Passive Energy

The NY Times published an article recently about 'passive' energy in Germany. They made it sound like something new. The book on passive energy was written in the mid 1970's by Edward Mazria ("The Passive Solar Energy Book"). "Passive energy" is created through the use of environment and smart construction to offset the need for energy input from outside sources. Passive energy is especially suitable for temperate climates where the difference between inside and outside temperatures is relatively small, and for high arid climates where cold temperatures can be offset by abundant sunshine. It can also supply a substantial amount of needed winter time heat in cold climates, thus ofsetting the need for more and  more greenhouse gas generating fuel inputs. 

The problem with passive energy is that it requires thought in planning, design, operations and maintenence. It is not idiot proof, it is not consumerist and it is not glamourous. One can not just throw up a stick-built house from a standard plan and expect it to  provide passive energy. There are some new technologies, such as the heat exchangers mentioned in the Times article, but the best source of information remains Edward's Mazria's book (which is linked above). While it is true that Mr. Mazria wrote the best book on passive energy more than 25 years ago, he continues to be on the cutting edge and also has a new initiative which he calls "Architecture 2030". Here is a blurb from and a link to his web page:

2030 Challenge Stimulus Plan Hits Capitol Hill 

President-elect Obama has committed to economic recovery, energy independence, carbon-neutral buildings by 2030 and an 80% reduction in US greenhouse gas emissions by 2050. Architecture 2030 has developed a groundbreaking economic stimulus plan that, with a single investment, simultaneously addresses all of these issues. Edward Mazria and Kristina Kershner presented the 2030 Challenge Stimulus Plan last week to policymakers and industry leaders in the Nation’s Capitol where the Plan is now gathering steam. http://www.architecture2030.org/

780 Million Dollars vs.15 Billion Dollars

Why Nuclear Electricity is Not the Answer

All the talk about building new nuclear plants may be nothing more than hot air. The current cost estimate for a major new coal fired plant in  is about 780 million dollars. Construction of a new nuclear plant of about the same output is estimated to be in the range of 15 billion dollars. In terms of the initial capital cost it is very difficult for nuclear power to compete with coal for electrical generation.  Any subsidies required to make nuclear power competitive would be in excess of the cost of offsetting their power generating capacity with wind, solar, and conservation technologies. 

The last nuclear power plants which were under construction in the United States, in Washington State, were decommissioned and sold for scrap after construction had begun. Not because of environmental problems but because escalating construction costs made it clear that the Washington utilities could earn a higher profit by promoting conservation than by selling nuclear generated electricity. In other words they discovered that they could make more money by giving away energy saving devices and construction subsidies than they could make by selling electricity generated in the new power plants. 

While we can expect subsidies for new technologies which will offset greenhouse gas producing coal plants, we should not expect the subsidies, and corresponding investment,  to go to nuclear until and unless it becomes clear that the other, less expensive technologies, including conservation, will meet our electricity needs. The math does not work.

I think that further proof of the direction this will take lies in Barack Obama's announcement that one of the first elements of the stimulus package will be a program to reduce energy usage in Federal buildings. 

Why Electricity Has Problems as a Car Fuel

The electric car has great potential, both in hybrid form and in the form of purely electric. However, remote generation is very wasteful. There are several reasons for this. First, very little of the energy released by burning, or fisioning, fuels in the power plant actually make it to the wheels of the car. In terms of raw energy, or btu's, for every 100 btu's of heat released from burning fuels in the power plant, only about 3 actually make it to the car in the way of usable energy. The rest is lost as waste heat and in transmission losses. Once in the car,  electricity is stored in batteries where it loses an additional 5% of its power for every day that it is stored. 

The original power source, if it is coal, is very cheap, but in addition to the lack of efficiency in the process of putting the power to the road, coal is a greenhouse gas producing fuel. The by-production of these gasses is much greater with coal based electricity, or even natural gas or oil generated electricity than with the direct burning of liquid fuels simply because so much more coal must be burned to generate the same amount of energy. 

Here is a comparison of the embedded energy from various fuels used in cars:

-Alcohol fuel: Approx. 0.7 btu's of fossil fuel energy required to create enough fuel to deliver 1 btu of energy to the fuel tank of a car.

-Gasoline: Approx 1.25 btu's of fossil fuel energy required to create enough fuel to deliver 1 btu of energy to the fuel tank of a car. Yes, it takes more energy to make alcohol and deliver it to a car than it does gasoline! 

-Electricity: Approx. 33 btu's of fossil fuel energy required to create enough fuel to deliver 1 btu of energy to the battery of a car. Nuclear generated electricity requires even more energy input because of the immense amount of waste heat that must be dissipated. 

The numbers above are fairly realistic. And some in the corn - alcohol fuel industry will tell you that alcohol fuel is bottled solar energy because of  the fact that corn and other vegetable fuel stocks are grown in the sun. If you would like to look at the numbers in more detail there is a good explanation available at the following link:  http://www.extension.iastate.edu/AGDM/articles/hof/HofJuly07.html  

Electric cars are the wave of the future, but we are not there yet. Coal generated electricity is dirty and inefficient. Nuclear is a better alternative in regards to green house gasses but it is much more expensive and there are still unresolved safety issues. Alternative technologies such as wind, tide, and fuel cell technologies are on the horizon but will not offset coal for some time to come. Hydro Power is maxed out in the United States. 

What this means in terms of overall efficiency and the production of greenhouse gasses is that for now, a highly efficient, non-plug-in hybrid vehicle is a better choice than a plug-in hybrid or an all electric vehicle. When and if electricity for cars can be generated by renewable, non fossil or fissionable fuels, then this formula may change. But for now, the environment and the economy are on the side of gasoline, diesel, natural gas and alcohol fuels.

Prognostication 09 (updated January 5)

Jim Kunstler's forecasts are very pessimistic (www.kunstler.com). Unfortunately they tend to be accurate. Of all the major bloggers who prognosticate on energy, economy and environment Jim has the best track record for elucidating the basics and for drawing conclusions about what they mean. I have been reading Jim's material for several years. At first I found it mostly entertaining, but I was not a believer. Jim writes with outrageous bluster and hypebole. While it makes for an interesting read, his style tends to undercut his credibility. His forecasts have been so outrageous that they make it difficult to believe him when he predicts  that the status quo will move so far, so quickly. 

I read a lot about energy, environment and economics - this is a natural result of practicing landscape architecture and environmental planning for the last 35 years. Landscape architecture and architecture are perennial bellwethers of the economy. They are the first to take a dive when the economy goes south and the first to recover when the economy comes back. So, being flexible and being able to forecast and move from one market to another, as markets rise and fall, becomes a survival tactic. 

The design professions for the built environment are driven by market conditions and react swiftly to upturns and down ticks in the economy. If you want to know when the economy will truly come back, you would do well to monitor the employment ads for these professions. When you notice a trend in increased hiring you can safely start to move back into the market because the money is starting to flow again and the landscape architects, architects and engineers are the first ones to begin the work of ramping up for new capital projects. 

So, Jim Kunstler has been on my radar for the reason than that he understands the issues, has good information, he can synthesize, and he writes well. At the beginning of each of the last few years he has made a forecast for the coming year. At the beginning of last year, he predicted pretty much what happened, as it happened, but so outrageously that it was hard to believe. By mid year, as things unrolled as he said they would, I started to pay serious attention to  his weekly blog. 

Jim has just published his forecast for 2009 and it does not include much hope for recovery, or even leveling out the broader economy. If his forecasts remain as accurate as they have been in the past, we are in for a rough ride. There will be a quick uptick from the influx of public money for public works but the underlying forces which have shaped the current downturn have not abated, nor will they abate in the near and intermediate term. 

Things will  be better in the design and construction sectors in the near term as the public money kicks in but the broader economy is in for a great deal of volatility as demand for commodities continues to skate along its convergence with peaking supply capacity. Many crucial natural resources such as free flowing oil, steel, copper, et.al. have fallen in price because of  over supply, but the capacity for supply to exceed demand is not far away and as the economy begins to recover, scarcities will return and drive prices back up, thereby once again weakening the fundamentals. Acknowledging that there are sectors and places where the economy is contra cyclical to conditions in most of the rest of the world, I will leave it to you to read his material yourself and draw your own conclusions. 

Mikes Forecast for the Design Professions

Except for federal, and some institutional work, everything in the development world pretty much shuts down early in a major recession. If real money has been dedicated to construction and the construction is underway, the work will probably be finished. However, the first sector to go down is the private development sector. This is followed a year or so later by the state and municipal sectors as their coffers dry up due to declining tax revenue. In a mild recession the private sector comes back first as money starts to come back into the system and then the municipal and state sectors come back as the tax money from the new employment and properties comes on line. The story is different in major recessions and in a depression because the money does not come back into the system quickly, or on its own. 

Within the design fields, the first to feel the pinch are those firms and individuals who work primarily for private developers. When these firms start to suffer they switch their marketing to focus more on municipal, state and federal work. It is difficult and time consuming to break into federal work so, unless they already have diversified into that market, or unless they can team with firms established in federal work, inexperienced firms probably will not succeed in the near term. 

The design firms which have already established themselves in the municipal and state arena now begin to feel the pinch as they find their competition has increased exponentially. For example, it is not uncommon to see thirty firms bidding on municipal projects that might have attracted fewer than ten bidders during good times. Not only that, but the firms inexperienced in municipal work drive fees down in that they tend to under bid the work because they do not understand the full ramifications of working within the world of the bureaucracy. And then the supply of work begins to dry up as tax revenues fall. So, unless a firm is ensconced in federal work or is somehow immune to economic fluctuations, they will have a tough row to hoe. The same, of course, goes for the individual landscape architects and allied professionals who are laid off or who hang in with their jobs under reduced circumstances. 

Where We Are and Where We are Headed

In terms of the design professions, and development in general, we are near the bottom of this cycle regardless off  what happens in the commodities markets. The feds are going to pour massive amounts of money into infrastructure projects and the first (or second) group to begin to reap the rewards of this influx of money will be the engineers, architects, planners and landscape architects who work in the arena of infrastructure and public works. As the work is designed, and it will be fast tracked, the design firms will ramp up quickly and begin to hire. As the designs move into construction the construction industries will also ramp up and begin to absorb the excess capacity within the commodities supply markets. All this work will generate income taxes. People will buy new houses and start to pay property taxes. The new tax money will help to repay the investment in kick starting the economy. The design professions should see an early upturn within three to six months. 

Update  1-5-09 >>>I did note above that the design  and engineering professions might be the second group to see the uptick. My sources tell me that the immediate kick start will likely go directly to construction, bypassing design. There is a backlog of designed and permitted, but unbuilt, projects virtually everywhere. Many see the quickest way to  get the most out of  the re-employment efforts is to  go directly to construction on those projects, as the lag time for design and permitting in the public arena can be very long. However, at the same time I believe that stimulus will be added at the research, development and design levels for new types of infrastructure projects to offset dependence on over demanded and under supplied commodities.

The danger lies in the possibility of inflation and volatility. As mentioned in my earlier post titled "How Do You Pay for a War?", inflation is good for debtor nations. Inflation results from a  loss of value of currency. As debts are tied to currency, the declining value of the currency effectively wipes out a corresponding amount of debt. Once heavy spending overcomes the deflationary pressures of economic decline, as it will, the spending becomes excessive and forces the currency being spent to decline in real value relative to commodities, products and real estate. Prices rise, salaries rise and a cycle is created. 

In order to avoid inflation, the stimulus will have to be reigned in, perhaps sharply and quickly. I am hearing that the stimulus package will be monitored to  avoid over inflating the money supply and that it may last no longer than 18 months. If true, this means that the duration of direct stimulus projects will be quite short. R&D projects for larger new technology projects will have to make a shift from stimulus to long term sustainability projects meant to keep things running. This process is very difficult to manage and it can easily result in economic volatility. 

At the same time, the world's supply lines reached peak yield in 2008 - this resulted in the surges in prices of commodities which helped spark the downturn. Because of the economic collapse, those supply lines are not being expanded and ceilings are not being raised. Very little new capacity is being added to the supply infrastructure because the profit has evaporated due to falling prices and few can obtain the money to make it happen. Despite the recent fall in commodity prices, supply has not increased. Only demand has gone down and it really has not gone down much, just enough to leave surpluses in the system's 'just in time' supply line, which has no room for storage. As the economy comes back on line we will quickly take up the slack and prices will begin to go up as demand quickly exceeds supply.  All of the major global economies are on the same track as we are, and the result will be volatility of supply and demand. 

The effect is that there are two separate forces acting to create volatility; the supply of currency and the supply of commodities. The design professions will be busy for the near term but the ability of the larger economy to ride out the volatility remains in question. If you believe Jim Kunstler, we will see much change in our world before stability returns. 

How do you pay for a war?

Answers vary. If you arre fighting a war of agression, and if you win, you pay for the war with plunder. You take the enemy's resources for yourself and use them in place of other, more expensive resources. Another way to profit from the wara is to corner the market and sell the appropriated resources to others at inflated prices. If you loose, you pay for the war with your own resources and labor to your disadvantage or perhaps to your complete ruin. If you do not win, and are not conquered, as in a stalemate or the late discovery that the rewards are not worth the sacrifice, then you have to find a way to reduce the war debt without selling off your own resources. The tried and true way of reducing real war debt is to reduce the value of the currency which has been promised to pay back the holders of the war debt.

The result of this action, in common language, is inflation. The way that you do it is to start printing, and spending, more money than can be backed by real wealth. In a free or lightly regulated economy this will reduce the value of the money, or even make it worthless as happened with Confederate money during and after the Civil War. Since the actual debt is locked in at the previous value of the money you get a real after the fact discount. In other words if you promised to pay for a bullet in dollars which were worth an ounce of gold but which are now worth only a half ounce of gold, you get the bullet for half price. Who loses? The holders of the debt. Who wins? The buyer of the bullet.

Ok, so who holds the debt and who bought the bullet? Well, in a global economy, the overall economy of the aggressor is used as collateral for the debt. The aggressor economy is seen globally as being a good investment and other nations put their money into it in hopes of getting a good return on their investment. Often this is seen as priming the pump; the loaning country will put money into the aggressors economy so that the aggressor will buy goods, perhaps arms, perhaps consumer goods, from the country making the loan. They do this by buying the currency of the aggressor country and thus making the currency seem to have more value or by selling goods to the aggressor at a discounted value, which has the same effect. The increased value of the aggressors currency allows the aggressor to have the funds to launch the war. The loaning country is gambling that the aggressor will win and that the aggressor will pay them back with money that is more valueable than when loaned.

There is another holder of the debt and that is the citizenry of the aggressor country. These citizens have invested in the economy of the aggressor nation, either by buying equity in the war machine or by being obligated to pay future taxes towards the war debt. There is also a middle operation in the finance of the war that makes a nice profit off of all the transactions regardless of whether the war is won. These people are generally smart enough to trade in currencies and commodities which will not loose value.

So, you fought the war but muddled it and did not get the plunder and cheap labor you thought you were going to get. Your war debt is pegged to a specific value of currency that is not tied to a specific commodity like gold or silver. How do you reduce the debt? You reduce its value relative to real commodities like gold. You do that by printing and spending more than you can borrow or tie to a real commodity. The result is that the currency loses value and you can pay back the debt with worthless money.

Sound familiar?

The Mall

I spent a good part of the day today in Atlanta's two premier malls, doing Christmas shopping. It really turned out to be futile as there was almost nothing in either mall which appealed to me, or which made sense as a gift for people I know. I guess that someone must be buying that stuff but for the most part it is over priced, mass produced crap. The only place that held any appeal to me is Mori, where they stock high quality travel goods, brief cases and Mont Blanc pens. Their stock is generally of high quality, the shop is well laid out and the staff is helpful.

I wound up buying a nice packable jacket for my wife (at Mori - it was the only jacket in the shop) but did not find anything else appealing in the whole mall. It seems that when the malls do have something that interests me, (like a pair of binoculars or a camera) it can be found in a specialty store, generally free standing or away from a mall, at a lower price and in a brand with a much higher quality. And forget about finding good quality outdoor clothing, and gear at the mall; it is all in the specialty stores like Dick's or REI.

Well, it is still an interesting place to visit. Hypnotic, in fact. The mall is the ultimate expression of American consumerism. It is also the new downtown for the automotive mobile. Why do so many people find this mecca of mediocre quality to be the center of their social life? Wouldn't it be more interesting, really, to spend the afternoon gallery hopping, or visiting a museum, or shopping in an interesting neighborhood district?

Of course, the energy implications of the mall are complete. The energy that it takes to get there, the contrived lack of connectivity, massive HVAC systems and general separation from nature.

Price increases drive conservation, but who gains?

Recent price increases for fuel will no doubt drive conservation. The laws of supply and demand are driving up the prices and the market is successfully forcing us to conserve fuel. But, as usual, there is a flip side to the equation. First, the cost of producing most fuelstocks has not risen significantly. It certainly has not risen in concert with the rise in delivered fuel prices. Therefore, the owners and managers of the fuel supply infrastructure is making a whole lot of money off of the shortage.

In terms of conservation, the increase in price is good; it will force us to save energy. But what is happening to all of our money? Is it going to go into R&D for new sources of energy, or is it going into boats and resort vacations for the company owners (and billion dollar stock options for the managers)?

Since the money is coming from John Q., should he have a say in what is done with it? Where does public policy enter the picture? Should, perhaps, the increase in price go into a tax fund so that the money can be put back into use in the public interest rather than funding luxurious lifestyles for a bunch of would be oligarchs? Can this sort of enquiry be delayed for a couple of years by having the Justice Department conduct investigations to see if price gouging is going on?

The President on Peak Oil

THE PRESIDENT: "See, what's changed is the global supply for fossil fuels is outstripping the -- the global demand is outstripping the global supply, and so you're seeing a price of the feedstock of normal energy going up, and technology driving the price of alternatives down. And that's why this is a really interesting moment that we're going to see. It has changed a lot of thinking. The price of natural gas and the price of crude oil has absolutely made these competitive alternative sources of energy real. And the question is, do we have the technological breakthroughs to make it such that it can get to your gas tanks."

The above is a quote from President Bush's recent speech at the National Renewable Energy Lab. I guess he is contradicting the Vice President as Mr. Cheney was recently quoted as saying that conservation offers no solution to the energy situation. Or maybe not. Click here for a link to the complete text.