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Roy L. Nersesian - Energy Economics: Markets, History and Policy

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Roy L. Nersesian Energy Economics: Markets, History and Policy
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Three quarters of our current electricity usage and transport methods are derived from fossil fuels and yet within two centuries these resources will dry up. Energy Economics covers the role of each fossil and renewable energy source in todays world, providing the information and tools that will enable students to understand the finite nature of fossil fuels and the alternative solutions that are available.

This textbook provides detailed examinations of key energy sources both fossil fuels and renewables including oil, coal, solar, and wind power and summarises how the current economics of energy evolved. Subsequent chapters explore issues around policy, technology and the possible future for each type of energy. In addition to this, readers are introduced to controversial topics including fracking and global warming in dedicated chapters on climate change and sustainability.

Each chapter concludes with a series of tasks, providing example problems and projects in order to further explore the proposed issues. An accompanying companion website contains extensive additional material on the history of the major types of fuel as well as technical material relating to oil exploration, the development of solar power and historical environmental legislation.

This textbook is an essential text for those who study energy economics, resource economics or energy policy.

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First published 2016
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

2016 Roy L. Nersesian

The right of Roy L. Nersesian to be identified as author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data
Catalog record for this book has been requested

ISBN: 978-1-138-85837-4 (hbk)
ISBN: 978-1-315-71806-4 (ebk)

Typeset in Bembo
by Book Now Ltd, London

Please visit the Companion Website at wwwroutledgecomcwnersesian for the - photo 1

Please visit the Companion Website at www.routledge.com/cw/nersesian for the following additional sections.

Chapter 2

Early History of Electricity

Generating Electricity Commercially

When Demand Exceeds Supply

Real Lesson of California

Chapter 3

The Role of Charcoal and Wood Pellets

Biomass in Home Heating

Two Processes for Making Ethanol

Proposed Solutions

Traditional Means of Making Cellulosic Ethanol

Chapter 4

First Energy Crisis

Origin and History of Coal

Coal and the Industrial Revolution

Rise and Fall of King Coal

Chapter 5

History of Lighting

History of Oil

Enter John D. Rockefeller

Enter Marcus Samuel

Enter British Petroleum

Emergence of Oil as a Strategically Vital Commodity

Opening Up the Middle East

Chapter 6

Earth as an Oil Manufacturer

Formation of Oil

Biotic Theory of Origin

Abiotic Theory of Origin

Oil Exploration and Production

Drilling Rights

Drilling Operations

Offshore Exploration Rigs

Offshore Production Rigs

Decision to Drill a Production Well

Getting Oil to a Refinery

Refining

Chapter 7

History of Coal Gas

History of Natural Gas

Battle over Lighting

Long Distance Transmission

Federal Regulation

War Years

Last Stop before Total Regulation

Chapter 8

Nuclear Incidents and Accidents

Three Mile Island Incident

Chernobyl Nuclear Accident

Fukushima Daiichi Accident

Disposal of Spent Fuel

Birth of the Environmental Movement

Saga of the Hoover and Glen Canyon Dams

Saga of Aswan High Dam

Chapter 9

Solar Power

Historical Development of Thermal Solar Power

Thermal Solar Energy for Heating Water

Thermal Solar Energy for Generating Electricity

Wind Power

Historical Development

Government Involvement in Developing Wind Turbines

Chapter 10

Hydrogen Economy

Historical Background

Hydrogen Today

Ocean Power

Tidal Power

Wave Power

Chapter 11

Environment

US Clean Air Acts

Cross-State Air Pollution Rule

Climate Change Conferences

Sulfur in Diesel Fuel

Efficiency and Conservation

Energy Star Program

Light Emitting Diodes and Compact Fluorescent Light Bulbs

US Green Building Council/LEED

Sustainable Energy

Energy Returned on Energy Invested (EROEI)

Online Figures

Figure CW7.1 US Residential Consumers, Cost of Natural Gas

Figure CW7.2 Consumption versus Waste of Natural Gas

Figure CW9.1 Solar Thermal Capacity

Figure CW9.2 Historical Development Solar Thermal Electricity Capacity

Figure CW11.1 EROEI Values for Various Types of Energy

Figure CW11.2 Rise of Energy Input to Sustain Growing Energy Output

Online Tables

Table CW6.1 Historical Development of Refining Processes

Table CW8.1 Examples of Radioactivity in Bq

Table CW8.2 Likely Effects of Whole-body Radiation Doses

Contents

Compressed natural gas (2,0004,000 psi) can be transported in specially built tanks. The problem is the cost of building large-capacity cargo tanks that can withstand this magnitude of pressure with a cargo still four times greater in volume than in a liquefied state. However, there are special circumstances where compressed natural gas carriers are feasible such as small natural gas fields in remote areas of the Amazon River where reserves are not sufficient to justify building a long-distance pipeline or a liquefaction plant. Compressed natural gas carriers are useful for natural gas delivery to lightly populated Caribbean or Southeast Asian islands whose consumption is far too small to sustain an LNG import terminal, but where less costly natural gas can be substituted for diesel fuel for electricity generation. Compressed natural gas is not conducive to high volume, long-distance transport of natural gas.

With the exception of Russia and the US, much of the worlds natural gas reserves would be stranded if pipelines were the only means of transmission. The construction of long-distance undersea pipelines to connect remote fields in Iran, Qatar, Nigeria, Venezuela, Indonesia, and Malaysia with industrially developed nations thousands of miles away in waters that may be 23 miles deep with undersea mountains replete with deep chasms would be either impossible to construct or prohibitively expensive. The natural gas reserves for these nations remained stranded with no commercial value until a new means of transmission was devised. Just as liquefied gas liquids (propane and butane) are refrigerated for transport as a liquid at ambient pressure, so too can natural gas. As a liquid, natural gas takes up 610 times less volume than at ambient conditions with a specific gravity a little less than LPG. The problem is that natural gas is a liquid at atmospheric pressure at a much colder temperature of 161C (258F), which imposes severe constraints on tank design and insulation to prevent LNG from coming in contact with the hull. Conventional steel in ship hulls, if exposed to the cold temperature of LNG, is subject to instantaneous cracking, known as brittle fracture. A few mass-produced Liberty freighters during the Second World War sunk after their hulls split open from brittle fracture when the vessels sailed into cold north Atlantic waters. A steel belt welded around the hull of Liberty vessels resulted in no further losses from this cause. Better quality steel prevents brittle fracture at freezing ocean temperatures, but not from the cold of liquefied natural gas.

A much greater technological challenge in tank design and insulation than LPG carriers had to be faced before natural gas could be transported as a liquid. The success of independent research efforts in the 1950s led to the first LNG delivery in 1964 from a liquefaction plant in Algeria to a regasification terminal on an island in the Thames River. From this time forward, Algeria would remain a major force in the LNG business, expanding its export capacity in 1973, 1978, 1980, and 1981. Small-scale LNG plants were built to export LNG from Alaska (Cook Inlet) to Japan in 1969 and from Libya to Europe in 1970. Brunei was the first large-scale LNG export project to serve Japan, starting operations in 1972 and relying on 75,000 cubic meter LNG vessels. This project was followed by other large-scale LNG export projects in Indonesia and Abu Dhabi in 1977, Malaysia in 1983 (a second in 1994), Australia in 1989, Qatar in 1997 (a second in 1999), Trinidad and Nigeria in 1999, Oman in 2000, and Egypt in 2005, employing 125,000 cubic meter LNG carriers. Many of these nations have subsequently expanded their LNG production capacity.

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