Electro-technology Dreams

Offshore wind turbines may or may not appear off the coast of Maryland.  The US Wind lease of over 125 square miles of ocean to build a 750 MW wind power array by 2020 would be a first for the U.S. In spite of the apparent progress (ocean surveys, turbine purchase actions), financial headwinds face Italy where US Wind's parent company, Renexia, resides. Just recovering from the aftermath of the 2008 financial crisis, Italy will face the coming worldwide recession too early.  Renexia's lack of financial transparency is not at all reassuring.

Aside from solar and wind, generating electricity on a residential scale from biomass, fuel cells, or closed-conduit hydropower include the opportunity to net-meter (that is, sell power on the grid) in Maryland.  Micro-combined heat and power (CHP) installations also qualify. Micro CHP (not to be confused with microchip) is exactly the kind of power that can be generated from a heat source such as those used to make biochar.  A start-up company called NanoConversion Technologies is coming out with a thermoelectric generator that they say beats Stirling engines, cost-wise.  The problem of capturing and using the waste heat from biochar could thereby be made a lot more feasible, since the operating temperature is near that for these devices. The components, which hold sodium, alumina, hot and cold fluids, and electro-magnetic fields, seem like they would cost considerably, so economics may prove to be the difficulty with this technology, as well.  However, they show humanitarian relief as a possible application of the device, so I may be pleasantly surprised at the price-tag.

Coal's Downturn

In some states, coal is being run out of business, but the "war on coal" hasn't reached that far yet in Maryland. We still make about half of our electricity from coal. Two coal-fired plants (1,200 MW in Montgomery and Prince Georges Counties) are expected to be retired by 2017 due to environmental regulations. In recent developments:

• Coal mining faces the prospect of tighter regulation to restore streams in order to reduce aquifer pollution. 
• Arch Coal, the most diversified coal mining company in the U.S. is about to be delisted by the NYSE. 
• Coal's dirty nature and regulations at the federal level are having major effects across the industry.
• Maryland claims to have the toughest clean air regulations on the east coast, and they just added some additional restrictions on NOx emissions, 

but there are still seven coal powered electric plants in the state.  Having the toughest air pollution restrictions on the east coast is admirable, but Baltimore still suffers from unhealthy air (a plight common to 85% of the world's population).

Yet, the nominally cleaner natural gas has its own set of problems. In the way of pollution, its greenhouse gas effect is 30 times worse, pound for pound, than CO2. It sometimes (more than we realize) gets loose on its own, like the 1 cubic mile of 1,500 psi gas being released from cracks that recently developed in a storage facility pipe under Los Angeles. As I pointed out in my last post, the prospect of less fracking (who wants to live in Oklahoma now, earthquake center of the U.S?) and the need to follow-through with plans to reduce global emissions makes investment in more gas-powered generation look pretty short-sighted. Solar and off-shore wind are looking better and better.

Fuel Switching

Nassim Nicholas Taleb's prognosis for 2016 sees commodities, rather than banks, as the locus of the next Lehman moment.  Countries and corporations whose continuance depends on stability of certain commodities are at most risk.  The U.S. economy is probably diverse enough to ride out the effects of commodity price swings, but some states will suffer more than others.  Maryland's diverse economy is among the strongest, so we don't need to be concerned that coal will continue to fall in production from its peak of 5 million below the current 2 million tons/year across 60 mines, all located in the two westernmost counties.  (John Michael Greer's Cumberland is at risk, though.)

The commodity that puts Calvert County's economy at risk is natural gas, though little is produced in Maryland. When Dominion Resources sought their approval for constructing the LNG export facility at Cove Point, our county commissioners acceded to deferring tax revenue from Dominion until the plant began to ship product.  That probably won't happen until 2018, if at all.

Initially, my doubts about the prospects of exporting natural gas were based on the high rates of depletion from fracking wells, leading to a precipitous drop in productivity.  While that alone may preclude exports a couple years from now, there are even more reasons to doubt now and they stem from economic causes.

Commodities volatility seems to favor exports from Cove Point, since fewer export facilities will likely be built in such an environment than the 18 originally envisioned.  Yet, the same volatility is causing mayhem among natural gas drillers.  As pointed out in my previous post, Chesapeake Energy, the second largest producer in the U.S., is headed for the junk pile.  Many others, whose business models were based on low-interest leverage and speculative land leases, will suffer the same fate.  With so many companies going under, the growth of fracked gas that has occurred over the past 5 years will level off and decline.  With coal being black-balled as a fuel due to its effect on the world's climate, it, too, will quickly decline in use.  This puts the onus on natural gas to fill some of the domestic demand.  Since 2000, the share of electricity produced by natural gas has risen 10%, replacing coal as the fuel.  The momentum of this fuel switching will be maintained, though farsighted power companies will opt for renewable sources instead, given the limits of natural gas reserves.

Just one-third of natural gas is used for electricity production.  The other uses are mainly for industrial and residential heating processes.  Something's got to give.  We don't have enough natural gas (especially if fracking is deemed environmentally untenable) to follow the current growth trend. Conservation will smooth our descent, but remember we also have lots of wood. It has an energy density about 1/3 of oil, but any able-bodied man with a sharp ax can get all he needs.

The Fracking Gamble

+Gail Tverberg 's theory about the deflationary spiral of oil prices (she thinks we are locked in to a price slide that will bottom out around $20/barrel) also applies to natural gas.  The fact that Chesapeake Energy (the U.S.'s second largest natural gas producer) is headed toward junk status supports this corollary.  A lot of Chesapeake's problem stems from land speculation with the intention of drilling and fracking.  These land deals were conducted with money from bright-eyed investors who never understood the economics of fracking and are now realizing how little real value most of the shale plays held.  Chesapeake's co-founder, Aubrey McClendon, seemed to know when to leave the party, as he departed the company in 2013.

He chose the name for the company out of a liking for the Chesapeake Bay area, despite the company's Oklahoma roots.  From Oklahoma, Chesapeake Energy's gas pipelines grew toward the Chesapeake Bay like a mycelium seeking humid climes to sprout its mushrooms.  After the fracking potential of the Marcellus Shale became known, the company surged further, to Pennsylvania. The pipeline assets were spun off years ago and now belong to Williams.

With the current demise of fracking due to the inability of the market to support the infrastructure and loss of investor interest, many natural gas companies will go under.  The price of natural gas should rise, however, once the markets have sloughed off the non-performing suppliers.  As coal is replaced by natural gas electricity generation, demand for gas should continue to grow.  The long-term damage to prices that Tverberg expects for oil may not apply to natural gas.

While the Chesapeake Bay region may have been the divining rod for Aubrey McClendon's vision of where Chesapeake Energy should go, it is there that he met the greatest opposition over the environmental repercussions of fracking.  Fracking has emboldened the U.S. to rescind laws against oil exporting and to build natural gas export facilities, such as the Cove Point Plant expansion underway a few miles from my home.  Aside from the public outcry against fracking, there are geological limits, climate considerations for which we are now internationally accountable, and the impending economic recession wrought largely by the same commercial ennui that brought about the energy price slump.  Fracking may never come back.  Cove Point may never export any liquefied natural gas.

The Future of Mass Transportation

One of Maryland author John Michael Greer's oddities (other than being an archdruid)
is that his preferred mode of intercity transportation is passenger rail.  In fact, he chose his adopted town, Cumberland, MD, partly because of its proximity to a working train station. The motivation for he and his wife's move to this Allegheny rust-belt arts-centric village was that we would soon enough become a more regionally-scaled economy, reverting from a global or national scale.  Underlying that conviction was the view that oil would not be abundantly cheap in the near future, driven by the occurrence of global peak oil. Rail travel would then become relatively more important.

It looks like JMG's move is now going to be validated, as we've arrived at peak oil. Although oil prices are much lower than in recent history, the price drop is driven by falling demand, which, along with a host of other commodities, shows that the world is entering a global recession. The fact that the Federal Reserve raised interest rates this month reduces debt-driven growth, so demand for oil, et. al., will continue to fall. Rather than a result principally of geological shortages of oil, which may have brought about a gradual decline in production, peak oil is instead being driven by incongruous financial behavior wherein increasing debt is no longer sustainable.  The interest rate rise is a signal that there will be a significant drop in worldwide oil production.  That is a synopsis of the view of Gail Tverberg, who, along with JMG spoke to us at the Age of Limits Conference in May 2013.  Ms. Tverberg points out that if there were a low-cost substitute for oil that we could deploy today, the fallout from peak oil could be ameliorated, but that appears to be years away.  Not even solar power appears to be cost-competitive enough yet to avert a premature end of the oil era.

If you haven't ridden a train or bus lately, it would be a good idea to start getting used to it.  Once airlines lose favor due to their excessive costs, shorter trips on these more economical vehicles will become the norm. It might surprise you to find out that trains still serve much of the country.  Besides AMTRAK, Maryland has its own MARC train system.  Unfortunately, due to the impending recession, I don't think Elon Musk will get the chance to speed trains up by turning them into air tube pods.

Don't Wait for the Lifeboats

The Brown- and Green-tech scenarios David Holmgren postulates are only half of the picture.  When you factor in the effects of a rapid decline in worldwide oil production, the scenarios become "Lifeboats" and "Earth Steward," respectively, with Earth Steward being the lesser of four evils. Murphy's law favors the greater of the four evils, especially as we find oil production to be past peak with no viable substitute.  Assuming oil production will decline more rapidly than our ability to power down in a controlled fashion gives us the Lifeboat scenario, where civilization fragments and humans die off by half.  If you think it couldn't get any worse than that, read Revelation or Dante's Inferno or a Cormac McCarthy novel; our capacity for suffering seems almost unlimited.  Yet, it is so troubling to plan for the Lifeboat scenario, much less act on that premise, that we are loath to even consider it.

Holmgren's solution to our predicament is to accelerate the collapse of the capitalistic system that now bewitches us in order to fail into a Green-tech future before a climate tipping point occurs, e.g. melting of arctic tundra permafrost, which would void the possibility of either of the more benign outcomes. Holmgren is Australian, which is far enough removed from our locale to make you think that it might be different for us here.  Maryland author and permaculturist John Michael Greer doesn't think so. His projections for our future are as frightening as Lifeboats.  His solution also mimics Holmgren's - Collapse Now and Avoid the Rush.

Maryland is due to update their own projections of local sea-level rise in early 2016.  I doubt they will include many of the positive feedback effects and climate tipping points that may arise in the years ahead.  This hot December is even making me wonder if we've already encountered one. While we are on high enough ground to not require a real lifeboat, it's a good thing we have access to the Navy base nearby in case we need a metaphorical one.

Climate Refugees

Did you notice the environmental subtext in the latest Star Wars movie contrasting the despoiled, brown desert world with the overgrown blue-green planet where freedom reigns?  It strains credulity to think that life could be sustained as depicted on the desert planet, while the blue-green planet offers a multitude of niches where creatures could luxuriate.  Earth is a mix of these two worlds, but with the desert gaining more ground every year.

Included in the desert are many cityscapes that are denuded of flora, paved over, serving as commons for swarms of seemingly unconcerned occupants.  This has been our direction since the time of Nimrod and the industrial revolution magnified the devastation many times over.  David Holmgren classes the two types of environment as results of brown- and green-tech.

Maryland is on course for more land "development" in the years ahead, but forest canopy cover is required to be a minimum of 40%, meaning we won't end up like the desert planet.  Other parts of our country will, namely the half west of the Mississippi (excluding the Northwest).  We and our neighboring states are sure to be the recipient of millions of internally displaced people (IDP's) coming from those deserted areas.  We will have to show them how to live a green-tech existence, e.g. forest gardening, if they are not to desertify our end of the continent, as well.

Masses of Arabs huddled around an occasional jihadist are yearning to be free of the civil wars in their desert homelands.  How able, not to mention willing, are we to rescue these refugees when there will soon be millions of our own in similar plights?  How about we settle any of these desert-acclimated migrants in the hot, dry West?  Perhaps they can show some Americans how to deal with the desert and when ours can't stand the heat any longer, maybe we will have learned how to accommodate refugees well enough to settle westerners in the florid east.