Energy Costs, Conservation and Renewable Energy

September 9, 2012Kenneth Stalder, P.G.

Energy Sources• Crude Oil – Gasoline• Electrical Costs -- Oil, Natural Gas,

Coal (in the future, may be converted to automobile fuel)

• Renewable energy (RE) is energy that comes from inexhaustible resources, such as wind, sunshine, and falling water.

• Nuclear – please wait until fusion.

Crude Oil• Oil will still be a major commodity until mid century• Hindsight is 20/20. Foresight is a rare commodity• 19,650,000 barrels a day used in the U.S.• 535,000 barrels of oil per day for Electric power generation

(3%)• By 2055, mpg should be 54.5 mpg, today:

– Toyota Prius 42 mpg– VW Jetta Diesel 34 mpg– Aston Martin DB9 14 mpg

• There will be a time when oil is too valuable just to burn as a fuel

.

Components of Crude Oil• Carbon – 84%• Hydrogen – 14%• Sulfur – 0.1 – 3%

– Less than .05% – ‘Sweet’– Greater than .05% - ‘Sour’ (max 1.99%)

• Nitrogen – less than 1%• Oyxgen – less than 1%• Metals – less than 1%• Salts – less than 1%

Where our Oil comes from

World Oil Consumption

Hubbert’s Peak• The Hubbert peak

theory is based on the observation that the amount of oil under the ground is finite.

• The rate of discovery which initially increases quickly must reach a maximum and decline.

• The theory is named after American geophysicist M. King Hubbert.

Oil Production Primary

• When a well is drilled, the pressure inside the formation pushes the oil deposits from the fissures and pores where it collects and into the well where it can be recovered.

• Primary recovery - the natural pressure inside the underground reservoir allows 10% of the supply to be recovered.

Oil Production Secondary

• Secondary oil recovery - when the pressure inside the well drops to levels that make primary recovery no longer viable.

• Waterflood - Water is injected into dedicated injection wells strategically located throughout the reservoir, and the water itself can be used to displace oil towards the producing wells. Recovery is about 25-30%.

Tertiary or Enhanced Oil Recovery

• Gas injection – CO2

• Chemical injection– Gel Polymer - long chain

polymer molecules

– Caustic Flooding - sodium hydroxide.

• Lowering the surface tension, reversing the rock wettability, mobilization of the oil and helps in drawing the oil out of the rock.

• Microbial Injection– biological based technology

consisting in manipulating function or structure, or both, of microbial environments existing in oil reservoirs.

• 20-40% more oil recovered

Quaternary Oil Recovery• More advanced, speculative, EOR

techniques • Price per barrel needs to be about

$200/barrel

What’s Left• U.S. Oil reservoirs have at least 30-50% oil

still in place. EOR techniques may recover some of that oil.

• 40% of world’s current crude output is “Sweet”

• 75% of proven crude oil reserves are classified as “Sour”.

• Refineries could be upgraded to handle sour crude oil – ‘for a price’.

• Heavy oil makes up about 15% of the World’s remaining oil reserves

• Oil Shale – U.S. has the largest potential reservoirs – just how do we get it out.

Oil Sands• Oil Sands are combination clay, sand, water and bitumen. Oil sands

can be mined and processed the bitumen which is then refined into oil.• Oil sands are found in about 70 countries, but Alberta, Canada has the

only large-scale mining operations• Production cost is 3x the normal production costs for oil wells

U.S. Refineries• The number of refineries in the U.S. has decreased in the last

20 years.• Total Capacity 17.4 million barrels/day• Refineries are operating at 91% capacity• 1.3 million barrels/day are imported• Most of the refineries are along the Gulf Coast

Why were prices so high for Gasoline 7 years ago

• World demand is nearly exceeding supply• Hurricanes took out 25% if U.S. crude oil

production 10-15% of U.S. refinery capacity. – After Hurricane Katrina, Saudi Arabia offered

to increase capacity by 500,000 barrels a day. – U.S. refineries rejected the offer because they

couldn’t handle “sour” crude oil.• Seasonal demand - Summer is usually

5% higher than the rest of the year• The result - $80.42 per barrel of oil

Why are prices so high for Gasoline today

• World demand is nearly exceeding supply• Refinery Fires in Washington, California

and Venezuela pushed gas prices up.• Hurricane Isaac hit the Gulf Coast region

refineries in the area shut down production.

• Regional instabilities• Seasonal demand - Summer is usually

5% higher than the rest of the year• The result - $96.47 per barrel of oil

The Cost of a Gallon of Unleaded Gasoline

Why do Gasoline prices vary from state to state

• Proximity of supply

• Supply disruptions

• Competition• Environmental

programs• State and local

taxes

What can you do about it?Get a Hybrid

1. Mitsubishi i: 126/99 mpg2. Nissan Leaf: 106/92 mpg 3. Ford Transit Connect Electric: 62/62 mpg4. Chevrolet Volt: 58/68 mpg 5. Toyota Prius: 51/48 mpg 6. Honda Civic Hybrid: 44/44 mpg 7. Toyota Prius v: 44/40 mpg8. Lexus CT200h: 43/40 mpg 9. Honda Insight 41/44 mpg 10. Toyota Camry Hybrid LE: 43/39 mpg

You’re just trying to save money

(not an environmentalist)1. Say you have a 2005 Ford Explorer with

79,000 miles. You can expect to get about $4,795 in trade-in.

2. That Toyota Prius is going to cost you about $27,902.

3. For that difference in cost, you could get about 6,081 gallons of gas (@$3.80/gal) and at 15 mpg you could go about 92,212 more miles

Of course if you want to trade in your 8 mpg Ferrari for Hybrid, then…

More Hybrids – a little more exciting forms of transportation

Porsche 918 Spyder Hybrid, 78 mpg, $845,000

Tesla Roadster, electric car, 200

mile range @ 100 miles per hour,

$100,000

If not a hybrid, then what about…

• Fuel Cell cars – Where’s that Hydrogen Fueling Station in Missouri and Kansas again?

• Biodiesel cars – A good alternative, assuming the price for used cooking oil and/or alligator fat remains low.

• Flexfuel cars – E85 - Fine if you want to pay a little less for 25-30% less mpg.

• Walking, Biking, Mass Transit, Horse…

A little more about E85• The Renewable Fuel Standard, enacted in 2005 by Congress requires

that 13.2 billion gallons of corn-based biofuel be produced in 2012. • One consequence is that 40% of the U.S. corn crop now goes to

ethanol, compared with 36% for feed. • Critics say ethanol also is a big factor in the price of a bushel of corn

going from an average $2.15 a bushel in the 1997-2006 period to more than $8 today.

• Algae-based ‘green’ crude, a substance that can be converted into jet fuel, automobile gasoline, and diesel, is a process that has been around for several years.

Ok, I just want to stay with my car

Gas Saving tips

• Drive Sensibly – Aggressive driving (speeding, rapid accleration and braking) wastes gas.

• Observe the speed limit– Gas mileage decreases at speeds above 60 mph– You can assume that 5 mph you drove over 60 is like

paying an additional $0.24 per gallon for gas• Remove Excessive Weight (up to 2% per 100 lbs).• Engine properly tuned - %4 savings• Air Filters replaced - %10• Tires properly inflated - %3• Recommend Motor Oil – 1-2%

Radical Tips for Saving Gas• When possible drive 60 mph on Interstates,

Divided Highways, etc.– Unless you are going to Denver, 70 or 75 mph isn’t

going to save you much time– For Example if you are driving from Lawrence to KC,

40 miles at 70 mph will take you about 34 minutes. If you go 60 mph it will take you 6 minutes longer, but you’ll save about $0.48

• In the summer, use the A/C sparingly– 5-25% savings– Don’t however roll down the windows as drag will

increase along with more fuel used.• Coast when possible.

Electricity Costs

• Capital Costs – Financing/Interest of Loans, Land Acquisition, Design, Construction, Interconnection to the Grid

• Fuel – Price, Availability• Operation and Maintenance – Personnel,

Reliability, Environmental monitoring, Unit lifetime.

Cooking a pot of rice with electricity for 1 hour uses 1000 watt-hour of electricity(1 kilowatt). The average residential rate is 8.3 cents per kWh. A typical household consumes about 11,000 kWh per year, costing an average of $900 annually.

Natural Gas

Where to Start - Conservation• Conservation involves changing your energy use behaviors

from wasteful, inefficient habits– such as leaving on the lights when you leave a room– to switching to energy-saving ones - Compact Fluorescents

provide superior light quality, 8-10 times longer life, 1/4 the energy use, to achi.ve the same amount of lighting

• Improve the home’s insulation and sealing draft-prone areas

Where to Continue• In the 1970s, the average refrigerator consumed about 1,500

KWH per year. Today, its dropped to about 500 KWH. – Energy Star-qualified refrigerators use 40% less energy than

conventional models sold in 2001.• Every $1 you spend on efficiency measures will save $3-$5 on

your renewable energy system costs.

Buying a New House

Solar and Wind for Large Scale Projects

Wind Energy Potential:Average MW: 121,900Annual kWh: 1,070 BillionRank in US: 3rd

Enough solar energy falls on Kansas each year to provide about 1,000 times our annual, current fossil fuel and nuclear energy consumption.

I want to generate my own RE Power

• Passive Solar house • Photovoltaics - Solar Power

Generation• Wind Power Generation• Pico-Hydro Power

Generation

Passive Solar

• Passive solar houses balance windows with heat absorbing thermal mass located on walls and floors in the direct vicinity of the southern exposed windows.

• Properly sized window overhangs block the high summer sun, preventing the building from overheating

• Low winter sun - warms the space.

• Minimal window area on the north, east, & west sides of the house

• Estimated costs about 3% more than regular construction

Solar Power Generation

• Residential Solar Electric Systems are generally priced by the system size. For example. a 2,500 sq ft house with AC requires probably a 3-4 kW system.

• Cost: $30,000.

Solar Power

Systems

• Grid Solar-Electric Systems - generate solar electricity and route it to the electric utility grid, offsetting a home’s electrical consumption and, in some instances, even turning the electric meter backwards. A battery backup system could be added.

• Off-Grid Solar-Electric Systems - operate independently from the grid to provide all of a household’s electricity. That means no electric bills and no blackouts—at least none caused by grid failures.

Wind Power Generation• There are 4 components

to most wind systems: – Wind turbines– Towers– Power inverter– Battery bank.

• A wind turbine must be free from obstructions within a 250’ radius, and a tower where the top of it would be at least 20’ above any surrounding object within that radius. 

• Approx. Cost $10-20K.

Wind Power System Components

Pico Hydro Power

• If your property has access to a stream or river, and you want to produce your own electricity, then you might try hydropower (however check your water rights to the stream) The cost of equipment is lower, and the kilowatt per dollar return is much better. As long as the stream continues to flow you have power.

• The most important element to have when producing hydropower is what is called “drop”. The greater amount of change in a stream’s elevation, the better it is for producing electricity.

$1,500 – 3,000 per

KW

Up to 5KW

Combination of Solar and Wind• Since the wind doesn’t always blow nor the

sun always shine. • Cost is higher.

Lower Cost Systems• Most systems costs too much, payback too

long• Renewable Energy Systems for:

– Backup Power– Solar Water Heaters– Partial Power Systems – Power outbuildings

Solar (or Wind) for Backup Generators

• Designed to come to your rescue when power trouble starts and your lights go out.

• Run a small refrigerator (high efficient ones are best) to keep your food from going bad.

• Run a sump pump in the basement if you have to get rid of excess water.

• Run a small heater in winter after an ice storm.• Have a garage door opener as the main entry to the

house?

Solar Water Heaters• Reliable technology offers long-term performance with low

maintenance. • To get the most for your money, you´ll want a properly sized system

that offers the best performance in your climate. • Water is routed to the solar storage tank, but never into the collectors. • Antifreeze mixture circulates from the collectors through a coil of pipe

in the solar tank, and then is pumped back through the collectors. • The water is warmed by heat transfer through contact with the pipe.• These systems require an expansion tank and other components for

filling, venting, and maintaining the system.• Drainback systems are effective & reliable, and can operate

20 years without needing service.

Solar Storage Tank

Solar Collector

Geothermal EnergyGround Loop 150 – 200’ deep, 300 – 400’ of pipeThe vertical loop is the preferred loop when land space is limited rocky soil conditions exist.

Summer - the geothermal system will remove the heat from your home and dissipate it into the earth via the ground loop.

Winter - the system will remove stored heat from the earth and move it into the system via the ground loop.

Horizontal Loop5 – 6’ deep , 800’ of pipe 130’of trench Preferred loop when land space and soil conditions are adequate.

Pond LoopMinimum 8’ deep, 1/4 acre pond surface, 400’ of pipe.

Energy for the Home: The Future

• “Thin film" photovoltaic technology, a high-tech coating that converts any surface covered with the film into a solar-electric power source.

• Rusty Solar Low-cost Photovoltaics • Fuel Cells?

More Info• Tips for Purchasing an Energy-Efficient Home http://

www.energycodes.gov/implement/pdfs/lib_ ks_tips_for_purchasing_an_energy-efficient_ home.pdf

• Building America - http://www1.eere.energy.gov/buildings/building_ america/

• HUEE - http://www.huee.org/• Small Wind in Kansas -

http://www.awea.org/smallwind/kansas.html• LEED -

http://greenbuildingelements.com/2008/01/28/greensburg-ks-to-rebuild-as-leed-platinum-city/

• Home Energy Saver http://hes.lbl.gov/hes/vh.shtml• Typical Energy Costs for Household Appliances http://

advisor.lbl.gov/apusage.html• Energy of the Future: http

://dsc.discovery.com/energy/energy-of-the-future• Algae into gasoline: http

://venturebeat.com/2012/04/02/sapphire-energy-gets-144m-in-its-fuel-tank-to-turn-algae-into-gasoline/