Clearing the air on transportation and pollution

The other day I went to a conference at London City Hall, in honour of the European Year of the Air organised by Clean Air in London.

The Problem: London has dirtier air than most places, although it’s no Beijing. But it is ahead of places like LA. It’s also the worst air quality in any major European city, not entirely shocking since it is the biggest.

The quick story of air pollution is how it is mostly made up of particulates and NOx, nitorogen oxide, not nitrous oxide and no laughing matter. Particulates is the fancy name for dirt. The greatest sources are coal fired generation or the tailpipes of diesel engines. The largest number of vehicles in central London are buses and taxis. But the killer fact, at least to me is that air pollution actually kills people 

Up to 9% of deaths in the capital’s most polluted areas are down to air pollution, a new London Assembly paper has reported.

The paper, Air Pollution in London, produced by the Assembly’s Health and Environment Committee, reports 8.3% of deaths in Westminster are attributable to man-made airborne particles.

Call me cynical, but why are many in UK media more upset about alleged dead goats in Pennsylvania fracking and not several thousand people put into an early grave in Westminster? Where is the anger of Green NGO’s who seem more interested in foisting cuddly toys on supporters gathered in the streets where charity muggers and victims alike are slowly dying than in actually solving anything?

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New England’s lack of shale gas lesson for Old England

Here’s something that can instruct us in the UK as to what happens when no shale gas resources are available. This recent document from the US Energy Information Administration on New England natural gas points out the key problem for New England:

Since November, New England has had the highest average spot natural gas prices in the nation. Average prices at the Algonquin Citygate trading point, a widely used index for New England natural gas buyers, have been $3 per million British thermal units (MMBtu) higher than natural gas prices at the Henry Hub, and more than $2 per MMBtu higher than average spot price at Transco Zone 6 NY, which serves New York City and has historically traded at prices similar to those in New England (see Figure 1).

Full pipelines from the west and south limit further deliveries from most of North America, while high international prices and declining production in eastern Canada pose challenges in making up the difference from the north and east, except at higher prices.

As a result of these market conditions, New England natural gas and electric power prices this winter could be volatile at times. During November and December, spot natural prices in the northeastern United States seesawed in relation to weather-driven pipeline constraints. This price volatility has continued into January 2013 to date. 

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Should Europe look south on energy security?

What effect could the Algerian events have on natural gas in Europe? In everyday operational terms the effects would be limited, but going forward perhaps Europe has been looking east when concerned about energy security and it’s time to start thinking in new directions: Not only about energy security in the south, but realising the importance of shale gas resources under our feet.

Algeria’s gas industry developed in the 1950’s and led to the first commercialization of world LNG. LNG development allows stranded gas to enter world markets and few places are as stranded as the Algerian Sahara. The area is over 1000 km from the coastal centres of population, literally in the middle of nowhere.

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California Dreaming on European Shale

The European shale debate mess we’re in has been dominated by issues arising in the Marcellus Shale of Pennsylvania and upstate New York with the result of the gridlock highlighted by Alan Riley in the FT today:

Far less positively, Europe will become the only big economic bloc without significant energy resources. The US, India, China and Latin America will all have access to shale, as well as offshore fossil fuels. As the US approaches energy independence, Washington will probably insist Europe invest in its own energy security by taking up part of the burden of protecting the flow of Gulf oil to the west currently provided by the US Navy.

If you are lucky enough to read French or trust Monsieur Google Translate, something broadly similar published in Le Monde today headlined The Geopolitical Revolution of shale gas is happening without Europe,  which is encouraging on a European scale. But perhaps California provides a better example to Europe. California has been a thinking outside the box world leader on energy from way back. Smart metering, renewables, nuclear, solar, wind and efficiency combined with lots of seed money from the liberal billionaires of Hollywood, Santa Barbara, Silicon Valley and the Bay Area combined with California’s vehicle emission and mileage standards to create a progressive government environment especially suited to green sensibilities even during Republican administrations.

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The US lesson for European oil

It’s been some time since I wrote on the second part of the US shale energy revolution, oil. To call it shale oil is inexact, and risks confusing shale oil with oil shale as found in Alberta, a mistake the Co-op already made in their extreme energy campaign objection to shale gas, although they’re too embarrassed now to admit the error. We’ve also concentrated here in Europe on shale gas, which risks losing the big picture

Shale oil is also known tight oil, and essentially can be described as using the two key shale gas techniques of hydraulic fracturing and horizontal drilling to access oil. Similar to gas, these are deposits geologists knew existed but which were considered inaccessible until 21st century technology. One doesn’t always need horizontal drilling, because lots of shale oil success comes from hydraulically fracturing existing vertical wells, which is causing the Permain Basin to come back from the dead. But for now the two key areas of US shale oil are the Bakken of North Dakota and the Eagle Ford in South Texas, extending south from San Antonio and further into Mexico.

The Bakken fits the description of what was once considered a mature oil province brought back from the dead. This chart from the Federal Reserve Bank of Minneapolis, shows the long view:

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The Triple Win: more gas,more renewables, less energy

It sometimes seems most people think electricity comes from the wall, unaware of the upstream sources of it, but an equally common belief is that we simply use too much or waste too much. Accordingly, objections to natural gas are often prefaced with the plea, “can’t we just use less?”. The answer is yes, but at the same time, let’s pat ourselves on the back for one of the few energy successes: continual advances in efficiency.

The declining amount of energy use is counter-intuitive to people in general and green arguments in particular.  In this case, alarmist greens find themselves in the strange position of denying  both reality and good news. According to the alarmists, any drop in energy seen in the UK has only been due to a combination of exporting manufacturing (and jobs) and reduced economic activity.

This extremely busy looking chart from the physicists at the Lawrence Livermore National Laboratory in California, shows that in the US, growing natural gas use does not, as the University of Manchester Tyndall Centre on climate change tells us, impede either renewable growth or uptake in efficiency.The US economy back in 2011 grew while the UK’s flatlined. In Q4 for example the US grew by a rate of 3% as the UK declined by -0.1 %.Yet:

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US Solar Chief on natural gas

Further proof natural gas in general and shale in particular aren’t an enemy of renewables comes from the head of San Francisco’s Recurrent Energy, a successful generator of solar electricity at utility scale. Judging by the amount of people who pick fights on Twitter, much of the opposition to shale gas in the UK comes from small installers of solar panels. For example one of Frack Off’s founders is one in Brighton and yet a consistent denier that he has any economic incentive from the campaign, economic self interest being reserved solely for the fossil fuel industry it appears. I first caught this via a story in the San Francisco Chronicle but this is from Recurrent CEO Arno Harris‘s blog:

Gas is now trapped within the geographic boundaries of North America because we don’t have the facilities to export gas to markets in Europe and Asia.

The oversupply trapped in the U.S. has caused the domestic price to collapse to by more than 50% to $2-$3 per thousand-cubic-feet (Mcf). That’s a fraction of prices in Europe where gas goes for $10-$11 per Mcf or those in post-Fukushima Japan which are over $17 per Mcf.

The severity of oversupply in the U.S. relative to global markets offers an opportunity for the United States to achieve something it has never had: a comprehensive energy plan that makes sense in terms of our economy, national security and public health. Better yet, it could rally support from interest groups previously at odds. How? By embracing natural gas exports. This would not only take the slack out of the natural gas market , but by doing so enable renewable energy to become the backbone of our power generation infrastructure.

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Shale Gas Can Complement Renewables to Cut Coal

A key misconception about shale gas in Europe has been that it is the enemy of renewables.The idea is notably strong in the UK, where local arms of global environment groups the Friends of the Earth, the WWF and Greenpeace seem more obsessed with UK specific targets than actually cutting global CO2 in the quickest way possible. Sadly, many reject any pragmatic response preferring to be ultra pure and unsuccessful rather than changing their minds to fit new facts. 

Outside the UK, the conversation is more realistic. I met Adnam Amin of the International Renewable Agency back in 2010 and found him to be fully aware of the issues surrounding shale gas while remaining refreshingly practical at the same time. Adnam gets the three key facts: CO2 is the problem, coal is the issue and gas today provides the answers:

A boom in shale-gas extraction, the technique that made the U.S. the top producer of the fuel, would complement growth in renewables because both curb use of dirtier commodities, theInternational Renewable Energy Agency said.

“Gas in the first instance is going to displace coal,” Adnan Amin, director-general of the agency known as IRENA, said in an interview in Abu Dhabi. “Shale gas at low cost can help to create a hybrid system,” whereby more gas-fired power is fed to the grid, supplanting coal, and augmented by wind and solar.

 My take on the renewable issue is that shale antis need to get real. If shale is such a threat how did wind increase 350% over the past two years in the UK?  Even in the US where natural gas beats everything on cost, the situation doesn’t sound so bleak:

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Shale Gas in Europe. Ours or theirs?

The best news for European gas prices and CO2 emissions came last week not from London or Brussels but from the Calvert County Maryland District Court:

Dominion Resources Inc. (D) can export liquefied natural gas from its Cove Point, Maryland, facility, a state court ruled, rejecting arguments by the Sierra Club that such exports violated a 2005 agreement.

US LNG exports are good for Europe in general, but Cove Point is especially significant. Cheniere Energy’s plans for an export terminal from Sabine Pass on the Gulf of Mexico are already under construction, but their exports could just as easily go to Asia as Europe. Cove Point is a week closer and forty cents per MMBTU cheaper to NW Europe. It’s also significantly closer than the 20 day voyage from Qatar and avoids those Suez tolls of $400K plus which aren’t exactly loose change on the front seat.

Another factor of LNG costs are the boil off of LNG lost during the voyage. The longer the voyage, the more gas lost, and the greater CO2 cost. Another minor advantage is the ambient temperature from the NE USA means lower boil off still. Those differences are small in percentage terms but they add up. A medium sized cargo of 120,000 tons is 5.8 million MMBTU, worth anything from $21 million at US prices on board to $52M in Europe and $90M+ to Japan or even higher as we’ve seen this week to distressed buyers:

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Negative outcomes of UK Energy Policy

Updated information based on final generation statistics of 2012 show the perverse consequences of UK energy policy in general and antipathy towards natural gas in particular.

This proves more than anything we are having the wrong conversations we need at a policy level. Conversations currently are media led and stress “controversial” shale gas and lead to interminable counter-productive arguing about the best forms of energy. Would it not be more useful to reach a consensus on which ones are the worst?

The figures come, via a reader active in the international chemical industry, from statistics sourced from Elexon, who in turn produce BM Reports,the source for the information I often refer to on the UK National Grid Status of real-time sources of UK  (ex NI) electricity production. The information is based on the output of electricty by fuel type in 2010 and 2012. It gives an accurate idea of how much CO2 the UK produced until last week. It’s not a pretty picture. 

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