Adopting an energy lean lifestyle

Mobility

In 2004 we were on holiday in Main Beach, Surfers’ Paradise. We stayed in a 22nd-floor apartment belonging to a relative. It was situated between the roads used for the Gold Coast Indy 300 car races, the spectator stand lying empty from the previous October’s race. From the balcony we saw helicopters and jet skis plying up and down the coast in a seemingly nihilistic fashion, but all this activity was eclipsed by a constant stream of normal traffic on the roads that had a few weeks before constituted the Indy track. The harbour was full of motor yachts. Perhaps the well-heeled owners could afford to keep big diesel tanks full, but most were using their boats as moored verandahs, watching the young stretch their legs on the end of a bungee rope attached to the boom of a crane on the opposite shore.

A bus picked us up at the door of the apartment block to take us to the Hinterland hills to experience the fabulous Mount Warning viewpoint and on to the tourist traps of wine and exotic fruit tasting. We returned to the busy roads that run parallel to Surfers’ Paradise beach, a stark contrast to the tranquillity of the Hinterland. I mused about the fate of Surfers’ when the mobility of the oil age has ebbed from the golden sands.

Back in the UK, on my website, I offer a plan for the UK to survive the 21st century, the century when the world’s oil, then its gas and most of the coal, will require more energy to recover than it yields and will be left in the ground. I do not have the temerity to offer a solution for Australia: there are many with local knowledge equal to the challenge, but I will comment on your uranium, some of which may end up in the UK, as Britain has no mines to feed its nuclear power stations and where a powerful industry lobby is talking up a nuclear “renaissance”.

“Stranded” gas

According to the BP Statistical Review 2005, Australia has reserves of 2,460 billion cubic metres (bcm) of natural gas, from which it produces 35.2 bcm annually: it consumes 24.5 bcm and exports 30 per cent of the production. If all the gas in the reserves can be extracted, at the current rate it would last 70 years, but as the gas reserves of other countries decline the demand for liquefied natural gas (LNG) will escalate. Gas will increasingly be used as a substitute for oil for the production of jet and motor fuels and petrochemicals.

Unfortunately most of the world’s reserves of gas are “stranded” from consuming countries, being located in uninhabitable places like Prudhoe Bay on the Alaskan north shore and the Barents Sea to the north of Russia or at the remote North West Shelf of Australia (Gorgon). Remoteness results in energy losses. Natural gas is purified before it is liquefied into LNG - a process that consumes around 15 per cent of the original gas volume. More is lost as it “gasses off” during the long voyage to its destination,although some of the released gas is used to propel the tankship. (This gas is used to propel the gas turbines of tankers.)

On arrival the LNG is re-gasified for addition to a natural gas pipeline network for augmentation of local supplies and for distribution. So-called gas-to-liquids (GTL) processes have been developed to produce liquid fuels, such as jet fuel, petrol and diesel from natural gas, but the thermal efficiency is poor, resulting in a loss of 50 per cent of what remains of the original gas.

So, as oil passes its peak in production, more gas will be used to substitute for the traditional mobility fuels, so bringing gas’s own peak in production forward, especially as the reserves are effectively reduced by the inefficiencies in its liquefaction and conversion. Peaks in oil and gas production will mean more use of coal for liquid fuel synthesis. Fuels synthesised from coal were used in Germany in World War II and latterly in South Africa where Sasol developed processes to avoid the effect of sanctions.

The Gorgon gas field is not so “stranded” for the Australians. However, it may be necessary to deny others access to its reserves. Internal demand may bring the practice of exporting 30 per cent of production to an end. Currently, 37 per cent of the oil consumed by Australia is imported.

Britain is now a net importer of natural gas and it could be that the past exports of its surplus production may in retrospect be seen as ill advised. Perhaps Australia will also regret its beneficence.

Nuclear power

In the very near future the UK will be dependent on imports of gas piped from Norway and Russia to augment North Sea gas. It is argued that to avoid the lights going out the government should arrange for the commissioning of ten new nuclear power stations, mainly to replace the existing stations that are nearing closure. This would constitute a reversion to the dismantled and outmoded corporate state, and discount the liberalised electricity market that has bankrupted the nuclear generator, British Energy.

The promoters have conveniently ignored the fact as the UK has no uranium mines, one imported fuel will be substituted for another. Uranium will be in great demand if all the world’s plans for new stations mature. So how secure would supplies of uranium be and which country will be the most aggressive competitor for them? The current situation is shown in Table 1.

_{(1) World Nuclear Power Reactors and Uranium Requirements
(2) World Uranium Production}

Unsurprisingly the US, the world’s largest consumer of oil and gas, turns out to be the biggest consumer of uranium. The US consumes 25 per cent of the world’s oil production, 25 per cent of its gas and takes 33 per cent of the world’s available uranium, while producing only 2 per cent of it from its own mines.

France ranks second and relies on nuclear power for 80 per cent of its electricity. But since its own mines are now worked out, it is the most insecure. Japan ranks next, followed by Germany, Russia, South Korea and the UK. The combined uranium consumption of the principal seven nations with nuclear power totals 53,500 tonnes (78 per cent of the supply), compared with their own primary mining production in 2005 of only 1,366 tonnes (2 per cent of the supply). World primary production is expected to amount to 40,000 tonnes in 2005, with the balance to satisfy the world demand of 68,000 tonnes coming from secondary sources, including ex-weapons highly enriched uranium (HEU), re-worked mine tailings, a little mixed oxide (MOX) and inventories. The secondary sources are expected to be exhausted within a decade, causing many nuclear power stations to close for lack of fuel.

How then can the rising aspirations for nuclear power by China and India, together with the need to replace obsolete stations in the US and the UK, be satisfied? China (is sensibly negotiating) negotiated with Canada and Australia, the top two uranium suppliers (12,000 and 9,000 tonnes per annum respectively) to establish long-term supply contracts to secure fuel supplies for its projected fleet of nuclear stations. The negotiations have presumably failed as China now seeks permission to explore and develop its own mines in Australia.

If China with its pile of US dollars competes with the US for its supplies of oil, gas and uranium there will be little energy security around. The UK, if it builds replacement nuclear power stations, will exchange insecure gas supplies for insecure supplies of uranium.

Australian uranium production

In 2004, the principal Australian mines were Ranger with 4,356 tonnes (0.24 per cent ore grade by open pit); Olympic Dam with 3,706 tonnes (0.045 per cent ore grade by underground with copper, gold and silver); and Beverley with 920 tonnes (0.18 per cent ore grade by in situ leaching).

The average ore grade mined is around 0.11 per cent, which means that for every tonne of uranium extracted around 4,500 tonnes of waste rock is mined and 900 tonnes of mill tailings added to a lagoon. The fossil fuel energy and electricity used to produce this tonne of uranium amounts to 2 gigawatt-hours (GWh), and 1,400 tonne of CO2 is released. So the 9,000 tonnes produced requires roughly 18,000 GWh and releases 12.6 million tonnes of CO2.

Given the current price of uranium of US$86 per kilogram (price at October 2005), the export revenue totals US$774 million, but the energy used in the mining and milling is equivalent to that obtained from 30 million barrels of crude oil at 37 per cent utilisation efficiency, totalling US$2 billion with oil costing US$67 a barrel. The price of uranium is rising rapidly, but will be set by the lower energy costs of producing uranium from the higher grade ores occurring in Canada, rather than the higher energy costs involved in mining and milling the lower grade ores in Australia. Because rising oil prices cannot be offset by rising uranium prices, it is not viable for Australia to merely supply uranium, denying itself the benefit of the energy that could be produced from it.

This energy penalty does not include the handling of the radioactive waste rock and mill tailings and the eventual restoration of the mining sites. As mines are exhausted, the revenue fails and the mining company has none to pay for the cost of the energy needed to perform the restoration.

The life of a uranium mine follows the same “Hubbert” curve first applied to US oil production, which was correctly forecast to peak around 1970. To maintain production, a succession of new mines have to be opened, requiring a constant energy input. The energy needed for exploration and mine development has to be generated from costly oil and gas. The high energy costs of mining low grade ores may prove prohibitive.

Conclusion

Without its own nuclear power stations, Australia’s uranium export business requires an undue use of scarce energy. But the overall nuclear power fuel cycle is not economic and the Australian nuclear lobby will not secure its hoped for “renaissance” without massive government subsidy. To supply Australian electricity generation of 236 TWh would require 30 nuclear power stations consuming 6,000 of the 9,000 tonnes annual production, leaving little to satisfy an undersupplied export market. Moreover, there would have to be a parallel investment in spent fuel handling and disposal. Continued use of coal, perhaps with carbon sequestration to appease Kyoto signatories, would be the simplest and cheapest course of action.

Although the generation of electricity is vital to Australian well-being, the real problem is to retain the mobility offered by oil products. It is often suggested that a hydrogen economy might provide a solution. Unfortunately hydrogen is not an energy source, merely a carrier and is produced by steam reforming of natural gas, which is very inefficient and emits the carbon in the gas as CO2. The other way is electrolysis of water, but this is even more inefficient. To retain Australia’s mobility in the absence of oil and gas would require the electrical output of around 200 nuclear stations of 1 GWe, which would require 40,000 tonnes of uranium per annum, the entire world’s mining production.

As around half of Australia’s primary energy is derived from coal, a better alternative could be the production of liquid fuels from coal using the South African Sasol processes. However, digging up coal has an energy penalty and a proper energy audit of the candidate coal fields will be advisable.

The depletion of the UK’s indigenous oil and gas in conjunction with a world shortage of all fuels except coal and wind will force the UK to adopt an energy-lean lifestyle, whether it plans for it or not.

I leave it to On Line Opinion’s readers to consider life in Australia after petrol, and to define a plan for survival through the 21st century.