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| We the Six Billion: The Ammonia Economy (part 2) | | 11/24/2009 1:54:00 PM | Email this article • Print this article |
by Joe Steinberger
Last week I wrote about a talk by Matt Simmons at which he proposed a solution to a predicted world shortage of water and petroleum: offshore wind generators to produce fresh water and ammonia from wind, air and sea water. I promised this week to explain why we could not afford to use this ammonia as a substitute for gasoline and heating oil, let alone afford water produced this way, and promised to suggest a more likely solution.
Let's look first at the new wind-power project on Vinalhaven. It cost $15 million. There are three 250-foot towers on which are installed wind turbines with 123-foot blades. In strong winds they can generate 4.5 megawatts. Because winds are not always strong, the developers expect to be able to generate a total of about 11,600 megawatt-hours of electricity per year, slightly more than the islands use. The coop owns a cable that connects the island's electric grid to the mainland, so when the wind does not blow they can draw from the mainland electric grid, and when the wind turbines produce a surplus they can sell it back to the mainland. As project consultant George Baker put it, "We're using the grid as our battery."
Because of its excellent site, because of the existing cable and that excellent "battery" (both of which came without additional cost), because of a government subsidy in the form of tax credits that were traded for a $5 million no-cost passive investment and a 4% government loan for the $10 million balance, this well-designed project is economically viable. Other wind projects with similar advantages can also be viable as long as they remain a small part of the total grid capacity.
Now let's imagine those three towers floating offshore. They now include a floating chemical factory: a water desalinization plant, a hydrogen electrolysis plant, and a plant to produce ammonia from the hydrogen by combining it with nitrogen from the air. The cost will certainly not be $15 million, but many times that. Optimistic estimates of the cost of offshore wind turbines have them costing twice what they cost on land, and the chemical factory would be at least as much again, so a minimum of $60 million - probably much more. Let us imagine too that all this is financed at market rates by private debt and equity. Then we must add the annual costs for the offshore chemical factory crews, the maintenance and transport crews and ships, etc.
You figure. I come up with $10 million a year as the lowest imaginable cost. How much ammonia will this buy? Based on standard numbers for ammonia production from electricity, that $10 million 11,600 megawatt-hours will produce the energy equivalent in ammonia of about 44,000 barrels of oil. This is $230 a barrel, twice the historic peak price, three times the current price, and equivalent to retail heating oil price in the range of $10 per gallon. This is a low-end estimate.
Some people could afford to pay $10 or $20 a gallon for transportation or heating fuel without changing their lifestyle, but most could not. They won't have any choice, some might say, but that is wrong. At prices of even $5 per gallon people begin feeling a powerful pressure to use less.
At his talk, Matt Simmons played down the potential for conservation, but in fact our potential for using less is huge. Under serious price pressure we could easily cut in half the amount of driving that we do, and we could easily double the gas mileage of the vehicles that we drive. That simple change would mean reducing demand to a quarter of what we now use. And the potential is much greater. Don't forget that 100 years ago nobody drove anywhere, and we managed to live perfectly decent lives.
Heating fuel is harder to do without, but even that is possible. In Germany today people are building well-insulated and airtight houses that can stay warm throughout the winter on body heat and sunlight and keep indoor air fresh via heat exchangers. Even in our existing homes here in Maine it is possible to cut heating fuel use in half (and make our homes healthier) just by turning down thermostats. By closing off unneeded rooms, by re-assembling our extended families, we can save much more.
It is true that we may not want to do these things, but we will prefer using less to going broke. Alternative energy, such as solar heat, and those windmills on Vinalhaven, will surely play a role too. It is unlikely, though, that ammonia-producing offshore windmills are going to be a part of our future: we cannot afford them.
The ammonia-economy fantasy is the result of an inability to come to grips with the central reality of our time. The era of virtually unlimited cheap energy, the era of cheap oil, is coming to an end. The industrial revolution was accelerated by that cheap energy: it is not going to replace it. We are reaching the limits not only of oil supplies, but also of our ability to sustain an ever more complex and expensive infrastructure.
The new smart is simple.
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Reader Comments
Posted: Thursday, December 03, 2009
Article comment by:
Brecon Quaddy
Thank you for this illuminating article. I have been a long time follower of the peak oil story and of Mr Simmons' contributions to its development.
Mr Simmons is, of course, talking about ammonia as a global solution. He foresees a massive worldwide roll-out of tens of thousands of 90-story offshore turbines and associated ammonia production plant.
However, my understanding of the impact of the 'net energy cliff', which civilisation will encounter after oil flows peak, is that the necessary investment for such a programme won't be possible, even assuming the political will exists.
Of course, that will be no skin off the nose of investors in early wind-ammonia projects. Even if the ammonia economy never happens, places like Maine will still be left with some nifty wind electricity generating capacity to up their chances of a favourable outcome during the, er, die-off.
In the meantime, Matt Simmons may have found the perfect way to sell windpower to a civilisation hooked on liquid-fuelled transportation, - at a time when the majority of people still don't want to listen to more sensible messages about the value of conservation.
Posted: Tuesday, December 01, 2009
Article comment by:
Hans Nicolaisen
Dave Doucette writes, in part, “This would be extremely cheap electricity…”.
I have to wonder how he can make such a statement in view of the fact that no one (including the proponents of this venture) has told us what might be the levelized cost of generation from this proposed venture, to say nothing of the delivered cost/price of electricity to the consumer. At the presently projected capital cost of $5000 per kilowatt of installed capacity, and a capacity factor of 40%, it is difficult to think that this will be “cheap” electricity by any stretch of imagination.
And, as I wrote earlier, large wind turbines, supported by deepwater floating platforms is, so far, unproven technology. While this may ultimately prove viable, we can’t count on its success, and we shouldn’t let what may turn out to be false promises distract us from measures that are known to work, including some of those suggested by Mr. Steinberger.
Posted: Tuesday, December 01, 2009
Article comment by:
Dave Doucette
There are some major flaws with your arguments:
1) The number of turbines projected for use off shore is several magnitudes greater than "15." Thereby reducing the ammonia generation cost factor.
2) Ammonia generation is targeted to off-peak usage times (i.e. third shift) where wind power generation is its highest. This would be extremely cheap electricity since the grid would already be beyond demand.
Think of ammonia as a chemical battery system with unlimited capacity.
Posted: Thursday, November 26, 2009
Article comment by:
Richard McKusic, Sr.
Excellent article about simpler being the answer. Some of us are doing that and making it work. Mr. Steinberger doesn't just talk the talk. He sets an example for the rest of us. We do not have the money nor the time to do Rumplestiltskin experiments. Didn't work for Rapunzel and it won't for us.
Posted: Wednesday, November 25, 2009
Article comment by:
Martin Thorpe
Whilst I share many of the doubts expressed concerning the technical viability of Matt Simmons "Ammonia Economy" I have little doubt that much higher oil prices are on there way. However, while $250 a barrel prices will deter some aspects of driver behaviour as a UK resident well used to paying 3 to 4 times the US pump price its impact should not be over stated. I am currently unemployed but still manage to run a big (by European standards) 3.2 litre Mercedes coupe, but I use it primarily as recreation and not as a means of transportation. In common with most Western Eurpoean cities But then Edinburgh is well served by public transport and crucially has a population density (and I would argue attendant quality of life, weather excepted!) way in excess of that of it's American counterparts. The real change that Peak Oil will usher in is the end of American suburban living and it's replacement a lifestyle based around modern, high density cities.
Posted: Tuesday, November 24, 2009
Article comment by:
Hans Nicolaisen
While all of us living in and near Rockland should give thanks, and express our utmost appreciation, to Matt Simmons for his work in restoring the Strand Theater, and even improving its historic grandeur, I have to wonder if he might be going overboard in his proposals regarding the promise of deepwater offshore windpower.
Deepwater floating platforms, providing a base for large wind turbines are, so far, completely unproven technology. For Mr. Simmons, along with Angus King, to suggest that a substantial part of Maine’s energy future will be taken care of by this unproven technology is premature at best.
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