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Chapter 69 of 111 · The Freeman 1972 by Foundation for Economic Education

Energy; J. Wei

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JAMES WEI James Wei assumed The Allan P. Colburn Chair of Chemical Engineering at Delaware in 1971, following a distinguished career in industry. He received the B.S. from Georgia Tech and the M.S. and Ph.D. at MIT. At Mobil Oil, he ad vanced from Research Chemical Engineer to Senior Scientist and concurrently held Visiting Professorships at Princeton and Cal Tech. Upon completion of Harvard's Advanced Management Program in 1969 he returned to Mobil as Man ager of Analysis. Prof. Wei received the ACS Award in Petroleum Chemistry in 1966 and the AIChE Professional Progress Award. He is a consulting editor for McGraw Hill and a mem ber of CHEMTECH's Executive Board. Prof. Wei is best known for his work in kinetics, catalysis, and mathematical analysis, but his recent attention has been focused on creating a chemical engineering courSe for freshmen. This article is slightly condensed and reprint ed by permission from the March 1972 issue of Chemical TechnoloAJ'.

ENERGY: THE CIVILIZATION and way of life we know are supported by a steady supply of low cost raw materials drawn from farms and forests, from the mines and wells, and from the air and water. In history when the supply of a raw material runs low and when there is no sub stitute in sight, people wonder whether civilization can survive. William Crooks observed in 1898 that intensive farming depended on the nitrate mines in Chile, and their eventual exhaustion would bring world wide famine. 1 This did not take place as the great chem ist, Haber, and the chemical engi neer, Bosch, rose to the challenge and solved the problem of nitrogen fixation via ammonia synthesis from air and water. As the skills of chemists and chemical engineers gradually in crease, almost any natural raw material can be synthesized or re placed. Outside of hydrogen, the chemical elements are hardly ever theUltimateRawMaterial__ lost from planet earth. 2 There is no such thing as "nonrenewable minerals" even though -rich depos its are exhaustible. Everything that is "used up" is still with us, but in altered and diluted form.

In this closed system of earth, we can and will recycle everything. Given enough energy, or thermo dynamic free energy, we can sep arate and· concentrate any ma terials and recombine them chem ically to form synthetic raw ma terial. All of the precious material con tained in the refuse. of our civ ilization collects on our lands, floats in our air, or runs off into the oceans. They can all be recov ered with sufficient expenditure of energy. From the ocean we are al ready recovering freshwater, mag nesi urn, bromine - it would be even easier if we could develop· or ganisms that concentrate some ele ments. Thus we realize that en ergy is the ultimate raw material which can be used to make food, water, other raw material-as well· as warming and cooling our homes and operating all our ma chinery. Energy Uses in'the Pas,t The United States has always been blessed with an abundance of cheap energy to augment human and animal muscle: from the swift flowing rivers providing water power, and great forests provid ing fire wood, down to the modern coal mines and oil gas fields. To day, this underpinning of our en tire economy and way of life con sumes only 3 per cent of our gross national product. Energy cost forms only 31j2 per cent of the cost of average industrial products, ranging from 8 per cent for chem icals to 0.3 per cent for apparel manufacturing. 3 The consumer cost of energy can be divided into three shares: production cost un der the supervision of engineers, 488 THE FREEMAN August transportation and distribution costs under the supervision of marketers, and federal and local taxes. Table 1 gives the approxi mate current prices. Only a small part of the cost of refined fuel is in the province of engineers. 4 ,5,6 Table 1. Current energy costs Production Consumer cost cost Gasoline, regular 12 36 ¢/gallon Naturalgas 16 148 ¢/thousandcu ft Fuel oil, No.2 11 20 ¢/gallon Electricity 0.7 2.8 ¢/kWh Consumer cost = productioncost + distribu tion and transportationcost + federal and local tax.

VVe use a great deal of energy because it is very cheap. Our tax laws are already designed to make energy more expensive. For in stance, automotive transportation requires three ingredients: vehicle, fuel, and road. The last item be longs to the public sector and is financed mostly from taxes collect ed from fuel. The excise and sales tax on a vehicle is less than 10 per cent of the manufactured cost, but on gasoline it equals manufac tured cost. 7 Despite this fact, the c~pital and maintenance cost of a piece of energy-using equipment is usually 15 to 20 times the an nualcost of fuel, for automobiles, air conditioners, and electric pow er plants. 5, 7 As long as fuel is cheap and equipment dear, we burn fuel up prodigiously. VVhen prices go up, we complain but go on burning without a pause. Past investment in equipment is very expensi ve and cannot be changed readily. VVhen copper is expensive, we can shift to aluminum; when butlers are too expensive we phase them out; but when energy is more expensive, we have neither alternative nor can we do without.

If it were not for the fact that engineers continue to improve equipment to save fuel, our use of energy would be even more prodig ious. For instance, in 1925 it took 25,000 Btu to make a kVVh of elec tricity but today it takes only 9,000 Btu. 8 Historically, the principal de terminants of energy use have been number of people and scale of affluence.9 Figure 1 shows the per capita gross national product of various nations against per capita energy use in 1961.10 It can pass as a fairly straight line, the richer one is, the more energy he burns up. If you look at such curves long enough, you can begin to see an S-curve. As you get richer you will buy more information and service, which require less ener gy than hardware. U.S. commer cial energy use is about 120 times the human intake of food energy; while in India it is about 3 times - for all manufacturing, farming, 19'72 200 ::I 150 ~ CCI ....c enc :=! 100 ea...os.

eau -CD =->- 50en -CD C ..... ENERGY: THE ULTIMATE RAW MATERIAL 1000 2000 Gross nationalproduct per capita(dollars) Figure 1. Nations GNP and energy use, 1961 489 3000 and transport. Figure 2 shows the historical U.S. GNP growth in constant 1958 dollars (where the effect of inflation is taken out) and energy consumption in Quads (a Quad is a quadrillion Btu, or a million times a billion BtU).l1 It appears that of late, energy growth lags a little behind GNP growth. An increase inafHuence without corresponding increase in energy use has never been achieved in the past and is difficult to see in the future. There may be frivolous uses of energy, such as the electric tooth brush; but the bulk is necessary to our way of life: home fires should be kept warm, people have to get to werk, f00d must be de livered, and the wheels of industry have to turn. The pattern of 490 THE FREEMAN August sources and uses of energy today, together with a government fore cast for the year 2000, is given in Table 2.12 Oil and gas have been Table 2. U.S. sources and uses of energy as % of total Projected 1970 2000 SOURCES Oil 43 32 Gas 31 26 Coal 21 16 Hydro 4 3 Nuclear 1 23 USES Residencecommerce 22 13 Transportation 25 13 Industry 31 20 Electricity generation 22 44 capturing markets steadily from coal for the last thirty years, since they are cleaner, more convenient and cheaper. Nuclear power will rise to capture markets from oil and gas in the future. In the use side, electrici ty generation has been the fastest growing segment and will continue to be.

The Two New Crises In recent years, the e~ergy use suddenly faces two new crises: shortage and environment. Hardly a day goes by without a black eye for energy in the mass media: Delmarva Power and Light refus ing new customers in natural gas, a blackout in the eastern seaboard, birds dying in oil spilled at Santa Barbara, opposition to strip min ing in West Virginia, scientists predieting that the polar ice cap will melt and flood coastal cities due to accumulation of carbon dioxide in air, scientists predicting combus tion dusts will block out sun light and cause a new ice age, and a Wall Street Journal article de claring that planet Earth is ap proaching an· energy ceiling .13,14 A year ago, Daniel Patrick Moyni han asked, "When would this in sane increase in energy use stop?" It may seem that the only way out is to use less energy in the future, save the irreplaceable resources for our grandchildren, and repair the damaged environment.

I would like to advance the thesis that there is no inevitable collision course between more en ergy use and better environment: a cleaner environment would mean much more use of energy. The main flaw of ecologists prophesy ing doom is their failure to appre ciate the ingenuity of scientists and engineers in inventing tech nological alternatives. A cleaner automobile means more use· of fuel, to produce hotter' and cleaner exhaust and to over come pressure drop in afterburn ers. Taking lead out of gasoline would mean a lower compression ratio and less efficient engine, which means more fuel. Cleaner smoke stacks in power plants mean either cleaner fuel by more refin ing of oil and coal, or stack gas 1972 ENERGY: THE ULTIMATE RAW MATERIAL 491 1400 140 1200 120 c:a 1000 100Ln en ~ =0-800 80 ..., ..... co 0 c en 600 60 ~=.S! ... "C ca m 400 40 =d 200 20 0 01920 1940 1960 1980 Figure 2. U.S. energy use and gross national product scrubbing and dust removal, all requiring more energy. The Bio logical Oxygen Demand of waste discharged into rivers and lakes by residential-industrial-agricul tural activities would require more sewage treatment and passage of more oxygen into water, which means more energy. The recycling of solid wastes means more energy use. Provided that society will face the facts and give engineers the resources and time, all the pollutants can be reduced to any required level by sufficient expen diture of energy - and a necessary increase in prices, which will de cline as experience grows.

At the end, energy is used to remove all other pollutants and a vast quantity of waste heat be comes the ultimate pollutant. So far, this is a local dispersal prob lem rather than a global problem. The fishes are hot in the outlet of a power plant, and New York City is three degrees hotter than the countryside in the winter. But the man-made waste heat rejection is currently only 50 ppm of the earth's heat budget, or the quan tity of solar radiation that the earth receives and sends back into space. 15 The supply of some forms of energy is short and prices are in creasing. The oil price increase is due to the demands of oil export_ing countries in the Middle East, Libya, and Venezuela, plus a short492 THE FREEMAN August age of tankers; the natural gas shortage is due to industry's un willingness to explore and to lay pipelines under the low existing governmeJt regulated prices; the coal shortage is due to earlier fore casts of its demise, and consequent underinvestment in opening new mines and manufacturing railway hopper cars; the nuclear power shortage is due to unforeseen diffi culties in construction. All of these are short-term problems, many due to past underinvestment in re search and development and plants, that can be solved later.

The costs of mining and extrac tion of a fuel is divided into two parts: the technology cost and rent. 16 The technology costs are managed by the geologists and en gineers in exploration and drilling holes - these costs reflect the bounty of earth and our present state of technology, and cannot be changed except by innovations in technology or by new discoveries. The rent cost includes royalty and bonuses to the land owners, pro duction and severance taxes, Fed eral income taxes, and windfalls for the lucky wildcatters - this cost is negotiable and represents the bargaining position of various parties and can be changed sud denly. We read that in the Persian Gulf, the technology cost of a bar rel of oil is only 10 cents, but the rent cost is $1.60 and going up. Despite the engineers' effort to cut cost every year, the rent costs can go up much faster. To affluent na tions such as Japan and the U.S., this cost increase is an unwelcome burden but, to less developed na tions such as India, this cost in crease is a serious blow.

The Arabs have more than two thirds of the free world oil; can they obtain indefinite increases in prices? We know that North America contains vast fuel re sources in coal, oil shale, and tar sand - many times greater than all the oil in the Middle East. Lab oratory and pilot plant runs show that they can be turned into oil and gas. Given enough money and time to do research and develop ment, chemists and engineers will find out how this could be done in great scales economically, and without damage to environment. Present guesses on synthetic crude oil prices are in the range of $4-$6 a barrel from these solid fuels, while small proj ects such as the Sun Oil process in tar sand in Al berta is almost competitive at present prices. 17 These vast re sources can form a price ceiling on oil and other energy sources for many years to come. The public and our government need to learn the facts, debate the issues, and pass rules on their exploitation.

We do not yet know how to do the mining-extracting-refining in the 1972 ENERGY: THE ULTIMATE RAW MATERIAL 493 ogenic cables that are super-con ducting. I am afraid that after the engineers have d~ne their jobs well and ·technology costs are cut, the dominant cost in electricity trans mission will turn out to he a rent cost again, paid to land owners to acquire the right of way. Radiation hazards 'in nuclear plants can be minimized to any desired level by spending more money. The final' radioactive hot wastes are· being stored in caves now. Eventually, they will be dis posed of by some other means, such as being sent into the sun by rockets. The sun is exceedingly radioactive now - a little bit more won't hurt. It can be our ultimate garbalge dump.1s When it comes to transporta tion, oil is the dominant fuel. Out side of a few electric trains and bicycles, almost everything else moves by oil on the land, in the sea, or in the air. Its dominance is due to its ease in use as a liquid, as well as high power density and low cost. Nature appears to have arrived at the same solution for transportation fuel much earlier.

When nature prepares something for a long journey, such as awal nut for dispersion, a cocoanut for ocean voyage, a salmon tra veling upstream to spawn, or a goose mi grating to South America, the body carbohydrates are converted into lipid or fat. 19 These fats dif0.69 0.46 $4/barrel $10/ton Electricity Gasoline No.6 fuel oil (1% S) Bituminous coal No.6 fuel oil (High S) $2.50/barrel 0.43 Natural gas 40¢/thousand CF 0.40 East Coast wholesale, without tax The approximate current whole sale prices of the more important fuels are shown in Table 3.4 The clean and convenient natural gas seems underpriced in this table. Lower sulfur fuel oils are natural ly more expensive than high sul fur fuel oils. Electricity is the cleanest to the consumer, totally available to do useful work, and the most expensive. Future Energy Uses The large-scale generation of electricity at remotely located nu clear plants and the burning of coal at the mine mouth would re move much danger and pollution from population centers. (Distance certainly lends enchantment here.) The increased cost of electricity transmission could be decreased by new developments, such as crymost economical manner, and with out damage to the environment. If engineers are given the job and the resources, they will rise to the occasion.

Table 3. Fuel prices Equivalent cost Unit cost $/million Btu O.B¢/kWh 2.34 12¢/gallon 1.00 494 THE FREEMAN August vice, but rather low in capacity. The flywheel was tried in buses in Switzerland and is capable of tre mendous improvements. One can conceive of a rotor with an ex ceedingly high speed of revolution, kept inside a high vacuum to mini mize friction, and made of com posite material of carbon filaments in epoxy resin to withstand the tremendous centrifugal forces. There is a great technological innovation on the way that can greatly influence the future pat tern of population distribution and transportation needs: the vi deophone. People live in great met ropolitan regions for the ease of contacting many other people and to use common facilities. These great concentrations lead to crowd ed cities and tremendous transpor tation problems. With a techni cally advanced videophone, one can have vivid and direct communica tions without leaving his home.

Managers and white-collar work ers, scientists and artists can live anywhere they choose and do all their work at home and by video phone; housewives can shop by videophone; students can talk to their professors by videophone. There is no need for people to get together except when they want to have fun together. People would only travel for pleasure then. This could result in a great dispersion of people back to the countryside. 385 200 85 40 1 Chemical energy kcal/g 11.0 9.3 5.2 4.8 4.1 4.1 Table 4. Energy density in storage Electric mechanical energy watt hr/lb (20% heat efficiency) 1,150 550 510 Gasoline Lipid Methanol Ammonia Carbohydrate Protein Sodium-sulfurbattery Conceptualsuper flywheel Lead acid battery Super fly wheel Rubber band For intercity traffic on land, and for long distance travel in the air or in the seas, it is difficult to see how oil can be replaced. For cen ter city stop-and-go traffic, it would be well to switch to vehicles with stored energy that is less heat generating. The rubber band is an obvious energy storage defer from petroleum only by the presence of a little oxygen. In fact, some geochemists believe that pe troleum originates in animal fat buried in the rocks for eons, and that the oxygen is removed by cat alytic action of bacteria or of clay.

Table 4 gives the comparative pow er density of a number of fuels and batteries. 7 It may be a bit un fair to compare gasoline to a bat tery in power density, since the battery carries both fuel and oxi dizer, but the oxidizer of gasoline is ubiquitous air that is always available except in space and un der water.

1972 ENERGY: THE ULTIMATE RAW MATERIAL 495 Future Supply of Energy The recoverable resources of energy in the world are quite large. The solid fuels are much greater in quantity than the liquid and gaseous petroleums, based on a study by Hubbert. 2o We know they are available, but we do not yet have the technology or agreed upon ground rules for their ex ploitation. Before these tremen dous resources can .be touched, there must be research and devel opment, environmental regulations, and ownership and profit rules es tablished. For the nuclear fuels, a de pendence on uranium oxide· ores of $10/lb would mean a rather limited future in comparison with coal. There may be much more urani urn to be discovered. If we are willing to pay more, we can use a great deal of low grade uranium. Future energy supplies will be pJentifulbut not neces sarily cheap. The truly overwhelming solar energy is the ultimate energy source when all else is gone. This prognostication was recently. enun ciated by Gaucher,21 and Glaser 22 has proposed a conceptual· scheme for using solar energy. He envi sioned synchronous satellites that constantly hover overhead at or bits 22,000 miles away, with solar cells 25 square miles in area. The electricity collected from the sun is beamed to earth at a safe in tensity on microwave and collected on giant antennas. This is avail able night and day, and goes through mist and driving rain with less than 5 per cent absorp tion loss. This idea is not far from today's technological capabilities.

For a trial balance, let the world energy demand increase by 4 per cent a year, compounded, based on modest population-GNP growth. With fossil fuel alone, we may be in trouble after 2050; adding cheap uranium, we are in trouble after 2070. After 2100, man-made energy release is 1 per cent of nat ural solar influx and the waste heat disposal problems have to be solved. Summary There is no inevitable collision course between high energy use and good environment. The public should be informed that there are technological alternatives. We read that after 150 years of fog,when sulfur-containing coal is replaced by clean natural gas, winter sun shine is returning to London. Scientists and engineers can solve nearly' all environmental problems when they are given the task, the resources and the time. Any combustion waste can be cleaned up; radioactive wastes can be sent into the sun; phosphates can be removed by tertiary sewage 496 THE FREEMAN August treatments; hot fishes near power plants can be saved by dry air cooling towers; solid wastes can be reduced to ashes, and the re mains recovered and recycled.

Many of these solutions are within today's technological capabilities. Weare only holding back to see which is the best solution, and who should pay, before vast investment programs begin. Even the waste heat disposal problem for earth may eventually succumb to the in genuities of our scientists and en gineers, just as the spectre of world famine forecast by William Crooks was dispelled by Haber and Bosch. All of this may not be cheap, and the cost of using energy may have to go up. But let us tell every one that a clean and adequate en ergy supply can be managed if we give chemists and chemical engi neers a chance. But w~ must plan ahead. ~ - Footnotes 1 Kobe, K. A., Inorganic Process Indus tries (Macmillan, New York, N.Y., 1948), p.230. 2 Jeans, James The Dynamical Theory of Gases (Dover, New York, N.Y.), 1954, p.342. 3 Leontief, W. W., "The Structure of the U.S. Economy," Sci. Amer., p. 25, April 1965.

4 Oil Gas J., p. 100, March 1, 1971; Energy News, 1 (10), March 15, 1971. 5 Elec. World, March 15, 1971. 6 My utility bill at Princeton, N.J. 7 The Autqmobile and Air Pollution, a report of the Panel on Electrically Pow ered Vehicles, U.S. Department of Commerce, Oct. 1967, pp. 49-99. 8 Schurr, S. H., and Netschert, B. C., Energy in the American Economy 1850 1975 (Johns Hopkins Press, Baltimore, Md., 1960) , p. 728. 9 Landsberg, H. H., and Schurr, S. H., Energy in the United States (Random House, New York, N.Y., 1968). 10 Singer, S. F., "Human Energy Pro duction as a Process in the Biosphere," Sci. Amer., p. 175, September 1970. 11 Dole, H. M., American's Energy Needs and Resources, speech by the As sistant Secretary of Interior at Stanford University, January 12, 1971. 12 Mills, G. A., Johnson, H. R., and Perry, H., "Fuels Management in an En vironmental Age," Environ. Sci. Tech nol., p. 30, January 1971.

13 Ehrlich, P. R., and Ehrlich, A. H., Population, Resources, Environment (W. H. Freeman, San Francisco, Calif., 1970) , Chap. 4 and 6. 14 Welles, J. G., "Will the Earth Reach an Energy Ceiling 1" Wall Street Jour nal, January 6, 1971. 15 Landsberg, H. E., "Manmade Cli matic Changes," Science, 170, 1265, (1970); Environmental Quality, a report by the Council on Environmental Qual ity, August 1970, Chap. V. 16 Adelman, M., "The World Oil Out look" in Natural Resources and Inter national Development (Johns Hopkins Press, Baltimore, Md., 1964). 17 Strom, A. H., and Eddinger, R. T., Chem. Eng. Pro gr. 67 (3), (1971). 18 Gordon, T. J., remark at a confer ence at the Institute of Man and Science, Rensselaerville, N.Y., 1969. 19 White, A., Handler, P., and Smith, E. L., Principles of Biochemistry, (Mc Graw-Hill, New York, N.Y., 1964), p. 282. 20 Hubbert, M. King, "Energy Re sources," in Resources and Man, by the committee on resources and man, Na tional Academy of Science-National Re search Council (Freeman, San Francisco, Calif., 1969).

21 Gaucher, L., Chem. Technol., March 1971, 153. 22 Glaser, P., Chem. Technol., October 1971, 606.

The Freeman 1972

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