Energy Myths and Realities Energy Myths and Realities: Bringing Science to the Energy Policy Debate Vaclav Smil The AEI Press Publisher for the American Enterprise Institute WASHINGTON, D.C. Distributed by arrangement with the Rowman & Littlefield Publishing Group, 4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706. To order call toll free 1-800-462-6420 or 1-717-794-3800. For all other inquiries please contact AEI Press, 1150 Seventeenth Street, N.W. Washington, D.C. 20036 or call 1-800-862-5801. Library of Congress Cataloging-in-Publication Data Smil, Vaclav. Energy myths and realities : bringing science to the energy policy debate / Vaclav Smil. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8447-4328-8 ISBN-10: 0-8447-4328-3 1. Renewable energy sources. 2. Energy policy. I. Title. TJ808.S639 2010 333.79'4—dc22 2010009437 14 13 12 11 10 1 2 3 4 5 6 7 © 2010 by the American Enterprise Institute for Public Policy Research, Wash- ington, D.C. All rights reserved. No part of this publication may be used or repro- duced in any manner whatsoever without permission in writing from the American Enterprise Institute except in the case of brief quotations embodied in news articles, critical articles, or reviews. The views expressed in the publications of the American Enterprise Institute are those of the authors and do not neces- sarily reflect the views of the staff, advisory panels, officers, or trustees of AEI. Printed in the United States of America Homines libenter quod volunt credunt Men believe what they want to —Publius Terentius v Contents LIST OF FIGURES xi KEY TO UNITS OF MEASURE xiii INTRODUCTION 1 Lost Opportunities 2 Persistent Myths 6 Challenging the Myths 11 PART I: LESSONS FROM THE PAST 15 1. THE FUTURE BELONGS TO ELECTRIC CARS 18 Electric- versus Gasoline-Powered Cars 19 Recent History of Electric Cars 20 Recent Electric Models 21 Electric Cars and the Supply of Electricity 23 More Efficient Gasoline Engines 28 2. NUCLEAR ELECTRICITY WILL BE TOO CHEAP TO METER 31 Peaceful Uses of Nuclear Fission 32 Retreat from Nuclear Power 35 Hope for Fast Breeder Reactors 38 New Case for Nuclear Energy 40 Successful Failure 42 3. SOFT-ENERGY ILLUSIONS 44 Advantages of Soft Energy 45 Soft Energy Today 47 The Hypercar 48 Other Soft-Energy Dreams 48 vii viii ENERGY MYTHS AND REALITIES Soft Energy in China 49 The “Perfect” Solution 52 The Future of Soft and Small Approaches 54 PART II: MYTHS IN THE HEADLINES 55 4. RUNNING OUT: PEAK OIL AND ITS MEANING 60 Predictions of Peak Oil Production 62 Untapped Resources 67 Nonconventional Oil Reserves 69 Production, Demand, and Prices 72 Countering the Claims of Peak-Oilers 76 5. SEQUESTRATION OF CARBON DIOXIDE 79 Organic Approaches 80 Technical Fixes 86 The Energy Penalty on Sequestration 93 6. LIQUID FUELS FROM PLANTS 98 Liquid Fuels for Transportation 100 Corn-Based Ethanol 101 Sugar Cane–Based Ethanol 104 Impacts of Ethanol Production 106 Cellulosic Ethanol, “A Huge New Source of Energy” 107 Biofuels, An Inappropriate Solution 113 7. ELECTRICITY FROM WIND 116 Evolution of Wind Power 118 Estimated Potential of Wind Power 119 Key Constraints on Wind Power 121 Realizing the Potential of Wind Power 130 8. THE PACE OF ENERGY TRANSITIONS 133 Present Realities 134 Past Transitions 136 Why Energy Transitions Are Gradual 140 The Repowering Challenge 141 False Analogy 143 CONTENTS ix CONCLUSION: LESSONS AND POLICY IMPLICATIONS 150 Electric Vehicles 150 Nuclear Power 152 Soft-Energy Conversions 155 Peak Oil 156 Carbon Sequestration 157 Crop-Based Ethanol 158 Wind-Powered Electricity Generation 159 Energy Transitions 160 A Quick Summation 162 NOTES 165 REFERENCES 177 INDEX 197 ABOUT THE AUTHOR 213 List of Figures 1-1 Trends in Corporate Average Fuel Economy (CAFE) for U.S. Vehicles 3 I-2a Monthly Mean Prices of Light Sweet Crude Oil on NYMEX, 1999–2008 5 I-2b Annual Mean Prices of the OPEC Reference Basket (ORB) 5 2-1 Trends in Cost Estimates for America’s 1 GWe Nuclear Generating Units 36 2-2 The World’s Nuclear Generating Capacity, Forecast and Actual 37 2-3 General Electric’s Forecast for U.S. Electricity Production 39 4-1a The Olduvai Gorge Theory: Duncan’s Depiction of the Oil Peak 61 4-1b Average Global Per-Capita Consumption of Primary Energy, 1950–2009 61 4-2a Hubbert’s Predictions for U.S. Crude Oil Production vs. Actual Production 63 4-2b Hubbert’s Predictions for Global Crude Oil Production vs. Actual Production 64 4-3a Cumulative Discovery Curves and EUR for the San Joaquin Basin 66 4-3b Cumulative Discovery Curves and EUR for the Permian Basin 67 4-4 Cyclic Steam Stimulation 70 4-5a Possible Peaks of Oil Extraction 74 xi xii ENERGY MYTHS AND REALITIES 4-5b Possible Peaks of Oil Extraction Charted by Hedberg Research Conference, 2006 75 5-1 Earth’s Biosphere: A Carbon Sequestration/ Regeneration System 81 6-1 U.S. Ethanol Production, 1980–2007 99 6-2 A Segment of Cellulose 107 7-1 Wind Speeds in Coastal Atlantic Europe 117 7-2 Power Curve of 3-MW Turbine V90 with Wind Speed Categories 126 8-1 Predicted and Actual Trends in U.S. Dependence on Foreign Crude Oil 135 8-2 Global Shares of Commercial Primary Energies, 1900–2008 137 8-3 Graphic Presentation of Moore’s Law 144 8-4 Increasing Conversion Efficiencies of Photovoltaic Cells 145 8-5 America’s Future High-Voltage Transmission Challenge 147 C-1 CO2 Emissions for Different Forms of Primary Energy 154 C-2 Declining Carbon Intensity of the U.S. Economy, 1950–2010 158 C-3 Value of Ballard Power Systems Shares on Toronto Stock Exchange, 1994–2008 162 Key to Units of Measure °C degree Celsius (unit of temperature) cm centimeter (unit of length) cm3 cubic centimeter E exa (prefix signifying 1018) EJ exajoule (quintillion joules; unit of energy) G giga (prefix signifying 109) g/Wh grams per watt hour (measure of energy density) Gb billion barrels GJ gigajoule (billion joules; unit of energy) GL billion liters GW gigawatt (billion watts; unit of power) GWe gigawatt electric (billion watts of electric power) h hour J joule (unit of energy) k kilo (prefix signifying 103) kg kilogram (thousand grams; unit of mass) km kilometer (thousand meters; unit of length) km/h kilometers per hour (unit of speed) km3 cubic kilometers (unit of volume) kW kilowatt (thousand watts; unit of power) kWe kilowatt electric (thousand watts of electric power) K degree Kelvin (unit of temperature) L liter (unit of volume) L/km liters per kilometer (unit of fuel consumption) m meter (unit of length) m/s meters per second (unit of speed) m2 square meter (unit of area) xiii xiv ENERGY MYTHS AND REALITIES m3 cubic meter (unit of volume) mpg miles per gallon (unit of fuel consumption) M mega (prefix signifying 106) MJ megajoule (million joules; unit of energy) Mbpd million barrels per day MW megawatt (unit of power) MWh megawatt hour (unit of energy) P peta (prefix signifying 1015) PWh petawatt hour (quadrillion watt hours; unit of energy) ppm parts per million T tera (prefix signifying 1012) Tb trillion barrels TW terawatt (trillion watts; unit of power) TWe terawatt electric (trillion watts of electric power) TWh terawatt hour (unit of energy) W watt (unit of power) W/m2 watts per square meter (unit of power density) Wh/kg watt hours per kilogram (unit of energy density) Wh/km watt hours per kilometer (measure of energy consumption) Introduction Modern civilization is the product of incessant large-scale combustion of coals, oils, and natural gases and of the steadily expanding generation of electricity from fossil fuels, as well as from the kinetic energy of water and the fissioning of uranium nuclei.1 Yet, for many decades, this fundamental link between the rising use of energies and the growing complexity and greater affluence of human societies was overlooked both by the public and by policymakers. The public was not concerned about energy supplies; media coverage of energy matters was sporadic; and no major Western gov- ernment had a ministry devoted specifically to energy affairs. This lack of interest changed with what came to be known as the first energy crisis—the increase in oil prices driven by the Organization of the Petroleum Exporting Countries (OPEC) in 1973 and 1974. This rise, from less than $2/barrel in early 1973 to more than $11/barrel by the spring of 1974 (BP 2009), was deliberately engineered by the leading oil exporters and did not take place in response to any physical shortage of the fuel. It went further than originally intended, cutting short the unprecedented period of economic expansion following World War II. It also turned the attention of individuals, organizations, and governments to the increasingly challenging task of securing a sufficient supply of sensibly priced energy. Moreover, this challenge coincided with the genesis of a new environmen- tal consciousness and, hence, with efforts to reduce environmental pollu- tion and prevent further ecosystemic degradation. Suddenly, everybody seemed to become an energy expert, eager to prof- fer solutions. In reality, however, only a relatively small group of people understood energy affairs well enough to recognize how much was unknown about the structure and dynamics of complex energy systems, and how perilous it was to prescribe any lasting course of action. Those 1 2 ENERGY MYTHS AND REALITIES knowledge gaps were largely filled during the years of intensifying energy studies that followed the first and then the second round of oil price increases (1979–81). But after those subsequent prices collapsed—from the peak of almost $40/barrel in March 1981 to $20/barrel by January 1986, and to less than $10/barrel in April 1986—the complacency of the period before 1973 rapidly returned (BP 2009).