Being an avid sports fan, I’ve always enjoyed watching the NCAA Basketball Tournament. In the spirit of what many call “March Madness”, I decided to put together a “Future Energy Sweet Sixteen Bracketology” meant to pit various energy sources against each other in a single-elimination pool. The purpose of the Energy Brackets is take a more unconventional way to look at our energy sources here in the U.S. and to make some assumptions based on public policy, technology advancements, consumer adoption, energy storage, efficiency and cost-effectiveness.
I’m highly confident this pool may look very different to a wide number of people. However, I do hope, if nothing else, this mock tournament helps drive increased conversation about whereU.S.energy markets may be headed. Again, some may question the seeding of the energy players listed in the brackets so let me begin by giving some brief explanations as to how I actually came to seed the entrants the way I did.
For starters, I used U.S. Energy Information Administration (EIA) data for primary energy use by source. I also cross-referenced U.S. renewable energy supply data released by the EIA in its recent Short-term Energy Outlook. I also used Blue Phoenix Inc. independent energy research and analysis to make some hard calls on rankings based on the present lack of mainstream energy storage solutions coupled with a lack of national policy in this country.
So let’s tip off the tournament with some brief explanations for seed positioning:
1) I chose Brent Oil as the Top Seed because on a global stage Brent has surpassed WTI Crude Oil as the industry benchmark for prices. Also, despite the International Energy Agency (IEA) suggesting theU.S.will overtake the Saudis in oil production by 2020, that jury is still out. In fact, only time will tell. If we are trying to meet 2020 carbon goals, producing more domestic oil may prove very costly in terms of climate change here at home. So positioning Brent as the #1 pick was really meant to put a horse in the energy tournament that goes against the logic of theU.S.energy becoming independent.
2) WTI Crude oil gets the #2 pick since the country is still very much addicted to oil and will likely be for years to come, even if we make strides with cleaner energy technologies.
3) Coal was picked in the 3rd slot because despite becoming less used thanks to growing popularity of natural gas, we simply can’t move away from coal with reckless abandon or we may risk surging electricity prices as a result.
4) With MIT Nuclear Physicist Ernie Moniz backed by President Obama as the new Energy Secretary, I do believe modern nuclear advances may take shape in this country. We have already seen the first U.S.nuclear reactor license awarded in three decades and small modular reactors (SMRs) are becoming more supported by the Department of Energy (DOE). So nuclear energy comes in as my #4 seed.
5) I ranked liquefied natural gas (LNG) as #5 because there is increasing bias that theU.S.could begin exporting this product. Also, there is a growing willingness to use LNG to heat homes, cook and for electricity generation in the industrial sector. Also, the dense nature of LNG makes me think it can be used more in the transport sector than some have suggested.
6) Compressed natural gas (CNG) is #6 on my list because I’m seeing more companies (i.e. General Electric, Chesapeake Energy, etc.) looking to tap this market. I’d like to CNG be advanced so longevity of use is no longer an issue. If that can be addressed, and prices to actually compress the gas become more affordable, more infrastructure is built nationally and if more diesel vehicles can be retrofitted for CNG use, I’d be much more comfortable swapping player ranking for #5 and #6. Unfortunately there is just a lot of “if’s” for me right now but there is much potential.
7) Hydroelectric was chosen primarily because of its current position in our energy arsenal as well as it potential. According to the USGS, hydropower represents 19% of total electricity production in the world yet only around 7% here in theU.S.Because water is a very precious commodity in its own right, I felt hydroelectric needed to be in the middle of the pack since recycling of water is still a major drawback and supplies of water can’t be renewed like many other players in the tournament. There is only finite water we have to remember.
8) Wood biomass is fascinating in that the possibilities are endless. I’d welcome seeing more biomass energy being created from garbage rather than crops though. Switchgrass is becoming more intriguing but modern landfills can and need to be larger source of power for this energy source to go deep in the tournament.
9) Liquid biofuels (i.e. ethanol and biodiesel) are increasing being looked at for answers to our energy future demand but a lot still needs to be still considered. Obviously, President Obama getting behind the use of algae as a fuel source and even Exxon Mobil devoting capital to algae should certainly keep this energy source in the middle of the pack for the tournament. Vegetable oil, butanol and ethanol are other liquid biofuels with a lot of potential.
10) Geothermal energy is appealing since it can be used in a wider geographic area these days thanks to improved technologies and it can help customers cut heating, air conditioning and hot water bills. Plus a 30% federal tax credit is in place for those who “install” versus “produce” geothermal heat systems by the end of 2013. A lack of policy regarding the future of geothermal power was the reason to put this source at #10.
11) I happen to be a fan of solar power and I was hard-pressed to drop solar as far as I did. However, I do believe until major breakthroughs with energy storage solutions develop on a larger scale, solar will remain challenged. I am ecstatic to see solar prices drop the way they have in recent years and become much more cost-competitive with other coal and gas so I’m hopeful, with the right storage solutions in place, this #11 seed could be a real name to watch to go very deep into the tournament.
12) Call me crazy considering the present state of offshore wind in this country but offshore wind is my Cinderella pick of the tournament. I continue to be amazed theU.S.does not currently have any offshore wind power generation. I’m expecting that to change rather dramatically in upcoming years and I believe the federal government will finally put policies in place that make long-term investment in offshore wind extremely attractive.
13) Not all wind is created equally so despite my enthusiasm for onshore wind, I chose it as a late seed largely because onshore wind energy produces lower power output than that generated by offshore wind. With increased storage solutions though, onshore wind could easily move into the middle of the pack of players, even in the top 5.
14) Cogeneration plants (COGEN) just doesn’t get the attention it deserves and despite having a history of proven success, there has been a reluctance to adopt to cogen plants where intermittent energy sources such as wind or solar are being used. I do believe we will see a modernization of the cogen plant though and that has me excited to make the #14 pick my absolute sleeper pick and overall winner of the tournament.
15) Fuel-cells are ranked #15 in my energy bracket because costs are really prohibitive still and infrastructure is quite desolate. Also, it produces less power per volume than other fuels such as gasoline and concerns regarding life-span of fuel-cells created remain problematic. There are also concerns when it comes to safety in vehicles that suffer collision.
16) Rounding out my Sweet Sixteen is thorium. my skepticism for thorium is really based on the fact there isn’t yet a domestic prototype thorium reactor in the marketplace that can accurately guide us to ascertain cost savings building a molten salt reactor would actually be compared to any other reactor (i.e. Light water, Pressurized Water, Traveling Wave, etc.). China is presenting moving forward with a small reactor based on thorium so this energy source may be down in some eyes but it should definitely not be out.
Have your own views on the brackets? Let us know your thoughts on energy by filling out the below Energy Bracketology, scanning your picks and emailing us at email@example.com. We will posts results to the Blue Phoenix Inc. website (www.bluephoenixinc.com). Thank you in advance for your submissions.