Cheap Dirty Fuels Versus Costly Clean Fuels
Which will win the race to fuel the future?
Burning fossil fuels loads the atmosphere with carbon dioxide, and that's raising the earth's average temperature. This raises the question: Will today's higher oil and gas prices necessarily spark the development of low-carbon, climate-friendly transport fuels? Unfortunately, energy produced from unconventional sources of fossil fuels is still often cheaper than many other proposed alternative fuel supplies. In addition, some allegedly green fuels aren't all that green.
Let's look at the fossil fuel conundrum. With oil at $100 per barrel, all kinds of alternative petroleum sources become more attractive. Consider the ongoing development of the Alberta tar sands in Canada. The reserves locked in these sands amount to 179 billion barrels of oil. The oil sands production cost estimates range from $25 to $40 per barrel. This was not economical just ten years ago when oil was selling for around $10 per barrel, but it looks great when the price of crude is hovering near $100 per barrel. Today, more than 1.1 million barrels of oil flow from the oil sands and production is projected to grow to more than 3 million barrels per day by 2015. However, producing oil from tar sands uses 2 to 5 barrels of water for each barrel of oil, scrapes large portions of the landscape bare which must then be reclaimed, and releases up to three times as much the chief global warming gas, carbon dioxide, as conventional oil production.
A similar analysis applies to the oil shale in the Green River Formation in the western United States. That formation contains an estimated 1.1 trillion to 500 billion barrels of recoverable crude according to a 2005 RAND Corporation report. That report suggests that it is economical to produce oil from Green River sources when oil prices are above $30 per barrel. Again, obtaining crude from oil shale is a dirty process, consuming 3 barrels of water per barrel of oil produced and releasing considerably more atmosphere warming carbon dioxide than conventional oil production.
In terms of global warming potential, an even more worrisome proposal is turning coal into liquid fuels. A brief from the American Association for the Advancement of Science (AAAS) finds that transforming coal to liquid transport fuels becomes economical when oil is $50 per barrel. The AAAS brief suggests that sequestering the excess carbon dioxide emitted from the process would increase production costs by $5 per barrel. And even in that case, the coal fuels would release 10 percent more carbon dioxide than conventional hydrocarbons. Coal to liquid fuels would have all of the environmental and health consequences associated with conventional coal mining. The AAAS brief cites an estimate that it would take an additional 250 million tons of coal, equivalent to 25 percent of the United States current annual production, to replace 10 percent of the country's present consumption of liquid transportation fuel.
What about so-called green alternatives like electric cars, hydrogen fueled cars or biofuels? Can they compete with these alternative oil supplies? Let's start with bioethanol produced from corn. Bioethanol is almost as contentious a fuel as petroleum. Since ethanol is a refined fuel, the easier comparison is with the price of gasoline. The Energy Information Administration (EIA) notes even as oil prices have climbed, the price of a gallon of ethanol produced in the U.S. has generally been higher than the price of a gallon of unleaded gasoline. Also, one must take into account the how plowing up additional land to produce biofuel crops affects the natural environment and growing concerns about the effect of biofuels on the price of food. The EIA notes that if oil prices fall to below $50 per barrel that cellulosic ethanol based on current technologies will not be cost competitive.
What about the much-ballyhooed hydrogen economy? The idea is that cars would run on fuel cells that would burn hydrogen and emit only water vapor. But where will the hydrogen come from? Ideally it would be produced by electrolysis—splitting water molecules using electricity. As engineer Robert Zubrin notes, however, hydrogen currently costs about $100 per kilogram and a kilogram of hydrogen contains about as much energy as a gallon of gasoline. Other sources of hydrogen include methane or even coal which have all the environmental downsides discussed above. Besides why waste perfectly good electricity to make hydrogen which will be used to make more electricity in fuel cells to propel automobiles? Why not use electricity directly?
So why not electric cars? Are they an economically feasible and environmentally friendly solution to our dirty liquid fuels conundrum? Current battery technologies are not up to the task, but nanotechnology may now be coming to the rescue. For example, Phoenix Motorcars is ordering NanoSafe batteries from the Reno, Nevada-based company Altairnano to fuel its all-electric trucks. These lithium ion batteries can be charged in 10 minutes at a commercial 480 volt station or in six hours using home power. The trucks can accelerate from 0 to 60 in 10 seconds with a top speed of 95 miles per hour and can go 100 miles before recharging. Amazingly these batteries can be recharged 20,000 times. Typical lithium ion batteries can be recharged only 500 to 1000 times, and lead acid batteries won't last more than 700 cycles. Nanosafe batteries replace combustible graphite in typical lithium ion batteries with nanoscale titanium.
How could a fleet of electric cars be fueled? In 2006, a U.S. Department of Energy study concluded that if 84 percent of all cars and light trucks were plug in hybrid electric vehicles (PHEVs), fueling them would not require any additional electric generation capacity. The study assumes that the PHEVs would travel an average of 33 miles per day solely on electric power and could be charged using off-peak power at night. PHEVs have gasoline engines that kick in for longer trips. In addition, electric utilities would develop a smart grid that would allow them to draw power from vehicle batteries hooked into the grid as a way to cover peak power periods, such air-conditioning on summer days or winter cold snaps. The big environmental upside is that the U.S. could dramatically cut back on greenhouse gas emissions from its transport sector.
While progress is being made in improving battery performance, current nano-batteries are not yet cheap. They add at least $6,000 to $10,000 in costs to a vehicle. For example, Phoenix Motorcars is adapting the Korean-made Ssangyong Actyon truck to all-electric. The regular version of that truck goes for $25,000 in Australia (not available in the U.S.) and Phoenix will sell its all-electric version for $45,000. The DOE PHEV study finds that when compared to 27.5 miles per gallon internal combustion vehicles, the break-even premium for a PHEV at $2.50 per gallon is $3,500 at when electricity costs $0.12 per kilowatt hour. At $3.50 per gallon, the premium rises to more than $6,500. So, current versions of PHEVs, using nanotech batteries, are not yet economical in comparison to gasoline powered vehicles.
Biotechnology is another possible pathway to a post-petroleum future. For example, the privately-held biotech company, LS9, based in San Carlos, CA. aims to use synthetic biology to skip over ethanol to directly produce gasoline. LS9 co-founder and Harvard University geneticist George Church describes synthetic biology as "treating biology the way you would treat large-scale integrated circuits. We've been dealing with one part at a time or a small number of parts. Synthetic biology is engineering of new systems using parts that we trust." Another way to think about it is that biologists want to do to biology what engineers have done to electronics and chemists have done with chemistry.
If LS9 succeeds, it would mean no need to change our current transportation infrastructure. LS9 has modified bacterial metabolic pathways so that their designed microbes can eat cellulose and excrete hydrocarbons that can be refined into gasoline and other petroleum products. In 2008, LS9 plans to build a pilot plant to test and perfect the process, and hopes to be selling biocrude to refineries within three to five years. Keep in mind that the source of the cellulose to feed LS9's microbes will also have important environmental implications.
If the goal is to encourage low-carbon transport fuel alternatives as a way to help prevent excessive man-made global warming, the carbon content of fossil fuels must have a price. A price on carbon emissions would steer inventors and consumers toward low-carbon alternatives. In practice, this would involve imposing either a carbon tax or a cap-and-trade carbon market. In the meantime, the technological race for fueling the 21st century's vehicle fleet is on, and unconventional fossil fuels are in the lead.
Ronald Bailey is Reason's science correspondent. His most recent book, Liberation Biology: The Scientific and Moral Case for the Biotech Revolution, is available from Prometheus Books.