So Much for Peak Oil, Plug-In Hybrids, and Reliance on Foreign Dictators
February 19, 2008 |
Cross-Posted from Prometheus.
In the New York Times Kenneth Chang reports on a novel application of air capture of carbon dioxide that promises carbon neutral gasoline forever. If commercially viable the technology could prove enormously disruptive to all sorts of interests.
The idea is simple. Air would be blown over a liquid solution of potassium carbonate, which would absorb the carbon dioxide. The carbon dioxide would then be extracted and subjected to chemical reactions that would turn it into fuel: methanol, gasoline or jet fuel.
This process could transform carbon dioxide from an unwanted, climate-changing pollutant into a vast resource for renewable fuels. The closed cycle — equal amounts of carbon dioxide emitted and removed — would mean that cars, trucks and airplanes using the synthetic fuels would no longer be contributing to global warming.
Although they have not yet built a synthetic fuel factory, or even a small prototype, the scientists say it is all based on existing technology.
"Everything in the concept has been built, is operating or has a close cousin that is operating," Dr. Martin said.
The Los Alamos proposal does not violate any laws of physics, and other scientists, like George A. Olah, a Nobel Prize-winning chemist at the University of Southern California, and Klaus Lackner, a professor of geophysics at Columbia University, have independently suggested similar ideas. Dr. Martin said he and Dr. Kubic had worked out their concept in more detail than previous proposals.
There is, however, a major caveat that explains why no one has built a carbon-dioxide-to-gasoline factory: it requires a great deal of energy.
To deal with that problem, the Los Alamos scientists say they have developed a number of innovations, including a new electrochemical process for detaching the carbon dioxide after it has been absorbed into the potassium carbonate solution. The process has been tested in Dr. Kubic’s garage, in a simple apparatus that looks like mutant Tupperware.
Even with those improvements, providing the energy to produce gasoline on a commercial scale — say, 750,000 gallons a day — would require a dedicated power plant, preferably a nuclear one, the scientists say.
According to their analysis, their concept, which would cost about $5 billion to build, could produce gasoline at an operating cost of $1.40 a gallon and would turn economically viable when the price at the pump hits $4.60 a gallon, taking into account construction costs and other expenses in getting the gas to the consumer. With some additional technological advances, the break-even price would drop to $3.40 a gallon, they said.
If their economic numbers are even close to the mark then air capture is coming to a refinery near you. Are you ready?
Comments
The bottom line for me is that a carbon tax isn
By muskel on 2009 09 26
Test 1
By Shane Rathbun on 2009 08 12
Hi Payal, thanks for your work on this report as well. Excellent analysis. Yes, I noticed that the level of offsets allowed is set in absolute terms, not as a percentage of required allowances, which would make the volume of offsets allowed decline proportionately over time as the cap goes down (and would make more sense). Seems crazy to think we'd be able to find 2 billion tons of good reliable offsets today, let alone in 2040 or 2050 as you point out. Thanks for the comment.
By Jesse Jenkins on 2009 04 20
Hi Jesse,
Thanks for your insightful blog and publicizing our report. Just a minor point, but the percentage of emissions allowance that can be met by offsets steadily rises over time (see the figure).
So by 2050 offsets can equal 2/3 of emissions allowances. Realistically, this doesn't make sense, because by 2050, one would expect source countries of offsets (India, China, Brazil) to also be reducing emissions, either through international agreements of their own domestic legislation. But this is what the bill allows!
By Payal Parekh on 2009 04 20
Jesse, sorry for the late reply.
On your last point, I would phrase it a bit differently. Compromise is inevitable, but I'm not sure that has to mean "cost containment," as in the kind of cost containment that is so aggressive it undermines the cap. Remember how before everyone talked about how a cap/trade would disproportionately hurt the poor? But that argument, while not gone, is generally muted now that policy makers have gotten serious about returning most of the revenue back to consumers to alleviate price increases. Its hard to scare someone with "your electricity bill will go up 10%" if the other side can say "yea but we'll mail you a check for $800 every year, more than the difference."
You could do this to address the regional cost issue as well, distributing some of the carbon revenue to states based on their vulnerability to a carbon price. Then, just like with the poor, there's no argument of "well what if the carbon price rises to X," because then the assistance goes up as well. So I'm still holding out hope that our need for compromise will not entail an overreliance on cost containment and other gimmicks, but obviously you can only be so optimistic after Waxman-Markey.
So if we take your point that offsets and assorted garbage will make their way into the bill, does that mean we need to spend the carbon revenue on clean energy? Maybe, but I think you have to be very careful to accomplish more than nothing. The cap sets the level of carbon reduction in the capped sectors, so from a practical perspective spending carbon revenue on deploying more wind farms than the cap otherwise would have compelled will lower the carbon price and a few coal plants will burn more coal or cofire less biomass or whatever to make it up.
You could spend the money on pursuing reductions outside the cap though, like protecting international forests, clean development generally, or trying to reduce our emissions in noncapped sectors (like agriculture). And most climate bills do some of this. But if you're spending on clean tech deployment in capped sectors, you're either raising or lowering the national cost of meeting the cap, but probably not contributing extra reductions beyond the cap. And I'd be generally skeptical, outside of addressing certain market failures such as transmission capacity and information problems with efficiency, that a broad program of energy deployment would really deploy resources more efficiently than private actors investing with their own money.
I could be missing part of your plan though. How do you see your deployment program interacting with the cap itself to exceed it?
By Max Epstein on 2009 04 20
Hi CTF, thanks for the comment. In theory, I do tend to lean towards a carbon tax as a more transparent and straightforward way to set a carbon price, but like I said, a similar end goal can be accomplished through a cap and trade system with a price ceiling (or even a price floor as well), which makes it more like a carbon tax anyway. However, I'm not a fan of "revenue-neutral" carbon pricing, if by that you mean returning all of the carbon dollars to individuals or businesses through decreased taxes elsewhere or direct rebates. I think that defeats the primary purpose of the carbon tax, which is to raise significant revenues to reinvest in accelerating the transition to a clean energy economy. Given the political limits placed on carbon pricing, we are highly unlikely (I'd even say we flat out are not going) to establish a price signal on carbon that is sufficient enough to drive the transition to a clean energy economy at the pace and scale we need. Beyond that, there are many non-price-related barriers to a clean energy economy that the private sector cannot overcome, even with a better price signal on carbon. For that, we need a smart policy of targeted public investments in clean energy R&D, accelerated early stage commercialization and deployment, enabling infrastructure, education and low-cost financing to bring down capital barriers to efficiency. Almost all of those are "public goods" - i.e. their benefits are diffuse whereas the costs to any private sector actor would be concentrated and prohibitive. This is a role for public investment. Public investments built the railroads, highways, and fiber optic cables that united a transcontinental nation and enabled ever more efficient commerce. Public investments electrified rural America and irrigated the arid West. And it was public investment in technological innovation that gave birth to jet engines and commercial aviation, gas turbines and nuclear power, microchips and the Internet. Each of these smart public investments supported and catalyzed innovative American firms and businesses, spurred lasting economic growth, and served as the foundation of the nation
By Jesse Jenkins on 2009 04 17
p.s. Max: thanks for the tip about the total allowances allocated in those years. I'll dig into the bill and see what you're talking about. Sounds weird, and haven't heard anyone else talk about that yet. What do you think about my concluding point though: that cost containment is inevitable, so we'd better be (a) thinking about the best kind of cost containment and (b) designing the rest of the policy to make up for the limits on carbon pricing that cost containment entails?
By Jesse Jenkins on 2009 04 17
Max, thanks for the comment. Yes, I'm not "gaga" over the Waxman bill, that's for sure. There are still a lot of crucial details to be worked out, and what we have now is a discussion draft only, but I'm not at all excited by it. You can read more of my coverage of the bill here: http://thebreakthrough.org/blog/2009/04/new_climate_bill_proof_of_misp.shtml The bill's authors try to make a big deal out of the fact that this is an "energy and climate bill", not a cap and trade bill, relying on the slough of additional regulations and standards in the bill, like the RPS you mention. But indeed, those regulations do little really to add to the bill's robustness, or even to help spur the development and deployment of clean, cheap energy technologies. For that, the bill should focus on reinvesting the proceeds of the carbon allowance auctions into clean energy development and deployment, enabling infrastructure (like a 21st century grid) and low-cost financing options to break down capital cost barriers for energy efficiency (in that order of priority, IMO). That would truly accelerate the transition to a clean energy economy in the U.S., create jobs, strengthen our economic competitiveness, lower the ultimate cost of compliance with the carbon regulations and actually make up for the limited price signal the cap and trade system is likely to produce (given all the offsets or other cost containment provisions). Watch the House Energy Subcommittee markup of this bill closely over the next couple of weeks. If Chairman Markey goes back to the kind of bill he introduced in 2008 (iCAP), which invested billions in clean energy, we may have something worth fighting for. If not, it'll be time to start from scratch while we wait for cap and trade to run aground somewhere down the line. (Note: our comments at the blog accept limited formatting and no html. We had a problem with it earlier and have turned it off. Sorry for the less-than-ideal comment formatting. We're trying to upgrade our comments fields soon. Bear with us!).
By Jesse Jenkins on 2009 04 17
I agree that cap and trade is fundamentally flawed and I hope beyond hope that Congress can move beyond it and work toward a revenue-neutral carbon tax. The bottom line for me is that a carbon tax isn
By CTF on 2009 04 17
huh, sorry for the huge clump, I swear I typed it in with paragraph breaks...
By Max Epstein on 2009 04 17
Jesse, its refreshing to see someone in the environmental community not go gaga over the Waxman bill just because it has a Renewable Electricity Standard (which doesn't increase the carbon reduction under a cap/trade anyway, it just makes you pay more for the same amount).
I would be careful citing the Friends of the Earth report on carbon trading though. One of their recommendations is to ban banking of allowances for use in future years, which I had never heard anyone seriously suggest before. I doubt you could find an economist who wouldn't agree that would seriously increase price volatility, not decrease it. There were a few other very curious proposals in there as well.
On offsets, I don't think the right criticism is that "there's no way we can get 2 billion good ones." If, like the CDM, only X million are certified, that would still be a net plus if we could monitor/verify them. But we can't. Like the Stanford authors you mention wrote, (full study available at: http://www.ucei.berkeley.edu/PDF/seminar20090213.pdf ) there are just fundamental incentive and monitoring problems with any offset program.
Finally, a couple more gimmicks that Waxman-Markey engages in. 1) The cap actually doesn't decline for the first 8 years. I'm confused where the idea that it does comes from (though the EPA administrator is given some authority to tweak things down the line. But you never know who will be president in 2012, much less 2020. In 2004 political consensus was Democrats wouldn't win another election for a longgg time). Check out pages 360-361 in the bill text here:
http://energycommerce.house.gov/Press_111/20090331/acesa_discussiondraft.pdf
4,770 million allowances in 2012, 4873 in 2020. In the intervening years it doesn't even stay stable or anything - it bounces around between 4666 and 5391. Weird. I mean the path's a bit irrelevant because of banking, but point is way more emissions allowances (and so actual emissions) are authorized for as long as anyone's planning on still being in office.
2) The "strategic reserve" of allowances to buffer price spikes is really just an absolute price ceiling. This is because its a virtually limitless pool of allowances because it dips from every year in advance, and proportionately more from later years, when proportionately more reductions are supposed to take place already. And then its continually refilled by purchasing offsets after allowances are expended. An actual "strategic reserve" would be a great idea, but to do it responsibly you'd have to fill it with extra allowances from a price-floor in the early years, or at least borrow from years in the soon-future (within 5 years or so). Borrowing from decades in the future is just punting to the future, just like not passing anything would be.
By Max Epstein on 2009 04 17
Hopefully, the new plan under the Barack Obama administration will provide that extra cash on payday so you won't need a payday loan. The President-elect will first put the economic stimulus and job-creation package to the test. He is proposing a tax cut and a program he calls Making Work Pay. Hopefully this new strategy will be a better way to stimulate the economy. We know that the movements under the current administration seem to be hurting instead of helping the economy. Right now the need for a payday loan is increasing. Although we may not know exactly what the outcome will be, we should not shy away from trying out a new plan. There are signs that we may be coming out of the recession. All we need is something to provide that boost we urgently need.
By Payday on 2009 01 10
Let's stop all this talk about "letting the automakers go under/fail/etc". THEY HAVE ALREADY FAILED. If congress does not "bail them out" it's not congress's fault. The decisions that have been made, that brought us to this point, have already been decided by these organizations themselves. I think there is actually little fear that this will be any worse of a fallout than the banking debacle we're already dealing with so WOULDN'T THIS BE THE BEST TIME TO LET IT DIE AND BE RESTRUCTURED FROM THE GROUND UP?
By KeyboardCowboy on 2008 11 19
. . . and what are you going to do if they take your money and then don't make the cars? or if they just make really crappy electric cars that won't sell? If you can't let these companies go under now, you won't be able to do so in a few years. Are you going to spend more tax money for rebates so people will buy inferior cars from GM, Ford, and Chrysler? None of these companies have kept any of their promises to consumers or shareholders for years.
By Robert L. www.neolibertarian.com on 2008 11 19
i am happy to read your article,it is really good,just like drink oolong,i am sure i will come back to you in future,thank you very much.
By teapots on 2008 10 02
"Slap on a price for carbon and watch it work its market magic, so the logic goes."
In the long term, it will, in the short term, it won't. This line of thinking assumes far too much rationality in business and consumer behavior.
In general, if market opportunities were taken moderately efficiently, billionaire entrepreneurs wouldn't exist. Instead, we would see continuous incremental improvements in every industry, and no big groups of underserved or overserved customers, with economic gains spreaded much more evenly.
"wondering if direct investment in clean energy might do more to slow global warming. "
Of course.
If you see a problem, the answer always is to be entrepreneurial. People won't become instantaneously entrepreneurial through incentives. What's more, if you'd make the price of carbon really high, a group of people simply would give up, lay dead, clueless on how to go on, until they're given some workable advice.
By Meryn Stol on 2008 05 09