Sources of Electricity Generation in America

Sources of Electricity Generation in America

Very interesting breakdown that helps one understand the dominance of various sources of energy for electricity consumption.

-Examine the importance of coal in the Appalachian region and how much of our nation’s emissions come from this region. It seems to me that we should clearly be supporting natural gas development in this region, not deriding it through “anti-fracking” campaigns.  This is a time when natural gas is one of the only sources of energy that can truly compete against dirt-cheap coal energy.  We should be developing our natural gas infrastructure exponentially.  As quoted from Jeff McMahon in the Forbes article, “4 Reasons Coal Declines Even as Natural Gas Prices Rise: EIA:”

“While price remains the primary factor in the short-term race between gas and coal, four other factors help gas displace coal in the long term, according to EIA:

  1. Efficiency: The efficiency of power generation from gas means it competes with coal even when it costs 1.5 times as much. “When the ratio of natural gas prices to coal prices is approximately 1.5 or lower, a typical natural gas-fired combined-cycle plant has lower generating costs than a typical coal-fired plant.”
  2. Competitiveness: “For new builds, natural gas and renewables generally are more competitive than coal.”
  3. Flexibility: “In general, combined-cycle (gas) units are considered to be more flexible than steam turbines. They can ramp their output up and down more easily, and their start-up and shutdown procedures involve less time and expense.”
  4. Regulation: “The interaction of fuel prices and environmental rules is a key factor in coal plant retirements. AEO2013 assumes that all coal-fired plants have flue gas desulfurization equipment (scrubbers) or dry sorbent injection systems installed by 2016 to comply with the Mercury and Air Toxics Standards. Higher coal prices, lower wholesale electricity prices (often tied to natural gas prices), and reduced use may make investment in such equipment uneconomical in some cases, resulting in plant retirements.””

http://www.forbes.com/sites/jeffmcmahon/2013/04/23/4-reasons-coal-declines-even-as-natural-gas-prices-rise-eia/

-Take a look at the importance of nuclear power in creating clean energy for our nation

-The West Coast has an impressive amount of clean energy sources and Washington, Idaho, Oregon, and Maine in particular, seem to have developed an incredible amount of hydroelectric energy generation

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The Progression of Fossil Fuels

Although I am clearly a supporter of energy efficiency and cleaner, more renewable energy sources, I do not automatically dismiss something because it supports the oil industry.  Petroleum has allowed us to fuel mass transportation and create plastics, reagents, kerosene, asphalt, and even pharmaceutical products.  It’s cheap abundance has improved our society tremendously, even allowing us to venture out into the solar system and beyond.  What if you even found out that the use of petroleum reduces energy usage in many facets of life?  From a publication entitled “Applications and societal benefits of plastics,” authors Anthony Andrady and Mike Neal write: “Using plastics in transportation, building and even packaging applications invariably results in very significant savings in materials and in fossil fuel energy. For example, a comprehensive study published in January 2005, GUA (Gesellschaft für umfassende Analysen GmbH) established that packaging beverages in PET versus glass or metal reduces energy consumption by 52% (83.2 GJ yr−1 in Europe alone). Greenhouse gas emissions were reduced 55% on the same basis (4.3 million tonnes CO2 eq yr−1 in Europe).” (http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2873019/)  These are the things we don’t take into consideration when we only assess the direct economic and environmental damage caused by various resources, such as examining gas prices and looking at carbon emissions levels.

In terms of cost efficiency, coal has always been cheaper than oil.  In 1949, the price of one short ton (2,000 lbs.) of anthracite (high-grade) coal, adjusted for inflation, was $61.38. (http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0709)  The price of one short ton of oil was over $200. (http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp)  However, oil has a distinct advantage in that it has higher energy density and allows for more efficient conversion as a liquid rather than a solid requiring a furnace.  Think of the difficulty of having automobiles and airplanes run on furnaces full of coal!  1 pound of oil has 2.4 x 10^7 Joules of energy.  Multiply by 2204 to receive an answer of 52.896 billion Joules per ton of oil.  One ton of coal carries 3.2 x 10^10 Joules of energy, or 32 billion Joules.  One ton of oil carries about 65% more energy than one ton of coal.  The point is that energy efficiency is the inevitable progression of society.  As society becomes more fast-paced, we require more efficient sources of energy to fuel our everyday lives.  Unfortunately, we have other factors such as limited resources and climate change that create diversions for the path of our energy progression.

When we look at the scope of oil production, reality is simply reality.  The fact of the matter is that petroleum is now expensive.  With oil prices bordering around $4 per gallon in America, and even higher elsewhere in the world, it is inevitable that we will be switching to new sources of energy.  Even throughout the early 20th century, oil prices hovered around a real price of $20 per barrel.  It was only a matter of time before we ran out of easy oil and prices rose substantially.  We hear news all the time that oil companies are breaking ground on a staggering number of new reserves across the world.  However, it is clear that oil will never be cheap again.  Anyone in the oil industry will tell you that the easy oil is now gone.  This is why when we think of the concept of “Peak Petroleum,” it doesn’t really matter how much is in the ground.  The only thing that matters is the point at which the price of oil becomes higher than other sources.  When other forms of energy become more cost effective, oil demand will decrease well before world oil reserves are fully depleted.  All that is required to come to this conclusion is to look at the trend in prices.

As of July 15, 2013, the average price for one gallon of gasoline was $3.61.  The average price for one “gallon” equivalent of natural gas was $2.11.  Natural gas is in a ripe position to take over the market due to this very fact.  The prices clearly exhibit why it is advantageous for people to convert to CNG vehicles.

The reasons you don’t see a highway full of natural gas-powered vehicles are seemingly absurd, but are common problems we see in upcoming industries that face an uphill battle against well-established industries.  First of all, the demand is currently suppressed because the transportation and storage infrastructure for natural gas is not widespread.  At the same time, there is an excess supply of natural gas.  Because the supply is greater than demand, there is an excess supply of natural gas on the market that can’t be sold profitably.  Thus, many businesses in the energy industry are actually switching back to oil!

Personally, I believe this is a temporary issue.  At the moment, natural gas has proven to be extremely profitable when power plants are converted to natural gas-electric power and electric cars can simply charge their batteries at the pump.  This saves tremendous amounts of energy because we don’t have to replace every gas station with stored natural gas.  As quoted from Siemens: “In 2035, according to the IEA, natural gas will account for 25 percent of the global energy supply; the current figure is 20 percent. In fact, some experts are predicting that gas might surpass coal as early as 2030.”