A special thank you to our customers and our employees. Thank you for helping us get here.
A special thank you to our customers and our employees. Thank you for helping us get here.
Midwest Energy News discusses the different efforts before the Iowa State Legislators regarding changes to Iowa’s policies affecting renewable energy projects, especially solar.
There are bills under consideration which would breathe long awaited life into the state’s efforts towards more sustainable policies and practices.
The article highlights the largest solar facility in the state designed and built by Dragonfly Solar for nation leading sustainable institution Luther College in Decorah Iowa.
Complete article can be accessed here: http://bit.ly/1kcbAkm
(Jan. 16, 2014)—Dairyland Power has signed an agreement with member cooperatives to purchase the renewable energy produced by a planned large solar facility to be located along U.S. Highway 52 north of Rochester, Minn.
The new solar installation will be 517 kilowatts (kW), and could produce enough energy to power nearly 60 homes. The facility will be located in the Oronoco Crossings Business Park and interconnected to People’s Energy Cooperative power delivery system. Construction of the solar facility is scheduled to begin as soon as weather permits and is planned to be operational in early spring.
The solar installation will be developed, owned and managed by three Dairyland member cooperatives: Freeborn-Mower Cooperative Services, People’s Energy Cooperative and Tri-County Electric Cooperative.
“The development of this solar project complements Dairyland’s current renewable energy resources, which provide about 12 percent of our members’ energy,” said Bill Berg, President and CEO. “Expanding solar resources is consistent with Dairyland’s strategic intent to diversify our energy resources portfolio.”
The three CEO’s of the local electric cooperatives issued a joint statement about the opportunity to bring solar energy to their part of the state. “Going it alone on a project like this would not have been possible. Electric co-ops have a rich history of working together, whether it is helping restore power following a storm or providing additional programs or services to their memberships. We couldn’t be more pleased about working together to bring renewable energy to this area of Minnesota that will benefit our members,” stated Elaine Garry, President/CEO of People’s Energy Cooperative.
Dragonfly Solar of Lakeville Minnesota will be responsible for engineering, procurement and construction for the project which will utilize U.S. manufactured solar components.
“We are excited to have an opportunity to partner with a group of utilities that continue to demonstrate their commitment to their customer base by taking steps to complement their existing energy delivery systems with solar,” said Steve Peters, President of Dragonfly Solar. “We appreciate their confidence in our company.”
Recently, Dragonfly Solar commissioned another PV installation on the roof of DeLaSalle High School on historic Nicollet Island, downtown Minneapolis; and has been featured on a video by former Secretary of Energy Steven Chu for their development and installation the largest solar PV facility in Iowa at Luther College in Decorah.
Fresh Water – Is Depletion a Serious Threat?
For at least three years now, several serious stock analysts who I follow have been suggesting that the next “big deal” will be in and around water. The underlying premise is that we are headed to a place where quality water suitable for human use becomes a commodity. As it becomes more difficult to find, companies and technologies will enter the space to help fill the need. Those companies that have strong leadership positions in the industry will sell their products and services with margin creating profitable growth in an industry we literally will not be able to be without. Although the underlying theme is easy enough to understand, it has always seemed just a little too far out from happening to attract the kind of attention (and spending), to create the demand to drive sales and stock prices to be a valid investment sector in my opinion…that has changed. Today’s competition for fresh water has accelerated at an incredible pace.
Growing up in rural Midwest USA, fresh and mostly clean ground water pumped for our use by our own individual well was expected. The mineral iron was an inconvenience which left untreated would yellow laundry, but aside from that, we didn’t worry about harmful chemicals. These wells were plentiful and relatively cheap as one only needed to drill 100 to maybe 300-400 feet down to access a seemingly endless supply of clean water to quench our thirst, wash our clothes, water our lawns and fill out toilets. As I got older and traveled across the US, I would spend time in large cities which draw their drinking water from nearby rivers or lakes and the taste and odor was quite a change from what I was used to.
When I returned to rural Minnesota in later years it was becoming more frequent for farmsteads to cap their older shallow wells due to apparent leaching of various agricultural elements such as animal waste, certain bacteria’s, fuel leaks, pesticides, herbicides or other unpleasant solutions fouling the source. They would then need to drill a deeper well or move to a different location where they would once again have access to clean water and begin again.
Even though I haven’t been around agriculture since high school years, once a farmer…weather and water are forever more than casual interest topics. Having traveled to Asia and becoming hospitalized with a severe stomach infection due to a very small ingestion of unsanitary water…(one very small dinner salad washed in local water in a 5 star hotel in Delhi)…gave me an even deeper appreciation of drinkable, sanitary water, right from the tap.
I have seen and experienced what life is like when one can’t eat food washed in tap water and can only drink bottled water from reputable companies. Although there are exceptions, generally we are not there in the U.S.…but I am convinced that clean fresh water needs to be a top concern for our country right now; and that we are already headed at incredible speed in the wrong direction. I decided to move from concern to action recently when reminded of another rapid expansion of fresh water use by another financial analyst. Not one I would have expected to convince me further of the need to pay attention, but he did…
This individual is a global advisor to institutions, governments and individuals like me when it comes to energy – oil and gas mainly. I am reluctant to share his name as his career is based on deep connections within the energy sector. I believe he may be one this nations’ brightest men when it comes to energy today, a real heavy hitter. I pay for his energy investment service, but he wrote an article that is public from which I will draw data from time to time.
We at Dragonfly had decided long ago to work very hard at becoming a source of reliable information stripped as much as possible from agendas on any side of an issue. I want to try to do this without being an alarmist or environmental preacher. It is my intention to try to be a good critic. What makes a good “critic”? For myself, and other senior management here at Dragonfly, it means that we are not interested in trying to push our opinions…we have them of course, but will try to keep them aside as much as possible. We will work to offer the good along with the bad and resist feeling compelled to always pass judgment. Instead we will try to focus on assembling the facts to allow you to make your own judgments. This is not easy to do.
I read more and more that us aging baby boomers are feeling a growing need to consider our legacy. As a parent, my children are close to starting their own families so availability of clean fresh water 30 years from now is a current issue for me. And like in this case, when I can, I want to choose wisely what I do and how I do it for my grandchildren’ sake. As a business person, I believe that as civilization continues to mature, in many areas, there are points where any action to change the course of previous efforts will cost much more and deliver a lot less as opposed to actions which could have been taken earlier on. The issue always is of course, getting enough to agree that the issue at hand needs a course change in the first place. Truthfully, I am worried that sooner rather than later, the effort required to deliver fresh water could become much more expensive to try and fix…to the point where the concept of ROI becomes irrelevant.
Like so many things today, there are strong forces – companies and institutions – spending enormous amounts of money to protect their interests by influencing debate and policy. Near the top of that global list are those whose mission is to deliver solutions to the world’s energy needs. This is at least as true here in the U.S. as anywhere else. I don’t condemn this…if they don’t look after their interests, who will? This group includes some of the most powerful companies in the world and water resources are becoming extremely important to their profitability, especially within the last five years or so. This is unfortunate because that may put them in direct conflict with your and my needs for clean fresh water. Hopefully as you learn more you will become more aware and become willing to join in the struggle behind striving to meet ever increasing demands with diminishing resources, which, I believe will be the Mantra for the next few decades and beyond. This will be required. Stewardship needs to add the friction to assure balance between profit motives and our rights as humans to live lives protected from policies that endanger us and our families. And if you are not going to do that, who will?
So let’s begin.
According to the National Oceanic and Atmospheric Association, the ocean covers 71 percent of the Earth’s surface and contains 97 percent of the planet’s water. Only about 2.5% – 3% of all water on earth is freshwater, and about 70% of that is tied up as polar ice and glaciers.
Of the free water remaining, only about 0.3% of it is in rivers and lakes. The rest is groundwater…
Although the source is a little dated, it still provides a good overall picture of global water resources. The changes we will be discussing do affect the global fresh water resource bar graph above. There is no argument anymore that glaciers, ice caps and sea ice have been diminishing at an accelerating rate. I recently read that Russia is starting to patrol a new seaway which had been covered by ice until recently in the southern fringes of the northern ice caps more or less staking claim to large oil deposits below. Of course, the melting of fresh water resources in the ice caps and most glaciers (68.8% of existing fresh water resources in middle bar of graph), do not directly add to the availability of fresh water for human use.
While on the subject, let’s deal with the oceans as a potential source of water available for human use.
We all know saline water can be made into freshwater. The process is called desalination, and its use has grown in attempts to provide people with needed freshwater. From the beginning of our nation, most of the United States has, or can gain access to, ample supplies of fresh water fit for human consumption. But fresh water has been in short supply in some parts of the world for some time. As populations continue to grow, shortages of fresh water look to become more of an issue. How far down that road is the issue here.
What Do We Mean by “Saline Water?”
Water that is saline contains significant concentrations of dissolved salts. In this case, the concentration is the amount (by weight) of salt in water, as expressed in “parts per million” (ppm). If water has a concentration of 10,000 ppm of dissolved salts, then one percent (10,000 divided by 1,000,000) of the weight of the water comes from dissolved salts.
Below are generally accepted guidelines for saline water:
Ocean water contains about 35,000 ppm of salt.
Source: Saline-water resources of North Dakota, USGS Water Supply Paper 1428, 1958.
The Worldwide Need for Freshwater
The scarcity of fresh water resources and the need for additional water supplies is already critical in many arid regions of the world. It is very likely that the water issue will be considered, like fossil fuel energy resources, to be one of factors contributing to local and global friction in the years to come. Of course being “arid” means they do not have fresh water resources in the form of surface water such as rivers, lakes, etc. and have only limited underground water resources which are becoming more brackish as abstraction of water from the aquifers continues (more on this in a minute).
The diagram to the left is courtesy of Desware: The Encyclopedia of Desalination and Water Resources. (You will notice the issue right away…the source of the “heat” required in the process.)
Desalination/Distillation is one of the earliest forms of water treatment, and still is a popular treatment solution throughout the world today. For ages sailors used this process on their ships to convert sea water into drinking water. Today, desalination plants are used to convert sea water to drinking water, not only on ships but in arid regions of the world, and to treat water in other areas that is fouled by natural and unnatural contaminants. Distillation is perhaps the one water treatment technology that most completely reduces the widest range of drinking water contaminants.
Our initial graphic provides a basic understanding of the process but in the real world, these plants are elaborate facilities which require a great deal of energy to run when in production.
Below is a picture of a plant in Israel. If you look closely, you can see the huge stock piles of fuel ready to be used in the background. It looks like vast amounts of coal does it not?
Another view of a plant in Saudi Arabia:
As you can see, these are huge industrial plants.
Another view of a plant in Dubai:
What you may find surprising are the number of desalination plants in operation around the world. The World Bank published the table below focusing on the Middle East and Africa where the largest concentrations of the plants exist.
However, they are becoming more common as fresh water resource requirements accelerate.
In some cases, these plants are being built almost as a safety net, or at least to sit in reserve until if and when the cost of fresh water gets high enough to run these plants at or above a break even point. For example, the plant pictured below was built in 2010 in Beckton on the East side of London which The Guardian reports will only be used in times of drought:
“Although the Beckton desalination plant will help to provide London with secure water supplies during times of drought and peak demand, we all must do more to reduce water consumption. The Environment Agency believes that metering should be rolled out to households in water-stressed areas. The water industry must also continue to manage leakage from its network of pipes.”
Did you catch that….peak demand?
Full article here if interested: http://www.theguardian.com/environment/2010/jun/02/thames-water-desalination-plant
If we could produce the heat without any need for carbon based fuels, this could become more attractive. There may be some hope in this area by coupling desalination plants with renewable energy production in order to ensure the production of water in a sustainable and environmentally friendly manner. Solar desalination is used by nature to produce rain which is the main “renewable” contributor of fresh water on earth. All available man-made distillation systems are duplication on a small scale of this natural process. Attention has been growing for the use of renewable energy as sources of heat-energy for desalination, especially in remote areas and islands. The high costs of fossil fuels, difficulties in obtaining and delivering them to these areas, attempts to conserve fossil fuels, interest in reducing air pollution, and the lack of electrical power in remote areas all add more pressure to deliver solutions that don’t sacrifice more green-house gas emissions for clean water generation.
This coupling is being done on a small scale as we speak. This is another picture of a small – local plant in India.
Is Desalination Really A Solution?
Until the “cost” of water rises to a high enough point, it does not come close to trying to deliver our fresh water needs in this way. Even when it does get expensive enough to break even at the desalinized delivery points, should this ever become the only source of drinkable water, unless everyone moves to the coasts, delivering or piping it into the interior areas of nations adds another layer of costs to the proposition. We can only hope that this does not have to become a “the” solution on a national – or global scale…at least based on any of the technologies available to us today.
Recent Accelerating Pressures on Fresh Water Resources
Shale Fossil Fuels and Our Water Supplies
This is where we need to pay attention. It speaks to the heart of this post.
The investment angle around water suggests that when oil is in the $100 a barrel and up range, there is enough money to fund the drilling and delivering of harder to reach shale oil and shale gas in the recently discovered shale regions we hear so much about these days…and…with a good deal of profit. I have read that the “break even point” is somewhere north of $60 a barrel. Below that, the costs to mine and deliver these products are higher than the revenue generated. What we want to discuss are the enormous amounts of water necessary to force these trapped substances from their home and to the surface.
If you look closely at the recent large finds of shale oil AND shale gas (see chart to the left), these deposits are in areas far away from the ocean. In the US, they are in places like Pennsylvania, Ohio, Colorado and North Dakota. The only source of any water for these giant inland fields is fresh water. Sometimes rivers but most often ground water as it is the easiest and least expensive source….the same ground water people living in those areas rely on for their human consumption.
Now consider the map below. It is a detailed map showing the principal water aquifers in the United States. Notice how closely they align with locations of shale oil and gas findings and production. This is good news for the mining companies as they have local access to water which we are now going to see is very important.
When we speak of the current “energy boom” which has developed mostly over the last 5 years here in the U.S., we are speaking of Shale gas and oil and the process of Hydraulic Fracturing or “fracking”. To move any further, we need an understanding of the processes currently employed to drill and deliver the oil and gas trapped in these rock formations.
What are Shale Gas-Oil and How Does Fracking Work?
Hydraulic fracturing or ”fracking” is a drilling process by which natural gas and oil are mined from the earth. Mining companies use hydraulic fracturing to recover gas from sources such as coal beds and shale gas formations underground. The process requires some of the most advanced equipment in the energy production business to fracture, or crack (hence “fracking”), underground rock formations, aiding the flow of oil or natural gas in areas that would otherwise not easily produce these resources. The natural gas and oil industry has been using hydraulic fracturing on a very small scale since Floyd Farris and J.B. Clark invented the process for Stanoling Oil and Gas Corporation in 1947. The first successful commercial application of fracking occurred in 1949 and sat mostly idle until recently. The costs of obtaining oil and gas with previous fracking technologies were too high to allow for any profits based on the then current price of these fossil fuels as we have already discussed. There have been massive increases in the use of this technology over the last five years.
Today hydraulic fracking is the primary process used by the mining companies to retrieve natural gas and “tight” oil in the US and Canada…and soon around the world. Very recent gigantic finds in South America have those in the fracking business giddy. Fracking is performed in nine out of ten of the country’s natural gas mines or formations today, and this has all happened roughly in the last five years or so.
The above graphic depicts the fracking process (even if I don’t agree with their spelling of the process).
A real basic definition for Hydraulic Fracturing is the process of fracturing rock via pressurized liquid. When we refer to fracking, we are talking about induced hydraulic fracturing/hydro-fracturing. With this process, water is mixed with sand and chemicals and injected under high pressure into a “wellbore” – (lengthy hole created by the vertical AND horizontal drilling process for this purpose), to create small fractures. When we speak of shale, we are talking about a compressed fine grained type of sedimentary rock. Once fractured, the chemicals combined with the pressurized water help free the contents of the shale that is not the shale itself. In shale gas, this is mostly methane but include other hydrocarbons like liquefied natural gases – butane, propane, and ethane in addition to carbon dioxide, nitrogen, hydrogen sulfide and even some uranium bearing solutions. I have read that the Uranium Energy Corporation is planning to use fracking to mine uranium. This would involve oxygenating the water component to increase the solubility to dissolve the uranium, and then pump the solution back to the surface. I am not sure how they would then extract the uranium but I am sure I would pass on a glass of the water that is left after that process. In all cases, the proppant (sand or aluminum oxide) holds these fractures open allowing for the release of previously trapped elements. So, equipment, fuels, sand, water and chemicals.
Once the fluid has delivered the desired contents of the well, about 50% to 70% of the total amount of fluids used is recovered with the balance remaining in the ground. Setting aside the fact that there is a “solution” left in these rock layers for – - (ever?), much of the concern also has to do with what to do with the water solution that is extracted. There are attempts to try to re-use some of the solution but even if that improves, eventually, there will be a great deal of contaminated water looking to find a home. The mining companies are quite secretive on exactly what goes into these solutions, but the data suggests that there ranges anywhere from 3 to 12 or more chemicals in the solution depending on location and type of hydrocarbons targeted. As you might guess, “freeing” oil requires different solvents and chemicals than freeing methane. In what I have seen, the information that has been released is that the concentrations of any one chemical are relatively small… (more on this later). Gels/compounds that increase the viscosity of the fluid along with foaming agents, biocides to prevent bacteria, anti-corrosion agents in addition to different acids like HCL, Formic Acid, Boric Acid, and others are used to help disintegrate the minerals of the rock formations. In fact, it is not just the chemicals but indeed some of the residue from the layers of earth the solution is pumped through, (minerals, lead, arsenic, etc…), which can contaminate the water for human consumption. Radon and mercury gases can leak out from the shale formations. I think it is fairly safe to say that without serious and highly expensive decontamination efforts which, for the most part are not being done today, there will be a great deal of contaminated fresh water to deal with in addition to the huge draw on fresh water resources which are already under growing competitive pressures.
With such small percentages, one might conclude that the potential harm caused by the injection of these chemicals is of little concern. The migration of gases and these chemicals to the surface along with the worry of contaminating fresh ground water resources via well flowback and unanticipated underground seismic activity related or not to the fracking process all are in play here. Certainly these are all possible side effects which may not show themselves for years, or even decades from now. At this scale, there is no way anyone can make a promise one way or another that far out. Even though the thought of these processes go against every instinct I have for preserving the integrity of our fresh water resources, lets set the contamination issue aside for a moment and just consider depletion…running out of the quantity of fresh water necessary to support the population growth happening on Earth today.
Interestingly, there is a lot of data on fresh water depletion, however, almost all of it has not had time to catch up with the explosion in fracking. So, in order for us to try to determine how our fresh water resources are fairing today, we will look at the increased fresh water “draw” from wide spread fracking.
Approximately 7 to 15 million liters, 1.85 to 4 million gallons, of water is used per well. In one document sponsored by the Independent Petroleum Association of America, they claim that the total of all chemicals used in the fracking fluids for a project in Texas was less than .5%. You can read more about it here: http://www.bseec.org/sites/all/pdf/frac-fluid.pdf They do go on to note that the specific compounds used in a given fracking operation will vary depending on a number of things including of course the target product they are mining as already discussed, along with source water quality, other site specifics, etc… If we do the math, that would seem to suggest 35,000 to 75,000 liters, or 10,000 to 20,000 gallons of chemicals per well.
These are pay attention stats: As of 2010, it was estimated that 60% of all new oil and gas wells worldwide were being hydraulically fractured. As of 2012, 2.5 million fracking jobs have been performed on oil and gas wells worldwide with over 1 million of these in the U.S. who leads all other countries in the use of these processes. So, whether it is fouled or just used up, at 1 million wells and 2 to 4 million gallons of water per well…where is that taking us?
These processes are really so new in the U.S. that it is too early in most cases to accurately predict mid to long range consequences to fresh water supplies. However, there is data that suggests there are real reasons to worry and this comes mostly from Canada who has been at this at scale longer than any other nation in the world. It gets the bulk of its shale oil and gas from open pit mining when the resources are close enough to the surface as well as deep well – horizontal drilling like that more common in the US. In either case, the water used to flush the hydrocarbons out into recoverable forms is eventually unusable for any purpose. There is no debate about that. Even with some of the open pit mining in Canada which lends itself more easily to some degree of water treatment and re-use, eventually the water becomes un-usable for anything. At this point, this remnant is currently being stored in above ground “lakes” or “tailing ponds” or re-injected/pumped deep underground and left there. Below are a couple of pictures of some of these areas in Alberta Canada.
Open-pit tar sands operations return almost none of the water they use back to the natural cycle because it always ends up toxic and therefore subject to a zero discharge policy. Although a large percentage of the waste water is recycled initially, it eventually ends up in tailings ponds like the one shown to the left taken at an Alberta tar sand operation. It is important to note that this kind of mining is not what we see in the US however many of the “components” involved in eventual delivery of the mined fuels are the same…equipment, fuels, water and chemicals.
Below is the same facility with the tailing pond in the forefront and the operations processing facility in the background.
Industry and government officials have long contended that the contaminants in the tailings ponds are not leaching into the groundwater, as some scientists, conservationists, and aboriginal leaders claim. Opponents to the practice state that the government of Alberta has an inadequate number of groundwater monitoring wells in the tar sands regions. And as a recent Royal Society of Canada expert panel reported, there is also no regional hydrogeological framework in place to assess the cumulative impacts of the oil sands industry on groundwater quality.
Bill Donahue of Water-Matters.org points out that cleaning up contaminated groundwater is sometimes impossible or prohibitively expensive due to the complexity of aquifers and the dynamic nature of underground channels — something that the U.S. Environmental Protection Agency has learned in attempting to clean up many Superfund sites. This relates to my comments at the beginning of this article regarding arriving at “points” where the costs to correct previous actions become much more expensive than different courses of actions if only taken earlier in the process.
The point here before we move on is that depletion is depletion. In the end, it is my position that we won’t care much if it is due to lack of fresh water resources or lack of usable fresh water resources when and if we get to a point where it demands serious lifestyle changes. My question for you is this: are fresh water resources being depleted at a rate that has run far ahead of mainstream knowledge and honest, transparent debate? You need to decide.
Now that we are all on the same page (I think), let us circle back around to the investment theme. At this early stage of this kind of extraction, the tight oil and gas fields have had access to an abundance of available fresh water at very low prices (already established). This of course is based on demand that does not yet factor large scale ongoing fracking. Since this technology is really just starting to really ramp up, its impact on fresh water supplies have not yet begun to be calculated and published. So far then, most may think that the current state of fresh water supply in the US is okay. Well, that information has been tracked for some time and the results are likely to surprise you. But as mentioned, pay attention to the dates….
Below is a map of areas of the US with recognized fresh water depletion:
Fresh Water Depletion as of 2008
Hmmm…isn’t that interesting.
This data is as of 2008. So the above map does not include any data from the last 5 years of explosive growth and usage of fresh water to support the fracking taking place in North Dakota…or really anywhere else in the US. The scale we are seeing today mostly developed in the last five years. Although oil drilling picked up a bit beginning in 2004 in North Dakota and Montana, it subsided once the price per barrel dropped below $60 which was the break-even point at the time. Once the price per barrel recovered after the 2008 economic near collapse, drilling picked up again in earnest and has been on a torrent pace ever since. The concern is the time necessary to make an accurate appraisal around water usage and other environmental concerns has not yet elapsed. In many ways, especially at this scale (as the graph below shows), it is still so new that real concrete data does not exist…at least anywhere in the public domain that I could find.
In just one example, current rock fracturing technology available starting in 2008 has caused a large scale boom in the Bakken formation production shown above. By the end of 2010 oil production rates had reached 458,000 barrels per day outstripping the capacity to ship oil out of the Bakken. The “rush” to North Dakota has been big news in the upper Midwest. The map below shows the location and a small summary of some of the positive revenue generating tremendous growth to much of North Dakota:
There is no doubt that the shale mining in Bakken has been an incredible economic boon to the Residents of North Dakota as well as Montana and areas in Canada. The growth has been so dramatic that typical services like housing, transportation, city and other local services along with other resources have been unable to keep up. For most, that is a problem they love having. I have traveled a lot to North Dakota over the last 10 to 20 years and the people in that state deserve economic growth as much as anybody. Additionally, I appreciate just how badly the U.S. needs real economic growth as well. Growth driven by real jobs creating real value by producing and delivering solutions to markets everywhere. We need to figure out how to do this better and I think we can.
Another benefit of the oversupply of natural gas in the U.S. has kept the price suppressed which has been more good news, at least for most of us in the US. At roughly $4 per bthu (British Thermal Unit), ….Americans have access to the cheapest price on Earth. In other parts of the world, take Asia for example who pay closer to $13 per bthu, it is a steal. All of that is good. Add the fact that natural gas burns much cleaner than take coal for example, and one can see how marketers are trumpeting the value of harvesting these resources. To really tap into the potential money in Shale Gas – we only needed a way to ship it in quantity to find a solution to the global price difference. Enter LNG – Liquefied Natural Gas.
I am not going into great detail here as this could easily be a lengthy article on it’s own. Suffice it to say that once the miners figured out a way to economically package a gas for export, the market would explode. Serious cooling is required to transform these mined gases to liquid forms. According to naturalgas.org, cooling natural gas to about -260°F at normal pressure results in the condensation of the gas into liquid form, known as Liquefied Natural Gas (LNG). This process is important, particularly for the transportation of natural gas, since LNG takes up about one six hundredth the volume of gaseous natural gas.
The LNG industry developed slowly during the second half of the last century because most LNG mining is located in remote areas not (yet), served by pipelines, and because of the large costs to treat and transport LNG. As of 2012, costs for constructing an LNG plant costs are estimated at least $1.5 billion per 1 mmtpa (million metric ton per annum), capacity, a receiving terminal costs $1 billion per 1 bcf/day (billion cubic feet per day), throughput capacity and LNG vessels cost $200 million–$300 million. We all use variations of this process like the 20 lb. propane cylinders used to run many gas grills for example. The main difference we are talking about of course is the tremendous difference in scale and infrastructure required to turn these recent processes into global business.
Once liquified, the concentrate is capable of being squeezed into containers and shipped anywhere. The problem has been that this process requires very specific equipment at very specific ports capable of storing and “passing” the product shippers with the right kind of ships who all add their margin and get it to the end user cheaper than it is being sold today. Just two years ago, there was one port that had been retrofitted to handle serious quantities of this fuel type. These are large industrial ports….huge investments in every piece along the value chain. In the last year alone, 4 more ports have been authorized by the EPA in the US. The massive momentum is well on it’s way with, at last count, over 20 more ports in various stages of adoption in the US alone.
For many people this is all very good news. Given the mainstream scaled choices available to you and me today, I would take growth in natural gas energy production over coal, oil and nuclear any day. And scale is a very big part of the issue here. At scale to meet demand which would allow for the retiring of the county’s worst polluting plants AND the increased demand we are seeing in the U.S. and all over the world, we do not have a lot of immediate solutions, at least not in the world of fossil fuels; but this is not that debate….it is about water – fresh water.
When considering water resources, and comparing the two graphs above with the previous map showing water depletion as of 2008, you see the concern. We need more accurate, current data.
Once again consider the shale finds which are driving this current US energy boom….
Groundwater is a valuable resource both in the United States and throughout the world. Where surface water, such as lakes and rivers, are scarce or inaccessible, groundwater supplies many of the hydrologic needs of people everywhere. In the United States, it is the source of drinking water for about half the total population and nearly all of the rural population, and it provides over 50 billion gallons per day for agricultural needs. Groundwater depletion, a term often defined as long-term water-level declines caused by sustained groundwater pumping, is a key issue associated with groundwater use. Many areas of the United States are experiencing groundwater depletion.
Excessive Pumping Can Overdraw the Groundwater “Bank Account”
The water stored in the ground can be compared to money kept in a bank account. If you withdraw money at a faster rate than you deposit new money you will eventually start having account-supply problems. Pumping water out of the ground faster than it is replenished over the longer-term required to replenish resources causes similar problems. The volume of groundwater in storage is decreasing in many areas of the United States in response to pumping. Some of the negative effects of groundwater depletion:
What Are Some Effects of Groundwater Depletion?
Pumping groundwater at a faster rate than it can be recharged can have some negative effects on the environment and the people who make use of the water:
Lowering of the Water Table
The most severe consequence of excessive groundwater pumping is that the water table, below which the ground is saturated with water, can be lowered. For water to be withdrawn from the ground, water must be pumped from a well that reaches below the water table. If groundwater levels decline too far, then the well owner might have to deepen the well, drill a new well, or, at least, attempt to lower the pump. Also, as water levels decline, the rate of water the well can yield declines.
Increased Costs for the User
As the depth to water increases, more energy is required to drive the pump in addition to the increased costs to get down to the lowered water table. Most wells are priced per foot so the farther they have to go, the more it costs initially and on an ongoing basis. Using the well can become prohibitively expensive.
Reduction of Water in Streams and Lakes
There is more of an interaction between the water in lakes and rivers and groundwater than most people think. Some, and often a great deal, of the water flowing in rivers come from seepage of groundwater into the stream bed. Go the very beginning of the Mississippi River in Northern Minnesota if you want an excellent example. The proportion of stream water that comes from groundwater inflow varies according to a region’s geography, geology, and climate.
Groundwater pumping can alter how water moves between an aquifer and a stream, lake, or wetland by either intercepting groundwater flow that discharges into the surface-water body under natural conditions, or by increasing the rate of water movement from the surface-water body into an aquifer. A related effect of groundwater pumping is the lowering of groundwater levels below the depth that stream side or wetland vegetation needs to survive. The overall effect is a loss of riparian vegetation and wildlife habitat. In many cases, the loss of the wetland vegetation adds to surface water contamination as these areas are natures way of “cleaning the water” before it enters into the streams and lakes.
Deterioration of Water Quality
One water-quality threat to fresh groundwater supplies is contamination from saltwater saltwater intrusion. All of the water in the ground is not fresh water; much of the very deep groundwater and water below oceans is saline. In fact, an estimated 3.1 million cubic miles (12.9 cubic kilometers) of saline groundwater exists compared to about 2.6 million cubic miles (10.5 million cubic kilometers) of fresh groundwater (Gleick, P. H., 1996: Water resources. In Encyclopedia of Climate and Weather, ed. by S. H. Schneider, Oxford University Press, New York, vol. 2, pp.817-823). Under natural conditions the boundary between the freshwater and saltwater tends to be relatively stable, but pumping can cause saltwater to migrate inland and upward, resulting in saltwater contamination of the water supply.
Where Does Groundwater Depletion Occur in the United States?
Groundwater depletion has been a concern in the Southwest and High Plains for many years, but increased demands on our groundwater resources have overstressed aquifers in many areas of the Nation, not just in arid regions. In addition, groundwater depletion occurs at scales ranging from a single well to aquifer systems underlying several states. The extents of the resulting effects depend on several factors including pumpage and natural discharge rates, physical properties of the aquifer, and natural and human-induced recharge rates. Some examples are given below.
Source: Groundwater Depletion in the United States (1900-2008), USGS Scientific Investigations Report 2013-5079.
Atlantic Coastal Plain - In Nassau and Suffolk Counties, Long Island, New York, pumping water for domestic supply has lowered the water table, reduced or eliminated the base flow of streams, and has caused saline groundwater to move inland.
Many other locations on the Atlantic coast are experiencing similar effects related to groundwater depletion. Surface-water flows have been reduced due to groundwater development in the Ipswich River basin, Massachusetts. Saltwater intrusion is occurring in coastal counties in New Jersey; Hilton Head Island, South Carolina; Brunswick and Savannah, Georgia; and Jacksonville and Miami, Florida.
West-central Florida - Groundwater development in the Tampa-St. Petersburg area has led to saltwater intrusion and subsidence in the form of sink hole development and concern about surface-water depletion from lakes in the area. In order to reduce its dependence on groundwater, Tampa has constructed a desalination plant to treat seawater for municipal supply.
Gulf Coastal Plain - Several areas in the Gulf Coastal Plain are experiencing effects related to groundwater depletion:
High Plains - The High Plains aquifer (which includes the Ogallala aquifer) underlies parts of eight States and has been intensively developed for irrigation. Since predevelopment, water levels have declined more than 100 feet in some areas and the saturated thickness has been reduced by more than half in others.
Pacific Northwest - Groundwater development of the Columbia River Basalt aquifer of Washington and Oregon for irrigation, public-supply, and industrial uses has caused water-level declines of more than 100 feet in several areas.
Desert Southwest - Increased groundwater pumping to support population growth in south-central Arizona (including the Tucson and Phoenix areas) has resulted in water-level declines of between 300 and 500 feet in much of the area. Land subsidence was first noticed in the 1940s and subsequently as much as 12.5 feet of subsidence has been measured.
The basic cause of land subsidence is a loss of support below ground. In other words, sometimes when water is taken out of the soil, the soil collapses, compacts, and drops. This depends on a number of factors, such as the type of soil and rock below the surface. Land subsidence is most often caused by human activities, mainly from the removal of subsurface water.
Below is a map of the U.S. showing some of the areas where subsidence has been attributed to the compaction of aquifer systems caused by groundwater pumpage. From “Land Subsidence in the United States“, USGS Fact Sheet-165-00, December 2000.
But here we are once again with dated data…this through the year 2000. Compare to the shale finds shown in the previous maps which are driving this current US energy boom and you can see the overlap.
Really, only the gulf coast is an area where land subsidence and shale mining overlap…as of 2000…this obviously is different today. The bulk of newer shale mining is in areas that up until the year 2000, or certainly before the year 2008, had minimal subsidence issues. But the pace of the mining is truly mind boggling. We need more current and accurate data on this before much longer so we can make informed decisions…but you certainly must see the potential risks.
The next graph may surprise you…it did me.
Chicago-Milwaukee area - Chicago has been using groundwater since at least 1864 and groundwater has been the sole source of drinking water for about 8.2 million people in the Great Lakes watershed. This long-term pumping has lowered groundwater levels by as much as 900 feet. The above map shows contours of water-level declines, in feet, in the Chicago-Milwaukee area from 1864 to 1980. The rivers in downtown Chicago, Lake Michigan…wow.
Many of us have known for some time that much of the West Coast agricultural production is heavily dependent on irrigation. This is not news. Has there been depletion out there which has resulted in any Land Subsidence that we might learn from?
The desert areas of the world are requiring more and more water to support growing populations and agriculture.
The photo below is a picture of the San Joaquin Valley southwest of Mendota in the agricultural area of California. Years and years of pumping ground water for irrigation has caused the land to drop.
The top sign shows where the land surface was back in 1925! Compare that to where the man is standing (about 1977).
This has resulted in the entire valley sinking an extraordinary amount. It has been argued that there is little consequence to land subsidence in a wide, flat agricultural basin since the settlement is more uniform. However, the large scale change like that in the San Joaquin Valley has greatly changed the hydrology of the area and it is hard to believe there are not some negative impact that will show up sometime in the future.
Unfortunately, not all groundwater-related subsidence is benign.
In Mexico City the buildings interact with the settlement, and cause cracking, tilting, and other major damage. In many places, large sinkholes open up, as well as surface cavities.
Closer to home, damage from Hurricane Katrina was exacerbated due to coastal sinking associated with groundwater withdrawal.
Damage from Hurricane Katrina was exacerbated due to coastal sinking, associated with groundwater withdrawal…did you know that? When this terrible disaster happened, do you remember any serious discussions about this? Other coastal areas of the world are having the same problems…Bangkok, Thailand for example. These areas have become so large that often the settlement and potential impacts can only be measured by surveys and GPS measurements.
In Your Back Yard
Things change when the problems appear in our back yards.
The Minneapolis – St. Paul 7 county metro area is home to a number of lakes. We are the cities of lakes in the land of lakes not to mention the beginning of the Mississippi as well as other large rivers like the Minnesota River and including the St. Croix, which is our border in the metro area between Minnesota and Wisconsin before it dumps into the Mississippi just to our South. I know I have taken this for granted. Take a look at the next graph:
Do you see what has been happening? From 1941 through 2010, we have been servicing the metro’s growing water needs more and more from ground water and less and less from surface water…i.e. Mississippi, Minnesota, St. Croix Rivers…lakes, etc.. What is below all those water towers you see all over the metro area? Wells of course!
Is This the Future?
White Bear Lake: This metro lake is in serious danger. Many households have invested a great deal to give their families the opportunity to live every day “on the lake”. No need for a second house – cabin. In the last couple of years, their lakeshore has receded by hundreds of feet. Docks 200 to 400 or more feet long eventually take you to a miniature version of the lake they live on. Until if and when it ever gets fixed, their equity is ruined.
There are discussions of possibly diverting some of the Mississippi a few miles to help resurrect their lake. This has happened in many other areas around the US and it looks to me that the rate at which this happens if we do not make some very serious changes, this will become a growing problem requiring a great deal more money to hope to affect a lot less results. Are we nearing a “tipping point”? Although I could not say we are on a global or even national scale, we definitely are in certain areas. It is my opinion that, like I always say, these kinds of big changes show up first around the fringes of our attention but should be a signal to us to look closer. That is what I am suggesting here…we all need to look a little closer.
Are you adding all this up?
Back To Investing – Follow the Money
Recently, a widely read energy blogger Eli Hinckley wrote that perhaps three factors around water resources will soon affect the prices of our energy. In a piece which appeared in The Christian Science Monitor, Hinckley noted prolonged droughts and overuse may prompt a reconsideration of the three real issues around water, fresh water, that would impact energy producers:
Okay, stay with me; we are on the home stretch.
With fracking, about one gallon of water is required for each million BTUs (equal to 1,000 cubic feet of gas).
The most reliable estimates I have seen puts our country’s expected shale gas production via fracking at 87 billion cubic feet per day by 2020…seven years from now. So 87 billion cubic feet per day divided by 1,000 is 870 million gallons of water per day. Now just hold that thought.
Today, the US generates over 40% of its total electricity via coal powered power plants. Coal powered electricity generation uses one gallon per kilowatt hour, an average home uses 2000 to 3000 kilowatt hours per month. This would suggest that by consuming 2000 to 3000 KwH per month of coal generated power, we are also consuming 2000 to 3000 gallons of water per month to light your homes and run your air conditioning. Fair enough.
Nuclear power plant generation requires much, much more. This is why you almost always see both types of plants near large water resources. In the central US, that is usually rivers. To locate these power plants in location where the only water resource would have been underground fresh water was known to be impractical 30 to 50 years ago when many of these plants were built…30 to 50 years ago. Near coasts, especially nuclear, they use the ocean of course, (Fukishimi Japan, etc..). As already mentioned, large cities are often also located on these same rivers and rely on them for human consumption.
If we move back and take a broader look, agriculture production accounts for about 70% of annual water usage worldwide. Drilling and mining needs are included in global industrial usage of about 23%. However, these figures are pre- 2008 and do not take into account the accelerated usage with shale gas and oil fracking procedures which I have now beat to death. 70% plus 23% is 93%…and ALL remaining needs must be covered by what remains.
Many investment analysts believe that at this point, for now, there is no need to panic. I have read some though who note that there are indications that rising demand from all areas may begin to outstrip water supply by 2030 and that some of those studies have put the deficit as high as 40%.
Access: Local authorities are making accessing water more expensive
Some of this may be genuine reactions to imbalances for water uses from other areas, maintaining adequate water pressure to provide everything from residential and commercial use to fire hydrants and public safety, e.g. White Bear Lake
There is no question that the issue of water in many communities is becoming a political issue. Large population centers in areas from California, Phoenix, Las Vegas and even Atlanta have all had scares of depleted water supplies. At a minimum we all should be paying attention to the activity around water and energy. As I have said before…large scale issues almost always show up at the fringes first. If not acted upon, the “recovery” time can be so long as to leave little to no real solutions that don’t affect the larger group in much more aggressive and expensive ways.
Treatment: What to do with the flowback – tailings, etc…
As the volume of shale gas and “tight” oil increases, so also does the problem of what to do with the contaminated water that comes back up the pipe with the gas and oil… (think Canada earlier in the article). IN the industry, the liquids retrieved as part of the fracking process is referred to as flowback. It contains tailings (rock shavings and other drilling residue), the chemicals put down the hole in the fracking process, and the hydrocarbons themselves.
I am not confident of if and when we will get a detailed list of the chemicals used in this process any more than we ever got the list of the chemicals dumped in massive quantities by BP to make the billions of gallons of oil magically disappear from the Gulf of Mexico. But follow me for a minute. Everyone knows that even light grease like that which often a result in cooking does not get removed easily by water alone. Detergents are used to more or less “grease” the oils so they can be more easily removed. Now consider the amount of money and effort required to drill these huge wells, much if it horizontal, then apply vast amounts of pressure to force the gas and oil out of the porous rock and fissures produced by the process in those less porous areas. Now, for those who have worked with heavy oils and fuels know, it is not just any compound that works to remove these heavy and sticky substances. Would you ever spend the money to force the water down there and not leverage all the “help” you can get to harvest every drop?
The good news is that the companies behind these efforts are not stupid. I know that new advances in fracking that are less reliant on harmful chemicals are being introduced and research into this area is high on their list. There has even been mention of non-water fracking attempts…one suggested carbon dioxide and propane. Propane? Also, when they can, water is currently re-used for later drilling in most locations but all agree that sooner or later this flowback cannot be returned to the environment. We saw one method for these waters which are treated and sit in large holding ponds…like the examples in Canada. As discussed earlier, what seems to be the order of the day for the U.S. however is to treat these water and permanently inject them into deep disposal basins underground. There has been talk that suggests that in some areas, before we run out of fresh water for fracking, we may exhaust the capacities of these underground “water basis”.
Transportation: At this point hauling the water away is about all that is left and that additional cost would have to greatly affect the delivered price of fracked fuels. If it isn’t the added cost to truck hazardous water away, there is always the threat that fresh water resources will become depleted or fouled in some way where the only option would be to truck the water in as well. Similar efforts, same results.
The expectations are that the U.S. will see hundreds of thousands of new (fracking), wells coming online within the next ten years or so.
Of course we have not even touched on some local issues around fracking like all the angst around the ongoing sand mining issue around our state and the Midwest. I have read where local authorities along the Mississippi have battled local enterprises who are extracting a huge amount of sand which they sell and ship off to the shale mining areas for the fracking process.
We require the energy that only these companies are in a position to deliver. Utilities are in the same position. There is no way we could survive near term with anything close to our current standard of living without the mining, processing and delivery of these fuels and the electricity they produce. Additionally, the utilities are required to have in arrears enough extra capacity to handle huge demand swings during frequent “peak use” times.
Do you understand that these high demand peak times are often “covered” by utilities with generation they can fire up quickly then let sit idle when not used? Diesel generators were the norm although natural gas generators are slowly replacing them as they wear out and are in need of costly maintenance. This “peak usage” generation capacity is a costly mandate for utilities. Its like having a couple of extra fully insured cars with full fuel tanks sitting in your driveway for friends and relatives to use. They show up a lot during the summer for mid afternoon and early evening drives…sometimes every day for weeks – really like long drives during hot weather, then are gone for days, or even a week or two. It is a tough business.
Where is the hope? My hope is that there is consistent monitoring and pressure to devise less harmful methods to continue to supply us the energy we demand. And I think that we all need to play better together. It will require change from all of us. This change is coming regardless of what we do or don’t do in my opinion. I heard it said once that it is not change itself that causes us pain, but the effort we expend fighting change. It is the fear of change, and yet, life is change.
The truth? There will be more than enough business to keep all mining companies rolling along and the utilities will continue to supply the power at a profit. It will be messy at times but even the most aggressive mandates to add renewables to this picture are not affecting any sizable generation. In most of the US, renewables account for 1% to 2% of existing energy production. I think many that fight this are doing it for fear of these solutions growing exponentially and causing widespread displacement of revenue…which can be a legitimate concern…although it doesn’t have to. The amount of time it would take for that to happen is more than adequate, many decades to a generation or so, to allow all the players the ability to figure out how best to migrate some of the economically and environmentally obsolete technologies and integrate solar, hydro and wind…while working on all other possibilities at the same time. We should be aggressive towards all clean energy while this fracking revolution plays out under continued scrutiny.
These mining companies and utilities represent the “systems” we have in place to placate our collective demand. It is easy for people in the renewable sector to demonize them…and in a case or two, what I have seen helps support those labels. However, the bulk of our dealings with these companies reveal organizations struggling to deliver what we all demand with increasing pressures on dramatically changing how they do that. This is hard stuff. I think the pressures being applied in the end are healthy for everyone. Change is required. At scale, it cannot happen overnight. There are companies that are embracing these changes, and there are companies that are fighting them at every turn. In my opinion, those that embrace the change will come out of this clean energy transition even stronger, and those that continue to fight will one day get on board but likely too late to become “less” than they could have.
You and Me: Alone, these problems are overwhelming…way too big we think. This of course is a lie. So, we bring it back home and do what we can do, knowing that if most of us just do that, it will get done.
Finally, A Shameless Plug for Our Company
Did I mention that we at Dragonfly Solar are experts at designing and installing clean commercial solar facilities? Did I also point out that the energy our systems produce are often very closely aligned with the highest usage (peak), times for companies and industry?
Give us a call if we can help.
Humans are an enterprising lot. Over the years, we study our surroundings and try to come up with “systems” that allow us to live our lives comfortably within the environment that we are presented with. I believe that for the most part, we underestimate just how narrow the windows are which allow our systems and solutions to remain functional and effective. Looking back years from now, it is my guess that the breakdown of our systems-solutions will be one of the consistent identifiers of the harm we are causing to the environment. Taken separately, they may cause us to pause for a moment…taken together, we will likely be very surprised at how we could have ever missed the clues to changes we are affecting to our own “system” on Earth.
I read about a prime example of this recently in my hometown newspaper, the Minneapolis Star and Tribune. The article entitled “Global Warming is a Load of Sewage”, was an account of a situation unfolding across our coldest climates in Northern Minnesota (read full article here). In places that pride themselves on the occasional but consistent 60 degree below zero (Fahrenheit) air temperature, the c**p is literally hitting the proverbial fan.
Many people who live in these areas are semi professional weather watchers. In the middle of winter, one has to pay some attention to what is going on or risk the lives of themselves and those they love. Blizzards and temperatures that can kill quickly are nothing to mess with this far north, but for many, the interest with local weather involves much more… it becomes a way of life.
Peter M. Leschak wrote a column which was printed in the Opinion section of Sunday, January 27, 2013 edition of the Star and Tribune. Mr. Leschak is a long time resident of Side Lake Minnesota and an author…and like many of his fellow neighbors, more than a keen weather watcher, he keeps accurate records. Doing so offers us yet another glimpse into what I call “global climate change creep”…slow, methodical change in the same direction.
On ground hogs day 1996, a weather watcher in Tower Minnesota, a town 35 miles west of the home of Mr. Leschak, set a new state low temperature record at minus 60 degrees Fahrenheit. Mr Leschak’s thermometer registered a mere minus 50, but he understood that temperatures can vary a lot in that kind of cold depending on specific location. So, just before sunrise, he hiked down to a neighboring bog clutching a thermometer to see if he could better that mark. Once there, he pulled out the thermometer and watched as the mercury dropped to minus 65 then separated into chunks as it crawled to minus 70. That year, he recorded 74 days when the temperature dipped to zero or below.
He believes that the following year’s winter began a warming trend that continues today. That winter, he recorded a mere 25 days at or below zero with the coldest morning registering 25 below zero…quite a change, but a trend does not one year make.
During the 1970’s – 1990’s, a minus 30-degree reading at his house was routine. But beginning this century, we have passed 5 winters without hitting one minus 30-degree low temp. His firewood consumption was reduced by 25%.
The locals are not impressed with these tepid winters referring to them as “luke cold”. As a result of these changes, the winters are also shorter. Mr. Leschak used to be able to count on a strong 4.5 to 5 months of cross-country skiing, which usually began before Thanksgiving and ran into April 1st or beyond. For the last decade, 3.5 months has become the norm…shaving an entire month or more off of the season. This 20% to 25% reduction in season also includes shortening the use of long wilderness trails for snowmobilers and a considerable loss to the local tourism driven economy.
To understand the issue, we first need to make sure everyone is on board with a very important “system” developed decades ago to support rural living. A “qualifier” to what follows – I am not a plumber or a septic system designer-developer. The technical aspects of rural septic design, although thoroughly researched, is not my specialty. My goal is to deliver an understanding of how these systems work in general to provide enough background to understand the story. This article is based on my understanding and it well may have a few details that are not 100% right, but it does not matter. The details that are important to the reason for this post ARE all correct to the very best of my ability.
At 60 degrees below, outhouses were a very challenging solution to our way of life, so is running water for that matter. When man finally combined them both into homes that stayed heated throughout long winters, a number of solutions were devised to deal with the bi-products of our eating and living…human waste. Initially, most systems were comprised of large holding tanks, which similar to the hole in the ground of a frozen outhouse, when it started to get full, someone in a big truck came and pumped it out and took it away to a bigger outhouse of sorts. This of course was messy and expensive, so over time, what is today the most common solution of rural sewage treatment was designed. These systems combine some of the holding tank thinking along with a version of mother natures cure for dirty, yucky fluids – the drain field.
The idea is to have the solids separated from the fluids through a settling process in a large underground tank often capable of holding 1000 gallons of fluid and other “related” materials. The heavier solids settle and the fluids, now called “effluent”, reach a level where they run out into a drain field consisting of underground pipe with holes in it. These pipes release the fluids over an area covered with various layers of rock, pebbles, sand and soils to filter out ever smaller waste particles which bacteria eventually finish off… returning clean water to the deeper water tables and aquifers. (see image below) When built right, these systems can be a sustainable solution, which requires little to no maintenance…it just keeps doing what it does.
I have lived in houses off and on for the last 30 – 40 years in Minnesota with this type of system in operation without any problems.
On January 4th 1990, Mr. Leschak came home one day from work to a house with a basement filled with raw sewage. If you have ever experienced this, you understand just how vile it is. Prior to this, his system had worked flawlessly for 12 winters. He figures about 70 gallons of raw sewage was in his home based on the number of trips it took to portage the sewage outdoors with his 5 gallon bucket. I have had to deal with this once in a home I owned. Interestingly enough, it was a city home with city run sewer systems.
In my case, the drain pipes to the sewer underground had been broken and were infiltrated by roots from a large tree in the front yard which eventually became clogged causing the sewage to back up into the basement. This isn’t fun. In Mr. Leschak’s case, the drain field had frozen solid. With no place for the fluids to drain, they filled the tank and backed up into his house, which was its only path, just like in my case.
Now I know what you are thinking. You are reading an article about climate change which is most closely related to global warming in many minds and his drain field froze.
Since this was the first time it had happened, Mr. Leshack began to investigate but soon the motivation dropped as he did not a see a return of the problem again until 2002….but it has happened 5 times now in the last decade. According to records, in February of 2007, 80 percent of the septic systems in Itasca County were frozen….locked up, including his. Although the temperatures had been warming in between those years, the minimal snow pack of 6 to 8 inches to keep the ground from freezing at the drain field depth was maintained. The now normal warming then re-freezing cycles causing dramatically affected average snow pack which continues to feed the cycle. The first few times result in having the basements pumped out and sanitized, but since it has become a consistent problem that looks like it is hear to stay, a different solution needed to be found. Septic systems are not cheap and what modification do you make? Is the trend going to get worse so you dig them deeper? How much deeper? One can’t go too deep without losing the structures that are the passive components in the process.
Usually the first sign that a homeowner receives that his drain field has frozen is when it backs up into his house. At that point, the “system” is not working and if you do not have your holding tank pumped out, it too will freeze crippling the system beyond an easy or inexpensive repair. In his area, a septic system pump and haul away runs just under $200. (see table below) A typical family of 4 uses about 150 gallons of sewer water-fluids each day so if pumping the tanks is the solution, it would need pumping in as little as every 6 – 7 days. Quite a dilemma.
Average Costs for Septic Services
|Cost to Pump Out the Septic Tank:||
$150 to $250
|Cost of Septic System Testing with Dye:||
$75 to $125
|Cost to Remove Clog in Pipes to Tank:||
$50 to $250 (or more, if it’s serious)
|Cost of Complete Visual Inspection:||
$300 to $600
|Cost to Replace Pipe from to Tank:||
$60 per foot
|Cost of Permit to Repair Septic System:||
$200 avg (low of $30, high of $444)
|Cost of Permit to Install New System:||
$350 avg (low of $180, high of $577)
|Cost of Replacing Septic Tank Baffle:||
$200 to $400
|Cost to Pressure Clean Distribution Pipes:||
$400 to $600
|Cost of Replacing Distribution Box:||
$600 to $800
|Cost of Installing New Septic Tank:||
$1,500 to $2,500
|*Cost of Replacing Drain/Leach Field:||
$3,000 to $10,000 to $15,000+
*NOTE: Frequently a homeowner builds a house and plans for the septic and drain-field in the layout of the lot and house. Land is cleared and excavated for the system, especially the drain-field. If a drain-field becomes an ongoing issue, and if there is available land, it may be cheaper to build a new drain field. However, often the site does not have a secondary area suitable for a new drain field, which then leaves removing the old drain-field and replacing it as an only solution which is much more costly.
This problem is new. You can find many old timers with these systems that never had one problem with these systems ever until the last decade. The depth for the drain-fields was/is based on all historical data available to us so no-one thought it would end up not being deep enough…until it is. It would be marginally much less expensive had we the foresight to think that climate change would suggest we hedge our bet and build these systems differently….deeper for example.
Everyone is looking for solutions. One of the more reasonable, at least at first glance, are electric septic system heaters. For about $1400 you can purchase a system, which claims to be easy to install, that forces heated air through the entire system. Mr. Leschak estimates it would add an additional 3000 kWh to his electric bill. He finds it more than ironic that while whether climate change is real is being debated as if there are any reasonable explanations to what we see happening around our world, in his back yard, in order to prevent drain field freezing caused by milder winters, he would have to increase his carbon footprint considerably thereby helping to accelerate more climate warming.
As I have said, this is climate change creep. Changes or shifts like this frequently appear first at the edges. Often what we all believe are robust systems which are predicated on what were considered strong and immovable premises…no one thought about this as a potential problem until it was.
For now, most have decided that they will need to treat their sewage as if there are no drain fields. Mr. Leschak has fashioned a sort of septic tank dipstick that has become part of his seasonal maintenance schedule. Throughout the winter, he regularly checks his tank levels and for now, will pay to pump the tank when it looks too close until he can figure out something better.
This is climate change at the fringe. It is always where changes are first noticeable. By itself it may not appear to have as big of an impact. But taken together with the other changes we are experiencing…to try to argue against climate change is just…..well, wrong.
Staggering amounts of money are being spent to convince us that the way we have always done it is the way we should continue to do it….energy use being at the top of the list…but they are wrong.
Y ou can!
The next generation may well be too late…
Next Post Coming Soon: Why are Mid-Eastern Oil Rich Countries Installing Solar at Break Neck Pace?
Luther College’s new $1.2 million solar energy field is nearing completion says Steven Peters, president of Dragonfly Solar, the company constructing the array of solar panels which will be the largest single solar energy production facility in the state of Iowa when it goes online in July.
“We finished all the foundation work last week and have started on the solar panels,” Peters reported to college officials this week. He said the trenching for the transmission lines is completed, the lines are run, and construction of the racks that support the solar panels is ahead of schedule.
“The Solar design by Dragonfly includes a few other “firsts” for the State of Iowa” Peters said. “Being located in a potential flood plain, we needed to elevate the entire array above the 100 year high water mark. In addition, knowing Luther’s commitment to sustainability, we wanted to make sure that as much as possible, everything in the project should be recyclable. For example, the vast majority of ground mount systems use concrete to secure the foundations of the array to protect against wind and snow loads. When, and if, the day comes to move these structures, our foundation can be easily extracted from the ground leaving nothing but bare ground, just like when we started.”
Located on a two-acre site along Pole Line Road on the north side of the Luther College campus, the 1,250 separate, SolarWorld USA, solar panels mounted in six rows are the main feature of the 280-kilowatt solar photovoltaic system. The solar field will provide electricity used by Baker Village, an all-electric student housing facility that uses geothermal energy for heating and cooling.
Luther will lease the solar panel array for seven years from Decorah Solar Field, LLC, a local company. The college plans to purchase the solar array after seven years. The solar panels have a 25-year warranty.
The solar field will be connected to Alliant Energy’s distribution line by a half-mile underground transmission line.
The solar panel field is Luther’s latest major project in sustainable methods of operation and energy conservation initiatives that will take the college to its zero carbon footprint goal. Luther plans to reduce its campus carbon footprint by 50 percent by the end of 2015, 70 percent by 2020, and achieve carbon neutral operation by 2030.
An investment in campus buildings energy efficiency in 2004 reduced the college’s carbon footprint 15 percent, and a 1.6-megawatt wind turbine erected in 2011 will bring an additional 15 percent reduction.
The solar panel array will produce a maximum of 280 kilowatts (kW) of electricity while the sun is shining. Factoring in variables such as cloud cover, shadows, and other weather issues, the facility is expected to produce an estimated 355,000 kW hours of electricity annually.
The solar panel array’s electrical power generation will make Baker Village a carbon-neutral facility, said Jim Martin-Schramm, Luther professor of religion and coordinator of the project.
Carbon neutrality has been a strategic goal of the college since June 2007. Carbon neutrality, or having a net zero carbon footprint, refers to achieving net zero greenhouse gas emissions. Produced primarily by the burning of fossil fuels, carbon dioxide emissions are the primary greenhouse gas contributing to global climate change and its increasingly unpredictable weather patterns.
Dragonfly Solar, based in Minneapolis – St. Paul, Minnesota, designed and built the solar facility. Dragonfly specializes in creative and unique leading edge design and build Solar PV and environmental services projects serving a wide array of clients, from Fortune 50 companies, educational and governmental institutions, small businesses, farms and some residential. Company is run and staffed by 20 plus year industry veterans with a common goal to leverage our experience and expertise to leave this world a better place than when we began our journey. And we do this professionally, on time and at or under budget.
To access the complete Luther Press Release on the Luther College website, go here: Luther College Press Release: Luther College $1.2 million Solar Energy Field Nears Completion
For more information regarding the Baker Village Solar Energy Project, visit Luther site at: Luther College – Leading the Way to a Sustainable Future!
For more on Dragonfly Solar, visit our website at: Consistent-Value Driven Partner to a Sustainable Future!
This video spells out some of the differences you will find when working with Dragonfly Solar. Our company brings a depth and breadth of experience not typcially found in the commercial solar-environmental services arena.
When applicable, we combine our renewable energy expertise with deep domain environmental services experience to deliver solutions that not only produce power at competitive rates, but blend green construction and environmental services to deliver solutions that address issues on multiple fronts….rain water run-off, brown fields, poor structural environments are just the tip of the iceberg of how projects we lead help maximize financial, ecological and politcal returns for our customers.
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I am reading for the second time in a year a book written by J. Matthew Sleeth, MD and published by Zondervan in 2005. Just like the first time, I grew motivated to do something but unlike the first time, I am writing this article. Please feel free to copy and paste as you wish. We would appreciate the link to our site but if that is too much trouble, copy away.
In Dr. Sleeth’s book, he writes about studies and his observations as chief of the medical staff at a large east coast hospital concerning the effects of current energy and climate policies on our lives. There is plenty of science to back up much of what he and many others write these days as there is plenty of bad science as well being used to promote agendas on both sides of this debate. Of course I have an agenda. Like many, I feel confident that mine is correct, but I don’t ask you to take that at face value. Instead, please educate yourself and correct me where I am wrong…I grow more convinced every day that we have no time left to be wrong that are not accompanied with worsening consequences.
Instead of beginning with the problems, I want to start with a small action item as an example of solutions that we all can do without a great deal of pain and suffering to our perceived standard of living.
If anyone has purchased energy consuming appliances in the last decade, we have heard of the “Energy Star” program. Energy Star was formed by the Environmental Protection Agency under President Bush Senior’s term. Their website featured this information: if every household changed out 5 of their most used bulbs for compact fluorescent light bulbs, the US could take 21 coal firing plants offline. This would keep 1 trillion pounds of poisonous gases and soot out of the air. Dr. Sleeth claims medical research shows some 64,000 deaths occur each year due to soot in the air.
Harvard School of Health looked at the impact of one power plant in Massachusetts and found that it caused 1,200 ER visits, 3,000 asthma attacks, and 110 deaths annually. But before we go on with this, we need some background and to do that, we go back to the beginning of energy use in America as it is known today.
Horsepower of course was the initial comparison created when everyone knew about “horse” power. Initially, it was used to help us relate to the new machines created to perform energy related, power generating activities. As a general rule then, a one horsepower motor can do roughly the same amount of work as one draft horse.
Dr. Sleeth used his automobile, a Honda Insight, as an example which was capable of producing 70 horsepower, roughly the equivalent of 70 draft horses. He went on to say that this was easily enough power to haul 1400 – 1500 adults…even 1400 – 1500 politicians (who often show up with hidden baggage.) I am not sure how this was exactly figured but as you will see, in the end, it could be off by a considerable margin and it really doesn’t matter.
The average SUV has 210 horsepower. For further perspective, that is the same as most yellow school buses rated to carry 90 adults. 210 horses are capable of carrying around well over 8000 adults. Imagine 210 horses all strung together pulling a small city of people. Okay, so you get the idea. Now let’s convert that to something we can more easily relate to….electricity.
A widely accepted conversion has one horse capable of producing about 750 watts if the horse were hitched to a generator and plodded along turning the motor. 2 horses together would create about 1500 watts per hour….1.5 kW – 1.5 kilowatts per hour.
If a family had these two horses hooked up out back working constantly, they could power one standard hair dryer. It might dry your hair, but not your clothes. To do that, you would need 5000 watts or over 7 horses.
So, what’s the problem?
Population. Main stream media doesn’t seem too interested in this story line. I do not know why this is so. I have my own ideas but will leave that for another day perhaps. No matter what your personal beliefs are, please consider for a moment the following information:
Let’s start with a few basics. Americans sometimes get lulled into thinking population problems are third world issues and turn a blind eye. Maybe it is because we have such a large country with so much open space remaining. I once hosted a team from India and I had them in Omaha for two weeks to assist me on a large project. They have a much different appreciation for open spaces.
Dr. Sleeth’s example to help us appreciate what is happening with global population was to take the last 8000 years and plot it on a 12 month calendar marking population milestones along the way. This is somewhat dated data based on the year 2000 census. It is important to keep this in mind as the last decades data gets updated and to remember that his conclusions were current 12 years ago. We have moved well past this of course by now.
As of the 2000 census, Earth’s population stood at roughly 6.5 billion people. January 1st of this “Earth Population Growth Calendar” then represents the year 8000 BC with every following “day” of the year equal to 27 years. December 31st, the end of our calendar, is the year end 2000 AD. That is our timeline.
In the interest of time, we are going to fast forward to July of the “Earth Population Growth Calendar”. At this time, life starts to change rather quickly as people start writing, using iron tools and building libraries. In September, Jesus Christ’s brief physical life begins and ends. Here is where it gets serious…December 24th of this calendar is a banner day. At this time 98% of all human history has passed and humanity reaches the 1 billion mark. Only 5 “days” later on 29th of December, population doubles to 2 billion people…7999 years, 11 months and 29 days to get to a global population of 2 billion humans. Moving on, we add another billion people by December 30th. On the 31st we add another billion in the morning, another billion in the afternoon and another billion by midnight radically accelerating to 6.5 billion people.
If we continue to grow at this pace placing a check mark on the day we add one billion or more people to our planet, the following January would have 60 million check marks…hello? Did you grasp this? This means that by the end of the very next month there would be an additional 60 million billion people…..ROUGHLY TEN PEOPLE FOR EVERY SQUARE FOOT OF EARTH! We are working at updating this time-line with current data but there is no doubt that this curve has gone almost completely vertical. It had already accomplished this by the end of the year 2000. There exists a great deal of census data that verify these numbers and the government maintains at least 2 websites devoted to population statistics.
Now, I do not think it matters how much you believe those numbers…cut them by 30%, 50% if you are a complete skeptic…the point is very clear…we do not have enough of anything to support this…food, water and of course energy. Why is gas $4 per gallon in 2012? Demand – there are many more global customers than there are producers and the issue is set to explode in the very near future. We have to change…we have waited until we have little choice.
An entire book could be written on how we got here but that is not the reason for this post. It is our belief that the world needs unselfish, honest and compassionate leadership perhaps more than any other time in its history. We need to wake up America! While we debate half measures the world’s strongest economies are taking bold moves to change course and protect themselves.
Is Money THE Issue?
China, arguably the strongest economy on Earth right now, enacted a Feed-in Tariff (FIT), last year to fund country wide solar expansion and it is working. They are not wasting time debating climate change or how much oil there is left on Earth. This at a time when their growth and economic “good news” could allow them many options including ignoring the problem and buy up all the fuel they need, (which in fact they are doing in addition to the FIT). This might suggest that money is not the issue, but more its ugly sister greed! How else do we explain the pressure to drill more, build more pipelines etc… so we can accelerate our use of a diminishing asset?
Well over a year ago, Solarbuzz reported that there were well in excess of 1000 commercial solar projects currently underway in China with over 700 greater than 1 MW in size. These numbers were associated with the newly enacted Feed-in Tariff, where electrical users pay a small increase in their rates which is applied towards the cost of implementations of renewable energy projects across the country…it is a strategic decision. Not unlike the 1930’s U.S. decision to employ thousands to build the nations highway systems during the last Great Depression, only the FIT decision has the potential to eventually free China from fossil fuel’s stranglehold as they produce electricity for decades in addition to gainfully employing its citizens to build out these clean energy producing systems. For many of the same reasons we see in the US (poor delivery systems via “the grid”), the bulk of those dollars are currently being allocated to solar which can deliver energy right where it is needed as opposed to large wind farms which then require a vehicle to deliver the energy to population centers. Accurate data is always a challenge from China but those numbers are certainly conservative now that more time has passed with this additional funding mechanism still in place.
The Chinese government has gone as far as setting up a national think tank, the “China National Renewable Energy Center“, to minimize their “addiction” to fossil fuels. The goal is to focus efforts to assemble well vetted policy as quickly as they can.
We have seen evidence of this focus represented currently in the extremely low prices of their solar components – especially solar panels, as their own demand helped spawn massive manufacturing and engineering efforts in the industry now being exported around the world. The New York Times reported in an article in February of this year titled “China Using Feed-in Tariff to Build Domestic Market”, that the government has made a national commitment of 15% of total energy by non-fossil fuels by the year 2020. China produced about 10 Gigawatts of solar panels in 2010 alone….more than the total installed base of the US. Like America, they toyed around with Nuclear as one of these options but for the most part abandoned this after watching the horror in Japan earlier this year. Nuclear is not coal, nor is it oil as in the Gulf of Mexico, but when it pollutes, it is a serious game changer. China has an aggressive, well formulated plan which they are implementing with blinding speed.
Europe, led by Germany, is also far ahead of the US. Of course they have had to deal with $4 – $5 gallon gasoline while having to import more and more oil to satisfy their needs for much longer than we have. To give you a comparison, Germany installed 3 Gigawatts of solar in December of 2011 while the US installed 1.7 Gigawatts for the entire 2011 year. This while maintaining the strongest European economy far and away…they are the reason Europe and the Euro has not already collapsed. Germany has been where we are now and like China, are positioning themselves for future “freedom” and I would argue continued prosperity. The US should leverage their efforts and modify them to fit any differences between a small country like Germany and the US. Instead we mostly ignore the problem engaged in the same inane arguments…it is irresponsible at best.
As a commercial solar developer, there is no question we are not completely objective on this topic. If you hire our company to do what we do well, our lives are better. However, my interest and research on these issues began long before deciding to leave decades in the technology arena to help start a new commercial solar company. The solar industry is not perfect, but I am certain that the more it succeeds, the better off all of us will be.
In closing, I think it is important to note that much of my perception around these matters started to change after I became a parent. As my children leave the nest to start their own lives, I grow more and more irritated with the way many businesses, politicians and governments are mishandling and often misleading the public. Children have a way of getting us out of ourselves. Often much to our surprise, not thinking about ourselves and our needs and wants actually feels much better than we ever imagined. And when I am not focused on me, I have more time and concern for you. Boy do we need this today. It just might characterize the solution to our global dilemma. I would like to think so.
You don’t have to agree with any of what is written here. The enemy is indifference. Please consider doing your own research and keep an open mind. When you arrive at some truth, take a stand…do something, we all need your help. If you would like to learn more about the potential for renewable energy solutions…please do contact us.
Credits: Book by J Matthew Sleeth MD, Serve God Save the Planet, published by Zondervan in 2005
So, are you an expert on renewable energy?
Much of what we do would qualify as “private labeling”. What I mean by that is we focus on designs that separate our clients from the rest of the same ole’ same ole’ pack. We are different because we have very deep, creative design core business talent and expertise in addition to our breadth and depth in solar and global business experience in general.
Below is an example of a custom solar car port electric vehicle charging implementation we finished in 2011 for the headquarters of one of the world’s largest corporations. Again – “private labeled”. There are grand opening events planned for the 1st and 2nd phases soon so we are limited in what we can share until then.
This is part of a global initiative. We are excited to be a part of it.
Why is this effort so different?
For starters, this initiative used the clients own solar panels which constituted the first time they had been installed ever in the US.
Similarly, we used the clients own commercial chargers, also a first.
Finally, we custom designed and built the structures for these specific products and for the exact location maximizing available space and integrating with existing architectural nuances. This is where we excel. We could have installed a few mass produced structures and ignored the specifics which we chose to leverage for a unique, brand-able implementation.
OUR GOAL: Leverage our unique skills and experience to maximize our clients returns while leaving a legacy that is different than what exists today for our children…one client at a time.
Please contact us for a discussion on how we might be able to help you help us all.
Generally it is our goal to use our site mainly as an educational source for the benefit of many. Forgive us from time to time when we may venture into a little commercialism to keep the lights on.
August 30, 2011
A CNN radio reporter named Jim Roope wrote an article today that was published on the CNN site focusing on a homeowner in Los Angeles California.
He starts out: If you’ve ever thought, “One day, I’m going to put in a solar energy system,” today might be the day.
Economic issues across the nation are contributing to the early demise of solar incentives such as tax breaks, grants and rebates. “We’ve been thinking about this for several years,” said California homeowner Jim Adams. “The cost wasn’t really coming down, so we went to the bank, asked for a loan and decided to get it done.”
So Adams had a 16-panel system installed on his roof in La Crescenta, California, about 15 miles north of Los Angeles. He received a 30% tax credit from the federal government and a 10% cash rebate from the state. It cost him $16,000 — a savings of $10,000.
This year, a federal 30% cash rebate through the U.S. Treasury Department comes to an end. And the 30% federal tax credit program will conclude at the end of 2016. These incentives, created as part of the federal stimulus package a few years ago, were designed to create a vibrant solar energy market. Along with the federal program, 29 states offered incentives. Many of those state programs are also becoming victims of budget cuts.
In addition, utilities in some parts of the country offer their own incentives up to a certain size limitation referred to as net-metering. For example, Xcel Energy, the largest utility in Minnesota, offered a $2.25 per KW one time cash rebate for all systems under 40 KW in size. Like many of these programs, the calendar allotment of funds (4.6 million for 2011), was exhausted well ahead of the end of the year (August for Xcel), as the demand far outstripped allotted funds. This, even after the intentional 40 kw cap (very SMALL commercial), which translates into a maximum rebate of approximately $90,000 (40 KW x $2.25 = $90k) for any one location was implemented. Xcel offers this rebate like many other utilities for the right to “own” the Renewable Energy Credits (commonly referred to as REC’s), these systems produce for the next 20 years. They can then use these credits to apply against power production from more polluting sources like coal. This allows them to extend the usability of these plants while meeting government clean fuel mandates.
Roope goes on to write:
Sales of rooftop solar panel installations jumped 67% last year, compared with 2009, according to the Solar Energies Industry Association.
The solar industry is lobbying the federal government to continue the 30% cash rebate program that’s ending this year. But there’s not much hope for an extension, considering the current political climate in Washington, where lawmakers are focused on trimming the budget.
Although much of Roope’s article was focused on residential installations, the larger commercial implementations have a lot to lose with the cash rebate ending this year. Most of these installations start in the $250,000 range and easily climb into the 3 to 5 million arena. The 30% cash payment versus credits was implemented in 2011 in an attempt to spur investment, create jobs and help nudge our country away from carbon producing fuels. The 30% in question was switched from a tax credit spread over time to a cash rebate returned to the solar system owners often in as little as a month or two after the system goes live. For a 3 million dollar project (small to medium in the commercial market), that is an instant cash rebate of $900,000 dollars set to move out of the financial equation. Without it, much of the momentum being generated in the industry will subside. A homeowner may decide to spend an extra $10,000 to do the right thing, but businesses and investors dance to a different tune or they end up not dancing at all. Although the components that make up the metrics for these offerings are as solid as they come, they still need to meet investment grade financial hurdles…which, under the existing structure with the cash rebate they do.
To appreciate the impact this will have, consider churches or schools for example. Most of the incentives offered in the past for solar as well as the majority of all other government incentives come in the form of tax incentives. So churches, schools, as well as some hospitals, cities; essentially all non profit organizations have been kept out of the market for these technologies until this last year because as non profits, they obviously have no use for any tax incentives. The 30% tax cash payments reverting back to tax credits spread over following years is due to continue into 2016, but this will result in these entities once again being kept out of this market as third party financing is likely to dry up. You and I will be called on to meet their needs in other taxes and/or user fees. With the accelerated deprecation schedules allowed for renewable energy systems, along with the 30% cash rebate, investors were stepping forward to fund systems for these organizations and others who either did not qualify or do not have the available funds to pay for it themselves.
In our previous example, that 3 million dollar system returned $900,000 only weeks after going live to the investor. They now have $2.1 million into the $3 million dollar system. The additional money the investors receive by selling the power these systems produce at prices at or below what the host would pay to the utility for the same amount of energy, along with the accelerated depreciation schedules and the cash payment make it a serious contender for investors with money to invest and an interest in helping the country move to a more free and clean America.
A case in point, our company Dragonfly Solar, is working with a number of large tax exempt institutions in the U.S. The investor “package” as it exists today has interested parties at the table to help fund the system for these institutions. The structure of these agreements is such that at the end of the 7 years necessary to satisfy the investor tax credits and depreciation, the institution (host), usually ends up owning the system for the rest of its life at a deeply discounted price. These power producing systems then become a long term, ongoing net positive cash flow asset for these entities. Usually a discounted price for the electricity the system produces over the initial term is negotiated between the investor who technically owns the system and the host as well so the host can receive immediate savings until the ownership changes hands. Since these systems have a useful life of 30 – 40 years…the savings can add up to a substantial amount. This lowers overhead and as the price for electricity rises, the more the host saves. It also represents cash flow that lowers the amount of money you and I have to fund via taxes, fees and/or charitable giving. It is a great plan.
In the current environment, the market for the products and services that make up these solar implementations have been increasing at a healthy clip. At the same time, R&D and better manufacturing processes driven by increased competition in this growing market have been steadily driving prices down for these products and services…that is exactly how it should be…but once again, the landscape is due to change.
American policies seem to be often set and last until the next election cycle and then everything is up for debate. And like most professional sports in the US, the “off” season for campaigning for re-election continues to shrink so we end up with political leaders working to implement half-hearted agendas. At the same time policies that should be re-evaluated often continue when the stated objectives are accomplished or just outdated. The amount of money still being directed towards tax incentives for oil, gas and coal – all huge carbon producing industries, is a perfect example of this second point. It is obvious that these incentives for the most part are unnecessary to support profitability for these industries. Many of the companies that enjoy these tax advantages that were implemented decades ago when they were young industries are piling up profits at levels that border on obscene. I am not un-biased. I think much of those incentives ought to be re-directed to carbon-less energy production solutions now. They are doing this right now in much of the rest of the developed and developing world. China is intent on owning the solar market and clearly recognizes the many advantages of generating power in-house with fixed costs and increasing returns…it is a no brainer.
So far this has been a dollars and sense discussion. I have not ventured into the recent examples of what our world’s dependence on other forms of energy has done within the last couple of years to our environment – thinking Gulf of Mexico and Japan; but shouldn’t these issues be a part of the decisioning process for everyone including the U.S. as well? That is real money being used to clean up and one day try to restore what we lost in those 2 recent examples. Instead here we are again in America – one foot in, then one foot out as the next election cycle begins….
Our immediate job now at Dragonfly is to try and persuade these institutions to move quicker than they are comfortable moving so they don’t end up at the table with no-one else there. Based on previous experience, I know this will be a challenge. The right people with the right knowledge will need to test the entrenched-institutionalized ways of doing things. I am pretty sure that is a good definition of progress if we agree we need change. It will take leadership – it always does. The smart money will move this year as the incentives represent an excellent opportunity for all parties. It is a great plan.
(You may use this information on your site as long as all links remain active, or you may link directly to this post by copying this link into your site-post: US Solar Cash Rebate Expiring )