Canada’s nuclear industry just turned 50 years old — so why is it still living in Mom and Dad’s basement?
For a closer look at wellhead to refinery gate Greenhouse gas (GHG) emissions, take a look at these Life Cycle Emissions reports by the Alberta Energy Research Institute.
The Jacobs Consultancy was originally commissioned by the Alberta Energy Research Institute (AERI) to verify or disprove the full fuel cycle analysis for gasoline-from-oil sands feedstock that is used in the GREET model and the modified GREET model that the University of Berkeley team has used to inform the California Low Carbon Fuel Standard. The presentations at the website shows you Jacobs’ findings as well as a comparison of Jacobs findings to those of TIAX—the research on which the Berkley modified GREET full fuel cycle GHG estimates are based.
After that first round of research was published, I asked AERI why they had not also looked at the diesel fuel cycle. After all, 78% of the full fuel cycle GHGs for gasoline occur at the tailpipe, and we all know that diesel tailpipe GHGs can be 10% to 15% lower (per ton mile of vehicle use) than tailpipe GHGs for gasoline-powered vehicles. Based on some of my historical working experience, I also understood that refinery GHGs could be as much as 15% lower in a refinery that is designed to maximize diesel output, relative to a refinery that has a 35% gasoline fraction target slate.
As a result, AERI asked Jacobs to look at the diesel full fuel cycle, but so far I have seen only preliminary conclusions from that analysis. You might want to look at a new presentation, "Life Cycle Analysis and Technology to Decrease Green House Gas Emissions".
This new research suggests that the full fuel cycle GHGs associated with Canadian exports of heavy oil and refined products from oil sands feedstock is statistically zero. In other words, the difference suggested in the slide deck is much smaller than the estimation error. But let’s move on from there.
All of the analysis at this site still deals in average wellhead to refinery gate and transportation emission estimates. It shows that oil sands recovery and upgrading/refining emissions vary greatly depending on extraction process, whether or not the upgrader/refinery is co-generating heat and steam, and whether or not it uses coke to produce heat/steam. The upgrading/refinery emission estimates you see in this analysis are based on the consultants’ best estimates of refinery averages.
But there is one combined upgrader/refinery in Canada that is designed to maximize diesel output (or at least NOT designed to achieve a 35% gasoline fraction) from oil sands feedstock. It is the Scotford Upgrader/Refinery Complex, owned and operated by Shell International. This 25 year-old upgrader/refinery complex was subject to a major expansion starting in 2006.
We do know the 2005 through 2008 GHGs for the Scotford and the rest of Shell’s operations in Alberta, but I don’t have an estimate of the upgrader’s and refinery’s throughputs at this time. The upgrader has a rated processing capacity of 155,000 barrels per day (24,600 m-3/d), but has at times pumped out more than 200,000 bbl/d (32,000 m-3/d). The refinery has a rated capacity of 100,000 bbls per day of synthetic crude feedstock.
Actual Scotford throughput levels in 2006 and 2007 would not be representative years, due to the construction project and related plant downtime. But based on old (pre-expansion) estimates of Scotford’s GHGs/MMBTU of product output ratio, I am guessing it should be lower than most other Canadian refineries and the GHG factors used in either the Jacobs or TIAX analysis.
This is because: (1) the upgrader uses waste heat from the refinery, (2) the upgrader co-generates electricity and steam and (3) neither the upgrader nor the refinery use coke as a heating fuel. I think the Scotford numbers would suggest that the differential between the oil sands to diesel upgrader/refinery GHGs relative to GHGs from conventional crude-to-gasoline in a refinery that is targeting a 35% gasoline fraction—which differential appears to favour diesel-to-diesel over conventional oil-to-gasoline—is large enough to offset the higher extraction -to-upgrader GHGs for oil sands feedstock.
I also believe you will see that a wide range of opportunities exist to cut GHGs in the oil sands supply chain, while GHGs/MMBTU worth of conventional oil tend to increase as conventional oil reserves become depleted. So the oil sands feedstock is also a superior platform for incremental GHG reductions in the liquid fuel supply chain.
Finally, a new diesel-focused upgrader/refinery is under construction in Alberta, being developed by Northwest Upgrading . The new upgrader/diesel refinery complex should be the "greenest" petroleum product refinery in the world. It includes carbon capture where the flue gas stream will be injected to enhance oil recovery rates at a nearby semi-depleted conventional sweet crude reserve. This complex relies on gasification and does not have a coking unit.
Fuel Shifting and Tailpipe GHGs
I found the best way to get a picture of how important fuel shifting from gasoline to diesel has been in the EU27’s transport GHG emission profile is to look at the nations’ actual detailed GHG inventories as they appear in the CRF reports here.
Download the .zip file for any country you want to look at. Open the file for 2007, then go to Table 1.A(a) and look at, say, "Road Transportation". Then do the same for as many prior years as you deem necessary. Look at the difference over time.
I show you part of the tables for Denmark, comparing 1999 and 2007, below. What this shows you is that fossil fuel consumption for road use increased 16.6% in Denmark from1999 through 2007, even though: (1) population grew only 3.2%, (2) cargo freight shipments fell 16.2% and (3) the tax-included price of diesel fuel increased 81% from 61.6 euros/1,000 litres to 111.3 euros/1,000 litres.
Since total cargo shipment (in tonne-miles) declined over the period, clearly 100% of the diesel fuel consumption increases reflect increases in passenger vehicle use and passenger vehicle fleet fuel-switching from gasoline to diesel. The dataset shows that Danish demand for transportation fuels actually grew over 42% between 1990 and 2007—even though population growth was under 6% and cargo freight shipments fell over this longer period.
With the gasoline and diesel consumption estimates from the UNFCCC, and the passenger and cargo freight estimates you can get from the US EIA and Eurostat, you can fairly easily calculate what the European transport sector GHG growth would have been in the absence of the passenger vehicle fleet fuel switch from gasoline to diesel. And you could calculate what the US and Canadian transport sector GHG trends would have been had we experienced a comparable fuel switch, given our passenger and freight transport trends (our cargo freight shipments have increased, not decreased as in the Danish example).
As an aside, the fuel consumption and price data belie the mantra that simply "putting a price on carbon" will lead to reductions in fuel demand.
If you compare population density and ambient temperature (in heating degree days or HDDs) weighted transportation fuel consumption for the developed OECD nations, you will find that there is a very high correlation between per capita fuel demand and (1) population density and (2) average household income. While fuel demand is income elastic it appears quite price inelastic over other-than-very-short periods.
So my gasoline to plug-in electric-biodiesel hybrid passenger vehicle fuel shift—where biodiesel from algae reactors are added to petroleum refinery complexes and the biodiesel is run through the hydro cracker to ensure that it works well in cold weather—is a short to medium term transport sector GHG mitigation strategy. Achieving liveable and walkable nodes of high population densities in our cities, with nodes connected by electric rail, has to be a long-term priority objective.
Read the first part of “The oil sands should be shut down, right?”
The Western Climate Initiative’s cap and trade market may soon need to be renamed The Canada Climate Initiative.
Until last week, the Western Climate Initiative boasted seven U.S. states and four Canadian provinces who were working toward the launch of a regional cap and trade system on Jan. 1, 2012. Last Thursday, Arizona formally announced it was backing out of cap and trade. As the state with the fastest rate of emission growth — 61% between 1990 and 2007 — many feared a body blow to Arizona’s economy if it tried to meet the initiative’s carbon reduction goals.
The following morning neighbouring Utah indicated it might follow suit. By a 6 to 2 vote, its House Committee on Public Utilities and Technology passed a nonbinding resolution to urge Governor Gary Herbert to pull out of the Western Climate Initiative. Earlier in the week, the full Utah House voted resoundingly — 56 to 17 — to curb any carbon-curbing attempts by the federal government’s Environmental Protection Agency. Specifically, the resolution introduced into the House “urges the United States Environmental Protection Agency to halt its carbon dioxide reduction policies and programs and with its ‘Endangerment Finding’ and related regulations until a full and independent investigation of the climate data conspiracy and global warming science can be substantiated.”
To date, only four of the 11 jurisdictions have adopted legislation that would allow them to participate in the cap-trade-market: California, British Columbia, Ontario and Quebec, with Manitoba appearing close to joining. Oregon, Washington, Montana and New Mexico have not yet adopted cap-and-trade legislation and now California, which is tottering toward bankruptcy, has become iffy: A voter initiative in California, if it passes in November, would halt the cap-and-trade program until unemployment falls to 5.5%.
Even before last week’s climate revolt, many believed the Western Climate Initiative unofficially died with the ascension of Barack Obama to the presidency. When George W. Bush was U.S. president, those backing climate change legislation could argue for a regional plan on the basis that national legislation would never pass a Bush presidency. As soon as Obama came to office, pressure built in the western states to abandon the regional cap and trade plan, on the logic that the states should harmonize with federal cap and trade policy. Now that federal cap and trade legislation appears dead, the states have cooled further to regional trading.
The upshot? By the end of the year, the only jurisdictions left in the Western Climate Initiative’s cap and trade program could be the Canadian provinces.
Lawrence Solomon, Financial Post, February 22, 2010
Lawrence Solomon
Financial Post
February 20, 2010
Environmentalism is the religion of the left, commentators often pronounce: “The Church of the Environment,” as conservative columnist Charles Krauthammer puts it.
I have no argument with them here. Many environmentalists have taken leave of their senses, making a ritual of recycling and a demon of carbon dioxide, a colourless, odourless and tasteless gas that is indispensable to all life on Earth. By conducting mystical inquisitions into our imagined carbon footprints instead of focusing on core issues such as protecting our air and water, environmentalists hurt their cause.
But those on the right, particularly in the U.S., have their own dogma, one that is equally irrational and that also hurts their cause. The religion of the right is Nuclear Power.
“Go nuclear,” urges Charles Krauthammer. “The nation should generate much more than the one-fifth of its electricity nuclear power currently produces”, urges conservative columnist George Will. Build 50 more nuclear plants, urges William Kristol of The Weekly Standard. “Senate Republicans support building 100 new plants as quickly as possible,” maintains Mitch McConnell, the Republican Senate Minority Leader.
All these defenders of the right preach the virtues of competition and free markets, of fiscal restraint, of small government, of innovations born of the entrepreneurial spirit. All preach the fallacy of thinking the government should be in the business of picking winners. Yet such is their faith that none are troubled by nuclear power’s role as the antithesis of everything their secular selves believe.
Not one nuclear plant, anywhere in the world, has ever been built without government subsidies of some kind. The only country that has enthusiastically embraced nuclear power — France, which obtains close to 80% of its electricity from its state-owned reactors — drove its power sector to financial ruin: “Catastrophic,” in the frank words of the president of Electricite de France, the state-owned power company. The only privately owned nuclear generating company that operated in a competitive environment — British Energy, which inherited the best reactors in the U.K. fleet after the U.K.’s state-owned monopoly was broken up and privatized — soon went bankrupt and was taken back by the U.K. government at taxpayer expense.
Commercial nuclear power is the most heavily subsidized industry in the history of the world and the single biggest money-loser in the history of business.
But, but, but, some conservatives might protest, nuclear power would be economic if not for the regulatory burden placed on it by environmentalists. Or on irrational consumer fears. Or on its association with the nuclear weapons industry.
They forget that in its early days, nuclear power was welcomed by environmentalists as a clean alternative to coal. That it was Ban the Bomb peaceniks, Einstein among them, who argued that nuclear weapons technology should be turned to peaceful uses. That it was the private sector insurance industry that refused to underwrite commercial nuclear technology because of the potential for a catastrophic accident. That it was the early private sector nuclear manufacturers — GE and Westinghouse — that likewise refused to stand behind their product to spare their shareholders the prospect of ruin: They sought and got government exemption from liability.
Most of all, conservatives forget that the commercial nuclear industry was a creation of government, launched in 1953 by the Eisenhower administration’s Atoms for Peace program. As early as 1957, Eisenhower learned through a report for the government’s Atomic Energy Commission that nuclear power was not commercially viable. Eisenhower then decided to push commercial nuclear power on foreign policy grounds, hoping that international regulation of the commercial nuclear power industry would discourage states from independently building reactors for military use.
Fifty years on and the industry remains commercially unviable, as everyone on the right knows. Urges Senator McConnell: “We hope Democrats will join us in [aggressively pushing nuclear power] … the president could start by moving forward on the nuclear loan guarantee program.”
This hope of McConnell, and of every other true-believing conservative, is gaining traction, and — miraculously — under the auspices of the most liberal U.S. government in memory. This week, the Obama administration announced a loan guarantee of $8.33-billion to build the first new U.S. reactors in nearly 30 years. “This is only the beginning,” Obama declared, in expressing his desire to kick-start a nuclear renaissance by tripling to $54.5-billion the subsidies that the Bush administration had introduced.
Only the beginning, indeed. If those loan guarantees prove sufficient to bring nuclear power back from the dead, electric utility ratepayers face surcharges that could exceed $40-billion per reactor over the reactor’s life, according to a study last year by the Institute for Energy and the Environment at the Vermont Law School. But even these sums wouldn’t be enough to make nuclear power commercially viable. According to a 2007 letter from Wall Street’s largest investment banks to the U.S. Administration, the private sector would require a 100% unconditional guarantee before risking its own money on the nuclear industry.
Krauthammer, Will, Kristol et al. know that nuclear power is uneconomic. That larding the nuclear technology undercuts more deserving technologies, present and future. That the government’s Congressional Budget Office and General Accounting Office both rate as high the chances that the government will need to make good on its loan guarantees.
But these conservatives have a faith that conquers all, a faith in nuclear power that sweeps aside their lesser faith in the marketplace.
Sources for this column:
The Economics of Nuclear Reactors — Renaissance or Relapse
Nuclear Power’s Role in Generating Electricity
(Feb. 20, 2010) Environmentalism is the religion of the left, commentators often pronounce: “The Church of the Environment,” as conservative columnist Charles Krauthammer puts it. Continue reading
De Telegraaf, the Netherlands’ largest daily newspaper, has totally vindicated the country’s most prominent global warming denier in a prominent article entitled “Henk Tennekes – He was right after all.”
Tennekes was the director of the Netherlands Meteorological Institute, KNMI, until the early 1990s, when his skepticism of the climate science coming out of the United Nations Intergovernmental Panel on Climate Change led him to be sacked. A translation into English of De Telegraaf’s no-holds-barred vindication appears here.
Lawrence Solomon, February 18, 2010
(Feb. 17, 2010) In the 1950s Leighton Ford, brother-in-law to Billy Grayham, brought a religious crusade to Tillsonburg. Continue reading
Ross Andrews
The Tillsonburg News
February 17, 2010
In the 1950s Leighton Ford, brother-in-law to Billy Grayham, brought a religious crusade to Tillsonburg. Choirs from area churches united voices for the services, some in St. Paul’s United Church, some in the old Capitol Theatre on Broadway. I sang bass in that choir and watched dozens of people answer the invitation to come to the front and accept salvation.
One evening I raised my hand and was added to the ranks of the saved.
We were urged to feed on the milk of the word and grow in the faith. Bible study groups met to search the scriptures for guidance.
One weekend five of us from the Straffordville United Church went to the Christian retreat centre at Five Oaks near Brantford. The main event was led by John Castile who introduced us to his book, Rediscovering Prayer.
Four of us had a chance to speak with the author in the little library of Five Oaks. We pressed him with questions about passages of scripture and he answered as well as he could. In the course of this exchange Castile told us frankly and respectfully that anyone who told us he was certain of the truth was probably wrong.
This greatly upset us at the time. In our newly professed faith we were not ready for such a wobbly crutch.
A few years later in 1963, Richard P. Feynman, the youngest physicist to work on the creation of the atomic bomb and the man who pinpointed the cause of the destruction of space shuttle Challenger in 1986, gave three lectures at the University of Washington. Those lectures were published in a slim volume entitled The Meaning of it All.
Feynman discussed science, religion, and a host of topics that puzzled his enquiring mind. The first lecture was called, The Uncertainty of Science.
Science means different things to different people, he said. It is a special way of finding things out. It is used to name the body of knowledge arising from things found out. Lastly it means new things you can do when you have found something out. These may be good or bad. You can grow crops with fertilizer, or you can make roadside bombs.
Feynman said the scientific method is based on the principle that observation is the judge of whether something is or is not.
All scientific knowledge is uncertain, he said. If you have made up your mind already, you might not solve the problem that has never been solved before.
You can see that John Castile and Richard Feynman had the same distrust of anyone who claimed to know the truth.
For some years now we have been told by certain scientists and a lot of people who don’t have a clue what they are talking about, putting their blind faith in the scientists, that our planet is growing dangerously warm. Oceans are going to drown whole nations as the glaciers melt. We must sacrifice to save the planet. We are urged to reduce our carbon footprint, meaning carbon dioxide, no matter what it costs.
Beneath the hysteria are voices urging careful examination of the arguments behind the rush to so-called green energy. Laurie Goldstein is one of these voices. Lawrence Solomon is another. Their columns are attacked by writers of letters to the editor who ignore their messages and spout the original alarms, even after the scientists have been caught cooking the books.
In January Solomon reported on a study done in Waterloo by professor Qin-Bin Lu and published in the peer-reviewed journal Physics Reports.
The gist of the study is that global warming was caused by us humans, but it is not carbon dioxide that trapped the heat. It was CFCs, chlorofluorocarbons that we used in refrigerators and spray bombs. When the ozone layer was destroyed over the polar regions and cancer-causing rays were let through, the nations drew up the Montreal Protocol in 1978 to stop production of CFCs.
Molecule for molecule, Solomon says CFCs are 10,000 times more potent as greenhouse gas than CO2.
Dr. Lu’s observations show that climate began by 2002 to return to normal conditions. He estimates it may take 50 to 70 years to complete the process.
Richard P.Feynman would remind us that science is never certain. We must see how his peers respond to Dr. Lu’s study before throwing our hats in the air.
Meanwhile we might stop badgering Steven Harper about embarrassing us before the world, and urge Premier McGuinty to slow the pouring of money into priming the pump of wind and solar generation in Ontario.
Canadian newspapers repeatedly report that "most" Canadian economists favour GST increases and carbon taxation to finance new income tax cuts.
It is true that "most economists" feel that increasing the GST and/or taxing carbon emissions and using the new revenues to cut income taxes is an appropriate modification of Canada’s tax system. The problem is that they are wrong.
These are the same economists who forecast that if Canada taxes carbon, investors will respond with a wave of new capital investment to modify Canadian manufacturing operations to avoid the carbon tax. In their models, capital never flees in response to new taxes–instead, they believe, it floods into the higher tax environment. If the economists’ theory is correct, of course, then we should never have bailed out Ontario’s auto sector. All we really needed to do to rejuvenate our auto sector was to hike taxes on aluminum, iron, steel, plastic and glass–key inputs in auto manufacturing.
You see, according to the theory espoused by our economists, taxing inputs to prohibitive price levels makes new investment flow into Canada. Of course, this is obviously bunk–consensus economics–but bunk.
In a society that believes in certain basic standards of welfare, to be efficient, the tax regime has to be at least neutral if not progressive. Taxes on the consumption of luxury goods can be progressive. But taxes on the consumption of essential goods and services (including energy) always eat up more of the disposable income of poor families than wealthy ones.
Let’s take energy, for example. The poorest 20% of Canadian families spend over 13% of their disposable income (that is income after GST rebates and income support receipts) on energy. 50% of those families do not own even one car, so do not have the option of driving less to cut energy expenses. 70% of those families rent their homes in buildings in which they have little to no control over appliance, heating and cooling system choices.
Meantime, the wealthiest 40% of Canadian families spend only 2.5% of their disposable income on energy, even though they operate, on average, 1.65 homes and 2.5 cars per family. Their average annual disposable incomes are 11 times the disposable incomes (including government support payments and GST rebates) for the poorest 20%.
So, by definition, any GST increase and/or carbon tax-subsidized income and corporate tax cuts represent an overall tax burden shift from the rich–who benefit most from the income tax cuts–to poorer families.
Don’t worry, say the leftie pro-GST economists. We can use the new GST and/or carbon tax revenues to cut taxes and increase income support to poor families.
Of course, this is where the inefficiency comes in. First, they say, we should shift tax burden to the poor from the wealthier taxpayers. Then we should administer expensive government programmes to return the recent tax increase in the form of income support, GST and home heating rebates to the very tax-payers to whom we just shifted burden. If it costs 10 cents on the dollar to collect the tax and 20 cents on the dollar to administer the programmes designed to give the tax back to the poor families from whom we just collected it, we have made our overall tax system much less efficient. And unless we only hire low income Canadians to work for CRCA, with 30 cents on each collected dollar going to the employees administering the tax system and rebate programmes, we will never have enough spare cash to adequately mitigate the impact of the tax shift to the poor.
In the late1980s/early 1990s, Great Britain and a number of northern European nations elected to increase the rate and coverage of value-added taxes and introduce environmental/new energy taxes to finance corporate and personal income tax cuts.
In 1996, with a sense that something was not quite right, the then-Conservative government commissioned a study of the impact of the UK tax system on families and households. This study has since been undertaken annually. By 2000, the UK and most EU governments realized that their early-1990s income to consumption tax shifts made their tax systems both more regressive and inefficient.
In Budget 2001, the UK Parliament cut the VAT on non-industrial energy purchases and other essential commodities to 5% (when the standard VAT on consumption was 17%) and committed to shift the basis of taxation in the UK from consumption back to income over the next 10 years. Many other EU nations also elected to massively discount the VAT rate on non-industrial energy consumption around the same time.
In 2003, the 27 member states of the European Union passed an "energy tax" directive into law that also provides for an 100% exemption from ALL ENERGY TAXES (not just emission taxes) for fuel and electricity consumed by any "energy intensive businesses", where "energy intensive" is any business for which energy costs account for 3% or more of operating costs. A tax shift that is bad for poor families has also proved a shift that is bad for small businesses that never paid much in income tax in the first place, especially energy intensive ones.
While UK Budget 2007 accurately boasts that real energy prices (including taxes) were finally down to historical lows, that budget also acknowledges that other actions required to address the highly regressive nature of the UK tax regime had not progressed.
I find the UK Treasury’s annual report entitled "The effects of taxes and benefits on household income, 200x/0x" most enlightening.
Note especially:
Obviously, it would be more efficient for the UK to simply to exempt 2/3 of all families from all forms of consumption tax and to finance any further support low income families need through the income tax system. We should not tie up so much in taxpayer resources paying middle to high income salaries to individuals whose government jobs are essentially no more than recycling tax receipts back to the families from whom those revenues were just collected.
I estimate that the UK might actually find they could cut the marginal income tax rate on the highest Brit income earners after they fully exempted the bottom 2/3 of income earning families from all forms of consumption tax, after realizing operating savings from the termination of the lion’s share of government tax revenue recycling programmes.
But Canada’s leading economists still believe that taking Canada farther down the UK’s tax system path is both effective and efficient–10 years after the UK Parliament realized their income to consumption tax shift was a grave mistake.
I wonder what our economists are reading in their spare time.
Until this week, the Western Climate Initiative boasted seven U.S. states and four Canadian provinces who were working toward the launch of a regional cap and trade system on Jan 1, 2012. On Thursday, Arizona formally announced it was backing out of cap and trade. As the state with the fastest rate of emission growth — 61% between 1990 and 2007 – many feared a body blow to Arizona’s economy if it tried to meet the initiative’s carbon reduction goals.
The following morning neighbouring Utah indicated it might follow suit. By a 6 to 2 vote, its House Committee on Public Utilities and Technology passed a nonbinding resolution to urge Governor Gary Herbert to pull out of the Western Climate Initiative. Earlier in the week, the full Utah House voted resoundingly – 56 to 17 – to curb any carbon-curbing attempts by the federal government’s Environmental Protection Agency. Specifically, the resolution “urges the United States Environmental Protection Agency to halt its carbon dioxide reduction policies and programs and with its ‘Endangerment Finding’ and related regulations until a full and independent investigation of the climate data conspiracy and global warming science can be substantiated.”
To date, only four of the 11 jurisdictions have adopted legislation that would allow them to participate in the cap-trade-market: California, British Columbia, Ontario and Quebec, with Manitoba appearing close to joining.
Oregon, Washington, Montana and New Mexico have not yet adopted cap-and-trade legislation and now California, which is tottering toward bankruptcy, has become iffy: A voter initiative in California, if it passes in November, would halt the cap-and-trade program until unemployment falls to 5.5%.
The upshot? By the end of the year, the only jurisdictions left in the Western Climate Initiative’s cap and trade program could be the Canadian provinces.
Lawrence Solomon, February 15, 2010
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