Asking the Wrong Questions with Natural Gas

MIT recently released an interim report on the continuing role of natural gas in society appropriately titled ‘The Future of Natural Gas’.1 Sadly with regards to the most meaningful question surrounding natural gas, the 104-page report loses its way by page 13. The prime mover influencing the growth of natural gas in the future is what long-term climate policy the United States pursues. With regards to climate policy the MIT report explores 3 different scenarios: a business-as-usual case with no significant carbon constraints; GHG emissions pricing through a cap-and-trade system or emissions tax leading to a 50% reduction in U.S. emissions below the 2005 level by 2050; GHG reduction via U.S. regulatory measures without emissions pricing: a renewable portfolio.1

On its face these scenarios seem appropriate, until one recalls that if the United States is only able to reduce emissions by 50% of 2005 levels by 2050 the development of dangerous and severely detrimental consequences due to human-driven climate change are all but guaranteed. The point of any climate policy should be to achieve an emissions goal, which will significantly reduce the probability of these dangerous and detrimental consequences otherwise what is the point of any change in the current climate policy at all. Sure a reduction of 50% may buy society a decade or two, but realistically it is highly unlikely that the extra decade will really matter in the end result. Therefore, while all three scenarios reviewed may have been viewed as politically viable (and they probably are), none of them accomplish the paramount goal of a new climate policy, thus the analysis inherently misses the most critical question regarding the role of natural gas in the future, which significantly reduces the usefulness of the analysis.

The most critical question regarding the future use of natural gas involves an aspect of its role as a substitute for coal in electricity production. While most individuals ‘in the know’ believe that natural gas will be used as a ‘bridge’ to a lower-carbon energy environment they do not address how long that bridge needs to be or even if it is appropriate in the first place. If the United States is going to take its role as a world leader in environmental issues seriously then an 80% reduction of 2005 emission levels by 2050 is the minimum requirement. To achieve such a result almost all to all (depending on the how the low-carbon transportation sector evolves) electricity will have to be produced through trace carbon means (geothermal, solar, wind, biomass, hydroelectric, nuclear, etc.). However, if this is the case, then the critical question is: will the monetary investment and resultant environmental damage that stems from acquiring unconventional sources of natural gas (as it is highly probable that there are not enough conventional gas reserves to provide the necessary electricity in the future) be better used to form a ‘bridge’ of natural gas which will start to collapse by 2035-40 or should this investment be applied to the more rapid deployment of these cleaner alternatives skipping natural gas entirely? If this question is not the first issue when discussing future energy policy, what is the point of having the discussion?

The MIT report also questions whether or not natural gas would be incorporated into the automobile fleet as a means to reduce emissions from the transportation sector. The development and rapid deployment of a natural gas fueled vehicle seems rather misguided unless electrical vehicles fall flat. For instance powering an electric vehicle with natural gas as the source of the electricity is more efficient, more economical and produces fewer emissions than using natural gas as a direct fuel for transportation. Overall it is unfortunate that this new MIT report misses the most critical issue when moving forward in the discussion regarding what sources will provide electricity in the future under the aim of emission reduction to reduce the probability of negative outcomes from human-driven global warming.

For more information regarding the background of how energy policy and electricity use must change to achieve the necessary emission reductions go to this link:

http://bastionofreason.blogspot.com/2009/07/emission-adherence-in-2020-and-2030.html

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1. Moniz, Ernest, Jacoby, Henry, Meggs, Anthony, et, Al. “The Future of Natural Gas: An Interdisciplinary MIT Study.” MIT Energy Initiative. 2010. ICBM: 978-0-9828008-0-5
http://web.mit.edu/mitei/research/studies/naturalgas.html

Regarding the New CAFE Standards

Recently the new CAFE standards for motor vehicles from 2012-201 were finalized. With this approval, numerous articles have once again appeared in the popular press discussing the fuel and cost savings that will come from this new standard. Unfortunately it appears that the administration is more than likely overestimating the savings due to three factors in their analysis, which easily could make a quality program look better than it actually is. Sadly overestimation of the benefits of a program due to the used assumptions is something done by both Republican and Democrat administrations.

The three factors that should draw concern are:

1. The highlighted analysis does not count the emissions generated from electrical vehicles and hybrids generated derived from the electricity component. Due to the fact that a significant percentage of the electricity that will power these new vehicles will come from coal and natural gas sources, considering these vehicles as zero carbon emitters is not accurate.

2. The analysis does not seem to estimate any gains in fuel economy independent of those driven by the new CAFE standards. If this is true, such an estimation is also inaccurate because there is reason to believe that with decreasing oil supplies leading to higher gas prices, the free market would demand some increase by manufacturers in fuel economy even if the government did not mandate it. Assuming a 0% increase in fuel economy creates a cost and emission savings profile that is inflated versus what reality would have dictated.

3. The analysis may not realistically look at vehicle replacement. Clearly despite the new CAFE standards all of the new cars developed under that standard are not going to instantly replace the cars currently on the road. Now the assumption regarding replacement is not as critical as the previous two noted assumptions with regard to the savings calculation. However, it is still important to ensure a proper replacement rate to maximize accuracy with regards to reduction in emissions as a means to combat global warming.

Understand that these questions regarding the assumptions for the new CAFE standards do not undermine the general conclusions of the analysis (that the new standards will result in lower gasoline consumption and reduce GHG emissions from the transportation sector.) However, the estimated benefits from the program may not be as sizable as reported. It is important to have accurate information regarding emission reduction because emission reduction is such a critical issue in preventing further global warming. An inaccurate analysis for the transportation sector may lead to inefficient emission reduction strategies for other sectors. For another perspective on how the CAFE standards will influence future reductions in greenhouse gas emissions go to the below link.

Plugging the Tail Pipe – Reducing Emissions from Transportation: http://bastionofreason.blogspot.com/2009/06/plugging-tail-pipe-reducing-emissions.html

Changing the Strategy – Planning for the Future

In the past months, including at the COP15 at Copenhagen, a large number of individuals have called for a scale of mitigation and remediation in global emissions of CO2 that would rapidly reduce the atmospheric concentration to at least 350 ppm. The target of 350 was selected, in part but not entirely due to the findings of Hansen et Al.1 which considered the current influence of climate forcings and what climate changes could be adapted to by human civilization at reasonable financial and human costs. Other goals have been proposed for 450 ppm where it is believed that average global temperature would not exceed 2 degrees C, which allows maintenance of a generally stable human society with proper adaptation strategies. However, the 350 camp adamantly believes that stabilization at 450 ppm would not be tenable to the comfortable survival of the human species on Earth, thus although 450 ppm would be acceptable for a very brief period of time, 350 ppm must be the plateau for a final CO2 atmospheric concentration.

Depending on what measurements one uses, the current atmospheric concentration of CO2 resides between 386-388 ppm.1,2 Unfortunately most proponents of the 350 movement fail to realize that this number represents CO2 concentration and its resultant climate forcing and not any of the other greenhouse gases which can be measured in CO2 equivalency. The atmospheric concentration for CO2 equivalency ranges even higher with a very high likelihood of being in the low to mid 400 ppm. Overall the 350 ppm goal must involve CO2 equivalency and not just CO2 alone otherwise the goal is structured in a way where direct achievement may not result in principled success.

Now one may find fault with the statement that CO2 equivalency is over 400 ppm, so how was that statement derived? The IPCC uses the following formula to calculate CO2 equivalency:

Total Climate Forcing = 5.35 ln(CO2 equivalency / CO2 pre-industrial);

First, note that CO2 pre-industrial is equal to the atmospheric CO2 concentration before humans began emitting large amounts into the atmosphere due to advances from the industrial revolution and beyond; this concentration is commonly viewed as 278-280 ppm.1 Most people view total climate forcing as the forcing from all significant greenhouse gases, significant greenhouse gases are defined by the Kyoto Treaty (CO2, CH4, N2O, HFCs and CFCs etc.).

Using these elements alone a total climate forcing relative to 2007 of approximately 2.71 W/m^2 can be calculated. This value leads to a CO2 equivalency of approximately 461.35 ppm to 464.67 ppm. However, this methodology does not take into account the fact that there are other forcings in the atmosphere as well which influence the climate such as areosols, surface albedo, clouds and ozone. In 2007 when the IPCC 4th Assessment Report was released due to a filing deadline it used empirical information from 2006 and earlier. This information generated a forcing map that defined a total climate forcing of approximately 1.6-1.7 W/m^2 when taking all relevant factors into consideration. The figure below outlines these forcings.3

These climate forcing numbers result in a CO2 equivalency of approximately 374.9 ppm to 382 ppm (very similar to the concentration of atmospheric CO2 at the time). The new CO2 equivalency numbers drop significantly due to the inclusion of the negative forcing influence assigned to aerosols, clouds and surface albedo among other elements. Unfortunately since the publication of the 2007 IPCC report new empirical evidence has re-evaluated the forcing influence of aerosols calculating a lower than previously thought negative climate forcing.4 Also new information has been discovered regarding clouds and the sustainability of their impact on climate forcing. Similar to aerosols, clouds provide a negative climate forcing which reduces the overall rate of increase in surface temperatures; however, this new information suggests that as sea surface temperatures increase low-level stratiform clouds decrease in both size and frequency.5 Thus the influence of clouds at reducing the severity of climate change is reduced as temperatures increase, so the influence of clouds will significantly wane over time.

In addition to the loss of influence from aerosols and clouds, surface albedo both on land and on sea, especially sea, have been taking a beating in recent years reducing their influence on limiting the rate of climate change. Finally logical intuition when viewing current empirical evidence suggests a higher atmospheric CO2 equivalency than a value equal to the current atmospheric CO2 concentration. For example the rate of ice melt in the Arctic, Greenland, Western and even Eastern Antarctica significantly eclipse the predictions made in the IPCC 4th Assessment Report, which suggests either incorrect assumptions regarding climate forcing or the exclusion of a significant factor influencing climate change in a negative (temperature increasing) way. With the size of most of the error bar associated with previous climate forcing calculations, the first option seems more probable. Overall with such rapid and negative changes to the climate everyone better hope beyond hope that CO2 equivalency is in the 400s and not the 300s, otherwise the situation is much worse than anyone previously thought.

With all this said there are a number of people that believe the target of 350 ppm is unrealistic in that humans do not possess the necessary tools and/or determination to accomplish such a goal and that humans are better off preparing for a world that has a greater average temperature of at least 2 degrees C. Proponents counter with claims that a phase out of coal in the next 20 years and aggressive anti-deforestation and reforestation programs would go a long way to reaching the 350 goal at modest costs. Unfortunately for the 350 ppm proponents the real failure in achieving maintenance of a familiar ecosystem and environment may not come from a failure in human will, but instead a failure in tactics based on inaccurate information. The chief concern is that improper tactics are being suggested to reach a goal due to incomplete information based on the warming trend.

There are two crucial elements pertaining to the probability of achieving a specific ceiling and stabilization of global surface temperatures: the climate sensitivity of the Earth and the atmospheric concentration of CO2 and other greenhouse gases. Climate sensitivity describes how the surface temperature changes in response to a stabilized doubling of atmospheric CO2. The reason climate sensitivity is important is it tries to provide a direct correlation between surface temperature and changes in CO2 concentration. Basically climate sensitivity describes the influence of greenhouse gases on temperature change. In 2007 the IPCC 4th Assessment Report defined the range of climate sensitivity between 2 and 4.5 degrees C.3 For 350 and other temperature ceiling movements such a range should be troubling because the lower range was raised by 0.5 degrees C from the IPCC 3rd Assessment in 2005 which defined climate sensitivity between 1.5 and 4.5 degrees C,3 in only a few years the estimated lower floor jumped 33%.

The primary means of deducing climate sensitivity is correlating known temperature change trends in the past with changes in atmospheric CO2 concentrations. The best historical data comes from the Last Glacial Maximum because of the size and accuracy of the temperature and CO2 concentration shifts. For example during the Last Glacial Maximum CO2 concentration where approximately 180 ppm vs. 280 ppm for typical pre-industrial times and the 386-388 ppm that current exist.6 Average surface temperatures dropped 7 degrees C in relation to this CO2 concentration which generated a climate sensitivity of 11.2 degrees C.6 Despite this number most climatologists consider it flawed due to questions surrounding how feedbacks like existing sea ice, clouds and water vapor with other particulates were factored in its calculation. Most believe that these feedback elements were more pronounced during the Last Glacial Maximum then they are now which significantly reduces climate sensitivity in the present.

Overall the most widely accepted value for climate sensitivity comes from Charney who calculated a climate sensitivity of 3 degrees C when incorporating fast feedbacks.7 Unfortunately this calculation assumed an instantaneous doubling in CO2 with no surface changes. Eliminating any surface changes limited the accuracy of the calculation. Hansen et Al.1 used paleoclimate data when including slow surface albedo feedback while assuming a first order relationship for the area of surface/sea ice as a function of global temperature to calculate a climate sensitivity of approximately double Charney’s calculation (6 degrees C vs. 3 degrees C). Normally such a calculation would not be a huge deal because slow feedbacks operate over centuries to millennium, but these operational ranges were only experienced through natural cycles, not with humans dumping hundreds of gigatons of CO2 into the atmosphere. Thus, it is difficult to rule out these slower feedbacks exerting an influence after decades instead of centuries. Empirical evidence especially demonstrates significance for these slower feedbacks because of the rapidly melting surface ice in the Arctic.

Determining a reasonable climate sensitivity is important because it is a principle element in how predictions are made regarding future changes in surface temperature and the overall climate in general. The principle elements that allow predictions on the future climate come from many different climate models and current empirical observations. Modeling the climate is incredibly complicated requiring thousands of different variables as well as the inclusion of hundreds to thousands of interactions between those variables to generate results that can even only be considered ‘in-the-ballpark’. The application of these interactions and variables creates a tremendous demand on time and energy for the computers involved in the modeling. Therefore, to ensure that the generation of a single result does not take weeks/months, certain elements are removed from consideration in the final results. In addition there are some gaps in knowledge regarding how certain variables interact with other variables and in an attempt to ensure some level of accuracy, these types of interactions are also removed or estimated as best as one can and modeled accordingly.

Unfortunately these omissions create inaccuracy in the ability of the model to predict how the climate will change relative to how it actually changes. It is in these omissions where most climate skeptics have attacked with the claim that because x model is potentially inaccurate then the very essence of climate change is wrong. Of course any rational person realizes that such claims are utter nonsense as all of the valid empirical evidence still demonstrates that climate change is occurring almost entirely due to the actions of humans and the lack of a completely accurate model, something that probably will never be generated in the first place, does nothing to taint that evidence. However, in the past few people have considered that the predictions made by climate models were incorrect on the other side of the coin, that they are underestimating the rate of climate change. Due to new empirical evidence, largely surrounding the much more rapid ice and glacier melt in the Arctic,8 more individuals are questioning whether the results of the 4th Annual IPCC report were inaccurate, predicting too slow of a surface temperature shift.

When predicting future temperature changes climate models tend to generate either a linear or a quasi-exponential change in the increase in average global air temperature over future years. For example after modeling four distinct scenarios of human action for the future, the 4th Annual IPCC report illustrated surface temperature changes as shown in the graph below.3

At first glance such predictions may seem practical based largely on how much CO2 and other greenhouse gases humans continue to emit into the atmosphere through future action. However, when considering all of the potential environmental feedback elements that could trigger during warming such results seems less and less plausible. The more noteworthy feedback factors that have a high probability of playing a role in additional future temperature increase include: increased water evaporation leading to more water vapor in the atmosphere,9,10 CO2 and methane release from melting permafrost,11,12 nitrous oxide release from peat sources,13 increased ocean albedo due to Arctic ice melt,3 new cloud synthesis or disappearance at different altitudes,5,14 increased rainforest dry season reversing sink to source behavior,15,16 and increased ocean temperatures resulting in conversion from sink to source. Although all of the previously listed feedback elements demand concern, permafrost melt and ocean out-gassing demand the most concern due to the sheer amount of CO2 that either process could eventually release into the atmosphere. Both of these problems have previously been addressed on this blog at the following links:

Permafrost: http://bastionofreason.blogspot.com/2009/08/permafrost-and-carbon-stores.html

Ocean Out-Gassing: http://bastionofreason.blogspot.com/2009/09/ocean-acidity-danger-and-remediation.html

It must be noted that the IPCC report identifies the potential inaccuracy in its conclusions due to feedback processes that were not included in the modeling. The decision to exclude most of the feedback information seems to stem from the lack of conclusive and accurate empirical information pertaining to those feedback processes. Basically the mindset of ‘some inaccuracy by not including feedback process A is better than gross inaccuracy through interpreting the feedback process incorrectly.’

Even though the potential inaccuracy is discussed, sadly enough it appears that increased water vapor was the only significant one attempted with varied results.3 A discussion was also given regarding the potential reduction of land and oceanic sinks due to surface temperature increases, but no direct comments regarding sink to source transformation were made. The inaccuracy of the IPCC used models and some of its conclusions have become quite evident most notably in the rapid pace of ice melt in the Arctic and new conclusions that the Arctic may be completely free of summer ice by only 2015-2020 instead of 2080-2100. The most unfortunate element in all of this seems to be the fact that most climate proponents themselves do not incorporate the potential feedback elements into their strategies with regards to limiting surface temperature increases to a certain boundary ceiling. Overall with the inclusion of feedback elements future average global surface temperature increases will more than likely follow a more severe trend than shown in the above graph.

The assumption of a more severe trend in temperature warming finds support when one considers the influence of the ocean in the carbon cycle. In large respects the ocean can be viewed as a dynamic replenishing buffer of some sorts. Various denizens of the ocean, most notably phytoplankton, are able to absorb CO2 either directly from the atmosphere or in the ocean for photosynthesis. When these organisms die, the CO2 that was used in photosynthesis is typically confined to the bottom of the ocean in sediment. After confinement to sediment the capacity of the ocean to absorb CO2 increases. In short due to the interaction of oceanic organisms the ocean is able to continually and consistently increase or at least maintain its ability to draw CO2 from the atmosphere.

Unfortunately buffers can only neutralize pH changes to certain concentrations. When a counter-agent (acid or base) is added at a high enough concentration the buffer collapses and the pH shifts. Such is also true for the ocean and its ability to absorb CO2. As the concentration of CO2, largely due to human driven activities, increases the ocean continues to absorb that CO2, but the rate of absorption is faster than the action of the pathway responsible for burying CO2 in sediment. Thus, concentrations of CO2 in the ocean build-up both by reducing the ability of the ocean to absorb further CO2 from the atmosphere as well as decreasing the efficiency of the CO2 removal pathway by limiting the available organisms responsible for that CO2 removal. The number of organisms is limited due to increases in acidity which result in less available calcium carbonate for certain food chain critical organisms to construct calcium carbonate infrastructure. When these creatures, like coral, are unable to create calcium carbonate shells it negatively affects large portions of the oceanic food chain including organisms that aid in CO2 removal. Eventually this process will conclude at a concentration equilibrium point where the ocean will no longer be able to absorb CO2 from the atmosphere eliminating its CO2 sink capacity.

Now while the loss of the ocean as a sink is bad enough, there is a very real possibility that the ocean will eventually become a source for increasing atmospheric CO2 instead of a sink. Most of the warming due to the excess CO2 in the atmosphere has not occurred on land, but in the ocean. This warming is important because gas solubility in a liquid decreases as temperature increases because increasing temperature increases available kinetic energy which increases molecule movement. Greater molecule movement increases the probability of bond breaking which reduces the ability of the gas to remain in solution. Therefore, as the ocean continues to warm its maximum capacity for CO2 storage in a dynamic equilibrium with the atmosphere will decrease causing it to release CO2 into the atmosphere until it is able to establish a new lower storage equilibrium. Although it is unclear how much CO2 could be released as a result of a negative gas solubility shift in the ocean, the fact that the ocean has increased in CO2 concentration by 118 +- 19 gigatons in the last 200 years17 and absorbs approximately 8-10 gigatons of CO2 a year from the atmosphere paints a dreary picture. Overall although out-gassing would be horrible, the loss of the ocean as a CO2 sink would be far worse over the course of decades.

Tie in the feedback resultant loss of the ocean as a CO2 sink with the potential of out-gassing to the prospect of a continual release of CO2 and methane from the potential 1,672 gigatons of carbon storage load in permafrost18,19 and those two feedback elements alone could create a huge shift in surface temperatures regardless of what humans emit in the decades to come.

Suppose one rejects the above contention of rapid severe warming due to these feedback effects? Even if such warming is rejected and such a rejection turns out to be correct in reality, those wishing to hold temperature increases at a ceiling of 2 degrees C still have the problem of ‘backwash warming’, warming that has yet to catch up with the influence of the current level of climate forcings. Basically the amount of climate forcing that has currently been applied to the environment has not been fully compensated for through change in average surface temperature largely due to slow feedbacks. That is to say that if all human based CO2 emissions were ceased tomorrow, the average global temperature would still increase another x degrees. Although it is not clear how much actual warming will occur through this ‘backwash’, Hansen et Al.1 estimate an additional global temperature increase of approximately 1.4 degrees C. Add that increase to the current increase from pre-industrial times of 0.6 to 0.9 degrees C (depending on what track information is used) and an increase of 2 degrees C is extremely probable regardless of what actions humans take. The graph used by Hansen et Al.1 to illustrate this additional future warming is shown below.

However, regardless of these concerns there is still time to successfully derail significant climate change, but only if the proper strategy is taken. Although the hot topic, the more trendy and popular geo-engineering strategies are unlikely to prove useful in short-term because of two significant flaws. First, they do relatively little, if anything, to alter the concentration of CO2 in the atmosphere instead they work to mask some percentage of the warming driven by this CO2 concentration. Second, they do nothing to change the concentration of CO2 in the ocean, which maintains ocean acidity and limits the ability of the ocean to remove CO2 from the atmosphere. Therefore, if geo-engineering is to be utilized the strategy must attack one of these two issues otherwise it would lack usefulness. Strategies like reforestation or bio-char would be useful, but would also fall far short of drawing out the required CO2. Also it is unlikely that exportation of CO2 into the upper atmosphere and eventually space would prove useful or even viable.

Reduction or mitigation of future emissions is an important element for limiting the total amount of temperature increase, but it is clear that the governments of the world are unwilling to create the cuts that allow mitigation to be an independent strategy that lacks further technological intervention. Currently despite the cries and curses from the environmentalist moment, it is unlikely that enough viable trace/zero emission energy can be generated to compensate for the draw down from coal and natural gas at the speeds required. Also regardless of how some environmentalist spin it, like Joe Romm of Climateprogress, China issuing a non-binding pledge to reduce carbon intensity is rather meaningless because reducing carbon intensity (with the economic growth still to available for China) instead of doing nothing is like getting a 32% on a test instead of a 19%, it is still failure. As it currently stands if the required cuts to avoid significant increases in surface temperature (2-3 degrees C) were to be made it would be a significant detriment to the overall global economic output due to less available energy. The energy gap that is created through emission mitigation for the United States was previous discussed in detail here:

http://bastionofreason.blogspot.com/2009/07/emission-adherence-in-2020-and-2030.html

So if mitigation is not occurring rapidly enough and generic geo-engineering tactics are basically worthless, what is to be done? The principle action beyond mitigation must be to draw CO2 out of the atmosphere via technological means. Technology must be harnessed solely because natural methods are just not fast enough. Not only are current carbon sinks becoming compromised due to current warming,20 but it is highly unrealistic that enough trees can be planted in the near-future to enhance land sink capacity especially when REDD, the most promising anti-deforestation proposal, has yet to expand in any significant capacity. Soil strategies using various tilling methods or bio-char may increase sink capacity by very minute amounts, but nothing to the level that is required. Thus, technology must be used.

In short all research funds that individuals want direct towards point-source carbon capture (a.k.a. clean coal) must instead be directed to non-point-source carbon capture (a.k.a. air capture). This blog has previously discussed the outstanding concerns with air capture and they are significant, but realistically the only way humans stop an increase in average surface temperature of even 3 degrees C without a miracle occurring is a combination of reducing carbon emissions and some form of air capture. Finally the development of a technology that could draw CO2 from the ocean would be an exceptionally useful tool in furthering mitigation by increasing the sink capacity of the ocean.

Overall the environmentalist movement needs to shift gears; it is somewhat humorous in that its members vent frustration at the portrayal of the question of global warming like it is a legitimate debate, yet these same individuals do the same by continuing to talk to species annihilators (global warming deniers) in a context of trying to convince them. At this point in time the debate is over; anyone who believes that humans are not the driving force behind climate change will not change his/her opinion regardless of what facts and evidence are highlighted, it is not worth wasting more time trying to convince them. The only thing that will convince these individuals are negative climate events that directly affect them, nothing which can be provided by environmentalists. In addition further discussion and proposition of foolish and inefficient boycotts of high emitters bad guys like Exxon should cease because truly such a strategy would be ineffective and just take time away and personnel away from more meaningful and effective endeavors. Instead it is time to move into research and innovation mode.

Solutions and strategies need to be prepared for when they are needed in the future. An honest assessment of what energy technologies will be needed to replace coal and natural gas will need to be identified. Just a quick note for those wind supporters, wind will not even come close to providing the necessary energy for global growth or even growth in the United States, especially if wind speeds continue to fall. Is nuclear really that expensive, preventing its widespread adoption, or is the expense only contingent on using 2nd generation technology over 3rd or 4th generation? What new energy strategies will need to be researched? There are many more questions beyond the few mentioned above that demand discussion and attention. Also these discussions cannot be broad based with weak statements like ‘oh all sorts of trace emission energy sources like wind, solar, nuclear and geothermal will be needed for the future’. No, these discussions must be full of details and specifics, so businesses and researchers know exactly what the future markets demand and expect.

In the end although mitigation is important, remediation is also important because the environment has reached a point where nature cannot restore the balance on its own. There are important questions to be asked regarding remediation and it is time for the environmental movement to start focusing in on those questions rather than lamenting or championing the latest meaningless poll regarding the public’s view of global warming, clean energy or whatever else is the subject of the poll de jour.

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1. Hansen, James, et, al. “Target Atmospheric CO2: Where Should Humanity Aim?” The Open Atmospheric Science Journal, 2008, 2, 217-231.

2. Tans, Pieter. NOAA/ESRL (www.esrl.noaa.gov/gmd/ccgg/trends)

3. Climate Change 2007: Synthesis Report. Intergovernmental Panel on Climate Change.

4. Myhre, Gunnar. “Consistency Between Satellite-Derived and Modeled Estimates of the Direct Aerosol Effect.” Science. June 18, 2009. DOI: 10.1126/science.1174461.

5. Clement, Amy, Burgman, Robert, and Norris, Joel. "Observational and Model Evidence for Positive Low-Level Cloud Feedback." Science. July 24, 2009. 325: 460-464. DOI: 10.1126/science.1171255

6. Kohler, Peter, et, Al. “What caused Earth’s temperature variations during the last 800,000 years? Data-based evidence on radiative forcing and constraints on climate sensitivity.” Quaternary Science Reviews. 2009. 1–17. doi:10.1016/j.quascirev.2009.09.026

7. Charney J. “Carbon Dioxide and Climate: A Scientific Assessment.” National Academy of Sciences Press: Washington DC 1979. 33.

8. Hawkins, Richard, et, Al. “In Case of Emergency.” Climate Safety. Public Interest Research Centre. 2008.

9. Santer, B, et, Al. “Identification of human-induced changes in atmospheric moisture content.” PNAS. 2007. 104: 15248-15253.

10. Dessler, A, et, Al. “Water-vapor climate feedback inferred from climate fluctuations, 2003-2008.” Geophysical Research Letters. 2008. 35: L20704.

11. Åkerman, H, and Johansson, M. “Thawing permafrost and thicker active layers in sub-arctic Sweden.” Permafrost and Periglacial Processes. 2008. 19: 279-292.

12. Jin, H.-j, et, Al. “Changes in permafrost environments along the Qinghai-Tibet engineering corridor induced by anthropogenic activities and climate warming.” Cold Regions Science and Technology. 2008. 53: 317-333.

13. Dorrepaal, E. et, Al. “Carbon respiration from subsurface peat accelerated by climate warming in the subarctic.” Nature. 2009. 460: 616-619.

14. Booth, B, et, Al. “Global warming uncertainties due to carbon cycle feedbacks exceed those due to CO2 emissions.” Geophysical Research. 2009. 11: 4179.

15. Cook, K, and Vizy, E. “Effects of Twenty-First Century Climate Change on the Amazon Rain Forest.” Journal of Climate. 2008. 21: 542-560.

16. Phillips, O, et, Al. “Drought sensitivity of the Amazon rainforest.” Science. 2009. 323: 1344-1347.

17. Sabine, C, et, Al. “The Oceanic Sink for Anthropogenic CO2.” Science. 2004. 305: 367-371.

18. Schuur, E, et Al. “Vulnerability of permafrost carbon to climate change: Implications for the global carbon cycle.” BioScience. 2008. 58: 701-714.

19. Tarnocai, C, et Al. “Soil organic carbon pools in the northern circumpolar permafrost region.” Global Biogeochemical Cycles. 2009. 23: GB2023.

20. Canadell, J, et, Al. “Contributions to accelerating atmospheric CO2 growth from economic activity, carbon intensity, and efficiency of natural sinks.” PNAS. 2007. 104: 18866-18870.

Revisiting the Energy Gap - McKinsey Report Update

For the original energy investigation go to:
http://bastionofreason.blogspot.com/2009/07/emission-adherence-in-2020-and-2030.html

With the recent release of the McKinsey and Company report, “Unlocking Energy Efficiency in the U.S. Economy” regarding the total efficiency potential for energy savings and emission reduction in the United States, it would prove useful to apply information obtained from this report to the previously analyzed issue of electricity shortfalls when meeting the current emission standards set forth by the ACES.

The McKinsey report hypothesizes a maximum savings of 9.1 Quadrillion BTUs (2.667 billion MW-h) of total energy if all of the efficiency projects proposed are successfully undertaken and completed.1 These efficiency savings are estimated to reduce annual CO2 emissions by up to 1.1 to billion tons (gigatons).1 From that total approximately 40.87% of those savings are from the electricity sector. Most of the remaining savings are somewhat inconsequential from an electricity standpoint due to the fact that they are derived from sectors that are capped under the ACES, therefore, those reduction would occur anyways. The only real advantage in these sectors, but it is a big one, is increased efficiency will involve significantly lower costs than other reduction mechanisms. One could argue that efficiency also has an advantage in speed of reduction (overall emissions are reduced faster through efficiency measures instead of other avenues), but the overall significance of this speed would only account for at a small elimination of future atmospheric CO2 concentration.

The total savings from electricity can be divided into two different sectors, those that influence the down-slope of demand and those that influence the up-slope of demand. The down-slope of demand refers to total reduction in electricity use by existing infrastructure. The reason the term ‘down-slope’ is utilized is because the electricity curve itself is flipped with the application of efficiency, instead of going up it begins to go down. The up-slope of demand refers to the total reduction in electricity use required by future infrastructure. The reason the term ‘up-slope’ is utilized is because electricity required by future buildings at best can only be reduced to 0 MW-h (if all of the electricity is provided by a self-generated non-emitting source), but it is improbable to conclude that all future infrastructure will meet this condition. Therefore, no matter how great the efficiency improvement to the new buildings, there will be an increase in electricity demand; efficiency cannot change the direction of the demand slope for new infrastructure, it can only reduce the slope of the increase.

So assuming that all of the efficiency alterations are deployed by 2020 as suggested by the McKinsey report, it would result in a total savings of 1,020,000,000 MW-h on the down-slope of demand and 70,000,000 MW-h on the up-slope of demand. Note that assuming all efficiency alternations it is a very improbable assumption as pointed out by the McKinsey report, the breadth of the improvements cover over 100 million buildings of private, local, state and federal level and billions of appliances and electronic devices. Thus, this upper limit proposed by the McKinsey report must be regarded as the best possible, albeit remarkably unlikely scenario. However, even if this is the best-case scenario the probability of its occurrence at this point in time is so unlikely that it cannot be seriously projected. Instead it can be viewed as a target point for savings from all existing infrastructure to be attained at some point in the distant future. 50% of this best-case scenario was assigned as the 2020 efficiency and was applied to the current model. The point of this update is to identify how this 50% best-case scenario would influence the required electricity growth in trace/zero emission and natural gas providers instead of based efficiency savings on projected electricity estimates.

The only major change is the incorporation of the proposed electricity reduction due to efficiency upgrades. The 2007 to 2020 electricity demand curve remained the same as in the previous study with the addition of the predicted up-slope demand from McKinsey subtracted from each scenario. The 2020 to 2030 electricity demand curve was divided into the low, medium and high scenarios estimated by the EIA, similar to the previous study, with an additional 12% reduction, pertaining to the percentage of total electricity reduction in the total energy reduction. Basically because only 50% of the maximum efficiency reduction was assumed for existing infrastructure leading to 2020, the 12% is representative of further efficiency deployment in the existing infrastructure. All other assumptions and details not directly pertaining to efficiency remain the same as described in the advanced energy gap model posted here:

The results from the 2007 to 2020 analysis are shown below.

Obviously there are significant reductions in both natural gas growth rates and rates of coal loss due to the reduction in electricity demand brought on by efficiency increases vs. most of the results from the percentage efficiency investigation. In fact the reduction in electricity demand is so great when considering a low expectation demand increase and when utilizing 06-07 renewable growth rates that no natural gas increase is required to bridge the gap created by the loss of coal. Instead the coal loss comes straight from the reduction in electricity demand instead of the direct need to adhere to the emission cap. This result may initially be surprising as even if the entire reduction portfolio described in the McKinsey report is executed, the 2020 emission cap is not obtained, so how can only execution of ½ of that portfolio meet the cap? Recall that emission reduction is not solely attributed to the realm of electricity, but reductions will come from other capped industrial sectors and the transportation sector. Also the coal values are slightly smaller than can be attributed to the reduction in electricity demand because there is a natural transfer from coal to less emission intensive electricity providers that exists outside of electricity demands.

The results from the 2030 analysis are shown below.

The reduction in rate of natural gas from all of the possible scenarios is typically lower than the rate calculated from all efficiency percentages in the previous investigation with the exception of the 100% efficiency. The reason for this result seems more tied to the rate of efficiency application then the total amount of application. That is the results seen here are typically better than the results seen in the previous percentage investigation not because of the overall electricity savings, but because a large majority of the electricity savings due to efficiency is attained in by 2020 whereas in the previous investigation the efficiency deployment was linear instead of forward leaning. Also the required wind growth rates are still considerably large which is troubling because of the continuing dependency of wind deployment on government subsidies to drive growth. The reason required wind growth rates are higher in the analysis vs. the 100% efficiency previous investigation is simply because in the 100% investigation a larger reduction in electricity demand was realized.

One may suggest that the wind growth rate in a given situation can be reduced by increasing the natural gas growth rate because of the reduced electricity demand. However, this is not plausible because recall that in the model coal derived electricity production falls to 0 by 2030, thus there is no coal to neutralize the increase in emissions generated by natural gas. Overall by 2030 when not using excessive amounts of offsets, the emission cap becomes the limiting factor determining electricity production, not electricity demand.

Using the previously predicted renewable growth rates and transportation emission reductions in conjunction with the efficiency deployment of this investigation, the results for the 2020 and 2030 analysis are:

Clearly the results demonstrate that these efficiency savings exceed the anticipated efficiency savings of the previous anticipated investigation, with lower natural gas growth and decline rates. This result simply re-enforces the obvious point that the more efficiency projects that are incorporated into existing infrastructure the less capital will be required to expand natural gas infrastructure and can be instead diverted to trace/no emission electricity providers.

Unfortunately the sad state of affairs is that even though only ½ of the total prospective savings projected by the McKinsey Institute was applied for this study, that result is still relatively improbable. The question comes down to why does it appear so difficult to do something society knows how to do and it would be rational to do?

Residential –

Aside from obvious informational issues (how to go about increasing efficiency in the first place), there are two main obstacles to increasing energy efficiency in the existing residential sector. First, the payback rate is rather slow, especially for those that do not use a lot of energy. The payback rate is dependent on the total amount of energy used, but the costs associated with applying the new efficiency measures are relatively fixed. Therefore, increasing energy efficiency is not very attractive to those that do not use a lot of energy because a 500-5,000 dollar investment may take over a decade before breaking even and may not make more than 5,000-10,000 dollars over the lifetime of the house. Also the investment depends on remaining within the improved residence for a significant period of time to recoup on the investment. The lifespan of the house vs. the payback rate is a significant problem. Although it is good for the planet, as a means to make money the slow rate of return reduces incentive.

The above obstacle can be best illustrated in the following example. Suppose Person A offered Person B either 1000 dollars right now (the investment for increasing energy efficiency Person B’s home) or 150 dollars per year over 10 years (the savings from the increased energy efficiency of Person B’s home), which offer has the higher percentage of acceptance by Person B? If psychological behavior from lottery winnings, (a very similar situation), reveal anything, Person B would select the first option an overwhelming amount of the time. The problem is although the second offer yields more money, the time required for its allocation makes it seem smaller. Also the 1000 dollars is concentrated which allows an individual more versatility in how it is spent, whereas the 150 dollars per year has limited options.

Second, the overall ability or incentive to make efficiency changes is an obstacle. This obstacle can be divided into two parts. First, for the wealthy the prospect of saving money through efficiency changes typically does not seem worth the investment or the aggravation involved in the installation of the new infrastructure. Rather it is easier to pay the extra 300-1500 dollars per year in energy costs than to go through the hassle of buying new appliances, installing new insulation and other home improvements. Second, for the less wealthy the prospect of saving money through efficiency changes may not be viable because of inability to afford the fixed price of making the change. Unfortunately the slow rate of return also hurts lower income households when it comes to efficiency changes because it limits the ability to make piecemeal changes using the money saved from one improvement to fund a second efficiency improvement and so on. Another concern for lower income households is the aforementioned total profitability in that it is reasonable to conclude that most lower income households do not use a lot of energy because they cannot afford to do so, both due to limited allocation of energy funds and the lack of funds to create three television, two computer and cappuccino maker homes, which would demand more energy. Thus, with lower energy use not only is the total rate of return slowed, but so is the total amount of money that efficiency investments will yield.

Although this low energy use may not so cut-and-dry because it is plausible to suggest that some lower income household unwittingly use more energy than some higher income households due to inefficiencies in heavily outdated appliances and other electrical items due to cost constraints. Overall in the long-term energy efficiency is definitely viable, but there must be considerable personal motivation to pull the trigger, basically one must care about the environment over any financial incentives. Unfortunately it is likely that those that have such a mindset and have the proper information regarding how to apply these efficiency measures have already done so, limiting the total viability for future changes. Therefore, unless the government steps in and directly or indirectly funds efficiency programs at a greater level of both capital and awareness, it is highly unlikely that a significant amount of efficiency savings will come from the existing residential sector. It is currently unlikely that any other methodology to drive efficiency incentive will work despite efficiency improvements actually being cost negative.

Commercial –

It is highly probable that the greatest level of success in applying increased energy efficiency will come from the commercial sector. The two biggest reasons for this anticipated success is first a greater anticipated rate of return due to shear energy use and second less total unique units that have to be improved. The first reason is important because a faster rate of return not only provides a greater incentive to initiate the improvement, but also allows for a greater ability to work from a piecemeal methodology, thus reducing the initial capital expenditure required for an increase in efficiency. However, due to area constraints, it is highly probable that initial costs would also be higher for commercial infrastructure. For example instead of 1000 dollars now or 150 per year for 10 years, the proposal would be 1200 dollars now or 210 per year for 10 years. The second reason also relates to the higher energy use in that to save x MWh one may have to apply efficiency improvement to 26 homes vs. 1 commercial building [based on the total divergence of efficiency changes that are available].1

The future of the residential and commercial sectors is a different beast entirely largely because of the new federal guidelines that exist in the ACES. If passed as is, the ACES would set national standards for both future residential and future commercial buildings, which would eliminate the problem of incentiving, for the efficiency improvements would be incorporated before sale. The prescribed efficiency codes are documented in Section 201 of the ACES.

The ACES proposes initial baseline standards correlating to the efficiency requirements in the 2004 ASHRAE Standard 90.1 and 2006 International Energy Conservation Code (IECC) code for the commercial and residential sectors respectively. Although some seem to unrealistically believe that all the DOE has to do is snap its fingers and new policy will both be enforced and executed, this is hardly the truth. Clearly there will be some delay between both the date of discussion and agreement and the date of agreement and enforcement. For example a 30% reduction from the baseline is supposed to be the target set immediately after the passage of the ACES. However, enforcement will not begin immediately despite the target being law immediately. Instead it will take anywhere from 1 to 2 and a half years before one can expect 100% of new buildings to abide by the new target code. The reason for this delay is that under subsection c: State Adoption of Energy Efficiency Building Codes – states could drag their feet for up to a year before enforcing the standards put forth on a given target date under Section 201. Also there are questions regarding enforcement issues on a national level and how they transfer to this one-year state grace period (is it consecutive or concurrent?). Thus, it is easy to overestimate the amount of energy saved from new buildings under these guidelines. [Note that this issue does not pertain to the estimates made by the McKinsey Report referenced above because they do not appear to include policies put forth by the ACES in their analysis.]

The biggest problem stemming from improving the energy efficiency of new buildings is that these improvements typically increase the capital costs associated with constructing the buildings, thus forcing the builders to increase the selling price. Price gouging due to forced inclusion from legal standards could account for an additional unanticipated increase in price. For example suppose the new regulations demanded an additional 50 square feet of insulation be installed in all new homes from currently existing standards to meet the new energy reduction standards. It is too idealistic to believe that insulation manufactures and provides will not gleefully raise their price in response to the greater required demand. These prospective price increases will then make most affordable housing less affordable. Therefore, the issue of increasing new home and other commercial building prices due to improved energy efficiency infrastructure will have to be addressed.

Overall this new addendum to the previous energy study illustrates both the benefits of increasing efficiency deployment, the pertinent obstacles to deploy a significant efficiency program to achieve these benefits and the fact that despite the benefits of efficiency, trace/zero emission technologies will still require a significant amount of growth for future energy demands. The biggest issue in aiding efficiency savings involves the development of an incentive type program that does not involve the government directly footing the bill. The problem with the government footing the bill is that due to the economic downturn, the national debt is already set to spike and further handouts for things individuals should already be doing is unacceptable. Ideally a price signal involving the increase in electricity price would serve as the proper motivating factor; however, Congress appears determined to limit any significant change in price signal in the short-term. Therefore, the best option would most likely be specifically targeted very low interest governmental loans given for the purchase of improving efficiency. Hopefully individuals and corporations can push forward in the pursuit of higher efficiency goals reducing the already daunting future requirements for electricity and energy generation under a future emission cap.

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1. "Unlocking Energy Efficiency in the U.S. Economy." McKinsey and Company. July 2009.
http://www.mckinsey.com/clientservice/electricpowernaturalgas/US_energy_efficiency/

Emission Adherence in 2020 and 2030 under the American Clean Energy and Security Act (ACES)

Revisiting the previous investigation of the ACES energy gap it was concluded that although the modeling and analysis itself was correct, an unrealistically high value was selected for the anticipated electricity demand, which generated a final conclusion that did not explore the entire range of growth possibilities. Therefore, it was important to conduct a second investigation using a greater range of anticipated electricity demands to generate more accurate expectations regarding renewable energy and efficiency requirements. This secondary investigation also adds an additional level of complexity by tracking emission and electricity generation expectations from 2020 to 2030 in addition to other more specific elements.

Recall from the previous analysis that the electricity generated from various sources in United States is shown in the table below. 1

* includes both Thermal and Photovoltaic
# all values are in MW-h;

Also recall from the previous analysis that it is logical to expect that a significant majority of the emission cuts in the United States will come from the transportation sector and the energy generation/use sector. The energy sector accounted for 53.6% of the total emissions in 2007 and 64.8% of CO2 emissions (3,902.3 million tons) and the transportation sector accounted for another 27.66% total emissions and 33.45% of CO2 emissions (2,014.4 million tons).2,3 Overall it would difficult to expect significant cuts from the agricultural sector not only because it is responsible for a lower percentage of emissions (most of these emissions being other GHGs, not CO2), but the emissions associated with the agricultural sector are more difficult to control than those in the transportation or energy sectors and most do not fall under any initial Phase of the ACES. In addition since the first energy gap post, reductions in agricultural emissions have become even less probable, especially leading up to 2020, due to certain concessions given to the agricultural sector to ensure passage of the ACES in the House.

General Analysis Assumptions –

The ACES is passed by the House and Senate as is (17% reduction of 2005 emission levels by 2020 and 42% reduction in 2005 emission levels by 2030)

The reason for this assumption is that the analysis must have an emission reduction target and the one provided by the ACES makes the most logical sense to use because it currently has the highest probability of actually becoming reality.

By a given target year, carbon emissions will be reduced to 100% of the cap.

What is the point of even conducting the analysis if the emission cap is not successful at reducing emissions? On the other side it is probably unrealistic to expect a significant emission reduction beyond the cap.

Economic considerations are ignored.

Initially one might view this assumption as unrealistic and irresponsible, but the purpose of this analysis is to identify possible solutions for bridging the energy gap while meeting the emission cap, not to investigate the most economically efficient solutions. In addition it is difficult to make cost estimates for certain energy sectors over a decade into the future due to changing technology and demands.

One of the biggest problems with ACES discussion is the economic distraction. So many people are debating about the total cost of meeting the caps they seem to forget the critical question is can the caps actually be attained in the first place and if so, what are the necessary expectations to do so? Economics are meaningless if the goal is not attainable because improper decisions are made.

No offset considerations were included in this analysis.

The goal of this analysis was to develop a strategy where one would have a level of rational confidence regarding the energy requirements for both the successful acquisition of the emission cap as well as bridging the energy gap. Offsets cannot be regarded as genuine emission reductions 100% of the time (in fact no one can really define even a genuine percentage for offsets although a range from 33 to 67% has been thrown around). Clearly due to this lack of certainty, inclusion of offsets would be counter-productive to a real analysis concerning the energy gap. Would the inclusion of offsets lessen the required growth for all other energy suppliers? It is highly probable that they would; however, it is difficult to determine an accurate assessment due to the lack of a defined percentage or even an estimate to how many will be purchased from now until 2020 or 2030; therefore it is not rational to include them in the analysis.

Emission reductions from the electricity generation sector will primarily involve reducing the amount of coal burned.

Coal is commonly regarded as the ‘dirtiest’ form of energy. For every 1 MW-h of coal approximately 1 ton of CO2 is released into the atmosphere whereas natural gas and petroleum only release 0.4-0.5 and 0.75 tons of CO2 per every MW-h of energy produced.4 Therefore, an optimized emission reduction scheme would remove the highest polluting entities first. Also petroleum only produces »1.5% of the energy in the United States, thus any petroleum cuts would be merger anyways.

Any changes in atmospheric methane, sulfur dioxide and nitrogen oxides (NOx) concentrations are insignificant.

This assumption is probably not very accurate because realistically it is highly probable that concentrations of methane and various nitrogen oxides will increase, but estimating additional requirements is not easily identified and could skew the analysis. Basically this assumption hopes for a favorable outcome with regards to other GHGs. Overall under all 3 early phases of the ACES a very small percentage of CO2 equivalent GHGs are capped;5 a measly drop in the bucket.

No Carbon Capture and Sequestration/Storage (CCS) technology is implemented.

The fact is that development of CCS technology is more than likely not going to provide any real benefit in the quest to reduce CO2 emission due to its low probability of success. Even if CCS technology is successfully administered in the near future it is unlikely to be incorporated into a significant number of coal derived electricity generation systems.

All reductions in the transportation sector come from either increased fuel efficiency or use of gasoline/biofuel blends where the biofuel is derived from an algae source.

This assumption is a little stretch, but a vast majority of the early reduction in transportation emissions is going to come from increased fuel efficiency and incorporation of gas/biofuel blends. Although hybrids, plug-ins and electricity vehicles have a significant amount of attention, until an automotive infrastructure supporting them is better established, it is difficult to conclude that their impact will be significant through widespread incorporation. Overall as determined in the previous analysis regarding reductions due to the White House’s new fuel economy policy, increases in electricity demands due to electric and hybrid cars would be small.


The analysis consisted of two parts. First, re-examining the information from 2007 to 2020 using more realistic anticipated electricity demands to determine the necessary natural gas growth rate to meet required energy needs as well as adherence to the emission cap. Second, extending the analysis from 2020 to 2030 to determine the required growths in renewable energy providers, especially wind, to meet required energy needs as well as adherence to the emission cap.

Based on previous information acquired both in the first energy gap analysis and the transportation analysis certain restrictions were placed on the possible scenarios applied to both portions of the investigation. For instance instead of utilizing three scenarios of transportation emission reduction (10%, 20% and 30%) like in the first analysis, this second analysis abandoned the 30% scenario for the 2020 analysis and the 10% scenario for the 2030 analysis. Therefore, only two transportation reduction scenarios were used in the investigation 10% and 20% for 2020 and 20% and 30% for 2030. The reductions were connected in logical succession for the second linked analysis, a 10% reduction in 2020 lead to a 20% reduction in 2030 where a 20% reduction in 2020 lead to a 30% reduction in 2030.

Once again the energy providers that were explored to fill the gap consisted of nuclear, wind, solar, biomass, geothermal and natural gas. It was assumed that there would be no significant growth in the petroleum or hydroelectric sectors. Petroleum was excluded because similar to natural gas, petroleum is not a trace/zero-emission energy provider so any increases would not result in a significant enough emission reduction vs. coal. Also petroleum only makes up approximately 1.5% of the total energy generation anyways so any increase or decrease in petroleum as a electricity provider to successfully adhere to the 2020 cap would be rather insignificant vs. the other reductions that have to be made. Hydroelectric was excluded because the overall growth rate of hydroelectric stations has pretty much peaked and energy generation has largely cycled within a range of 240,000,000 MW-h to 290,000,000 MW-h since 2000.1 Any tide based hydroelectric power was considered insignificant based on its growth potential and total electricity generation potential.

The 2020 and 2030 emission caps outlined in the ACES are 17% and 42% of the total carbon dioxide equivalent of 2005 identified in Section 721, subsection e, Part 2, Section A, subsection i of the ACES as 7,206 million tons respectively. Therefore, the emission cap would be 5,980,980,000 tons of carbon dioxide equivalent for 2020 and 4,179,480,000 tons of carbon dioxide equivalent for 2030.

In addition to the energy gap that is generated from removing coal and natural gas from the electricity grid to meet emission caps, it is reasonable to anticipate that additional electricity will be demanded for both 2020 and 2030. According to the EIA the electricity demand for 2007 could be averaged to approximately 3,904,400,000 MW-h.6 The EIA estimates low, average and high additional demand scenarios for 2030 where additional demand is approximately 16%, 26% and 36% respectively. From this information, assuming an 55%/45% ratio of progression from 2007 to 2020 vs. 2020 to 2030, additional demands were calculated and are shown in the table below.

Again due to the efficiency measures outlined in the ACES in addition to increased public awareness to the importance of efficiency different efficiency scenarios were explored for both the 2020 and the 2030 analysis. Five linked efficiency scenarios were applied to the investigation: 0% to 30%, 30% to 50%, 30% to 80%, 50% to 100% and 80% to 100% representing progression from 2020 to 2030.

The EIA low, average and high electricity demand scenarios are predicated on two elements. The demand required for existing infrastructure and the demand required for future infrastructure with weighting on the demands of future infrastructure. Most of the immediate reductions in electricity demand will come from efficiency applications to existing buildings and later be distributed to new buildings. However, although increases in efficiency will reduce electricity demand, it will not eliminate all of the electricity demanded by new infrastructure; therefore, it is reasonable to believe that from 2007 to 2030 the total electricity demand will not drop below 2007 levels.

In the report “International Energy Outlook 2009” the EIA estimates various growth trends for various forms of energy and fuels up to 2030 for a variety of countries including the United States. Using the growth estimates from this report and other available EIA information, will enough energy be generated to bridge the gap? From the information an annual growth rate from 2006 to 2020 can be estimated for wind, nuclear and geothermal.7,8,9 In the first analysis a biomass growth rate was assumed instead of calculated from prognosticated data. For this analysis a biomass growth rate was calculated from EIA projection estimates.6 Solar photovoltaic and solar thermal growth rates were also calculated, but because EIA information on 2007 electricity generation does not differentiate between the two the larger of the two calculated growth rates was used to model the growth of the solar power sector.10 Calculated annual growth rates were 8.165%, 0.65%, 2.94%, 6.71% and 11.17% for wind, nuclear, geothermal, biomass and solar respectively.

However, the annual growth rates calculated above are different from the growth rates that were experienced between 2006 and 2007 as shown in the first table. Most of the growth rates between 2006 and 2007 exceed those that are calculated from the long-term EIA estimations. The electricity generation potential of trace/zero emission sources was also examined using these growth rates. Recall in the first energy gap analysis that the continuation of a 29.56% annual growth rate for wind was viewed as unreasonable and a maximum hypothesized annual growth rate of 20% was utilized. Renewable growth rate scenarios were labeled as either standard (EIA estimates) or 06-07.

Inclusion of natural gas complicates emission adherence to the cap because natural gas is not a trace/zero emission source. Natural gas does release about a ton of CO2 per about 2.5 MW-h of energy generated (assuming the most efficiency energy generation process). In order to compensate for these emissions, a necessary step to ensure adherence to the emission cap in 2020 or 2030, a coal masking reduction rate of 20% was assigned. For instance suppose natural gas produces an additional 30,000 MW-h of electricity from year x to year y. That new electricity would produce 12,000 tons of additional CO2 emissions. Utilizing the aforementioned coal masking reduction rate, 20% of those new emissions, 2,400 tons of CO2, would be masked by removing an additional 2,400 MW-h of coal-generated electricity from the grid (coal generating approximately 1 ton of CO2 per MW-h). The coal masking rate of 20% was selected to create a controlled rate of decline in coal derived electricity production in order to limit the probability of potential brownouts.

In addition to the transportation and electricity generation sectors CO2 originates from other sources as well, especially manufacturing. In fact there are still approximately 1,600 - 1,700 million tons of CO2 (due to some overlap between sectors) that can be reduced from other sectors that eventually fall under the ACES cap during one of the three phases (Phase 1 begins in 2012, Phase 2 begins in 2014 and Phase 3 begins in 2016). Based on when a particular emission element fell under the cap, estimates of reduction were calculated from this group of emission elements for 2020 and 2030. For the 2020 cap it was assumed that 17% of the emissions would be reduced by 2020 if the sector was 100% capped under Phase 1, 12.5% if 100% capped under Phase 2 and 8.5% if 100% capped under Phase 3. For the 2030 cap it was assumed that 35% of the emissions would be reduced by 2030. The reason 35% was selected over 42% is it was hypothesized that it would be easier to make emission reductions in the electricity and transportation sectors over the manufacturing and other specialty sectors. Overall an additional 210,171,166 tons of CO2 were removed from these sectors in 2020 for the 2020 cap and 596,015,000 tons of CO2 were removed from these sectors in 2030 for the 2030 cap. The table below illustrates the total emission assumptions made for each sector from available cap information.5

* Values are in tons of CO2; Also the 2020 total is off by 1 due to rounding;

One of the primary goals of the analysis was to determine the minimum required growth rate for natural gas to cover the energy gap created due to adherence to the emission cap in the assigned scenarios. The results of the 2020 analysis are shown in the table below –

* Growth Rates are listed as annual growth rates pertaining to the time period between 2007 and 2020;
** NG Increase = % Increase in energy generated by natural gas utilized for electricity from 2007 levels; 100 = multiplying the 2007 amount (896,590,000 MW-h) by 2;

First, the scenarios are categorized as followed: [Efficiency; Renewable Growth Rates; Transportation Reduction; Anticipated Electricity for 2020]. Second, only four complete scenarios are listed in the table because the 30% efficiency scenario was repeated twice, in prospect for the 2020 to 2030 investigation. (30% to 50% and 30% to 80%);

As expected the required natural gas growth rate decreases as efficiency, transportation reduction or renewable growth rates increase. The optimal scenario generates a meager natural gas growth rate of only 1.80% whereas the worst-case scenario requires a natural gas growth rate of 10.99%. From a cursorily glance at the results transportation reduction appears to be the least significant factor influencing natural gas growth rate. The most influential factor appears to be the use of 06-07 renewable growth rates vs. standard as 06-07 rates generate 2-4% lower natural gas rates vs. standard when all other factors remain the same.

The initial lack of influence from the transportation reductions was surprising, so a specific breakdown analysis was conducted to identify how single percent changes in a given factor influenced the natural gas growth rate. The comparison was made between the transportation reduction rate per percent change vs. the wind energy growth rate per percent change. Wind was selected because outside of natural gas wind typically accounted for 60 – 85% of the new electricity generation from renewable sources in the investigation due to its large initial baseline (34,450,000 MW-h) and its large annual growth rate range (typically larger than all other growth rates sans solar which has a 56 times lower baseline). The only other relevant selection for exploration of renewable influence would have been nuclear and it is difficult to expect significant growth in nuclear in the coming decade. The results of this analysis are illustrated in the graphs below, the first one representing changes in transportation reductions and the second representing changes in the wind growth rate.

From the above information when broken down to a percentage aspect, transportation is slight more or slight less influential than the wind depending on the circumstances, although most of the time transportation is more influential. The reason the renewable growth rates appear to be more influential in the 2020 analysis is because the percentage range between different transportation reductions is smaller than the percentage range between wind growth values and there are other elements contributing to the renewable influence besides wind.

A somewhat troubling factor from these results was the rate of increase in natural gas electricity generation that will be required in the next decade. With the exception of the most favorable scenarios, most scenarios anticipated at least a 100% increase in natural gas requirements. Unfortunately due to the significantly high annual growth rates utilized in most of the favorable scenarios, these scenarios are not probable in reality. Another concern is that even at an efficiency of 80%, without significantly high renewable growth rates the required natural gas growth rate still ranges from 6.22% to 8.13%. The reason that such values should be a concern will be discussed later.

Finally looking at the rate of coal loss and the total amount of coal removed from producing electricity; the reduction rate of coal is important because despite what some may want to believe, it would be difficult to rapidly remove coal from electricity production without significant economic costs and rolling brownouts. Therefore, the optimal scenario solutions involve a reasonable reduction rate. Unfortunately it is difficult to ascertain what a reasonable reduction rate is, but something in single digits seems manageable.

In this vein it is important to look at the masking rate, which has a significant influence on the rate of coal loss. The graphs below document the influence of the masking rate on the natural gas growth rate under specific scenario elements. The baseline assigned for this investigation was 50% efficiency, 10% transportation reduction, Standard renewable growth rates and average anticipated future electricity demand.

* Note that the small hump before the equilibrium point is a visual error in the creation of the graph. The equilibrium point is the highest natural gas growth rate generated from the data;

The minimum required annual natural gas growth rate increases almost linearly with the masking rate until equilibrium. The equilibrium point occurs when all existing coal reserves utilized for electricity production have been expended. The reason the natural gas growth rate increases with an increasing masking factor is when coal is removed from electricity generation it increases the existing electricity shortfall, thus more natural gas needs to be burned for electricity to cover that portion of the gap. Granted the more natural gas that is substituted for coal the greater amount of CO2 emission reduction occurs, but the size of the emission cushion is irrelevant for this portion of the analysis. However, the cushion would play a role in aiding any future required emission reductions. Overall for the masking rate it was important to avoid generating an equilibrium value, but also select a value that would result in the reduction of enough coal to cover the natural gas emissions to adhere to the cap, thus why 20% was selected in the first place.

The second portion of the investigation was to identify the necessary elements to adhere to the emission cap of 58% for 2030 (or a 42% reduction from 2005 levels) and bridge the resultant energy gap. The analysis was conducted by stringing together a 2020 analysis to a 2030 analysis while assuming a natural progression in both efficiency and transportation. For example suppose a 2020 analysis scenario consisted of a 30% efficiency and 20% transportation reduction. In the linked 2030 analysis the efficiency would either be 50% or 80% with a 30% transportation reduction. In order to optimize the ability to meet the emission cap, all increased growth in natural gas stopped after 2020. An additional wind growth rate was assigned for the 2020 to 2030 time period. Assigned natural gas growth rates carried over from the 2020 investigation to the appropriate linked 2030 investigation. The design was facilitated so that all coal use in electricity production was eliminated by 2030. Note that realistically a 30% reduction in transportation 2007 level emissions is fairly optimistic.

The table below outlines the results of the 2030 portion of the analysis.

* Relates to the specific wind growth rate assigned between 2020 and 2030;
** Relates to the difference between the maximum amount of electricity generated from natural gas in 2020 to the amount of electricity generated from natural gas in 2030;

One thing that can be immediately recognized when looking at the results is the considerable difference in the natural gas reduction rate and the total remaining natural gas levels used for electricity production between the 20% and 30% transportation reduction scenarios. The primary reason that the transportation reduction factor has such a dramatically pronounced influence on the 2020-2030 reduction over the 2007-2020 reduction is the general lack of available coal.

During the 2007-2020 investigation there was plenty of coal that could be removed from the grid to contribute to the emission reductions required to meet the cap. In fact there was a total of 2.016 billion tons of CO2 that could be removed to meet a cap that demanded a reduction of approximately 1.301 billion tons (recall 2007 emission data is being used because it is the most relevant data to use). Replacing all of that coal with natural gas would generate a net savings of 1.2096 billion tons of CO2 meeting approximately 92.9% of the cap. Add in the 200+ million CO2 cut from manufacturing and any transportation reductions were technically not required, although they were important in the sense of complimenting the level of natural gas and renewable growth to cover the electricity lost from coal loss. However, during the 2020-2030 investigation 40-90% of the coal had already been removed from the equation, leaving most of the electricity-based reductions revolving around the reduction of natural gas. The difference between 20% and 30% transportation reduction is approximately 201 million tons of CO2. That difference is equivalent to 502.5 million MW-h of electricity produced by natural gas, which ranges from 19.5% to 214% of the total required additional amount of natural gas production in 2020 over the multiple scenarios, clearly a significant difference maker. Although transportation and other non-electricity emission reductions are important, again the size of renewable growth rates also play a role in controlling the natural gas reduction rate as using the 06-07 growth rates resulted in a 2-5% reduction in the required natural gas reduction rate.

Another conclusion that may seem unusual at first is the fact that at 100% efficiency all of the 2020-2030 wind growth rates are identical regardless of the assumed anticipated growth when the natural gas reduction rate was not 0%. This result occurred because at 100% efficiency all of the anticipated growth is eliminated, so the size of the anticipated growth is meaningless, therefore the required energy is equal to the energy lost from reductions in output from coal and natural gas.

The natural gas reduction rate is an interesting element because reducing the amount of electricity generated from natural gas is much easier than increasing the amount of electricity generated from natural gas. However, the higher the value of reduction the greater perceived economical consequences because the larger the required drop, the more radical the transition from natural gas to renewable energy which will result in a greater level of job loss and electricity interruption.

Another piece of useful information that was acquired from the secondary investigation is the importance of the 2007-2020 study on the anticipated natural gas reduction rate. For example when looking at the difference between the natural gas reduction rate in the 50% and 80% efficiency scenarios in the 2020-2030 analysis there is no difference. The reason for this lack of difference is because with all things remaining the same, the 30% efficiency scenario for 2007-2020 analysis that linked into the 50% and 80% 2020-2030 analysis established the same natural gas growth rate. In the first portion of the second investigation, natural gas and coal contributions to the grid were reduced to meet the emission cap. This reduction has nothing to do with increased efficiency because those reductions are required. Efficiency would only matter in this situation if said efficiency exceeded 100%. However, the efficiency did influence the resultant wind growth rate from 2020-2030.

A final point regarding the second portion of the investigation is that four specific scenarios actually generated a condition where no natural gas reductions were required to adhere to the both the energy requirements and the proposed emission cap. The reason for such a result is that emission reduction from non-electricity sectors was considerably higher than required due to the lower initial requirement of natural gas due to the high level of renewable growth in the 2007-2020 time period. In fact these scenarios actually demonstrated a significant reduction required wind growth due to the lack of natural gas loss.

All of the above investigations sought to generate a workable range of information pertaining to the relationship between any energy gap and the emission caps generated by the ACES. However, generating a realistic single scenario would go a long way to understanding what needs to be done, if anything.

For the 2020 portion of the specific analysis, based on the previous analysis regarding reductions in the transportation sector it is reasonable, albeit a little optimistic, to anticipate a 12.5% reduction in emissions from 2007 to 2020. Also due to increased efficiency it is reasonable to assume an anticipated electricity demand that is the average of the low and average scenarios provided by the EIA, which would require an additional 447,903,500 MW-h of electricity. Energy savings due to efficiency increases was assumed to be approximately 1.07 quadrillion Btus. Finally the same non-electricity and transportation reduction scheme that was used in the broader above analysis was used in this specific example (210,171,166 tons of CO2).

Annual renewable growth rates were typically estimated based on general trends. Wind was assumed to grow at 17%, slightly smaller than the previously estimated maximum growth of 20%, a value used in the 06-07 scenario of the above analysis. Solar was estimated slightly higher at 18% growth annually due to the much lower initial baseline of provided electricity; however, it can be argued that growth in solar power has far and away the largest possible standard deviation based on potential future costs. Overall an annual growth of anywhere from 10% to 35% would not be out of the question. Nuclear growth was limited to 0.8% due to the already high capacity rates of currently operating plants (90%+) and the trend that it is improbable that a significant number of new plants will be constructed and fully functional by 2020 due to the high capital costs and general lengthy construction times. Similar to the nuclear growth rate, increases in geothermal-based electricity were considered small, 1% annual growth, due to similar concerns over plant construction times and lack of attention because geothermal is not as hyped or flashy as wind or solar. Finally the growth rate for biomass was estimated at a conservative 2.5% due to concerns that significant new barriers to its expansion would be created with the reduction of co-firing in coal plants due to coal loss and questions about feedstock supply. Similar to solar, biomass is difficult to gauge because of its wide range of growth potential. The results for the 2007-2020 analysis using the above scenario assumptions are shown in the table below.

In a scenario that could very well be witnessed in reality, natural gas growth is manageable, but higher than most growth in the past, especially on a consistent basis. Recall that since 1996 until 2007 the highest year to year growth in natural gas as an energy source was 10.82% from 1997 to 1998.11 2006 to 2007 produced the second highest year to year growth with the previously illustrated 9.81%. In addition the future annual growth rate of natural gas from 2006 to 2020 can be calculated at 0.78% with 96.5% of that growth coming in the last 5 years (from 2015 to 2020).12 Also this growth requires a total natural gas volume of 7.01 trillion cubic feet be devoted to electricity generation, (4.04 trillion cubic feet more natural gas than used 2007), a result that will require a significant number of new national gas acquisition projects or considerable increase in natural gas importation. Remember that the 4.04 trillion cubic feet of additional natural gas is only applied for a single year, 2020. For most of the investigated scenarios, from 2010 to 2030 an additional 25-60 trillion cubic feet of natural gas will be required (this specific analysis required an additional 42.24 trillion cubic feet). One bright spot is the amount of coal loss is significant, but controlled at only 8.94% annually with a total reduction of 71%.

For the 2020-2030 portion of the specific scenario investigation, another 10.5% in reduction of transportation emissions was anticipated along with an efficiency which resulted in a savings of 2.94 quadrillion Btus or an additional 1.87 quadrillion Btus from 2020 to 2030. The non-electrical and transportation emission reductions were also carried over from the broad investigation.

Assuming no change in any non-wind renewable annual growth rates from 2020 to 2030, the results from the 2020-2030 investigation are shown in the table below.

Regarding the results of the 2020-2030 portion of the investigation, the natural gas reduction rate is manageable, but higher than desired. Unfortunately the biggest problem is the accelerated increase in the required annual wind growth rate to fill the energy gap. The reason this increase is a problem is outlined below.

The electricity demand from wind in 2030 in the most immediate analysis is 2,636,171,979 MW-h (approximately 76.5 times the amount produced in 2007). Based on the information provided by the EIA the total MW potential of wind power in the United States rose between 2006 and 2007 from 11,603 to 16,818. Using that information an average full potential of operation can be calculated at approximately 2170 hours per year or a capacity of 24.8%.

The largest wind farm in the United States is Horse Hollow Wind Energy Center in Taylor and Nolan Counties in Texas, which produces 735 MW of peak power from 421 turbines, covers a land mass of 47,000 acres or approximately 64 acres/MW.13 Using this information how much land and total capacity will be required to generated the anticipated wind derived electricity in the above analysis? First, it is reasonable to assume that wind technology will not remain stagnant, but will steadily improve. A 30% increase in turbine efficiency from now until 2030 seems reasonable with the ability to retrofit older models. With this increase the ratio of acres per MW drops to 49.19. Next assume that the average full potential of operation increases by 2% per year from 2007 to 2030 due to administration of offshore wind turbines and even the possibility of aerial suspended turbines capturing higher velocity winds more frequently. Even with those increases in efficiency and power generation, a total of 770.4 GW will still be required covering a total land area of 59,210 square miles to attain the required wind-based electricity in the above scenario, a result that falls far short of the extremely ambitious 300 GW scenario proposed by the EERE.14

The sobering reality of the above wind requirements leads to the obvious conclusion that clearly if significant reductions are going to come from the electricity generation sector other trace/zero emission renewables will need to be cultivated. Unfortunately as previously mentioned such a scenario does not look promising. One of the best options, nuclear power is struggling because of high capital costs, extended plant construction times and a lack of technological development in the United States due to continuing concerns about terrorism and nuclear waste. Biomass is a huge question mark. Solar could grow at 30% annually over the next two decades and still be a relative non-factor in electricity production (255,533,901 MW-h in 2030). Hydroelectric is pretty much tapped out outside of some small pickings made through tidal generation. Geothermal has potential, but may need new geological mapping and a lot more attention. Include in all that uncertainty the fact that support and mandates for renewable energy growth continue to be weakened with every new draft of the ACES and things do not look promising.

Another concern is the apparent competition between efficiency and renewable innovation and development. The ACES Section 782 subsection g allocates permits to go into a fund labeled the State Energy and Environmental Development (SEED) from which state and local governments can draw funds for efficiency and renewable projects. 20% of the SEED money must go to renewable energy programs and another 20% must go to energy efficiency leaving the remaining 60% to be allocated freely between the two. The question is why must funds be divided between one or the other, why not devote considerable funds to both efficiency and renewable energy innovation and development? Overall if competition is required, it appears that more funds should be distributed to renewable development over efficiency because although energy efficiency represents the quintessential ‘low-hanging fruit’ of emission reduction15, efficiency can only go so far and in later years renewable energy will be far more important and will take far longer to implement. It seems that too many people are thinking too short-term due to short-term economics, but that type of thinking created these emission issues in the first place. It appears more suitable to extend efficiency improvements by 3-5 years if that same time frame can be reduced from significant renewable development.

Returning to one of the analysis assumptions regarding offsets, what if offsets were used? Offsets would provide the ability to advance towards cap adherence while not contributing additional stress on the energy gap? The problem with offsets is that it is difficult to confirm whether or not they are genuinely reducing CO2 or other GHG levels as a number of sources have demonstrated their lack of reliability.16,17,18,19 So although one may argue that numerically offsets would significantly aid cap adherence while not increasing the potential energy gap, such an argument would be an exercise in futility because the Earth only cares if those offsets are actually working in reality, not just on paper and the whole point of the cap is to generate genuine emission reduction. Also it is difficult to hypothesize the number of offsets that would be utilized. Some argue that because of European infiltration into international offset markets for a number of years now, the available number of international offsets would be far and few between and those available would have significant costs.20 If this contention is correct that leaves a cap of 1 billion tons of domestic offsets per year for substitution. However, domestic offset opportunities have not been effectively isolated and classified in the detail required to make a firm assumption regarding how prevalent their stockpiles over the coming decade and how effective they would be at contributing to emission reduction.

Anti-deforestation based offsets are a different matter. Although there are some remaining problems regarding additionality of deforestation offsets, the ACES as currently structured does provide some elements that look to reduce deforestation. However, including emission reductions from deforestation against the cap can be a little tricky. Suppose in a given year 300 million tons of CO2 are prevented from being released into the atmosphere due to anti-deforestation efforts. How does this reduction play against the cap? It would be incorrect to continuously count these savings because deforestation is a single-time release event. Therefore, it would be proper to count such a savings against the cap in year increments as the total savings divided by the difference between the target year and the year of initiation in the particular savings program. For example if that 300 million tons of CO2 was prevented from release in 2012 then 37.5 million tons of CO2 could be counted off of the 1.2 billion tons of CO2 required for removal to adhere to the 2020 cap, if the 300 million tons are not counted all at once in 2012. Anti-deforestation measures are exceedingly important and should be pursued, but it does not appear that they will provide significant relief to cap adherence vs. energy gap creation and the necessary size of renewable growth rates through procedures in the ACES.

This perceived difficulty in meeting both the emission cap as well as the resultant energy gap might invoke an interesting, if not somewhat controversial strategy. One of the questions that can be asked after looking at the results of this investigation is whether or not the 2020 cap of 17% is a good thing? Previously it was argued that the cap was too weak, that it needed to be higher to generate the necessary momentum to carry into the more difficult 42% emission reduction demanded by the 2030 cap. However, the yo-yo effect of natural gas growth and decline seen in this analysis under most of the investigated scenarios casts doubt on the benefits of the 2020 cap. Rationally it does not make logical or economic sense to increase the electricity derived from natural gas by 75-300% (over a vast number of explored scenarios) over a 10-year period then do an about-face and decrease the electricity derived from natural gas by 67-95% from the 2020 high over the next 10 years after that. For example at 50% 2020 efficiency to 100% 2030 efficiency 10% to 20% transportation reduction with 06-07 growth rates at average anticipation, the rise and fall (yo-yo effect) of natural gas electricity generation is shown in the figure below.

Some may argue that the necessary end point infrastructure already exists, the natural gas plants themselves, and they simply function at a low electricity generating capacity due to the low costs of coal, which in time is neutralized by the ACES. Although this seems true, one must not forget about where the supply of natural gas to increase the capacity of those plants will originate. Currently, although it can be argued that through unconventional natural gas reverses the United States has enough natural gas to generate the necessary levels of electricity, most of those reserves have yet to be explored or tapped. Both exploration and tapping cost significant capital, capital it does not make logical sense to spend for only 5-10 years of operation where instead that capital can be spent on trace/zero emission electricity generation. Therefore, it may be worth considering eliminating the 2020 emission cap altogether as the cap itself is the only element that facilitates this natural gas yo-yo effect. Clearly such a decision needs to be weighed carefully.

In a scenario that eliminates the 2020 cap, the 2012 cap would be extended from 2012 to 2020 acting as almost like an 8-year grace period for various corporations, but ensuring no increase in emissions. After 2020 the dynamics behind the progression of the 2030 cap, which could be strengthened to something like 50% instead of 42% due to the grace period, would be enforced requiring greater emission reductions and harsher penalties for those failing to comply. Realistically it is highly probable to conclude that the emission reduction from 2012 to 2020 will not attain some form of equilibrium around 97% of the 2005 value, but will progressively fall due to the impending application of the 2030 cap because even though they could, it would not make sound business sense for corporations to do nothing over the 8 year period with a significant increase in reductions in the future. The scenario differs from business as usual because in the business as usual scenario there is no emission cap in the future. It would be reasonable to expect an emission reduction between 5-12% from 2012 to 2020, smaller than the current cap at 17%, but larger than the 3% cap at 2012.

Assuming that U.S. emissions in 2012 adhere to the 97% ACES cap and a linear decrease in emissions between noted cap years, the three tables below illustrate the differences in CO2 equivalent ppm contributions to the global environment from U.S. emissions from 2012 to 2030 in three proposed scenarios: Normal 2020 Cap and Normal 2030 Cap; 8% Reduction in 2005 emissions by 2020 and Normal 2030 Cap; 2012 Cap up to 2020 and Normal 2030 Cap;

So in the result of the scenario abandoning the 2020 cap in favor of extending the 2012 cap and no strengthening of the 2030 cap the total ppm difference is 1.164. In the passive reduction scenario the total ppm difference is 0.748. However, it is currently impossible to gauge whether or not abandoning the 2020 cap is rational because no estimates exist for the capital that would be expended to generate the requisite natural gas supplies to bridge the energy gap leading to 2020.

Another question surrounding the viability of dumping the 2020 cap would be the behavior of the natural gas companies. The capital required to generate the necessary supply to meet the electricity generation needs provided by natural gas will come from natural gas companies. However, if the 2020 cap is removed the natural gas supply requirement will drop significantly leading to a significantly reduced amount of investment in creating new supply wells. Think about it this way – a pharmaceutical company spends 3-6 years developing a drug for market, sells that drug on the market for 4-6 years making a significant amount of money doing so, then the drug is banned. Under the current 2020 cap that is the highly probable existence of the natural gas industry in the generation of electricity. The question is will the pharmaceutical/natural gas company make or lose money through the entire process? Overall it is highly likely that with electricity regulation profit will not be made. Therefore, would the pharmaceutical company aim to invest in a longer-term project that would require 6-10 years of investment before payoff (trace/zero emission energy providers) or do nothing. Knowing that answer would go along way to determining if dropping the 2020 cap is a wise move. If the natural gas companies invest in renewables, then the additional 8-year grace period has meaning because when the 2030 cap takes over in 2021 a larger amount of renewable electricity generation will be in the pipeline. If the natural gas companies do nothing then the additional 8-year grace period only results in additional CO2 being put into the atmosphere.

Overall the above investigation identifies a number of important questions that need to be asked about the future of electricity production under the ACES. First, what trace/zero emission electricity providers have the ability to/need to replace coal and natural gas in the future? Second, what behavior can be anticipated from coal and especially natural gas electricity generating sectors in the future regarding investment in renewables? Third, how legitimate are offsets and how large will their role be in future emission reduction? Fourth, is the 2020 cap a benefit or an obstacle to effective emission reduction? Fifth, can the global environment afford a smaller anticipated reduction in emissions from the United States from now until 2020 with a possible larger reduction between 2020 and 2030? Without identifying high probable and honest/objective answers for each of these questions, it would be difficult to envision the ACES being effective at reducing CO2 emissions without generating large excessive costs and/or energy shortfalls over its lifetime.

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