How Dense Can They Get?
When it comes to power, energy density is the key. Solar power, wind power, and ethanol are so expensive because they are derived from very diffuse energy sources. It takes a lot of energy collectors such as solar cells, wind turbines, or corn stalks covering many square miles to produce the same amount of power that traditional coal, natural gas, or nuclear plants can on just a few acres.
Each of these alternative energy sources is based on mature technology. Agriculture and fermentation have their roots in prehistory; windmills date back at least to 65 B.C.; the photovoltaic effect was discovered in 1839. Yet nowhere in the world are these technologies serving as primary energy sources without significant government subsidies. While incremental improvements can be expected, it would take an order-of-magnitude increase in productivity for them to become viable. As old and as well-researched as the technologies are, such improvements are possible but unlikely. As significant future energy sources, these technologies are dead ends, which is why the government, and not the private sector, is funding them.
Industry is more than willing to risk research dollars on technologies that show real promise, but it is not willing to flush shareholder money down a rat hole. Politicians, however, operate from different incentives. When a crisis, real or imagined, makes headlines, they want voters to see them “doing something” about it, and they must move quickly because election cycles and constituent attention spans are short. Funding long-term research in promising technologies doesn’t meet politicians’ needs. Solar panels, wind turbines, and ethanol refineries are all current technology and can be erected quickly with fanfare and photo ops. By the time these alternative power sources prove to be financial and, possibly, environmental busts, the politicians will have been reelected and voters’ attention will have shifted to the next crisis.
Another benefit of subsidizing “shovel ready” solutions is that existing technologies have existing supporters who can provide campaign funds. Such supporters, however, constitute a well-financed status quo that will make government funding, once started, difficult to end. For example, even though corn-based ethanol has driven up food and fuel prices, increased auto emissions, raised atmospheric carbon dioxide concentrations (by causing additional acreage to be tilled), and possibly resulted in net energy losses, the government is still subsidizing the industry and still requiring that the fuel be added to gasoline.
Wind energy, for its part, has been “just a few years away” from being economically competitive with conventional power for at least the last 25 years, and this will not change any time soon. The Energy Information Agency predicts that in 2016 wind power will still be 49 percent to 77 percent more expensive than electricity from either coal or natural gas. Furthermore, because wind turbines work only when the wind blows, wind farms cannot replace conventional plants. Backup power from conventional sources, usually gas turbines, must be ready to come on line the moment the wind fails. Despite these fundamental problems, subsidies continue to flow thanks to an entrenched lobby.
By contrast, consider the significant oil-industry investments in researching biofuels made from algae. Unlike ethanol, biofuels are chemically similar to fuel made from petroleum and, like petroleum-based fuels, have a significantly higher energy content than ethanol. Biofuels can also be handled by current fuel distribution systems and can be burned in today’s vehicles.
Algae can be grown in brackish water on desert land and, with today’s technology, can produce over 2,000 gallons of fuel per acre each year. This compares favorably with the approximately 250 gallons of ethanol that can be produced from an acre of corn—a ratio of 8 to 1. Accounting for the differences in BTU content, the ratio jumps to over 12 to 1. It may even be possible to boost productivity to 100,000 gallons per acre per year, raising algae’s potential to over 600 times that of corn-based ethanol!
Biofuels are carbon-neutral because the carbon dioxide released when they are burned is extracted from the atmosphere by the algae. Unlike burning petroleum-based fuels, then, burning biofuels will not result in a net increase in atmospheric CO2 levels.
With algae’s vast potential, it is easy to understand why private industry is interested and why no government subsidies are needed to encourage investment. Moreover, if algae-based fuels do not prove viable, the companies now researching them will have no “status quo” problems with ending their investments and shifting scarce resources to more promising technologies—where “promise” is measured in density.
A previous version of this article originally appeared at www.thefreemanonline.org.
Comment by Douglass Holmes on 6 January 2010:
There is a huge problem in overcoming economic ignorance. Many people cannot understand how wind power could be more expensive since once the wind turbine is built, the power is free. The problem is that for each unit of power, the capital required to build a wind turbine is much more. And that capital must be recovered.
Comment by bob on 8 January 2010:
The algae revolution will not be televised. The gasoline used today from oil will be slowly replaced and mixed with algae based gasoline over tie, there is already algae fuel in the market but no one knows. The oil companies are smart on this point, avoid being lumped in with wind and solar prevents them from having the bad taste of a failed boondoggle associated with their product down the road.
Long live my V8
Comment by James Madison Fan on 21 January 2010:
No mention of the 14 billion in tax breaks for Big Oil in 2009 alone.
No mention of Congress waiving 65 billion in public royalties for access to oil and gas on Federal property.
No mention that we’ve been investing in oil infrastructure since day one representing hundreds of billions of dollars.
No mention that the top 10 oil consuming countries on the planet use more than 18 billion barrels of oil every year and this rate is increasing as China and India become more energy dependented.
Let’s not think about these things. Looking to the future is as scary as it is uncertain. Let’s wait until the last minute when gas prices look like mortgage quotes and the economy is tanked because we had an easy energy source and investing in something other than fossil fuels seemed like a waste of money.
We wouldn’t want to do something stupid like we did in the 60′s by going to the Moon. All that did was make the US the most technologically advanced country on the planet fueling technologies from computers to medicine to cook ware to cell phones to freeze dried foods. Total waste.
Let’s rest on our laurels. History proves that’s a good thing.
Comment by Richard W. Fulmer on 1 February 2010:
JM Fan and Chris,
I’m not arguing against either alternative energy technologies or renewables – after all algae-based biofuel is both an alternative technology and a renewable. What I am arguing against is letting government pick the winners. Government expenditures tend to be driven by political considerations rather than by technical or economic feasibility. Also, government programs are notoriously hard to eliminate even when they prove to be counterproductive.
There is a question as to whether ethanol production from corn actually results in a net energy gain, but this is unknowable as long as it is subsidized. I would therefore very much like to see if ethanol would shine on a level playing field.
I do not favor government subsidizing the oil industry any more than I favor it subsidizing wind and ethanol. That said, many of the tax breaks that government grants to the oil industry are also extended to manufacturers, including (presumably) the ethanol and wind industries.
Admittedly, I have a built-in bias in favor of anything that lowers taxes because I believe that people have the right to the fruits of their labor. A practical (though secondary) consideration is that people can (and do) spend their own money to better effect than can government.
Thanks for your thought-provoking comments. Keep them coming!
Comment by James Madison Fan on 10 February 2010:
Mr. Fulmer,
Please accept my thanks for your reply. I’ve been posting on here for something like a year now and you’re one of the few that seems interested in the comments of those that follow up on your article.
You are correct that the algae is a renewable source and I apologize for not addressing that. Your article is correct in supporting the algae technology.
My difficulty resides in those like Rush Limbaugh that seem fixated on maintaining the status quo. “Coal and Oil are good enough.” “Renewable energy is for tree huggers.” “Scientists don’t know what they’re talking about.” I find it frustratingly short sighted. Experts may not agree on when we will run out of oil but every single one agrees that we eventually will.
Every time I hear about renewable technologies it is erroneously linked to the concept that one energy source needs to replace oil. My vision is nuclear, wind, solar, methane, ethanol, etc. in competition with each other. If algae replaces 15% and nukes replace 25% and methane replaces 10%, and ethanol another 10% at the very least that means competition for big oil which they currently lack entirely. This means OPEC can’t hold us hostage by manipulating oil prices and we don’t have to worry about the global economy tanking if the sheiks get an itch to raise the price per barrel. We’ve spent more than a century investing in oil technology and infrastructure, why not wind, solar, ethanol, methane, algae, and anything else that looks like it has potential?
I know this is Libertarian heresy but I think government has a place in R&D. As noted previously I would offer the Apollo program as evidence. This was a significant achievement for Man and a milestone in our development in much the same way as Columbus or Magellan’s travels but fame and pride are not its greatest benefits. The investment has paid dividends in every technology there is. The positive economic effects of this program cannot be overstated resulting in a return on investment of millions if not billions per dollar spent. I cannot fathom a scenario where such a vast and complex project could have been undertaken by any other entity besides the government due to resources it consumes without specific rewards.
A business needs to invest money where it does the business the most good. This isn’t just good business, they have a fiduciary responsibility that is legally mandated. It is not economically feasible for a company to take on significant short term and long term risks for dubious long term rewards almost regardless of the pursuit but the government has a different definition of success. For every percentage point they can shift from foreign oil to domestic energy sources it represents hundreds of US jobs as well as billion of dollars spent domestically rather than flowing into foreign coffers. It also means stable energy costs rather than watching prices soar every time there is a spike in crude. There are a multitude of benefits that are exceedingly good for the country that help the GNP, stabilize Wallstreet, create jobs, expand the economy, etc. that a business would find difficult if not impossible to capitalize on so you can’t measure the success of a business program versus a government program using the same criteria.
We have been sitting around waiting for the next breakthrough but discovery does not work that way. It needs to be pursued with passion. We need men of vision to lead us into the next millennium as we search for new answers. We can only do that if we harness that which truly separates Man from beast:
Our ability to imagining what is not, but could be.
Comment by Richard W. Fulmer on 11 February 2010:
James Madison Fan,
Good post, lots to ponder. You may well be right that we’ll need a mix of technologies to replace oil as the cost of producing it rises. A couple of thoughts, though. Until practical and affordable electric and/or hydrogen vehicles are available, wind, solar, and nukes cannot take the place of oil. Only one or two percent of electricity is produced from oil in the United States, so new sources of electricity sources will not make much of an dent in oil demand.
Power plants can be used to produce hydrogen fuel via water electrolysis. However, like wind, solar, and corn-based ethanol, hydrogen has a “density problem.” A hydrogen-powered vehicle would need a very large tank to have a range comparable to that of a gasoline-powered car. And, until a distribution network can be built, filling that tank will be difficult.
It may actually be possible for algae-based fuel to replace oil all by itself. The world uses almost 90 million barrels (Bbls) of oil a day. Assuming we really can produce 100,000 gallons (or 2381 Bbls) of biofuel per acre of algae farm per year, we would need 13.8 million acres or 21,573 sq miles (an area almost one-fifth the size of New Mexico). That’s a lot of land, but it represents less than one-half of one percent of all the land currently under cultivation worldwide. Further, algae can be grown on desert land, so (unlike growing corn for ethanol) its cultivation would have no impact on food production.
One of the reasons I believe that algae has real potential is that private businesses are willing to invest so much to investigate that potential. ExxonMobil alone is spending some $600 million – real money even for Exxon. As you pointed out, companies like Exxon have fiduciary responsibilities and are not going to spend their shareholders’ money on dubious projects.
On the jobs front, I don’t believe that government spending results in a net increase in employment. Before the government can give anyone a dollar, it first has to take that dollar from someone else. While jobs may be created in those industries to which government gives dollars, jobs will be lost in those industries from which it takes them. The jobs story is even worse in the case of windmills. Much of the government grant money is going overseas where most of the wind turbines we are installing are being manufactured. Our tax dollars are creating more jobs in Japan than they are here.
A big problem with government-funded research is that it is necessarily politicized – in the end, politicians decide what gets researched and what doesn’t. I think that Climategate may end up being THE textbook example.
Comment by Warren on 16 February 2010:
Would it also be possible to stack algae production in multistory buildings? Either build up or dig down or combine both. This guy is doing it at one level http://www.cnn.com/2008/TECH/science/04/01/algae.oil/index.html but why couldn’t you have more than one floor?
If you had two floors producing algae that would halve the amount of land you need. Get up to ten floors and you would be down to 2150 sq miles.
The engineering would be a challenge, especially making sure sunlight was delivered, probably by sunshafts and reflectors, but it could be done.
Imagine a million gallons per acre!
Comment by James Madison Fan on 22 February 2010:
Mr. Fulmer,
The 2% figure is misleading. The US Energy Administration indicates 46% of oil based energy is consumed in transportation. 54% goes to heating oil, propane gas for water heaters, and other industrial, commercial, and residential uses much of which could be replaced by other fuel sources.
The US needs approximately 100 quadrillion BTU’s of energy per annum. 37% of this comes from oil, 23% from coal, 24% from natural gas, 9% from nukes, and 7% from renewable sources.
http://tonto.eia.doe.gov/energyexplained/index.cfm
I know it may boarder on pure science fiction but a nuclear powered car using a uranium pellet the size of the upper digit of your finger could fuel a vehicle for years. Such a vehicle might be impractical based on our current understanding of nukes but it wouldn’t take much to cure this deficiency if we made it a priority.
Am I proponent of nuclear tech? Not to the exclusion of the other technologies but it seems like a viable source especially when only 9% of the energy in the US comes from nukes but 80% of the energy in France does. I think public opinion in the wake of Three Mile Island and Chernobyl is the primary reason this percentage is not higher in the US rather than any technological inhibitions. Everyone wants more prisons; no one wants them in their back yard. Everyone wants more energy; no one wants a nuke plant in their back yard.
As an example of the idiocy surrounding renewable energy, last month one of the owners in my condo complex suggested installing solar cells at our Board meeting and it was met with objections about structural issues and aesthetics rather than any debate as to the viability of the technology. I find it bizarre when roof beatification takes precedent over energy savings. Perhaps someone can explain this to me because I lack that particular gene.
I have to agree that direct government involvement in specifically creating jobs ala the Bush / Obama “stimulus” is inherently flawed for the reasons you point out. These are nothing more than welfare programs and I have an ongoing debate about the necessity of bailing out corporations that are “too big to fail.” My inner economist and libertarian are constantly at war over this topic but that’s fodder for a different article.
However there are projects that only a government can initiate that better the entire community via this investment that is beyond to scope of business in much the same way war is a function of government that is beyond the scope of business. The Moon Landing didn’t provide the Federal Government with a direct financial return on investment. It isn’t like some explorer coming home from the Americas with a cargo hold filled with gems, gold, and sundry. Those days are gone until we can start mining asteroids. It is the intangibles that make this kind of investment so important. Typically business cannot make money on intangibles and that is especially true when these intangibles relate to diplomatic gamesmanship. Business can use the money spent on these projects and apply the technologies discovered but P&G isn’t particularly interested if the Soviet Union knows we have better rocket and guidance tech. That’s something for the Kremlin to ponder. So the best way for the government to spend our money is to ensuring we continue to compete as the technological king of the mountain by supporting education, R&D, and pushing for new breakthroughs rather than handing out billions supporting bad business.
Thank you for your time.
Comment by James Madison Fan on 22 February 2010:
Warren,
It would seem to me that the limits on the size of the farm depend on the amount of sunlight and nutrients. That would be a function of the algae. Giant Kelp grows around a meter a day off the coast of California. I do not see any reason that we could not use water based algaes in massive farms off the coast and produce fantastic amounts of algae and kelp for very near free. Winter in the North means summer in the south so production is constant. Since the algae is edible it could also be used to support aquaculture. This really does seem to be too good to be true. Call me jaded but I’m waiting for the other shoe to drop.
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