Friday, November 25, 2011

Light to Medium and Heavy To Light

We have light to medium and heavy to light. I am not talking about boxing fighting weight divisions but rather how energy companies are playing the arbitrage due to high price of liquid transportation fuels (middle weights) and the lower price of natural gas (light as a bantam weight) as well as the lower price of heavy oils, shale, tar, and even wood (the heavy weights). I recently blogged about compressed natural gas and how it should be used as a transportation fuel as this can be done with very little loss of energy (about 3% to 5% for compression of the gas), it is very economical, and will yield lower carbon emission per mile traveled. Of course we in the ignited states will not settle for a simple solution, we prefer the Rube Goldberg solutions of converting natural gas to liquids or using brute force gymnastics to get the heavy weight fuels to lighten up and yield liquid transportation fuels.

Liquids are great fuels. They have the highest energy per unit volume, can be stored at ambient conditions in simple tanks, and are easily pumped. One cannot pump coal, tar, wood, or corn stalks. The problem with converting solids to liquids is that it is costly, almost half of the energy content of the solid fuel is lost in the conversion process, and the factories that perform this transformation have high carbon dioxide emissions. Storing natural gas requires high pressure cylinders or thermos like cryogenic tanks. Converting natural gas to diesel and gasoline is less costly than starting with solids, and has lower carbon emissions at the factory, still wastes as much as 45% of the energy contained in the natural gas, and half of the hydrogen in the synthesis gas ends up as water not fuel.

Converting natural gas to electricity in the most efficient combined cycle generation station yields a thermal efficiency of approximately 55%. Transmitting the electricity and converting it into direct current for use in battery powered vehicles causes another loss of 15%, therefore by the time all losses are accounted for only 40% of the energy in the gas ends up in the batteries on board the vehicle. From the above analysis it can be argued that transforming the natural gas into other forms of energy for transportation is simply wasteful. Of course we do this because the value of liquid transportation fuels is high and there is money to be made transforming the natural gas. The government’s energy policy also subsidizes these expensive alternates. However, the best policy is to use the natural gas directly as the fuel on board the vehicle. My previous blog showed the economic driver for natural gas fired personal vehicles.

Compressed Natural Gas Now a website reports that in Europe and other parts of the world 28 models of new vehicles propelled by CNG are in production and are available for purchase. In the US only Honda offers such a production vehicle (Civic GX). There are 2.75 million compressed natural gas vehicles in Pakistan compared with minuscule figure of 110,000 on the road in the USA. I’d imagine that many of the CNG vehicles in Pakistan are three wheel scooters and have been retrofitted with high pressure tanks by small workshops in that country. Iran and Argentina follow Pakistan in leading the number of CNG vehicles with almost 2 million such vehicles in each of these countries. Bolivia one of the poorest countries in the Western Hemisphere has 140,000 CNG vehicles. It is a pathetic indictment of the incompetence of our department of entropy that the US is a laggard in the CNG world. We have bet a wad of money on advanced biofuels and advanced batteries and the energy source that is right under our feet and yields the most bang (BTU) for our buck never gets any mention, attention, or funding. T Boon Pickins who is an energy man and a billionaire has tried and tried to promote CNG only to be ignored. I wish he would take the role of Energy Secretary and set a target for 10 million CNG vehicles in 10 years. We may have to learn the Argentine Tango on Dancing With The Stars if we are going to do this. I am not certain of the national dances in Pakistan or Iran but I imagine they do it without women and men dancing together and without the passion of the Tango.

Seriously why is the US such a laggard in CNG vehicles? The answer goes back to 2003 when another not so brilliant guru in government had no clue of the future but dictated national policy. This guru was none other than Al The Green Spanner In The Works. The news from June 10, 2003 was the following:
Alan Greenspan the Federal Reserve Chairman warned that Americans can expect high natural gas prices and tight supplies for the foreseeable future and urged the nation to build facilities to import gas.
"Today's tight natural gas markets have been a long time coming," Greenspan told a House panel. "We are not apt to return to earlier periods of relative abundance and low prices any time soon."
Greenspan took issue with policy-makers who believed the United States should try to become self-sufficient in terms of gas supplies. "There is no way we can be self-sufficient," he said, adding, "It is in the interests of this country not to endeavor to localize, to be protectionist, to pull in our horns."

Fast forward to November 2011 and the US is now likely in the next decade to be a net exporter of natural gas due to the proliferation of a new technology in natural gas production from shale formations deep in the earth. Al was just another super smart idiot who led us in the wrong direction not only in energy but also in housing.