Research Triangle Energy Consortium

Steel is considered a “hard to abate” commodity because the production process uses a lot of fossil fuel and alternative processing methods are not readily available. The first step in the production is reducing iron ore (an oxide) to metallic iron. This is a continuous process performed in a vertical shaft furnace known as a blast furnace and the reducing agent is a form of processed coal known as coke. This is the primary culprit responsible for the high carbon footprint of steel, which is estimated to be about 2.2 tonne CO_2e per tonne steel. By comparison, that other hard to abate structural commodity, cement, has a footprint of about 1 tonne CO_2e per tonne cement.

The molten iron containing a few percent carbon is transferred from the blast furnace directly to a Basic Oxygen Furnace, where much of the carbon is oxidized to produce steel, which requires the carbon to be a fraction of a percent. This is known as primary steel. Steel produced from remelting scrap iron and steel is known as secondary steel, and has a very small carbon footprint, but is in relatively short supply.

A recent report from the Rocky Mountain Institute (RMI) provides a review of alternate ironmaking with lower carbon footprint. Their figure is reproduced below.

Courtesy RMI

They highlight the Direct Reduction Iron (DRI) process as the primary means to greener steel. This process has a vertical shaft variant which uses synthesis gas (syngas), a mixture of CO and H₂, as the reducing agent, instead of coke. The operating temperatures are also less than half that in blast furnaces. The result is a reduction of associated carbon to 0.8 tonne CO_2e per tonne steel, after the iron is converted to steel in an electric arc furnace (labeled EAF in the figure).

The report advocates a recent variant comprising substituting H₂ for the syngas, piloted by a Swedish entity Hybrit. This is straightforward because syngas can be reacted with water in what is known as the Water Gas Shift reaction to produce H₂ and CO₂, which, if sequestered, makes the hydrogen carbon free (although saddled with the color blue, rather than green). Alternatively, green hydrogen could be produced from electrolyzing water with carbon-free electricity. The report advocates this approach, and further estimates that if green electricity is used in the EAF as well, the carbon emissions associated with a tonne of steel drop to 0.1 tonne (see figure).

So, there you appear to have it. Switch to the DRI/EAF process and use green electricity for the EAF and to produce hydrogen as the reducing agent. The RMI report notes that the steel industry has vertically integrated to ensure supply of relatively scarce coking coal. It advocates that the new process do the same with respect to green electricity supply. This may well be necessary because grids will not be carbon-free for a long time (see  https://www.rti.org/rti-press-publication/carbon-free-power).  Captive supply will also have a lot of competition. But it could be done, certainly over time.

But there is a fly in that ointment. This is the fact that the DRI process can only use high grade iron ore, with over 64% iron, preferably over 67%. Those who don’t care why should skip the rest of this paragraph. In a blast furnace the mineral impurities such as silica and alumina are removed by combining with oxides of Ca and Mg to form a molten phase known as slag. This floats on top of the molten iron and both are removed continuously. In the DRI process the temperatures are too low for slag formation. Consequently, very small proportions of mineral impurities are tolerated. These small amounts are slagged in the EAF. Low impurities equate to high grade iron ore. Hence the requirement for the ore to be high grade.

Such high-grade ore is in very short supply. Most of the known reserves are in Brazil and Australia. The DRI process has been commercial for decades, but only about 7% of the steel supply comes from this source. The shortage of supply (and of world reserves, for that matter) and the higher cost of the high-grade ore are contributory factors.

Before we get into my opinion on the way forward, two other avenues to green(er) steel bear mention. A story in The Economist describes a way to clean up the blast furnace process. The CO₂ emitted is broken down into CO and oxygen using perovskites (essentially known science). The CO is used as the reducing agent in the furnace (instead of coke) and the oxygen is used in the steelmaking. There are practical issues in replacing the structural aspects of the coke. But the allure is that it modifies existing capital equipment. A complete departure from the blast furnace is electrolytic steel. The clever bit in a recent embodiment is their inert anodes. But the electricity must be carbon-free for the steel to qualify as green. And the process uses a lot of it: 4 MWh per tonne of steel. Scaling to anywhere close to the world usage of 2 billion tonnes per year means the need for a high fraction of all the power produced, leave alone the clean power. And as we noted earlier, carbon-free grids are not in the immediate future.

Where does that leave us? My favorite is the DRI/EAF with hydrogen, especially if we are not too choosy on the color of hydrogen; blue will do till green is feasible at scale. It is a tweak to an accepted process, essentially the same work force, so more easily acceptable. And that can be important for a staid industry such as iron and steel. The high-grade ore is the main hurdle to scale. Magnetite is the highest-grade variety, and it could be actively prospected. There will not be enough. We need another source.

One such is ultramafic rocks such as olivine, which are some of the most abundant minerals on earth and close to the surface. These are mixed silicates of iron and magnesium (in the main). Early-stage research offers the promise of extracting the Fe portion, and as luck (and thermodynamics) would have it, the Fe will be in a valence state making the oxide magnetite.

The CO₂ in blast furnace emissions can be captured and stored for under USD 50 per tonne of CO₂ with technology available today. This is well below the carbon penalty in Europe today. Partial use of hydrogen as a coke substitute would be minimally intrusive.

The two approaches above could handle the bulk of the decarbonization. They could be supplemented by electrolytic steel where captive carbon-free electricity could be arranged.

And don’t forget that Kermit the Frog said*, “It’s not easy being green”.

Vikram Rao

March 25, 2023

*Bein’ Green, Song by Kermit the Frog (Jim Henson), 1970, written by Joe Raposo

Direct air capture of CO₂ (DAC) is all the vogue in carbon capture, with considerable innovation occurring. Nature tried its hand at innovating in the passive DAC space a while back. The public is very familiar with the role of forests. To a lesser degree, also known is the role of oceans as carbon sinks.

But it may surprise many that there is a form of vegetation that does a far better job than trees. Five times better per square meter in places. These are plants in peat bogs, which capture CO₂ and transfer it over time to the organic layer below, which results in the material we know as peat. Peat may be classified as a very early form of coal, with as little as 40% carbon. Were it to be subjected to higher temperatures and pressures by being buried under sediment, it would eventually convert to lignite, and thence to bituminous and finally anthracite coal. The last clocks in at over 90% carbon and looks like a shiny black rock. Countries, such as Estonia, which are short of other hydrocarbons, have combusted peat for electricity. In other places, regular folks have retrieved buckets of peat from the bogs and burned them for fuel.

Source: Peat Bogs Wallpapers High Quality | Download Free (yesofcorsa.com)

But it may surprise many that there is a form of vegetation that does a far better job than trees. Five times better per square meter in places. These are plants in peat bogs, which capture CO₂ and transfer it over time to the organic layer below, which results in the material we know as peat. Peat may be classified as a very early form of coal, with as little as 40% carbon. Were it to be subjected to higher temperatures and pressures by being buried under sediment, it would eventually convert to lignite, and thence to bituminous and finally anthracite coal. The last clocks in at over 90% carbon and looks like a shiny black rock. Countries, such as Estonia, which are short of other hydrocarbons, have combusted peat for electricity. In other places, regular folks have retrieved buckets of peat from the bogs and burned them for fuel.

Peat bogs comprise only 3% of the surface of the earth, but account for 30% of the land-based stored carbon, which is double that stored by all forests combined.  For comparison, forests cover about 31% of the earth’s surface. A recent paper compares carbon storage by trees and peat in boreal forested peatland (peatland that also has partial or complete tree canopy). They estimate that the organic storage is higher in the peat layers than in the trees and subsoil (11.0–12.6 kg m−2 versus 2.8–5.7 kg m−2) over a “short” period of 200 years.

And yet, saving rainforests gets all the ink. Save the peat bog does not have the same ring. And yet, it should. Admittedly, on imagery alone, a bog finds it hard to compete against a rainforest. Cuddly koala bears versus fanged Tasmanian Devils (mind you, as any Aussie knows, real-life koalas are not to be messed with either, and in a further nod to excellent promotion, they are not even bears, they are marsupials, as are kangaroos). And the comparison is not that straightforward, because forests provide other benefits over bogs.  In any case, the global warming situation is so dire that this is not an either/or proposition. The purpose of this discussion is twofold. One is to draw attention to peat bogs as at least just as important as forests for preservation and expansion, including the use in carbon offset programs. The other is to delve into the science of why peat moss is more effective than other plant matter in capturing and storing carbon.

Sphagnum mosses are the dominant species in peat bogs. They are specially adapted to thrive in low pH (acidic), anaerobic and nutrient poor waterlogged environments. The bog microbiome (defined as a mix of microbes) plays a critical role in the fate of the Sphagnum. The microbiome is dominated by bacteria, but also has fungi. The microbes are highly specific to the Sphagnum, indicating plant-microbe co-evolution. This specificity is believed to increase the carbon fixation efficiency, and to adapt to changing climatic conditions. An Oak Ridge National Laboratory investigation showed that heat tolerant microbes transferred heat tolerance to the Sphagnum.

A key feature of the low pH and anaerobic environment is that when the mosses die, they sink into the bog and do not decompose, thus retaining the carbon for incorporation into the peat layer. Meanwhile new moss grows above. This unique ecosystem carries on fixing carbon from the atmosphere in a manner far more effective than any other natural means. Yet, possibly through a failure to recognize the value, or through a desire to repurpose the land for commercial interests, many of the peatlands have been drained. In the state of North Carolina, nearly 70% of peatlands were drained, according to a Nature Conservancy report (Afield, Spring 2023), a reading of which was the impetus for this discussion. Drained peatlands cease to be carbon absorbers and become emitters. In the more spectacular instances, fires lit by lightning strikes have burned and smoldered for up to a year, spewing as much as 270 tons of CO₂ per day. This duration of a year is not surprising because the fire can go underground, where the fuel is plentiful.

Reforestation is a laudable goal. As is the support of the many ongoing investigations targeting passive and active capture of CO₂ from the air. But, equally, restoring peatlands and protecting existing ones ought to be a priority. Nature has already provided an efficient CO₂ sponge. We must feed it*. Adopt a bog.

Vikram Rao

* Sat on a fence, but it don’t work, from Under Pressure, by Queen and David Bowie (1981), written by Roger Taylor, Freddie Mercury, David Bowie, John Deacon and Brian May.

Electric vehicles are critical in the effort to mitigate climate change effects. But they do have a significant carbon footprint, driven by the fact that more energy is used to manufacture an EV than an equivalent gasoline driven car. Over a lifetime of use, however, the emissions from gasoline combustion dominate. A study at Argonne National Laboratory estimates that the lifetime greenhouse gas emissions from EVs are 40% of those from gasoline powered vehicles, as depicted in the figure. We discuss here how we could do better than that.

Source: Argonne National Labs GREET 2021, as cited in Electric Vehicle Myths | US EPA

The variability in the particulars of both types of vehicles necessarily makes such estimates inexact, and yet instructive. Both have assumed lifetimes of 173,151 miles and the EV has a range of 300 miles, while the gasoline engine delivers 30.7 miles to the gallon. This places the vehicles roughly in the vicinity of compact cars or small SUVs. With the decimal points and all, you know a model dictated the results!

In the bottom two buckets, the bulk of emissions are from energy used in the manufacture of materials and assemblies. For most metals, primary production (from ore and other sources such as brine) is more energy intensive than secondary production, also known as recycling. In steel, for example, a tonne of conventional steel has an associated CO2 production of 1.8 tonnes. An improved process, known as Direct Reduction Iron (DRI), with limited scalability, has a third of that, and with a variant that takes it to near zero. Scrap iron and steel, simply melted with some refining action, has a fraction of the DRI figure. But due to economic availability, only 30% of steel is from scrap.

EVs have on average 900 kg steel, which is about 6.9 grams/mile, or about 27% of the “other manufacturing” component in the figure. Green steel use would eliminate most of the steel contribution. The steel industry is actively addressing the issue. One startup is producing electrolytic iron, which is green if the electricity is carbon-free. Carbon capture at the iron production source would get most of the job done economically in areas such as Europe with an explicit price on carbon.

Minerals other than iron comprise 210 kg per vehicle on average. The largest contributors are graphite 66.3 Kg, nickel 39.9 Kg, and cobalt 13.3 Kg. Significant energy is expended in their production, even though graphite is largely a derivative of a petroleum refining waste. When batteries are recycled, nickel, cobalt and lithium will have lowered carbon footprints.

The gray portion is the largest contributor in EVs, and mostly comprises the carbon emissions associated with the production of electricity. In this figure, they used the national average for the US in 2020, when the renewable portion was 21%. The Energy Information Administration forecasts that figure to double by 2050. To the extent that EVs are charged in homes, averages apply. But public charging could well use a higher proportion of carbon-free power. A startup in India has a portable solar unit for charging stations.

The gray component is also affected by electricity used per mile. These figures are notoriously hard to compute because vehicles and driving conditions vary. One of the earliest cars to go all-electric was the Nissan Leaf. It came out with a 40-kWh battery pack which targeted range of 149 miles. This computes to about 0.27 kWh per mile. Later models with a 62-kWh pack had a range of 226 miles. This too computes to 0.27 kWh per mile, which is a trifle surprising because the heavier pack ought to deliver worse mileage. I calculated battery pack weights for several models and found 6.4 kg/kWh to be a reasonable figure. The newer Leaf model could have been expected to be 141 kg heavier than the earlier model which weighed in at 1490 kg. But the effect of greater weight is felt in pickup trucks. From public records I conclude that the Ford F150 Lightning and the Rivian R1T clock in at 0.49 and 0.42 kWh per mile, respectively. This is not surprising because these vehicles are more rugged and built to pull loads.

Electricity will get greener over time and recycling will surely become more common, if for no other reason than worries about supply of lithium, cobalt and nickel, and concerns about dodgy working conditions in the countries home to the major supplies.

 I decided to use the Hyundai Ioniq 5, the Motor Trend SUV of the year, for a discussion of driving options. This model, as do many of the others in the same general category, offers two range options: 240 miles range with a 58-kWh battery, and 300 miles with 77 kWh. Based strictly on battery size, the weight difference is nearly 7%. I compute battery cost difference to be about USD 3800, based on an estimated battery retail cost of USD 200 per kWh. So, a consumer is paying more and emitting more CO2 (due to increased weight) by opting for the longer range. But what if Level 3 (high voltage DC) fast charging were available at multiple points, including every rest stop on the highways? I estimate that Level 3 chargers can fill at the rate of 3 kWh per minute. That means the difference in capacities of the two versions of the Ioniq 5 can be made up in 6 minutes. 6 minutes. That’s shorter than the time at the rest stop to hit the rest room, or “walk” the dog, or grab a snack. Curiously, the battery size difference for the Ford F 150 Lightning is also the same as for the Ioniq 5, although the CO2 penalty per mile is greater for that vehicle, as discussed in a recent NY Times piece. But the consumer can opt to buy the lower range model and make up the difference in range with only minimal inconvenience.

Existing plans to decarbonize the grid will drive down the carbon footprint of EVs, as will any policy drivers to encourage recycling of EV batteries. But interestingly, investment in Level 3 charging infrastructure could influence consumer behavior which results in reduction in use of critical minerals such as cobalt and nickel, with a further knock-on effect of reduction in carbon footprint. Critical minerals access could be important when EV adoption hits high gear and puts strains on the supply chains. And every carbon mitigation approach is another brick in the wall*.

Vikram Rao

*just another brick in the wall, from Another Brick in the Wall, by Pink Floyd (1979), written by Roger Waters. Not the common interpretation of the lyric.

Low-cost energy lifts all boats of economic prosperity. Equally, the opposite is also true. Over the years, countries have used energy as weapons of political will. When that has happened, the cost of that unit of energy has risen, thus achieving the intended privation to influence a political position. But not all forms of energy are equally susceptible to this manipulation. Examining just the scalable low-carbon energies of the future for vulnerability to supply chain disruption, the likely rank order in increasing vulnerability is advanced geothermal systems, small modular reactors, innovative storage means (including hydrogen), wind electricity and solar electricity.

Given the magnitude of the impact of the curtailment of energy access, small wonder that energy exporting nations use energy access as weapons of political will. In the last half century there have been two of note. One was the oil embargo portion of the trade sanctions against South Africa in an effort to influence abandonment of the apartheid policy. It was only moderately successful in of itself because of backdoor supplies. But it did cause the first successful commercialization of gas to liquids technology. Eventually, other factors forced the policy changes eliminating apartheid.

A more dramatic one was the Arab Oil Embargo in 1973, in retaliation for a pro-Israeli stance by the US and others in the Yom Kippur War between Israel and Egypt. It lasted only about 6 months in the US (bit more elsewhere) but caused economic havoc and permanently raised the price of oil. This emboldened oil exploration in the North Sea and justified the Canadian oil sands. The latter, in no small measure, contributed to North America now being essentially self-sufficient in oil and gas. The North Sea oil and gas boom made Europe less reliant on the Middle East. In that sense, the embargo acted against the interests of the authors. But the use of oil as a weapon of political will, no matter the outcome, was established.

A smaller saber rattle was in the winter of 2009, when Russia cut off natural gas supplies to Europe to punish Ukraine, through where the pipeline traversed. It was only for 10 days but taught a lesson which certainly was not learnt by the Germans and other Europeans. Shortly thereafter, increased reliance was placed on natural gas from Russia. And now look at the consequences. The Russian invasion of Ukraine, accompanied by the reaction by much of the world to reduce or eliminate imports of energy from Russia, has caused a spike in the cost energy. The wild swings in the cost of natural gas in Europe, as compared to relative stability in the US, are shown in the figure. This has rippled through the economies of the world.

Remedies for Energy Used as a Weapon

One remedy would be to have energy treaties with trusted neighbors, much the same as defense treaties. This would apply to virtually any source of energy, but best suited for oil, gas and electricity. Interdependency helps. Mexico is short of natural gas and has surplus heavy oil, which is well suited for US refineries, and plentiful US shale gas is dispatched in exchange. Canadian heavy oil is mostly sent to the US, where refineries prefer it to the domestic shale oil, in part because it sells for a discount of about USD 20 per barrel today. South Asia does not as yet have anything codified but could, possibly with India as the hub. The trust aspect would probably limit any India focused South Asia grouping to just include Bangladesh, Bhutan, Sikkim, Sri Lanka, Maldives, and possibly Myanmar.

In a de-carbonizing world, the energy of the future is largely carbon-free electricity. A disruption, were it to be attempted, would come in the form of limiting access to key elements of the supply chain, not the commodity itself. Carbon-free electricity is a mixed bag in being susceptible to supply chain disruption. Considering just the US as an example, wind energy is probably fine, with the componentry largely sourced domestically. But as in most manufactured items today, supply is distributed. The largest sources are three European countries combined, and India.

Solar power, on the other hand, sources the vast majority of componentry from China, even though the assembly may be in neighboring countries such as Malaysia, making the import seem to be from those countries. Over 80% of polysilicon used worldwide for manufacture of solar panels is from China. Risk to supply can originate from action at either end. The Chinese factories producing polysilicon are believed to discriminate against a minority. But if the reaction to Russian aggressions is any indication, the US may not initiate anything. In the case of Russia, enriched uranium (uranium with higher concentration of the fissionable U235 in the U238 than found in the mined ore) was discreetly not in the list of import bans from Russia, probably because it was too necessary.  Russia is the largest supplier to the US, at about 30%.

It is still too early to tell where components will get sourced for small modular reactors (SMRs), because none or being made in manufactured quantities yet. But the likelihood for sourcing from friendly countries is high except for the enriched uranium. But the enrichment process is well understood and could be ramped up in most trusted countries. Processing of spent fuel, as already practiced in France, will conserve resources. Furthermore, the breeder reactor versions using thorium in place of uranium would benefit from the fact that a major source would be Australia. India too has significant reserves of thorium.

The winner in the insulation from sanctions sweepstakes is the class of offerings known as advanced geothermal systems. They use conventional equipment from the oil and gas industry, and in fact will pick up personnel and equipment increasingly made redundant with upcoming demand destruction in oil. They, together with SMRs, are ideal for filling the temporal gaps in solar- and wind-based electricity production.

Energy treaties with friendlies*, and choice of energy sources most impervious to external manipulation are the best recourse against the use of energy as a weapon of political will.

Vikram Rao

February 7, 2023

*With a little help from my friends, from With a Little Help from My Friends, the Beatles (1967), written by John Lennon and Paul McCartney

Two weeks ago, The House entertained 140 amendments to HR21, a bill intended to influence the drawdown of the Strategic Petroleum Reserve (SPR). President Biden had executed a drawdown last year in response to oil supply disruptions caused by the Russian invasion of the Ukraine. An amendment by Marjorie Taylor Greene seeking to halt the drawdown was defeated 418 to 14, a historic beat down of any amendment. That is interesting, and embarrassing for her, but what in Sam Hill is going on here?* The answer, further detailed below, is that the SPR has been passe for quite a while. Now, it is just a piggy bank for the administration in power and a convenient political football for the opposition, the latter being emboldened by the fact that the public (including “experts”) does not realize that the original purpose of the SPR is no longer relevant, certainly not at its current size. Here’s why.

The Arab Oil Embargo in 1973 caused a major supply disruption in the US. President Ford signed the Energy Policy and Conservation Act in 1975, which enabled a petroleum reserve of up to 1 billion barrels of oil in four locations in Texas and Louisiana. This target was later lowered to 714 million barrels. The purpose was to ameliorate the effects of “economically-threatening disruption in oil supplies”. SPR releases have been ordered 3 times prior to the current one, twice by Republican Presidents and once by a Democrat. There has been no hint of releases being a partisan issue. Until now.

The three previous releases were in 1991 (Desert Storm driven), 2008 (Hurricane Katrina), and 2011 (International Energy Agency led effort in response to dramatic supply disruptions in Libya and elsewhere). The significance of the year 2011 is that US shale oil production hit its stride shortly thereafter. Once it did so, two aspects became clear. One, that the reserves were enormous, and two that production could commence within months of financing and permitting. Several thousand drilled, but not completed (DUC, pronounced duck) wells could come on stream even faster, and nearly half the cost would already have been incurred. Today, North America is essentially self-sufficient in oil, and natural gas too, for that matter. This is a far cry from the Arab Oil Embargo days that caused the creation of the SPR. Back then, the US was heavily dependent on imported oil and new domestic oil production, especially offshore, would take years. Today, shale oil in the ground is the strategic reserve.

Let’s discuss timing. SPR releases are limited to a rate of 1 MM bpd (one million barrels per day). 90 MM barrels could be drawn in 90 days, or roughly 3 months. Double that and we have 180 MM barrels in 6 months. Currently, the SPR is at about 370 MM barrels. That could get drawn down another 100 MM barrels and still leave enough cushion for shale oil production to pick up the slack in the event of a catastrophic curtailment of normal oil supply. Not only is the current drawdown to 370 MM barrels not consequential to national security, even a further withdrawal would be safe. There is a caveat. Many small operators went bankrupt during the Covid related demand drop and the properties are now with more fiscally conservative owners. Therefore, in the event of a true national energy related emergency, the government may need to step in to assure the necessary production. Persuasion largely failed in the last year or so, but nor did we have a dire situation. In fact, none of the three previous releases were triggered by anything approaching the threshold of supply disruption envisioned when the SPR was authorized. In each case, as in the one ongoing, the release was coordinated with other countries. The US portion was about 30 MM barrels on each occasion, a barely noticeable dent in the total (see figure). So, in close to half a century after creation, the SPR has never been needed for the original purpose. US shale reserves and the feasibility of relatively rapid production ramp up further reduce the justification for anything more than a modest reserve of 200 MM barrels. The current brouhaha over withdrawals is a tempest in the SPR teapot.

Vikram Rao

February 2, 2023

*Everybody look what’s going down, from For What It’s Worth (Stop, Hey What’s That Sound), song by Buffalo Springfield (1966), written by Stephen Stills.

I published my “fun book” nearly six months ago, entitled A Stranger in No Land, tales of assimilation. With considerable reluctance, because it smacks of self-promotion, I am linking you to it. The sneak peek that Amazon gives is well selected. But the Preface may be more informative relative to your wanting to investigate it any further. Accordingly, it is reproduced below. The cover art is a painting by my mother, and the illustrations are by my grandniece. As I noted, a fun book.

PREFACE

“People are strange when you are a stranger”

From People are Strange by The Doors (Written by Robbie Krieger and Jim Morrison)

            As the Doors song line goes, a stranger in a new land will be faced by strange behavior. The episode described in If it Moves. . . was the author’s introduction to the stark contrast in sexuality of California in the 1960’s to the experience of a 21-year-old from the all-boys (at the time) Indian Institute of Technology in sleepy Madras. Culture shock about defines it. These shocks can range from the essentially pleasant and intriguing, as was this one, to the shocking. But they all share the trait of a feeling of inadequacy. Of a lack of preparedness.

            In this situation, the stranger has two choices. One is capitulation. (S)he simply returns home. This may not be a physical return; it could merely entail making a choice not to be involved in said activity. In context, home is a zone of comfort. Similarly, the interpretation of “land” in the book title would be a place or pursuit (public speaking, for example), not necessarily a country. When I (the author) was a child, the capitulation option was not available when the family moved every couple of years on postings. Children of such professional nomads, affectionately known the world over as army brats, are reduced to the second choice. Assimilate. Minor avoidances are possible, such as school changes. But in the main, one simply fits in. Personality differences matter for the ability to fit. I was blessed with malleability and the childhood experiences served to inspire confidence that I would not be a stranger in any land for too long.

            This book is largely devoted to tales of assimilation. Characters appear with the familiar names used by the author in addressing them. The meanings of the names and relationships to the author may be found in the Glossary.

The principal criterion for inclusion as a chapter was that something interesting or fun had to have happened. On more than one occasion, that criterion was compelling in its own right. Assimilation took a back seat unless one indulged in flights of fancy to find that association. The Scrooge Strategy was one such. At a performance of The Christmas Carol, the actor playing Scrooge took some extemporaneous license which appeared to give Scrooge a sense of humor. This emboldened me to present a side of Scrooge that Mr. Dickens never intended. Business schools tempted to include the Scrooge Strategy in their branding classes best come calling for permission.

            In Jodhpur I do start the book at the beginning of the journey. An early chapter is Forty-nine Not Out which recounts the considerable step for a 16-year-old to leave home on a two-day train journey to live and study at an elite institution where everybody could be expected to be as competent as he. This would be unlike the relative walk in the park high school experience. That I became comfortable enough even in the first year to take time to help launch the campus monthly Campastimes is as much a testimony to the embrace of the setting as it is to my assimilative skills. That is when my love of writing emerged. My second to last book is dedicated to Campastimes, and not to a person.

The Stanford University years are prominently represented, beginning with If it Moves, and followed by Forks in the Academic Road and De-mystifying Legendre. These last two have more academic underpinnings, but fitting in takes many forms, and the “something interesting happened” stricture was always in play. That period was transformational. The process of becoming an American was well under way at the end of the Stanford era, even recognizing that California, especially in the sixties, might not have been fully representative of the US. Domicile had not been intended. The plan had been a master’s degree at Stanford, at essentially no cost, followed by a return to India. Events conspired.

The next major change, working for a living, at first on the other coast and later in Houston, merited three chapters as well. All fall in the main theme of the book, beginning with Folded or Crumpled, with an amusing rite of passage at work. When Cultures Cross and When in Rome have the shoe on the other foot. I am now the American dealing with strangeness in England and France, respectively. Interestingly, once one crosses a major cultural barrier, all the rest appear easier to traverse. In When Cultures Cross, I am put in the position of saying grace prior to the company Christmas meal in Cheltenham, England. With ten minutes notice. The Director of the facility realized he was no longer the senior person present; I was. Custom decreed that I, the Hindu, who had only read about such things, perform. Perform, I duly did; having read Jane Austen came in handy.

The two chapters The Rao Dog Tells Tales and The Last Lap for the Rao Dog relate to the assimilative trials faced by our dog Kalu following adoption from the SPCA. Written in her first person, it will be annoying to some. My defense is Peter Mayle. Not that I aspire to his stature, but this author of A Good Year¹ also took a flyer with a first-person narration by his dog in A Dog’s Life². A great read, as are many of his other books set in and around Provence.

            Even the chapters departing from the assimilation theme have elements of cultural differences. Culinary Matters describes the compelling social circumstances under which horse was consumed for the first (and last) time in West Germany (was West and East back then). Close Encounters, on the other hand, is a pure capitulation to whimsy. But closely adheres to the stricture of being interesting, with intent to amuse. If the last is all that a reader gets out of the book, I will be content.

1 Mayle, P A Good Year (2006) Vintage ISBN 0307277755 

2 Mayle, P, A Dog’s Life (1996) Penguin Books Ltd. ISBN 0140261559

There is a lot of teeth gnashing about President Biden ordering a limited drawdown of the Strategic Petroleum Reserve (SPR) earlier this year. A New York Times piece warns that the SPR is at its lowest level in four decades (see chart). How relevant is that statistic?

Let’s go back to how it all began. In 1973 the US was importing 6.2 million barrels per day (MMbpd). Today, it is the largest oil producer and a net exporter by a small margin. But importantly, about half the imports are from Canada, with whom the US has a mutual dependency. Canada has heavy crude the bulk of which is refined in the US, with a resulting export of refined products. Viewed in North American terms, imports from other parts of the world are minor.

Back to 1973. The Arab Oil Embargo to countries such as the US and the UK caused a tripling of the price of oil. To avoid such disruption, the US decided in 1975 to create the SPR. Since then, the crises that drove the decision have not materialized. Drawdowns have been few and light (see chart). In other words, even before shale oil and the resulting North American self-sufficiency, strategic access has not been needed. And yet, pundits, such as those in the NY Times piece, keep maintaining that someday the reserve may be needed*. We discuss that premise here.

The SPR comprises four salt caverns, created by drilling into salt bodies and excavating using circulating water. These are ideal for storage of oil. In fact, salt has been an important impermeable stratum to trap oil in reservoirs. At its peak the reserve had about 719 MM barrels. It was filled over the years and has a low average purchase cost of USD 28 per barrel. While the President’s purpose was to ease the cost of gasoline at the pump for the populace, the sale of SPR oil is coincidentally generating a profit for the government at today’s prices.

Oil is not all the same. One reason the US imports oil from Canada and Mexico, while at the same time exporting domestic production is that US refineries prefer the heavy oil from those countries. They have expensive process equipment to refine such oil, which they get at a large discount because the cost to refine is higher for these crudes. To pay more for light shale oil, while at the same time idling the expensive kit, makes no economic sense. And unlike the European situation with Russian oil and gas, the imports are from friendly neighbors who need the US refineries.

Similarly, the oil in the SPR is not all the same. Over 60% of it is high in sulfur (designated sour) and has significantly lower value than the sweet oil.  The final withdrawals this year are 85% sweet, possibly because that is the mix most suited for purchasers. If, and when, shale oil is injected, it will improve the quality of the balance. But that ought not to be necessary. Here is why shale oil could directly address any shortfalls in supply.

First, there is a significant inventory of DUC wells. DUC stands for drilled and uncompleted and is pronounced duck. I will spare you duck hunting allusions. The hydraulic fracturing portion of the completion is the costly part of the operation. It was suspended for some wells during the low oil prices of a few years ago and the wells were mothballed. Such wells can come on stream in a matter of weeks. Second, even new reservoirs can be accessed and flow oil in a few months. Environmentalists are concerned that new wells will perpetuate fossil fuel production. Ordinarily they would be right for, say, deep water wells. But shale oil wells are burdened with high rates of reservoir depletion. Production from the first couple of years must justify the return on investment. The capital asset does not need years of production to provide the return, as it would for conventional plants such as refineries, or deep water wells, for that matter.

The drawdown executed by the US administration of about 1 MMbpd for 180 days is nearing the end, with 160 MM barrels already released. The reserve is at about 420 MM barrels and will drop to 400 MM barrels by the end of the year. In the unlikely event that the strategic purpose of the SPR is invoked, and it has not since its inception, that amount provides a cushion while additional shale oil is brought on stream.  Over the last few years, the shale oil industry has been more restrained than in the past, seeking better returns. If this were to be a national security issue, short term policy measures could overcome that hurdle.

Shale oil in the ground is our strategic petroleum reserve.

Vikram Rao

October 1, 2022

*’Cause someday never comes, from Someday Never Comes, Creedence Clearwater Revival (1972), written by John Fogerty.

California’s recent decarbonization legislation includes extending the life of the Diablo Canyon nuclear reactors in the face of environmentalist opposition. Their concern has been for the marine creatures potentially killed during cooling water uptake from the ocean. The dilemma posed in the title, similar to between a rock and a hard place, applies to the Diablo Canyon decision. A recent paper from Stanford and MIT details the issues and lands in the extended life camp with some twists discussed later here.

Back to the dilemma. No form of energy, clean or otherwise, comes without baggage. So, it comes down to compromises. Wind has avian mortality and visual pollution. Solar may carry the least baggage, but recent events pose a unique twist. The price of natural gas going up 5 and 6-fold in Europe due to climate change and Russian aggression shows that reliance on a global supply chain could be fraught. In context, over 60% of solar panel components originate in China. Sabers are rattling in the Taiwan Strait. No telling what happens to solar panel costs if things escalate.

More dilemma: opponents of the decision want to simply build more solar and wind capacity. Even Senator Dianne Feinstein weighed in with the opinion that absent the Diablo decision there would be more natural gas usage. Exactly right, especially if the course of action proposed by opponents, more solar and wind, is followed. This is because solar and wind have low capacity utilization due to diurnal and seasonal gaps in output. At this time these gaps are dominantly filled by natural gas power generation. In other words, more solar and wind means more natural gas burned until carbon-free gap fillers, such as advanced geothermal systems and small modular (nuclear) reactors, hit their stride. And that will take a decade. In the meantime, Diablo Canyon 24/7 output notwithstanding, natural gas will continue to increasingly be used in step with addition of solar and wind capacity. A mitigative measure on the associated CO₂ production would be carbon capture and storage attached to the natural gas power plants. The best-in-class technology achieves this for USD 40 per tonne CO₂. One of the new California bills encourages this direction. It is opposed on the grounds that it encourages more fossil fuel production. True. But, as noted above, until carbon-free gap fillers are at scale, natural gas is the only practical alternative. Rock and a hard place.

The two plants at Diablo Canyon account for 9% of the electricity and 16% of the carbon-free electricity for the fifth largest economy in the world. Removing it would make already tough zero emission goals almost unattainable, certainly the 2030 ones. This state is currently in an epic heat wave causing power demand spikes. It is also the state most vulnerable to climate change driven forest fires. It can ill afford to take out any carbon-free capacity, especially if the concerns expressed on Diablo Canyon continuance can be met by other means.

Enter the Stanford/MIT paper. It has explicit engineered solutions to minimize marine life extinction in the water procurement. It also has two other interesting suggestions to maximize the environmentally related value of Diablo Canyon. One is to use part of the output to desalinate seawater. The measures taken to protect marine life would apply here as well during the water acquisition. Since reverse osmosis produces a highly saline wastewater, the disposal in the ocean would need to follow means to minimize damage to sea bottom species. These are known methods and simply need adoption.

The other suggestion is to electrolyze water to produce hydrogen. This would be considered green hydrogen because the electricity was carbon-free. Power is employed in this way in Europe during periods of low demand. There they are piloting adding a 20% hydrogen cut to natural gas pipelines, to reduce fossil fuel use. A point of note is that the electrolytic process requires 9 kg fresh water for each kg hydrogen produced. While green electrolytic hydrogen is seductive, especially when using electricity during period of low demand, fresh water is in short supply in many areas, especially South/Central California. Could be a reason for the Stanford/MIT report suggestion regarding desalination at Diablo Canyon.

Aggressive decarbonization strategies will come with tough choices. An easy one is to target “carbon-free” rather than “renewable” energy. A harder one is to tolerate bridging methods, such as natural gas power with carbon capture and storage. The trick is to ensure that the bridges* are to definite targets. With sunset clauses.

Vikram Rao

September 4, 2022

*A bridge over troubled water, from Bridge Over Troubled Water, Simon and Garfunkle (1970)

Electricity prices in Europe are going through the proverbial roof, as reported in a NY Times piece. There but for fortune go you and I, is the song line*. Substitute “shale gas” for “fortune” and you have the United States today. Were it not for shale gas, we would be facing a dismal future in electricity pricing and carbon mitigation.

European electricity prices are being driven by high prices for natural gas. A scant two years ago, the price ranged from USD 5 to 8 per MMBTU (which is roughly equivalent to a thousand cubic feet).  At the time US prices would have been between USD 2 and 3. In the last ten months, European prices have fluctuated between USD 25 and 60, with a peak of USD 70 following the Russian invasion of Ukraine. These are unprecedented numbers. At the peak, natural gas was at a calorific equivalent of oil at USD 420 per barrel.

Even discounting the war related peak as unusual, even the pre-war price of USD 25 to 35 was extraordinarily high and appears to have been driven by LNG supply and demand imbalance. Reminding folks, Liquefied Natural Gas (LNG) chills the gas to -161 C, in so doing compresses the gas 600 times, and is the only realistic means for transoceanic transport of natural gas. The overall delivered cost per thousand cubic feet goes up between USD 3 and 4, depending on the distance of the destination.

When the crisis struck, Europe was getting a natural gas mix of domestic, Russian and LNG. LNG became the last cubic foot and therefore the determinant of price. Climate change related droughts in Asia led to shortfalls in hydroelectricity, thus raising LNG demand, which outstripped supply. Diverting supplies from these other destinations to Europe escalated the cost.

In the US, the norm since 2010 has been natural gas at a fraction of the oil price, except when oil took unusual dips, making gas both cleaner and more affordable. The significance of the year 2010 is that shale gas production hit its stride in 2009, causing natural gas prices to remain low, mostly under USD 5. But, prior to that the US was a net importer of gas and much of it was expected to arrive in the form of LNG, with 41 regasification terminals under consideration. In fact, Cheniere Energy’s Sabine Pass plant, with a regassification capacity of 4 billion cubic feet per day (bcfd) was commissioned in 2008 but by 2010 the decision was made to convert it to a liquefaction facility. Expensive facilities such as high draft vessel berthing and gas storage translated to the new mission. This bold move, betting on shale gas potential, gave them a lead and the model has been emulated by others.

With exports averaging 11.2 bcfd this year, the US went from being an important importer of LNG in 2006 to the largest exporter in 2022. It currently supplies nearly half of Europe’s LNG. Ironically, France, which banned hydraulic fracturing, was the largest recipient of shale gas derived LNG from the US in June.

Gas driven decline in coal power Courtesy US Energy Information Administration

Were it not for shale gas, the US certainly would not have been in a position to ameliorate the pain in Europe today. On the contrary, it would have been a major importer of LNG and there is every reason to believe that it would have been facing the same electricity pricing crisis being endured by Europe today. Furthermore, coal-based electricity would have seen a resurgence. Evidence for this is that in 2021, when natural gas prices nearly doubled, coal-based plant capacity factors increased by nearly 25% (see figure). This elasticity means that if the US had seen anything like the 5- and 6-fold natural gas price increases that Europe experienced pre-war, substantial shifts to coal would have been likely, with new capacity additions. This last would be because the shale gas-based decline in coal plants would not have occurred in the first place. Dismal, indeed, from an environmental standpoint.

There but for shale gas . . . .

Vikram Rao

August 29, 2022

*There but for Fortune, Joan Baez (1964), written by Phil Ochs

For the longest time blue had been content as a pure spectrum color at a nominal wavelength of 450 nm. Then the hydrogen police said it was not green enough. This despite Kermit the Frog informing us that it was not easy being green. Apparently, Britain agrees with Kermit, as reported in an Economist story. Their hydrogen strategy is heavily loaded with blue.

First a reminder on definitions. When hydrogen is synthesized by reacting methane with water, the process known as steam methane reforming, it is classified as grey hydrogen. If the resultant CO₂ is captured and stored, the color of the hydrogen turns blue. If the hydrogen is produced from splitting water electrolytically using green electricity, it is classified as green hydrogen. To confuse matters further, the Government of India has classified the blue hydrogen from methane reforming as green if the methane is biogas sourced.

Going back to the Economist story, Britain has called for hydrogen to be 4% of energy demand by 2030. Even at this relatively modest target, the green electricity required for this hydrogen to be green would be 126 TWh (terawatt hours). This compares to the total green electricity production in 2020 of 135 TWh, with many potential uses beyond electrolytic hydrogen. In fact, one of the uses planned is blending hydrogen to a 20% level in natural gas pipelines. Mainland Europe has been piloting this and there is a consensus that a 20% blend is tolerated by the pipelines and by the end use.

The British plan calls for production of blue hydrogen in two locations with industry such as ammonia and methanol production that already uses grey hydrogen. Carbon mitigation in industry takes two forms. One is to change the process by replacing the existing reactant, such as coke, with hydrogen, thus curbing or eliminating CO2 emissions. One such is ironmaking with the Direct Reduction Iron process, and the resulting steel would be considered green steel if the hydrogen were to be green. Steelmaking is specifically cited by the British plan.

The other approach is to not change the process, but simply substitute a zero-carbon hydrogen for the grey hydrogen. The British plan favors blue hydrogen as a pragmatic means to achieve carbon mitigation faster than may be possible with just green hydrogen. This plan relies on economical means for capturing and storing the CO2 from the methane reforming. This is increasingly a reasonable expectation, with technology already commercial and likely to be available at scale within a couple of years. Economical is defined as fully loaded cost lower than the carbon penalty in force at the time. This is variable and stands at about €85 at this writing (see figure). A leading carbon capture technology claims capture costs at USD 40 per tonne, with an expected reduction to USD 30 over time. Given that geologic storage costs about USD 10 per tonne, the combined figure is well below the carbon penalty.

The Good Before the Great

Few would dispute that the most desirable hydrogen is the green variety. Here too a relaxation must be sought for the strict definition. The electricity source ought to be expanded from renewable to carbon-free. The carbon mitigation purpose is served and scalable carbon-free sources such as geothermal energy and nuclear power are then comfortably included. As previously discussed, these are excellent fillers of the diurnal and seasonal gaps in solar and wind production.

But green electricity is in short supply compared to the demand. The primary reason is that the largest sources, solar and wind, have low capacity utilization. On the demand side, everybody wants some. The MIT spinout Boston Metals needs it to make electrolytic green steel. The other principal green steel method, DRI, needs electrolytic (green) hydrogen. Data centers supporting the cloud are energy hogs that are growing steeply. All the major players in that space want green electricity. Ditto for bitcoin that other fast growing energy intensive sector. In other words, relatively sparse green electricity has many calls on it.

Enter blue hydrogen. The case against it begins with the fact that only 90 to 95% of the CO2 is captured at the point source. Some is still released. The other knock on it is that natural gas production is implicitly encouraged. But the uncomfortable truth is that every new solar/wind emplacement already creates demand for natural gas to fill the longer duration gaps in output. Although coal and oil will continue to decline, natural gas will be needed as a gap filler till the zero-carbon alternatives hit their stride; and that is a decade or more away. That is plain and simple pragmatism. As is the need for blue hydrogen until green electricity becomes more easily available. It is the only viable near-zero-carbon hydrogen that can achieve scale swiftly.

The battle against climate change must be joined with the best weapons at hand. No active battlefront waits on the ultimate weapon. Blue ought to be the primary color of hydrogen until, again quoting Kermit*, being green is easier.

Vikram Rao

* It’s not easy bein’ green Kermit the Frog, written by Joe Raposo, sung by Jim Henson (1970)