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Eii Overview & Energy Presentation.10.18.07

Eii Overview & Energy Presentation.10.18.07



This presentation from 2007 was a consolidation of research I had done in the finance sector evaluating the convergence of global energy demand, geo-political conflict, diminishing domestic energy ...

This presentation from 2007 was a consolidation of research I had done in the finance sector evaluating the convergence of global energy demand, geo-political conflict, diminishing domestic energy resources, climate change, and the pending need to focus on emission reduction and U.S. energy independence.



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    Eii Overview & Energy Presentation.10.18.07 Eii Overview & Energy Presentation.10.18.07 Presentation Transcript

    • Environmental Impact Initiative (EII) Organization & Energy Industry Overview Managing Director David A. Champion Revision Date: October 18, 2007
    • EII –Organization & Energy Industry Overview Contents Questions & Answers 2 Environmental Impact Initiative –Premise & Mission 5 Presentation Scope 7 Glossary of Terms & Acronyms 8 Executive Summary 9 What is energy? And, why is it important? 12 Where does energy come from? –The life cycle of gasoline, coal and natural gas 13 Why is energy demand increasing? –Macroeconomics 17 How do hydrocarbons affect our environment? 26 Why is the cost of fossil fuels increasing? 42 Fossil fuels are a limited natural resource 61 U.S. energy policy 69 Renewable energies (Wind, Solar, Hydro, Geothermal) 72 Improving existing technologies (Clean-Coal, Natural Gas, Nuclear, Waste-to-Energy) 99 Automobiles & Alternative fuels (Ethanol, Bio-diesel, Hydrogen) 121 Energy conservation 151 Carbon footprint & offsets 170 Conclusion 174 Sources & References 175 –2– ©2007 Environmental Impact Initiative
    • EII Questions: 1. The United States represents 5% of the earth’s population; what percent of the world’s greenhouse gas emissions do we emit? 2. What percent of waste does America recycle? 3. How much carbon dioxide does 1 gallon of gasoline produce? 4. What is the federally mandated fuel economy standard in the U.S.? 5. If every car in the U.S. increased its fuel efficiency by 7.6 miles per gallon, we could stop importing oil from which global region? 6. If the United States became solely dependent upon its own domestic production of oil from current wells to fuel our economy, how long could we sustain our current consumption rates? 7. What costs more 1 gallon (8 x 16 oz. bottles) of filtered water, or one gallon of regular unleaded gasoline? 8. How many trees would the average U.S. household have to plant each year to absorb the amount of carbon dioxide they emit? 9. Where does our electricity come from in the United States? 10. How many children today have asthma in the United States? 11. How many of the contiguous 48 states is it NOT permissible to eat all types of fresh water fish due to high levels of mercury? 12. Two of the fastest growing renewable energy generation methods are Solar and Wind, where were these technologies invented? –3– ©2007 Environmental Impact Initiative
    • EII Answers: 1. The United States emits 30% of the world’s greenhouse gases. The average U.S. household emits 41,800 lbs. of carbon dioxide or 5 times the average global household quantity. 2. According to the U.S. EPA, Americans dispose of 250 million tons of municipal solid waste per year (4.5 lbs. per person/per day) and recycle 23.8% of this waste and compost 8.4%. 3. 1 gallon of gasoline at 6.3 lbs. produces 19.4 lbs. of carbon dioxide, this is because when hydrocarbons burn, the carbon molecules are combined with two oxygen molecules to form CO2, which is 3 times heavier than the original gasoline. The average car burns its weight in CO2 every 4 months. 4. In 1987 the U.S. fuel economy was 22.1 miles per gallon (mpg) for light-duty vehicles and was reduced to 20.9mpg in 1997 and then 21.0mpg in 2006, remaining relatively unchanged for over 20 years. 5. 7.6 more miles/gal. on every car in the U.S. would result in independence from Middle East oil imports. 6. The U.S. holds about 680 million barrels of strategic oil reserves, produces 4.66MM barrels per day domestically, but consumes 21MM barrels per day resulting in only 40 days of domestically available oil. 7. The average U.S. price for a 16oz. bottle of purified water is $1.00 x 8 = $8.00/gallon or 2.5 times more than a gallon of gasoline. Americans consumed 8.3billion gallons of bottled water in 2006, costing $66.4bn dollars. 8. The average mature tree consumes about 48 lbs. of CO2 per annum. If the average U.S. household emits 41,800 lbs. of carbon dioxide, each household would need to plant 871 trees per year to be carbon neutral. 9. 49% of our electricity comes from coal-fired power plants, 20% from natural gas, 19.4% from nuclear, 7% hydroelectric, 2.4% from renewable energy sources such as, biofuels, waste to energy, solar and wind. 10. Asthma currently affects 6.2 million children and is the most common chronic childhood disorder, it is the leading cause of absenteeism in schools. 80% of asthmatic cases, especially in Black and Hispanic children takes place in industrial regions that do not meet U.S. EPA federal air pollution standards. 11. You cannot eat all types of fresh water fish in 44 states due to high levels of mercury. The burning of coal and mining causes the majority of mercury, lead, and arsenic poisoning in the United States. 12. Both solar and wind electrical generation were invented in the U.S.A., however both of these technologies are now predominantly supplied by German, Japanese, and Chinese companies. –4– ©2007 Environmental Impact Initiative
    • EII The Environmental Impact Initiative -Premise The questions and answers on the previous pages are meant to be thought provoking and provide examples of the energy related challenges that exist today both globally and in the U.S. These challenges are summarized below: There exists today an uncertain and diminishing supply of conventional energy sources at affordable prices to meet a growing world demand. Fossil fuels used as the primary energy source, cause human and environmental harm. Poor waste management and a lack of sustainable business practices affect our natural resources such as water, soil, air, and forests. Animosity towards the U.S. based on our per capita energy use and pollution emissions will only increase unless we take a leadership role in environmental stewardship, sustainable product development, renewable energy projects and international energy policy. Be sure that these issues will define this new millennium. The solutions to these challenges rest in our ability to adopt energy efficient practices and products, in our ability to develop economically viable renewable energies, to produce alternative transportation vehicles and fuels, and in managing our waste and pollution emissions with the goal of protecting our valuable natural resources and progressing a sustainable energy future. The Environmental Impact Initiative (EII) was created to be the vehicle through which we communicate the above issues, research affordable and actionable solutions, and through our members and sponsors, we make these solutions a reality. –5– ©2007 Environmental Impact Initiative
    • EII The Environmental Impact Initiative -Mission Mission Statement: To initiate environmental stewardship with businesses and residents by demonstrating the positive financial and social impacts of resource preservation, energy conservation, pollution minimization and waste management best-practices within the urban setting. Vision: Pollution controls, waste management, renewable energies, energy-efficient technologies, and environmental best-practices will protect our depleting natural resources, provide sustainable energy to the masses, and will yield both ecological as well as financial benefits to the cities in which we execute our mission. Guiding Principles: Lead by example, be a catalyst for positive environmental change at home and in your community Solutions must be financially and environmentally justified to be sustainable Tirelessly research and analyze new products, technologies and practices to establish best-in-class solutions Remain politically neutral as pollution, resource depletion, and improving our living environment equally impacts every person despite their political preference Focus on positive messages, benefits and actions Build an effective and active membership based upon these key traits: trust, honesty, diversity, mutual respect, complete communication, a shared vision, and a collaborative effort focused on results All funding and use of monies will be made transparent to sponsors and members Perform every task with a sense of urgency –6– ©2007 Environmental Impact Initiative
    • EII EII: Research, Promote, Act Research: The environmental impact initiative will tirelessly research and analyze products, services, companies, and processes which will fulfill our mission statement. The EII will act as a resource for other institutions and clients, therefore must stay abreast of the latest environmental and energy trends. Research tools include various publications, industry or technology expert reviews, company specific meetings, research papers done by financial or academic institutions, and from meetings with other energy/environmental groups. Promote: Education and public awareness are at the forefront of long-term, sustainable changes and social movements. Clients must be aware of the issues and potential solutions in order to properly act. The use of billboards, newsprint, promotional products, and our website will be used to create awareness. Presentations at schools, businesses, and environmental events will help educate the public. Hosting large environmental seminars with expert discussion panels, company/product overviews, and subject specific breakout sessions will help promote the adoption and investment in our subject matter. A strong and diverse social network of EII members and sponsors will help spread the word. Act: Through our sponsors and members we will work to implement the services, products, technologies, processes and practices that we promote. Action can take many forms: volunteer work at an environmental community project, writing and implementing a best-in- class recycling program for a commercial office building, motivating residents or businesses to better insulate their homes or purchase energy-efficient appliances, working with target businesses to evaluate the implementation of solar panels on their property and working with city or state officials to influence policy, promote renewable projects, carbon offsets, energy- efficient products or purchasing fuel efficient vehicles. –7– ©2007 Environmental Impact Initiative
    • EII Presentation Scope This presentation is designed to: Provide potential members and sponsors with an overview and purpose of the EII organization Articulate the EII view of the energy industry, current issues, and viable solutions Validate our view with factual data, detailed references, and expert advice Inspire our audience to make changes in their own lives and to be a positive example for others To recruit members and sponsors –8– ©2007 Environmental Impact Initiative
    • EII Glossary of Terms & Acronyms AEO – Annual Energy Outlook LNG – Liquid Natural Gas Bbls – Billion Barrels of Oil MCF – Thousand Cubic Feet BTU – British Thermal Unit MTOE – Million Tonnes Oil Equivalence CO2 – Carbon Dioxide MW – MegaWatt CNG – Compressed Natural Gas NAP –Northern Appalachian Coal DOE – U.S. Department of Energy NG – Natural Gas EIA – U.S. Energy Information Administration Non-OECD – Non members of the OECD EII – Environmental Impact Initiative OECD – Organisation for Economic Co- operation & Development EPA – U.S. Environmental Protection Agency OPEC – Organization of the Petroleum EtOH - Ethanol Exporting Countries EU – European Union PTW – Pump to Wheels FC – Fuel Cell PV – PhotoVoltaic –solar cells FCV – Fuel Cell Vehicle R&D –Research & Development GDP – Gross Domestic Product RFG – ReFormulated Gasoline (regular gasoline GHG – Greenhouse Gas blended with ethanol) H or H2 - Hydrogen TCF – Trillion Cubic Feet HEV – Hybrid Electric Vehicle TW – Terawatts (1 trillion watts) ICE – Internal Combustion Engine USD – United States Dollar ICEV – Internal Combustion Engine Vehicle WTI – West Texas Intermediate –crude oil IEA – International Energy Agency designation kWh – KiloWatt Hour WTP – Well to Pump LDV –Light Duty Vehicle WTW – Well to Wheel –9– ©2007 Environmental Impact Initiative
    • EII Executive Summary World energy demand is increasing at a rate of 1.8% per annum, due to global population growth, the industrialization of China and India, and the desire of industrialized nations to continue to grow their own gross domestic products. 87.5% of the world’s energy currently comes from the burning of hydrocarbons (fossil fuels). Electricity is primarily generated by coal and natural gas, whereas transportation fuels come from petroleum. As fossil fuels are burned and converted into energy, they release carbon dioxide as well as a variety of other harmful greenhouse gases and pollutants. Scientists and politicians around the world now believe that the continued use of fossil fuels negatively impacts human health, the environment as well as geo-political stability. As a result, hydrocarbons carry with them a very high societal cost. Fossil fuel prices will remain relatively high vs. historical values. Prices will be driven by increased global demand, resource depletion, marginal cost increases in extracting more difficult unconventional sources, higher refinement costs of heavier more sulfur laden oil, transporting fuels from greater distances, production constraints of petroleum providers and the additional cost of pollution controls. Fossil fuels are a limited natural resource. As these increasingly important and costly resources diminish we are seeing examples of protectionism, fascism, and war play out on the global stage. Energy independence needs to become a primary objective of the United States. Reducing our dependency upon foreign energy supplies, minimizing energy price fluctuations, and diversifying our energy portfolio means long-term economic stability for America. The United States will follow the rest of the world with some form of a carbon tax or carbon cap and trade proposal in efforts to reduce greenhouse gas emissions, but will most likely not mandate the change until the next presidential election in 2009 or until the next evolution of the Kyoto protocol envisioned by 2012. – 10 – ©2007 Environmental Impact Initiative
    • EII Executive Summary –(continued) Federal and state governments as well as concerned citizen utility boards work to keep our gas prices and utility costs low by mandating utility price caps on electricity, maintaining low taxes on gasoline and other fuels, providing subsidies and tax incentives to offset the increased cost of fossil fuel discovery and production, and have grandfathered in older- more pollutive facilities which do not meet current U.S. EPA clean air standards. Inadvertently, these practices perpetuate the use of older, less efficient power plants and deter the capital investment in more efficient generating technologies, renewable energies and pollution control systems. The U.S. federal government along with many states are working to develop new energy policies, incentives and grants focused on energy conservation, fuel-efficiency standards, renewable energy projects, alternative transportation fuels and, green building design/construction. Today, residents and businesses alike can benefit financially as well as environmentally by taking advantage of existing tax credits, grants, green mortgages, solar & wind projects, and the purchase of energy-efficient appliances. Coal is a highly abundant domestic resource which promises to supply the United States with enough energy to meet our needs for the next 200 years. Coal however, in its current form, has the worst pollution profile of any electrical generation fuel and poses serious health and environmental risks. Given that 49% of today’s electricity in the U.S. is generated by coal-fired power plants, significant research & development in clean-coal technologies, and strict government pollution policies are required to keep coal a viable, long- term energy source. Nuclear power, although heavily debated as a ‘clean energy’ will continue to be instrumental on a global and U.S. basis to meet future electricity demands. Nuclear power offers low kWh costs, reliable electrical output, low societal costs and virtually zero greenhouse gas emissions. Wind power has achieved global compounded annual growth rates of 30%. Larger wind turbines and component economies of scale allow wind to be on grid parity with fossil fuel generators. However, wind farms need to overcome variable power output with more electrical storage capacity, need to be strategically placed in areas which do not effect migratory bird paths and require better marketing to overcome their negative aesthetics and sound perceptions. – 11 – ©2007 Environmental Impact Initiative
    • EII Executive Summary –(continued) Solar promises to offer the greatest energy potential of any electrical generation method. More solar energy hits the earth in 1 hour than the planet uses in an entire year. Harnessing that solar energy through photovoltaic and thermal cells requires increased R&D on materials and cell efficiencies. The U.S. as well as other governments are sharing in R&D expenses and offering financial incentives to early adopters to facilitate economies of scale for solar producers. The solar industry expects PV cells to be at electrical grid parity by 2012. Capturing and using methane gas from dairy farms, ranches, landfills, and sewage treatment facilities has a dual benefit: 1) methane gas accounts for about 18% of greenhouse gas emission and is 25 times more potent than carbon dioxide at trapping heat in the atmosphere, and 2) methane gas can be combusted to drive electrical generators or can be used to generate steam for industrial purposes. In the U.S., corn ethanol will increase in growth and popularity with continued government blender credits and import tariffs, but is not sustainable in the long-term. Corn ethanol has a high feedstock cost, inadequate farmable acres to meet future growth expectations, requires large water reserves, has quality issues, increases the cost of corn for livestock feed, and is not competitive to regular gasoline in price or btu value. Although still in the developmental stage, cellulosic and thermal-chemical ethanol promises to produce lower cost ethanol using a wide variety of municipal solid, agricultural, or forestry waste. Increased government fuel efficiency standards for automobiles, greater environmental awareness and higher conventional fuel prices will drive more hybrid adoption, the return of the electric car, and the slow evolution of the hydrogen fuel cell. The term “negawatt”, coined by Amory Lovins, means a unit of saved energy. Instead of looking for ways to generate more energy to meet our growing global demand, we instead look for ways to reduce our energy demands. This concept has sparked a wide variety of energy saving products, services and practices that can help home-owners, commercial building owners, and industrial spaces save money and the environment by reducing their overall energy or utility spend. The U.S. EPA-Energystar and U.S. Green Building Council’s LEED programs are changing the way that architects, builders, and construction suppliers design, build and operate new or renovated spaces. – 12 – ©2007 Environmental Impact Initiative
    • EII What is energy? And, why is it important? en·er·gy [ énnərjee ] (plural en·er·gies) -1. ability to do things: the ability or power to work or make an effort, 2. vigor: liveliness and forcefulness, 3. forceful effort: a vigorous effort or action, 4. power supply or source: a supply or source of electrical, mechanical, or other form of power, 5. physics capacity to do work: the capacity of a body or system to do work. Energy is used in every aspect of modern day life whether its driving your car, turning on a light, or preparing food, energy is important because we wouldn’t have the quality of life that we so enjoy without it’s benefit. The truth is that most American’s don’t think about energy, unless fuel prices increase significantly enough to affect our purchasing decisions or change our behavior. However, it is important to understand the ‘life cycle’ of the energy we use. This includes which energy source or fuel we are consuming, where the fuel came from, how it was produced, how it was supplied to us, what benefit do we receive from it, what waste or byproduct does it generate, and what is the net affect on society, the environment, and our economy? To demonstrate the life cycle of a few key energy sources, we will look at a simplified selection of our most common energy sources: petroleum for motor fuel, coal for electricity, and natural gas for heating. We will look at all major steps of these fuel sources to gain a better understanding of the process and industry that is in place to provide us with the comforts and quality of life that we enjoy. – 13 – ©2007 Environmental Impact Initiative
    • EII-Where does energy come from? Life cycle of gasoline 5Blender-distributors take Crude oil is discovered, 3 1 Refineries purify, distill drilled, and pumped from the motor fuel and mix it and formulate a number deep sea platforms or with detergents & octane 7 of different fuels as well Consumers pump the gas from land-based jack- enhancers such as ethanol as petrochemicals to create different grades of into their vehicles and pumps drive off gasoline 2 Crude oil is 4 sent through Motor fuels are 6 Tank trucks then pipelines or usually piped to large transport the delivered to storage tanks or can blended fuels to refineries via be transported via multiple gas oil freighters railcars or tank trucks stations to storage tanks Inputs: electricity, natural gas, motor fuels, energy intensive heavy equipment, massive logistics & infrastructure Outputs: fossil fuel pollution, physical and residual destruction to ocean floor, land, aquifers, natural gas and methane release or flare, petroleum vapors from distribution, storage and pumping, combustion of petroleum is the single largest contributor to carbon dioxide emission in the United States 66% of U.S. oil is imported contributing $314 billion dollars to the U.S. deficit per year, the burning of petroleum contributes to 25% of the smog in our cities, the U.S. spends $50bn per year to militarily secure oil supplies – 14 – ©2007 Environmental Impact Initiative
    • EII-Where does energy come from? Life cycle of coal-fired electrical generation 4 Coal-fired power plants burn 6 Electricity 1 the coal in large boilers which provides us 3 Coal is Coal is excavated from either heats water into steam which with the transported underground coal mines or then turns a large turbine ability to run a to power large topical strip mines creating electricity wide variety of plants in appliances, large equipment and quantities products via barges or railcars called unit trains 2 Coal is then pulverized into 5 Electricity is then carried smaller chunks and through a vast network of made ready for substations and power transport lines to our homes and businesses Inputs: electricity, natural gas, motor fuels, energy intensive heavy equipment, massive infrastructure & logistics, difficult and hazardous working conditions Outputs: sulfuric acid water run-off, sulfur dioxide leading to acid rain, nitrogen oxides, mercury, lead, arsenic along with other heavy metal pollution, coal is the second largest contributor to CO2 emissions in the U.S. Note: 49% of U.S. electricity is generated from coal-fired plants consuming 1 billion tons of coal per year, coal is domestically available and is a primary export of the United States. – 15 – ©2007 Environmental Impact Initiative
    • EII-Where does energy come from? Life cycle of natural gas 1 Natural gas (NG) 3 Processing plants remove comes from similar impurities from the gas and 5 Storage facilities underground wells hold the methane make the gas ready to be 8 NG and LNG can be used to fuel like oil; exploration, gas and make it compressed and moved our ovens, stoves, furnaces, hot drilling and regionally available through pipelines, or they can water heaters and automobiles production takes for use turn the gas into liquid fuel place in the ocean or (LNG) 6 Gas meters on land measure our consumption 2NG is then 4 Gas pipelines are compressed at 100 mile piped or shipped in bulk intervals, allowing the gas to travel long 7 Natural gas is used to distances, most of these pipes are to a processing generate electricity as well as underground plant for industrial heat Inputs: electricity, natural gas, motor fuels, energy intensive heavy equipment, large infrastructure & logistics Outputs: although cleaner than coal or petroleum, natural gas is still considered a fossil fuel which releases carbon dioxide, carbon monoxide, and methane gases. The exploration, production and distribution of natural gas is destructive to the ocean floor, land, forests, air and water. – 16 – ©2007 Environmental Impact Initiative
    • EII-Where does energy come from? Section Review The previous slides demonstrate three conventional fossil fuel supply chains or ‘life cycles’. The supply chains for petroleum, coal and natural gas are energy intensive, complex, span multiple continents, require massive amounts of capital cost, annual maintenance, and logistics. These supply chains are also prone to disruptions for a number of reasons: war, natural phenomenon like hurricanes and floods, political embargoes or maneuvering, production capacity constraints, safety violations, regulatory reasons, and of course natural resource depletion. In order to provide a growing global market with ample and stable supplies of energy at affordable prices, the supply from these fossil fuel sources need to continue to grow in line with global demand. To better understand what is driving global demand, and how much more of these primary energy sources will be required, we need to look at global economics. – 17 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? Macroeconomics The global population currently stands around 6.6 billion people and is growing at a rate of 1.3% or 78 million people per year China and India (and other non-OECD nations), will grow their energy demands by 2.6% p.a. as they work towards a GDP growth rate of 5.3% vs. mature OECD economies whose energy demands are only increasing by .8% per year with GDP targets of 2.5% Global GDP per capita is approximately $9300 and growing at a rate of 4.1% per annum. As GDP increases so does demand for energy and energy sources per person. In comparison, global energy (in BTUs) per capita is 70MM whereas the U.S. is 284MM BTUs per person, this indicates that there is a lot more energy to be consumed per person as the majority of the world’s population achieves a higher GDP The shift in energy consumption demonstrates that OECD nations are moving from energy intensive industries to more services, and non-OECD nations are growing GDP through industrialization, which requires more energy and electricity generated from cheap sources Global energy demands will be led by industrial uses, transportation, residential and then commercial sectors; electrical generation for industrial uses requires the vast majority of coal & natural gas, while the transportation sector requires oil. Oil, Coal, Natural Gas, Nuclear and Renewable are today’s ranking of global energy sources. The EII believes that there will be a major shift from oil as the primary energy source to coal, and that wind will break out as the primary ‘renewable’ source in the short-term, followed by hydroelectric and then solar in the long-term OPEC has 77% of the world’s oil reserves, the former Soviet Union has 10%, whereas the U.S. only has 2%. However, the U.S. consumes 26% of global oil production making energy independence a major issue for the U.S. as well as other countries. – 18 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics The world population is growing by 78MM people per annum, additional energy production is required to meet growing demand Global population estimated at 6.6 bn in 2007 2007 – 19 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics Growing GDP, especially through the industrialization of Non- OECD nations China & India = 1/3 Earth’s population 14.0 Non-OECD GDP Non-OECD Energy Demand 12.0 GDP & Energy Growth % per Year OECD GDP Non-OECD GDP & Energy Demand OECD Energy Demand “Cumulative Growth” 10.0 Global GDP/Energy Analysis: 8.0 •4.1% annual global GDP growth rate OECD and Non- OECD GDP •1.8% annual global Energy growth from 1980 6.0 base level growth rate •Non-OECD GDP growth = 4.0 5.3% •Non-OECD Energy growth = 2.0 2.6% •OECD GDP growth = 2.5% 0.0 •OECD Energy growth = 0.8 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028 Energy Information Administration, International Energy Outlook 2007 – 20 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics Comparison of US, China and India GDP and carbon emissions per capita. As China and India grow so will their energy demands and their pollution emissions Carbon Dioxide Emissions & GDP Per Capita 2004 40.0 35.0 CO2 Emissions (Mt/Capita) GDP (Thsd USD/capita) GDP per Capita 30.0 25.0 GDP per CapitaCapita Emissions per 20.0 Emissions per capita 15.0 Global GDP per 10.0 capita average 5.0 0.0 Japan India Africa Australia/New Canada OECD Europe South Korea Russia Mexico China Other Non- Other Other Non- United States Brazil Middle East Energy Information Administration, Carbon Dioxide & GDP per capita by region, 2004 – 21 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics Global energy use by sector –Industry leads, demonstrating more energy required by industrializing nations: China & India Energy by End Use Sector 300.0 250.0 quadrillion btus Transportation 200.0 Industrial 150.0 Residential 100.0 Commercial 50.0 0.0 2004 2015 2030 Energy Information Administration, International Energy Outlook 2007 *To put these figures into perspective, total global electricity demand is now 470.63 quadrillion btu’s or equal to approx. 5,372,489 megawatts of power per year. This is equal to 7,163 average sized coal-fired power plants or 4,297 average nuclear plants. Our global electricity demand is expected to grow to 714.62 quad btu’s per annum by the year 2030. This means that we need to increase our electrical supply by 52% over the next 23 years. Much of which is occurring in China and India by adding 1 new 750MW coal-fired power plant per week! – 22 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics The transportation sector uses 60% of all oil produced, global demand requires an additional 580 million more barrels per year Oil Use by Sector (Mtoe) 3500 3000 2500 Transport 2000 Industry Mtoe All Other Sectors 1500 Non-energy Uses 1000 500 0 2002 2010 2020 2030 Source: IEA WEO2004 *To put this global demand figure into perspective, the world consumes 30.3 billion barrels of oil per year today, the U.S. consumes 7.7 billion barrels per year or 26% of the world’s total. By 2030, world demand is expected to grow to 43.07 billion barrels per year or 42%. The U.S. is expected to represent 24% of this total or 10.1 billion barrels per year. – 23 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics Comparison of global energy supply from 2007 to 2030 2030 2007 World Energy Breakdown % Hydroelectric Coal surpasses Oil as the primary energy • 5.8% source Natural Nuclear Natural Gas and Oil decrease, giving way to • Gas Wind 6.0% growing alternative energies 23.1% 0.6% Coal Wind is now the dominate alternative • BioFuels 26.8% energy source, renewables represent 20.3% 0.6% of total Geothermal 0.1% More nuclear plants are established, • Oil Solar followed by Hydro and Solar electricity 37.0% Other 0.0% generation 7.1% 2007 2030 World Energy Breakdown % 87.5% of the world’s energy comes • Hydroelectric Wind from fossil fuels Nuclear Natural Gas 4.1% 12.0% 4.5% 20.7% Oil is dominate energy source • Solar mainly for transportation 3.4% Oil Hydroelectric power generation • Geothermal 25.4% and Nuclear are the largest “clean 0.4% energies” BioFuels Coal Hydrogen 0.2% 29.1% Renewables only represent 7% of • 0.1% total energy supply Coghill Capital Research, Energy Generation Matrix 2007 – 24 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics United States energy production by fuel type U.S. Energy Generation by Source 2006 Renewable Petroleum (Solar/Wind) 2% Other (landfill 2% methane) 1% Hydroelectric Coal 7% Natural Gas Nuclear Nuclear Coal 19% Hydroelectric 49% Renewable (Solar/Wind) Petroleum Natural Gas Other (landfill methane) 20% Source: EIA, net Generation by Energy Source, 2006 Annual Review Today, fossil fuels represent 72% of the energy fuel used to power the U.S. What will be the leading energy source in 10, 20, 50 years from now? Coal?, Nuclear?, Solar? What are the political, industrial, and environmental impacts of changing energy sources? – 25 – ©2007 Environmental Impact Initiative
    • EII-Why is energy demand increasing? -Macroeconomics Section Review Population growth creates an inherent demand on energy to feed, cloth, and shelter more people in the world. As emerging nations like China and India grow their economies through industrialization they will require more energy than OECD or industrialized nations. Furthermore, as China and India develop a middle class, these individuals now have the ability to purchase motorized vehicles which require gasoline, homes or apartments which require heat and electricity, and now have the disposable income to purchase more clothing, food, and consumables, all of which consume more energy. Currently, fossil fuels represent the largest portion (87.5%) of the world’s energy sources, and 72% of the United States energy sources. If we are to meet a growing world and U.S. demand, we need to locate, produce, distribute, and consume more fossil fuels, also known as hydrocarbons. In the following section, we will chemically define what a hydrocarbon is and why burning or combusting hydrocarbons are believed to cause unprecedented human and environmental health risks. – 26 – ©2007 Environmental Impact Initiative
    • Molecular Components and Weight of Dry Air EII –How do hydrocarbons affect our environment? Molecular Mass-M M in Dry Air Component Component % Nitrogen (N2) 0.7809 28.02 21.88 Oxygen (O2) 0.2095 32.00 6.704 Argon (Ar) 0.00933 39.94 0.373 Carbon Dioxide (CO2) 0.0003 44.01 0.013 The chemistry of hydrocarbon combustion Hydrogen (H2) 0.0000005 2.02 0 Molecular Mass = 28.97 Pure Hydrocarbon (Methane) = CH4 Where 1 carbon is bonded with 4 hydrogen molecules H=1 (M=16) where M – indicates molecular weight H = 1C=12H = 1 H=1 Hydrocarbon chains link additional carbon molecules with more hydrogen molecules to form straight, branched or ring structures = ethane (C2H6), propane (C3H8), kerosene (C12H26), etc… Complete Combustion occurs when hydrocarbons are burned in the presence of excess oxygen, resulting in carbon dioxide, water vapor, and the release of energy as heat and light. H=1 O=16 C=12 O=16 O=16 O=16 O=16 H = 1C=12H = 1 O=16 O=16 H=1 H=1 H=1 H=1 O=16 H=1 H2O H2O CO2 2O2 CH4 M = 18 M = 18 M = 44 M = 64 M = 16 Incomplete Combustion occurs when insufficient oxygen is present, resulting in carbon monoxide, straight carbon (or both), water vapor, and the release of energy as heat and light. H=1 C=12 O=16 O=16 H = 1C=12H = 1 O=16 H=1 H=1 O=16 H=1 H2O O2 CO CH4 M = 18 M = 32 M = 28 M = 16 *To summarize, combusting hydrocarbons breaks apart carbon and hydrogen molecules and allows them to be bonded with other available molecules such as oxygen, sulfur, nitrogen, and other carbon or hydrogen molecules to create entirely new chemical compounds. – 27 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? How does hydrocarbon combustion affect our environment? Complex and naturally occurring hydrocarbons have been concealed underground for millions of years in the form of coal, crude oil, and methane gas. Only in the past 200 years since the industrial revolution have we begun to excavate, produce and combust these fossil fuels for electricity, motor fuel, and heat at increasing levels. As we learned in the previous slide, hydrocarbon combustion results in the creation of new chemical compounds. Free carbon molecules are combined with oxygen molecules to form CO carbon monoxide –a toxic gas, or two oxygen molecules to form CO2 carbon dioxide –which is believed to be the major contributor to the greenhouse effect. Furthermore, water vapor (H2O M=18) and carbon monoxide (CO M=28) are lighter than dry air (N,O,H M=29) and will rise, and carbon dioxide (CO2 M=44) and ozone (O3 M=48) are heavier than dry air and will form a grey haze near the ground which we call smog. Other than burning very pure methane gas, hydrocarbons almost always contain impurities. These impurities can range from mercury, lead and arsenic to low levels of uranium and thorium or other naturally occurring radioactive isotopes. All of which are considered carcinogens or mutagens and adversely affect humans and animals. According to Oak Ridge National Laboratory, Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants. Beside the carbon oxides discussed above, other chemical compositions resulting from the burning of hydrocarbons include noxious and poison compounds like sulfur oxide & nitrous oxide, both of which are federally regulated now by the United States. Ozone (O3) is an indirect byproduct of hydrocarbon combustion and sunlight, resulting in a powerful oxidizing agent as well as a leading cause of bronchial aggravation or asthma. Although numerous byproducts come from the combustion of hydrocarbons, it is the greenhouse gases that have stirred so much controversy over the past 10 years. – 28 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? The Greenhouse effect Greenhouse gases include water vapor, carbon dioxide, methane, nitrous oxide and ozone. These greenhouse gases are the primary byproduct of hydrocarbon combustion. NACC/USGCP graphic Union of Concerned Scientists for Environmental Solutions – 29 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Scientists speculate that the Earth’s temperature will rise in correlation to carbon dioxide levels in our atmosphere Ice core samples dating back 400,000 years demonstrate the positive correlation between atmospheric CO2 content and the Earth’s surface temperature Red Line is Carbon Dioxide Content (PPM) Blue Line is Earth’s surface temperature (C) Historical carbon dioxide record from the Vostok ice core samples, “Climate and atmospheric history of the past 420,000 years” 1999, Petit J.R., Jouzel J; .and Alexey Fedorov The Pliocene Paradox, Science 312, 1485-1489, June 2006 Yale – 30 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Greenhouse gases primarily come from electrical generation, industrial processes, transportation and agricultural byproducts Emissions Database for Global Atmospheric Research, (EDGAR) version 3.2, 2000 – 31 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? A proliferation of headlines, articles and books inspire political and scientific debate, global warming or just pollution? – 32 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? United Nations Framework Convention on Climate Change In 1992 the UNFCCC was created as an environmental treaty aimed at reducing emissions of greenhouse gases to combat global warming. Signatories to the treaty were split into three categories: 1) Annex I (industrialized nations), 2) Annex II (developed countries which pay for costs of developing countries) and, 3) Developing countries. In 1997 the UNFCCC adopted the first legally binding protocol, named after the place of signing Kyoto Japan. The Kyoto protocol bound signatories to reducing their countries carbon emissions between 6-8% below 1990 levels. Although the U.S. signed the protocol, it was not sent to the U.S. Senate for ratification. The U.S. was concerned about the impact to the U.S. economy, method of funding developing countries, the fact that developing countries were not required to also reduce their carbon emissions, and that the U.S. could not use agricultural and forest ‘carbon sinks’ in its reduction program. In 2001, the UNFCCC found resolution to many of these negotiations and agreed to 1) Flexible mechanisms including carbon emissions trading, joint implementation of carbon offset projects and Clean Development Mechanisms (CDM) which allow industrialized nations to fund emission reduction activities in developing countries, 2) Agricultural and forest carbon sinks were allowed to country specific caps, 3) Compliance procedures and mechanisms with consequences to countries who do not meet emission limits, 4) Financing -3 new funds were created to provide assistance to climate change programs. The UNFCCC and the publicity and debate that the Kyoto protocol created inspired the world to look at new energy policies, energy efficient products and services, environmental and human-health impact of fossil fuels, damage to fragile ecosystems, sustainable packaging and product life-cycles, all of this wrapped up into a global movement concerned about “GLOBAL WARMING”. WARMING – 33 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? CO2 emissions are expected to continue to rise unless we reduce the combustion of hydrocarbons or find a way to sequester CO2 Billions of metric tonnes Co2 27% 19% Source: International Energy Agency, world outlook 2006 – 34 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Long-term effects of global warming according to the Intergovernmental Panel on Climate Change second assessment: Increased global surface temperature causing the retreat of glaciers, melting of North Atlantic and Artic ice caps and the rise of sea level by 0.2 cm/year The slowing of the thermohaline –oceanic circulatory pump which regulates global sea temperatures and produces regular global weather patterns Increased severe weather patterns, droughts in some areas, floods in others, stronger and more frequent hurricanes Increased spread of disease and insects due to longer warming periods which allow the pests to survive longer, examples: dengue fever, malaria, west nile virus & mountain pine beetle Decreased permafrost increases biodegrading and methane release from typically frozen biomass such as peat bogs, which further aggravates global warming Acidification of the ocean as more CO2 is absorbed and changes the pH level of the water, effecting calcifying organisms such as: corals, mollusks, crustaceans, some of the lowest level species in our food chain Evaporation of wetlands and topical fresh water reserves –Florida everglades, and Africa’s lake chad are examples which will impact not only millions of people who depend on the water, fish, and vegetation growing from these reserves, but also the millions of animal species which depend upon these ecosystems Increased health risks including asthma and lung disease from ozone, and longer, more severe heat waves The Stern report on global warming released October 2006 estimated that global warming could cost as much as $9 trillion dollars through lost productivity, mass migration, insurance outlays, crop damage, land and property damage, healthcare costs and mortality – 35 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? The Societal Cost of Hydrocarbons The burning of hydrocarbons has not only a high product cost for petroleum, natural gas, and coal, but also includes a very high societal cost. Societal costs can be more difficult to calculate than commodity costs and they vary from society to society. We will look at the societal cost of fossil fuels broken down into three main categories: environmental, military, and healthcare costs. *Thick gray layer of smog over Eastern China, NASA Terra Satellite images 2005 Beijing Jinan Shanghai – 36 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? The use of hydrocarbons have not only an economic product cost, but also a very high societal cost to the entire population Environmental Costs: Air, Water & Soil pollution regulation & clean-up Beijing before & after rainfall Industrial waste pouring into the Yangtze river Soil erosion and run-off in Iowa U.S. Related Data: Regulation of air, water and soil pollution = $8.1 billion p.a. Oil pollution from motor vehicles causes $4.6 billion in damages to crops, forests, rivers, lakes, buildings and monuments p.a. Air, water and soil pollution from electrical generation (coal and natural gas fired boilers) costs between $14.8-90.3 billion each year 1 gallon of spilled oil can contaminate 1 million gallons of fresh water 1 MWh from a coal-fired generation plant releases 2,249 lbs. of CO2, 13 lbs. of sulfur dioxide, 6 lbs. of nitrogen oxides, and various levels of toxic mercury and arsenic, depending upon the purity of the coal – 37 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Societal Cost of Hydrocarbons Military Costs: Strategic U.S. military bases ($49bn), oil & gas supply route security ($20bn), strategic petroleum reserves ($30bn), War in Iraq has a financial cost of $275 million per day x 4 years= $401.5 billion dollars before any rebuilding or long-term health costs are applied Healthcare Costs: Lung disease & asthma treatments caused by pollution ($16.1bn), lead, mercury and arsenic poisoning from coal fired plants causes mental retardation, a host of learning disabilities, premature mortality, and has been linked to the growing number of autism cases in the U.S. ($88-640bn), 760,000 Chinese die prematurely each year from air & water pollution ($99bn) – 38 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? So what are the societal costs of fossil fuels in the United States? Fossil Fuel Costs (billions USD) Low Mid High $49.00 $75.00 $100.00 Military Base & Supply Route Security $14.80 $53.00 $90.30 Environmental Monitoring & Clean-up $24.30 $237.00 $450.00 Healthcare treatment & mortality from pollution $88.10 $365.00 $640.30 Total Fossil Fuels Costs Using the Mid range of societal costs above divided by the total quantity of fossil fuel sourced consumed in 2006, we can calculate the financial impact to these fuel sources: 2006 Avg. Cost Add Mid Societal Cost Total Cost/Unit Consumer Increase $20.49 $93.83 $114.32 $0.0454 cents/kWh Coal (short ton) $60 $26.68 $86.68 $1.54 per gallon Crude Oil (barrel) $6.80 $2.74 $9.54 $0.0235 cents/kWh Natural Gas (mmcf) The Mid range societal costs increase: (this is generation cost ONLY, no distribution or retail costs included) Coal fired electrical generation costs go from $0.026 cents to $0.0714 cents per kWh Natural gas electrical generation costs go from $0.0615 cents to $0.0851 cents per kWh Regular gallon of unleaded gasoline goes from $3.46 to $5.01 dollars per gallon Sources: Intergovernmental Panel on Climate Change, Department of Resource Economics and Public Policy –University of Massachusetts, Ontario Ministry of Energy, National Defense Council Foundation, and the Institute for the Analysis of Global Security we will consider the following costs of fossil fuels (in billions of US dollars) – 39 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Importing 5 bbls of oil per year + economic loses + societal costs = $10 per gallon Defense Spending Oil Supply Disruptions $1 $1 39 34 Jobs Lost Overseas Taxes Lost Overseas $5 $0 43 19 Healthcare Costs Environmental Cost $1 $0 51 21 Total $1 07 0 Source: National Defense Council Foundation & Institute for the Analysis of Global Security – 40 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Societal costs are allocated to the price of gasoline in other countries through gas or carbon taxes, but U.S. has the lowest tax Automotive Gasoline -April 2007 $/Gal. No- Country Tax Tax Rate Taxes Total $/Gallon UK 2.21 205% 4.54 6.76 Germany 2.32 190% 4.41 6.74 Italy 2.51 157% 3.95 6.46 France 2.33 174% 4.05 6.38 Spain 2.47 111% 2.74 5.21 Japan 2.23 86% 1.91 4.14 Canada 2.46 42% 1.03 3.50 USA 2.41 14-16% 0.40 2.81 International Energy Agency –End-User Petroleum prices April 2007 – 41 – ©2007 Environmental Impact Initiative
    • EII –How do hydrocarbons affect our environment? Section Review The burning of fossil fuels (hydrocarbons) is the major contributor to global pollution. Of primary concern to humans, plants and animals is the release of heavy metals such as mercury and radioactive isotopes like uranium, which are known carcinogens and mutagens. As of 2005 the U.S. set a mercury emission limit on generation facilities, but has yet to create a financial method (cap and trade, tax or penalty) to enforce or influence mercury reduction. Successful emissions limits (cap and trade system) have been set for nitrogen oxide (NOX) as well as sulfur dioxide (SO2) both of which are responsible for acid rain. Greenhouse gases from the combustion of hydrocarbons is believed to have adverse environmental effects such as: melting ice caps, extreme weather patterns, methane release from melting permafrost and the increased lifespan and spread of certain pests. The United Nations Framework Convention on Climate Change (UNFCCC) has organized an intergovernmental panel on climate change to scientifically and politically address the effects of global warming. The U.S. is the second largest carbon emitter in the world behind China. In the U.S., petroleum combustion results in 2.6 trillion lbs. of carbon dioxide equivalent greenhouse gases per year, representing 45% of our nation’s total. Coal emits 4.8 trillion lbs. or 35% and natural gas (methane) represents 19% or 2.6 trillion lbs. per year. According to the EIA 2007 outlook, U.S. greenhouse gas emissions increased 25% over the past 17 years since 1990 and are expected to continue to grow at a rate of 1.2% per year through 2030. Fossil fuels carry a high societal cost, including large military costs to secure and protect oil producing nations, healthcare costs associated premature mortality, lung disease and a host of mental conditions, and finally the cost of monitoring and cleaning up water, soil and air related pollution. In our base case analysis, U.S. societal costs amount to $365 billion dollars per year. Associating these societal costs to fossil fuels is one reason why we believe hydrocarbons will increase in fuel price in the future. In the next section we will explore several other reasons why we believe fossil fuels will remain at relatively high prices in the future. – 42 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Why is the cost of fossil fuels increasing? There are a number of reasons why we believe the cost for petroleum, coal and natural gas as our primary energy sources will continue to increase in the future: Global demand is increasing as we reviewed in the macroeconomics section Societal costs are being allocated to fossil fuels as we reviewed in the last section In the financial commodities market “energy” futures are linked by their btu value, thus as one commodity rises the others follow by their btu equivalent ratio Global supplies of conventional oil and natural gas are decreasing, thus these limited resources are depleting, we will look at peak oil and gas estimates The marginal cost (production and transporting) of supplying oil, gas and coal is increasing along with higher motor fuel and equipment costs Global oil production is at 95+% of capacity, any supply disruptions will result in outages and higher oil prices More countries are mandating carbon taxes or carbon caps, thus increasing the cost of operations which utilize fossil fuels and emit large quantities of carbon dioxide or other greenhouse gases – 43 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Historical prices of West Texas Intermediate crude oil *Note the historical price spikes from oil disruptions WTI Crude Oil Price West Texas Intermediate Historical Prices Linear (WTI Crude Oil Price) 90 2005 Hurricanes Katrina and Rita 80 disrupt gulf coast oil 1990 Iraq supply invasion of 70 Kuwait USD/Barrel (2007 CPI adj.) 60 Sept. 11, 2001 50 Terrorist Attack on U.S. 40 30 20 10 0 7 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 19 8 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 Source: Bloomberg USCRWTIC commodity prices 1987 -2007, CPI adjusted for inflation – 44 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Historical prices of Nymex –Henry Hub natural gas Natural gas has a btu value of 1,031,000 per mcf equal to 302 kWh/mcf. Whereas, oil has a btu value of 5,800,000 per barrel or 1700 kWh/brl. Natural gas historically traded at a ratio of 5.6:1 to crude oil. Any oil supply disruptions would also adversely effect natural gas. U.S. Natural Gas Prices Nymex/Henry Hub Natural Gas Prices Linear (Nymex/Henry Hub Natural Gas Prices) 16 2005 Hurricanes Katrina and Rita disrupt gulf coast NG USD per MMbtu (2007 CPI adj.) Winter 2000-2001 14 supply California energy crisis, pipeline 12 explosion & cold winter 10 8 6 4 2 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 Source: Bloomberg Nymex/Henry Hub commodity prices 1990 -2007, CPI adjusted for inflation – 45 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Historical prices of Central Appalachian Coal Although coal production and supply chain activities were not effected by either the California energy crisis or hurricanes Katrina and Rita, the energy relationship with oil and natural gas, increased the price of coal as seen below U.S. Central Appalachian Coal Prices U.S. CAPP Price Linear (U.S. CAPP Price) 80 2005 Hurricanes Katrina and Rita, disrupted energy market, 70 rising oil and gas prices led to USD per ton (2007 CPI adj.) higher coal prices 60 Winter 2000-2001 50 California energy crisis 40 30 20 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: Bloomberg CAPP Coal BUS index prices 1990 -2007, CPI adjusted for inflation – 46 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? U.S. oil, natural gas and coal prices are linked by their btu value, history shows a strong correlation in energy prices U.S. Oil, Gas & Coal Prices per Million BTU $12.00 $11.00 $10.00 USD per million BTU $9.00 $8.00 WTI Crude Oil $7.00 $6.00 Henry Hub Gas $5.00 NAP Coal $4.00 $3.00 $2.00 $1.00 $- 1990 1991 1992 1993 1994 1995 1996 1997 1998 2099 2000 2001 2002 2003 2004 2005 06 19 – 47 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Global oil consumption is increasing at 1.4% p.a. compared world oil estimates that are expected to decline Oil Estimates vs. Global Demand 200 180 160 Millions of Barrels per Day World Oil Demand 140 GAP 120 Peak Oil Estimates 100 Conventional Oil Estimates 80 Unconventional Oil 60 Estimates 40 20 0 0 0 0 0 0 0 0 0 99 01 02 03 04 05 06 07 1 2 2 2 2 2 2 2 World Oil Consumption –EIA 2007 International Annual Outlook, World Oil Consumption *Assumes no changes to fuel economy standards, hybrid vehicle adoption, and uses EIA “reference” price for oil and motor gasoline Peak Oil Estimates –Colin Cambell, The Association of Peak Oil and Gas, 2004 Conventional Oil Estimates & Unconventional Estimates –CERA Cambridge Energy Research Association 11.14. 2006 – 48 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Global oil production of (low priced, light-sweet crude) is nearing its production peak In 2006, oil production in Norway fell 6.9%, 10% in the United Kingdom, 1% in the United States, 2.1% in Mexico, and an estimated 5% in Venezuela demonstrating that we are on the down-slope of global oil production 2007 Unconventional Oil sources such as oil sands, oil shales, deepwater & polar oil will constitute a higher % of total oil Dr. Colin Campbell, The Association for the Study of Peak Oil & Gas, 2004 Scenario – 49 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? U.S. crude oil and natural gas supply and demand Gulf of Mexico Production Trend U.S. Oil & Gas Production 600.00 6,000.00 Oil Production Natural Gas Production Million Stock Tank Barrel (Oil,GOM) 500.00 5,000.00 4000 25000 Billion Cu. Ft (Gas, GOM) 3500 400.00 4,000.00 Oil (millions of barrels) 20000 Gas (billions cu. ft.) 3000 300.00 3,000.00 2500 15000 2000 200.00 2,000.00 10000 1500 100.00 1,000.00 1000 5000 500 - - 0 0 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 Oil, Million STB Gas, Billion Cu. Ft 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 Source: www.gomr.mms.gov ( Minerals Management Service, Gulf of Mexico) Source: EIA, 2006 Annual Energy Review, Natural Gas & Oil production U.S. Natural Gas Supply & Demand U.S. oil demand is growing at a rate of 1.1% per annum 30 U.S. oil production is decreasing at a rate of 1.8% p.a. U.S. NG Demand 25 U.S. natural gas demand is growing at a rate of .8% per year 20 trillion cubic feet U.S. natural gas production is decreasing at a rate of 15 .2% per year Lower 48 Conventional 10 Mexico is no longer a net importer of natural gas to the U.S. & Canadian imports are down 3.8% p.a. Lwr48 Unconventional/Unproven 5 Overseas LNG Alaskan Pipeline U.S. natural gas demand relies heavily on overseas Canada 0 Liquid Natural Gas (LNG) production 90 992 994 996 998 000 002 004 006 008 010 012 014 016 018 020 022 024 026 028 030 19 -5 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Source: EIA – U.S. Energy Outlook 2007 – 50 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Transportation in the U.S. has outpaced domestic oil production U.S. Oil Use for Transportation 22 Ac tu al P rojected 20 Millions of Barrels per Day 18 A ir 16 D o m estic M arine ic le s 14 Veh P rod uction ea vy 12 H 10 8 L ig h t T rucks 6 R ail O ff-road 4 C ars 2 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Y ear S ource: T ransportation E nergy D ata B ook: E dition 21, D O E /O R N L-6966, S eptem ber 2001, and E IA A nnual E nergy O utlook 2003, January 2003 Two-thirds of the 20 million barrels of oil Americans use each day is used for transportation, the other 3rd goes into plastics, fertilizers and petrochemicals. No alternatives exist today that can match oil’s, availability, function and price. America imports 60 percent of the oil it consumes, that is expected to grow to 68% by 2025. 99% of our cars, trucks, boats and planes run on refined oil products, without oil the U.S. economy doesn’t move. – 51 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Field exploration, production and distribution costs are increasing as oil and gas wells are being drilled in more remote & deeper areas Gulf of Mexico 1961 Gulf of Mexico 2001 1,450 million Barrels of Oil equivalent 80 million Barrels of Oil equivalent (BOE), with 7,365 active leases and (BOE), 415 active leases, wells were less wells reaching over 120 miles off the than 20 miles off the coast and no coast and going to depths of 7 miles deeper than a few hundred feet U.S. Department of Interior/Minerals Management, National Geographic maps, 2004 – 52 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Non-conventional oil production increases by 23% through 2010. Non-conventional oil (i.e. oil sands & shale) costs more to extract, requires more complex filtration, is more difficult to transport through existing pipelines, and requires different equipment to refine into fuels and petrochemicals. The marginal cost of oil moves from $22/barrel to $45/barrel. Source: ExxonMobil – 53 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Crude oil produced today is heavier and more sulfur-laden Crude oil quality has deteriorated meaningfully over the past several years, a trend not likely to reverse, increasing the need for refinery upgrades to convert Heavy-Sour crudes into light, sweet petroleum products Crude Quality Deterioration: Heavier, More Sour Crude Oil 33.5 1.10% 33 1.05% ontent 32.5 1.00% ravity Percent Sulfur C 32 Specific G 0.95% 31.5 0.90% 31 0.85% 30.5 30 0.80% 2000 2001 2002 2003 2004 2005 American Petroleum Institute, shows their API specific gravity as inverse of liquid weight, the blue bars indicate a lower API sg, which means a heavier crude oil, the red line shows the % sulfur content of the heavier crude – 54 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? World oil consumption outpaces world oil refinery capacity World Oil Refinery Capacity & Throughput vs. Consumption 2005 figure indicates production at 95% of world 100000 capacity 2010 figure indicates 90000 Thousands of barrels daily production at 98% of world capacity *includes scheduled 80000 production expansions in the U.S and in OPEC countries 70000 60000 World Refinery Capacities 50000 World Refinery Throughput 40000 World Consumption 30000 20000 10000 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 British Petroleum Statistical Review of World Energy June 2007 – 55 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Annual Energy Outlook…High Oil Prices October 15, 2007 NYMEX is trading at $85.41, Brent $82.00, WTI $86.13 – 56 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? U.S. Coal production, consumption and inventories U.S. Coal Production & Consumption U.S. Coal Production & Consumptioin 1400.0 1200.0 1000.0 Millions of Tons Coal Production 800.0 Coal Consumption 600.0 Coal Stocks 400.0 200.0 0.0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 19 19 19 19 19 19 19 19 19 19 20 20 20 20 Source: EIA Annual Energy Review 2006, Coal production, consumption & stocks Average coal production between 1950 -1999 was 67 million tons more than annual consumption, however in the past 6 years, average production was only 17.1 million tons more than annual consumption. Average coal inventories between 1950 -1999 were 20.7% of coal consumption, however in the past 6 years average inventories dropped to 15.2%, demonstrating a slow-down in U.S. coal use and production. – 57 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Carbon cap & trade is one mechanism for controlling & reducing carbon emissions Concerns about global warming are fostering creative strategies for reducing our CO2 and other green house gas emissions. The Kyoto Protocol, now in effect, embodies the most widely accepted process for controlling and reducing carbon emissions through the use of economic incentives. Here are the key components of the “Cap and Trade” system: Federal regulators establish a “cap” that sets a limit on the amount of pollutants that can be emitted. cap Companies or groups that emit pollutants are given credits (or sold credits by the fed) which are allowances representing the right to emit a specific amount, credits cannot exceed the caps set. Companies that pollute beyond their allowances must buy credits from those who pollute less than their allowances, this transfer is a carbon trade, conducted on an open market exchange or bi- laterally between a buyer & seller. Carbon trades work to penalize those companies who pollute more and reward companies who reduce their emissions or were designed as an offset. There are several carbon trading systems established throughout the world, the largest is the European Union’s Greenhouse Gas Emission Trading Scheme; NY and Chicago both established free market carbon exchanges as well. The emissions cap is usually lowered over time and the fed retires a set quantity of credits. Credits can also be purchased by groups or companies who then retire them or donate them to nonprofit organizations for a tax deduction. In all cases, the fewer available credits, the higher the price becomes for the remaining credits and it costs more to pollute. A credible and effective cap and trade system is already in use today for sulfur dioxide (SO2). This market was established in 1990 as part of the acid rain program. The cap & trade system is not without its issues, market regulation is required as to not oversupply the market with credits, enforcement of actual facility pollutants and validation of reductions requires costly audits, credits and trades are targeted at corporations rather than residents, and the credibility of such trades and market prices is under scrutiny. – 58 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? A carbon tax is another A carbon tax is an excise tax on the sale of fossil fuels –coal, petroleum products, natural gas –based on their carbon content. Coal has the highest carbon content at 1,143.52 lbs. per short ton, oil is second at 259.5 lbs. per barrel, and natural gas is third at 32.85 lbs. per thousand cubic feet. The carbon tax is set and administered by the federal government to accompany current or reformed tax code and spreads the burden of tax on consumers of energy. Gradually, the tax can be increased to make higher content energy sources, such as coal and oil, more expensive to consumers. Over time, renewable energy sources and alternative fuels will be at cost equality with fossil fuel sources, and consumers will demand for more energy-efficient products, services and lower carbon content fuels. Based upon the joint publication of Duke Energy and World Resources Institute, “Taxing Carbon to Finance Tax Reform”, they estimate that a federal excise carbon tax of $12, gradually rising to $17 over a 10-year period would generate federal revenues of $208 billion over a that period. The tax would be collected where fossil fuels entered the economy, such as ports, oil refineries, natural gas providers, and coal-processing plants. Applying the levy to as few as 2,000 entities across the country would cover approximately 82% of the United State’s greenhouse gas emissions. The federal government could then use those tax dollars to implement new energy policies, provide more grants for the research and development of renewable energies and alternative fuels, develop our electrical grid infrastructure or perhaps a hydrogen motor fuel infrastructure, and provide the poor with financial assistance or tax reductions to offset the higher carbon taxes which will surely impact everyone’s cost of living. Opponents of the carbon tax claim that this system does not set nor measure carbon limits, most large utilities companies will just pass through the cost to consumers, thus this is just another consumer tax, the tax is seen as a luxury tax to the wealthy, and the federal government can’t be trusted to use the new revenue to fund renewable energies or energy-efficient programs. – 59 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? The estimated price impact of a carbon tax or cap and trade YEAR 2006 2007 2010 2015 2020 2025 2030 Carbon Credit USD/mT of CO2 $ - $ 3.00 $ 18.00 $ 43.00 $ 68.00 $ 93.00 $ 118.00 Carbon Tax/ton of CO2 $ - $ 3.00 $ 12.00 $ 27.00 $ 42.00 $ 57.00 $ 72.00 Coal (per kilowatthour) Coal kWh cost w/ cap-trade $ 0.029 $ 0.031 $ 0.034 $ 0.046 $ 0.065 $ 0.083 $ 0.101 Coal kWh cost w/ carbon tax $ 0.029 $ 0.034 $ 0.045 $ 0.068 $ 0.089 $ 0.111 $ 0.133 Natural Gas (per kilowatthour) Natural gas kWh cost w/ cap-trade $ 0.064 $ 0.064 $ 0.068 $ 0.077 $ 0.090 $ 0.104 $ 0.120 Natural gas kWh cost w/ carbon tax $ 0.064 $ 0.064 $ 0.074 $ 0.089 $ 0.105 $ 0.122 $ 0.138 Crude Oil (per barrel) Crude Oil cost w/ cap-trade $ 66.960 $ 67.310 $ 72.036 $ 83.501 $ 97.658 $ 110.761 $ 124.841 Crude Oil cost w/ carbon tax $ 66.960 $ 68.545 $ 76.368 $ 89.975 $ 104.356 $ 119.591 $ 135.769 Reg. Unleaded Gasoline (per gallon) Gasoline w/ cap-trade $ 3.348 $ 3.366 $ 3.602 $ 4.175 $ 4.883 $ 5.538 $ 6.242 Gasoline w/ carbon tax $ 3.348 $ 3.427 $ 3.818 $ 4.499 $ 5.218 $ 5.980 $ 6.788 – 60 – ©2007 Environmental Impact Initiative
    • EII –Why is the cost of fossil fuels increasing? Section Review Fossil fuels in general, will follow the free market economy cost curve. Producers will work to optimize their profits by balancing production to demand without over or under supplying. However, there are significant issues effecting the stability of supply and demand which were outlined in this section: Global demand is increasing faster than production demand is coming on line. Global oil production is at 95%+ of capacity, any supply disruptions will result in outages and higher oil prices. Governments are beginning to allocate healthcare, military and environmental costs to fossil fuels via carbon cap and trade mandates and carbon taxes. In the financial commodities market “energy” futures are linked by their btu value, thus as one commodity rises the others follow by their equivalent btu ratio. The marginal cost (production and transporting) of supplying oil, gas and coal is increasing along with higher motor fuel and equipment costs. Fossil fuels are a limited natural resource. Peak discoveries of conventional oil and natural gas occurred back in the mid 1960’s, peak production is occurring right now. Thus, increasing exploration, drilling, and production costs are spread over lower oil and gas supplies. Unconventional oil and gas is simply more expensive to process. In the next section, we will demonstrate how diminishing fossil fuel supplies are leading to increased global conflict. – 61 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource Fossil fuels are a limited natural resource, diminishing supplies will lead to more global conflict Examples of global facism, protectionism, and war based upon energy resources: Hugo Chavez –Venezuelan President: 2002 fires upper management of state owned oil company Petroleos de Venezuela (PDVSA), removes 18,000 labor union workers and takes control of oil revenues to fund social/communistic programs 2006 Venezuela is only OPEC country calling for lower oil production to drive oil prices higher 2007 Chavez announces that all oilfields in Orinoco Belt, including joint ventures and equipment owned by Exxon-Mobil, Chevron, BP, Statoil, would fall under majority control by PDVSA Vladimir Putin –Russian President: Oil and gas generate 70% of Russia’s income and is used to influence foreign policy with Soviet states as well as European countries. Russia owns the world’s largest deposits of natural gas and 3rd largest oil reserves 2006, Moscow forced Shell Oil company to hand over the largest foreign investment project in Russia to the State owned Gazprom, which now controls 51% of the Sakhalin facility 2007, Moscow is now forcing the hand of a joint venture with BP, refusing to allow the entity to build a planned and licensed pipeline into China Asia: As the chart indicates, China’s demand for oil is increasing at an unprecedented rate of 6.8% per annum, their top 4 suppliers of oil are Angola, Saudi Arabia, Iran and Russia 2004-2007: China and Japan are in diplomatic battle over access to a Siberian Oil pipeline, both countries heavily dependent upon the resource for motor fuels and petrochemicals, have offered between $14-20 billion dollars in infrastructure, weapons, and social funding to gain pipeline access. – 62 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource Securing the remaining reserves of global oil has ravished the Middle East and now threatens Africa Middle East: The middle east holds 76% of the world’s known oil reserves, produces 44% of the world’s oil and Saudi Arabia leads OPEC which commands world oil supply and thus pricing 1980-1988: Iran-Iraq war over border disputes and control over oil-rich Khuzestan province, thus dominance of Persian Gulf region 1988-1990: U.S. supported Iraq’s war effort against Iran, providing weapons, food, and commodity credits in exchange for oil and a pipeline through Jordan 1990: Invasion of Kuwait by Iraq over failure to repay some $14bn dollars borrowed by Iraq to fund the Iran-Iraq war, whereby Iraq wanted to raise money by cutting oil production and raising the price of oil through its OPEC membership, and Kuwait increased production to keep prices low. Further aggravation came when Iraq claimed that Kuwait was drilling slanted wells into Iraqi’s portion of the giant Rumaila field which both countries shared. 1990: Retreating Iraqi forces set fire to Kuwaiti oil fields and are claimed to have blown up an oil tanker in the gulf spilling 400 million gallons of crude oil into the ocean 2003-200?: Invasion of Iraq by U.S. and alliance forces to disarm Iraq of weapons of mass destruction, to end Saddam Hussein’s support for terrorism and to free the Iraqi people Today, the U.S. imports 25% of it’s oil from the Middle East, including 6% from Iraq Africa: Africa is quickly becoming established as the next Middle East. Its oil-rich nations of Angola, Nigeria and Equatorial Guinea represent 15% of the U.S. oil imports, and 22% of China’s oil imports . China and the U.S. are in diplomatic as well as civil battle over African oil fields. The U.S. is organizing an entirely new military command over Africa named “Africom” to stabalize Dufar, Sudan from terrorist activities as well as oil production and distribution China is offering billions of USD to African nations to secure long-term contracts – 63 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource N. America, Europe, Australia and Asia are highly dependent upon cheap, stable oil prices to fuel our economies The E.U. imports 80% of its oil and 60% of its natural gas, primarily from the Middle East & Former USSR Africa now exports Japan imports 90% of 30% of the world’s its oil and 96% of its oil natural gas, it has The U.S. imports virtually no domestic 60% of its oil and sources 20% of its natural gas OPEC controls 76% of the world’s oil reserves, dominated by Saudi Arabia, Iran, Iraq & Kuwait Australia imports 60% of its oil International Energy Agency, IEA Statistics, 2006 – 64 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource Energy & economic independence, the U.S. has been trying to reduce our oil addiction for 30 years with no success… Nixon Ford Carter Reagan Bush Sr. Bush Jr. (*) represents actual % of foreign oil consumed that year (<) represents oil reduction goal set by President Source: Energy Information Agency, Presidential Speeches The U.S. will spend more than $400 billion dollars to purchase foreign oil and gas this year. Oil and gas disruptions over the past 30 years have cost Americans $2.3 trillion dollars. Every $10 increase in crude oil costs the average American family $700 per year. OPEC controls 76% of the world’s oil reserves, dominated by Saudi Arabia, Iran, Iraq & Kuwait The U.S. and other world importers are beginning to realize that we are funding countries and governments that are not friendly towards Western democracies: Iran, Iraq, Venezuela, Nigeria Diminishing natural reserves will lead to more geopolitical and regional conflicts over those reserves. – 65 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource Global oil reserves, dependency rests on OPEC Saudi Arabia, Iran, Iraq and Kuwait have the largest oil reserves of all OPEC countries. Geopolitical and religious conflicts have ravished these regions for decades. The U.S. does consider the affect of supply disruptions from this region and spends over $50 billion dollars per year in military support, bases, and in port security to this region. *Not including the cost of the war in Iraq or desert storm. OPEC (Organization of the Petroleum Exporting Countries, Facts and Figures, www.opec.org, 2005 data – 66 – ©2007 Environmental Impact Initiative
    • OPEC is at record high (95%) production capacity, over the past 30 years America has realized economic penalties of $2.3 trillion dollars due to past supply disruptions from the OPEC cartel 100% 1973 OPEC oil embargo over Western support of 1990 Iraq invades Kuwait Israel, production declines 95% and start of Middle East & prices quadruple 1979 Outbreak of hostilities over next decade Iranian Revolution & 90% Economic sanctions against Egypt for their treaty with Israel 85% 80% 1980 Saudis gain full 1998 Sept. 11, 2001 control over Economic World Trade 75% Aramco 1975 Arab downturn of Towers and King Faisal is South-East attack on the assassinated 70% Asia Pentagon 65% 60% 1983-86 Oil prices collapse due to over 55% supply of oil, until Saudi Aramco, OPEC Production Capacity unites OPEC and controls production Utilization 50% 2005E 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 OPEC production IEA -2005 – 67 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource Oil tradeoffs: Create new energy policy focused on oil Continue spending billions of dollars on foreign oil independence Increase national debt Offering R&D grants, tax credits, and other financial incentives Support foreign investment with military & political expense Increase domestic drilling, discovery, & production Be subject to more extreme price fluctuations out of Invest in alternative fuels to compliment and the control of U.S. government and businesses substitute foreign oil supplies Increased hostilities in the Middle East & Africa Increase fuel efficiencies to reduce overall demand Cheaper Foreign Oil? More Expensive Domestic Oil? Gauging from the U.S. Energy Policy Act 2005, as well as global investment in renewable energies and alternative motor fuels, there is a significant trend moving towards energy and especially oil independence. – 68 – ©2007 Environmental Impact Initiative
    • EII –Fossil fuels are a limited natural resource Section Review Natural gas, petroleum, and coal are limited natural resources which represent 87.5% of the world’s energy sources and 72% of the United States’. As these resources decrease and global demand increases, the value of these commodities increases as does the conflict surrounding them. OPEC controls 77% of the world’s oil reserves; Saudi Arabia as OPEC’s swing producer can control output volumes, thus world oil prices. We are already seeing examples of protectionism, nationalism, facism, and war play out on the global stage. Resource-rich countries like Russia, Saudi Arabia, Venezuela and Iran will continue to use their control of petroleum and natural gas to influence foreign policy and to fund domestic political and social ideology, which may be in conflict with Western democracy. China and the United States are aggressively vying for the rights to explore, produce and ship oil from Sudan, Angola, Nigeria and Equatorial Guinea. Human rights activists are concerned about the manner in which these governments are influencing local regimes to grant them oil rights. Environmental activists are concerned about the lack of environmental controls within African nations and the overall effect to local residents as well as to the earth. The U.S. is often accused of progressing imperialism to secure our future sources of energy. The establishment of Africom, will surely perpetuate this global view. Animosity towards the United States will only continue as we aggressively pursue these limited resources. The U.S., like other nations, must refocus their attention, money, and policy on energy independence. Instead of spending almost $530 billion dollars per year to purchase, protect and store foreign oil, we could use that money domestically to research and develop alternative motor fuels, provide grants to our automobile manufacturers to create more fuel-efficient cars, provide residents and businesses with tax incentives to adopt renewable energy or energy-efficient systems, offer low interest loans to coal-fired power plants to implement pollution control systems or gasification systems, the U.S. could build a more efficient and integrated electrical infrastructure. Undoubtedly, the U.S. would benefit socially, economically and environmentally from these efforts. – 69 – ©2007 Environmental Impact Initiative
    • EII- U.S. and global energy policy Fortunately, environmental concerns are leading to new energy policies and incentive programs U.S. Energy policy act 2005: authorizing loan guarantees to innovative technologies, requires 7.5 bn gallons of biofuels to be mixed with gasoline by 2012, subsidizes wind and alternative energy producers, tax breaks for energy conservation in homes and businesses, offers oil and gas tax credits for additional drilling in the gulf, more unconventional exploration, calls for the environmental evaluation of producing oil from sands and shales in the West, enhances the stability and reliability of our electrical grid, incentives and authorization for more nuclear power U.S. 20 in 10: 20% of our fuel will come from alternative sources by 2017 = 35 bn gallons E.U. Energy for a Changing World: 20% cut in CO2 by 2020, 50% emissions cut by 2050, 10% use of biofuels by 2020, increase market competition by unbundling generators from distribution networks, sponsoring numerous technology developments in renewable energies, ‘energy certification’ for buildings, ‘energy labels’ for consumer goods, limit of 130 grams of CO2/km for cars by 2012, and fostering ‘energy relationships’ with Africa & Russia to help them leap-frog low carbon technologies Feed in tariffs: electric utilities buy electricity from renewable energy generators under a government sponsored, multi-year, guaranteed rate. (Japan, Germany, Canada, France, Greece, Italy, Spain, and in California) Net metering: allows bi-directional metering of electricity to or from the grid, thus giving electricity producers the ability to sell access electricity back to the grid -41 U.S. States have various forms of net metering Quebec: 2007 announced Canada’s first carbon tax, 0.8 cent on gas, 0.9 on diesel, 0.96 heating oil and $8/ton on coal, expected to assist the country in meeting is 2012 Kyoto emission limit. – 70 – ©2007 Environmental Impact Initiative
    • EII- U.S. and global energy policy Many U.S. States are spearheading the effort to lower carbon emissions and kick-start the new energy economy In the absence of a national policy, many U.S. States are organizing their own emission reduction programs. The Regional Greenhouse Gas Initiative (RGGI) is a multi-state agreement between Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, Vermont and recently Maryland to implement a carbon cap and trade system, with regional emission limits set at 121.3 million tons of CO2 through 2014, decreasing by 10% through 2018, to approximately equivalent 1990 levels. The Western Climate Initiative (WCI) was launched in February 2007 between the governors of Arizona, California, New Mexico, Oregon and Washington and works to establish a framework for statewide collaboration, metrics, and strategies for lowering greenhouse gas emissions and advocating reduction technologies and renewable energy development. The WCI expects to set a regional carbon cap by Fall 2007 and establish a market based mechanism to achieve the emission goal by August 2008. The Database of State Incentives for Renewables & Efficiency can be found at www.dsireusa.org. DSIRE provides federal incentives as well as individual State financial incentives, rules, regulations, policies, and related programs and initiatives so that individuals and businesses can see the benefits available to them and also the regulations to operate under. State of Illinois: Renewable portfolio standard enacted June, 22, 2001 calls for 25% renewable energies by 2025 including: solar water heat, solar photovoltaics, landfill gas, wind, biomass, hydroelectric and biodeisel, basically increasing our utility of these sources by 1.5% per year. It is expected that 75% of the power comes from wind. State energy independence plan calls for 50% of the State’s energy supply to come from homegrown fuels by 2017, focused on ethanol, biodiesel and coal-syngas. FutureGen is considering 2 sites in Illinois to build the cleanest coal-to-energy plant in the world. BP just announced $500 million dollar UofI & Berkeley biofuels laboratory in Champaign. – 71 – ©2007 Environmental Impact Initiative
    • EII- U.S. and global energy policy A combination of strategies are required to reduce global pollution & greenhouse gases while meeting future energy needs ENERGY EFFICIENCY STRATEGIES: Global Carbon Emission (billions of metric tons per year) Each wedge is a separate +9 F •Fuel economy improvement from 22mpg to strategy for reducing carbon 12 800 ppm 60mpg dioxide from the my •Increase efficiency in heating, cooling, no y nc atmosphere co lighting and appliances by 25% cie le i eff ue •Improve coal and gas fired power plant 1: f ctric ncy ge electrical generation from 40 to 60% e ed 2 : e l cie effi W ge •Improve electrical grid efficiency and grid s 10 l/ga ed W 3: coa infrastructure dge We RENEWABLE ENERGY STRATEGIES: •Wind generated electric power +5.4 F •Solar thermal and solar photovoltaic power 525 ppm •Geothermal electrical generation 8 •Hydro-electric generation (tidal, wave, oceanic or river flow) •Utilize biowaste and biofuels such as landfill methane gas •Utilize renewable energy sources to generate 6 hydrogen for transportation fuel LOW-CARBON FUELS: •Replace older, more pollutive coal-fired plants with natural gas turbines •Build more nuclear power plants 3.6 F 450 ppm 4 •Coal gasification into syngas for electrical generation and coal to vehicle fuel using fischer-tropsch Global ALTERNATIVE MOTOR FUELS: Temperat 2 ure and •Corn and Sugar Cane based ethanol parts per million •Chemical thermal & cellulose ethanol CO2 1957 2007 2050 •Soy, Canola and other natural biodiesel CARBON CAPTURE/STORAGE Concept source: Princeton University, prfs: Robert Socolow & Stephen Pacala •Introduce systems to capture and store 72 – – ©2007 Environmental Impact Initiative carbon dioxide underground
    • EII-Renewable Energies Renewable Energies Cost Comparison of Various Electrical Generation Sources US Cents/kWh Wind (U.S. cents per kilowatt) 25 Solar 15-20 20 15 Hydro 7.5-10.7 6.5-8.2 10 6.0-8.2 5.5-7.5 Geothermal 4.8-5.2 3.7-4.7 2.6-4.0 5 0 d r as ro s al ar l oa la as in m le yd G So W C M er uc H al io th N ur B eo at G N International Energy Association, “Costs of Generating Electricity”, IEA/NEA -2005 Energy Efficiency and Renewable Energy & MIT –Enhanced Geothermal Systems study , 2005 Hydro Research Foundation & US DOE, 21 hydroelectric plants built in USA from 1993 – 73 – ©2007 Environmental Impact Initiative
    • EII –Renewable Energies Price parity of solar & wind vs. natural gas, coal and nuclear Power Source Base w/ Carbon Trade w/ Societal Cost Solar N/A N/A Wind N/A N/A Natural Gas Coal Nuclear N/A N/A Wind & Wind & Wind & Solar kWh Solar kWh Solar kWh parity w/ parity w/ parity w/ Nuclear Natural Gas Coal Source: EII Research – 74 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies Renewable vs. fossil fuel electrical generation tradeoffs Plant Pollution/ Generating Permit Fuel Resource Constant Cents per Carbon Scalability Life Span +Construction Source Availability Output kWh Emissions to MW (years) Time (years) 100% domestic, abundant 3.7-4.7 50+ 3-4 Coal LEGEND 100% domestic, R&D stage 6-12? 50+ 4-5 Clean-Coal Good Natural 80% domestic, declining 4.8-6.5 50+ 2 Gas Moderate 100% domestic, heavily regulated 2.6-4.0 40+ 8-12 Nuclear Poor Varies by region 6.5-8.2 30+ 2 Wind Abundant in daylight only 20-30 25+ 1-2 Solar Hydro- Restricted by geography 6.0-8.2 50+ 5-8 electric Available, difficult to collect 7.5-10.7 30+ 1-2 Biomass – 75 – ©2007 Environmental Impact Initiative Source: EII Research
    • EII -Renewable Energies -Wind Wind According to the European Wind Energy Association, the wind is capable of supplying 10% of the world’s electricity by 2030 Comparable grid energy cost per kWh ($0.065 -0.082) to fossil fuels Cost curve, driven by larger turbines & blades with greater efficiencies, economies of scale, larger wind farms and more competition In 2006 global wind energy reached 59,084 MW (representing less than ½% of the U.S. total energy generation) but is estimated to grow at 35% per year There are 8000+ parts and components within a single windmill. The market is fragmented and fraught with capacity constraints and delays. Wind projects need to lock in turbines early, test various locations for wind speed at different heights, and take into consideration bird migration paths, wind farm aesthetics, and proximity to the grid – 76 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Wind Renewable Energy Resource Map –Wind Power in meters/second 7-8 7-8 6.4-7.5 7-7.5 8-8.8 7-8 5.6-6.4 6.4-7.5 8-8.8 6.4-7.5 < 5.6 5.6-6.4 Cost of Wind Energy at Speeds Wind Speed Cost per kWh 5-6 $0.12-.08 6-7 $0.08-.06 7-8 $0.06-.04 8-9 $0.04-.03 – 77 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Wind Wind cost curve, Global & U.S. annual wind installations Global Annual Wind Installations Annual Capacity Additions (MW) 16000 14000 30% 12000 10000 40% MW Added W ind (MW ) 8000 Solar (MW ) 6000 4000 2000 0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Wind – GWEA; Solar – Year PVPS, SolarBuzz IEA Declining Wind Cost Curve as Turbines increase in size and scale 125m 5000 kW 80m 2000 kW 50m 40m 600 kW 500 kW Sources: National Renewable Energy Laboratory 15m 20m (www.nrel.gov/analysis/docs/cost_curves_2005) 50 kW 100 kW American Wind Energy Association facts & figures 2006 – 78 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Wind Wind Value Chain: Activities & companies Turbine Production Electricity Installation Production & Inputs Production Testing Activities Steel forging Design of features Site selection and System monitoring approval Fiberglass, carbon for Component assembly Optimization blades Road and support Control software Maintenance & repair structure build Gear boxes development Sale into grid Connectivity to grid or Electronics & cabling plant Install and commission Sample Companies Skoda (VW) Repower Caterpillar ABB (monitoring) Hansen (Suzlon) Vestas Martifer EDF Winergy (Siemens) Gamesa Nexans RWE LM Glasfiber GE Draka Florida Power & Light Zoltek (ZOLT) Siemens Independent developers Independent developers Suzlon – 79 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Wind Suppliers of wind turbines: GE is only U.S. company in top 10 Top 10 Global Wind Turbine Suppliers in 2006 Others, 5% Goldwind (CHN), 3% Acciona (SPA), 3% Repower (GER), 3% Vestas (DEN), 28% Nordex (GER), 3% Siemens (GER), 7% Suzlon (IND), 8% Gamesa (SPA), 16% Enercon (GER), 15% GE Wind (USA), 16% The first windmill to generate electricity was the Brush Postmill in Cleveland Ohio 1888. The U.S. has since given up it’s lead as the founder of the electrical wind mill. Source: BTM-Consult World Market Update 2006 – 80 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Wind Analysis of a wind farm project in Illinois 2007 Project Scope: Supply 30,000 homes with electricity from a wind farm *Avg. home requires 5100 kWh x 30,000 = 153,000 MW per year *Avg. wind speed class 4 (7-7.5 meters per second) Project Size: 50MW (153,000 MW x 8760 hours/yr x 35%) Turbines required: 50 / 2MW turbines = 25 turbines Land Required: Each turbine requires .2025 km of space x 25 = 5 square kilometers Capital Cost: $70.37MM USD Financing: 60% debt, 40% equity, interest rate 8.75% and loan of 10 years Annual gross revenue = $6MM dollars or $0.04 cents per kW, grid rate increases 6%p.a. Annual Expenses: -Debt $3.4MM, Distribution/transmission $100K, Operation and maint. $150K, Labor $200K, Mgt fees & insurance $250K, Property taxes or rental $100K, inflation adj. 3% Taxes: 35%, *No production tax credits as of 2007, legislation pending $0.015/kWh Depreciation: 20yr straightline, $3.24MM scrap value after 25 year of turbine(s) life WACC: 9.25% NPV: $4.709MM *no tax credit With tax credit $0.015/kWH = NPV: $20MM ROI: 6.69% *no tax credit With tax credit = ROI: 28.45% IRR: 10% *no tax credit With tax credit = IRR: 12.68% – 81 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Solar Solar energy is the most abundant energy source on the planet. Every hour the sun provides the Earth with more energy than the entire world consumes in a year. Through further technological advances and greater economies of scale, solar photovoltaic electricity production costs will be on par with conventional electrical generation methods ~.07-.10 cents/ kWh But unlike coal, natural gas or oil, the photovoltaic process emits no pollutants or green house gases. Although silicon (Si) is highly abundant near the Earth’s surface, it requires complex processing to be made into crystalline silicon wafers used as the light- absorbing semiconductor in photovoltaic cells (PV). In 2006 and the beginning of 2007, the demand for crystalline silicon has outpaced supplies, resulting in long backlogs. Today, companies are racing to build Si capacity to meet future needs. As an industry structure is beginning to emerge with OEM’s, system vendors, government and financial intermediaries, solar thermal and photovoltaic customers and solar services –installation and maintenance. Subsidies and feed-in tariffs will be required until perhaps 2012 to drive demand and assist with research & development costs and economies of scale. Global installations of PV were 1,460 MW in 2005, 1744 MW in 2006 and 2007 looks to be around ~2200 MW, estimated annual growth looks healthy at +30%. Solar represents only .1% of total U.S. energy generation today. – 82 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Renewable energy source map -solar radiation 70% of the United States has above average kWh solar radiation per annum, and the South Western portion of the U.S. has very high levels of solar radiation available per year – 83 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Energy generation sources through 2100 –solar dominates Other Renewables Annual use of primary energy Thermal Solar Solar Photovoltaic Wind Biomass Hydropower Nuclear Natural Gas Coal Oil Source: Solarwirtschaft Germany, Projections by Scientific Advisory Board to the Federal Government – 84 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Scale: Cumulative solar capacity is growing at 20-40% p.a. Solar - Cumulative Generating Capacity (MW) 7000 6000 5000 Cumulative MW 4000 Solar (MW) 3000 2000 1000 0 1999 2000 2001 2002 2003 2004 2005 2006 Year Source: Wind – GWEA; Solar – IEA PVPS, SolarBuzz – 85 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Supply & Demand: Solar cost breakdown CA peak grid: $0.37/kWh $/kWh 0.30 0.25 0.08 0.20 0.02 MA avg grid: $0.17/kWh 0.15 0.05 0.10 0.04 0.10 ID avg grid: 0.02 $0.06/kWh 0.02 0.02 Grid rates in Silicon Ingots Wafers Cells Modules Module Inverters Installation Total 2010 various Total Estimate states Source: Michael Rogol/Photon Consulting, April 2007. EII analysis. Photon Consulting unsubsidized cost estimate $0.50/kWh, reduced to $0.25/kWh with typical subsidies. – 86 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Solar: An industry structure is emerging Supply Intermediaries Demand • Installation credits • Generation subsidies • Tax credits to OEM’s • Permits/zoning • Grid connectivity Government Equipment System Solar energy manufacturers vendors buyers Financial • Retail • Modules/panels • System design intermediaries • Government • Mounting • Installation • Deal sourcing • Industrial • Tracking • Maintenance • Supply agreements • Homeowners • Roofing material • Warranty • Project bundling • Builders • Inverters • Tax & legal • Investors • Cabling • Deal closing – 87 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Solar Value Chain: Activities & companies Component System Production Electricity Production & Integration Inputs Production Testing Activities Polysilicon production Cell production Module assembly Operations Substrates (metal, glass, Defect inspection System integration Upgrades plastic) Production equipment Property Procurement Pricing Wafer production Permits Regulatory interface Silane gas production Project Management End of life actions Wiring/cables Purchasing Installation & Test Sample Companies On-Grid: AXT Applied Materials Conergy MEMC Energy Conversion Phoenix Sonnenstrom SAG Solarstrom Renewable Energy Crp Q-Cells Solar Integrated Tech Tenesol (Total) Off-Grid: Sumco/Mitsubishi Renewable Energy Crp Solon Tokuyama Sharp MSK Corp Coca-Cola Wacker Chemie Solarworld Siliken Munich Intl Airport Icos Vision (inspection) Xantrex (inverters) San Diego Schools – 88 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Regulatory drivers assisting in the growth of solar cells Federal energy bill (July 2005) provides tax credit up to $2,000 for solar systems at homes (through 2009) and businesses (through 2011) California Solar Initiative, $300M budget (2006) to fund solar projects < 30kW at $2.80/Watt (vs. $8- 15/Watt actual) Nevada pays $3/Watt up to 5kW max for certain on- grid PV facilities Renewable energy law (EEG), up for review in 2007, provides generous feed-in tariff of €0.51/kwh (2004 level) declining 5% p.a. for 20 years Feed-in tariffs passed March 2004, favorable Likely to double solar energy production to 50 MW in 2006 PV part of national energy objectives since 1994, with 2030 targets Italy: government funding to achieve 200 MW Korea: new feed-in law passed 2005 – 89 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Suppliers: Non-US companies have dominated Top 10 Global Solar Cell Producers in 2006 Other producers, 17% Sharp (JPN), 22% BP Solar (USA), 4% SolarWorld (GER), 5% Schott Solar (GER), 5% Q-Cells (GER), 13% Motech (TWN), 5% Mitsubishi (JPN), 6% Kyocera (JPN), 9% Sanyo (JPN), 8% Suntech (CHN), 8% American inventor Charles Fritts is credited with building the first solar cell in 1883, followed by U.S. patent holder Russell Ohl in 1946. Although the U.S. led the development of the PV cell, we did not maintain our dominance on this important future technology. Today, the U.S. barely makes the top 10 countries producing solar cells. Source: Photon International, 3/2007. – 90 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Implementation: Solar cell material types Single-crystal silicon Multi-crystalline Amorphous silicon Poly-crystalline thin Single-crystalline thin (monocrystalline) silicon film (e.g., CuInSe, film (e.g., GaAs) (polycrystalline) CdTe, thin film Si) Composition Uniform atomic Small grains of Random atomic Small crystalline grains Extremely thin, single arrangement, grown crystalline material structure, assembled in of semiconducting crystal from same crystal randomly arranged multi-junction layers, materials minimal Si use Applications PV panels, Satellites, #2 PV panels, #1 market Flexible roofing panels, Buildings Satellites, concentrator market share share calculators, watches, systems space?, #3 market share Efficiency High, up to 20% Medium, less than Low, 8% (ENER data) Medium, 10-17%, less High, 25-35%, less single-crystal, ~15% to 13% (lab) sensitive to heat than sensitive to heat vs Si Si based based, flexible designs possible Complexity High, Si purification Medium Medium, can be mass- High High process, cells must be produced connected in modules Cost High, extremly high Medium, less than Low, can be combined Low, no Si, can be High, key barrier purity of Si required single crystal w low cost substrates combined w low cost (e.g., plastic, glass), substrates (e.g., plastic, large area reqd, low Si glass) Companies Sunways, Ersol, BP Q-Cells, REC, Unisolar (ENER), Q- BP Solar, Nanosolar Emcore Solar Sunpower, Sunways, Cells (QCE) Evergreen (”String Ribbon”) Not silicon-dependent Silicon-dependent – 91 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Solar Analysis of a solar house installation project What is the NPV of a typical residential PV system? New residential roof in Mendocino, CA Used 17x 120-Watt thin film laminates, 406mm wide x 5.5m long (2.04 kW over a 38 sq m area = 54 W/sq m, vs. 130 W/sq m for crystalline) Install cost $8/Watt before incentives, including inverter and backup battery (vs. $10-15/W for crystalline) $2.80/W Calif. Energy Commission rebate, reduces cost to $5.20/W Total install cost = 17 * 120 * $5.20 = $10,608 Assume 1,500 kWh annual output per 1 kW rated power = 1,500 * 2.04 = 3,060 kWh per year $0.15 per kWh average grid price (PG&E data) $2,000 federal tax credit Life of project 25 years, 6% discount rate, grid price increases 7% p.a. NPV of solar system = $4,024 – 92 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Hydro Hydro-power Types of water power include: Waterwheels –used for hundreds of years to power mills and machinery Hoover dam Flour Mill Hydroelectricity –including hydroelectric dams or river-run generators Tidal power –which captures the energy from the ebb and flow of tides Wave power buoy Marine Turbines Wave power –which uses the energy provided by waves Oceanic current –using the thermohaline ocean current Wave power Wave/Tidal concentrator Hydraulics – 93 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Hydro Hydro-power pros and cons Hydro or water powered generators use the immense energy provided by waves, tides, oceanic pumps, and falling water to generate electricity. Hydropower represents 5.8% of global energy output today (almost equal to global nuclear power), and 4% of all U.S. energy output. Hydro-power offers several advantages for the generation of electricity: 1) no carbon emissions or pollution during electrical generation, 2) large-scale MW power generation, 3) low cost 6.0-8.2 cents per kWh electricity cost, and 4) long product and facility generation life span (40-60 years). Disadvantages of hydropower include: 1) availability of resources for hydro-electric dams, 2) social and environmental detriments of manipulating or damming rivers (i.e. Three Gorges dam on the Yangtze), 3) surface area required for wave and tidal applications impairs boat traffic and seaside access, 4) the ocean is very corrosive, 5) aesthetics, 6) proximity to land-based electric loads and infrastructure, and 7) the weather and thus the wave speed, height, and power is unpredictable. According to the U.S. DOE Energy Information Administration, hydro-power although growing will remain around 4% of the U.S. total energy generation through 2030. Hydropower remains yet another renewable energy that can help the U.S. and the world achieve lower carbon and pollution emissions, while increasing electricity generation to meet growing demands. – 94 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Geothermal Geothermal Geothermal energy captures the heat of the earth and uses it to produce electricity, heat and cool homes and buildings. Geothermal systems have great potential to contribute enormous quantities of clean, carbon-free energy and thanks to advances in drilling and exploration technologies, geothermal units can be installed just about anywhere in the United States. According to the Geothermal Energy Association the United States is the world leader in geothermal heating and the generation of electric power using geothermal energy. Total installed capacity to date is 2,850 MW or .5% of total U.S. energy generation. There is 2,455 MW of new geothermal power plant capacity in development today in 11 states: Alaska, California, Hawaii, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming. According to a 2006 joint report by MIT and the U.S. Department of Energy, Enhanced Geothermal Systems (EGS) will be capable of producing 100 billion watts (1-5%) of U.S. electricity in the next 50 years given advanced drilling, materials, and steam turbine technologies. Geothermal heat pumps installations have been growing at an annual rate of 15 percent, with over 600,000 units installed in the U.S. in 2005. 50,000 to 60,000 new units are installed every year in the U.S. -- the largest growth in the world for geothermal heat pumps. Geothermal electrical generation is high risk as significant capital cost is required to set-up a geothermal generation facility, and the life-span of a deep geothermal well is unknown. – 95 – ©2007 Environmental Impact Initiative
    • Renewable energy source map –Geothermal temperatures U.S. DOE, Energy Efficiency and Renewable Energy, geothermal resource map showing the estimated subterranean temperatures at a depth of 6 kilometers. – 96 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Geothermal Diagram of three geothermal electrical generation plants Idaho National Laboratory: 3 Geothermal Generation Facilities Dry Steam Power plants using dry steam systems were the first type of geothermal power generation plants built. They use the steam from the geothermal reservoir as it comes from wells, and route it directly through turbine/generator units to produce electricity. An example of a dry steam generation operation is at the Geysers in northern California. Flash steam plants are the most common type of geothermal power generation plants in operation today. They use water at temperatures greater than 360° F (182° C) that is pumped under high pressure to the generation equipment at the surface. Upon reaching the generation equipment the pressure is suddenly reduced, allowing some of the hot water to convert or “flash” into steam. This steam is then used to power the turbine/generator units to produce electricity. The remaining hot water not flashed into steam, and the water condensed from the steam is generally pumped back into the reservoir. An example of an area using the flash steam operation is the CalEnergy Navy I flash geothermal power plant at the Coso geothermal field. Binary cycle geothermal power generation plants, the water from the geothermal reservoir is used to heat another “working fluid” which is vaporized and used to turn the turbine/generator units. The geothermal water, and the “working fluid” are each confined in separate circulating systems or “closed loops” and never come in contact with each other. The advantage of the Binary Cycle plant is that they can operate with lower temperature waters (225° F - 360° F), by using working fluids that have an even lower boiling point than water. They also produce no air emissions. An example of an area using a Binary Cycle power generation system is the Mammoth Pacific binary geothermal power plants at the Casa Diablo geothermal field. – 97 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies -Geothermal Geothermal investment analysis According to the MIT/DOE Enhanced Geothermal Systems joint 2006 study, an early investment of $300 to $400 million over the next 15 years would be required to make early-generation EGS power plants competitive with U.S. electricity supply markets. Given the early stages of large capacity EGS power plants and the unproven longevity of such projects, the U.S. government would need to provide R&D funds, offer loan guarantees, and help co-fund projects similar to what they have done with new nuclear power plants and hydroelectric dams. After a few EGS plants at several sites are build and operational, the technology will improve to a point where development costs and risks would diminish significantly, thus encouraging public investment in the now proven technology. EGS electricity production costs would be at grid parity to conventional generators or below market prices by 2030. With a combined public/private investment in the United States of $800 million to $1 billion dollars, EGS technology could produce more than 100,000 MW of electrical power by 2050. By comparison the U.S. DOE has announced that it will build a $1.3 billion dollar FutureGen emission-free coal plant which will produce only 275 MW of electricity through gasification of coal into hydrogen and capturing/sequestering the CO2 emissions in underground caverns. – 98 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies Section Review Renewable energy technologies have existed in the United States for hundreds of years. In fact, the U.S. invented solar photovoltaic power, wind electrical generation and up until a few years ago operated more hydro-electric dams than any other country. The wide geographical diversity in the United States offers resource rich regions in which we can implement solar, wind, geothermal and hydro-electric applications. Renewable energy sources such as wind, solar, hydro-power and geothermal are expected to be at “grid parity” with conventional electrical generation sources over the next 10 years. As renewable generation technologies are more widely adopted, competition will increase, economies of scale will occur and the price per kWh produced will drop. Our federal government needs to catalyze the early adoption rate with tax incentives, rebates and research and development grants. Renewable energy sources help solve many of today’ most pressing global issues. Wind, solar, hydro-power and geothermal can be domestically implemented, thus providing America with energy independence. Renewable energy sources do not emit greenhouse gases or other pollution in the generation of electricity, thus providing Americans with healthier air, water and soil. Investing in domestic companies helps stimulate our economy, lower our national debt, and provides more jobs. Having domestically secure energy sources means less military occupation and operations on foreign soil, thus reducing international animosity and the threat of terrorist attacks. While the U.S. increases the scale and efficiencies of renewable energies, we recognize that improvements to existing, conventional energy sources must also be progressed. Technological advances in coal, natural gas, nuclear and waste-to-energy are also needed. – 99 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies Improving existing technologies (Coal, Natural Gas, Nuclear, & Waste-to-Energy As we have seen earlier, coal produces 26.8% of the world’s energy, while natural gas produces 23.1% and nuclear a mere 6%. In the U.S. the percentages are higher with coal representing 33.5%, natural gas 30% and nuclear 11.5%. Despite the hundreds of billions of dollars invested in U.S. electrical generation plants, equipment, labor, and infrastructure, it is said that the U.S. pet food industry spends more dollars in annual research and development than the U.S. electric industry. Given that coal, natural gas and nuclear represent 75% of the U.S. electricity supply today, it is important to maintain these sources of energy to meet current and future needs as we continue to develop our nation’s renewable energy sources. In order to be competitive in the future electrical generation market, conventional power generators will need to comply with more strict environmental laws, carbon emission limitations or taxes, plant site and building permits, and will need to compete for investment monies being poured into renewable energy sources. One promising set of new technologies is waste-to-energy or energy-recovery from municipal solid waste, biowaste or biomass. The next few slides provide a brief overview of Coal, Natural Gas, Nuclear, and Waste- to-Energy research & development, and technologies that are being pursued to meet future needs. – 100 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies Coal The largest consumers of energy in the world, U.S.A., China, and India have an abundance of domestic coal for electrical, gasification or liquid use. It is estimated the U.S. has 200+ years of coal reserves. Coal-fired power plants represent the largest portion of global electricity generation, and this trend is growing with China building 1 new power plant per week. However, coal has the worst pollution profile of any fuel source and will be the hardest hit by global emission reductions, pollution limits, and carbon caps or taxes. The environmental and healthcare costs associated with coal are very high. In 2006 the average price of coal was $20.49 (before delivery), and when factoring in the societal costs the price ranges from $33.14 to $195.30 per short ton. Carbon cap and trade or a carbon tax could potentially raise the per kilowatt hour cost of coal from $0.03/kWh to $0.13/kWh, making coal uncompetitive with other electrical generation sources. Investments in clean coal technologies (coal-to-liquid, coal-to-gas, pollution controls, etc…) have great promise, but are relatively unproven and require more research and development to make these advances more of a mainstream reality. – 101 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Coal Coal is abundant & used heavily in China, U.S. and India. In the U.S., coal is cheap and stable relative to other fossil fuels 2006 World Production Volumes 2006 Proved World Coal Reserves 2500.0 300000 2000.0 250000 million of tonnes million of tonnes 200000 1500.0 150000 1000.0 100000 500.0 50000 0.0 0 n a a na d a io A ric si an di S at ne hi In EU U SA ia Af ia na ne a n an ol r C ic de tio d al do P ai hi st U fr th In tr ra Fe kr C A h In us ou ak de U h A ut an S az Fe So K si n ia us s us R R U.S. Oil, Gas & Coal Prices per Million BTU 2006 World Coal Consumption $12.00 2500 $11.00 $10.00 2000 million of tonnes $9.00 USD per million BTU 1500 $8.00 WTI Crude Oil $7.00 1000 $6.00 Henry Hub Gas $5.00 NAP Coal 500 $4.00 0 $3.00 $2.00 SA n ia na nd ia a ea y n pa ic an d io al or hi U la fr In $1.00 tr Ja t m ra Po C A K us er de th th A G $- u u Fe So So an si 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 20 99 20 00 20 01 20 02 20 03 20 04 20 05 06 us 19 R Source: BP Statistical Review of World Energy, June 2007 ©2007 Environmental Impact Initiative – 102 –
    • EII –Improving existing technologies -Coal World Installed Coal-Fired Generating Capacity (GW) The EIA estimates that worldwide coal-fired generation capacity will increase 2.2% peryear from 1,119 GW in 2003 to 1,997 GW in 2030. US coal-fired generation capacity is expected to increase 1.4% annually, from 310 GW in 2003 to 457 GW in 2030. China's coal-fired generation capacityis expected to increase 4.5% annually, from 239 GW in 2003 to 785 GW in 2030. Coal-fired power plantshave operational lives of several decades. Coal can provide usable energy at a cost of between $1 and $2 per MMBtu compared to $6 to $12 per MMBtu for oil and natural gas. – 103 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Coal Major coal regions in the US – 104 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Coal Clean coal technologies Clean coal technologies relate to the innovations in the production, combustion and emissions control of coal for the generation of electricity and alternative fuel industries. Why clean coal? Coal is globally abundant, domestically available in the top 5 largest energy consumers’ countries, is the fastest growing fuel for electrical generation, is low cost, and has a very high btu value. Coal’s major drawback however is it’s pollution profile: CO, CO2, NOx, SOx, Mercury, Lead, and Arsenic Technologies and suppliers: (BOLD implies small cap company) PRE-COMBUSTION ADVANCED COMBUSTION POST COMBUSTION PULVERIZED COAL INTEGRATED GASIFICATION ELECTROSTATIC PRECIPITATORS COMBINED CYCLE FLUIDIZED BED FABRIC FILTERS (BAG HOUSE) OXYFUEL COAL WASHING FLUE GAS DESULPHURIZATION SUPERCRITICAL & ULTRA- GASIFICATION SELECTIVE CATALYTIC & NON- SUPERCRITICAL CATALYTIC REDUCTION LIQUIFICATION LOW-NOX BURNERS CARBON CAPTURE & SEQUESTRATION POWDER ACTIVATED CARBON (MERCURY) Foster Wheeler, GE, Jacobs Engineering, Fuel Tek (FTEK), Peerless Mfg (PMFG), Rentech (RTK), Evergreen energy (EEE),Hitachi, Symons, Gyradisc, HP, Shaw, Honeywell, McDermott International, Ceco Environmental (CECE), ADA-ES, Henan Liming, Alstrom, Energy Products of BG, BP, Enitechnologie sPa, Repsol, Statoil Inc (ADES), Babcock & Wilcox, Alstrom, Idaho, Black & Veatch, Consol Energy, Hitachi, Turbosonic (TSTA), Met-Pro (MPR) Dakota Gasification, Taiyuan, Honeywell, – 105 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies Natural Gas Over the past 15 years there have been 2,749 natural gas electrical generation plants built in the U.S.A., compared to 85 coal-fired plants and only 2 nuclear power plants. Natural gas has significantly lower societal costs than coal and oil. Carbon emissions are ½ that of an equivalent MW coal fired power plant 97% of the natural gas consumed in the U.S. is sourced from North America (Canada, Mexico, the Gulf of Mexico and domestically) which mitigates supply disruptions, the need for military support and reduces political conflicts Natural gas is easily and cheaply transported through pipelines However, natural gas discoveries and production in North America are declining rapidly and unconventional sources are more difficult and costly to access, leading to the same issues encountered in the oil sector Using natural gas in vehicles is difficult as it needs to be compressed (CNG), or liquified at low temperatures (LNG) Natural gas historically follows crude oil prices with a ratio of 6:1, however today natural gas is trading at a ratio of 11:1, making it a cheaper alternative New technologies in combined or integrated combined cycle gas turbines increase the efficiency of using natural gas to produce electricity and steam – 106 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies –Natural Gas Natural Gas: Demand by Sector – 107 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies –Natural Gas Current & expected sources of natural gas in the US – 108 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies –Natural Gas US LNG imports have surged to record levels (Bcf/d) Liquefied natural gas imports into the US have surged to record levels in recent months. Waterborne LNG estimates that imports in May are likely to reach to record of 3.3 Bcf/d, up from the April 2007 record high of 3.2 Bcf/d (see Exhibit 9). LNG imports are expected to ease in June largely as Dominion’s Cove Point LNG terminal in Maryland is down for maintenance. Imports come from: Trinidad, Qatar, Algeria, UAE, Nigeria, Oman and Asia – 109 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies –Natural Gas Integrated Gasification Combined Cycle (IGCC) Diagram In a gas powered combined cycle generation plant, the gas (natural gas or syngas) will be combusted to turn a gas powered turbine and then the residual heat from combustion will be used to generate steam which will then be used to run an additional steam generator. Efficiency gain is significant, from 59% up to 85%. The other benefit of IGCC power plants is the pollution reduction. New IGCC plants achieve low levels of NOx emissions, greater than 90% mercury removal, and greater than 99% sulfur dioxide removal. Lastly, these plants are considered “capture ready” where carbon dioxide emissions can be captured and stored much more easily and cheaply since the carbon can be removed and processed in the gasifier, before the fuel is combusted. Source: Wikipedia/Wikimedia, author & diagram by Stan Zurek – 110 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies Nuclear Power Of generating sources, nuclear power offers the lowest electrical production cost, especially when compounding the societal cost of using fossil fuels. Nuclear is a clean energy in that it produces zero carbon emission and virtually no pollution in the generation of electricity. However, historical events such as three mile island, Chernobyl and the nuclear arms race sparked anti-nuclear sentiments which stunted the growth of nuclear power over the past 25 years. Today 435 nuclear plants exist worldwide with a total capacity of 367 GW. 31 new plants are under construction, 64 plants are being permitted, and a planned total of 158 new nuclear plants are expected to be operational by 2030 with an estimated cost of $360 billion dollars. U.S. and other governments have authorized billions of dollars in nuclear research & technical development, tax incentives, liability waivers, and federal loan guarantees to encourage more nuclear investment Uranium mining, refining, and processing is a lucrative fuel segment with growing potential. Uranium costs, although increasing, are a minor proportion of total generating costs in nuclear facilities – 111 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Nuclear New reactors under construction or planned by country as of January 2007 Currently there are 435 reactors in operation with 31 under construction, 64 in the planning phase and 158 proposed. Under the Energy Policy Act 2005, the U.S. appropriated $65.3MM dollars in 2006 and $54MM dollars in 2007 to the Nuclear Power 2010 Initiative. The program objectives include: identifying new nuclear sites, advancing nuclear technologies, evaluation and permitting new facilities, and to upgrade regulatory processes. Based upon current estimates global uranium demand could top 350 MMlbs within the next 20 years. Current Source: Amba Research U.S.A. world demand is 180MMlbs p.a, and due to 25 years of underinvestment in the sector and the regulatory hurdles associated with new operations we believe that supply will be inelastic. – 112 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Nuclear Existing and proposed new nuclear power plants in the U.S. There are now 103 fully licensed nuclear power reactors in the USA Existing nuclear plants Proposed nuclear sites Source: Department of Energy, Nuclear facilities & proposed nuclear sites U.S.A. – 113 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Nuclear Roadmap to commercial nuclear plant operation As compared against a 3-4 year period of construction for a coal-fired plant, a nuclear power plant would take a minimum of 7 years from design to commercial operation. Source: Nuclear Energy Institute ( NEI) – 114 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Nuclear Energy Policy Act 2005 – Incentives for the US nuclear power industry Production tax credit of 1.8 c/kWh from the first 6000 MWe of new nuclear plants in their first 8 years of operation (same as for wind power on unlimited basis) Federal risk insurance of $2 billion to cover regulatory delays in full-power operation of the first six advanced new plants Rationalized tax on decommissioning funds (some reduced) Federal loan guarantees for advanced nuclear reactors or other emission-free technologies up to 80% of the project cost The Price Anderson Act for nuclear liability protection extended for 20 years ~$500 million for first two, then $250mm for next four. More than $100 billion dollars in government-industry research and development – 115 – ©2007 Environmental Impact Initiative
    • EII –Improving existing technologies -Nuclear Greenhouse gas emissions from electricity generation by different sources Nuclear power is one of the few energy sources that emit virtually no air-polluting or greenhouse gases. The entire nuclear fuel cycle including mining of ore and the construction of power plants has been estimated to emit between 2.5 and 6 grams of carbon equivalent per kWh of energy produced. This is roughly equal to the estimated releases from the use of renewable sources (wind, hydro and solar power) and about 20-75 times less than the emissions from natural gas power sources, the cleanest fossil fuel available – 116 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies –Waste-to-Energy Waste-To-Energy Waste-to-Energy is generically used to summarize the various methods of converting organic matter into heat, electricity or a synthetic fuel such as methane, methanol or ethanol. These fuels can then be used to generate electricity, steam, or as the precursor for other fuels such as hydrogen or diesel. Several methods can be used to convert various forms of municipal solid waste, biowaste or biomass into energy: Gasification –reacting the carbonaceous material at high temperatures with controlled amounts of oxygen to create synthesis gas. Syngas may be burned directly, used to produce methanol or hydrogen, or converted using the Fischer-Tropsch process into synthetic fuel. Pyrolysis –the chemical decomposition of organic materials by heating in the absence of oxygen helps reduce the mass of the waste treated while extracting hydrocarbon gases or liquids. Plasma arc gasification –incinerates waste within a plasma converter which utilizes pressure and electricity passed between two electrodes to generate temperatures above 10,000 degrees C. These high temperatures break organic matter down into elemental gas and solid waste. The syngas can then be used to generate electricity. Anaerobic digestion –the biological degradation of organic material in the absence of air. An anaerobic digester can use biodegradable waste, sewage, industrial effluents, animal or agricultural waste and municipal solid waste to create biogas. Thermal/Chemical –using powerful acids and temperature to breakdown organic matter into cellulose and hemicellulose which are precursors to sugar, which can then be extracted to make ethanol. Mechanical/Biological treatment –is the process by which waste is mechanically broken down into smaller matter which can then be dried and burned as fuel, anaerobically digested, or composted to create biogas or as a soil improver. – 117 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies –Waste-to-Energy Renewable Energy Source Map -Biomass/Biofuel Resources The Midwest is rich in biomass/biofuel resources such as municipal waste and gasses, agricultural residue, forestry byproducts, corn, soybeans, and other “energy crops”. – 118 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies –Waste-to-Energy Several waste-to-energy process flows Plasma Arc –gasification process BlueFire Arkenol ethanol process Landfill gas to gas electric turbine Anaerobic Digestion – 119 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies –Waste-to-Energy Pros and Cons of converting waste to energy Pros: Cons: Methane accounts for 18% of greenhouse gas Gasification, pyrolisis, and cellulose emissions in the U.S., and is 25 times more technologies are in their infancy; large-scale potent than carbon dioxide at trapping heat operations & costs need to be proven in the atmosphere. Waste-to-energy It is very difficult to get municipal processes constructively use agricultural incineration or plasma arc permits, due to the byproducts, biomass, municipal waste and elemental gases emitted from these fossil fuel byproducts rather than flaring or operations and the wide variety of products venting methane into the atmosphere used Waste is a low-cost feedstock Animal byproduct and manure is difficult to Using the waste for energy helps reduce utilize in large-scale operations due to their volume going into landfills, thus extending distance and separation from electrical loads their useful life Human sewage as a source of methane gas is Biomass waste is typically generated in large also difficult to capture due to existing open population areas, thus offering a local air sewage treatment facilities, existing feedstock reducing freight and providing infrastructure and return on capital required ample supplies to energy generators to utilize the fuel source Dried biomass can also be combusted and Moving large volumes of forestry and wood used as the heat/steam source for the various waste adds cost to the feedstock, thus waste-to-energy processes, thus little utilizing smaller, portable combustion units external energy is required are required – 120 – ©2007 Environmental Impact Initiative
    • EII -Renewable Energies –Waste-to-Energy Section Review In order to meet growing U.S. and world energy needs, conventional electrical generation and energy sources such as coal, natural gas and nuclear will continue to be in high demand. In order for these energy sources to meet changing market needs, pollution requirements, carbon emission restrictions, new technology and advancements are required. As coal represents the most domestically available resource for energy hungry countries such as the United States, China and India, advances in clean coal technologies are of great interest. Gasification and liquefaction of coal eliminate most impurities prior to combustion, and allow carbon molecules to be separated and sequestered more easily. Selective Catalytic Reduction (SCR), Air Pollution Control (APC), and other pre-combustion, advanced combustion and post combustion technologies will allow coal be a long-term viable energy source. Integrated Gasification Combined Cycle (IGCC) electrical turbines increase the efficiency of coal- to-gas and natural gas sources by almost 30% by using the heat generated from the gas combustion/turbine cycle to create steam which then drives a secondary steam electric generator. Nuclear power offers large-scale MW power generation capacity, low-emissions, reliable electrical generation at low kWh prices. Advances in nuclear safety, spent fuel core waste management, and reactor design will progress the adoption of more nuclear power plants in the United States, China, India and elsewhere. Waste-to-energy technologies have low cost feedstocks, reduce methane emissions, and many processes are becoming available to convert waste into electricity, heat and synthetic fuels. We will next look at the advances in the automobile and the alternative fuels industry. – 121 – ©2007 Environmental Impact Initiative
    • EII –Automobiles & Alternative Fuels Automobiles Increasing gas prices, government support for higher fuel economy standards and concerns over carbon emissions and pollutants from the transportation sector, have driven automobile manufacturers to look at alternative fuel cars and trucks as well as to develop more hybrid and electric vehicles. GMC Sierra Flex-Fuel Truck Mercedes-Benz M & EClass Biodiesel Toyota Prius Electric-Gas Hybrid Honda Civic GX Natural Gas Phoenix Motors Electric SUV Hartford CT, Hydrogen Fuel Cell Bus – 122 – ©2007 Environmental Impact Initiative
    • EII -Automobiles Three transport modes account for about 80% of all transport energy use (Air, Freight Trucks, & Light Duty Vehicles) 140 120 100 Water Rail 80 exajoules Buses 2-3 wheelers Air 60 Freight trucks LDVs 40 20 0 2000 2010 2020 2030 Source: IEA/SMP Spreadsheet Model Reference Case – 123 – ©2007 Environmental Impact Initiative
    • EII -Automobiles The same three modes also account for about 80% of transport vehicle CO2 emissions 10000 9000 8000 7000 2-3 wheelers Freight + Passenger rail 6000 Buses Mt 5000 Water-borne Air 4000 Freight trucks LDVs 3000 2000 1000 0 2000 2010 2020 2030 Source: SMP/IEA Spreadsheet Model Reference Case – 124 – ©2007 Environmental Impact Initiative
    • EII -Automobiles Impact of individual technologies on worldwide greenhouse gas emissions from road vehicles – 125 – ©2007 Environmental Impact Initiative
    • EII -Automobiles To return worldwide road vehicle GHG emission to their 2000 level, requires a combination of technologies Σ(1+2+3+4+5) – 126 – ©2007 Environmental Impact Initiative
    • EII -Automobiles U.S. expected growth in alternative vehicle sales by fuel type EIA Annual Energy Outlook 2007 shows that through 2030, alternative fuel vehicles will represent 14% of total vehicles sold in the United States. Of these, Flex-fuel ethanol cars and trucks will be surpassed by Electric-Gasoline Hybrid vehicles, with growth rates of 6.4% per annum. U.S. Alternative Fuel Vehicles 800.0 700.0 600.0 Thousands of vehicles sold Ethanol-Flex Fuel ICE Electric-Gasoline Hybrid 500.0 Liquefied Petroleum Gases Bi-fuel 400.0 Compressed Natural Gas Bi-fuel Electric Vehicle 300.0 Ethanol ICE 200.0 Compressed Natural Gas ICE Fuel Cell Hydrogen 100.0 0.0 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 -100.0 Source: U.S. Department of Energy/ Energy Information Administration/ Annual Outlook 2007/ Alternative Fuel Vehicles – 127 – ©2007 Environmental Impact Initiative
    • EII -Automobiles Automotive fuel efficient technologies available today Avg. Avg. Savings Efficiency over life of Efficiency Technologies Increase vehicle What it does Companies Engine Optimizes the flow of fuel & air into the engine Honda, Fiat, BMW, Nissan Variable timing and lift 5.0% $1,400 Limits cylinder operation when not Cadillac, Mitsubishi, needed Mercedes-Benz Cylinder deactivation 7.5% $2,000 increase air flow and combustion ratio Most OEMs Turbochargers & superchargers 7.5% $2,000 automatically turns engine off during idle Volkswagen, BMW, Toyota Integrated starter/Generator 8% $2,200 delivers better fuel/air ratio to cylinders Most OEMs Direct fuel injection 11-13% $3,200 Transmission Uses seamless pulley mechanisms Ford, Nissan, Toyota, BMW, rather than shifting gears GM, Audi, Dodge Continuous variable transmission 6% $1,600 combines manual/automatic shifting for optimal gearing Most OEMs Automated manual transmissions 7% $1,900 Fuel Assist Electrolyzed hydrogen injection to fuel Hy*Drive Technologies, combustion $2,200-3,000 HyPower Fuel, Inc. HyPower 8-12% Tires Optimizes fuel efficiency of the vehicle Properly inflate tires 3-5% $1,200 Extends tire life and air loss by removing moisture, cools tire temperature and optimizes fuel economy Check with local tire shop Inflate tires with nitrogen 3-7% $1,800 Source: www.fueleconomy.gov -engine technologies – 128 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels Alternative Fuels Comparison of alternative fuels vs. conventional fuels Ethanol Bio-deisel Hydrogen fuel cells – 129 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels Energy Content (BTU heat value) of Various Fuels 1,200 1058 990 1,000 950 922 800 Thousand Btu per ft3 683 635 594 600 488 400 270 266 200 68 16 0 LN Biorenewable Diesel Biodiesel Gasoline LPG Ethanol Methanol (@ 3626 psi) Ethanol CNG CNG Compressed NiMH Diesel Fuel Propane G Diesel F-T (@ 3626 psi) Hydrogen Battery Liquid H2 Diesel (@ 3626 psi) Source: Argonne National Laboratory’s GREET model, 2004 – 130 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels Percent change in lifecycle GHG emissions vs. 1 BTU of gasoline Regular gasoline baseline % Greenhouse gas reduction vs. gasoline % GHG increase vs. gasoline Source: Argonne National Laboratory’s GREET model, 2004 – 131 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol Ethanol Corn ethanol utilizes high value added feedstock, requires more acreage than farmable land to produce volumes targeted by 2030, and is raising commodity food prices in the U.S. & Mexico. However, investment in corn ethanol will continue as long as U.S. government incentives exist, corn futures remain below $4 per bushel and crude oil prices remain above $65 per barrel. That being said, short-term supply overhangs may exist as demand accelerates more slowly than production capacity. Long-term, if the US wishes to reach its goal of 35B gallons of renewable fuels, corn ethanol will continue to be an important part of fuel independence. Sugar Cane ethanol is currently the most viable option and will grow to meet global demands, but is restricted in the U.S. due to high tariffs. – 132 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol Worldwide ethanol consumption 70,000 60,000 50,000 Liters (millions) 40,000 30,000 20,000 10,000 - 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 Beverage Brazil US EU India Thailand China Australia Canada Central America Peru Columbia Source: New York Board of Trade – 133 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol Worldwide Ethanol Consumption Drivers US: E-10 and E-85 (flex fuel) Brazil: E-20 and E-25 and for flex fuel any blend Canada: E-10 and E-85 Sweden: E-5 and E-85 India: E-5 US Australia: E-10 • There are more than 5mm flex fuel vehicles in the US Thailand: E-10 • GM, Ford, and Chrysler have committed to double production of China: E-10 vehicles that run on ethanol and other renewables by 2010, to at least 2mm annually. Columbia: E-10 • Ethanol may account for 10% of automobile fuel within five years, Peru: E-10 compared with less than 3% now. Paraguay: E-7 • According to US Energy Department plans, by 2030, this number is Venezuela: E-10 targeted to grow to 30%, representing 230 billion liters of consumption, or 14x current Brazilian production. Argentina: E-5 until 2010 South Korea: E-6, E-7 Japan: E-3 until 2007 If these authorized blend levels as described above are met, the world would require an additional 40 billion liters, or twice the existing worldwide production. Source: Infinity Bio-Energy – 134 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol Not All Ethanol Is Created Equal Energy Ratio (Energy Out / Energy In) of Brazilian Sugarcane and potentially Cellulosic Ethanol is far greater than that of corn, mainly due to the energy used in the production process. 9 8 7 6 Energy Balance 5 4 3 2 1 0 Petroleum Wheat Corn Sugar Beet Cellulosic Brazilian Sugar E thanol Cane *Notes: 1) Brazilian sugar cane ethanol includes the burning of bagasse as a heating fuel source for ethanol production. 2) Corn ethanol includes the energy used to purify and dry the distillers grains for animal feedstock. – 135 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol Brazilian ethanol market 350+ mills in Brazil ~100 new mills under construction Fragmented industry, only 3 publicly listed companies (Cosan, Infinity, Sao Martinho) Vale do Rosario and Santa Elisa are merging and will subsequently go public Most mills family owned and operated Domestic consumption is expected to grow from approximately 14 billion liters in 2006 to approximately 26 billion liters in 2010 Production 2006 2010 Domestic Consumption 14.0B L 24.9B L Export 3.4B L 5.9B L Total 17.4B L 30.8B L Flex Fuel Vehicles (FFV): Can run on either gasoline or ethanol. In May of 2005 FFV sales surpassed gasoline driven vehicle sales. Today FFV comprise about 1.85mm vehicles in Brazil. 80% of new cars sold in 2006 were “flex fuel”. Volkswagen has announced that, starting in June, they will only produce “flex fuel” cars in Brazil. Significant drop in emissions since the growth of flex fuels has been recorded. Ethanol prices are currently 60% of the price of gasoline. Caveat: Ethanol gets about 75% of the fuel mileage of gasoline. Higher horsepower and better engine performance. Source: UNICA, Infinity Bio-Energy – 136 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol US Corn Ethanol Industry Remains Protected The United States’ 54-cent tariff on imported ethanol encourages domestic production, while assuring that the 51-cent blender excise tax benefits only U.S. producers. The import tax has resulted in low levels of more efficient Sugar Cane-based imports to the US. 6000 5000 4000 Gallons (mm) 3000 2000 1000 0 2002 2003 2004 2005 2006 Brazilian E thanol Imports Total E thanol Imports US E thanol Production Source: RFA – 137 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol U.S. Ethanol Production and Production Capacity, 1999-2007 billion gallons 8 Production Capacity Consumption 6 4 Under Construction August 2006 2 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 (August) (projected) – 138 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol High corn prices effects other commodities Strong demand for corn used to make corn ethanol, increases the price of corn and lures more farmers to plant corn. Higher demand for corn raises the price of corn, and lower supply of soybeans and other crops raise the price of these crops. Cattle, pigs, and chickens eat variations of corn and other crops as feeds, thus when feedstock increases so does the cost of a wide variety of commodities i.e. flour, meats, cheeses, milk, eggs, bacon, as well as the cost to make ethanol. CBOT Future Prices Corn, Soy, Wheat & Ethanol $12.00 $10.00 $8.00 US Dollars $6.00 $4.00 $2.00 $0.00 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Corn Soybean Wheat Ethanol – 139 – ©2007 Environmental Impact Initiative
    • EII –Alternative Fuels-Ethanol Investment sensitivities for corn ethanol (Crude vs. Corn Matrix) Source: Citibank – 140 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels -Ethanol Corn Ethanol: Pros & Cons Cons Pros High value added feedstock Renewable fuel that reduces GHG emissions Energy & water intensive Increases energy independence Lower fuel efficiency Benefits the agricultural-rural economy Increased usage of fertilizer and pesticides No significant change in infrastructure or automotive components Reduced crop rotation Agricultural subsidies are leveraged for Social implications of higher food costs social good Require stainless steel transport and piping Not economically feasible without government tariffs and subsidies at current fuel prices – 141 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Bio-diesel Bio-diesel Much more of an emphasis outside of the US given prevalence of diesel engines in not only trucks but also passenger cars. Here in the US, quality issues abound. Will need 2% fuel mixture or higher mandate to move the industry forward. Feedstock other than soybean oil will be attractive such as sunflower or canola. Biodesiel requires additives to prevent phasing and freezing – 142 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Bio-diesel Mercedes-Benz BLUETEC diesel advantage Mercedes is challenging even the most fuel-efficient hybrid vehicles with a new line of BLUETEC diesel engines. BLUETEC is a modular exhaust treatment technology which runs the diesel fuel through 4-5 filters to reduce nitrogen-oxide, 98% of particulate matters, and other diesel related pollutants. Performance comparison of a Mercedes E-Class E320 gas engine vs. BLUETEC Mercedes-Benz Fuel Type / Engine Miles Per Gallon Horsepower/ Price/ Annual Fuel Model (city/highway) Torque Cost 2008 E-350 Premium Unleaded 19 / 26 268 hp / 258 lb ft $51,675 / $2,200 Gasoline Engine / 3.5L V6 490 miles /tank 0-60 in 6.5 sec. 2008 E-320 Diesel Engine (can 26 / 35 210 hp / 400 lb ft $52,675 / $1,325 BLUETEC incorporate 5% (save $875 p.a.) bio-diesel) / V6 675 miles /tank 0-60 in 6.6 sec. – 143 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Hydrogen 1 1 H Full Hydrogen-based fuel infrastructure still has a long way to go, and may in fact never exist Hydrogen 1.00794 Hydrogen injection to provide more fuel efficiency and fewer emissions is gaining in popularity Hydrogen fuel cells to power automobiles or generate electricity are available but very expensive The production of hydrogen, safe storage and transportation are limiting factors in the future hydrogen economy. A universally accepted technology will be required for proper infrastructure to immerge – 144 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Hydrogen production technologies Hydrogen Production Processes Primary Method Process Feedstock Energy Pros & Cons Heat for steam, nuclear is best 70% efficient, requires carbon Steam reforming Natural gas option 700-1000C sequestration High temperature heat from Thermochemical Water advanced gas-cooled nuclear Splitting Water reactors No emissions -nuclear power Thermal Some emissions, energy Steam and oxygen at high intensive not proven on large Gasification Coal, Biomass temperature and pressure scale Moderately high temperatures and Some emissions, will require Pyrolysis Biomass steam carbon sequestration Low to zero emissions Renewables, including wind, solar depending upon electricity Electrochemical Electrolysis Water and geothermal electricity source, energy intensive Photoelectrochemical Water Direct sunlight No emissions No emissions, small volumes at present, with high cost of Photobiological Water and Algae strains Direct sunlight algae genectic alteration Biological R&D required, relatively Anaerobic Digestion Biomass High temperature steam unproven Fermentation micro- R&D required, cellulose organisms Biomass High temperature steam technology advancing – 145 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Hydrogen storage technologies Hydrogen Storage Technologies Primary Method Process Pros & Cons Companies Hydrogen gas is compressed and stored Tanks are heavy, explosion hazards, Compressed Hydrogen Gas in steel, aluminum, copper of other alloy need to be statically controlled, and Dynetek (DNK), Quantum tank, usually with a fiberglass liner pressurized (QTWW), Lincoln Composites Temperature controlled tanks requiring Air Products (APD), Air additional energy input, heavy and Liquide (AIRP), BOC (BOX), Liquid Hydrogen Hydrogen converted to a liquid using massive tanks, but storage at ambient GE, Linde (LING), Norsk cryogenics (below -250 degrees Celcius) pressure (HHY), Praxair (PX) ECD Ovonics (ENER), Hydrides are easily transportable and Ergenics, Inc, GE, H Bank, Under high temperature and pressure, safer than other methods, hydrides HERA, Hydrexia, Hydrogen Metal Hydrides hydrogen reacts with many transition require a secondary reaction to separate Components, Texaco- metals to form hydrides hydrogen for use Ovonics, Varmaraf ehf Nanotubes are expensive $50,000 for 2 Hyperion Catalysis, Carbon Hydrogen can attach itself to a positively lbs., U.S. requires 6.5% of hydrogen nanotechnologies, MER Carbon nanotubes charged carbon nanotube and saturate weight in transportation, nanotubes don't corporation, n-Tec, Carbon the structure. qualify as lighter weight Solutions Hydrogen can be combined with other Hydrogen needs to released from chemical compounds to be transported chemical compound through a second Millenium Cell (MCEL), Chemical Reaction and stored. Examples include: Ammonia, reaction, hydrogen is produced on Powerball Technologies oxidation, and methanol demand (PRBL), Safe Hydrogen, LLC Tiny hollow glass spheres are warmed, increasing the permeability of their walls Spheres need to be kept cool, until Glass Microspheres and soaked in a pressurized hydrogen release of the hydrogen is desired, and gas refueling is an issue – 146 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Public companies operating in the developing hydrogen space Hydrogen Companies Ticker Name Products Market Cap Other Solar, Hydrogen solid storage systems, semiconductors, optical memory, fuel Energy Converstion Devices ( cells ENER $1.28B Manufacturer of hydrogen fuel cells BLDP Ballard Power Systems 661M Portable, consumer electronics back-up power systems MDTL Medis Technologies, Ltd 602M Stationary power generators using clean technologies FCEL Fuel Cell Energy 369M Stationary power and heat combined power systems for residential and commercial customers CWR.L Ceres Power 279M Fuel cells, modules, test systems CFU.L Ceramic Fuel Cells Ltd 272M On-site generation, fuel cell products, test systems PLUG Plug Power 260M Materials, manufacturing of fuel cells and electrolysers ITM.L itm Power 241M hydrogen generating systems for automotive fuel injection HGS.V Hy Drive Technologies, ltd 152M On-site generation, fuel cell products, test systems HYGS Hydrogenics Corporation 100M Hybrid electric and fuel cell vehicles QTWW Quantum Technologies 99.1M Portable power generators and back-up systems PTX.L Protonex 77.5M Power generation, Hydrogen generation Distributed Energy Systems and technology services DESC 64.4M Cord-free power packs and rechargeable packs for consumer electronics MKTY MTI Micro fuel cells 60M Hydrogen battery technology for military, medical, industrial and consumer products MCEL Millenium Cell 51.5M Hydrocarbon membrances for fuel cells PYF.L Polyfuel 41.8M Manufacturer of hydrogen fuel cells PWAC Power Air Corporation 20.6M Fuel storage cylinders DNK Dynetek Industries 33.5M – 147 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Today Fuel Cell Vehicles (FCV) actually require more total energy use than conventional Internal Combustion Engines (ICE) but, … Producing hydrogen or electricity via these sources requires more total energy than traditional gasoline and ICE engines 14,000 PTW WTP Total Energy Use: Btu/mi 12,000 ICE and Hybrid FCV FC Hybrid 10,000 8,000 6,000 4,000 2,000 0 2 2 2 2 H EV EV 2 2 EV V 2 H 2 H H H H H H H H CE O O h H IC lH h h Et G h G Et h h kW kW lI kW kW W N FG W :N se FG m m se .k V: .k fro A EV R ie fro A S S ie R FC ew ew C U :C D :U D H 2 2 V: V: n en H EV :H EV FC Re FC FC V: :R H EV H V: FC FC EV FC H FC H FC 2 FC H Source: Argonne National Laboratories, GREET Model –Well to Wheel Analysis of Advanced Fuel/Vehicle Systems, May 2005 – 148 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Hydrogen fuels cells virtually eliminate the use of petroleum, thus reducing our oil dependency, and carbon emissions ICE and Hybrid 4,000 Petroleum Energy Use: Btu/mi PTW WTP 3,500 3,000 2,500 2,000 Demonstrates high 1,500 petroleum consumption FCV to fuel these vehicles, FC Hybrid thus high pollution and 1,000 carbon dioxide emissions 500 0 2 2 2 2 H EV EV 2 2 EV V 2 H 2 H H H H H H H H CE O O h H IC lH h h G Et h G Et h h kW kW lI kW kW W N FG W :N se FG m m se .k V: .k fro A EV R ie fro A S S R ie FC ew ew C U :C D :U D H 2 V: 2 V: n en H EV EV :H FC Re FC FC V: :R H EV H V: FC FC EV FC H FC H FC 2 FC H Source: Argonne National Laboratories, GREET Model –Well to Wheel Analysis of Advanced Fuel/Vehicle Systems, May 2005 – 149 – ©2007 Environmental Impact Initiative
    • EII -Alternative Fuels –Hydrogen Hydrogen infrastructure requires billions of dollars and a universally accepted transportation and storage technology – 150 – ©2007 Environmental Impact Initiative
    • EII –Automobiles & Alternative Fuels Section Review Transportation represents 28% of the nations’ total energy use and causes 33% of the greenhouse gas emission in the United States. Petroleum/Oil is the primary fuel source for all transportation. Given that oil prices, thus gasoline prices have fluctuated dramatically over the past 5 years due to global supply issues, diminishing resources, capacity constraints, extreme weather as well as international conflicts, consumers are seeking more fuel-efficient vehicles as well as alternative fuel vehicles to meet future needs. The big 3 auto makers in the U.S. Ford, GM, and Daimler-Chrysler are making more ‘flex-fuel’ vehicles which can run on E85 ethanol as well as regular gasoline, and also building on previous experiences with natural gas cars and electric automobiles. Japanese firms Toyota and Honda are focused on gas-electric hybrid vehicles which currently provide the most miles per gallon for passenger cars, and light-duty trucks. Prompted by U.S. government subsidies and blender credits, the U.S. ethanol market has erupted with corn-based ethanol production reaching volumes of 7.5 billion gallons. Under Bush’s 20 in 10 plan, 20% of our fuel will come from alternative sources by 2017 = 35 bn gallons. Alternative fuels such as corn ethanol, soybean bio-diesel and hydrogen fuel cell technology are fraught with obstacles: high cost feedstocks, quality constraints, quantity constraints, and lack of proper supply chain equipment and infrastructure prevent these fuels from making a significant dent in our oil-based economy. A combination of technologies will be required in the near-term to supplement our transportation demands and to limit our pollution emissions, until a winning strategy is implemented. – 151 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Energy Conservation Focus & Trends Amory Lovins with the Rocky Mountain Institute coined the term “negawatt” as a unit of measure equal to a megawatt, that is conserved through energy efficiency. The rule of energy efficiency is that the cheapest and cleanest energy is the energy that we don’t use and that a power company doesn’t have to produce. Trends in energy efficiency have been increasing since the 1970’s environmental movement and the creation of the United States Environmental Protection Agency. The national laws that followed included the National Environmental Policy Act 1969, The Clean Air Act (1970), The Clean Water Act (1977), and 31 additional acts covering air, water, soil, workers, and wildlife. In 1992 the US EPA and DOE teamed up to introduce ENERGY STAR as a voluntary labeling program designed to identify and promote energy-efficient products for the home and office. The goal was to save consumers money, to reduce green house gas emissions through energy conservation, and to set strict energy use guidelines for products in the United States. 1995 signing of the Kyoto protocol have lead many companies to seek energy and carbon dioxide reduction techniques. In 2000 a group of U.S. architects and builders created the U.S. Green Building Council (USGBC) and developed LEED (Leadership in Energy and Environmental Design) a national rating system emphasizing sustainable building design, construction, and energy efficiency. Early 2001 rolling black-outs in the State of California have lead to greater focus on energy conservation & industry management. Today’s trends include sustainable products, services which analyze and help reduce energy waste, pollution controls, separation of waste streams into recyclable or useable components, and promoting environmental friendliness. Residents and businesses alike realize that they can reduce their utility bills and conserve precious natural resources by reducing their energy consumption. – 152 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Review of energy consumption & emissions by U.S. sector Source: DOE/EIA Annual Energy Review 2007 – 153 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Avg. U.S. household energy profile –where we spend our money Consumer Electronics Lighting $240 (15%) ~plug-ins $144 (9%) Air Conditioning Kitchen Appliances $176 (11%) $192 (12%) Gasoline Water Air Heating $2200 Washer & Dryer Heating $480 (30%) $208 (13%) (22mpg) $160 (10%) Source: www.energystar.gov, home statistics 2006 – 154 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation 10 steps to a ‘green’ home Residential energy use represents 21% of the total energy consumed in America and accounts for only 10.3% of all greenhouse gases emitted, but electrical loses (inefficiencies) to residential customers outweigh those of industrial, commercial and transportation sectors. • Target a 25% reduction in home energy use • Heating & Cooling • Lighting • Water management • Kitchen & Laundry • Consumer electronics • Reduce driving and drive smart • Recycle Source: US DOE/EIA Annual Energy Review 2007 • Minimize the use of consumable products • Yard management – 155 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 1: Target a 25% reduction in energy utility Targeting a 25% reduction in home energy use means real savings to American families, on average this reduction would save you more than $400 per year. There are more than 55 million single family homes in America, each consuming the equivalent of 26 barrels of oil per annum, every step that you take as a home owner helps benefit our economy, the environment and your health. Document your past 12 months of utility bills as a benchmark (natural gas, electricity, propane, heating oil, etc… indicating amount consumed and cost. Perform a home energy audit offered by local electrical company, city, or audit service company. Document where your home is inefficient and losing money. Determine what practical and economic fixes you can afford to reduce your utility expense. Visit www.dsireusa.org to see if you qualify for a State or Federal tax incentive or rebate for installing energy-saving appliances or home repairs. Implement the energy-saving recommendations presented here. – 156 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 2: Heating & cooling Heating & cooling represent 41% of your home’s utility cost, much of which is wasted due to improper insulation, air circulation and equipment maintenance. Purchase a programmable thermostat, – set the temperature comfortably high in the summer (78) and low in the winter (68) – pre-program the thermostat to energy-saving mode when you are away from home Insulate your home: The average U.S. home loses 31% of its air through walls, ceilings and flooring, 15% through existing ducts, and 14% through the fireplace Clean or replace air filters once a month, and perform annual maintenance on HVAC equipment During winter keep the shades or draperies open on south-facing windows allow the sun to help warm those areas, in the summer close those shades or draperies to reduce the solar heat. When replacing heating and cooling appliances, select only energy-efficient or energy- star rated equipment. Geothermal systems are available today, and although triple the cost of a conventional natural gas or electrical system, they save from 50% to 70% of monthly utility costs and offer lower annual maintenance costs – 157 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 3: Lighting Lighting constitutes 15% of your home’s utility cost. It is also the easiest and most affordable way to reduce your electrical expense. Incandescent light bulbs waste 90% of their electricity as heat Turn off lights in rooms which are not being used Install motion detector light switches or dimmers Install light timers or solar switches on outdoor lights Open curtains or blinds and use natural light when and where possible Replace at least the top 5 lights in your home with compact fluorescent lights (CFL) CFL are 70% more energy efficient than incandescent and last 10 times longer Replacing a 100watt incandescent with a 35 watt CFL will save $30 over the life of the bulb Light bulb comparison Total Total Bulb Bulb Cost Cost per Electric Cost cost per per 4000 Bulb Type Avg. Cost Watts Equal to Lumens Life Hours life hours per hour hour hrs Std. Incandescent $0.69 60 60W 520 5,000 $0.000138 $ 0.0060 $0.006138 $24.55 Halogen screw in $6.98 60 60W 650 4,000 $0.001745 $ 0.0060 $0.007745 $30.98 Halogen MR16 $5.45 50 50W 3400 6,000 $0.000908 $ 0.0050 $0.005908 $23.63 Flourescent Tubes $2.03 25 60W 2225 20,000 $0.000102 $ 0.0025 $0.002602 $10.41 Compact Fluorescent $1.98 15 60W 900 10,000 $0.000198 $ 0.0015 $0.001698 $6.79 High Pressure Sodium $10.47 70 70W 6300 24,000 $0.000436 $ 0.0070 $0.007436 $29.75 Metal Halide $11.70 70 70W 6000 15,000 $0.000780 $ 0.0070 $0.007780 $31.12 LED PAR30 $62.99 12 55W 7000 50,000 $0.001260 $ 0.0012 $0.002460 $9.84 Avg. home utility rate $0.10 per kilowatt hour, thus $ 0.0001 per watt Source: 1000bulbs.com – 158 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 4: Water management Water represents 13% of your home’s utility expense. Insulate your water heater and all visible hot water pipes Set your water heater temperature to 120 degrees F Take more showers than baths Drain 1 quart of water from your hot water tank every 3 months to remove sediment which impedes heat transfer Repair leaky faucets and pipes Install aerating, low flow faucets and shower heads to conserve water When replacing your dish washer or clothes washer, purchase energy star approved appliances Tankless water heaters heat water on demand using electric coils, rather than continuously heating a tank of water, saving 30% of your current hot water cost Purchase a rain water barrel and use to water your lawn or garden Average hot water use by activity: ACTIVITY GALLONS PER USE Clothes Washing 32 Bathing 30 Showering 15 Dishwasher 12 Preparing Food 5 Hand washing 4 Toilet use 1 gallon per flush – 159 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 5: Kitchen & laundry appliances Kitchen and laundry appliances are 12% of the average home’s utility expense. Seek only Energy Star approved appliances and products. Today’s appliances are between 25-50% more energy efficient than those just built 5 years ago. Scrape off food rather than rinsing off food before placing inside your dishwasher For maximum efficiency wash full loads in your dish and clothes washing machines Use cold water rather than hot water cycles, 90% of the energy used in a washing machine is to heat the water Use the high spin option on your laundry machine to extract the maximum amount of moisture from clothes, this will reduce your drying time and energy Air dry clothes and dishes when possible Follow the maintenance instructions on your kitchen and laundry appliances to maximize their life span and efficiency. Clean your refrigerator coils at least 2-times per year Use small electric toaster ovens rather than your full-sized oven for cooking small meals Use a microwave for warming meals or boiling a few cups of water rather than a stove top gas burner Energy Star front load clothes washers use 40% less water, use cold rather than hot water, need less detergent, have better dry cycles to remove moisture from clothes which reduces the drying time and energy. These machines will save about $110 per year in total costs. – 160 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 6: Consumer electronics Consumer electronics are the fastest growing utility expense in America today. The EIA forecasts that by 2030 consumer electronics will represent ~30% of our annual electric costs. 75% of the electricity used to power home electronics is consumed while the products are turned off, these “phantom” loads can be dramatically reduced by seeking home electronics with the Energy Star label. Cell phone and AC adapter-computer chargers should be unplugged from the wall outlet when not in use, they draw almost the same amount of electricity from an outlet when they don’t have anything charging as when they do. Home entertainment equipment should be plugged into a surge protector and turned off when not in use. A plasma TV will draw almost half of its electricity when it is off as when it is on. Cable boxes, especially DVR’s and DVD/VHS boxes will continue to draw about 50 watts of electricity per hour when off. Use your computer’s power management features to turn off your monitor when not used for more than 5 minutes or place your computer into hibernate mode. Laptop computers use about 30% less electricity than desktop computers. Use rechargeable batteries instead of throwaway batteries, be sure to unplug battery chargers and remove rechargeable batteries when complete. Multi-function devices such as combined printer, scanner, copier, fax machines will help reduce electric bills, remember to copy using both sides of the paper. – 161 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 7: Reduce driving and drive smart Transportation represents 28% of our nation’s total energy use and 33% of the carbon and pollution emissions. In fact, carbon monoxide, nitrous oxide and pollutant particulates from automobiles kill thousands of Americans each year. Here are some easy steps to help reduce your contribution to automobile pollution and ways to save money on gasoline. Walk or ride your bike rather than drive, we could all use the exercise! Take public transportation or carpool. Both of these options allow you to save on gas, insurance and time, be more social, have more time to read or do work, or sleep. Plan your errands, this will reduce your driving time and fuel consumption as well as make your trips more productive. Know where you are going, consult a map, use a gps/navigation system, and listen to the radio for traffic alerts. Don’t unnecessarily idle your vehicle, most automobiles require 30 seconds to 1 minute to warm up and turn your car off when waiting for someone. Drive the speed limit, avoid aggressive starting and stopping, use your cruise control. Maintain your vehicle according to your manufacturer’s suggested annual maintenance schedule, keep the tires inflated properly. Reduce the weight in your car by removing heavy and unnecessary objects. Improve your vehicles aerodynamics by removing items on the roof or sticking out of windows. – 162 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 8: Recycle Recycling is related to any product or material which is considered waste, but can be re-used, reworked, or reprocessed as a new raw material for some other function. Identify which items your local or municipal recycling program will accept and communicate these items to your household. Most cities will provide you with a recycling bin to use free of charge, otherwise purchase one of the right size and design that fits your household needs as well as the city’s collection criteria. Quickly rinse or clean-off the recyclable material and place into the appropriate bin if separation is required, typical recyclables are: glass, aluminum, plastic, paper, cardboard, steel, copper, tin, and rubber. *Aluminum cans require only 5% of the energy to recycle them that was initially used to produce new. Recycle old clothes into usable rags for cleaning or maintenance work. Used food storage containers such as glass jelly jars, plastic butter or cool whip tubs can be cleaned and reused to store food or used as small planter pots. Take your old car battery and car tires into a local automotive repair shop, they will often give you a discount off of replacement parts or take them for free. Take old clothes or furniture to a Goodwill or Salvation Army location so that they can be given to or sold to other people. Hold a neighborhood garage sale, often times giving away or selling your old toys, furniture and clothes is better than having them go into a landfill. – 163 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 9: Minimize the use of consumable products Paper represents the largest consumable product in the United States. Each virgin ton of paper requires 3,688 lbs. of wood, 24,000 gallons of water, 360 lbs. of salt cake, 76 lbs. of soda ash, 4,200 kWh of electricity, 4 barrels of oil, and 127 lbs. of air, water and solids pollution. Consider this when using consumable paper products and remember to recycle. Purchase products that can be recycled. Minimize the use of paper plates, paper towels, toilet paper and copy paper. If used, throw them into a compost pile or the recycling bin. Instead use cloth napkins and cleaning cloths that can be washed and reused. Use plastic or ceramic dishes and cups that can go into the dishwasher. Bring your own canvas or large durable bag to the grocery store, don’t use paper or plastic bags offered. Use rechargeable batteries. Buy glass milk containers and return to the store. Purchase a faucet or refrigerator water filtration device as opposed to purchasing bottled water. Purchase items in bulk, rather than smaller individually wrapped packaging. Reuse scrap paper to write notes or use a dry erase board for posting family messages. Set your printer and copier to use both sides of the copy paper. – 164 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation -10 steps to a “green” home Step 10: Yard management The average U.S. home produces 41,800 lbs. of carbon dioxide per year. The average mature tree consumes only 48 lbs. of carbon dioxide per year. To be carbon neutral the average American family needs to plant 871 trees PER YEAR. You can do your part by maintaining your yard and the outside of your home. Planting trees, bushes and shrubs in your yard increases the aesthetic value of your home, absorbs carbon dioxide as well as other pollutants, retains moisture around your home and helps minimize island heat effect by providing shade to blacktop areas. When mowing your lawn use a mulching blade, thus keeping valuable nutrients in your soil and reducing the need and expense to bag yard waste. When mowing your lawn use the highest setting possible, longer grass helps keep weeds from growing, helps keep moisture in your lawn, and helps your lawn endure dry spells. Create a composting pile where you can put lawn clippings, leaves, residual food, pet waste, etc… and use this compost to fertilize your lawn and garden. Use integrated pest management (IPM) best practices to control weeds, insects and diseases. http://www.epa.gov/agriculture/ag101/pestipm.html Nonpoint source pollution (NPS) is the leading cause of water pollution in America. Excess fertilizer, pesticides, oil, grease, soil, construction debris, garbage, pet wastes, salt, and other ingredients are washed away into storm sewers after rainfall or snowmelt and eventually find their way into lakes, ponds and rivers. Do your part and maintain a clean and healthy yard, driveway, patio, and garden. – 165 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Look for the yellow “EnergyGuide” label when purchasing new appliances The EnergyGuide label gives you two important pieces of information you can use to compare different brands and models when shopping for a new appliance: Estimated energy consumption on a scale showing a range for similar models. Estimated annual operating cost based on the national average cost of electricity. – 166 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Avg. commercial office energy profile –where we spend our money Lighting 25% Computers, copiers and other office equipment 30% Small Appliances 5% Heating & Cooling 35% Water Heating & Usage 5% – 167 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Commercial & small business energy conservation practices Commercial & small building complexes will have similar energy-efficient recommendations to that of a home with a few exceptions. • Automate heating and cooling according to the work schedule and times, thus saving energy in off-hours and on weekends. • Use natural light to heat the office in the winter and close shades in the summer to cool the office. • Use compact fluorescents where available and tubular fluorescents in large work areas • Install motion detectors in offices, bathrooms, and kitchens so that the lights turn off automatically when not in use. • Install air dryers in the bathrooms rather than paper towels. • Have employees bring their own drink cup or coffee mug to use at work. • Use power management systems for all desktop computers and monitors, don’t use screen savers. • Set copy or printer settings to default print on both sides of copy paper. • Bring more real plants and trees into the office to absorb some CO2 and provide moisture into the workplace. • Get a copy of your building’s recycling program, or develop your own within the office. Set small recycling bins under desks and larger ones at work stations or copy machines. • Organize office carpools or pick-up/drop-offs from public transportation depots. – 168 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Energy management systems and services for businesses MACH Energy –uses pattern recognition software to help commercial real estate managers to identify energy consumption sources and makes recommendations for reduction, on average saving building owners $0.10/square foot on energy costs. Consumer Powerline shares in customer energy savings after analyzing their operations and demand patterns and recommending changes and products. Verdiem specializes in computer network analysis using their proprietary ‘Surveyor’ that cuts computer power usage from 5-15% annually. Echelon is a leading producer of software systems for control networks and advanced ‘smart metering’ systems. ITRON, Inc. is a leading producer of smart meters capable of collecting and analyzing data from wireless communications, water, gas, electric flows and reporting data back to facility owners. With the evolution of carbon caps and trade regulation, their will be a growing demand for home and business energy audits. Companies specializing in this area today are: HOTK, TRR, EEI, TTEK, KGHI, CXIA, NYTS, EESC, GSHF, GDVE, HESI, IFTV, SERV, listed by public ticker. – 169 – ©2007 Environmental Impact Initiative
    • EII -Energy Conservation Section Review Energy conservation is the practice of decreasing the quantity of energy used while achieving a similar outcome. Those of us old enough can remember President Carter, in a thick sweater sitting by a lit fireplace, telling us that all Americans need to sacrifice some comforts to achieve lower utility bills, more energy independence, and a better environment. Today, we realize that lowering our energy usage, conserving natural resources, protecting our environment, increasing national security, maximizing profits, and increasing our quality of life do not have to be mutually exclusive. There are a great many things that we can do to conserve electricity and lower our use of natural gas or motor fuel. Being a knowledgeable and conscientious consumer is the first step. At the beginning of this presentation we provided examples of three basic life cycles for petroleum, coal and natural gas. The concept here was to provide the reader with a better understanding of the complex and enormous supply chains at work to provide you with the energy that so many of us take for granted today. Lets face it, Americans are spoiled. We live in an environment of abundance. We are a materialistic society which often desires bigger things, at a lower cost, delivered faster at the expense of the environment or sustainability. However, what we don’t often realize is that many of our current purchasing and consumer habits are not sustainable. It is only until our habits effect our wallets or we physically run out of stuff that we wake up to the problems that the rest of the world has already realized. Steps 2 through 10, provide practical examples of actions, products and services that we can take to lower our energy utilities focused on: heating/cooling, lighting, water, major appliances, consumer electronics, driving/fuel-economy, recycling, consumable products, and yard management. – 170 – ©2007 Environmental Impact Initiative
    • EII –Carbon footprints and offsets Carbon footprints and offsets In slides 57 and 58 we provided a brief overview of the carbon cap and trade system as well as a carbon tax as means to curb growing greenhouse gas emissions. A carbon footprint is the total amount of carbon dioxide (CO2) and other greenhouse gases emitted by an organization throughout a designated life cycle or time period. A carbon footprint is measured in units of carbon dioxide, usually in metric tonnes (2,204.6 lbs). A carbon footprint or baseline is usually established for a designated period. For example under the Chicago Climate Exchange (CCX), Phase I members used their average greenhouse gas emissions from 1998 through 2001, whereas Phase II members used just the year 2000. Each member is issued emissions allowances (credits) equal to those initial footprints. Emission reduction targets are then set to help lower the total amount of emissions over a set time period. For example, a 4% emission reduction below the baseline by 2010 means that any member must reduce their greenhouse gas emissions by 4% below their initial footprint by 2010. Each member is granted or allowed a certain number of Carbon credits or in the case of CCX, Carbon Financial Instruments (CFI’s) equal to 100 metric tons of CO2. If that member is unable to meet the new emission target, they must offset their greenhouse gas emission by purchasing new credits at a market price equal to the actual emissions above their allowance. Offsets are projects which may sequester, destroy or displace greenhouse gas emissions. These offsets are given CFI’s in exchange for the amount of CO2 reduction they provide. The offsets may then sell their credits to those organizations which cannot meet their emission reduction targets at a market price. The following slides will provide carbon footprint and offset examples. – 171 – ©2007 Environmental Impact Initiative
    • EII –Carbon footprints and offsets Carbon footprint examples (credits equal to 100 metric tons CO2) Single Family Home Activity Annual Usage/Units Calculation Emissions as CO2/mT Credits Required (100 mT) Electricity Consumed 1,000 / kilowatt hours (kWh) 1000 x .00043 0.43 0.0043 Natural Gas Consumed 500 / therms 500 x .0053 2.65 0.0265 Annual LPG 10 / gallons 10 x .0058 0.058 0.00058 Car Miles Traveled 15,000 / miles (SUV 6 cylinder) 15000 x 0.0005474 8.211 0.08211 Flight Miles Traveled 4,500 / air miles 4500x 0.000933 4.2 0.042 Houshold Total 15.55 0.16 Electricity Consumed 5,000 / kilowatt hours (kWh) 5000 x .00043 2.15 0.0215 Corporate Office Natural Gas Consumed 2,000 / therms 2000 x .0053 10.6 0.106 LPG Consumed 50 / gallons 50 x .0058 0.29 0.0029 Car Fleet Miles 150,000 / miles (10 cars) 150000 x .0005474 82.11 0.8211 Taxi Miles Traveled 5,000 / miles 5000 x .0005474 2.737 0.02737 Cumulative Flight Miles 170,000 / air miles 170000 x .0009333 158.661 1.58661 Hotel Accomodations 240 / nights stayed 240 x .035 8.4 0.084 Small Corporate Office Total 264.95 2.65 Electricity Consumed 200,000 / kilowatt hours (kWh) 200000 x .00043 86 0.86 Natural Gas Consumed 25,000 / therms 25000 x .0053 132.5 1.325 Large Corporation LPG Consumed 20,000 / gallons 20000 x .0058 116 1.16 Car Fleet Miles 2,500,000 / miles 2500000 x .0005474 1368.5 13.685 Truck Fleet Miles 7,300,000 / miles 7300000 x .0004245 3098.85 30.9885 Taxi Miles Traveled 60,000 / miles 60000 x .0005474 32.844 0.32844 Cumulative Flight Miles 3,000,000 / air miles 3000000 x .0009333 2799.9 27.999 Hotel Accomodations 3,600 / nights stayed 3600 x .035 126 1.26 VOC's released 50,000 / kgs. 50000 x .0053 265 2.65 Petroleum Products 100,000 / gallons 100000 x .0102 1015 10.15 Small Corporation Total 9040.59 90.41 – 172 – ©2007 Environmental Impact Initiative
    • EII –Carbon footprints and offsets Carbon offset projects 3 Kyoto Protocol mechanisms Certified Emission Reductions (CERs): 1. Joint Implementation: where a developed country has a high cost of domestic greenhouse gas reduction, thus sets up a GHG reduction project in another developed country as a joint venture. 2. Clean Development Mechanism: a developed country can sponsor greenhouse gas reduction project in a developing country which may be lower cost but has a global equivalent GHG reduction. The developing country benefits from capital expenditure and the developed nation receives credits for the project. 3. Emissions Trading: countries or organization can trade both Certified Carbon Credits (Certified Emission Reductions) and Voluntary Carbon Credits (Voluntary Emission Reductions) on an open market. Gold Standard CER’s Certified Emission Reductions (CER Voluntary Emission Reductions VER’s Reforestation Carbon reduction, capture or Corporate emission reductions sequestration projects Wind Farm through energy-efficient Clean coal or syngas conversions upgrades Solar Array Installation of integrated Carbon sinks: Forestry practices, Hydroelectric Project combined cycle combustion mining reduction, oceanic operations plankton growth, agriculture no- Biofuel Generation till, biowaste/mass collection Waste to gas generation MSW or Landfill Gas Capture & Cement carbon dioxide reduction Use Fuel switch conversion or capture/storage Geothermal Generation – 173 – ©2007 Environmental Impact Initiative
    • EII –Carbon footprints and offsets Carbon resources Name Category Function Website/Contact Info. Chicago Climate Exchange www.chicagoclimatex.com Provides a centralized European Climate Exchange www.europeanclimateexchange.com Carbon Market market to trade carbon International Carbon Bank & Exchange www.icbe.com financial instruments International Emissions Trading Assoc. www.ieta.org European Union Emissions Trading Scheme http://ec.europa.eu National Association of Securities Dealers Provides independent 3rd Auditors/ Carbon Financial Industry Regulatory Authority www.finra.org party carbon emissions Credit KPMG International www.kpmg.com and offset audit and Certification TUV-SUD Group www.tuev-sued.com certification SGS Group www.sgs.com Tudor Investment www.tudorventures.com Work with companies to Camco International www.camco-international.com Environmental offset emissions by Morgan Stanley www.morganstanley.com Financiers developing, financing and Goldman Sachs www.goldmansachs.com managing offset projects HSBC www.hsbc.com EcoSecurities Group www.ecosecurities.com Facilitate the buying and AgCert International www.agcert.com Carbon Brokers selling of carbon financial Camco International www.camco-international.com instruments Carbon Trading www.carbontrading.com Carbon Trust www.carbontrust.co.uk Carbon footprint Clean Edge www.cleanedge.com Carbon market calculators, market Carbon Fund www.carbonfund.org information information/data, other Carbon Footprint www.carbonfootprint.com links EcoBusinessLinks www.ecobusinesslinks.com – 174 – ©2007 Environmental Impact Initiative
    • EII Conclusion: The information contained in this presentation is meant to be thought provoking and provide examples of the energy related challenges and potential solutions that exist today both globally and in the U.S. These challenges are summarized below: There exists today an uncertain and diminishing supply of conventional energy sources at affordable prices to meet a growing world demand. Fossil fuels used as the primary energy source, cause human and environmental harm. Poor waste management and a lack of sustainable business practices affect our natural resources such as water, soil, air, and forests. Animosity towards the U.S. based on our per capita energy use and pollution emissions will only increase unless we take a leadership role in environmental stewardship, product development, renewable energy projects, and international energy policy. Be sure that these issues will define this new millennium. The solutions to these challenges rest in our ability to adopt energy efficient practices and products, in our ability to develop economically viable renewable energies, to produce alternative transportation vehicles and fuels, and in managing our waste and pollution emissions with the goal of protecting our valuable natural resources and progressing a sustainable energy future. The Environmental Impact Initiative (EII) was created to be the vehicle through which we communicate the above issues, research affordable and actionable solutions, and through our members and sponsors, we make these solutions a reality. I invite you to join the Environmental Impact Initiative and to help America shape our energy future. Sincerely, David A. Champion – 175 – ©2007 Environmental Impact Initiative
    • EII Sources and References 1. Energy Information Administration, International Energy Outlook 2003, 2004, 2005, 2006, and 2007 2. Energy Information Administration, U.S. Energy Outlook 2003, 2004, 2005, 2006, and 2007 3. United Nations, World Population Prospects, 1998 revision 4. M. King Hubbert –hubbertpeak.com 5. Dr. Colin Campbell –Association for the study of Peak Oil and Gas, 2006 6. Kenneth Deffeyes –Beyond Oil, The View from Hubbert’s Peak, 2005 7. OPEC –Facts and Data, Global Oil Reserves, June 2007 8. Solar Buzz & EPIA (European Photovoltaic Industries Association), global installation capacity and growth, June 2007 9. Renewable Fuels Association, Ethanol, 2007 10. U.S. Department of Energy Hydrogen Fuel Posture Plan, 2007 11. Global Wind Energy Council, June 2007 12. Global Wind Energy Association, June 2007 13. Organization for Economic –Co-operation and Development (OECD), May, June 2007 14. Hydroelectricity –Wikipedia, referencing hydro-electric power capacity, facilities, and timelines Ren21 –Renewable energy policy network for the 21st century. Renewable global status report 2007 15. 16. International Energy Agency, World Energy Outlook, 2004, 2005, 2006 17. U.S. Environmental Protection Agency, Information Sources, Envirofacts, Environmental Information Management System, Programs, Laws, Regulations & Dockets, 18. United Nations Framework Convention on Climate Change, -Kyoto Protocol 19. European Commission –energy, renewable energy sectors, european strategic energy technology plan 20. U.S. Department of Energy (DOE), Energy Star, Office of Energy Efficiency and Renewable Energy, Energy Sources, – 176 – ©2007 Environmental Impact Initiative
    • EII Sources and References (continued) 21. Intergovernmental Panel on Climate Change, Carbon Emissions, World Required Emission, 2001 22. Union of Concerned Scientists for Environmental Solutions, green house gases and global warming 23. Mongabay.com, global carbon dioxide charts and statistics, 2006, 2007 24. Emissions Database for Global Atmospheric Research, (EDGAR) version 3.2, 2000 25. Historical carbon dioxide record from the Vostok ice core samples, “Climate and atmospheric history of the past 420,000 years” 1999, Petit J.R., Jouzel J; .and Alexey Fedorov The Pliocene Paradox, Science 312, 1485- 1489, June 2006 Yale 26. U.S. Department of Interior/Minerals Management, National Geographic maps, 2004 27. British Petroleum, Statistical Review of World Energy, 2004, 2005, 2006 28. Exxon-Mobile, oil and gas statistics, 2004, 2005, 2006 29. American Petroleum Institute 30. Source: www.gomr.mms.gov ( Minerals Management Service, Gulf of Mexico) 31. OPEC (Organization of the Petroleum Exporting Countries, Facts and Figures, www.opec.org, 2005 data 32. Bloomberg, WTI Crude Oil Spot Market pricing 1987 -2007, Henry Hub natural gas spot market pricing, 1987 – 2007 33. Morgan Stanley research, and EIA US Energy Report, “Gas used at Independent Power Producers” and “Current and Expected Imports of natural gas”. 34. Chicago Climate Exchange, http://www.chicagoclimatex.com 35. Department of Energy, “Transportation Energy Data Book”, Edition 21, September, 2001 36. Energy Information Agency, Presidential Speeches, as published in the Wall Street Journal, “Thinking Strategically” by Andy Grove, January 2007 – 177 – ©2007 Environmental Impact Initiative
    • EII Sources and References (continued) 37. Conventional Oil Estimates & Unconventional Estimates –CERA Cambridge Energy Research Association 11.14. 2006 38. Nuclear Energy Institute ( NEI), www.nei.org 39. World Nuclear Association, www.world-nuclear.org 40. International Atomic Energy Agency, www.iaea.org 41. USEC marketing, NAC Fuel Trac, TradeTech, Ux Consulting 42. MIT – 2003 study by Massachusetts Institute of Tech. 43. DGEMP – 2003 study by French Energy agency 44. T&L- 2003 study by Finnish Power Plant 45. RAE- 2004 study by Royal Academy of Engineering, UK 46. U of C- 2004 study by University of Chicago 47. CERI – 2004 study by Canadian institute 48. Energy Efficiency and Renewable Energy & MIT –Enhanced Geothermal Systems study , 2005 49. Hydro Research Foundation & US DOE, 21 hydroelectric plants built in USA from 1993 50. NREL, National Renewable Energy Laboratories, U.S. renewable energy maps, www.nrel.gov 51. Solarbuzz –www.solarbuzz.com 52. European Wind Energy Association (EWEA), www.ewea.org 53. Michael Rogol/Photon Consulting, April 2007 54. International Energy Agency’s –Photovoltaic Power Systems Programme (IEA-PVPS) 55. Argonne National Laboratory’s GREET model, 2004 – 178 – ©2007 Environmental Impact Initiative
    • EII Sources and References (continued) 56. World Business Council for Sustainable Development (WBCSD) –sustainable mobility project calculations for transportation sector 57. The Clean Tech Revolution, Ron Pernick & Clint Wilder, 2007 58. Fiberstars (EFOI) presentation at MCF, Next Generation Energy Conference, May 2007 59. Robert H. Socolow and Stephen W. Pacala, Princeton University, Oak Ridge National Laboratory (Global Carbon Emissions Data) –updated 2006 60. Wikipedia/Wikimedia, author & diagram by Stan Zurek – 179 – ©2007 Environmental Impact Initiative