Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

24 March 2012

Coal: Faust’s Fate Come to Life

[For an update on relevant recent developments, click here.]

Most educated Westerners know the tale of Faust. He was an aging, infirm scholar who regretted a life spent in barren intellectual pursuits. When he bewailed his impending death, Satan appeared in human form and made him an offer. Sell me your immortal soul, Satan bargained, and I will restore your youth and give you the love of your desire.

Faust agreed, and Satan kept part of his bargain. He gave Faust the appearance and strength of youth and made the young lady Faust desired love him.

But Faust soon realized that his new “youth” was just an illusion. He still had the mind and conscience of an old man. He regretted deceiving the young lady, whose innocence and purity had evoked in him genuine love. In the end, Faust despaired, repented and gave his soul up to Satan without achieving the object of his desire.

The Devil’s deal was a “Faustian bargain.” Today that term connotes any deal with obvious (and unrealistic) immediate attractions but disastrous long-term consequences.

And so it is with coal. The fuel’s abundance creates a strong temptation toward profligate use. China, Germany, and our own nation have enough coal in the ground to power our respective societies for a century or more. But the consequences of doing that would be selling the purity of our atmosphere and the health of ourselves and our planet to Satan, with disaster even in the medium term.

When you travel by aircraft, at an altitude of 30,000 to 40,000 feet, you are flying at the upper limits of the Earth’s atmosphere. That’s why you need an oxygen mask to survive if the cabin pressurization fails. Your altitude is eight or fewer miles; the Earth’s radius is over 4,000 miles. Although you are flying above the part of the atmosphere that supports life, you are only one five-hundredth of a radius above the Earth’s surface.

So our life-giving atmosphere is thinner than a single sheet of paper placed on the surface of an average living-room globe. It is a tiny layer of oxygen, nitrogen and other gases, held in place by the force of gravity. Yet it supports all life on Earth, including ours. Blow it away, and every living thing (including, eventually, even oxygen-breathing deep-sea creatures) would perish.

So why would we want to fill this thin, fragile, and indescribably precious biological reserve with carbon dioxide (which we exhale but cannot breathe), sulfur dioxide (which forms sulfuric acid—acid rain—when combined with water, including in our lungs), mercury pollution (which poisons our lakes, seas and fish), and particulate smog that darkens our cities and causes epidemics of asthma and other respiratory diseases? It’s a puzzlement.

Even birds, with their tiny brains, know enough not to foul their nests. But we human persist in fouling our paper-thin atmosphere, which supports all life on Earth. We do it day after day, with pollutants that destroy our quality of life, impair our health, and ultimately will cook our planet and inundate our coastal lowlands.

It’s not as if we don’t have warning aplenty what coal can do. We now have serious reports by serious scientists who spend their whole lives studying these things. And we have historical records and stories galore of Dickensian England, with its sickening London “fogs.”

We now know that they weren’t “fogs” at all, but dense coal smogs from space heating and primitive industry. They miraculously disappeared in the twentieth century, when Londoners stopped heating their homes and businesses with coal.

As if other examples were needed, we now have Hong Kong. This once-lovely tropical financial center is now a modern version of Dickensian London, with its own version of London fogs. This time the coal pollution comes not from home heating (which the warm climate makes unnecessary) but from the massive coal-fired factories of South China’s industrial heartland in nearby Guangzhou and the Pearl River Delta.

Some people (not scientists, but politicians and untrained reporters) appear to think this massive, regional pollution comes from buses, trucks and cars in the city itself. But this view belies historical memory, arithmetic and common sense. There is no way that mere buses and other vehicles in a city of Hong Kong’s small physical size could create the massive and sustained pollution of the city, Kowloon and the surrounding open sea, which miraculously disappears over Chinese New Year holidays when the regional factories shut down.

China has many other examples of our dark future if we, as a species, continue down this Faustian path. Economically, Shanghai, Beijing and other big Chinese cities are among our planet’s most dynamic places to live. Environmentally, they are among the very worst. On a bad day, people suffer headaches, asthma and difficulty breathing. Those old enough wistfully recall the fresh smell of spring or fall in their youth. Those too young to remember can only suffer the asthma of immature immune systems exposed to extraordinary environmental stress, and look forward with dread to a lifetime of more of the same.

Like the promise of Faust’s youth, the “promise” of coal is really an illusion. For despite its abundance, coal, too, will run out. And when it does it will leave us with a blasted, sooty, polluted planet, with an entirely different continental map and an entirely different climate. About a third of the plant and animal species that exist today will be gone, entirely extinguished by our own improvident hand. And generations of humans living in polluted cities will have no idea what it is to smell the freshness of a sunny spring day or the bracing clarity of a crisp fall evening, or to see the Milky Way at night.

The fate of Faust is an apt analogy, because a world powered by coal will resemble nothing so much as Hell.

It’s not as if we have to suffer that fate to preserve our civilization. We have abundant alternatives for energy, right now, today. We have the wind and sun, which produce no pollution at all and will never run out. We have nuclear power, which produces some radioactive waste but no air pollution, and which can be made much, much safer with a little imagination and capital investment. And we have natural gas, which produces no dangerous pollutants at all, and only half the greenhouse gases of burning coal. And as it turns out, all of these alternatives are cheaper than coal (1, 2 and 3), even in the short run, especially if you count coal’s gargantuan but hard-to-calculate external costs (1 and 2).

At this point in our history, our species faces only two problems that could seriously threaten our survival. One is the proliferation of nuclear weapons. That issue is still in doubt. But we appear to have developed a strong and growing international consensus that nuclear weapons are not for offensive use, just for defensive, passive non-use as deterrents. If that consensus holds, our species just might muddle through.

Perhaps because its effects are less dramatic than nuclear explosions and radioactive fallout, we so far have ignored the equally serious threat of coal. But our atmosphere is not getting any thicker or cleaner, our population any smaller, or our collective need for energy any less. Will we take the Faustian bargain or, foreseeing the consequences, avoid it like the Homo sapiens that we are supposed to be? That is the chief issue for energy policy today, and one of the two most important issues facing our human species.

One thing is both ironic and hopeful. Germany, which created the modern version of Faust’s legend, has already seen the light. By focusing massively on energy from the wind and sun, it is avoiding both the Faustian bargain of coal and the lesser but real risks of nuclear energy. In the process, it is perpetuating a manufacturing boom based on sound engineering and superb technical foresight. It would be a fine thing indeed if the nation that gave us the legend of Faust also showed us the solution: using our free will and human intelligence to reject the cheap temptation and take the better path.

Erratum: An earlier version of this post put the Earth’s radius as “over 8,000 miles.” That was error. The Earth’s diameter, not radius, is over 8,000 miles. I regret the error, which is corrected above, and which does not change the qualitative conclusions.

Update on the Future of Coal (3/31/12):

Given the timing of this post, readers may be wondering whether I’m some kind of insider or maybe clairvoyant.

Just three days after I published it, the Obama Administration announced a new environmental regulation for coal-fired power plants. The rule will probably keep us from building any more such plants. It may even cause some existing ones to be phased out prematurely.

No, I’m not clairvoyant. And I’m no insider, certainly not in Washington. I’m a (mostly) retired professor who’s never worked in Washington, but who still reads and thinks. And the ideas on this blog are completely my own, entirely independent of anyone else’s (except my wife’s).

It’s important for readers to know that. Everyone, including me, the President, and his environmental experts, all see the same writing on the wall.

So do the owners of and workers in the last remaining coal-fired power plant in the Seattle area. They recently agreed—without legislation, litigation or regulation—to close the plant down by 2025.

The new regulation implicitly tells why. It’s not law yet. It still has to go through a comment period, revisions, and then probably extended litigation.

But its gist is simple and fair. It doesn’t shut down or prohibit anything. It just requires coal power plants to reduce their carbon emissions to about the same level as natural-gas plants now produce. [See ¶3 under “Old King Coal”]

The coal barons know they can’t do that, at least not with anything like current technology. So they are screaming that the regulation will kill their industry.

Maybe it will. But whatever happened to so-called “clean coal”? Remember when those TV ads tried to make you think it was a real technology, not just an advertising slogan cooked up by coal’s PR hacks?

If there really were such a thing as “clean coal,” aka “carbon sequestration,” don’t you think the coal barons would be asking for federal subsidies to install it? Or at least the same loan guarantees that the new nuclear plants in the South are getting?

But they aren’t. The coal barons are leading a frontal assault on the proposed regulation because they know that “clean coal” is only a PR slogan and the subject of ongoing research. And even the research must be government-supported because it’s so iffy that no private investors will put money into it. My previous analysis explains why.

So no, I’m neither in the know nor telepathic. Nor is this a case of great minds thinking alike. It’s just common sense.

We’ve used this dirtiest of fossil fuels for far too long. We’re not just changing our climate in ways likely to devastate large numbers of our species, especially those living near low-lying coastlines. We’re also destroying the environment that we evolved in (or, if you prefer, that God gave us) with toxins and pollutants that can make us miserable and destroy our health.

So now everyone can see that the huge drop in natural-gas prices brought about by the fracking craze has given us a golden opportunity. We can dump this diabolical fuel and run our cars and power stations on natural gas while we build an infrastructure for solar, wind and safe nuclear energy. And that infrastructure will power us for hundreds of years, without poisoning our air, heating our atmosphere, or destroying our planet.

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17 March 2012

Who Should Drive Electric Cars

[Update: As of April 2013, recent price reductions for the Nissan Leaf have greatly reduced the higher capital cost of electric cars. Together with federal and state tax credits, they eliminate the price advantage of gasoline over electric cars in states like California. For analysis and figures in the context of driving on the sun, which I have contracted to do, click here.]

Overview: Electric Cars’ Current Advantages and Disadvantages
Range: A Non-Issue for Short Commutes
Higher Capital Cost: the Real Issue for Most Buyers
Why Buy an Electric Car
A Simple Test for Carbon Benefit

Faithful readers of his blog are no doubt wondering where I now stand on electric cars. My last post on the subject, over a year ago, laid out the growing choice between the Chevy Volt, Nissan Leaf and still-to-come electric Ford Focus. And my most recent posts (1, 2, and 3) suggested converting cars to natural gas.

So where do I stand on the Volt, the Leaf and the promised Focus now?

Well, I’ve been thinking and learning. Those are always dangerous things to do. Now my choice to drive electric, not to mention my choice of vehicle, seems more complex than before. So I thought readers might like to see my reasoning and maybe apply it to their own lives.

Even before starting, I should note an important fact. As I write this post (from abroad), only one arguably electric vehicle—the Chevy Volt—is actually available for test driving and purchase where I live. As an ex-scientist and ex-engineer, I simply won’t buy a car without lots of research and a test drive. So I’d be stymied in any event.

But that’s not the main reason for my hesitation. I could always visit another state and buy a car if I were really determined to have it. Read on.

Overview: Electric Cars’ Current Advantages and Disadvantages

Let’s start with the main practical reasons to buy, or not to buy, an electric vehicle. I’ve explained most of these points in other posts, so for now, let’s just go with bullet points and links:

Advantages of electric driving, compared to gasoline or diesel cars:

Personal advantages:

Lower per-mile energy cost (by about a factor of three, right now)
Much better stability and reliability of “fuel” prices
Far simpler, more elegant and more “high-tech” vehicle design
The convenience of “gassing up” nightly in your own garage
Next-to-no engine noise in idling or driving
No carbon-monoxide risk or effluent smells
Much lower maintenance expense (if battery packs prove reliable)

Societal advantages:

No direct urban pollution
Energy independence (as virtually no electricity comes from oil)
Possibly reduced indirect pollution, depending on power source
Possible reduction in greenhouse gases, depending on power source

Disadvantages of electric driving:

Personal disadvantages:

Higher initial capital cost (price of car)
Reduced range of driving between rechargings
Range more dependent on climate, terrain, driving style and habits
Fewer public stations for recharging
Effects of interior climate control on range

Societal disadvantages:

Possibly increased indirect pollution, depending on power source
Possible increase in greenhouse gases, depending on power source

Range: A Non-Issue for Short Commutes.

For people in multi-car families, reduced range is not really an issue. As long as at least one family member has a relatively short daily commute—less than 30 miles round trip for the Volt or 60 for the Leaf—either car can easily accommodate it on electricity alone. The family can use its other vehicle(s) for longer trips. (The Volt allows single drivers to make a similar accommodation; they can switch to gasoline for longer trips.)

So range is a non-issue. Consumers who drive only long range won’t buy electric cars, and those who don’t won’t notice the difference. They’ll just have to keep a sharper eye on the “fuel” gauge.

Higher Capital Cost: the Real Issue for Most Buyers

Because range is a non-issue for buyers, electric cars’ high capital cost is by far their most important personal disadvantage. The following table shows how long it would take a consumer to recover the “extra” capital cost of a Nissan Leaf or Chevy Volt, as compared to a $26,000 Toyota Prius, depending on how many miles per year he or she drives:

Time to Recover Additional Capital Investment in Nissan Leaf or Chevy Volt, as Compared to $26,000 Toyota Prius

Vehicle and Comparison PriceMiles per Year DrivenRecovery Time (Years)
Nissan Leaf $32,00010,0007
Nissan Leaf $32,00015,0004.7
Nissan Leaf $32,00020,0003.5
Nissan Leaf $32,00030,0002.3
Nissan Leaf $32,00040,0001.7
Chevy Volt $42,00010,00018.6
Chevy Volt $42,00015,00012.4
Chevy Volt $42,00020,0009.3
Chevy Volt $42,00025,0007.4

This table computes recovery times simply. It divides the relevant price difference ($6,000 for the Leaf or $16,000 for the Volt) by the difference in per-mile energy cost between gasoline and residential electricity from this table. The result is the number of miles a buyer needs to drive to recover the initial price difference in energy savings. To convert that number to years, the table divides it by the annual miles driven; the result is rounded to the nearest tenth of a year. For buyers who can get electricity at lower industrial rates (for example, in corporate fleets), the recovery times would be about 8.6/10.3 = 83% of those listed above.

Leaf buyers can recover the price difference more quickly than Volt buyers not only because their price difference is lower, but also because the Leaf can drive more miles electrically per year. The standard minimum recharging time of four hours limits daily operations to three times the single-charge range. That’s about 180 miles for the Leaf and 90 miles for the Volt. At those daily ranges, maximum annual ranges for weekday-only electric operations (250 days per year) are 45,000 miles for the Leaf and 22,500 miles for the Volt. (The Volt of course could run much farther on gasoline but would reap no fuel savings for that additional mileage.) Battery-swap schemes—exchanging a charged for a discharged battery pack in ten minutes or so—could extend the annual range of either vehicle and further reduce investment recovery times.

In normal business, investors expect to recover capital costs in two to three years, especially for rapidly depreciating assets like cars. Only the Leaf can meet that criterion (as compared to the Prius), and then only for high annual mileages, 30,000 to 40,000 per year.

Electric-car buyers will start to save money on mileage the minute they drive their cars out of the showroom. But because of their cars’ higher initial capital cost, it’s fair to say that saving money is not a good reason to buy a Leaf or Volt. Drivers for whom overall economy is a primary goal would be much better off converting their existing vehicles to natural gas, or buying a brand new natural-gas vehicle.

Why Buy an Electric Car

At the moment, saving money is not the best reason to buy an electric car. It may be some day—perhaps even some day soon—as gasoline prices continue to rise and the capital costs of electric cars fall with manufacturing experience, wider sales, and economies of scale.

But today, the main reasons for buying electric cars are less economic and more cultural.

It’s hard to prioritize these advantages because they depend in part on buyers’ personal tastes. Yet the fact that they are individual and unquantifiable makes them no less real.

I won’t try to prioritize the reasons for all drivers. Doing so would require a massive marketing or psychological survey. I will simply list them as they influence me and trust readers to re-order them according to their own personal proclivities. All these advantages are real, but different buyers will weigh them differently.

High on my list of advantages is the idea of driving the first really new kind of personal vehicle in my lifetime. Not only are electric cars much simpler and more elegant in design than vehicles based on reciprocating internal-combustion engines. They are also cleaner and much less noisy. The don’t emit carbon monoxide, they don’t foul your garage, and they don’t foul city air. Add to that the convenience of “gassing up” in your own garage with an overnight charge, and the Leaf or Volt is worth paying more for.

When you add the societal advantages, the case for electric cars becomes persuasive despite the added cost. As an American, rationalist, humanist and modernist, I absolutely despise being dependent on regimes like Saudi Arabia in my daily life. When I think about it, it makes me angrier than almost anything else, other than our bankers getting away scot free, with billions, after destroying the global economy (1 and 2). The thought that I could get on with my life, without ever again contributing (even indirectly) to Saudi Arabia or Iran is worth $5,000 to $10,000 to me all by itself.

But the other chief societal advantage of electric cars—reducing pollution and the acceleration of global warming—is contingent. It all depends on where your electricity comes from.

You can tell by reading the pie chart on your electricity bill. Unfortunately for me, where I now live in retirement, about 87% of my power comes from coal.

That grieves me deeply. Coal is by far the most environmentally damaging fuel known to industry today (1 and 2). It’s the chief culprit in raising the level of greenhouse gases. And even if you don’t believe in climate change, its effects on acid rain, mercury pollution of lakes, oceans and seas (and the fish we eat), particulate and hydrocarbon smog in and near cities and the resulting asthma epidemic are horrendous.

I’ve been traveling widely in retirement, and I see the effects of coal smog everywhere. And everywhere, every year, they get worse. So I just can’t stand the idea of driving on coal. It puts me off my feed and makes the Volt’s or Leaf’s other attractions seem like personal self-indulgence at society’s expense.

Helping destroy the planet, even to cut off the Saudis, just doesn’t seem like a good idea. So given the power sources in the place I now live, I’m no longer so so impatient to buy.

A Simple Test for Carbon Benefit

But that’s just me. People in other areas get their electricity from other sources. And they all place different values on the various personal and societal advantages of electric driving. Some may value energy independence so highly that they’re willing to ignore coal’s gargantuan environmental costs just to get away from the Saudis.

But for those who are primarily concerned with the environment, and who credit the scientists on global warming, a simple numerical test can help. Per unit of energy, coal produces about twice the effluent of greenhouse gases as does natural gas. Oil produces more than natural gas, but the two are close enough in their greenhouse effluents to consider them roughly equivalent for car-buying decisions. Hydroelectric, nuclear, wind, solar and other renewable sources of electrical power produce no greenhouse emissions at all.

So if you want to lower your carbon footprint by electric driving, here’s the inequality you have to satisfy:

1(NG) + 2(C) + 0(R) < 1(G),

where NG, C, R and G are, respectively, the amount of energy in your driving that comes from natural gas, coal, renewable or nuclear power, and gasoline.

If you divide by G to get proportions and eliminate the zero term, the inequality becomes:

NG/G + 2C/G < 1

That is, the proportion of your power that comes from natural gas, plus twice the proportion that comes from coal, must be less than 100%.

Only if part of your power comes from non-carbon or renewable sources can you lower your carbon footprint by driving on electricity. In that case, your fraction of coal power must be less than half, thus:

2C/G < 1, or C/G < 1/2

If your fraction of coal power is less than one-half, you can still lower your carbon footprint if your fraction of natural-gas power is low enough. Following is a table that shows, for each fraction of coal power, how much power you can get from natural gas and still lower your carbon footprint as compared to driving on gasoline:

Maximum Percentage of Electric Power from Natural Gas to Equal or Reduce Gasoline Carbon Footprint, as Function of Percentage from Coal

Percentage of Power from CoalMaximum Permissible Percentage from Natural Gas

As this table shows, the most important variable for determining whether you, as a driver, can reduce your carbon footprint by driving on electricity is the percentage of electric power in your community that comes from coal. If it’s 50% or more, you’re out of luck. You simply can’t lower your carbon footprint by driving on electricity. You might as well switch to natural gas, which will reduce your carbon footprint only slightly but will reduce urban air pollution and save you lots of money.

If coal’s fraction is less than 50%, the fraction that can come from natural gas and still allow you to lower your carbon footprint, as well as to achieve energy independence, varies rapidly with coal’s percentage. The farther coal’s fraction falls, the better. But natural gas can’t take up the slack entirely without raising the carbon footprint. That’s just one more reason to ramp up wind, solar, safe nuclear and hydroelectric power, which add no carbon at all.


Electric driving is not for everyone. If saving money in the short term is your primary objective, it’s not for you. If you need a long-range vehicle, it’s not for you. And if you care about carbon and live in a area where 50% or more our your electricity comes from coal, it’s not for you. You’ll just be increasing your carbon footprint and air pollution.

But if you live in an area where coal produces less than half of your electricity, driving electric becomes interesting. You might be lowering your carbon footprint, reducing energy dependence and enjoying the pleasures of an elegantly designed, modern vehicle that doesn’t belch fumes or make lots of noise and that you can “refuel” overnight in your own garage. You can begin your inquiry with the pie chart on your electricity bill.

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08 March 2012

Natural Gas: the Best Transitional Fuel


Advantages of Natural Gas

Introduction. Energy policy is hard enough by itself. The basic concepts (1 and 2) are abstract and slippery. Then you must wade through a vast sludge of self-serving nonsense (1, 2 and 3) put out by various advocates for this or that. The coal industry’s mammoth propaganda machine makes it as hard to see the light of day as it will be in our cities (1 and 2) if that machine wins.

But facts and data now emerging permit us to draw a clear and important conclusion. For the immediate future, we should focus our national energy policy on converting both our electric power plants and our cars and trucks to natural gas—all the while continuing to press ahead with more sustainable solutions. If present estimates of total natural-gas reserves are accurate, and if we don’t sell a lot of them abroad, they should give us a few decades to develop sustainable solutions based on solar, wind and safe nuclear power.

Here’s the analysis:

1. Price, price and price. The present cost of a barrel of oil is about $105. The present cost of a quantity of natural gas with the same amount of energy (5.8 million BTU) is $ 2.6 x 5.8 = $15.08.

Thus right now, today, natural gas is more than seven times cheaper than oil per unit of energy. That ratio can only grow as hundreds of millions more consumers in the developing world enter the middle class and start looking for oil-burning vehicles. And unlike oil, natural gas doesn’t need refining to propel cars and trucks.

Those price differences don’t necessarily translate to price relief for drivers. But they can. More careful price comparisons show that natural gas at industrial pricing can reduce the per-mile energy cost of driving by a factor of seven. If natural-gas stations can command industrial prices, and if they can keep their operating costs and profit down to a total of 20%, driving consumers can enjoy relief from high gasoline prices by nearly a factor of six. And even at much higher residential prices, those who install compressors in their homes can get price relief, right now, by nearly a factor of three.

From an accounting standpoint, that’s all you really need to know. But there’s even more good news: the future looks nearly as good as the present. Experts who read the tea leaves of the futures markets predict that the natural-gas energy-equivalent of a barrel of oil will not exceeed $29 before 2022—ten years away.

You can convert a car or small truck to run on natural gas for $3,500 to $7,000. If it now runs 30,000 miles per year on 20 miles per gallon, natural-gas drivers could save at least $2.72 per gallon-equivalent in fuel costs during those ten years, after recovering the lower price of converting. The total savings (over 9.33 years) would exceed $38,000—enough to buy a brand new vehicle.

Yet price is just the beginning of natural gas’ advantages. Read on.

2. Energy independence. The Energy Information Administration estimates that, during this year (2012), we will import 3.41 billion barrels of crude oil. If the price of a barrel goes no higher, the annual cost will be $105 x 3.41 = $358 billion.

The price of oil is likely to rise substantially as time goes on (1 and 2). But even if it doesn’t, that’s a third of a trillion dollars each year which: (1) increases our trade deficit, (2) leaves our shores forever, (3) enriches others’ economies, not ours, and (4) supports regimes that we would rather not support, like Saudi Arabia, Iran, and Venezuela.

We can cut that number to zero in five to ten years by a simple expedient. We already produce well over one-third of our oil consumption. So all we have to do is convert our fleet of passenger cars, vans and small trucks (including those used for business) to natural gas, leaving crude oil as a feedstock for jet fuel and diesel fuel for long-range, heavy trucks and construction machinery.

Doing so would not be hard at all. We already have over one million natural-gas vehicles on our roads. Our industries know both how to make brand-new natural-gas cars and trucks and how to convert old ones from gasoline.

All we have to do is switch. Consumers and business, not government, will lead the way, pulled by the incentive of three to six times lower per-mile energy cost. Government might provide incentives for switching, especially to low-income consumers who would benefit most from low per-mile costs but can’t afford the capital expense of converting. It could justify the incentives not only as providing economic relief for those who need it, but also as indirectly subsidizing businesses that do the converting and make the parts, thereby creating jobs.

3. Economic growth. National security and trade deficits are good reasons for seeking energy independence ASAP. But they are far from the only ones. A natural-gas small-vehicle fleet would boost economic growth here at home in six ways:
    a. By reducing the cost of hauling people and small loads by a factor between three and six, it would lower the cost of everything, reduce prices to consumers and make American industry more competitive abroad.
    b. By removing some demand pressure from oil for small vehicles, it might reduce the price of diesel fuel and jet fuel, thereby lowering costs in our trucking, intercity bus, shipping, and airline industries. That would lower the cost of almost everything and make those industries more competitive.
    c. Building new natural-gas service stations, converting old ones to natural gas, and adding new natural-gas pumps to old ones would help revive our construction industry nationwide.
    d. Converting existing cars and trucks from gasoline to natural gas would create a cottage industry of small businesses, with non-outsourceable jobs. (It’s impossible to retrofit a vehicle on another continent.)
    e. Designing and building the necessary equipment and parts—chiefly compressors, compressed-gas tanks, regulators, fuel injectors and safety devices—would help revitalize domestic manufacturing. Ramping up conversion quickly would create numerous opportunities for small- and medium-side manufacturing businesses. Although some of this manufacturing could be outsourced, retrofitters could chose their own parts, and each manufacturer would be the best designer, most efficient manufacturer, and most attractive warrantor of original equipment for its own vehicles.
    f. The different driving ranges and slightly different characteristics of natural-gas vehicles (as compared to those burning gasoline) would prepare consumers for a later and more gradual shift to electric cars.
4. Reducing pollution. Burning natural gas instead of gasoline creates less hydrocarbon smog and virtually no particulate emissions. As more and more cars switched to natural gas, urban pollution would decline, as would the incidence of smog-induced asthma.

5. Reducing the acceleration of global warming. Natural gas is a carbon-bearing fossil fuel. Its wider use will accelerate the already alarming growth rate of atmospheric carbon dioxide, and therefore of climate change.

But burning natural gas creates less carbon than burning oil that must be refined, let alone extracted by heating tar sands or shale. And it creates only half the carbon emissions of burning coal. So it appears to be the best alternative in the short-to-medium term.

Our table of cost per mile driven for various forms of energy shows why. Of all the types of energy listed, only nuclear and solar power are comparable to natural gas at industrial prices. Both will take time—probably at least a decade—to roll out in sufficient quantity nationwide.

In the meantime, electric cars will “burn” a lot of coal, because coal produces the plurality of of our nation’s electricity. For 2010, for example, coal produced 1,847,290 out of a total of 4,125,060 gigawatt-hours, or 45%.

Coal is not only the worst source, by far, of climate-changing carbon. It also produces acid rain, mercury pollution, asthma-causing particulate pollution and hydrocarbon smog. From an environmental perspective, reducing and eventually eliminating its use as rapidly as possible is job one.

Increasing the use of electricity for transportation before we can wean our electricity grid from coal would do the opposite. Converting our electric-power plants and small-vehicle fleet to natural gas first would prevent us from backsliding as carbon-spewing coal power replaced gasoline for transportation.

For small vehicles, converting to natural gas will be an easy transition, for two reasons. First, the capital costs of switching from gasoline to natural gas are far lower than those for switching from gasoline to electricity. While consumers can switch from gasoline to natural gas for as low a price as $3,500, there is no practical or economical way today to convert existing gasoline cars to electricity. A consumer who wants to drive electrically has to incur the capital cost of a brand new vehicle, which, for electric cars, is now in the $30,000 range. That’s a substantial economic barrier to consumers’ acceptance of electric driving, to add to the reduced range of electric cars.

Second, natural-gas driving is here now. Cottage industries are doing vehicle conversions as I write these words. They can expand virally, facilitating rapid, nationwide adoption of natural gas as a transportation fuel.

In contrast, clean nationwide adoption of electric driving will require a reduction in the capital cost of electric cars, conversion of power generation nationwide from coal to solar, wind and nuclear power, and perhaps also upgrading our nation’s power grid for the substantial additional burden of driving on electricity. All that will take time.

There are a few regions in which environmentally benign hydroelectric and/or nuclear electricity already predominate over coal. By and large, they tend to be regions with more economically upscale consumers able to afford electric cars. In those few lucky regions, there is no reason why the electricity “solution”—which has higher capital cost but also offers significant savings over gasoline—can’t roll out simultaneously with conversions to natural gas. Converting from coal to natural gas for electric power everywhere also can help. But practically speaking, the chief means of ameliorating global warming in the short and medium term has to be natural gas.

A natural-gas small-vehicle fleet is not ideal. Ideal would be electric light vehicles running on solar, wind or nuclear power, and long-haul heavy transport running on natural gas.

But we have to be realistic. As always, American consumers will demand the convenience of individual vehicles. Any policy that tries to stop them will fail in the marketplace and encounter heavy political opposition. So we have to assume that cars and light trucks will continue to run. And if they don’t run on electricity, they will have to burn something.

If we do nothing, they’ll burn more and more expensive oil, which will come from more and more energy-inefficient and carbon-polluting sources like tar sands. If we convert to electric vehicles without switching to clean electricity first, nearly half of our small-vehicle fleet will run on coal, the most disastrously polluting fuel known.

So for practically achievable reductions in pollution and the acceleration of global warming, switching to natural gas for both electric power and transportation is the best of a series of not-so-good alternatives. And, as we will see, that “solution” will predominate only for a few decades, as we convert to even less polluting sources of power.

6. Reducing accidental environmental damage. Apart from global warming, which natural gas will improve but not enough, natural gas will vastly improve the environmental consequences of our transportation system in other respects. It will:
    a. Reduce, if not eliminate, environmental damage caused by pipeline leaks, shipping accidents and other environmental spills. (In every spill, natural gas would be better because: (1) it dissipates naturally, without “cleanup,” even if liquified; (2) its impact on wildlife would be temporary and localized at the spill site; and (3) its natural dissipation would make repairs and reconstruction of damaged pipelines and vessels easier, quicker and less expensive.)
    b. Reduce the environmental impact of extraction. (Even natural gas “fracking” requires only drilling, i.e., “pinprick” holes, compared to the vast strip-mining needed to exploit tar sands and shale oil. While gas fracking can release methane—a potent greenhouse gas—and pollute water supplies, it does not typically ruin vast areas of land, as “advanced” oil-recovery techniques undoubtedly will do.)
* * *

Natural gas thus has impressive advantages over oil, let alone coal. But nothing is perfect. There are two drawbacks, although neither seems important enough to preclude switching to natural gas from coal and gasoline.

7. “Fracking” issues. The first drawback of natural gas already has received considerable publicity. The fracturing or “fracking” process can pollute water supplies, sicken residents near extraction sites, cause drilling “mini-quakes,” and cancel natural gas’ modest global-warming advantage by releasing methane into the atmosphere.

The current “fracking” craze is what gave us natural gas’ low prices, by increasing both supplies and reserves of natural gas dramatically. Without fracking, switching of light transportation to natural gas wouldn’t be worth while, because our natural-gas reserves wouldn’t last long enough. So fracking and switching are two sides of the same coin.

The current controversies over its unintended consequences suggest that fracking is neither riskless nor costless. But if you drill down (pardon the expression) into the controversies, they seem to arise mostly from “wildcat” drilling, i.e., drilling by less responsible energy producers, in sensitive areas, in a rush to make money ASAP. Furthermore, each wildcatter seems to have a “proprietary” extraction technique, using unknown and often carcinogenic chemicals that, because their identity is secret, scare the hell out of nearby residents.

At the moment, these problems seem easily solvable by obvious means. We can: (1) require all drillers to disclose what they inject into the ground, (2) drill more carefully, (3) rapidly settle on a set of standard “best practices,” which accumulating national experience should make clear, and (4) compensate victims of poor drilling practices, instead of stonewalling and compensating lawyers. Most of all, we can (5) drill first in gas fields far from inhabited areas and save the more sensitive spots for drilling later, when safe technology and practices will be more widely known and rising gas prices will encourage their use.

The same frenzy of wildcatting that drove the oil industry a century ago is inappropriate today, in a much more heavily populated nation with infinitely greater environmental sensitivity. If the more responsible and better-financed energy producers can’t contain the worst excesses of wildcatting with persuasion, economic pressure and buy-outs, the government will have to step in with regulation. But industry self-policing is vastly preferable, if only because it will work much faster than any political “solution” in our broken government.

With so much money and so many policy objectives at stake, you would think industry would clean up its act, and pronto. But whichever path improvement in drilling takes, a slow pace seems unlikely to undermine the compelling advantages of natural gas discussed above.

8. Limited reserves. What will, in the medium term, disturb the vast benefits of natural gas is its second drawback. All good things must come to an end.

The fracking craze made (and makes) switching to natural gas possible, by vastly increasing our nation’s usable reserves of that fuel. But natural gas is not a long-term solution to our energy problems. Some day in the medium term, even fracked reserves will run out.

It’s not too hard to calculate when that day will come. Let’s start with Daniel Yergin’s optimistic estimate, from last April, of total US natural-gas reserves, including fracked gas, at 2.5 quadrillion cubic feet. For good measure let’s add recent estimates of Alaska’s shale gas—80 trillion cubic feet—for a total of 2.58 quadrillion cubic feet.

In order to compare reserves with “burn rates,” we first convert that number into BTU, the standard unit for consumption. Since 1 cubic foot of natural gas produces 1,025 BTU, our generous estimate of total US natural-gas energy reserves would provide 2.58 x 1.025 = 2.64 x 10**18 BTU, or 2,640 quadrillion BTU.

Our own Energy Information Administration publishes comprehensive records and projections of US consumption rates for various sources of energy, all in quadrillion BTU. Based on its projected figures for this year (2012), the following table shows how long our entire natural-gas reserves will last, depending on what we use them for:

Working Life of All US Natural-Gas Reserves, Including “Fracked” Gas, Based on 2012 Consumption Rates

Use(s) of Natural GasTotal “Burn Rate”
(Quadrillion BTU per year)
Resulting Life of Reserves
Present Uses (mostly
heating and industry)
Present Uses and Replacing Electric Coal41.1964
Present Uses and
Replacing Transportation Oil
Present Uses and Replacing
Both Electric Coal and Transportation Oil

Conclusions. Thirty-nine years is not a lot of time. If we sell half our natural-gas production abroad, which we might do in a global market, we will have less than two decades. But it’s also possible that we might import some net gas from Canada (via pipeline) or from elsewhere in liquified form. So we probably have from two to four decades to make more sustainable solutions work.

That’s not a lot of leeway at the lower end. But it’s enough. And it will be an easy interim transition for both electric power and transportation.

For electric power, all we have to do is build natural-gas power plants, which are much simpler, smaller and cheaper than coal-fired ones, let alone nuclear plants. Gas plants also require less restrictive environmental regulation and provoke infinitely less NIMBY opposition. By building them to much smaller scale than coal plants, we can take better advantage of local natural-gas resources and put power sources closer to users, cutting transmission and distribution costs.

If engineers are clever, they can design the same steam turbines and generators for natural-gas plants to work later with solar thermal and safe nuclear power sources. Then only the burners, stacks and substructure of natural-gas plants need be depreciated when natural gas runs out or becomes too expensive with declining supply (like oil now!). Turbines and electric generators can be moved.

For transportation, all we have to do is change the fuel tanks, fuel injectors and some safety systems on our current vehicles. The rest of the vehicles can stay pretty much as is, although diesel engines may require some modification, turbine-style injectors, or higher-pressure tanks. The huge price advantage of natural gas over oil products will drive the transition without substantial government intervention in markets.

It’s kind of sad to think of a precious natural resource, which took Nature tens of millions of years to create, being all used up in an energy orgy a few decades long. But even that scenario is millions of times better than using coal instead. Our cities would become unlivable, like Beijing on a bad day, and our planet would heat up to a point where no one my age today would recognize it. And of course natural gas is much better than oil, whose increasing price will soon kill any chance at sustained economic recovery. (See 1, 2 and 3 [begin at “can foresee”)].)

If we switch to natural gas, global warming will continue to increase, but at a lower rate, and none of these shorter-term problems will arise. Before our fracked gas runs out, we should have more sustainable solutions in place, with far fewer carbon emissions.

But we have to start the transitions right now, to both natural gas and more sustainable solutions. Even as we convert to natural gas, we must continue building solar and wind farms, safe nuclear plants, and a smart grid to use them all.

As we walk and chew gum at the same time, natural-gas plants will serve as natural complements to solar and wind power. They will solve the intermittency or “baseload”problem simply and cheaply, without the horrendous pollution of coal or the expense, delay and risk of nuclear power. In fact, they can solve it better and cheaper because they can ramp up and cut down output faster and more easily.

Using natural gas in tandem with sun and wind will have another signal advantage. Every kilowatt-hour of electricity generated by wind and sun will save an equivalent amount of natural gas, thereby extending the life of our reserves and the transition deadline.

Solar, wind and natural-gas plants are also natural complements for yet another reason: they all have the same advantage of scalability. We can make them big or small, almost at will, to work together, to take advantage of local conditions, and to reduce transmission and distribution costs.

So natural-gas plants will serve as adjuncts to solar and wind power until we develop more durable solutions to intermittency, such as storing, pipelining and trading in electrolyzed hydrogen made with power from the sun and wind.

All these promises are impressive. But the chief reasons for using natural gas as a transition fuel now are economic. It will reduce the rising pressure to continue banging our heads against the oil-supply wall. It will cut transportation and power costs substantially. It will save us from ruining our cities and planet by returning to a nineteenth-century dirty fuel. And, as we switch to electric cars, it will allow us to ramp up our total electricity capacity much more quickly than nuclear or coal power and with much, much less pollution than coal.

So from the point of view of price, clean air, economic growth, energy independence, global warming, a smooth transition to better solutions, and consumer happiness—without which no energy policy is viable politically—it looks like full speed ahead for natural gas, with due care in “fracking.”

Table Notes:

1. Reserve lives are rounded to the nearest year. “Burn rates” are shown to four significant figures only to facilitate checking my sources.

2. The natural gas burn rate for 2012 is 22.61 quadrillion BTU, taken from this table, under “Total Energy Consumption.”

3. The “Electric Coal” burn rate for 2012 is 18.58 quadrillion BTU, taken from this table, under “Electric Power, Steam Coal.”

4. The “Oil for Transportation” burn rate for 2012 is 27.14 quadrillion BTU, taken from this table, under “Energy Use by Mode, Total,” but excluding lubricants and pipeline fuel.

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05 March 2012

Should Crazy People Have Nuclear Weapons?

[This post is, I hope, my last on the subjects raised by Israeli Prime Minister Netanyahu’s visit. In a few days I’ll be back on the topic most dear to my heart: energy.]

The title of this post sounds like the topic for an off-the-wall high-school debate. Yet it’s the very question the international community now must wrestle with, especially Russia and China.

That’s essentially what the President told us in his sober but brilliant interview in The Atlantic Magazine this week. That’s why he later described our policy not as containing Iran, but as preventing it from getting a nuclear weapon. And that’s why, after flirting with containment myself, I’m now with him.

To be sure, the President phrased his objections politely, in standard diplomatic-speak. He decried the possibility of a nuclear arms race in the Middle East.

But let’s be frank. We’ve long had a nuclear arms race among major powers, and even between India and Pakistan. No one has let fly yet. So what, if anything, is different about the Middle East?

Part of the answer lies in religion. Would anyone care to refight the last three centuries of religious wars in Europe, this time with nuclear weapons? Those wars ended with even greater wars of secular imperialism. But now, finally, Europe is at peace, and the peace seems durable. Ditto Asia.

What makes the Middle East scary is more than just religion. With only limited irony, you can say that people in the region are crazy. Or maybe just their leaders are; sometimes it’s hard to see which.

Whoever’s at fault, the so-called “nations” in that region just don’t seem to meet the same standards of reason, prudence and humanity that prevail throughout the rest of the world today, including most of Africa and Latin America. They don’t even seem to have the same level of common sense—let alone human empathy.

Maybe that’s because nearly all of them are not really nations. They are constructs of the British Foreign Office or (in Israel’s case) the United Nations. They didn’t grow up through millennia of painful social and ethnic evolution, as did Europe and Asia. They were made, and quite recently in historical terms.

Let’s start with the worst, Bashar al-Assad’s Syria. Suppose that, as little as two years ago, someone from the future had shown you a magic video. The tape portrayed Assad prancing among his sycophants, smiling and giving high signs, while his primitive but still dangerous military butchered his own unarmed people with modern artillery. Would you have believed the video?

I wouldn’t. I would have pointed out that Assad is an educated man, a medical doctor, with a reputation for “conservatism.” (Didn’t that word once mean something good? Is butchering people “conservative”?) I would have said that anyone with half a brain, especially today, knows that sort of behavior is (to use Obamanian understatement) “not sustainable.” Even the Russians, in their brief spasm of civil violence in 1993, directed artillery mostly at their Parliament building, and fewer than 200 people died.

But in disbelieving, I would have been wrong.

Next take Assad’s best friends: the so-called “Islamic Republic” of Iran. According to our own CIA, it has the world’s fourth largest proven oil reserves. With rational leadership, it could (and should) be doing exactly what Russia is doing today. It should be selling and exploiting those reserves to pull its economy up by the bootstraps, into the twenty-first century, and give its people a better life.

If you’d asked me right after the Islamic Revolution (and I knew what I know today), that’s exactly what I would have predicted. But again I would have been wrong.

What has Iran has done instead? It has wasted extraordinary resources and effort in making itself the world’s biggest troublemaker, second only to the teenage mutant tyrant of North Korea.

It started by supporting and radicalizing Lebanese and Palestinian movements against Israel. These movements specialize in assassinating opposition leaders in Lebanon and Gaza, encouraging Palestinian youth to make themselves human bombs, and rocketing Israeli civilians and schoolchildren. And one of them calls itself the “Party of God.”

Why Israel? God knows. Did Israel ever do anything to Iran? Not that I know of, and certainly nothing important. We Yanks did plenty. We installed a nasty puppet dictator in Iran for 25 years. Later we incited Saddam to attack Iran, with disastrous effects, including over a million deaths on both sides.

So Iran has every reason to be angry at us. But the only plausible reason for targeting Israel, it seems, is to get back at us because Israel is our best friend in the region. Sympathy for Palestinians and their legitimate grievances is not enough to justify perpetual belligerence, far less the sort of belligerence that keeps Palestinians themselves in a perpetual state of war and poverty.

We Yanks have plenty of sympathy for South Koreans. We put more money, blood and intelligence into making their society work than ever Iran put into Greater Palestine, and with infinitely greater success. But when the North’s imbecile Kims threaten to wipe South Korea off the map, as they have done so many times, do we threaten the North the same way? No. With infinite patience, we talk with it and give it food and hope it will come to its senses. Despite all our warts and decline, we still can recognize that perpetual belligerence and grinding conflict are just “not sustainable.”

If you think I’ve exhausted the craziness with Syria and Iran, think again. I’m just getting started.

Next is Saudi Arabia. Here’s a medieval monarchy—one of a bare handful still left on our harried planet. It’s got the same resources as Russia and Iran, even better. In fact it has the biggest oil reserves of any nation in the world, by far. It could use its oil revenue to create a golden oasis not only in its own deserts, but, with trade and beneficence, throughout the Middle East.

But what does it do? It uses its wealth to maintain its medieval monarchy and the royal family’s obscene privileges. When its people get restive, it uses some to buy them off. And all the while it funds madrassas throughout the Middle East and Central Asia, which teach nothing useful, only Wahhabi extremist religion and hate.

Never once, apparently, did the Saudis’ brilliant oil manipulators consider the possibility that these acts, too, might not be sustainable. And now that the dark ravens of their hateful visions are circling back toward home, they begin to talk about nuclear armament.

We’re still not done yet. Consider Iraq. It’s probably a better place now that Saddam is gone. But it took a vicious civil war to get Iraqis to sit down and reason with each other. Right now, that reasoning process appears to be stuck.

Maybe some day—maybe even soon—Iraqis will conclude that perpetual enmity towards one’s neighbors and countrymen is not sustainable. But would you bet a city or two, maybe a radioactive genocide, on their learning that lesson before acquiring nuclear weapons? That’s what you’d be doing if you let them have them.

Last but not least, we come to Israel. A lot has been said about its noisy but effective democracy, its free press, and its thriving universities and high-tech communities. All those things are true and admirable.

But still, doesn’t it seem a little crazy that Israel’s highest leader keeps referring to modern territory (which also happens to belong partly to neighbors now) using terms that haven’t been heard in politics or diplomacy for about two millennia? Doesn’t it seem even crazier when his purpose in doing so appears to be to justify land grabs whose only real justification is the same rule the Nazis once used: “Macht macht Recht”?

If it were up to me—and I’m Jewish—I wouldn’t give any of these people nuclear weapons. They simply don’t have the maturity of societies in Europe and most of Asia. They haven’t yet been so exhausted by hideous and decades-long conflicts with non-nuclear weapons (including religious wars), to figure out that even those conflicts are neither desirable nor sustainable. They haven’t yet learned to live like adults, so we want them to have nuclear weapons?

Unfortunately, Israel already has nuclear weapons. And maybe their vast power has helped sober Israelis up. Israel has never admitted their possession. Far from bragging about them or blustering with them, it seems embarrassed to have them—a reaction entirely appropriate for victims of the Holocaust. And never, ever has Israel threatened their use, at least in public. (But neither has Russia, China, nor any other country that has them, even Pakistan. Sobriety seems to come from knowing what they can do.)

That’s all to the good. Yet I still can’t get by the constant references to “Judea and Samaria” and the constantly expanding “settlements.” Neither of those things squares with a twenty-first century country living in a complex region where every neighbor has grievances of its own, and at least some of them are legitimate. And I can’t forget that a Jewish extremist killed Yitzhak Rabin, whose survival might have written an entirely different regional history.

I don’t know what causes this craziness. Maybe it’s something in the air. Maybe the entire region is too focused on history and fixed scripture ever to forget, move on, and eventually forgive or let live.

But whatever the cause, I know one thing. When the President, in his usually impressive understatement, says he doesn’t want to see a nuclear arms race in the Middle East, I hear him saying something else. I hear him saying we don’t want crazy people to have nuclear weapons. And I fully agree.

Except for the Kims’ North Korea and Robert Mugabe’s Zimbabwe, the nations of the Middle East are among the least civilized, least restrained and most likely to explode on our planet. It’s bad enough that Israel has nuclear weapons; at least it seems to be handling them sensibly. But we certainly don’t want nuclear arms to spread in that region.

If it takes a few air strikes to prevent that from happening, so be it. But please let them be American, not Israeli. America is sufficiently far away and powerful, and has meddled enough there already, as to cause not much more than the usual grumbling. Israeli strikes would only inflame the whole region and make things much worse.

And I don’t know about you, but I also have a special aversion. I never want to see modern weapons—the product of four hundred years of reason and science—used to resurrect Judea or Samaria.

Let the dead stay dead and the living go on living. If young people want something to fight and possibly die for, let them fight for their own future, not a biblical past. That’s what Arab youth are dying for, right now, by the thousands, in the Arab Spring. And especially let no one have the power to turn a land holy to three religions into a radioactive Hell that not even Moses, in his worst apocalyptic visions, ever could have imagined.

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02 March 2012

Comparative Energy Costs of Driving: Cents per Mile

[For an update to late 2013, with important new analysis from the consumer’s perspective, click here.]

[To jump to the table, click here. To jump to the conclusions, click here. For comment on the President’s interview on Iran, click here.]

Our most crying need for better energy policy is in transportation. That’s where we spend $372 billion per year on foreign oil at present prices and importation rates.

That waste will only get worse. As gasoline and oil prices go up—and they will (1 and 2)—that expense will increase. Every year, we will waste at least one-third of a trillion dollars (1) increasing our trade deficit, (2) enriching others’ economies, rather than our own, and (3) supporting regimes that we would rather not support, like Saudi Arabia, Iran, and Venezuela.

In all the heated discussions over how to bring that awful number down, I have never seen a comparison of greatest interest to every driver: the cost of driving per mile. So I’ve compiled the following table, using simple arithmetic and publicly available information (linked in or through this post).

The table shows the cost of fuel or electrical power, per mile driven, for various automotive energy sources. It focuses on the fuel or power source alone, ignoring the capital cost of the vehicle, depreciation, and other practically important expenses, such as insurance and maintenance. Its numbers are therefore much lower, for example, than the “mileage rates” at which the federal and state governments quite properly reimburse their employees for each mile of official travel.

The table shows energy cost alone. It lists energy sources in order of decreasing per-mile cost. Its sole purpose is to let readers judge for themselves the validity of competing claims about the relative “economy” of various sources of automotive energy. Notes following the table explain how each number was calculated.

Energy Cost of Driving, in Cents per Mile,
for Various Automotive Energy Sources

Energy SourceUnderlying Price ParameterCents per Mile Driven
Gasoline$3.78 per gallon12.6
Natural Gas (Residential)$1.28 per gallon equivalent4.3
Conventional Electricity
11.6 cents per kWh4
Conventional Electricity
6.8 cents per kWh2.3
Natural Gas (Industrial)$0.55 per gallon equivalent1.8
Solar Photovoltaic
5.1 cents per kWh1.8
Nuclear Electricity4.4 cents per kWh1.5

The most important finding from this table relates to gasoline. You could increase to 80 MPG the mileage (30 MPG) used to calculate the per-mile energy cost of gasoline and still not match any other per-mile cost in the table. And the price of gasoline is only going to rise, as hundreds of millions of consumers in the developing world enter the middle class and cause massive increases in global demand for oil. Gasoline is obsolete.

Nuclear electricity, solar photovoltaic electricity, and natural gas at industrial prices all offer the lowest energy costs per mile. But the results in the table for the first two are, at best, accurate only within about 30%, and natural-gas prices are subject to much wider change. Therefore the table cannot distinguish among these three energy sources. Insofar as concerns cost, they should be seen as roughly equivalent. Conventional electricity (largely from coal) and natural gas at residential prices would roughly double their cost per mile.

Another implication of this table is that our system for distributing natural gas to residences is much more costly and inefficient than our similar system for electricity. Consider the ratio of energy cost per mile for residential service to that for industrial service. For electricity, that ratio is 4/2.3 = 1.74. For natural gas, it’s 4.3/1.8 = 2.39, 37% higher. As cars and light trucks switch to natural gas for cheaper fuel, one goal of energy policy might be to reduce this discrepancy.

On the other hand, relatively high residential gas prices might encourage the development of independent natural-gas service stations. With current natural-gas distribution schemes, consumers could nearly double their savings over gasoline by buying compressed natural gas from a natural-gas station, which presumably would pay industrial prices, rather than by installing a compressor in their homes and paying residential retail prices. Consumers would have to pay the natural gas station’s amortized operating cost and a reasonable profit, but together those expenses should not increase the per-mile cost of energy by more than about 20%.

The other important finding from this table is that all alternative forms of energy would lower gasoline’s current per-mile energy cost by nearly a factor of three. Natural gas at residential prices would lower it by more than factor of four, after recovering the cost of a home compressor. The lowest-cost alternatives—solar photovoltaic electricity, nuclear electricity and natural gas at industrial prices—would reduce the per-mile energy cost of driving to between one-seventh and one-eighth that with gasoline.

An upcoming essay will discuss the more general implications of these conclusions for short- and medium-term energy policy.


General: The table’s cost per mile is rounded to the nearest tenth of a cent.

I have been unable to find enough publicly-available, authoritative data on windmills or solar thermal plants to compute the relative costs of their electricity. They are omitted for that reason, and no other.

Gasoline: This cost figure begins with the US Energy Information Administration’s national weekly average price of gasoline, all grades. The number shown is for the week of February 27, 2012, namely $3.78 per gallon. The cost per mile (12.6 cents) is that number, divided by 30 MPG—a respectable but not stellar mileage.

Natural Gas (Residential): The price per mile is based on energy equivalence, using the ratio of the residential retail price of an amount of natural gas containing the same energy as a gallon of gasoline to the retail price of that gallon.

A thousand cubic feet of natural gas provides 1.027 million BTU, which is energy-equivalent to 8.27 gallons of gasoline. So to calculate the energy-equivalent retail price of natural gas, we just divide its price per thousand cubic feet by 8.27.

As of November 2011 (the latest data available) the all-US average residential retail price of natural gas was $10.59 per thousand cubic feet. So, as of November 2011, at residential retail prices, an amount of natural gas providing the same energy as a gallon of gasoline cost $10.59/8.27 = $1.28.

The cost of that natural gas per mile is therefore the just cost for gasoline, multiplied by the price ratio for equivalent energies of natural gas and gasoline, thus: 12.6 cents per mile x (1.28/3.78) = 4.3 cents per mile.

Conventional Electricity (Residential): The price of electricity per kilowatt-hour is the EIA’s nationwide average price of residential electricity for 2010. The cost per mile is that number divided by a calculated mileage (miles per kilowatt-hour) of the Nissan Leaf.

We derive the Leaf’s electrical mileage by dividing the Leaf’s range (70 miles) for highway driving in hot summer by its battery capacity, 24 kilowatt-hours. Since the Leaf’s range for driving in hot summer is one of its lowest (its nominal range is 100 miles), this mileage factor is conservative (on the low side), so the cost per mile errs on the high side.

Conventional Electricity (Industrial): We use precisely the same method as for residential conventional electricity. But we use the EIA’s nationwide average price of industrial electricity for 2010. The resulting cost per mile is conservative on the high side, as above.

Natural Gas (Industrial): This calculation proceeds as for natural gas at residential prices. The only difference is the differing retail price of natural gas for industry. For the same month (November 2011) as in that calculation, the all-US average industrial price of natural gas was $4.53 per thousand cubic feet. So the industrial retail price of an amount of natural gas providing the same energy as a gallon of gasoline was $4.53/8.27 = $0.55. And the cost per mile for industrial natural gas was 12.6 cents per mile x $0.55/$3.78 = 1.8 cents per mile.

Solar Photovoltaic Electricity: We come to this number in the same way as for other forms of electric power. But we use the calculated cost of solar photovoltaic power (3.42 cents/kWh) taken from this post, based on the amortized capital cost of the solar plant and the time value of money for financing it. Then we add 50% for retail cost, as follows: 40% for the average cost of transmitting and distributing electric power today, and 10% for the producer’s profit. The result is the underlying retail price parameter, 5.13 cents per kWh.

This calculation omits fuel costs, as solar power needs no fuel, and external costs, as solar plants require no fuel extraction and have no effluent. It ignores maintenance costs because they are much lower than for coal plants, which generate a plurality of conventional electricity, and because there is insufficient experience with large photovoltaic solar arrays to estimate maintenance cost. Since the relevant maintenance cost is the cost per kilowatt-hour delivered, it is unlikely to change the figures shown significantly. (For more on how to calculate renewable energy costs, see this post.)

For four reasons, the table’s per-mile cost figure for solar electricity is the least certain of all and is likely to be the most conservative, i.e., unrealistically high. First, it is based on a solar-cell production cost of $1 per Watt. Yet Morningstar’s investment report of 12/20/11 [subscription required] expects the industry’s leading low-cost producer, First Solar, to reach 65 cents this year—a 35% reduction. In time, that cost is expected to drop as low as 50 cents. Second, the assumed capital cost of the rest of the plant (an additional dollar per Watt) will come down as experience in building and maintaining solar photovoltaic plants grows.

Third, the table’s cost of solar photovoltaic power assumes unrealistically high financing costs: a forty-year loan at 4% interest, which is more than homeowners pay today for financing their homes. With lower interest rates and shorter payback periods, let alone government subsidies and/or loan guarantees, that cost would drop considerably.

Finally, like all the table’s entries for electric power, the cost of solar photovoltaic power is based on the Nissan Leaf’s current electrical mileage. The Leaf is the very first all-electric production car, and that number is likely to go up with time and experience. There is no reason, in principle, why the cost of driving a mile on solar power cannot drop to half a penny or even below.

Nuclear electricity: This number is computed just like the number for conventional electricity. But it uses a lower cost for nuclear electric power, derived from Morningstar’s 1/13/12 investment report [subscription required] on Exelon Corp., a nuclear power company. The report says that Exelon’s nuclear power (no doubt at wholesale) costs $15 per megawatt-hour, as compared to conventional power, which costs $40. So the table reduces the price parameter for conventional electricity at retail by that ratio (15/40), thus: 11.6 cents/kWh x (15/40) = 4.35 cents/kWh.

Correction: An earlier version of this post put the three cheapest per-mile costs of driving at one-eighth the cost of gasoline. That ratio is correct for nuclear electricity, but the correct cost ratio for industrial-priced natural gas and solar photovoltaic energy is one-seventh that of gasoline. These differences are not significant because, as explained in the conclusions, the numbers in the table are not accurate enough to make such small differences reliable.

Obama on Iran: The Adult in the Room

Yesterday Atlantic Magazine published an exclusive interview of the President by crack reporter Jeffrey Goldberg on Iran’s nuclear program. Everyone who cares about foreign policy—let alone Iran’s nuclear threat—should read it.

In so many ways, the interview shows just how smart and skillful the President is. First, he gave his interview to a serious journalist in a serious publication (one one the few we have left). That alone shows how gravely he treats the issue. No one-liners or Fox rants for this President!

Second, he assuaged fears in Israel and here at home about how seriously he takes the threat of a nuclear-armed Iran to both Israel and the world. At least twice he pledged that we “have Israel’s back” and always will.

Third (and, for me, most important) the President’s substantial analysis showed how complex and nuanced the problem is, and how well he appreciates all the risks and possible unintended consequences of air strikes. Generously, he also gave credit to Israeli Prime Minister Benjamin Netanyahu for having similar understanding, thereby reassuring Netanyahu skeptics like me.

Fourth, the President offered strong reasons for a military option, but only if all else fails. His reasons included: (1) a nuclear arms race in the Middle East, (2) the risk of someone using nuclear weapons in sectarian passion, (3) the danger of utterly destroying the nonproliferation regime, (4) the risks of Iran giving weapons to terrorists, (5) the risks of further conventional war in the world’s most volatile region, (6) dangers to the global economy, and (7) the greater durability and reliability of a “solution” that Iran itself endorses.

Finally, the President made clear, in no uncertain terms, that he’s not bluffing in keeping the military option on the table. Here are his exact words:
“I think that the Israeli government recognizes that, as president of the United States, I don’t bluff. I also don’t, as a matter of sound policy, go around advertising exactly what our intentions are. But I think both the Iranian and the Israeli governments recognize that when the United States says it is unacceptable for Iran to have a nuclear weapon, we mean what we say.”

A man who has spent his entire political career practicing the diplomatic art of understatement need not say more. He certainly doesn’t have beat his chest or threaten. Coming from Barack Obama (let alone as President!), those sentences mean far more than any off-the-cuff, thoughtless frat-boy one-liner bubbling up on the Republican campaign trail.

Until reading his interview, I had been prepared to go all the way toward stopping Iran, except for war. But now I would support the President in an American—if not Iraeli—air strike to knock out Iran’s enrichment facilities if all else fails. Here, besides the ones the President outlined, are my own additional reasons:

An Israeli air strike might start a war with Iran. That’s especially so if it has to be repeated, as it would probably have to be to complete its mission. The US, being much stronger and more remote, is unlikely to suffer a real war. Iran might make reprisals against American forces, embassies and citizens in the region. But Iran has nothing like the global reach to make war on the US, let alone at home. A war like those in Afghanistan and Iraq is extremely unlikely because only our Air Force and Navy would participate. So an American air strike is better for both Israel and regional peace than one by Israel. (If one happens, I hope Israel will just sit on the sidelines and do no more than provide any necessary bases and logistical support. Plausible deniability would be a very good idea.)

Second, the Israeli Air Force simply doesn’t have the firepower that we do. After ten years of war in Afghanistan and Iraq, we have a huge arsenal of drones, cruise missiles, stealth fighters and stealth bombers, all with handlers and pilots having recent combat experience. We also have much bigger bunker-busting bombs. If even one of those penetrated Iran’s enrichment caverns while centrifuges were running, it would not only create absolute mechanical havoc. It would spew radioactive uranium compounds an all directions. Further enrichment work would require massive decontamination efforts, even if possible. Air strikes are not the best option, but if they become necessary, we can do the job.

The Israelis’ chance of completing the mission, let alone with a single strike, are much lower. Their chance of completing it without starting some sort of wider war are even less.

Finally, Bashar al-Assad has given us a more recent but equally potent reason not to shrink from air strikes. What would happen if a psychopath like him got nuclear weapons? Would he have used one, instead of conventional artillery, to massacre Homs?

A quick answer might seem “no.” But as you watch Syrian video of him strutting among his sycophants like a manic madman while his forces butcher his own people, the answer seems less clear. Would a man like him have any real understanding of what nuclear weapons can do? Even if so, would he have the insight and the modicum of empathy needed to understand why no one, anywhere in the world, has used nuclear weapons except to end history’s most terrible war? Psychopaths like him have none of those traits.

The risk of a tyrant using nuclear weapons to cow his own people and annihilate his own domestic opposition is something the world never really considered until recently. Now we should.

I personally think that Iran’s leaders are more rational and less psychopathic than Assad. But who really knows what they might do if their hold on power were threatened? If the regime had nuclear weapons, no external country would likely threaten to use—let alone actually use—its own nukes, for fear of starting a nuclear war.

Should we gamble the future of Iran’s own people, let alone Israel’s and the world’s, on untested hope? Might nuclear weapons make a gruesome tyranny durable, perhaps even perpetual? I think that’s a question no one wants to answer through sad practical experience.

So, for all these reasons, I would support the President in an American air strike against Iran’s nuclear facilities. But I’ll do so only if and when he, with his extraordinary intelligence, political skill, insight and empathy—plus secret, shared American and Israeli intelligence—says that all other options have failed and nothing else will work.

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