My first post in this series, Climate Change – Part I – Scientific Debate, could be summarized as follows:

1. The mechanism of how carbon based gases can influence air temperature (the “greenhouse gas effect”) is well established basic physics.
2. On average, the global atmospheric temperature has been rising over the last century.
3. Part I discussed how ice core drillings in Vostok/Antarctica going back 420,000 years shows undeniable correlation between CO2 and temperature in the atmosphere throughout numerous cooling/warming cycles. However, the temperature changes occurred 800 years ahead of the CO2 changes; not the other way around.  It’s noteworthy that Al Gore used this same data in support of his core argument that carbon is driving global warming in his movie, An Inconvenient Truth, but failed to point out that CO2 changes lagged behind temperature changes by 800 years (perhaps another inconvenient truth).
4. Heating/cooling cycles happened long before humans discovered fossil fuels. Something triggered each of these cycles. These triggers (whatever they might be) are thought to cause rapid changes through positive feedback mechanisms.
5. Some speculate that the release of massive amounts of man-made CO2 could become one of these triggers.
6. Notwithstanding the Vostok data, many (but not all) climate scientists have somehow concluded that man-made CO2 is driving an increase in global temperatures.

On to Part II which discuss how some scientists are pursuing the sun and clouds (water vapor) as alternatives to carbon as the key drivers of climate change.

My final post for 2008. The year in review as explained by Uncle Jay. Happy New Year to all of us!

The last weekend before the recent presidential election, a San Francisco Chronicle interview found Mr. Obama stating, “Build the coal plants if they want, but it will bankrupt them if they do.” Not surprisingly, the conservative herd quickly wolfed down this final slab of red meat and lept to the conclusion that the Obama administration intended to literally bankrupt coal plants and more broadly the entire coal industry. Insofar as the electorate was concerned, that dog didn’t hunt. Still, many of my Republican acquaintances continue to insist that the coal industry will be in the next administration’s crosshairs.

Is bankrupting coal plant operators and coal producers a credible threat? Let’s start with where our electricity comes from today. As shown in the pie chart below, we currently derive almost 50% of our electricity from coal! Yes, coal. So let’s be realistic. No sane administration is going to shut down almost 50% of the nation’s power supply overnight.

Even under an accelerated national moon-shot style rebuild program, it would take a decade or more to replace the existing fleet of coal plants. It takes 3-5 years to build a single large complex traditional power plant. Coal plants produced over 2,000,000,000 Megawatt-Hours of energy last year. Let’s break that down. Divide by the number of hours per year (8760) and we get 228,310 Megawatts worth of running coal plants each hour. Figure an average coal plant size of 500 Megawatts and that gives us about 457 plants. But since they all can’t run 24x7x365 we need some extra plants. Using an 85% capacity factor we end up with 537 plants. Published numbers run closer to 600 so we’re in the ball park here. At a nominal replacement cost of $2,000,000 per Megawatt (very optimistic!), we’d need to invest 537x500x2,000,000 which equals roughly $500 billion (half a trillion) dollars.

The real price tag could easily be double or more – say an even $1 trillion.  And since we’d be building all these plants almost simultaneously, the demand for steel, concrete, engineered equipment, contractors, and design/construction labor would skyrocket so figure at least a 50-100% premium so now we’re pushing $3-4 trillion. But maybe clean coal plants aren’t so clean. So let’s say we replaced them with nuclear plants. Ka-ching! Now we’re up to $4-6 trillion and counting. No nukes you say! Ok, then let’s go green and replace those coal plants with a combination of wind and solar. Adjusting for higher costs and lower operational availability puts us somewhere in the land of $6-8 trillion. Add in the obligatory cost overruns and we could see $10 trillion. Now we’re talking real money. About equal to the current national debt! And we haven’t even touched on the cost of upgrading the national electrical grid.

Oh, and let’s not forget that while we’re busy bankrupting the coal business and replacing the existing coal fleet these past 20+ years, our national demand for additional power supplies is projected to increased by 30% so let’s throw another $3 trillion dollar green log on that fire. Warm yet? Does bankrupting the coal business sound realistic? Hardly.

So what was Mr. Obama driving at with his comment? I believe he was simply being realistic by suggesting that building the next conventional coal power plant may prove to be an imprudent investment. Coal plants have been popular amongst utilities because until very recently coal fired power has had the lowest apparent cost. Why apparent cost? Because coal produces low cost electricity provided you ignore what economist refer to as “externalities”. An externality occurs when an economic activity causes external costs or benefits to third party stakeholders (in this case all living organisms) who do not participate in the economic transaction. Global warming has been ranked as the #1 externality of all economic activity in terms of the magnitude of potential harm yet remains largely unmitigated and unaccounted for in consumer electricity prices.

Many, including Mr. Obama, believe that carbon emissions, in the form of either a carbon tax or cap-and-trade program, will soon become a reality. The Northeastern Regional Greenhouse Gas Initiative that kicks in starting in 2009 is a prime example. And since coal is the most carbon intensive of the three fossil fuels (natural gas, oil & coal), the costs to emit carbon will fall hardest on coal plants. After all, that’s the whole point of climate change regulation; impose a tax (whether directly or indirectly) on the worst offenders in order to change behavior. Those emitting the least carbon pay little or nothing. Properly applied, these regulations will eventually tip the playing field in the favor of greener low/zero carbon sources of electricity like wind, solar and biomass that would otherwise lose out to coal because they are currently more expensive when the cost of externalities are not included. Politically, this is tricky business of the first order because it’s a sure bet the voter will end up paying more for electricity – some would say we’d finally be paying the “real” price.

Moving away from traditionally lower cost electricity derived from coal goes totally against the political grain; especially in coal states. Nevertheless, widespread opposition to new coal plants has become fierce. Even though carbon regulations have barely entered the picture, the belief that such regulations are inevitable, if not imminent, are changing the politics of electricity. Some regulators are already aligned with Obama’s views. Just last month, the Wisconsin Public Service Commission unanimously denied Wisconsin Power and Light’s plan to build a new 300 MW coal-fired electric generation in part because of uncertainty over the costs of complying with future possible carbon dioxide regulations. The fact that the new state-of-the-art coal plant had a nose bleed price tag of $4,200 per kW ($1.25 billion for 300 MW) was no doubt also a big factor. So much for low cost electricity derived from coal.

But even as we begin to wean ourselves off of coal, the question of what to replace it with goes largely unanswered. We need new baseload generation – the kind of power plants that can provide power whenever we need it – day or night. Natural gas is the default solution but T. Boone Pickens says we need to funnel natural gas into transportation fuel. Wind and solar can’t provide baseload power – at least not today or until we have some phenomenal breakthrough in battery/storage technology that could prove as elusive as nuclear fusion. Ironically, as new coal plants are becoming politically radioactive, nuclear power is seeing a potential resurgence; albeit very slowly. Now if can only solve that nasty spent nuclear fuel problem we might get somewhere – in 20 years or so. Meanwhile, coal will be with us for at least another generation, Obama’s statements notwithstanding.