Total Energy Efficiency Of The US

The US economy is only about 33% energy efficient today, with two-thirds of primary energy production lost before it’s put to use. Energy efficiency improvements will be a huge part of sustaining economic growth moving forward.LLNL_US_EFC_20081

What is the total energy efficiency of the US economy? More precisely, what percentage of primary energy input, whether from fossil fuels or renewables, is actually used for our benefit? The Lawrence Livermore National Laboratory (LLNL) studies energy flows within the US economy, and produces the diagram above annually. For 2008, LLNL calculates that the nation’s energy efficiency is roughly 42%, with the remaining 58% of energy lost primarily as wasted combustion heat [1].

By itself, having a 42% efficient economy indicates that significant improvements in our energy security are possible through efficiency improvements alone. But there is ample evidence that the US is significantly less efficient than the diagram indicates. One key assumption in particular biases the calculation: LLNL assumes that residential, commercial, and industrial users of energy are 80% efficient in their end use of energy. The primary uses of energy in American homes are heating, cooling, and water heating, and these activities are closer to 50% efficient than 80% efficient in the average American home [2]. Even the most efficient lighting is only about 20% efficient, and huge number of computers and gadgets using and powering the internet can be incredibly inefficient [3]. While industrial users of energy have an economic incentive to prevent waste, they can’t avoid the inefficiencies inherent in lighting and mechanical engines. Finally, transportation in the US is probably closer to 20% efficient, rather than 25% as used in the LLNL study [4].

In place of the 80%  efficiency used by LLNL, we can substitute a 50% efficiency estimate for residential and commercial users, a 75% estimate for industry, and a 20% estimate for transportation. Using these estimates of end-use efficiency, total energy efficiency in the US economy is around 33%. The US has huge room for improvement, which should provide hope for our energy future. If the US were able to improve its energy efficiency from 33% to 50%, primary energy usage could be cut by a third. The US could supply today’s annual energy needs with 67 quads (quadrillion BTU) instead of 102 quads. That’s $650 Billion worth of energy at today’s prices [5]!

During the energy shock of the late 70’s and early 80’s, the US decreased the energy intensity of its economy by as much 5% per year. Given the dual constraints of rising world energy demand and Peak Oil, a similar effort may be required soon. It’s good to know that the US has plenty of room to improve, and to know that improvements in efficiency can generate huge savings.

[1] Neither the economy nor even a single power plant can ever by 100% energy efficient. The heat engines (internal combustion engines, fossil-fuel power plants, etc) used to run most of modern society cannot exceed certain theoretical limits governed by the laws of thermodynamics, so that even the most efficient combined-cycle power plants today are only about 60% efficient.

[2] American residential energy use is dominated by hvac usage and water heating, as the EIA shows in table 14 of its energy usage survey. Household furnaces range from 65% to 90% in efficiency, but the typical house loses 25% of its heat through its windows alone, so that heating a house is perhaps 50% efficient overall. Gas water heaters are 50-70% efficient. None of these numbers take into account time when a home is unoccupied, when energy efficiency is effectively 0% if systems are not turned off.

[3] Incandescent light bulbs aren’t even 5% efficient, while fluorescent bulbs reach around 15% efficiency. During the summer and in warmer parts of the country, the majority of the energy used in lighting (lost as heat) must be counteracted with air conditioning! Computers and data centers are also incredibly inefficient, particularly when measured from a standpoint of average cpu utilization. Servers in data centers are typically configured with enough cpu power to sustain peak activities like handling the Christmas rush at an ecommerce website. As a result, they spend most of their time at very low average utilization, and probably run at less than 10% energy efficiency.

[4] Internal combustion engines are only about 20% efficient in real-world driving conditions, and this may not take into account extraordinary efficiency losses caused by traffic jams, which themselves result in billions of dollars worth of economic losses annually.

[5] The EIA Kids’ page provides convenient numbers on the BTU content of different fuels (if only adults knew this much!). We can calculate the rough average price of a BTU by averaging the cost per BTU of oil and the cost per BTU of coal. According to the EIA, a ton of coal costs roughly $50, and contains 19.98 million BTU, for a cost of $2.50 per million BTU. A barrel of oil costs roughly $80 and contains 5.8 million BTU, for a cost of $13.80 per million BTU. A simple average gives us a price of roughly $8 per million BTU. Saving 35 quadrillion BTU of energy with changes at power plants thus equates to a savings of $280 Billion per year. If the energy efficiency changes occur at the point of end use, however, the savings could be much greater, since higher value forms of energy like electricity are much more expensive.  One kilowatt-hour of electricity equates to 3412 BTU, and costs roughly 10 cents, which equals $29.30 per million BTU. If the 35 quadrillion BTU of energy efficiency savings all occur at point of end use, approximately $1 trillion in annual savings are possible! In reality, efficiency gains will occur across the system, so an average of the two estimates yields a savings estimate of $650 Billion per year.

Is Peak Oil Real? A List of Countries Past Peak

Only 14 of the 54 oil producing nations in the world are still increasing their oil production. The era of cheap oil is definitively over, as shown below.

Is peak oil real? The BP Statistical Review of World Energy provides the data needed to answer this question. Using the 2009 edition, I have compiled a list of all oil producing countries and regions in the world, along with the production status of each, ordered by year of peak production. BP groups minor producers into categories like “Other Africa”, and “Other Middle East”, and that notation is used here. All production numbers are quoted in barrels/day.

Country Peak Prod. 2008 Prod. % Off Peak Peak Year
United States 11297 7337 -35% 1970
Venezuela 3754 2566 -32% 1970
Libya 3357 1846 -45% 1970
Other Middle East 79 33 -58% 1970
Kuwait 3339 2784 -17% 1972
Iran 6060 4325 -29% 1974
Indonesia 1685 1004 -41% 1977
Romania 313 99 -68% 1977
Trinidad & Tobago 230 149 -35% 1978
Iraq 3489 2423 -31% 1979
Brunei 261 175 -33% 1979
Tunisia 118 89 -25% 1980
Peru 196 120 -39% 1982
Cameroon 181 84 -54% 1985
Other Europe & Eurasia 762 427 -44% 1986
Russian Federation 11484 9886 -14% 1987*
Egypt 941 722 -23% 1993
Other Asia Pacific 276 237 -14% 1993
India 774 766 -1% 1995*
Syria 596 398 -33% 1995
Gabon 365 235 -36% 1996
Argentina 890 682 -23% 1998
Colombia 838 618 -26% 1999
United Kingdom 2909 1544 -47% 1999
Rep. of Congo (Brazzaville) 266 249 -6% 1999*
Uzbekistan 191 111 -42% 1999
Australia 809 556 -31% 2000
Norway 3418 2455 -28% 2001
Oman 961 728 -24% 2001
Yemen 457 305 -33% 2002
Other S. & Cent. America 153 138 -10% 2003*
Mexico 3824 3157 -17% 2004
Malaysia 793 754 -5% 2004*
Vietnam 427 317 -26% 2004
Denmark 390 287 -26% 2004
Other Africa 75 54 -28% 2004*
Nigeria 2580 2170 -16% 2005*
Chad 173 127 -27% 2005*
Italy 127 108 -15% 2005*
Ecuador 545 514 -6% 2006*
Saudi Arabia 11114 10846 -2% 2005 / Growing
Canada 3320 3238 -2% 2007 / Growing
Algeria 2016 1993 -1% 2007 / Growing
Equatorial Guinea 368 361 -2% 2007 / Growing
China 3795 3795 Growing
United Arab Emirates 2980 2980 Growing
Brazil 1899 1899 Growing
Angola 1875 1875 Growing
Kazakhstan 1554 1554 Growing
Qatar 1378 1378 Growing
Azerbaijan 914 914 Growing
Sudan 480 480 Growing
Thailand 325 325 Growing
Turkmenistan 205 205 Growing
Peaked / Flat Countries Total 49597 60.6% of world oil production
Growing Countries Total 32223 39.4% of world oil production

Only 14 out of 54 oil producing countries and regions in the world continue to increase production, while 30 are definitely past their production peak, and the remaining 10 appear to have flat or declining production [1]. Put another way, peak oil is real in 61% of the oil producing world when weighted by production. Since 2008 capped a record run for oil prices, most countries and oil companies were trying all-out to increase production. While a handful of producers (think Iraq) might be limited by above-ground factors, the majority of producers simply couldn’t do any better in 2008 [2].

The evidence of the demise of the cheap oil era has become insurmountable. In the face of the highest oil prices on record, the great majority of the world’s oil producers were incapable of taking advantage and producing more oil. Many nations including the US saw their oil production peak decades ago – there simply is no turning the clock back. This list shows that we are relying on a small number of countries to keep providing cheap oil. We need to move faster to alternatives and greater energy efficiency, before the last fourteen peak as well.

* More information on these countries:

  • Russian Federation – Russia’s oil production collapsed by the early 90’s as the Soviet Union collapsed, but despite a decade of growth, Russia’s own oil execs don’t think the old peak can be surpassed.
  • India’s production appeared to plateau in 1995, and has stayed within a steady range since. The EIA forecasts Indian oil production to remain flat or decline slightly in the near future.
  • Republic of Congo (Brazzaville) hit a production plateau in 1998, though current production is still very close to 1999 peak levels.
  • Other Central & South America – The remaining countries of the Americas hit a production peak in 2003, though it’s still too soon to know if this will be final peak.
  • Malaysia has been on a production plateau since 1995, and the EIA projects flat or falling production.
  • Other Africa – Oil production in much of Africa is potentially impacted by above-ground constraints, so it’s definitely possible that production will rise here. It will rise from a low base of only 50,000 bpd however, and may not have much impact on total world production.
  • Nigeria is impacted by domestic insurgencies in its oil-producing regions, and may be able to lift production if the political situation improves.
  • Chad’s oil production history is too short to definitively identify a peak in production, but the drop-off since 2005 has been dramatic.
  • Italy has been on a production plateau for over 10 years, and it’s unlikely that a mature economy is significantly under-exploiting its resource potential.
  • Ecuador’s production grew rapidly until 2004, but has leveled off and declined somewhat since then.

[1] To be considered past-peak, a producer’s current (2008) production has to be at least 10% less than its best year, and the best year must have occurred prior to 2005. Some countries’ production has been artificially constrained by political and other non-geological considerations. But in some of these cases, it will be difficult to pass an old peak because decades of depletion have occurred since that peak. Iraq peaked in 1979, making it all the more difficult to pass that now.

[2] While OPEC maintains formal production quotas, it is widely believed that only Saudi Arabia had true spare capacity in 2008, while all other OPEC nations were producing at capacity. The truth is unclear, since OPEC nations do not provide detailed reserve statistics for their oil fields.

Total has created its own short list of oil producers past peak, and Wikipedia has a list here.

Plugin Hybrid List

http://www.pluginamerica.org/plug-in-vehicle-tracker.html
Plugin America, an organization devoted to promoting electric and plugin hybrid vehicles, has put together an excellent list of plugin vehicles (linked above). Most major auto manufacturers now have a plugin model targeted for 2011 or earlier.

Continuing advances in battery technology mean that by 2011 plugin hybrids will be cost effective at today’s gas prices ($2.50 per gallon), and by 2013 hybrids may be cost effective at $2 a gallon.

How Long Until Greenland Melts?

It would take 7400 years to melt Greenland at currently observed ice melting rates, and many hundreds of years even with a non-linear increase in melting rates.

Numerous studies and direct observation show that Greenland’s ice sheet is melting, and the latest studies show that snowfall on Greenland is not sufficient to offset this loss. If the entirety of Greenland’s ice sheet were to melt, sea levels worldwide would rise by roughly 20 feet. This rise would severely damage or wipe out many of the world’s major cities, and accordingly the threat of catastrophic sea level increase is listed among the primary threats of global warming.

This brings to light an important question: how long do we have until Greenland’s ice sheet melts, or until its melting causes a significant amount of sea level rise?

Greenland’s ice sheet has a total volume of 2.6 million kilometers cubed, and according to a recent study, lost an average of 222 km cubed of ice in the last couple of years. In 2007, the year that Arctic ice cover set a new summertime minimum, 350 km cubed of ice was lost. Assuming this extreme rate continues, Greenland will be fully melted in 7400 years. Of course, ice melt rates are non-linear, and so this rate could increase considerably as temperatures rise.

Assume for a moment that the rate of ice melt rises by an order of magnitude (10x) beyond the 2007 record. 740 years of melting would still be required to melt all of Greenland, and even at that rate sea levels would rise only 2 feet by 2100! If the ice immediately begins melting at 100 times the record rate, then a real catastrophe would ensue, as sea levels would rise by the full twenty feet before the end of the century.

What would it take to trigger a catastrophic increase in Greenland’s ice melt rate? Unfortunately, this isn’t yet well understood, with some research showing that Greenland’s ice sheet could tolerate significantly higher temperatures. This is based in part on research showing that during the last interglacial period, 125,000 years ago, about half of the Greenland ice sheet persisted despite temperatures 5C higher than today. It’s a good idea to keep this and the melt rate calculations in mind when weighing the threat of AGW-induced sea level rise against potential solutions.

Electric vs Gasoline – Which is more cost effective?

Last summer gas prices spiked and the media was awash in stories about the electric car, whether from major automakers or startups. Just a few months later, gasoline is at $1.50 and SUV sales have begun to rise again. Environmental and foreign policy benefits notwithstanding, electric vehicles are perceived to be more expensive than gasoline vehicles. At what gasoline price are electric vehicles more cost effective?

In Theory, Electric Vehicles are More Efficient

Electric motors are very efficient, converting over 90% of electrical power supplied into motion, while gasoline engines manage only 20% efficiency. On a full life cycle basis including power plants and oil wells, electric vehicles manage about 34% efficiency versus only 14% for gasoline vehicles [1]. In theory electric vehicles are much more efficient.

But how does it work in practice? Let’s take a look at two real-world examples, the Tesla electric sports car, and the Hymotion plugin-hybrid modification for the Toyota Prius.

Hymotion Toyota Prius and Tesla Examples

Hymotion is now selling a plugin hybrid modification for the Toyota Prius which enables it to travel roughly 40 miles with minimal gasoline usage. Hymotion states that independent testers have verified the Hymotion-modified Prius capable of receiving a 150mpg EPA city rating.

The Hymotion modification uses 5 Kwh of electricity, worth about 50 cents, to help power it through a 40 mile trip, while using the gas engine about 20% of the time. At $1.50 a gallon the total fuel cost for a 40 mile trip is about 30 cents, resulting in a total trip cost of 80 cents. The average American vehicle gets 20 mpg, so it would use 2 gallons for the trip, or $3.

Tesla provides a good life cycle energy usage comparison between its electric sports car and other automobiles on its website. The Tesla uses 177 watt-hours of energy per mile traveled, which costs 1.7 cents on average. Based on Tesla’s numbers, a 40 mile trip would cost 68 cents in a Tesla versus $3 for gasoline in a typical vehicle.

Even at $1.50 gas or $1 gas, electric and plugin-hybrid vehicles are significantly cheaper to operate than gasoline vehicles. But electric and hybrid vehicles are significantly more expensive than comparable gasoline vehicles today, which motivates the primary question:

At What Gasoline Price are Hybrid or Electric Vehicles Competitive?

For the Hymotion-modified Toyota Prius, the breakeven price of gas is around $3 a gallon. The Hymotion modification for the Toyota Prius costs $10,000, and the Prius itself costs roughly $5000 more than a similar non-hybrid vehicle. At $3 a gallon, a driver that drives 12,000 miles per year would save about $1500 per year, just recouping his initial investment over a 10 year timeframe.

Batteries represent the primary factor in the additional cost of hybrid vehicles, and battery price-performance is improving at a rate of about 8% per year. At this rate, the breakeven price will probably be $2 a gallon in 2013.

Plugin hybrids and electric vehicles provide one additional savings: time. The average driver fills up almost every week, losing a total of 8 hours a year. For busy professionals, 8 hours of time could be worth $500 to $1000 or more, making plugin-hybrids the cost-effective choice today!

Footnotes:

[1] Electrical energy is created by burning fossil fuels in a power plant at 40% efficiency, followed by transmitting it to your house at 93% efficiency, and using it in an electric vehicle at 92% efficiency, providing a total efficiency of around 34% for an electric vehicle. Crude oil refineries operate at 75% efficiency, and gasoline distribution might cause another 6% energy loss. Since internal combustion engines are only 20% efficient, total efficiency would be around 14%. Assuming that the natural gas and oil to power our vehicles comes from the same well, we can directly compare these efficiencies, and thus conclude that electric vehicles are significantly more efficient.

Level the Playing Field for Mass Transit

President-elect Barack Obama announced a massive public works program this weekend to rebuild America’s infrastructure, with investments in transportation, energy efficiency, and schools planned.

Obama could further his fiscal stimulus and infrastructure program by leveling the playing field between road and mass transit investments. When the Interstate highway system was created, the federal government provided 90% of the financing, requiring states to pitch in the remaining 10%. In contrast, most transit projects in the US received little or no federal funding until the 70’s, and currently receive 60-80% in federal financing. In addition, transit projects have to meet steep qualification requirements before being funded, while states are provided lump sum funding for road projects which can be used with much greater discretion.

Why not level the playing field by allowing states to use federal transportation funding as they see fit, without explicitly allocating it for roads or mass transit? States with large urban areas could then focus on large-scale transit projects, while rural states could focus on traditional road construction. This blog has consistently advocated against subsidies of all kinds, but since most major transportation projects are funded via the DOT, it makes sense to enable states to spend the money according to their needs.

In the current economic environment, fiscal stimulus is advisable, and fully funding mass transit projects will help advance the new administration’s energy policy as well. Providing equal funding for both mass transit and roads should be an easy win for the Obama administration, and I hope that the new President takes this step.

The Earth is Not Dying

In addition, we cannot cannot destroy the Earth. It’s highly unlikely that humans could even end life on Earth, even if we gave it our best shot (unless Darth Vader loans us a Death Star). Total nuclear holocaust (the simultaneous use of all nuclear weapons on Earth) would lead to the death of most, and perhaps all of humanity, but the Earth would still be around. In perhaps a few decades, and at most a few hundred years, Earth would be teeming with life again. Sure, most of us complex vertebrates would say adios, but give the planet a bit of geologic time, and something equally interesting would probably replace us.Why do I bring this up? With the reemergence of global warming as a major issue in the last few years, alarmists are again making grandiose claims that we’re killing the planet, or that we’re going to destroy life on Earth. Hyperbole may be a way of getting attention (like the title of this post!), but it also tends to discredit an argument. When environmentalists scream that we’re killing the Earth and need to change our ways, what do people do? They tune out.
Read the full entry (308 words) …

Tax Pollution, Not Work

How could it possibly be a bad idea? Environmental pollution is the largest single economic externality faced by modern market economies like the United States. Households and companies alike do not suffer direct costs for their pollution, and therefore have no incentive to curtail it. Meanwhile we all suffer its negative effects, which include increased rates of asthma and respiratory illness, and also include rising temperatures worldwide.
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Global warming is real; should you care?

There is little scientific dispute at this point that global warming is occurring, and that humans are causing some part of it, as even the Competitive Enterprise Institute (a conservative free enterprise think tank) is now willing to admit. The remaining question: just how big a problem is global warming, and what are the consequences if we do nothing? An Inconvenient Truth makes it appear that Florida will be underwater sometime soon if we sit idly by. Reality, at least as scientists currently understand it, probably lies somewhere between Al Gore’s doom-saying and CEI’s laughable slogan, “CO2: We Call It Life.”

Of all the potential effects of global warming, rising sea levels are thought to have the most catastrophic consequences. If the Greenland ice sheet or a large part of Antarctica really do melt, the resulting 20 foot rise in sea levels would destroy the majority of the world’s great cities and displace billions of people. But how long will a rise of 20 feet, or even two feet, take at current rates of warming and ice melt? Realclimate.org summarizes recent research here, wherein the most aggressive estimates indicate that Greenland’s ice sheet melting is increasing sea levels by up to 0.57mm per year. But if Greenland continues melting at that rate, it will take one thousand years to raise sea levels one foot!

Even an order of magnitude increase in ice melting would only cause sea levels to rise a foot by 2100. The Intergovernmental Panel on Climate Change Report’s most aggressive estimate calls for a three foot sea level rise by 2100; this estimate includes significant ice melt. While this scenario has significant implications for coastal cities, it is not apocalyptic, and it also represents an outlier prediction compared to most climate models. It seems then that we should care about global warming in the very long term, but it is unlikely to have a significant impact during our lifetime. There are dozens of environmental and social issues that deserve greater present concern, including the AIDS pandemic and infectious diseases like tuberculosis and malaria, which continue to kill tens of millions annually.

At the same time, it wouldn’t hurt to take some simple steps to curb CO2 emissions growth. The CEI and others complain that it is impossible to curb CO2 emissions growth without hurting the economy. On the contrary, prudent shifts in government policy can reduce emissions while increasing growth. If the United States were to fund all highway construction with gasoline taxes, for instance, this would pass the costs of car travel directly on to the end consumer – which increases economic efficiency while decreasing emissions. I’ve written previously about applying the gas guzzler tax fairly, so that consumers are not rewarded for buying large SUVs instead of large cars. Finally, ending the huge subsidies to the oil, gas, and coal industries would make alternative energy more competitive, while saving taxpayers billions.