"Energy and Global Warming News for December 1st: Whales inspire new tidal energy turbine; EPA’s tiny cellulosic biofuels mandate for 2011; Seoul goes green"
The next generation of ocean tidal energy turbines could be based on humpback whale flippers, and we may have the U.S. Naval Academy to thank for that. The new design is being developed by Ensign Timothy Gruber, who is pursuing a graduate degree at MIT, with guidance from Naval Academy engineering professors. If it proves successful, the new design could give a major boost to efforts by the U.S. Department of Defense to ditch risky, out-of-date fossil fuels in favor of renewable energy.
Ocean Tidal Turbines
In contrast to ocean wave turbines, which are powered by relatively dramatic forces, tidal turbines are designed to draw power from low speed flows. On the plus side, tidal turbines are not subject to the hazards and vagaries of wave action. Given the vast tidal resources of the planet, tidal turbines could emerge as a major renewable energy source. The key is in designing high efficiency blades that can extract the most energy from slothful currents.
Drawing from foundational research, the Naval Academy researchers took their cues from Humpback whale flippers and designed a new blade with bumps along the leading edge. The addition of these protuberances has been shown to improve aerodynamic flow, and initial testing at low speeds has borne out the expectations. The researchers also note that the bumps do not appear to interfere with the blades’ efficiency when higher flow rates are introduced.
Tidal Power for Everyone
The Naval Academy blades lend themselves to the kind of large scale tidal turbines that will be needed to generate a significant portion of global energy needs. Humpback whales are just one source of inspiration; for example, a new large-scale underwater turbine based on kite dynamics is also under development. That still leaves plenty of room for micro-turbines and other small scale installations. In the future, there will be slow-speed turbines in rivers and in canals. There may also be turbines that can scavenge for energy in the waters that flow through treatment plants, factories, and other facilities.
Washington, DC, United States — In Washington, the U.S. Environmental Protection Agency finalized the 2011 percentage standards for the four fuels categories under the agency’s Renewable Fuel Standard program, known as RFS2.
In July, the EPA indicating in a draft ruling that it would specify a range of 6-25 million gallons of cellulosic ethanol, and finalized its mandated volumes at 6.6 million gallons, way, way down from the 250 million gallons of cellulosic biofuels originally envisioned for 2011 in the 2007 Energy Independence and Security Act.
The Actual Mandated Volumes
Cellulosic biofuel, 6.6 mill gal
Biomass-based diesel, 800 million gallons
Advanced biofuel (towards which which both biomass-based diesel and cellulosic biofuel volumes apply), 1.35 billion gallons
Renewable fuel, 13.95 billion gallons
Here’s the EPA’s rationale:
“We first considered whether it appears likely that the required biomass-based diesel volume of 0.8 billion gallons can be met with existing biodiesel production capacity in 2011″¦we believe that the 0.8 billion gallon standard can indeed be met”¦Of the remaining 0.15 bill gallons, up to 0.026 bill gallons would be met with the proposed volume of cellulosic biofuel. Based on our analysis as described in Section II.C, there may be sufficient volumes of other advanced biofuels, such as imported sugarcane ethanol, additional biodiesel, or renewable diesel, such that the standard for advanced biofuel could remain at the statutory level of 1.35 billion gallons.”
In short, it will be up to blenders to find between 124 and 144 million gallons of qualifying advanced biofuels from imported sugarcane ethanol, additional cellulosic biofuel production, additional biodiesel, or renewable diesel, during 2011, or the blenders can buy appropriate Renewable Information Number (RINs) credits to make up the difference.
OK – why?
The EPA is matching its mandates to production capacity. The fact that there was only 300 million gallons of biodiesel produced in the US this year is less important than larger numbers in production capacity. The mandate is expected to supply the demand that will begin to absorb that stranded capacity.
The Unsurprising EPA Pull-back
Back in July, we commented on the 25.5 million gallon potential for cellulosic biofuels that “readers may be surprised to hear that the Bell Bioenergy and Cell Energy projects are projecting up to 20.4 million gallons of production in 2011. Neither project has been much heard from of late. The Bell Bioenergy website hasn’t been updated, for example, in nearly 18 months with any project information, and Cello Energy hasn’t been heard of at all in the industry since principals of the company suffered a fraud judgment last year in connection with its investment history. At one point back in 2008, Cello was projected to supply 75 million gallons towards the 2010 mandate, and it was primarily the delay in this project that caused the cellulosic biofuel mandate to be waived down last year.”
The Good News
So where are some of the higher-profile projects in cellulosic biofuel, like INEOS Bio, AE Biofuels commercial-scale project, POET’s Project Liberty, Dynamic Fuels, Range Fuels, Enerkem, Gevo and others that are expected to come online?
Well, the Digest did a check-around, and it appears that, in general, the EPA has it right in terms of actual production in 2011, at least that projects are willing to commit to. POET’s Project Liberty is scheduled to open in early 2012, AE Biofuels and INEOS Bio are not giving specific commitments on the timing of their expansions (preferring to underpromise and overdeliver), and Iogen’s 23 Mgy project does not appear to be in position to be completed before the very end of the year (if then, depending on financing).
As for reasons why it has not come along faster, there are three factors. First, technological uncertainty. Second, the failure in the banking sector, combined with the failure of the DOE Loan Guarantee program. Third, the momentum gathering with competing biofuels.
The Coskata Perspective
“It is important to note that the EPA did not waive the total volume of advanced biofuels that need to be blended in 2011. The 240 million gallon shortfall of cellulosic biofuels was simply added onto the 1.15 billion gallons of advanced biofuels in 2011 to keep the total at 1.35 billion gallons,” said Wes Bolsen, chief marketing officer and vice president of government affairs for Coskata. “This is a major commitment from them, and a sign to obligated parties that they need to start building plants now if they want to even come close to meeting the 2015 mandate of 5.5 billion gallons of total advanced, and 21 billion gallons in 2022. The new RFS II numbers further demonstrate that the industry needs enduring government support that not only gives investors certainty in the long term market value of cellulosic biofuels, but perhaps more importantly, helps motivate investment in the short-term around the construction of commercial scale facilities,” Bolsen added.
Growth Energy’s Take
“There’s no question that the potential for cellulosic ethanol remains on track,” Growth Energy said in a prepared statement. “That is why it is so important to have real targets to give confidence that there will be a market for those who are investing in the industry. Some of the pilot projects are on the edge of delivering commercial-scale volumes of cellulosic ethanol to the market, for a price that is competitive to gasoline. But not all pilot projects are that close, and that’s in large part because the market for ethanol is capped by arbitrary regulation in the U.S. What’s preventing the growth of cellulosic ethanol in the transportation fuels market is the lack of access to the market – and without that market, we’re not drawing the necessary investment. That’s why Growth Energy is pushing our Fueling Freedom proposal, which would reform market access and let cellulosic ethanol compete with gasoline derived from foreign oil.”
The Real Winner: Brazil
At the Digest, we note along with Coskata that the EPA did not back down from their overall 1.35 billion gallon advanced biofuels mandate. But we are not sure we agree with Coskata that it is “a sign to obligated parties that they need to start building plants now if they want to even come close to meeting the 2015 mandate of 5.5 billion gallons of total advanced, and 21 billion gallons in 2022.”
We suspect that the real winner is not the US cellulosic ethanol industry, but rather first-generation Brazilian biofuels.
Catchlight Energy is theorizing that there is no way to hit the advanced biofuels standard set by the Congress in the next few years and that instead of paying the “tax penalty” for not hitting the goal, oil companies will simply buy ethanol from Brazil because it is cheaper than paying the tax. Brazilian ethanol qualifies as an advanced biofuel.
Brazilian Producers Register with EPA as Advanced Biofuels Producers
We note that, from Brazil, Cargill, Della Coletta Bioenergia, Asucar Guarani, LDC Bioenergia and four mills that are part of the Copersucar association registered in the past week with the EPA as advanced renewable fuel producers. Ethanol from Brazil is still subject to a tariff, but the tariff was devised originally as an offset to the ethanol tax credit – thereby ensuring that US taxpayer dollars were not subsidizing Brazilian ethanol production. With the ethanol tax credit in danger of a substantial cut – and we have heard figures as low as thirty cents per gallon – there may be pressure to lower the Brazilian ethanol tariff. That may clear the way for the entry of low-cost Brazilian ethanol to supply the growing volumes of advanced biofuel under the Renewable Fuel Standard.
The World Bank and the UN Development Programme (UNDP) yesterday launched a new website designed to make it easier for developing countries to access the myriad of grants, funds and loans intended to support climate change projects.
Unveiled on the sidelines of the Cancun climate change summit, the new Climate Finance Options aims to make it easier for policymakers and entrepreneurs to navigate the growing number of different financing mechanisms that have emerged as industrialised nations attempt to make good on their pledge to provide $30bn of climate financing over the next three years.
“Accessing finance from the growing number of climate funds – all with different criteria and requirements – is a complex and time-consuming business for many developing countries,” said Andrew Steer, World Bank Group special envoy for climate change, in a statement. “This website disentangles the spaghetti, providing user-friendly information that will help officials, NGOs and entrepreneurs to tap into finance with a minimum of fuss.”
The new service came as the EU negotiating team in Cancun released a report detailing how it provided ‚¬2.2bn of extra climate aid in 2010 and is on track to deliver the ‚¬7.2bn the bloc promised to provide between 2010 and 2012 as part of the fast start finance commitments made in last year’s Copenhagen Accord.
The report revealed that the total funding provided in 2010 will fall just shy of the ‚¬2.4bn that had been planned as a result of a shortfall from Italy. It also confirmed that 52 per cent of the funding was provided in the form of loans or equity investments with the remainder delivered as grants.
Artur Runge-Metzger, the head of the European Commission team in Cancun, defended the use of loans insisting that they were a more effective means of funding energy efficiency projects than grants.
“It is a revolving fund,” he said. “You insulate your house and you save the money and then the fund can be lent to someone else.”
However, some developing countries remain wary of climate funding initiatives that would require repayments and are demanding that the bulk of the money promised by industrialised nations should be provided as grants. Questions are also being asked about the extent to which the $30bn promised by industrialised nations represents additional funding or a repurposing of existing development budgets.
Despite the disappointment of COP15 in Copenhagen last year, and wary expectation for COP16 in Cancun this year, delegates at the latest G20 (Group of 20 major economies) meeting in Seoul earlier this month, reaffirmed their commitment to fighting climate change. World leaders there said they would ‘spare no effort to reach a balanced and successful outcome in Cancun’.
Had they taken note of their surroundings, they would have seen what can be achieved with a little political will and some genuine commitment to the environment. By redesigning its road layout and revamping its public transport systems, the South Korean capital is now bidding to become one of the greenest cities in the world.
It’s certainly come a long way since the 1960s and 1970s, when South Korea went through an industrial boom that took it from being the second-poorest nation in the UN to one of the richest. The sudden increase in its wealth did not come without consequences, however, and in the early 1980s people began to notice the impact that this economic growth was having on the environment.
Over the past decade South Korea, and particularly the capital city Seoul, has taken drastic steps to try to reduce the amount of pollution it creates and to curb its reliance on fossil fuels. This has involved taking small steps and attempting to re-educate a money-fixated culture. Seeing large roads and old buildings being demolished in the capital, not all South Koreans have agreed with what is happening in Seoul, but slowly its citizens are beginning to reap the benefits, as the health and economic benefits of turning their heavily polluted city into a green haven become apparent.
Fremont, California-based Solyndra has just completed its latest French solar installation to date on a warehouse roof near Toulouse, PV Tech is reporting. The huge array of more than 7,080 Solyndra panels will generate approximately 1,360 megawatt hours a year. It is the largest Solyndra system in France and one of the largest worldwide.
The 1.2 MW warehouse roof array was completed by a French Solyndra installation partner Nazca, on the roof of a warehouse owned by Port de Barcelona, one of the main commercial transport and distribution arteries in the Mediterranean area.
Back at home, Solyndra is under heavy criticism for receiving support from the Obama administration in 2009 and yet subsequently having to cut back on its employee numbers (by between 20 and 40, out of 1,000) which it announced earlier this month.
The company made sense as an investment in US green tech at the time. Solyndra manufactures a completely unique cylindrical solar panel that can convert reflected light from all angles when installed on flat white building roofs. Their competitive advantage was the great ease of installation: about as easy as just unfolding a series of card tables.
But the panels are made of thin film; copper-indium-gallium-deselinide. This new kind of solar panel material used to be cheaper than traditional silicon solar. So, like Nanosolar and other California thin film start ups, Solyndra looked like a sure green tech bet for government support. As part of the Recovery Act stimulus bill, the Obama administration offered a loan guarantee to Solyndra in 2009 – which attracted a billion in private VC funding for Solyndra – even after the Great Recession, however, the US government got in too late.
As a result of the EU signing Kyoto in 1997, requiring that they reduce carbon emissions with cap and trade starting in 2005, Spain and Germany had offered subsidies that have spurred such a run on solar that it created a glut. European innovation has outperformed US innovation. As a result, traditional solar prices have dropped so much worldwide that silicon solar is now cheaper than thin film.
Solyndra’s installation costs are lower, and the panels do not need to have roof penetration, but the panels are now more expensive than silicon solar which is now flirting with $1 a watt. When you include installation costs, they are competitive with silicon panels that are significantly more labor-intensive on the roof.
Solar power shouldn’t just be for those who can afford the upfront costs of installing a system, right? I sure don’t think so. Apparently, some folks in California and Morgan Stanley agree with me and are making it available to low-income residents of California now. Central Coast Energy Services in California, the Association of California Community Energy Services (ACCES), financial giant Morgan Stanley (to be specific, its solar energy subsidiary, Morgan Stanley Solar Solutions), and 12 energy service providers are now working together on a 10-year pilot program focused on providing free solar power to “income-qualified residents” of California.
The key objective of the pilot program is to install 600 solar photovoltaic systems on low-income multi-family dwellings in California. These systems would, of course, end up saving these residents a ton of money.
“This solar energy project is a wonderful example of innovative public-private partnerships that deliver real benefits to low-income citizens,” said Arleen Novotney, executive director of Association of California Community.
Of course, this reminds me of a similar program I wrote about just a couple months ago “” Multifamily Affordable Solar Housing (MASH). That program uses a tiny portion of the California Solar Initiative’s $3.2 billion to put solar panels on low-income homes in California (for free). Looks like a great program that I think could be extended across the U.S.
And, going a little further back in time, this new pilot program reminds me of another California project that even goes a step further. As part of the GoSolarSF initiative, San Francisco has a program in place now (at least until the middle of 2011) that hires residents of affordable housing units in San Francisco to put solar power systems on their own buildings.
These are all great initiatives bringing solar power and its many benefits to a larger portion of the population. Great to see their proliferation in California.
Having tried the softer approach last year, and failed to get an agreement at Copenhagen, this year, the US appears to be going for an all or nothing approach.
In a briefing with journalists, Todd Stern, the chief climate envoy for the US, said, “We’re either going to see progress across the range of issues or we’re not going to see much progress. We’re not going to race forward on three issues and a take a first step on other important ones. We’re going to have to get them all moving at a similar pace.”
Here’s the problem. The developing nations (including China and India) want three financial commitments from the developed nations: for help against deforestation, with (renewable energy) technology sharing and in adapting to the results of climate change.
The US is saying, only in return for these two concessions:
According the UK Guardian the US criteria is that developing nations commit to emissions cuts, and to the establishment of a verifiable system of accounting for these cuts. If these features were included in a treaty, the United States would agree to the three provisions that are important to emerging economies.
China and India are being directly targeted by this negotiating posture. President Obama offered technology transfer arrangements with both last year, prior to Copenhagen, and got results from both in movement towards an agreement at Copenhagen.
After the Obama visit and agreement on technology transfer, India agreed to 20% cuts, and China agreed to reduce greenhouse gases by 40% in advance of Copenhagen. China has since enacted cap and trade, forced utilities to buy renewable energy, revised the grid to make it renewable-friendly and turned itself into the world’s largest clean energy investment magnet, in the process bypassing the US in clean tech development. It is more than meeting its side of the bargain.
But China had previously balked at the “verifiable” aspect of cuts. That the US is holding out for this suggests that that might now be within reach.
Indeed, Michael Levi is noting that the two Indian proposals, obtained by the Associated Press, address the sticky subjects of monitoring emissions cuts and sharing environmentally friendly technologies with poor and developing nations.
“India is proposing a framework for accountability by which nations do their own reporting to U.N. climate authorities, which would then review and assess the reports. There would be no punishments for violations, suggesting targets would be voluntary rather than legally binding, but includes developing nations in the rubric of commitments.
“Industrialized countries would detail their emissions, progress and future plans in reaching emissions targets as well as how much funding they have contributed for poor nations. Developing countries would offer similar details on their emissions and targets.”
U.S. natural gas reserves increased by the most in history last year, and crude reserves also rose, as companies drilled frantically into shale rock formations with new technology, the Energy Information Administration said in an annual report on Tuesday.
U.S. net proved natural gas reserves rose 11 percent, or 28.8 trillion cubic feet (tcf), in 2009 to total 284 tcf, underscoring the dramatic impact that new gas pumped from shale rock formations is having on world energy supply.
Louisiana, whose statewide reserves grew quickest, saw its economically viable gas reserves surge by 77 percent, or 9.2 tcf, led by developments in its Haynesville Shale.
U.S. net proved crude oil reserves rose 9 percent, or 1.8 billion barrels, to 22.3 billion barrels in 2009. Texas saw its proved oil volumes rise most, by 529 million barrels, or 11 percent.
North Dakota, home of the oil-rich Bakken Shale formation, saw its reserves jump by a whopping 83 percent, or 481 million barrels.
“These increases demonstrate the possibility of an expanding role for domestic natural gas and crude oil in meeting both current and projected U.S. energy demands,” EIA researchers said in their report.
Proved reserves — which now stand at the equivalent of 12 years of gas consumption and 3.3 years of oil demand — represent energy supplies that are extensively charted out and could be tapped under current market conditions. Total recoverable reserves, however, can be far higher.
The addition of 47.6 tcf in new proved gas reserves was the sharpest on record and caps seven straight years of increases, EIA said. It was led by gas from shale rock formations, such as Haynesville, where advances in horizontal drilling and hydraulic fracturing have unlocked vast new energy potential.
Subsidies and tariffs to promote domestic ethanol production are “fiscally irresponsible and environmentally unwise” and should be ended, a bipartisan group of United States senators declared in a letter to the chamber’s leaders on Tuesday.
“Eliminating or reducing ethanol subsidies and trade barriers are important steps we can take to reduce the budget deficit, improve the environment, and lessen our reliance on imported oil,” the senators wrote to the Democratic majority leader, Senator Harry Reid, and the Republican minority leader, Senator Mitch McConnell.
The letter was circulated by Dianne Feinstein, Democrat of California, and John Kyl, Republican of Arizona. The 15 co-signers included John McCain of Arizona and Tom Coburn of Oklahoma, both Republicans; and Barbara Boxer of California and Jack Reed of Rhode Island, both Democrats.
Supporters of domestic ethanol call it a cleaner-burning fuel than gasoline that offsets oil imports from autocratic regimes abroad and creates American jobs. But the growing appetite of ethanol refiners for the American corn crop has steadily driven up the price of food worldwide, while increased demand for corn has caused an rise in fertilizer use and pesticide-intensive agriculture in the United States.
High tariffs on imported ethanol, meanwhile, artificially drive up the price of domestic ethanol, angering fiscal conservatives.
Earlier this week a coalition of advocacy groups from across the political spectrum issued their own call to end the ethanol subsidy for refiners.
Their letter, to Congressional leaders in the House and Senate, was signed by Freedomworks, the Heartland Institute and other conservative groups as well as environmental organizations like the Sierra Club and the liberal activist group MoveOn.org.
Food and livestock industry groups have made their own calls to end ethanol subsidies, arguing that the policies have led to a rise in the price of feed and basic food commodities.
Federal policies currently provide for a tariff of 54 cents a gallon on ethanol imports and a subsidy of45 cents a gallon for blending ethanol into gasoline. Federal law mandates that oil companies use 12 billion gallons of renewable fuels such as ethanol in this year, rising to 15 billion gallons by 2015. As a result, Treasury will pay out at least $31 billion to refiners over the next five years if the blending subsidy is renewed.
The ethanol mandate will rise to 36 billion gallons per year by 2022.
“We cannot afford to pay industry for following the law,” the senators wrote.
The senators also argued that the tariff on imported ethanol, which is 9 cents a gallon higher than the subsidy it was intended to offset, made the country more dependent on foreign oil and was a waste of federal funds. Ethanol from Brazil and other sugar-producing countries is cheaper than domestic corn-based ethanol, but the high tariff discourages low-cost imports.
“This lack of parity puts imported ethanol at a competitive disadvantage against imported oil,” the letter states. “Eliminating or reducing the ethanol tariff would diversify our fuel supply, replace oil imports from OPEC countries with ethanol from our allies, and expand our trade relationships with democratic states.”
Supporters of expanded domestic ethanol production sharply disputed the senators’ claims, warning that cutting off the subsidies and ending the tariff would put thousands of Americans out of work and devastate the domestic ethanol industry.
“Calling for the elimination of investment in domestic ethanol production may seem pennywise, but is extraordinarily pound foolish,” the Renewable Fuels Association, a trade association, said in a statement.
Both the ethanol blending subsidy and the tariff on imported ethanol will expire at the end of the year without Congressional action. If they are allowed to lapse, re-enacting the policies may be difficult, given the more fiscally conservative nature of the incoming Congress.
“I think once it’s dead, it’s much harder to shock it back into life,” said Nathanael Greene, director of renewable energy policy at the National Resources Defense Council.