Open Letter to Mr. Ajay Banga, President, The World Bank Group

 

Dear Mr. Banga,

Congratulations on being appointed the President of the World Bank. I watched your interview with Fareed Zacharia of June 11, 2023, and am prompted to write this letter requesting that you reconsider the policy forbidding investments in nuclear power. 

You grew up in India and your experience informs you of the absolute need for adequate energy for people around the world. Like you, I too grew up in India. I too witnessed the improvements in the quality of life and health when charcoal- or dung-fired clay pots were replaced by gas stoves, or when electrical bulbs replaced kerosene lamps. As one of your predecessors, Dr. Jim-Yong Kim, pointed out in an interview that the enormous progress made during the last 25 years lifted over a billion people out of poverty. He could foresee lifting another billion in the not-too-distant future. Earlier progress was made on the backs of coal and oil. Can we afford to do the same to help the next billion?

I am glad you called for an energy transition from coal-to-gas-to-renewables. Yet, calls for divestment from fossil fuel companies to mitigate climate change only reduces the supply of gas, raising the cost of fuel and most adversely hurting the poor. There is no social justice in that.

The absence of nuclear power in the coal-to-gas-to-renewables transition you discuss is deeply concerning to me. Wind and solar are intermittent energy sources and when you consider the cost of storage at scale, they are not cheap—not in direct dollars, nor in their environmental footprint when accounting for all the mining required for the materials. If we rely only on wind and solar to provide the required clean energy, we will have to increase mining activities manifold and encroach on natural habitats, further exacerbating the risk of pandemics.

Nuclear power can produce vast quantities of carbon-free energy. It has resulted in the fewest fatalities per unit of energy delivered than any other system, including wind and solar. It also has the smallest environmental footprint. It is unfortunate that multinational agencies like the World Bank and the International Finance Corporation have a policy against supporting deployment of nuclear power plants. Their reluctance is based principally on our unfounded fear of radiation, reinforced by decades of fearmongering by environmental activists.

I ask you to reconsider the policy against supporting nuclear power projects. In concert with quickly deployable wind and solar technologies, nuclear power can provide the requisite base power without the need for inefficient gas-fired power plants. Should you have any questions, please contact me.

Respectfully,

Ripudaman

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Ripudaman Malhotra

Fellow, American Chemical Society

Misguided Disinvestment

 

The call for divesting from fossil companies is getting louder by the day with more environmental activists, celebrities, religious organizations, universities, pension funds managers, institutional investors and legislatures joining in the chorus. The fossil fuel divestment movement, which began in the early 2010s, seeks to encourage individuals and institutions to remove their investments from companies that are involved in the production and use of fossil fuels, such as coal, oil, and natural gas. Though I agree with the goal of transitioning away from fossil energy, I believe that the disinvestment is misguided. Not only does it not reduce carbon emissions, it also exacerbates social injustice. Let me explain.

The movement believes that climate change, which is largely being caused by our use of fossil fuels, is an existential threat and argues for a quick transition to clean fuels. The logic behind divestment goes something like this. It would send a strong signal to fossil fuel companies that there is growing concern in the public about the impacts of their activities, which would send a message to governments and other investors that the risks associated with fossil fuel investments are increasing. It would pressure them into adopting more sustainable practices or transition to cleaner energy sources or face the financial risk of holding stranded assets. Divestment can help reduce this financial risk for investors. For individuals and organizations that are committed to environmental and social responsibility, divestment from fossil fuels can be a way to align their investments with their values.

The environmental activists have influenced several states in the United States into considering legislation for divestment from fossil fuel companies. In 2015, California passed a law that requires the state's public employee pension funds to divest from coal companies. This was followed by New York, which in 2020 introduced legislation that would require the state pension fund to divest from fossil fuels by 2023. After that, many states like Massachusetts, Maryland, Oregon, and Vermont introduced similar legislation. The divestment has had the effect of making it harder for the oil and gas companies to raise funds for projects as lenders are viewing the loans riskier. As a result, the industry has cut back on drilling and used its earnings to buy back stock.

About 3 billion people in the world today are living with energy poverty, which results in low life-expectancy, high infant mortality, high death rates during childbirth, malnutrition, unsanitary conditions, inadequate infrastructure, and general impoverishment. Children, mostly girls, spend their days collecting fuel and fetching water from distant wells or ponds. The loss of human potential is staggering. How many of these children could have grown up to be teachers, engineers, doctors, leaders, entrepreneurs, lawyers, etc.

Indoor cooking over animal dung or wood exposes children to more pollutants and further impacts their health. The health benefits for them in switching to gas are enormous, and efforts should be made to furnish them with steady supplies of pipelined gas or LPG cylinders.

The lack of investments in drilling has made this task more difficult, particularly in view of the global disruptions in the supply of natural gas following the invasion of Ukraine by Russia. The US could be in a better place to supply the world with liquefied natural gas and ensure energy security. The situation in Europe could have been much dire the past winter but for the mild weather. We have time to gear up for the next winter. It is ironic that in view of rapidly changing climate we are rushing to install climate-dependent energy sources.

I recognize that natural gas is still a fossil fuel, whose burning leads to carbon emissions. I would just point out that the reason US greenhouse gas emissions have declined is basically a result of switching from coal to natural gas. We could have reduced the emissions even further, if instead of investing in wind and solar projects (20% availability), which we back up with natural gas fired plants of 30% efficiency, we had installed fewer, base-load, combined-cycle natural gas power plants with efficiencies of 55% or higher. It would also have saved us the hassle of integrating intermittent wind and solar power with the grid.

This is not the time to cut investments in oil and gas production. Unless the demand for their use comes down, greenhouse gas emissions will not decrease. Calls for divestment only assuage one’s guilt for using products and services made possible with fossil energy.

A Tribute to President Jimmy Carter

 

President Carter is currently under hospice care. Before it is all too late and rendered moot by life's irreversible course, I want to express my appreciation for the man who is an inspiration to me. 

Dear President Carter,

 

I was a chemistry graduate student in 1978 when I first heard your call for a moral equivalent of war to gain energy independence, in the wake of oil embargoes by OPEC. Caricaturists called this your “meow” moment. It was more a “roar” to me, and I enlisted as a foot soldier in your army in this “moral equivalent of war.” I worked most of my career on energy-related issues: at first the problem was rather simple. We lacked liquid fuels to meet our transportation needs, but we had plenty of coal. Coal had been converted to liquids. 

 

The technology for liquefying coal was developed in early twentieth century in Germany, but it was very expensive. It was also deployed by Germany during the war and later by South Africa to mitigate international sanctions, but the costs needed to come down substantially for coal-derived liquids to compete with oil in a free economy. The energy challenge has since become a whole lot tougher with the recognition of the climate change engendered by burning fossil fuels for energy. Today, we seek energy from sources that are also environmentally benign and compatible with the goals of sustainability.

 

Working in the field of energy made me acutely aware of the looming energy crisis humanity is facing, and the need for an informed public debate on the choices we have to make. About fifteen years ago, I joined my colleagues Hew Crane and Ed Kinderman to write a book that could be a citizens’ guide to energy. Admittedly, energy is a difficult subject to discuss, but it is made even more so by the plethora of units and mind numbing multipliers of billions, trillions, and quadrillions.

 

While waiting in the gas lines in 1973, Hew had come to the realization that annual global consumption of oil was then approaching one cubic mile, and a cubic mile of oil seemed to be a good unit to describe energy from all sources. At a conference in January 2016, physicist Amory Lovins brought to my attention that you had arrived at a similar conclusion, but that as a navy man he preferred cubic nautical miles. I did some searching of old documents from your days in the White House and came across a memo dated April 18, 1977, by Stu Eizenstat converting barrels to cubic miles. There were also some hand scribbled calculations on the page, probably by you. The thought made a tingle ran up my spine. 

 

Energy is not the only area in which you have inspired me. Your moral rectitude and tireless pursuit of social justice have been just as inspiring. Your efforts at resolving conflicts, promoting peace through free and fair elections, and fighting diseases are all laudable. The way you have dedicated your life to public service after the presidency stands as a shining example of how to live out one’s retirement.

 

Wishing you comfort and peace in your remaining days.

 

Testimony in supprt of Colorado SB23-70: Classify Nuclear Power as Clean Energy

 

My name is Ripudaman Malhotra, and I am retired scientist with over 36 years of experience in research on the chemistry of energy conversion at SRI International, Menlo Park, CA. This work made me acutely aware of the looming global energy crisis. To improve the quality of life we must double the energy supply, particularly in the form of electricity. However, more than 80% of the energy currently comes from fossil fuels, whose use is directly responsible for the global climate change.

 

Reducing CO₂ emissions is essential for mitigating climate change as well as ocean acidification that threatens our food supply. On a life-cycle basis, nuclear power has the lowest emissions and the smallest environmental footprint to build and operate. Per DoE analsyes, wind and solar plants require ten to fifteen time more of commodity materials like steel, glass, concrete, and copper. Procuring these at the required rates will require encroaching wild habitats.

 

Nuclear power also the best safety record, especially in terms of fatalities for a given amount of energy delivered. These attributes make nuclear energy ideal for decarbonizing our energy system. Indeed, countries like France and Sweden that have succeeded in deeply decarbonizing their energy supply, have relied heavily on nuclear power.

 

As we electrify our transport system, promote self-driving vehicles, electrify home appliances, and expand cloud computing services, we will need ever increasing supplies of clean energy. Nuclear energy can fulfill this need. Yet, instead of building nuclear plants we are prematurely closing them down, often a result of policies designed to promote “renewable energy.” Scientifically speaking, none of the sources of energy are “renewable.” Energy does not renew itself; it is always dissipated. Because “renewable” sources are intermittent, we currently back them up with natural gas plants. As we transition away from fossil fuels, we will have to use batteries or other storage technologies that will raise the cost and life-cycle emissions of “renewables.” By relying on wind and solar, we would be making our energy more reliant on climate at a time when the climate is undergoing major changes. In contrast, nuclear power is reliable and always dispatchable.

 

“Renewable” sources qualify for financial incentives such as investment and production tax credits (ITC and PTC), and renewable energy certificates (REC). Renewable portfolio standards (RPS) give priority to renewables forcing other plants to ramp down when they are plentiful (such as at high noon). These policies distort the market and unduly handicap baseload power plants like nuclear, forcing their closures. By classifying nuclear as a clean source, which it is, will allow nuclear power to access these incentive programs, thus forestalling premature shuttering and promoting its expansion.

 

If permitting is streamlined for developing small modular reactors, these walk-away safe nuclear plants would be the cheapest source of electricity. Some of the new designs also offer the possibility of using the “waste” nuclear fuel, currently being stored in dry concrete casks at nuclear power plants. We should be treating this “waste” as the resource it actually is.

 

There are hundreds of coal-fired power plants in the US that could be retrofitted with these modular reactors. These shuttered or soon to be shuttered power plants are already connected to the grid and have most of the workforce at hand. They offer a quick path to expanding the use of clean nuclear power.

 

I therefore urge that the Senate adopt SB23-079 and classify nuclear power as “clean power.”

 

Respectfully,

Ripudaman Malhotra

Energy Provisions in the Inflation Reduction Act

 

Today, Aug. 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA). Provisions in this law cover diverse topics like climate, health, and taxes. With $369 billion dollars devoted to climate and energy, this law is single largest action taken by the US Congress to curb the growing threat from climate change. Given how deadlocked the Congress has been these past few years and how many bills were never even voted on, the passage of IRA along strict party lines is nevertheless an achievement worth noting. 

 

Do I like everything in it? No! Could I have passed a better legislation? No! I am just celebrating the enactment of this important law that addresses our climate and energy crisis. Earlier today, I had a conversation with artist and host Michael Killen on his show, The Michael Killen Report, on this topic. A link to it follows a brief discussion of the IRA. 

 

IRA is projected to cut greenhouse gas emissions by 40% from 2005 levels by 2030. That’s 80% of what the larger Build Back Better was projected to achieve. Most of the energy-related provisions focus on electricity. That reflects the growing realization that we need to electrify as much of the society as possible and produce clean electricity to run it. It provides investments and tax credits for a diverse set of energy initiatives covering electrical power generation, transmission and distribution, and consumption.

 

A. Generation

1. Provides $60 B in incentives for installation new clean energy systems—mostly wind and solar. It will lock in investment and production tax credits (ITC and PTC) for the next ten years. By removing this uncertainty of revenues from ITC and PTC, the bill incentivizes businesses to engage in these projects. Leveraged with the private investments, these funds could increase the US renewable energy capacity to 300 GW from its current level of 200 GW.
2. Provides funding through Defense Authorization Act for domestic manufacture of solar panels, off-shore wind turbines, batteries, and critical minerals. Currently, most of the critical materials are manufactured in China.
3. The bill includes PTC for nuclear power companies to keep them open as well as funds for R&D into newer technologies.
4. Extends current tax credits for biofuel and biodiesel for ten years.

 

B. Distribution

1. Modernizes the electrical grid with new interstate high tension transmission lines for greater resiliency.
2. Streamlines the permitting process for easement acquisition to facilitate new transmission and distribution lines.

 

C. Consumption

1. Transportation
• Accelerate adoption of EVs through tax credits to customers of up to $7,500 for new $4,000 for used vehicles.
• Funds for building out a network of 500,000 charging stations.
• Promote electrification of heavy-duty vehicles (trucks, buses, etc.). Includes funding for expanding electrification of USPS vehicles, school buses, and government-owned fleet of vehicles.
2. Commercial Residential
• Provides rebates and tax credits to home-owners for energy audits and retrofits for improving efficiencies (electrical stoves; heat pumps; insulation).
• Includes tax incentives for district energy systems in residential and business communities.
3. Industrial
• Promotes the use of hydrogen for high temp. industrial heating instead for fossil fuels
• Provides tax credits for production of hydrogen with reduced carbon footprint.

 

There are many important provisions to curb ghg emissions, such as capping of abandoned wells and funds for improved agricultural processes, as well as leasing of lands for oil and gas extraction and pipelines. There are also about $10 billion allocated for “climate justice” measures to redress neighborhoods that have been adversely affected by energy industry.

 

Will these actions stop climate change? No; climate change is a global phenomenon, and it will take collective action from all other nations as well. Yet, it is a small step in the right direction. Let’s hope it spurs appropriate actions throughout the globe.

 

Here's the video link. Take a listen.

 

 

Hydrogen: Hope or Hype

 

Headlines declaring hydrogen as the clean fuel for the future are becoming all too frequent. Governments and private companies in Australia, India, China, Germany, Saudi Arabia, and many other countries have announced large projects for producing, storing, and transporting hydrogen. Globally, over 300 projects are being undertaken with investments amounting to $500 billion. India has unveiled plans for producing 5 million tonnes of hydrogen in a bid to become a global export hub.

The promise of hydrogen is that it produces only water when it burns. Thus, using it instead of coal, oil, or natural gas would eliminate greenhouse gas (GHG) emissions. Hydrogen certainly has a role in the net-zero emissions scenarios of tomorrow, for example those proposed by the Intergovernmental Panel for Climate Change (IPCC), the International Energy Agency (IEA) and many other organizations. Most scenarios for decarbonization rely on electrifying as much as possible. While the bulk of decarbonization will come from the electrification of home appliances, vehicles, and industries there are many sectors such as metal refining, long-distance trucking, and shipping that are hard to decarbonize with electricity alone and here hydrogen could play a crucial role. But calling it the fuel of the future is a stretch too far. Hydrogen currently represents less than 1% of total global energy and even in the net-zero emissions scenarios it barely increases to 5% by 2050; nowhere near enough to justify the appellation.

Some exaggeration by promoters of any technology is understandable, but when these pronouncements begin to change government policy, it behooves everyone to take a closer look at the contributions hydrogen can make in the future. If the primary reason for using hydrogen is to reduce greenhouse gas emissions, we must consider the extent to which hydrogen will need to replace fossil fuels and ensure that the hydrogen is produced in ways that do not emit greenhouse gases. This essay will review the ways hydrogen is produced as well as point out the areas where use of hydrogen will be critically important in reducing GHG emissions.

While hydrogen is the most abundant element in the universe, it is not present as such on Earth. On Earth hydrogen is mostly present in combination with oxygen as water. It is also present in combination with varying amounts of carbon in fossil fuels such as natural gas, oil, and coal, as well as in biomass. Hydrogen can be produced from any of these sources, but the processing will entail energy consumption and/or emission of carbon dioxide. Hydrogen is not a source of energy; it is an energy carrier. In that respect, it resembles electricity–we must expend energy from another source to produce it.

Hydrogen Production. Hydrogen is a widely used industrial gas. About 90 million metric tons are produced each year, equivalent to about 6% of global oil consumption. Most of the hydrogen is used in petroleum refining, and for producing ammonia and methanol. Currently, half of the hydrogen is produced by the reaction of natural gas (methane) with steam in a process known as steam reforming. Analogous reactions with petroleum, coal, or biomass provide most of the remainder. Steam reforming is the cheapest source of hydrogen and is used in petroleum refining operations and for producing ammonia. However, each tonne of hydrogen produced by this process entails producing about 6 tonnes of carbon dioxide, and hence hydrogen produced using current technologies would not be helpful for a transition to a clean future unless the carbon dioxide is captured and sequestered. Technology for carbon capture and sequestration (CCS) is still very expensive and not practiced at anywhere near the required scale.

Hydrogen can also be produced by the electrolysis of water as well–passing electricity through water. The electrolysis process does not entail emission of carbon dioxide, but there could be emissions in producing the electricity. Commercial electrolyzers have an efficiency of 75% and require over 50 MWh of electricity to produce a tonne of hydrogen. Producing one tonne of hydrogen by electrolysis would result in emitting 20 tonnes of carbon dioxide if the electricity was generated by a natural gas power plant and over 50 tonnes if coal was burned to generate the electricity. Either way, it is a situation far worse than with steam reforming!

Colors of Hydrogen. Hydrogen itself is a colorless gas. However, depending on the process used to produce it different colors have been assigned to it to reflect the varying amounts carbon emissions. Indeed, there is full rainbow of hydrogen designations (Figure). Hydrogen produced by fossil fuels has the highest emissions and is labeled black or grey. If carbon-capture is employed in conjunction with such production, the resulting hydrogen is labeled blue. If we use a clean source of electricity to produce hydrogen, it could be a desirable fuel. Indeed, promoters of hydrogen are talking about using wind and solar power to produce what is called green hydrogen. Nuclear power could also be used to produce emissions-free hydrogen; it is referred to as pink hydrogen. Other sources of clean electricity include hydro and geothermal power.

Figure: Colors of hydrogen depending on production technologies.
Source: Global Energy Infrastructure

To produce the 500 million tonnes of hydrogen projected in the net-zero scenarios would require 2,600 TWh of clean electricity, an amount that could be generated from 1,200 GW of wind or solar farms. To put in perspective, current global installed capacity of wind and solar power is only 1,400 GW. The recently announced Adani–Total venture seeks to dedicate 2.3 GW of solar to produce green hydrogen, capable of producing only 10,000 tonnes of hydrogen a year—a tiny fraction of what is needed.

Hydrogen Consumption. One large application of hydrogen is in metals refining. Use of hydrogen instead of coal/coke for reducing iron ore and producing steel has been developed but it is currently being practiced at only a very small scale because the process is more expensive. Expanding hydrogen’s role in metallurgical operations could reduce up to 20% of greenhouse gases, but that would require producing over 200 million tonnes of emissions-free hydrogen.

Transportation contributes to about one third of greenhouse gas emissions and use of hydrogen in this sector would be very impactful. Hydrogen packs far more energy per unit of weight or volume than batteries, but hydrogen has to be contained in a vessel. Because storage vessels must withstand high pressures, they must be constructed from heavy steel or other materials bolstered by reinforced fiber, resulting in increased weight for the overall system. For cars and light duty vehicles, battery EVs outperform hydrogen FC-EV.

There is another reason why fuel-cell EVs have not gained traction whereas battery EVs are rapidly penetrating this sector; it has to do with efficiency. Batteries return around 95% of the electrical energy saved in them. In the case of a fuel-cell vehicle we lose 30% of the energy in first producing hydrogen from electricity, and then another 35% in the regenerating electricity using the fuel cell, for a combined efficiency of 45%. Increasing the efficiencies of electrolyzers and fuel cells could allow FC-EVs to gain market share in this sector. Until then they will remain a minor player.

The chief drawback of battery EVs is their relatively lower capacity and slow recharging. For long-distance trucking and other heavy-duty applications where large amounts of on-board energy needs to be stored, hydrogen fuel cells technology becomes attractive. Storing compressed hydrogen becomes more practical in large vehicles and ships.

Hydrogen, like batteries, is a way of storing electricity. If electric power is generated at times when there is low demand, it makes sense to store it—put it in a bank if you like. However, there are substantial energy losses both during conversion of electricity to hydrogen (30%) and regeneration of electricity from hydrogen (40%). The situation is akin to a bank that charges you a 30% fee to deposit money and again charges you a 40% fee during withdrawal! You must be desperate to save money in such a bank. For this reason, schemes to produce hydrogen at wind and solar facilities to ameliorate the problem of intermittency makes limited sense. It would be far better to use the excess electricity directly for water treatment, desalination, or whatever else the local region may need.

My Guest Coulmn in Corporate Tycoons, May 2022