Week of August 3

Revival of natural gas cars…DME in China…new method of carbon sequestration…MIT report on future cars…death of Geoffrey Ballard.

T. Boone Pickens continues to pontificate, and his latest nostrum involves the transportation sector, which, I should point out, is unlikely to benefit from wind power unless we go all electric or else adopt land sailors—you know, those three wheeled sail driven buggies people race on dry lake beds.

So what is the Pickens cure for high oil prices? High natural gas prices! Mr. Pickens seriously advocates the conversion of the consumer automotive fleet to operate on natural gas, claiming that this will ensure energy security and reasonable fuel prices. And surely his natural gas holdings have nothing to do with his position on the matter.

Anyone who has been following natural gas markets over the course of this decade knows that the price of natural gas has risen by multiples—not quite as much petroleum, but a lot. So much that a lot of operators of gas fired electrical plants are wondering how they will survive, and enough to devastate the American chemical industry which depends on natural gas as a feedstock. And as for natural gas enabling America to shake off the shackles of foreign energy dependency, don't count on it. Twenty-nine percent of all the conventional natural gas in the world is believed to reside in Russia, scarcely our staunchest ally, especially now that she is at war with Georgia.

And one faces the further question as to whether production of natural gas could possibly keep pace with demand should it be diverted to transportation. Here Pickens has an answer, though not necessarily one with which everyone would concur.

Pickens suggests that the segment of electrical generation industry now using natural gas should transition to wind power, freeing the gas to run cars, never mind the fact that the portion of natural gas devoted to power plants would be quite insufficient to run the nation's transportation network or even that part of it comprised of private automobiles.

Now there's no question you can run an automobile on natural gas. The technology for doing so is well proven, and probably over a million such vehicles operate throughout the world, including many vehicles belonging to government and commercial fleets here in the U.S. Indeed, natural gas is by far the most widely used alternative transportation fuel in this country—nothing else comes close.

But betting the future on the continued availability of natural gas in requisite amounts, and betting upon long term price stability are both risky for a number of reasons.

Peak Natural Gas?

Natural gas, like any other fossil fuel resource, is ultimately constrained. The existing supply won't last forever. But one finds far fewer discussions of peak natural gas than peak oil or even peak coal. Is that because there's a lot more of it?

Well there probably is, but, as it turns out, that's not really the issue, because oil and gas are really very different kinds of resources.

When geologists speak of peak oil, they are generally referring to the peak of conventional oil production. In the case of petroleum, the unconventional resources such as tar sands, oil shale, and ultra deep oil are generally left out of the discussion because they are clearly a lot more expensive to extract and demonstrably can't be produced very quickly in spite of the enormous size of the resource. At the point when we have to depend largely on unconventional oil—and that point will come sooner than many people realize—oil will get really costly, and will have to be rationed in one way or another.

Natural gas resources are something else again, however.

First of all, the unconventional resources such as shale gas, coal bed methane, tight gas, and deep gas are already being worked on a massive scale and account for a double digit percentage of the total gas produced in the world. Only two of the unconventional resources—the two biggest, as it happens—are not being exploited, namely, gas from geo-pressurized zones and methane hydrates. (See primers section of the Website for a description of each under "Fossil Fuels".)

A second anomaly involves the geographical distribution of natural gas resources and the difficulty in transporting the stuff.

The best way to get natural gas to market is to pipe it to where you want it to go. Unfortunately, only about 50% of the resources are proximate to existing pipelines. The rest of its is "stranded" in the parlance of the industry, and a lot of that stranded gas is believed to be in the Russian Federation where no additional pipeline capacity is going to be built until the government deems such construction warranted.

Russia to date has shown absolutely no disposition to open the spigot and sell off its natural gas resource as quickly as possible at discounted prices. And why would they when it makes both economic and political sense to limit production and maintain high prices? Just like the oil producers.

But to return to our discussion of natural gas transmission, unless you lay more pipe to the stranded natural gas, in which case it will no longer be stranded, the only way to get the stuff to the market is to cool it to a liquid and move it by rail or tanker ship. That's an expensive way to transport it, but there you are. In fact, it arguably makes more sense to convert the natural gas into a liquid fuel such as synthetic gasoline or DME on the spot and then ship or pipe that to its destination.

Of course liquid natural gas terminals are none too popular in the U.S. and Pickens' scheme would require a lot more of them. We'll leave you to determine the likelihood of them being built in the face of the massive NIMBY.

Right now there are huge efforts underway to extract unconventional natural gas from large and hitherto neglected shale deposits in the U.S. such as the Marcellus, Barnett, and Bakken shales. So far such production has not caused the price to drop. Will it in the future? Don't count on it.

Frankly, one of the biggest problems I see here is not the cost of extraction but the fact that natural gas is already spoken for in a number of thriving markets. The power plants using natural gas turbines cannot easily convert over to other sources of energy, Pickens' suggestions about building wind farms notwithstanding. If they can't get gas, they go bankrupt. The petroleum refiners are also heavily dependent upon natural gas which they use to produce hydrogen for hydro-treating. They absolutely have to have it, there's no reasonably priced substitute. But perhaps even more important, ammonia factories depend upon natural gas as a feedstock and most commercial fertilizer is made from ammonia. We currently have a global food crisis on our hands, and it's not being helped by the soaring prices of fertilizer which are driven in turn by increases in natural gas prices. Already progressive political elements are in a considerable tizzy over the effect of biofuel production on food prices. Start diverting natural gas into the huge North American transportation market and you may see food riots and even famines elsewhere in the world. But then maybe by serving transportation markets you could bid the price way up, even higher than it is now. There's a thought.

DME in China – Again

I recently received an announcement of a study from Research and Markets on DME in China. The study states that China will increase DME production by a factor of seven over the course of the next two years and will begin a serious effort to promote DME as a motor fuel. If this finding is correct, that's significant.

We happen to think that DME manufactured from coal might be the fuel of the future. The basic manufacturing process is relatively inexpensive, and the fuel itself has a lot of things going for it in that it is super clean burning, nontoxic, and very high in cetane. Of course, with coal there's always a problem with carbon, but given the lower cost of DME production vis a vis Fischer Tropsch or Bergius process synfuels, it might be economically feasible to put carbon sequestration in place in a DME production facility which would also probably be combined with an IGCC power plant running on hydrogen.

Which brings us to our next news item.

A New Technique for Carbon Sequestration

I earlier alluded to a recent study commissioned by Green Peace which cast doubt on the feasibility of carbon sequestration. The study pointed out correctly that as CO2 reservoirs fill with the accumulated emissions of decades of fossil fuel combustion, leaks, however small in terms of the percentage of the whole, become increasingly dangerous. One percent of 50 years of emissions, for example, represents one hell of a lot of carbon dioxide going back into the atmosphere.

In other words, you'd be distributing the emissions over time, but the amount produced on an annual basis would still be enormous, and would accumulate in the atmosphere. Since CO2 is removed from the atmosphere rather slowly today, and perhaps more slowly tomorrow as deforestation and destruction of the ocean's plankton layer proceeds, sequestration might not be much of a solution, at least by any means that has actually been tested to date.

Recently some researchers at the famous Lamont-Doherty Earth Observatory published a paper that suggests that maybe one form of carbon sequestration can actually work.

Their idea, expounded in a paper entitled "Carbon Dioxide Sequestration in Deep-Sea Basalt" is that the huge, porous basalt shield located off the U.S. Pacific Coast from Northern California to Vancouver and known as the Juan de Fuca Ridge is good place to pipe CO2 captured from industrial sites.

According to the authors, leakage would be highly unlikely due to the presence of several mechanisms which together conspire to keep the CO2 in place. First of all, the pressured CO2 is heavier than water at the depths at which it would be released and would not rise to the surface. Second, it would be apt to form a clathrate compound immediately, and would assume a solid form, further stabilizing it. Third, the basalt itself is surmounted with highly impermeable silt that would act to prevent any gas from being released. And, fourth, the CO2 would eventually form solid, highly stable carbonate compounds within the basalt reservoirs. So not much chance of anything getting out. The authors further calculate that this one formation could easily store decades worth of emissions from the nation's entire industrial base with room to spare.

The authors are quick to point out that no tests involving actual CO2 have been performed confirming their hypothesis. It seems plausible, but that's as much as we can say at present.

The process, which would require long undersea pipelines, would likely be exceedingly costly as well. Whether that cost would be deemed supportable would depend upon a larger determination regarding the future of fossil fuel powered electrical plants.

MIT Looks at the Future of the Automobile

When the nation's foremost technical and scientific university issues a book length report on the future of green personal transportation, it commands attention.

The report is entitled "On the Road in 2035" and for this sort of thing it's a page turner. As title indicates, it examines the future of the automobile some twenty-five years out and reaches some interesting conclusions, of which more momentarily.

The underlying assumption is that concerns about greenhouse gases and global climate change are the principle drivers for change in automotive design and that improvements in fuel economy will be achieved to reduce emissions, not to reduce fuel consumption per se. I happen to believe precisely the opposite, that pain at the pump is the principle driver, not high minded concerns about the future of mankind on a dying plant. My guess is that at least in the United States the global warming denialists will ultimately prevail, not because the science backs them because it doesn't, but because conservative Republicans will swiftly regain control of all branches of government, perhaps in perpetuity, and will block all climate legislation. I further believe John McCain's acknowledgement of global warming is not genuine and will not influence his conduct as President.

But back to the report. The MIT team of researchers believes that fuel consumption reductions as high as 50% are possible with only moderate increases in sticker price. They further believe that spark ignition engines will vie with compression ignition in terms of fuel economy, and that pure electric vehicles using either fuel cells or batteries will fail to find a large market. They also feel that biofuels will not play a major role in transportation, and that if alternatives assume any major market share, coal-to-liquid fuels will predominate. Finally, they think that reductions in vehicle weight and reduced air resistance will contribute significantly to improved fuel economy. The report, incidentally, is strongly US-centric and pays relatively little attention to Europe and less to the exploding automotive market in East Asia.

I happen to agree with most of the findings but I was somewhat mystified at the failure of the team to delve into some of the more interesting developments in internal combustion engine technology such as variable valve timing, Atkinson cycles, homogenous charge combustion, plasma ignition, and advances in continuously variable transmissions.

As a matter of interest, they also see a standoff occurring between plug-in hybrids and pure internal combustion engines, and between diesel and gasoline, with no clearly dominant technology emerging.

My own guess is that steeply rising fuel costs will prompt much more radical innovation than they foresee. But it won't come from incumbent auto makers. By 2035 a lot of them will be gone because rapid evolution is alien to what they do. They simply will not survive in an environment that demands it. A lot of industries have virtually gone away in the U.S. in the past including steel, consumer electronics, machine tools, and shipbuilding—industries where this nation was heavily dominant. There's nothing sacrosanct about automobiles, I'm afraid.

The Death of Geoffrey Ballard

This past week the man who launched the fuel cell craze of the nineties and the beginning of this decade passed away. He was Geoffrey Ballard, a physicist who founded Ballard Fuel Cells in Vancouver in the late eighties, and took the hydrogen PEM fuel cell out of the laboratory and into commercial production.

I never met Ballard. I tried to interview him once but he was unresponsive. I am well aware of his reputation and his accomplishments, however. Ballard and his team of researchers made exponential cost/performance improvements in PEM cells during the early nineties and succeeded in establishing them in a few very narrow niche markets. They also encouraged speculation that such devices would soon be used to power automobiles.

A look at Ballard Corporation's own faltering progress in making further improvements subsequent to 1996 should have discouraged such speculations, but such was not the case. Literally thousands of companies entered the hydrogen fuel cell business at the beginning of this decade, and proponents of the "hydrogen economy" were everywhere. I myself was only briefly among those proponents. For a listing of the principal arguments against the hydrogen economy read the primer "Why the Hydrogen Highway Never Got Built" which reflects my current views on the subject.

Still, Ballard was as consequential a research scientist as one can imagine, and his work gave tremendous stimulus to the whole field of fuel cell engineering. Without Ballard fuel cells would scarcely merit mention today. Unquestionably, he was a brilliant innovator. May he rest in peace.

republicans taking over

I don’t think you have to worry about the republicans taking over as long as morons like Lindsey Graham are running the party.

Jim Middlesworth