1. Jan/2006Jaccard / Res&EnvMgmt / SFU1 Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy Mark Jaccard School of Resource and Environmental Management Simon Fraser University Vancouver, Canada January, 2006

2. Jan/2006Jaccard / Res&EnvMgmt / SFU2 Prescription – assume humanity should strive for: –A near-zero-emissions (indoor, urban, regional, global) energy system with low impacts and risks to land and water –Expansion of system to meet legitimate energy service needs of the global population Prediction – given this sustainability prescription: –How will major energy options fare this century and beyond? –What might such a system cost? –How could we achieve it? Prescription and prediction of a sustainable energy system

3. Jan/2006Jaccard / Res&EnvMgmt / SFU3 Motive: a researcher’s reaction to strong assumptions Troubled by many recent books attributing major global problems to fossil fuels – war, economic chaos, environmental harm. “Civilization as we know it will come to an end sometime in this century unless we can find a way to live without fossil fuels.” (Goodstein, End of the Age of Oil, Norton, 2004).

4. Jan/2006Jaccard / Res&EnvMgmt / SFU4 What is the energy system?

5. Jan/2006Jaccard / Res&EnvMgmt / SFU5 Current trends Total =: 429 EJ 6 GtC/year Total =: 1,390 EJ >20 GtC/year 20002100 Population – 6 billion E/GDP - 13.5MJ/$ Population – 10.5 billion E/GDP – 6 MJ/$

6. Jan/2006Jaccard / Res&EnvMgmt / SFU6 Sustainable secondary energy in 2100?

7. Jan/2006Jaccard / Res&EnvMgmt / SFU7 Challenges for nuclear and renewables Nuclear power (risk perception) –Aversion to extreme event risk (focus on outcomes) –Geopolitical risk Renewables (uncertain costs with scale-up) –Cost declines with R&D and cumulative production –Cost increases from scale-up related to low energy density, variable output and inconvenient location

8. Jan/2006Jaccard / Res&EnvMgmt / SFU8 Energy efficiency trend

9. Jan/2006Jaccard / Res&EnvMgmt / SFU9 Challenges to accelerating the efficiency trend Ignored costs of more efficient devices –risks of long-payback and new technologies –intangible costs of imperfect substitutes Mega-rebound from energy productivity –direct end-use rebound –innovation and commercialization rebound Policy barriers –ineffectiveness of information and subsidies –political challenge of higher prices and regulation

10. Jan/2006Jaccard / Res&EnvMgmt / SFU10 Fossil fuels: “the unusual suspect” How long can they last? –reserves and resources of coal, oil and natural gas –substitution between fuels and with other energy Can we use them cleanly? –history of cleaning up –new and old challenges – urban, regional, global

11. Jan/2006Jaccard / Res&EnvMgmt / SFU11 Hubbert’s peak

12. Jan/2006Jaccard / Res&EnvMgmt / SFU12 What consequence?

13. Jan/2006Jaccard / Res&EnvMgmt / SFU13 Oil sources and substitution

14. Jan/2006Jaccard / Res&EnvMgmt / SFU14 Secondary energy prices and primary energy substitution

15. Jan/2006Jaccard / Res&EnvMgmt / SFU15 Zero-emission fossil fuel use natural gas coal, oil combustion, reforming, gasification CO 2, etc. electricityhydrogen

16. Jan/2006Jaccard / Res&EnvMgmt / SFU16 Geological storage of CO 2 and other emissions

17. Jan/2006Jaccard / Res&EnvMgmt / SFU17 Carbon sources and sinks Source: David Keith

18. Jan/2006Jaccard / Res&EnvMgmt / SFU18 Zero-emission fossil fuels energy system

19. Jan/2006Jaccard / Res&EnvMgmt / SFU19 Criteria for predicting social preferences Projected cost (synthesis of numerous studies) –Depletion of higher quality resources and sites –Cost reduction through innovation –Cost reduction through greater production (economies-of- scale and economies-of-learning) Extreme event risk –Aversion to extreme event risk (focus on outcomes) Geopolitical risk –Energy supply security and political independence Path dependence –Not a decision criterion, but a long-term cost factor

20. Jan/2006Jaccard / Res&EnvMgmt / SFU20 Projected electricity cost Zero-emission generation of electricity (¢/kWh in $US 2000) Assumed input prices are coal $1.5 – 3/GJ, natural gas $5 – 7/GJ, and biomass $2 – 5/GJ. 2 4 6 8 10 12 (¢/kWh) coal combustion coal gasification natural gas nuclear hydro wind + storage biomass PV-solar

21. Jan/2006Jaccard / Res&EnvMgmt / SFU21 Projected hydrogen cost Zero-emission production of hydrogen ($/GJ in $US 2000) Assumed input prices are coal $1.5 – 3/GJ, natural gas $5 – 7/GJ, and biomass $2 – 5/GJ. See electricity prices figure for electrolysis. 5 10 15 20 25 ($/GJ) coal gasification natural gas biomass gasification Nuclear electrolysis of water Wind/hydro electrolysis of water

22. Jan/2006Jaccard / Res&EnvMgmt / SFU22 The challenge for nuclear The limits for efficiency Renewables versus zero-emission fossil fuels Incorporating all criteria

23. Jan/2006Jaccard / Res&EnvMgmt / SFU23 Primary energy shares in a near-zero-emission future Fossil Fuels 358 EJ Ren. Modern 16 EJ Ren. Trad. 45 EJ Nuclear 9 EJ Ren. Modern 450 Fossil Fuels 680 Nuclear 40 Ren. Trad. 30 GHG Emissions = 6Gt/C Total = 1,200 EJ GHG Emissions = 1~2GtC 20002100 Fossil Fuels 358 EJ Ren. Modern 16 EJ Ren. Trad. 45 EJ Nuclear 9 EJ Ren. Modern 450 Fossil Fuels 680 Nuclear 40 Ren. Trad. 30 Total = 429 EJ Total = 1,200 EJ GHG Emissions = 1~2GtC 20002100

24. Jan/2006Jaccard / Res&EnvMgmt / SFU24 Energy price increases –Electricity final price increase of 25-50% over the next 50 years (less than 1% per year) –Similar increases for clean burning gaseous (H 2 or H 2 mixed with natural gas) and liquid (biomass) fuels Rising energy cost share of household budgets –Increasing in typical OECD country from today’s 6% to 8% by about 2050 –Compare to 20% energy cost share of household budget in 1900 and 20% in developing countries today Impacts for energy consumers

25. Jan/2006Jaccard / Res&EnvMgmt / SFU25 Careful not to bias energy regulation against clean fossil fuels –Subsidies and regulations that only favour efficiency, renewables and nuclear Newer approaches –Multi-sector or economy-wide cap and trade (with safety valve) –Sector-specific regulated niche markets Impacts for energy regulation

26. Jan/2006Jaccard / Res&EnvMgmt / SFU26 Conclusion Energy system should be seen in terms of means and ends – not good guys and bad guys. The end is a clean, enduring and low cost energy system – with minimal extreme event and geopolitical risk. In the pursuit of this end, fossil fuels can be part of a sustainable energy system for a very long time.

27. Jan/2006Jaccard / Res&EnvMgmt / SFU27 For details order online at www.cambridge.org