T. Boone Pickens Knows Energy - So Does George Chapman, His Amarillo Neighbor
T. Boone Pickens has captured America’s attention with his PickensPlan for energy. He recently testified in front of the US Senate and provided them with some excellent information about oil and gas depletion, asked repeatedly for them to continue supplying the Production Tax Credit (PTC) and described how there were perfectly located corridors in the US that were the “Saudia Arabia” of wind.
He has been running advertisements on major media outlets describing a clear challenge - America now sends $700 Billion across its borders every year to purchase oil.
Pickens has a plan to reduce that number and he intends to share the details of the plan during the coming weeks. He has been an oilman all his life; that has made him a strong believer in Peak Oil.
As a professional geologist and energy investor, he believes that the only way that the world’s oil supply and demand will be balanced in the future is for the price to achieve a high enough level to drive down the demand. He does not see any hope of dramatically increasing the rate of daily production above its current level of 85 million barrels of oil per day.
Pickens’s publicly released plan is to build a trillion dollars worth of wind turbines and 200 billion dollars worth of transmission lines in order to supply 20% of the US electricity market with wind. He claims that will push large quantities of domestic natural gas out of the electricity market and into the vehicle market as a replacement for gasoline and diesel fuel.
Pickens knows the energy business, and knows his geology. He also understands geography and I bet he can play a mean hand of poker.
The reason for the transition from energy to poker is that I believe that Pickens has a much better hand than he has revealed. The details on the visible cards do not add up - natural gas supplies 20% of the electrical power in the US, but a significant portion of the gas that we use for electricity is quick response peaking power in low capital cost gas turbines. If wind supplied 20% of the electrical power in the US, that portion of the gas use would certainly not decrease because wind blows when it wants to, not when the grid operator turns the knobs.
In my opinion, Pickens’s hole card is the energy source that he mentions only at the very end of his list of energy sources during his Senate testimony - nuclear. I watched the video a couple of times and realized that his poker face slipped just a little bit. When he had one of his people show a graph of the wind resources in the US, he said that they are in the right places “for safety”.
No one generally talks about putting wind in remote areas because of safety. Having wind and solar resources concentrated in places where few people live is more of a challenge than an advantage, since the energy has to be shipped a long way. People do, however, talk about putting large nuclear power plants into areas with low population density for safety reasons. (I am not one of them, but bear with me here.)
Pickens is a lifelong resident of Amarillo, Texas, owns a 68,000 acre ranch in Roberts County, and owns the water rights to a portion of the Ogallala Aquifer.
He also has a neighbor named George Chapman who has announced plans to build two large Evolutionary Power Reactors (EPR) in Amarillo. Each of those reactors will produce 1600 MW of 24 x 7 electrical power. They are also designed with load following capabilities.
Mr. Chapman understands that there is a race on to build new nuclear plants in the US, with a significant financial reward waiting for those who cross the finish line in front. As he told Amarillo.com during an interview in early 2007, “If we didn’t think we were going to win it, we wouldn’t get in the race,” Chapman said. When Mr. Chapman first discussed his plans, people asked several questions including:
- Who will buy the power? (The sparsely populated Texas Panhandle does not need 3200 MW of electricity.)
- Where will you get the cooling water needed for large pressurized water reactors?
When Pickens completes a transmission corridor from his planned wind farms to population centers like Dallas-Ft. Worth, the lines will be able to provide a higher return on the investment by carrying reliable nuclear generated power as well as the intermittent power provided by the wind turbines.
Amarillo Power’s reactors will also displace a lot more gas from the electrical power grid than covering the panhandle of Texas with as many wind turbines as we can possibly build between now and 2016, which is when I predict that Chapman’s reactors will start operating.
Intriguing hypothesis, don’t you think?
Photo credits
CNG Pump © Christine Gable – About.com Hybrid Cars & Alt Fuels
Hole card - Rod Adams under Creative Commons
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Rod Adams is the publisher of Atomic Insights, the host of The Atomic Show Podcast and the founder of Adams Atomic Engines, Inc.
Natural gas cars are much better than what we have now, but the real game changer is the “Air Car” - see The Discovery Channel’s Beyond Tomorrow story - http://www.youtube.com/watch?v=QmqpGZv0YT4
That’s a bad draw, only a fool tries for an inside straight, although a flush is certainly possible there too.
“…a significant portion of the gas that we use for electricity is quick response peaking power in low capital cost gas turbines. If wind supplied 20% of the electrical power in the US, that portion of the gas use would certainly not decrease because wind blows when it wants to, not when the grid operator turns the knobs.”
You’re the only other person I have heard even mention this topic besides myself. THANK YOU!! I work at a consulting firm and am planning the integration of wind farms with an overall control area penetration level of almost 40% of the total generating capacity. Once wind reaches beyond 10% penetration additional electricity reserves become necessary for grid reliability and safety. Natural gas is the primary source of quick-response load following generation. Wind is not, and can not do this WITHOUT energy storage. Dispatchable nuclear or energy storage must be Picken’s hole card. I can’t imagine that he has not considered this aspect, but I guess you never know…
ps. There aren’t any “knobs” used for generation dispatch anymore. Computer control systems are used to keep the Area Control Error (ACE) between the required levels with a response time of only seconds, but I do realize it was more of a figure-of-speech statement.
Great post!!!
This is a great post.
It will be interesting to see what Pickens hole card is. He’s a smart businessman and knows what he’s doing.
I do not agree with Pickens idea for natural gas to fuel vehicles. We would only run in to the same type of problems that we have with oil eventually.
If we’re going to revamp gas stations around the entire country, it would be more wise to do that with electrical stations so people could recharge their plug in hybrids and electric vehicles.
Damond:
One infrastructure piece that electricity and natural gas have in common is that they are available in many residences. There are kits available that allow refilling a CNG vehicle at home.
Nicely done. I’d figured on Pickens having some big bets on LNG, probably via infrastructure companies that also serve the oil industry. But I hadn’t seen the nuclear connection yet. Crafty guy. At worst, he beats the hell out of the big wigs at Chevron, Texaco et al.
Pickens’ HVDC transmission investment the key piece of infrastructure, and it is for the most part neutral regarding generation technology. Naturally, the path would have to go through the wind cooridor and to the deserts (re- Scientific American Jan 2008 issue- “Solar Grand Plan”).
The observation regarding nuclear is apt, and if Pickens doesn’t intend it, others will bring it up. Clearly, the huge obstacle is the lengthy permitting process required in most states. However, with an HVDC line nearby, then states have the option of making nuclear generation a state industry- eg- their legislature might be willing to streamline the permitting if such a national distribution grid were in place. The attractive portion for large investors is that small conservative or underpopulated states like Utah or North Dakota might be more easily motivated by nuclear lobbying.
I am surprized that there was no treatment of grid energy storage in the plan, and that precious little space was given to description of the thing that was going to cost the 200 billion dollars: the transmission grid.
If T Boone Pickens is as smart, and clever as you have described, then he really knows what to do. His hole card is the electrical energy corridors(electrical transmission lines), and not wind turbine farms. It is not energy corridors (many)stretching from the midwest (North Dakota to Texas) to the rest of the continental US, but one large energy corridor leading from the Texas Gulf coast to the giganic reservoir of petroleum locked in oil shale in Colorado, Utah and Wyoming.
A few facts and history:
. The amount of recoverable petroleum in this area, could supply all the gasoline/diesel, for all of the cars, SUVs, and Trucks in the US for 210 years!
. During the late 1970s and early 1980s a major effort was undertaken to develop this source, under the synfuels program of the Carter Administration. Exxon was the major player. At its peak, there were 2200 employees working on the development.
. Exxon abandoned this program due to the fact the bottom fell out of petroleum prices, and the technology used was an environmental disaster (i.e mining the shale( a 1000 feet of overburden) , bringing the shale to the surface, and then retorting the shale for the kerogen (producing a lot of very nasty aerosols).
. Shell Oil Company has been working for 20 years on In Situ extraction of the kerogen, and I believe that have the problem solved. They have produced with there very small pilot program about 2000 barrels of oit. Briefly there technology incorporates freezing of the oil shale (with refigerants), at its perimeter, and then cooking the oil shale in situ, with ELECTRICAl HEATING elements to temperatures of from 500 to 700 F. The frozen shale at the perimeter stabilizes the contamination.
. This technique requires a lot of ELECTRICAL ENERGY.
. A lot of electrical generation is required.
. Available water(cooling towers ) is the achilles heal for this method, since this area is almost a desert.
. This is where the transmission lines comes into play. The gulf coast in Texas has plenty of water, but no coal for the power plants. Nuclear Power Units (About 10 of the latest Japanese designed 1400 megawatt electrical), could be sited along the gulf coast.
. If this method works then after about 3 years after the Nuke plants, and transmission energy corridors were in operation the US could be completely free of imported oil. That is saving about $700 billion dollars per year, which is now shipped overseas.
This is T. Boone Pickens’s ace in the hole. He has control over the Energy Corridors in Texas, and maybe some leading out of Texas.
Problems with this method:
The problems with this method all all institutional, and not technical.
(1) There is now a federal law which embargos the development of oil shale on federal lands(most of the oil shale is on BLM land), coupled with state laws in colorado.
(2) You are well aware of the institutional bottlenecks governing building Nukes.
(3) The Energy corridors would involve several states. The control of High Voltage transmission lines is currently Balkanized (i.e. Each State has a veto power), However, I believe that there is a law in place which would allow the FERC (Federal Energy Regulatory Committee) to supercede any bottlenecks from individual states.
(4) Financing for the construction of the 10 NUKEs
(5) The United States does not currently have the technical capability to build these NUKES. The design, and licensing would have to be imported from Japan. We do not have the technically capability to actually build these plants. We do not have the in-house reservoir of technicians, craftsmen (example nuclear qualified welders), and engineers to actually build the plant. The main nuclear reactor pressure vessal would have to be fabricated in Japan. The steam generator probably from Japan. The incore instrumentation, such as thermocouples, and neutron detectors, could be produced in the US, however the technology to weld place the detectors in the reactor core is not available in the US. This is the result of our disfunctional energy policy for the last 30 years.
Miscellaneous comments about natural gas generation, windfarm generation, transmission lines, the electrical grid and electricity storage.
(1) The grid must maintain a balance, at all times, that is the amount of electricity produce must equal the amount of electricity that is used.
(2) There is no known physical way to store large quantities of electricity (a very small amount can be stored by pumped storage– hydro damns. Batteries, and electrolysis produced hydrogen storage are a joke. The search for a practical large scale storage system has been the holy grail for about 40 years.
(3) The grid must be balanced all time in voltage, and frequency (voltage, about a 4 volt window, and frequency, about a 1 hertz window). If the 4 volt limit is exceeded, then power plants are tripped otherwise the grid would be damaged, (i.e. power plants, and transformers). If the voltage is less than this 4 volts, then we would initially have brownouts, and then rolling blackouts. For a major power incident, the grid would become unstable, and have to be shut down, over a wide area, and it could only come on line in steps (Wind generated electricty is useless in reenergizing th grid).
Natural gas is used in two ways. It is used for baseload production (combined cycle gas turbines, and for peakers, open cycle gas turbines). A combined cycle gas turbine has two stages, a gas turbine (like a jet engine), and a steam turbine which uses the exausts hot air from the gas turbine to produce steam which drives a generator. The open cycle gas turbine has only the 1st stage.
The combined cycle gas turbine is very efficient, about 50-55% efficient, however, it takes a long time to bring it up in temperature (up to 3 days), and this prohibits it use as a peaker–That is it cannot be cycled in temperature, and if it is used for peaking it must be operated in spinning reserve mode (generator tripped on and off the grid), and as a consequence its efficiency is drastically reduced, and its maintenace issues are increased.
The open cycle gas turbine, can be turned on and off quite rapidly, but its efficiency is low–about 20-25%. They are only used in the peaking mode.
Most of the new generating plants in the US are combined cycle gas turbines, because utilities cannot build coal, or nuclear power plants.
Wind generated electricity cannot be used in the peaking mode, because the electrical production (supply side) is governed by mother nature, and not by the demands of the grid (demand side). Electricity cannot be stored. Therefore wind generation must be used in a baseload configuration. However for a sufficient penetration into the generation mode wind power cannot replace conventional methods of generation, including combined cyle gas turbines. To give as an example, for a 100 megawatt wind farm, it can only replace about 4 megawatt of conventional natural gas generation. I refer the interesting reader to the Wind Energy Report (2005) (page 9) produced and published E-ON. E-on is the largest investor owned utility in the world, mostly in Germany, and Spain, and has control of the largest porfolio of wind energy in the world. WEB–
eon-netz.com, click on the english version of the 2005 wind energy report.
Because of the intermittant generation of electricity, and because wind farms are spread out over a large area, They are very inefficient in the use of electrical transmission lines. For example, transmission lines are “sized” for the maximum generated power (basic ohms, and kirchoffs laws). The energy produced by wind farms is proportional to the average power of these wind farms, not the peak power. Typically, say in Germany, the average power of wind is 18% of the peak power (called the capacity factor or feed-in capacity). In contrast, here in the US the capacity factor for a NUKE is 94-95%(data from Exelon Corp- and NEA). In addition NG baselode, and almost all other baseload is generated near the demand side (about 50 miles), not a 1000 miles (wind midwest to california, or wind midwest to the east coast)
The bottom line is that implementation of Pickens proposed plan would require construction of high voltage transmission power lines from the midwest to the rest of the United States equal to or exceeding all of the high voltage transmission lines currently in use in the continental US!!!
The single largest issue with natgas is, that BTU-wise there is about the same amount of natgas as oil. So yes, you can invest into natgas, related technologies and infrastructure, for a quick buck. However natgas is not going to provide a sustainable solution is the same way oil combustion is not sustainable.
The more the speculators and investors push the natgas price (the easiest oil substitute), the more appealing are sustainable non-combustion alternatives. Natgas is still a fossil fuel and its combustion creates millions of tons of GHG / GWe / year.