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Can US Fracked Gas Save Europe?

by ManfromMiddletown Thu Mar 20th, 2014 at 03:56:16 AM EST

There is a low, but rising, rumble.  Last week, GOP House Speaker John Boehner let loose the argument that all the US needs to do to free Europe from dependence on Russian gas imports is to export fracked gas.

Russia has been playing a much more intricate game than the United States in recent years. The resulting imbalance has created a growing threat to global stability, as evidenced last week by Vladimir Putin's invasion of neighboring Ukraine. The ability to turn the tables and put the Russian leader in check lies right beneath our feet, in the form of vast supplies of natural energy.

Cue the talking heads parroting the meme that the Obama administration is aiding and abetting our once, and again, Soviet Russian nemesis by keeping all that sweet fracked gas trapped in North America.  Just one problem.  Even a cursory examination of the facts reveals that the scenario envisioned by Boehner et al, the US replacing EU imports of Russian gas, isn't even a remote possibility.  Let's lay out the facts of the case.

front-paged by afew


What's The Argument for Exporting Gas?

This is actually a fairly easy question to answer.  Unlike oil, gas is not easily transported.  This is why there are significant differences in the regional price of gas. The World Bank's Pink Sheet lays this out clearly.

American natural gas is available for between 20-30% of the price in Europe and Japan. Note also that the price paid in Japan is significantly higher than that paid in Europe.  The takeaway is that given a choice, US gas exports will head to Asia, not Europe.  Which means that any serious effort to replace Russian gas with imports from North America is going to require either a 30%+ increase in EU gas prices, or massive subsidies.

But, really, it's more than this.  It's not just that "fighting" Putin with gas is economically unfeasible. Basic facts suggest that, even in the long term, it's not even technically possible to do this.

How Much Gas Does Russia Export to the EU?

We could look at aggregate statistics here, but I really want to lay out the facts on the ground.  The International Energy Agency operates a great interactive site about the gas trade in Europe.  There are 13 border crossing at which Russian gas enters the EU, of these 5 pass through Ukraine.

Northern Crossings

The northern, non-Ukraine, pipeline crossings into the European Union exported 71.5 Billion Cubic Meters (BCM) of gas in 2013. If we exclude the Nord Stream pipeline which runs under the Baltic directly from Russia to Germany, this falls to 48.1 BCM.  No capacity data is available for Nord Stream, but the other crossings have a capacity of 69.3 BCM.  Yielding a capacity factor of 69.4%. This is concentrated in the crossings into the Baltic Republics, while the capacity factor at the other crossings climbs to 83%. Again, notice that a good third of the gas entering these northern crossings comes directly to Germany via Nord Stream, which only came online in late 2011. One way to read this is that the Germans have no stomach for the games that occur when you depend upon gas transiting Ukraine. With Nord Stream, the gas factor doesn't really have the same urgency for them.

Ukraine Crossings

Just over half of Russian gas exports to the EU transit Ukraine.  In 2013, 82.3 BCM passed through the country.  Capacity to move 100 BCM more through the country existed, but was left unused such that the capacity factor on these Ukraine transiting pipelines was only 45%. A picture should be emerging here.  Ukraine is vital not only because a lot of natural gas moves through the country, but also because that is where the slack capacity is at.  There's only 20 BCM of slack capacity in those northern pipelines, which means that if the pipelines transiting the Ukraine shut down, the EU only has access to 60% of the gas it's been importing.  Maybe more can be moved through Nord Stream, but that's no real help for the Eastern European countries.

There has been enormous growth in the use of natural gas as a fuel for electricity production in last 20 years. In 2011, about a fifth of EU electricity was generated using gas. Back in 1990, just 7% was. The proportion of EU electricity production coming from gas has tripled in the last 20 years.  For much of Northwest Europe, the gas required for this expansion has come from the North Sea.  Southern European countries, including Italy and Spain, have developed extensive energy link to North Africa.  But in Eastern Europe, there is an overwhelming dependence upon Russia's Gazprom.

153.8 BCM annually is the magic number.  If the US is going to replace gas imported to the EU from Russia, that's what has to be replaced.  This brings us to another important question.

Does the EU Have the Infrastructure Place?

Europe does have a fairly highly developed system of LNG import terminals and gas storage facilities.  But, as you can see from the map below, these tend to be concentrated in Western Europe.

 

In 2013, IEA data shows that the EU imported 80.1 BCM of gas via LNG, and had the capacity in place to import 235.9 BCM annually.  This means that the EU is only using about a third of its LNG capacity annually.   Monthly, there is the ability to move about 19.7 BCM of gas, of which about 6.7 BCM were actually imported.  Replacing Russian gas would require that a further 12.8 BCM a month, boosting total imports to 19.5 BCM, or 99% of LNG capacity.  And, again, the pipelines are all configured to run west, not east.

In the present crisis, the EU has assessed its capacity to redirect gas flows to east to the Ukraine.

Ukraine last year imported around 28 billion cubic metres (bcm) of natural gas from Russia, which wants to maintain its influence over the former Soviet republic and fend off EU efforts to limit Moscow's sway. ...

"The country (Ukraine) has sufficient gas storage to hold it through a few months, and could also turn to neighbours for additional gas supplies via reverse flows on pipelines that could bring up to 10 bcm (per year) of gas from Germany and Hungary through Poland and Slovakia," political risk consultancy Eurasia Group said in a report this week.

Many other analysts say the available capacity to pump gas from the EU to Ukraine is well below 10 bcm, and Eurasia Group also warned that Ukraine would be likely to receive less.

"If gas supplies to Europe are already compromised by an ongoing conflict, Ukraine may find its neighbours increasingly unwilling to provide this stopgap supply," it added.

Well that just blew up the magic number.  If rescuing Ukraine is part of the agenda, import replacements rise to 181.8 BCM, well above the current capacity of LNG terminals.  Moreover, all those terminals are located in Western Europe, and there is very little capacity move gas from these facilities to Eastern Europe. And, we haven't even talked about the American end of the deal.

Does the US Have the Infrastructure Place?

The first step to understanding whether the US has the capacity to meet EU LNG needs is to convert units.  The magic numbers we have mentioned thus far have been 181.8 BCM including Ukraine, 153.8 BCM excluding it.  In the US, gas is measured in billion cubic feet (BCF).  1 cubic meter equals 35.3 cubic feet.  Which translates our magic numbers to 6417.5 BCF annually including Ukraine, and 5429.1 BCF without Ukraine. For import/export terminals, FERC gives daily capacity (BCF/D), so 17.6 BCF/D including Ukraine, and 14.8 BCF/D excluding it.  At present, the only operational US LNG export terminal is in Alaska, however it has been shut down in recent months due to technical and legal issues.

The map above shows all currently operating LNG terminals in the US. While some are approved for re-export, they all are primarily import terminals. This is because prior to the fracking boom, the established understanding was that the US would need to import natural gas to meet needs.  If you look at the map below, you can see the current proposed/potential LNG export terminals, and their capacities.

Add the capacity of all US terminals up, and you get 18.24 BCF/D from proposed terminals, and a further 12.84 BCF/D in potential LNG terminals. So theoretically, once all these are built, there would be the LNG capacity to replace Russia gas exports to the EU.  However, this presumes two things.  First, that this capacity is going to be available in the short term, which it will not. The only facility that currently approved facility, Sabine Pass in Louisiana, will not enter operation until 2015 and cost $10 billion. The expense in terms of construction costs alone should give us all pause, but it's more than that. Second, there's not reason to believe that exporters wouldn't seek out higher prices in East Asian markets rather than export to Europe.  

How Much Gas Does the US Have to Export?

It has been a hard winter in the US.  One of the consequences of this is that US natural gas in storage has fallen to levels not seen since 2003, and is well below the levels seen since the start of the fracking boom.

EIA figures show that the share of US gas from shale has increased by 432% since 2007, from 1990 BCF to 10297 BCF annually.  During the same period, total US gas production grew from around 24.6 Trillion Cubic Feet annually to around 29.5 Trillion Cubic Feet a year, while production from conventional sources actually fell by 15%.

Total US gas production in 2013 was 30167.2 BCF, meaning that the amount required to supply the EU+Ukraine amount to around a fifth of total US production. Over time, this percentage should fall, as shale gas is predicted to increase total production by around 40% over the present.

This of course assumes that fracking will continue to pan out.  That is far from certain, and in fact an energy expert brought to Brussels to discuss the US fracking boom had this to say:

But according to David Hughes, a geoscientist and former team leader on unconventional gas for the Canadian Potential Gas Committee, the US boom on which many base their expectations is founded on shifting sands.

The cheap price bubble [in the US] will burst within two-to-four years, Hughes said. At a high enough price, the supply bubble will burst perhaps 10-to-15 years later, when drilling locations become sparse.

Supply can be maintained for many years, he added, but only at much higher prices with ever-escalating environmental impacts due to the accelerating number of wells that must be drilled.

In short, it's a fracking bubble. The irrational exuberance is such that something like 36% of the fracked gas produced in North Dakota is flared.  The view from space is telling, with the Bakken field putting out about the same amount of light as metro Atlanta.

Nationally, something under 1% of gas is flared.  Why is so much gas flared in the Bakken?  

The majority of North Dakota gas (roughly 70 percent) is ultimately marketed; however, a significant percentage of the state's natural gas production is burned off in flares due to a lack of pipelines, processing and compression infrastructure.

According to the North Dakota Pipeline Authority flaring occurs when natural gas is burned on location due to a lack of gathering pipeline infrastructure or economic alternatives. In addition, although 55 percent of flaring occurs at wells that are unconnected to the gas gathering system where production has outpaced infrastructure investment, 45 percent occurs at wells that are already connected due to pipeline capacity and compression challenges.

Again, it's the infrastructure that's the problem.  This may appear to lend credence to the exporters argument, however there's another problem.  Building out the infrastructure required to bring shale gas to market (any market) efficiently will require a least several years.  By the time that the infrastructure is ready, the fields themselves may well be dry.  Drilling reports from the EIA show that it is only constant investment in new wells that is sustaining current production.  Fracked wells tend to have a shorter lifespan, with most of the gas coming out early as compared to traditional drilling methods.  

So What?

This is all fascinating, you might say, but why should I care?  

First of all, rising gas prices will mean rising heating costs throughout much of the country. But it's more than that.  Natural gas is a key feedstock for the production nitrogen based fertilizers.  Modern American agriculture depends upon massive nitrogen inputs in order to sustain production.  This is particularly true of corn, for which usage statistics are plotted below.

The Green Revolution of the 1960s saw massive increases in agricultural production, however this required massive increases in the amount of fertilizer applied per acre.    Not incidentally, this all occurred in the context of increasing US fertilizer production, which leveled off at the same time as increases in fertilizer inputs.

As us natural gas production stagnated, the production of fertilizers began to shift overseas. USGS statistics show how ammonia imports began to climb, as did domestic natural gas prices, during the start of the 21st century.

Not only were fertilizer imports increasing, new suppliers began to emerge with the end of the Cold War, as USDA statistics show.

At the moment, Trinidad is our largest supplier of ammonia, however this is likely to change.  Starting in the 1990s, Trinidad discovered that it could operate a profitable fertilizer industry capitalizing on its plentiful, and cheap, natural gas.  This is set to change, as gas production is predicted to peak in 2021. Meaning that fertilizer production is likely to shift to where natural gas is cheapest and most plentiful: Russia/Ukraine.

In short, in seeking to cut European dependence on Russian gas, we may end up increasing out own dependence on Russian fertilizer imports.  I've tried to lay out here why this whole idea that the US will become a major gas exporter is implausible. What I hope that this final section on fertilizer imports does is establish that even if possible, exporting fracked American gas is unwise, because it will help fuel other sorts of dependence. In the long term, we need to invest in efforts to economically produce hydrogen from water, not natural gas. But in the short term, this is what we've got.  And efforts to ramp up natural gas exports to Europe are going to fuel increases in US fertilizer imports from the very country that we are trying to isolate economically. All so that a few companies which have been imprudent in their development of new fracked gas wells can be rescued from the bubble they've blown by raising US gas prices.  Ultimately, this is the scam that's being played out here, and it's one that even a basic glance at the facts of the matter reveals.

Display:
It occurs to me that the last section here is of less use on this site than Daily Kos, but I don't really feel like trying to write out an alternative.

I suppose that the "So What?" in the case of the EU is to examine alternatives. Arguably, much of what has throttled the development of wind farms in recent years has been the, relatively, low price of gas, and the perception that fracking would arrive in Europe in the forseeable future.  Both seem set to change.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 18th, 2014 at 04:04:43 AM EST
ManfromMiddletown:
the last section here is of less use on this site than Daily Kos

Nope. It's of great interest, like the whole diary.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Mar 19th, 2014 at 04:37:07 AM EST
[ Parent ]
Re: ammonia, see this diary and others by SacredCowTipper. There's no need for imports to synthesize nitrogenous fertiliser.

There's also no need for as much nitrogenous fertiliser. Maize monoculture + irrigation leads to overuse of N, hence nitrate pollution of aquifers.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Mar 23rd, 2014 at 04:01:03 AM EST
[ Parent ]
Link isn't working.  Blued out, but won't click.

I think that SacredCowTipper is Stranded Wind, aka Neal. (Google the latter username and the real first name.)

There are serious issues with the source here.  Serious, serious issues. Just an FYI so that you don't step into the hot mess unbeknownest to yourself.

That said, I do think that in the long term synthesis of hydrogen from electrolysis of water is going to be an fruitful venture.  I just don't think that the science is there yet. AFAIK, the only place where the process is used is in Zimbabwe, where it's a holdover from the days of Rhodesia sustained by current sanctions. They use hydro as the electric source.

As for overuse of nitrogen fertilizers.  There's an argument for that.  Before electrolysis enters into the mix, I think there's a ready source of methane to be had in the massive manure lagoons that are associated with Confined Animal Feeding Operations (CAFOs) in North America.  Interestingly, European transplants (primarily Dutch) are a driving force in scaling CAFOs up in the Great Lakes region.

They sell expensive land in the Netherlands, and come to the US with buckets of cash.  Because they are making a $500,000+ investment, they get waived through immigration under the EB-5 visa program.  Land is much cheaper here, and they are able to put up massive buildings that house thousands of animals.  Producing millions of gallons of manure, which is over applied to the relatively small patches of land the CAFO owns.

In most states, they have no obligation to treat the manure, meaning that there is no incentive to dispose of it responsibly.  A small tipping fee could change the economics enough to justify investment in bio-diesel and related industries.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Mar 23rd, 2014 at 06:13:05 AM EST
[ Parent ]
The link works for me. Yes, it's Stranded Wind.

The link wasn't meant as an endorsement (I was never convinced by the specific projects proposed). Simply an example of why we don't need to import ammonia.

Whether the nitrogen is of synthetic or organic origin, abuse creates pollution of the water supply. Spreading slurry from intensive animal operations is a typical form of abuse.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Mar 23rd, 2014 at 06:23:33 AM EST
[ Parent ]
In the Ogallala Aquifer here in the US, nitrate pollution is pretty solidly tied to high ammonia fertilizer use.
by rifek on Tue Mar 25th, 2014 at 10:07:45 PM EST
[ Parent ]
Here's the link again to see if it works.

Oddly, it works from Recent Comments, not from here in the diary..?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Mar 23rd, 2014 at 06:25:45 AM EST
[ Parent ]
Both links works for me from inside the diary.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sun Mar 23rd, 2014 at 07:20:26 AM EST
[ Parent ]
Well argued and well researched.

Of course, I have confirmation bias as I guessed from the start that the claim to replacing Russia as Europes gas supplier was bogus. Now I actually have something to base that on.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Mar 18th, 2014 at 09:20:30 AM EST
Thanks.  I have been cranking away at this for about a week, so some of the references may be a little out of date.  

I was watching CNN a few weeks back, and noticed that Newt Gingrich kept pulling out this idea.  And.... it sounded like bullshit to me.  So I thought, I know where the numbers are at.  The IEA European Gas site is awesome, and it makes it possible to put actual numbers to the whole situation. Converting between metric and customary is a pain, but with US EIA numbers, you quickly see that this all is a gigantic pipe dream.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 18th, 2014 at 09:48:43 AM EST
[ Parent ]
The LNG infrastructure in Europe is far more advanced than I thought. Where does all the gas come from?
by generic on Tue Mar 18th, 2014 at 10:32:02 AM EST
Checking here (table T3_4), the biggest supplier is Qatar, followed by Algeria and Nigeria.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Mar 18th, 2014 at 11:19:03 AM EST
[ Parent ]
I strongly suspect that what has would up Boehner and other advocates for exporting gas is 'donations' from energy interests who are primarily interested in getting subsidies for the creation of export terminals so as to be able to raise the price of their gas sold into the US market. Build a terminal, lock in contracts to sell to foreign buyers, then, when supply tightens, even more money can be made domestically.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 18th, 2014 at 02:15:27 PM EST
'has wound up'

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 18th, 2014 at 09:50:23 PM EST
[ Parent ]
If we had legitimate imperialists running this country we'd have a much faster transition to a post-fossil fuel economy.

you are the media you consume.

by MillMan (millguy at gmail) on Thu Mar 20th, 2014 at 03:37:50 PM EST
[ Parent ]
Our fossil fuel imperialists wanabees have first to concern themselves with their own power base, which they are sucking dry beneath their feet. They care first about that. A proper Emperor, such as Norton, would be concerned with the longer term health of the empire.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Mar 20th, 2014 at 11:34:24 PM EST
[ Parent ]
This was excellent.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 18th, 2014 at 06:22:08 PM EST
Top-notch, gracias M from M.

I tried to share this on FB but it brought up a link to the whole site as opposed to just this diary.

Is it just I or are others having this glitch?

'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 Wed Mar 19th, 2014 at 08:56:46 AM EST
Found a workaround...

'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 Wed Mar 19th, 2014 at 09:01:37 AM EST
[ Parent ]
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Mar 23rd, 2014 at 03:53:31 AM EST
I suppose something about actual alternatives is in order.  So little time.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Mar 23rd, 2014 at 06:16:02 AM EST
[ Parent ]
... indirectly.

The large increase in US gas supply has led to a falling gas price, which to a considerable extent has displaced coal in US power generation, to such a degree that US greenhouse gas emissions have fallen below its Kyoto obligations.

The American coal surplus is in turn exported to Europe, where the cheap American coal displaces natural gas in European power generation. As a consequence of this (and of other factors), massive numbers of European gas-fired power plants, some of them brand new, have been mothballed.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Tue Mar 25th, 2014 at 11:44:01 AM EST
Also a lot of European gas plants are being mothballed because of wind and solar.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Mar 26th, 2014 at 05:25:27 PM EST
[ Parent ]
Are you suggesting that, instead of a crash program to import American gas (which is known to be unfeasible), it would be better to launch a crash program to build more wind and solar (which is proven to reduce gas dependence?)

We can rely on the EU to avoid that idea at all costs.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Mar 27th, 2014 at 06:59:13 AM EST
[ Parent ]
Just read the introduction of this annual report
Installed power capacity on the Spanish peninsula closed 2013 at 102,281 MW (556 MW greater than 2012). The greatest increase was recorded by solar thermal (15% or 300 MW) and solar photovoltaic (3.3% or 140 MW). Other technologies have not experienced power variations or have been insignificant.

Producible hydroelectric stood at 32,205 GWh, 16% higher than the all-time average and 2.5 times greater than that registered in 2012. Hydroelectric reserves for the complete set of reservoirs ended 2013 with a fill level close to 52% of its total capacity, compared to 38% last year.

Regarding the balance in the generation mix , the high rainfall recorded in 2013 has resulted in a significant growth in hydroelectric generation over the previous year (+75.8% in hydroelectric under ordinary regime). Also, renewable generation included in the special regime grew 14.2% compared to 2012. In contrast, significant decreases were recorded in production from combined cycle (-34.2%), coal-fired (-27.3%) and nuclear (-8.3%) power stations.



A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 27th, 2014 at 08:05:04 AM EST
[ Parent ]
(Checking the table via the link) Wow, I missed when Spain turned into a net electricity exporter! This in spite of the Rahoy government killing the feed-in law.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu Mar 27th, 2014 at 08:29:21 AM EST
[ Parent ]
Rajoy is going to kill the economy trying to rescue the utilities from their overinvestment in combined-cycle gas power plants.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 27th, 2014 at 10:08:55 AM EST
[ Parent ]
25,353 MW producing 25,409 GWh, that's indeed a capacity factor of 11.4%...

By the way, is the special-regime "non-renewable thermal" in the tables cogeneration?

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

by DoDo on Fri Mar 28th, 2014 at 07:00:08 PM EST
[ Parent ]
I'd have to double check, but I do believe that Combined Cycle gets a feed in tariff.  Spain has history of bubbles and busts in electricity production based on massive price increases.  

At the start of the 20th century, the country faced a serious problem in that domestic coal was expensive, and of low quality.  With high tariff walls, that meant that electricity was costly.  So as the start of the 20th century, there was massive investment in hydroelectric.  This basically covered demand until the 1960s, when the economic miracle took hold.

At that time, Spain turned to petroleum fired plants to cover new demand. At the time petroleum was a cheap alternative to coal. Understandably, they got shellacked come the oil crisis. There had been a a number of nuclear facilities planned at the start of the 1980s, but there was local opposition.  ETA got the idea that this was an issue that they could latch on to.  And....  they killed some of the workers at the planned Lemoniz plant. The government abandoned the expansion shortly thereafter.  At this time, there was a movement towards combined cycle gas plants during the  80s and 90s.  Again, gas was a cheap alternative.  That began to come to an end.  Finally, Spain moved to develop windpower in the late 1990s. The drive to build up renewables has a lot to do with the relative energy poverty of the Iberian Peninsula.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Mar 28th, 2014 at 08:58:03 PM EST
[ Parent ]
...and after all that, austerity came and Rahoy killed the renewables boom.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Mar 29th, 2014 at 05:29:51 AM EST
[ Parent ]
Spanish coal mining ceased to be profitable in the 1960s. Apart from the low quality of the coal, the problem was the low capital investment (the emphasis on labour over machinery). The coal mining oligarchs were bailed out and Spain has been subsidizing its coal for 50 years. This became a problem when the European Coal and Steel Community treaty lapsed in 2002, making coal subsidies illegal under EU law.

Investment in hydroelectric continued into the 1960s because dams are big civil engineering projects which the Spanish oligarchy likes. Franco liked to have himself filmed for propaganda inaugurating dams. His speeches about "pertinacious drought" became a running joke.

Spain built some nuclear around 1970 but all the nuclear plants now in operation were built in the 1980s. It now has seven 1Gw complexes due to be phased out in the 2020s to 2030s. There is a nuclear moratorium since 1984 meaning no new plants.

A number of combined-cycle gas plants were completed after 2000, with extremely optimistic projections on future demand growth. The Spanish government liberalised the electricity market and instituted a baroque pricing system which includes massive subsidies to producers, which have become larger and larger as demand has lagged projections and combined-cycle plants have become money losers.

The need to protect the electric utility oligarchy and rescue them for their overinvestment in gas plants is behind Rajoy's killing of renewable energy in Spain.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Mar 30th, 2014 at 06:01:42 AM EST
[ Parent ]
All of the capacity factors for the peninsular system (I'm being lazy and used end-of-the-year capacity figures because there were only minimal changes; except for solar thermoelectric, where I used the end-of-year figure minus half of the annual increase):
  • large hydro: 22.0%
  • nuclear: 81.8%
  • coal: 40.8%
  • combined cycle gas: 11.4%
  • small hydro: 39.4%
  • wind: 27.1%
  • solar photovoltaic: 20.5%
  • solar thermoelectric: ~24.3%
  • biomass: 58.4%
  • "non-renewable thermal" (apparent cogeneration): 51.3%

Lots of interesting figures:
  • Even with the big increase vs. last year, water scarcity seems to weigh on large hydro.
  • Of the thermal plants, it seems biomass is the one where baseload provision is the most significant alongside scheduled variable load (which usually requires load factors around 40%).
  • Both wind (which is all on-shore) and PV have impressive capacity factors. The latter is twice that in Germany, and only a fifth (5 percentage points) short of what Desertec expected in Africa.
  • Solar thermal's capacity factor is not much above that of PV although as far as I know, installations are more concentrated on the best spots in southern Spain.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Mar 29th, 2014 at 05:55:58 AM EST
[ Parent ]
According to the report, cogeneration does not include "non-renewable thermal" nor fuel-gas.

This page describes the "special regime" as

Las instalaciones de producción de energía eléctrica en régimen especial deberán tener potencia instalada igual o inferior a 50 MW y estar en alguno de estos grupos:

a) Instalaciones que utilicen cogeneración u otras formas de producción de energía eléctrica asociadas a la electricidad, con un rendimiento energético elevado.

b) Instalaciones que utilicen energías renovables no consumibles, biomasa, biocombustibles, etc.

c) Instalaciones que utilicen residuos urbanos u otros residuos.

d) Instalaciones de tratamiento y reducción de residuos agrícolas, ganaderos y servicios.

Electical power production facilities in the special regime must have a nominal power no greater than 50 MW and be in one of the following groups:

a) Facilities using cogeneration or other forms of production of high-yield electrical power.

b) Facilities using nonconsumable [?] renewable energies such as biomass, biofuels, etc.

c) Facilities using urban or other waste.

d) Facilities for the treatment and reduction of waste from agriculture, anumal husbandry or services.



A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Mar 30th, 2014 at 06:13:18 AM EST
[ Parent ]
"energías renovables no consumibles"

At a guess, this would be geothermal?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Mar 31st, 2014 at 11:10:22 AM EST
[ Parent ]
I'm guessing small (less than 50MW) solar thermal might fall in this category, too?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 31st, 2014 at 12:24:43 PM EST
[ Parent ]
cogeneration does not include "non-renewable thermal" nor fuel-gas

The "non-renewable thermal" category in the table is a sub-category of "Special regime", and I was wondering whether it was identical to cogeneration. From the 2007 law in via your link, it's not identical because facilities using waste energy are included, too ("Instalaciones que incluyan una central que utilice energías residuales procedentes de cualquier instalación, máquina o proceso industrial cuya finalidad no sea la producción de energía eléctrica y/o mecánica").

b) Facilities using nonconsumable [?] renewable energies such as biomass, biofuels, etc.

I think it's an enumeration rather than "such as". Indeed checking the 2007 law, "nonconsumable" covers wind, solar, geothermal and small hydro.

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

by DoDo on Wed Apr 2nd, 2014 at 06:19:05 AM EST
[ Parent ]
Europe Seen Paying Twice as Much to Replace Russian Gas
Europe's natural gas prices would have to double to lure enough cargoes from the global market to replace Russian supplies, adding to the challenges of decreasing the region's dependence on its neighbor.

Benchmark U.K. prices would need to rise 128 percent to attract liquefied natural gas if Europe had to replace all its Russian fuel for two summer months, according to Energy Aspects Ltd. in London. LNG, shipped by tanker from as far away as Australia, would be the main alternative to the regional pipelines filled by Russia.

by das monde on Fri Mar 28th, 2014 at 08:57:45 AM EST
[ Parent ]
The US's next step in becoming a third-world country: Promote extractive industries, export the product for the benefit of the 1%, internalize the costs to the detriment of the 99%.
by rifek on Tue Mar 25th, 2014 at 10:18:55 PM EST
For a considerable part of its history, the US was the worlds leading oil exporter. Seemed to work out pretty well.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Mar 26th, 2014 at 04:49:42 PM EST
[ Parent ]
Because in addition to exporting, we fueled our own expanding economy with a resulting competitive advantage over energy-importing countries.  1973 was the end of that advantage, and it's been downhill ever since.
by rifek on Wed Mar 26th, 2014 at 06:59:59 PM EST
[ Parent ]
Before 1973, oil already traded on the international market. This means that US firms had to pay just as much as foreign buyers. Hence, being an oil exporter did not give the US a competitive advantage, just like Sweden being an iron ore exporter does not give our steel mills any advantage.

Except, in both cases, that the industry creates know-how. But that is true after the US became an oil importer as well.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Mar 27th, 2014 at 07:11:25 AM EST
[ Parent ]
The argument is that with the US being a net exporter and domestic oil production being cartelised, the US oil industry was a price-setter, not a price-taker. That ended when peak oil in the contiguous US states was reached in the early 1970s. But you know all this, you're in ASPO.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 27th, 2014 at 07:47:56 AM EST
[ Parent ]
Sure, but it was a price-setter for everyone, not just for US consumers.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Mar 27th, 2014 at 08:33:39 AM EST
[ Parent ]
That is like saying that the US Navy does not provide the US a privileged position in the international trade system because the US keeps the sea lanes open for everyone, not just US-flagged vessels.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 28th, 2014 at 06:42:51 PM EST
[ Parent ]
Hard to see how American firms profit from having to pay for keeping the SLOC's open, while say German or Swedish or Danish firms are freeriders.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Mar 29th, 2014 at 09:18:19 AM EST
[ Parent ]
The trade system has rules. The Americans are the ones making the lion's share of those rules, because they are the guy with the gun. And of course they make them such that tribute flows to America.

One of the most important of those rules is "the US can run a perpetual foreign deficit." That's a quite amazing privilege, and one afforded to nobody else in the American trade bloc.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Mar 29th, 2014 at 04:38:57 PM EST
[ Parent ]
The American dominance of the global trade system does not have its roots in the US role as an oil exporter, but rather the US role as an economic and military powerhouse.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Mar 29th, 2014 at 05:10:45 PM EST
[ Parent ]
Jake talked about the US Navy (and not Texaco) keeking the sea lanes open. The analogy is that just like keeping the lanes open is a benefit to the power that keeps them open, setting prices as an oil exporter also has a benefit for the domestic industry.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Mar 30th, 2014 at 06:15:29 AM EST
[ Parent ]
Starvid, I don't understand if all oil use (US) had to be purchased on the international market. Were there no direct sales from producers to customers in the US? If not, how are US auto fuel prices so decoupled from EU and others?

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Mar 27th, 2014 at 07:48:44 AM EST
[ Parent ]
Look, if oil prices were to fall below the world market price in the US, arbitrageurs would quickly remove that difference, barring infrastructure limits.  

The difference in auto fuel prices between the US and Europe is all about taxes. If we didn't tax gas in Europe, it would be as cheap as in the US.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Mar 27th, 2014 at 08:35:39 AM EST
[ Parent ]
How do you explain the spread between WTI and Brent?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 27th, 2014 at 09:15:52 AM EST
[ Parent ]
Infrastructure limitations. Keystone XL will eliminate them.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Mar 27th, 2014 at 09:28:06 AM EST
[ Parent ]
since two years, infrastructure limitations were circumvented by vastly increased use of tar sand trains (includes fracked hydrocarbons)... and the number is still increasing strongly.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Mar 27th, 2014 at 09:56:09 AM EST
[ Parent ]
Without the trains, the divergence would be even greater. It's no coincidence that the divergence materialized at the same time as the shale oil boom.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Mar 27th, 2014 at 10:53:35 AM EST
[ Parent ]
You mean financial arbitrage is not the only force at play? I'm SHOCKED, I tell you, SHOCKED

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Mar 30th, 2014 at 06:19:05 AM EST
[ Parent ]
However:

  1. External costs were never considered, and are only now truly coming to light. Environmental costs are proving to be truly devastating.

  2. With external costs not considered, we had a century and a half of unsustainable development, a costly misdirection for civilization. One example, the complete illegal dismantling of the Los Angeles public transport system in favor of the internal combustion engine.

  3. Fossil fuels delayed a push toward sustainability that had already begun in the late 1800s. By the 1930s, in the US alone, there were already millions (6?) of water pumping windmills, and over 30,000 windmills to produce electricity in the mid-west. Killed by the Rural Electrification Administration.

  4. We are only now beginning to see the costly results of this misdirection.

  5. So actually, hasn't worked out so well after all, if the long view means a healthy sustainable civilization.


"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu Mar 27th, 2014 at 05:54:36 AM EST
[ Parent ]
Europe Doesn't Need America's Fracked Gas » Dean Baker, CounterPunch
If the goal is to reduce demand for Russian natural gas, the most cost-effective way is to do much more of what Germany and, to a lesser extent, the rest of the EU is already doing: promote conservation and mass transit and further subsidize the cost of installing solar and wind energy. That might not sound as hard-nosed as drilling everywhere, polluting groundwater and exposing people to the dangers of transporting a highly explosive fuel, but it is the solution that makes the most economic sense.
by das monde on Thu Mar 27th, 2014 at 11:23:19 AM EST
Not counting that 'Schland (Germany) is turning it's back on renewables big time... well, actually, just the government. Dinosaurs.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Fri Mar 28th, 2014 at 03:49:07 AM EST
[ Parent ]
And they probably count BER and Stuttgart 3000 as investment in mass transit.
by gk (gk (gk quattro due due sette @gmail.com)) on Fri Mar 28th, 2014 at 03:50:09 AM EST
[ Parent ]
Well, quite frankly, the single most cost-efficient step is probably to flip the switch from "off" to "on" in the German nuclear fleet. That's more than 8000 MW just sitting on the sidelines.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Mar 28th, 2014 at 06:12:20 PM EST
[ Parent ]
Um, that will replace neither heating nor peak power... And in fact, one of the stations still running will now be closed early for lack of profitability.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Mar 28th, 2014 at 06:53:11 PM EST
[ Parent ]
Cheaper and more abundant electricity should ease fuel switching away from gas. Remember, unlike oil or electricity, gas is not a neccesity but a choice.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Mar 29th, 2014 at 09:15:42 AM EST
[ Parent ]
It's not cheaper and you'd need something else other than coal to switch away to.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Mar 29th, 2014 at 03:26:42 PM EST
[ Parent ]
Restarting already built and payed offed nukes is very cheap. They are expensive to build, but cheap to run. A lot like wind.

Pretty much anything you can do with gas, you can do with electricity as well. The exception is the kind of petrochemical industry where the alternative to gas is oil.

But heating? No problem. 20 years ago, most free-standing houses around had electrical heating. You might consider that a little wasteful, and it was, but we had the power and it was clean, so why not? With the current higher power prices that doesn't make sense any longer, so now most of those houses have switched either to district heating (in cities), modern advanced wood stoves, or most interestingly, geothermal heat-pumps. You put one kWh of electricity in and get 3-5 kWh of heat back. That's more efficient than gas heating, even if the electricity was generated in a gas-fired power plant. Which it obviously don't need to be when you have 8 GW of nuclear power standing idle...

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sat Mar 29th, 2014 at 05:08:59 PM EST
[ Parent ]
Restarting already built and payed offed nukes is very cheap.

Again, running maintenance-heavy old nukes in Germany is not that cheap, as shown by the announced early closure of Grafenrheinfeld for lack of profitability. Not to mention the cost of retrofitting closed nukes for new safety regulations.

Pretty much anything you can do with gas, you can do with electricity as well.

Do you want to generate load-proportional electricity with electricity?... As for heating, re-starting old nukes tomorrow won't result in the instant conversion of home heating equipment. If we talk about the long term, electric heating might be part of a long-term solution, but the example of France shows that this brings its own problems (I think two winters ago a cold spell led to a surge of demand above 100 GW, forcing France to import even with nukes running full-throttle, leading to network problems in Germany which were predictably blamed on wind).

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

by DoDo on Wed Apr 2nd, 2014 at 06:28:53 AM EST
[ Parent ]
Coal society news:

Australia's richest person, mining heiress Gina Rinehart, secured a $US694 million loan from American taxpayers..

'Thanks for buying back a worthless pile of turd': Twitter spat breaks out between warring billionaires Nat Rothschild and Aga Bakrie over coal firm split

by das monde on Fri Mar 28th, 2014 at 08:06:35 AM EST


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