some not very efficient, but some are among the most advanced in the world.
    http://www.nytimes.com/2009/05/11/world/asia/11coal.html

  15. “China has 13 nuclear power units under construction, more than any other country, with 11 more planned.”

    It is amazing how far behind China is, only 30 or 40 years. Back then 30+ reactors were under construction in the US.

    Four of the nukes in China are being built by US companies. More than 4 would be under construction in the US except the US is a democracy and we have to debate these things ad nasuem (Latin for we, the government, can not shoot anti-nukes).

    Two of the nukes in China are being built the French who have two under in the EU that are nearing completion. Four of the French design would be under construction in the US but are not for the same reason.

    The remaining reactors under construction are older designs mostly a cloned French design from a cloned US design.

    In the US 30+ nukes are planned and I am not sure about the EU but it is a bunch.

    It is nice that China is going to produce some of its electricity without slave labor, thanks to western countries but it is not leadership.

  16. It is amazing how far behind China is, only 30 or 40 years. Back then 30+ reactors were under construction in the US.

    Merry Christmas, Kit. I think you have something to offer here, but in 2010 I have zero tolerance of you antagonizing other posters. Give your posts a read before you hit "Post", and if you think something you wrote might be insulting or antagonistic if the same was directed at you, then don't post it. Your posts are subject to deletion without warning from this day forward.

    RR

  17. Some unplanned carbon emissions yesterday at your former place of employment.

    I had not seen that, but oddly enough I dreamed about the refinery last night. I dreamed that I was visiting my old friends and colleagues.

    RR

  18. Aww. I thought our Christmas present was that you had finally banned Kit P after over a year of his gratuitous insults.

  19. Your Christmas present is that there will be no more gratuitous insults. In fact, if I fail to delete something that contains anything resembling an insult, call it to my attention and I will zap it.

    RR

  20. Excellent list, perfect pitch and content.
    I feel fortunate to read such an excellent blog, to compare against my own rambling thoughts.
    I remain optimistic that the real boom is starting right now, and Asia will lead the way for another 20 years. I see a "Long Boom," and no Long Recession.
    Higher living standards and a cleaner world are on the cusp. Engineers and scientists such as RR can take credit, along with investors, teachers, and other people who show up for work and do their jobs.
    I am happy to be a fan, and wish top of the season to all. I enjoy everyone's commentary.

  21. Well actually my Christmas was two WWII submarine movies. My wife is easy to shop for, plane tickets to get the kids home. This year I had to put chains on the truck and drive to an open air port 100 miles south. It took 4 hours the day before just to see if I could get to the main road and back.

    When I got main road it was clear so I planned to take off the chains at the gas station. Unfortunately, it was in the next county over which is not very good with basic services. I was happy to see the US highway was open since it was closed the night before and the National Guard had to be called out to rescue the unprepared. At the next county line, 4 lanes of cleared highway demonstrating that some governments are more competent than ohers.

    Life is full of trials and tribulations, some more important than others. I am now golden for another year.

  22. Related to China possibly being the single biggest driver of oil prices over the next 5-10 years, in 2009 China passed the US to become the largest market for automobiles. Though they might barely miss meeting the 2008 US sales number.

    More on China being everywhere, not just in oil,… In 2009 China signed deals to invest over a billion US$ to build hydroelectric and coal power plants and major transmission lines in Tajikistan
    http://www.cacianalyst.org/?q=node/5141
    T. Boone Pickens has cancelled his wind farm in Texas. Instead China will be a partner in building a 600 MW wind farm in Texas using turbines made in China.
    To me this has nothing to do with leadership, or lack of it. I see it as a sign that China sees energy as an important growth industry and it wants to play a big part.

  23. I am sorry Clee but I do not understand your fascination with China. The government of China is a repressive government and I think it is good that they are becoming less repressive.

    Energy is freedom. Freedom from backbreaking labor of heating and cooking with wood and washing cloths by hand. Freedom to travel to where your talent takes you.

    EDF, the French electric utility, just invested $4 billion if 5 US nuke plants. South Korea is the leading bidder in a huge nuke deal with UAE. Lot of people are lots of places but China is not a mover of shaker in energy.

    There is a about a billion people in the world that will die without ever having access to clean water or electricity. South Korea made the transition maybe China can do it.

  24. Doggy — Oil & Gas provide something like 60% of the global energy which (among other things) lets you comment on a blog like this. Throw in coal, and fossil fuels provide about 90% of global energy. (The rest is mostly nuclear and hydropower).

    So any list on energy-related stories is likely to be high on fossil fuels, and on oil & gas in particular.

    Of course, there were other stories — such as Shell's decision to stop investing in uncompetitive intermittent wind & solar. Was that the kind of story you think should have been included?

  25. Kit, I am no more fascinated with China than I was fascinated with the USSR when they were the repressive "Evil Empire". But just as RR pointed out in his top 5th energy story of 2009 that China is everywhere bidding and signing contracts on oil, I see China as intentionally making moves in all forms energy, not just nuclear electricity, which you seem fixated on.

    Sure, lots of countries are making moves, but with 1/5th of the world population, and one that is trying to improve its standard of living with more energy, China is worth watching in the world energy business and markets. I am not proclaiming any good/evil or leader/follower value judgements, though you seem to think I am.

  26. Prediction for 2010 energy story of the year: Lithium batteries. Maybe 2012. Sooner or later. Seems like every week someone announces production or research advance.
    How long until commercialization?
    The Oil Age is ending with a whimper.

  27. "Those people are impressing the dickens out of me."

    Talking with Europeans who were around back in the days when the US was fab, a number had the perception that the then US advantage lay in the US willingness to get on & actually try things, whereas the Euros were slow to implement.

    Same thing seems to be happening now with China. They built a mag-lev train in Shanghai – using largely imported technology. Now the same thing with high speed trains – using imported technology. China built its first Airbus this year. And BMW is building its first auto assembly plant in China.

    Similarly on power supply. China seems willing to try anything. Build a coal plant, build a nuclear power station, even build a bird-whacker. Meanwhile, those in the US who want to build a wind factory offshore Massachussets essentially have to sit around & wait for Teddie Kennedy to die.

    All those regulations to make us safer & improve the environment are going to end up making us all unemployed, as innovation is driven to more welcoming environments like China.

  28. Rufus — I hope you are right. But something is going to have to give, if the US is going to get back on track.

    It will probably take a real roll-back in regulation. (Keep the sensible ones; eliminate the rest, especially the barriers to innovation). Great simplification of the tax regime. Retraining of most lawyers into productive activities. Restructuring the educational system. And an entirely new political class, equipped with the latest upgrades in humility.

    Before that happens, things will probably first have to get a lot worse. Given the creaking structure of the world these days, my guess is that we will be given that opportunity to get back on track. Good & hard.

  29. In the US 30+ nukes are planned and I am not sure about the EU but it is a bunch.

    Hello Kit,

    Do you happen to have a link for that? The last info I had read said zero, so apparently that was way off. Thanks!

    OD

  30. “Do you happen to have a link for that?”

    For the US NRC schedules go to:
    http://www.nrc.gov/reactors/new-reactors.html

    Click on “Application Schedule for New Reactors”

    Over at NEI:
    http://www.nei.org/keyissues/newnuclearplants/

    “Some 17 companies and consortia are considering building more than 30 nuclear power plants.”

    To keep up with world nukes:

    http://www.world-nuclear-news.org/

    I do not try to keep up with Russia and FSU. Too much to keep up with. If I have a low opinion of the Chinese government, Russia is worse. Nuclear power is a matter of state pride in Russia.

  31. “real roll-back in regulation”

    First it is not going to happen in the US. Second I need Kinu to tell me how many people it is okay to kill.

    Currently in the US we produce energy without killing out customers while protecting the environment. Energy is affordable too.

    “those in the US who want to build a wind factory offshore Massachussets essentially have to sit around & wait for Teddie Kennedy to die.”

    I think Kinu means an offshore wind farm. As I see there is not a barrier to innovation but there are lots of barriers to being stupid. For the last few years, about 8 GW of wind capacity has been erected in the US. Apparently, many have figured it out.

    I really get tired of people say we can not do things in the US when we are doing those things and are a world leader. Clee says China built more wind capacity. That would make US #2. Zero died last year erecting wind turbines in the US last year. How about China? How much electricity did they produce?

    The US no longer leads China in coal production but China leads the world in coal mining deaths. The US leads in safety and productivity per miner.

    When the quality of life in China improves because of energy use, the Chinese people will start demanding regulations that protect workers and the environment.

  32. "Second I need Kinu to tell me how many people it is okay to kill."

    Well, Kit, it seems to be acceptable to kill about 25,000 people per year in the US transportation system. Is that what you were looking for?

    To remind you of things you already know —
    1. "Pollution" is economically wasteful. As are unsafe working conditions.
    2. There are diminishing returns on reducing "pollution" and on improving workplace safety.

    It seems fairly self-evident that China is on the low side of the benefit vs cost optimum — tighter regulation will actually improve China's overall economic performance.

    It is equally self-evident that the US is on the far side of the benefit vs. cost optimum. Cutting back on unnecessary regulation will improve the economic performance of the US, making the pie bigger.

    Goodness! There is reportedly a cottage industry hand-making copies of 1970s mechanical pressure gauges for certain nuclear power plants. If the operators wanted to replace those old gauges with cheaper more reliable modern electronic pressure gauges, they would have to trigger an extensive review process, complete with opportunities for the usual trust-fund watermelons to throw wrenches into the process. Cheaper to pay someone to hand-make an old-fashioned replacement.

    Regulation — we can have too much of a good thing. We can – and do – have more than we can actually afford.

  33. Time to learn more about South Korean.

    “The Wall Street Journal reports Dec 27 that a consortium led by South Korean companies has won a $20.4 billion contract to build four new nuclear reactors in the United Arab Emirates (UAE).”

    According to this link SK has 20 operating reactors, 20 planned with 5 under construction.
    http://www.world-nuclear.org/info/inf81.html

  34. “25,000 people per year in the US transportation system”

    Kinu let me remind you of what you already know, the risk that people will voluntarily assume is much higher than what can be imposed by industry.

    “There is reportedly a cottage industry hand-making copies of 1970s mechanical pressure gauges for certain nuclear power plants.”

    Sounds like BS. Do you work in an industry where they trow things away instead of fixing them?

    However, it does not sound like Kinu does not understand the purpose of the regulations he is griping about. First of all, those old nuke plants may be over regulated but they are the cheapest source of electricity so I think the regulations are affordable.

    So Kinu, you want to take an electronic pressure gage without testing it and put it an area of high temperature, humidity, and radiation area hoping it will work after a design basis accident like a steam line break during an earth quake? Even if regulations were not in place good engineers would specify that testing.

    There are some operating nuke plants that were built without NRC regulation or codes or standards, Good engineering practices become NRC regulation and codes or standards. When regulations did come out, utilities has to show how they met the requirements.

    Also, now that it is apparent that we are going fix anything that breaks on a nuke plant rather than throw it away after 40 years; digital control systems are being 'qualified'.

    “opportunities for the usual trust-fund watermelons to throw wrenches into the process.”

    The nuclear industry is now a mature industry and case law is pretty much settled. There are lots of examples of power uprates and plant life extensions where intervenors do not show up. The new process for licensing nuke plants resolves all the legal issues before a license is issued.

  35. Kit, thanks for your input on Nuclear. It's greatly appreciated.

    Too often, we have to be reminded that there are usually "two" sides to any Energy Story.

  36. Ben,

    Panasonic originally manufactured a 2.9 Amp hour cell for laptops. Their latest laptop cell is 3.1 Ah. Late 2010 they will begin producing a 3.4 Amp/hour battery and the year following a 4.0 Ah cell.

    The all-electric Tesla roadster uses over 6000 of these laptop cells in its battery and Panasonic's latest 4.0 Amp/hour cell would give the car an effective range of 335 miles between charges (vs 244 miles with present 2.9 Ah cell)

    …..A leap of nearly 100 miles in range.

    The implications for PHEV's and BEV's is obvious.

    The Computer and electronics industries are driving these small format battery tech advances, but large format cells for EV's can't be far behind.

    John

  37. “usually "two" sides to any Energy Story”

    Anit-nukes like to talk about how unreliable nuke plants are. The regulatory system does not help. Every time something happens at a nuke plant it get reported to the NRC and ends up in the local paper and on the TV.

    Thirty years of experience has been designed into existing plants. There are software programs to enhance realizability down the smallest component. I mentioned that it takes even the good plant a couple of years to work out the bugs. One of our reliability experts said that the South Koreans have shown that reliability designed into new designs can result in trouble free operation in even the first year of commercial operation.

    “In 2005 the capacity factor for South Korean power reactors averaged 96.5% – one of the highest in the world.”

  38. When the Trojan nuclear plant outside of Portland, OR started up everyone (especially the environmentalist type) was complaining about the expensive power among many other things.

    Years later İ was passing through Portland and happened to listen to a talk radio show where the same bunches were complaining it was being shutdown – they were complaining about losing some of the cheapest power on the grid!

    All new power is expensive and most old power is cheap.

  39. John-
    It is amazing the progress being made in lithium batteries. Lithium air batteries promise incredible leaps in usefulness.
    The United States can obtain energy independence in a decade, while raising living standards and cleaning the air.
    One more oil price spike, and it may happen even without intelligent government policy anyway.
    One thing is clear: Doom is for doomsters. Only.

  40. Russ I am not sure if Trojan nuclear plant was ever the source of cheap electricity. When I talk about learning lessons, sometimes the lessons are very expensive for those learning the lessons. It cost the same to run a nuke plant weather it has a 95% capacity factor or a 50% CF. The same design of nuke might have an O&M cost of under $20/MWh while another utility have cost over $40/MWh.

    The biggest problem is that Trojan needed to replace steam generators (SG) after 20 years. This requires cutting hole in the containment building. Very expensive in a region with cheap electricity like the PNW and hard to justify to the PUC when the plant has not been very reliable.

    A lot change between 1992 and 2002. New sources if electricity in the PNW were not as cheap as promised by the anti-nukes. The capital cost of replacing SG and extending the life of the plant to 60 years is well established.

    As Russ points out, the cheapest cost of making electricity is with a nuke twenty years after construction when the capital costs are paid off.

    Here is a link to the new nuke EDF is building in France. The equipment hatch is big enough to allow the reactor vessel & SG to pass through. Well duh! Hindsight is wonderful.

    http://energy.edf.com/edf-fr-accueil/edf-and-power-generation/nuclear-power/the-future-of-nuclear-power/epr-y-flamanville-3/views-of-flamanville-3-122322.html

  41. I am interested in the idea of adding nuclear produced H2 to an xTL process.

    Dennis, you can greatly increase the yields by adding hydrogen to the process. That is one thing that would enhance the attractiveness of a specific location: Available hydrogen. It is not a necessity, but definitely a nice luxury.

    RR

  42. I believe we will be in a long recession for several years or even decades, just based on the world's unsound banking systems. We are still close to the cliff, regardless of what the MSM may say. We could have an oil glut for the next 20 years and it wouldn't matter. JMO.
    Amen to that!

    The prostitutians are further complicating things by trying to get the economy back to its heyday (2006) rather than putting it on a sustainable path. Earth to prostitutians: Why do you want to put the economy back into its pre-bubble-bursting heights? Do you like the sight of bubbles bursting? Are you aware that people get hurt?

    Prostitutian (frowning): Eh…eh I'll have to get back to you… (returns attention to lobbyist on cell phone) Sorry about that. You were saying?

    But something is going to have to give, if the US is going to get back on track.
    My suggestion: Get rid of (1)the electoral college and (2)the lottery style of justice, aka the jury system.

    The electoral college thwarts the voters' intentions by keeping third parties out. Of course, both parties like it that way, so don't expect any changes.

    The jury system ensures that you get inconsistent judgements, and that suing somebody because you spilled coffee on yourself might just be extremely profitable. So keep buying those lottery tickets (keep suing), people, for you, too, could be rich!

    To change the latter, you'd need to get around the trial lawyers. Good luck with that, since their buDDies are in control of everything. And likely to stay in control as the party of just-say-no continues to say no.

  43. Is Choren involed with the French BTL plus external H2 pilot just because they are experts in biomass gasification, or are they actively seeking out opportunities to find synergies with people who can produce excess hydrogen (and oxygen)?

    It seems to me that with biomass, you just need to be lucky enough to find the source of biomass and hydrogen together, because of the scale and logistics of biomass.

    But with coal it would be possible to build a nuclear hydrogen plant and a CTL plant together, near the coal and do it on a scale that makes sense. I'm thinking Montana or Wyoming.

  44. The electoral college system also means you don't end up with a mishmash of small parties that can't agree on anything or do anything – AKA most European countries.

  45. The electoral college system also means you don't end up with a mishmash of small parties that can't agree on anything or do anything – AKA most European countries.
    You got to be kidding. On the do-nothing front, it would be near impossible to beat the current system, especially in the Senate.

    Why outsource presidential elections to Ohio, Pennsylvania and Florida? No democracy can ignore its biggest states (California, Texas and New York), just because the total vote in those states are known ahead of the election.

    Let the little guys in: the ones with crazy ideas would sink. At least such a system would keep the big parties (a little) more honest.

  46. Kinu, as you note sources other than oil and gas supply almost half our energy. I'd expect a Top 10 list to include some mention of major contributors such as coal (bigger than gas), nuclear and hydro or minor but fast-growing contributors such as wind and solar. This is a good oil/gas Top 10 list, but there's more to energy than just oil and gas.

Comments are closed.