Sgt Hulka Uncut

uncensored opinion and technical information on stuff

Archive for category Economics

What the short term future might be

Dec 10

Posted by Sgt Hulka in Climate Change, Economics, Good Ideas | 1 Comment

This is a reply to a comment from yesterday, as I wanted to add a couple of figures to explain my position better.

Thanks for continuing to participate, Otto.

My answer is that we will supply current demand load of electricity as we phase out coal rapidly by taking no options off the table in every country, and having a frank and open exchange of ideas about the overall cost/benefit of our electric power generation means. The discussion will be different in each country, but I will give you an example based on Australia to make my point.

But let’s not even talk about the means by which we will generate power, until we first talk about how we efficiently use the power we are generating now, and take whatever incentivised approaches we can to shift people and processes to more energy efficient operation. I am talking about boring old insulation, HVAC balancing, upgrades of lines, transformers, switch and “smart grid” technologies. As we begin that, we then should begin the design, siting and planning for the transitional power plants, and more speculative R&D on the long term power plants.

For example, I believe here in Australia, we should we should have the hard argument about going from 80% coal (the first figure) to something more like 44% gas (we have bucket loads of it), 25% nuclear, and a mix of other renewables (20%) over the next 10 years, as shown in the second figure. This is an aggressive target, and as I said should be combined with the even more aggressive push in energy efficiency.

2010:

Screen shot 2009-12-10 at 2.30.07 PM

2020:

Screen shot 2009-12-10 at 2.30.19 PM

That is why I think the major thrust of your argument is technically incorrect when you say there is only one thing that can do it, and you are far oversimplifying the argument if you say that all the other sources of energies combined cannot meet our current and future demand requirements. You should have some evidence to support this argument in the USA, if you conclude that only nuclear energy can address your situation.

And note the fatalism in your argument that “we cannot wait until the renewable technologies mature”. Mate, these technologies ARE mature. They work, they have achieved thermodynamic efficiencies that equal or exceed that of the internal combustion engine, and if I switched your place over to a couple of them, you would be surprised how reliable they would run your place, even when you need to keep the big screen tv in the fallout shelter, the weapons store and the underground water purification system running at the same time. However, if what you mean by mature is that they need to cost what the magic dirt does, then that isn’t going to happen. And why should it really? Coal is the false economy, and renewables technologies will never “mature” by falling in cost until there is guaranteed installed base to justify economy of scale in manufacturing, installation and maintenance. By believing only in one answer, you are participating in killing off the others.

While I don’t buy your argument about only nuclear being the solution, your solution could be partly correct. I think that we will have to operate with a significant potion of our electricity supplied by nuclear all over the world, wherever it makes the most appropriate sense. But only for about the lifetime of one plant, which might be closer to 20 years. Then we phase out nuclear and all the other bridging fuels that we can.

In the next five years worldwide, we need to be spending lots of time, money and resources in designing and implementing the energy efficiency improvements that we know already exist (anyone smell a big jobs stimulus package here?) right when we need it, and also possibly in doing some regulation of personal behaviour (maybe even some draconian regulation), but I will open up a heated argument on at a later date.

Join me in the future?

Dec 9

Posted by Sgt Hulka in Climate Change, Economics, Good Ideas | 1 Comment

I want to discuss a couple of questions I have had that have been bubbling away in my head for a long while. So, in no particular order, what are we going to do about coal?, and what are going to happen with jobs in a future low carbon emitting world?

See, you can get most anyone who will accept the scientific method to buy into the need to take action on anthropogenic climate change. And to fix the problem, I don’t see any way burning coal for fuel is going to work going forward, due to the huge rate of emissions in relation to the energy that can be produced. But when you talk about eliminating the vast majority of all the jobs in the industries of coal mining, shipping, and burning for fuel, you are talking about a lot of disruption. I see these as key issues that are locked together in the short and long-term. In achieving a low carbon future, we also need to attempt to limit damage to people’s current livelihood, while we at the same time entice them to a better one.

We need to have an answer for where we are going to employ people who leave the coal industry, and what sort of short-term safety net we will put in place to assist those effected, if Australia as a nation decide to make big cuts in our emissions rapidly, and at least start to satisfy the goals of the scientist greenies on the left. Because crap though they may be as a political party, their goals are closer to what are required than anyone on the right of politics, I suggest.

For the sake of argument, let’s assume we are to make cuts in CO2 emissions that are deeper than currently proposed, and more rapidly than currently proposed in the draft legislation in front of the Australian Parliament. We can save all the planet for our grandkids, great, but right now, the issue is jobs, and who is going to gain them and who is required to lose them in the near to mid-term.

Let’s first look at the losers. As I have said, there are going to have to be massive amounts of job losses in coal mining, some in shipping, and almost all those currently in coal burning. Below are some numbers from the Australian Bureau of Statistics from August 2009:

• 40,800 persons in Coal Mining (full and part time)
• 6,600 persons in Coal and Petroleum Product Manufacturing (full and part time)
• 31,400 persons in exploration and mining support services
• 10,706,500 persons employed in today (full and part time)

Also, just for later discussion:

• 2,200 persons in electricity, gas and water services
• 55,200 persons in electricity supply

If every one of the 47,400 persons in the coal mining and coal products manufacturing industries were to lose their job, we would need to re-employ 0.44% of working population in Australia. That is a conservative number, since we know that not all of them would lose their jobs, and some of them are actually employed in petroleum refineries and not coking coal plants. But that is the direct severity of how bad the problem could be. How many people involved in shipping coal to the ports and power plants, and shipping coal overseas, would lose their jobs? I am not sure, as the statistics I have are not broken down well enough. But lets say half of the 31,400 persons in the exploration and mining support services area were put out of work. This is probably a conservative estimate, since coal doesn’t make up half of the mass of the minerals that are explored for and mined in Australia.

In the power generation area, I don’t think that there is a good argument that any people will be put out of work, because the electricity demand will continue (and in fact grow), and the persons required to operate and maintain power generation facilities should be roughly similar, regardless of the type. But let’s assume that we do lose 80% of those jobs too, based on the coal usage fraction of our electricity generation. Yes, we are that addicted to burning the magic dirt.

So all up, we have just under 1% of the working population will lose their jobs. And if you told me that we were going to suffer an additional 1% unemployment in a year, or six months or even a month, it would be a challenge, but not an insurmountable one, for either our society or our economy. And the reality is, we couldn’t lose all those coal plants and replace them with anything else in less than about 10-15 years. We are talking about 80% of our generating capacity, after all.

Then, remember, all those people need not be out of work long, and they don’t all have to go take low paying jobs at McDonalds either. To replace 80% of our generating capacity is going to create so many jobs, it will make the stimulus effort last year look like a bake at a school fete. By my estimate, those jobs will include:

• R&D work for renewables that can be installed in the next 10-20 years;
• Energy efficiency equipment and materials manufacturing;
• Energy efficiency designers and installers;
• Designers of new plants and equipment to deliver power over the mid term (nuclear, gas, geothermal, wind, solar, etc.);
• Manufacturers of equipment to generate power; and
• Construction supervision and labour to build all this new infrastructure.

Of the above, I suggest that all but the semi-skilled installers of the energy efficiency equipment and some of the construction labourers will have jobs that are equally as valuable as the mining, trucking and shipping jobs that will be lost. However, having a job is not all, and we need to consider the disruption of the migrations that may be caused from places like Musswellbrook, NSW. It should be government policy to provide a safety net in the form of re-training, relocation and direct unemployment relief to workers displaced by the conversion away from coal burning.

That is, provided we don’t have to face any arguments based on the reasoning that just because a grandfather was a coal miner and a father was a coal miner, that somehow the son has some sort of mystical right to be a coal miner. There are many communities that have been built around the industries of salt, whale oil, steam engines and asbestos that are all relegated to history, and coal is going there too, whether you like it or not.

But let’s not dwell on the negative. The low carbon future has so many positives going for it, it should be a no-brainer to get society to go along, even those now working in coal. So, I challenge any real people out there working in the coal industry to call me on my facts if they are wrong, test my logic, and help refute or improve my argument. Because it is an argument I feel we must win, and now. And also recognise this: While people may face some uncertainty and disruption over the move away from coal, there are some legal persons (companies) that have a vested interest in using that disruption to real persons in an effort to thwart any attempts to reduce the activity of those companies, even though the change is in the best interest of all the real persons. We should expect that, as those legal persons are sociopathic by design.

NASA scientist embraces the Rapture?

Dec 4

Posted by Sgt Hulka in Climate Change, Economics, International, Politics, Science | Comments off

James Hansen, a top NASA scientist who helped bring attention to the dangers of global warming more than 20 years ago, wants Copenhagen to fail.

That’s right, and from the dude who is like the godfather of climate change science.

His major complaint seems to be that the Danish plan reduces emissions over 40 years, which he says is too long, and we will be in a disaster by then. I tend to agree. However, we will also need to recover from that disaster, and having a long term cut in CO2 emissions will also be part of that solution, in real or in spirit. Let me explain.

James is saying that any cap and trade type ETS, won’t work fast enough and that a straight energy tax is what is required immediately. If I ran the show worldwide, I would agree with him, do that immediately, and stifle all debate as strong as required to maintain my control on power. And believe me, you’d have a shit fight on your hands, taking on all business that use energy worldwide, and the energy intense ones most of all. But I would do it, because I believe fundamentally that James is right, and we are either at or just past the point where we must act to stop anthropogenic climate change. However, I am not ready to go join the rapturists, and unless we find a way to reduce emissions soon, and possibly reverse feedforward loops in climate change, we might not be ok long term, like as a species.

Assuming we have not passed the point of no return with regard to overall average warming, then the major advanced economies (in terms of lower energy intensity, or $/GDP, but high overall emissions) are going to have to cap our emissions and reduce them over time. No question about it. And as they do that, industries in those countries will have to either directly reduce their emissions themselves, or get someone else to do for them, through the only flexible compliance method specifically identified in the Kyoto Agreement, an ETS. They are proven to work, use economic drivers and markets for efficiency, and can be on the whole fair and egalitarian (just as Wall Street can be).

So I hope Copenhagen succeeds, although I don’t like the track record of the politicians anymore than James does. Copenhagen would be a real coup if we could also get some countries to sign up to firm commitments on the real issue, so we can quit worrying about how much CO2 we put out in total.

See, while the spirit of the long-term solution will retain emissions reduction, the functional design of it should be an energy intensity tax (or a mix of energy intensity limits for equipment, facilities, industries, etc.), much like vehicle efficiency standards, which improved the fleet so much in the USA beginning in 1978. Pity they didn’t keep that up. So, what we really need long term is for everyone in the advanced and the developing world to sign up to energy intensity targets. Otherwise they will continue to install more high-CO2 emitting, low energy efficiency crap, like they are doing now. It may surprise you to know that coal fired electricity production not only has the largest installed base (50% of production) but that it is also the fastest growing rate of new plants that are being installed (primarily in China, Russia, India). So, as James is saying, we better get cracking on that, or we will also be in need of a zombie plan even if the big emitters now all achieve fantastic reductions in CO2 emissions.

So what after CPRS?

Dec 2

Posted by Sgt Hulka in Climate Change, Economics, Politics | 2 Comments

Before a brief note on the pending death of the emissions trading system (ETS) in the Australian Senate, and the implications of that as well as the change in leadership of the opposition in Australia, I first want to provide an update on the climate change fraud post. It is noted today that the head of the Climate Research Unit at the University of East Anglia has stepped down over the issue of the leaked emails. Good, but let’s hope the authorities continue to pursue any issue of lawbreaking as a result of that affair to the full extent of the law. For those on my side, it does not help our scientific case to take action if we harbour liars, cheats or those who encourage others to such behaviour. This is a particularly pertinent point when debate needs to begin again now toward another election in Australia that will depend largely on winning an argument in the public sphere with a Coalition that is now led by its vocal minority which believes that anthropogenic climate change does not exist.

Despite her hard work, I see the failure to pass a CPRS largely as a result of the failure by the Minister For Climate Change (Penny Wong) in being able to advocate and articulate the issue to the public at large, who would then pressure their elected representatives to take action on the issue, followed by the Greens failure in making the perfect the enemy of the good, as I have discussed in detail previously.

I also see it as a failure on the part of people like me, who have taken the effort over the last 15 years to understand the issue of anthropogenic climate change, decide a position on it, and know some of the solutions, but have failed to lobby hard enough at every opportunity to achieve the goal. This record of my thoughts was begun recently as one means to try to address that failure, in an educational manner. So, I encourage those on any side of the issue to ask me any specific questions and debate me on the merits of your arguments and solutions (if you see a problem).

While we have the science and popular opinion (hearts) on our side, what we need to begin effective action is the minds of the population. We need to detail specifically what an ETS or a simplified carbon tax will cost, and who will pay for it. Because this change isn’t free, and by choice or by coercion, eventually we are going to have to require everyone, as individuals or through their companies, to pay up if we are to address anthropogenic climate change. It is a challenge on the scale of the largest human society has faced, but one I am convinced we could meet, if we so choose. It reminds me of the words of John F Kennedy in 1962.

“We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard.”

Almost 50 years later, there are hopefully enough of us left to look past our own short term self interest and do something hard.

Carving Up the Cap

Nov 26

Posted by Sgt Hulka in Climate Change, Economics, International, Politics | 1 Comment

The discussions are shaping up for Copenhagen, as more countries like the US now are floating actual proposals for cutting their emissions, while other countries like China seem to want to refuse to do anything until those that got us to this point commit to paying their fair share. The arguments seem to be shaping up along these lines: Developing countries want the developed countries to “pay” for the reductions required in CO2 by drastically reducing their emissions from a baseline, as they have been the ones that have benefited from the failure to control emissions in the past. The developed countries are more worried about the rates of increase in CO2 emissions from the developing countries, partly because if the developed nations were to agree to reduce their emissions greatly, those emissions reductions would simply be “eaten up” in a few years by growing emissions from the developed world. The answer to getting any sort of binding agreements in Copenhagen (or later) seems to be in finding the metric to balance out both the developed world and the developing world in doing both.

If we are going to get to where we think we need to go, we need to do something along the lines of limiting average temperature rise to 2C, which translates into something like limiting CO2 concentration in the atmosphere to about 350 parts per million by volume (ppmv). To achieve this balance is going to mean a cap of emissions worldwide, which will be reduced over time to get where we need to go. It is not as simple as just dividing up the contributions to this cap by what contributions are now, which means developed economies get more since they started making the emissions first. We also can’t just divvy up the contributions to the emissions cap on a per capita basis, since that would mean that developed nations would have to reduce their emissions (and lifestyles) to those equivalent to the developing countries. But a balance can be struck, and possibly in ways that may not drive us all into economic ruin.

The US, most of Europe, Japan, Australia and other developed countries should be willing to make very challenging cuts to their 1990 base emissions, and in exchange India, China and the rest of the developing world should be willing to accept limits in their rates of emissions increases, or a limit in their per capita emissions which is lower than that in the developed world. Negotiations should focus on the definitions of developed/developing, and the size of cuts and per capita limits required worldwide to reach the goal. Negotiations can start with the voluntary unilateral cuts and commitments to go farther if others do their bit, as Australia has proposed to do. This is why I have advocated having our CPRS completed before the Copenhagen meeting.

If an international agreement is reached, we can then get on with achieving it, and despite the costs, it won’t have to ruin economies worldwide. I will post in the near future on why I don’t believe the costs will be significant in the overall scheme of things, even if the miniscule chance of the overwhelming scientific opionion proves to be incorrect!

If you won’t kick in your $1.05 . . .

Nov 25

Posted by Sgt Hulka in Climate Change, Economics, Science | 2 Comments

. . . or $2 or $5, who will? That’s the number that and independent analysis by the Citi Group has found that a ton of coal would increase as a result of the CPRS being introduced. Now, 5 bucks a ton sounds pretty severe when you look at it on a cost/ton basis. My current look at energy prices suggest that this average rise of $5 would raise the average price for a ton of coal from $45 to $50. That’s an 11% increase! If I was selling coal, I would want to make a huge issue out of that sort of rise that I would undoubtedly have to pass on to my customers. But, let’s look a little closer at how that cost rise plays out on the basis of the measure used throughout the energy industry in dollars per kilowatt hour ($/kWh). The results may surprise you a little. When converted to cost per amount of power delivered, some sources of energy break down like this:

Coal: $0.007/kWh
Gas: $.0.03/ kWh
Oil: $0.05/ kWh
Solar: $0.38/ kWh
Nuclear: $0.006/ kWh

So, if you look at it on this basis, that 5 bucks a ton only converts to only 1 tenth of 1 cent a kilowatt hour (or a cost of $0.008/kwh). That means what is an absolutely screaming deal on a cost basis becomes only an incredibly good deal, or only a third the price of gas rather than a quarter. Damn, I think we better subsidise those lost profits right away rather than risk any coal companies cutting jobs, huh?

Finally, when examining the numbers, the other thing to keep in mind is that it is not all about cost, is it? Because if it were, we wouldn’t be worried about making coal more expensive in relation to say, solar power. Instead, we would be working on plans to locate a lot more nuclear plants much closer to the users of the power in Sydney, Melbourne, Brisbane and Perth, wouldn’t we? I’m sure we are all on board with that, right?

Right?

Is this thing even on?