Monday, November 28, 2011

The trouble with oil and one near-term solution to LIHEAP worries

Here's a very sobering article from the NYT about the cuts to LIHEAP, the program that provides heat oil assistance to thousands of Mainers.

This is the problem with all those sources of unconventional oil we've been studying in class, the Bakken shale and the Albertan tar sands, and so on. Although these sources reduce North America's dependence on oil from "petrostates" like Saudi Arabia, Venezuela, or Russia, they don't reduce price. High cost heat oil will be with us for years to come, as long as demand from developing nations continues to increase, and as long as the new sources we rely on are as expensive as they are to extract.

What should Mainers do?

Insulate, weatherize, and/or switch to a cheaper-per-btu fuel, such as home-grown hardwood pellet or firewood. Those are the only realistic choices in the short term, absent some Big New Idea in Maine energy.

The sooner we realize this, the better.

The Governor's Office of Energy Independence is promoting increasing natural gas supplies as one solution. I believe this is a useful measure in the medium to long run, but I'm not sure what we think it's going to do for us this winter.

I'm sorry, Mr. LePage and Mr. Fletcher, but I don't understand how natural gas, admittedly cheap right now, can be an immediate substitute for high cost heat oil when we only have a very small amount of city gas supply infrastructure in Maine to begin. We have to lay new pipe to get that new gas to new consumers. The current crisis that results from the lack of LIHEAP and the high cost of heat oil can't last very long. People, even those on low incomes, will adjust to the loss of LIHEAP over time, two or three or four winters, by making investments in home weatherization, insulation, and switching to pellet or firewood fuel at the margin. The state's efficiency and weatherization programs, increasingly efficient themselves (5,000 homes were weatherized last year, a record), will help cut the time taken to bridge to warmer, weatherized Maine homes down a tad, but much of the interim will be a good deal colder, at the margin, for a larger number of Mainers than before.

By the time that gas pipe has been laid, much of the current heat oil crisis will be past, and much of the suffering will be over. The new infrastructure will be nice to have, in five or ten years time. But it isn't going to help next week and next month, this winter and next winter, which is when we'll need the help.

There's another way to think about this: Natural gas, which is very cheap now, can be a good substitute for coal in electricity production, however, reducing climate emissions and costs, and electricity in general can be much more easily easily gotten to consumers as a heat source than gas using existing infrastructure. We could buy more natural gas instead of oil tomorrow, if we wished, if we were to use that gas as electricity.

(Before anyone write to complain, let me state a disclaimer: Yes, I do know the Second Law. Very well, thank you. I know that we'll use overall more energy this way. But this is about economics and the time-taken-to-deploy technology, as well as physics. You need to know a bit about all three, in my business.)

Maybe what we should do for this year, instead of imagining we're going to magically lay all that pipe in the frozen months, is create some kind of lower cost, off-peak electricity scheme, and help folk access the cheaper price of gas through off-peak electricity, by allowing them to heat their homes with small, cheap, and relatively safe electric resistance heaters using off-peak power.

Ceramic storage heaters are particularly useful because they can be run off low cost, off-peak power and the energy stored up will last for several hours.

(The url above links to just one manufacturer. No endorsement is intended. Indeed, this technology is so simple, these heaters could be manufactured right here in Maine if we wished, a true job-creator.)

One closely associated idea that has (possibly) begun to circulate in the legislature is for a community energy bill that would allow towns and municipalities to create or to buy into power production projects, such as wind or small scale hydro or biomass plants, and to sell that energy at discount to themselves, and possibly taxpayers through some kind of smart grid accounting system. Introduced by Kevin Raye, and reported, as far as I can tell, only in the Quoddy Times, "An Act to Increase Energy Options" is a durn good idea, if you ask me.

It would be an even better idea if it included this Smart-Grid, off-peak discount-sales-to-LIHEAP recipients and local taxpayers option I'm suggesting. Without that, well, it's still a decent idea, just not a really timely one at this particular juncture in Maine energy history.

Unfortunately, I was unable to secure any details of this act despite writing to my State Senator Mike Thibodeau, whose utilities regulation committee it has been assigned to.

I'll keep working on it.

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