Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Monday, December 10, 2012

Bad Gas

Colleagues,

Last year, when the EPA announced its new fuel efficiency standards for automobiles, I penned this little analysis. I thought I'd post it now, seeing as how Canada, courtesy the irrepressible bureaucrats at Environment Canada, has decided to follow Obama down the rabbit hole.

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Colleagues,

Just a short note today to signal Wednesday's announcement by the White House of new EPA regulations that will require automobiles, by 2025, to achieve a fuel efficiency standard of 54.5 miles per gallon (Note A).

…yeah, okay then.  For the record, the auto industry, and the internal combustion engine that is it's principal component, is over 100 years old.  Automakers have been attempting to improve fuel efficiency for pretty much the whole of that period.  How far, you ask, have they gotten?  Well, according to Ford, the top fuel efficiency of the Model-T - the Flivver, the infamous Tin Lizzie, mass production of which began in September of 1908, a little over 104 years ago - was 25 MPG.  The highway fuel efficiency rating of a 2012 4WD Ford Fusion is…25 MPG.  The latter is naturally a little more comfortable, what with air conditioning, a CD player, and cushioned as opposed to wooden seats, but the fuel efficiency is pretty much the same.

Think I'm joking?  Let's go to the data.  In 1978, a 6-cylinder Jeep CJ got 18.1 MPG on the highway.  In 2011, a Jeep Patriot 2WD, after 33 years of gas crunches, climbing gas prices, and EPA efficiency targets, got 29 MPG on the highway.  Not interested in SUVs?  In 1978, the top fuel efficiency for a production car was 35.1 MPG by the Chevy Chevette (it beat the famously fulminatory Pinto by half-a-MPG) with 35.1 MPG on the highway.  The Chevette, for those of you who never got to see Star Wars in a theatre, was a two-door hatchback weighing in at less than a ton.  A comparable vehicle today?  How about a Honda Civic?  It gets 36 MPG.

I expect you see the pattern.  Let's make it graphical.  Here's US Government data on the MPG characteristics of the current suite of 2012 production vehicles on offer.  Along the Y-axis we have highway fuel efficiency in MPG; along the bottom, vehicular class, as follows: 1=2-seaters, 2=minicompact, 3=subcompact, 4=compact, 5=midsize cars, 6=large cars, 7=small station wagons, 8=midsize station wagons, 9=large station wagons, 10=small 2WD pickups, 11=small 4WD pickups, 12=standard 2WD pickups, 13=standard 4WD pickups, 14=cargo vans, 15=passenger vans, 17=2WD special purpose vehicles, 20=2WD minivans, 21=4WD minivans, 22=2WD SUVs, and 23=4WD SUVs.




2015 is three years away.  Which cars meet the EPA's mandated fuel efficiency targets for that year?  Well, using composite city-highway milage, there are 8 that do (they don't all show up because of overlap on the graph).  Here they are:  The Toyota Prius, the Prius wagon, the Honda Civic Hybrid, the Toyota CT200H, the Ford Fusion Hybrid, the Ford Lincoln MKZ hybrid, the Chevy Volt, and the Toyota Scion iQ.

Guess what they all have in common?  That's right.  They're all hybrids.  Notice something else?  They're all small.  Even the one that nominally rates as a wagon - the Prius v - isn't exactly a battleship.  In other words, it's impossible for today's automakers to make a car that meets the EPA's 2015 fuel efficiency standard without making it both small and a hybrid.

What if we look just UNDER the EPA standard?  Well, the Volkswagon Passat gets 35 MPG combined (it gets 43 MPG on the highway, which is better than every hybrid vehicle except the Prius and the Civic hybrid).  Moreover, it's the same size as the Prius (bigger than the Volt or the Civic).  So what's the difference?  It's in the MSRP, amigos.

 

2012 Volkswagen Passat Sedan - base price $19,995

2012 Chevy Volt - base price $41,545

 

With that kind of price differential, who'd buy a Volt?  Well, would it change your mind if you knew that Dalton McGuinty would give you back $10,000 if you did? (Note B)  That still leaves you paying a $12,000 premium for a smaller vehicle.  At a difference in fuel efficiency of only 5.4% (combined; the Passat is actually 7% more fuel-efficient than the smaller Volt in highway driving), it's going to take a long time to make up $12K.

Now, bearing in mind that the fuel efficiency of the Model-T 100 years ago was 25 MPG, take a look at how many production vehicles currently meet the EPA fuel efficiency target for 2025.  The answer is "none".  The only one that even comes close is the Prius, and it's still 10% shy of the gold standard.  In fact, the only vehicles that presently meet that target are the all-electric Volt and the Tesla - all-electric vehicles that don't burn any fuel at all.

NOW do you get the picture?  The purpose of the EPA's 2025 target is to eliminate the internal combustion engine.

Here's my question: just how likely do you think that is?
 
//Don//
 
Notes

A) [http://www.nationalreview.com/planet-gore/283363/epa-2025-pigs-will-fly-henry-payne]
B) [http://gm-volt.com/2009/07/17/canadian-government-gives-10000-chevy-volt-subsidy-angers-toyota/]

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Just to drive the point home (so to speak), the average increase in fuel efficiency for cars over the past century has been zero. The Ford Fusion gets the same MPG as a Model T. But Obama's EPA - and now Environment Canada - expect auto manufacturers to achieve a 100% increase in fuel efficiency by 2025. That's thirteen years away. The laws of physics haven't changed. The only possible conclusion - the ONLY conclusion - is that this is an ideologically-driven attempt to regulate the internal combustion engine out of existence.

And why? As an auto-da-fe; an act of faith to propitiate the Gods of Carbon Dioxide.  As a little reminder, there has been no statistically significant warming for 16 years despite a 10% increase in atmospheric carbon dioxide concentrations. There is no justification in science or reason for the anthropogenic global warming thesis - and thus no justification in science or reason for costly, pointless government regulations aimed at outlawing one of the fundamental technologies that drive the western world.

A few more words on the Canadian take on this little endeavour. Here's how the government plans to sell the standards change to Canadians.

"These new regulations improve fuel efficiency so that by 2025 new cars will consume 50% less fuel and emit 50% less GHGs than a similar 2008 model, leading to significant savings at the pump," said Environment Minister Peter Kent. "At today's gas prices, a Canadian driving a model year 2025 vehicle would pay, on average, around $900 less per year compared to driving today's new vehicles."
 
Awesome. So at a savings of $900 per annum, it'll only take the average Canadian family thirteen and a half years to pay off the extra $12,000 that their Volt will cost them. Assuming, of course, that they didn't finance the difference, and assuming that the Ontario government can afford to continue subsidizing every Volt that's sold to the tune of $10,000 a pop.

Ontarians buy 45,000-50,000 new passenger cars per month. That's 540,000 - 600,000 new cars per year. If everyone buys Volts - and once these new regulations are in force, that's all that anyone in Ontario will be allowed to buy - then the Ontario government is going to be on the hook for $10,000 x 550,000 = $5,500,000,000 in hybrid car subsidies every year.

Ontario's budget deficit in 2012 was already $15.2 billion. These subsidies would bump that up by a third.  All to support sales of a car that can go at most 80 km on a 10-hour charge, provided it's not too cold.

Can't politicians do arithmetic?

Thursday, November 1, 2012

19 January 2012 – Going nuclear: Models vs. History

“I’m sure that in 1985 plutonium is available in every corner drugstore, but in 1955 it’s a little hard to come by!” - Dr. Emmet L. Brown

Colleagues,

With Iran’s accelerating nuclear activities (and the periodic unfortunate demise of certain of its scientists) consuming all of our attention, a question of an historical bent seems pertinent:  Just how long does it take to build an atomic bomb?

It’s not an idle query, because there are no hard and fast rules.  Every historical case is unique.  The US Manhattan Project, for example, was launched in 1942 and achieved its first nuclear detonation on 16 July 1945, a delay of only three years.  While a great deal of the elementary physics of nuclear explosives had already been set out (including, in some cases, by scientists who later participated in the Project), the fact that two separate viable bomb designs (gun-type, used in the Little Boy weapon dropped on Hiroshima, and implosion-type, used in the Fat Man design that was tested at Alamogordo and subsequently dropped on Nagasaki), and more importantly two separate production processes for weapons-grade fissile material (highly enriched uranium for the gun-type weapons, and plutonium for the implosion weapons) were arrived at in only three years was a feat of defence-focussed R&D that wouldn’t be repeated until the Apollo Program.

(A note on weapon design.  Gun-type weapons function by slamming two sub-critical masses of fissile material together from opposite ends of a tube.  The speed of assembly is limited by the expansion of the combustion products for the propellant used, and runs at several hundred metres per second. Conventional propellant can create velocities of 500-800 metres per second. In an implosion type weapon, a sphere of fissile material is compressed by the controlled explosion of an outer shell of HE.  HE explodes at a speed of 7000-9000 metres per second, depending on the explosive compound (TNT is at the low end, with an explosive velocity of 6900 m/s, while Octol, which is a mix of 75% HMX and 25% TNT, is at the high end, around 8900 m/s.  Speed of assembly for an implosion type weapon is therefore in the range of tens of thousands of metres per second.  Why this is important will be explained later.)

The US experience therefore serves as the benchmark.  All subsequent nuclear weapons programs benefitted from the success of the Manhattan Project, if only from the knowledge that building a nuclear explosive was possible (something that the Manhattan Project scientists couldn’t confirm empirically until the Trinity test).  More direct assistance was available in some cases; the Soviet atomic program, for example, benefitted from espionage by communist agents in the employ of the US government, while Pakistan’s bomb designs were provided by China.  Still, for the sake of historical comparison, it’s worth tracking the progress of nuclear weapons development by other states, if only to demonstrate the extent to which they differ. 

Progress rates of nuclear weapon programs*
Years
 
Program Start
Fission wpn test
Fusion wpn test
∆to fission
∆to fusion
USA
1942
1945
1952
3
10
USSR
1942
1949
1953
7
11
UK
1946
1952
1957
6
11
FR
1956
1960
1968
4
12
PRC
1958
1964
1967
6
9
India
1967
1974
1998
7
31
Pakistan
1972
1998
-
26
-
DPRK
1956
2006
-
50
-

With the exception of a few outliers, though, the timelines don’t really differ all that much.  In fact, with only two exceptions the average time from program start to achieving a fission explosion seems to vary from 3 to 7 years, with the mode being 6.5 years; while the average time from program start to achieving a fusion (as opposed to simply a boosted fission) explosion seems to vary from 9 to 12 years, with the mode being 11 years.
Of course, those of us looking backward benefit from the existence of historical data points.  And of course there’s no guarantee that the next country to “go nuclear” will necessarily follow historical patterns; every case is different.  Some countries developed nuclear weapons under wartime pressures, while others did not; some had outside assistance, while others went it alone; and one - the US - pursued the project without knowing whether a nuclear weapon was even possible (or, on the other end of the scale, whether it would overperform, and end up setting the atmosphere on fire or destroying the world).  It’s important not to underestimate the value of knowing that something can be done before you set out to try and do it yourself.   It’s also important to bear in mind that at least one of the above countries - Pakistan - likely possessed a nuclear weapon long before testing it.
All of which brings me to the subject of this discussion, which was the attempt by the US Government 46 years ago to try and guesstimate how long it would take for the “next” country to develop a nuclear weapon. 
In May of 1964, the Lawrence Radiation Laboratory at the University of California Livermore (now known as Lawrence Livermore Labs) launched a highly classified, very small project.  Dubbed the “Nth Country Experiment”, the project brought together three post-graduate students, none of whom had any expertise in or specialized knowledge of nuclear weapons, and tasked them to design a workable nuclear explosive device.  The three participants were:

·         David A. Dobson, 27, Ph.D. (Physics, Berkley, 1964) - experimental atomic physics

·         David N. Pipkorn, 28, Ph.D. (Physics, University of Illinois, 1964) - experimental solid state physics

·         Robert W. Seldon, 28, Ph.D. (Physics, University of Wisconsin, 1964) - low temperature physics

Note that all were newly-graduated doctoral candidates.  The experiment was designed to simulate the challenges facing a putative “Nth Country”, one that had access to qualified academic personnel, but no outside assistance.  They were to work entirely from unclassified sources.  The trio were given a single point of contact at LRL - a physicist, A.J. Hudgins - and had to go through him for all information requests.  All communications were conducted in writing to minimize the chance of accidentally passing any helpful information to the team.  Hudgins, using the resources of the weapons designers at LRL and other Department of Energy facilities, took the questions, and - simulating the testing process that would be available to a real team of weapon designers - staffed them out to expert groups to develop answers.  In this way, the trio could propose design and fabrication features for a weapon, and subsequently receive “test data” (derived either from actual previous US nuclear weapon tests, or from simulations of how the proposed material designs might work) to help guide them in their work.
Based on what they were able to learn from unclassified sources (not a great deal, compared to what is available today), they made a number of interesting assumptions about how they should proceed.  I use the word “interesting” because they departed somewhat from their fields and took into consideration economic and political issues in addition to questions of pure physics.  For example, they dismissed U-233 as a fissile material because the cost of building a thorium breeder reactor to produce the element was deemed “prohibitive”.  They established that it would cost about the same to produce U-235 or Pu-239; but when they questioned “Nth Country Treasury Department”, they were informed that the country had the resources to produce one or the other, but not both.  Interestingly, they weighted Pu-239 higher, because it is isolated from uranium reactor waste (whereas U-235 is produced by enriching natural uranium).  This meant that building plutonium-fuelled bombs had economic advantages because it required the “Nth Country” to invest in nuclear reactor technology rather than simply in uranium enrichment technology.
The two other considerations they looked at were physics, and weapon design.  From a physics standpoint, plutonium has both a lower critical mass (meaning less fissile material would be required per bomb) and higher compressibility, which makes it easier than U-235 to use in an implosion type weapon. But plutonium cannot be produced without Pu-240 contamination, which has a high neutron background and a high spontaneous fission rate, making it impossible to use in gun-type weapons, because given their slow assembly speed, the high neutron flux would initiate fission before the core was assembled, causing a premature explosion and a poor yield (a “fizzle”).  U-235, on the other hand, has a low neutron background and a low spontaneous fission rate, meaning that it could be used in a gun-type weapon, which is by far the easier type of design to develop.
According to the trio,

So there was a certain amount of scientific hubris involved in the selection process - which I suppose means that the trio were behaving like normal scientists.  In any event, by December 1964, the three ersatz weaponeers had settled on a plutonium-based implosion type weapon.
The trio attacked the problem in three phases.  Phase I was achieving an understanding of the basic concepts and design considerations required to begin the design process.  Phase II extended the basic physics of the design problem through quantitative neutronics calculations looking at compression characteristics of the materials in question, the design of converging explosive lenses, and the development or selection of detonators and a neutron initiator (an “initiator” provides an initial burst of neutrons to kick-start a fission chain reaction).  The second phase also looked at optimizing the mass of the plutonium core, and establishing the required thickness of the tamper (a metallic layer outside the core that serves both as a solid mass to provide the compressive impulse when struck by the explosive shock wave, and as a neutron reflector to intensify the building neutron flux in the compressed core).  Phase III of the project extended Phase II into final calculations of the implosion physics and the “iterative fission expansion” (i.e., the production of sufficient neutrons at the correct rate to sustain and multiply the fission reaction).  Once these calculations were complete, the bomb design would be “proved” to the maximum theoretical extent possible short of an actual build-and-test.
The trio submitted their design in September 1966.  The final report was submitted in December of that year and was assessed by experienced weapon designers at LRL and elsewhere.  Each of the elements of the design - the core, the tamper, the initiator, the explosives, the detonators, and all of the physics calculations - was individually critiqued.  The final report, which was published in March of 1967, was classified SECRET (ATOMIC WEAPON CATEGORY SIGMA 1), and the version which was released 30 years later in 1995 is so heavily redacted that it does not show whether, in the opinion of the assessors, the design would have worked or not.  The physicists who critiqued the design disagreed with some of the numbers and calculations in the trio’s report, and opined that the designers offered very little firm information about the criticality of the proposed system; they state that “confidence in the expected yield is unwarranted.”  This was not a crushing comment; the US nuclear testing program experienced many extreme variances between expected and actual yields, ranging from numerous complete “fizzles” that achieved no criticality, to the infamous Castle Bravo test shot on 1 March1954, which was expected to produce a yield of 4-6 Mt, but which actually produced a yield of 15 Mt, completely obliterating Bikini Atoll and resulting in a 280-mile fallout plume that contaminated the Marshall Islands and the crew of a Japanese fishing vessel. Sometimes you don't know what you don't know until you "go empirical", and find out the hard way.
One of the interesting things about the report of the Nth Country Experiment is that while the redactors severed anything that might assist an actual Nth Country in building a bomb, they left in a good many very interesting observations made by the project trio and by the experts that assessed their work.  The trio, for example, rejected a priori any comparison between their work and the work at Los Alamos by the Manhattan Project scientists, noting that that prior group contained “some of the world’s outstanding physicists”, and acknowledging the “motivational climate in which they worked.”  The trio, by contrast “had the advantage of knowing that a bomb could be built”.  They also acknowledged the importance of having access to a library containing “a large quantity of literature on shock waves, explosives, nuclear physics and reactor technology” that had been published since 1945.  They noted that the project rules slowed them down somewhat; they spent “a good deal of time preparing requests which presented enough information about our understanding of what was being requested so that a suitable reply could be obtained”; such procedures would not necessarily obtain if a real Nth Country was racing to build a bomb.  There were no artificial firewalls or stovepipes between the physicists, engineers and technicians working at Los Alamos.
They also noted that they could have designed a U-235-based gun type bomb, and that had they done so, they would have been able to submit a working design much earlier.  They also made two very interesting observations about thermonuclear weapons, stating first that while they believed that their implosion weapon would be credible without a test, they could see no way of designing a thermonuclear weapon without testing.  In that context, they made the following observation:

That report was submitted on 14 December 1966.  Exactly six months later, on 17 June 1967, China tested its first thermonuclear weapon, a 3.3 Mt radiation implosion (Teller-Ulam) style device, at Lop Nor.  Obviously the trio knew what they were talking about.
The assessment team also made a number of very interesting observations about the assumptions made by the trio in designing their approach to the experiment:
In other words, an Nth Country might be less interested in long-term economic benefits and challenging scientific problems than getting their hands on a workable bomb NOW.  Such a country might opt for uranium enrichment and a simple, reliable gun-type weapon over building a plutonium production complex and designing a complicated implosion type weapon.
It would certainly explain why, for example, a country with immense oil and gas reserves might be building an enormous uranium enrichment complex (<cough> IRAN <cough>). Hint: it's not for nuclear power plants.
Would a new bomb project work out the same way today?  A lot of things are different from 1966.  There’s a lot more information out there about nuclear weapons design, it’s a lot easier to find thanks to the Innerwebz; and it’s an AWFUL lot easier to do the kinds of calculations necessary to design explosives, cores and shock waves.  One of the anecdotes recounted by Robert Seldon during an interview for the final report details just how much computing technology changed from 1945 to 1965:

An average laptop today has orders of magnitude more computing power than the LRL mainframe did in 1965, and that mainframe was orders of magnitude more powerful than "a room full of girls with desk-calculators".  What took months of data manipulation for the Trinity scientists and weeks of programming for the Nth Country trio would take at most hours for a modern computing setup. Maybe seconds.
So what’s the point of all of this?  Well, I find it interesting that the Nth Country trio managed to get from nothing to what was likely a workable bomb design in about two and a half years of desultory effort (only one of the members was full-time; the others were part-time), all while working from unclassified sources.  That matches pretty closely to the low end of the “delta to fission” timeline that history demonstrates seems to be the average to get to a working bomb.  If you factor in having to build a reactor and produce and refine plutonium from the reactor waste (which admittedly would probably be done concurrently to the bomb design effort), you might add another year or two to that, still falling comfortably into the mid-range of the average time it takes for a country to go from nothing to its first fission test.  So here we have a case where the output of an experimental model seems to line up fairly well with historical experience.
Suppose we apply that model and experience to Iran...what do we get?  Well, it’s a little hard to nail down the beginning of Iran’s nuclear weapons program, as they’ve had a reactor program for quite some time.  The existence of concealed uranium enrichment facilities was revealed in 2002, launching the ongoing IAEA investigation process and leading to seven successive UNSC resolutions demanding cessation of enrichment and imposing sanctions.  Iran has since “doubled down”, building more enrichment capacity and declaring itself a “nuclear state” in 2010.  The point is that we are at the very least well past the decade mark in Iran’s quest for nuclear weapons.  Only North Korea took longer to go from “mission” to “fission” - and Iran isn’t North Korea.  We won’t be able to put Iran on the chart until they actually detonate a nuclear weapon - but if history and the Nth Country Experiment are any guide, statistically speaking there’s a pretty solid chance that they’ve already got one.
But as I said above - “of course there’s no guarantee that the next country to 'go nuclear' will necessarily follow historical patterns; every case is different.”  Some countries - like South Africa, Brazil, and Argentina - stop short of testing.  Others might be stopped short of testing.  I hate to say “we’ll have to wait and see what happens”, but everything, in one way or another, is an experiment, whether it’s leaving 3 guys alone in a room for a couple of years and waiting to see what they come up with...or leaving a bunch of folks like Khomeini and Ahmadinejad alone in a resource-rich country for three decades, and waiting to see what they come up with.
Some experiments go well.  Some don’t.  I guess we’ll have to wait and see how this one goes.
While we're waiting, if you'd like to read the (expurgated) summary report of the Nth Country Experiment, it's available here:
Cheers,
//Don//

Notes

A) I left Israel off the list because the alleged start date for their nuclear weapon program is unconfirmed, and there has been no confirmed test.  Although if that data were entered, it would be a start date in the “late 1950s” with a first weapon built in the “late 1960s”, and a possible test (in conjunction with South Africa) in 1979.  This would give a “delta to fission” of about 20 years.  Deployment-before-testing is historically unusual, but not surprising in an undeclared nuclear power that likely received outside assistance with, and therefore had high confidence in, its bomb design.  Pakistan almost certainly fits this mould as well; it received bomb design assistance from China, and almost certainly had a deployed nuclear weapon long before conducting its first test in 1998 in response to India’s wave of nuclear tests.

Friday, October 5, 2012

16 December 2011 – Seeing the light

Colleagues,

There's been an illuminating development in the battle in the US Congress to avoid a federal shutdown.  The $1 trillion spending bill, agreed last night, runs to more than 1200 pages and includes all manner of provisions inserted at the last minute in order to garner sufficient bipartisan support to ensure passage.(Note A)

One of those last-minute changes was a rider defunding the Department of Energy's standards for light bulb efficiency that would have gradually outlawed traditional incandescent bulbs.  The result of an energy law signed in 2007 by then-President George W. Bush, the DOE standards were to have been phased in gradually; the first victims would have been 100W incandescent bulbs, which would have been outlawed as of 1 January 2012, a fortnight hence.  Grass-roots Republican supporters had seized on the ban, making it a cause-celebre, and the issue has been at the forefront of talk radio and Tea Party-type discussions for months.  Democrats railed against the rider, but managed to eke out what they consider a win by including provisions requiring recipients of federal grants in amounts of $1 million or more to certify that they will upgrade the efficiency of facilities to the 2007 lighting standards.(Note B)

The light bulb ban is one of those rare issues that seems to galvanize the disparate ends of the political spectrum.  Democrats justified the ban by citing the impending extinction of polar bears and the drowning of coastal cities; Republicans countered with charges of war-against-the-poor and historical treason against the sainted memory of Thomas Alva Edison.  Lost in all the rhetoric, as usual, was the bulk of empirical fact, to wit, that while incandescent bulbs consume more electricity to operate, the lowest-cost alternative - compact fluorescent bulbs - are far more expensive than incandescent bulbs, contain liquid mercury, rarely last as long as advertised, must be disposed of as toxic waste, and are virtually all made in China (and thus must be shipped across the ocean on oil-powered cargo ships).  One reason for the manufacturing location is that China is virtually the world's only source of the rare earth elements used in the phosphors coating the interior of the CFL tubes.  The next generation of candidate illumination, LED lights, are even more expensive (due primarily to the need for a heavy and costly heat sink) and unless of very high quality, do not come close to mimicking the characteristics of incandescent bulbs.

As an exercise in cost-effectiveness, I ran the numbers on these back in March (see "Are governments smarter than a5th-grader?, 8 March 2011"), and concluded that the payback period for LED bulbs is about 6 years.  I'm six months [17 months, now! - ed.] into that on my office light bulbs right now and they're all still working; let's see how that goes.

Of course, the cost-effectiveness calculation is only one part of the equation.  The unit cost of the spotlamps I bought was $35, about 30 times the cost of a comparable incandescent spotlamp.  The average wage-earner isn't in a position to engage in costly experimentation with novel lighting technologies; if you're pulling down $35K a year as a general labourer, $35 for a single light bulb might seem a little outrageous.  That, in my opinion, is what fuelled much of the discontent with the DOE standards that would have led to the demise of the incandescents about two weeks from now.  Of course, the visceral response by many Americans to the government telling them what light bulbs they can and can't buy probably had something to do with it, too; live free or die, and all that.  You can have my incandescents when you pry them from my cold, dead hands...

What I find especially interesting from a strategic analysis perspective is how some in the environmental lobby responded to the news that the bill effectively lifted the impending ban.  Jim DePeso, the policy director of the group "Republicans for Environment Protection", was quoted as saying:

"In the real world, outside talk radio's echo chamber, lighting manufacturers such as GE, Philips and Sylvania have tooled up to produce new incandescent light bulbs that look and operate exactly the same as old incandescent bulbs, and give off just as much warm light...The only difference is they produce less excess heat and are therefore 30 percent more efficient. Same light, lower energy bills. What's not to like?"

Well, Jim, as I pointed out above, there's a lot not to like.  But what DePeso is referring to is a new suite of bulbs like the Osram Sylvania, a halogen bulb that reportedly replicates 100-W performance while consuming only 72W of current.(Note C)  
 
The Osram Sylvania 72W halogen bulb

Unlike the CFLs, Sylvania makes the Osram, which doesn't contain mercury, in Mexico.  But there's another strategic problem, you see - unlike traditional incandescents, these bulbs require rare earth phosphors.  This prompted Sylvania to issue a consumer notice earlier this year:

Rare earth metals  are elements vital to the manufacturing of our energy-efficient fluorescent lamps as they are a crucial component of the light-producing tri-phosphors inside the lamps. Currently, 95% of the world’s rare earth metal mining and oxide production comes from China where the manufacture and export of these compounds is heavily taxed and controlled.

The Chinese government has implemented new tariffs and mining regulations on rare earth materials. These actions, coupled with increasingly strict export quotas, have caused the price of these compounds to substantially increase – as much as 3500% since January of 2010 in some cases.

Due to regulation, exports of rare earth materials were reduced 40% from 2009 to 2010 and another 35% during the first half of 2011 compared with prior year. It is clear that the Chinease [sic] policies regarding rare earth materials must be addressed with multiple strategies in order to stabilize pricing and supply of these critical minerals.

OSRAM SYLVANIA has and will continue to take steps to combat these rising costs. We have continued to strengthen our supply chain while spurring our research and development teams into action. We are investigating the ability to reduce the weight of powders used in fluorescent lamps while evaluating alternatives to the current phosphor combinations. However, despite our best efforts, the rising cost of rare earth oxides has outpaced our ability to absorb them.

In order to combat the steep rising costs of these raw materials, OSRAM SYLVANIA will increase pricing on our fluorescent lamps, including our T8, T5, Deluxe T12 and all CFL pin and self-ballasted lamps. These increases will go into effect July 1, 2011; August 1, 2011; and then monthly until the cost of rare earth materials are stabilized.(Note D)

What does that mean for the bulbs that Mr. DePose thinks are the next big thing, infinitely preferable to traditional incandescents?  Well, it means that they're going to get more expensive.  And they're not exactly cheap right now.  The 72W Osram Sylvania goes for $8.20, which is more than ten times the price of a 100W Phillips Duramax, which retails for $2.98 per four-pack at Home Depot.  But the Osram isn't ten times as efficient (it uses 72% of the power of the 100W Duramax); and it isn't ten times as long-lived (it's rated for 3500 hrs, compared to 1500 hrs for the Duramax).  So it's already not much of a deal.  Furthermore, as the above statement indicates, that $8.20-per-bulb price is subject to change without notice due to the impact of China's near-total rare earths monopoly on REE supplies needed by the Mexican manufacturer.(E)
As for Mr. DePose's comment about GE, Sylvania, Philips and so forth gearing up to make the new light bulbs...well, is that a consequence of consumer demand for vastly more expensive light bulbs?  Or is it a consequence of the 2007 Bush Energy law outlawing incandescent bulbs that was supposed to come into effect on New Year's Day?
The Great Light Bulb Purge - narrowly averted by Congress, at least for now - is an excellent example of the chicken-and-egg relationship of government regulation with consumer preference in the modern "free" market.  Apart from moral pressure (like the David Suzuki Foundation's recent and ludicrously hyperbolic "Drowning Santa" campaign), there are essentially two ways that governments can force consumers to buy things they wouldn't otherwise buy.  One is subsidies - governments giving taxpayer money to industries to make otherwise non-competitive products cheap enough for consumers to consider buying them (q.v. wind power, solar power, and hybrid and electric vehicles - I've got sources if you want'em) - and the other is regulating technologies deemed 'undesirable' out of business.  This is the source of the philosophy reflected in Obama’s campaign promise to bankrupt coal-fired electrical generating concerns (Note F).
Both approaches constitute interference in the marketplace.  And as I've mentioned before in previous missives, both of these techniques seem to keep popping up, time and time again, in the political drive towards the 'green energy' economy.
But for the moment, at least insofar as the venerable incandescent bulb is concerned, it seems as though someone just might have "seen the light".
(Exclamation of joy at sudden observation of luminescence expurgated)

Let us therefore give thanks.

Cheers,

//Don//

P.S.  A back-of-the-envelope calculation tells us a little bit about the cost comparison.  The 72W Osram Sylvania bulb sells for $8.20 online.  A 4-pack of Phillips Duramax 100W bulbs costs $2.98 at Home Depot, or $0.75 apiece.  The Duramax has a rated lifespan of 1500 hrs; the Osram 72W, 3500 hrs.  To get 21,000 hours of light, you'd need 6 Osrams or 14 Duramaxes.  21,000 hrs of Osrams would consume 1512 kWh of electricity.  21,000 hrs of Duramaxes would consume 2100 kWh of electricity.  At roughly $0.10 per kWh, the Osrams would cost you $151.2; the Duramaxes, $210.  So you're saving $58.80 over 21,000 hrs, or $0.0028 per hour of use.  Those 6 Osrams would cost you $49.20, whereas 16 Duramaxes would cost you $12.00.  So you're paying $37.20 more for the bulbs, but saving $58.80 on electricity, for a total savings of $21.60 over 21,000 hrs.  Unless the Osrams don't last as long as advertised, or their price goes up due to the rare earths shortage, of course.

Notes
A) http://www.politico.com/news/stories/1211/70530.html

B) http://www.politico.com/news/stories/1211/70534_Page2.html

C) http://assets.sylvania.com/assets/Documents/Consumer_SocketSurvey_FINAL.6f999370-cb88-479f-94e1-a6483531b81f.pdf

D) http://www.sylvania.com/Phosphors/

E) http://www.bulbtronics.com/Search-The-Warehouse/ProductDetail.aspx?sid=0000984&pid=OS72MBCAP120V&AspxAutoDetectCookieSupport=1

F) http://frontporchpolitics.com/2012/07/obama-keeps-campaign-promise-patriot-coal-bankrupt/

Saturday, September 29, 2012

Impossible things

Colleagues,

For years now, I've been a fan of Failblog. With the possible exception of Mark Steyn's punditry, it does a better job of blending the sublime with the ridiculous than just about any other site out there.

But I had to take issue with this photo:


Actually, not so much with the photo as with where it was posted: under "Win".

It's not a "win", people. Sure, it's a great picture of SST ENDEAVOR...but it's a picture of America's last operational space shuttle being delivered to a museum.  To put it another way, a couple of weeks after Neil Armstrong died, and 40 years after a human being last walked on another planet, America parked its last manned space launch vehicle forever.  The US government couldn't build a Saturn V rocket right now if it tried.  Think about that; it's like saying Chrysler couldn't build a 1968 Plymouth Fury.

Okay...maybe that's a bad example. They probably couldn't.

What that picture really signifies is that America is out of the manned space travel business, which - given that every other space programme in the world has only ever been a half-arsed attempt to copy America - is pretty much the same as saying that mankind is out of the manned space travel business.  Sure, there are robots on Mars, and lots of stuff like Cassini flying around the solar system (and out of it) - but even in the unmanned realm, the most extraordinary successes, like Voyager, are decades in America's past.

Maybe the death of manned space travel was inevitable. Is exploration really a necessity, or is it a luxury? Should the brokest nation in the history of human civilization not place its priorities elsewhere - like, for example, getting its fiscal house in order before spending billions to shoot a select few to tromp around Mare Tranquilitatis again (or, heaven forfend, Olympus Mons)?

Or is manned space travel one of those activities the ancillary civilizational benefits of which outweigh the costs? Is it le beau geste - the technological, the emotional, the moral equivalent of Caesar standing alongside the Rubicon and saying Alea iacta est? Is it a challenge that draws us onwards? Do we need a destiny to strive for?

I don't mean to suggest that we should aim for L5 colonies and lunar settlement and Martian terraforming; not just now, anyway.  But we need that challenge. Carl Sagan, a prisoner of the Cold War, used to say that a human future in space was our only defence against the possibility that we might destroy ourselves. I'm not that apocalyptic about it; I simply think that we need a challenge. Without a challenge, a civilization stagnates and festers. From a challenge comes shared purpose, and from shared purpose comes a sense of destiny.  For England, it was Empire; for America, it was serving as the democratic ideal. Hell, for the Soviets it was world socialism (at least until the West's economic karma ran over their dogma).  Bottom line, we need a goal; something unusual, something glorious even, to strive for. We need something inspiring to work towards. Not a mishmash of feel-good sociocultural gobbledegook of the sort peddled by Obama and his band of free-spending vandals and wastrels; not pastel sunshine, happy unicorns, or (as Steyn puts it) a "far distant horizon where educated women and fire-breathing Imams frolic and gambol side by side around their Chevy Volts". That's an image of America as a low-rent rest home, where the disabled half of the population squats in cheap wheelchairs staring blankly at Honey Boo-Boo while the other half spoons pabulum into their mouths.  That's not a vision, but a nightmare; a purgatory of cultural senescence that is far more destructive (and, terrifyingly, far more likely) than the shower of plasma and neutrons that had Sagan quaking in his boots.

No, we need something more than that, a greater purpose to draw us onwards; something grander and more inspiring to work towards than the vital goal of sacrificing the livelihood of the present to achieve a statistically immeasurable decline in the rate of increase in sea levels. We need something to struggle for that's not merely difficult, but that's impossible.  Why impossible? Because we're humans, that's why. Isn't "you can't do that" the most annoying thing you've ever been told? Doesn't it make you want to head right out and do "that", whatever "that" might be?  Doesn't the word "impossible" just...well, doesn't it just piss you off?

The White Queen famously told Alice that she sometimes believed six impossible things before breakfast.  When Rev. Dodgson wrote those words, balloons were common, but human flight was an impossibility.  Half a century later, courtesy the Wright brothers, it was not only possible, but routine; but rocket-powered flight was impossible.  Ten years after that, thanks to Robert Goddard, rockets weren't impossible anymore, and ten years later they were being used as weapons of war; but pushing a human past the speed of sound certainly was. Twenty-two years after Goddard, the sound barrier was broken by Chuck Yeager, but putting a man into space and bringing him back was impossible.  Fourteen years after Yeager, man was exceeding the sound barrier by several factors, and Yuri Gagarin went up and came back; but it seemed impossible that man would ever walk on the Moon.  Only eight years after Gagarin, Neil Armstrong took that first historic step.  That was forty-three years ago.

That's five impossible things, and we're just getting started.  We've visited every planet in our neighbourhood and our robot servants are patrolling the most promising one, looking for signs of water and life. Our emissaries, bearing our greetings, are on their way out of the solar system - the most primitive and inefficient form of interstellar communication imaginable, but the first one we could achieve, and so we did it.  We did it.

The shuttles were great, but enshrining them is like enshrining a bus or a dumptruck. They were not the tools of glory. Those will be the next ship - the one that takes humans to Mars, or to the asteroids, or to Ganymede or Europea or Titan. Or somewhere else.

So yeah, it's a nice picture of Endeavor.  But Endeavor was a UPS truck. It was a service van.  I want to see the next Flyer, the next X-1, the next Saturn V.  I want to see the next Nina, Pinta, and Santa Maria.

Endeavor is what was.

I want to know what's next.

//Don//

Tuesday, September 25, 2012

25 November 2011 – China’s coal rush

"Never interrupt an enemy when he is making a mistake."

- N. Bonaparte

 

"Son, a Russky don't take a dump without a plan."

- Admiral Joshua Painter (Fred Dalton Thompson), The Hunt for Red October

Colleagues,

For most of 2010, carbon shares on the EU carbon market were trading at well above  €15/tonne, which is astronomical compared to the $0.05/tonne that US carbon shares crash-landed at a year ago, leading to the closure of the Chicago Climate Exchange.  Over the past few months, however, the European carbon market decided to follow its US counterpart and began a long, slow thundering in.

 

According to Bloomberg, that's the last 12 months.  Last summer, carbon shares peaked above €17/tonne, then plunged along with other shares when the European debt crisis started to gather steam in June, and continued to decline through the autumn.  Over the last two days, though, they plunged again.  Since May, they've lost nearly 60% of their value.

What happened over the last two days?  Well, unless you've been living in a hole or watching the mainstream media (sorry, I guess that's redundant), you're probably aware that an anonymous poster dumped another pile of emails stolen or otherwise acquired from the University of East Anglia's Climate Research Unit (CRU).  Those who follow such things have dubbed this release "Climategate 2.0", and the collection doesn't disappoint; once again, some of the biggest names in the alarmist camp of climate science feature prominently, and are shown to be engaged less in science than in trying to figure out how to make science serve a political end. 

Don't take my word for it; go and read them if you like.  As always, the data speak for themselves.


Why does this matter?  Well, because the Durban climate talks are going to begin next Monday.  The email dump came just a few days before the Conference gets underway, just as the first dump (that launched the original "Climategate" and immortalized the phrase, "Hide the Decline!") came a few days before the Copenhagen climate talks began at the end of 2009. 

That's a little red meat for the conspiracy theorists out there.  Here's some more:

Nov 15-18, 2009: US president Barack Obama visits China
Nov 19, 2009: Climategate I emails released
Dec 2009: Copenhagen climate talks

Nov 19, 2011: US president Barack Obama visits China
Nov 22, 2011: Climategate II emails released
Nov 28, 2011: Durban climate talks begin

Is there an Obama-China-Climategate connection? To quote Dash Parr's gluteally-wounded teacher in The Incredibles, "Coincidence?  I think NOT!"

The China-climate angle is important, because what I really wanted to talk about is what we can expect from China next week.  It's funny how China keeps alternately being referred to and ignored in discussions of global warming climate change global climate disruption.  Last month, I attended a Centre for International Governance Innovation meeting entitled "China's Global Impact, How Canada Should Respond".  In the six hours I sat there, the word 'China' was used hundreds if not thousands of times, only slightly more frequently than "climate change" and "partner".  The word "communist", however, wasn't used once, not even in the context of the fact that the "Chinese Communist Party" is the state's governing entity, and has been for close to sixty years.  The ther term never so much as came up.

What was mentioned, though, was China's clear and unequivocal dedication to environmental stewardship.  One of the presenters, whom I shall spare identification (Chatham House rules and all that), claimed to have met with numerous Chinese government officials "at the Deputy Minister level", all of whom swore to him that China was merely waiting for the US and other industrialized countries to act to reduce carbon emissions, after which Beijing would immediately take draconian action to reduce China's own carbon emissions.  The speaker repeated this claim at least twice more during his presentation, and again during the lunch.

At this point I could cite chapter and verse to point out that China surpassed the US last year as the world's largest carbon dioxide emitter, and that the gap has exploded as the recession digs into US industry (as of right now, China produces 23% of the world's emissions to the US's 18%).  I could mention the legendary statistic that China, in addition to building nuclear power plants and planning to expand its wind generation capacity from 12 to 100 GW over the next eight years, is building "one coal-fired generating station per week".  I could mention that China is becoming a motorized society faster than any other on Earth.  I could also mention that 300,000,000 Chinese citizens have yet to benefit from any of these advances, so all of these changes are going to be going on for a long time - long after, in fact, China's carbon dioxide emissions have left US emissions in the dust, and have surpassed those of the rest of the world combined.  I could mention that China emits more CO2 in a month than Canada does in a year - and that the increase in China's emissions alone over the next year or so will surpass Canada's annual emissions.  We could return our entire country to the Stone Age tomorrow, and a year from now global CO2 emissions would be unchanged.  Except it wouldn't because in the Stone Age folks still burned wood to cook their mammoth burgers and, you know, survive winter.  But I digest.

Anyway, I don't need to mention all of that because we all know it, right?  And besides, it's all good, because just as soon as the US and Canada and Russia and France and Japan and Germany and Italy and whomever agree on a plan to reduce carbon emissions, China's going to jump right on board.  They'll get with the programme, and throttle those CO2 emissions...right?

Or maybe they won't.  Maybe they'll do what they've been doing for the past 20 years - bide their time, talk the talk, and watch in bemused astonishment as their strategic adversaries simultaneously a) work to hamstring their domestic ability to produce electricity and therefore support industry, b) create regulatory environments that force companies to move to China in order to be able to make a profit, c) rack up huge amounts of consumer debt to buy from those (now-China-based) companies the same products that until recently had been made at home, while d) enjoying a social safety net that is unsustainable from the now-shrunken tax base and must therefore be propped up by purchasing truly astronomical quantities of debt...from China.

But wait - China must be sincere about the whole "carbon reductions" thing, no?  After all, they're increasing their wind power capacity by a factor of seven over the next 9 years!  Okay - let's run the numbers.  Suppose they go whole-hog and deploy the full 88 GW of wind generation capacity.  At a capacity factor of 25% (the statistical average, although few wind farms ever manage to sustain that), that means they're actually likely to get about 22 GW of actual generating capacity.  At 24 hrs a day, 365 days a year, that translates to 192,720 GWh.  In 2008, the US produced 1,985,801 GWh of electricity by burning coal, and this generated 2,001,806,000 tonnes of CO2, for a ratio of 1008 tonnes of CO2 per GWh of electricity produced (statistics from the US Energy Information Administration).  Assuming China's coal-fired electrical generating plants are as thermally efficient as US plants (and they aren't), this means that China's planned wind deployments should save 192,720 x 1008 = 194,273,269 tonnes of CO2.  That sounds like a lot; after all, Canada's annual emissions in 2008 were 544,091,000 tonnes of CO2.  So you might argue that if China completes its planned wind power deployments by 2020, they'll be able to save an annual amount of CO2 emissions equal to about 35% of Canada's annual emissions.  That's good, right?

As of last summer, China was planning to build 234 GW of coal-fired generating capacity...to be completed by 2016.(See the figure below, and note A)  At a capacity factor of 90%, that's 1,844,856 GWh per year.  Yes, you heard right - between 2011 and 2016, China is already planning to increase its existing electrical generating capacity by roughly as much coal-fired electrical generating capacity as exists in the entire US. 

Take a close look at that graphic, and think about the fact that all US existing and planned coal-fired capacity is in red and yellow, whereas all of the blue and green belongs to China.  Moreover, the US is taking coal plants off line.  Now...who's got a "coal problem"?

(Source: Erik Shuster, “Tracking New Coal-Fired Power Plants”, National Energy Technology Laboratory, 12 July 2011)

So that 192M tonnes of CO2 they're saving by installing wind turbines ends up amounting to less than 10% of the 2B tonnes of CO2 emissions they'll be adding from new coal-fired generating stations.  And the new coal stations are going to come on line much more quickly than the turbines.  They're already pouring the cement.

What's my point?  They say that diplomats are folks who are sent abroad to lie for their country.  With an entire United States-worth of coal-fired generating stations due to come on-line by the last year of the second Obama Administration, just how credible are China's claims that they're "just waiting for the US" to take meaningful action to reduce GHG emissions before taking the plunge themselves?  And if the US is willing to further hamstring its economy through regulatory action...why get in the way?  Why on Earth would the Chinese interrupt their enemies while they're making a mistake?

By the way, those wind turbines they're planning to deploy?  Each one contains between 600 and 1000 kg of neodymium-iron-boron magnets.  Hitachi owns the patent on NdFeB magnets, and they used to be made in the US, by companies like Magnequench.  The problem was, after the early 1990s, when Molycorp - the US's only producer of neodymium - declined due to regulatory pressures to renew the license for its mine at Mountain Pass, California, the only remaining source of neodymium was the mine at Baotou, China.  So, in 2000, Magnequench moved its NdFeB magnet facility from Valparaiso, Indiana to China.  Shortly thereafter, Vacuumschmeize, a German NdFeB magnet producer located in Elizabethtown, Kentucky, relocated to China. They were followed two years later by Hitachi Magnetics, which in 2005 relocated its Edmore, Michigan magnet production facility to - you guessed it - China.  Today, nearly 90% of all NdFeB magnets are produced in China.  So even if the new wind turbines are a complete waste of time and money, the money's being spent in China, and the time being wasted is that of salaried Chinese workers.

It's almost like they've got a five-year plan or something.

Cheers,

//Don//
 
Notes:
A) http://www.netl.doe.gov/coal/refshelf/ncp.pdf