Boom times in North Dakota
The Bakken Shale formation near Williston, North Dakota is fueling a rapid oil boom and change in lifestyle for the residents. Oil production in North Dakota is nearing a half a million barrels of oil per day (in a nation that consumes roughly 19 million barrels of oil per day during a recession and a little more than 20 million barrels of oil per day during better economic times.)
EnergyNow! visited Williston, ND for its show that aired on November 20, 2011 to capture the flavor and activity of an oil boom town.
The show begs some serious questions about the longevity of the boom, the long term effects of the boom on the land and the people, the permanent loss of fresh water, and about the utility of the skills developed during the boom to other tasks after the oil runs out. As a general rule, I prefer figuring out ways to mitigate those challenges to figuring out ways to purchase or take oil from underneath foreign soil.
Since I do not live in an oil boom town, however, there might be other points of view worth considering. What are your thoughts?
I’ve mentioned this before, but I’m a bit of a breadbasket guy – I think there’s a place for all forms of energy in our economy, though I’d really like to see oil, coal, and gas consumption decrease over time, so we can stretch out what we have as long as possible, instead of extracting and burning it as fast as we can.
I’d like to see more nuclear because I think in a lot of applications, we can replace the use of fossil fuels with nuclear, and keep using the hydrocarbons for the tasks that they really are uniquely suited to – airplanes, small boats, vehicles (although I’m a fan of the plugin-hybrid concept, like the Chevy Volt, where you can run on electric power for your daily run-around, and gas up for longer trips).
As for these people in North Dakota, I can’t honestly feel bad that they have a boom going on that is improving their financial condition – I’m glad for them. I just wish that the increase in domestic production was also accompanied by a decrease in overall consumption, and a steep decrease in consumption of foreign oil.
It’s not just a boom town, it’s a massive “mystery city.”
Thanks for the link! My friend Alan and I were looking at those lights when we were assembling a panorama view of two timelapse sequences from the ISS, trying to figure out what they were. Since we’re in Calgary, the Alberta corridor was easy enough to spot for us. The lights certainly are a good proxy for economic activity and the land impact of some types of energy extraction.
Oil is a global commodity. Any domestic U.S. oil gets sold on the global market. If a refiner can buy oil cheaper from overseas, he will do so. If a U.S. producer can sell oil for more money overseas, the oil will go overseas.
If the U.S. produces too much oil, OPEC will cut production. Most of the imported U.S. oil comes from Canada, but since the market is global, OPEC cuts will affect prices everywhere.
The boom is great for those enjoying the profits, but they are socializing the costs (global warming). Kind of like tobacco farmers make a living hurting others.
Ironically, the people against hydrofracking in the Marcellus Shale are using the “dangers” of radioactivity as a political ploy:
http://ribjoint.blogspot.com/2011/11/hydrofracking-radioactivity.html
The fact that oil is a global commodity has nothing to do with improving the balance of trade with domestic production. I say this, although I am also concerned about climate change and am not thrilled that we continue to find new fossil fuel deposits to burn.
I thought there was a small amount of radon released by fracking and since you believe in the negative effects of low-levels of radiation, why the criticism?
The power industry has always been boom and bust when it comes to construction. California’s smoke and mirror RPS is creating construction jobs in the Mojave Desert for those who like it hot.
U.S. EPA Issues Permit to Palmdale Power Plant, Requires Limits for Greenhouse Gas Emissions
http://yosemite.epa.gov/opa/admpress.nsf/0/CC22EB37B16F31D08525794A0068F026
Being an engineer I want to know the number behind all the hype for a ‘hyrid solar gas’ power plant.
“The permit sets limits for carbon dioxide emissions at 774 pounds per megawatt-hour”
I am not impressed but if there is a Best Available Technology (BAT) for emissions the standard should be less than 100 based on nuke plants.
The stated cost is $950 million for what is essentially a 530 MWe CCGT.
The California Energy Commission has a web site for this power plant:
http://www.energy.ca.gov/sitingcases/palmdale/documents/index.html
I have studied solar thermal for a long time and I can tell from the conceptual drawing what I will find:
“The solar thermal input will provide approximately 10 percent of the peak power generated by the project during the daily periods of highest energy demand.”
Another ‘renewable energy’ power plant that is 3% renewable energy and 97% fossil. If you look at the project description, it has natural gas fired heaters to warm the oil in the solar collectors. At best during part of a few days, 10% is solar.
What about a new nuke?
“California law currently prohibits the construction of any new nuclear power plants in California until the California Energy Commission finds that there exists a demonstrated and federally-approved technology for the permanent disposal of spent fuel from these facilities. Therefore, this alternative is not feasible. (Ex. 300, p. 6-28.)”
Does renewable energy produce hazardous waste? Of course I know the answer before looking:
“The record estimates generation of 10 cubic yards per year of hazardous HTF contaminated soils and 750 cubic yards per year of non-hazardous soils.”
BTW HTF = heating a heat transfer fluid and like spent nuclear fuel, exposure = DEAD
WFO
More power, more better. We need all of the energy we can get. This energy crisis the output of the Bakken field will do little to ease the overall crunch for oil. Exxon earlier this year reported that the new additions of oil were less than the extractions.
Unfortunately, this is a drop in the bucket in global oil production of 2.5 E10 bbl/yr. OPEC lost the ability to control prices back in the 1980’s. The cartel has been broken for a long time. I define broken that if it reduces its production it reduces its revenue. Thus, their only option is to pump as much as they can get their hands on. For political reasons they want us to think that their cartel is still effective and able to control the world prices. To believe that is like whistling in the dark pretending everything is ok.
If we are at peak oil today, which I think is accurate, then when we started in 1859 we had 3 trillion bbl of oil to discover. With oil supply as a major constraint for the global economy, I doubt we are going to see much improvement in economic activity unless one of two things happen: we get real efficient real fast, or we find something that is fungible for oil, e.g. synthetic fuels derived from coal. We are likely to stay at this output level for a while ~150m^3/sec before noting any decline and prices will remain constant at least for the next few years.
What energy crisis Cal? There is no shortage of fear mongers trying to sell books.
The energy industry can provide all the energy when and where society needs. It would not be that hard either. The biggest obstacle is idiot politicians.
It does take a little planning. Maybe in 35 years we might need modular HTGCR to produce hydrogen. We are less than 10 years away from a working prototype. Only five years after the 2005 Energy Bill, American farmers were producing a surplus of ethanol to export. A city of a million people with a nuke plant would need another nuke if city folks switched to BEV for their short trips.
Meeting the needs of society is not that hard. Food and energy are dirt cheap. I do hear rich people complaining about the cost of heating their million dollar house and filling up their SUV.
We did not switch from horses to the ICE because we ran out of horses.
So a crisis in one sector of energy production yields a crisis in others. I have no doubt that we are going to see fewer SUV’s on the market. We will see fewer gasoline powered engines. An example is my wife and I where we sold our gasoline vehicles for TDI because we wanted to change technology while our old technology still had value. We are seeing more of this in our economy. We are seeing this because we have a constrained transportation fuel supply that is about 40% of our total primary energy consumption. So you’re telling me that having a constraint on 40% of our primary energy is not a crisis. Want to think about your position again.
Cal, there are two reasons to buy a TDI. The first is you are stupid and got suckered by car salesmen. Second you drive a lot. It has been a while since I checked but I think the economic break even point is around 300k miles. For the record, a TDI is an ICE.
Think about this. Our food supply is not constrained. The people who sell us oil are 100% constrained by the US Navy. We have a treasured tradition of freedom of seas. Do not think for a moment any other country can keep the sea lanes open if we withdraw our carrier groups.
That is one end of the spectrum. The other end is carpooling. Go ahead and mess with the US. If POTUS calls for a month of carpooling and boosting ethanol to E20 during a national emergency caused by inference from foreign powers, then a clear message about how addicted we are not.
So no, I do not need to rethink my position.
As it happens, the oil from the Bekkan is probably the purist crude ever found in the U.S. If you actually look at it, it’s about the consistency and viscosity of honey. It has the same *color* as a dark amber honey collected by bees visiting walnut and chestnut trees. The stuff is amazingly clean. It is considered the ‘sweetest’ of the sweet crudes. I’m happy for the region and the people living there.
The oil here is in sharp contrast to the oil just over the border in Alberta, the tar sands. A super carbon spewing form of fossil fuel that is worse, by far, than any other crude oil on the planent. And that’s just to get it out of the ground.
Kit
The crisis in energy as in the 1970s is not in electricity generation. It is in the availability of oil for transportation fuels. Ask yourself, with the sky high oil prices why production has not jumped? The lead time to bring a well on service is about 6 months to a year. Deep water takes a bit longer. Although we have had politically motivated restrictions on oil production in our country. US production, although not trivial has limited impact on global production. It is perhaps why our country is increasing production. So looking at global production and exploration, which has not been curtailed, we see it remaining constant since roughly 2006.
The impact of high oil prices is that it makes everything else
More expensive including other forms of energy. It serves as a way of devaluing the dollar. So although we can increase all other forms of energy production at will. We cannot produce more oil by drilling more. A physics analogy to this is you have a positive displacement pump on a pressurized tank of oil. We start out at a low speed because we don’t have enough money to buy the power to drive the pump. As we sell more oil we get more money and can operate the pump a little faster our output increases. Eventually we start to notice that we have to work that much harder to get an equivalent amount of oil. The pump has to operate at a much higher specific power for a given output. We will reach a point where our output peaks and we can only input so much power into the pump. This is the effect that we are seeing now with oil.
So a crisis in one sector of energy production yields a crisis in others. I have no doubt that we are going to see fewer SUV’s on the market. We will see fewer gasoline powered engines. An example is my wife and I where we sold our gasoline vehicles for TDI because we wanted to change technology while our old technology still had value. We are seeing more of this in our economy. We are seeing this because we have a constrained transportation fuel supply that is about 40% of our total primary energy consumption. So you’re telling me that having a constraint on 40% of our primary energy is not a crisis. Want to think about your position again.
Kit
The crisis in energy as in the 1970s is not in electricity generation. It is in the availability of oil for transportation fuels. Ask yourself, with the sky high oil prices why production has not jumped? The lead time to bring a well on service is about 6 months to a year. Deep water takes a bit longer. Although we have had politically motivated restrictions on oil production in our country. US production, although not trivial has limited impact on global production. It is perhaps why our country is increasing production. So looking at global production and exploration, which has not been curtailed, we see it remaining constant since roughly 2006.
The impact of high oil prices is that it makes everything else
More expensive including other forms of energy. It serves as a way of devaluing the dollar. So although we can increase all other forms of energy production at will. We cannot produce more oil by drilling more. A physics analogy to this is you have a positive displacement pump on a pressurized tank of oil. We start out at a low speed because we don’t have enough money to buy the power to drive the pump. As we sell more oil we get more money and can operate the pump a little faster our output increases. Eventually we start to notice that we have to work that much harder to get an equivalent amount of oil. The pump has to operate at a much higher specific power for a given output. We will reach a point where our output peaks and we can only input so much power into the pump. This is the effect that we are seeing now with oil.
Cal you are consistent, consistently wrong. Part of the cause of the 70s energy ‘crisis’ was the increasing use of oil in the US to make electricity. Part of the solution was to replace oil generation with nukes. Second was making cars more efficient. My ‘84 Suburban got 100% better mileage than my ’74 International TravelAll.
One of the interesting trends associated with the improvement in mileage, SUV became popular and carpooling became unpopular.
The other misconception that Cal has is that things become more expensive with energy costs. I think the reason for this misconception is that small amounts energy returns high increases in productivity and standard of living. For example, energy in the form of tractor fuel and fertilizer are less than 10% of the costs. If there is a 100% percent increase energy, which is only a 5% increase in food production costs.
Energy will always be a cheap commodity relative to the value added. Say the cost of a new nuke is $60/MWh. That will drive the cost of a Hollywood shower from 25 cents to 30 cents. Think about that the next time you and over a five dollar bill and say keep the change for a cup of coffee.
Kit,
The main spike in energy prices in the 1970’s was with the Iranian revolution, the OPEC embargo was small potatoes. There were some other perturbations earlier, but that was the big one in 1975. Since 1949, oil as a primary energy source has ranged from 37% (today) to 48% (1977) and an average of about 42%.
Vehicle energy intensity (Btu/passenger-mile) remained relatively constant from 1970-1975 from by 1980 it dropped by 10% from 1970 levels. Today it is 72% of 1970 levels with a roughly linear decline since 1980. So this is not just your suburban it is the statistics for the entire country.
The petroleum prices did not spike until 1975. We did not start phasing oil out of electricity production until about 1980. The bulk of the oil replacements actually came from coal. Since 1970, coal outpaced new nuclear capacity 3:1.
To understand the role of energy in the economy I suggest you read, “The Economic Growth Engine: How Energy and Work Drive Material Prosperity” Energy is fundamental to our economy. Think of the price of energy as condenser vacuum. We usually operate with vacuum on the order of 3.4 psia. What is the impact of increasing vacuum by a factor of 4 on the performance of the turbine. In the grand scheme of things it is a minuscule change in the pressure differential, but with a noticeable effect on turbine output.
As for your comment about being sold by a salesman on TDI, I was sold by the change in performance and the age of my current vehicles. I did a levelized cost analysis and found that it was worth replacing my wife’s SUV (8/15 mpg city/hwy) with a new one 16/26 (mpg city/hwy) while the salvage value was relatively high for that vehicle. As for my car, I had 17/21 mpg and went to 26/40 mpg. I used the EIA 2009 forecasts for fuel prices in each of their economic scenarios and based a levelized cost off of the change. I did not include the change in insurance, because the vehicles were close. I assumed a 3.75% IRR (my cost of money) and estimated vehicle miles travels based off of the previous 4 years. It was a slight adaptation to the levelized cost model I had from evaluating electricity generation.
Be careful what you assume. You have a great deal of unstated assumptions on which you are basing for assumptions. If you care to discuss the statistics of US primary energy consumption and the implications I will be more than happy to oblige.
Unless otherwise noted all data is from EIA 2010 AER and http://www.bts.gov/publications/national_transportation_statistics/#chapter_4
By the way using EIA 2009 numbers new nuclear (AP-1000) is around $97 without any subsidy and with loan guarantees. The Congressional Budget Office has a wonderful levelized cost model that is very detailed.
Or you could have taken the money you spent on the car, to buy stocks. The stocks would perform at least twice the 3.75 ROI of the car. So, would the extra money gained from the higher stock ROI give you the ability offset the oil your old car would use to a greater degree?
You may have found the best economic deal with the constraint of low gas use new car. However, was it the best economic deal for your entire budget?
@Jason – over the past 10 years, the average return for stocks has been considerably less than 4% on an annualized basis. It is a myth propagated by the financial industry that stocks are a predictable way to increase returns.
(I happen to have a number of individual stock investments, but am well aware of the risk associated with that form of investing.)
Ok, so stock may be a poor example. That would need to be determined by his analysis.
I just wonder what his goal was for the analysis. Was it to find the lowest cost vehicle, out of all possibilities, to drive for the next 10 years? Or was it to find out that his predetermined car choices was lower cost than his current?
If Cal included an estimate to drive fewer miles he would find that the TDI option is not best. Doing something else would be better. Driving fewer miles would also leave more oil in the ground for everyone else.
Of course this is all guesswork as he didn’t post all of his calculations. I want him to have a positive return, I just have doubts he will realized it.
What would be the most cost-effective way of reducing automobile dependency? Would striking down zoning laws which mandate low-density sprawl be the way to go?
Selling your car.
I can only speak for my own similar analysis. In 2001, I was transferred to a new job, but had no desire to move. Part of my reluctance was my employer’s policy that a transfer of less than 50 miles did not qualify for relocation. My commute thus increased from 10 miles per day to nearly 100 miles per day. Driving less was not a viable option.
I thus gave away the 11 year old minivan I had been driving about 6,000 miles per year and purchase a Jetta TDI with a manual transmission.
My average mileage over the past 217k miles has been about 45. At the time I bought the car, diesel fuel was almost always cheaper than regular gasoline.
The car has been an excellent investment and a “freedom machine” that can go almost 600 miles on each tank. My mechanic tells me that the engine is just about broken in and should last at least another 100k miles.
Actually Cal, I am a big fan of Robert Ayres and his theories on industrial ecology and LCA. Used them to create business plans for renewable energy. In any case, this old mechanical engineer does not need to read a book to understand how important energy is to the economy. My point is that we have no problem producing the energy we need given the chance.
Your analysis of your TDI reinforced the stupid end of my argument. The most important statistic is how much fuel you use. How many miles do you plan on driving in the next 5 years? My old pickup gets 24-30 city but I only drive in 5k a year. I did buy my wife a new Corolla few years back to replace the ’89 Ford Aerostar. It got 24 mpg highway until it had 250k miles on it. When the cost of a tune up is more than the car is worth, it is time to give it up.
I did consider a TDI but you have to drive 60k miles a year to break even. Not to make too fun of your economic analysis with IRR and all, it you want to save money spend less. It is not that hard. If the difference in cost will pay for 300k in fuel, you are not making an good economic choice.
The mistake Cal made is comparing a SUV to a compact car.
As far as leveling costs, neither EIA or CBO makes electricity.
Do you get the point that electricity is a cheap commodity? It is like that new car. It is expensive to drive compared to the old POS. You do not make choices based on EIA statistics, you make choices on actual circumstances .
I drive a diesel car too (a Ford Fiesta in my case), but at UK motor fuel prices (I’m currently paying £1.38 per litre — which is $8.07 per US gallon) there is far more benefit from the improved thermodynamic efficiency. The better fuel consumption also means a lower road tax bracket 😉
“In any case, this old mechanical engineer does not need to read a book to understand how important energy is to the economy.”
No, that is precisely why you should read that book. Energy is not important to the economy, it is the economy, actually 81% of GDP. So oil represents 30% of our economy, a little more than that because it has a higher thermal efficiency when used in industrial processes.
“The mistake Cal made is comparing a SUV to a compact car.”
No it was two vehicles: SUV to SUV for my wife sedan to compact for me. I live in Atlanta, so my city milage is abysmal. You would be lucky to break 20 mpg. You make wonderful assumptions.
The incremental cost over the choices (when you are in the market for a new car) is small. If you are looking at an electric or PHEV the battery replacement makes them not even close to existing gasoline engines. I used 10 years on the vehicles for replacement. If buying a new car it does not make sense to purchase anything else other than a TDI, unless you can get a reliable vehicle that has such a low entry cost that it can absorb the difference. You presume that that was my market. It was not.
“The most important statistic is how much fuel you use.”
This I incorporated with an annual capacity factor to represent the miles driven. What would a LCA be without it? You are good at making baseless assumptions.
“[If] you want to save money spend less.”
I agree, whole heartedly. Both previous vehicles required premium fuel, so the fuel costs were a wash between that and diesel.
“As far as leveling costs, neither EIA or CBO makes electricity.”
No, but utilities do and are constrained by capital and debt requirements that specify various rates of return, debt levels and financing costs. I would hope a utility LCA would contain such vagaries as preferred stock, warrants and different debt financing mechanisms including actual costs of capital, was well as detailed construction timelines and build in schedule uncertainty. The EIA takes their data as a survey from utilities and vendors along with the costs of recent construction projects. The CBO model was the most robust with the fewest assumptions that I found. I hope that you understand that an LCA is an evaluation tool. I was evaluating based off of the information at hand.
“Do you get the point that electricity is a cheap commodity? It is like that new car. It is expensive to drive compared to the old POS. You do not make choices based on EIA statistics, you make choices on actual circumstances .”
No, I make decisions based on the sum of information that I have available to me so I fully understand my circumstances. I work to understand why things are happening the way they are and what is being done to address the problems we face. Understanding where we are and how we got here is vital to understand where things are going. So I build and test models and theories.
The cost of electricity is effected, indirectly, by the price of oil. Our consumption of electricity particularly from nuclear power has kept our average cost of energy from skyrocketing. The reduction of oil in electricity to < 1% is a chief explanation for this.
I don't think that you understand that I want to be wrong about what I've found. It is unsettling. So please prove me wrong. Doing a cursory review and stating that you don't need to learn something new, doesn't go very far in advancing your arguments. Your problem is that you are an "expert" and as such you question very little.
Kit,
I will love to banter with you in the future. I however have to go off the grid for a while so my responses will be delayed. Please do not take this as an abdication.
Happy Thanksgiving, Cal!`
One boom is just like all the other booms. Everybody is having fun eating their elephant ears as they watch the parade go buy.
Eventually there will be a bust and crash. Abandon equipment that will need to be remediated by someone else. Homes people won’t be able to sell because nobody wants to live there.
Then it will be “economies” fault, or the “banks” fault or the “markets” fault that businesses have to close and homes sit vacant waiting for buyers that will never come.
I passed through Williston ND this summer, and it’s a pretty impressive sight. I needed a bite to eat (on my way to Montana) and every restaurant in town had an hour or more wait (no matter the time of day I was told). I chose a local mexican restaurant, and it was like eating in a construction zone (they were expanding the restaurant as fast as people were arriving). Roughnecks filled every table (high school dropouts, old coots, tough looking women, immigrants … no matter). During my wait, I ended up in a very personal conversation with a long time local resident who moved to the area during the first North Dakota oil boom back in the 70s and early 80s. It lasted some 5-10 years, and then the bottom fell out (production peaked and prices dropped). Everyone left, and then began the lean and quiet years. It was “take what you can get,” people who made good bets remained, and the person who was telling me her story made a life for her and her family in the area. Times were tough. But no more.
She grinned ear to ear from all the money she was making, she knew there were many problems (environmental, crime, worker safety) but it was all something to be pushed aside as she raked in the short term score. And she loved to talk about the excitement and energy of the town (like seeing a runaway train pass by your doorstep). But amidst her excitement and optimism there was also skepticism and a heavy dose of realism that none of this lasts. She’s been through it once before. Best to take what you can get, and deal with the consequences later once people leave (and some sense of normalcy returns to the community). It was currently a wild ride, but it was not going to define her community in the long run (at least not for her and her family). She was taking what she could get, but the long term would belong to those who planned ahead (and planned well for the turnaround).
What impressed me most was the physical scene. Traffic is at a standstill in the town. City streets are a giant parking lot of sand, water, and oil trucks. There is no pipeline out of the area, so they move everything by truck. It doesn’t matter the time of day, rush hour is 24 hours long. And semi-tractors pulling heavy loads wreak havoc on city streets and highways leading out of town, every road is a construction zone. They build up the roads as fast as the trucks tear them down. And around every repair site there is a temporary spur road that leads traffic around the area. So there are parallel temporary roads built alongside the permanent roads, all made of dirt. And all of this sends up huge dust clouds that obliterate the sun for much of the day. I drove out of town at night, and the drill pads out on the prairie were an impressive sight. Lit up like fire crackers or roman candles (and flaring huge amounts of natural gas). I also saw ambulances, three of them heading into town. Maybe they were carrying some senior citizen living out on his wheat farm (now surrounded by drill pads, dust, and diesel fumes), but most likely it was workers injured on the job. The whole thing left a very distinct and powerful impression.
@El – thank you for the vivid personal description. I am hoping that Energy Now! will take their cameras to the areas in Georgia and South Carolina where there is a much quieter and, I believe, sustainable boom going on as workers prepare the sites where four new nuclear units should be built – if Greg Jaczko will ever get around to putting the design certification of the AP1000 on the NRC agenda. The staff has completed the work and released its report – at least a month ago. For whatever reason, the commission does not yet have a scheduled date for its decision. Southern Company has informed the Georgia PUC that the project completion may be delayed by 5 months and cost an additional $40 million if the combined construction and operating license is not issued by the end of 2011. http://www.gpb.org/news/2011/11/22/expanding-plant-vogtle-costlier
The article’s authors implies that the fault is “supplier issues” but what it does not state as clearly as I would like is that the problem the suppliers are having is that they cannot get a design certification approval from the NRC and that is playing havoc with their ability to schedule the work necessary to move forward on the project. There are strict limits to what they can do without the certification, so some workers have done all they can so far. The company is now in the situation of either paying them to do nothing or laying them off, with an uncertain ability to recall the people who have been trained and are knowledgable about the state of the project and understand all of the paperwork that they need to do.
It is really a distressing situation caused by the stubborn political behavior of a single, ill trained, poorly selected bureaucrat.
NYT has a story on the boom in today’s paper:
“Oil Rigs Bring Camps of Men to the Prairie”
http://www.nytimes.com/2011/11/26/us/north-dakota-oil-boom-creates-camps-of-men.html
Another vivid description of the quick payout, the tough rules (one violation and you’re out), and the physical limits of the boom. As I can testify from personal experience, they got one thing wrong … there’s a smattering of tough looking women (and lots of service work in the towns) taking advantage of the boom. The article talks about local representatives advocating for more “permanent” housing, so people can bring their families to area. This is the only way you really build a community. If everyone is hired for the job, and has their life and support systems elsewhere, why on earth would you care what happens to the place (as long as your check back home has a bunch of high numbers in it).
@El – I am pretty sure that one of the reasons that the oil and gas companies are bringing in temporary housing is that they know that the boom will not last all that long. Though the Bakken may very well be a big play, the areas near the current boomtowns will be played out within a decade or two and the drilling work will have to relocate to more convenient places. The crews will not commute the longer and longer distances required as the work moves away; they will move to new “man camps”. As I recall, that article mentioned that the physical structures for the camps in North Dakota were simply relocated from other played out areas.
One of the many things I like about nuclear energy is that there are booms during the construction phase, but there are also sustained, two generation long jobs in plant operations AND the infrastructure that gets built during the boom continues to produce a valuable and useful product for many decades into the future. By law, the owners of those facilities even have to put aside sufficient funds to return the sites back to a useful condition after the infrastructure is past its useful life.
It is not hard to travel around the world and find out what is left behind when an extraction enterprise like oil and gas runs out of raw material.
True enough! But on this basis, I tend to prefer highly distributed and renewable energy generation better (especially since it gives small business entrepreneurs, domestic content manufacturers, tax revenues, installation, insurance, service, equipment, inspection, construction, and other trade work over a much wider area … and has already provided a great deal of rural revitalization to small towns that need the help). Take a look at Ontario FIT programs (in just the first round):
http://www.carbon49.com/2010/04/ontario-feed-in-tariff-program-8-billion-of-deals-so-far/
Whether it’s a small wind or hydro installation, or roof top solar panels … the majority of applications are from small businesses, organizations, and individuals (and cover the whole province as you can see from the maps). A Hatch consulting report suggests 76% of the benefits from program go to independent operators (individuals, organizations, and small businesses), and remaining 8% to local distribution companies, and 16% to utilities. In some locations (Spain, Denmark, Germany), FIT pricing schemes have even lowered wholesale market price of electricity as a result of merit order effect. It’s enough bottom up free market and distributed capital growth to make even an occupy wall street protester sit up and take notice (and everyday rate payers reap the windfalls in low prices, environmental, social, and economic benefits).
@EL
The vast majority of the wind capacity being installed has nothing to do with small business – it is a taxpayer subsidized industrial enterprise that has been captured by such small companies as GE, Siemens, Vestas, Eberdrola, and NextEra (formerly known as FP&L.)
Solar installers may be small business, but most of the revenue goes to equipment suppliers – small companies like BP, Sharp, and Suntek Power (a giant Chinese company).
Lots of reports to the contrary! For a single 100 MW wind farm in North Dakota:
Summary of studies available here.
Academic studies show the same. For Texas wind farm at 1398 MW installed capacity, “Total lifetime economic activity to the state from the projects equated to more than $1.8 billion … The total economic activity to the local communities was also substantial, equating to nearly $730 million over the assumed 20-year life cycle of the farms, or $0.52 million per MW of installed capacity.” Economic benefited reported for 1) construction period (project managers, environmental technicians, legal staff, road builders, concrete pourers, supply chain impacts, accountants, tower manufactures, etc.), and 2) operations and management (maintenance technicians, administrative staff, tool providers, parts manufacturers, insurance providers, land leases, tax payments, etc.).
@EL – The Nuclear Energy Institute has similar reports available about the job creation and economic benefits that accrue to local communities that host nuclear power stations.
“At the end of 2009, NEI estimates that private investment in new nuclear power plants has created an estimated 14,000-15,000 jobs. Over the last several years, the nuclear industry has invested over $4 billion in new nuclear plant development, and plans to invest approximately $8 billion in the next several years to be in a position to start construction in 2011-2012.
http://www.nei.org/resourcesandstats/documentlibrary/newplants/whitepaper/new-nuclear-plants-an-engine-for-job-creation-economic-growth/
And:
http://www.nei.org/resourcesandstats/documentlibrary/reliableandaffordableenergy/factsheet/nuclearpowerplantcontributions/
Happy Thanksgiving Rod. Here is what I am thankful for, we are building new nuke plants.
I certainly do not find anything about the new units at Vogle distressing. Adding more NQA oversight at this stage of the project should be expected. At this stage of the DC/COL process the code requirements for Q components have been established for many years. However, if a vendor for a long lead time components does not get its NQA program right, it significantly delay the project.
What about the recent announcement that the failure of the NRC to do its job and make a decision to certify the AP1000 may add five months and $40 million (at least) to the cost of the project?
http://www.publicbroadcasting.net/wabe/news.newsmain/article/1/0/1877844/Atlanta./Third.nuclear.reactor.opening.at.Plant.Vogtle.could.face.delay
It drives me nuts that some are blaming the vendors without mentioning the real source of the delay in getting permission to move the project forward.
Full disclosure – I own stock in both Toshiba and Shaw Group. I believe you also have vested interests to disclose on this topic.
Rod you have a bad case of Selective Reading Disorder (SRD).
I follow the commercial nuclear industry closely but I choose to ignore the MSM. I think the NRC is doing a good job of processing both DC and COL. They have not failed.
Rod is an example of English major who uses the language to fit his whims and drama. To be precise with words, the only place that the NRC has failed is in meeting his unrealistic expectations.
About ten years ago, I was a member of a integrated safety analysis (ISA) team. Out team lead has just be canned because we were going to slow. The manger was introducing the new lead and providing his versions of his unrealistic expectations. I stood up and told the manager that he wrong about the NRC’s requirements. Furthermore, it did not matter. As a member of the public, I would not let happen. I would be at the first public meeting voicing my concerns. As it turns out, the new team lead was also a former navy nuke officer. It was clear that he could not be intimidated. Also the manger was back in at the end of the day, stating that he had misunderstood.
As it turns out, the manager who interfaced with the NRC made me a team lead. I know that the NRC is looking for. It is not that hard, the NRC tells you in general terms. I was also willing to consider schedule. Ideally, ISA should be done as part of design concept. In this case, construction was underway and equipment was in the warehouse. One skid mounted set of equipment was an accident waiting to happen. I took pictures of it and sent out an email two weeks before the the schedule had the final documentation sent to the NRC. The ISA team came up with a simple solution, We got the documentation to the NRC on time and they approved in the time frame we expected. We met our contractual obligation.
The point I want to make is that the NRC has no schedule obligations. In the above example, the ‘innovative’ engineering solution would generate many questions which takes time to answer. The operators on the ISA team who would use the equipment has questions, like who’s stupid idea is this. Give the NRC what they expect to see, it takes them less time for the review.
The issue with new reactors is that 80% is what the NRC has been looking at for 30 years. However, 20% is different. My slice of the pie used the KISS principle. Chapter 16 of the FSAR is technical specifications. The same function is a page and a half for older plants. Now it is half a page. Gone is the heat tracking. The NRC asked how we could meet the LCO it the temperature was below technical specification. We had done a calculation that showed we had 4 days of margin for the rooms cooling down and we could restore the system temperature in less than 4 hours just by running it. We added this information to the ‘basis’ and the NRC was happy.
So the NRC is doing a professional job. That is my expectation.
@Kit – speaking of selective reading disorder, you failed to notice that I was not complaining about the professional staff, but about the politically appointed NRC leadership. The staff completed its work and recommended the AP1000 DCA for approval more than a month ago. What is the commission – specifically the Chairman – waiting for?
I live in North Dakota and some of these things the media tends to hype up. For instance, crime is not rampant, it’s simply an increase due to greater populations in cities. The media makes it sound like there’s a crime wave going on.
We keep hearing the oil companies will be here for the next 20 years or so and this boom isn’t going away anytime soon, short of new frac drilling regulations. The ground water issue needs more research I imagine, because that is a serious issue, but the last I read is these oil deposits are far below the local water tables and contamination shouldn’t be an issue.
The boom has created a lot of good paying jobs and many oil companies are giving back to the communities. Hess donated 25 million to ND’s school system and there has been an outpouring of support for Minot in the wake of the flood that destroyed a good 4000 homes there earlier this year.
Rod there is nothing in the articles you linked to support your accusations. I read both what you wrote and what you linked. Rod you have created a drama for yourself. I see this all the time in bloggers. It called circular reasoning. Rod makes a wild leap of logic and later on quotes himself.
I was on a business trip with a younger associate who was a recognized expert on organic fertilizer while I was just someone who had a compost pile in my backyard. He kept telling me that my terminology was wrong based on the booklet he wrote. However, the overarching concept was composting was the most cost effective renewable energy protect based on LCA. You have to look ant nutrients and energy in soil to grow food.
The purpose of the business trip was to develop an industrial ecology system based on the theories of Robert Ayres who wrote the book that Cal mentioned above. Where I lived in the PNW at the time had two environmental problems, blowing dust which was natural affect of the semi-arid climate and animal waste stinking up the valley.
Using my nuclear industry root cause analysis (RCA) experience, I determined the root cause of wind erosion is not enough organic material in the soil. Living bacteria glue the soil together. Dairy farms and cattle feed lots have too much organic material. When this happens, bacteria produce methane and hydrogen sulfide which not only smells bad but is an industrial hazard more difficult to manage than radiation. As it turns out, you can make electricity. While Dairy farmers have too organic material, their neighbors do not have enough. The industrial ecology task was safely handle the organic material and energy so that a waste one place that resulted in pollution was a beneficial product used nearby that reduced pollution. Electric, gas, and water utilities organize dangerous disturbed energy sources into useful products.
So much for theory. Back to Rod’s issue which is regulatory uncertainty and why I think the NRC is easy to deal with. It comes down to one individual who is the last individual to sign off and become the target of too many environmental lawyers. For the above dairy farm example, I could talk to that person. In one county, the regulator would regulate the project into certain death. In another county, the regulator says hey buddy if you can get a dairy farmer to agree, I will rubber stamp it as ag handle equipment.
Regulatory uncertainty is something that we have to deal with and is a normal part of the process. If you do not like it, do not get into a energy field that is not nuclear. It does not get better.
Kit – your mistake was in limiting your reading to the articles I specifically linked to. I expect that you are fully capable of expanding your search to determine if I was blowing smoke or talking about a real issue.
Now that I have a little more time, here is one of many articles you can find about the staff’s recommendation on 21 Oct.
http://www.pittsburghlive.com/x/pittsburghtrib/business/s_763241.html
Your comment about having two different outcome from different regulators depending on your skillful persuasion is worthy of criticism. It might be the “way of the world” and something that you accept without complaint, but it is scarily similar to the devolution into a “pull” based economy as described near the end of Atlas Shrugged.
As a professional, I might have to occasionally hold my nose and my tongue and simply deal with such arbitrary enforcement of what are supposed to be more fairly applied rules. However, as a writer, I am free to point out the problem and try to energize others into a state of righteous indignation.
Rod you would be mistaken to think you are better informed about the DC or COL process or for that matter existing process of licensing new nukes. While of course I have many similar articles in the nuclear press to the link just posted by Rod, it not just what I read but what I do professionally that forms my decisions.
Like may other professionals who have responsibilities for submitting information to the NRC, we are on the hook when it comes to possible criminal charges if we are not professional in the performance of duties. So in this matter I do not see Rod as professional since he has not earned his strips to even know how to be in ‘a state of righteous indignation’.
Rod you are just wrong on this issue. Neither the DC or COL is being delayed for ‘arbitrary enforcement’. My normal response to the NRC is what is wrong with them. After I clam down, I remember that the NRC has to answer to the public. Sure I know and they know in a particular case that hydrogen is not a problem but they are going to want to see a calculation showing it is not a problem.
Once upon a time, the NRC accepted a statements about hydrogen not being a problem. Then a welder stuck an arc and there was an unexpected pop. In the media there was a ‘hydrogen explosion’ at nuke plant. Next thing you know NRC suits are testifying before Congress.
So the NRC has to show that they did their job. When the level of problems they find are near insignificant, that is an indication that we have done a good job. I would also live next to a nuke plant.
Of course Rod if you thought hydrogen fool cells are a good idea, I would not let you park one next to my house.
Odd point? Well Rod I have enough technical knowledge to stop hydrogen fool cells. We do not want Arnie Gutherson finding a reason to tie a completed new nuke up in court for years.
These days nuclear case law is pretty much settled. Yes, it is a lengthy process but no Rod you have not provided evidenced of wrong doing but the opposite.
I love the way this jackass makes broad declarations in the imperative. You have made such a poor case for your position, and have continuously asserted it with such arrogance that no one can take you seriously.