Marcellus Shale Gas Rig. Ruhrfisch photo.

The Vail Global Energy Forum, March 1 to 3, was dominated by discussions of what Colorado Governor John Hickenlooper called “the unbelievable surfeit of natural gas.” Hickenlooper, along with many gas advocates, believes that the United States has enough economically-viable gas reserves to last a century.

One pay-off: old, inefficient coal plants are closing, cutting off their high carbon emissions. Oil-stocks financial analyst Tom Petrie predicts that by 2025, the American transportation sector will be driven largely by natural gas, either directly as a motor fuel or indirectly through electric batteries charged by natural gas power stations. “That will back us out of $1 million a day of oil imports,” he said, with profound benefits to the economy. In addition, he said, as natural gas replaces coal, the United States will gradually come to meet Kyoto Protocol goals. New geopolitical alliances will emerge, as Russian and Iranian gas supplant Saudi petroleum in the Chinese and Indian markets.

Other voices say that gas may be a bubble. Last year, with natural gas selling at $2.50 per thousand cubic feet, drilling companies lost money. A report published by the Post Carbon Institute this month suggests that the half-life of a typical well is about two years ― a typical shale-gas well production rate drops about 70 percent in the first year, and 50 percent each year thereafter. According to J. David Hughes, author of “Drill, Baby, Drill: Can Unconventional Fuels User in a New Era of Energy Abundance?”, maintaining today’s level production rate will cost about $42 billion a year to drill 7,000 new wells a year ― and in 2012 existing wells produced gas worth just $32.5 billion. (To download the Hughes report, go to http://www.postcarbon.org/drill-baby-drill/report.)  The price has since risen to $3.50, and will have to go higher to keep shale-gas drilling profitable.

Jim Brown, president/western hemisphere at Halliburton, told the Vail audience that shale gas has increased proven U.S. gas reserves by 66 percent. Still, that’s finite resource, said Mark Zoback, professor of geophysics at Stanford. “If  we do replace coal and oil with natural gas, the gas reserve comes down to about 30 years, not a century,” he said. “The short term is rosy, and we’re in a better position than we were five years ago. But it won’t last forever.”

The lesson: Gas is still a bridge fuel to a grid powered by large-scale renewable sources, and if fully exploited it’s a short bridge. The news this week that a Japanese research team has succeeded in extracting methane from an undersea methane hydrate formation suggests that the world may have enough natural gas to cook the atmosphere many times over.

That fact makes it even more urgent to drive the costs of wind, solar, geothermal and biofuels down below the cost of natural gas.

New wind capacity grew 247 percent over installations in January 2012, and new solar capacity grew 128 percent over the same month a year ago.

No new fossil-fuel plants came online anywhere in the country.

FERC Chart

The “Energy Infrastructure Update” details the projects commissioned in January:

Electric Generation Highlights

• BP Wind Energy’s 470 MW Flat Ridge 2 Wind Farm in Nashville, KS is online. Flat Ridge 2 consists of 294 GE 1.6 MW turbines. Another 130 MW is expected to come online by year end 2013. The electricity generated is sold to Southwestern Electric Power Co., Associated Electric Cooperative Inc, and Arkansas Electric Cooperative Corp. under long-term contracts.

• Duke Energy Renewables’ 402 MW Los Vientos I and II in Willacy County, TX are online. Los Vientos I consists of 87 Siemens 2.3 MW turbines; Los Vientos II consists of 84 Mitsubishi Heavy Industries 2.4 MW turbines. The electricity generated is sold to CPS Energy and Austin Energy under long-term contracts.

• Exelon Corp’s 82 MW Beebe Community Wind Farm in Gratiot County, MI is online. Beebe Community Wind consists of 34 Nordex 2.4 MW turbines. Another 82 MW is expected to come online by year end 2013. The electricity generated is sold to Consumers Energy Co. under long-term contract.

• Equity Industrial Turbines’ 4 MW Gloucester Wind in Gloucester, MA in online. Gloucester Wind consists of a pair of 2 MW turbines. The electricity generated is sold to the City of Gloucester under long-term contract.

• Waste Management Inc.’s 4 MW Mahoning LFG Facility in Mahoning County, OH is online. Methane from the landfill is used to fire the Caterpillar Inc Technology generator. The power generated is sold to American Municipal Power Inc. under long-term contract.

• Solar farms in California: 1) Exelon Corp’s 115 MW Antelope Valley Solar Project near Lancaster is online. Another 115 MW is expected to come online by year end 2013. The power generated is sold to PG&E under long-term contract. 2) NRG’s 107.4 MW California Valley Solar Ranch Units 2 and 3 in San Luis Obispo County are online. Units 3 and 4 with 62.5 MW each, are expected to come online by year end 2013. The power generated is sold to PG&E under long-term contract.

• Duke Energy Renewables’ 10 MW Black Mountain Solar Power Project near Kingman, AZ is online. Black Mountain solar consists of 42,000 PV panels. The power generated is sold to UniSource Energy Services under long-term contract.

• Volkswagen Group of America’s 10 MW Chattanooga Volkswagen Solar in Chattanooga, TN is online. The solar park consists of 33,600 JA Solar modules. The electricity generated is contracted on-site to Volkswagen Group of America.

• Exelon Corp’s 5.7 MW Outback Solar in Lake County, OR is online. The solar park consists of 20,000 PV panels. Another 10 MW is expected to come online by year end 2013. The electricity generated is sold to Portland General Electric under long-term contract.

• Siemens AG’s 4.5 MW White Sand Missile Range Solar in Dona Ana County, NM is online. The solar park consists of 15,500 sun-tracking PV panels. The electricity generated is contracted on-site to the U.S. Army.

Click here to download the complete report.

Why Americans Pay 80% More for PV

In a study supported by the Department of Energy’s SunShot program, the Lawrence Berkeley Lab has revised its assessment of why solar installations are cheaper in Germany than in the United States.  It’s not because labor rates are lower; instead, standard practices mean fewer labor hours on each installation, with no permitting fees or sales taxes. In 2012, the lab finds that the average cost of a customer-owned PV system (under 10kW) in the United States was $6.21 per watt before incentives; that’s 80 percent higher than the average cost in Germany, $3.42. Hardware costs were nearly equal.

Here’s a summary of the report:

• Total non-hardware costs for residential PV in Germany are about $2.70/W lower than in the U.S.

• Customer acquisition costs average just $0.07/W in Germany, or roughly $0.62/W lower than in the U.S.

• Installation labor requirements reportedly average 39 hours for German systems, leading to $0.36/W lower costs than in the U.S.

• PII (permit, inspection, interconnection) processes require 5 hours of labor, on average, in Germany, with no permitting fee, resulting in PII costs roughly $0.21/W lower than in the U.S.

• German residential systems are exempt from sales/value-added tax, while U.S. systems are subject to an average sales tax of roughly $0.21/W (accounting for sales tax exemptions in many U.S. states)

• The remaining gap in soft costs between Germany in the U.S. (~$1.32/W) is associated with overhead, profit, and other residual soft costs not captured in the categories above.

To download a summary of the report, click http://emp.lbl.gov/sites/all/files/german-us-pv-price-ppt.pdf

The Alliance Commission, chaired by Senator Mark Warner and National Grid President Tom King, is a blue-ribbon group of two dozen private sector executives, including finance, utility and technology firms. It includes Dan Arvizu, director or NREL; Mike Eckhart, mangaging director and global head of environmental finance at Citigroup; retired General Wesley Clark; former New York Governor George Pataki; and Fred Krupp, president of the Environmental Defense Fund.

The report, among other steps, advocates enabling institutional investors to buy energy efficiency financial obligations on a large scale, using securities based on uniform contract structures (in place, for instance, of investing in fossil-fuel limited partnerships and investment trusts). And it suggests that mortgage lenders should consider household energy and transportation cost savings, which reduce the cost of owning a home, when underwriting. The fact that a homeowner can afford a larger monthly mortgage payment may make for reduced risk and a more attractive loan.

Here’s the report’s own outline of steps to be taken to double America’s energy efficiency:

Make financing more easilyavailable for energy efficiency projects:

• Make more capital available by enabling institutional investors to buy energy efficiency financial obligations on a large scale using securities based on uniform contract structures and better performance data.

• Establish state and local programs for financing of efficiency measures, which may use repayment on utility bills or on property tax bills (the capital could be provided by institutional investors).

• Consider household energy and transportation costs when underwriting mortgages to allow for larger or more attractive loans for homes with lower monthly costs.

» Advance energy productivity through federal tax reform:

• reform federal energy efficiency tax incentives so that they focus on high efficiency technologies and measures and on promoting innovation and market transformation.

• Adjust commercial and industrial depreciation schedules to encourage investments that can boost energy productivity.

Support energy productivity innovation and market adoption:

• Increase federal investment in basic and applied research, development, demonstration, deployment, and technical assistance.

Governments lead by example:

• Apply innovative best practices to government buildings and vehicle fleets.

• Make all cost-effective efficiency improvements to federal buildings using private financing and public funds.

To download the full report, go to:

http://ase.org/sites/default/files/full_commission_report.pdf

“We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries – we must claim its promise. That is how we will maintain our economic vitality and our national treasure – our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.”

White House officials told reporters to expect more detail in the State of the Union speech, scheduled for Feb. 12. They emphasized that the administration will use executive power to sidestep opposition in Congress, enforcing EPA rules to shut down coal-fired power plants and establishing efficiency standards for buildings and appliances.

Read the full transcript here: http://www.whitehouse.gov/the-press-office/2013/01/21/inaugural-address-president-barack-obama

See the New York Times article.

Official White House Photo by Sonya N. Hebert

Forum chair Marlene Brown, of Sandia National Laboratory, said, “I created this forum to promote women who are working in all aspects of solar to encourage other women to get involved. The purpose of the forum is to inspire women to become more technically involved in solar, not just peripheral to it. It’s easy for us to talk about what we do, but this isn’t a forum to just talk about what we do for work but about how we got where we are and the obstacles and barriers that we’ve come up against and broke through or just moved out of the way to continue on our path. I’m looking for women in different aspects of solar. Examples are electricians, teachers, women in government, business owners and others.”

The forum is scheduled for Thursday, April 18, just before the Women in Solar Luncheon. Contact Brown at mbwildwoman@gmail.com

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