What goes down: Stein’s Law and the cost of energy

Carey King, BURN Contributor

Stein’s Law states: “If something cannot go on forever, it will stop.”

For nearly 60 years after World War II, the percent of U.S. household income spent on food and energy – or personal consumption expenditures (PCE) – declined.

But then things started to change. Again. Between 1998 and 2002, PCE for food and energy stopped declining and started increasing. The PCE for “food + energy” reached a minimum of 18% in 2002. Whether or not this will be the minimum percentage PCE for “food + energy” for the US for all time is a good question.

But this percentage cannot decrease forever because energy and food will never be free – back to Stein’s Law. As we’ll see shortly, the reversal of these trends could be an indicator of a fundamental transformation for our economy and society.

Carey King - Food_Energy chart

Figure 1. Personal consumption expenditures of US households expressed as a percentage of total expenditures. Data are from the US Bureau of Economic Analysis Table 2.3.5. Food = “Food and beverages purchased for off-premises consumption” and “Food services and accommodations.” Energy = “gasoline and other energy goods and of electricity and gas.”

The reason to consider both the PCE for energy and food is because food was fundamentally an energy source of pre-industrial power from humans and animals. Before fossil fuels and significant industrialization using wind, wood, and water power in the early 1800s, food was the major energy resource for prime movers.

The food that animals and people ate was the fuel that powered them, and therefore the machines and tools they operated. Thus, the quantity of food and fodder produced from the land had a major influence on the amount of power for agriculture and a little industry.

In a large sense, fossil fuels and subsequent technologies drove down the relative cost of food and energy. Those energy-dense resources enabled the technical change that generated economic growth. Fossil fuels also meant fewer and fewer workers were needed to grow food and mine energy sources.

Since 2002, we have been spending an increasingly higher proportion of our personal income on food and energy, due to resource scarcity. Thus, there has been an increased demand for more investment (capital and labor) in these basic needs.

In other words, food and energy have become increasingly scarce – and therefore, more expensive – because of the rising demands for each around the world.

As a result, an increasing proportion of workers and other resources may be needed to produce the same quantity of food and energy (fossil and renewable), possibly with declining per capita consumption. This is the exact opposite trend of fossil-fueled industrialization!

The truth is that constraints in food and energy supplies, together with consumption patterns (and demographics, too, but that’s another subject) have caught up with much of the ‘advanced’ economies (e.g. EU, US, Japan). Unconventional oil alternatives – oil sands, deepwater, oil shale, biofuels – don’t have the same level of pure energetic value as energy sources of the past.

In considering the ongoing debate about American jobs and decreasing unemployment rates, note how the oil and gas commercials tout the jobs they create. Then, remember the figure in this article. Historically, the economy has grown the most when we’re moving jobs out of the energy sectors.

The rising cost of energy is a primary cause of our slow economy, and there is a limited rate at which we can adjust to this new reality. The sooner citizens, businesses, and politicians accept this fact, the better we will be in the future.

Carey King is a research associate in the University of Texas at Austin’s Center for International Energy and Environmental Policy. King researches energy systems and how they work together and within the environment. King contributes blog posts for Environmental Research Web, under Energy – The Nexus of Everything.

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VOICES: Post-Fukushima nuclear fears & Japan’s energy dilemma

Japan used to get a third of its electricity from nuclear power plants. But after the Fukushima Daichi nuclear disaster, nearly all of the plants were idled.

Now, the country is importing fossil fuels, plunging it into a trade deficit for the first time in a generation.

Prime Minister Shinzo Abe wants to restart the idled plants. But polls show the people of Japan are strongly anti-nuclear these days.

Catherine Winter asked some families in Japan what they think.

 

Aiko_Crop

Aiko Shimada, 37, says Japan’s nuclear plants should stay off even if it hurts the country’s economy. (Catherine Winter)

 

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Two-year-old Karera Tani’s family lives in Chiba, about 130 miles from Fukushima. They fled to Osaka when the nuclear plant melted down. (Catherine Winter)

 

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Yoshiko and Takayuki Nakamura with their 4-year-old daughter Ayano. Yoshiko is against nuclear energy in Japan, but Takayuki thinks nuclear plants can be operated safely. (Catherine Winter)

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Tar sands in the US? It’s not just about the Keystone Pipeline

Alex Chadwick, BURN Host

This just in: the Obama Administration continues trying to walk the very fine line that will least anger his many critics in the energy industry and among environmental groups.

 The latest is an announcement last week from the outgoing Secretary of Interior, Ken Salazar. It’s about development of potentially huge hydrocarbon reserves in Colorado, Wyoming and Utah.

The DOI agency that manages federal lands – aptly named the Bureau of Land Management (BLM) – has formulated new rules about how to exploit these reserves in a way that it says is environmentally sound, and a good financial deal for the feds and, ultimately, taxpayers.

From comments by Mr. Salazar: “This plan maintains a strong focus on research and development to promote new technologies that may eventually lead to safe and responsible commercial development of these domestic energy resources. It will help ensure that we acquire critically important information about these technologies and their potential effects on the landscape, especially our scarce water resources in the West.” 

But it’s a good bet that no one will be happy with this. There are oil shale and tar sands operations already set to get underway this summer in Utah – operating on state and private lands, and thus not subject to BLM rules. The tar sands operation would be the first of its kind in this country. The oil shale facility would be the first US site for that development in thirty years.

Both hydrocarbons are solids in their natural state, and must be treated, and often heated, to be transformed into petroleum. The estimated recoverable reserves of these hydrocarbons are enormous – perhaps three times the size of the oil holdings in Saudi Arabia. The world’s easy-to-get petroleum reserves are dwindling, but the industry sees huge potential payoffs in these ‘unconventional’ fuels.

And the Greens see a disaster. The climate numbers keep getting worse. Much worse. More hydrocarbons = more devastation for our children and grandchildren, the Greens say. We have to leave some hydrocarbons in the ground, and these are the ones to start with. It takes more energy to make them usable, which means their carbon consequences are even greater than normal petroleum.

Oh, by the way: jobs, jobs, jobs, jobs, jobs, jobs. And jobs.

This new BLM proposed rule is now open for 60 days of comment. It’s just another small tick for the time bomb of energy and climate. And why now? An act of grace by Mr. Salazar. His replacement, the new Secretary of Interior, Sally Jewell, CEO of Recreational Equipment, Inc., is about to get a confirmation vote by the full US Senate. She’ll be glad this isn’t waiting for her. But those 60 days will pass soon enough.

The ticking doesn’t ever stop. There’s a tremendous political fight in this country right now about the Keystone XL Pipeline meant to carry Canadian tar sands to US Gulf Coast refineries. As US land continues to be developed for tar sand exploitation, the fight won’t just be about resources coming in from Canada. The battle will be here, too.
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Power to the people: Bulgaria’s sky-high light bills

Robert Rand, BURN Editor

This story, in a recent online edition of the British newspaper, the Telegraph, is for those of you worried about paying your monthly electric bills. Here’s the headline and lead sentence (point of reference: a British pound equals around $1.50):

Bulgaria Bishop

The bishop in question lives in Bulgaria, one of the poorest members of the European Union. The cleric’s name is Nikolay, and his eBay-like effort to pay the electric bill of a church named Saint Marina is one rather offbeat consequence of an energy crisis so monumental in scope that it has triggered mass demonstrations, at least four self-immolations, and, last month, the resignation of Bulgaria’s prime minister and his government.

 bulgaria mapBulgaria is one of those former Soviet controlled countries in eastern Europe forced to walk the difficult path towards capitalism and democracy after the collapse of communism in 1989. It is situated in the Balkans – always a rough block to live on.

Energy distribution in Bulgaria is dominated by three foreign-run power companies, two from the Czech Republic and one from Austria. Under them, electricity prices more than doubled between December and January, the delayed hit of a nearly 14 percent price increase imposed last summer.

The surge was caused by a complicated and volatile combination of global market forces, high wintertime energy consumption, inefficient management and political corruption. An analysis by the Center for the Study of Democracy, a non-partisan Bulgarian think-tank, attributed the rise of social discontent to a citizenry fed up with having to pay a premium for bad governance.

Protesters in Bulgaria. The sign reads: “Czech Pirates.” (AP Photo/Valentina Petrova)

Protesters in Bulgaria. The sign reads: “Czech Pirates.” (AP Photo/Valentina Petrova)

Utility costs initially set off the protests, which featured demonstrators torching electric bills and tossing snowballs at the country’s economy and energy minister. The movement then turned into something bigger: a broad call for political and economic reform, higher living standards, and an end to corruption.

 A caretaker government now sits in Sofia, Bulgaria’s capital. Demonstrations have slacked off for the time being as the country awaits the outcome of parliamentary elections on May 12.

By the way: That bishop with the Rolex watch? He didn’t receive much in the way of sympathy. The Bulgarian church, like the government, has a PR problem. It is second only to the state as a landowner, and its wealth – as represented by that Rolex – has hurt its public standing. According to the British magazine The Economist, “Alleged ties to dubious businessmen and to the communist-era secret police as well as the luxurious lifestyle of some of its highest-ranking bishops have damaged the church’s reputation.”

Maybe it’s time for the Bulgarian church, and state, to switch off the power and light some candles.

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Why the Greens are going nuclear

Alex Chadwick, BURN Host

From the Manhattan Institute, a conservative think tank, a take on the ongoing schism among Greens on the nuclear question. The piece looks at the migration of environmentalists – historically anti-atomic energy – to the pro-nuclear side.

The emergence of the pronuclear Greens represents an important schism in modern environmentalism. For decades, groups like the Sierra Club and Greenpeace have pushed an antinuclear agenda and contended that the only energy path for the future is the widespread deployment of wind turbines and solar panels. But fear of carbon emissions and climate change has catalyzed a major rethinking. As Brand puts it in a new documentary, Pandora’s Promise, which explores the conversion of antinuclear activists to the pronuclear side: “The question is often asked, ‘Can you be an environmentalist and be pronuclear?’ I would turn that around and say, ‘In light of climate change, can you be an environmentalist and not be pronuclear?’ ”

The writer appears to be pro-nuclear, and this piece makes the argument that climate change is so serious that we must go heavier on nuclear because there are no other better options.

 For nuclear energy to gain significant momentum in the global marketplace, then, it has to get much cheaper. In a September essay published in Foreign Policy, Nordhaus and Shellenberger, with coauthor Jessica Levering, provided a road map for revitalizing the nuclear sector. They called for a “new national commitment” to the development and commercialization of next-generation nuclear technologies, including small modular reactors. The goal, they said, should be reactors that can be built at “a significantly lower cost than current designs,” as well as a new, more nimble regulatory framework that can review and approve the new designs.

While that plan is sensible enough, it’s not clear whether groups like the Sierra Club and Greenpeace can be persuaded to abandon their antinuclear zealotry. Nevertheless, it’s encouraging to see that some influential environmentalists are realizing that we have no choice but to embrace the astonishing power of the atom. We do have to get better at nuclear power, and that will take time. But we’re only at the beginning of the Nuclear Age.

It’s not especially persuasive for the US, given the abundance of very cheap natural gas here. But natural gas is much more expensive in Europe and Japan, and nuclear looks much better there.

But should it, especially in the evolving form of small, modular reactors – termed SMRs? I missed this a couple of weeks ago, but Taxpayers for Common Sense – a Washington, DC, based non-profit – gave its Golden Fleece award to the Department of Energy for its support of SMRs. Hundreds of billions of dollars a year in subsidies.

The group said that the subsidies often go to large, very profitable companies that don’t need help with their R&D. Golden Fleece awards were originally handed out by the late Senator William Proxmire of Wisonsin, who used them to ridicule what he considered wasteful government spending. BURN covered one small start-up looking to develop its own SMR, Nuscale Power, on our first radio special.

My observation: the regulatory oversight of nuclear seems appropriate and necessary. But the same standards are not nearly so applied to other energy sources.

Hello, big oil, coal and gas – I’m talking about you.

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On super-highway to climate catastrophe, a demand for full tanks

By Alex Chadwick, BURN Host

I’ve run across two interesting pieces in the last few days on energy resources, climate and doing the math.

At the Vancouver Sun, reporter Pete McMartin reviews the numbers on carbon build-up in the atmosphere. Getting worse, and likely to get worse still, with world changing consequences.

He digs up a now four year-old paper on greenhouse emissions from a European research team lead by German climatologist Malte Meinshausen. The study was short but dense, McMartin notes, so few people took note of one of its scariest points. The researchers set out “to determine just how much time mankind had left before our burning of fossil fuels would cause catastrophic global warming.”

The problem was, no one was exactly sure how much fossil-fuel consumption had already contributed to global warming, or how much fossil fuel mankind could consume without going over the 2 C marker. Those phenomena needed to be quantified. Meinshausen’s team did just that. It constructed a rigorous model by incorporating hundreds of factors that had never been grouped together before, and then ran them through a thousand different scenarios. The team’s conclusion?

Time was perilously short.

It found that if we continued at present levels of fossil fuel consumption (and, in fact, consumption has been rising annually), we have somewhere between an 11-to 15-year window to prevent global temperatures from surpassing the 2 C threshold in this century.

And the longer we waited, the worse the odds got.

I’ve seen these numbers before. McMartin makes a compelling case for remembering to stay with information and data that’s really important.

And at an annual meeting in New York for financial analysts last week, ExxonMobil CEO Rex Tillerson said the company will increase spending on exploration by one-billion dollars a year for the next several years. They were already going to spend a lot. Now they’ll spend more – “$190 billion over the next five years.”

That’s an average investment of $38 billion each year on some of the most technologically challenging projects on the planet. (By comparison, our earnings over the previous five years have averaged $36 billion per year.)

Those projects range from energy exploration in the Russian arctic and producing liquefied natural gas in the remote Papua New Guinea Highlands to oil sands production in Canada and expansion of our world-class refinery and petrochemical complexes in Singapore and Texas. We advance those projects likely to provide long-term shareholder value, and focus on the efficient use of capital to achieve superior investment returns.

Exxon’s production is going up, too – by 4% a year between now and 2017.

The one thing for sure about energy is that demand is not going away. The big, highly consumptive economies are doing better with conservation – but that’s not where the new demand is coming from. It’s the rest of the world that wants to catch up.

So, what do we do?

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Rome BURNS – The Vatican Conclave: Green Smoke Rising

By Robert Rand, BURN Editor

Last October, at a ceremony marking the 500th anniversary of the Sistine Chapel ceiling, Pope Benedict XVI, now retired, declared that Michaelangelo’s frescoes exude the “light of God.” He might have added that solar panels now light the Vatican.

The Sistine was the venue this week for a papal conclave to elect Benedict’s successor. Cardinal Jorge Mario Bergoglio, from Argentina, was selected. The new pope, named Francis I, will be the beneficiary of Benedict’s propensity for solar energy.

Take a look at this shot from Google maps:

Vatican Solar Panels_Google Map

The circular piazza is Saint Peter’s Square. The Sistine Chapel is on the top left, above and to the right of the iconic Dome of St. Peters’ Basilica. A stone’s throw from the Sistene, on the other side of the basilica, is a large, modernistic, quasi-rectangular shaped building. It’s the Paul VI auditorium, where, when the weather is bad, the pope holds weekly audiences with members of the public. The building has a photovoltaic panel roof.

The solar panels – more than 2000 of them — were installed in 2008, with Benedict’s blessing. They produce the energy required to heat, cool and light the building. One of the project’s engineers told the Associated Press that the panels “avoid 200 tons of carbon dioxide” every year. “This is the equivalent to 70 tons of oil.”

Benedict, who assumed the papacy in 2005, has criticized “the unbalanced use of energy” in the world. He once asked Catholics to reduce carbon consumption for Lent. And during his papacy work began on a “Vatican Climate Forest” in Hungary. The idea: plant more than 100,000 trees to absorb as much carbon dioxide as the Holy See emits annually. The objective: make the Vatican a carbon-neutral state.

Benedict has been called a “Green Pope.”  He is the first pontiff to have tooled around St. Peter’s square in an all electric Popemobile, donated to the Vatican last year by Renault.

The vehicle is powered by a lithium ion battery. Benedict previously had expressed interest in a solar powered vehicle.

All of which inspired one writer at The Atlantic to describe Benedict’s papacy as the embodiment of “The Father, The Sun, and the Holy Spirit.”

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Tokyo Restaurant Serves Fukushima-Sourced Food to Make a Point

A group of volunteers who help with reconstruction in the area damaged by the 2011 tsunami gathers at Tokyo's Fukko Shien Sakaba. The restaurant serves food from Fukushima, and donates all of its profits to help the disaster region. Photo: Catherine Winter

A group of volunteers who help with reconstruction in the area damaged by the 2011 tsunami gathers at Tokyo’s Fukko Shien Sakaba. The restaurant serves food from Fukushima, and donates all of its profits to help the disaster region. Photo: Catherine Winter

 

In Japan, farmers and fishermen are having a tough time making a living anywhere near the site of the nuclear meltdown in Fukushima two years ago. Many consumers are afraid products from the disaster region may be contaminated with radiation.

But one restaurant in Tokyo deliberately serves food from Fukushima and other parts of northeast Japan hit by the tsunami and the radiation cloud.

Reporter Catherine Winter visited on a recent evening. She discovered that customers are drawn by a desire to help the disaster victims – and by 96 different kinds of sake.

 

 

MORE: Listen to Catherine’s story about how people in Japan are facing their food challenges, 2 years after the nuclear meltdown.

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National Geographic’s ‘Great Energy Challenge:’ Safety Question on Fukushima Anniversary

A team of officials from the U.S. Nuclear Regulatory Commission visit the destroyed Fukushima Daiichi in Japan December. (Photograph courtesy NRC/Flickr)

A team of officials from the U.S. Nuclear Regulatory Commission visit the destroyed Fukushima Daiichi in Japan December. (Photograph courtesy NRC/Flickr)

 

BURN is partnering with National Geographic’s The Great Energy Challenge blog – a three-year initiative designed to help all of us better understand the breadth and depth of our current energy situation. Here is an excerpt from a GEC post by BURN host Alex Chadwick.

Safety Question on Fukushima Anniversary: Should Plants of the Same Design Have Filtered Vents?

When the giant winter storm Nemo hit New England in February, the Pilgrim Nuclear Power Generating Station in Plymouth, Massachusetts, lost outside power for seven days. Diesel backups took over operating the reactors’ cooling system. (Related Quiz: “What Do You Know About Nuclear Power?”)

Pilgrim has the same kind of reactors that failed at Fukushima, Japan, after an earthquake and tsunami two years ago today crippled offsite power and emergency back-ups. The Pilgrim incident came as the U.S. nuclear industry is fighting proposed new safety measures meant for a crisis that might begin exactly this way. (Related: “Rare Video: Japan Tsunami“)

Of the 104 reactors in the U.S., 31 are very like those in Fukushima. Here is a map of those 31 U.S. sites.

After Fukushima, the U.S. Nuclear Regulatory Commission (NRC) studied what happened. Should it require new safety measures here, even though a crisis is very unlikely?

“It’s not zero,” says Charles Casto, director of NRC Region III, which oversees plants in the Midwest. “The probability’s not zero; it’s something.”

Region III has about two dozen reactors. We spoke at Casto’s office. Nuclear regulation, he said, is about possibility more than probability.

“You take your best – based on history…you know, what has history shown you that the probability would be?” Casto said. “But that doesn’t mean zero.”

Gas Build-Up

The Fukushima reactors, and their 31 U.S. cousins, including the Pilgrim Station, are old boiling water reactors with “Mark I” and “Mark II” containment systems, built by General Electric. The safety enclosures for the reactors are too small. If their cores start to melt down, the containments could fail in several ways, including a build-up of hydrogen gas with radioactive particles and explosion, as at Fukushima. (Related: “Japan Reactor Crisis: Satellite Pictures Reveal Damage“) There’s an increasingly politicized dispute between the industry and the NRC over how to make preventing meltdowns safer.

READ || The rest of Alex’s story for National Geographic’s Great Energy Challenge.

LISTEN || BURN’s story on US reactor venting concerns, post-Fukushima.

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LISTEN || Japanese Worry About Food, 2 Years After Fukushima

Some people in Japan are worried about eating seafood after reading news reports about radioactive fish. But business is still brisk at Tokyo's famous Tsukiji fish market. Photo: Catherine Winter

In Japan, people call it 3-11. It’s shorthand for the tsunami and nuclear accident two years ago. The disaster left behind devastation that may never be completely cleaned up. Tens of thousands of people still can’t go home. People are still missing.

And people are still afraid of radioactive contamination. Japan’s government insists the food supply is safe.

But in Tokyo, reporter Catherine Winter found that some people have made big changes in their eating habits.

 

MORE: Listen to Catherine’s story about a Tokyo restaurant serving Fukushima-sourced food – to make a point, and a difference.

 

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