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OWOE - Blog
More interesting energy stories that you haven’t heard
April 1, 2020

Guest blog by Mr. R. U. Cirius: Here are some interesting and somewhat offbeat energy stories that haven't gotten much media attention during the first three months of the year.

UoA Windship renewable energy vessel

Students from the University of Acadians (UoA), not to be outdone by their archrivals at the Massachusetts Technology Institute (MTI) (see story below), have turned their focus toward harnessing wind energy. Last year, after placing 20th of 20 teams at the Canadian National Concrete Canoe Competition, the students decided their expertise was better suited to larger vessels. By focusing their collective background and skills on the problem, they developed a new, high-tech, 100% renewable fuel, cargo vessel which they have named Windship (see Fig. 1). They believe it will revolutionize marine transportation in the 21st century.

Fig. 1 (Credits: Fitz Henry Lane /wikipedia.org)

Click here to learn more about wind power.

Coal Slaw - a new high-energy and environmentally friendly food product

The researches from the Massachusetts Technology Institute (MTI) who brought you Coal Bricks from 2019 have now turned their focus to utilizing existing coal resources without increasing carbon dioxide emissions and addressing world hunger, simultaneously. Their new product, Coal Slaw, combines the energy content from anthracite coal dust and protein from cricket meal with the added polyisobutylene (for texture and "chewiness") to create a tasty and healthy food product. Due to the low cost and wide availability of the respective ingredients, Coal Slaw can be produced in large quantities anywhere in the world. It doesn't require refrigeration or any special handling and has a shelf life of over 1,000 years. The US military has taken notice and has begun to replace all its MREs with the new Coal Slaw packets.

Click here to learn more about coal power.

Foamcrete building products reduce carbon dioxide in the atmosphere

CO2 Solutions, LLC, the start-up company that brought you Fizz Wizzie last year, has a new product that utilizes carbon dioxide removed from the atmosphere. Using the same revolutionary process that extracts CO2 from air as used to produce your favorite Fizz Wizzie drinks, CO2 Solutions can now create a CO2 infused concrete product called Foamcrete. The entrained carbon dioxide bubbles within the concrete matrix allow for a much lighter concrete building product. And the perfectly spherical shape of the bubbles allow for a surrounding concrete matrix that loses very little strength compared to a 100% concrete product. They have determined that approximate 30% CO2 to concrete, on a volumetric basis, is the sweet spot where the ratio of applied stress to net weight is maximum. Foamcrete can be easily formed into many different shapes for different construction applications. For site-specific applications, CO2 Solutions is currently developing on-site Foamcrete mixers that will allow compete flexibility in size and shape for your every construction need.

A new use for old wind turbine blades

Much has been written about the challenges of disposal of old wind turbine blades. Dr. Marko Ramius from the National Wind Energy Laboratory (NWEL), who last year identified the "turbulence boundary interface" that contributed to California's record "superbloom" of wildflowers, has found a clever use for old wind turbine blades to keep them out of landfills. Dr. Ramius has demonstrated in the laboratory that the fiber-reinforced epoxy composite that is used for blades can be shredded into long moldable strips with extrememly high tensile strength that can be coated with synthetic rubber. The product is extremely durable and doesn't degrade under heat or abrasion, which makes it an ideal material for automobile tires. He has filed for a patent application and trademark for Turbitires. Word on the street is that Tesla has already committed to purchases all he can produce as soon as a commercial scale process is up and running.

Click here to learn more about wind turbines.

What if a wind farm was a real farm?

The Temporal Technical University of Texas (colloquially referred to as “Tick-Tock-Tex”), located in Abilene, Texas, has been researching what to do with all the wind farms located in the area when they reach the end of their lives. One answer they’ve come up with is to remove the turbine blades but leave the towers in place as vertical farms for growing vegetables. Turbines consist of extremely tall shafts that create an enclosed environment, protected from the elements. The university researchers outfitted an abandoned tower with vertical vegetable racks and installed humidifying and drip water systems. They demonstrated that the environment was conducive for growing pole beans, climbing peas, vine tomatoes, cucumbers, melons, squashes, pumpkins, and even sweet potatoes.

Click here to learn more about wind turbines, and be sure to listen to the Dixie Chicks singing West Texas Wind.

And now for something completely different (and a bit less revolutionary)

How solar panels turn air into water

Source Hydropanels from Zero Mass Water can produce pure drinking water from air with no power required. These panels, which come in pre-assembled boxes, utilize solar panels to gather energy from the sun and increase the dew point inside the box. Each Hydropanel is 4 feet x 8 feet, and a standard array contains 2 Hydropanels. The standard array will produce on average 4-10 liters of water each day or between 8 and 20 16.9 oz standard water bottles, depending on sunshine and humidity, and the system will work even in very low humidity regions. Each Hydropanel holds 30 liters in a reservoir for a total of 60 liters for a standard array and can connect easily via a water line to your dispensing unit. For more information take a look at Ben Sullins' (our favorite video blogger from Teslanomics) latest video. No joke here.


Oil Supply – If Everyone Produces, Everyone Goes Bust Part 2
March 30, 2020

Guest blog by S. A. Shelley: In Part 1 of this blog on Oil Supply, l examined the supply-demand history of oil over the past decade, which has set the stage for the dramatic changes in the industry that are just beginning. In this blog I'll explore some of the likely consequences and will venture to predict some of the dramatic events to come and some of the likely irreversible impacts recent events will have on the world oil industry.

For the last few years, OPEC+ has been trying to curtail supply to more closely match demand. In theory this should work but in practice it hasn't. While the Saudis were trying to rebalance markets by cutting supply, their actions had no effect when OPEC+ partners such as Russia had their own agenda (see Fig. 1).

Fig. 1: The Russkies Are Masters of Self-interest

Russia has an advantage over the Saudis in that Russian pipelines link to Europe and China. The Saudis have an advantage over Russia in that they can produce and sell at much lower prices than the Russians. However, pumping like madmen (sorry, madpeople) won’t help at all, especially with steady demand decline and, in this year, with the additional demand shocks due to COVID-19 and the resulting recession.

Storing Oil Afloat Will Not Help

One of the first questions that popped up in the industry when the supply war broke out is: "who has tankers and storage available?" In 2016, there was approximately 1 billion barrels of oil in storage in tankers around the world.  More recently, tanker rate have surged with the supply war as traders and producers charter tankers to carry to market and store this cheap bounty.

What will happen to oil prices when the cheap oil going into storage now gets released by traders when storage costs start to diminish profits?  Once all available oil storage capacity is filled, the real price war will start. Woe to the trader who thinks that oil prices will recover in 6 months (Figs 2a and 2b), and woe to oil prices when traders start to dump oil from storage before they start losing money.

Fig. 2a: Comparing Brent Futures against Oil Tanker Storage
Fig. 2b Potential Profit / Loss Storing Oil on a VL:C (2,000,000 bls)

Will Shale Continue to Supply Oil to the World?

Some people curse tight oil while others are very grateful for it. Tight oil (shale oil) has been the number one reason for the tremendous increase in domestic oil production in the United States.

Global conventional crude oil plateaued in January 2005. This would prove to be a decisive turning point for the industrial ecosystem. Since then, unconventional oil sources like tight oil (fracked oil shale) and oil sands have made up the demand shortfall, where U.S. shale (tight oil, fracking with horizontal drilling) contributed 71.4% of new global oil supply since 2005.

But, and it's a big but, nobody is certain whether tight oil can indefinitely continue to produce at its current levels or how much more production can be squeezed out of the Permian basin in West Texas. The following figure is taken from the same Finnish report.

Fig. 3: Daily Oil Production from Permian Basin (Source: tupa.gtk.fi)

Tight oil supply may soon peak for the Permian basin in West Texas, and other tight oil formations may need to kick in to keep production levels high, but at what cost per well?

What Will be the Effect of Low Oil Prices on Shale or Oilsands?

Now that the oil supply war has started, and oil is being flooded on to the markets, oil prices have crashed to levels at which shale oil producers will find it difficult to remain solvent. But, while this may have been a tactical objective of the Russkies and Saudis, it will not be a strategic win. In the short term, yes, oil producers in West Texas and other shale basins will be under financial stress, and there will be some bankruptcies, consolidations and production cutbacks. Overlooked in Riyadh or Moscow is that for the long run, those shale (and oil sand) resources still remain. So, in the future, two things will develop:

  • American technical and financial ingenuity will figure out ways to produce at lower cost, and
  • The U.S economy is far more diverse and resilient than the Russian or Saudi economies and will adapt to any new reality more quickly and better.

If oil prices rise, then the flexible shale oil producers will come back onstream quickly. If oil prices remain low for a long time, the U.S will thrive with cheap oil form overseas. The worst thing for the Russians and Saudis, if they truly intended to knock shale oil out of the market, is that they will need to wait at least 2 or more years to do that because wells already drilled are just now coming on line, and their decline is at least 2 years out. If the oil supply war lasts for longer, then it is likely that some oil dependent nation states will fail (I'm looking at you Russia and most of the big OPEC producers). Furthermore, for how long will Russia and China continue to prop up Venezuela? Every ruble or yuan sent to Venezuela is a ruble or yuan thrown away.

Oil will also still come from Canada because the marginal cost of heavy oil production in Canada is around $25 / bbl, and Canadian producers have been very adept at staying afloat while WCS oil was selling at between $20 to $30 / bbl (and most recently at around $9 /bbl).  On top of that, Canadian producers have been producing against a hostile government and an internationally funded campaign of climate wonks (extremists). The Canadian economy is not as diverse or resilient as the American, but as long as American thrives, Canada will survive and it could thrive a bit if the massive discount on WCS were overcome with access to deepwater ports.

Is Big Oil Still a Fiscally Sustainable Business?

Investors were already questioning the value of big oil before this oil supply war started.  In the last quarter of 2019, most, if not all, major oil companies had significantly lower earnings. "A tipping point for the future of fossil fuels may have been reached this year as financial markets massively down-rated traditional energy companies, with their slumping share prices destroying "staggering" amounts of shareholder wealth."

A more careful financial analysis reveals that it is quite likely that most oil firms are now burning through financial reserves faster than they can replenish them. In essence we've got the technology to produce oil almost anywhere, even on Mars (if Musk would let us), but while oil companies historically worried about replacing produced reserves with new discoveries, now oil companies seem worried about supporting dividends with diminishing cash flows, while new reserve discovery and development appears to have becomes a secondary objective. Persistent oversupply yields low prices and low profits, which in turn leaves less cash available for capex investment in future production.

On top of the investors moving away from oil companies and projects, in some areas of the world the pressure to stop new investments or developments is unrelenting and growing: "Opening a new fossil fuel basin in the middle of our ocean was always madness," she said. "Moving to net zero emissions by 2050 means we must reduce pollution now, not give the green light to new polluting projects.

There still is plenty of conventional oil supply (including tight oil and oil sands already in production) to meet existing global demand and some near term demand growth (highly unlikely) for some time. Yet, big oil companies are still executing large projects with ambitious production targets in new frontiers but with higher risk of increasing pressure on oil prices, which could then result in additional and earlier than planned write-downs or large, expensive stranded assets. Something has to change to keep the oil businesses functioning because operating in a business-as-usual mode while trying to negotiate production cuts to support prices wasn't enough now and isn't going to be enough in the long run. Expecting oil demand to remain level, let alone rise, also isn't a viable strategy anymore.

Fig. 4: Which asset will get written down faster? (source: thetexan.news)

Vive l'Alberta Libre


Oil Supply – If Everyone Produces, Everyone Goes Bust – Part 1
March 26, 2020

Guest blog by S. A. Shelley: A few years back, I wrote that at some point in the future (now-ish) oil produces may need to resort to providing incentives for ICE buyers, or undertake more extreme measures to ensure sufficient oil demand. Well, oil producers have not yet undertaken either of those steps and, as noted in a recent blog, we've now hit peak oil demand. So producers were resorting to the next best means of balancing the supply-demand equation by curtailing supply in order to support oil prices. At best this was a short term solution to a growing long term problem. Now with the beginning of the oil supply war, we see that curtailing supply has failed completely, and, as predicted in my February 2, 2019 blog, somebody has decided to produce the hell out of its reserves while there still is a market for oil. This will not be a short war; it will be long and drawn out, and the eventual winners will not be who everyone now thinks they will be. In Part 1 of my blog on this topic, I'll examine the supply-demand history of oil over the past decade, which has set the stage for the dramatic changes in the industry that are just beginning. In the upcoming Part 2 I'll explore the likely consequences.

Supply is Growing Faster than Demand and Losses

Examining global supply and demand data (see IEA, OPEC, BP, etc.) from the end of 2015 to the end of 2019 reveals that global oil supply was growing at a faster rate (approx 2% per annum) than global oil demand (approx 1.5 % per annum). I've selected a subset of oil production data corresponding to a group of 14 nations that in 2015 supplied over half of the world's oil and that at the end of 2019 were still supplying over half of the world's oil (Fig. 1).

Fig. 1: Global Oil Suppliers, Select group of 14 Nations

A few things are surprising:

  • In spite of deliberate political hostility towards oil and interference against oil in Canada, Canada managed to increase oil production (this will not make the neo-communists in Ottawa happy)
  • Iraq is now out-producing Iran by a significant amount
  • Russia increased production by about the same amount as Saudi Arabia cut production
  • The U.S. shale effect is definitely noticeable

"The US is expected to remain the main growth driver in 2020, along with Norway, Brazil, Canada, Guyana and Australia." This sentence from OPEC's February Monthly Oil Market Report reveals that Guyana, not included in Fig.1, is quickly become a significant supplier of oil to world markets with production forecasts of 1,000,000 bbls / day bantered about in Houston.

A few things are not surprising in Fig.1, namely that Angola, Mexico and Venezuela production has declined. The cumulative supply decline in these nations amounts to 3,000,000 bbls/ day resulting from political breakdown or graft and corruption sucking their industries dry. Recent news suggests that production in Libya has collapsed to just 72,000 bbls / day. That’s another 1,000,000 bbls / day of oil taken from the market supply.

Think about this: Over the last 4 years, the world has seen steady oil production growth that exceeded demand growth and even managed to offset 3,000,000 bbls / day of existing supply loss.  To every oil executive or investor, think about this in particular: If the next project is to bring 100,000 or 200,000 bbls / day of supply on stream in 5 years, will that supply add to the supply glut or is it meant to replace some diminishing production elsewhere?

Economics 101 Refresher

#1. Small shifts in price cause movements along the supply or demand curves.

#2. Externalities including demand shocks or changes in technology cause movements of the supply or demand curves.

#3. In the long run, we are all dead.

If the world is flush with oil supply, which then drives down prices, then there should be rebalancing of the supply-demand market. But this is not what's happening. Until this supply war broke out, crude oil supplies, especially in the OECD countries have been very steady for some time (Fig. 2) despite low prices which should otherwise reduce inventories by stimulating demand and consumption of that oil.

Fig. 2 (source: EIA)

For the most part, the oil supply and demand curves have been closely correlated (Fig. 3).

Fig. 3 Global Oil Supply and Demand (source: erce.energy)

However, under closer examination of Fig. 3, apart from 2008 to 2009, it becomes evident that oil supply has consistently exceeded demand, and this has resulted in the steady build and maintenance of oil inventories in the last decade. In the U.S. we've started to see more frequent and unexpected inventory builds than drawdowns. Furthermore, who knows how much oil inventory is hidden in China or other less transparent countries? 

With a world already awash in oil and demand leveling (and likely decreasing even more once the full toll from the coronavirus outbreak is understood), the Saudis and Russians decided to start a supply war. Stay tuned for Part 2 to help understand the dramatic and likely irreversible impacts on the world oil industry.

Vive l'Alberta Libre!


Coping with two crises
March 23, 2020

Note from your OWOE editor: Houston has always been a city whose fortunes have risen and fallen with the price of oil. Now it is being hit with two crises at the same time - the coronavirus pandemic which is significantly cutting oil demand, and the Saudia Arabia-Russia battle for market share which is flooding the world with oil and forcing down its price (see Fig. 1). The result has been immediate and drastic. The almost instantaneous drop in price from the $50-60 per barrel range to the $20-30 per barrel range is worse than the drop in 2014 that almost destroyed the US oil business, with some analysts predicting the possibility of $5/bbl oil. Oil companies are looking at every way possible to cut spending quickly, including cancelling projects, idling rigs, instituting hiring freezes, and laying off staff. Add on top of that the fear of transmission of the coronavirus and need for social distancing are having what could be a long-term impact on oil demand as well as making it even harder to work, assuming one is fortunate to keep a job in this climate.

Fig. 1 - WTI Crude Oil Prices - 10yr History

So what does one do in this difficult situation? OWOE readers should recall a blog by Kelley Ellis from just over a year ago. Ms Ellis was an engineer in the oil industry who chose to step away from her career after being laid off and to devote her time to raising a family. Ms. Ellis, as with many people in Houston and around the country, is now facing the challenges of handling the impact of the current situation on her family. She created a fun little video that should bring a smile to your face.

Backyard Draw - a movie by Kelley Ellis

I hope some good will come out of these two crises. We're hearing about dramatic improvements in air quality in China, swans and dolphins returning to the Venice canals, reductions in rush hour traffic, people socializing with their neighbors, and just bringing families together. CleanTechnica asks why COVID-19 is taken more seriously than climate change. Well...maybe these two crises will help us focus on the benefits of not depending so heavily on fossil fuels. In the meantime I'm anxious to find out if all the time we're spending together with social distancing will result in a larger spike in pregnancies or divorces.


The World is at Peak Demand
March 16, 2020

Guest blog by SA Shelley: (Note from your OWOE editor: This demand blog was written a few weeks before the oil supply war started. The oil supply war and corresponding drop in oil prices will be discussed in an oil supply blog in a few weeks. However, the author firmly believes that COVID-19 and a likely economic recession are short term demand shocks. Long term demand decline resulting from shifts in technology and consumer behavior, key issues addressed in this blog, is inevitable.)

The world has hit peak oil demand. I wrote it, I'm standing by it, and no apologies to anyone for this.

Most recently, a lot of worry has beset the industry over falling oil demand due to the COVID-19 outbreak (see cnbc.com and bloomberg.com). Barely a month or so before this, the oil industry panicked over a potential war between the U.S and Iran that could reduce global oil supply. Last week a refinery fire was a threat to oil demand. Next week, it could be news that Elvis was spotted driving a Hummer in Helena. These are short term events triggering short term price reactions initiated by options traders changing their positions.  Everybody needs to chill, take a deep breath and look far out into the future at the bigger problem in the world, i.e., having excess oil supply as oil demand begins to fall. Quick fortunes can be made by quick trades, but the long game builds dynasties and new industries.

Demand Will Start Falling, Gradually at First, then Precipitously

In last year's blog about oil demand, I provided a graph indicating that the year-over-year change in oil demand has been steadily slowing for the last couple of decades. I've updated that chart, Fig. 1 below, to incorporate the current panic about COVID-19 affecting oil demand in the first quarter of 2020 and OPEC's overall reduced outlook, and I changed the trendline to a 2-year moving average (dashed, red line) to help oil traders better understand the picture.

Fig.1 Oil Demand Growth Actual, Near Term Forecast and Trend

Current global oil consumption is just under 102 million bbls / day. But with around 0.5% annual demand growth, we're effectively at zero demand growth, and we'll soon be in sustained demand decline for several reasons.

  • New Technology Is Beginning to Have a Noticeable Impact on Oil Demand

1% of oil demand growth per year is around 1,000,000 bbls / year. Technology now coming on line can cost-effectively and easily displace that volume of oil within a year or two. For example, as noted in a prior blog, every 1,000 Electric buses (Ebuses) on the road displaces 500 bbls of oil demand per day. Two years ago there were about 300,000 Ebuses on the road, which removed about 150,000 bbls / day of oil demand. By the end of this year there will be about 500,000 Ebuses on the road, eliminating another 100,000 bbls / day of oil demand. By 2025, there will probably be an additional 700,000 EBuses on the road worldwide, eliminating another 350,000 bbls /day of oil demand. This is all within the noise range of oil flows and doesn’t take into account other large vehicle fleets that are transitioning to electric drive. "…fleet operators are a little different. They really run the numbers." UPS, which is planning to deploy 10,000 electric delivery vans, has probably done some careful cost calculation to justify its decision. Add another 100,000 electric delivery vans for Amazon, and fleets are going to put a big dent on oil demand very quickly. To paraphrase a philandering president, "It's the fleets, stupid".

  • Changes in Social Habits

Or is it? Every year, some analyst decries the imminent arrival of self-driving cars as fanciful and deluded.  Even as recently as a few years ago many analysts warned that EVs are too expensive, too impractical and just toys for the idle wealthy.  But what analysts overlook is the changing social habits, wherein younger folks are eschewing vehicle purchases and choosing to live in areas with access to good public transit and vehicle sharing. These shifts in social values are already being felt in demand for new vehicle sales - ICEs included. This means that the pool of gasoline guzzling personal vehicles on the road is shrinking. Toss some cool EVs into the mix and you'll have even fewer gas guzzlers driving around.

  • Old Uses for Oil Will Be Supplanted by Natural Gas

After transportation, residential or industrial heating is another large use for oil. Some analysts argue that the conversion costs for existing industries are too expensive. I propose that as new industries arise and existing industries renew, gas will be the first choice (or maybe renewables), and oil won't be considered at all. Natural gas is cheap and so abundant now that the cost versus benefit of using natural gas instead of oil for industrial heating is getting to be very attractive..

  • Developing Economies Are Actively Looking for Ways to Stop Using Oil

China and India, along with a host of other developing nations, were going to be the saviors of oil demand growth just as OECD oil demand falls. Well that's no longer a guaranteed thing.

  • Physical Oil Flows Have High Variability

Getting and keeping hard, precise data about oil supply and demand is an imperfect endeavor. Many producers don't share data and many consumers also "adjust" data. It is very likely that the variability in oil trades is more than 1% or even as high as 5%. Thus until someone can design a trading system that objectively measures physical oil flows to less than 1% variability, we're in the noise region. So, if future oil flow data cannot be trusted, then any future increases reported will also be suspect.

All of these factors lead me to bravely conclude that we've hit peak oil demand. I’ll concede that oil demand could pop up a bit to 103 or maybe 104 million bbls / day, but that's just wiggles in the noise. The time when annual oil demand grew yearly by several million bbls / day are long gone.

Big oil started with Rockefeller supplying kerosene for lighting. But then the invention of electrical technology nearly killed the oil industry, and it wasn't until automobiles, requiring liquid fuels, began arriving in large markets that the oil industry was saved. I'm sure that when electric lighting reared its ugly head, there were executives in the oil companies dismissing the technology as unproven and unreliable. Yet here we are again, 100+ years later, with electrical technology poised to kill oil once again. Oil industry executives in Houston, Dubai, and Moscow should read a bit of history and then worry more about the future.

Vive l'Alberta Libre!

P.S. As always, for a small fee, OWOE staff will be happy to help the oil industry worry less about the future.


Wind Waste
March 3, 2020

Guest blog by S. A. Shelley: There still is continuing debate in California as to how much of what kinds of renewable energy are needed in order to achieve net-zero energy by 2045 . California is blessed with an abundance of renewable energy resources, especially solar, wind and geothermal, and California is still the 6th or 7th oil and gas producing state in the country (see also ShaleXP). But California has not yet harvested any of its significant renewable offshore energy resources.

There has been a lot of licensing and planning activity for offshore wind in California and we've already discussed the main issue with that (i.e., too expensive) in prior blogs (see California does not need big, very expensive floating offshore wind farms and Gung-ho for Geo) while other folks are pointing out other environmental problems with massive California offshore wind farms. To these challenges, I'd like to add another concern: Wind turbine waste.

Fig. 1 - Pieces of wind turbine blades being buried in a land fill (bloomberg)

It turns out that wind turbines generate a lot of non-biodegradable, non-recyclable waste at the end of their 20 or 25 year operating life. In particular, wind turbine blades made from composite materials are discarded straight to a landfill (Fig. 1).

While there is some research on ways and means to re-use turbine blades, this re-use by chopping up blades into smaller pieces will eventually introduce another kind of long-life, indestructible micro-material into the environment. While climate activists argue against CO2 emissions, they ignore that CO2 is essential to plant life whereas micro-plastics and micro-materials have negatively adverse effects on all life.

Let's consider just the mass of wind waste that will be generated by the proposed Morro Bay Widfarm of about 1.0 GW rated capacity assuming that it uses 8 MW turbines. A typical 8 MW wind turbine consists of three blades, each with a mass of about 35 tonnes. Thus for a 1.0 GW wind farm, with 8 MW turbines, in about 20 to 25 years, California will need to bury over 13,000 tonnes of non-biodegradable, non-re-usable turbine waste in a landfill.

But it gets worse. Every 18 to 24 months, an offshore wind turbine suffers a major failure, requiring either a gearbox change or a blade replacement. Giving the industry proponents the benefit of the doubt, let's say that every 48 months, one blade is replaced on each turbine. This means that during operations, California will then need to bury an additional 2,000 to 2,600 tonnes of non-biodegradable, non-re-usable wind turbine waste in a landfill during the lifetime of the project.

That's a lot of waste for just one offshore wind farm, and I've yet to see anyone address that future problem now.

So what are some of the alternatives to floating offshore wind farms in California?

Solar for one. Until every third home or every third business has solar on its roof, there really is no need to go offshore California with big, expensive wind farms. Solar panels are still made from recyclable materials, and can actually be made with some bio-degradable components.

Another choice is geothermal. Geothermal systems are made with recyclable materials such as steel piping, and geothermal buildings can be made with carbon neutral building systems.

Yet a third choice, not yet considered by California to any great extent, is going offshore with ocean current or ocean wave energy. Again, ocean current or wave energy equipment is built almost 99% from steel or concrete. Plus, because the energy density in waves and currents is factors greater than the energy contained in an equivalent volume of air, the footprint of ocean wave or current energy systems is significantly smaller than the footprint of offshore wind. You get the same power output with a much smaller physical space in the ocean.

Combine any of the above with energy storage systems and California will be revved up to thrive for centuries with a completely carbon neutral and green energy network.

Many years ago, wind turbines were small, local and biodegradable (Fig. 2a); now they're big, ubiquitous and tough to recycle (Fig. 2b).

Fig. 2a - Old wind tech (pinterest), Fig. 2b New wind tech (career-wind-energy)

We've gone from distributed, renewable power using recyclable and biodegradable materials to copying industrial power, but instead of coal and smog, we're concentrating power using high tech, low recyclable and non-biodegradable materials. Is this really a better way forward?

California does need some small amounts of offshore wind that can more readily and holistically be integrated into its energy and environmental goals. But as I've argued before, California does not need massive offshore windfarms: Massive farms lead to massive cost and waste problems.

Vive le California plus Intelligente!

Vive l’Alberta Libre!


How We Use Energy at Home (1850-Present)
February 26, 2020

Guest blog by Amanda Tallent: Although the principle of wanting warmth and light in our homes has been constant, the way that we provide these necessities has evolved tremendously over the last 150 years. This makes the future exciting to think about, as we are finding new ways to be sustainable yet innovative when it comes to providing energy in the United States and globally. The team at The Zebra has given insight on the topic, sharing the history and probable future of energy use. 

From Wood to Oil, Gas, and Electricity 

Using the heater has been, and still is, one of the most dominant uses of energy in U.S. homes. At first, we burned wood to produce fuel. As the 1800s progressed, coal was introduced. It was an alternative that took up less space while being able to reach high temperatures in a shorter amount of time. By 1961, coal was mostly replaced with oil and gas, something that we still predominately still use today. While providing us with many solutions, petroleum comes from the finite amount of fossil fuels the Earth has and is also harmful to the environment. This leads us to the expansion of turning to renewable energy. 

What is Renewable Energy? 

Renewable energy is "clean" energy that can be replenished or restored, compared to fossil fuels (oil, natural gas, and coal). Some examples of renewable energy are wind, solar and geothermal. 

Wind is not only renewable but provides us with a clean, non-polluting option; making it one of the fastest-growing renewable energy. With a wind turbine, the wind is transformed into mechanical energy that we can use for electricity. Solar energy takes the heat and light that the sun provides and turns it into energy. With geothermal, we can get heat from under the ground of the earth. This method has been improving with engineers creating geothermal wells drilled many miles into the surface to produce energy. The three alternatives to fossil fuels will lead to a less-polluted planet. 

Energy in Our Homes

Every month, you're paying for your utilities. From water to electricity, plus natural gas in some cases, the list goes on. By reducing the amount of electricity and water you use at home, there's also less demand for those resources. Turning off the lights when not being used may seem like a small task, but if done on a large scale, it can result in a great global impact. The way we get energy is changing, yes, but the amount we use is also increasing yearly. 

Looking at the way we use energy in our homes, the top three include space heating, appliances/electronics, and water heating. Being cognizant of the amount you use in your home can be beneficial on a global scale. 

Where Do We Get Our Energy From in the U.S.? 

The leading source of energy in the United States is petroleum, mainly used for fueling our transportation, and is a nonrenewable source. However, there seems to be a rise in electric cars which might cause a downfall in petroleum use. Although helpful, petroleum leads to polluted air and has been toxic to the environment. 


Following petroleum is natural gas, another nonrenewable source. Natural gas is predominately used for electricity and making plastic. In our homes, natural gas is used for ovens, stoves and clothes dryers along with space and water heating. The third source of energy used in the U.S. is coal, which is also mainly used to convert into electricity. Producing sulfur, which produces acid rain and carbon dioxide, this method is also not an environmentally-friendly one. Use of coal is decreasing, but it is still one of the top on the list. 

Renewable resources, although not the most common yet, are one of the fastest-growing options when it comes to getting energy. 

In our homes, it has become second nature to turn all the lights on, crank up the air conditioning constantly and take long, hot showers. That being said, there has been a growing demand for energy. This has left us with a need for an eco-friendly, efficient route for energy consumption, and to make cut-backs when it comes to electricity and fuel use. 

If you want to learn more about the timeline of energy usage in the United States, past and present, the infographic below from The Zebra has great visuals on the subject.

home energy use infographic


Greenhouse Gas Emissions – A Short Summary of CO2
February 1, 2020

Guest blog by S. A. Shelley: As some people, including most notably the Prime Minister of Canada, are confused about greenhouse gas emissions, both during production of electricity and during transportation, I feel that it is time to write a quick blog about this. I will focus mostly on CO2 emissions, which are believed to be the predominant greenhouse emissions driving global warming, even though the effect of methane (CH4) emissions on warming are roughly 20 times as potent (see edf.org, greenplanet.org, and Scientific American), and some other industrially produced gases that are ubiquitous in modern life are yet exponentially more potent.

CO2 Emitted during Electricity Production

Electricity is produced in several ways, including from coal burning power plants, nuclear fueled steam power plants, to windmills and hydropower. Comparing the average amount of CO2 emitted during electricity production by each of these methods (Fig. 1), we see that, by far, coal burning power plants are the worst ways to produce electricity. 

Fig. 1. Comparing Grams of CO2 emitted per kWh of Electricity Produced

What is obvious in Fig. 1 is that burning stuff to make electricity is the most carbon intensive means of doing so. Secondly, if the world really wants to make a fast reduction in CO2 emissions, it needs to quickly switch from coal burning to gas burning. I say this because even though every technology to the right of Biomass is very low carbon technology, none of those, save perhaps nuclear and wind, are available in sufficient quantities in the short term to supplant electricity produced by coal, while gas is immediately available and of sufficient quantity to make a really big impact fast.

CO2 Emitted during Passenger Travel

Comparing amount of CO2 emitted per passenger per mile traveled yields Figure 2. 

Fig. 2. Comparing Grams of CO2 emitted per Passenger per Mile Travelled (200 Mile Trip)

It should be noted that the amount of CO2 produced varies a bit by distance travelled because of such things as airplane take-offs. During take-offs, airplanes are at max power and max CO2 output, but once cruising are sipping fuel, and, thus, CO2 emissions fall. For longer trips CO2 emissions per passenger per mile decrease, but not of sufficient amount to move airplanes further to the right in Fig. 2. For almost any travel, an airplane is the worst way to go. Worse yet is going by private jet.

So what can be done quickly to reduce CO2 output, save the earth and make money doing it? Burn less coal and burn more gas, while providing opportunities for the other clean power technologies to grow and flourish.

For transport, as Greta Thunberg has shown, fly less, and get people out of large cars into smaller, more fuel efficient vehicles. This will work in Europe and Asia with their superb rail networks and preference for more fuel efficient vehicles and nascent surge of interest in EVs. But America needs to catch up, with its limited rail network and where folks still prefer to drive a big truck or SUV for solitary commuting and the occasional bag of groceries.  It's a bit more complicated than that though, but Americans for the most part still prefer displays of conspicuous consumption rather than building financial security. All other things being equal then, if time is no worry, travelling by train and by bus is the way to go. Most importantly, don’t fly by private jet.

How Are Countries Faring with Reducing CO2 Emissions?

It was the best of governments and the worst of governments: A time of pomp and vanity, versus resolve and obstinacy. It is Canada versus the United States in terms of CO2 gas emissions. While we've just entered 2020, the most current data that I can find for both nations is up until 2018. Fig. 3 compares the per capita CO2 emissions between Canada and the United States.

Fig. 3. Comparing per Capita Yearly CO2 Emitted In Canada and the United States

A few things are surprising. Firstly, since 2005, the year of the Paris Accord to reduce GHG emissions including CO2, the United States has decreased per capita CO2 emissions by 17.6% while Canada has only been able to achieve a reduction of 7.0%. The second thing is that by 2015 the United States passed Canada in lower CO2 emissions. Surely the data must be wrong? The data is not wrong.

In the United States, the big reduction in CO2 emissions has come about mainly by replacing coal fired power plants with gas turbine power plants. Some additional reductions in CO2 have been achieved by better vehicle fuel economy and other efficiency gains in using power in the economy. Going forward, the rapidly expanding wind and solar power plants in the U.S. will start eating into the gas turbine power supply, and we can confidently expect further reductions in CO2 emissions per capita. All this in spite of an administration in Washington that is keen on supporting coal and hostile towards alternative fuels. Yet in spite of this hostility, in the United States, utilities have realized that gas and renewables are now the lowest cost and most profitable means to supply power.

Compare this then to Canada, which since 2015 has been governed by a Liberal, neo-communist government that champions environmentalism and green energy. Why then can't Canada achieve similar reductions as that greedy, capitalist state to the south? Well, therein is a big part of the answer.

Vive l'Alberta Libre!

P.S. It is very likely that CO2 emissions per capita in Canada have climbed even higher in 2019. Last December the Federal Liberal Government in Canada released, then quickly removed from public access, its annual GHG emissions report. If CO2 emissions have climbed higher, then expect the Liberal Government to increase carbon taxes to try to hammer CO2 emissions down. Instead it will be Canadians that in the long run will be hammered – the chocolate rations have been increased and the carbon emissions have decreased – until Canada’s utopia equals Ingsoc on all levels.

P.P.S. Forthcoming blogs:

  • Global Oil and Gas - Demand and Supply
  • Another set of blogs explaining why Canada is doomed in its energy and environmental goals
  • The need and means for Western Canada to become independent in order to thrive economically and environmentally


OWOE January 2020 Prediction – A US Legacy Carmaker will Disappear this Decade
January 23, 2020

It’s a new year and a new decade and time to make a bold prediction regarding developments in the energy industry and associated transportation industry. The last few years have been a wild ride for electrical vehicles (EVs) with Tesla continuously in the headlines. Will Tesla go bankrupt? Will Tesla change the way the world views automobiles? Is Tesla stock a good buy at $250/share (2019) or $550 (2020)? But other automakers have made their own headlines: Jaguar began sales of its iPace EV, Volkswagen began sales of its eTron, and Ford introduced its Mustang Mach-E. A prediction concerning EVs is warranted, but OWOE is going to go beyond EVs and make a prediction concerning the broader automobile industry: Within this next decade one of the three US legacy car makers will cease to exist.

This prediction is not an outcome of Tesla getting so big and garnering such a large share of the market that legacy US car makers - GM, Ford, and Fiat Chrysler (subsequently referred to here as "L3") - cannot compete. It is based on the recognition that the younger generations of Americans do not want cars from the legacy car makers. Let's look at some statistics first.

Much news has been made of the fact that sales of sedans from the L3 have plummeted in recent years. The headlines have stated that Americans no longer want sedans. USA Today reported in June, 2019 : "Americans are ditching passenger cars in droves...That puts pressure on the automakers to make up for the lost sales with new SUVs. Luckily for them, the nation's SUV boom is alive and well..." Detroit News reported for 2019: "It's all trucks and SUVs, as General Motors, Ford and Fiat Chrysler increasingly abandon the sedan and small-car markets for what they see as more profitable, in-demand vehicles."

But the reality is that overall sales of sedans in the US did not drop nearly as the headlines implied. Detroit News continues with "industry leaders outside the U.S. are angling to scoop up buyers who decide they don't want a new crossover or SUV in their driveways." Japanese, Korean, and German auto companies continued to sell sedans ranging from low price Kias to luxury Mercedes. And Tesla increased sales of its EV lineup by 50% from 2018 to 2019, driven by its mass-market Model 3 sedan. (See the OWOE blog on Tesla's Model 3.) Clearly, there is still a large market for sedans. Americans just aren’t buying sedans from the L3.

Why is that? Tesla sales are driven by the fact that they are the best performing cars in any segment; they are cheaper than similar size luxury sedans; they are cheaper from an overall cost of ownership than smaller, lower-end sedans; and they have tapped into a market that values the benefits to the planet of driving an EV. Plus, and this is a big plus, they have captured the imagination of younger drivers with their application of technology. Much like the iPhone crushed its legacy cell phone competitors when it was introduced, Teslas have demonstrated how technology can change the driving experience. German sedans continue to sell because of their reputation for good engineering and a certain prestige factor, and Japanese and Korean sedans continue to sell because of a combination of quality and low cost. The L3 automakers fail on all counts - they don't excite, haven't figured out how to integrate technology to enhance the driving experience, they still struggle from a low-quality reputation that they haven’t been able to shake-off from the 1970s and early 1980s, and they can't compete on cost and durability.

Now, let's look at demographics, public policies and personal choices. Young adults are driving less than ever before, prefer to live closer to work, and are delaying having families. Ride sharing is quickly becoming the preferred transport choice, particularly among young adults, for short trips, leading to greater efficiency in miles per vehicle. Many cities are improving the public transportation option by upgrading/expanding their public transportation infrastructure, encouraging development along public transportation corridors, or implementing congestion pricing for driving into city centers. Now throw in the fact that the life of a Tesla is estimated at between 300,000 and 1 million miles, or a factor of 2-7 times the average internal combustion engine (ICE) vehicle. Will Texans give up their pick-up trucks? Will big families stop needing SUVs? Not likely. But all of these trends point to reduced purchases of ICEs, which are the L3's primary, if not exclusive, product.

And how will the L3 react? Most likely, just as they always have, by focusing on the short term. They will concentrate on their big vehicles with the highest profit margin, foresake R&D because they are strapped for cash, and head blindly into oblivion. What about GM’s decision to turn Cadillac into an EV business? Maybe, but there’s hardly a single young person who would consider buying a Cadillac - that’s their parent’s or more likely grandparent’s car.  What about Ford’s plan to shift heavily to EVs? Maybe, given the response to their Mustang Mach-E, but it’s still targeting a small market compared to its F150 pick-ups.

OWOE's prediction - in the next 10 year (and possibly much sooner) one of the L3 will successfully transition to the EV market; one of the L3 will stand by their current big vehicle strategy and successfully maintain market share by cannibalizing their competitors; and one of the L3 will cease to exist. The question is which one?

Indeed it is very likely that a few other large, traditional, international auto manufacturers may also go bust before the decade ends.


Money Laundering and Renewable Energy – A Great Opportunity
January 2, 2020

Guest blog by S. A. Shelley: If the world wants to move quickly to a lot of renewable energy, then maybe money laundering is the key to getting it done.

It's been well known for some time that money laundering is a significant driver in real estate  ( see theweek.com and boingboing.net)   Such shenanigans with real estate began way back in the 1980s in Florida, with cocaine cowboys literally knocking on home-owners' doors and offering cash for homes at above market value.  From there, it moved to California, Hong Kong and Dubai, Vancouver, and of course London...until a large chunk of high-end real estate was infected somewhat by illicit money. There are of course other means to launder money. Cash flow businesses such as restaurants or car washes have also been havens, i.e., anything that can provide a large, difficult to trace production output and revenues versus costs and volumes of input: Was that 1lb of pasta used to make 5 dishes or 6?

Unfortunately financial regulators and the law are getting better at stopping traditional means of money laundering. For a while it looked like crypto-currency, being beyond the control of nation-states, was going to save money laundering, but crypto-currencies have their drawbacks too, including fluctuating values and, of course, limited means to pass through the large volumes of money, around $10 trillion per year, that sustain the illicit economies in the world. Furthermore, as some governments begin moving towards digital currencies themselves, and removing large denomination bills from circulation, money laundering will have additional challenges in the near future. After real estates, there are diamonds, gold and high value art or collectibles, but those, too, are coming under increasing scrutiny, and there are only so many Picassos or Rembrandts to go around.

So where can ill-gotten gains be laundered? What industry is there that offers huge production volumes with some variant transparency?  Renewable energy. That's right, I’m proposing that renewable energy is a great way for elites of dubious background to transform money, makes even more money and at the same time help the earth.

Consider a 1 GW solar plant. Did it produce or 1.0 GW that day or was it 1.05 GW?  Or an EV battery: did it discharge 10 MWH or 11? Those variable margins are a great place for money launderers to sneak in and clean up while helping the earth clean up its emissions mess.   It's not quite that simple, but it's appealing and probably best to get into the business at the outset, when regulations and laws are still poorly defined. Get in very early in the development phase and there are probably government incentives that are also available to guarantee a certain cash flow, payback or tax credit for a time.  The argument for laundering through real estate is that people need a roof over their heads and will pay dearly to have it. The same argument can be applied to energy in that people need to stay warm and need to be able to move about to their job and such, and thus will always pay for some form of energy.

Investing in renewables at the outset also avoids the problem of investing in legacy coal or oil industries, namely any forthcoming liabilities for past externalities.

Years and years ago, I had an interesting chat with a business professor about investing. He candidly suggested to follow the Mob. "The Mob hires the best and brightest from Harvard, Stanford and the like. Invest in what the Mob invests." It remains to be seen whether Harvard and Stanford whizzes are encouraging investments in renewables. I'm all for this, because at this time, if it takes a deal with the devil to save the earth, then let's worry about the details later.

Vive l'Alberta Libre!