Minnesota's Energy Future?©

Dell Erickson

Minneapolis, MN
October 20, 2003

Part III:  Conservation, Jevons’ Paradox and
Alternative Energies


Part III-A

 

 

Part III:  Conservation, Jevons’ Paradox and Alternative Energies

144

 

 

       Conservation & Jevons’ Paradox

144

            Conservation

145

            Consumption

148

            Efficiency & Productivity

150

               Conservation and Vehicle Mileage Standards

151

            Conservation Summary

153

 

 

       Alternative Energies

155

            Net Energy

156

               Table 12: Comparative Net Energies

158

               Implications in Brief

158

       Tar Sands

159

       Hydrogen

161

            Storage & Transport

165

            The Hybrid Car

166

            Cost Comparisons

170

            The Fuel Tank

171

            Hydrogen & the Automobile Industry

172

            Hydrogen – Hybrid Car Summary

174

 

 

       Evaluating Windpower

176

            Overview

176

            Wind Potential

178

            Transmission Costs

180

            The Load Factor, Growing Demand, Capital Investments, & Air Pollution

180

            Greenhouse Emissions

184

            Removal

184

            Access Roads, Crops & Demonstration Projects

185

            Jobs & the Local Economy

186

               Table 13: Direct Employment in Electricity Generation, Various Technologies, United States

187

            Buffalo Ridge – Lake Benton Development

189

            Energy Storage

191

            Birds

194

            Pollution

196

                 Noise Pollution

196

                Visual & Land Pollution

197

                        Figure 22: Windturbine Next to Minnesota Capitol

198

                        Figure 23: Size Comparisons of Windturbines

198

                        Miles of Land & Changing Rural Values

199

                            Table 14:  Land Requirements of Energy Technologies

199

                Windcommerce Photographs

202

                        Figure 24: Access Roads,  Lake Benton, Minnesota

202

                        Figure 25: Roads, Stormlake, Iowa

203

                        Figure 26: Hilltop Roads, Tennessee Valley Authority (TVA)

203

                        Figure 27: Landscape, Koudia, Morocco

204

                        Figure 28: Construction Site, Pennsylvania Windproject

204

                        Figure 29: Windproject Remnants, Altamont, California

205

                        Figure 30: Collapsed Tower, England

205

                        Figure 31: Loss of Turbine Blade, Minnesota

206

            Windcommerce Subsidies

207

                Federal Subsidies

208

                State Subsidies

209

            Summary of Windpower

215

 

Conservation and Jevons’ Paradox

There has developed in the contemporary natural sciences a recognition that there is a subset of problems such as population, atomic war and environmental corruption, for which there are no technical solutions.
    
Garrett Hardin, 1998.1


The most frequently proposed remedies to our energy dilemmas are conservation, increasing efficiencies, and the development of alternative energies.  The underlying idea is to bring energy use into conformance with resource reality without structural changes.  The primary drivers of these approaches are that they are consistent with past practices, require little, if any, structural or social changes, and are politically uncomplicated.

While conservation has been the cornerstone of energy policy since the 1970s, society is closer today to a serious energy dilemma than when the initial alarms were sounded.  Because the conservation strategy contains mixed messages it obligates supporters to clarify conservation proposals by providing the details.2

The strategy appears to be accepted because it is consistent with prior practices rather than promoting thoughtful methods designed to achieve a sustainable society.  As the well-known advertisement says, “pay me now, or pay me later, but pay me you will!”  In the sustainability sense, the jingle means to avoid the path leading to the paying predicament.

In 1845, English mathematician William Stanley Jevons studied efficiency and use of resources.  Specifically regarding coal use in England, John H. Lienhard wrote that Jevons said the “Watt engine … was invented because the older Newcomen engine was so inefficient.  Did Watt’s invention cut coal consumption by quadrupling efficiency?  Quite the contrary!  By making steam power more efficient, he spread the use of steam throughout the land. Coal consumption was skyrocketing.”  Lienhard continued stating that Jevons concluded, “increased efficiency wouldn't save us in any case.”  The same could now be said of a significant number of energy related proposals.3

Jevons’ Paradox explains why improving gasoline mileage standards has not reduced oil use or oil imports, has not prevented Minnesota's and California's electric grids brownouts and blackouts, or improved gas mileage standards, improved home insulation, or efficiency of refrigerators and numerous calls to reduce “consumption” (reduce the “Footprint”) and other “conservation” programs have not lead to a decrease in energy use.  On the contrary, conservation and improvements in efficiency or productivity are frequently used to accommodate or encourage growth.  The net of improved energy efficiency and conservation is to encourage additional use by reducing or limiting prices.  The process of improving efficiency lowers consumer cost and encourages additional energy and resource use for individuals and for societies worldwide.  Thus, conservation or efficiency supports further consumption, while simultaneously discouraging investments in alternative energy.

Dr. Horace Herring explains the economics of conservation behavior observing that “technology tends to be used to provide greater levels of service, rather than reduced consumption”.  This should come as no surprise; it is the fundamental tenant of Western behavior, economic thought, and teaching.

The irony of the conservation and efficiency principles is that these programs would lead to the best of all possible worlds if populations were at sustainable levels.4  Dr. Herring quotes Wolfgang Sachs saying that “an increase in resource efficiency alone leads to nothing, unless it goes hand in hand with an intelligent restraint of growth.”  The effects are as stated above and are abundantly evident in the costs and energy statistics presented in Part I of this paper discussing energy and population growth.5

Conservation becomes an unfortunate Jevons’ paradox when the efficiency improvement programs are said to reduce energy use in the face of actual energy increases.  It will be difficult for the public to comprehend why a policy recognized for decades (if not centuries) for promoting growth and resource consumption in an era of looming resource shortages is said to conserve those resources.


Conservation

We need an energy bill that encourages consumption.
President George Bush, State of the Union Speech, Trenton, NJ, September 23, 2002.


Setting Mr. Jevons aside for the moment, conservation is frequently thought of as part or a substantial part of the solution to energy problems.  Supporters frequently broaden the concept to include increasing efficiency and by implication, economic productivity.  The common understanding of conservation is to use less of something yet have the same results.  As will be discussed, however, what appears beneficial at the individual level can have its presumed benefits nullified if society as a whole attempts the same.  Conservation encourages further consumption.  Without addressing more fundamental issues, conservation and increasing efficiencies are counterproductive to a sustainable society and dependable long-run energy policies.

Conservation’s initial steps are almost without effort.  Generally less publicly known are the subsequent characteristics of conservation and efficiency —the last few steps are difficult.  Because of human nature, practicality, economics, and primarily, that bugaboo natural law, the 2nd Law of Thermodynamics and its brother the Law of Diminishing Returns, the initial implementation of conservation and efficiency policies are relatively inexpensive yet produce significant benefits.  However, each increment of benefit becomes increasingly difficult and costly to implement.

The passage of the Environmental Protection Agency (EPA) and implementation of various anti-pollution measures demonstrates the well known engineering principles.  Because of the physics involved, the first approximately 90% of benefit generally is an ordinary almost inconspicuous matter.  The removal by scrubbers of air pollution from electric generating plants is relatively inexpensive for the first 90% to 95% of contaminants.  The reduction in pollutants is relatively painless and consequently politicians and environmentalists are held in high public esteem.  However, as the percentage of contaminates removed increases, expenditures increase at an even higher rate, each of the last few percentage points of removal could cost a multiple of each preceding percentage.  Although ecosystem needs are unchanged, the increasing expenses changes the political will to sustain the anti-pollution system.  A similar situation is seen in water pollution.  The removal of particulate matter and bacterial control is easily and inexpensively accomplished.  On the other hand, explaining why few communities construct these facilities, the tertiary level removal of chemicals and toxic metals requires substantial cost increases.

The suggestion is also made that controlling pollution at the source is both morally and economically appropriate.  Although in conflict with appropriate market pricing controlling pollution at the source shifting cost underlies current commercial interest in passing “cost to benefit” legislation.  In reality, rather than incorporating all cost of production into the product this class of legislation is an attempt to shift cost from production of a product to the commons and the public.  The economics and science may indicate the product or service may not be sustainably produced if priced appropriately.  Indeed, it essentially implies that with growth, increments of conservation and efficiency must be continuously implemented and that additional costs be subsidized by the public.

The concepts of efficiency and productivity ―the maintenance or bettering of existing standards of living― are somewhat inconsistent with the strategy of conservation.  Although Minnesota and federal energy policies assert that conservation and efficiency are actually sources of additional energy, this is not the case.  True, society may benefit in not spending money on current energy, thus, “creating” discretionary income with the money spent on other items or saved and invested.  Although not using energy today may give the appearance of providing additional energy, conservation and efficiency should be seen as tools to reallocate energy rather than a means of providing new energy reserves.  Rather than burning a lump of coal or Mcf of natural gas today only to be used tomorrow, it is not a source of new energy.  Thus, the strategy of “conservation” creates a conflict between its core assumption, that of doing with less, and rising or even maintaining living standards.  However, conservation will play a role in establishing a sustainable society if today’s foregone consumption is accomplished in a stable society rather than providing for growth.

Because the reallocation can be between public or industry groups, regions, states, internationally, or over time, it is important to explicitly describe the intent of a conservation program.  That is to say, which target groups will benefit from the personal sacrifices requested of individuals, households or industrial sector and in what time horizon?  As demonstrated in the first part of this paper discussing growth, the goal of conservation or efficiency may be to benefit other individuals and groups from a different place or time.

How can personal sacrifice be of personal benefit when reallocation to others is the primary policy goal?  The implementation of conservation policy is at the level of the individual while the goals tend to be abstract.  When government conservation programs are directed to the utility, they misdirect responsibility for reducing energy use from end users and consumers; consumers do not receive the necessary price and use signals necessary for a sustainable economy.  Government policies are almost always broad based, thus, personal conservation efforts are frequently rewarded by higher prices and higher taxes to make up for the less conservation minded.  Unless the program is carefully designed, the small user will be compelled to pay the system costs of the average or large user.

From the perspective of preparing for a sustainable society, the energy critical matter is the determination of the quantity of energy used to produce the energy output.  In this regard, conservation may be thought of as the leading option —in many respects, not requiring additional energy.  As common sense suggests, it is of limited utility in the long run.  Even primitive societies require energy.

Perhaps the best, if not only reason supporting conservation is that it has the potential of postponing the crisis aspects of resource depletion, providing the opportunity to constructively revise existing policies and programs.  Although temporary, the process is more certain than exploring for additional scarce resources in the belief that an unknown yet colossal resource discovery will redeem the status quo.

When natural resources become a critical concern, as they inevitably will, a surreal race betting continual increases in conservation or efficiency to match otherwise unlimited population growth ensues.  It should be clear that “conservation” becomes a means of distributing what remains when increases in efficiency fail to pace growth.  Policies, for example, of remedying energy or housing affordability are heartfelt but actually address symptoms of larger problems and are circular in nature.  The 50 governors and Minnesota policymakers ought to recognize this fact and prepare to reconcile current policies.

In August of 2001, the governors of the fifty states, three territories, and two commonwealths convened the 93rd annual meeting of the National Governors Association in Providence, Rhode Island.  The collected governors agreed that looming energy shortages and environmental challenges could affect their state and national economies.  The economic damage in California offered well-understood economic lessons.  Therefore, at that conference the governors began to promote a national energy policy and agreed to the strategies and language to be used.

The governors' fundamental message was to emphasize conservation.  According to Iowa Governor Thomas Vilsack, Chairman of the Natural Resources Committee, “the policy sends a clear message that solving our nation's energy problems demand more conservation, especially utilizing renewable fuels like ethanol.”  Not only is conservation and ethanol development a priority but, to use Governor Vilsack's words, so is assuring “adequate, affordable energy supplies and services … and stable [energy] prices.”6  The Governors Association's agreement to promote conservation and efficiency is truly an acknowledgement that existing efficiency and conservation programs are no longer keeping pace and that growing demands have begun to stress resource limits.

The language and focus agreed to at the governor's conference are unmistakably threaded throughout Minnesota energy reports.

The governors appear to be mixing common conservation policies with ambiguous farm policies and labeling it “conservation”.  The questionable energy flows of ethanol or biodiesel for example, are discussed later in this part under “alternative energies”.  Attempting here to finesse the political implications, it appears that the governors are attempting to counterbalance the Bush Administration's national energy policy issued in May 2001, that, although promoting energy alternatives, emphasized nuclear and fossil fuel based energy development with decreasing regulatory procedures involved in obtaining additional energy reserves.

The conservation strategy implies reserving some quantity of resources for future use.  Its function is to change current behavior and lifestyles to reduce patterns of energy use.  Because economic success is directly correlated with energy use, an implication of many forms of conservation is the redistribution of income.  As illustrated by the governors at Rhode Island, various allied groups have carefully chosen the use of the term “conservation”.  The reason is that the term itself, “conservation”, carries positive public impressions —that of doing good.  However, there is another reason.  The term was chosen to replace the word “consumption” or “over-consumption” which is less relied upon at this time.  Formerly, this language was frequently expressed by social activists, anti-establishment, and politically left of center groups —then spread to government departments.

Apparently certain groups in and out of government found that the public did not approve the use of the pejorative term “consumption”, occasionally preceded by an unkind adjective describing Americans.  It would be foolhardy for these groups to promote a program that maybe difficult to implement under other circumstances.  Thus, in or out of government they hitched their wagon to a more favorable term that has many equivalent implications.

The motivations of certain groups may also have special interests at heart.  Although that statement may bring to mind some nefarious group, it may apply to associations one wouldn't generally think of.  Horace Herring in his paper titled “Why Energy Efficiency is not Enough” found the “Voluntary Simplicity” movement is dominated by religious and similar groups.  Although they reduce personal consumption, e.g., “Little House on the Prairie”, they use the benefits of technology and increasing efficiencies to, as Dr. Herring states, “expand their religious institutions, in terms of numbers, power, and wealth.”  Thus, he writes, “personal abstinence is no guarantee of institutional frugality.”  In Minnesota, the “NextStep” movement with its substantial involvement with social activists, developers, real estate interests, and associated groups have an unclear motivation as well.7

Perhaps, the greatest failing of the conservation, efficiency, and alternative energy strategies approach is the implication that current social, energy, environmental, and economic patterns are sustainable: as presently construed, conservation's primary function is to maintain the status quo and cloak economic and social problems associated with resource changes.  In that manner, it may lull the public into inaction and shield policymakers from fashioning appropriate policy.

As the public realizes the increasing demands of the conserver philosophy, the motivation to accept the changes in social and economic lifestyles could be tested in spite of the language used.


Consumption

It is population growth alone not an increase in per capita consumption that is driving much of the environmental destruction we see across the globe today.
        Patrick Burns, National Audubon Society. January 2003.
8


Some say the energy problem is one of over-consumption and that the “conserving” solution lies in reducing consumption.  Is it really conserving, consumption, or are the dilemmas centered on population growth or some combination?  The preceding discussion regarding conservation, energy and growth suggests the answers are more complicated than those who argue consumption admit.  Jevons Paradox is that conservation encourages consumption.

If one argues that the energy problem is primarily one of consumption it is reasonable to ask that an objective, quantified level of “appropriate” consumption and coincident population levels be given (as measured by per capita GDP, Footprint, Btu's of energy, et al.).  It is also important to specify the amount of reduction by economic sector, residential, commercial, and so on.  Finally, it is critical to answer at what level of consumption will the regulations be satisfied?

The underlying motivation of those who argue consumption generally appears to be income re-distribution and balancing living standards on a global scale.  Although frequently well intentioned, these compassionate individuals fail to note that resources are not equally distributed, a pricing system is required to serve as an allocation mechanism, and most importantly, local culture overwhelmingly determine standards and practices of living.9

Charts presented in this paper help visually provide an answer to the opening question.  Yet, it is common sense that increasing energy use is primarily dependent on more people using energy, and as noted previously, consumption and standards of living are inexorably connected to the quantity of energy used by society.  Limiting increases in consumption or establishing an unchanging, or possibly arbitrary, level while under a growth scenario implies annual decreases in per capita energy use and commensurately declining living standards.

Perhaps the initial reductions in consumption can be accomplished without significant difficulty.  However, after a few years the burdens will become evident and society is likely to chafe under the tightening restrictions.  For example, assume the objective is a modest 3% annual consumption decline.  In the first or even second year, 3% will be barely noticeable.  A 10% reduction in about three years will certainly become noticeable and consumers may begin to question the program.  Possible weak forms of anarchy, thriving black markets, an expanding underground economy, and government restrictions to thwart it may result.  In time the grinding nature of the regulations hit home.  Nevertheless, steadfast proponents could point to the initial successes and remind the public the anti-consumption program is the correct solution.  Because the effects are cumulative, after 20 years a 65% lower living standard will be the result.  With the U.S. population increasing another 70 – 80 million inhabitants in this short period, the strains will be more than economic.  Indeed, long before the 20th year, social conflicts will be commonplace, air conditioning will be prohibited, thermostat settings halved, and bicycles and mopeds will be the required transportation vehicles!

Consumer resistance may become more pronounced when citizens realize the consumption reductions mandated are not meant to conserve energy or resources for future use —their children and grandchildren― but primarily to provide the energy necessary for population increases particularly to those from foreign lands.  The California example vividly demonstrates that reducing consumption prolongs the status quo but doesn't provide the comprehensive solution the situation requires.

It is equally problematic that a substantial percentage of U.S. energy consumption is involved with transportation.  Approximately 60% of oil use is for transportation.  Although the quantity Americans use is admonished by some, the fundamental reasons for the quantity are overlooked: the U.S. population is immense, geographically large, its people travel, food and manufactured items are frequently transported across thousands of miles within the country and the seldom mentioned reason that the U.S. is the world's largest exporter.

The good U.S. neighbor to the north, Canada, is also geographically large and therefore a leading user of energy.  Indeed, Canada's per capita energy use is significantly greater than the U.S.  Those who argue against U.S. consumption fail to note this fact.

They also make invalid comparisons.  A generally valid comparison would be to compare the combined states of the “European Union” (EU) to the U.S.  Both population levels and geographic area are approximately similar.  European states on the other hand, are unlike the U.S. in that each nation has a long history of independence and separation whereas the various U.S. states are inseparably interconnected.  The patterns of energy use in transportation under the EU will merge over time with the U.S., Canadian, and Australian experience.

Which brings us full circle.  Not only are the power “shortages”, but also increasing traffic gridlock, sprawl, loss of wildlife habitat, pollution, and a lengthy list of other concerns, primarily not a result of consumption.

Improper use of data is used to promote an otherwise untenable position.  By emphasizing consumption government and environmentalists are promoting economic inefficiencies, much higher energy cost, and a destabilized and unsustainable society.  Worse, it generates public confusion and the potential for legislating inappropriate and unsustainable policies.  As California clearly demonstrates, in light of diminishing resources current practices and policies are creating the energy dilemmas now confronting California, Minnesota, and the U.S.  The conserving philosophy, reducing consumption, clearly has a role but with little lasting benefit unless the underlying demand factors are addressed.


Efficiency & Productivity

Whereas conservation involves behavioral changes, efficiency and increasing productivity involves the application of science and technology to reduce energy use.  Efficiency and productivity generally imply increasing units of output without increasing fixed costs.  Lacking increases in productivity living standards cannot improve.

The aim of technology is the discovery of the perpetual motion machine, a device that does work without the use of energy or produces as much energy as it uses while providing the substance to do work: unending improvements in living standards.  The welcome effects of improved efficiency are evident throughout technological societies.  Because efficiency and productivity means to do the same amount of work with less energy, technological advancements will be required to not only bridge the Olduvai Gap to a sustainable society, but also play a significant role in maintaining society.

Increasing efficiency is nearly the definition of economical energy use.  On the other hand, in almost every instance, changing efficiencies requires the purchase of an item, increasing consumption.  The concept of efficiency is often promoted by those with an economic agenda.  However, unless the criteria used measures the energy output relative to the energy inputs unsustainable decisions may be made.  This concept unquestionably applies to the development of alternative energies.  It cannot be the attraction of technology that governs the policy, but the net energy involved in the process.  It is energy available from ongoing processes that determines a sustainable society.

Although the strategies of efficiency and productivity appear a laudable goal, wisely using resources ―as Jevons Paradox indicates― the employment of these strategies in uneconomic alternative energies may aggravate energy use and exacerbate the human condition.

Unfortunately, losing energy at each level of processing the 2nd Law of Thermodynamics interferes with human faith in technology and its ability to solve human predicaments.  Physics, not economics, explains why oil or natural gas or water cannot be extracted faster than ground pore spaces allow or as the pores dry, no high price will release their hold.  Forcing natural resource fields to give up their resource by using technology to pressurize, heat, or develop a chemical agent to squeeze out small additional amounts of the resource takes place at much higher costs.  Raising prices has widespread economic repercussions and on allocations of energy.

Note the distinction between energy, a natural based resource, and dollars, a means of pricing economic items, a distinction government reports fail to consider.  If the price of gasoline is reduced because of “conservation” the driver will tend to spend the savings, money not spent on gasoline, on another product or service and with it, changing patterns of energy use.

There is another subtle misapplication of the idea of “efficiency”, a belief that efficient energy use is the same as efficiency in the economic sense.  Economic efficiency is sometimes thought of as efficient distribution of income.  In that regard, it would maximize resource use by encouraging consumption (“Pareto Optimality”).  In general, economic efficiency has to do with the speed —generally freedom of money flows through the economy.  In its purer form it’s a laissez-faire economic doctrine or Libertarian view or even the politics of anarchists.  In semi-free American markets, natural resources and energy are parts of the process, but labor, productivity, regulations, taxes, and so on are all mixed in the general economic milieu determining economic efficiency.  Economic efficiency very likely is consistent with conservation in some respects and actually discourages conservation in other respects.  Jevons would say the same situation applies to gas mileage standards and efficiency of cars in the attempt to reduce gasoline and oil use.

In other words, current developed societies are more than capable of using substantial quantities of energy very efficiently.  Indeed, the U.S. is the largest user in total (not per capita) energy in the world and its industry is far more efficient and capable of competing globally than any other nation.  Clearly demonstrating the philosophy of conserving by increasing efficiency, U.S. energy in terms of consumption of Btu's over the 1948 – 1999 period has grown at an annual compounded rate of 2.6% while energy consumption per dollar of real GDP (inflation adjusted) has shown a -1.3% rate.  The result has been that energy per dollar of GDP has fallen almost by half even as total energy use has increased by more than 2.6 times.10  The decline in energy required per dollar of GDP is the reason underlying the rising U.S. standard of living.


Conservation & Vehicle Mileage Standards

In many respects mileage standards are a growth accommodative mechanism.  The purchase of a new vehicle reflects Americans’ optimistic nature, sense of excitement, power, self-worth, and technologically superior skills; all of those base emotions are very expertly marketed by the industry.  Although the marketing reinforces Americans’ self-image, in terms of energy, higher mileage standards and more Americans is an inconsistent policy.

Rather than a rational decision that petroleum resources at some point will dry up, the impetus for improving mileage was a response to the OPEC block’s sharp increase in oil prices in the early 1970s.  Nevertheless, the results have been impressive.  According to the Energy Information Agency a 52% increase was attained from 1967 to 1997, from 14.1 to 21.5 miles per gallon.  Since that time improvements have come grudgingly and now appear in decline.  The 52% increase in mileage was, however, overwhelmed by an 18% increase in miles driven per vehicle, 9,849 in 1967 to 11,575 in 1997.  Consumption increases were primarily due to a 69 million (34.7%) population increase.11

If population had achieved stability in 1967, as the U.S. population was trending, the 52% increase in mileage would have flowed through to future drivers and generations.  The 7.4 mpg increase would have resulted in a decline in average gasoline use of 240.1 gallons per driver, -34.2 %, if population had not grown.

The data indicates that today's drivers use 34.7% or 2.0 billion gallons more than the same number of drivers at the 1967 level, given the substantial increases in mileage.  This is a real-life example of population growth overwhelming conservation and efficiency.12

Moreover, if a comprehensive oil use reduction program were implemented, then increasing mileage standards could provide the funding wherewithal and buy time to facilitate the development of appropriate alternative energies.  Because of the enormity of the situation, small mileage improvements will have negligible impact on consumption.  Because air travel uses the equivalent of almost 20% of total U.S. oil consumption (approximately 1.8 billion barrels per day), reducing air industry subsidies would be an important consideration in any oil conservation program.  It should also be apparent that sprawl control to alleviate increases in miles driven is of minor benefit compared to benefits of moderating growth.

Let's use a second approach to more clearly demonstrate how conservation, technology, and increasing efficiency function.  The following approximately real-world illustration of automobile gasoline mileage standards will be used.  As in the actual national data described above, technology and improved efficiency is clearly seen in the production of recent vehicles and engines while conservation evident in significant decreases in gasoline use per mile traveled.

Assume miles driven per vehicle are constant, and:

1,000 cars @ 20 mpg. = 50 gallons consumed.

2,000 cars @ 30 mpg. = 66 gallons consumed.

3,000 cars @ 35 mpg. = 85 gallons consumed.


The frequent characterization of the improvement in gas mileage seen in the example is that conservation achieved a 50% reduction in gasoline use (20 => 30 mpg.) and because of the increase in miles per gallon conservation's virtue is praised.  In the period following the praise continues when technological advancements produce another 15% improvement in miles per gallon (30 => 35 mpg.).  Nevertheless, in the first instance, gasoline consumption increased by a third (50 => 66 gallons) and another 28% increase in the second (66 => 85 gallons).  The substantial increase in gallons consumed demonstrates that growth overwhelms conservation or improvements in efficiency.  California and its electricity use is a shining example.

Jevons paradox explains the futility of setting gasoline mileage standards.  Setting standards does not discourage consumption.  On the contrary, gas mileage standards work to stimulate demand by limiting price increases.  On a different level, it is a means of misallocating resources by concealing the correct economic costs, a “subsidy” that overtime is counter productive to sound energy policies.  In no small measure by misallocating resources, gas mileage standards inappropriately stimulates transportation dependent sectors of the economy and exacerbates energy and other related matters.  In some respects, setting standards is a misguided egalitarian effort that results in little consumer benefit.

The most compelling example of the futility of conservation is from Minnesota's own energy report, “Minnesota Energy Planning Report, 2001 Draft”.13  Rather than using vehicle data to promote a sustainable society the report promoted instability by attempting to downplay population's role in increasing gasoline consumption.  Overlooked by the Minnesota report's statistical analysis is that those awesome “muscle” cars of the early period presented in the State's report were powered by dinosaur engines, big V-8 engines which averaged miles per gallon in the single digits or low teens.

Many cars today are equally quick, much smaller, and with miles per gallon averaging over twice those of their forerunners.  In other words, the 122% increase in gasoline use of the state’s report was propelled by Minnesota's million-population increase over the period.  Had Minnesota's population been stable, mileage improvements would have actually conserved the resource and flowed through to future generations.  A stable Minnesota population would have resulted in halving gasoline consumption.  The identical situation exists for every state and nation.

Gas mileage standards and other similar "conservation" measures work as an effective conserving measure only if additional vehicle sales are limited to replacement of existing vehicles or annual total gasoline consumption from all vehicles is a fixed amount.  The benefits of technological efficiency will flow through to society and its resource base only under these circumstances.  Under present conservation program standards or its proposed substitution, rail transit, neither required stipulation is mandated.

Despite the laudable goals offered, the apparent state and national practice has been to sell more people more but smaller cars, each vehicle with improved miles per gallon.  Subways, light or commuter rail transit are merely an extension of this unsustainable philosophy.  The establishment of gas mileage standards should be thought of as a means of protecting and sustaining the involved and very powerful transportation and other consumer industries rather than a means of resolving energy dilemmas.


Conservation Summary

Government has the obligation to pass appropriate legislation that would guide population, consumption, alternative energy, and other developments toward a sustainable society.  However, the public and policymakers must be cognizant of the distinction between the ongoing energy needs of society and welfare to the few.  The presumed benefits of increasing efficiency should build on market based principles in general or misallocation of resources will work counter to policies leading to a sustainable society.

Conservation and efficiency are means of maintaining the status quo as long as possible.  Although temporarily moderating energy use, it should be thought of as a short term tactic in a proposed energy program; it is clearly not sufficient.  As Jevons Paradox confirms, conservation or energy efficiency accommodates or encourages the trend to population extremes.  Unless reconsidered the pattern will continue until the inexorable reality arrives —with a more vulnerable population and fewer options.

On the other hand, conservation and improvements in efficiency can be pathways to maintaining or possibly bettering standards of living while reducing the use of resources.  Although clearly following the governors' program, the California situation demonstrates that conservation and efficiencies should be considered secondary to other long-run solutions.

Reducing consumption does not produce energy but can be a useful short-term facilitator of change.  The benefits of conservation are best applied in a short-term crisis situation when a portion of the electric grid becomes regionally unavailable due to weather or accident for example.  In emergency scenarios rapid implementation of conservation programs would be a prudent first step.  Conservation should be thought of as a temporary practice that stretches existing energy resources further providing the opportunity to implement other fundamental long-term policies.  In that manner, conservation can facilitate progress toward a more sustainable society, but not sustain it.

The fundamental purpose of “green” or similar kinds of taxes should be to increase revenues designated exclusively for the development and later implementation of improved energies.  Because higher energy prices will affect the disadvantaged, there will be proposals to adjust energy prices based on income levels a laudable and heartfelt idea that must be avoided.  If the true expenses of energy are not immediately evident to the consumer, unsustainable energy patterns are likely to continue.  Meeting both assistance and energy objectives simultaneously can be achieved by working through the income tax rather than the utility regulatory system.

Unless programs far beyond any now considered are implemented, reductions in oil and other energy resources through mileage standards, energy efficiency, or conservation policies will only play a minor role in achieving a sustainable energy policy.  It should be noted that current Minnesota and other states’ proposals to reduce energy efficiency standards notably proposals for home and apartment construction standards to make housing “more affordable” misallocates and create additional demand on resources.

Similarly, ill-designed carbon based or ecotaxes, consumer or industrial tax exemptions and credits may result in unwise subsidizes of energy alternatives and behaviors.  If subsidies exist or if all production costs, including ecosystem based and future cost, are not fully included in the selling price of the service or product, then use of resources even if efficiently flowing through the economy in the short run may not be conducive to achieving energy objectives.  These kinds of taxes presume governments fathom the economic and ecosystem requirements regarding the best approach to achieving sustainability.  Intelligent planning implies that the energy processes chosen must be those with the greatest energy output relative to energy input —net energy benefit and conservation as a policy be sparingly employed.

If reducing standards of living by promoting conservation or limiting consumption is the most meaningful solution offered by policy, then it is fair and logical to ask “what is the quality of life they have in mind?”  When living standards are sufficiently lowered will policies change or will the government's declining living standard spiral be maintained in response to continuing growth and diminishing resources?

What is a practical thermostat setting in a Minnesota winter?  Arizona summer?

In answering this question recall that population growth has tremendous momentum, requiring over 50 years before reaching a stable level after implementing a policy to stop growth.  Our children and their children will bear the brunt of decisions made today.  Their interests must be foremost in mind.

The reality of conservation in the face of growth is that despite the praise, society is worse off in each succeeding period.

 

Alternative Energies


The search for alternatives can be summarized as follows14:

1.      Potential energy alternatives will require substantial quantities of existing baseline energy sources to develop, manufacture, and distribute;

2.      Possible alternatives to current energy systems, especially petroleum, will require the remodeling of a substantial portion of the world's existing energy infrastructure;

3.      All major current energy sources, especially oil, are either not directly substitutable or only with extraordinary effort and expense; and

4.      The search for alternative energies is a search for the technological fix, the pattern society has followed, inexorably leading to the current imbalances.

Although alternative energies employ fossil fuels in their development and manufacture, they are frequently referred to as renewable or sustainable forms of energy.  Thus, there is considerable ambiguity surrounding what a “renewable” energy source is and what it is not.15

Generally, renewables are thought to be sun, wind, biomass (vegetation), and water based.  With the exception of water —hydro is restricted by geology and weather it is correct to say these energy inputs are indefinite.  However, energy for human work is man-made; the energy from these sources may not be “renewable” because the costs of conversion exceed the energy derived from the “renewable” source.  What is termed “renewable” in the biological sense is seldom sustainable in the energy or economic realm.

In the last three decades, energy from renewable sources has grown in line with increases in total energy, just over 2% per year.  However, more recently the “new renewables” such as wind, solar, and geothermal, experienced growth of 9% with wind producing the highest increase (52%) and solar energy 32% per year.  The high percentage increases are due to the low beginning basis rather than the relative contribution to total energy consumption.  On the other hand, the International Energy Agency (IEA) forecasts relatively greater use of non-renewables 1.7% growth vs. 1.4% growth over the next three decades due to, they believe, improving industrialization and modernization of today's developing nations.  The IEA believes the developing countries will burn fewer trees and less dung and greater amounts of oil, coal, and natural gas.  The trend to renewables and a quick reading of Part II of this paper suggests the extent of the contradictions in the IEA position.16

If wise long-run resource decisions are to be made, a benchmark is required to base and prioritize competing energy systems.  Without a proven standard the promotion of an alternative energy may do more harm than maintaining the status quo.  The priority list should be based on net energy returned analysis.

The 2nd Law of Thermodynamics and the Law of Diminishing Returns are the reasons Dr. Barry Commoner said “there is no free lunch.”  That is to say, every step in the process of manufacturing alternative energy requires substantial energy.  Each successive level required to produce energy is less efficient overall, results in less available energy, and corresponding higher prices.  The greater the number of processing steps removed from the primary energy source, the greater the energy losses, higher the end product (user level) costs, and less sustainable the energy source.

Therefore, for the end user the important factor in proposing alternative energies is the process efficiencies involved and, of crucial importance, reducing the circular nature of the energy requirements of the alternative.  Frequently, the manufacturing, production, and distribution processes require the same increasingly scarce energy resources the alternative energy is said to substitute.  The test of an alternative energy is if it can be sustained using the alternative energy's output as the processing energy.  However, studies have concluded that when alternative energies are used to produce alternative energies, the process becomes an endless spiral of increasing costs.  It is imperative to recognize that researchers have concluded that modern Western economies cannot be sustained on hydrogen, solar, windpower, and biomass alternative energies.  Because of costs of production and weak efficiencies, the bugaboo of high dollar and energy costs invariably outweigh the consumer energy potential.

In addition to economic factors, the alternative energy must produce enough energy to manufacture and deploy the same energy source.  Whether this is measured in payback or net energy returned, the critical issue is energy efficiency.  An appropriate policy may be a transition period using less costly alternatives in the short run while longer term incorporating a more expensive and sustainable option.

Thus, advancing the idea that they are “renewable” mischaracterizes the actual relationship between energy inputs and outputs.  Generally when it is said that efficiencies are weak or costs high, the implication is that it can be “sustained” only temporarily.  Moreover, baseline energies are required to construct the manufacturing and processing facilities.  Contrary to the substitution theory, as current energy resources rise in price, alternative energies rise at a greater rate, becoming less economic.  Reconstructing society using alternative energies will be expensive!

In many respects the search for alternative energies involves the establishment of a parallel and duplicate energy system.  Rather than a solution, the production of alternative energies will lead to resource shortages sooner and ratcheting higher energy costs.  Unfortunately, as society approaches the Olduvai Gorge, carefully crafted temporary energy inefficiencies may be a useful transition option.  However, the window of opportunity for social and structural change is drawing to a close; the time necessary for implementation of appropriate programs is dwindling.


Net Energy

Minter's Maxim: A society's transition from a more efficient energy source to a less efficient energy source will always and invariably decrease the wealth, flexibility and options available to that society.
        James H. Minter. 2002


An essential technique for evaluating energy systems is net energy analysis.  Net energy determines the quantity of energy delivered to society by an energy source.  Briefly defined, energy returned on energy invested (often EROEI or less frequently, eMergy) is the total energy required to find, extract, process, deliver, and reform a source of energy into a socially useful form every phase ending with the light switch and light bulb of consumer use.  In brief, it is the ratio of energy (a thermodynamic quantity, a physical unit) invested to produce and use the energy output, consumer energy.  The models demonstrate the intermediate steps and lock on energy production of the 2nd Law of Thermodynamics each processing step reduces available energy.  It is stated as a ratio of energy returned to energy invested, e.g., 2 : 1, 20 : 1.17,18  Its calculation can involve complex flows and use a less rigorous social science (economics) to calculate portions of the investment.  The process discloses the energy patterns fundamentally, and incidentally the economic patterns.  Generally not considered by traditional analysis, the declining quality (btu output) of extractive energies coal, oil, nuclear, and natural gas can be included in the net energy calculations.  Because of these factors, EROEI is the true measure of the effectiveness and sustainability of an energy source.

A similar but narrower relationship is the Energy Profit Ratio to Energy Payback Time (EPR : EPT).  It is a long-term measure of the net energy produced over the life of the energy source.  This measure compares the energy availability in a fuel or equipment to the quantity of energy necessary to produce it.  In describing the alternative energy benefits both government and industry promotions frequently use an incomplete version of the EPR : EPT method.  These “studies” often overstate the justification of alternative energies.  The difference is that EROEI is a more complete measure because it considers more than just the energy source and its use.

Drs. Cutler J. Cleveland and Robert K. Kaufmann describe net energy systems stating that,19

Biophysical and ecological economists argue that net energy analysis has several advantages over standard economic analysis. First, net energy analysis assesses the change in the physical scarcity of energy resources, and therefore is immune to the effects of market imperfections that distort monetary data. Second, because goods and services are produced from the conversion of energy into useful work, net energy is a measure of the potential to do useful work in economic systems. Third, EROI can be used to rank alternative energy supply technologies according to their potential abilities to do useful work in the economy.

International Standard 13602-1: 2002 - Technical Energy Systems - Methods for Analyses, describes a means of evaluating net energy.  ISO 13602-1 provides methods to analyze, evaluate, and compare energy systems.  It describes relationships between energy inputs and outputs.  In this regard, it is helpful, however its goal is for certification, marketing, and labeling purposes.  ISO 13602-1 is available the American National Standards Institute.20

When an alternative energy is proposed as a substitute for existing baseline energies the EROEI of the alternative should be analyzed and contrasted with the energy source it is intended to replace.

The larger the net energy ratio the more condense the energy and efficient the energy source.  Traditional baseline energy sources such as hydropower (40+ : 1) and oil (30 : 1) have very high ratios.  Alternative energies characteristically have low or even negative net energy ratios.

Thus, the primary reason for performing net energy analysis is to compare alternate energy technologies without the noise of the money system.  Although analysis can be accomplished incorporating economic variables such as money, because many energy prices are distorted by legislation and sometimes the physical nature of the energy such as hydro-power, the evaluation of the physical aspects is used.  Comparing EROEIs of various energies places them on an equal basis for making judgments.  Fortunately, sufficient net energy analysis has been performed to compare the relative merits of competing energies, and in most circumstances net energies based on robust analysis are available.

In reality, sustainability and consumer costs are determined by the net energy of the energy.  Table 12 (next page) demonstrates that because of significantly reduced net energies, it will be difficult to sustain current population and consumption preferences using even the best of the alternative energies.  Sustaining current economies will be improbable with the majority of alternative energies.

Table 12 illustrates the net energy of traditional and alternative energies.

Table 12:  Comparative Net Energies 

Energy Source

Net Energy

Comment

Society

A

B

C

D

E

Hydro

40 – 50

 

Unreliable: drought

Current society

 

Oil

~30

Limited supply

 

Natural Gas

~25

Limited supply

 

Coal

20 – 30

 

Future society

Nuclear

5 – 20

Varies with assumptions

LNG

5

 

 

Alternatives:

 

 

 

Windcommerce

4 – 10

Unreliable

 

Hydrogen

Negative

 

 

Ethanol

 

 

Biodiesel

 

 

Solar: Large scale

≤5

Regional

 

Photovoltaic

Negative

Improving

 

Biodigestion

Slightly positive

Little data

 


Dr. Gene Tyner performed a comprehensive net energy from windpower analysis using two scenarios.  In the first scenario, a static unchanging analysis the net energy of windpower was determined to be 4.15.  The reason for the difference from the higher range shown in the table is that this study is substantially more factor inclusive than average or earlier studies.  It should be noted that the reason for the poor EROEI and economics are that the substantial net energy (and financial) losses in early periods are too great to overcome in later years due to low energy output of windpower.21

The second scenario is long-run; it illustrates a 100 year dynamic with growth analysis assuming an economy using 25% windpower.  The analysis concluded that net windpower energy over the period is -116%.  In other words, roughly speaking, in a growth scenario for every $1.16 invested, $1.00 in energy is returned from windpower. (Tyner, 2001. p9, Table 3b. Line 23, Col O.)


Implications in Brief

There are several implications of net energies noted by “Minter’s Maxim” opening this section.

Subsidizes are necessary to overcome the physics of net energy.  Examining the list of state and federal subsidies and comparing them with the net energies seen in the above table demonstrates that there is a strong correlation between low energy returns and increasing subsidies.

Dr. Tyner also performed a net energy analysis for the overall U.S. economy.  Tyner’s research found that the overall net energy (EROEI) for the U.S. is 9.8.  Considering the high “current society” values presented in the above table, this is a relatively low number.  Thus, a critical finding demonstrated in Table 12 is that in order to support U.S. and Western societies’ high EROEI, energies in the 20 – 30 range are required.  These are the traditional concentrated forms of energy.  Future energy sources are less concentrated, diffuse, and less reliable.  Columns D & E of Table 12 also demonstrate that the energy future will be characterized by reducing net energy (lower EROEI) energies.22

The most significant aspect of net energy is that the higher the ratio, the lower the quantity of energy and resources required to process and deliver energy to the end user.

Generally, the higher the net energy,

·         the lower the costs of energy;

·         higher the productive employment;

·         higher the potential living standard;

·         longer high energy level societies can be maintained; and

·         less complicated the transition to a sustainable society.

In summary, higher net energy (higher EROEI’s) imply higher productive employment and standard of living.  The lowest cost sustainable society can only be achieved if the net energy returns of energy sources are an important consideration.  In order to maintain a living standard using an energy source with a net energy of 5 when the living standard is based on a 20 net energy system implies that four times the current energy structure is required.

Because petroleum embedded in tar sands is one proposed method of expanding oil (and gas) reserves the next few pages discusses this option.  Following the discussion of tar sands is a brief analysis of hydrogen or fuel cells as an alternative to oil in transportation.  It will be seen that neither of these energy alternatives is realistic.  A discussion of the potential for windpower follows.  Windcommerce is properly viewed as a supplementary energy source.  This section concludes with a discussion of ethanol, methanol, and biodiesel as a transportation fuel.  These farm-based alternatives have negative implications for farmers and lack sustainable economics.  Finally, a brief discussion of wood as a firing source for generating electricity is presented.  The conclusion is that the use of wood biomass as an energy development has little in economics or biology to support its development.  The section on alternative energies concludes with a brief discussion of the sustainable farm transition.


Tar Sands

According to industry analysts the world leader in tar sand ores is Canada where the mineral covers approximately 77,000 square kilometers (km2).  The oil bearing sands are found chiefly in four Alberta regions:  Athabasca (26,300 km2), Cold Lake (13,500 km2), Peace River (4,900 km2), and Wabasca (4,300 km2).  It is estimated that in this region between 280 and 300 billion barrels of oil are recoverable.  However, as serious existing problems document, the development of the Canadian tar sands comes at high environmental and economic costs while producing negligible or net negative energy.

The largest producer today is Syncrude of Canada producing about 215,000 barrels of oil daily, about 14% of Canada's total oil production.  In an $8 billion project a consortium lead by Syncrude expects to produce approximately 25% of total Canadian oil.  In 1999, Syncrude produced 81.4 million barrels and by 2007 the plan is to produce 170 million barrels per year.

If the $8 billion capital investment is divided by the output (170 million barrels), the result yields a ballpark breakeven oil price almost double the market price today —$47 per barrel (in today's dollar).  This implies a cost of gasoline over $3 a gallon before transporting, operating expenses and profit margin when the current gasoline price is less than $1.50.  Suggesting the temporary nature of the large Syncrude development, if production reached a goal of 200 million barrels per year the total recoverable reserves will be exhausted within 15 years.  That is to say, by the year 2020 Canada will have few remaining natural gas or oil reserves in any form.  The environmental consequences of extraction and processing, however, will persist.

The effect on the land is only one of several environmental consequences.  Mining the tar sands is a massive undertaking.  To simply prepare the site for the Aurora mine opened last year required the removal of over 20 million cubic meters of overburden.  The tractor-like vehicles have 43 cubic meter “shovels”, each scoop significantly larger than a two-car garage.  Syncrude is proud to state that “more soil has been excavated by Syncrude than from the construction of the Great Pyramid of Cheops, the Great Wall of China, the Suez Canal and the 10 biggest dams in the world combined.”  And the developments are in the early stages!  With 77,000 km2 of land with ore, the size of the mines could easily swell beyond imagination.23

Although Canada has greater free water resources than any other nation the copious use of a life-sustaining resource for tar sand processing requires careful thought.

Water laced with oil and tailings is a byproduct of the manufacturing process.  It has been found that for every barrel of useful oil manufactured, over twice the volume of water polluted wastes result.  The current Alberta Syncrude pond is greater than 23 kilometers (14.5 miles) in circumference (25 km2), with about six meters (20 feet) of water polluted with tailings laced oil lying above a 40 meter layer (125 feet) composed of oil mixed with sand, silt, and clay.  Thus, by 2025 Syncrude will have in excess of one billion cubic meters of fine tailings and other matter stored in ponds and maintained as polluted muddy water.  (However, as described above, recoverable tar sand oil deposits will be depleted a decade before 2025.)  In addition, there are also heavy tailings requiring sizeable ponds as well.

The good news is that these heavier tailings are less “long lived” than the lighter fine tailings and require smaller water “recycling” ponds.  Nevertheless, with the proposed increases in production a body of contaminated water resembling a small sea will be required.24  Recognizing the staggering water requirements —the tar sands developments are now using half the region’s water the Alberta government is in the process of restricting access and raising water prices to discourage its consumption.

The development of the tar sands is an excellent example of the idea of “not-in-my-backyard”; it's out, way out of general public view.  One suspects that if its development were close to Edmonton or Montreal there would be vigorous energy discussions throughout Canada regarding the overall benefits of tar sands.  However, with the proposed production increases its environmental aspects will become apparent to all but the least informed.

In addition to land and water pollution are the effects on the planet's atmosphere.  The 1997 Kyoto Protocols are frequently cited as a reason not to undertake a development using energy energy developments often increase air and other pollution.  In terms of energy returned on energy invested, the lower the output ratio the greater the pollution.  Tar sands (and oil shales) development requires substantial energy, thus there is the potential for relatively increasing air pollution.  In the Kyoto Protocols Canada agreed to reduce emissions to 6% below 1990 levels by 2012.  Because of increasing energy developments and consumption Canada is 20% above its Kyoto commitment and will likely rise above 40% because of energy projects such as tar sands development.  One study reports that if the tar sands are developed as scheduled it would raise global greenhouse emissions by 6.7% above Kyoto targets.25

Finally, as previously suggested by its high processing cost, the manufacturing process is another circular energy sink yielding significantly less useful energy than the energy inputs.  Because its manufacture and processing inefficiencies require large quantities of energy, its trendline production and selling costs will always lie above and at a steeper rising slope than the primary energy sources it proposes to substitute (whose costs are also rising).

To replace any meaningful number of existing oil plants or decommissioned nuclear electric generating plants would involve the construction of large numbers of tar sand conversion manufacturing facilities.  Additional plants would also be required to make up the difference in efficiencies, about two tar sand conversion plants to every current oil plant and four or more for each nuclear plant.

The enormous expenditures will outlive the useful life of the investment.  Assuming further development and construction, the tar sand ores would be exhausted in less than half the optimistic time horizon stated above.  Further development further reduces its useful life.

As the cost of production increases with decreasing primary energy resources, the unsupportable economies of tar sands will become even more evident.  Moreover, the transport of manufactured oil several hundred —even thousands of miles across Canada or to its southern neighbor will necessitate very substantial costs via pipelines or other means of transport.

A similar energy conversion proposal was circulated about 25 years ago in Minnesota by Minnegasco (now Reliant Energy) and the huge peat bogs in Koochiching County in northern Minnesota.  The proposal was to use dried peat as boiler fuel.  The process would have required the removal of about five to ten acres of peat a day to a depth of ten feet creating a vast hole of dark brown (tannic acidic) water.  Minnegasco thought the plan was a prudent one because it required large amounts of natural gas to dry the peat!

Reminding one of the Canadian tar sands proposals, few at the time questioned the net energy implications.  It is clear that the energy requirements to produce the end consumer product significantly exceeded the energy sold to the consumer.  This peat-to-electricity plan is a clear example of negative net energy.   The plan was dropped when the Indian Reservation holding most of the land rejected it.

To replace a meaningful percentage of U.S. oil supply by developing the Canadian tar sands requires substantial environmental and economic tradeoffs.  The manufacture of oil or gas (or worse, LNG) from tar sands requires a multiple of today's baseline energy costs.  Significant development of the tar sands would imperil the economy without benefiting a trend to a sustainable society.


Hydrogen

As fusion is to the electric industry, hydrogen is to the transportation industry virtually the technologist dream of a perpetual motion machine.  The federal and Minnesota governments believe hydrogen is an endless perpetual motion machine without environmental consequences.26  However, if it is to be realized, the “hydrogen economy” will be substantially more expensive and smaller scale than planned.27  Hydrogen's characteristics as a fuel source have been known for many years.  Also well known are the energy drawbacks preventing its economical use which today's sophisticated technologies have been unable to overcome.

Natural gas or propane fuelled vehicles as oil based substitutes are not discussed because of diminishing resources and probability of escalating prices.

The last of a series of three Minnesota energy reports (released January 7, 2003) promoted a “hydrogen economy” notably in transportation.  It's improbable that hydrogen's time will come —certainly not as the hyped “hydrogen economy” because of insurmountable difficulties: liquid hydrogen as a fuel source requires minus 250ºF storage, an absolute guarantee the liquid hydrogen tank won't explode, with poor “gas” mileage hydrogen requires vast increases in “fuel” production, ponderous cryogenic storage tanks, and is an energy sink costing more to reach the car's tank than the energy consumed as fuel.  The “hydrogen economy” is unworkable: a trend toward a hydrogen economy implies greater dependence on diminishing fossil fuels.

Currently the U.S. produces more than 100 billion cubic feet of hydrogen.  In addition to use in producing rocket fuels for NASA, hydrogen is most frequently used in ammonia (fertilizers), methanol production, glass, various chemical products, cosmetics, lubricants, and refining petroleum for gasoline and heating oil.  Its use in methanol is frequently to produce the gasoline additive MTBE.28  Despite unsatisfactory economics, hydrogen technology is also being applied to portable power generating plants.29  The Schatz Energy Research Center, for example, recently built a hydrogen generation station for use with their fuel cell vehicles.

An alternative to hydrogen in fuel cells or batteries is a zinc-air fuel process.  Zinc-air power is more economical and efficient than hydrogen.  The zinc-air process uses conventional materials, is a liquid at normal temperature, requires less storage space, is not explosive, and develops more energy per unit of weight than hydrogen.  It is therefore, a much better fit with current vehicles.30  There is a second alternative using a boron process.  Natrium will produce hydrogen from sodium boro-hydride (borax).  The resulting non-toxic sodium borate can then be recycled at a processing facility.  The mileage is acceptable, 30 miles per gallon in Chrysler/Daimler prototypes, but the required tank is large and borax is an extremely caustic chemical that would pose a serious problem in an accident.

Hydrogen’s chief selling point, in theory, is that there is literally an inexhaustible supply of the basic resource, an inexhaustible replacement for oil.  Hydrogen can be manufactured from ordinary water.  Common sense suggests one can’t pour water into a gas tank and drive.  Hydrogen can be made from a number of materials natural gas, ethanol, and water are frequently mentioned.  However, it can also be manufactured from oil and coal.31  Occasionally the product is manufactured using methanol, itself an energy intensive source made from another fossil fuel in a process known as steam methane reforming.  Methanol, using the same fossil fuels, is only slightly more efficient.  The fossil fuel used is frequently natural gas and sometimes coal, which is then combined in a high-pressure steam process to produce hydrogen.  Although promoted by its connections to water, in practice the primary feedstock is natural gas.

The use of natural gas adds another dimension to the cost structure of hydrogen production.  Establishing a floor price to its use, the price of the feedstock notably natural gas is an important component of the manufacturing cost.  In other words, hydrogen is another means of substantially increasing natural gas consumption and reforming of high quality energies into lower quality energy.

Whether the energy source is natural gas or methanol or another source, the overall energy efficiencies of hybrid vehicles are less than the cars they propose to replace.  Because energy is consumed at each level of processing, adding a second or third level energy source and a bank of batteries is less energy efficient than efficiently using a single existing energy source.  In terms of energy efficiency it would be vastly superior to directly burn natural gas in a vehicle than converting it to hydrogen then burning it, or converting hydrogen into electricity to run an electric motor.

The reasons underlying the promotion of hydrogen have less to do with energy efficiency or pollution concerns than with the automobile infrastructure and associated industries.  With billions of government and industry dollars behind the program, related articles and legislation becomes less science based.  Similar to ethanol production, once firms and workers become dependent on the institutional processes, the process begins a life of its own irrespective of the unconvincing economic, energy, or environmental factors.

The economics and energy characteristics of hydrogen development possibly supports a role in a minor energy niche.

The burning of the Hindenberg blimp is the public’s image of hydrogen.  Yet fire and explosion threats are less than one may think.  Because it is a gas containing relatively less energy per unit of volume, an explosion would be significantly less damaging and less incendiary than an equal volume of gasoline, propane, or natural gas.

Hydrogen has a relatively low ignition temperature and burns over a wider range of concentrations (low concentrations due to minor leaks are less likely to burn).  Although leaks are a serious issue in a relatively closed space, the gas dissipates safely upward rather than concentrating near ground level.  On the other hand, hydrogen is clear and odorless and leaks are unlikely to be quickly noticed.  Similar to alcohol in race cars it also burns with an invisible flame and can be unnoticed until harm is done.  Many of the fire related issues should be resolved with technology, as in adding an odor agent to the gas (at a further reduction in efficiency).  Nevertheless, it does add another technological hurdle and another layer of expense.

Hydrogen is not a source of energy in the typical sense, but a carrier of energy much like a battery because it “carries” stored energy.  Fossil fuels are a primary source of energy because they have “stored” sunlight energy over millions of years hydrocarbon (hydrogen and carbon).  They are concentrated power.  Congressional researchers Daniel Morgan and Fred Sissine state that “since hydrogen is not a primary fuel, but must rather be produced from some other energy source, generating power with utility-scale hydrogen fuel cells is essentially equivalent to using hydrogen for energy storage.”31

Hydrogen’s high cost is due to manufacturing inefficiencies and low power inherent in the gas.  Hydrogen begins at the “refinery” where it is manufactured and delivered by trucks or pipeline to where it is pumped into a vehicle.  The “no free lunch” caution 2nd Law of Thermodynamics dictates that manufacturing involving several energy laden processes implies that hydrogen is another energy sink.  Indeed, the energy consumed in the manufacturing process results in substantial energy losses.  To liquefy hydrogen in small scale operations implies more energy is consumed in its manufacture than available as the end product.  In large-scale manufacturing, approximately 30% of the energy is consumed in its processing.33  The process is actually one of converting one high-energy form —frequently natural gas derived methane into another form then pumping it into a storage medium; hydrogen fuel cells convert hydrogen to electricity.  Perhaps technological advances will increase processing efficiencies making hydrogen less of an energy sink.

The Alternative Energy Institute sums the cost dilemmas as follows,34

… the most daunting problem associated with current hydrogen production is the energy needed to produce it and to provide for energy losses in the hydrogen-to-application chain. Using existing conventional technology, "hydrogen requires at least twice as much energy as electricity — twice the tonnage of coal, twice the number of nuclear plants, or twice the field of PV panels — to perform an equivalent unit of work. Most of today's hydrogen is produced from natural gas, which is only an interim solution since it discards 30% of the energy in one valuable but depletable fuel (natural gas) to obtain 70% of another (hydrogen).

Separating the “H” from the O2 requires a great deal of energy.  Pure hydrogen is reformed from natural gas or electrolyzed in water.  It is possible to manufacture hydrogen in a process called “electrolysis” or “hydrolysis” using electricity to break the bonds holding hydrogen and oxygen together.  In a process similar to electrolysis, hydrogen can also be produced by heating water to approximately 1,800º F to separate the hydrogen and oxygen atoms.  In addition to the high and expensive energy requirements, the costs associated with compression or freezing and storage, transmission, and operations must be added.  After manufacture, hydrogen can be “burned” or used in fuel cells to produce electricity.  In order to “burn” in a vehicle it must be recombined with oxygen, a process giving off heat as energy and water vapor as a waste.  It is apparent that the process requires significant technology advances and abundant energy.  Converting electricity into “hydrogen” fuel results in the loss of approximately half the energy in its manufacture.  National Public Radio’s David Kestenbaum reported that if nuclear plants were to provide the electricity to manufacture hydrogen to replace gasoline in transportation it would require 241 -1,000 megawatt nuclear power plants.35

On the other hand, with pure water as a waste, hydrogen's use is generally environmentally benign.  Only if leaked in quantity or when burned can pollution be a significant factor.  Because hydrogen harms the ozone, an hydrogen economy is likely to leak substantial volumes into the atmosphere.  According to researchers at the California Institute of Technology, the effects on ozone could be serious.36  Pollution is upstream in the manufacture of hydrogen or the energy sources used in manufacturing and it can be substantial.  Processing creates significant quantities of the greenhouse emission, CO2.

Hydrogen’s manufacturing cost implications will be reflected in the pocketbooks of those driving or owning a car, truck, or flying an airplane.  Depending on the conversion energy, hydrogen processing is up to about 80% efficient in using electricity to extract the hydrogen from water sources.  In alternative energy cars using fuel cells, studies show that because the fuel cell is similar to a battery in operation, it is less than 50% efficient in delivering energy.  The resulting complete cycle efficiency is less than 40% (80% of 50%).  Converting these efficiencies to kWh per gallon yields an oil equivalent and optimistic cost in the $4 to $5 per gallon range, or approximately two to four times the price of gasoline.37

High costs are confirmed by another study.  Using less optimistic technology assumptions than the above studies, Congressional research concluded that hydrogen “cost $2.40 to $3.60 per kilogram of hydrogen produced”, or in the range of $8 to $12 per gallon, 5 to 7 times the price of gasoline.  “This high cost”, Congressional researchers found is “expected to limit electrolysis to niche markets in the near and mid term.”38  Dr. Ted Trainer has also examined the physics and economics of hydrogen as a fuel source and concluded that hydrogen as fuel for automobiles will cost approximately $21 per gallon to manufacture.39

By way of cost comparisons, the bottom line of producing hydrogen from natural gas is 5.6 times the cost of natural gas, 10.3 times coal, and 20.1 times using electricity in electrolysis.40  The shortside of hydrogen is that it would be a superior energy practice for consumers to use the energy required in manufacturing, directly (in a home furnace for example).

The use of hydrogen as a fuel source clearly illustrates the energy sink process noted in the introduction.  With hydrogen it is likely that $0.50 of useable alternative energy would cost more than $1.00 in conventional energy to deliver while further limiting the resource base of primary energies.

If hydrogen is to be a competitive replacement energy product, its copious energy requirements must be generated from conventional large-scale and inexpensive baseline energy sources.  The production contradictions inherent in hydrogen are that the capital, operating, and pollution costs of fossil fuels are embedded in the manufacture of hydrogenBecause the energy required to produce hydrogen is substantial, as fossil fuel reserves decline the ability to substitute hydrogen declines in lockstep.  The higher the price of fossil fuels the higher the price of hydrogen.  In a circular pattern, if the large-scale and cheap energy sources were readily available it would negate the need for hydrogen or fuel cells.  Its fundamental energy requirements imply that hydrogen is not a suitable alternative energy source.  The short of it is that the development of hydrogen aggravates our impending energy dilemma.


Storage & Transport

In addition to manufacturing are the storage and transmission costs.  Unlike the simple filling of a gasoline tank, distributing hydrogen to the consumer requires roughly 40% of the energy contained in the fuel.41  The total energy required to generate, compress, and store hydrogen at the station exceeds the energy of the hydrogen fuel by 150%.42  Jeopardizing other uses of electricity, the energy source is electricity.

The fundamental nature of hydrogen explains its high transmission and storage costs.  As a gas, hydrogen requires 3,000 times more container area than the energy equivalent amount of gasoline.  Thus, it must be highly compressed to be portable.  After compressing, liquid hydrogen is either stored at minus 250º F or pressurized at 3,000 to 5,000 pounds per square inch in large, strong, and expensive tanks.  If the pressure cannot be maintained or deep frozen, the contents will assuming the vent works properly evaporate.  Thus, leaving the vehicle unplugged for any period of time will result in the fuel tank found empty when the driver returns.  Congressional researchers found that “as a liquid, hydrogen contains almost three times more energy than an equal weight of gasoline, and takes up only about 2.7 times as much space for an equal energy content.”43  Unfortunately, hydrogen cannot be utilized as frozen liquid “gas”.

There are also distribution costs to consider.  To transport hydrogen from a production facility to a distribution point similar to a gasoline station implies literally constructing a pipeline system duplicating the natural gas pipeline system.  Although pipeline transport could be accomplished in existing natural gas pipelines modified to transport pressurized hydrogen, the cost of transmission under the best of circumstances could be approximately 50% higher than for natural gas.  The cost of using a new hydrogen engineered pipeline is estimated to be 4.6 times the cost of natural gas for the equivalent energy.44  Because of the approximately 300% volume increases necessary for equivalent energy, both the size of the pipeline and number of booster compressors would be multiplied.

The cost effective design would be to construct manufacturing facilities proximate to users and tap into existing natural gas pipelines.  This is the industry’s and Administration’s hydrogen plan and one explanation why natural gas is the preferred source.  In other words, hydrogen vehicles make worse the energy situation they are said to remedy.  The existing natural gas infrastructure would be used an enormous subsidy.  It presumes however, that there is surplus natural gas, distribution pipelines, and that natural gas will be abundant over the next generation or two.  These assumptions are false.

Because the trucking infrastructure currently exists, transport by trucks is an option.  An exceedingly expensive option!  An average freeway based gasoline station can be serviced by a single 40-ton gasoline delivery truck.  However, to provide an energy equivalent amount of hydrogen per day requires a fleet of 21 hydrogen delivery trucks.  Since tanker trucks account for approximately 1% of total trucks, the implication is that 120 trucks will be on the road where 100 were previously, 21 or 17% delivering hydrogen.  An alarming statistic, hydrogen delivery would statistically be involved in more than 15% of all truck accidents.45


The Hybrid Car

From the impending peak of global oil production to the high depletion rate of natural gas wells in North America, we're headed pedal-to-the-metal into The Last Energy Crunch.
      Chip Haynes, 2001
46


With fuel mileage approaching 70 miles per gallon, the estimated reduction in gasoline (and oil) use from hybrid vehicles is exciting.  Hybrids combine standard small car engines, usually close to 1.5L with an electric motor using batteries.  Improving fuel mileage, the gasoline engine is used to power the vehicle over its efficient power range.  Electric motors are used in starting the vehicle from a stop position to about 15 miles an hour when the gasoline engine takes over and in assisting hill climbing or passing.  In some models, the gas engine shuts down at a stop.  One intriguing aspect of the hybrid vehicle is that the batteries can be charged using the vehicle's breaking action, actually the core of the breaking system.  Generally, in proposed fueled models the batteries are fully charged at home overnight to take advantage of cheaper off-peak rates.

There are a number of critical factors overlooked in the promotion of the hybrid vehicle: price, inefficiencies, pollution, and practicality. Although the fuel mileage is laudable, the energy used in processing is a big step in the wrong energy direction.

Prototype vehicles cost in the $500,000 to $700,000 range, or more.  With federal funding, car manufacturers have successfully built and leased vehicles to the public.  These early heavily subsidized models are priced in the $20,000 range for small two seat vehicles lacking a luggage trunk.  Cars in commercial production, at approximately $45,000 (if not subsidized) are not priced for the average worker.

Let’s first briefly examine current production hybrid vehicles using gasoline and then vehicles using hydrogen.

Priced at approximately $21,000, two current 2003 production hybrid vehicles are the Honda Civic Hybrid and the Toyota Prius.  Subsidizing the high price, the government allows a $2,000 tax deduction.  Rather than hydrogen/fuel cell hybrids, these cars use standard gasoline engines, 1.3L -85 horsepower for the Honda and 1.5L -70 horsepower for the Toyota.  The brushless electric DC motor in the Honda delivers 13.4 horsepower while the Toyota has 44 horsepower.  The brushless motor avoids the ozone destroying gas resulting from arcing in standard motors.  Both vehicles use sealed nickel-metal hydride batteries (Ni-MH) 120 -1.2V and 144V output in the Honda and 228 -1.2V with 273.6V output in the Toyota.  The batteries are stored in banks behind the rear seat, between the rear wheels.  The primary battery pack for the Toyota is priced at the dealer at $5,700 with the smaller auxiliary battery, $185 (the engine battery is a third battery).  The smaller Honda battery is priced at $4,500 from the dealer.  Transmissions are either 5-speed manual or automatic.  The miles per gallon rating for the Honda is 48 city and 47 highway and for the Toyota, 52 and 45 respectively.  Comparable conventionally powered economy cars are rated to 52 mpg.  The Civic Hybrid weighs 2,500 pounds and has a fuel tank range of 502 miles.  The Prius weighs 2,800 pounds with a cruising range of 536 miles.

Other than the power system, the Honda Civic Hybrid is identical in all other respects to the standard $14,000 Civic and the Toyota body style appears to be between the $14,500 Corolla and the $11,500 Echo.  The standard Civic has a 1.7L engine delivering a rated 38 highway 29 city mpg.  The Toyota Corolla is powered by a 1.8L 130 horsepower engine delivering 39 highway 29 city mpg.  The Echo with a 1.5L engine is rated at 39 and 33 respectively.

Without the gasoline engine, the electric powertrain system operates as a battery driven car and carries with it all its negatives.  The pollution of the battery powered car is at the generating source of the electricity, conventional baseline energy with efficiencies of approximately 40%.  Combining the efficiency of the electric motor (80%) with the generator yields, at best, an overall efficiency of 32% (40% of 80%).  The consequences of batteries is discussed in the gasoline and hydrogen hybrids.

Both hybrid vehicles are advertised as providing cleaner air and, for the Prius, a “clearer conscience”.  The wallet will also feel the difference.  The approximately $6,000 – $7,000 or more higher price buys slightly more than 10 mpg or saving a little over 100 gallons of gas per year $150.  If it is assumed the battery pack has a life of six years, then the cost of batteries $6,000 implies the car will decline in value $1,000 per year (plus dealer installation costs) in addition to normal depreciation.  It implies that when the market price of the standard Civic or Echo/Corolla is equal to the resell market price of the hybrid, the hybrid will no longer be used as a hybrid.  It is unreasonable to spend more than $6,000 when the benefit is minimal and falls rapidly.

The battery pack’s charging and energy delivery efficiency declines after a few years of use.  Although it remains adequate for powering the electric motor, in general the energy used to charge the system will increase until toward the life of the battery pack, the power from the gasoline engine is increasingly used to generate electricity for the motor.  In short, the rated gas mileage will continue to decline especially at slower speeds.  In short when the hybrid battery loses sufficient energy or quits, the hybrid-gasoline vehicle will be good only for parts.

In fact, because the electric powertrain system (weight, motor, etc.) is a drag on the efficiency of the gasoline engine, the mpg of the car will be somewhat less than the standard comparable car.  An additional cost would be to separate and isolate the electric system in effect converting the hybrid into a standard vehicle.  In that case, the “hybrid” vehicle will be worth less than the standard comparable car equal to the value of the decline in mpg and added costs of conversion.  Indeed, if the electric powertrain cannot be detached from the gasoline system, the vehicle will be unable to be resold at the resell value of the comparable car.  Because of the additional battery costs, that point will be when the comparable vehicles are approximately half depreciated: $14,000 ÷ 2 = $7,000.  Even if operating well, it could imply the life of the hybrid vehicle is approximately half the life of the comparable vehicle ―a good approximation is the life of the initial battery.

The miniscule reduction in gasoline use is overshadowed by the energy required to replace the vehicle with an entirely new vehicle twice as often.  The net energy loss is enormous.

The better city mileage is due to the gasoline engine being shut down when stopped (the worst possible gas mileages is at idle).  Because the engine is shut down or not used at reduced speeds, the potential for manipulating mileage is evident.  The cities with gridlock will find hybrid “gas mileage” best.  Stopping and starting the vehicle uses the electric system.  (It would be vastly superior to smooth traffic flow by sequencing traffic signals so vehicle stops would be minimized and eliminated where possible.)  The more the vehicle is used on freeways, the closer the vehicle’s mileage is to a standard economy car.  Because the engine is used less, downtown areas will have less car created air pollution.  However, because the batteries are primarily charged using the gasoline engine, pollution will be transferred from the downtown to local suburban areas.  If the charging amps produced from stopping the vehicle in downtown areas is less than the amps charge necessary, then, the engine will makeup the downtown discharge and perform normal charging; pollution will be increased in suburban areas a likely consequence.

Using the vehicle’s stopping momentum to charge the battery is the only energy efficiency improvement of the hybrid vehicle.  The energy used in accelerating is lost as heat in a standard vehicle.  In the hybrid, the stopping momentum “heat loss” is captured as “free” energy converting it to electricity stored in the battery pack.  If there were no energy losses in the acceleration – deceleration sequence it would be a perpetual motion machine.  However, if the charging system is 90% efficient and the electric motor 80% efficient, the total process could be no more than approximately 70% efficient (90% of 80%) a loss of 30%.  If this were not the case, a hybrid vehicle could go across the country by simply accelerating then decelerating.  30% is also the minimal increase in pollution transferred to the suburban area.  The gasoline engine is the primary charging system.  It is the reason highway mileage is less than the comparable vehicle with the same engine.  If all systems were used in the same portion the overall efficiency would be 29% (gasoline engine, 40% x charging cycle, 90% x electric motor, 80% = 28.8%).  The 70% efficiency reflects the higher city gasoline mileage (uses half the powertrain systems).  The lower highway mileage reflects the lower efficiency of the vehicle including the closed charging system.  Comparable economy cars exceed the highway mileage of these hybrids and have proven to last many years with low cost for maintenance.

The hydrogen fueled hybrid suffers from all of the problems of the gasoline hybrid and adds several more.  In addition to the rich purchase price and operating costs, for most purposes the mile limitation prohibits widespread use.  Even a doubling of the current 70 or so miles per tankful remains a severe stumbling block to use.  In addition, as those living in cold climates are aware, batteries lose effective capacity under cold weather conditions.  The vehicle’s ability to deliver energy and power is hampered by cold temperatures.  The already limited driving range is less reliable in cold winter months.  In regions with severe cold, such as Minnesota, the use of hybrid vehicles could place the driver and passengers at risk of weather related injury.  The gasoline hybrid overcomes this potentially serious problem by having redundant batteries and using passenger compartment heat to heat the motor batteries.

In both types of vehicles the electric motor is used to back up the vehicle, and pulling or pushing another vehicle or pulling a small trailer or boat would be ill-advised.  The use of powerful electric motors have the drawback of producing “noise” the high pitched and annoying “whine” characteristic of electric motors.  Perhaps the relatively quiet slow running mode is of interest to police and the government.  Thus, for numerous common purposes the use of hybrid vehicles requires a second conventionally powered vehicle a duplicate non-hybrid vehicle or transportation system.

A transportation source that requires greater amounts of energy than existing systems actually expands the nation's energy dilemma and cannot be considered sustainable.  Using hydrogen tank pressures, methane (natural gas) for example contains 3.2 times the energy and octane (gasoline) 3.4.47  An abridged net energy comparison would indicate that hydrogen or hybrid vehicles are net users of energy relative to conventionally powered vehicles.  A comprehensive net energy analysis (EROEI or eMergy) would drive the negative energy comparison for the hydrogen hybrid vehicle technology deeply negative.  The substantial increases in vehicle costs are indicative of the negative energy differences.  To presume the complete process using other alternative energies —such as windpower is renewable or sustainable mischaracterizes the energy processes involved.

Let’s compare the energy efficiencies of the hybrid or hydrogen vehicles with present-day conventionally powered vehicles.  The internal combustion engine has total energy efficiency in the 30% to 40% range.  Although burning hydrogen is up to 55% efficient and the electric motor is very efficient at about 80%, the generating plants described earlier and used to provide the electrical energy for the hydrogen hybrid's batteries have an efficiency of less than 50%.  The hybrid electric system component is a plug-in system, therefore is no more than 40% efficient (80% of 50%).  Before considering the use of burning hydrogen to produce electricity, combining the two (30% to 40% for the gasoline engine plus 40% for the electric portion) results in an overall efficiency of the hybrid vehicle approximately equal to existing vehicles.  If transmission line losses (discussed earlier) are factored in and unrealistically assuming no energy frictions within the vehicle, another 10% loss of efficiency is probable for the electric component.  Burning the hydrogen results in an efficiency of 28% (55% of 50%).  Combining the various energy levels yields net hybrid vehicle efficiency in the 30% range or less.

Thus, the overall efficiency of the hybrid vehicle is less than the efficiency of the internal combustion engine it replaces.  Furthermore, because the high mileage advertised is attainable only at consistent speeds above 15 to 20 miles per hour, the stop-and-go traffic congestion of all but small rural cities make the hydrogen hybrid less efficient and impractical for many drivers.  With growth, congestion will become worse and further reduce the economic backing for hydrogen.

Proposals to use alternative energy to produce hydrogen compound the energy losses and is discussed later in this paper.  Large-scale solar and windcommerce energy are mentioned.  However, assuming a generous solar efficiency of 20% combined with 40% efficiency for a hybrid results in an overall efficiency of only 8% (20% x 40%).  A similar outcome would result from other alternative energies as well ―windpower is a good illustration.

Significantly reduced air pollution at the vehicle level appears to be of greater government importance than the increase in mileage or overall energy efficiency.  Hybrid systems received a boost when California legislated a zero or near zero pollution emissions vehicle.  Possible only in legislation, a zero emissions vehicle is physically impossible in the real world.  When one hears comments that hybrid (or other) vehicles have zero-emissions, caution should be exercised: no such energy feat is possible.  The significant emissions, however, are produced upstream or downstream from the vehicle.  Michael Ruppert in an article titled “Why Hydrogen is No Solution - Scientific Answers to Marketing Hype, Deception and Wishful Thinking”, states “arguing that hydrogen burned in a car engine produces no greenhouse gases ignores the fact that those same gases were produced at the plant that made the hydrogen to begin with.”48  Hybrids ran into a significant speedbump when the House Ways and Means Committee in early 2003 removed proposed consumer tax credits from legislation.  The reason given was, according to Chairman Representative Bill Thomas, credits were not necessary because consumers would purchase the higher mileage vehicles without the tax inducement.49

Because the primary by-product of driving the hybrid vehicle is water vapor, hydrogen vehicles are said to be nearly pollution-free.  Operating the vehicle on the street is very different than manufacturing the vehicle or providing for its day-to-day operating needs.  For most drivers the hybrid vehicle utilizes the most polluting and least efficient electrical aspects of its development: hybrid vehicles exacerbate the situations it is said to remedy.  Hydrogen processing and hybrid vehicles use copious quantities of electricity, thus, environmental consequences associated with the generation of electricity using oil, coal, and nuclear energies are embedded in hybrid vehicles.  This essentially holds true no matter what the time the batteries are charged.  Overnight charging reflects an insignificant change in resource use in time rather than conservation.  Whatever the air, land, and water pollution associated with generating substantial quantities of electricity it is embedded in hybrid vehicles.  Because they are serious users of electricity, pollution consequences are equally serious.


Cost Comparisons

There are capital costs in addition to the processing costs of the hydrogen fuel.  The capital costs include the purchase price and the batteries of the hybrid vehicle.  Beginning with batteries, these costs will be compared to the cost of gasoline and the savings in mileage.

The luggage and additional seating capacities of standard automobiles are replaced in hybrid vehicles with batteries.  The typical batteries are heavy, cost several thousand dollars, and have a useful life of less than three years.  Because of the toxic nature of standard or Ni-MH (gasoline hybrid) batteries, their production, recycling, and disposal must be handled with care.

Three illustrations will clarify the cost comparisons.

Excluding the capital cost for the moment and assuming a hydrogen hybrid vehicle is driven 10,000 miles a year at 70 miles per gallon results in about 143 gallons of gasoline consumed per year.  Comparing today's typical economy car achieving 40 miles per gallon with a hybrid implies the yearly savings would be about 105 gallons of gasoline, or $130 (((10,000 ÷ 40mpg) - (10,000 ÷ 70 mpg) (@$1.25 per gallon))).  Although, they are not commercially available at this time, prototype cars the size of a SUV have been found to average an increase in mileage of approximately five miles per gallon.  This is equal to $125 saving per year, about 100 gallons of gasoline or approximately 2½ barrels of oil.

Assume the batteries cost $3,000 and electricity, estimated at $1.00 per day, are included in the miles per gallon cost (Note that these are prices as standard batteries ―Ni-MH last longer but cost much more so the annual net cost difference is immaterial.)  Thus, the additional cost of batteries is $7.35 per gallon ((($3,000 ÷ 3) ÷ (143 gallons per year) + ((365 x $1) ÷ 143))).  Assuming the initial $20,000 in additional costs is halved, the additional  $10,000 purchase price when spread over 10 driving years produces an additional $7 expense for every gallon consumed ((10,000 ÷ 10) ÷ (143)).  The breakeven point is $14.35 per gallon gasoline.  The price relationship will not change with diminishing fossil fuels.  In manufacturing hydrogen, fossil fuels are paired with hydrogen, as the price of fossil fuels rise —natural gas— the price of hydrogen rises proportionally.

Total costs should be compared to the savings, about $130.  Spending an additional $20,000 in capital ($45,000 hybrid - $25,000 economy car), $14 per gallon, either directly in the price of the vehicle or less directly as government subsidies (increased taxes) above the cost of comparable economy cars is poor economics.  Adding approximately $1,000 per year for batteries, large daily electricity costs, another $1,000 to $2,000 in converting home electric systems and installation of a charging system all in order to save $130 in gasoline plus an oil change or occasional break pad replacement is counter productive to a sound energy policy.  Halving manufacturing cost due to production efficiencies would not produce an economically sufficient hybrid vehicle nor would a 50% increase above the already high mileage produce an economic hybrid vehicle.

In sum, for hydrogen hybrid cars to be cost effective requires the pump price of gasoline to be more than $14 per gallon ($7 + $7.35).  Because of the high dealer price (+$7,000) and high cost of the Ni-MH battery ($6,000), the resulting necessary pump price for the gasoline hybrid is similar.  The additional cost of SUV and van classes of vehicles would be proportionately higher.  As fossil fuels rise in price, breakeven comparison prices will rise as well.  The painfully high price also understates the actual manufacturing and driving costs because it assumes that the substantially higher cost of energy it represents is not reflected in the cost of energy used to manufacture the hybrid vehicle.


The Fuel Tank

Lack of adequate trip length per tankful is a critical consumer disadvantage.

There are two intertwined fuel tank engineering problems requiring a suitable solution.  The first objective is to make the tank 100% crash-proof so its contents won't ignite or explode and the second is to make the tank approximately the size of conventional vehicles while obtaining equal mileage per tankful.  The lack of stored energy in hydrogen is a serious and costly disadvantage helping to explain its fuel tank problems.  Large tanks are necessary because hydrogen carries less energy per volume than any of its competitors —methane (natural gas), methanol, propane, or octane (gasoline).  In equal volumes as a liquid, hydrogen has approximately “one-third the energy of gasoline and about one-half of ethanol.”50  Because its natural state is a gas, the hydrogen fuel tank must withstand high pressures or be contained in special extreme cold temperature tanks in liquid form.  In comparison, the typical gasoline tank is inexpensively and simply constructed from sheetmetal.51  The present-day smaller and lower pressure or frozen liquid hydrogen fuel tanks result in inconvenient trip length.  A doubling to 5,000 pound per square inch pressures to increase fuel volume and potential driving miles requires substantial engineering and production expertise.  The result is an exorbitantly expensive tank.

Even the newest storage innovation, the graphite based “nanotube”, only holds approximately 6% fuel by weight.  In other words, 94% of the weight of this novel and expensive storage system would be the storage medium not the fuel.  In contrast, the current car gasoline tank weighs about 10 pounds, holds 125 pounds of gasoline with three times the useable energy, and is capable of moving the vehicle 400 – 500 miles.

Note that the special tank requires pressurized venting to release the buildup of internal pressures as cold gases warm.  Literally, the hydrogen will boil.  Without a perfectly designed vent system, gas expansion becomes dangerously explosive.  A perfectly operating vent is required to empty the tank if extreme cold is not maintained.

Virtually nullifying any idealized efficiency consideration, maintaining hydrogen in frozen liquid form requires significant investments in energy.  It is clear that much of the energy contained in hydrogen is required to refrigerate and store the product.  If the fuel is used in a circular pattern to operate a device to freeze the hydrogen, fuel efficiency declines further.  Likewise, the unit must be frequently plugged into an electricity source when garaged.  Lack of freezing implies that a driver’s return from a short vacation or business trip would find an empty fuel tank.  One must wonder what would happen in the summer or winter —even a Minnesota winter is relatively warm!— if the cooling system or safety vent failed while the vehicle was parked in a garage, downtown business office tower, or at airport lot while away on a business trip or vacation?  One can only imagine the outcome if a van full of these tanks suddenly ignited in busy central downtown business area.


Hydrogen & the Automobile Industry

The primary impetus for the hydrogen and gasoline hybrid vehicles is the Administration’s $1.2 billion budget promoting these vehicles.  Despite its shortcomings, the automobile industry is vigorously pursuing hydrogen technologies.  No doubt acutely aware of the approaching Olduvai Energy Gorge, all three U.S. auto companies hope to begin replacing the current internal combustion engines with mass produced hydrogen fueled cars by 2004.  Shell has told the Organization for Economic Cooperation and Development (OECD) countries that by 2020 “gas and renewables could meet almost fifty percent of the fuel requirements for power generation.”

Canadian based Ballard Power Systems is the world's largest company involved in developing fuel cell technology with prototypes already traveling the streets from companies like Daimler-Chrysler, Ford and Honda.  Shell has also formed a hydrogen fuel cell subsidiary and is, like many other energy companies, spending billions of dollars on research and development of solar, wind, and biomass alternative energies.  In addition, BMW has a large research department employed working on hydrogen as a motor fuel.52

The production efficiencies, expense and technological impediments suggest the persistent efforts of automobile companies will ensure hydrogen or gasoline-fueled vehicles, but —as suggested previously perhaps significantly fewer in number than anticipated.  Initial studies considered costs of implementing hydrogen on the order of $300 to $6,500 per vehicle.  Actual gasoline hybrids are more than $7,000 more expensive than comparable conventional economy cars.  More recent studies indicate a possible hydrogen-hybrid cost of less than $500 per vehicle.  The actual gasoline hybrid suggests the lower range is unlikely to be realized.  The range of assumptions explains the wide variation in estimated costs.  The overriding assumption of these studies is that large production volumes will ensure significant economies of scale.  It is reasonable to question the numbers.  The storage tank and hydrogen engine modifications alone will likely exceed the minimum expected price increases of these generally industry sponsored studies.

Mirroring their unbridled enthusiasm, the industry thinks selling prices will be competitive with conventional cars.  Perhaps what is meant by use of the term “competitive pricing” is not that hydrogen vehicle production costs will decline but that economy of scale of conventional vehicles decline, thus forcing higher prices of conventional vehicles and making comparisons more favorable.

Because experimental vehicles are very expensive to estimate, selling prices would not be helpful in determining the feasibility of the hydrogen car.  The inhibiting factor is less the technology of the car than the energy losses and cost of manufacturing hydrogen fuel and corresponding efficiency of the fuel cell.

Lawrence Burns, Vice-President of General Motor's Research & Development and Planning, describes the hydrogen vehicle “frame” as a “skateboard” with various vehicle items —such as batteries and fuel tanks, placed on the “skateboard” framework with a light-weight shell covering passengers.53  Thus, hybrid vehicles compete with Geos and similar vehicles already known for excellent fuel efficiencies, but hybrids are considerably less consumer friendly.

Ford has committed to bringing a hydrogen based fuel-cell vehicle to market based in its Focus car by 2004.  Journalists in attendance at an industry-sponsored event had the opportunity to drive the prototype car.  Characteristic of the storage dilemma, the car had two truck sized fuel tanks in its “trunk” and yet had an estimated driving range of only about 60 miles.  Still in design stage, engineers believe an “improved” tank will increase the car's range to more than 150 miles.  The Ford fuel tanks are made by another Canadian company, Dynetek Industries Ltd.  Reflecting the decisions of investors, the 3rd Quarter 2001 Dynetek Financial Report said that “the confidence of investors for alternative fuel technology companies has been less than positive”.  Accordingly, the company is losing money and its securities selling for about $C2.50.  Ford has not made cost data available.54

Not to be outdone, Toyota in an association with GM plans to offer a hydrogen based commercial car by 2003.  The source of the hydrogen fuel will be derived from sulfur-free gasoline.  Expecting a technological breakthrough, “the new vehicle employs a reformer to extract hydrogen from a still to be developed 'clean hydrocarbon' fuel [sulfur-free gasoline]” using a 120 liter “reformer” located under the rear seat.  With anticipated performance comparable to conventional cars, and excepting the mileage and storage tanks issues, Toyota plans to sell up to 50 of these high powered 188 horsepower cars in the first year.

It is difficult to determine the gas mileage from the data presented.  It is evident that either few vehicles will be sold so the mandated mileage standards will still be met, or the vehicles must be exempted from gas mileage standards.  This would be a substantial subsidy and license to pollute at the level of the electricity generator.  The data in the Toyota/GM project was given in “gasoline equivalents” which results in gas mileage of over 13 miles per gallon.  Because that number is exceptionally high based on other hydrogen vehicles and the use of the ambiguous “equivalency” terminology, it is reasonable to divide that number by three (the relative energy efficiency performance of gasoline) to arrive at hydrogen fuel mileage.  The comparable data is in the range of other hydrogen vehicles, a little less than 4½ miles per gallon.  No energy performance or cost data were released.  Note the Dynetek financial data show that Japan is its single largest customer for fuel cell products.55

In May 2000 BMW offered to the world the first (they claimed) production-based hydrogen car.  The BMW 750hL has a 12-cylinder engine, performance comparable with standard cars, and a top speed of 135 mph.  The BMW vehicle could be in the $300,000 price range.   With mileage around 5½ miles per gallon, even with its 140 liter tank its cruising range is limited to approximately 200 miles.  BMW expects to sell several thousand of the cars and to have hydrogen fuel stations throughout Europe by the year 2010.

The reason for the larger engine is hydrogen engines produce about one-third less power than a conventional gasoline engine.  The lack of power relative to conventional engines is less a consequence of the engine: gasoline is nearly three times more powerful.  Typical smaller horsepower hydrogen engines would demonstrate to the public the lackluster performance of the vehicles.

Due to favorable performance comparisons, large engines are an important marketing tool.  The larger, more luxurious hydrogen cars encourage the development of a positive image and rationalize the required exorbitantly high selling prices.  Evidently vehicle mileage standards will not be factor in determining its development or advertising. 
 

Hydrogen – Hybrid Car Summary

Pursuing the hydrogen economy is similar to seeking the mythical “Fountain of Youth” or Cornucopians who have wonderful intentions but overlook the science and economics involved in the pursuit.  Enthusiastically endorsing the process gives a false sense of well-being and security while ultimately depleting important natural resources.

Although seldom stated, alternative energies such as “hydrogen” are energy sources requiring conventional baseline systems in order to be developed and maintained.  Both the hydrogen and gasoline-hybrid requires the purchase of a conventional vehicle for many activities routinely accomplished by a conventional car, e.g., pulling a trailer.  The large-scale manufacture of hydrogen would require the construction of large numbers of new coal or nuclear baseline generating plants.  Hydrogen as an automotive fuel is similar to pouring electricity into the fuel tank.  In effect, society requires a parallel energy system in order to make the hydrogen energy economy transition.  And it must be an ongoing process accomplished in an economic environment of declining oil and natural gas reserves.

If society is to achieve sustainability it must not squander its available energy resources.  The additional costs of a “hydrogen economy” are more than substantial —they are virtually beyond imaging.  The most significant impediment to manufacturing hydrogen is that each processing step involves consuming significant quantities of conventional energy.  After manufacturing, hydrogen must be compressed and stored under stringent conditions.  The electricity required for the hydrogen economy to replace oil would imply a three-fold increase in electricity generation.56  The awesome electricity requirement would come at the expense of residential and commercial applications.  The increases in electricity required are far more than windpower or photovoltaics or any alternative energy could produce.  On the other hand, the energy involved in transporting oil —the energy hydrogen proposes to replace— is approximately 90% of the energy delivered.57

When one considers that the production of hydrogen is about one-third as efficient as gasoline, the total equivalent energy required to replace gasoline is at least 8 times (and perhaps 10 or more times) that for gasoline.  If the average gasoline car mileage is assumed to be 25 miles per gallon and hydrogen vehicles about 6 miles per gallon, then more than four times the current volume of gasoline would be required if hydrogen is to replace the current energy of gasoline.  The minor mileage difference in terms of conserving oil are that if all U.S. vehicles overnight were replaced with hybrid vehicles, it wouldn't save more than a single day of world oil production or approximately three to four days of U.S. use.  Thus, hydrogen’s use as an energy source falls short of the energy required in its production.  To evolve into the “hydrogen economy” would imply modifying significant infrastructure areas of the gasoline dependent economy.  While hydrogen can play a role in future energy needs, any use of hydrogen involves a multiple of the energy and expense of the gasoline it replaces.

Perhaps the use of hydrogen will find some use in a local “niche”, perhaps commercial vehicles, and its uncompetitive costs passed onto clients for providing a service.

Consumer reluctance to spend large sums to replace the gasoline-hybrid’s battery pack will limit use of a “hybrid” vehicle.

Mandating hybrid vehicles of any type for state departments would be at substantial taxpayer expense.  Rather than constructing a misfiring “hydrogen economy” it would be measurably more efficient to use the electricity to energize public transport such as downtown trolley-cars seen in San Francisco and Europe.

As a conservation program the development of hydrogen or hybrid automobiles is a continuation of the status quo and suffers the same deficiencies as other conservation programs.  The exorbitant price, pollution, impracticality for many purposes, and negative net energy required of the hybrid-electric vehicle makes worse the problems the vehicles are said to remedy.  The funding and energy resources consumed by developing hydrogen will reduce available overall energy and lower economic and social options.  The hybrid vehicle is a resource glutton that will literally make society poorer.58


Evaluating Windpower

The power of the wind is promoted as an alternative method of meeting electricity demands.  The implication is that it requires virtually no other energy source but free and non polluting “wind”, the ideal perpetual motion notion.

Windpower is a wonderful sounding idea that is fanciful thinking.  There are a number of drawbacks that persuade against its development: frequently it is windy when not needed, calm when electrical demands are greatest, and windpower can be only a local or regional and minor electrical contributor at best.  Because of inefficiencies relative to traditional baseline energies and high development and transmission costs, it is unrealistic to assume windpower can replace current energies or be used as a source of energy to process other alternative energies such as ethanol or hydrogen.  Perhaps its best positive feature is that windturbines can be constructed relatively quickly.  At worst, windpower is yet another energy sink requiring more energy to develop and maintain a site and to deliver its energy than the energy derived from it.  In conclusion, the capital invested in windcommerce would lead to a more sustainable future using modern efficient coal technologies.

In brief, windpower:

  1. Is not a “renewable” or sustainable source of alternative energy;
  2. Has either minor emissions benefit or claims are dubious;
  3. Has widespread serious land and environmental consequences;
  4. Is an energy sink using more energy than it generates; and
  5. Is prospering only because of extensive federal and state subsidies.

The windpower evaluation begins with an overview outlining the associated issues, and then further discusses each factor in subsequent pages.


Overview

A “farm” growing energy?  No!  “Farm” is the wholesome sounding name frequently given to windpower developments.  Yet, windfarm is a strange name —imagine square miles of 500 foot and larger towers with a grid of roads bulldozed into an otherwise pastoral landscape.  Because windpower is not a “farm” and its development dependent on an association of government and industry, this paper will use the term “windcommerce” to refer to the wind energy industry.59

Environmentally “green”, non-polluting with benign global warming effects are important environmental selling points for windcommerce.  This should be reconsidered.  Windcommerce may exacerbate the very energy problems it claims to resolve because the manufacturing, development, and operating processes all require standard baseline energies.  In many respects, windcommerce duplicates existing energies while reallocating funds from existing energy industries, generating facilities, and anti-pollution programs.60  Thus, windcommerce may have the unintended consequence of actually exacerbating energy and environmental concerns.  The (dubious) air pollution benefits come at a steep price —spoiling of numerous land based environments while at the same time reducing funds available for environmental and efficiency improvements in existing generators.

Responding to windcommerce’s frequently repeated pollution benefits, in the “Darmstadt Manifesto” German scientists concluded that windpower produced minor quantities of electricity while insignificantly reducing air pollution.  German scientists studied Germany’s more than 7,000 windturbines and concluded that “less than 1% of the electricity needed is produced” and that “the contribution made by the use of wind energy to the avoidance of greenhouse gases is somewhere between one and two thousandths.”61  In other words, Germany concluded that windpower is not the renewable energy answer to pollution or energy.

The rigorous German study appears to demonstrate that shrewd industry marketing preceded science.  Claiming environmental benefits while economically unwise and environmentally disruptive, the industry has employed a carefully crafted marketing plan.  The plan even extends to the level of the windturbine in the field where windturbines are painted white, symbolizing purity and cleanliness.  Yet, even the color can be a problem.  The white paint can be glaring and the blades at certain periods in the morning and evening are known to have annoying strobelight-like reflections as each blade reflects sunlight at certain angles.  The polished surfaces benefiting blade rotation conflict with the requirement of reducing reflecting surfaces from the use of textured and non-glare surfaces.

And, as one can imagine with giant fan blades, they do make noise.

Windcommerce “studies” are frequently overly selective in the issues studied and data can be difficult to obtain to evaluate its merits.  Invariably, sponsors will claim that the data is not public.  Thus, rigorous evaluation is not often possible resulting in windcommerce decisions made with incomplete information.

Strategically placed in the middle of the nation's prime wind generation area is the DOE's National Wind Technology Center.  This 290 acre site just north of Golden, Colorado, is the wind turbine design research and field testing center for the U.S.  It is the industry's primary source of testing and information.  Although this facility is another industry subsidy, a windpower research facility is welcome and necessary if alternative wind energy designs and systems are to be evaluated.  This research site has the potential to provide the industry and the public important design information from a near optimal wind location.  Unfortunately, the National Wind Center operates as an industry surrogate, available cost data from the center is sparse and operating costs from field trials is infrequently offered or not completely comparable.62

The “load-factor” (actual useable operating time) is the principal reason for windpower's high consumer costs, ineffectiveness, and extensive visual pollution.  The majority of time turbines stand statue-like, unproductive and idle, enormous capital investments earning a negative energy and monetary return.  The load factor is between one-fourth and one-third, suggesting that for every three or four expensive windturbines constructed, on average less than one produces consumer energy.

The net energy returned on energy invested in windpower is only positive under relatively high wind conditions conditions seldom found in the U.S., certainly not in Minnesota.  In a comprehensive analysis of the energy returned on energy invested and net economic benefits of windpower, Dr. Gene Tyner found that in a static (unchanging analysis) the net energy returned on windpower is 4.15.  He found that the substantial net energy losses in early years overwhelm the gains in later years.  The initial conclusion is that the energy returned justifies its widespread development.  However, the energy returned on traditional baseline energies is in the 20 range and total U.S. economy energy returned on energy invested is 9.8.  If windpower was a dominant energy generator, the economic implication would be a standard of living one-fourth the current standard.63   Dr. Tyner also performed a dynamic 100 year growth study assuming an economy generating 25% of its electricity from windpower.  Over the long time period net energy was determined to be -116%.  In other words, for every $1 in wind energy returned, the cost is $1.16.64  The benefits that appear to accrue in the intermediate term become liabilities the longer the time period and greater the development of windpower.

Very expensive energy storage facilities must be constructed for the smaller windmills favored by ranchers, farms, and individuals.  The reasons are identical to large commercial windturbines: limited output and unavailability during high demand periods.  The energy storage systems are racks of expensive batteries.  In addition, for large commercial sized windturbine generators a backup traditional fuel based generator is indispensable because storage facilities cannot be built to match electrical demands.  Most frequently natural gas is the backup fossil fuel for electrical generation.  In other words, windpower is another term for significantly increasing consumption of natural gas.

Siting of windturbines is another important consideration.  The location must lie in windprone areas without natural or manmade obstacles to impede the free flow of the wind.  Wind complexes also have the unavoidable dilemma of visually polluting entire regions.65  The irony for environmentalist and “smart growth” advocates is that while promoting windcommerce as a benefit to the environment, its enormous land requirement aggravates sprawl and development in rural environments, parks, natural and farm areas.  Moreover, by attracting employees from larger metropolitan areas, windpower reduces opportunities to advance “smart growth” concepts in larger cities.

There is also a potentially serious problem: the production of ozone destroying gases.  Inherent with electric motors and generators, windturbines produce emissions that destroy the protective ozone.  Produced by every lightning discharge, electricity passing through air within the generator produces these environmentally dangerous gasses.  A study quantifying the amount and effects of ozone destroying gases created by the “motors” in windturbines has not been done.  With the large and growing number of windturbines, further development could have serious ozone impacts.

These are the windcommerce issues discussed in this section.  It begins by discussing the potential for wind development in Minnesota and then describes growth in demand and lack of reliability of windpower systems.  The basic costs of windturbine systems are discussed followed by an evaluation of the economic impacts and job claims.  The substantial energy storage requirement of smaller non-commercial applications is discussed.   Several windcommerce issues are illustrated using the largest windcommerce development in Minnesota, southwest Minnesota’s Buffalo Ridge.  The environmental consequences of windcommerce include effects on flying species, noise and visual pollution.  This section concludes with a discussion of the subsidies now employed to encourage windcommerce development and its net energy implications.  Without substantial subsides the development of windcommerce would be problematic.


Wind Potential

Windcommerce is economically possible only under very limited wind conditions, thus statements suggesting the Midwest (and Minnesota in particular) has tremendous wind energy potential should be reconsidered.  The quantity of electricity produced can fluctuate from one locality to another in short time periods, and seasonally.  Because the quantity of energy produced varies with the wind speed, the speed and pattern of prevailing winds is significant.  The energy contained in wind increases at a multiple of the windspeed up to high wind conditions where it trails off.  Continuous wind speed in the low to mid teens is the minimum levels for efficient electricity generation with wind speeds into the twenties more productive.  Also due to the physics involved, windspeeds above the mid thirties result in the windturbines shutting down.  The “plate” rating (the rated output) is frequently based on windspeeds of approximately 30 mph ―twice the average windspeed at Minnesota’s premier wind prone area.  Thus, assuming the wind is blowing, the window of windspeeds for effective wind energy production is narrow.

Wind’s characteristic unreliability creates difficulties in managing the entire electric grid, requires constant monitoring and adjustment of the output of the big conventional generators.  The greater the percent of grid system windpower generation the greater the grid system is destabilized and larger the baseline generating system reserve capacity required.

In general, the western half of the nation has greater windpower potential than the eastern half.  Minnesota is on the national windpower line dividing acceptable and unproductive regions.66  The large area in the shadow of the Rocky Mountains (lee or eastern side) from Texas to Idaho has only moderate wind potential.  The eastern half of the nation and many regions of the southwest, including much of California and its large valleys, are not in general capable of economically supporting windcommerce.  Notwithstanding environmental considerations, it appears that the higher elevation areas from northern New Mexico to Oregon are best suited.  Although not included in the windpower potential study, it is likely that populated areas of Alaska and much of Hawaii may have areas suitable for windpower.  Nationally, Minnesota ranks 9th among the states with a mathematically estimated 657 billion kWh of windpower potential.  That Minnesota ranks this high suggests the mediocre windcommerce potential for the nation.67  If the “657 gWh” potential were true in practice rather than in theory, Minnesota ―or the U.S.― would never have an energy problem.  The 657 gWh calculation will be revisited later.  As Minnesota illustrates, for most regions of the nation, isolated areas and communities with unique local geographic features are the best that can be realized.

The geography and meteorology of Minnesota generally limits windcommerce potential to approximately one-fourth of the western and southwestern sections of the state.  There are approximately 79,600 square miles of land in Minnesota and almost all of it with only modest to fair or poor windpower potential.  Department of Energy (DOE) data demonstrate that approximately three-fourths of Minnesota does not qualify for effective windcommerce development.  Overall less than 20,000 square miles of Minnesota has even minimal potential for windcommerce development.

Based on average windspeeds using a “7” point scale (“7” is best) the area from Minneapolis northwest to the Roseau is rated “2” (“marginal”) meaning generally not suitable for windpower development.  The area roughly from Mankato northwest to Kittson County has a “4”rating or “good”.  The balance of the state is rated “3” (“fair”).  There are no large Minnesota regions rated “excellent, outstanding, or superb”.68  From north to south, the potential region covers a line just east of the Red River, south to Crookston, Fergus Falls, Morris, Montevideo, and finally to Jackson County.  The single best moderately wind prone area lies in southwestern Minnesota, the well known and windcommerce developed Buffalo Ridge/Lake Benton region.  There are also isolated but minor locations in several other areas, near Duluth in the northcentral or in Winona County in the southeast, for example.

Making windcommerce less attractive is that the windprone area(s) are far from population centers.  In other words, claiming that Minnesota has excellent windpower potential largely overstates the case.  DOE data implies that only isolated local areas such as Buffalo Ridge in southwestern Minnesota may at some minimal output level support windcommerce development.  Minnesota studies confirm the DOE data.  DOE data indicate that North and South Dakota have greater windpower potential than Minnesota.69


Transmission Costs

The cost of transferring wind generated electricity over any but short distances becomes an energy and money losing development.  The wind potential of an area is a secondary consideration with proximity to electricity users a primary consideration.  Windcommerce must be located adjacent to important transmission lines and the transmission lines must be subsidized in order to be viable.  Even if area testing suggests reasonable wind potential, because the distance to population centers is great, many areas will not be suitable for economical windpower development.

This is especially true because wind generators produce DC current, requiring somewhat different lines to distribute and expensive conversion to AC current.  The DC current generated by windturbines requires either converters on site or closely spaced substations to maintain the current.  The energy used for the conversion process is either derived from the windturbine reducing its output, or normal AC baseline generating facilities.  High voltage DC transmission lines (HVDC) solve the line-loss problem, but are only economic if transmission distances exceed 350 miles.  Constructing a generating plant in northern Minnesota with the goal of transferring its energy to southern Minnesota or in southern Minnesota for transmission to Chicago, Illinois would raise a number of unacceptable peripheral issues.

Due to the energy costs of conversion and line losses, transmission of electrical energy beyond 100 miles becomes a less efficient and more wasteful use of energy.  The costs of distribution and transmission bring the issue of subsidies to the forefront.  The windpower utility’s use of existing transmission and distribution facilities without additional compensation to non-windpower users is a significant windpower subsidy.  For windcommerce owners to construct nearly a duplicate transmission or distribution system would be prohibitively expensive and a misuse of resources.

Because windcommerce is local, the allocation of transmission cost is an important consideration.  The appropriate energy policy would be for the windcommerce site (or other alternative electrical energies) to in effect “rent” the transmission and distribution lines constructed for conventional baseline energy consumers.  The “rent” would be used to offset transmission costs borne by consumers other than from the wind generating site.


The Load Factor, Growing Demand, Capital Investments, & Air Pollution

Wind availability combined with the windturbine load factor has another equally irksome aspect.  It is assumed that daily and seasonal consumer electricity demand matches wind availability.  However, electricity demand rapidly increases every morning as people wake up and prepare for work.  Even if windpower could meet the total kWh use for the day, it frequently will not meet rapid daily increases or seasonal peaking demands.  This point was punctuated during the summer of 2001.  In the hottest day of the summer with a record 8,300 megawatts of electricity demanded, Minnesota's best —the entire imposing Lake Benton windpower complex— could only muster three megawatts!  Perhaps no other fact remotely suggests the need and staggering costs for an entire duplicate energy system if alternative energies are developed.70

Unfortunately, the prevailing Minnesota and national wind pattern is almost the mirror of consumer demands.  The prevailing Minnesota (and Midwest) winds are strongest in winter followed by spring, moderate in the fall, and weakest in the summer.  Moreover, the highest windspeeds are a consequence of storms; however storm winds can exceed the design capabilities and result in the shutdown of the turbines.71

Moreover, the trend toward constructing higher and bigger windturbines increases the number of periods when wind speeds exceed the production design of the turbine.  Favored wind sites are in the wind alleys most susceptible to high winds that shut down the turbine.  The larger windturbines appear to trade-off higher potential short term capacity for increasing unreliability.  DOE reports there is “already some evidence that conditions related to the nighttime low-level jet-stream may be causing some turbines to shut down because of fault conditions in the early evening hours and then remain off for the balance of the night.  Shutting down and remaining shut down applies to gusting wind conditions.  The dilemma is that once safeguards shut the turbine down, it can remain non-producing for extended time periods and frequently requires manually resetting.”72  Today's larger and taller windturbines are 400’ to 800’ or higher.  The greater the MW design output, the larger the fan and higher the windturbine required.  For example, the proposed 400' blades will reach nearly 1,000 feet and the 5-MW, 500 foot blades, almost one-quarter mile.  The frequency of unintended shutdowns will increase as a result of the height.  The visual pollution will be staggering.

Windcommerce proponents assume windpower can meet increasing electricity demand from growing populations and the retirement of some of the existing fossil and nuclear fuel generating plants.  The American Wind Energy Association estimates that approximately 300 MW of additional windpower will be located in Minnesota, Iowa and Wisconsin with more planned for North and South Dakota.  Although it seems unlikely, these Midwest states will account for almost half of all U.S. new wind developments.

The unreliability and lackluster economics of windcommerce suggests otherwise.  Those interested in understanding windpower may locate material in their search, material that mischaracterizes Minnesota's wind possibilities.  In light of the wind potential described earlier, the accuracy of the statement that Minnesota has 657 gWh of wind potential should be questioned.

For example, one widely circulated report —which will remain anonymous to protect those who should know better― stated that 2.5 acres of land selling for $100 in Wyoming “could yield $25,000 worth of electricity” every year.  These three figures are probably accurate.  However, no cost data was given.  The implication is that for every $100 invested a windturbine owner could receive $25,000 every year.

In reality, the annual cost of generation and transmission very likely would exceed the revenues.  The $100 would be the market rate an investor is willing to invest now for the $25,000 income stream, discounted at an appropriate rate, e.g., 10%.  If the stated income stream accurately portrayed windpower then an investor would be willing to pay more than $235,000 for the land in order to earn a 10% return on the investment.  (Note that in the “report” mentioned above, the capital, operating and transmission costs were overlooked.) The land is inexpensive because it is unproductive for most economic purposes, little in demand, and in a sparsely populated area.

A further examination of the economic possibilities of windcommerce to meet the rising Minnesota electricity demand is in order.  The windpower load factor (actual productive operating time) assumed by Xcel Energy is 34% ―while national studies show a 22.8% load factor.  The significant difference is probably explained by noting that the Xcel experience is based on the state's premier wind development region.  Perhaps some of the difference also lies in the definition of load.  For example, turbine blades may revolve 60% to 70% of the time but because the windspeed is insufficient to generate useable quantities of electricity, it cannot be said to drive load, produce electricity for the consumer.
 

To demonstrate windcommerce, loading and the arithmetic of Minnesota electricity growth, the following assumptions will be used:

·         Load factor of 30% (0.3);

·         12,700 kWh average use (actual year 2000, see Table 22, p274, footnote #1);

·         85,000 annual Minnesota population increase; and

·         Each additional windturbine produces 2 MW of electricity.


Therefore the annual electricity requirement is:

1.  85,000 x 12,700 kWh = 1,080,000,000 kWh (or 1,080 MW);

And windcommerce will produce (“Y” -MW):

2.  0.3 x 8,760 hrs x Y = 1,080,000,000 kWh (24 hours x 365 days = 8,760);

3.  then, Y = 1,080,000,000 kWh ÷ (0.3 x 8,760 = 2,628) = 410,960 kWh;

4.  or Y = 411 MW.


Using the design capacity of windmills yields approximately one-third of annual Minnesota kWh growth.  If meeting one-third of Minnesota’s energy growth is the objective, then assuming 2 MW windturbines are constructed, the annual construction of 411 ÷ 2 MW = 205 windturbines are required.  Because of growth, the construction of three additional turbines the following year (208 total), six additional turbines the next (214 total), and so on would be necessary.  Obviously, the required sprawling acreage use of 30 to 50 acres per windturbine has dramatic siting, extensive transmission lines, and land consequences an issue worthy of public discussion.

Perhaps another illustration would help clarify the ability of windcommerce to satisfy growing Minnesota energy demand.  Assume 100% of the annual energy demand increases were met by windcommerce.  In that instance, the one-year construction requirement would be 1,080 MW times 3 ÷ 2 MW turbines = 1,620.  This proposal would result in the construction of 1,620 windturbines this year, 1,635 the next, and 1,650 the following year due to growth. (x 3 = 3,240; 3,240 ÷ 2 MW = 1,620.) 1,635 MW is the equivalent of 1½ Prairie Island nuclear power plants.

A reasonable estimate of the cost of each 2 MW windturbine is $2.2 million.  American Electric Power, for example, purchased on December 31, 2001 the 160 MW Indian Mesa Wind Power Project from Enron Wind Company paying $1.094 million per megawatt.  Applying this cost to the quantity to be built indicates that the total construction cost for these windturbines would be $3.56 billion in the first year (1,620 x $2.2 million), $3.6 billion the next and $3.63 billion the following year, assuming no inflation in construction costs.  The annual increments of additional construction will continue until either increases in total energy use (not per capita use) or population growth stops.

Perhaps the $3.56 billion in annual windturbine construction costs (at a minimum) and 81,000 acres of land required are manageable by Minnesotans?  It should be obvious from this illustration the impossibility of windcommerce to match any but a minor fraction of Minnesota's (or the nation's) electricity demand growth.

Moreover, these cost estimates are only a fraction of the actual capital requirements.  The reason for this is that the generating life of windturbines is approximately one-half to one-third the useful life of existing conventional generating facilities.  The design life of windturbines is about 20 years, while that of nuclear plants 30 to 40 years and for coal plants up to 60 years.  The core generating facilities of the windcommerce system require reconstruction every approximately 20 years.  On average, in addition to the annual construction increment, 5% of the total of all operating windturbines must be replaced annually.  In the 100% windcommerce scenario, it implies spending more than $177 million constructing over 80 additional windturbines annually.  The larger the MW capacity constructed and replaced each year, the greater the compounding financial costs involved and environmental damage.

In an exhaustive United Kingdom study, Great Britain's Royal Academy of Engineering on August 30, 2002 released its analysis of windpower.  Drawing parallels with the Minnesota legislation, the study evaluated the government proposal to require 22,000 MW of windturbine generated electricity by the year 2020.  In appraising windpower, the Royal Academy stated that, “the Government’s energy policy is hopelessly unrealistic”.  The researchers found wind energy unreliable, producing less than a third of the installed capacity and would be an impractical intermittent generator —“not dependable” in their words.  If the proposed 22,000 MW of capacity were fully developed, the research concluded that it could produce not more than 600 MW under many UK wind conditions.  If the proposal were reduced to 7,300 MW, the figure would be 200 MW.  In the language of the report, correlating a hypothetical wind power capacity of 7,300 MW installed throughout the country with actual Met Office wind data” concludes that the “most likely power output nationally is seen to be less than 200 MW.”

Shadowing the Minnesota outcome, the conclusion was that because 75 – 85% of installed capacity is not useable, the 22,000 MW proposal would require the construction of another 16,000 to 19,000 MW of conventionally fueled generating plants.  The study also cautioned that windpower's intermittent quality requires that the standby generators be on-line at all times.  The identical situation applies to Minnesota: the idling plants would generate minor quantities of electricity while generating greenhouse emissions.73

The implication of the load factor is that for every three or four expensive Minnesota windturbines constructed, only the equivalent of one windturbine produces consumer energy.  In brief, under the best circumstances, 100 kWh of electricity requires 300 kWh of other baseline energies to be produced.  A “windpower society” would be an energy intermittent society requiring conventional baseline energies in order to function.

The implication of the weak load factor is that capital costs are sunk costs and non-productive the majority of the time.  In terms of an energy system it is a fixed and disturbing cost.  Worse, storage expense will likely apply to virtually any alternative energy system.  Note that this cost does not include the capital costs of land, the windturbine, administration, maintenance, or additional cost of converting DC current to AC line voltage, all of which are expensed whether the electricity is from storage or the windturbine.

Efficient allocation of energy funding is of critical importance.  Energy demands are very large and the risks of energy unreliability can be a consequence of ill conceived policies.  According to DOE, energy has “historically received about 15% of total global investments and comprised about 5% of the world GDP.”  The World Energy Council and World Bank project capital investment of approximately US$ 30 trillion (in 1992 prices) between 1990 and 2020.  Alarmingly, the World Bank states that the capital needs are equal to 50% more than the world’s entire GDP in 1989.  Obviously, competition for capital ―domestic and international― will be vigorous.  The World Bank acknowledges that only 20% of the total will be available from the Bank and similar organizations with the balance from domestic funds and private capital.  In no small measure, the implication is for much higher energy prices in order to provide the funding capital.  Likely, the best financing terms will be available to the best client states.  Distortions in the energy markets will occur if allocation of capital is not based on science and the market for energy.74

The bottom line is that for wind development to be a primary electrical energy source, it will require more than three times the plate rating capacity of generators, storage, and cover widely spaced regions in order to reliably match demands.  Because conventional baseline generators are required to be on constant standby and the capital cost of windcommerce is more than 20% greater than baseline coal plants, it is clear the investment in windpower is misdirected.


Greenhouse Emissions

It should also be clear that the “benign environmental” claim understates windpower's environmental impacts.  Because of its unreliability and modest production, baseline energies must simultaneously be online, prepared to generate additional electricity.  Because windturbines generate on an intermittent basis, an entire backup or reserve system must be in place and operating at all times.

The dependency on traditional baseline energies implies that windpower indirectly produces then embeds emissions involved in global warming.  The energy inefficiencies, transmission losses, and environmental and economic costs of the primary generators must be included in assessing the economics and environmental impacts of windcommerce.  Generators will be using resources and producing polluting emissions, even if not actually generating consumer electricity.  Moreover, because the online generators will be the most efficient ―certainly hydro, nuclear, and the most modern coal plants― the use of resources and production of emissions are clearly overstated by the proponents of windcommerce.  The older, even “grandfathered” coal generating plants are included when comparing the reduction in emissions while those are the plants least likely to be online.  In addition, costs include the typical baseline energy costs for construction, steels, plastics, lines, cement, vehicles used, transport and equipment energy of labor, and ozone produced by the turbine “motor”.

In other words, the energy produced by windpower is unnecessary while contributing the equivalent of much of an entire electrical energy system to global emissions.  This serious price of windpower is seldom considered.  Conventional baseline electricity generators would produce reliable and larger quantities of energy at lower environmental and resource costs.


Removal

Finally, the capital requirements fail to consider another substantial cost of constructing a windturbine project: cost of removal and demolition.  Removal of the tower and associated infrastructure are self-evident; however the tower is held in place by a concrete slab the size of a small house ―environmentally sensitive disposal of the slab must be accomplished.  Incorporating the high costs of removing these items is an appropriate cost of a wind project.  Perhaps a “cost of removal” sinking fund should be established for each windturbine.  To assure the necessary funds and to avoid conflicts of interest, the fund should be fully funded within 10 years; the management of the fund should be independent of the owner, and not under direct state control.  An alternative would be to require owners to provide private non-government insurance policies underwriting removal, liability, and potential “business interruption” due to failure or accident.

In summary, with less than one-third the capital investment, modern clean coal generators will annually produce more electricity reliability over a much longer period of time and at considerably less expense and environmental impact.  In consumer terms, windturbine development suggests unnecessarily higher energy cost and up to three times the capital outlays of typical baseline generating facilities borne by ratepayers.
 

Access Roads, Crops & Demonstration Projects

In Minnesota and in other states demonstration windprojects have been constructed with the purpose of boosting acceptance and selling associated infrastructure products.  This paper will examine a hypothetical Minnesota demonstration project as a means of outlining a number of the economic and environmental issues overlooked in industry promotions.  Promotions include guided tours targeting business groups, government officials, and students and their teachers, for example.  The primary target groups are, however, those interested in promoting, purchasing, and developing windcommerce sites, legislators, farmers, and investors.

Contrary to the acronym “windfarm” chosen by windcommerce advocates, these are serious entrepreneur businessmen who have discovered a government and industry sponsored energy niche taking advantage of numerous subsidies.  The purpose of state and federal programs is to increase investor or owner income and eliminate or redirect the risks of doing the business of windpower.  For example, demonstration projects subtly assume the sale of the land will be used to deconstruct the entire project and return the land to its original standing.  This is an unlikely assumption.  The larger assumption is that the property is purchased rather than rented.  The reasons are clear: owners reap generous subsidies ― price appreciation, property and sales tax, depreciation write-off’s, production credits, and so forth.  With windcommerce one can buy a guaranteed generally appreciating land asset and virtually have government guaranteed income.

This introduction will briefly outline two costs generally neglected: crops forgone and land ―in dollars and area.  The demonstration site is assumed to have 17 windturbines on a half-section (320 acres), and advertised as using 6 acres for the individual turbine sites and access roads.  The cost of the half-section will not be considered here.

The dollar costs of windpower include the loss in revenues from the crops grown on the landsite.  Assuming the farmland will produce corn at 175 bushels per acre with a bushel priced at $2.50, the annual loss in crop revenues is 6 x 175 x $2.50 or $2,625.  In brief, using only the quantity of land used in the advertisements results in windpower costing the farmer approximately $2,600 every year.

The land used in siting and for access roads should also be considered a cost factor.  In windprone farm areas in Minnesota, agricultural land is expensive.  A conservative assumption is to price each acre at $1,500, thus the 6 acres cost $9,000.

It is reasonable to ask if the 6 acres properly represent the land required.  The answer is a resounding “no”.  The entire 17-windturbine demonstration project covers 320 acres, indicating that the project requires roughly 20 acres per windturbine.

Minnesota's farmland (and virtually nationwide) is platted into mile square sections (640 acres) with county roads sometimes along one side.  A farmer may also have a tractor access “road” (more like a pathway) to his fields.  Consider a windproject as a checkerboard grid of roads and access drives, “driveways” to each windturbine ―as the grid lines.  Assume a county road already lies along two sides, no road is needed at either end, and that access roads are 30' and driveways 20' wide.  Separating the windproject’s half-section (320 acres) into a grid indicates that three additional roads will divide the grid into four equal parts.  In adding three additional roads the windturbines are now accessible from the five roads (2 sides + 3 inside the section, new).  Each road can access 1/4th mile divided by two or 700'.  This grid work of access roads appears to reflect actual practice and adequately separates each windturbine.


Now the land requirements for roadways become:

1.  30' x 2,640' x 3 ÷ 43,560' = ~5 1/2 acres.

2.  20' x 300' x 17 ÷ 43,560' = ~2 1/2 acres.


Or approximately 8 acres in access roads.  The revised figures for this modest demonstration system are another $12,000 in land and $3,500 in annual lost corn revenue.

The “bedrock” of the actual site must also be included.  Each windturbine site rests on about the same land area as a suburban residential house lot, roughly one-half an acre.

3.  17 x 1/2 acre = 8½ acres.


8½ x $1,500 = $12,750 in additional land cost.

8½ x 175 x $2.50 = $3,718 in lost annual corn income.


The total of these generally undisclosed costs are $12,000 (road land) + $3,500 (road crops) + $12,750 (turbine land) + $3,718 (turbine crops).  This amounts to almost $32,000 in the first year and approximately $8,200 in lost crop revenues every subsequent year.  In terms of electricity generation and not considering any other factor, in the first year these costs theoretically are recouped by generating and selling 1.07 MW at 3¢ per kWh (the legislative buy-back price).

In summary, it is reasonable to estimate the total grid of roads and siting as at least 5% and likely 7% of the total land area covered by the development.  The bottom line of windcommerce is the loss of vast acreages of natural areas and farmland.

Because substantial employment gains are said to accompany windcommerce development, these claims will now be evaluated.  The mind-boggling land requirements and impacts are introduced in the section discussing the Buffalo Ridge ― Lake Benton project and at greater length under the heading “visual and land pollution”.


Jobs & the Local Economy

In addition to “benign” environmental impacts the primary advertised claim for windcommerce is the economic benefit to the local communities.  In report after report, Minnesota and other states claim that the large investments and operating cost of windcommerce are actually job creating.  Proponents evidently believe that increases in consumer expenses are positive for the economy.  There is more to the apparent economic benefit argument than generally heard.  Studies demonstrate that the job rationale is false: windcommerce is very likely a net energy sink ―and economics follow energy patterns.75  It is state and federal windpower generosity that provides a substantial windfall to local communities and individual farmers.

A Minnesota report states that “from a job standpoint residents of the Plains which have suffered boom-and-bust employment in oil and coal should find particularly appealing the fact that wind development creates about fifteen jobs for every million dollars of investment.” The reference will remain “anonymous” in order to protect the reputations of the writers of a state report!  Most folks in the Midwest would be surprised to learn that they had suffered from problems in the oil patch or with coal fields.  The Midwest states have no commercial oil and only the Dakotas have coal reserves and are doing quite nicely with sales!  Using Texas and Oklahoma to market windcommerce in Minnesota and adjacent states appears highly questionable.

The reasonableness of the state windcommerce “job creation” numbers will be evaluated using the Buffalo Ridge, Minnesota project.

Assume:

1.      $50 million investment and 15 jobs per $1 million, then x $50 million = 750 jobs;


Add annual wages and benefits.

Assume: $50,000 non-professional, $75,000 professional; and that 80% are non-professional, thus,
 

2.   600 x $50,000 = $30,000,000 (80% x 750 = 600); and

3.       150 x $75,000 = $11,250,000 (20% x 750).


If windcommerce job creation were of the magnitude as promoted the result would be the sum of non-professional and professional employment or in this illustration, a total of approximately $41,250,000 in annual labor costs for every $50 million invested.

Investment in the Buffalo Ridge region is approaching $1 billion.  For every $1 billion invested, as indicated under the construction scenarios mentioned above, 33,000 additional employees —6,600 professional and 26,400 non-professional would be required.  Because $3.56 billion is the annual construction obligation under the full windcommerce build option these employment numbers would be tripled.  If this were the state’s windcommerce objective, the annual growth in the labor force at the Buffalo Ridge region would approximate 33,000 and for the full build scenario, 115,000 additional employees —120% of the total annual Minnesota population increase!  If this optimistic job creation scenario were accurate then a city of workers larger than Duluth would be required every year.

The Enron Wind Company suggests a less optimistic scenario.  The company found that the Lake Benton I (Buffalo Ridge), 107 MW project required about 150 temporary construction workers and the Lake Benton II, 104 MW project only 90.  The total ongoing positions for these two very large windcommerce projects only number about 20 workers.  Using the average 80 : 20 ratio from the preceding results in an average wage and benefit of $55,000, thus the first two buffalo Ridge projects produce approximately $1.1 million in additional annual labor expenses.  It is evident the actual experience is a small fraction of the employment promises.76

The following table, as adjusted, was prepared by a Minnesota Senate research analyst for a Minnesota Senate Energy Committee held February 26, 2003.  The purpose of the table was to suggest the relative job creation “benefits” of various energy sources.  Not surprisingly, perhaps, in a state vigorously promoting alternative energy ―notably windpower― the number of jobs arising from wind projects was listed as approximately four times that of traditional energies.77   The alternative energy, solar thermal, is seen as producing twice the jobs of baseline energy and windpower double that figure.
 

Table 13:  Direct Employment in Electricity Generation, Various Technologies, United States

 

Technology

Jobs (per 1,000 gWh/year)1

Increasing costs2

Nuclear

100

Geothermal

112

Coal

116

Solar Thermal

248

Wind

542

1. Flavin & Lensen, 1990.
            2. Column not in original table.


The table was offered in direct response to testimony from Xcel Energy in windpower hearing held the previous week.  In that testimony Xcel compared nuclear power very favorably against windpower.  The reason is that the state required Xcel to provide a growing percentage of electricity from windpower.  In essence, the Xcel Study suggested that windpower was uneconomic and its energy return was less favorable than other energy sources.

Businessmen know that labor is a significant cost factor in production.  Only in government would high labor costs be considered a benefit.  The low efficiencies of windpower are the underlying reason for the substantial labor needs and a reason for its marginal economics.  The relatively large number of jobs is a direct consequence of the low energy returns mentioned earlier which were clearly reflected in the Xcel Study.

In energy terms, employment growth and a thriving economy inversely follow the kWh cost of energy.  The lower the cost of energy, the greater the economic benefit.

The impacts on local labor markets and wage scales are also an important consideration.  Labor markets in most rural areas are tight with limited opportunity for rapid skill changes and upward mobility.  Because of local labor frictions and shortages, major technological developments such as windcommerce launched in rural areas will require hiring employees already employed by rural companies, small local stores and shops, and small and mid-sized manufacturers.  Because of state subsidies and mandates windcommerce has wage and employee benefits superior to local business.  Thus, it tends to siphon the limited workers from other businesses in the community.  The result is that the mainstream local community suffers a labor shortage and potential inflationary wage spiral at the less experienced and skilled levels of the community.

In order to replace these low-wage local workers the community will attempt to attract workers from distant rural and larger cities.  The area may also become a magnet for illegal aliens and to some in the business community, a reason for increasing legal immigration.  Because population growth is the fundamental energy problem, to increase immigration is counterproductive to a sound energy policy and to containing sprawl.  Immigration’s sole function would be to misallocate already increasingly scarce economic and natural resources and reduce long-run economic activity.  Of course sprawl would be pandemic under any windpower development scenario.

If the development were sponsored by a utility or a non-utility contractor (as is frequently the case), the contractor’s non-local and out-of-state employees will primarily be responsible for construction and administration.  Capital investment benefits and construction wages in great part flow away from Minnesota to the home states or nation.  Contractor firms will draw what labor may be available from the local non-skilled labor pool for temporary and unskilled ongoing maintenance needs.  The administrative and skilled positions are unlikely to involve significant numbers of local employees.  This has been the experience at Lake Benton, Minnesota.

In addition to the higher generating costs of windpower are the administrative costs and investment return of an additional layer of utility company.  The added windpower layer should increase local consumer costs.  Reallocation implies that costs to local communities and users are shifted to distant communities and users.  Reallocation implies that purchases of products and services by local utilities to local companies in some measure will decline and thus reduce local sales and employment opportunities.

In many respects windcommerce is a reallocation of many existing economic niches, taking jobs from other local area wide firms is an example.  Thus, a reallocation of economic activity may give the appearance of an increase in economic activity because locally new economic sectors (rural farm communities) may be stimulated.  But there is little overall regional economic change —the former economic sectors are similarly diminished.  What local benefits are possible are due to subsidies borne by non-local taxpayers and electricity users and associated job-holders.

Other than the additional expenses unique to windpower this last point is not significantly different from the normal production expenses paid by Xcel.  Indeed, because employment and economic activity follows efficient low cost energy patterns, windpower’s high cost excess energy requirements diminish overall state employment.  The revenue paid to the windturbine company will reduce overall local economic activity if the local cost of windpower exceeds the previous baseline kWh cost; the probability is that the net economic impact of windcommerce is a reduction in state economic activity.  Requiring Xcel Energy to purchase the output gives the appearance of money flowing within Minnesota, yet Xcel is only a conduit passing on to the out-of-state owners all ratepayer paid costs of windpower, including an investment return.  Xcel, in addition, adds another layer of administrative fees and additional investment return.78
 

Buffalo Ridge – Lake Benton Development

On a rise in the center of the most wind prone area in Minnesota, southwestern Minnesota's Buffalo Ridge is the posterchild for windcommerce in Minnesota.

With an average wind speed of almost 15 miles an hour the area was an obvious first (and only) choice for large-scale windcommerce development.  Discussed previously under wind potential, the area is the only significant Minnesota area capable of supporting windcommerce ―at some minimal level.  Although at the minimum for windcommerce, the relatively high average wind speed in the region can effectively produce electricity.  The site's direct energy output is only slightly more expensive than traditional gas fired generators.  Xcel Energy buys the electricity under contract at the price of 3¢ to 4¢ a kilowatt-hour ($30 – $40 per MW) then sells it back at 8¢ per kilowatt-hour.  Subtly encouraging construction of natural gas fired generators, the mandated price paid (i.e., energy cost) approximates the cost of power generated by gas-fired turbines, the current source of choice for utilities seeking new capacity.

Although the purchase price set by Minnesota rules appears in the reasonable range, it is generous, a large but subtle subsidy.  The correct price would be the established price for any short term purchased power.  This is the cheapest price a utility pays for additional electricity.  If the wind-generated electricity is transferred to the Twin Cities area, unsuspecting consumers in the Twin Cities would be compelled to pay significantly higher prices than energy obtained from their normal sources.  In addition to other price factors, the higher price is the combination of the state’s mandated 3¢ to 4¢ per kWh purchased cost of power and the 5% – 10% increase due to cost of transmission.

It may also be considered a subsidy for more expensive gas fired generating plants.  The Montana Public Utilities Commission explicitly recognized the correct price schedule in a recent order.  In a $65 million windcommerce project working through a local subsidiary, Navitas Energy (of Minneapolis) proposed three rates, $32.75, $31.65, and $28 per MW.  The Minnesota rate is in the middle of the proposed Montana rates.  The Montana utility commission recognizing the proposed rate would be a substantial subsidy, said that the appropriate rate is the short term purchased power rate and granted the rate of $10 per MW (1¢ per kWh).79

According to Xcel Energy there are currently about 450 windturbines in the Buffalo Ridge area with design capacity of approximately 300 MW (average windturbine size about 0.75 MW).  The company plans to more than double the current output within 10 years.  Again, important cost data were not provided.80

The Lake Benton I Project (Buffalo Ridge) was a substantial windpower development.  In 1998 the 107 MW, 143 -250’ high windmill project (average size about 0.75 MW) comprised about 73% of the additional 147 MW of wind energy added in the entire U.S. at the time.81

Mentioned previously, the Buffalo Ridge project was the outcome of 1994 legislation.  At the time a quid pro quo traded off unpopular nuclear power for windmills.  One element of the arrangement was to add 425 MW of additional windpower by 2002.  In exchange the legislation permitted Xcel (Northern States Power, NSP) to store nuclear wastes at its Prairie Island nuclear plant.  The reason was that the existing storage permit was approaching its maximum and would have forced the shutdown of the nuclear plant.  In some respects the situation is amusing in its irony.  Because of windpower’s minor energy production, traditional baseline generators are required to construct and maintain windpower.  Therefore, one could conclude the Minnesota Legislature agreed to use nuclear power to produce the energy to make windpower, after which the intention is for windpower to replace the nuclear power.  The last laugh will be at Prairie Island when the public fully appreciates the lack of reliable but expensive windpower energy that cannot match Prairie Island’s dependable low cost generation.  Simultaneously, Prairie Island was able to provide electricity to consumers and construct the windcomplex.  The windcomplex cannot provide the electricity to even replace itself.

The agreement required Xcel (NSP) to purchase electricity from the project and prevented the company from temporarily developing its own windcommerce sites.  A subsidiary of the now defunct Enron was the legislated development choice.  As will become evident in the discussion of subsidies, there are compelling reasons a seller would want to sell and a second buyer to purchase after a reasonably brief period approximately five years.

The trade of Buffalo Ridge for Prairie Island put the state, Xcel, and environmentalists in a uniquely conflicted position.  Douglas Jehl of the San Antonio Express-News said of the deal “that arrangement was part of a bargain that has allowed the utility's nuclear power plant to stay in operation.”  While remaining a substantial player in windcommerce developments, Xcel's (NSP) only downside was the temporary prohibition of constructing its own developments.  The Xcel ratepayer appear to be least involved —now paying higher rates and subsidizing developments that may not benefit but the few.  The nuclear facility was to remain in operation, storage canisters of stored nuclear wastes funded by ratepayers, and the additional costs of windpower and income to the company and developers flowing in utility bill paid by unsuspecting ratepayers.  The Prairie Island nuclear waste storage issue will be revisited in 2007 when the permits require renewing.82

Promoting the Buffalo Ridge projects, on the final day of 2001 Xcel announced the planned construction of additional transmission lines for windcommerce developments.  The reason given was to provide additional lines to take advantage of the increases in windpower generated energy.  The company said existing lines have reached their transmission capacity limits.  In some respects then, the development appears to be a prudent enlargement of the Midwest electrical grid.

The line will connect Sherburne County (Monticello) on the north side of Minneapolis (161-kV), Lakefield (near Fairmont —south of Minneapolis), Nobles and Murray counties in the far southwest near Pipestone (and Buffalo Ridge), Minnesota (345kV lines), with Sioux Falls, South Dakota.  It will likely connect the wind developments in Storm Lake Iowa as well.  The new transmission lines, it was stated would also transmit electricity from a new biomass power plant under development in Benson, Minnesota, site of the Buffalo Ridge.  No cost data were provided.

Because there is insufficient demand in southern Minnesota, northern Iowa, and eastern South Dakota to utilize all of the available and planned windpower increases, the issue becomes one of determining which direction energy will flow.  Apparently the intention is to isolate a regional electrical power grid such that the local community will be served by wind generated electricity during windy periods and remain connected to the greater grid as a backup and the primary energy source.  Temporary surplus energy produced during windy periods will be wheeled (transported via transmission lines) out of the local region.  The wheeled energy is thought would produce additional local revenues.  Perhaps the intention is for customers as distant as Minneapolis and St. Paul to use electricity generated from windmills or biomass as distant as southwestern Minnesota, northwestern Iowa, and southeastern South Dakota.

It may be designed with good intentions for the local Buffalo Ridge communities, however windpower generated electricity is relatively expensive to produce and very expensive to transport.  While the entire U.S. electricity grid uses AC current, windpower produces DC current which cannot be economically transported by conventional methods.  An extremely energy consuming process, DC current must either be constantly boosted in transmission or be converted into AC current before transporting.  The difference in energy loss in transmission between AC and DC is not the issue.  In order for windpower to transport its electricity it must utilize transmission facilities used and produced by traditional baseline energies ―a substantial and little realized subsidy.  The true cost of windcommerce would require constructing a duplicate transmission system that would be fully utilized between 1/4th and 1/3rd of the time.  Some propose the use of supercooled lines to reduce line losses.  The use of supercooled transmissions cables can reduce line losses to negligible amounts.  However, the proposal comes with a high dollar price of grid re-construction and the promise that any break in the line will result in the meltdown of the entire system.  The re-construction of the transmission system also requires generous quantities of energy generated by baseline energies.  The Xcel transmission program would entail an enormous local subsidy for windpower paid by distant ratepayers with very minor cost savings from existing facilities in line loss reductions.

Finally, because total utility costs are averaged into ratepayers’ bills, ratepayers in non-windcommerce user areas such as the Twin-Cities are compelled by legislation to provide funding for the expensive construction and delivery cost of windpower generated electricity for customers miles distant.  Conversely, those same distant windturbine based ratepayers will pay lower rates than justified by their energy use and sources.  The subsidies are considerable and evident but seldom understood by ratepayers.83

Given a choice, it is unreasonable to assume Twin Cities area residents will choose to purchase very expensive electricity produced almost 200 miles way.  When the Twin Cities is surrounded by large relatively inexpensive baseline generating facilities and with ready access to inexpensive hydropower generated electricity from Canada, common sense suggests there maybe another reason.


Energy Storage

Because windturbines operate effectively between 22% and 33% of the time, either other sources of energy must be convenient or a means of storing wind-generated electricity must be available.  The question of matching demand becomes apparent given the research regarding wind availability mentioned previously.  Windpower is generally not directly available during periods of high electrical demand on a daily or in most of the country, seasonal basis.  Those sweltering days of summer and glacial days of winter characteristic of Minnesota and the Midwest are seasons of greatest energy demands, yet the generally weak periods for wind.

A genuine windpower conundrum: large windcommerce installations require existing baseline electric generating facilities to initially develop the windturbine materials, the installed site, and serve as a primary energy source when windspeeds are inadequate —the majority of time.

If windpower is to be a primary energy source, the implication is to recklessly overbuild the entire wind producing and transmission complex and transport the excess electricity over great distances from high current wind areas to areas with low current wind conditions.  This is unreasonable; it would soon bankrupt society.  Because the majority of time on a daily or seasonal basis windpower is not adequately productive, an economical means of energy storage is required.  To overcome this dilemma, many of the larger-scale windcommerce installations being developed today are designed to use natural gas fired boilers in tandem with windpower.

In other words, windcommerce is another means to significantly increase the consumption and rapid depletion of natural gas.

Further discussion of the second option —the use of batteries to store energy for smaller windmill applications― is warranted.  Batteries or other storage media add another level of complexity and expense to the commercialization of wind.  The storage costs for small producers suggest the relative degree of similar costs for large commercial producers.  Batteries require energy to manufacture, space to store, significant quantities of energy to maintain efficient operating warmth in winter, sophisticated and costly electronics, expensive recharging, and can impact the environment when its useful life is finished.  The capital and recharging costs for storage indicates this expense is substantial, approaching one-half the capital investment costs.

Because smaller windmills are often promoted by state and federal authorities for many local applications —farmers, ranchers, agriculture users and the occasional individual― the estimated cost of a modest sized 20 kW wind generator will be used to demonstrate the economics of smaller windmills.

Typical installed cost of a 20 kW windmill in the Midwest region is about $45,000 with maintenance of approximately $500 per year.  Amortizing these costs over 20 years implies a fixed annual windpower expense of $4,250.  If winds average about 10 miles per hour the windmill will average roughly 20,000 kWh per year output; at 12 miles per hour, 32,500 kWh, and at 18 miles per hour, about 54,000 kWh per year.

Using the above kWh and assuming a generous price of 10¢ per kWh results in annual revenues of $2,000, $3,250, or $5,400 respectively, depending on average wind speed.  To place these wind speeds in perspective, note that the 18 mile per hour figure assumes average wind speeds three mile per hour higher than that available at Minnesota's best commercial wind site, Buffalo Ridge.  The implication of small-scale windmill use is that only under high consumer price scenarios is it justified and only if wind speeds are close to double the Midwest average.  The only possible means of managing installed costs would be for the installer, contractor, and electricians to perform their duties pro-bono —without pay— possible and practicable at the farm level.  In that case, the installed cost could be roughly 25% lower —still uneconomic.84

To the purchase and installed price, the additional cost of electricity storage must be considered.  Using the following —and highly optimistic assumptions of kWh generation and sales one obtains,

1.  20 kW generator can develop 480 kWh per day (20 x 24hrs);
2.  14,400 kWh/month (480 x 30);
3.  172,800 kWh per year (14,400 x 12);
4.  0.3 x 172,800 = 51,840 kWh per year (assume load factor of 30%); and
5.  @ $0.10/kWh = $5,184 of sales revenue per year.

The resulting assumed kWh produced, 51,840, is approximately equivalent to an average wind speed of 17½ miles per hour.  In order for storage to be effective for a farmer with a single 20 kW windmill, three banks of 57-800-mAH deep cycle marine style batteries (650 to 1200-mAH are available) would be required.  Assume each battery has a useful life of 4 – 5 years and can be purchased at a discounted price of $60 per battery.  Note that actual lifetime of most batteries is close to 3 years and special generation storage batteries cost about twice these estimates.  (An mAH or ampere hour is a measure of capacity, the ability to sustain one amp for one hour; an mAH or milliampere-hour is one-thousandths of an AH; AH is frequently used for large batteries and mAH for smaller batteries).

Therefore:
6.  Each battery bank cost $60 x 57 = $3,420;
7.      x 3 banks = $10,260; and
8.      Are replaced every 5 years, $2,052 per year ($10,260 ÷ 5).

The annual storage capital cost equals 39.5% of the purchase price ($2,052 ÷ $5,184).  Using more realistic real world assumptions the annual cost would be more than $6,480 per year rather than $2,052 ($120 x 57 ÷ 3 = $6,840).  In other words, even using optimistic estimates well over one-third of total output of each windmill is required for capital cost of wind energy storage.  Because of wind availability storage facilities will be utilized more than 2/3rds of time.

Let's examine the time periods and discharge and recharging cycle costs.  Assume a maximum safe discharge rate of 1/10 AH per battery,

Therefore:
9.         80 mAH for ten hours (800 ÷ 10);
10.     3 x 57 batteries = 80 x 171 = 13,680 mAH; and
11.     13.7 x 13,680 = 187,416 watts, (13.7 is voltage of fully charged battery; volts x amps = watts); or
12.     187.4 kWh safe discharge over ten hours (about equal to 18 -100 watt lightbulbs).

The approximate charging and storage cost can be estimated as follows:
13.    13.7 x 800 = 10,960 watts per charge (10.96 kWh);
14.      187,416 kWh per charge, 1.874 mw (3 x 57 x 10.96); and
15.      187,416 x $0.10 per kWh equals $18.74 to fully recharge the 171 batteries.

Therefore, the energy requirement for a single complete battery cycle exceeds 9% of total potential windturbine capacity (1.87 ÷ 20 = 9.37%).

However, the energy is stored for future use, not lost.  It is irrelevant if the windmill is generating electricity for system use or battery storage, the consumer use of the kWh is the same, only the kWh losses will be different.  Thus the $18.74 does not represent the actual cost per charging cycle over time.

The additional expense to the consumer is the energy losses involved in charging the batteries and the approximately 2% per day lost in battery storage.  If these are conservatively assumed to be 15% (9% + line + storage losses), the cost of storage batteries can be found by summing the purchase price and 15% losses of the potential battery in storage.

In this example, the per charge cost would approximate $2.81 or 281 kWh per charge, (15% x $18.74).  Moreover, the additional cost is not $2.81 but because on average the charge/discharge cycle will continue over 2/3rds of each day on average and since the charge cycle is 10 hours, not quite two cycles can be accomplished each day (assuming the wind has sufficient velocity).

Therefore,
16.     24 hours x 365 equals 8,760 hours x 2/3 equals 5,840 charge hours per year;
17.     One full cycle equals 18 hours (8 charge, 10 discharge);
18.     5,840 ÷ 18 gives 324 cycles per year; and
19.     Each cycle @ $2.81, 324 x $2.81 equals $910 per year.

The discharge-charge cycle amounts to about 44% of the storage capital costs ($910 ÷ $2,052).

Therefore,
20.     Total storage cost equals $2,052 + $910 or $2,962 per year.

This amount applies to each windmill and is the equivalent of 2.96 MW of the 20 total MW capacity or 14.8% of total windpower output.  The cost of storage is approximately 15% of total capacity.  The irony of the situation is that actual storage recharging cycle costs calculated above are overstated because the dearth of wind over many cycles prevents the recharging cycle from operating; the balance is derived from traditional baseline energies.

The paper now turns to the effects of windpower on flying species and the additional pollution concerns frequently avoided in its promotions.


Birds

Windturbines can be lethal to flying wildlife insects, bats and birds.  Although songbirds are the primary victims, the primary concern is with the large predator birds such as hawks and eagles, and migratory birds whose flyways are frequently those same wind alleys preferred for windcommerce development.85

The larger the windmill, the greater the potential conflict.  For example, the radar bats use to guide flight doesn't appear to detect the rapidly moving blades in time to avoid contact.  One does not appreciate the speed of the blades (nor enormity) until one stands immediately below an operating turbine.  From a distance, the turbine blades may appear to be moving at a leisurely pace, however, the actual speed deceives birds and bats (and human spectators): the blade tips are moving at Cuisinart cutting speeds.  Consider that the three blade tips of a 150’ turbine blade at a typical 30 revolutions per minute are revolving at 160 mph; a 200' blade: 215 mph; 250' : 270 mph; and a 500' blade : 535 mph.  In Minnesota windpower projects each of the three turbine blades are slicing through the air at a rate of close to 250 miles per hour. (Example, 150' blade: 2 x 3.14 x 75 x 30 x (60 ÷ 5,280) = 160 mph.)

In addition, the movements of the turbine blades create a nearby vacuum pulling flying objects into the windstream.  The potential harm is directly proportional to the dimension of the windturbine; the sweep of each large windturbine can approximate the size of four football fields.  A 500' diameter windturbine will have a sweep of 190,000 square feet, approximately four acres. (500': 3.14 x 2502 = 190,000, ÷ 48,000 ≈ 4.)  It is not overstatement to say that large wind projects have the potential of being a maze of enormous triple-bladed dicers for migrating birds, songbirds, bats, and insects.

Not only can the blade speed be lethal to birds, bats, and insects but the potential jet plane speed of the turbine blade is a reason engineering shuts down the turbine at relatively modest windspeeds.  High rotation speeds imperil the structural integrity of the blades.  Approaching or exceeding the speed of sound (easily attainable with larger windturbines) results in compromising the structural integrity of the windturbine.  High speeds also increase the potential of hurling the immense blade, a one-way Boomerang-like projectile, for long distances.  The impact on a dwelling, airplane, or sight-seeing helicopter ¼ or ½ mile or more away could be heartbreaking –and perhaps subject to judicial action.

Reducing bat and bird conflict is an important consideration.  Although the avian species is not as high on the evolutionary intelligence scale as other species, resident birds occasionally are able to learn and adjust to some windmills and local conditions.  Thus, in some instances local birds should be able to learn to avoid the blades and support cables (if used).  Bird – windmill research is ongoing; however it appears fatalities can be reduced by the construction of larger and slower revolving turbines with more blades.  Painting the blades with UV gel type paints (“NUV”) also appears to help alert some bird species to the blades.  In this way birds are able better recognize the blades and prepare to avoid them.86  Smooth surfaces and internal ladders also eliminate nesting and perching habitats that attract birds.  An effective method has been to construct nearby but out-of-the-way bird habitats to help draw local birds from the immediate windturbine site.

Shutting down windturbines during periods of high bird activity and removing and prohibiting siting of windturbines in known areas of high bird activity are appropriate regulatory options.  Maryland regulators explicitly incorporated this important protective measure into a first-of-its-kind rule.  Regulators evidently did not have the natural environment fully in mind when drafting the rules, however.  Acknowledging that the blades could kill large numbers of migratory birds, the Maryland regulations stated that the sum of the windturbines in a development totaling 25 windturbines could only be shutdown a total of 18 hours a year.  The regulations said that if the entire development killed more than 200 birds or bats in a 24-hour period, the windturbines could be shutdown for a maximum of 18 hours per year.  Arithmetically, the rule allows windturbines to potentially kill 1,825,000 birds before being shutdown for a maximum of 18 hours (200 x 365 = 73,000 per turbine; 73,000 x 25 turbines = 1,825,000).  After the maximum had been reached, no further shutdowns are possible, no matter the consequences to flying wildlife.87

Harming of domestic and a few wild animals primarily endangered species is subject to the court system.  A legal quirk of windcommerce is that the identical outcome in a windproject is, apparently, not considered having the same legal status.  Apparently the killing of endangered species or other animal by windturbines can be carried out without liability although its location and very nature has a high probability of harm.  The awesome environmental and wildlife implications have been the basis of lawsuits stopping windprojects.  Complying with environmental laws specifically for avian species and migrating birds a big Mount Storm, West Virginia windproject was cancelled.88  Perhaps this helps explain the state of Minnesota exempting windpower from environmental impacts by statute.

Flying insects can and do create serious energy losses.  Insects such as dragonflies, bees, and butterflies and many other flying critters impact the blades.  Flying species only need to fly in the proximate area for the revolving blades’ tornado-like winds to do its damage.  Because of their numbers the airfoil can be disturbed reducing blade rotation speed by as much as 25% in smaller applications.  Similar to migrating birds using wind flyways, the huge whirling blades can be a severe problem for migrating insects, notably the Swallowtail and the endangered Monarch butterflies.  Compounding the problem, aircraft warning lights on the towers in addition to being a significant visual annoyance may attract moths and some species of butterflies.

A final unanswered question: What are the effects of noise on wildlife of the 65db noise at distances of 400’ to 500'?  Do predators or their prey have difficulty detecting prey or escaping predators due to the increase in noise and deflection of wind patterns?  Errant wind patterns will break the scent link to and from potential prey and predators.  Because of their dependence on sound and odor to detect prey or food sources, predator-prey relationships will be affected.  Changing environmental patterns will likely disadvantage predators and result in an increase in prey species, rodents in particular.

There are, moreover, critical issues other than costs and impact on flying species that are difficult to overcome: land demands, destruction of natural environments and pollution.
 

Pollution

The problems associated with siting windcommerce dwarf those for traditional generators, coal, oil, nuclear, or natural gas baseline generating plants.

Pollution is in four forms:

1. The pollution embedded in the baseline energies used to produce and maintain the wind development (discussed earlier);

2. Noise pollution;

3. The widespread and inevitable visual pollution; and

4. The unprecedented land requirements.


Noise Pollution

With larger windturbines come substantial increases in noise and visual pollution.  They are not quiet but produce a constant “swishing” fan sound that's been compared to standing by a freeway.  In the home a fan user escapes noise by turning down the fan speed.  In a windcommerce development there can be no relief from the unremitting noise until the wind subsides.  The noise factor helps to explain why wind developments are located some distance from residential areas.  Although the noise is not as piercing as that from a racecar, those residing near a wind development are fully aware of the incessant drone created by windturbines.89  Even smaller windmills are noticeably noisy.  The noise explains why back in the early 1980s communities were passing restrictive noise regulations to prevent the development of high performance “egg-beater” style windmills in residential areas.

“Noise” is more than the sounds commonly heard by the ear.  Windturbines also generate electrical interference with nearby radios, TVs, and other electronic devices.  The electronic disturbances from windturbines can affect such items as airplane control towers and marine navigation systems, for example.  Electrical interference helps explain why they are located in low population density and non-city areas.

In a recent study of a modern small 0.9 kW, three-blade, 7-foot diameter fan, 67db was the noise level at its rated speed of 12.5 meters per second (28 mph).  This windmill is the type often used by ranchers, farmers, and rural individuals.  The tested windmill was on a 30-foot support with the microphone placed at a distance of 35 feet from the base.  The noise to windspeed correlation appears to be closely related at every level until high windspeeds are achieved (when the design's safety features began to shut down the blades).  Even at minimum windspeeds of 6 meters per second (13 mph) the noise was 45db and in straight-line linear fashion reached 73db at 16 meters per second (36 mph).  The 73db level is about the level the Metropolitan Airports Commission is targeting for jetplanes as they pass over homes in south Minneapolis.  The drone of larger complexes is routinely in the 51db range.90
 

Visual & Land Pollution

Nostalgic romantic reminders of a more open era, windmills built in the early development of the Midwest have little in common with today's giant modern energy driven windcommerce sites.  There is no comparison of today’s massive windturbines and yesteryear’s farm windmills.  “Windfarm” or “windpark” are strange terms for these skyscraper developments.  Rather than an apt description the term appears to be an attempt to use language to manipulate perception.  A tranquil cornfield a windturbine is not!  Imagine a two or more mile square of exquisitely beautiful landscape now covered with 250’ towers (or larger) with blades revolving hundreds of miles per hour reaching heights of 500’ to 1,000’ or more!

Windmills used in the 1800s and early 1900s were small, low, used for grinding grain and pumping ground water on isolated farmsteads.

One practical solution to noise and land siting would be to make windcommerce zones in or proximate to downtown metropolitan areas.  Siting windpower installations in downtown areas would also directly connect electricity cost with users, eliminate rural visual and noise pollution, and reduce expenses associated with transmission.  Wouldn't properly sized windmills be as or more effective if placed on high downtown buildings?  These buildings are in effect pre-built towers with the added benefit of being directly connected to the user.  In downtown areas, the redirection and vortex from the higher buildings could actually increase wind flows from adjacent and lower level buildings.  Smaller and high performance “egg-beater” style windmills would likely fit existing structures without costly structural modifications and larger units would clearly be an advantage in new construction.  If economics support stand-alone windturbines the economic benefit of adding windpower directly to structures of large users should be compelling.  Because of the obvious consumer and environmental benefits the wonder is that there has been no legislation in this direction.

Windturbines cannot be hidden from view any easier than hiding downtown Minneapolis’s Foshay Tower.  By default, windcommerce complexes are sited in flatland farm or natural prairie areas or the peaks of selected hills.  Because trees, hills, and human structures block or retard windspeed, windcommerce sites are located either where these features are not present or the hindrances removed.  Advertised as a “green” clean development, will windpower have the unintentional consequence of removing vast quantities of trees, reduction of wildlife, and damage to natural habitats?  On ridges and hilltops, the same trees vigorously defended by environmentalists are sacrificed as clear-cuts for windprojects.  The widespread environmental repercussions will be most evident in farming areas and areas proximate to local communities.  Even on rural farms, the windmills stand in open areas well above treeline and farm structures.

The relative size of today’s windturbine is illustrated in the following picture showing the front view of the Minnesota State Capitol with a typical Minnesota windturbine placed adjacent to the main entrance steps.

Figure 22:  Windturbine Next to Minnesota Capitol

 

The following figure illustrates the relative size of a modest windturbine compared to several common items.

Figure 23:  Size Comparisons of Windturbines

Great Point Lighthouse, Nantucket; a 30' sailboat, and the Statue of Liberty.
Courtesy of Alliance to Protect Nantucket Sound.


Figure 23 illustrates a smaller turbine than seen in Figure 22 showing the Minnesota State Capitol.  This illustration compares a 164' 3-bladed windturbine, an ordinary if not small windturbine.  Modern windturbines are proportionally larger, with the largest windturbines approximately three times the size of the Statue of Liberty.  The windturbine illustrated in Figure 23 is similar in height to the landmark Foshay Tower in downtown Minneapolis.  It is also significantly smaller than many of the windturbines throughout the country, including Minnesota. Today’s windturbines shadow the 447' Foshay Tower, the highest skyscraper in Minneapolis until the IDS tower was constructed in the 1970s.  The largest windturbines today exceed the height even of the IDS tower.
 

Miles of Land & Changing Rural Values

The location of windcommerce becomes a genuine “not in my backyard” (NIMBY) proposition.

Visually cluttering the landscape for 20 – 30 miles in every direction, today's wind projects sprawl over vast areas, areas requiring several square miles for each development with each separate unit producing relatively minor quantities of electricity.  Because windpower requires extremely large and numerous areas to become a meaningful energy contributor, it implies that large areas now sublime in nature will be converted into environmentally threatened eyesores.  With modern larger higher units this is a substantial, growing, and likely technologically insurmountable problem.  Modern windturbines have 250΄ – 500΄ diameter blades reaching heights of 1,000΄, reaching clouds a quarter mile high!

The land requirements for the electrical needs of a city of 100,000 residents by various energy systems is seen in Table 14.

Table 14:  Land Requirements of Energy Technologies

Electrical Energy Technology

Land (hectares)

Solar Thermal Central Receiver

800

Photovoltaics

600

Wind Power

2,700

Hydropower

13,000

Forest Biomass

330,000

Solar Ponds

9,000

Nuclear

68

Coal

90

Note: coal and nuclear land area includes mining.

Pimentel, et al., 1989. From, “Table 3. Land resource requirements for construction of energy
facilities that produce 1 billion kWh per year of electricity for a city of 100,000 people.”


Using the data from Table 14 for example, the land area required for windpower to generate electricity for a city of 100,000 people would be 10.4 miles square (1 ha = 2.47 acres, therefore 2.47 x 2,700 = 6,669 acres, ÷ 640 acres per mile = 10.42).

The consumption of land and visual pollution requires elaboration.  The land area required by a windcommerce project is composed of the actual land area under a windturbine, grid work of roads (discussed under “demonstrations”) and the distance between the windturbines.  Each windturbine requires about the same “bedrock” area as a suburban residential house lot, approximately half an acre.  However, each windturbine requires 30, 40, 50 or more acres because of blade size and wind currents.

If wind complexes were to become the primary source of additional electricity in Minnesota the land requirements would be beyond comprehension.

The following two projects demonstrate the land requirements of windcommerce.  In Chicago, Illinois Wind Energy will construct a $50 million wind development near Princeton, Illinois to produce 30 to 50 MW on about 1,500 acres, about 50 acres per windturbine.  Navitas Energy (of Minneapolis) will build a $55 million, 50 MW wind farm on 5,000 acres, about 100 acres per windturbine, near Mendota, Illinois.91  The Minnesota experience is that each 0.75 MW turbine requires not less than 30 acres and the 2-MW windturbine requires 40 to 50 acres.  If windcommerce were the selected alternative energy choice for meeting Minnesota's growing electricity demands, the 1,620 windturbines discussed previously under “demands”, would be needed in the current year, with increasing numbers of facilities constructed in each succeeding year.  The full-scale wind development option will require 81,000 acres of land in the first year (126 square miles), 81,750 the next year (128 square miles), and an additional 82,500 in the third year (129 square miles) and so on each succeeding year (1,620 x 50 = 81,000).

In sharp contrast, a modern baseline generating plant could produce considerably more electricity at less cost and utilize a small fraction of the land area only a single square mile.

Projects using smaller windturbines produce less electricity at lower costs but trade-off increased acreage for only slightly less visual pollution.  The larger windturbines reach much higher heights creating higher levels of visual pollution but impact fewer total acres of land.  Because of costs, technology, and very likely the enormous visual pollution, thus far Minnesota has selected smaller units in the 1 MW range.  Although still reaching great heights, the 1.0 MW or 1.5 MW turbines require approximately 30 and 40 acres respectively, but are somewhat lower than larger capacity units with less visual impacts.  As indicated, to use lower MW windturbines requires larger land areas devoted to windcommerce.  Assuming 30 acres per unit, the use of 1.0 MW windturbines will require the construction of 3,240 windturbines on 97,200 acres of land (152 square miles) rather than 81,000 acres, an increase of more than 16,000 acres in only the first year.  It is probable that the capital, transmission, and operating requirements will also follow the land needs.

If 1.0 MW windturbines are the development choice, before an individual born today retires, every section of land in western Minnesota will have several windturbines placed on it.  Even with 2-MW windturbines the entire region will become a “forest” of windturbines.  Emphasizing the impending growth to windcommerce imbalance is that years before numbers in the Minnesota population projections are reached, every section of Minnesota land will contain at least 18 windturbines.

Considering a program of using windcommerce to provide one-third of the growth in electricity demands, the land requirements are difficult to grasp.  Exacerbated by using small, but even using large windturbines, windcommerce development forces an unwinable contest between farmland, natural areas and windpower —with wide-ranging sprawl, wildlife habitat and natural areas reduced to memory or scenes in history books.

Will state owned land currently held for environmental reasons be converted into energy producing areas?  The state of Minnesota is known throughout the nation for its natural beauty and promoted by the Minnesota Office of Tourism and any number of resorts!  Tourists and others passing through Minnesota will be met with a forest of massive towers rather than the pristine beauty of the Minnesota countryside.  Visitors and traveling state residents will be greeted with miles of visual pollution in an otherwise serenely beautiful region.  When the initial curiosity is satisfied the compelling negatives will move to center-stage: the public will become aware of the negative energy and cost implications and that windturbines are icons signifying business intrigue and energy waste.  The descriptive term “Green Minnesota” will take on a different meaning.

The commercialization of windpower pits those who may benefit against those who do not.  Do individual farmers benefit?  Financially windproject owners are handsomely rewarded.  Other residents in the area will be less fortunate.  For example, the value of property affected by a windcommerce development but not directly involved in the farm annuity payments could be decreased.  Reducing demand for property has the effect of reducing the selling price of existing dwellings.  In other words, increases in the value of farmer property may come at expense of local resident non-farmers.

Individual farmers realize the payments are an unexpected windfall and can go to great lengths to obtain it.  In 1999 FPL Energy applied to construct a windproject by Addison, Wisconsin.  After significant local opposition, the application was withdrawn and FPL Energy closed their office in Addison on January 29, 2002.  In May the farmers who had agreed to site the windturbines brought a lawsuit against FPL in the amount of $7 million in alleged damages.  After the claim was denied, the group filed suit with the town of Addison.92

However, whether large or smaller turbines are constructed the financial and environmental burdens will be borne collectively by society and the environment.  Surely, the reason for residing in a pristine environmental area would be questioned.

Area residents who are not farmers enjoy living in farm communities and near natural areas for the community values and life style it offers.  Constructing windturbines detracts from that life style and therefore reduces the value of the residential area for those holding those values.  Windcommerce will tend to encourage an influx of people with somewhat different social and environmental values.  It would be ironic that one unintended consequence of windcommerce would be the unmaking of the community values and life styles now at the forefront of living in rural communities.

Because visual pollution affects those surrounding the wind development for many miles it is reasonable and appropriate to compensate all residents in the surrounding area, not only a few local farmers.  In brief, selected farmers are being enriched while diminishing the living standard not only of other local residents but also of everyone in Minnesota.

Another question that deserves an answer is, “do others have rights to determine the extent of visual pollution or are the majority of citizens uninterested in the outcome?”  Because it is the local community and rural farms that are said to benefit, it is reasonable to propose wind developments in the local and nearby communities 30 miles in every direction and permit the local residents to vote by ballot box on the development and its numerous related issues.  Because of the long-term nature and potential divisiveness of the issue appropriate legislation should be considered ensuring that approval is in the form of consensus, a sizeable majority of local residents affirming support of local windcommerce developments.  Equity also requires connecting the direct receivers of the energy benefit to the economics and environmental consequences.  This has been seldom the case —redirected costs and substantial subsidies have taken precedence over linking benefit with costs.

Because of the volume of government and industry windpower promotions, opposition has been slow to develop and receive candid media or policymaker attention.  A more inclusive, economically, and environmentally wise understanding is gaining acceptance.  See the references for further information.

An Hyannis, Massachusetts windpower reform organization, Alliance to Protect Nantucket Sound, succinctly states an opponent’s point of view,93

As more wind power stations are placed in environmentally or culturally sensitive areas, people around the world are challenging developers who cloak themselves in the green armor of environmentalism while pocketing huge profits and ruining the environment.

 


Windcommerce photographs

A picture is worth more than a thousand words.  Industry and state photographs promoting windsites are cleverly prepared to avoid illustrating the environmental aspects of wind development.  It is reasonable to conclude promoters are fully aware of the consequences to farm, natural areas, and wildlife and the massive turbine dimensions, vast land requirements, and unsightly road grid required.  The following photographs illustrate many of the land and environmental issues mentioned in the text.

 

Figure 24:  Access roads, Lake Benton, Minnesota

Lake Benton, Minnesota area. Note width of access roads and border.
Multiply by size of project.

 

Figure 25:  Roads, Storm Lake, Iowa

Storm Lake, Iowa development. Note extent of access roads and grid; concrete base.

 

Figure 26:  Hilltop Roads, Tennessee Valley Authority (TVA)

Tennessee. TVA windproject.  Driveway road grid, hilltop location. Trees clearcut and mountain top landscape reconfigured.

 

Figure 27:  Landscape, Koudia, Morocco.

Koudia, Morocco. Landscape consequences in natural area. Erosion and wildlife barrier. Country is unimportant.

 

Figure 28:  Construction Site, Pennsylvania Windproject.

The size of the roads required parallels the size of the development. Large dollar amounts are for road building. Visually compare as natural area.

 

Figure 29:  Windproject Remnants, Altamont, California.

  
Photograph courtesy of Bob Smith and mensetmanus.net.
See original at <
http//www.mensetmanus.net/windpower/altamont/ >.

Altamont, California. Major windproject built in the 1980s, early 1990s. Photo taken several years after closing due to poor economics. Demolitions, or in this case accumulating site costs, are often not included in studies or project cost.

  

Figure 30:  Collapsed Tower, England.

 

 

Figure 31:  Loss of Turbine Blade, Minnesota.

 

Smaller turbine available in Minnesota.

 

Windcommerce Subsidies

A Hobson's Choice, subsidies make free choice a mask covering all choices but that pre-selected.

Indeed, were subsidies not wrapped around windcommerce it would be a mortality wounded rather than growth industry.

A subsidy is an expense borne by someone else.  Windpower is prospering because it is heavily subsidized.  Although no comprehensive government or industry economic study has yet to thoroughly describe the rate and taxpayer effects of policies and practices encouraging windcommerce, it is safe to report that the effect of subsidies is to promptly return to owners and investors the entire amount of their invested capital and more than half of the annual operating costs.  Government is providing the windpower industry substantial taxpayer funding for utility company and private industry obligations and benefits.  In great measure, the financial responsibilities of owners and risks of windcommerce are borne by other energy users and taxpayers.

Doubling the burden of the non-windcommerce consumer, a backup power system is necessary.  The same megawatts of baseline generators, probably coal, will be constructed in addition to the wind development.  In brief, windpower development exacerbates the energy dilemmas it is said to remedy.  This applies equally to ethanol and biodiesel production and the manufacture of hydrogen as sources of fuel.  Modern coal and coal-gasification plants have experienced substantial increases in generating efficiencies and as a consequence operate at lower costs, use considerably less coal to produce the same kWh and with well controlled environmental impact.

The industry is quick to point out that consumer cost per kWh has been declining since 1987.  This is generally true; however, the broad spectrum of subsidies is seldom, if ever mentioned.  Nor is an evaluation of the economics of windpower available because cost data is rarely included in reviews or project plans intended for public information.  Thus, publicly available reports do not provide an adequate economic evaluation of windpower nor can analysis be performed from the limited data.  For example, neither the state nor industry sponsors for the Lake Benton – Buffalo Ridge complex provide complete economic or pricing information central to a discussion of its merits.  An interested individual is forced to search through voluminous legislation in order to have an idea of the scope of the promotions.

In order to increase efficiency and be economically successful either the same quantity of kWh generated from smaller windturbines or decreases in required minimum effective wind speeds must occur.  Progress has been slow or absent in this regard.  The energy returned on energy invested remains modest or negative.  Unfortunately, necessitating heavy government subsidies, needed technological advancements have not been as successful as supporters indicate.  The reduced production costs are more a consequence of economies of scale, building more massive windturbines, than significant increases in efficiencies of output or delivery to end users.

The language in federal or state legislation describes windpower, ethanol, biodiesel, and other forms of alternative energies as being renewable energies and sustainable.  It is one matter to use language to describe events, it is quite another to use science and economics to justify the language.  In order for alternative energy to be “renewable” ideally its net energy output should (at least) equal today's baseline energies.  Language aside, an energy source that cannot use the net energy it produces to reproduce itself build and operate is neither renewable nor sustainable.

The heavy subsidies suggest the magnitude of the non-renewable aspects of windcommerce.  The large Altamont, California windproject (Figure 29) folded when the tax subsidies were withdrawn. 

At the present time 36 states including Minnesota and the federal government subsidize windcommerce development as “renewable” energy systems.  Current promotions of windcommerce are a reminder of early government and industry promotions for nuclear power use; “will cheaply be able to dig shipping channels and roads through mountains” was one favorite statement.  Similar to the effusive statements regarding nuclear power, windcommerce advocates overstate the assumed benefits and underplay or neglect the true costs.94

Windcommerce subsidies range from indirect and subtle to obvious.  Financial subsidies are at the federal and state levels and often work through the income, property, and sales tax systems and ratepayer tariffs.


Federal Subsidies

Federal subsidies include, for example, a 1.8¢ per kWh productive “incentive” for non-taxable entities, a 1.8¢ per kWh tax credit for most businesses, and a generous five-year double declining depreciation write-off.95  Investor-owned utilities and municipal utilities use the “Production Tax Credit” (PTC) and electric cooperatives use the “Renewable Energy Production Incentive”.  This credit effectively subsidizes approximately 1.8¢ per kWh.  Clearly, this tax credit is a tremendous subsidy, reducing a consumer's windpower bill more than 20%.

The current PTC legislation was due for renewal at December 31, 2001.  Enron Wind Company, the leading company involved in the development of the Buffalo Ridge, is actively promoting the continuation of the tax credit.  Urging industry members and interested parties to contact Congress, in a suggested letter for activists the company said the “PTC assists wind power by leveling the playing field when it comes to government assistance for energy generation.”  Although the statement is partially accurate the suggested magnitude of assistance to other energy industries is overstated.  Admitting to the deficient economics of windcommerce, the company said that the industry requires the PTC to compete with baseline generators while researching technologies to make the future industry competitive.96

Federal and state accelerated depreciation allowances effectively permit utilities to “up-front” tax benefits.  Glenn Schleede, President, Energy Market & Policy Analysis, in an economic analysis of windpower in West Virginia compiled a detailed schedule documenting the many federal and state subsidies.97,98  For example, capital investments in windcommerce are permitted to use a five-year “double-declining balance” method of accelerated depreciation.  The West Virginia study demonstrates that a utility will have 52% of its investment returned within 18 to 24 months with the remaining balance returned in the following 36 to 48 months.99

The West Virginia windcommerce development parallels those in the Buffalo Ridge area and proposed developments of current Minnesota legislation.  The study documented that a 2003 project in Grant County, West Virginia with $300 million in capital and related investment would return more than $325 million over 10 years.  Due to tax benefits, 69% of the total capital invested is returned within 5 years.  In addition is the $236 million in revenues from the 3¢ – 4¢ per kWh revenue mandated by legislation.  In brief, within a brief five years, a utility will have all of its windcommerce investment deducted from taxes; the balance of the operating life is with substantially reduced investment risk while including a steady windfall of income.

Because regulatory books are often on a different basis —a double set of books there is a timing difference in accounting and of costs flowing through to owners and investors and ratepayers.  The investment returns are calculated using one set of books while taxpayer tariffs are based on a second set.  Thus, the benefits of rapid depreciation may not flow through to ratepayers.  The timing error is evident when the windproject is sold soon after the project’s cost is written off.

The Minneapolis based Star Tribune newspaper contained a lengthy article regarding a quirky aspect of the property tax–accelerated depreciation rules.  The accelerated depreciation allowance lowers the assessments for property tax purposes, thus local communities holding the promise of tax windfall money are sorely disappointed.  Lincoln County with its Lake Benton complex placed a 60-day moratorium on new construction when taxes could not pay the increase in local community costs due to the projects.  The proposed solution was to reduce the emphasis on the property tax and replace it with a production tax.  A common windcommerce refrain, the intention is to balance local community expenditures now funded from the property tax and windpower energy user costs by shifting those costs to distant tax and ratepayers.  A production tax would be more reliable —and easily adjusted upward but would be borne generally by non-owners and non-local users.100

Operating and construction subsidies are promoted by the U.S. Department of Energy (DOE)/Electric Power Research Institute (EPRI) Turbine Verification Program.  The DOE/EPRI provides funding to facilitate the development and construction by utility companies.  Under this arrangement the utility will own and operate the windturbines —a form of investor ownership at public expense.  It is clear that an important aspect of the program is to eliminate investment risk.  Market risk assessment is directly linked to associated costs and uncertainty of investment return for a windcommerce project.  Risky ventures such as windpower imply significant investor discounts reducing potential investment and increasing cost of capital and costs of windpower.  In using a government and taxpayer funded program, risk is being assumed by taxpayers rather than owners and investors.  Due to government protection the industry’s capital costs are significantly reduced and consumer prices minimized.  In brief, government policies are encouraging electricity consumption by arbitrarily establishing below market electricity rates.  Nevertheless, the investor will earn a return on funds provided by the public.

If the local utility building the windcomplex is a cooperative, subsidies are notably egregious.  The users are the owners.  Therefore, with the exception of costs shifted to distant users/owners, all offsetting subsidies flow directly through the cooperative to the users making their cost of electricity a relative bargain with the liabilities paid by non co-op users other rate and taxpayers.  This particularly applies to the Buffalo Ridge Lake Benton region where electric cooperatives generally are the utility.

For an overview of the federal government position see the legislation introduced on December 5, 2001 by Representative Barton (R-TX), Chairman of the House Energy and Air Quality Subcommittee.  The legislation is titled the “Clean Energy provisions of Title IX – Energy, regarding renewables energy incentives.”101
 

State Subsidies

According to a Wisconsin windpower dealer “Minnesota is the best state in the country for public benefits!”102

The catalog of state subsidies is a thick one.  Similar to the federal inducements, these incentives take many forms including payment of 1.5¢ per kWh for 10 years, the federal depreciation schedule, a graduated production tax most frequently amounting to 3.6¢ per kWh, exemptions from personal, corporate, sales, and property taxes, rebates, grants, and below market interest rate loans.  Minnesota for example, exempts windcommerce from property taxes and the 6.5% state sales tax paid by all other utility customers.  Minnesota is also rebating $150,000 each for connecting 750 Kw or larger windpower generators to the local grid.  Interesting is that the funding source is from special “oil overcharge money”.103

Wind power’s promise to provide rural development benefits faces a reality check where most wind energy development is occurring through contracts to large wind farms owned by national and even multi-national corporations.  The landowners where the turbines are sited typically receive payments of $2,500 – $3,500 per MW of turbine installed.  This is a welcome supplement to their income, but it pales besides the much greater revenue they could receive by owning the windturbines.

The subsidies begin by subtly encouraging financial institutions to provide loans to developers.  Because the state requires a utility to purchase any electricity generated at 3¢ – 4¢ per kWh, a financial institution is virtually guaranteed revenues will reimburse a loan.  The $25,000 or more profit per turbine for the first 10 years (and more thereafter) from the 1.5¢ per kWh per 1-MW turbine from the producer payment subsidy serves a similar function.104  The same situation would apply to permit applications and related items.  The guaranteed long-term price of 3¢ – 4¢ per kWh and tax advantages to a owner, corporation or legal limited partnership provides a windfall to owners and a risk-free return to the financing company.  The practice generally serves to eliminate business and financial risks of business and reduce costs of capital.

Minnesota legislation has been drafted with this idea in mind,105

Cost recovery. The expenses incurred by the utility over the duration of the approved contract or useful life of the investment … shall be recoverable from the ratepayers of the utility, … the commission shall approve or approve as modified a rate schedule providing for the automatic adjustment of charges to recover …transmission costs that are directly allocable to the need to transmit power from the renewable sources of energy.

On a less direct level, the cost of purchased power above the market rate (discussed previously) lowers the selling margin to the utility and reduces its profits.  The utility’s selling price will likely be four or five times the purchased power price.  In order for the utility to maintain its profit margin the utility is compelled to raise rates to other consumers.  If the utility is unable to raise rates investor and owner profits will decline.  If regulation or other factors prevent higher rates competition with non-windpower utilities is an excellent example the price of the company’s securities will fall.

Major windcommerce legislation Minnesota Law §4401 also contains language facilitating windcommerce development.106  Subsection §4401.0450 Contents of Site Permit Application, Subpart 7 Environmental Impacts, excludes environmental review by definition that,

Wind projects have not been found to have significant environmental and human impacts.

Subsection IIIB-1 authorizes state sponsored monopolies and denies oversight applicable to other similar matters,

The permit will authorize the permittee to proceed with construction of a wind project in a specific area, effectively precluding other developers from building in that area. The permit may be an effective tool in finalizing financing of a proposed project. The state permit will pre-empt local review of the project and eliminate the need to seek separate permits from a number of local governmental bodies.

 

Local government will be affected by these rules in the sense that a permit for a LWECS project will determine the location of the facility and the conditions under which the project is to be constructed and operated. Local government will be pre-empted from enforcing its own zoning and other regulations.
Minnesota Statutes section 116C.697.

 
§4401.0300 Permit Requirement, Subpart 2. SWECS (smaller windpower projects), eliminates the requirement that a “site permit from the EQB (Environmental Quality Board) is required to construct a wind project” and that “no state environmental review is required of an electric generating facility of less than five megawatts.  Further, it states that the EQB has no jurisdiction over smaller projects or that local governments are responsible for regulating small wind projects.

Regarding decommissioning after a windturbine’s useful life, §4401.0450 Contents of Site Permit Application, Subpart 13, states that the EQB will not promulgate requirements for funding decommissioning and that the EQB “will allow applicants to be creative” as long as the funds will be available at the (unspecified) decommissioning period.

On February 12, 2001, led by its Chair, Rep. Ken Wolf, the Minnesota House Regulated Industries Committee introduced HF–492 and HF–710 intended to promote renewable energies.  HF–492 establishes a state-wide energy plan exempting existing plants that convert to “cleaner fuels” and “no fuel use” from the property tax and capped emissions levels.  The capping of emissions appears more as a public relations ploy than environmental program —the “renewable energies” have low direct emissions but significantly greater indirect levels of air pollution than conventional baseline energy.  The bill also requires utilities to share conservation goals with consumers.  One interpretation of this legislation is that the “sharing” actually involves spreading the high development and operating costs of “renewable” developments across non-owners and non-users.  The companion legislation HF–710, sponsored by the Minnesota Chamber of Commerce, offers consumers a “choice” of selecting the source of energy.  The “choice” notion includes streamlining regulatory requirements regarding energy transmission.  This is conceptually a prudent change; however it implies that all production, transmission (with line losses), and distribution costs are fully included in ratepayer tariffs.  Although the Chamber of Commerce bill has merit, the probability that all costs are included is doubtful.

HF–492 contains one additional subsidy: $500,000 per year for “modern energy technologies” funded from the Renewable Development Fund at Xcel Energy.  The discussion of this “fund” under the nuclear power section should be considered at this point as well.  In Minnesota, subsidies began in earnest in 1994 when the legislature paired the increased storage of nuclear wastes canisters at the Prairie Island Nuclear Plant with the construction of 425 MW of  windpower by NSP (Xcel Energy) wind energy, subsequently increased it in January 1999 by 400 MW, and yet another 400 MW by 2012.  All related costs are passed on to rate and state taxpayers.  The purpose of this “new” source of money is to site energy developments, “energy parks”, “closer to the need”.  The implication is that smaller, i.e., “renewable” and natural gas generating facilities are encouraged and that the public and regulatory roles in siting new facilities are diminished.

Under HF–3519 and SF–2675 (CH–312) the state obligates its agencies to use “cleaner fuel” if it’s available at “similar costs” to typical fuels.  The requirement includes the purchase of biodiesel, ethanol, hydrogen, and natural gas fuelled vehicles.  The nebulous “similar costs” statement and that the state itself is the policing agent implies a wide price latitude will prevail.  Mandating entire fleets of vehicles to use particular fuels is a generous boost to an otherwise untenable energy source.  In introducing HF–2574 Rep. Dan McElroy stated that biodiesel “is a fuel of great promise”.  As the discussion of biodiesel demonstrated, the “promise” of biodiesel requires substantial state assistance to be realized.  The legislation expands the definition of renewables under certain tax and consumer rebate programs to include biodiesel and qualifies biodiesel generation facilities to be eligible for the 1.5¢ per kWh tax credit subsidy.  The bottom line is that taxpayers and consumers will pay higher taxes and rate charges, while reducing reliability of the electricity grid and quantity of available energy overtime.

Minnesota's House legislation HF–1323 (Rep. Loren G. Jennings) and HF–659 (Rep. Ken Wolf) are the principal energy bills.  Rep. Wolf's bill is called the “Minnesota Energy Security and Reliability Act” and contains the financial and policy portions of Minnesota energy legislation.  It establishes the “Minnesota Energy Reliability Trust Fund” to provide incentives for the construction of generating plants using “renewable” energy.  Setting a novel precedent, the bill provides for establishing “Energy Parks”.  Not only are construction subsidies a significant item, but the siting of plants now structured in the public domain becomes a more streamlined affair.  The legislation adds a consumer surcharge of $0.00017 to every kWh sold and $0.003 per Mcf of natural gas sold.  The fund limit is $50 million and uses construction tax credits to flow the subsidy through to the utility, a generous investor and owner windfall.

One imagines that as the fund limit is approached, there will be increasing political pressures applied to fund an additional undertaking: free investment capital with income guarantees is not easy to obtain.  One wonders if the accelerated depreciation provisions are also applied to construction financed from this Trust Fund?  The legislation also includes provisions for construction using tax-increment financing and exemptions from personal property taxes.  The substance of this legislation is to quietly shift the costs of windcommerce or other alternative energies from the owner, investor or utility, and local consumer to non-owners and non-local consumers, even out-of-state.

Evidently, the industry is working through the Governors Conventions members to draft similar legislation throughout the country.  Resembling the Minnesota legislation, the 1993 – 1995 Texas legislative session passed a bill providing $2 billion for renewable energy over the next 10 years, most of it for windpower development.

Similar to legislation proposed in Minnesota, as an outcome of their “Energy Smart” program the New York governor on June 11, 2001 issued an Executive Order requiring the state to purchase 10% of their electricity from renewable sources by 2005 and 20% by 2010.  This amounts to an effective tax credit of almost 2.5¢ per kWh (and includes an automatic inflation adjustment).  When added to the federal credit, windpower is on a half-price sale!  To facilitate the transition, New York paid $5 million of a $34 million 30 MW windpower project.  In combination with the generous depreciation allowance this is a philanthropic gesture to the owner and investor.107  Minnesota has similar legislation.

A widely used subsidy is to use “net energy” pricing where electricity in excess of current use or storage is “sold back” to the local area utility company.  On the surface it appears a reasonable and common sense approach.  Using “net energy” pricing to reduce windpower users’ electric bills by the amount generated may appear an excellent practice.  However, unless the price paid by the utility is not less than the current cost of generation, it will be an uneconomical purchase.  The excess cost increase is passed onto other ratepayers —a potentially immense subsidy and misallocation of consumer cost.

Moreover, unless correctly applied, it inappropriately shifts a significant proportion of the fixed and capital costs of wind generated electricity to other customers.  There are substantial fixed costs of serving each customer the administration, generators, and transmission and distribution lines which are independent of the variable costs, fuel for example.  It is the variable costs that are reflected in net energy pricing; windpower has high fixed costs.

The high and fixed expenses are appropriately the obligation of each customer served regardless of the quantity of electricity consumed.  If these costs are not borne by a customer because of windpower credits or subsidies, the remaining customer base is unduly charged the cost of serving another customer.  Because fixed costs are the largest component of utility costs net energy pricing is a serious form of income redistribution and misallocation of scarce resources.  In order to avoid subsidies by other ratepayers, either the windpower user must be allocated the true costs or the owner or investor of the windcommerce utility assume financial responsibility.  The correct purchase price of wind generated electricity is the variable costs of the utility at the time the windpower enters the electric grid.  Utilities know this amount at any point in time because it forms the basis for efficient internal production, purchase price of grid energy, and transmission price to other utilities (wheeled sales).  This is the ratepayer principle underlying the Montana Public Utility’s rate finding mentioned under the “Buffalo Ridge – Lake Benton Project” subheading.  The Minnesota Department of Commerce and Public Utilities Commission would be wise to review the reasoning of their Montana colleagues.

Although of modest impact at this time, further windpower development increases the potential for shifting greater windpower costs to decreasing numbers of baseline utility users.  With planned windcommerce increases and associated subsidies, the current fixed capital, operating, maintenance, building, personnel, and administrative costs will undergo a circular process having fewer consumers carry their expense burden.  The reduction (or revisions in calculated costs) in specific ratepayer classes implies that substantial rate increases will be shifted from owners and windpower users to the economically immobile and non-windcommerce users.  There can be no doubt those large industrial users, as they already have accomplished using small natural gas generators, will opt out of the increasingly expensive baseline system and seek to generate their own electricity.  In other words, because of windcommerce the least affected consumer will increasingly be required to fund the baseline system on which windcommerce depends.

Windcommerce requires changing local property tax and zoning regulations from farm to business status.  If this is not done, incorrect property tax assessments or exemptions must be considered another substantial subsidy.  The recent Minnesota legislation creating county “tax free commerce zones” shares similar characteristics shifting costs to other consumers and taxpayers.  Further examination reveals that the property tax exemption is a substantially greater subsidy than readily apparent.

The $2,000 to $5,000 annual payment to the landowner per windturbine, often a farmer, is said to benefit local rural economies.  Moreover, income flows derived from the land determines land values with a large area such as Buffalo Ridge receiving $1 to $3 million or more per year in revenues.  Land values will rise accordingly.  More apparent good news, the source of the investment is not necessarily from Minnesota but from the firm that constructed the wind complex located in Chicago or New York or overseas for many Minnesota installations.  Still more apparent good economic news, this implies that there are no offsetting Minnesota impacts.  On the other hand, if a local or state “production tax” applied to kWh sales were implemented, the tax would offset possible benefits of the annual wind annuity payment.  Relative to cropland income the windcommerce annuity payment may seem large; however, the economics of windcommerce dictate modest compensation levels if the economic viability of windpower is to be successful.

The annual $1 to $3 million in windcommerce payments to farmers and landowners are contractual annuities guaranteed for 20 years.  These annual payments have substantial value today.  The annuity makes the windmill site extremely valuable, at least 25 times its agricultural value.  The high value explains why it is exempted from additional taxation.  At a minimum the land value is the present value of the annual income stream.  Assuming a 10% investment return, a $2,000 annual payment implies a current value of about $17,000, a $3,000 annuity, $26,000, $4,000, $34,000, and a $5,000 annual payment is worth about $43,000 today.  Making the payments appear even more generous is that the actual land required by a windturbine is less than an acre, ¼ or ½ acre is common with one-acre for larger units or other facilities.

A resourceful entrepreneur would exchange rights to the annuity and in return give the owner, farmer or landowner a satisfying upfront cash payment.  The entrepreneur would pay the farmer an appropriately discounted sum based on current interest rates and expectations of future payments, e.g., $26,000.  The probability is that an entire investment niche could develop —with intelligent farmers reaping the financial benefits and shifting all associated risks to the buyer of the rights.  Wind Commerce Investment Trusts (WCIT's or “Winchets”) for large complex financial transactions or Wind Power Investment Trusts (WPIT's or “Winpits”) for smaller undertakings could be sold and bought by institutions, mutual funds, individuals, and speculators on stock and commodity exchanges.  The instruments would behave in financial markets much like a bond.  An alternative would be for a fixed unit cost with the annuity varying based on sales.  The market-wise approach would be for investors to compete at “auction” for the WCIT's or WPIT's.

Zoning agricultural land with a substantial non-agriculture business of energy value is a considerable subsidy to the farmer or owner.  The number of windturbines on the farmer’s property multiplies the subsidy.  Assuming a 350-acre farm, a ¼ section grid, 40 acres at each point, indicates possible 15 windturbine installations with 30 acres remaining for the homestead.  Assuming an annual payment of $2,500 with a current value of about $21,000 each ($26,000 discounted at a 10% return), the 15 windmills will produce $562,500 in income over 20 years and that sum discounted to present value instantly adds $315,000 to the value of the farm today.  The $315,000 increase in farm value is currently shielded from income and exempt from property taxes.

A similar amount can be determined for every individual windturbine installation in every state.  The sum of the increase in land values now overlooked by legislation is an energy subsidy of unparalleled proportions.  In addition, unlike any other small business entrepreneur, the subsidy applies to a few individuals made fortunate by legislation.  To reduce the local community tax load on non-commercial or subsidized developments and to compensate for the revenue loss to local communities also implies that other local commercial enterprises and residential homeowners will see their tax burdens increase if existing services are to be maintained or to provide for the growth in government services.

The subsidy is more than in property taxes.  Because the land business of windcommerce is now classified as farmland the installation will receive favorable inheritance tax treatments accorded farmers and when the farmland is sold its value basis stepped-up to the data of death and then treated as a capital asset receiving most favorable low capital gains taxation.  The general public with similar circumstances is compelled to pay at least twice and possibly over three times more in taxes as these fortunate farmers and other windpower owners.

For the rural community government legislation makes it a genuine Hobson's Choice, there is really no alternative.  Local farmers, property owners, and the public (or state environmental lands) have no genuine choice in the matter.  A government proposed wind complex development compels farmers to compete against neighbor farmers or farmers in nearby towns and other landowners for the windfall cash payment and annuity dollar.  If one farmer disagrees with an installation, a neighbor may not.  Landowners may otherwise choose not to participate because of what they perceive as inadequate compensation levels or for ecological or other reasons.  The farmer or landowner may feel that by applying rental payments to the single half-acre on which the windturbine physically stands is insufficient when each windturbine directly involves 40 acres of farmland and the farmstead can literally lie in its shadow —with visual pollution for miles.

Whatever the reason for disapproval, the income flows to the other farmer or landowner while the negatives directly impact adjacent farmers and are widely dispersed throughout the larger community.  Because individual compensation speaks a powerful language and the negatives apply to a large diffuse common area, realistically there can be no escape.

Although rental and lease payments are intended to overcome local resistance it is the state's “eminent domain” or land confiscation legislation that provides the last and final added impetus to the development of windcommerce.  If the state feels the area has windcommerce potential, farmers, other citizens, and whole communities who wish to opt out of any windpower or transmission program can be compelled to participate.

Minnesota Law is explicit:

M.S. 222.36 RIGHT OF EMINENT DOMAIN IN CERTAIN CASES.

Any public service corporation shall have the right to obtain by condemnation, under the right of eminent domain, any land, or any right over, through, or across the same, or any easement therein, necessary for the convenient prosecution of its enterprise; and … may in the same manner acquire the right to construct its lines over, along, and upon the right-of-way … .

M.S. 300.04 STATE AND LOCAL CONTROL OF EMINENT DOMAIN.

The state may supervise and regulate the business … and … may fix the compensation which it may charge for its services. … The corporation may acquire by right of eminent domain the private property necessary or convenient for the transaction of the public business for which it was formed.


Summary of Windpower

It should be clear that in misallocating energy costs government policies are inadvertently promoting social and economic class distinctions.  These policies are a mythical golem that will turn on its creators and the innocent public.  Under current practices, increases in windcommerce increase the consumer costs of baseline energies and make comparisons more favorable.  Were the costs properly allocated the tenuous and circular economics of windcommerce would become self-evident with each additional installation.

The lacking economics, energy flows, and environmental effects are now coming to the forefront of decision making: authorities are now reexamining their policies.  Denmark after heavily promoting and subsidizing windpower has now reappraised its position.  According to the Danish Wind Industry Association, the chief marketer of Danish windcommerce, the Danish Ministry of Energy recently cut windpower energy research by 60%.  In addition, the Danish government cancelled three large seabased windcommerce projects worth 5 billion Dkr (about US$ 1.5 billion).  The projects were to be constructed near Gedser, Omø Stålgrunde and the island of Læsø.  With some of the highest electricity rates in the world due to windpower, the Minister said canceling the windprojects would save taxpayers 900 million Dkr every year.108

The annuity payments to local farmers and landowners may be considered an attempt to remedy or balance the local economic consequences of negative out-of-local and out-of-state money flows.  The several levels of subsidies suggest the extent of the negative economics of windcommerce to a state and region.  It is through the application of subsidies that one sees statements that energy investments are returned within one to three years of operation and subsequently appear as an endless windfall of energy riches.  And, like the wished for perpetual motion notion, does it all in an environmentally benign and friendly manner.

It is clear why legislatures and Congress with important farm influences promote windcommerce.  The use of significant payments, tax credits, and other subsidies are an enormous form of welfare to the agriculture industry and to individual farms in particular.  The bottom line of windcommerce subsidies is that state legislatures and Congress have essentially eliminated owner and investor risks associated with alternative energy processes and developments while severely harming the environment and adding ratcheting increases in resource consumption and consumer prices.  In so far as owners and manufacturers are out of state (or nation), the dollars flow to those areas as well.  In addition, government policies are virtually guaranteeing business groups a rate of return on taxpayer and ratepayer generated funds and shift much of the increased costs to unsuspecting and distant tax and ratepayers.

Windpower is not a renewable energy source; it increases resource depletion and fails to reduce pollution.  The development of windcommerce is expensive, unreliable and is an energy intensive system.  The paradox of windpower is that it requires a duplicate parallel energy system, traditional baseline energies to be developed and maintained.  If coal-generating plants were built with modern technology and pollution controls, pollution would not be an issue and the price of electricity delivered to the buyer would be substantially less than for windpower.
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Used with permission of Dell Erickson
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