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Address to the Commission's 2010 Consultation on Energy

by Luis de Sousa Sat Jul 3rd, 2010 at 01:52:22 PM EST

Below the fold can be found the submission I produced for the Commission's Consultation on Energy. Time has been in short supply lately, what was initially conceived as a draft to be posted for public review and completion ended up successively postponed to the last few days. This version was sent to the Consultation's e-mail box last night at 23H53 CET, only 7 minutes before the deadline. References are scant, some sections are incomplete and the English shaky here and there; but it contains some food for though, especially in the opening stages. [UPDATE 05-07-2010] A bunch of typos identified by melo corrected.

Address to the Commission's 2010 Consultation on Energy
Luís Moreira de Sousa
July 3, 2010

1 Introduction

This document is an attempt to address the Energy Consultation launched by the European Commission in the first half of 2010. This consultation is part of a process that shall take the Commission to a new Energy Policy Programme a few years from now.

After 6 years with energy prices much above the ground flat figures that made the norm during the previous two decades, the European Union is finally taking into due consideration this crucial sector. It is now contemplating an Economy highly dependent on foreign energy, together with meagre and dwindling traditional sources of indigenous energy. As it stands now, the Socio-Economic model the European Union is built on simply doesn't seem able to perdure on traditional sources of energy, especially fossil fuels. This has lead to the Programme know as 20-20-20, that among other things, aims at increasing energy production from renewable energy sources and efficiency. This Programme is rather shy in many areas and in others it contradicts itself or is contradicted by other Communitarian policies.

It is more that time for a new, serious and all-encompassing Energy Policy for Europe. Otherwise the survival of Europe itself is at stake; and not only the European Construction project, but states themselves may disintegrate if they are not willing or capable of tackling the transition due ahead. Simply put, there's no Economy without accessible and secure Energy, and without an Economy there's no Social State.

This document is divided into two sections, one outlining the Background, where Europe is squared in today's world energy market, and a second presenting a possible Policy, congruent with the given panorama, establishing goals and pointing possible means.

Some deeper issues that are either closely related to, or at the root of, today's energy problems are not address in this document; two obvious cases are Population and the Monetary System. Essentially, the Policy presented assumes implicitly that Economic Growth is viable in the future. The aim of this document is to present practical options that can be easily grasped by lawmakers and stakeholders in general, leaving outside more complex concerns, that though important, should be discussed in a different context.

2 Background

This section tries to explain why energy come back to be a public concern in recent years and why stakeholders have been dedicated to it more than usual. Each fossil fuel is briefly analysed separately, with a few observations on the expected evolution of its availability. Finally, some reflections are made on the consequences to Europe's Economy.

2.1 Oil

Oil prices began in 2004 a cavalcade that would last for almost 4 years, slowly breaking all previous records. Even in the wake of the hardest Economic recession of the last 30 years, oil prices are today about four times what they where a decade ago. These incessant high prices have lent the due credibility to those that for some time had warned against impeding difficulties in continuing the breathless world Oil production growth of the past two decades. Among these can be highlighted Colin Campbell and Jean Laherrére [1], Richard Duncan and Walter Youngquist [2] or Kenneth Deffeyes [3] for their oil production forecasts or Ali Bakhtiari [4] for his price predictions.

The constraints to oil production growth have today been acknowledge by most, even by the Industry itself [5], as show by Figure 1. Also notable have been the implicit warnings issued by the IEA, that despite continuously publishing production scenarios perpetually matching demand, have been vocal in other contexts explaining how unlikely that is to happen, especially in the figure of it's Chief-Economist, Fatih Birol [6].

Figure 1: Future World Oil production and Demand forecasts according to Petrobras.

Peak Oil, as was baptised by Colin Campbell, is a pretty palpable reality at this stage, but for Europe reality is bit more intricate. Only one of its states is a net oil exporter, with most meeting their needs fully with imports. Figure 2 presents the volumes of oil made available at the international market every year by all the relevant exporters and a forecast of its evolution into the future. International oil trade peaked in 2005 and has entered a permanent decline; moreover, this decline will likely accelerate during the next decade, by 2020 taking away between 1/3 or 1/4 of the volume of oil available in the market in 2005. This has been the main reason behind the high price environment of the past 6 years.

Figure 2: World Oil Exports, past and projected.

But Europe's woes deepen further, its most important suppliers, Norway and Russia, that supply Europe almost exclusively, are themselves entering terminal production decline. Within a decade Norway's oil exports shall be no more that a small fraction of what they are today; as for Russia an halving of exports in the same period must be seen as likely.

It is hard to envision how Europe will square in this race for the dwindling international oil market. One thing is for certain, with its heavy foreign dependence and now diminutive internal production it is the Economic block with most to lose.

2.2 Gas

A Peak of world Natural Gas production is not something to expect in the short term. Though some have pointed to such possibility, even independent researchers usually position it some decades away. Today, with the development of unconventional reserves in North America, terminal decline in that region at least has been postponed for some years.

But Gas is not a fungible commodity like Oil, its trade is mostly regional, reliant on pipeline deliveries. Europe's access to this energy source must be observed at a geographically restricted scope. Imports equate to about 60% of consumption, supplied by three neighbouring blocks: Russia, Norway and the Magreb. Norway is reaching its production zenith by now, with a visible reduction in exports unfolding in the next decade. Russia is still away from such decline, likely maintaining present production levels during the next fifteen to twenty years; the question on Russia is its internal demand, which has been slowly eating away export capacity. A maintenance of present Russian gas exports to Europe can be seen as a best case scenario. The only export capacity growth to expect is from the Magreb, though not in sufficient volumes to make the gap opened by the other two neighbouring suppliers.

Compounding on this imports scenario is a declining internal production. Peaking in 2001 during the golden days of the North Sea, gas production in Europe has been slowly declining up to now and should accelerate into the future. A huge gap will open between production and a relentless demand that up to 2008 had been growing 2% annually. Euan Mearns [8] produced an analysis of the European Gas Market in 2007 that detailed these issues, a digest is presented in Figure 3. The only way to match an annual demand growth of 2% would be importing all the Natural Gas traded in the world by ship in liquid state. The likelihood of that is very slim, especially in face of competition from emerging economies.

Figure 3: Gas scenarios for OECD Europe summarising the indigenous supply forecasts and demand forecasts.

In Europe, but especially in the United States, Natural Gas has been used as a campaigning flag by some politicians, promoting it as a benign or beneficial energy source, in some cases even casting the idea of a non-fossil origin [9]. This has created the wrong impression that Gas may be the answer to most, if not all, of the world's energy problems. The United Kingdom, for instance, is expecting to be generating two thirds of its electricity from Natural Gas a few years from now; how that will be possible is beyond anyone.

2.3 Coal

Like Gas, a peak of world Coal production is not to be expected in the short term. And unlike the two previous fossil fuels, reserves and future production profiles estimates are yet to converge. Predictions exist for a world Coal Peak between 2025 and 2060, remaining open the question of whether it can ever surpass today's energy flow from Oil.

In the short term Coal presents different challenges, stemming from the relatively small size of its international market; most of the Coal mined in the world is consumed within borders. Coal consumption in the EU has decreased dramatically in the wake of the economic crisis (down 17% since 2008) but it still is the main source of baseload electricity in most states, with 45% of it being imported. On the other side of the table are the emerging economies, India alone should in 2010 consume more Coal than the EU for the first time in History; as for China, it consumes almost half of all the Coal mined in the world, almost six times what the EU consumes and growing close to 10% per annum.

So far China remained Coal self-sufficient, despite some sporadic periods when it had to temporarily recur to the international market. One of these episodes took place in the Spring of 2007, at a time when prices in Europe where around 45 $/tonne. China became a net importer of Coal for a few months and even after closing the gap later that year, faced a harsh Winter in the early weeks of 2008, that compromised mining and transport, prompting shortages in most of the country. By this time Coal was being traded at the Amsterdam port for more than 140 $/tonne [10]. It took less than 12 months for Coal prices to produce the same move Oil prices made in four years.

Coal Consumption in Asia is growing so fast that episodes like the 2007/2008 crunch can become permanent. The IEA expects China and India together to be demanding over 110 Mtoe on the international market already by 2015 [6]; this figure is very close to what the EU imported together in 2009. Can the international market cope with such demand surge? Of all international fossil fuel markets, Coal may well be the one yielding the greatest surprises for the next decade.

2.4 Fossil Fuels and the Economy

High energy prices had been the omens of Economic Recession during the XX century, once it became clear in 2004 that OPEC was impotent to rein in oil prices, many where those announcing an imminent crisis. The shock came only in 2008, when high energy prices coupled with rising interest rates dried up household spending and triggered credit defaults throughout much of the OECD. This crisis revealed serious fragilities in the financial system with over indebtedness by households, companies and states.

In Europe this recession had different impacts on different states, but immediately threatened liquidity all across the bloc. This was dealt at the time with state guarantees on private bank credit, but with economic activity nearly stalled, it evolved into a confidence crisis on state solvability. This confidence crisis affected only some states, particularly those in the Eurogroup with large budget deficits, though they are indebted mostly to other EU states. But it is paramount to note that those states that are today in bigger trouble to finance themselves are exactly those more reliant on Oil as primary energy source [11], as Figure 4 shows.

Figure 4: Oil dependence by state in the EU.

There may be several reasons for this coincidence, but it clearly shows that fossil fuel dependence is having a determining role in the present crisis. Moreover, it also indicates that a Pan-European scope is indispensable for an effective Energy Policy.

The Economic Crisis is now going on for almost 2 years. GDP numbers may have grown occasionally, but Unemployment figures are still high and in some cases still growing. At the same time oil prices remain about 2.5 times what they where back in 2004. An Economy based on fossil fuels will always have little roam to grow while supplies of these energy sources remain constrained. This low growth, high unemployment environment can perdure for as long as Europe keeps its dependence on foreign supplies of fossil fuels.

In fact this crisis is facilitating an important shift of fossil fuel usage from the OECD to emerging economies [12] as Figure 5 portraits. These economies function on much lower energy per capita requirements, proving to be more resilient to the present constraints in the international market. An unsustainable economic paradigm is coming to an end, and if economic recession is the only way for Europe and the OECD to reduce its reliance on fossil fuels, then economic recession is what it will be.

Figure 5: OECD and Non-OECD shares of the world total liquids consumption (EIA data).

Already under strain, the socio-economic model under which Europe is built on will eventually became unviable under this fossil fuel paradigm, the Europe Project being likewise at stake. The European goals of Concordia, Solidarity, Equality and Freedom cannot be defended on the present, defunct, energy paradigm.

3 The Policy

The Energy Policy elements presented are here outlined using the Business Motivation Model (BMM) framework [13]. This framework intends to organize business plans in order to make them easy to understand, follow and maintain1. It is composed by three essential types of elements:

  • Ends - the future state the business pretends to reach;
  • Means - the methods employ to reach those ends;
  • Influences - things that impact or constrain the business;

For the present purpose only Ends and Means are considered, an assessment of Influences being outside the scope of this document. Ends breakdown into three types of ever more detailed categories:

  • Vision - a single sentence wrapping up the pretended business state;
  • Goals - conditions that must be satisfied on a continuing basis for the business to attain the Vision;
  • Objectives - specific, measurable and time-framed targets that the business must achieve to fulfil its Goals;

Means breakdown in a similar hierarchy:

  • Mission - a single sentence defining the business operation that can make the Vision a reality;
  • Strategy - macroscopic course of action that takes the business to its Goals;
  • Tactic - specific activity that implements a strategy;

Translating this framework to an Economic or Policy Programme, Vision and Mission can be seen as the digest of its grand objective, a direct way to make its purpose explicit. Goals and Strategies define the next level, Ends that are either collectively perceived as relevant or imposed by circumstances; they stem from, and exist, mostly in a technical plane, largely disconnected from political philosophies. Objectives and Tactics comprise the bottom level of Policy application, corresponding to executive targets and initiatives. It is at this level of implementation that political orientation has the larger role.

This document shall focus mainly on the higher-level of Goals and Strategies; no Targets are presented and only a limited number of Tactics are discussed. The intention is to simply show stereotyped courses of action, without diving into political or philosophical considerations.

At the Tactical level considerations on taxes may be made, such as "reflect the consumer electronics labelling framework into the taxing scheme". These references are always made in abstract, leaving open implementation options; for the example above, labelling could translate into a VAT rebate, a VAT increase or both. The taxing scheme can as well comprise individual or collective income taxes, all depending on each Executive's philosophy.

The proposed Policy is presented in the following subsections: firstly Vision, Mission and Goals are presented as a first macro-view with introducing texts outlining the overall aims. Then a number of Strategies are put forward and discussed for each Goal, with some tactics put forward in an informal way.

Each policy element is index with a character reflecting its type and a sequential number reflecting hierarchy, e.g. the first goal is indexed as G1 and is supported by strategies S1.1 and S1.2.

3.1 Vision

A United, Solidarian and Egalitarian Europe beyond fossil fuels.

3.2 Mission

Move Europe and its Socio-Economic model to a non fossil fuel reliant paradigm.

3.3 Goals G1. Efficiency - do more with less.

Former Energy Commissioner Andris Piebalgs once wrote that his favourite energy source was Efficiency, that could as well be turned into an Energy Policy motto. Efficiency measures are those that have greater impacts on the shorter time-frame, they dispense technological development and usually are not politically sensitive. Measures in this field must always have an important role in Energy Policy for an Economy like Europe's, given it's reliance abroad. Unfortunately, some of the present policies included in the 20-20-20 package aim at exactly the opposite direction.

G2. Electricity Generation - on fully indigenous energy sources.

Electricity will become an even more important energy vector, as Europe shifts away from fossil fuels. Especially as Transport trades liquid vectors for electricity, generation needs shall increase by important amounts. If electricity continues to be generated with fossil fuels (mainly Gas and Coal) the effect of this shift could even be negative. It is thus essential for Europe to move towards a fully renewable electricity market or at least fully reliant on indigenous energy sources.

G3. Freight Transport - out of the roads.

Well over half of the oil consumed in the EU is used for Transport. During the few months of 2008, when oil prices remained over 100 $/barrel, it became apparent that the road infrastructure isn't viable in such environment, with strikes erupting all across the continent. Changing the transport of goods and commodities can represent an important reduction of Europe's oil dependence while having little impact on every day life. It is seamless to either the manufacturer or the client if some merchandise moves on rail or by ship, instead of the road. Moreover, much of the infrastructure to make such shift already exists, perhaps simply needing maintenance. Implementation could be made progressively, first on inter-state transport, then on inter-city and so on.

G4. Passenger Transport - a new concept of individual travel.

Today individual travel is performed mainly on two modes of transport: by road car (inter-city) or by air-plane (inter-state). Both of them are now highly reliant on oil, with aviation being 100% reliant on jet-fuel and no serious prospects for an alternative. Substituting these two modes present two different challenges: the air-plane's speed (travelling at 900 Km/h) and the individual car's flexibility (being simultaneously a commuter, a small freighter and a mid-range vehicle). Overcoming these two challenges shall require a new concepts of what travelling to another state or to another city may mean, but it is imperative that it takes place.

Humans cherish the concept of the individual vehicle for the perception of control it provides them, ready to travel large distances, to take relevant loads to wherever, whenever it may be opportune. This versatility is a produce of the low volumetric density of oil products. But in reality cars are confined to roads, constrained by its driver availability and being repetitively used as a simple commuters. Travellers shall have to make similar concessions to those they do when travelling by air-plane: being subject to a pre-determined schedule and route, travelling with strangers and using other modes closer to destination, but at closer ranges that the traditional inter-state flight.

Like modern cars, air-planes are a bi-product of oil's volumetric density, allowing an heavy chunk of metal to rapidly cross the skies. Aviation does not seem to have any substitute for jet-fuel, such is its specificity. In time, flying will likely become unaffordable to the larger share of population, something which, without mitigation, can have profound social and cultural impacts for Europe. Travellers shall have to concede longer hours of inter-state travel, but if these coincide with regular leisure or resting periods, their impact on daily life can be reduced close to null.

3.4 Strategies G1. Efficiency - do more with less S1.1. Abandon CCS targets

Carbon Capture and Sequestration (CCS) has no place in a fossil fuel constrained world, where the extra 30% to 40% extra primary energy needed to run such systems isn't available. The implementation of the existing CCS programme shall have tragic consequences for Europe. Any targets on this matter must be scrapped immediately.

S1.2. Abandon agro-fuel targets

One of the 20-20-20 targets is a replacement of 10% of the transportation fuels used today in Europe with agro-fuels. To achieve that an area at least the size of Germany would have to be covered with dedicated crops [14]. This target will likely have to be met with imports, though of a more expensive and in much lower supply commodity than oil. There is no logic to justify such target, immediate scrapping is imperative.

S1.3. Re-penalise fossil fuels

In recent years a number of fossil-fuel based energy vectors have been promoted accross the EU, including Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) and jet-fuel. These vectors have benefited from tax breaks when used as transport fuels, something that makes little sense from a Energy Policy perspective. Fuel duties have played an important role avoiding the higher energy per capita figures of other OECD members (e.g. USA, Canada), hence avoiding over-reliance on foreign energy. Moreover, these market biases have prompted owners to spend thousands of euros retrofitting their vehicles to use these vectors, a relevant investment that brings no efficiency improvement. There's no reason to differentiate between fossil fuel based vectors, all must be brought into the same tax framework.

S1.4. Use Thermal Waste Heat

Fossil fuels are primary energy sources that are transformed into motion or electricity by means of combustion. This is a rather inefficient process, where between 50% and 70% of the input energy is lost as heat. Though, recently combined cycle power plants have became the norm, targets must be set for an all round efficiency increase in electrical generation, including older power plants. Other tactics may combine to boost this strategy, such as the spreading of district heating systems, especially in northern states.

S1.5. Use urban waste

A process already in motion in some parts of the EU, that should also be turned into an European wide practice. Waste contains many different forms of matter that can be used as energy source, either by outright combustion or by processing to useful vectors such as bio-diesel. This strategy can be seen as part of a larger Environmental goal of closing Society's matter cycle.

S1.6. Promote efficient consumer goods

Part of the Commission's present Energy Policy implementation is already a much wider Labelling framework now extending to a great number of consumer goods. This initiative should be progressively extended to all goods that use energy or otherwise have a relevant impact on energy efficiency (e.g. car tyres). More than that, the Labelling scheme should also be reflected in the taxing scheme of these products, thus providing a market bias in favour of efficiency. To work, a Labelling Framework will likely need a supporting institution responsible for testing goods and keeping efficiency ranks up-to-date.

G2. Electricity Generation - on fully indigenous energy sources. S2.1. Support Renewable Energy

Some states have already shifted a relevant fraction of its electricity generation to indigenous renewable energies that go beyond the traditional hydro-electric. This has been achieved in great measure due to the introduction of feed-in tariffs, fixed rates by which grid operators must buy the generated electricity. Though more expensive than fossil fuels, feed-in tariffs are nonetheless considerably below present final prices at the consumer (e.g. in Portugal and Spain Wind feed-in tariffs are circa 0.075 euro/kWh, whereas consumers pay 0.12 euro/kWh).

This approach seems sharp in two ways: it facilitates investment (which for renewables is mostly before start-up) and can impose a benchmark to separate between lower and higher EROEI 2 energy sources. In the current market, where many different forms of renewable energy are promoted by different agents, a single fixed feed-in tariff for every one will stave off immature or low EROEI sources from entering the market. Additionally, a higher tariff limited to a certain generation capacity (say 10 Mw) could be employed for development projects.

S2.2. Promote Energy Storage

Feed-in tariffs for electricity generation as just part of a larger process to shift from fossil fuels to renewable. Being mostly intermittent in nature, renewables pose some challenges to grid management, many times not matching the instantaneous demand on the grid. So far this has been mitigated with the use of the hydro-electric park for storage, augmenting the hydrological potential for load-balance generation. In time, with an increased intermittent supply to the grid, hidro-electric storage may not be enough; new forms of energy storage must be promoted side by side with renewable energies.

This strategy can also be implemented with special tariffs for energy storage. It can take many forms, simply as fixed figures for intake and feed-in, or more complex schemes contemplating the daily variations of the demand/supply balance.

S2.3. Develop an European Nuclear Programme

Now patent from the experience by the states with higher penetration rates, renewable energies are having impact chiefly on load balance generation (in great measure due to its coupling with hydro-electric as explained above). Base-load generation will feel the impact later and likely only after larger scale storage systems are in place. Objectively, the only ready, scalable, indigenous alternative to fossil-fuels for base-load is Nuclear energy. It is thus time for the EU to assume this fact and take this energy source seriously.

A real European Nuclear Programme should not be seen simply as an expansion project but rather as a maintenance, assessment and long term road-map for this energy source. An important part of this programme would have to be information, explaining to the EU citizen what Nuclear energy is, why is it needed, what are the potential hazards, how they are mitigated, what is the EU planning for it long term. After that a thorough assessment of each state' base-load needs should take place, especially for those that do not have relevant Coal resources and do not use Nuclear. And on this assessment the Nuclear Park could be properly dimensioned and its hypothetical decommissioning planned for the long term.

G3. Freight Transport - out of the roads. S3.1. Limit inter-state road freight

Tackling freight transport should start by the long distance, where empty haulage has the worst impact (finding back-trip loads is harder). This can be implemented in several ways, with special tolls on inter-state highways for hauliers, creating an inter-state circulation tax scheme for trucks, adjusting the taxing scheme on goods transported by road, etc.

The lion share of implementing this strategy would be recycling the jobs lost in the hauling industry. Workers in this sector would primarily be lead to the alternative industries: rail-roads, water-ways and maritime shipping; other options may exist in the logistic sector aggregated to these industries.

S3.2. Limit inter-city road freight

Similar to the previous strategy, this one would came at a later phase, with inter-state road transport already greatly reduced. The tactics discussed above largely apply here and would translate into an European-wide cost hike for road hauling. Only for short distances, where rail or waterways are impracticable, road freight could be left as is.

S3.3. European Rail Freight Network

In parallel to the phase-out of road hauling a programme to create an European-wide standard freight rail network would be necessary. A first stage could correspond to a network connecting every state capital, composed by slow lines (maximum speeds circa 100 Km/h). In time this would expand to all cities above a certain threshold size.

Underpinning this network an information system would be needed to allow a hauling operator to easily contract its container trip between any two nodes of the network.

S3.4. European Shipping Network

Also part of the alternative to road freight, maritime shipping, though reliant on fossil fuels, presents several advantages, a much reduced fuel usage per tonne-kilometre and relatively low infrastructure requirements. A programme would be needed to facilitate navigation all around the EU's coasts, to provide proper logistic infrastructure at ports and facilitate the movement of goods through customs (scrapping any barriers of this sort to inter-state shipping).

As before, a proper information system is indispensable for the management and tracking of freight ships, plus the useful instruments for easy contracting.

G4. Passenger Transport - a new concept of individual travel. S4.1. Promote Aerodynamics

Somewhere after the Second World War the car industry simply forgot about Aerodynamics (or may have passed it to the back seat). Charismatic cars like the Volkswagen (later christened as beetle) or the Citröen DS, where built with much higher concerns on this field than those available today. Air is the largest obstacle to the movement of a car on a tarmac road, and the only one in flat road at constant speeds. The other obstacle is mass, entering the equation whenever there is acceleration. The car industry seems to be slowly tackling the mass component with energy recovery systems on breaking (something associated with the popular concept of "hybrid-car"). Though indirectly penalized by fuel duties, movement through Air has so far been left unmitigated.

Implementation could be achieved with progressive industry standards for minimum frontal area / shape ratios or by adjustments to the taxing scheme. Aerodynamic vehicles will likely steal away some of the flexibility embodied in today's cars. Vehicles to transport large loads or large numbers of passengers would become less attractive. Overcoming this difficulty is something the industry can possibly deal with by itself, e.g. by recurring to concepts such as modularity.

An Aerodynamic bias on the car market may also have another important function by facilitating the penetration of alternative vector vehicles. These vectors are invariably less denser than oil products, thus providing less travel distance for the same tank size; better Aerodynamics shall increase these vehicle's range, improving their usefulness.

S4.2. Substitute inter-state Air travel for High Speed Rail

Using quasi-straight lines passing over major cities, a path between Athens and Brussels is about 2000 Km long; between Tallinn and Brussless it is about 1900 Km and between Lisbon and Brussels a little less. At an average speed of 200 Km/h these distances are covered in 10 hours or less. At face value, such a long time inside a train may not be that appealing. But instead of idealizing it as a regular plane trip with the passenger stranded in a seat, it can imagined in a different way. A passenger takes the Trans-Europa-Express at 8 pm in Athens and moves to the restaurant car for dinner. Somewhat later the passenger enters a small, but comfortable, cabin where some hours are spent reading, watching a picture or blogging, before going to bed. At 7 am the next day the passenger is up, goes for breakfast and at 8 am leaves the train at the destination city, where a cab or bus shall complete the journey to a starting business or vacation day.

There is certainly more to it than this simple story, children, luggage, etc, but for many occasions this could become a reality. A programme to substitute inter-state air travel by rail would not only require an high-speed network connecting at least every state capital, it would also need to make night travel affordable. Taking advantage of economies of scale, architecting new train cars, improving modal integration, a new long-distance passenger travel system must become a reality in Europe.

S4.3. Penalize jet-fuel

Complementing the introduction of an European high speed rail network is the simple measure of introducing fuel duties on jet-fuel. Though referenced before, it is important to stress that jet-fuel is subject to no duty at all throughout the EU. It's introduction is sensitive, since without a proper alternative long distance passenger travel could become unaffordable; on the other hand it would work as an important incentive to the introduction of a high speed rail network. It could be implemented progressively, firstly impacting only domestic flights below a certain distance, then spreading to all internal flights and later to all jet-fuel marketed in the EU.

4 Summary

Europe faces enormous challenges in the years, and possibly decades, ahead due to its reliance on foreign imports of fossil energy. By different factors, outright scarcity, geographic constraints or demand growth from competing importers, Oil, Gas and Coal are all set to become harder to afford for Europe. If no other way is provided for the reduction of their usage, then economic hardship shall take care of such task.

An Energy Policy directed at fossil fuel scarcity is today paramount for Europe, and may rest on it the survival of its Socio-Economic paradigm. Even the EU's cohesion itself may come at stake without a path to an Economy based on indigenous energy.

This document proposes an Energy Policy from a macroscopic stance, founded on four pillars: Efficiency - continuously improve the way Europe uses energy; Electricity generation - substitute foreign fossil fuel imports for indigenous renewables and Nuclear if needed; Freight Transport - substituting road hauling for rail, water-ways and maritime shipping; Passenger Transport - changing the way Europeans think of passenger transport, with new concepts of individual/family vehicles and long distance travel.

May our leaders have the courage and science to tackle this challenge.

A more detailed and direct description of BMM can be found at this webpage: http://www.selectbs.com/adt/analysis-and-design/what-is-business-motivation-modeling-bmm
EROEI - Energy Return On Energy Invested; it is a measure of how much useful energy is delivered to society by an energy source, after excluding build-up, operation and other energy inputs.
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de Sousa, L. M., Andris Piebalgs : getting a sense of proportion, The Oil Drum, n. 3780, March 2008.

Glad they received at least one massive dose of reality for their consideration. Nicely done.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jul 4th, 2010 at 12:03:11 AM EST
European Tribune - Address to the Commission's 2010 Consultation on Energy
once it became clear in 2004 that OPEC was impotent to reign in oil prices,

PN: don't you mean rein? reign conveys a totally different meaning.

European Tribune - Address to the Commission's 2010 Consultation on Energy

Already under strain, the socio-economic model under which Europe is built on will eventually became inviable

European Tribune - Address to the Commission's 2010 Consultation on Energy

An Economy based on fossil fuels will always have little roam to grow while supplies of these energy sources remain constrained.

room to grow.

European Tribune - Address to the Commission's 2010 Consultation on Energy

Compressed Natural Gas (CNG) and jet-fuel. These vectors have benefited from tax brakes

tax breaks

European Tribune - Address to the Commission's 2010 Consultation on Energy

hidro-electric park


European Tribune - Address to the Commission's 2010 Consultation on Energy

what is the EU planing for it long term.


European Tribune - Address to the Commission's 2010 Consultation on Energy

goods trough customs


European Tribune - Address to the Commission's 2010 Consultation on Energy

energy recovery systems on breaking


European Tribune - Address to the Commission's 2010 Consultation on Energy

recurring to concepts such a modularity.

such as

i hope you don't mind the typo hunting. i would have been glad to do it for free, but i can see the deadline was only just made, so... in future if you need, i would be pleased to help.

three points that come to mind reading this

  1. the truckers unions, and the possibility of strike retaliation from this quarter, crippling to the no-storage retail industries. the power of the french farmers to make government backtrack is traditionally notable, am i wrong in thinking the business-blocking capacity of these people could be catastrophic, and how difficult it will be for them to re-train, (no pun intended)?

  2. the ramp up of shipping will have nasty side effects on shoreline ecologies (unless better fuels are brought online) and consequently tourism, (which may become a luxury unaffordable to most anyways, but that's another diary). more oil drilling/shipping in the med will also ratchet up this eco destruction.

(apparently the quality of diesel burned by these behemoths is also a serious issue.)

  3. i personally don't believe that nuclear will be able to be run in less organised euro-societies as competently as in France, uranium is also in dwindling supply, the water needs will become more incongruous with glaciers melting already, and the public's -to my mind throroughly rational- fear of nightmarish eco-blowback will be considerable, coupled with the difficulty of financing/insuring more nukes, NIMBY, and the sheer astro-costs of building more and making those extant totally safe, including from terrists of every flavour, from home and abroad.

the level of topdown statist control to force the public to accept this doctrine would ruin whatever civil liberties still exist... not your remit for this doc, but not easily skipped over. were you right on this, which i don't believe you are, europe's postwar movement toward liberal democracy will be stalled if not reversed.

i know infinitely less than you do, but do you think it's possible to invest the kind of money needed to sustain a nuke based energy policy for the next 20 years without people rebelling against so much of their taxes going to such dangerous tech, that not even the scandinavians can come in on time/budget/safety, with the best of present science behind them?

i cannot see any other way to force people to pay so highly and far into the next decades for something they so instinctively and wholeheartedly distrust, and no matter how persuasive those rational actors are about it being the only way forward, because it supposedly doesn't up our carbon bill stratospherically. people on the street know better than to trust regulators any more, see BP.

i support all the rest of what you endorse and suggest very, very much, but would have loved to see you devote the same plaudits and support to the huge job creation potential of retrofitting architecture to conform to natural rules concerning passive solar, geothermal heat/cooling, home PV and water heating etc.

taken sufficiently seriously the EU would have enormous powers to push legislation vigourously in this direction, instead of the mostly token efforts, pace germany and spain.

the seriousness of blanketing europe with 'safe' nukes to keep our blithe lifestyles would have to be orders of magnitude more of a commitment, yet can you see no better way?

great points about oil, gas, roads, rail... (disco wagons, lol?) biofuels, all facts that are staring us in the face yet spin rulz, and the crowning glory of your diary, the graph that shows the PIIGS as the countries most untogether and too lazy/corrupt/short-termist to change their systems to accommodate facts, the growing public awareness that we have to change, and our hubris in thinking we can always drill deeper, take more risks. we're already seeing the deadly consequences of this hoary line of thought. energy independence is worth a lot, but there are limits, whereas none with natural systems...

just supposing nukes are The Great Middle Way, how are you going to 'educate' the public to accept them peacefully, when only france has set a level of safety that appeases its people, and that presupposes we do get all the information...

the nuke industry has all the integrity and public image of BP right now, and not unfairly, considering their allergy to transparency.

on paper the numbers may add up to nukes working for now, but the mental subjugation and dictatorial nature of the regimes would make europe uninhabitable for many on principle, starting a new form of eco-migration.

people will not vote for nukes after their history unless educated in depth as to why this would be advantageous. with offshore wind, solar incentives, smart grids and other such socially positive changes around them already, i think they will be quite willing to do without some of their age-of-fossil-fuel-abundance creature comforts, ride bikes more and keep their civil liberties, thankyou very much.

the gorilla in the room is the titanic battle between energy companies, (and the shillpols they buy). whose names will be on the utility bills we pay for the next decade? Italy imports 75% of its daily needs, yet there are thousands of locations where homeowners would be ready, willing and able to contribute roof space to PV, were the startup costs more heavily subsidised, and the huge savings in buying foreign AC redirected to greater rollout, instead of fattening the pockets of those middlemen making more profit selling us russian/libyan gas, australian uranium, saudi oil, whatever, while selling their own people down the river, both ecologically and economically.

some titans will lose, and fight bitterly not to. TBTF will be bandied again.

i totally fail to see why rechannelling a huge amount of capital to the nuke industry will in any way shape or form be socioeconomic progress, even in its role of 'male minore'.... frying pan > fire.

replacing one set of topdown malgovernances and human intelligence-insulting energy policies with another of execrable track record of trustworthiness or attention to public safety is movement that seems as best sideways, (and quite probably retro) not forward.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun Jul 4th, 2010 at 05:19:40 AM EST
[ Parent ]
Boy, what a long comment! Thanks for your thoughts, and for the typo-hunt.

On trucking, the market can always be biased in such a way by executive decisions that road hauling businesses go broke... Part of their power is the lack of alternative modes, once those are in place they'll be easy to deal. Though not disregarding the fact that forcing someone to quit their profession is not a pretty thing...

I don't share your negative view on shipping. Port infrastructure would need to grow, but beyond that there's "only" the increased risk of fuel spill. Maybe for a change, bio-fuels might help on that. Going to the beach on torrid days is one of the most folksy things you can do, it simply won't go away. Tourism will go on too, folk may just have to content themselves with closer to home resorts.

On Nuclear, I think it is time to go beyond all the intoxicating propaganda the Greens have been putting out since the 1970s. With Coal in for a good ride, I just don't see how it can be dispensed. An European Programme is needed exactly because many states do not have the dimension (e.g Portugal). But note DoDo's comments below, he sees Renewables directly replacing Nuclear, which would meant a much sooner phase out.

Finally, I should have mentioned Architecture on the Labeling initiatives. Home Labeling has been mandatory for about one year in Portugal, with direct translation into the taxing scheme; is it the consequence of Framework Legislation? I have to check on that.


by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Mon Jul 5th, 2010 at 02:50:36 PM EST
[ Parent ]
Regarding intermittent renewables and inflexible nuclear, also see an example (with power output curves) in my latest diary.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jul 6th, 2010 at 06:26:02 AM EST
[ Parent ]
Now patent from the experience by the states with higher penetration rates, renewable energies are having impact chiefly on load balance generation (in great measure due to its coupling with hydro-electric as explained above). Base-load generation will feel the impact later and likely only after larger scale storage systems are in place.

Hm? No. This analysis is still stuck in the old and unrealistic baseload - peak load picture, and the conclusion that baseload has to be replaced is completely off target.

You have to distinguish at least three regimes of electricity generation:

  1. one that is run at full power save for maintenance (and emergencies);
  2. another that is run at variable power, but in a pre-planned way;
  3. finally one that does load balance on the short term, reacting to the actual fluctuations of the difference between supply from the first two and demand.

In the classic generation system, the first is made up of baseload plants operated at constant power like coal and nuclear; and the duty of the second is to compensate for the daily fluctuation in demand as well as maintenance or accident related downtime for large baseload plants.

In the now emerging generation system, intermittent renewables are part of the first regime, and what was the compensation of downtime is now the compensation of intermittency for the second regime.

It is completely pointless to build new baseload plants when renewables are spreading. It is intermediate, load-following power that needs at least to be maintained. Whether nuclear can play that role (in place of newer coal plants and gas), is open to debate; but profitability will be affected and companies will be certainly even less willing to invest in nuclear power if they can't run at full power all the time.

So if you want to de-carbonise intermediate power, it is better to look at hydro, natural balancing, pumped storage (both water and air), and possibly HDR geothermal.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sun Jul 4th, 2010 at 06:17:29 AM EST
Hi DoDo,

As far as I understand it, in Portugal baseload is used to identify both regime 1 and 2. I see it may not be correct, but I don't see the regime 1 simply disappearing.

A portion of the renewable energy feed to the grid comes from micro- or mini-hydro in small water-streams; for all matters and purposes they are baseload. There also other renewables, that when coming of age shall produce baseload, e.g. stimulated geothermal.


by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Mon Jul 5th, 2010 at 07:17:50 AM EST
[ Parent ]
I don't see the regime 1 simply disappearing

Neither do I: I see regime 1 continuing but with coal and nuclear displaced by intermittent renewables. At any rate, with the spread of renewables, the focus should be regime 2, not regime 1.

Regarding mini-hydro and stimulated geothermal, while they can be operated at constant power, they can also be operated at variable power, hence, they would be good candidates for de-carbonising regime 2 (maybe even regime 3), along with energy storage.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Jul 5th, 2010 at 08:08:29 AM EST
[ Parent ]
S4.2. Substitute inter-state Air travel for High Speed Rail

Using quasi-straight lines passing over major cities, a path between Athens and Brussels is about 2000 Km long; between Tallinn and Brussless it is about 1900 Km and between Lisbon and Brussels a little less. At an average speed of 200 Km/h these distances are covered in 10 hours or less.

A broader argument could have been made in advance to your point:

  1. Within a range of 3-4 hours resp. 600-1000 km, HSR is clearly competitive with short-haul air. So the complete replacement of short-haul air should be a no-brainer.
  2. If an European network of connected lines that are each under 600 km is built, then in addition to the 600-1000 km journeys that already ensure profitability, longer runs are possible.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Jul 4th, 2010 at 07:57:36 AM EST
Underpinning this network an information system would be needed to allow a hauling operator to easily contract its container trip between any two nodes of the network.

This is something the major operators already implemented.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sun Jul 4th, 2010 at 08:01:59 AM EST
Have you ever blogged on that?

by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Mon Jul 5th, 2010 at 02:51:50 PM EST
[ Parent ]
No and I wouldn't call myself an expert on this. But I know that
  1. for international freight transports, there is an agreement abbreviated CIM, which imposes a system of rail consignment notes (RCNs) that uniquely identify transports, part of the system is code numbers for loading stations as well as operators;
  2. this system is computerised (but I don't know whether at operator, national or European level), allowing tracking of transports at least at stopping station level;
  3. specifically for container transports, operators are moving towards GPS tracking (example).

While tracking is no problem, flexibility of transports is another issue. Almost all operators today tend to favour assignments that can be part of regular transport in large volumes, even when it's about containers. So if you want to send a container between two container terminals connected twice a day by container trains, you'll have no problems (apart from delays); but if you want to send a single container or other single wagonload from a given station to another, you may find many operators rather unprepared for organising that efficiently, and rather customer-unfriendly...

Having mentioned delays, what you say about a separate freight network is of course important. It doesn't have to be all separate, but either separating off long-distance passenger transport (as when high-speed lines are built) or both long-distance passenger and freight (as when avoiding lines are built especially in mountainous areas), the capacity freed up will be significant due to the different speeds of the different train types.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Jul 6th, 2010 at 05:06:47 AM EST
[ Parent ]
This approach seems sharp in two ways: it facilitates investment (which for renewables is mostly before start-up) and can impose a benchmark to separate between lower and higher EROEI 2 energy sources. In the current market, where many different forms of renewable energy are promoted by different agents, a single fixed feed-in tariff for every one will stave off immature or low EROEI sources from entering the market.

Hm? The idea of feed-in tariffs is precisely to make immature sources mature.

On a broader note, methinks the key point you could have made here is that feed-in tariffs can be used to differentiate for whatever reasons policymakers want to differentiate. That point holds even if actual policy goals could be up for debate: you want to promote high EROEI and large-scale projects, I would want to discourage large-scale greenfield photovoltaic, the German feed-in law on wind wants to encourage the seeking of locations with good wind, etc.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sun Jul 4th, 2010 at 08:12:26 AM EST
The idea of feed-in tariffs is precisely to make immature sources mature.

Reading Jérôme's stuff and from what I'm able to follow locally, I'd say this as much more to the with the investment structure of these projects than anything else.

A fixed feed-in tariff for all renewables will directly differentiate between those that are good investments from those that are not.


by Luis de Sousa (luis[dot]de[dot]sousa[at]protonmail[dot]ch) on Mon Jul 5th, 2010 at 02:55:38 PM EST
[ Parent ]
as much more to the with the investment structure of these projects than anything else

The front-loaded investment structure of most renewables is a reason the feed-in law is superior to other support systems like certificates or tax breaks extended every year, and why maintaining it can be a good thing even when the feed-in rate can be lowered to the average market price. But it was not the reason for creating a support, back when even wind was way more expensive than coal or gas. From the justification preamble of the German feed-in law (in its current updated 2009 form):

Die Realisierung einer nachhaltigen Energieversorgung ist besonders bedeutsam. Es gilt dabei, die Energieversorgung künftiger Generationen unter Berücksichtigung der Belange des Naturschutzes, ökologischer Ziele und gleichzeitigem wirtschaftlichem Wachstum sicherzustellen. Ein Kernelement dieser Strategie ist es, den Anteil Erneuerbarer Energien an der Energieversorgung im Interesse der Sicherung endlicher Energieressourcen und im Hinblick auf den Umwelt- und den Klimaschutz weiter deutlich gesteigert werden.The realisation of sustainable energy supply is especially important. In this context, it is necessary to ensure the supply of energy for future generations in consideration of nature conservation, ecological goals and simultaneous economic growth. A core element of this strategy is to increase the share of renewable energies in the supply of energy significantly in the interests of securing finite energy resources and with view to environmental and climate protection.
Hierfür sollen Erneuerbare Energien mittel- bis langfristig ihre Wettbewerbsfähigkeit im Energiebinnenmarkt erreichen. Denn nur dann, wenn sich Erneuerbare Energien ohne finanzielle Förderung auf dem Markt behaupten, können sie auf Dauer eine tragende Rolle im Energiemarkt spielen. Die Berücksichtigung der unterschiedlichen externen Kosten (insbesondere langfristige Umwelt- und Klimaschäden) der konventionellen und Erneuerbaren Energien bei gleichzeitiger volkswirtschaftlicher Verträglichkeit bleibt weiter ein wichtiges Ziel.For this, renewable energies should achieve competitiveness on the domestic energy market on the medium and longer run. Because only once renewable energies stand their ground on the market without financial support can they play a leading part on the energy market for the long haul. The consideration of the various external costs (in particular long-term environmental and climate damage) of conventional and renewable energies with simultaneous comatibility with the national economy remains an important goal.
Von großer Bedeutung sind ferner die direkt aus dem Ausbau der Erneuerbaren Energien im Strommarkt - und damit aus dem Erneuerbare-Energien-Gesetz - resultierenden Wirkungen auf den Wirtschaftsstandort Deutschland. Der Bau, Betrieb und die Instandhaltung von Anlagen zur Erzeugung Erneuerbarer Energien führen zu Investitionen, die zur Wertschöpfung in Deutschland beiträgt und damit auch Arbeitsplätze schaffen.Furthermore, the effects on the German economy resulting directly from the development of renewable energies on the electricity market - and thus from the feed-in law - are of great importance. The construction, operation and maintenance of facilities to produce renewable energies lead to investments which contribute to added value in Germany and create jobs with that.
Gleichzeitig erfüllt das Erneuerbare-Energien-Gesetz eine wichtige industriepolitische Funktion. Die durch das Erneuerbare-Energien-Gesetz induzierten technologischen Innovationen und die durch Lerneffekte eintretende weitere Senkung der spezifischen Erzeugungskosten für Strom aus Erneuerbaren Energien stärken die hervorragende internationale Wettbewerbsposition der deutschen Erneuerbare-Energien-Branche...At the same time, the feed-in law fulfils an important industry policy role. The technological innovations induced by the feed-in law and the further reduction of specific production costs for electricity from renewable energies arising from learning effects strengthen the superb international competitiveness of the German renewables sector...

In less detail, all these points are echoed in the first paragraph of the law itself.

The one point not explicit above is that by creating large and stable markets, feed-in laws allow the industry to scale up production and realise economies of scale.

I further underline that the pre-defined annual degression of the feed-in rates (German system) resp. the annual re-set of the feed-in rates (Spanish system) is the key policy element to spur further reductions in production costs. Again from the above document:

...die Technologien zur Erzeugung von Strom aus Erneuerbaren Energien [müssen] laufend fortentwickelt werden. Dies trifft insbesondere für die Fotovoltaik zu. Um diesen Prozess zu fördern, werden die Vergütungssätze dieses Gesetzes nach Energieträgern und teilweise auch technologiespezifisch differenziert sowie degressiv ausgestaltet. Dadurch wird ein Anreiz zu Innovation und Effizienz gesetzt. Darüber hinaus ist die reale Preisentwicklung zu berücksichtigen. Ziel ist es, die Techniken zur Erzeugung von Strom aus Erneuerbaren Energien möglichst schnell zur vollständigen preislichen Konkurrenzfähigkeit gegenüber den konventionellen Energien zu verhelfen......the technologies to generate electricity from renewable energies have to be developed further continuously. This is true above all for photovoltaics. To foster this process, the feed-in rates of this law are shaped in a way that it differentiates according to energy source and partly also according to technology, and is degressive. That way, the incentive for innovation and efficiency is set. Furthermore, the real price development is to be considered. The goal is to help technologies that generate electricity from renewable energies achieve complete price competitiveness vs. conventional energies as quickly as possible...

A fixed feed-in tariff for all renewables will directly differentiate between those that are good investments from those that are not.

What is your definition of "good investment"? And do I get you right: you want a single and fixed feed-in rate for all types of renewables? That doesn't seem to make any policy sense. It won't spur further development and price reduction for the cheapest renewables that have production posts below the rate, and it won't help the maturing and development of other renewables at all.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Jul 6th, 2010 at 06:24:11 AM EST
[ Parent ]

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