MIT e i 1 Towards a Clean Energy Future Fracturing Some Energy Fairy Tales Melanie Kenderdine MIT Energy Initiative ID: 613918
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MIT Energy Initiative
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Towards a Clean Energy Future: Fracturing Some Energy Fairy Tales
Melanie Kenderdine MIT Energy Initiative NESCAUM/Endicott House August 17, 2011Slide2
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The Sky Really is Falling: Some Hard TruthsSlide3
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EIA forecasts a 30% global increase in CO
2
emissions in next two decades
60% of the CO
2
emissions in 2010 will be from 6 countries: the US, Japan, Russia, India, Germany and China
49% of this increase will be from China alone
68% of this increase will be from China, India, the US, and the Middle East
Climate Change Challenge: Global CO
2
Emissions*, 2010/2030
*million metric tons EIA 2009 IAEOSlide4
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Without Policy
With Policy
Analysis of Climate Policy Targets Under Uncertainty, Prinn, et al 2009
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It’s later – and more serious -- than we think Slide5
E.S. Figure 1. America’s electricity comes from old powerplants1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s
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Annual per Capita Electricity Consumption
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“The world will need to consume four times
as much energy by 2100 to raise the
standard of living in developing nations to that of those in
developed nations.”Slide6
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Challenge: Global Energy Consumption 2030
Source: Lawrence Livermore National Laboratory, John Ziagos
680 quads/yr
.
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US Energy Supply Since 1850
?
Can We Cut Transition Time by 2/3rds?
Wood
Coal
Oil
GasSlide8
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Spinning Straw into Gold (maybe)Slide9
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Gas
Coal
Electric sector
CO2 Mitigation with Carbon PriceSlide10
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Beware the Long-term Impacts of Policy Decisions on Energy Infrastructure/Mix
Use of Petroleum/Natural Gas in Power Generation Hotly Debated Post-OPEC Oil Embargo
Debate has Chilling Effect on New Gas Plant Construction
US Congress, 1975-1977
Congress Outlaws Natural Gas for Power Generation
Spurs Construction of Coal-Fired Power Plants
Washington DC, 1978
Congress Repeals Fuel Use Act, Paving Way for New Gas Generation
Washington, DC, 1987
Embargo + Fuel Use Act + TMI = New Market Share for Coal Plants
Kenderdine Market Analysis, 2010
De-regulation of Natural Gas, Wave of New Technologies Spurs US Gas Production
1978-1990
In 2007, roughly 27% of all CO
2
emissions from the power sector came from coal plants built between 1975 and 1987.Slide11
Uprising Against the Ethanol Mandate
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Federal Reserve Chairman Alan Greenspan Declares Impending Natural Gas Crisis
Fox News, June 23, 2003
ExxonMobil and Qatar Petroleum sign agreement for LNG supply
Pipeline & Gas Journal, November 1, 2003
“I strongly support developing new LNG capacity in the United States.”
President Bush, July, 2004 election interview
Exxon to Buy XTO for $31 Billion in Bet on U.S. Gas
Bloomberg, December 14, 2009
Beware of the “Herd Mentality”
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Exxon says N. America gas production has peaked
Reuters, June 21, 2005
Huge natural gas field 'discovered' in Texas
Major energy firms seeing benefit in developing domestic sources
WorldNetDaily
, June 21, 2005
Up, Up and Away: Shale Gas Production Takes Off
Oil and Gas Investor, June 15 2008
U.S. Shale Gas Plays Affecting Global LNG Market
WSJ,
November 3, 2009Slide12
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Coal
Pet.
NGCC
NG
other
Nuc.HydroOther Renew
All energy73.6
13.44211.4
91.8
36.3
40
48.7
Power Generation Technologies, Capacity Factors, 2007
% Nameplate Capacity vs. %
G
eneration , 2009Slide13
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TX
LA
MS
AR
OK
NM
AZ
CA
NV
OR
WA
ID
MT
WY
ND
SD
MN
IA
WI
IL
MO
TN
AL
FL
GA
SC
NC
VA
WV
OH
MI
IN
PA
MD
DE
NJ
NY
CT
RI
MA
ME
NH
KY
Scale: 100,000,000 MWh
MWh coal generation, heat rate <10,000
MWh coal generation for pre-1987 plants with >10,000 heat rate
Existing NGCC capacity operating at 85% capacity factor minus 2008 actual MWh generation (FDNP)
Scale and Location of Fully-Dispatched NGCC Potential and Coal Generation
(
MWh
, 2008)Slide14
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Coal to Gas Fuel Substitution Benefits Vary by Region
Nationwide, coal generation displacement with surplus NGCC would:
reduce CO2 emissions from power
generation by 20%
reduce CO2 emissions nationwide by 8% reduce mercury emissions by 33% reduce NOx emissions by 32% cost roughly $16 per
ton/CO2The displacement of coal generation with NGCC generation should be pursued as the only practical option for near term, large scale CO2 emissions reductionsSlide15
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Spinning Gold into Straw: Unintended ConsequencesSlide16
Uprising Against the Ethanol Mandate
Senate Committee Ups Ethanol Mandate to 8 Billion Gallons by 2012
AAHSTO Journal, June 1, 2005
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Beware the Unintended Consequences of Mandates
Gov. Schwarzenegger Praises Federal Grant to Help in Building 15 Ethanol Fueling Stations in California
Governor’s Press Release, Oct 31, 2006
Ethanol industry balks at legislative mandate to boost production
Renewable Fuels Assn., Dec 08, 2009
US Congress gives final OK to huge ethanol boost
ICIS News, December 18, 2007
Ethanol's popularity wanes amid rising food prices
USA Today 5.22.08
U.S. Food Industry Calls for Ethanol Mandate Waiver
Reuters, June 6, 2008
Uprising Against the Ethanol Mandate
New York Times, July 23, 2008
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Coal
Wind
The
principal
impacts
of increased deployment of intermittent
renewable energy sources in the short term are – the displacement of NGCC generation increased utilization of operating reserves
more frequent cycling of mid-range or even base load
plants.
Gas
NGCC
Large Scale Penetration
of Intermittent
Wind in Short Term/ERCOTSlide18
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Buildings: Full
Fuel Cycle Energy/CO2
Energy Consumption
CO2 Emissions
Fuel Energy per 100 MWh of Useful Energy Site EnergySource Energy
Ton CO2 per 100 MWh of Useful Energy
Gas +10%
2.7X
+
=
Electricity + 194%
For buildings, a move to full fuel cycle efficiency (site vs. source) metrics will improve how consumers, builders, policy makers choose among energy options (especially natural gas and electricity).
E
fficiency
metrics need to be tailored to regional variations in climate and the electricity supply
mix
.Slide19
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Forgetting the Moral of the StorySlide20
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Public and public-private funding for natural gas research is down substantially even as gas takes a more prominent role.
Consideration should be given to restoring a public-private RD&D research model –
Industry-led portfolios
Multi-year funding
Federal Funding
GRI Funding
Steady over 15 years
Time limited tax credit
Gas produced under tax credit
Gas produced after tax credit
RD&D Spending
Historical Overview:
Coalbed
Methane R&DSlide21
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DOE Budget Summary, FY2011
DOE Energy R&D: FY 12 Request
(million $)
Coal 100%
Solar 39%
Bio 29%
Wind 11%Slide22
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Happily Ever After?Slide23
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New structures for $1.6 billion in energy research over the next five years
The Changing DOE Innovation Ecosystem Slide24
Uprising Against the Ethanol Mandate
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24Current DOE Organization of Energy Programs
Renewables/ Efficiency
Nuclear EnergyElectric ReliabilityOffice of ScienceFossil Energy (Coal, gas, oil)Undersecretary, Energy/Environment Undersecretary, Science Advanced Research Projects Agency - E
Secretary, US DOE
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Relationship of electricity to fuel sources?
Is there an organizational home to migrate basic science discoveries to technology solutions?
Why is efficiency in the
renewables
office?
Is there any significant relationship between vehicle, building, industrial efficiency technologies?
Where does transportation fit? What about transportation fuels?
Where would you put an energy and water program?
Which office is responsible for distributed generation?
If a fuel meets environmental specifications do we care which fuel we use?
Can we develop a comprehensive research/policy portfolio when offices are organized around fuels? Slide25
Uprising Against the Ethanol Mandate
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A Different Structure: A Portfolio Approach
Office of ScienceUndersecretary,
Science & EnergyAdvanced Research Projects Agency - E Secretary, US DOE MIT
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Office of Transportation
Office of Buildings
Office of Industrial Energy
End use model
Functional model
Office of Power
Office of Heat
Office of Fuel
Efficiency, Carbon Mgmt., Water Embedded in Each