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A gas supply disruption case study - the Varanus Island explosion
Posted by Big Gav on July 11, 2008 - 6:20pm in The Oil Drum: Australia/New Zealand
Topic: Supply/Production
Tags: apache, australia, gas, original, supply disruption, varanus island, western australia [list all tags]
An explosion at Apache's Varanus Island gas plant in Western Australia on June 3 cut off 30 per cent of the state's domestic gas supply. Supplies to mines and industry in the Pilbara region (the heartland of Australian iron ore mining) fell by 45 per cent.
The supply disruption was exacerbated by an inability to start alternative forms of power generation - the coal fired Collie power station, for example, had damaged turbine blades and could not immediately return to service.
This has had a large impact on the local economy (the WA Chamber of Commerce and Industry estimates the crisis will have cost the state $6.7 billion, assuming energy supplies are fully restored by December) and makes an interesting case study of the effects of a sudden reduction in energy supplies.
The explosion
The cause of the explosion is rumoured to be a corroded pipe that ruptured, though Apache is remaining coy about responding to this theory for the time being.
The National Offshore Petroleum Safety Authority, which is investigating the incident, said it would be "inappropriate to pre-empt the findings by releasing any investigation material beforehand". The WA opposition is calling for a Royal Commission to investigate the incident, similar to the one that examined the 1998 Longford plant explosion and fire, which cut household gas supplies in Victoria for two weeks.
The situation has been exacerbated by the lack of any contingency plans for a disaster, in spite of police warnings that these were needed and highlighting potential weaknesses at the facility. The company reportedly responded to one of the issues raised - the need to have spare parts available - by asking "How can we justify having a $8 million component sitting on the shelf ?".
A few years ago there was a minor bout of hysteria about the hospital in the nearby (by WA standards) town of Port Hedland serving halal meals to patients, so I've been (pleasantly) surprised that no one has tried to gain any political mileage by trying to wield the "power of nightmares" and invoke the terrorism bogeyman as a possible cause.
This might be because the whole issue has disappeared from the Australian political scene since the unceremonious departure of unloved ex-Prime Minister John Howard, but it could also be because there has been a long standing military operation protecting vital infrastructure in the area, thus making the possibility remote.
WA gas supply
WA holds the majority of Australia's natural gas reserves and is a fairly large producer of gas by global standards (much of the gas produced being exported to North Asia in the form of LNG from the North West Shelf gas project on the Burrup peninsula).
WA is much more reliant on gas for its energy needs than other states - the most recent figures from the Australian Bureau of Agriculture and Resource Economics (ABARE) show WA uses 385,000 terajoules of natural gas a year, compared to Victoria's 258,000 terajoules and NSW's 140,000 terajoules. The gas is mostly used to generate electricity - 60% of WA's power supply comes from gas.
Varanus Island produces 380 terajoules of gas, sourced from the Harriet and John Brookes joint ventures, with most of it distributed to the south west of the state via the 1600 km Dampier to Bunbury pipeline. Up to 60 terajoules of gas is transported to the Kalgoorlie region via the Goldfields gas pipeline, which services big mining customers.
Impact on the economy
Gas supplies to mines and industry in the Pilbara region have fallen 45 per cent, those to the Goldfields have fallen by 20 per cent and the state's southwest, where most of the population lives, has seen a 20 per cent reduction for large industries and commerce, and a further 25 per cent drop for mid-sized businesses.
As a large swathe of business has been affected, almost every industry sector has been vocally complaining about how much suffering it is enduring and how much special assistance or priority access to energy supplies it needs.
* The WA Food Industry Association has called for government support, claiming it will "lose market share" and businesses may have to stop production.
* The mining industry has decreased production. Examples of companies flagging decreased output include nickel producer Minara Resources, goldminer Newcrest Mining and mineral sands miner Iluka Resources.
* Alcoa (Australia) notified customers it was declaring force majeure on its supply contracts for alumina.
* BHP Billiton brought forward a four-month shutdown of its Kalgoorlie nickel smelter, freeing up gas supplies for its Worsley aluminium refinery (which caused a rise in global nickel prices due to the tight supply situation).
* Fertiliser manufacturer Burrup Holdings delayed its float on the stockmarket, after its gas suppliers issued it with a "force majeure" notice.
* Wesfarmers has also reported disruption to its fertiliser and LPG businesses.
* Midland Brick, the world's largest brickworks, has had to shut down its kilns on a number of occasions.
* Laundry services have shut down, with the hotel industry struggling to find supplies of clean linen.
Responses to the disruption
The Varanus Island incident has rekindled the security of energy supply debate first sparked by the January shutdown of the North-West Shelf project, which put two-thirds of the state's gas supply offline for a shorter period of time.
At one point WA premier Alan Carpenter was warning he might he might need to invoke emergency powers to seize control over all gas and electricity supplies in the state, though he seems to have calmed down since then - although he has announced that energy security will be a key issue in future.
The major supply side response for many larger gas customers has been to switch to diesel generation instead. This comes at a fairly large price, as diesel costs around 10 times as much as gas, according to the WA Office of Energy.
The cost of switching from gas to diesel to gas had meant that some large gas-fired power generation units with secure gas supply contracts with the (still online) north west shelf project have remained on gas instead of switching to diesel where possible, causing some controversy.
The other major supply response has been to restart 2 mothballed coal fired power stations - the 110 megawatt Kwinana Unit One (which Premier Carpenter says should free up about five terajoules of gas a day) and the 340 megawatt Muja AB power station at Collie (prompting some protests about reopening the dirtiest generation facility in the state). The state government has also asked local utility Verve Energy to consider building a new coal fired generator in Collie.
While the WA state government was happy to revive the local coal industry, it has remained firmly opposed to nuclear power, with Carpenter stating “There will be no nuclear power, no nuclear waste and uranium mining in WA while I am the Premier”.
Carpenter has also announced a (tiny) investment of $6 million into low carbon emissions technology, with the money being used for the construction of a 2 MW solar power station in Kalgoorlie and the development of an oil mallee harvesting machine. More usefully, he has also announced an expanded public transport network, including a link from the Perth city centre to the airport, light rail and tram routes, and the extension of existing railway lines.
Robert Amin, Curtin University's chair of Petroleum Engineering, criticised the state government's lack of contingency plans, recommending WA should have at least a month's worth of gas stored in underground reservoirs for use in such situations, noting that depleted gas reservoirs in Dongara were ideal.
The WA Liberal opposition proposed an assortment of measures to respond to the crisis, including:
* accelerating development of natural gas reserves
* duplication of the pipeline network from the north west to southern WA
* using LNG tankers to ship gas from the north
* interconnection the pipeline network to the eastern states
Some of these seem a bit random, given that duplicating the pipeline, for example, would have made no difference at all to the current situation.
A gas interconnection to the east coast would be an interesting (albeit expensive) project - it would have the benefit of increasing supply options for the east (mitigating the depletion of Cooper Basin and Bass Strait fields), but would also likely rapidly increase east coast gas prices to be in line with those of the international LNG market.
Summary
Overall, the reaction to the incident has been less than inspiring, with the response largely being to switch back to the dirty and depleting alternatives of coal and diesel. No real thought seems to have been given to ways of making the state's energy supplies more resilient in future, or to the fact that diesel is getting increasingly expensive and will likely to be much harder to obtain in future years.
A better response would have been to instead begin planning to embed more distributed generation, along with smarter demand management, into the grid from a variety of sources. Given that WA has high quality solar resources, particularly in the north west where they are world class, and a vast amount of space for wind and wave power generation, I would hope that efforts are undertaken to start substituting (or at least supplementing) both coal and gas fired generators with alternatives that don't depend on the continued extraction of finite resources.
The most useful action taken during the crisis that I've seen so far has been from Alcoa (the largest single user of gas), which decided to push ahead with WA's first "tight gas" development - the Warro gas field in the state's mid-west. Managing Director Alan Cransberg said that if it proves to be commercially viable it could supply up to 10 per cent of domestic gas demand - but denied the Varanus Island prompted the decision, instead pointing to shortages of gas supply that already existed before the incident.
Cross posted from Peak Energy.
44 comments on A gas supply disruption case study - the Varanus Island explosion
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A good summary of the WA situation.As usual we have a state Labor government stuck in some sort of mind/time warp.The dismissal of the nuclear option is predictable as is the pathetic level of interest in solar thermal.The opposition,as usual display the same disconnect from reality.
While using natural gas for base load power generation is wasteful one would have thought that it would have been prudent to have some sort of backup in place.After all there are huge quantities of gas produced in the region and most of it is exported - another waste.
When cornered the government understandably returns to the coal option - any port in a storm,but then proposes building another coal powered generator.Go figure.
Like Queensland,the powers that be in WA are in the thrall of the resources boom,a very fragile boom.If they have any ability to look outside their cave their vision is clouded by money.
As Aeldric postulated yesterday how do we go about convincing these people to look outside the square?
I live in WA also and I am a member of the Labor Party and have tried to work on some of the policy committees. These so called consultative committees are not consulted or listened to at all.
WA has probably the best potential for renewables with vast open sunny spaces as well and huge wind resources. I do not know how to get Governments away from the hands of the Greenhouse Mafias that actually control policy.
BTW anyone watch the new Working Dog production "The Hollowmen"? Have a look at it and maybe you will get an idea of why we do not think outside the square.
Someone could start a political party, SEG the Sustainable Energy Group, whose policies are purely renewable energy, analogous to the way the Greens represent the environment (supposedly).
The Powers That Be set up these stupid two party systems all around the world specifically so they could control things, being given a choice of two parties that essentially obey the same master is no choice at all, there is no democracy, we've been had.
Actually that is not such a bad idea. The Greens have the balance of power in the Senate. You really only need to get one senate seat to have that sort of power over the Government like the pokies guy.
Big Gav how about we start the renewable energy/Peak oil party with the aim of being a lobby group/political party along the lines of the Greens to combat the greenhouse mafia.
I left the Greens because of the fairies at the bottom of the garden people in it and their drugs policy. If we could steer clear of this perhaps we could have a chance. We need to redirect the Green Car money into electric cars and plug ins rather than subsidising Toyota.
Our first sort of objective could be to get Ausra to build a large scale solar thermal with storage here in Australia.
I'm certainly in favour of another party appearing on the political landscape in Australia - preferably a centrist / small "l" liberal/libertarian party to fill the void left by the Democrats, which isn't beholden to the interest groups that own the Liberal and Labor parties.
I'm not sure how best this could be achieved though - there seems to have been lots of attempts without anyone getting much traction.
Happy to listen to ideas on the topic.
Getting some large scale CSP projects underway is a worthy goal though - I'm hoping the increase in the MRET to 20% gets up, which would be the biggest boost that this aim could receive in the short term.
Ausra have had a few state premiers visit them (as per the Brumby / Bligh visit I mentioned earlier in the week), so hopefully they are already doing some marketing to try and expand back home as well.
Don't know either - just how do you start a political party. Perhaps a start in WA would be the go as there is a State election coming up. If we started then we could get some press coverage for free.
It amazes me sometime that some people here can express their dissapointment in the political process in terms as if it is a consumer item that has been sold to us on certain promises and then found to be a dud.
Politics is something you can choose to participate in and, if you do, you will find that the job of a political executive (minister) is much harder than you think. We don't give them absolute power for very good reasons. We shouldn't expect too much from them either. They don't have super powers just becasue they get elected.
In reality, there is a 2 party system.
Those who love money
And those who do not love money
Everything else is BS
1stly
Nuclear is unsuitable in WA simply due to grid stability issues.
The AP1000 reactor, 1GWe output, would cause unacceptable grid reliability expenses, in standby generators, in the SWIS (South West Interconected System). The SWIS, based around the Perth area of Western Australia, only has a minimum power level of 1.6GW. Nuclear power has multiple reactors sited together as it has large economies of scale in such things as it's skilled labour and shared facilities.
This would be cause an unacceptable cost in WA due to the small size of the grid and the necessity of having alternate generators on standby.
2ndly.
Gas generally isn't used for base load power. Part of the problem with the timing of the gas interruption is that the coal fired plants were our of commission due to servicing, either scheduled or unscheduled in the case of the collie power station.
The only use of gas in the normal merit order of generation is in co-generation(~500MW), the Rockingham-1 combined cycle gas plant (250MW) and the Pinjar (1GW) open cycle gas turbine peaking plants.
This means that gas problems only have a big bite in the summer A/C peak rather than in winter.
3rdly,
There is a backup plan. The Pinjar and Rockingham gas plants can and are use diesel at a rate of ~1ML/day. The local electricity market takes this into account with pricing with a wholesale price up to 40c/kw hr.
It's an expensive plan, it's not too imaginative but it is a plan.
4thly.
There is already a new coal plant under construction right now, the bluewater plant, with commissioning due in November 2008. It's hardly any port in a storm.
All the rest with the fragile boom, looking to coal in a crisis and lack of vision is pretty reasonable, but applies to politicians generally.
Yours,
Lachlan the Accountant (from Perth)
If grid stability problems are an issue with nuclear, I expect they are with wind and solar as well.
After I stumbled across the transmission line issue, it seems like I run into it wherever I go. Private companies think only of what they can plug into the grid. There needs to be major planning, added storage, and transmission lines to make the whole thing work. Somehow, all of the grid costs are "someone else's" and no one ever gets to them. If we want to talk about these additional sources of power, it may be that transmission lines and storage need to be the first items of discussion, not last.
Thanks for the good question Gail.
There are also grid stability issues with solar and wind but they are different than for nuclear. In WA, it's a small isolated grid, so the problems are more stability of generation rather than stability of distribution.
The WA office of energy commissioned a report exploring wind penetration in small grids and here is a summary.
For solar, given the grid demand situation is always higher during daylight hours, a large amount of solar is able to be adsorbed without difficulty. Existing dispatch and merit order processes will keep the grid stable up to a high penetration rate (~40%).
For wind, the problem isn't when the wind doesn't blow. It's when it's blowing too much during the middle of the night. Coal power plants (in WA at least) are not designed to be throttled up and down, and startup from cold shutdown takes 72+hr for some of the existing power stations. So an excess of wind generation means that the coal plants are forced to shut down during a gusty winters night. This places an upper limit of ~15% of minimum grid load as wind capacity with an additional cost of ~$6/MW hr in spinning reserve at this penetration rate. This maximum penetration assumed only 1 huge wind farm, no SCADA remote disconnection of some wind turbines, no pump storage or hydro power what so ever, and a minimum coal plant output of 80%. If any of those assumptions change then the penetration rate can go much higher with minimal cost.
For larger grids, eg Europe, North America, statistical processes allow wind to penetrate higher than a small grid.
The transmission aspect is a problem, with single sites and renewable "hot spots" generating huge amounts of power that needs to go to meet demand elsewhere. Longer term planing for regulated grids would have to be part of the regulating process anyway. So form a Peoples Power Party to put public political pressure for proper power planing.
Lachlan the Accountant.
Thanks for the useful additional explanations (and the tongue twisting closing sentence).
How old are the WA coal plants ?
My understanding (though I have no data here to confirm my memory is correct) is that the raft of big coal plants in NSW (built in the late 70s and early 80s) have a reasonably wide range they can be throttled up and down - covering a range of something like 350 MW to 660 MW per unit.
Is SCADA disconnect of wind turbines during periods of over-generation uncommon ? It doesn't sound like an expensive feature to add.
Adding storage so you can manage output (and maximise profit by dispatching power at optimal times) would be better of course, but that does add significant cost.
The age of the WA power plants vary, from the 50's for the Muja A/B units that were mothballed and are being crash recommissioned to bring more coal power online, to Kwinana units which are 60's, which were converted from using oil during the 70's to gas, oil or coal, to the other Muja units of the 70's to the Collie power station in the 90's, which had a turbine failure which has exacerbated the gas crisis. The gas pipeline from the north west shelf was completed in '83 and there were only gas plants built in that decade.
The SCADA disconnect is easy to do but any problems with it tend to relate to payment while the units are not generating. Thats more a marketing and contract problem rather than an engineering one.
Unfortunately geography has limited pump storage in WA, due an almost complete lack of hydro power in the SWIS to use for pump storage, as used by the Snowy scheme and the stanthorp corportation in QLD.
With historic gas prices in WA, it's cheaper to use open cycle gas peaking plants to meat the demand peaks than to construct a stand alone pump storage site. The unintended vulnerabilities this causes is why the varanus island accident is worthy of this article.
Thanks.
Hopefully the Warro gas project works out and they decide to put some storage capacity in place at Dongara as per one of the recommendations.
Long term I don't think burning gas as a way of generating electricity makes any sense at all (instead it should be reserved for fertiliser, plastics and other uses where there aren't as many alternatives).
While WA has plenty of gas, and will for some time, I think the LNG price is likely to climb along with the oil price, and the WA domestic market will pay a price linked to the LNG price. So putting a range of renewables online, coupled with some storage options (compressed air - if possible, flow batteries, graphite, molten salt etc) and better demand management, will become the most cost effective option in the medium term.
Regarding the excess night time wind issue, there are groups in the US looking at the same problem there and trying to implement large scale electric vehicle charging as the way of soaking up the excess energy and putting it to good use during the day. I think this will be the long term (10 - 20 years) solution everywhere.
Thanks for the thoughtful comments Lachlan.
The issue with a nuclear plant not being an option because of its size relative to the rest of the grid is a common one for not using nuclear - the New Zealand electricity chief recently made the same point there:
http://www.radionz.co.nz/news/latest/200805261525/ebd63aa
Regarding Bluewater - is that the same as the plant the state govt has reported to have asked Verve to build, or are they two separate facilities (ie. is yet another coal fired plant to be built) ?
Bluewater is owned and operated by the Griffin Group, a major local coal producer. It is a merchant coal plant built to supply the progressively deregulated electricity market. This is completely separate to any additional construction for Verve Energy.
Verve energy has an upper limit on the total generating capacity of 3GW (~75% of state demand) as a spur to new market entrants. They will be below this level within 5 years according to scheduled decommissioning of their existing power stations. So, Verve will be in the market for additional power stations in the near future.
Lachlan the Accountant
Lachlan:
If the AP1000 is too large for the WA grid, what about South Africa's proposed PBMR, which is designed to produce 165 MWe? That size is well within the range of the coal fired power plants that are apparently on the grid.
I am also not so sure about your assertions about gas not being part of the base load. Other sources that I have found indicate that WA gets about 60% of its electrical power by burning gas - under normal circumstances, that is. It is hard to get to that kind of portion of the market without supplying at least some of the base load.
My sympathies to my Australian friends, and my envy as well. With hard work, you may be able to effect a paradigm shift in energy policy that will put you a decade ahead of the rest of us.
Western Australia was at near capacity gas supply/demand balance when this event occurred. That's a result of the Just in Time Lean Production Model so beloved by the modern masters of manufacturing and the ramp up of new mining projects. No one wants too much excess capacity in any system.Thats' why the $8 million dollar spare parts were not available.
No private corporation carries that sort of inventory cost on the shelf these days, its' a waste of capital. Coincidentally, Apache Corp announced earlier this year the expansion of gas production in partnership with Santos at Devil's Creek. This capacity was due on line in 2010 because that's about when the system demand would be at 95% capacity full time..
As for Premier Carpenters " over my dead body" statements re Uranium mining in WA, he'll probably end up as a political corpse at the next election.
I think if you asked the WA electorate "do you support uranium mining at Yeelirie, an enrichment facility at York and a reactor on the Harvey river" then you may manage to achieve a unanimous "no" vote.
However, there is nothing stopping the WA govt commencing a couple of large scale CSP plants and more wind farms along the coast right now - and it would probably help Carpenter get re-elected.
Luckily for him the opposition leader is busy sniffing the seats of female staffers (honest - look it up) and is thus unlikely to depose him even if he is performing poorly.
As it is, rising gas prices (with WA prices basically tied to international LNG prices) are likely to make all alternatives economic in the not-too-distant future.
http://news.theage.com.au/national/wa-gas-hike-not-linked-to-shortage-20...
As for Devil's Creek, I think they need the new pipeline to be commissioned before any additional gas supplies can be sent south (once Varanus is back online).
What we need to do is draw a diagram for the silly pollies to LOOK at, reading's a bit of a challenge for them.
Lets design a 250 MW solar PV system, let's see: 6 million will give 2 MW according to Allen, so .... gee that's less than a billion dollars, we could buy a dozen 250 MW solar power stations for what the power outage has cost us.
That's either very wrong or something is very wrong with the political and market systems.
Suddenly I feel kinda ANGRY.
If a billion dollars is so easy to lay your hands on, why don't you form a company, float on the stock exchange and then go build it yourself? Channel your anger into something constructive :)
I think that the government is protecting the electrical company from lawsuits for not providing a secure power supply. Of course, the government is also forbidding the power company to charge enough money to finance a secure electrical supply, so it's hard to cast blame on the company.
Which is why he's blaming the government?
Not to say that your government is any dumber than ours. We have had many blackouts, each of which was at peak demand, in a still, hot, sunny, day, when solar power sites around the countryside would have been at peak production, thus avoiding the blackouts at less cost than was suffered by the interruptions of business suffered during the blackouts.
How many billion dollar blackouts do we have to suffer before we just build a solar supplement to the generation and transmission facilities we already have?
Hi, I try not to post too much and I've already blown my limit for the week but;
I was not blaming the government more "the overall system" for this singular aspect of our rather large dilemma.
Sorry for the misunderstanding.
It is not easy for an individual or "business group" to raise a billion, For The WA state govt it shouldn't be a big ask. (ie For 2 million West Australians = $500 each, I've got my share.)
PS: I'm not really angry, lost that virtue years ago.
I think the mining boom that propels WA has only got a few more good years. Reason; Peak Oil. Oil is vital for mine trucks, locomotives and explosives. Gas used in alumina processing is desperately wanted overseas. Coking coal from the eastern Australian seabord is needed to smelt WA iron ore in India, Japan and South Korea. Those countries may not have carbon caps but the spot price of coking coal went up 70% in 2007. I also suspect that one day people will realise baked beans may be a better investment than gold. WA should enjoy it while it lasts.
As for Alan 'loves coal hates uranium' Carpenter there has already been a bet on his political demise with the $500m sale of the Kintyre uranium deposit.
Given that the WA Liberal party is probably the least effective in the country, its hard to see them rising up from the grave (I don't think anyone will forget the seat sniffing incident in a hurry, and the guy is still in charge).
We may see a much bigger Green vote next time round or (less likely) a revival of the fortunes of the Democrats.
Thanks for your support:
http://www.reddit.com/info/6rei1/comments/
http://digg.com/general_sciences/A_gas_supply_disruption_case_study_the_...
Hopefully construction will begin on a 750 MW, 6500 acre solar plant will begin in California next year.
http://www.stirlingenergy.com/
Keep watching SES, which was taken over by the Irish NTR group.
I have no idea why this project is taking so long.
I think its at least partly due to issues with environmental approvals, which is why they decreased the size from 900 MW to 750 MW.
http://peakenergy.blogspot.com/2008/07/sunrise-in-san-diego.html
But it does seem to be going ahead - they have a customer, which is one of the biggest hurdles.
My brother-in-law is a reasonably senior engineer at one of the Pilbarra mines. I grilled him this Easter when he was staying with us about the post-peak-oil plans for his mine. He happily admits that they're current position is more good luck than good planning.
BHP has been taking a fairly active interest in generation from solar in the area. They footed the bill (100%) for every solar generator in the area. Which is not much generating capacity as yet; the idea is to keep their hand in and keep knowledgeable so that when the price of gas exceeds the price of solar that they're ready.
Other than for electrical generation (which is substantial, to be sure), fossil fuels are only in use for two kinds of equipment.
I was going to phone him and ask how the gas shortages have affected him, but my nephew had an accident and had to be flown down to Perth. I found it rather ironic. All the best plans for surviving without heavy fossil fuel inputs... and they don't have a local hospital able to do surgery because it's cheaper to charter a plane and burn jet fuel when it's needed than to build locally.
Electric trucks are beginning to appear - though they may take a while to reach the size of the really big mining vehicles.
http://www.latimes.com/news/science/environment/la-me-truck26-2008jun26,...
It would presumably be much easier to convert them to CNG, though maybe tank size is an issue.
http://peakenergy.blogspot.com/2008/06/cng-vehicles-in-us.html
I've heard many similar tales to your hospital story from a friend who works at Karratha hospital - apparently Woodside have a plane to fly injured employees south - except it can't take the really serious cases and they have to go with the Flying Doctor service anyway. You'd think just paying for a special ward in Karratha (and maybe one at Newman or Tom Price) would be simpler and not much more expensive.
Granted finding qualified staff is probably a limiting factor.
If you are interested in this kind of studies, you may want to check the 1998 Canadian Ice storm. At the height of the Canadian winter an ice storm massively destroyed power lines, basically shutting down the grid for weeks. Tens of thousands of people were unable to heat their homes and work places. Oil and gas furnaces didn't work because they need electricity for ignition and/or blowers. Residents were evacuated to designated shelters that could be powered with generators unless they owned a heating system that was not dependent on electricity like a wood stove. The army was dispatched to help with the relief efforts and keep the abandoned homes secure. This situation had to be sustained for weeks while hydro was busy rebuilding the power lines.
All economic activity just stopped for lack of power. Businesses had to shut down because people could show up to work. Stores were closed and farmers were given priority access to generators in order to keep their livestock alive. Every body gave priority to caring about their family well being and handling the crisis. This affected not only the cities where the power was shut down but also surrounding areas where the power was in limited supply. There were rotating black outs and a government mandated close of all non essential business activity to conserve power. About every electric utilities in North America dispatched staff, equipment and supplies to help rebuild the power grid in emergency.
This is not exactly a peak oil rehearsal since the physical destruction of power lines is not the same as the disappearance of the energy source. Oil remained available for transportation, although part of the delivery system like gas stations had to shut down because it needed electricity to operate. On the other hand it shows the magnitude of the logistics effort required to handle a severe disruption in a relatively small area.
This link provide a summary of the events. There are a few inaccuracies due to their underestimating of the severity of the problems in the triangle noir area, that is the triangle between Granby, St-Hyacinthe and St-Jean-sur-Richelieu south of Montreal. Electricity in these three cities was shut down for as long as six weeks.
http://canadaonline.about.com/cs/weather/p/icestorm.htm
Other links
http://en.wikipedia.org/wiki/1998_Ice_Storm
http://www.crhnet.ca/icestorm.html
www.cmaj.ca/cgi/reprint/158/4/520.pdf
In picture, here
http://sst-ess.rncan-nrcan.gc.ca/ercc-rrcc/workshop-atelier/roy/images/0...
A TV news broadcast
http://www.youtube.com/watch?v=cv8eij9loVQ&NR=1
And the CBC archives
English: http://archives.cbc.ca/environment/extreme_weather/topics/258/
French: http://archives.radio-canada.ca/environnement/catastrophes_naturelles/do...
Thanks - that's an interesting case study.
I've seen pictures of damaged pylons from that ice storm before but never realised the full extent of it.
Not a single post on scaling back industry.
Say elimination of Alcoa smelters.
That's because its not an easy option for anyone to contemplate.
Could you perhaps outline the benefits and weigh them up against the opportunity costs ?
Alcoa seem to understand that they need to contribute to finding new energy options and not just rely on gas from the north west. They usually seem to make an effort to comply with all the environmental regulations that the WA government has imposed on them over - at least that was the impression they managed to imprint into my brain when I was growing up in WA. Obviously there is a fair amount of forest destruction involved in bauxite mining, but the remediated land seemed to re-grow trees pretty rapidly once they'd moved on.
I'm not sure how shutting down a WA alumina producer would change things for the better in any case - as an example, aluminium is a lightweight material, which means machinery built using it is likely significantly more energy efficient than that built using alternatives (whether or not that makes up for all the embodied energy in the aluminium is an interesting question of course). Isn't the easier path to go down the one that powers alumina production with clean energy sources - if they were using power from a CSP plant in the WA desert, would you really want them shut down ?
(As a disclaimer I'll note that I'm a little bit biased here as Al Cransberg used to be a good friend of mine, though I haven't seen him for maybe 15 years and don't have strong feelings one way or the other regarding Alcoa)
I'm from arkansas, the only state in the US with
bauxite. And diamonds.
No accident that.
The aluminium industry has severely curtailed their industry here.
Jamaica, I imagine, is where the bauxite's coming from now.
The US is wiping out it's salmon to keep Boeing supplied
with aluminium.
WA is making a trade off a well. I don't know exactly where it
is yet, but you're making it.
Are you talking about the production of alumina in the mines and alumina refineries of Western Australia, or the actual electrolytic 'smelting' of aluminium metal, which happens on the east coast, but not in WA?
Indirect GHG emissions from fossil fuel electricity generation - which aren’t really emissions from the aluminium production industry at all - hence comprise 88 percent of the GHG emissions intensity ascribed to the aluminium smelting industry.
If the overall GHG emissions intensity of the electricity supply of 939 g/kWhe was cut to, say, 100 g/kWhe through the replacement of coal fired generators with nuclear energy, geothermal, solar thermal, hydroelectricity or what have you, then the greenhouse gas emissions of aluminium production in Australia can be cut from 31.6 mt to 6.9 mt - 3.52 tonnes CO2-e per tonne Al, compared with 16.1 tonnes CO2-e per tonne Al at present - a 78% reduction in greenhouse gas emissions intensity, and that’s on top of any further improvement in energy efficiency and/or process efficiency, PFC emissions reduction and so forth, in the industry.
Aluminium smelters are not at all the cause for concern here. The burning of coal and fossil fuel for essentially all the country’s electricity generation is by far the foremost concern that we need to address.
[That's copied from my own blog post - I hope nobody accuses me of plagiarism...]
We can't just "close down Alcoa smelters" - they'd just move off shore, either to Europe or Canada or somewhere where cheap, clean nuclear power and hydroelectricity are available to them, or to China or India where they can get away with using all the coal fired electricity without complaints.
We can quite easily clean up our electricity, and prevent that happening.
We've got to get the materials like aluminium that our society relies upon from somewhere.
So Rex Connor was only 33 years ahead of his time eh?
http://whitlamdismissal.com/loans/
Well, we've got all the other ingredients of the 1975 crisis: burgeoning Stagflation, a messianic PM, an inexperienced government and an oil shock...
I wonder if Khemlani still has those petrodollars burning a hole in his pocket?
;-)
That one is before my time (I was just a small kid at the time) - interesting story though - the Whitlam years sound like fun in some ways.
The gas pipeline and electrified interstate railways ideas were good - can't say I'm sad we missed out on the uranium enrichment plant though (although I guess it would have given us nuclear weapons capability !).
Reginald Xavier (Rex) Connor was ahead of his time. Several TOD ANZ posters seem to be channelling his ideas though. I see there was a dotted line on Gav's gas network map whereby east and west Australia could be connected. Thereby making it hard for the Taleban to blow up LNG tankers with their submarines or whatever.
If Rex were alive today I'm sure he'd agree with some of my ideas like prioritising gas uses and only selling uranium to those who play ball. Maybe Rex was reincarnated as Vladimir Putin.
But I dont WANT a Halal meal!
---Jerry Seinfeld
Thanks for this post Gav.
I've been reading into planning/mitigation/analysis of situations not completely dissimilar to this, but locally where I live (i.e. not in AUS).
The challenges, the policy and business solutions and prevailing complacency are, imho, systemic. What I mean, that they are not necessarily any single actors fault and as such they are also very hard to fix alone.
So, the issues often lack proper solutions not due to malice, but due to difficulty of co-ordinated planning in the face of changing uncertainties. The isseus are as systemic side effects, if you will.
I'm not sure if the situation is similar in Australia, but as I read the Office of Energy's report on WA gas disruption and your post above, I couldn't help but to draw some parallels between our situation and yours.
Let me try and illustrate.
Why it happened and analysis of that
It happened, because there was a singular and isolated, non-recurring 6-sigma-or-more deviation event. Meaning, yes we've learned from it, this event will not happen again, we'll make sure of it.
Of course, this ignores the fact that there may be other six or more sigma deviation events that occur with equal disruptive effects, but which have not bee assessed.
Second, many operators both upstream and downstream businesses are already insured. Insurance is a hedge against issues like these. It makes economic sense to pay a lower cost insurance than protect against failure of systems through fault-tolerance or extra capacity. Thus we have question like "we should we stock the 8Mil spare part?". In effect they are saying: who will pay us for us stocking that 8Mil part and making a loss on it.
As we all known, insurance does not cover disrupted energy delivery, only some rudimentary primary losses by the insuring party (and mostly nothing down through the value chain).
But that's enough, most players think - because they plan in isolation: capacity, need, risks, hedges and everything in dollars. Everybody tries to do it themselves and financially only - when the primary risks are shared and operationally destructive.
Most are unable to think in operative terms the issues of disruption, unless they turn it into money.
Lives lost or anything like that do not come into the equation, unless of course, somebody puts a price on a life.
That's what it boils down to: financial risk management.
As long as it suffices and is priced at a level that organizations can afford, why should they do anything else?
Immediate mitigation
Almost everywhere fuel oil and coal are the back up power for gas. Coal is the more economic option when the disruption is known in advance. Fuel oil when it's not and a faster ramp up is needed and the issues is considered to be short-lived.
However, with the huge price rise in mid-distillates in the past few years, this is becoming an issue for the back up power generation. Most are still assuming the price rise is a temporary phenomenon and are not making long term changes to change this.
As for environmental effects, I'm not sure almost anybody in the industry cares this in regards to the temporary capacity planning. Or even if they did, what could they do? It may be a bit bad for the image to some, but under a disruption scenario, people would probably understand even if one incinerated squirrels for energy, so companies play along. I've also read papers where alternative back up options have been looked at and they almost always fall on one thing: cost (of implementing and sometimes maintaining).
Longer term planning
Often in policy planning when a thing X happens, then everything even remote related that has been sitting in the aisles and waiting for the right opportunity is hastily put together under the tag of 'solution for X'.
Now, it seems the measures recommended in the WA gas case are similar to these, at least some of them. We all know this is the way the policy system works: people can't push things forward until there is momentum. It doesn't matter whose momentum it is or under what banner. As long as you can tag along, you can push things through.
So, I'd take those 'nat gas reserves', 'pipeline duplication' and other issues as possible weak signals of what to look in to - as they may also have potential 'issues' that would need to be dealt with separately, even if they wouldn't have helped with the disruption that happened.
If there are no issues, then they're probably just a policy smokescreen: ie. advocate something that sounds nice, but is so infeasible that it'll never go through. Then you can always blame somebody else. Yes, I've seen this happen too.
Political and energy infrastructure planning
This is the big one. Now, I don't claim to be an authority or to know how people think, so take this with a grain of salt.
I think people who have been in the network/power business with the past 30 years are very competent with and accustomed to running a steady ship. Things have not changed that rapidly in the past decades and people in the industry are geared for that.
Now things are starting to move around and making decision making really difficult: climate policy, emission trading, issues on coal, changes in legislation, rapidly changing winds in politics, public acceptance of nuclear, multiple issues with primary fuels in regards to financial deprecation times, possibility and risks of renewable energy, rapidly changing payback calculations for various investment types, etc.
While some welcome this, others are almost in paralysis and don't know what to do. They recommend that let's just go on doing as we have done for the past 30 years, because things went really smooth all the time we did that. Maybe they will now do the same. One can easily criticize this reaction as anti-intellectual and to some extent it is that, but it is also very human and can be quite prevalent in the face of increasing uncertainty.
Summary
Having looked at one issue more closely as a risk management issue I have come to an interim conclusion that the problems are not easy to solve or anywhere near clear cut.
In this sense they represent a class of problems called wicked problems (ref: Rittel). The guys and gals trying to solve these in the industry are - to the extent that I can imagine and have met - very much like us: concerned about the future for their kids, often jaded with politics and also wanting to make the best decisions - or at least avoid the really lousy ones.
What we and they often forget in this situation, is that for wicked problems there are often no single best answers. Further, in a face of emerging chaos or at least growing uncertainty, even non-proven action is often more fruitful than intellectually fallaciously proven inaction.
That is, we must choose and make the best of it, even if we lack the data to be sure. Especially when it may well be that it can take a fairly long time, before things again settle on the level where we can make 'sure' decisions. That is, until things have been at an equal steady and non-changing pace in the industry as they have been in the past few decades.
I believe we are heading towards a time of multiple minor disruptions, in energy and other markets and we are not mentally/culturally yet prepared for it after such a long period of fairly steady development. Adjusting to disruptive changes take time, unless something that forces us to act now somehow accelerates the process.
Good comments - I agree.
I hope that highlighting some of these cases and pointing to the possibility of similar events occurring as oil and gas become harder to obtain in future, that people start to think about making the grid more resilient and diversifying energy sources while there is ample time to do so.
Next time something like this happens they might find that going to diesel backup isn't so easy - and relying on coal as the final fallback option (assuming there are mothballed plants sitting around) isn't a great option either if you consider the bigger picture.
Maybe the final $6+ billion bill might convince the state govt that requiring critical infrastructure providers to have adequate contingency plans and spare parts on hand is a worthwhile thing too do, rather than just relying on insurance to cover their own losses.