Crossing the Energy Divide: Recapturing Lost Energy
Politically and emotionally, energy independence has become a hot issue not only for Americans, but for oil-dependent countries all over the world. In 1973, the Arab oil embargo caused long lines at American gas pumps. In winter 2009, eight European countries had to go weeks without natural gas—causing millions of people to freeze—because Russian politicians decided to cut off their supply. Only a few countries are oil or gas exporters; the rest (including the United States) are increasingly at the mercy of those few—unless they can find a way out.
American politicians' responses to the call for energy independence have been reflexively quick and predictably consistent with their ideological proclivities. With the gasoline price spike of 2008, Republicans aggressively renewed their call to drill for more oil off the California and Florida coasts and in the Arctic National Wildlife Refuge, areas where drilling has been prohibited for environmental reasons. They also called for reviving the nuclear industry and building many new nuclear power plants. Drilling would be consistent with the long-held conservative view that the exploration and conquest of nature has been at the heart of the American quest,1 and that the government shouldn't tell corporations what they can or can't do. Conservatives also argue that nuclear power wouldn't generate greenhouse gases. Environmentalists and the Obama administration have called for a shift from oil to renewable energy resources as fast as possible, because of the damage done in recent years both to the climate and to the nation's reputation (and clout) around the world.
Unfortunately, both of these political impulses are mistaken. The conservative call to drill for more oil in ecologically vulnerable areas is misconceived for two reasons. First, geological studies have made it clear that little oil would likely be found there2—the call is largely symbolic. And whatever is there will take a decade to extract, so the immediate benefit would be essentially zero. Second, it's possible to achieve U.S. energy independence without such drilling—and without the commensurate increases in global-warming carbon dioxide emissions that the extra oil produced would then generate. As we show in this chapter, we can make the fossil fuels that we're currently using produce more energy service—so much that, within the next 20 years, it will be possible to end oil imports from the Middle East without any new drilling off Palm Beach or La Jolla, or in the middle of a caribou migration route. The heavy lobbying for nuclear power tends to obscure the fact that, although nuclear sources provide some electric power, they don't provide a substitute for petroleum, either gasoline or petrochemicals.
Some of the environmentalists are mistaken, too. Although the need to replace oil and coal (and possibly nuclear power) could hardly be more critical, it will take at least several decades to make the full changeover. We share the goals—and the sense of urgency—of the alternative-energy advocates. But there is no politically or financially viable way to overcome the real-world constraints of capital depreciation, massive capital replacement of obsolescent fossil-fuel infrastructure (including roads and highways), and the impossibility of mobilizing new investment overnight. A gargantuan share of U.S. assets is locked into the old system; even under emergency conditions, it will take many years to free them up. On the other hand, even if the old infrastructure could be dismantled in a week, it would be a huge mistake because, paradoxically, the fastest way to achieve U.S. energy independence and sharply cut carbon emissions is to leave the old system in place a while longer—investing in short-term modifications that can greatly increase the total output of useful work with existing fuel inputs and simultaneously reduce the output of greenhouse gas emissions. We can explain this best by looking at a real-world case.
The Hidden Gold of Energy Recycling
On the south shore of Lake Michigan, in the northwest corner of Indiana, the Mittal Steel Company has a coking facility called Cokenergy. Coke (the industrial substance, not the soft drink) is nearly pure carbon, made by heating coal in the absence of air to remove the methane, sulfur, ammonia, tar, and other impurities to make it suitable for use in a steel-making blast furnace. Some of the gas removed in this process is used to heat the ovens. In a conventional facility, the combustible coke-oven gas is captured, but the hot combustion products from heating the ovens themselves are normally blown into the air.
But Cokenergy is not conventional. In addition to recovering the gases for use elsewhere, this plant captures waste heat and uses it to generate electricity as a byproduct. This "recycled" energy is produced without any incremental carbon dioxide emissions or other pollution. Although the primary process (making coke) uses a fossil fuel, the subsequent production of electric power from the high-temperature waste heat does not. The byproduct electricity is as clean as if it were made by solar collectors. This carbon-free electricity is then used to run the rolling machines in Mittal's adjacent steel plant.
In 2005, the Mittal coking plant generated 90 megawatts (MW) of emissions-free electric power. As we noted in the Introduction, that output, combined with the 100MW of recycled energy that nearby rival U.S. Steel produced, exceeded the entire U.S. output of solar-photovoltaic (PV) energy that year. Combined with the more than 900MW of recycled waste-energy streams other American plants harnessed, the nation's recycled-energy output was about seven times the U.S. solar-photovoltaic production that year. Moreover, the companies that recycle their waste energy haven't needed to buy this power from local utilities. This eliminates all the carbon dioxide emissions (and other pollutants) that the utilities' production of that amount of power would otherwise generate. Yet the total U.S. production of emissions-free "bonus" electricity by this method is still only about 10 percent of the amount that currently operating American plants could produce—without burning any additional fossil fuel. Solar PV has gained rapidly since 2005, but even if it continues to expand at a meteoric rate, it has started from such a small base that it will take many years to replace a large share of the fossil fuel we now depend on. Wind power is further along, but it, too, will need many years. And it's those "bridge" years we need to be concerned about. Companies can install facilities such as the one at Mittal Steel's Cokenergy plant within three or four years. And those facilities are profitable. The electricity from Mittal's recycling operation costs only half of what the local utility charges its customers.
It's a bizarre, perhaps ironic situation, to be sure. From an aesthetic or emotional standpoint, a progressive environmentalist might find it hard to accept that using fossil fuel more effectively is preferable to just switching as soon as possible to renewables, as so many people seem to suggest. But from the standpoint of physical science and engineering, it's indisputable: If our goal is to reduce carbon emissions on a large scale as quickly as possible, the most effective way is to invest in "cogeneration." This means recycling the high-temperature waste heat energy not just from coking, but from a spectrum of existing fossil fuel–burning industrial processes—such as smelting, oil refining, carbon-black production, and chemical processing—into electricity that's as clean as if it had been produced by wind or the sun. And this energy is cheaper.
That last point is critical: Recycling waste-energy streams from industrial uses of fossil fuels is still far cheaper than energy from solar-photovoltaic generation or wind turbines, and far cleaner than energy from biomass. The day will come when the renewables will be competitive without subsidies, and civilization will be on safer ground. Wind power is sufficiently developed to compete with nuclear power or fossil fuels in some windy places, but solar power (both thermal and photovoltaic) still has a long way to go. For the next few years, even with the 2009 financial rescue plan's boost for alternative energy, a dollar invested in waste-energy recycling such as the program at the Mittal plant will produce more emissions-free new power—and carbon dioxide reduction—than a dollar invested in renewables.
We must quickly add that this does not mean investors should have second thoughts about investing in renewable energy. For the strategy outlined here to make any sense, investment in solar, wind, and hydrogen sources should continue to increase. Energy recycling such as the kind Mittal Steel is doing is a short-term strategy intended to hold the fort until renewable output is big enough to take over. Until then, recycling the heat from the coke plant is the smartest thing Mittal Steel can do.
Unfortunately, this doesn't mean that such low-cost, emissions-free energy can provide the power for your home or office—yet. Mittal Steel distributes its 90MW from Cokenergy only to its own steel plant, not to the people of East Chicago, Indiana, where the plant is located. However, supplying clean electricity to the enormously energy-consuming steel-making process in this way not only reduces the need for Mittal to buy electricity from its local utility, but also greatly reduces the amount of carbon dioxide that the utility pumps into the air over northern Indiana.
In addition to high-temperature heat, we can recycle several other kinds of waste-energy streams that thousands of American industrial plants generate. We can inexpensively convert much of this waste to electric power that would otherwise need to be generated by coal- or natural gas–burning power plants or by nuclear plants.3
In Rochester, New York, the Kodak Corporation has a complex that stretches 5 miles end-to-end. A steam-pressure system that powers its chemical processing now recycles 3 million pounds of what would otherwise be waste steam per hour, generating electric power that, at last count, was eliminating 3.6 million barrels of oil-equivalent per year and saving Kodak $80 million on its electric bill.
A third category of waste-energy stream is flammable gas, which petroleum refineries and some chemical plants often simply burn off (flare) into the sky. If you've ever driven along a certain stretch of the New Jersey Turnpike at night, along I-95 near Philadelphia, or in the "Cancer Alley" area of Louisiana, you've seen (and smelled) a lot of gas flaring. In principle, companies could have used all that wasted energy to make cheap electricity.
At a U.S. Steel plant in Gary, Indiana, and in steel plants all over the world, a byproduct of the iron-smelting process is "blast-furnace gas," which consists mostly of carbon monoxide and nitrogen, with some hydrogen and carbon dioxide. The monoxide and hydrogen make it flammable (and toxic), so it must be flared if a beneficial use cannot be found. But in this plant, the blast-furnace gas is captured to produce steam, which drives a steam turbine powering a generator with an annual output of 100MW—even more than at the Mittal coking plant a few miles to the west.
A fourth kind of waste-energy stream is produced by decompression. About 8 percent of the natural gas shipped by pipeline is used for compression of the gas itself, to drive it through the pipelines. At the delivery point, this compression energy is lost. Yet a simple back-pressure turbine, costing a few hundred dollars per kilowatt, can convert that pressure to useful electricity. This process alone could add another 6,500MW of carbon-free electricity in the United States, saving roughly 1 percent of U.S. fossil-fuel consumption and the greenhouse gas emissions.