Fossil Fooled, Nuke Duped, and Now Texas Gas?

This blog previously lamented that our Congress critters are fossil fooled and nuke duped. It especially would seem that any chance of the Senate passing ACES requires we all get more radioactive. Sigh, just more BAUAAAE (Business As Usual And Above All Else), fellow soldiers.

: Image via Wikipedia

Now, for us old folks, an even greater threat than degradation of the atmosphere and catastrophic climate change from a continuation of business as usual practices… MORE GAS!

O.K., O.K., less drama, more data… The Pickens Press Corp (an elite unit of Boone’s Army) relays a Dallas Morning News editorial.

When a company the size of AT&T says it plans to make a massive investment in compressed natural gas-powered vehicles, the rest of us need to take notice.

The Dallas-based communications giant recently promised to spend $565 million over the next decade to buy 15,000 alternative fuel vehicles. At least $350 million of the investment, believed to be the largest of its kind by a U.S. company, will go toward purchasing 8,000 compressed natural gas vehicles.

This effort deserves immense praise. For the sake of national security and economic prosperity, the United States needs to wean itself from imported oil. And although natural gas is also a fossil fuel, it’s a step in the right direction.

Hm, now where have I heard those initials before? Ah, nevermind, back to technology in the pursuit of profit and power.

Efforts such as this one by AT&T can boost a technology that has been slow to take hold in the United States. Large companies often have thousands of fleet vehicles that they replace periodically. It makes perfect sense to replace aging dirtier-burning gasoline-powered vehicles with cleaner natural gas and hybrid varieties. Each drop of gasoline that isn’t burned benefits the environment and cuts the apron strings to foreign oil.

AT&T’s investment is just the latest validation of ideas coming from T. Boone Pickens, the legendary oilman who has become a Pied Piper for domestic energy independence. A year ago, Pickens introduced a broad energy plan that, among other things, would convert trucks and company fleets that burn diesel and gas into vehicles running on compressed natural gas.

At the time, many dismissed him as a shrewd, self-serving businessman who stood to profit handsomely if the country adopted his plan, which also included investments in wind and solar energy. Indeed, he has invested in companies that produce natural gas, sell natural gas vehicle fuel and build wind farms.

But Pickens also has pumped millions of dollars into efforts to encourage Americans to change their energy habits and has supported federal legislation designed to shift the nation from foreign energy sources. His advocacy has been bipartisan and broad: He has buttonholed mayors, business executives and lawmakers in his crusade to change the way Americans produce and use energy.

“During the 2004 presidential campaign, Pickens spent $3 million to help bankroll the Swift Boat organization, a group tied to supporters of President Bush that ran television ads questioning Kerry’s record as a swift boat commander during the Vietnam War. The ads were believed to have damaged Kerry in several battleground states, contributing to his narrow loss to Bush… Today, Pickens is bankrolling a much different kind of campaign.”

Still, the nation lacks a comprehensive network of natural gas refilling stations or, for that matter, many natural gas-powered cars and trucks owned by private individuals. That’s why it’s essential that operators of commercial fleets become an aggressive part of the solution. AT&T, for example, says it will help build about 40 compressed natural gas fueling stations.

The compressed natural gas industry also could use some help from Congress, namely the extension of natural gas fuel, vehicle and infrastructure tax credits for 18 years and incentives for auto manufacturers to produce natural gas vehicles.

Pickens deserves a big share of the credit for the progress so far. His relentless advocacy for this issue is part of the reason the nation is thinking about energy in new ways.

Yes, yes, I recall it was just two posts ago that this blog favorably reviewed the proposed development on public lands of combined cycle, solar thermal and natural gas turbine power plants. Nevertheless, mass development of NGVs is NOT a step in the right direction. Such an approach does away with the more favorable part of the BLM (Bureau of Land Management) development, i.e., making efficient use of ubiquitous solar energy.

Rather, it commits development to more ICE. Internal combustion engines) have been significant contributors of human caused, carbon emissions, which some Congress critters have just caught on, might be, now they ain’t saying definitely, but just might be a problem, if those “other” countries start to misbehave! (Hawk-splut)

Bill Mauldin was most famous for his World War II cartoons depicting American soldiers, as represented by the archetypal characters Willie and Joe, two weary and bedraggled infantry troopers who stoically endure the difficulties and dangers of duty in the field.

Natural gas in D.C.

The Pickens Press Corps informs us dogfaces that a Senate version of H.R. 1835 is expected to be introduced this week and key provisions of the legislation encourage the use of natural gas.

–Extend for 18 years the alternative fuel credits for natural gas used as a vehicle fuel, the purchase of natural gas-fueled vehicles, and the installation of natural gas vehicle refueling property credit.
–Make all dedicated natural gas-fueled vehicles eligible for a credit equal to 80 percent of the vehicle’s incremental cost.
–Make all bi-fuel/natural gas-fueled vehicles eligible for a credit equal to 50 percent of the vehicle’s incremental cost.
–Allow the vehicle and infrastructure tax credits to count against the AMT provisions and make them transferable.
–Provide grants for light- and heavy-duty natural gas vehicle and engine development.

Please note. While they may have constituted a partial solution, back in the 1970s, when America experienced its first gas crisis, such shenanigans now fail from an environmental perspective. The momentum to create multi-fuel vehicles is still business as usual with more image than substance about serious reduction of our excessive carbon footprint.

“Ah, the American Plan, eh?”

You bet your gas! Initially, the “Pickens Plan” called for “the U.S. to generate 22 percent of its electricity through wind and other sources.” Many, like this blog, enlisted when Boone became “a critic of U.S. dependence on oil and a champion of wind power.”

A further note… This post is subject to valid criticism. Isn’t choosing compressed natural gas rather than gas flaring other than BAU? Furthermore, don’t natural gas range extended vehicles have a better carbon footprint that many clunkers now on the road, especially when biogas from anaerobic digestion of waste is the fuel? While this blog would agree with such assertions, the larger question is whether you choose technology for personal profit over science in the service of humanity.

Even the most optimistic climate scientists say we have precious little time in which to enact bold policy change to mitigate the worst consequences of anthropogenic emissions. And, those scientists suggesting solutions affirm that renewable energy sources, such as wind and solar, are right choices. So, General Pickens drops wind power development, and more Congress critters might agree with natural gas as a limited, local strategy. It may be a politically savvy move, Poseidon Adventure fans, it still is the wrong end of the Sinking Ship.

Green Inc.: Pickens Drops Plan for Wind Farm (greeninc.blogs.nytimes.com)

5 Comments

jcwinnie

Posted 2009-7-11 at 7:54 pm | Permalink

Regular TOD (The Oil Drum) contributor, “Gail the Actuary” thanked “Heading Out” for his summary of the reasons for the lack of movement by Boone Pickens on his wind farm in Texas. “I hadn’t realized how many pieces of this proposal had gone wrong–pretty much all of them, it sounds like”.

Pickens told The Wall Street Journal that “the wind farm project was scuttled in part because of the lack of adequate transmission lines to carry the electricity from remote locations to cities. He had hoped to build new transmission lines but ultimately was unable to secure financing.” The WSJ article also noted:

Natural gas-fired power plants are direct competitors to wind farms and other forms of clean energy. Natural gas prices have fallen about 70% from last year’s high, making wind less attractive as a source of power.

“Heading Out” detailed the tribulations that Pickens faced when obtaining the connections to bring the wind power into the grid. These new transmission lines are needed, since in Texas the existing grid is incapagle of handling more capacity. OTD commentator steve_piper agreed.

It’s really a classic case of oversupply. So many wind turbines have gone in to the high-quality sites in West Texas that wholesale prices have crashed and a fair amount of existing wind farms get shut in due to lack of transmission capacity.

Wind farms don’t usually rely on wholesale markets for their revenue, but on fixed price contracts driven by Renewable Portfolio Standards and similar requirements. In the case of Texas, it has a target of 5880 MW by 2015, but around 7000 MW have already been built. So unless Texas raises the requirement there is no need to contract for additional capacity.

As Gail notes, lower energy usage in the current recession makes all of this tougher.

Gail’s initial comment to Heading Out was:

One that you didn’t mention is the fact that US electrical demand is down in the past year. Because of this, there is less need for additional electrical production capacity. I wonder if this will have any impact of Boone’s ability to find other places for his wind turbines. I suppose if there are mandates that a certain share of power come from renewable sources, utilities will add wind turbines, even if demand is down. If fixed costs are the same (actually increasing because of wind), and variable costs are down by only the reduction in fuel costs (coal or low-cost natural gas), it seems like this will mean that electrical prices will rise for the consumer, if wind is added.

steve_piper speculates:

If I read the tea leaves for this summer correctly, climate change is pushing peak demand higher in Texas, even while energy use lags. This won’t help wind, however, unless a way to store it can be brought to market… Bottom line is that I think Pickens is waiting it out. ERCOT is investing $400/kW of new wind in grid upgrades by 2012, signalling a likelihood that Texas will indeed increase its targets.

Finally, towards the end of the commentary, there is some interesting dialogue between Niobium41 and Gail the Actuary:

Niobium41:

It’s very windy in that part of Texas – they should put out at least 35 to 38%% of their rated output. That means these turbines would be generating some electricity about 85% of the time, and maxing out about 15% of the time. They won’t make any electricity only 15% of the time. But, if you consider the whole state of Texas, it’s probably always windy someplace in the state. So, if the winds die off near El Paso, they are probably just fine near Dallas and vice versa.

In effect, with a large enough area (about 400 x 400 miles) and wind arrays scattered across this area, a nice stable average production will result. This won’t help peak demand times, but there are ways around that problem. Wind turbines in this scenario become baseload power; things like pumped hydro than can be used to fill in the peaks/soak up excess in low demand/high wind times.

However, it is a bit of a gambling arrangement in Texas for electricity – they are plagued with that marginal price crap. Wind turbines work best when they can get a fixed price for all the electricity they make – and they work really well with Feed-In Tariffs. After all, one of the big benefits of wind is that it has completely predictable production costs for 20 years – and these costs are not related to the price or availability of oil, gas, coal or uranium. But the Texas electricity market is designed for fossil fuels. They need to modernize out of that obsolete model. The estimated Texas onshore wind capacity is humongous – about 135 GW – or twice the current peak consumption. Offshore has a similar potential in Texas…In 2007 Texas electricity use average 46.3 GW, but they have over 100 GW of generating capacity statewide – see http://www.eia.doe.gov/cneaf/electricity/st_profiles/texas.html. As long as they have that obsolete electricity sales system, they won’t be able to break away from fossil fuel depedance/addiction. But that also goes for the rest of this nation, too.

As for T. Boone (or now nicknamed TB, and about as desired as that), his scheme also relied on enormous “tax income” – subsidies of ~ 2.1 c/kw-hr on passive income for 10 years (the Production Tax Credit), and the more important MACRS rapid deduction (worth about 3 c/kw-hr for a 10 year basis). But, if people do not pay taxes they get no tax credits, and if they don’t have taxable income, no tax deductions. The US incentives/subsidies for wind are butt-ugly during good times, and pretty useless during bad economic times.

Gail the Actuary:

I made some calculations using EIA data and average capacity during they year (beginning plus ending divided by 2. Texas wind generation as a percentage of capacity has been as follows:

2003___24.7%

2004___27.8%

2005___31.8%

2006___33.9%

2007___28.4%

These amounts are quite a bit better than the US average, but not what you are quoting. Lack of transmission capacity (mentioned in one of HO’s quotes) may now be an issue.

Regarding taxes (details here), I thought that there was a recent change to get around the “problem” of no taxable income to offset–direct payment instead of tax credits.

Niobium41:

The “poor” wind performance is an artifact of how wind energy capacity is reported, as well as the huge surge in wind turbine installations in Texas. Capacity reported for each year is that recorded on Dec 31, whether it was installed in January or December. But, when MW-hr for the year of, say 2007, is divided by the installed capacity as of December 31, 2007, then the result is skewed to lower net efficiency. This is why the big drop occurred between 2006 and 2007.

Many of the windy sites in Texas have average wind speeds in excess of 8 m/s at hub heights. Germany is probably quite envious of this resource – they often use 6 m/s wind speeds at 80 meter heights, and to get around this, they use higher heights (100, 113, 120 meter hub heights), whereas in Texas, there really is no need to go above 80 meter tower heights. And in several cases, wind turbines that only operate effectively in fast wind speeds – like the Vestas V90 x 3 MW machines – are used in Texas.

Until recently, the boom in Texas wind (they now have 7900 MW installed and another 1100 MW in the works) was based on high gas prices, lots of really windy land and that air conditioned society. Once these remaining turbines are completed (–> 9 GW capacity), this is about $18 billion worth of investment in renewable generation. Presumably, these investments occurred after decent wind resource studies were done, and those financing the investments (typically, 60% to 70% of a wind farm is financed by loans; the interest on these loans is tax deductible, and this creates more “paper losses” when added to the MACRS rapid depreciation). The banks doing these loans would need a reasonable idea of the expected energy output from these investments – the biggest of which (Horse Hollow) is about 750 MW capacity = $1.5 billion installed cost = ~ $1 billion in total loans), and 28% output would not cut the mustard, so to speak.

Also, when you add up the PTC and the interest rate/MACRS deductions, about 2/3 of the installed cost of the wind farms will be “paid” via the lack of taxes paid to the Federal govt for these subsidies. Since ONLY the really really rich can use these credits, this represents a net transfer of $12 billion from “everybody” to the upper 2% of the income distribution. Talk about financial perversion….and due to the way these wind companies are structured, it is virtually impossible to buy stock in these wind farms. The best that can be done is to buy stock in companies like Florida Power & Light (FPL), which also has that aptly named “Turkey Point” nuke complex, Fuel oil or “Orimulsion” – a bitumen water emulsion (http://en.wikipedia.org/wiki/Orimulsion) – Venezuelan crude oil burning power plants, some coal and natural gas burners. It’s like 1 part wind and 10 parts yuck for their power generation mix. If you wanted to invest your money just is wind farms and thus “vote with your dollars”, this is extremely difficult.
jcwinnie

Posted 2009-7-24 at 7:23 pm | Permalink

Joseph Romm notes that natural gas comes with its own set of environmental caveats.

It is a carbon-based fuel and its extraction from shale, the most significant new source, if not managed carefully, can have serious water, land use and wildlife impacts, especially in the hands of irresponsible producers and lax regulators. But those impacts can be mitigated by careful regulation and are dwarfed by the disaster of coal.

Nevertheless, Romm is in favor of using natural gas instead of other fossil fuels. So far, Climate Progress has had a 3 part series on natural gas:
- There appears to be a lot more natural gas than previously thought (Part 1)
- And, therefore, unconventional gas makes the 2020 Waxman-Markey target so damn easy and cheap to meet (Part 2),
- Which is great for low-cost climate action, bad for coal (Part 3). And it always bears repeating, as Part 3 discusses, that natural gas is the critical low-carbon “firming” resource that can enable deep penetration of both windpower and concentrated solar thermal power.
jcwinnie

Posted 2009-7-30 at 10:01 am | Permalink

A little HuffPo bird, A. Siegel, told me to exercise caution about General Pickens’ Manuevers.
Perhaps due to the very concept that a conservative Republican would embrace wind power and well aware of his $10s of millions in advertising resources, too many leading Democratic Party politicians have seemingly embraced T Boone Pickens and have given him extensive private access to private Democratic events.

Now, putting aside the not-minor issue that T Boone is unapologetic for his leading role in funding and supporting the vicious and deceit-laden swift-boating of the Democratic Party Presidential nominee, John Kerry, in 2004, there is the quite serious reality that The Pickens Plan is fatally flawed and those flaws are not brought to the table at these events were Pickens is warmly greeted as “a friend.”

…

Since launching The Pickens Plan in 2008, T Boone Pickens has become a face for American households about the potential for changing America’s energy structure.
Like this blog, HuffPo reporter Siegel would seem to favor the plan advocated by T Boone advocates that would reduce America’s dependence on overseas oil by:
- Constructing a major wind electricity generation and transmission capability
- Use that wind to displace the 20+% of electricity from natural gas
- Use the natural gas, instead, for transportation (cars, buses, trucks)
While T Boone’s down-home style and $10s of millions of investment in advertising/ web services etc. have helped build up quite a following, the details of the plan don’t stand up to any serious scrutiny:
- The Pickens Plan is not cost effective when compared to other options for reducing our foreign oil dependency;
- Wind is not an easy path for displacing natural gas electricity transmission. In fact, wind and natural gas are natural partners for a cost-effective energy system.
- The plan moves the US from one fossil-fuel dependency (oil) to another (natural gas).
- The Pickens Plan does nothing to reduce the most serious concern in the energy sector when it comes to Global Warming: coal-fired electricity generation.
- And, so on … the list of problems is quite long.
Even with all these problems, T Boone has lots of friends in Congress, three of whom recently introduced a bill to advance T Boone’s plan.

From Robert Menendez’s web site:

U.S. Senate Majority Leader Harry Reid (D-NV) and Senators Orrin Hatch (R-UT) and Robert Menendez (D-NJ) were joined today by energy-independence advocate T. Boone Pickens to tout new legislation that would boost vehicles that run on clean natural gas. The NAT GAS Act, introduced today by Menendez and co-sponsored by Reid and Hatch, would extend and increase tax credits for natural gas vehicles and refueling.

That bill would greatly increase resources toward natural gas vehicles when the resources could be better spent elsewhere and otherwise to reduce America’s oil dependency.

And, T Boone has had quite a bit of access within leading Democratic Party circles. For example, Nancy Pelosi (whose husband, by the way, invests with T Boone) arranged for T Boone to speak with the House Caucus.

This private access continues tomorrow, as the Democratic Policy Committee (DPC) will (reportedly) have T Boone Pickens as its speaker at its weekly lunch.

DPC Lunches. Every Thursday the Senate is in session, the DPC hosts a lunch at which senators hear from leading figures in government, politics, business and journalism. Past guests have included Al Gore, Madeleine Albright, Condoleezza Rice, Colin Powell, Henry Paulson, Warren Buffett, Bill Gates, Michael Bloomberg, John Sweeney, Rupert Murdoch, Bill Moyers, Tim Russert, and Tom Friedman.

Yes, it seems that T Boone could meet the requirement of being a “leading figure” but we have to wonder whether there is going to be anyone in the room prepared with the information to and willing to challenge T. Boone Pickens’ smooth truthiness-laden sales pitch.

And, let us not forget that this is occurring just as the Senate is struggling to figure out how to develop a sensible energy and climate bill to marry up with the Waxman-Markey American Clean Energy and Security (ACES) Act. Anyone doubt that T Boone will push hard for funding for natural gas vehicles?

Is there no one else?
jcwinnie

Posted 2009-8-2 at 7:24 am | Permalink

While Boone actually may believe in wind power, rather than just profess he does, he still is a fossil fuel Texan (see Bush-Cheney regime) strongly advocating the use of NGVs.

John McGovern would seem to be another espoused greenie-weenie advocating the same in Ohio.

Currently, natural gas is quite popular in the transit and refuse sectors, due to a variety of factors, including lower cost of fuel, reduced need for engine maintenance, and drastically reduced emissions. In the light-duty sector, the Honda Civic GX (the only OEM NatGas vehicle for purchase in the US) has been named the greenest car in America for five years running! If the GX does not meet your needs, know that Baytech Corporation and BAF Technologies are certified by the US EPA to perform warranted retrofits on General Motors and Ford vehicles. Whether, OEM or retrofitted, Natural Gas Vehicles (and fuel) are currently eligible for large tax credit. The only current issue is lack of refueling options, although for personal use, that can be remedied with the purchase of a Phil home refueling appliance, which connects into your existing natural gas line.

However, with the coming realization that we in Ohio, home of 3 major metro areas, can produce our own fuel from our own waste; plentiful refueling options are destined to be on the way!

Ohio’s examples of Natural Gas from Waste:
- Akron Sewage Plant
- Solid Waste Authority of Central Ohio
jcwinnie

Posted 2009-8-2 at 4:49 pm | Permalink

In his Green Car Congress post, “New Models Drive Surge in Natural Gas Vehicle Sales in Sweden“, Mike Millikin gives a passing nod to NGVs.

The monthly sales rate of natural gas vehicles in Sweden has increased from about 150 to more than 700 units, according to NGVA Europe. The results are largely driven by the new Volkswagen TSI Passat EcoFuel (60% of sales) and the Mercedes B 170 NGT (24% of sales). In June, 2.9 % of all new passenger cars sold in Sweden were NGVs.

“The Passat Estate TSI EcoFuel is powered by a 1.4-liter TSI 110 kW (148 hp) engine running on either natural gas or gasoline. “

More than 50% of all new cars sold in the Swedish market are company cars supplied to employees and used both for company and private purposes, and most of these are medium-sized sedans or wagons.

Sweden at the end of 2008 had just under 17,000 NGVs, according to NGVA Europe, and the Swedish NGV sales in June ran at an annual rate of 8,700 vehicles. Sales of new NGVs are now accelerating and may soon reach about 800 units monthly, corresponding with an annual sales rate of close to 10,000 vehicles.

The 85 kW (116 hp) “four-cylinder engine has been modified by Mercedes-Benz to include additional gas injectors on the underside of the intake manifold. A close-coupled pressure governor with an electromagnetic shut-off valve regulates the supply of natural gas and keeps the pressure within the system constant…. In addition to the gasoline tank, the B 170 NGT has five natural gas reservoirs with a total capacity of 16 kilograms.”

Mercedes engineers compiled a full lifecycle analysis for the natural-gas vehicle. Assuming a total distance travelled of 150,000 kilometers (93,205 miles), overall CO2 emissions are some 20% below the figure for the comparable gasoline-engined model. NOx emissions are 11% lower, and CO emissions are down 54%. The greater ecological cost of the manufacturing process for the new B 170 NGT is balanced out after a distance of 17,300 kilometers (10,750 miles).

After Gutenberg