Quality of lifestyle and cost of energy: can we return to wealth of energy?

[Ulmo]

I ask the following question during and after reading the following article:

Can we return to the wealth of inexpensive energy necessary to support a middle class high quality lifestyle known to most USA citizens back in the early 1960s?

Here's the article reference which spurred my question and goal:

"The Center Didn't Hold"

by Tyler Durden
Feb 3, 2017 9:15 PM

"The Center Didn't Hold" | Zero Hedge

So, in response to that article, I wonder if solar power, hydroelectric power, wind power, batteries, and electric cars can bring us back to the wealth of energy we lived on during the early 1960s and around then. I think this is a goal that we should actively pursue. I think if Elon Musk and Donald Trump saw these as goals (despite their respective personal lacks of need for it themselves), they could help push this a little bit. Even more, I think we the people can push it even more. But I think most of it comes from market economics: will new (clean, as it happens) energy replace old (half dirty, as it happens) energy's former lower level of cost, i.e., plentiful and inexpensive, ushering in a new age of wealth, health, and moral quality?

 

[daniel]

While I don't agree with everything in the article, I do share its pessimistic view of the future. And to answer your question, I don't think we can ever return to the cheap-energy economy of the recent past. We do need to develop sustainable energy if we are to maintain something of our industrial society. Wind and solar need to be part of this, but it may be necessary to use nuclear as well. Newer nuclear plant designs are much less subject to failure than the older designs now operating, and produce less waste. Whether we have the political will for any of this seems unlikely. As we continue to consume and throw away finite resources, I think we will have a gradual decline in standard of living of the middle class, a growth of the lower class, and a continued rise in the separation between the richest and the poorest, as well as between the wealthy class as a whole, and the middle class as a whole. Rising cost of energy, rising cost of living, and automation which pushes formerly skilled workers into unskilled jobs with fewer people needed to maintain the automated factories, will drive us, not into a Mad Max or Terminator dystopia, but into a slow slide towards ever-lower levels of prosperity for most people.

The above is just my opinion, of course. I am a pessimist by nature.

 

[RDoc]

IMHO we (the Earth's population) is going to need a whole lot more cheap energy in the near future, which is why I support advanced nuclear.

First, because even if everyone uses only the energy intensity of Europe, we'll need at least 3 times the current energy production to bring everyone up to a middle class lifestyle.

Second, because we're not going to fix CO2 emissions in time, we're going to have to extract CO2 from the atmosphere.

Then there are things like supplying enough water, likely requiring desalinization and, hopefully, significant advances in technology.

 

[Topher]

There never was a wealth of energy. You were just living in the place that was hogging all the energy reserves, and burning through them at a rate of 1 Million years of accumulation per year.

That said, people could live a nice lifestyle solely on the solar energy that hits non-arable portions of the planet. Give up the greed and it is pretty easy.

Thank you kindly.

 

[Merrill]

I'm optimistic for the future of green energy because as time goes on it has become less expensive, so even if you do not care about the environment and are a climate denier if you are a business person you will want to make money and you will make more buy doing wind and solar.

 

[daniel]

There never was a wealth of energy. You were just living in the place that was hogging all the energy reserves, and burning through them at a rate of 1 Million years of accumulation per year.

That said, people could live a nice lifestyle solely on the solar energy that hits non-arable portions of the planet. Give up the greed and it is pretty easy.

Thank you kindly.

Give up the greed? Are you serious? You do realize you're talking about human beings, don't you?

 

[cpa]

A lot has changed since those halcyon days of the '50s and '60s. For one, the population explosion that continues not only in California and the United States, but also throughout the globe. I grew up in a suburb of Los Angeles during that time, and our electricity was provided by the municipal utility (not Southern California Edison.) My city along with several others had entered into a long-term contract (I think forty years) to purchase hydro power from Hoover Dam on the Colorado River for something like 1 cent per kWh. The price was ridiculously cheap. Our rates were something like 40% of Edison's.

In the '70s I had a client that had part ownership in a geothermal facility. This client had owned this property since the '30s. My client had a contract to sell the electricity generated by this geothermal facility to the public utility at a price that was directly related to the equivalent price that it would cost the utility to purchase electricity generated from burning natural gas and other petroleum products. You can imagine just how much this client's revenues skyrocketed when the price of petroleum products started spiking. Yet operating costs remained flat.

I agree that renewables like the geothermal facility are going to be less expensive than coal and natural gas generated electricity. But the cost per kWh is still relatively inexpensive--less than a nickel for us today with PG&E. It is all the other charges for our bundled services that jack the rate up. There is a much larger expanse of infrastructure to maintain and improve than in the '60s. There are households that receive subsidies to keep their utility costs affordable--these subsidies are billed to everyone else.

The business model for public utilities is probably over a century old. As society evolves, the Utility Commissions merely adopt changes and amendments to these models as proposed by the utilities themselves. Accordingly, we have this increasingly complex structure for determining rates that is based on a 100-year-old framework.

I think it is time to reexamine the business model for utilities and make it more efficient. But today there is no incentive to keep costs low.

 

[Evbwcaer]

I think it should be pointed out that energy is most likely getting cheaper everyday.

The ability to externalize the cost of fossil fuels is going down, which doesn't make it more expensive, it just makes it more expensive to the person consuming it.

Additionally, each next unit of carbon pollution has more costly externalities than the last, so as renewables make up a larger percentage, true cost goes down.

When you look at the "cheap energy" of a previous generation, please add into the costs health care expenses instigated by mercury pollution, the partial cost of the Superfund program, black lung, athsma
attacks caused by air pollution, etc.

"More expensive" renewables have almost none of these types of these very real and calculable costs associated with them.

 

[Merrill]

A lot has changed since those halcyon days of the '50s and '60s. For one, the population explosion that continues not only in California and the United States, but also throughout the globe. I grew up in a suburb of Los Angeles during that time, and our electricity was provided by the municipal utility (not Southern California Edison.) My city along with several others had entered into a long-term contract (I think forty years) to purchase hydro power from Hoover Dam on the Colorado River for something like 1 cent per kWh. The price was ridiculously cheap. Our rates were something like 40% of Edison's.

In the '70s I had a client that had part ownership in a geothermal facility. This client had owned this property since the '30s. My client had a contract to sell the electricity generated by this geothermal facility to the public utility at a price that was directly related to the equivalent price that it would cost the utility to purchase electricity generated from burning natural gas and other petroleum products. You can imagine just how much this client's revenues skyrocketed when the price of petroleum products started spiking. Yet operating costs remained flat.

I agree that renewables like the geothermal facility are going to be less expensive than coal and natural gas generated electricity. But the cost per kWh is still relatively inexpensive--less than a nickel for us today with PG&E. It is all the other charges for our bundled services that jack the rate up. There is a much larger expanse of infrastructure to maintain and improve than in the '60s. There are households that receive subsidies to keep their utility costs affordable--these subsidies are billed to everyone else.

The business model for public utilities is probably over a century old. As society evolves, the Utility Commissions merely adopt changes and amendments to these models as proposed by the utilities themselves. Accordingly, we have this increasingly complex structure for determining rates that is based on a 100-year-old framework.

I think it is time to reexamine the business model for utilities and make it more efficient. But today there is no incentive to keep costs low.

How do you get electricity for 5 cents a kW from PG&E?

 

[[email protected]]

Hi Merrill: Hope this finds you well! Here is Sonoma Clean's E6 that I have:

SCP Generation Rate
Energy Charge ($/KWH)
Summer Peak 0.18254 1 pm to 7 pm M-F*
Summer Part Peak 0.08363 10 am to 1 pm & 7-9 pm M-F & 5-8 pm Sat/Sun*
Summer Off-Peak 0.04386 All other hours including holidays**
Winter Partial Peak 0.06636 5-8 pm M-F*
Winter Off-Peak 0.05534 All other hours including holidays**

Summer is May 1 – October 31. Winter is November 1 – April 30.

Let's get together when the weather warms up a bit! John

 

[Merrill]

Hi Merrill: Hope this finds you well! Here is Sonoma Clean's E6 that I have:

SCP Generation Rate
Energy Charge ($/KWH)
Summer Peak 0.18254 1 pm to 7 pm M-F*
Summer Part Peak 0.08363 10 am to 1 pm & 7-9 pm M-F & 5-8 pm Sat/Sun*
Summer Off-Peak 0.04386 All other hours including holidays**
Winter Partial Peak 0.06636 5-8 pm M-F*
Winter Off-Peak 0.05534 All other hours including holidays**

Summer is May 1 – October 31. Winter is November 1 – April 30.

Let's get together when the weather warms up a bit! John

Thanks John, maybe I will switch to SCP at true up in June. Tired of the rain, lunch when the sun comes out.

 

[omgwtfbyobbq]

Both per capita energy consumption and household earnings have been more or less flat since the 1960s.

If anything, I would think that the substantial increase in household income from after WWII to the early 1960s is what drove most of the increase in energy consumption during that time. At the same time, the wealthy have captured the majority of wealth created since the 1960s, which I think is distressing for most people, especially compared to a post WWII United States.

I think most people would prefer an economy based on merit as opposed to the oligarchy we have now. Unfortunately, most substantial movements towards ecnomic equality tend to be associated with violence.

Stanford historian uncovers a grim correlation between violence and inequality over the millennia | Stanford News

Things do change though, so hopefully we can address economic inequality through non-violent economic conflict instead of violent physical conflict.

 

[glenhurst]

It is worth noting that between the plains states (i.e., the midwest) and the coastal areas of the US, there is enough wind to generate 10 times the electricity needed to power everything in the US. And before anyone says "Yes, but the wind isn't always blowing", it is always blowing somewhere, and it's always blowing in most of the midwest and coastal areas. So, there's enough wind to provide for the base load. Then, while the price of wind continues to drop at a modest but steady rate, the cost of solar continues to just plummet. And while it won't get cheaper at the same rate that microprocessors have over the past 45 years, the path for solar will still be similar. So, the price for renewable power will continue to drop for at least the next 20 years, probably longer. And another plus that will make renewable power cheaper: there's no fuel cost, meaning long-term commitments (PPAs) can be made with very little risk that costs will rise. Coal, oil, gas, and especially nuclear cannot make the same claim.

So, is cheap energy in the future possible? Definitely yes.

 

[daniel]

It is worth noting that between the plains states (i.e., the midwest) and the coastal areas of the US, there is enough wind to generate 10 times the electricity needed to power everything in the US. And before anyone says "Yes, but the wind isn't always blowing", it is always blowing somewhere, and it's always blowing in most of the midwest and coastal areas. So, there's enough wind to provide for the base load. Then, while the price of wind continues to drop at a modest but steady rate, the cost of solar continues to just plummet. And while it won't get cheaper at the same rate that microprocessors have over the past 45 years, the path for solar will still be similar. So, the price for renewable power will continue to drop for at least the next 20 years, probably longer. And another plus that will make renewable power cheaper: there's no fuel cost, meaning long-term commitments (PPAs) can be made with very little risk that costs will rise. Coal, oil, gas, and especially nuclear cannot make the same claim.

So, is cheap energy in the future possible? Definitely yes.

What I am about to write may be out of date, as it's been a decade since I left North Dakota.

North Dakota has been described as the Saudi Arabia of wind. The wind is one of the reasons I left, along with the cold, It is fierce. It's also a tremendous energy resource. But there's a problem: If you produce electricity you need to get it to a market, whether that be a nearby city, or the scattered farm population, or one of the major regional cities. And in North Dakota the coal companies own the transmission lines, and they don't like the competition. In some states, the power companies have to buy your excess energy, but since the coal companies seem to own the state legislature, as well as the transmission lines, in N.D. the power company does not have to allow your power onto their transmission lines.

So all that wind goes to waste, because there's no way to get it to market without building not only the wind farms, but also the transmission lines to the likely markets of Minneapolis or Chicago, and that requires raising capital.

Again, I don't know if the situation is the same now or if it has changed. But it's things like this that block rational energy solutions.

BTW, in North Dakota the peak power demand is cold windy weather, so wind is a perfect match. What to do when the wind isn't blowing? When the wind is not blowing, North Dakota has a much lower power demand. N.D. gets wind precisely when it needs the most power.

 

[rays427]

I don't actually understand this. Not all energy prices are higher than they were back in the 1960s. If you include inflation the price of gasoline is currently about the same as it was in 1968. When I started work in 1968 the price of gasoline was $.36 per gallon in Southern California. If you take inflation the price would be $2.48 per gallon which is about what it is today. In addition vehicles are much more efficient so out of pocket cost is actually much less.. In addition the income of all economic levels have gone up even though the rich have gone up much more than others. This means energy should be less impact on folks budgets. Natural gas

 

[nwdiver]

Thanks to solar, efficient appliances and electric vehicles I'm up to my ears in excess energy. With the exception of December it's incredibly difficult for me to use all the energy that my PV array produces. This level of energy independence would have been cost prohibitive for me just 10 years ago and the costs are still falling.

IMHO we (the Earth's population) is going to need a whole lot more cheap energy in the near future, which is why I support advanced nuclear.

Cheap and nuclear do not belong in the same sentence... unless it's 'wouldn't it be nice if nuclear was cheap?'

There are more people today without electricity than when the first electric bulb was energized. These people simply cannot afford nor do they need the massive amounts of electricity a nuclear power plant produces. They still use Kerosene for light. A poster sized solar panel, small battery and a LED light bulb would have an incredible effect on their quality of life for a fraction the cost of a grid and centralized power generation.

 

[SageBrush]

Energy poverty in the US = Energy stupidity
Or put another way: waste and stupidity have outpaced generic efficiency gains.

There is just no problem reducing current electricity consumption by 2/3rds through conservation (read: stop wasting it!) and efficiency. That lowers the average cost in the US to about 4 cents a kWh in todays dollars, or about 0.5 cents a kWh in 1960

I was thinking about this in relation to cars, after my wife reminded me that my Mom told her how gasoline was so cheap in the 60s she did not have to think about it. The interesting thing is, her perception was wrong. She drove around in a cheap car that went around 12 miles on a gallon, and found the least expensive fueling stations in Los Angeles that charged about 24 cents a gallon -- so 2 cents a mile. Since then inflation has deflated the dollar to about 1/8th its value so today that lifestyle would cost 16 cents a gallon. But cheap cars today like the Honda Fit get 40 mpg and fuel is about $2.40 a gallon, or 6 cents a mile. You would have to own and drive a 1960s POS today to reach 1960s fuel cost parity.

 

[Topher]

Give up the greed? Are you serious? You do realize you're talking about human beings, don't you?

Yup. Greed is a fairly recent human invention. It is not universal, nor required for human survival. If we became interested in happiness rather than greed, we would be far better off. And there is no reason that we couldn't.

Thank you kindly.

 

[daniel]

Yup. Greed is a fairly recent human invention. It is not universal, nor required for human survival. If we became interested in happiness rather than greed, we would be far better off. And there is no reason that we couldn't.

Thank you kindly.

I agree that greed is not necessary for human survival. In fact, it may be the thing that destroys us. But it is certainly not recent. Nor is it limited to humans. Some animals share, as do most people within their own circle. But many animals fight over food, and humans have been fighting each other to amass possessions at least since the earliest civilizations. And while there are communalistic tribal societies, they are rare. And they usually exist where resources are plentiful, there is enough for everyone, and the technology to utilize the surplus labor of others is lacking.

Greed is not universal, but it is extremely widespread and grows out of our primitive struggle for survival.

 

[glenhurst]

What I am about to write may be out of date, as it's been a decade since I left North Dakota.

North Dakota has been described as the Saudi Arabia of wind. The wind is one of the reasons I left, along with the cold, It is fierce. It's also a tremendous energy resource. But there's a problem: If you produce electricity you need to get it to a market, whether that be a nearby city, or the scattered farm population, or one of the major regional cities. And in North Dakota the coal companies own the transmission lines, and they don't like the competition. In some states, the power companies have to buy your excess energy, but since the coal companies seem to own the state legislature, as well as the transmission lines, in N.D. the power company does not have to allow your power onto their transmission lines.

So all that wind goes to waste, because there's no way to get it to market without building not only the wind farms, but also the transmission lines to the likely markets of Minneapolis or Chicago, and that requires raising capital.

Again, I don't know if the situation is the same now or if it has changed. But it's things like this that block rational energy solutions.

BTW, in North Dakota the peak power demand is cold windy weather, so wind is a perfect match. What to do when the wind isn't blowing? When the wind is not blowing, North Dakota has a much lower power demand. N.D. gets wind precisely when it needs the most power.

I'm originally from Iowa (don't live there anymore) where there's also a lot of wind available, particularly in the northwest (though it doesn't quite match the potential of North Dakota). I'd love to see the midwest become the "energy basket" of the country and the potential is there. And that's just wind. But they need a way to get all that electricity they could generate to market, as you said. The good news is Clean Line Energy is working on building HVDC lines from the midwest to the east for just that reason (Projects Overview). The bad news is they just recently walked away from their Rock Island project because of resistance from the farmers upon whose land the line would have run. I don't think the farmers are anti-renewable; they see it as a property rights issue and didn't want to be forced into accepting towers. I *think* the mistake that CL made was trying to get the land for the towers for the line via eminent domain rather than striking deals/contracts with each property owner. I can understand the appeal for CL of being able to get the necessary plots of land in one fell swoop--doing each one individually would be slower and more expensive. OTOH, cell phone companies (I used to work for one) negotiated tower deals one by one and managed to make it work financially. Clear Line needs to offer the landowners a deal they can't refuse. But to do so probably comes down to issues of access to capital (access to capital, BTW, is one of the biggest subsidies that fossil fuel companies enjoy that renewables don't).

I recently saw mention of a study that showed that wind mills and solar farms tended to follow HVDC implementations (build it and they will come). I think ND, SD, IA, NE, KS, and OK are all leaving a ton of money on the table by not figuring out a way get their abundant potential energy to the market. And that's money that's not a Faustian bargain like the Bakken oil fields are for North Dakota.