July 26, 2003

Why we really need to get off oil

Energy pricing (like most other pricing) is an exercise in change at the margin (Jude Wanniski's The Way the World Works is an eye opener). You don't have to change over an entire infrastructure to get radical change in the energy market, you just have to move the demand curve to the left by incrementally shifting to a new infrastructure and watch as prices drop for old style energy. If you can drop the price ceiling sufficiently, the old energy source is no longer used, no matter how plentiful it is. You can go to Norway and buy whale oil but it isn't very economic anymore because its marginal cost at any significant usage would be very, very high. Shifting to the right can be just as economy changing and often in a very bad way if supply stays static.

So what's the magic new energy infrastructure and why should we switch? Hydrogen (combined with the hydrogen fuel cell) and because we (the world) can't afford to be this energy poor anymore. 1st world security is likely to require the demand curve for energy is going to end up shifting right, way, way right.

First, Hydrogen: Hydrogen has the advantage of being everywhere. You can get it from most energy sources. Hydrogen driven fuel cells are starting to replace batteries and generators so it isn't your usual pie in the sky alternative energy scheme. Products are starting to ship today and more are likely to follow soon. Because this switch is economics motivated and not politically motivated, we have the luxury of going forward with development without as much risk of becoming a total white elephant.

Pretty much any energy source can be converted into hydrogen. What are currently waste streams (animal, plant, and waste product biomass for example) all of a sudden become marketable energy sources because you no longer need to modify motors to use one of several specific types of fuel. Hydrogen's ubiquity means that even without fuel conversion to hydrogen before you pump it into your fuel reservoir fuel cells can run on a lot of different fuels with the addition of various fuel processors. Various alternative fuels that individually can't make the cut as a mass replacement for petroleum can all feed into the same hydrogen infrastructure and collectively do some good.

But why do we need so much more energy? Well, a very bright professor by the name of Thomas Barnett noticed that the US military keeps going back to the same places again and again.

The places that keep falling apart and require military intervention to prop up shared some characteristics. They were poor, they weren't integrating into the global system for one reason or another, and they kept attracting trouble both internally and from other areas. A new set of rules is required to understand these countries and go about the problem of solving them because these are the places that terrorists will hide and these are the places that will end up breeding new problems for the US unless they are shifted from the "non-integrating gap" to the "functioning core" of countries with which we may have disagreements but generally have enough stake in the system that diplomats and not troops are the proper response.

To cut a very long story short, we need to improve the 3rd world and we need to do it soon before the cost of truly scary weapons like a genetically engineered plague or nuclear weapons become easily affordable for rich crazies like Osama bin Laden. At that point, it won't be safe for failed states to exist anywhere in the world to provide a safe haven sufficient for a private nuclear weapons program to happen.

Getting rid of the third world by integrating them into the globalizing economic system and raising their standard of living is going to radically change worldwide energy use patterns, shifting the energy demand curve to the right. Frankly speaking, we probably don't have enough sources of energy available if we limit ourselves to a petroleum economy. The status quo is unsustainable if we want to quickly shrink the number of failed states which threaten us.

So hydrogen buys us some time in the short term, bringing underused potential energy sources into the mainstream market. It also buys us time because fuel cells are not Carnot (heat) engines and thus are not subject to the limits of the Carnot engine and so are more efficient at temperatures used in most engines (see chart in the link). Where carnot engines are 30% efficient (around where a lot of internal combustion engines land), fuel cells are 80% efficent at the same temperature.

But Hydrogen is also useful because once we have a new multifuel friendly energy production stream we no longer have the chicken and the egg problem of new infrastructure for each minor new idea. You just take your energy and convert to hydrogen to use existing infrastructure. It lowers the barrier to new solutions, a good thing in and of itself.

And we need new solutions because as the 3rd world gets good governments that didn't screw up their own economies energy prices will soon be bid through the roof, collapsing much of the world economy if nothing is done to increase supply.

Now it is likely that the solution to this problem will not be monolithic. Part of it is going to be efficient use of current energy sources (like retiring old, inefficent soviet era infrastructure all over the old Soviet bloc territories), nuclear energy (like the new pebble bed reactors that are physically impossible to melt down even with zero coolant), and exotic new sources like beamed solar from outside our atmosphere (there are orbital and lunar variants on this).

That last deserves a special mention because it has the potential to scale high enough to be a major player on its own, without aggregation. Beamed solar is useful because it doesn't suffer from three of the great problems that will always doom terrestrial solar power. Solar stations in orbit or on the moon get much more intense sunlight than the equivalent cell gets here. Solar cells in orbit or on the moon aren't likely to crowd out any other uses for that space so scaling them to useful proportions is no problem as long as the power is cheap enough, and outside the atmosphere, solar power doesn't have to worry about cloud cover.

The catch? As usual, it's the cost (in this case, largely the launch cost). The only thing that offers launch costs low enough to make them practical would be a space elevator. It's a really good thing then that somebody is building one. But that's a rant for another day.

Posted by TMLutas at July 26, 2003 02:35 AM