Suntech made a huge mistake, purchasing an 80% stake in Global Solar Fund in 2008. Turns out that was not only a bad investment, Suntech was essetially defrauded. They lost $683 million on the deal and they needed that money to make payments on their debt. When they couldn’t, they had to file for bankruptcy.

So the mighty fall. Suntech was number two in the world in manufacturing as recently as 2011. But does this signify the end of solar? No.

The only impact this will have on the solar industry will be a temporary easing of market conditions for other manufacturers. There’s too much product floating around out there–and until some entreprenurial company buys Suntech’s remaining assets, there will be a little less of a surplus. This means a bit better margin for the rest of the solar universe, which is very much a good thing. Module manufacturers have been skating on thin-ice margins for two years.

Like the flurry of bankruptcies that afflicted Western solar companies over the last year and a half, this is very much normal operations in a young and quickly growing industry sector.

Compassion for Suntech–continued optimism for solar–and back to work, everybody.

Over at the Breakthrough Institute, Roger Pielke has published an interesting article that basically replicates the work I’ve done  here at 3,000 Quads.

In arriving at his projected totals for future energy consumption, he uses the exact same methodology as I did in my report–picking a country that has ‘x’ level of energy consumption and calculating the result if the developing world reaches that level of prosperity. It’s sobering stuff.

I sent Roger the report a year ago in November of 2011 and a couple of weeks back he mentioned that he was working on something similar. He came up with similar answers, although he doesn’t use a timeline for achievement the way I did–I predicted 947 quads by 2030, roughly 2000 quads by 2050 and 3000 quads by 2075. (Not that I’m claiming the idea is my intellectual property–Dan Nocera has been writing in a similar vein for several years as well. But a hat tip would have been nice.)

Here’s his chart:

And here’s one of mine:Good to know great minds think alike.

“As the data shows, China is now burning almost as much coal as the rest of the world—combined. And despite impressive support from Beijing for renewable energy and a dawning understanding about the dangers of air pollution, coal use in China is poised to continue rising, if slower than it has in recent years. That’s deadly for the Chinese people—see the truly horrific air pollution in Beijing this past month—and it’s dangerous for the rest of the world. Coal already accounts for 20% of global greenhouse gas emissions, making it one of the biggest causes of man-made climate change. Combine that with the direct damage that air pollution from coal combustion does to human health, and there’s a reason why some have called coal the enemy of the human race.”

Read more: http://science.time.com/2013/01/29/the-scariest-environmental-fact-in-the-world/#ixzz2JPbBPc4w

“Data from China’s National Bureau of Statistics show the total energy consumed in China in 2011 (including 3.48 billion tons standard coal) increasing by 7 percent year-on-year. Experts estimate that the growth rate of energy consumption in 2012 will drop below 5 percent, hitting a 10-year low since 2002. Meanwhile, coal imports have increased by 60 percent to 290 million tons in 2012.”

The U.S. DOE’s International Energy Outlook for 2011 (they canceled their 2012 edition) predicted an average annual growth rate for China’s energy consumption at 2.3% through 2035.

If China continues to increase energy consumption at 7% annually, by 2030 their consumption could reach 316 quads.

India’s growth in energy consumption has averaged 8% per year for the past decade–the DOE predicted their growth would be slower than China’s. If they continue at their present pace they will reach 237 quads by 2030.

The two countries alone will consume more energy than the entire world did in 2012.

Forget toys, Lenovo computers and iPhones from China. And forget willing call center workers and Bollywood films from India. What they will be offering the world for the next few decades consists of pollution, black soot to float up to the Arctic and growing amounts of CO2.

I don’t blame them a bit for what they’re doing. I do hope they do it fast enough so their leaders can become as conscious of environmental impacts as some in the developed world. Many of their citizens already are–some have even moved ahead of the West in environmental consciousness.

I do blame us for ignoring what’s happening. If we’re not careful we’ll hit the 3,000 quad barrier before 2075. And it will be coming (mostly) from coal.

Look, people–I understand that the fight on climate change has real reasons behind it. I feel fairly certain that some activists have wildly exaggerated what they claim climate has already done due to global warming. I have come to believe that atmospheric sensitivity is lower than some activists claim.

But really–are we going to ignore the coal that India and China will burn to generate more energy than the entire world consumed this year?

From the New York Times: “A total of 55 plants have closed or have announced plans to shut down, according to a count by the Sierra Club. That will leave 395 coal-burning plants in the United States, compared with 522 in 2010, according to the Sierra Club.”

…”Nationwide, coal production dropped this year by an estimated 7 percent even as exports grew to Asia and Europe, according to the Energy Department.”

Now that’s cookin’ with gas… Let’s hope it spreads quickly throughout the world. China has more restrictive mileage standards for its cars than the U.S. Maybe they’ll do the same with coal.

We have once again returned to a world where energy discussions are dominated by demand. It’s a very different world than that where all the focus is on supply.

As has been a recurrent theme on this blog, I need to note that many have not recognized this sea change. Organizations ranging from the U.S. Department of Energy and the International Energy Agency to the World Bank and the International Monetary Fund are still basing their forecasts on potential supply bottlenecks rather than watching how demand is calling forth new supplies from all over the world.

The stories on the DOE’s EIA webpage tell part of the story–from their perspective, trying to give their ‘customers’ (us) what they want. A story of supply. ‘The Availability of Petroleum and Petroleum Products From C0untries Other Than Iran.’ ‘Crude Oil Inventories.’ ‘Weekly Coal Production.’

This focus on supply has led these agencies to underestimate the growth of energy for the future. Regular readers will see me banging the drum again on this.

Energy supply has changed. China is currently building 308 hydroelectric facilities–large dams to generate electricity–in 70 countries worldwide.

Growth in U.S. energy has reached the top of the hill and now has surpassed the very modest growth in energy consumption in this country.

The world has 66 nuclear power plants under construction, 26 in China alone.

While the U.S. plays in its own sandbox with fracked natural gas, Australia, the Ukraine, Israel and plans in Brazil are changing everybody’s ideas about electricity generation and even automotive fuel.

Renewable energy continues to grow, providing almost 17% of all energy used in 2012.

Basically, folks, increased demand from the developing world called forth successful efforts to increase supply.

This is great news–the developing countries will have access to the energy they need to develop up to and perhaps beyond the living standards of the rich world. I am ecstatic.

This is terrifying news, as well. Despite the growth in non-emissive energy sources, the primary sources for fuel remain coal and petroleum. The annual growth rate in coal consumption since 1999 is 4.4%.

This weblog is titled 3,000 Quads because unconstrained growth will lead to that level of energy being consumed by 2075, far more than the supply-oriented organizations are projecting now.

Because of these errors, I think they have underestimated short term energy demand (through 2030) by a third. And I’ve spent a lot of time here showing why and discussing the possible consequences.

How do organizations like the U.S. Department of Energy’s Energy Information Administration, the International Energy Administration, World Resources Institute, the IMF, the World Bank and companies like Exxon, BP and others who produce energy estimates get tied up in knots about things like this?

I think the answer, implied by the title of this post, is fairly easy to illustrate and explains a lot of problems with forecasting both within and outside the energy sector.

Take the DOE’s EIA. They spent a lot of time and energy developing a model of future growth of energy. I’m sure they were diligent and thought hard about it. (I think the defect is that it’s based on energy supplies, not demand, and that it thinks that people will quit using energy if it gets expensive.)

But the problem with their recent forecasts lies in their model-dependent analysis. After spending all that time and energy building their model, obviously they’re going to use it a lot. Sadly, it seems that they’ve tunneled their vision onto the model to the exclusion of a lot of data in the real world. (This is then exacerbated by the confirmation bias of looking at friendly analysis of the same sources by other organizations and feeling relieved when they arrive at similar results.)

Model dependency crops up in other areas as well. Economics, climate change–both are examples where tunnel vision is hurting analysis. We saw in my recent post that nobody had published a simple mash-up of CO2 emissions and recent temperature trends and my modest posting of the two together got quite a reaction. In finance, many of the great and the good seem determined to ignore Nassim Nicholas Taleb in charting paths to economic recovery, with one side making the (almost forgiveable) error of wanting to adopt one-half of the Keynesian prescription (deficit spending for investment in the face of a liquidity trap) without making a good faith commitment to practicing the other half (creating a budget surplus) when times are good.

The other side (the ECB and U.S. Republicans) are making the far more grievous error of looking at deficit numbers in isolation, thinking that the gross totals and their increase are reasons to abandon social programs and reduce debt at any cost. It makes me wonder if any of them have ever had a mortgage on a home. The cost to borrow money for governments with floating currencies has never been lower and the U.S. and the UK in particular should be spending their way to recovery. It will be tougher for the Eurozone countries, but they need to find a way.

In climate change discussions both activists and skeptics have found a comfort zone of data they are willing to use to advance their arguments. Activists like models, as real world observations are not exact enough to help them make their case. Skeptics like statistical rules and laws, which highlight the deficiencies and call arguments into question. Neither side has spent enough time examining the sources of data used by the other team. Activists still, in the waning days of 2012, show a surprising naivete and ignorance about statistics, while skeptics stubbornly refuse to acknowledge that models can be useful, if users keep their limitations in mind and a copy of The Black Swan on their desks.

The other fields that suffer from the same tunnel vision–healthcare, gun control, genetically modified organisms and their utility/safety or lack thereof–tend to comprise, with those examined above, most of the things we fight about.

I don’t consider that surprising. I don’t consider it unintentional. I do consider it as potentially fatal to the cause of solving any of the real problems that confront modern society.

I suppose I should be tempted to sink back into the morass of the climate wars and go for the big traffic that might justify my adding ads to the site. For now I’m going to resist. There are too many places where people can go to talk about climate change, and too few where energy is the focus. And I think this might be the only one with a micro focus on energy consumption.

Energy consumption. The worry of mine that gave birth to this weblog is that we are underestimating future energy consumption and as a result are sleepwalking into a world where coal becomes (again) the default fuel used to power the rise of the developing world. We’re not doing the infrastructure planning that will allow nuclear, hydroelectric, wind/solar/biofuels and even natural gas to take some of the burden off of old king coal.

Specifically, in the near term I project that the world will use 947 quads in 2035, far more than the 712 estimated by the DOE EIA, the IEA and the U.N. I also project it will only get worse after 2035, leading to an incredible 3,000 quads every year by 2075.

Of course this will have an effect on climate–even if atmospheric sensitivity is as low as I think (and hope), the brute force effect of the emissions associated with that much consumption of coal will impact our climate.

I’ve tried to show it and discuss it. So far, more than 22,000 visits to this blog have maybe convinced a few hundred people that I have a case. I hope so.

On to today’s topic. The Department of Energy’s Energy Information Administration has published their Early Release of the U.S. Annual Energy Outlook for 2013.

Some key points:

• Domestic production of crude oil is increasing and is expected to continue to increase, reaching 7.5 million barrels per day by 2019
• Our consumption of natural gas is also expected to increase, from 6.8 trillion cubic feet per year in 2011 to 7.8 trillion cubic feet in 2019
• They have increased their projections of generation from solar and wind, from 13% of the total in 2011 to 16% in 2040. The EIA is not so optimistic about advanced biofuels, lowering the predicted output from all biomass from their 2012 prediction of 5.4 quads to 4.2 quads by 2035
• With improved efficiency of energy use and a shift away from the most carbon-intensive fuels, U.S. energy-related carbon dioxide
  (CO2) emissions remain more than 5 percent below their 2005 level through 2040
• They have upped their prediction of GDP growth per year, from 2.5% to 2.6% CAGR through 2040.
• As for the reason I was so eager to look at the report… they obviously don’t agree with me. They predict that total energy consumption will rise by a total of 7% by 2035, from 98 quads in 2011 to 104 quads in 2035 and then by 6% to 2040 to a total of 108 quads. (I think it will be higher.)
• Their justification still centers around their belief that energy intensity will decline as total U.S. population increases by 29 percent from 2011 to 2040, but energy use grows by only 10 percent, with energy use per capita declining by 15 percent from 2011 to 2040. I want some of what they’re smoking

Overall, I still think they’re looking too much at the inputs to their models–pricing and supply constraints, availability etc., instead of accepting that the demand for fuel is not very price sensitive and will be driven by population and GDP growth. Energy efficiency will surely help us out. But we’ve picked a lot of the low hanging fruit from that tree, and future progress in energy efficiency will be progressively more difficult.

Second, for returning to direct discussion of climate change, something that is closely connected to energy consumption but so controversial as to impede rather than inspire rational discussion. But as I don’t see this elsewhere I want to write this here.

The physics behind the theory of global warming are solid. CO2 is a greenhouse gas, we’re emitting industrial levels of it, a significant portion remains in the atmosphere for a fairly long time. This retards the cooling of the Earth and temperatures warm as a result.

One of the few non-controversial datasets in climate change is the Keeling curve, the graph of the concentrations of CO2 in the atmosphere reproduced here:

We see concentrations rising steadily from 315 parts per million in 1960 to 395 ppm last year. It’s close to 400 ppm now.

Human emissions of CO2 caused by burning of fossil fuels and production of cement have risen similarly:

Emissions have climbed at an even higher rate than concentrations.

And the third data source to look at (for simplicity’s sake–we could actually look at dozens of data sources) is temperature changes. This chart shows the global average temperature change from a ‘normal’ 30-year range from 1950-1980. It comes from the Goddard Institute for Space Studies, led by scientist James Hansen.

This shows a fairly constant rise in temperatures since 1978.

Once again, you don’t have to be a climate scientist to think that there seems to be a connection. The physical theory published first by Svante Arrhenius over 100 years ago and elaborated on by a century’s worth of scientists has observational evidence that tends to confirm it. I certainly believe in it.

In fact, I believe that global temperatures will probably rise by about 2 degrees Celsius over the course of this century. The difference in estimated temperature rises from different sources almost always comes from the differences in estimated atmospheric sensitivity to concentrations of CO2 in the atmosphere. Having extra CO2 in the atmosphere warms the atmosphere, which is presumed to produce more water vapor, which is also a greenhouse gas and would contribute more warming than the CO2 by itself. How much extra warming would ensue is pretty much the heart and soul of the debate over global warming.

Those who think that there isn’t much of an additional effect (that sensitivity of the atmosphere is low) have been chuckling very publicly because temperatures haven’t risen very much (if at all) since the big El Nino year of 1998. This is not hugely surprising, as the shape of the data is uneven, a sawtooth with ups and downs that can last a decade or longer. But it is happening at an inconvenient time politically for those who are worried that sensitivity is high. They are trying to get the world to prepare for warming of 4.5C or higher, without much success.

Here’s what temperatures look like more recently.

By itself, this chart doesn’t explain very much. As I said, it is not uncommon or unexpected for the temperature record to have flat or declining periods that last a decade or more.

However, I have a problem. The Carbon Dioxide Information Analysis Center (CDIAC) has estimates of how much CO2 humans have emitted since 1750. (Confusingly, they convert the CO2 to tons of carbon with a fixed formula.) That chart is the first one way up there at the top of the post. It rises dramatically

But looking at the data global.1751_2009 (3), one thing jumps out at me. CDIAC writes “Since 1751 approximately 356 billion metric tonnes of carbon have been released to the atmosphere from the consumption of fossil fuels and cement production.” And they helpfully provide an Excel spreadsheet showing their estimates by year.

And almost one-third of that number, 110 billion metric tonnes, have occurred since that time in 1998 when temperatures reached their temporary plateau.

Because heat moves somewhat sluggishly through the earth’s oceans, and because there is a lag factor in other earth systems, we do not expect a hair-trigger reaction to increases in CO2 emissions and concentrations.

But one-third of all human emissions of CO2 have occurred since 1998. And temperatures haven’t budged as a result.

This does not ‘disprove’ global warming–at all. I still believe that temperatures will climb this century, mostly as a result of the brute force effect of the 3,000 quads of energy we will burn every year starting in 2075–the reason I started this weblog.

However it makes it exceedingly difficult to use the past 15 years as evidence of a very high sensitivity of the atmosphere to CO2 concentrations. And it makes me feel more comfortable about my ‘lukewarm’ estimate of 2C temperature rises as opposed to the more alarming 4.5C rises put forward by some of those who are most active in the movement to reduce emissions drastically.

And it makes me wonder about why people don’t include relevant data when they discuss these issues. Is it really that politically incorrect to show real data, even if that data doesn’t advance your case?