Sorry for the delay everyone. I hope you had a great New Years and welcome to 2011, only two more years of the Obama regime, at least hopefully. Anyways, back to the explanation of America’s Energy Future.
If you don’t know already America is planning on using more electricity in the future. As the electric car grows in popularity because of the ever increasing cost of gasoline, and we use more and more electrically powerful devices (For instance those HD TVs we love so much completely wipe out all the electrical savings you might have gotten if you had retrofitted your house with double pain windows, better insulation, and ultra good weather stripping, yes they use that much electricity). America’s rabid want for electricity is only going to continue to grow as long as electricity stays cheap, which it will because we’ll force it to be that way because we make laws that force it to be that way.
So electricity usage will only go up over time, and alternative energy sources aren’t going to save the day, so who is? Where are we going to get all of that new electricity. Well for the most part the answer is Coal, Nuclear, and Natural Gas and that is because those options are cheap. Each of them costs about the same amount of investment capital per megawatt production and each of the fuel sources is massively abundant domestically. You know in some areas to “mine” coal they simply drive trains up to mountains, blow the mountain up and let the rocks fall down into the train cars and then drive the train away. We have literally mountains of coal, which coupled with fairly lax health and safety regulations and state granted subsidies to the coal mining corporations, it is very cheap to mine coal. Natural Gas collection is a rapidly growing business here in the U.S. and it also is proving to be fairly cheap to harvest. So cheap in fact that it’s production has effectively helped to stall the nuclear power industry’s regrowth.
That and the poor economy. You see most people figure, well if I can’t get rid of the smog spewing, acid rain causing, radioactivity spreading coal power plants with alternative energy sources, at least I’ll be able to do it with nuclear power right? The answer is only if the economy supports large credit loans AND we can wait around for several years while the plants are built. As a nuclear engineer I have to own up to the sad fact that it takes a long time and a lot of money to build a nuclear power plant, 5-8 years in fact and somewhere around $6 Billion. The current state of the economy is very anti-credit right now, too many people defaulting on large loans like mortgages. Now try and get a bank to give you a $6 billion loan. Yeah, figured it would be pretty hard. Couple that (Boy I sure do like using that phrase don’t I) with the fact that, as I stated in Part 1, Electricity Companies don’t have that much money. In regulated environments the utilities can’t pass the cost of building new power plants on to the consumer until the plant is actually completed. Meaning that for 5-8 years a utility that is building a nuclear plant has to suck it up and pay out the money from it’s 12% profit. The largest utility in the country that already runs nuclear power plants only makes $13 billion every year, and that’s not profit, that’s total. The sad sad truth is that without loans you can’t build a nuclear plant and right now no one wants to give anyone a loan.
Now as the economy improves the picture will get brighter. More utilities will invest in nuclear and more plants will be built, but if you do the time math then you can see that we’re going to have to get more power from somewhere during those 10 years before the new plants come online and the solution to that problem is, you guessed it, coal and gas. Coal and gas plants are cheap to build, cheap to run, and the price of the stuff you’re burning is cheap. So as the energy needs of the country grow over the next 30 years we will be meeting the new demand with nuclear in the long run and coal and gas in the short run, and at the end of the day, in 30 years, roughly half our electricity in the country will be from Coal, 20-30% will be from Nuclear, and the lions share of the rest of the 20-30% will be from Natural Gas, which is basically what we have right now.
That is unless one or more of the following things happen:
1) We stop all subsidies and regulations on the utilities and enforce anti trust laws on the utilities to ensure competition. (This will drive prices for electricity high enough that the average homeowner will actually want to spend the money to do something about it, and it will give the utilities the money they need to invest in new technology)
2) A breakthrough is made in an alternative energy solution that is very cheap, very efficient, and is marketed correctly to the average American.
3) The Federal Government decides that electricity is important enough that the United States should have a comprehensive plan to produce it in the future.
Personally I unfortunately don’t see any of that happening, so we’ll be stuck breathing coal smog. Hey at least we’re not in China….or New Jersey.
I can definitely say that natural gas collection in on the rise. At work we are selling the tools for this like crazy to places like Canada and Mexico. I was wondering what your thought on Methane Ice as a more abundant natural gas is (or at least more energetic than the levels of fossil fuels that we have now). I have heard some wild claims about the stuff but I haven’t really had the time to look into their validity.
Also I agree that we haven’t even tapped other coal deposits on the planet. Under Siberia there are crazy amount of coal, it just costs to much to get to. Should coal start to run dry other places it would still be cheaper to get coal from there than use these alternative sources.