California, unplugged

It’s official. Nobody likes global warming. Everybody wants to cut carbon emissions. Renewable energy is all the rage. A green wave is sweeping California, the country and the world. The Nobel Peace Prize goes to Al Gore.

Huzzah!

Yet as much as people dislike global warming, they love their electricity. They need their refrigerators, air conditioners and washer/dryers. They’re obsessed with watching television, surfing the Internet and playing electric guitars. Computers, printers and copy machines come in pretty handy down at the office, too. Electricity is a splendorous thing.

Unfortunately, some methods for generating electricity are among the worst greenhouse-gas offenders on the planet, especially coal-fired power plants, which supply 21 percent of California’s electricity. Other methods produce no carbon emissions, but raise their own environmental concerns, such as nuclear power plants, which supply 13 percent of the state’s electricity. California uses natural gas, which burns cleaner than coal and lacks nuclear power’s stigma, to generate 41 percent of its electricity.

But there’s a problem with natural gas: We’re running out of it. The North American domestic supply has been in decline for two decades. Gas can be imported from overseas, but it must be liquefied first, a complex process that requires special ships and infrastructure for liquefying, transporting and re-gasifying the liquid natural gas, or LNG. The United States is already years behind in building such infrastructure. Without it, industry experts predict the price of gas will skyrocket in the near future.

Global warming and resource depletion—in this case, the declining domestic gas supply—have put state policymakers in a bind: Is it possible to significantly reduce carbon emissions and still provide enough power to the people? So far, the answer to the first half of the question appears to be yes, emissions can be reduced. From a series of decisions made last spring and unfolding as this is being written, it’s not clear if the second half of the question has been asked.

Last April, when Assemblyman Chuck DeVore, R-Irvine, introduced AB 719, a bill seeking to rescind the state’s 31-year ban on constructing nuclear-power plants, the Assembly Natural Resource Committee instantly squashed it. DeVore argued that emission-free nuclear power was necessary to help the state fight global warming and meet future electrical demand. Activists countered that nuclear power is “the most dangerous technology on Earth.” Chairwoman Loni Hancock, D-Berkeley, noted that there are safe alternatives to nuclear power, such as solar and wind energy. The committee voted 6-3 along party lines to kill the bill.

One month later, Gov. Arnold Schwarzenegger rejected BHP Billiton’s proposal to build a LNG port off the Ventura County coast. Legislators, environmentalists and media universally lauded the decision, which followed rejection of the project by the California Coastal Commission for environmental concerns that included, for the first time ever, greenhouse emissions.

In a press release, Assemblyman Lloyd Levine, D-Van Nuys, called the proposed LNG port “the wrong project at the wrong time for California.” Thanks to efforts to increase energy efficiency and the amount of renewable sources, he said, “There is no need to lessen our state’s commitment to a clean environment by approving the BHP Billiton terminal.”

One week after that, the California Energy Commission put into effect new state laws that forbid municipal utilities from signing new contracts with coal-fired power plants. Twenty-one percent of the state’s electricity is generated by coal-fired plants, most of it coming from out of state. That percentage will steadily decline as existing coal contracts expire over the next 20 years, replaced by renewable sources.

The three decisions, made in roughly the span of one month, had two things in common. Each decision reduced the future use of resources—nuclear power, gas and coal—that collectively generate 75 percent of the state’s electricity. In turn, each decision insinuated that renewable energy sources will fill the gap. There’s only one problem with that equation.

It doesn’t quite add up.

Seventy-five percent of California’s electricity is generated with natural gas, coal or nuclear power. Hydroelectric generation provides another 15 percent, an amount that’s fixed because most of the state’s large hydro sites have been developed already. Renewables—geothermal, biomass, wind, small hydro and solar—provide the final 10 percent of the total.

By fiat, renewables are slotted to provide a larger slice of the pie. The state’s renewable-portfolio standard, or RPS, requires utilities to generate 20 percent of their electricity with renewable sources by 2010, and 33 percent by 2020. That will help reduce the reliance on fossil fuels and also greenhouse emissions. But even if utilities hit the 33 percent target, by no means a certainty, the rest of the electricity, two-thirds of the total supply, has to come from somewhere. Fifteen percent will come from hydro. The rest, more than half of the total, will be generated with gas, coal and nuclear power.

It’s the pressure imposed by declining fossil fuels and the need to curb greenhouse gases that produces the fuzzy math. Natural gas provides 41 percent of the electrical mix. Suppose the state reduces its reliance on it, as many officials are wisely suggesting, reducing use to just 30 percent of the mix. Then imagine the licenses at the San Onofre and Diablo Canyon nuclear power plants expiring in the 2020s, as activists desire. The law prohibits construction of new plants, dropping nuclear power’s input to zero. That leaves a 20 percent hole to fill, and the only resource left is coal, the worst greenhouse emitter of them all. It’s like a snake swallowing its tail. You’re right back where you started.

Complicating the issue is the fact that gas, coal, nuclear power and hydro provide “base load” generation, meaning they can generate electricity 24 hours per day, 365 days a year. Some renewables, such as geothermal and biomass, can generate base load, but at present such use is limited. Natural gas is also used in so-called peaking units that provide extra electricity during times of heavy demand, such as scorching hot summer afternoons. So far, no renewable source has this capability. It’s simply not a case of trading one for the other.

The hand-off between fossil fuel and renewable energy is going to be complex and will take decades. Global warming isn’t the only problem we have to deal with; it may not even be the worst. We live in an era when all of our major natural resources—petroleum, natural gas, coal, uranium—are in decline. Energy expert Richard Heinberg, who has written pioneering work on the subject of peak oil, calls it “peak everything.” Once you’ve used half of a given finite resource, you’ve reached the peak. Decline inevitably follows, often at a much more precipitous pace than the rise. This is particularly true in the case of natural gas.

In his latest book, Peak Everything: Waking up to the Century of Declines, Heinberg writes that it “is difficult to avoid the conclusion that we have caught ourselves on the horns of universal ecological dilemma, consisting of interlinked elements of population pressure, resource depletion and habitat destruction on a scale unprecedented in history.”

Whether we can extract ourselves from the horns remains to be seen. Gas, coal, nuclear power and renewables will all play a part in the success of that effort. Decisions made today will determine how much of those resources are available tomorrow. Making the right decisions depends on how honest and open the debate is. So far it hasn’t been much of either.

No nukes is good nukes
Assemblyman DeVore was not deterred by the near instantaneous rejection of AB 719, his bill to lift the nuclear-construction moratorium. Instead, he and a group of businessmen who want to build a nuclear plant in Fresno teamed up to place the bill on the July 2008 ballot. The initiative was titled the “Zero Carbon Act” until anti-nuclear activists, including Rochelle Becker, founding member of the Alliance for Nuclear Responsibility, complained the name was misleading. It’s now known as the “Removal of Prohibitions on the Construction of Nuclear Power Plants Statute.”

Existing state law bans the construction of new nuclear power plants until a federal high-level nuclear waste repository is available. The preferred federal site, Yucca Mountain, 100 miles north of Las Vegas, is scheduled to open in 2016, but remains mired in litigation. It may never open. Without a dump site, California’s prohibition against new construction would remain in effect.

DeVore’s initiative seeks to end that prohibition, as well as shift regulation of locally stored waste from state to federal rules. It also prohibits the construction of nuclear-power plants in seismically sensitive areas.

DeVore, a libertarian-leaning conservative, told SN&R that the nuclear issue became important to him after the Legislature passed the Global Warming Solutions Act and SB 1368, the bill prohibiting the renewal of energy contracts from coal.

“One of the reasons I voted against these bills is that they’re not saying how we get there from here,” DeVore said. “You’ve got all these great policy pronouncements that will make you look like heroes, but because of term limits, most of them will be long gone by the time the crunch hits, including the governor, who will leave office a year after [the Global Warming Solutions Act] goes into effect.

“There’s only certain ways that you can generate electricity,” he continued. “There are only a certain number of finite technologies, each with their own strengths and weakness[es], each with their own costs to produce, each with their own effect on the environment. Nuclear power, if it’s done right, as is typically the case in the West, offers a pretty compelling, low-cost, reliable, safe, clean—from an air-pollution and from CO2-emission standpoint—alternative to these other sources of power.”

While activists question each of those claims, a 2003 study by the Massachusetts Institute of Technology found that nuclear power, if employed on a massive scale, could cut global greenhouse emissions by as much as 25 percent. There are currently 104 commercial nuclear reactors operating in the United States. The MIT plan called for a total of 300 plants nationally and 1,000 worldwide. Such a project would become economically feasible if carbon credits defrayed the cost of nuclear-plant construction, the study found.

That’s not a risk Assemblyman Levine is willing to take.

“There are a number of problems with nuclear power,” Levine told SN&R, citing cost and safety concerns, matters that are open for lengthy debate. “There is no storage facility available, and I guarantee you if you ran a proposition that said, ‘People of Fresno, you want a nuclear power plant? OK, then you have to store the waste on site,’ there’s no way in hell they would do that.”

Even if the people of Fresno did vote to bury nuclear waste in their backyard, that’s no guarantee a plant would be built. Opposition is stiff, well-organized and determined to shut down nuclear power once and for all. Becker scoffed at DeVore’s proposition.

“It’s an initiative that from its very title is meant to mislead the people of California,” Becker told SN&R. “It’s not in any way an answer to global warming. It really is a repeal of the state’s safety laws.”

The debate may be moot, according to Heinberg. It seems uranium has its own peak to contend with.

“Nuclear power just doesn’t make sense on an expanded scale,” he told SN&R. “The Energy Watch Group in Germany, which reports to the German parliament, did a study of the uranium supply last year. In the best-case scenario, they forecast a peak in supply well before 2050. If the resource scenario is less than best-case, and if the world decides to build lots of new reactors, we could see a peak much sooner, perhaps in 15 years.”

Peak everything, indeed.

Nagging gas problem
No energy resource is more problematic for California than natural gas, which provides 41 percent of the state’s electricity. When denying BHP Billiton’s bid to build an LNG terminal last May, Schwarzenegger made no mention of the declining domestic supply of natural gas or that experts estimate at least 40 new LNG ports, as well as 112 new LNG tankers, need to be constructed to meet the nation’s natural-gas demand in the near future.

“I’m disappointed that we’re not going to see LNG terminals in California,” said Susan Patterson, president of the Sacramento Municipal Utility District’s board of directors. Sixty percent of SMUD’s electricity is generated with natural gas. At the same time, she said the “state is too heavily reliant on natural gas for electricity generation. I would prefer that SMUD not be so dependent on natural gas for base load electricity generation. … The cost of gas is very volatile, and it doesn’t seem to be going down. It’s only going up.”

The declining domestic supply of natural gas is no secret. In the 1970s, construction of new gas-generation plants was prohibited by federal law for that reason. After the Three Mile Island accident put nuclear power in the United States on hold, the Reagan administration, seeking to provide a source of electricity that could meet federal air-quality-control guidelines, lifted the ban on natural gas.

“I am terrified about our reliance on natural gas,” DeVore said. “Everyone keeps blocking liquid-natural-gas terminals from going in on our coast. The problem is that gas fields in North America, in the Rocky Mountain area and Canada, are in decline. Meanwhile, use is going up.”

Although natural gas burns cleaner that coal, the gas itself, which is comprised mostly of methane, is actually 20 times more destructive than carbon dioxide. A globalized LNG infrastructure will provide that many more opportunities for leaks and, thanks to LNG’s extreme volatility, there is increased risk of major accidents and terrorist attacks at facilities and on ships. To top it off, the major supplies of natural gas overseas are found in Iran and Russia, two countries not exactly on the best terms with the United States.

“We are perhaps one revolution in a natural-gas-producing country away, or one explosion of an LNG tanker, or any sort of a disruption to the supply chain, from having enormously higher natural-gas prices, as the people who burn it in the turbines struggle to keep those turbines supplied,” DeVore said.

While DeVore and Patterson agreed that natural gas is not California’s long-term energy future, both support LNG ports off the coast of California in the short term. PG&E isn’t content to wait around for that to happen—or not happen—according to spokesman Jon Tremayne.

“LNG terminals are obviously a part of California’s energy supply,” he said, citing the LNG port in Baja that’s nearing the end of construction and will provide gas to Southern California once it’s completed. PG&E currently is pursuing a pipeline project called the Pacific Connector that will link a proposed LNG terminal in Coos Bay, Ore., with PG&E’s gas-transmission facilities.

Levine acknowledged the state’s current dependence on the fossil fuel, but insists now is the time to wean ourselves off of it, not increase our reliance on it.

“If we increase the natural-gas component, we increase our reliance on the world natural-gas market, which is subject to huge price fluctuations and huge vulnerabilities,” Levine said. “It’s almost like enabling an alcoholic. If we build this because it’s easy, then I’m afraid we won’t do the tough work that’s necessary. We’ll just put off what we need to be doing with solar wind and geothermal.”

Heinberg sided with Levine.

“No one expects LNG to fill the gap even if terminals are built,” he said. “There just isn’t enough spare LNG sloshing around the global-export system. We’ve got to reduce our gas dependency, and do so quickly. This is an enormous job, and nobody is even talking about it. My guess is that by 2012 or so we will see skyrocketing gas prices, regional shortages, and folks in other parts of the country freezing to death for lack of heat in the winter.”

Patterson said that SMUD’s long-term domestic-natural-gas contracts will permit the utility to meet its customers’ demands for the next 20 years. Don’t bet on it, argued Heinberg.

“The contracts may exist, but how will they be fulfilled with a plummeting natural-gas supply?” he asked.

Renewables to the rescue?
Lawmakers and public officials have conferred some astounding traits upon renewable-energy sources. Somehow, geothermal, biomass, wind, solar and other alternative sources will pick up the slack, as fossil fuels and nuclear power are depleted or phased out, without exacerbating global warming and without causing a decline in the electrified standard of living we all enjoy today. Sounds good, but, as pointed out above, even if the state’s renewable-portfolio standard of 33 percent is met by 2020, gas, nuclear power and coal still will have to provide at least 50 percent of the energy supply.

Moreover, hitting that 33 percent target presents daunting challenges. Perhaps the most significant concerns the lack of transmission lines running from the remote areas where geothermal and wind power are generated to the population centers where the electricity is needed.

“Generally speaking, with natural gas, or with other fuel sources, you can build the power plant relatively close to the infrastructure needed to deliver the power,” explained Gregg Fishman, spokesman for the California Independent System Operator, which serves as a sort “air traffic controller” over the state’s electrical transmission system. “You can then move the fuel to the plant. If you’re talking about natural gas, you build a pipeline. With wind, solar, geothermal and hydro to some extent, you have to build a power plant where the ‘fuel’ exists. You can’t move the wind to somewhere where it’s more convenient. You can’t move a geothermal area—you have to go where the heat is close to the ground.”

Wind and geothermal power are known as “location constrained” resources. A prime example is the giant wind farm in Tehachapi, east of Los Angeles in the Mojave Desert. Southern California Edison wanted to access the power but couldn’t raise the capital necessary to build the transmission facilities. However, if transmission lines can be shown to provide benefits to the entire network, the ISO can charge users for access to the lines and reimburse Edison for the cost. As it happened, the transmission project also helped relieve congestion between the Northern and Southern California power grids, reason enough to justify the line-access charge.

“We’re still finding there are plenty of areas where you’re just not going to be able to make that stretch,” Fishman said. “The Imperial Valley has geothermal resources that have never been tapped because the transmission doesn’t go there, and there’s no reason to put it there.”

The ISO has filed a hybrid financing method with the Federal Energy Regulatory Commission to help utilities finance transmission lines to the location constrained resources. The financing method awaits FERC approval.

Patterson points out another obstacle renewables face. Geothermal, wind, biomass and small hydro account for almost all of the state’s renewable generation. Many of those resources already have been developed, or as Patterson puts it, “We’ve already picked most of the low-hanging fruit.” That leaves solar power, which may be the new sexy, but accounts for less than 1 percent of California’s total electric production. Schwarzenegger’s celebrated plan to create 1 million solar roofs by 2018 will provide 3,000 megawatts of additional electricity, but that’s only 6 percent of the estimated 50,000 MW needed by then.

Because sources such as wind and solar are intermittent—they depend on the wind blowing or the sun shining for generation—utilities are working on methods for storing electricity until it is needed. PG&E is experimenting with giant flywheels to store energy; SMUD is currently scouting for a pump-storage location. With pump storage, water is pumped uphill to a reservoir using, say, wind power, which is generated at night when there is little load on the system. Later in the afternoon, when the load peaks, water can be released through turbine generators to create additional electricity.

As might be expected, solar energy has its own special set of environmental problems. Heinberg notes that silicon and rare minerals such as gallium used to manufacture photovoltaic cells have reached their peak. And DeVore pointed out so-called thermal solar plants take up a tremendous amount of land space, creating vast “dead zones” where no vegetation is permitted to exist.

Despite all of these challenges, PG&E spokesman Tremayne is confident that California will lead the way into the renewable-energy future.

“The grid of the future in all of North America is going to look a lot like what PG&E, other utilities and state leaders think the grid in California is going to look like,” he said. “There will be a much more interactive power grid in the future. It will take some time to get there, but we will, and the rest of the country will follow.”

What shape we as a culture arrive in remains a subject of debate. Levine believes we can survive the transition with our standard of living intact, if we keep our focus on energy efficiency. Tested technology such as dual-pane windows combined with new advances, such as smart meters that measure demand response, will provide enough cushion to see us through the change.

“We’re not asking people to do without,” Levine said. “We’re not asking people to suffer. We’re not talking about what people thought of in the ’70s with conservation. This is efficiency, not conservation. We’re not talking about putting on four sweaters, two jackets and a blanket and turning the thermostat down to 40 degrees. We’re talking about using what we have more efficiently.”

Heinberg’s view is not as rosy.

“There is no way that Californians will be able to continue using electricity at current and growing rates,” he said. “In just a very few years, we will see regular blackouts and brownouts, calls to cut consumption and price hikes. If we were to go-for-broke on renewables (as we should), that would help, but the German grid-management agency, which has about as much experience with renewables as anybody in the world, says we should not count on wind for more than 20 percent of total load. Solar is also problematic for the same reason: It’s intermittent, and we don’t have tons of storage capacity. In the best case, wind, solar, tidal, wave, and geothermal together could provide California with enough electricity to maintain an industrial economy, but probably at significantly lower total energy levels than we are used to.”

Last week, the Energy Information Administration warned that people who warm their homes with heating oil, natural gas or electricity can all expect to pay significantly higher bills this winter. The price of natural gas is expected to rise by 10 percent. Better get used to it. You’re going to be hearing that a lot from here on out.