Harry Clarke On economics, politics & other things

October 5, 2012

Robert Gordon’s technological pessimism (revised)

Filed under: energy issues,environment,macroeconomics — hc @ 11:58 am

It is mainly during the last 300 years that sustained economic gains to certain people have occurred.  For the most part these people were living in industrializing Western-style, market-based economies.  From the longer-term historical perspective of human existence over 50,000 years this sustained, broad-based economic progress has been a relatively short-lived aberration. (more…)

November 3, 2008

Algal biomass as alternative energy source

Filed under: energy issues — hc @ 10:29 pm

This is a guest post by modest, Sydney-based journalist Sir Henry Casingbroke. Sir Henry previously contributed this related post.

I am surprised how little discussion there has been about one of the most obvious and painless ways of doing something practical about emissions of CO2 into atmosphere.

The main problem lies with electricity generated by burning coal followed by internal combustion engines using petroleum products.

Three vague “solutions” have been offered, none of which is likely to eventuate in Australia: (1) electricity generation from nuclear energy (2) carbon sequestration by piping carbon dioxide underground (3) “clean-coal” technology.

First, nuclear energy has the twin political problems of siting the disposal of spent fuel. As a uranium producer we wouldn’t be in a position to export the spent fuel overseas for storage, both morally and practically – we’d have to store here. It can safely be buried deep underground but it is at a huge cost and complexity as is currently done in Sweden. Then there is siting the facility itself – because nuclear power stations use water for cooling, in Australia they would have to be located on the coast to utilise seawater. But that’s where the vast bulk of our population is. The attendant complication is that electricity generation needs to be closeish to where it is needed because of the substantial energy losses in the high-power transmission lines – thus creating an impasse – nuclear generation needs to be on the coast and near people, but people don’t want nuclear power stations anywhere near them. This is obviously in a too-hard basket politically and so we can assume that nuclear power stations aren’t going to be built here any time soon. And even if one or two were to be built, that wouldn’t make much difference to our base-load needs, coal would still have to used for the bulk of our electricity so the problem would remain.

We do have an abundance of good quality coal and it is sited just where we need it – close to industry and major population centres, and furthermore, we have developed our industry and infrastructure around it. Abandoning coal as an energy source is just not going to happen, no matter what politicians and do-gooders say.

One of the “solutions” flogged around last year was carbon sequestration, which involves rerouting the CO2 that would go out the chimney by piping it underground instead. But geology would have to play an important part in this – carbon dioxide could leak to the surface through fissures somewhere else unless there is a uniform and solid rock formation enclosing the gas securely. The consequences of such leakage would be dire as CO2 in high concentrations and under pressure it would be lethal to people and animals. The problem here is that even if this technology was to work (doubtful), the geology under the land on which the coal stations are currently situated is not congruent with that type of solid, non-porous rock that is required to seal in the pressurized gas. That is because our power stations are embedded in a geology that contains coal and shale, both notoriously porous. The best thing that can be done is reduction in soot and particles in the air through mechanical and chemical scrubbing but CO2 will keep building up in the atmosphere in an increasing rate as the economy and the population grows.

Back to first principles. The holy grail in energy is to more efficiently and cleanly transform solar energy into power. Coal is a solar battery, i.e. solar energy stored in carbon (and which returns to the atmosphere as CO2).

While you can’t eliminate the carbon dioxide as you extract energy from coal, it is possible to recycle the CO2 in a useful way to produce more energy so that you minimise the amount of CO2 emitted per kilowatt of power.

The solution in the quickest timeframe is to grow algae biomass in ponds in proximity to power stations. Fast growing algae require lots of CO2. Some species of algae produce easily harvested oil that can be turned into diesel.

It was suggested as early as the 1950s that large-scale ponds growing algae could be used to transform solar energy into usable energy.

Coal power stations near population centres are ideal places to site such ponds because they emit plenty of CO2. Algal ponds can use wastewater and wastewater nutrients plus all that CO2 to grow the algal biomass. The CO2 and solar energy combine in photosynthesis. Photosynthetic organisms such as algae and photosynthetic bacteria in waste combine to make solar energy available in useable forms such as methanol from its algal biomass and diesel fuel from its oil for internal combustion engines.

(To make biodiesel you need methanol as a reagent because the oil straight from the plant is far too viscous to be used in an internal combustion chamber. Algal bloom biomass can provide both the methanol and the oil, although methanol can be also sourced from coal and natural gas.)

By siting auxillary diesel powered power generators alongside the coal steam turbine power generators it would be possible to thus use the algal biomass fuel in situ without having to truck it anywhere else. You would also have a source of methanol from either coal or the biomass. Again, the carbon dioxide emitted by the diesel power generator plants could again be recycled.

This system can be put into effect with current technology and without having to scrap our existing power generation infrastructure.

It has the added benefit of being comparatively simple way of reducing our reliance on non-renewable petroleum based fuels, it is intelligent and practical use of solar energy, and it uses wastewater around cities that otherwise pollutes the environment. Excess biofuel diesel generated at the ponds can of course be onsold for use in transport to power trucks, buses, trains and cars.

Finally, an article by Michael Briggs of the University of New Hampshire, physics department does some maths on how much land would be needed to produce algal diesel for all US transportation needs: the figure is 39,000 sq km.

By way of comparison, land made useless by dryland salinity in Australia is currently around 54,000 sq km and growing. (Algae would grow very well in salinity affected land.)

Of course, Australia’s annual diesel fuel usage is a lot less than that of the USA – our 8 billion litres vs 530 billion litres or 1.5%. Extrapolating this means we would consequently use a lot less land for all our transport diesel needs.

Currently, algal diesel would cost about twice that of petroleum based diesel. But factor in its CO2 ameliorating factors. Remove the removal of the fuel excise on biofuels, and we have a goer here. I imagine the cost would come down in time.

July 25, 2008

Are excises on fuel too high?

Filed under: climate change,congestion,energy issues — hc @ 12:52 am

This provocative post by Gary Becker argues that the low taxes on US petrol completely internalise the external costs of petrol consumption in terms of the global warming and foreign oil dependence externalities imposed on the US.  On this basis, Australian excises on petrol – much higher than US excises – would seem to be on the high side and to go further than you would want in internalising externalities that hurt Aussies.  Thus the Rudd Government’s Green Paper decision to exempt petrol from carbon charges by rebating any carbon cost from current excises would seem justifiable.  At least it is not a priori a foolish argument.

Of course Rudd is concerned with the political costs of taxing petrol further when its cost is currently high.  Maybe this is not a dishonourable position either.

Becker points out a host of benefits of high current fuel prices in internalising congestion and other externalities.  He is right. OPEC and China are jointly doing a better job of managing congestion issues in Melbourne than the Victorian Government with their inane fixation on expensive tunnels and extra freeways.

April 11, 2008

Cross price & supply effects of oil price changes

Filed under: energy issues — hc @ 10:10 pm

I always try to emphasise to economics students the importance of (a) cross price elasticity effects on demands and (b) the supply effects of price changes. These issues are particularly important for assessing the effects of recent surging primary energy prices which are having impacts throughout the economies of both developed and newly-emerging countries.

Liquid fuel prices have risen massively over recent years. During a recent trip to Asia I learned that fuelwood and charcoal resources in developing countries are again coming under intense pressure because they can provide effective substitutes replacing the use of fuels such as charcoal and kerosene. In Africa these effects are of limited extent because in many countries there charcoal already provides 80% of fuel needs. The difficulty is this potentially renewable resource is being depleted and rising fuel prices can be expected to accelerate this trend. Fuelwood resources in developed countries are coming under increased pressure because of increased prices of competing heating fuels – even sawdust is becoming expensive. Suprisingly too those developed country agricultural lands that were diverted towards biodiversity conservation are being redirected back into agriculture because of fuel-price-induced food price rises that stem from cost effects in energy-intensive agriculture and the diversion of crops into biofuels.

I have posted on the various linkages between increased fuel prices and increased food prices. In developing countries food prices rose 25% over the past year – wheat prices rose 120%. This is bad news for communities which spend 75% or more of the household budget on food. I notice in my own household budget that food costs are playing an increasing role.

Longer-term the effects of high liquid fuel prices will stimulate new technology developments and alternative sources of energy supply. These will eventually come to moderate the effects of higher liquid fuel costs on forestry, the environment and food supplies. But short-term expect quite a lot of economic pain.

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