Saturday, June 14, 2008

Iceland Is Correct


These days, you have to be a believer in global warming or peak oil or market manipulation or you are considered a heathen. You can't look at issues with a cold eye and say "your ideal is based on wrong assumptions." One of those assumptions is that if you oppose some forms of alternative energy as not being reliable and sufficient, then you are a lackey for the oil cartel or the nuclear power companies.

For the near future, my bet is that nuclear power and coal are the only wide-spread alternatives to oil and natural gas that make any economic sense whatsoever. But that doesn't mean we can't selectively use other alternative such as solar and wind power as local, stop-gap solutions. To me, however, the really viable long-term solution for the entire world's energy needs is geothermal.

The following two extracts are from U.S. government studies done 31 years apart. The conclusions are quite similar; the effort to make use of the studies are the same... none. Still, you may want to read this post. By the time you finish, you may understand my reasoning.

From 1976 - ABSTRACT

This study is concerned with U.S. geothermal resources, their potential for
commercial utilization by electric utilities between now and the year 2000, and
their impact on the utility industry.

The geothermal resources that are expected to be economic for near-term electrical use in the United States are almost all in moderate to high temperature hydrothermal systems, located in the western states. Known hydrothermal systems lie in geographically narrow, continuous tectonic belts marked by faults, volcanism, and earthquakes. Most undiscovered hydrothermal resources can be expected to lie in the same belts, which pass through the service areas of a number of major and many smaller western utilities.

USGS estimates of the resources in identified hydrothermal systems were extrapolated to the ndiscovered resources marked by hot springs, and further to the blind resources between hot spring areas within the tectonic belts. The resulting estimate of the total hydrothermal resource to a depth of 10,000 ft. is about 100,000 MWe for 30 years with about one-half in undiscovered blind resources, one-fourth in undiscovered hot spring resources, and one-fourth in identified systems.

Water rates and direct capital costs for geothermal power plants were evaluated as functions of resource temperature, together with costs and expected flowrates for geothermal wells. Combining these results with the temperature distribution of identified hydrothermal systems, a current supply curve for geothermal energy was made. This shows an estimated 20,000 MWe for 30 years potentially producible with current technology from identified resources for direct capital
costs of $800/KW or less.

The projected supply curve shows an estimated 30,000 to 60,000 MWe for 30 years potentially available at $800/KW or less, in 1976 dollars, taking account of estimated undiscovered resources and probable technical advances.

[click on image for larger view]
1/3 of a century later...
This new representation comprises 126 GW of resource potential nationally: 89 GW across all resource types in the Western regions and 37 GW mostly from coproduced potential in the non-Western regions. The total represented capacity is nearly the same for the Western regions as used in previous recent DOE Office of Energy Efficiency and Renewable Energy (EERE) Government Performance and Results Act (GPRA) benefits assessments. However, the Western region mix among specific resources is different. The updated supply features significantly lower levelized cost of energy (LCOE) for hydrothermal resources and somewhat lower LCOEs for EGS than used previously. Further, the inclusion of a significant amount of relatively low-cost coproduced resource further accentuates these cost differences and contributes to a significant increase in the total amount of geothermal resource that is likely to be technologically and economically.
The estimate of 100+ GW in 1976 is about the same as the 126 GW in 2007. So, in 1/3 century, the government has made slight improvements in the estimates... but not much effort in the development of this resource.

In 2004, I wrote:
The virtually limitless amount of clean, geothermal energy available worldwide makes this energy source worth pursuing as a PERMANENT ALTERNATIVE to either oil or nuclear power. Geothermal energy would facilitate the non-polluting production of hydrogen fuel or electricity for battery-powered vehicles for our transportation needs.

Solar, wind and even small-scale geothermal energy could be used as local sources of power to augment a vast network of geothermal energy. Geothermal energy is available now for your home.
Did you miss that last link? That's the sneaky part that applies to you and several billion other people. There is more to geothermal energy than tapping the Yellowstone basin [as some commenters interpret my posts]. But the reality is that clean, energy independence is just waiting for us to act upon a couple of studies.
Iceland is correct [don't let Homeland Security know that I wrote this].

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There is always an easy solution to every human problem—neat, plausible, and wrong.
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“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
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Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)