MANHATTAN CONTRARIAN
Franz Menton
One of the core themes of this site for several years has been conducting reality checks on the plans of Net Zero’s central planners. Is there a possibility that these zero-carbon economies will work? Or is it just dreams that ignore obvious physical obstacles in a religious zeal to achieve an imaginary utopia of the future?
My previous writings on this subject are summarized in my December 2022 report The Energy Storage Conundrum and in my recent posts (here and here) on the work of Bill Ponton in relation to the UK.
On April 5, Tesla launched a major report of its own entitled Sustainable Energy for the Whole Earth. Tesla comes to opposite conclusions from me and the people I have quoted in my writings on the subject. From the summary:
This paper states that sustainable energy management is technically feasible and requires less investment and less depletion of materials than continuing today’s unsustainable energy management. While many previous studies have come to a similar conclusion, this study seeks to advance thinking in terms of material intensity, production capacity and manufacturing investments required for a transition across all energy sectors worldwide.
Could it be? Finally, this Tesla report is clearly backed by many millions of dollars in funding, with dozens of smart and highly paid people working on sophisticated computer models for months or even years to achieve impressive results. In contrast, the people whose work I have relied on – Roger Andrews, Ken Gregory, Bill Ponton – as well as myself are all unpaid volunteers working on my own with no resources other than the Internet and perhaps an Excel spreadsheet.
Before I go into some specifics, I should mention that I have a lot of admiration for Tesla’s CEO, Elon Musk. He is a true creative business genius. However, let’s not lose sight of the fact that all of its key businesses before Twitter — electric vehicles, batteries, solar panels, space launches — depend almost entirely, if not entirely, for their revenue on the use of government subsidy and handout programs . In particular, the electric vehicle business, which accounts for the lion’s share of Musk’s net worth, has a valuation that can only be justified by the belief that essentially all vehicles will soon be electrified. Until now, EV market share has depended almost entirely on a combination of government subsidies and coercion (e.g., “fuel economy” standards that exempt EVs). If EVs don’t hit the auto market, Musk may not be wealthier than you or me by 2030. I suggest keeping this in mind as you look at Tesla’s Sustainable Energy report.
There is a huge amount of detail here and I only have time for so much. But let’s take a look at how this report proposes to deal with energy storage for the US. Recall that Ken Gregory calculated that with a full switch to wind and solar power, the US would need to store about 250,000 GWh (that would be 250 TWh ) to achieve full annual storage given the seasonal pattern of wind and solar power generation. and go through the discharge cycle. Try deploying the 250 TWh of storage with lithium-ion batteries at $200/KWh and that will net you about $50 trillion. Given the current US annual GDP of under $25 trillion, that would be a bit prohibitive.
Here’s the chart from the Tesla report on how they plan to handle storage in the US:
As you can see, their answer is almost all hydrogen. The proposed total storage of 120 TWh is less than half of what Gregory calculated would be needed, but not far out of range.
For Tesla, the idea of using hydrogen for storage is a lot less crazy than relying mostly on batteries. But as discussed in my Energy Storage report, hydrogen produced by electrolysis from water and using only renewable electricity is far from cheap. For my report, I found a figure of $4-6/kg to produce this “green” hydrogen, which equates to a price of $32-48/MMBTUs (the units in which natural gas prices are usually quoted). In contrast, natural gas prices have fluctuated, but over the last ten years they have always been below $10/MMBTU and mostly around $3-5/MMBTU. The current price is closer to $2/MMBTU. The Tesla report quotes a price of around $3/kg ($24/MMBTU) just for storing the hydrogen annually.
As also discussed in my energy storage report, hydrogen is more difficult to manage than natural gas in every way. It’s less energy-dense (which means more pipeline capacity is needed to carry the same amount of energy), it embrittles steel pipes, it’s more explosive and dangerous, it’s more prone to leaks, and so on. Switching to hydrogen as a vehicle for energy storage would mean creating an entire national infrastructure of new plants. Almost none of this currently exists, is under construction or even in the planning phase. I can’t find any effort in the Tesla report to estimate the cost of this.
And private investments won’t build it. Why? For the simple reason that natural gas is cheaper and better in every respect. No one is going to buy green hydrogen at $40/MMBTU when natural gas is available at $5, and no one is going to build infrastructure to transport and store hydrogen until the price is competitive.
So Tesla can say whatever they want that their zero-carbon energy system “requires less investment and less material degradation,” but the fact is, the market says otherwise. The whole “hydrogen economy” thing is entirely dependent on a new economy of central government planning and handouts, and is sitting around waiting for the next round of hundreds of billions of dollars in government subsidies to get it going.
Without going into detail about other sections of the Tesla report, I’m just saying that there are many obvious fantasies. How about air travel, for example? No problem!:
Long-haul flights, which account for an estimated 80% of air travel energy use (85 billion gallons/year of jet fuel worldwide), can be powered by synthetic fuels generated from surplus renewable electricity using the Fischer-Tropsch process, which produces a mixture from carbon monoxide (CO) and hydrogen (H2) to synthesize a variety of liquid hydrocarbons and has proven to be a viable route for the synthesis of synthetic jet fuel.
Just another little thing that needs to be reinvented from scratch.
Why would a Tesla issue such a report? It doesn’t take much thought to understand why. Inspiring bureaucrats to realize their utopia is the path to the mandates and subsidies for electric vehicles and batteries for decades to come that will keep Musk as the world’s richest man. And what if everything doesn’t work out in the end? someone else’s problem
So, Mr. Musk, if all of this can be done for “less investment” than our current system, there should be real money in building the demonstration project to show us all how it works. How about taking one of the smaller Hawaiian islands (Maui?) and installing the wind turbines, solar panels, hydrogen electrolysers and storage facilities to go 100% carbon free? Hawaiians will all save money and you will make billions more. I hereby call your bluff. Open up or shut up!
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