Monthly Archives: April 2012

How Do We Deal With Good News About Energy?

Because so much of the conversation about energy issues is oriented around changing the behaviour of people in their homes and cars, in governments in their policies, taxes and regulations and in corporate practice, most of what you read has a Voice of Doom quality to it. And I might fall into that trap from time to time… But there is good news out there, too.

If I can try and introduce a note of optimism, let’s talk about U.S. energy consumption for just a second. Many people have noted that consumption peaked in 2007 at 101.3 quads. It dropped to 94.5 as the recession bit and climbed back up to 97.7 the next year. But last year it dropped again, to 97.5 quads. This is with GDP growth and population rise.

More importantly, look at fossil fuels over the same period. Their consumption also peaked in 2007, at 86.2 quads. The succeeding years showed FF totals at 78.4, 81.1 and 80.

So although overall consumption picked back up and has now leveled off, fossil fuel consumption dropped more and picked less back up.

So we not only might be seeing a plateau (won’t use the word peak) in demand, the mix is getting greener.

Does that cheer anyone up? In only 4 years, fossil fuels dropped from 85% of our portfolio to 82%.

Hooray! Or something like that. Link is here:

I should add that even within fossil fuels there is change brewing, with coal decreasing and natural gas increasing. So: we’re using less energy than in 2007. Of that lower figure, a lower percentage is produced by fossil fuels. Of that lower percentage, more is natural gas, which produces less CO2 than the coal it replaces.Who’s got the bubbly on ice?

What Correlates With Energy Consumption?

Well, after yesterday’s comparison of Texas and California, which are at the opposite ends of the spectrum regarding energy consumption per person per year, I thought I’d take it a bit further.

Here is a ranked list of 49 of the 50 states (missing Hawaii and Washington D.C. at the moment): Energy per capita with other factors, US 2009

The average for the entire U.S. was 308 mbtus (million British Thermal Units) per person per year for 2009. That compares favorably with Canada (427 mbtus  per capita) but not so well with Germany (250 mbtus).

However, there is more variation found within the United States than between the U.S. and other developed countries. New York has per capita energy consumption of 196 mbtus. Wyoming has consumption of 956 mbtus, higher than Kuwait, Qatar…

Because Germany is a well-developed, high infrastructure country that even has autobahns without speed limits, I think they could serve as a goal for U.S. energy efficiency enthusiasts such as myself. So it’s nice to begin this with the observation that nine U.S. states (Maryland, Florida, New Hampshire, Connecticut, Arizona, California, Massachusetts, Rhode Island and New York) all have already achieved this target.

And there are really only 13 states with per capita energy consumption above 400 mbtus (Wyoming, Alaska, Louisiana, North Dakota, Iowa, Texas, South Dakota, Kentucky, Nebraska, Montana, Indiana, Alabama and Oklahoma).

There are some other points of interest:

  • The median household income for the 13 worst states is $46,816. The median household income for the 9 best performing states is $58,016. Those who say that rising incomes lower energy consumption may have a point, although it could be that wealthier people prefer Connecticut to North Dakota…
  • The average population density per square mile for the 13 worst states is 58.3. The average population density per square mile for the 9 top performers is 488. Urbanization is the environment’s best friend.
  • The average insolation (a measurement of how much sunlight an area receives) for the 13 worst states is 3.97. The average insolation for the 9 best performing states is 4.21.
  • The average residential electricity rates in the 13 worst states in 2010 was 9.85 cents per kilowatt hour. The average residential electricity rates in the 9 best performing states in 2010 was 15.29 cents per kilowatt hour. Incentive to conserve…

Have a look at the data and let me know what else you find that’s interesting.

State Population density (2011) Energy consumption per capita Detached Housing Median Income Ave. Insolation
 Wyoming 5.851 956 145,260 52,664 4.25
 Alaska 1.264 907 152,688 66,953 2.09
 Louisiana 105 750 1,184,167 42,492 4.76
 North Dakota 9.916 661 179,821 47,827 3.68
 Iowa 54.81 472 911,987 48,044 3.77
 Texas 98.07 456 5,171,892 48,259 4.83
 South Dakota 10.86 444 217,681 45,043 3.87
 Kentucky 110 435 1,156,003 40,072 3.9
 Nebraska 23.97 423 519,763 47,357 3.98
 Montana 6.858 422 276,433 42,322 3.96
 Indiana 181.7 409 1,802,259 45,424 3.87
 Alabama 94.65 405 1,300,272 40,489 4.34
 Oklahoma 55.22 404 1,080,624 41,664 4.36
 West Virginia 77.06 393 583,695 37,435 3.73
 Mississippi 63.5 386 791,569 36,646 3.59
 Kansas 35.09 385 818,954 47,817 4.11
 Arkansas 56.43 365 809,373 37,823 4.46
 South Carolina 155.4 347 1,078,678 42,442 4.15
 Minnesota 67.14 344 1,399,993 55,616 3.68
 Tennessee 155.4 340 1,642,085 41,725 4.04
 New Mexico 17.16 334 475,829 43,028 4.97
 Idaho 19.15 330 369,924 44,926 4.24
 Maine 43.04 327 439,459 45,734 3.82
 Ohio 281.9 315 3,221,505 45,395 3.83
 Wisconsin 105.2 309 1,531,612 49,993 3.69
88.08 inhabitants per square mile (34.01 /km2) 308
 Washington 102.6 305 1,527,867 56,548 3.53
 Missouri 87.26 304 1,679,585 45,229 4.09
 Virginia 204.5 303 1,810,353 59,330 3.9
 Georgia 169.5 301 2,107,317 47,590 4.37
 Illinois 231.5 296 2,831,011 53,966 3.72
 Colorado 49.33 290 1,122,331 55,430 4.55
 Pennsylvania 284.3 290 2,935,248 49,520 3.84
 Delaware 464.3 288 191,688 56,860 3.84
 Oregon 40.33 279 911,595 48,457 3.82
 New Jersey 1,189 275 1,794,967 68,342 3.63
 North Carolina 198.2 272 2,267,890 43,674 4.2
 Michigan 173.9 271 2,988,818 45,255 3.58
 Utah 34.3 271 520,101 55,117 4.53
 Nevada 24.8 268 432,437 53,341 5.3
 Vermont 67.73 254 193,229 51,618 3.43
 Maryland 596.3 251 1,097,673 69,272 3.98
 Florida 353.4 232 3,816,527 44,736 5.26
 New Hampshire 147 229 341,299 60,567 3.58
 Connecticut 739.1 224 816,706 67,034 3.59
 Arizona 57.05 221 1,244,172 48,745 5.38
 California 241.7 217 6,883,493 58,931 5.4
 Massachusetts 840.2 216 1,374,479 64,081 3.58
 Rhode Island 1,006 207 241,202 54,119 3.64
 New York 412.3 196 3,198,486 54,659 3.53

Texas vs. California

The two states are ranked #1 and #2 in population. Texas has an area of 269,000 square miles and a population density of 98 people per square mile while California has an area of 163,000 square miles and a population density of 242 per square mile.

Is population density a sufficient explanation for the differing rates of energy consumption? Texas consumed 456 mbtus per person in 2009, compared to 217 mbtus per person in California.

I don’t know the answer. Any ideas from commenters? Los Angeles is the second largest metropolitan statistical area (MSA) in the country, with almost 13 million people, but Dallas/Ft.Worth/ Arlington is 4th and Houston 6th, and taken together they equal Los Angeles.

I really don’t know and I really would like to know. Why does Texas use twice as much energy per person as California?

California uses more gas for transportation than Texas (17 billion gallons vs. 12 billion). The geography and climate have similar extremes in terms of deserts and temperatures. The average square footage of homes in Texas was 2,168 sq ft in 2005, 500 more than the 1,607 in California. However, the average annual energy consumption per square foot was higher in California (41.7 thousand BTUs) than  in Texas (37.6). California has 6.88 million single family detached homes, compared to Texas’ total of 5.17 million.

California’s median household income in 2010 was $58,931 compared to Texas’ median HHI of $48,259.

Help me out here, please. If population density is the single most important factor, that’s pretty important information. And yet I don’t recall reading much about population density and its effects on energy consumption.

(I should note that New York City consumes 1% of the country’s energy. However it has 3% of the country’s population….)

Pointing Towards Energy Consumption Solutions

Before we start hectoring China to start reducing energy consumption (watch it peak about 2050, though), we should take a look at our own.

The United States uses about 100 quads per year right now. Unless you’ve been reading this blog or have related interests, that figure probably doesn’t mean very much to you. Here’s what a quad really is. 100 quads is really a lot of energy–about 20% of world consumption by about 6% of the world’s population.

Another way to look at energy consumption is to look at how much energy is consumed per person per year. In the United States we are using about 310 million British Thermal Units per person per year. (What’s a British Thermal Unit? See here.)

That’s a lot of energy, but not as much as people burn in Canada (427 mbtus per capita) or Iceland (560 mbtus per capita), but as we have more people, that’s scant comfort.  If we reduced our average consumption by 20%, to about 250 mbtus per person, we’d be using energy at the same rate as the Germans (245 mbtus per capita).

Well, would that involve major sacrifice? We might ask Maryland, which used 250 mbtus per capita in 2009. Or New York, which used 196 mbtus in the same year. They’re actually fairly sophisticated, high infrastructure places–kinda like Germany. The trick is for places like Tennessee (331 mbtus per capita) to catch up with the leaders. Here’s how it looks on a map.

We do this all the time in other fields. We establish a benchmark (250 mbtus per person), provide assistance to those in the back of the pack, reward achievement and penalize those who don’t make an effort.

And it works wherever it’s tried (and done well).

China and Coal

China has worked hard to develop alternative sources of energy. They were picked to lead in solar installations this year before Wen Ji Bao announced in March that they were not going to blindly throw renewables up everywhere at random. Nobody really knows what the ramifications of that statement are as of yet.

China has put in place the infrastructure to supply the world with wind turbines and solar panels. It leads the world in building dams for hydroelectric power. They don’t seem to be doing too much in the realm of biofuels, from what I’ve read, but are eagerly looking for frackable gas supplies–and have found some big deposits.

But for all that, it’s coal, folks. China depends on coal today. China will depend on coal in 2030. Bearing in mind my projection that China will be using 247 quads in 2030 (as opposed to 100 last year), this chart is sobering:

If my total of 247 quads is correct, that would indicate 185 quads of coal alone. That compares to 56 quads China got from coal in 2010.  That is more than the 156 quads the world got from coal in 2010. 

And I was going to start this post off with the cheerful news that in the U.S., coal consumption dropped by 5% last year, to under 20 quads. Oh, well.

Fuel Portfolio of Choice

It is clear that we will be using a broad mix of fuels to generate the energy we will need. I have predicted here that the total will be higher than the Department of Energy’s Energy Information Administration, but whether you believe their figures or mine, it would be foolhardy to walk away from any of the sources of energy we currently have.

Bearing in mind that the U.S. used about 100 quads last year, have a look at the table released today by the EIA regarding how much energy we are getting from renewables:

U.S. Renewables & CO2 Emissions Summary
2010 2011 2012 2013
Conventional hydroelectric power only. Hydroelectricity generated by pumped storage is not included in renewable energy.
Fuel ethanol and biodiesel supply represent domestic production only.
U.S. Renewables Supply (quadrillion Btu)
Hydroelectric Powera 2.539 3.171 2.779 2.660
Geothermal 0.208 0.222 0.227 0.228
Solar 0.109 0.114 0.128 0.139
Wind 0.924 1.168 1.327 1.388
Wood 1.979 1.967 1.975 2.005
Ethanolb 1.127 1.183 1.174 1.171
Biodieselb 0.039 0.110 0.110 0.128
Other Renewables 0.479 0.482 0.491 0.501
Total 7.404 8.418 8.189 8.220

Eight percent from renewables isn’t peanuts.  The kicker is the 2 quads we get from wood–we probably don’t really want that to be so high. Hydroelectric is going to have a down year, which masks the growth in solar, wind and biofuels.

Those 8 quads and 8% are roughly matched by nuclear power, which produced 8.44 quads in 2010. That gets us to almost 17 quads and 17% of the current total, which is really quite respectable.

What’s tough is looking at expected growth out to 2030. The EIA forecasts that nuclear will grow at 0.4% per year, yielding 9.55 quads in 2030. They expect 1.7% annual growth from renewables, which would take it to 11.1 quads. That’s 20.65 quads, which will be 19% of the total 108 quads they project for the U.S. in 2030.

Could do better…

I’ll say again I think their forecast of 108 quads in 2030 for the U.S. seems low. That’s scary. I think their forecast of renewable and nuclear energy is also low. That’s cheering.

This is kind of a high stakes race we’re watching. Hope we get it right.

Policy Implications of Increased Energy Consumption

So far I believe I have made a credible case that the world will consume close to 1,000 quads in 2030, far more than the 721 projected by U.S. and international agencies. If I’m off, I’m not off by much. I have a long way to go to make the case that consumption will continue to increase to 2,000 quads by 2050 and 3,000 by 2075, but the short term case looks pretty solid.

What does that mean for us? I would like to examine the implications for public policy and would definitely like your input.

I think the first finding would be that the decision by Germany and Japan to retire most or all of their nuclear power generation is something they will regret fairly quickly. Japan imports almost all of its fuel at present, while Germany’s replacement for nuclear may well end up being the dirtiest of brown coal sources. The fungible nature of fossil fuels and the market structure of the energy sector pretty much guarantees that an unexpected increase of 25% in demand will cause energy prices to rise dramatically.

The second thing to jump out at me is that, along with other major fuel-rich countries, the U.S. stands to benefit greatly from this development, a point I have seen made recently in major media, from Tom Friedman’s semi-jocular question about the U.S. joining OPEC to more serious analysis of our improved balance of trade.  The U.S., which still has a lot of oil, gas and coal, should be able to not only meet domestic demand, but sell a lot of it abroad. The U.S. will be happily joined by countries like Brazil, Russia and Nigeria. Major importers like China, India and Japan will have to make adjustments in their policies as well as their markets.

The third effect is the boost that rising oil prices will give to renewable energy. Ethanol will be back and more investment will be made in the sexy new fourth generation biofuels–heck, maybe one of them will work. But gas prices will rise, too–in part because the infrastructure to transport it is only partially built and in part because demand will outstrip even the huge supplies of frackable gas. And as that happens, the other renewables–wind and solar–will begin to compete on cost as well as ‘ethical purity‘. Not a minute too soon.

I believe there will be a chain reaction of consequences beyond the three I’ve mentioned here–and I would welcome input from those of you with time to give it some thought.