This week’s Bloomberg Businessweek had an article titled On China’s Electricity Grid, East Needs West, that explained the mega cities of China’s east coast are consuming resources from the coal rich areas in the country’s far western provinces resulting in lengthy transmission lines and growing instability among the minority ethnic groups there.
One of the biggest problems with having cities so far removed from the natural resources that power those cities is transmission. In China, freight railroads and river barges are already overloaded and overcrowded. This led party leaders to push for development of interior regions of the country and build high voltage transmission networks called the West-East Electricity Transfer Project. By 2020 the total capacity of this project is projected to equal 60 Hoover Dams.
The second problem with this large-scale coal driven buildup is the lack of water resources available to produce steam in these plants. Many of these planned coal plants are located in water scarce regions including Xinjiang and Inner Mongolia and has led to tensions with ethic Mongolians and Uighurs who depend on farming and herding for their livelihood. By tapping already stressed aquifers and wetlands, there could be a larger problem looming.
A better idea would be harness China’s production capacity of solar PV cells and adopt a domestic policy of distributed generation. DG is sited near the end user of the electricity and therefore less vulnerable to losses during transmission. PV cells can be placed vertically up the sides of the country’s many skyscrapers eliminating the need to clear land for ground-based systems. Smart building design is another idea that could drastically reduce demand for electricity and save the country from building expensive, inefficient, centralized power plants.
China’s massive infrastructure build out has been nothing short of extraordinary. Now it has the opportunity to leap ahead of other developing nations by committing resources towards building the next generation cities. Distributed generation, microgrids, and smart integrative building design can all help to make this idea a reality.
I read a quick article in Bloomberg Businessweek last week that detailed an unlikely alliance between tar sands producers and environmentalists to put a pollution tax on the dirty, heavy crude coming out of Alberta. Yes, that is correct. Tar sands producers are actually lobbying for a carbon tax or cap-and-trade system that would help to clean up their operations. In British Columbia, a province that enacted a carbon tax, families are paying an average annual premium of $376 and have reduced their per capita emissions 10%. The producer’s biggest fears are to be viewed as “too polluting” by other nations, resulting in no market for their exports. America’s opposition to the Keystone XL pipeline highlights this fear. Unless the tar sands can change their appearance, it seems that the world would be okay without the product. An oil industry spokesman even said that “If your country looks at Canada and says your energy exports are too carbon intensive, then it becomes and economic competitiveness issue.”
Standing in the way of this unlikely alliance and subsequent carbon pricing is the Prime Minister Stephen Harper. Harper has traditionally emphasized business and job creation over environmental issues and is responsible for pulling Canada out of the Kyoto Protocol, the only nation to do so. Failure to embrace cleaner regulations on the tar sands may soon become an environmental and economic problem for The Great White North.
The winds of change are blowing, and nations are figuring out how to monetize carbon. If Canada can enact sensible regulation that appeases both oil producers and environmentalists, then it can be a leader in the carbon markets. If it fights the winds of change, then it risks being left behind by the rest of the world. The simple answer is to put a price on carbon and use the proceeds to invest in clean technology developments.
Years ago, when the US thought they would have to import LNG’s from abroad there was a massive build out of over 24 LNG plants for regassification. Thanks to horizontal drilling and hydrologic fracturing, the US will not have to worry about LNG imports for the next century at the earliest. Converting these regassification plants to be export terminals makes economic sense and environmental sense. With the exception of Sabine Pass in Louisiana who was just recently granted permission to export, all that equipment now sits idle along the gulf coast.
At the heart of the issue is the fact that American gas now sells for $3.40 per MBTU domestically but over $12 in Europe and up to $20 in Asia. Turning American nat gas to LNG cost about $5 per MBTU, so exports of LNG can be beneficial to the economy. Furthermore, the glut of natural gas has actually forced producers to stop producing until the supply dwindles or demand picks up. Tapping the international markets would allow this process to balance out. Of course, there is steady opposition to LNG exports from uncommon bedfellows of environmentalist and business proponents who respectively oppose fracking on environmental grounds and who want to maintain their access to cheap fuels.
I have gone back and forth on the subject of fracking several times now but generally agree with the economic arguments set forth in this article. While I am not a proponent of fracking, the following issues deserve mention:
Nat Gas is priced on a regional market as opposed to a global market. The lack of export infrastructure acts as a subsidy thereby keeping the price of gas artificially low and promoting inefficient use of the fuel. Increasing LNG exports will increase the price but will hopefully establish a free and transparent market. The revenues of the fuel trade should be used in clean technology research and developing next generation technologies.
With cheap nat gas prices in the USA, developing nations have been leaning towards coal to fuel their consumption. Access to natural gas will hopefully reduce the emissions in the developing world more than if the gas were kept in the US.
These two points rely on the assumption that fracking remains legal. As I write this, a moratorium on fracking (bill A.5424-A) was just passed by the Assembly and will go before the NY State Senate and then on to the Governor for signature.
Clean technology has never been more affordable or accessible to the masses. Policy makers are now realizing the national security and economic concerns of relying on fossil fuels. Clean, distributed sources of energy combined with sustainable development are our best options for a healthy, prosperous future.