Friday, April 10, 2015

Writing on the Fossil Fuel Wall

https://s3.amazonaws.com/mosaic-landing/World_US_RPS_3_1250w.jpgThere's a lot of wishful thinking in Alaska that oil and gas prices will rebound and save us from economic ruin and collapse.  But it doesn’t take an energy expert to read the writing on the wall: 

The Age of Fossil Fuels is over.  

The signs are everywhere.  

A recent report by Stanford economist Frank Wolak predicts that the global oil prices will stay low for the next 2 decades.  He ascribes this price intransigence to increased energy production in North America, better technologies and the declining market power of the OPEC countries.

And there’s more to the story.

Climate change is spurring nations and states around the globe to adopt aggressive mandatory renewable energy goals.  To date, more than 67 countries currently have renewable energy policy targets.

Sweden currently leads the EU with 51% of its energy coming from renewables. Norway, Alaska’s bellwether, meets 98% of its energy needs with hydroelectric, geothermal and wind.  China, India, and even Saudi Arabia see the writing on the wall and are all setting rigorous renewable energy goals. 

In the US, California, our largest energy market, recently pledged to meet 50% of its energy needs from renewables by 2030.  Our sister state, Hawaii has adopted an even more ambitious 70% by 2030 clean energy goal with 30% from efficiency and 40% from locally generated renewables.

Some renewable energy watchers predict that 100% renewable energy will be the new normal. 

While still a small percent of the global market, renewable energy markets are exploding.  According to the International Energy Agency’s Medium-Term Renewable Energy Market Report for 2014:

“In 2013, renewable power capacity expanded at its fastest pace to date. Renewable power generation continued to grow strongly, reaching almost 22% of the global mix, compared with 21% in 2012 and 18% in 2007. Globally, renewable electricity generation is now on par with that of natural gas, which remained relatively stable in 2013. Investment in new renewable power capacity topped USD 250 billion globally in 2013 and is likely to remain at high levels.”

According to Bloomberg, even with a 14% drop in investments (to US $214.4 billion), renewables accounted for 44% of 2013’s newly installed generating capacity

Alaska would be wise to abandon its dirty energy past and move swiftly and smartly into the clean energy future. 

And that’s the good news. 

We have abundant and diverse renewable energy resources that could power our rail belt cities, southeast and meet 100% of electricity needs of every rural community.   
The question, you ask next is, “who will pay for this great transition”?

We know from the Trans Alaska Pipeline that massive public/private spending is good for the economy, a fact confirmed by expert economists. 

Alaskans long for the good old days of the TAPS boom.  Governor Walker’s current proposal to invest $65 billion in public funds to build a natural gas line/LNG export plant is just the latest in a long string of proposed paths  to energy independence while pumping up revenue generating fossil fuel exports. 

We are on the right track but headed in the wrong direction.    

It’s time for Alaska to invest in a new vision; one that builds true, fuel-free energy independence, energy security and community resiliency for all Alaskans as we head into an uncertain climate future.  

We can do this by adopting a mandatory 100% Renewable Energy goal by 2025 in place of our non-binding 50% goal.

Instead of gambling our $65 billion future on failing and fading old energy markets let’s invest in a vast new distributed wind, geothermal, small hydro, wave and solar powered future, retrofit every home and business, build new net-zero buildings, expand an electrified rail system to serve commuters and rural Alaskans alike, construct rural microgrids for every energy and climate stressed community and expand food and basic industries to meet more of Alaska’s needs locally. 

A swift transition will create an abundance of jobs, diversify and grow our economy and ensure a renewable future for all Alaskans.


Saturday, February 21, 2015

North to the future means renewable energy, not fossil fuels

 
Solar thermal collectors, Agate Inn, Wasilla, AK (photo by Ceal Smith)


Guest post by Eric Treider, originally posted: Feb. 18, 2015, Alaska Dispatch News. 

Oil is old news; Alaska's future is in renewable energy. 
 
While Alaska’s lawmakers are busy dodging the blame for the mess they made, they’re ignoring an even greater threat: Even if oil prices return to normal, and even if we break with tradition and arrange to be paid fairly for our oil, someday we won’t be able to depend on oil for jobs and government revenues like we used to.

North Slope oil fields are nearly played out, and the natural gas pipeline will never fully replace them. As Alaska’s oil gauge nears empty, we need to develop new industries to support our economy. Time for us to pull our heads out of our pipeline and look around for fresh ideas, like renewable energy.
When some folks hear the words “renewable energy,” they think of granola, patchouli oil and posey-sniffers. They think that harnessing the forces of nature is a cool idea but not quite ready for prime time. They think we should let market forces do their thing in terms of ushering in the transition to renewable energy generation -- if there even is one.

They couldn’t be more wrong. In many areas of the world, photovoltaic panels and wind turbines are providing an ever-expanding share of electricity. Scotland plans to power nearly 1 million households with electricity generated through tidal power. In Germany, which receives less solar energy than Southcentral Alaska, almost 7 percent of the nation’s electricity is generated by the sun. And other nations aren’t far behind. Many nations intend to fully convert to renewable energy over time.

Technical innovations and economies of scale are forcing prices down for solar panels and other renewable energy gear. Producing green energy is beginning to make economic sense. The trend is clear -- the world will someday be powered by the sun, the wind and the water. Let’s quit living in the past, and let’s try to capitalize on this transition toward sustainable energy production.

At this critical time, let’s devote our state’s intellectual capital and our dwindling financial resources toward building a new Alaskan economy -- one based on designing and building the equipment needed to harness the power of nature: Tide-turbines, hydro-powered turbines, wind turbines, geothermal steam turbines, solar panels, biomass energy systems and wood-gasification systems.

We’ve got brilliant, hard-working people right here in Alaska who can design and build this gear. Due to low oil prices, the folks needed to birth these industries are at risk of being laid off, and many will leave the state -- educators, engineers, technicians, machinists and skilled workers. Has it even occurred to our lawmakers to involve these talented people in a revolutionary effort to re-invent our economy?

Before they’re gone, let’s put these people to work on a project that will outlive us all. Perhaps we could take some of the Permanent Fund’s poorly performing bond-holdings and use those funds to establish a Public Bank of Alaska which could provide the venture capital needed to launch these enterprises. Let’s set these businesses up as workers’ cooperatives -- an extremely successful, engaging business model where the employees own their companies, share in decision-making, appoint their managers and share in the profits, which would stay in Alaska.

And we’ll fuel these industries through nature’s powerhouse. We are sitting on a mother lode of renewable energy. Cook Inlet embodies the second most abundant source of tidal power in the world. On some rivers, hydropower is appropriate. Certain areas of the state have notable wind resources and during the long, clear, cool days of spring, solar panels generate up to 20 percent more electricity than they are supposed to. Our lush vegetation is a feast for biomass energy generators and wood-gasification systems.

Inexpensive renewable energy will help all Alaskans, especially those in rural areas, and it could turn the tide for marginal, but strategic, industries that require reasonably-priced electricity, such as agriculture.

Visionary Alaska Gov. Walter Hickel once said, “Cheap electricity isn’t about turning on a light. It’s about turning on an opportunity.”

Truly, Alaska is at a turning point. Do we just let life happen to us and allow our economy to wither? Or do we take bold, calculated steps toward forging a new future for ourselves and our children?

Eric Treider is a laid-off oilfield worker, a broke-down gold miner and a former candidate for Alaska Senate. He lives with his wife Nelma in Soldotna.

Tuesday, January 27, 2015

Key Facts on Keystone, ANWR, Chukchi, and NPR-A that Nobody is Talking About

Over the past couple of weeks much has been written about the economic consequences that Keystone could have on Alaska. Now the offshore drilling controversy, ANWR, and NPR-A are attracting headlines here, and the economic consequences of those projects should be considered in the same light.

Senator Lisa Murkowski addressed the pro-Keystone argument in her recent Alaska Dispatch commentary, but it seems she misunderstood our concerns.

The concern voiced about her support for Keystone is the competition from Canadian tar sands and Bakken oil, not access to market as she implied. Six months ago Alaska was still enjoying a sellers market and Keystone wasn't threatening our revenue. Now it's a buyers market, and every project that doesn't provide revenue to Alaska is competition.

Even Lisa acknowledged the law of supply and demand when she wrote that "low prices result when world markets are well supplied", so how could she not see that even lower prices result when markets are over-supplied? Keystone would make outside projects better investment prospects for limited investment money that we all compete for. Bakken and the tar sands would rob us of investment money, increase the oil glut bubble, drive down oil prices even further, and increase Alaska's fiscal deficit.

Keystone isn't being built as an alternative to shipping oil by train to the west coast, it's being built as *additional* shipping capacity to increase Canada's market share, all to Alaska's detriment.

It'd be great if we could blame Saudi Arabia or Iran for the oil glut and falling prices, but OPEC didn't do it. All they did was refuse to relinquish their market share to the American frackers who caused the glut. One of the largest contributors to this oil bubble is Bakken, the field that Lisa acknowledges is one of Alaska's direct competitors.  She also touts Bakken as one of the largest beneficiaries of Keystone. Keystone can only increase the glut and lower oil prices more. Keystone is bad for Alaska in every way, period.

A related issue that Lisa said she will tackle is to make offshore drilling easier. As laid out in the 2011 study by the University of Alaska and Northern Economics, Alaska receives almost no revenue from oil and gas produced on Federal lands, including offshore drilling in the Chukchi Sea, ANWR and NPR-A. Given this frequently overlooked fact, we have to wonder what cost/benefit calculation Murkowski did on that issue. If she had said she was going to try to get Alaska a 50% share of the royalties, perhaps we could have assumed she was working for Alaska instead of at cross-purposes.

Norm Van Vactor already discussed the Bristol Bay and Bering Sea offshore prospects at length in this recent Dispatch commentary, so let's take a look at Royal Dutch Shell's big offshore project in the Chukchi Sea. Remember, Alaska will collect no tax revenues from that project. All we'll get is all the risk (just like in Bristol Bay.)
How much risk?

According to the Bureau of Ocean Management's Environmental Impact Statement filed for the Chukchi Sea Planning Area (Volume 1, page 154), there's a 75% chance that full development will result in at least one large spill of 1,000 bbl to 150,000 bbl of oil. 150,000 barrels is over half the size of the Exxon Valdez spill.

They calculated that figure using nominal global risk probabilities that don't include additional risks inherent to working in the Arctic Ocean. Assuming that Chukchi oil field risks are at least double that of gulf coast risks, we get a near certain expectation of multiple large spills that could cumulatively exceed the Exxon Valdez's.

Near certainty isn't a risk, it's a deliberate sacrifice.

Let's consider how much we'll sacrifice, assuming the worst. The extent of the catastrophe probably depends on the season. If, as seems most likely, a spill were to happen in the spring when very large thick ice floes are loose and moving fast, then the sea ice edge would probably be just north of the accident.

Wind and currents would determine how it spreads. An offshore wind would push the oil toward the edge of the ice even as the Beaufort Gyre carried the oil west towards Wrangel Island, potentially oiling every inch of the sea ice edge in the Chukchi Sea. An onshore wind would push the oil toward shore and into the Alaskan Coastal Current, which would carry the oil east perhaps as far as Barrow, potentially oiling our coast all the way. Or a strong and steady north wind could push the oil south to Diomede and Wales. More likely, winds would shift over the course of the whole disaster, taking the oil in every direction. My understanding is that walruses, polar bears, seabirds and seals would be following the sea ice edge at that time, so there's a chance that most members of those populations would be oiled. But I'm not an expert on what all would be threatened; you'd want to ask the Inupiat about that.

What would that do to them, the people of the sea, if their entire cultural underpinnings are irreparably destroyed? They're Lisa's Alaskan constituents too, and I hope she thinks long and hard about whether Royal Dutch Shell's fortunes are more important to her than that sacrifice would be to the Inupiat and Alaska.

What could Lisa do with her Senate Committee on Energy and Natural Resources chairmanship that would really help us? A very good start would be working with Governor Walker to make Alaska completely energy independent. We have more renewable energy potential per capita than anywhere else in the world. Yet, each of us pays thousands per year to outside multinational corporations for fossil fuels. Altogether, Alaskans bleed billions annually to outside interests for our energy. Ending that loss would be the equivalent of fixing our deficit.

Kerry Williams (author)/Ceal Smith (researcher)
Alaska Energy & Climate Change

Alaska Oil & Gas Industry Emissions Fact Sheet

For Immediate Release Contacts: Ceal Smith, Alaska Institute for Climate and Energy, (907) 952-7474,   ceal@akclimateaction.org Kat...