Navigant Research Blog

As Gas Wells Multiply, So Do Fracking Studies

— March 22, 2013

Ernest Moniz, President Obama’s nominee to become Secretary of Energy, encountered a minor tempest this week when environmentalists unearthed a 2011 MIT study on natural gas production and fracking, which Moniz led as the head of MIT’s Energy Institute.  The study, which concluded that the potential environmental damage from fracking is “challenging, but manageable,” was conducted by a team that included two researchers with ties to the oil and gas industry.  The White House quickly defended Moniz as an independent scientist, and the controversy is unlikely to keep Moniz from succeeding Stephen Chu atop the Energy Department.

Independent or not, the MIT report now rests on a shelf that groans under the weight of fracking studies and reports that multiply almost as fast as the natural gas wells themselves.  The latest version, which heavily favors the natural gas rush, comes from the University of Southern California and the Communications Institute, an L.A. think tank, and was “funded in part by a grant from the Western States Petroleum Assn.,” reports The Los Angeles Times.

There are plenty of examples of counter-studies detailing the horrors of fracking.  The granddaddy of anti-fracking reports was produced by Robert Howarth of Cornell in 2011, and concluded that over the long term, “shale gas is worse than conventional gas and is, in fact, worse than coal and worse than oil.”

Howarth’s gloomy findings have been disputed by studies from “the Environmental Defense Fund, the National Resources Defense Council, the Council on Foreign Relations, the Energy Department and numerous independent university teams, including a Carnegie Mellon study partly financed by the Sierra Club,” noted Forbes contributor Jon Entine.

Another 5 Years

In New York, a highly touted report from the Geisinger Health System is “likely years away,” the project’s leader acknowledged recently.  New York lawmakers and Governor Andrew Cuomo are in a struggle over limitations – or an outright ban – on fracking in the state, which overlies parts of the vast Marcellus Shale formation, which some geologists believe holds enough shale gas to provide U.S. electricity needs for a century or more.  New York’s review of the social and environmental effects of fracking is now in its fifth year, with no end in sight.

So proliferative is the research on fracking that the industry is in danger of being “entombed” by endless “iterative studies,” wrote a commenter on The Motley Fool, a stock-trading website.  Some supporters have had enough: University of Oklahoma professor David Deming, who has a rich history of provocative statements dismissing the concepts of peak oil and renewable energy, declared recently in a Wall Street Journal editorial that the oil and gas industry needs to man up and emulate the NRA by forcefully confronting its critics and “seizing the moral high ground.”

“The fossil-fuel industry—which could be the most powerful lobby in Washington—is hopelessly ineffective and self-defeating,” Deming moaned.

No Stopping

That is manifestly false – Steve Coll’s book on Exxon Mobil, Private Empire, provides 600 pages of evidence that the oil majors are among the most powerful entities on earth, often functioning as quasi-governments, for both good and ill, in the countries in which they operate.

At any rate, the thousands of pages of research on the effects of fracking scatter, for now, like confetti on the tracks as the locomotive of the natural gas boom thunders past.  That train is not slowing down soon.  Rather than taking an adversarial stance to regulators and environmental groups, natural gas producers could reduce their costs and risks by cooperating with regulators, being transparent about the chemicals they inject underground, and sharing infrastructure in areas with multiple producers.  Those are the conclusions of, you guessed it, a study by Accenture.

There are efforts afoot to do just that.  The Pittsburgh-based Center for Sustainable Shale Development is working on a new set of standards for the industry that would include a certification process to verify that producers are operating in environmentally safe and socially responsible ways.  As my colleague Dave Hurst reports, the Center has been set up by a group of organizations across the energy spectrum, including Chevron, Shell, the Clean Air Task Force, Consol Energy, the Environmental Defense Fund, Group Against Smog and Pollution, Heinz Endowments, and the William Penn Foundation. Lawrence Livermore National Laboratory is helping to develop the technical standards.  Such cooperation offers a much more productive approach than burying your opponents in a blizzard of conflicting studies.


With New Energy Fund, Obama Adds Fuel to Cleantech Engine

— March 15, 2013

Speaking today at Argonne National Laboratory, outside Chicago, President Obama laid out the details of his “Energy Security Trust,” a proposal to direct $2 billion in federal revenue from oil and gas leases to R&D for clean transportation technologies.  Following up on the pledge made in his State of the Union Address, to confront global climate change, the plan unveiled today should add momentum to a cleantech market surge that’s already underway.

In that sense, the new funding will mean that the federal government, under a Democratic administration, is catching up to broader social and economic shifts.

Eighty-four percent of Americans now understand that carbon emissions from human activity are “probably” or “definitely” causing global climate change, according to a February survey by Duke University.  Two-thirds support limitations on greenhouse gas emissions from power plants, factories and cars, and government-imposed requirements for utilities to generate more power from low-carbon sources.  The public has long since moved beyond denial on climate change and the future of the world’s energy system, and is well into acceptance that something – even if it involves raising taxes and putting a price, in some form, on carbon – must be done about it.

Obama’s plan is relatively modest – the congressional Budget Office estimates that proceeds from federal oil and gas leases on public lands will total $150 billion between 2012 and 2022, so the president is talking about shifting 1.3% of that money to advanced vehicles.  But the Energy Security Trust reflects a clearer understanding that market forces and public attitudes are quickly tipping the balance away from fossil fuels and toward renewable and other forms of low-carbon energy, including the natural gas boom that is helping to power an accelerating economy.

Boardroom Realization

Not everyone in Washington, of course, agrees.  But the market itself is moving ahead of policymakers.

  • Driven by falling turbine prices and the rush to take advantage of production tax credits (which were set to expire but were renewed by Congress in early January), wind energy was the fastest growing source of new electricity generation in the United States in 2012.  Nationwide wind generating capacity increased by 13.1 gigawatts last year – up 28 percent from 2011, according to the American Wind Energy Association.
  • The solar industry also enjoyed a record year, as new installations of solar photovoltaic systems grew 76% over 2011, to total 3.3 GW in 2012, with an estimated market value of $11.5 billion, according to the Solar Energy Industries Association.
  • According to our forthcoming Market Data report on microgrids, revenue from worldwide deployments of microgrids – many of them harnessing distributed renewable energy resources – will reach $8.3 billion in 2013, increasing to more than $40 billion annually by 2020. That is sharply higher than previous market forecasts.
  • The move away from coal and nuclear power continues to gain momentum, as power generators in the Midwest, like Dominion, shutter aging reactors and sell off coal plants.

Most of these trends will continue to unfold regardless of government intervention. Indeed, there are signals that the mental shift away from a carbon-based economy is happening even in the boardrooms of the oil majors.  In a new report from its Scenarios Group, Royal Dutch Shell – which exited the solar sector in 2009, saying it would focus on biopower instead – acknowledges that solar power could become the world’s biggest source of energy by the second half of the 21st century.

“These scenarios show how the choices made by governments, businesses and individuals in the next few years will have a major impact on the way the future unfolds,” commented Shell CEO Peter Voser in a statement on the new report.  What Obama’s new smart-transportation plan will do is add Washington’s imprimatur to a cleantech economy already poised for growth.


ARPA-E Top Prize Goes to Nuclear Start-Up

— March 8, 2013

Source: Transatomic PowerLast fall I blogged about Transatomic Power, a startup founded by a couple of MIT grad students that aims to build innovative molten salt nuclear reactors that can consume spent fuel from existing conventional reactors.  Transatomic got a big boost when it took the top prize at this year’s ARPA-E Innovation Summit.

ARPA-E is the advanced R&D arm of the U.S. Department of Energy, the counterpart to DARPA at the Pentagon.  Transatomic, whose technology is based on work done at Oak Ridge National Laboratory in the 1960s, under Alvin Weinberg (a period covered in detail in my book, SuperFuel), won out from around 200 clean energy startups.  Among the finalists were BDL Water, which aims to treat water used for fracking; Hevo, which is developing a wireless charging system for electric vehicles; and Altenera, which uses “oscillating reeds” to harvest wind energy.

Called a “Waste Annihilating Molten Salt Reactor,”  Transatomic’s system sustains nuclear fission in a liquid, molten-salt fuel, rather than in solid fuel rods.  Liquid-fuel reactors have several advantages over conventional solid-fuel rods, including safety – they operate at atmospheric pressure, obviating the need for huge pressurized containment vessels, and if the reactor begins to overheat, a “freeze plug” at the bottom of the core melts, draining the liquid fuel into a radiation-proof underground tank.

Thorium Shift

Molten-salt reactors are also the preferred technology for shifting to thorium, an alternative nuclear fuel that is cleaner, safer, and more abundant than uranium.  Leslie Dewan and Mark Massie, the founders of Transatomic, say that their design is “fuel-agnostic” in the sense that it can run on either uranium or thorium.  Using spent fuel from conventional light-water reactors, to help solve the nuclear waste-disposal problem, is a good way to get the initial reactors built.  CEO Russ Wilcox told Mark Halper, of Smart Planet, that the uranium reactor would serve as “a stepping stone” to a thorium-fueled version.

It will probably cost $2 billion or so to get the first Transatomic reactor built.  Winning a DOE contest is a long way from getting serious funding, but ARPA-E has an increased emphasis on commercialization, and the judges are largely drawn from big Silicon Valley venture capital firms.  So the ARPA-E win is a big step for a small company that hopes to transform the nuclear power industry.


Automakers Straddle the EV Charging Chasm

— February 10, 2013

Source: Gurdjieffbooks.wordpress.comThe emerging competition between the fast EV charging standard CHAdeMO and the Society of Automotive Engineers’ new “combo charger” technology took another twist last month when Tesla Motors said that the version of its new Model S released in Japan will include an adapter that makes it compatible with the CHAdeMO charging system.  Tesla, which uses its own proprietary “Supercharger” technology for fast direct-current (DC) charging, has also produced an adapter to go with the SAE’s enhanced J1772 specification.  Tesla thus becomes the latest automaker to attempt to straddle the divide between charging protocols in this fast-evolving sector.

The SAE’s new system, officially called the “J1772 SAE Electric Vehicle and Plug in Hybrid Electric Vehicle Conductive Charge Coupler,” augments the original J1772 technology to enable charging with AC Level 1 and 2 charging infrastructure, or with fast DC systems.  Finalized last October, it is expected to become the de facto worldwide standard – except in Japan, where the major Japanese automakers including Nissan, Toyota, and Mitsubishi have all already adopted CHAdeMO, which first became available in 2010.

Tesla’s decision to produce a CHAdeMO-compatible sedan when it already has an in-house fast charging system highlights the period of market confusion and standards competition the plug-in EV industry finds itself in.  “This is exactly not what plug-in vehicles need,” commented Danny King, on Autobloggreen.  The name-calling has already begun: Japanese officials scoff at the SAE spec as “the plug without the cars,” while GM executive Shad Balch effectively called for an embargo of CHAdeMO chargers during a public hearing in California last May.

The major U.S. and German automakers have all lined up behind the combo charger, and new models compatible with the technology are expected later this year.  Given the hype over slower-than-expected sales of EVs, both in the United States and abroad, it’s unfortunate that the industry would allow itself to be sidetracked over what is, at bottom, an argument over the plug.  It will likely take 3 to 5 years for this standards confusion to work itself out.  The only bright side is that motorists, unlike smartphone users, rarely transport their vehicles to other continents.


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