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Friday, October 03, 2008

Clean Energy 2030


Basically, Google has released a plan for reducing CO2 output and providing energy over the next 22 years. It focuses on increasing X source Y%, increasing CAFE standards to Z, and things of that nature. It purports to offer a trillion dollars in net savings by 2030.

1) Net Savings
If there is money to be saved by doing this, people will do it spontaneously. No government action is required, and in fact there is no practical purpose to the production of this report. Now, many of you, like the author, have an incomplete understanding of capitalism, so let me give you some examples.

If wind power is cheaper than coal, utilities will build wind power.

If plug-in hybrids save money on gas, people will buy hybrids.

Note that power companies and individuals are already doing this. Why, then, do we need increased Wind Power mandates and CAFE standards? The answer is that many silicon valley investors and companies, including Google, are investing in Green Tech. They want government subsidies and regulatory monopolies and so forth at the expense of the taxpayer and true energy efficiency.

The cost estimates don't take into account the reactions in other sectors of the economy to the increased resources used on the 2030 plan.

2) Nuclear Power
Presumably, the 2030 plan predicts a slight growth in nuclear energy use because it's politically controversial and the people who are targeted by this propaganda piece oppose it. Leaving aside the unpleasant reality that nuclear is the only medium-term alternative to coal, let's create a logical dichotomy.

If nuclear power is bad, we should destroy the existing plants.

If nuclear power is good, we should build many more of them.

This type of argument isn't intrinsically valid, but the statements are true in this case. Instead of either of the logical courses of action, the 2030 plan suggests a slight increase in nuclear generation. I'd also like to point out that the graph seems awfully smooth, considering the amount of power produced by a single reactor.

Also, they assume, and I quote:

Plug-in [electric vehicle] electricity cost: 7 cents per kWh

There is no source of power that cheap other than nuclear. They also need to go into more detail on the variation in power generated by wind and solar over the course of a 24 hour period if they intend to use the assumption of flex-power, which they do quite often.

3)Oil consumption in 2030
We will probably use the same or lower percentage of global oil production that we use today. However, the amount of oil production is decreasing. The decrease can be estimated accurately by Hubbert's Peak; unfortunately, we can't accurately determine where on the curve we are until the peak has already passed. If it's already occurred, we'll know in a few years.

The economics of oil production are such that the total output will not deviate significantly, so, in order to predict our oil consumption, one must analyze the supply, not the demand. The result is that increasing the efficiency of oil consumption will not reduce the amount of oil consumed but will instead lower prices. This is true because many common economic assumptions do not hold. (The instantaneous supply curve is a flat line in the region of interest).

The paper predicts a 38% drop in consumption, which sounds a little high. It would mean a 38% drop in global oil production. Even if we hit Hubbert's peak in 2006, 24 years would only take us back to oil production levels of 1982, a reduction of 27%.


There are already many other well-written comments on the plan, none of which I have read yet. I'm sure I repeat some of them, but I couldn't stay silent.


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