Coal, climate change, and our energy future

This Monday morning, I have one thing on my mind: coal.  Tennessee Ernie Ford’s Sixteen Tons is ringing through the air:

“I was born one mornin’ when the sun didn’t shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number nine coal
And the straw boss said “Well, a-bless my soul”

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store”

Why am I thinking about coal, you might ask?  It is not just Ford’s sweet voice.  In the December issue of The Atlantic, James Fallows examines efforts in China and the United States to create “clean coal.” To many environmentalists, that is a dangerous oxymoron.  You probably saw this ad, filmed by the Coen Brothers:

That ad was in response to ads like this, from General Electric:

Well, on one hand you have folks that say clean coal is impossible.  On the other hand you have General Electric saying that “coal is looking more beautiful every day.”  Who is right?  Well Fallows’ article gets to the heart of that question.  He identifies some of the basic math that makes coal inescapably part of our immediate energy future:

“Precisely because coal already plays such a major role in world power supplies, basic math means that it will inescapably do so for a very long time. For instance: through the past decade, the United States has talked about, passed regulations in favor of, and made technological breakthroughs in all fields of renewable energy. Between 1995 and 2008, the amount of electricity coming from solar power rose by two-thirds in the United States, and wind-generated electricity went up more than 15-fold. Yet over those same years, the amount of electricity generated by coal went up much faster, in absolute terms, than electricity generated from any other source. The journalist Robert Bryce has drawn on U.S. government figures to show that between 1995 and 2008, “the absolute increase in total electricity produced by coal was about 5.8 times as great as the increase from wind and 823 times as great as the increase from solar”—and this during the dawn of the green-energy era in America. Power generated by the wind and sun increased significantly in America last year; but power generated by coal increased more than seven times as much.”

An article today in the New York Times shows that China’s hunger for coal has now resulted in coal imports from Australia, the United States, Indonesia, Canada, Columbia, and South Africa; new mines are even being planned in Washington State.  Fallows interviewed Ming Sung, a geologist who worked in the United States for many years for the Department of Energy and Shell Oil, and now works in China for the Boston-based Clean Air Task Force:

“People without a technical background think, ‘Coal is dirty! It’s bad, but will you turn off your refrigerator for 30 years while we work on renewables? Turn off the computer? Or ask people in China to do that? Unless you will, you can’t get rid of coal for decades. As [U.S. Energy Secretary] Steven Chu has said, we have to face the nightmare of coal for a while.”

Sung’s Clean Air Task Force is working to create partnerships between American and Chinese businesses to develop new technologies like underground coal gasification (UCG).  Here is a description of  UCG from the CATF:

“UCG processes coal where it lies, eliminating the environmental hazards of mining. In the process, coal is converted into a syngas through partial oxidation, creating the same reactions as surface gasifiers. The syngas generates “feedstocks” for several products, including electric power, chemicals, liquid fuels, hydrogen, and synthetic natural gas.  UCG allows for extensive pollution control and costs less to construct and operate than equivalent plants using surface gasifiers. The process has the potential to greatly enhance energy security, environmental sustainability, and economic competitiveness.”

In the United States, only one UCG plant is being constructed, the Texas Clean Energy Project, in Odessa, Texas.  However, in China, the development is occurring much faster.  In fact, development in all areas of energy research is occurring much faster:

‘In the search for “progress on coal,” like other forms of energy research and development, China is now the Google, the Intel, the General Motors and Ford of their heyday—the place where the doing occurs, and thus the learning by doing as well. “They are doing so much so fast that their learning curve is at an inflection that simply could not be matched in the United States,” David Mohler of Duke Energy told me. “In America, it takes a decade to get a permit for a plant,” a U.S. government official who works in China said. “Here, they build the whole thing in 21 months. To me, it’s all about accelerating our way to the right technologies, which will be much slower without the Chinese. “You can think of China as a huge laboratory for deploying technology,” the official added. “The energy demand is going like this”—his hand mimicked an airplane taking off—“and they need to build new capacity all the time. They can go from concept to deployment in half the time we can, sometimes a third. We have some advanced ideas. They have the capability to deploy it very quickly. That is where the partnership works.”’

So lets go back to the beginning.  How do we create a sustainable future, with sustainable energy consumption?  There are a lot of perspectives out there; I see them every day.  I happen have faith in the potential of nuclear power, whereas some of my colleagues would sooner eradicate nuclear power and rely on solar and wind.  The geologists and businessmen in Fallows’ article believe that coal is inescapably part of our future.  Who is right?

In part, I suppose, it depends on how you envision energy consumption developing, globally.  Coal, natural gas, nuclear power, and oil provide the majority of our energy today.  To stop using them, and rely exclusively on wind, solar, geothermal, and other developing clean energy possibilities, will require us to consume energy locally instead of systemically, and it will require us to reduce the scale of our consumption significantly.  More importantly, to get there, it will require time, energy, and financial investments on a significant scale.  Additionally, it will require a sea change in the way we live.  Alternatively, the people in Fallows’ article look for a game changing technology that will create a ‘clean coal.’  Similar to those efforts, Bill Gates and others are looking to the  next generation technology of Travelling Wave Reactors (TWR), which promise to produce almost zero waste with lower costs, a significant progression from 1960s nuclear energy technology.  The big problem in following either path seriously is that like our political gridlocks, we face ideological inflexibility in developing climate solutions.  Fallows identifies the problem we face in America:

“But China’s very effectiveness and dynamism, beneficial as they may be in this case, highlight an American failure—a failure that seems not transient or incidental but deep and hard to correct. The manifestation of the failure is that China is where the world’s “doing” now goes on, in this industry and many others. If you want to learn how the power plants of the future will work, you must go to Tianjin—or Shanghai, or Chengdu—to find out. Power companies from America, Europe, and Japan are fortunate to have a place to learn. Young engineers and managers and entrepreneurs in China are fortunate that the companies teaching the rest of the world will be Chinese.  The deeper problem is the revealed difference in national capacity, in seriousness and ability to deliver. The Chinese government can decide to transform the country’s energy system in 10 years, and no one doubts that it will. An incoming U.S. administration can promise to create a clean-energy revolution, but only naïfs believe that it will. “The most impressive aspect of the Chinese performance is their determination to do what is needed,” Julio Friedmann told me. “To be the first, to be the biggest, to have the best export technology for cleaning up coal.” America obviously is not displaying comparable determination—and the saddest aspect of the U.S. performance, he said, is that it seems not deliberate but passive and accidental, the product of modern America’s inability to focus public effort on public problems. “No one in the U.S. government could ever imagine a 10-year plan to ensure U.S. leadership in solar power or batteries or anything else,” Joseph Romm, a former Department of Energy official who now writes the blog Climate Progress, told me. “It’s just not possible, so nobody even bothers to propose it.” The Chinese system as a whole has great weaknesses as well as great strengths. Its challenges, as I have reported so often in these pages, make the threats facing America look trivial by comparison. But its response to the energy challenge—including its commitment to dealing with the dirty, unavoidable reality of coal—reveals a seriousness about facing big problems that America now appears to lack.”

The reality is that we need to look to everything: we need to reduce our energy consumption, become more efficient, increase the development of wind and solar, and pursue new technologies like UCG and TWR.  With growing energy consumption globally, with the coming age of electric vehicles, we will need to have all of the solutions we can get our hands on.  There is no one Holy Grail here.  We need strict environmentalists to work with climate change denialists, and everyone in between, to increase investment in new technology, to increase efficiencies, to guard precious resources like rare earth metals, and to reduce the throughput of energy and resources in our economy.  We need to get over our disagreements and find common ground, pronto.  Clean coal?  I am willing to embrace the possibility.

Rhode Island could learn something from China

While the Rhode Island politicos bicker about whether and how to construct an offshore windfarm, and Rhode Island ratepayers insist that they prefer diesel generators and coal, externalities and all, China is showing what a clean-tech engine really looks like.

In July, the 102 MW Donghai Bridge Wind Farm went online and transmitted good clean energy to the mainland from the East China Sea.  China was the first, outside Europe, and they are not slowing down.  They have several other farms under construction.  In the next 3 years, they plan to add 514MW of offshore wind energy.  In the next 20 years they plan to add 30GW.  China is actually making this happen – right now.

Wake up Rhode Island!  Do you want 21st Century clean-tech jobs at Quonset Point?   Or, do you hope those textile mills will suddenly come back into style?

Is Japan outgrowing growth?

Yesterday in the Times Japanese Professor Norihiro Kato reflected on the news that China recently overtook Japan as the World’s second biggest economy.  Surprisingly, Kato reacted with “relief,” as if a “load [was] off my shoulders.”  In fact, he calls the new Japanese reality a maturity:

“The rest of the world’s population is still exploding, and we are coming to see the limits of our resources.  The age of ‘right shoulder up’ is over.  Japan doesn’t need to be No. 2 in the world, or No. 5 or 15.  It’s time to look at more important things, to think more about the environment and people less lucky than ourselves… Freshly overtaken by China, Japan now seems to stand at the vanguard of a new downsizing movement, leading the way for countries bound sooner or later to follow in its wake.  In a world where limits are increasingly apparent, Japan… may well reveal what it is like to outgrow growth.”

Some economists, those of the ‘right shoulder up,’ neo-classical province, would argue that limitless growth is possible, especially if you remove all regulation and government interference.  These neo-classical economists do not recognize limits, they do not account for the stock of natural resources that is blindly being used.  Of course, Kato points out that in Japan the new 20-somethings are revolting against the old logic of limitless growth.  He calls them non-consumers, frugal, savers.  Will the United States follow Japan?

Inevitably, yes.  Japan is mired in deflation, where “consumer demand has become so weak – and deflationary expectations are now such the norm – that the economy seems no longer to respond to such monetary tools.”  Sound familiar?  Interest rates are at record lows here in the United States, and the economy is responding sluggishly, if at all.  Economists are arguing that the era of inevitably rising house prices is over.  That housing wealth was the engine for the nacent growth in the past decade.  With health care costs continuing to rise, our current economic model is unsustainable.

Of course, when you consider looming resource limits, where oil, minerals, and even fresh water will become more scarce and more expensive, and you have a recipe for a sea change.  The old guard will continue to argue for exponential growth, but sooner or later, the kids won’t buy the same tired argument.

Review of The Shock Doctrine, by Naomi Klein

I was born in 1976, and came of age in Ronald Reagan’s ‘Morning in America.’   After reading Naomi Klein’s 2007 book The Shock Doctrine: The Rise of Disaster Capitalism, I feel as if a veil has been lifted from my perception of history, and the important events of my youth stand out in new significance.  The story told in this important book centers around Milton Freidman, and the fundamentalist capitalist beliefs espoused at the University of Chicago School of Economics, where Freidman taught.

Klein’s main thesis in the book, which travels across continents and decades, is that in order to implement the fundamentalist economic policies espoused by the Chicago School, a clean slate is required.   The technique to facilitate that clean slate is what amounts to the shock doctrine.  Klein uses a quote from Freidman’s introduction to his seminal work, Capitalism and Freedom to quantify the shock doctrine.  Freidman observes that:

“Only a crisis – actual or perceived – produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are lying around.  That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”

The crisis that Freidman describes is crucial.  To analyze how that crisis and the clean sheet are created, Klein uses torture as a metaphor, tracing the ghastly experiments at McGill University by psychiatrist Ewen Cameron, under the direction of the CIA (through its MK FrUltra program).

Dr. Ewen Cameron

Cameron believed that in order to teach his patients new behaviors, old pathological patterns needed to broken up to create a tabula rasa.  The way to create that blank slate was to attack the mind with electricity, uppers, downers, and hallucinogens to, in Cameron’s words, “disinhibit [the patient] so that his defenses might be reduced.”

The CIA provided grants to Cameron starting in 1957; at this point Cameron started upping the number of shocks to unprecedented levels, increasing the dosage of drugs, and experimenting with sensory deprivation and extended sleep.  The CIA took the fruit of Cameron’s research and produced a handbook, Kubark Counterintelligence Interrogation, a secret manual on the interrogation of resistant sources.  The CIA taught these methods to authoritarian governments including Chile, Guatemala, Honduras, and Iran.

Klein traces the introduction of this fundamentalist form of capitalism over the last 40 years and finds that:

“Seen through the lens of this doctrine… some of the most infamous human rights violations of this era, which have tended to be viewed as sadistic acts carried out by antidemocratic regimes, were in fact either committed with the deliberate intent of terrorizing the public or actively harnessed to prepare the ground for the introduction of radical free market ‘reforms.’”

Argentina, Chile, and Bolivia were part of the first wave of the imposition of Freidman’s reforms, and those junta regimes used disappearances, as well as torture techniques from the Kubark handbook, to eliminate opposition to the implementation of reforms.  Klein also views the 1990s crises in China, Russia, and Asia through the lens of the shock doctrine, and closely looks at the role of the International Monetary Fund in creating the necessary shock condition.  Ultimately, Klein turns to 9/11, Iraq and Sri Lanka to show the rise of disaster capitalism as a global movement.

Economist Milton Freidman

In the 1960s, at the University of Chicago, Freidman saw a United States where its capitalism was tainted by “interferences”  (fixed prices, minimum wage, public education); while they may have provided benefits to the public, these interferences polluted the equilibrium of the market and inhibited market signals.  Freidman and his fellow Chicago economists (including his mentor Friedrich Hayek) wanted to purify the market, to get rid of these interferences.  Friedman saw the mixed economy supported by John Maynard Keynes as the enemy to be defeated.

Freidman’s prescription was as follows: remove as many rules and regulations as possible, privatize most state assets, and cut back most social programs.  Taxes should be low, and flat, if they should exist at all.  Protectionism was sacrilege to Freidman.  The invisible hand should determine prices, and there should be no minimum wage.  These were bold steps to take, even in the capitalist United States.  In order to prove his theories, Freidman would have to demonstrate them in the real world. He found a laboratory in Chile, one of the Developmentalist, mixed economies in South America that sought to find a middle road between the Cold War economic extremes.

These economies were linked around the United Nations Economic Commission for Latin America, based in Santiago Chile, and headed by economist Raul Prebisch.  In the 1950s and early 1960s, the Developmentalist economies prospered, and nurtured a burgeoning middle class.  However, American multi-national companies like Ford convinced the United States government create a program that, starting in 1956, educated 100 Chilean economists at the University of Chicago.  These Chileans, indoctrinated in Freidman’s fundamentalist beliefs, were unable to change Chile, however, without America’s help.

After the 1970 election of leftist Salvador Allende, the new government promised to nationalize sectors of the economy that were being run by foreign corporations.  President Nixon declared a virtual war on Chile through the Ad Hoc Committee on Chile, which included ITT, owner of 70% of the Chilean phone system.  Ultimately, in September 1973 General Augusto Pinochet took power in a military coup, but before the coup, the Chicago boys prepared a set of laws and regulations known as “The Brick” which went into effect immediately, a 500 page economic bible full of deregulation, privatization, and social spending cuts.

General Augusto Pinochet

Unfortunately, by 1974, counter to the expectations of Freidman and the Chicago Boys, inflation doubled to 375%.  The Chicago boys argued that the medicine wasn’t strong enough, and Freidman himself came to the country in 1975 to personally make the same case.  Freidman urged another 25% spending cut, and even more deregulation.  Unfortunately, in the next year the economy contracted by 15%, and unemployment reached 20%.  In fact, the economy did not start to improve until 1982, when Pinochet was forced to follow Allende’s advice and nationalize many companies.  Ultimately, the real legacy of Freidman’s prescription in Chile was that by 1988, 45% of the population had fallen below the poverty line, while the richest 10% had seen their incomes increase 83%.  But it wasn’t just poverty that eviscerated the middle class; Pinochet used the techniques in the Kubark manual to torture prisoners, who instead of being arrested, were “disappeared.”  In fact, the CIA trained Pinochet’s security forces, along with those in Uruguay and Argentina.  Ultimately, in South America, that was the effort required to create a tabula rasa: military coup, economic shock, and torture.

Klein’s conception of the Shock Doctrine is most clear when she looks at the brutal dictatorships in South America, as well as South Africa’s transition and Russia’s paradigm shift in the 1990s.  Klein’s analysis of Russia under Yeltzin is powerful.  I was in high school and college during those years, and my impression was formed from the jingoistic American press.  Klein makes clear that the IMF and Jeffrey Sachs, economic wunderkind, produced the kind of pressure that resulted in tragedy and mass killings.

However, Klein’s argument loses coherence when she looks at China, the United States, and Sri Lanka.  In the United States, Klein makes the leap from Freidman laissez-faire economics to the privatized homeland security apparatus.  I applaud the critique of Donald Rumsfeld, a Freidman acolyte, but it doesn’t fit the overall thesis.  In China, Klein describes the protestors as resisting the free market reforms of Deng Xiaoping.  Klein argues that most of the protestors opposed free market reforms, and that Xiaoping attacked those protestors to quell the rebellion and implement reforms while the Chinese population was still in shock.  This narrative is historically tenuous, at best.

However, the larger point of Klein, particularly as demonstrated in South America, is valid.  Freidman’s fundamentalist free market reforms require a tabula rasa, and the middle and lower classes will naturally oppose the lowering of their standard of living.  In order to create the tabula rasa, some level of force will be required.  The research that Ewen Cameron completed at McGill University is particularly troubling, especially in light of the torture that the United States implemented in Iraq.  In fact, Iraq is a Pandora’s box that should continue to produce troubling revelations.  Hopefully, those revelations will remain in the public consciousness the next time that we want to create the kind of fundamental change that President Bush wanted to in Iraq, that General Pinochet wanted to do in Chile, and that dictators have long sought to do in the name of the free market.

How can we change our economy from a jet to a helicopter?

Ecological Economist Herman Daly

Herman Daly, an Ecological Economist from the university of Maryland, argues that we humans will, sooner rather than later, have to transtion from a growth-based economy to what he calls a Steady State Economy (SSE).  In Daly’s conception, the economy has grown immensely over the last few hundred years compared to the static, steady state of the Earth; the more it continues to grow, the more it will have to conform to the Earth:

“That behavior mode is a steady state—a system that permits qualitative development but not aggregate quantitative growth. Growth is more of the same stuff; development is the same amount of better stuff (or at least different stuff). The remaining natural world no longer is able to provide the sources and sinks for the metabolic throughput necessary to sustain the existing oversized economy—much less a growing one. Economists have focused too much on the economy’s circulatory system and have neglected to study its digestive tract. Throughput growth means pushing more of the same food through an ever larger digestive tract; development means eating better food and digesting it more thoroughly. Clearly the economy must conform to the rules of a steady state—seek qualitative development, but stop aggregate quantitative growth.”

To further identify what a SSE would look like, Daly compares a growth based economy to an airplane, designed for forward motion, unable to hover in place.  Unlike the airplane, a SSE would be more like a helicopter, which is designed to hover.  In other words, the SSE would have a relatively constant population and stock of capitol, and maintain a reasonable rate of materiel throughput “within the regenerative and assimilative capacities of the ecosystem.”  To create the SSE, Daly recommends upstream resource taxes (instead of income taxes), redistribution of wealth, ecological protectionism, and an emphasis on durable, long lasting consumer goods.

To achieve these goals, decoupling will be necessary.  Absolute decoupling in when resource impacts decline in total, across the economy.  In his book Prosperity Without Growth, Tim Jackson points out that despite greater efficiencies and technological innovations, no absolute decoupling has occurred since the Kyoto climate summit:

“Despite declining energy and carbon intensities, carbon dioxide emissions from fossil fuels have increased 80% since 1970.  Emissions are almost 40% higher than they were in 1990 – the Kyoto base year – and since the year 2000 they have been growing at over 3% per year…. [and] what’s true for fossil resources and carbon emissions is true for material throughputs more generally.”

So, decoupling will require hard work and sacrifices in our standards of living.  However, energy and mineral resources get more and more expensive by the day, as the Energy Returned on Energy Invested continues to drop across the board, from oil to copper.  Additionally resources that we humans have long taken for granted are becoming scarce.  Today the New York Times described new investments by Australian in desalination plants to meet the country’s water needs:

‘In one of the country’s biggest infrastructure projects in its history, Australia’s five largest cities are spending $13.2 billion on desalination plants capable of sucking millions of gallons of seawater from the surrounding oceans every day, removing the salt and yielding potable water. In two years, when the last plant is scheduled to be up and running, Australia’s major cities will draw up to 30 percent of their water from the sea. The country is still recovering from its worst drought ever, a decade-long parching that the government says was deepened by climate change. With water shortages looming, other countries, including the United States and China, are also looking to the sea. “We consider ourselves the canary in the coal mine for climate change-induced changes to water supply systems,” said Ross Young, executive director of the Water Services Association of Australia, an umbrella group of the country’s urban water utilities. He described the $13.2 billion as “the cost of adapting to climate change.”’

What this means is that the economy is already bumping up against the limits of the Earth.  However, the decoupling that Daly advocates will require careful coordination on development, between nations, not the type of ad hoc development planning that is evident in Australia.  Unfortunately, as Jackson shows in his book, the developing economies, especially in India and China, will require more and more resources in coming years.  The schism that was evident at the Climate summit in Copenhagen between Europe and the United States, and the developing economies belies that the careful coordination required to achieve decoupling is a long way off.  Unfortunately, I think it will take some much more vivid evidence of the economy bumping up against the limits of the Earth to inspire the necessary action and coordination.  The growth based economy, represented by the worship of Gross National Product, is in our DNA.  It will take a shock to our system to create the conditions for the necessary change.

Busy weekend in the Western Pacific

It was a busy weekend in my old stomping ground, the Western Pacific.  Late last week South Korea announced that clear evidence points to a North Korean submarine in the March 26 attack on the South Korean corvette Cheonan.  South Korea, with U.S. backing, announced that it would sever all trade with North Korea, which would deny the Stalinist regime an estimated 14.5% of its international trade and $253 Million in revenue.  Of course, North Korea relies on China for much of its trade, and China is and an awkward position.  One wonders if this crisis dance will ever end, or whether China will take a firm hand with North Korea.  It looks like this will be a busy summer in the waters off the Korean Peninsula.

Further south, Japan relented to American pressure and agreed to keep the Marine Corps Air Station on the island, against the wishes of Okinawans.  This was a loss of face for Prime Minister Yukio Hatoyama, who campaigned on a promise to remove the air base from Okinawa.  The islanders have been upset with the American presence on Okinawa since the 1995 rape and abduction of a 12 year old girl by two Marines and a Sailor.  The history of this island is fascinating, and revealing.  Until 1868 it was part of the Ryukyu Kingdom, an independent regional trade hub between China and Japan; Japan annexed the island and it became the Ryukyu prefecture in 1879.  Just a few weeks ago, on the excellent Tom Hanks-produced mini-series The Pacific, the Battle of Okinawa was portrayed; over 150,000 U.S. and Japanese troops, and over 100,000 Okinawans died during the 82-day battle, which the Americans fought to get a staging ground to attack the Japanese mainland.  The island was actually under U.S control from 1945-1972, and many military bases were built on the island.  Okinawa is perched in the East China Sea at a location that all but guarantees its continued military significance.

UPDATE: (5/25) NY Times: Relations between North and South Korea, already strained over the sinking of a South Korean warship, deteriorated to their worst point in years on Tuesday as the South Korean president redesignated the North as its archenemy, and the North said it would sever its few remaining ties with the South.