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Technology and Environment. 1989. Pp. 110136. Washington, DC: National Academy Press. Advanced Fossil Fuel Systems and Beyond THOMAS H. LEE The terms of the energy debate have changed dramatically over the last 15 years. Whereas the size of the fossil fuel resource base was the overriding concern of the 1970s, today the formidable challenge is how to use energy sources in ways that support social and economic development and protect the environments ~ develop a strategic perspective on how to meet this challenge in the long term, it will be necessary to explore some of the misconceptions of the past that led to costly errors in energy planning. Such a review, in retrospect and prospect, will help answer the question: What happens after the fossil age? THE MYTH OF "RUNNING OUT OF RESOURCES" For years, energy planners thought that the driving force for the shift from one energy source to another was resource depletion: Whatever is the most desirable and necessary resource will run out quickly or soon enough to push the movement to alternatives. This running out hypothesis has pervaded the bureaucratic, business, and scientific communities for decades. It has served as a basis for national policy, industrial policy, investment policy, and research policy. In the case of energy, it is a myth that resource depletion is the driving force for resource substitution. Studies of nonfuel minerals have led to a similar conclusion (Tilton, 1984~. For centuries, fuelwood, animal and farm waste, and animal and human muscle power were the mainstays of energr supply. Compared with contemporary energy consumption patterns, these traditional energy forms 114

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 1o2 jo1 10 10-1 10-2 1850 1 900 Mood ,X~,= - ~ _: Natural Gas 0.99 0.90 0.10 Nuclear \/ ~Fusions art 1 -~ 1 1 ~ Or 1 0.01 2050 1 950 2000 Year 115 c - o ._ LL FIGURE 1 Histoncal and projected trends in global pnma~y energy consumption. The amount of energy (tons of coal equivalent) from each source is plotted as a Faction f of the total energy market, with log Aft-f' ~ the ordinal=. Me smith Ocular trends are the model estimates based on historical data; irregular lines are historical data. SOURCE: Marchetti and Nakicenovic (1979~. were used at low absolute levels and low densities of generation and end use. Essentially, their exploitation was not dependent on infrastructure for transformation and transport. These patterns were altered with the emergence and intensification of the industrial revolution of the nineteenth century. As Figure 1 shows, fuelwood was replaced by coal during the latter half of the nineteenth century. Fuelwood's share declined from some 70 percent in 1860 to about 20 percent in the early l900s at the same time that coal's share increased from 30 to almost 80 percent. Fuelwood was abandoned, not primarily because of the threat of resource depletion, but because coal mining and coal end-use technologies provided an energy source that could do what fuelwood disband better. Although it was possible (and still is) to operate trains and ships with fuelwood and use it for shaft power and electricity, advances in coal technology made it increasingly easier, more efficient, more reliable, and cheaper to do so with coal. However, by 1910 coal's rapid growth had ceased, with its share of the primary market peaking some 10 years later and declining in relative shares thereafter in a pattern that is almost symmetrical with that of fuelwood 50 years earlier. By the early 1960s, coal had been displaced by crude oil as the dominant fuel on the primary market, both in market shares

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116 THONGS H. I :FE and on an absolute basis. ~day, a similar substitution pattern can be observed. Coal resources were (and still are) abundant. But with the discovery around 1860 of oil by drilling, a set of oil-related technologies began a development process that eventually led to the large-scale and efficient refining of crude oil into a broad range of products and chemical feedstock These innovations opened the market for oiL On the end-use side, refined oil products proved to be far superior to coal for powering trains, automobiles, and aircraft; for generating electricity; and for providing residential and commercial heating. All of these end-use applications, except automobiles and aircraft, had been achieved first by use of coal. The primary radically new application opened up by the use of oil was, of course, aviation, now a large consumer of refined oil products. Nonetheless, around 1980 crude oil peaked on the world primary market, both in terms of shares and on an absolute basis, and began to decline thereafter. As Figure 1 also shows, natural gas and nuclear energy have been steadily gaining market shares against crude oil: natural gas since the 1920s, and nuclear energy since 1970. Thus, from the historical perspective, energy substitution has been driven by the availability of a set of new technologies that enabled an alternative energy source to satisfy better the end-use demand of society. Another point seldom mentioned is that the so-called reserves them- selves are actually [unctions of technology. The more advanced the tech- nology, the more reserves become known and recoverable. An excellent example is the Kern River story as described by Adelman (1987) in an address before the National Press Club. Kern River in Califorrua was discovered in 1899. After 43 yeam of production, it had "remaining reserves" of 54 million barrels In the next 43 yeam of life, it produced not 54 but 730 million. At the end of that time, in 1986, it had "remaining reserves" of about 900 million barrels The past trend is clear: technology has been the engine of change in the energy sector. I believe that the role of technology in energy will continue to be the same as in the past, despite a shift in emphasis to environmental protection and other societal needs. NAT GAS: A BRIDGE TO THE POSTFOSSIL AGE? More than a decade ago, the International Institute for Applied Sys- tems Analysis (IIASA) forecast that after oil, natural gas and nuclear energy would be the dominant growth fuels over the next few decades. At that time, these predictions were a highly controversial and emotional issue. They have, however, stood the test of time reasonably well. New reserves have been discovered in many parts of the world. The consumption of methane in the world has been increasing (Figure 2), with the United

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 104 103 - C7 1o2 10 ~ _ 10O 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1850 1900 1950 2000 J 117 Coal_ ~ ~ ,_J 1 '' Several Gas Wood / l iNuclear 1 950 Year FIGURE 2 World pama~y energy consumption (in gigawatt-yeam per year). SOURCE: Grubler and Nakicenovic (1988, p. 15~. States being the single exception. The U.S. Power Industry and Industrial Fuel Use Act of 1978 (Public Law 95~20, 42 USC 8301), forbidding the use of natural gas for electricity generation, was modified in 1987. There is ample evidence to indicate that the consumption trend will reverse. A more recent gas study by IIASA indicates that after the year 2000, Europe may have to depend increasingly on natural gas for its energy needs (Rogner, 1988~. 1b discuss further the likelihood that natural gas will become the bridge to the postfossil age, natural gas technologies must be examined in the framework of technology life cycles. In many ways, technological systems and biological systems can be described similarly. One can define in a qualitative way three different stages in the life cycle (Figure 3~: the embryonic, growth, and maturity stages. As a technology progresses through its life cycle, a number of measurable quantities evolve along S- shaped curves. The simplest S-shaped curve is described by the logistic equation. For any parameter x (e.g., performance, market size), dx/dt = By-x), where y is the upper limit (saturation value) for x, ~ is the time, and tic is a constant. When x is plotted against I, it has the form of a symmetrical

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118 a, E a, ~5 on Ct I_ ho - a) CO' FIGURE 3 Technology life cycle. THOAI45 H. r FE ,: /Saturation or Senescence /- Early Development Time S curve. Let x) be denoted by A, which is the fraction of saturation value attained by x. If f/1-f is plotted versus time on a semilog scale, a straight line is obtained. Evolution of the technical performance of passenger aircraft may be used as an example (Figure 4). Instead of following closely a single straight line, there is a band, with the left line representing the performance of the best airplanes. If one had to choose between different modes of transporta- tion for investment purposes in the 1930s, the most favorable information that was available for aviation was on the DC-3. Still, comparing the performance, cost, and personal comfort of a DC-3 with that offered by railroads, one might easily have concluded in the 1930s that the railroad would remain superior. Fifty years later, there is no convenient way to travel between coasts in the United States by raiL From looking at Figure 4, the reason is clear. The young aviation technology of the 1930s improved its performance (as measured by passenger-kilometers per hour) by more than a factor of 100 over the following 40 years. The already mature railroad technology showed no such performance improvement. Examining energy technology in this context suggests that gas technol- ogy is still young. For years, natural gas was a by-product of oil exploration. Only recently have wells been drilled intentionally for gas exploration. By plotting logistically the drilling and production rates of so-called nonasso- ciated gas (Figures 5 and 6), the share of gas wells is seen to increase

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 1o2 10' 10 10-1 10-2 10-3 ~,~ ~ 1920 1940 1960 1980 2000 2020 ~.~' 119 /, - 1970/~- B747/ / TU-1 44 B707 / ~ A300 TU-114~/ DCG10 L1011 L~7/ i Caravelle Do/ ~CV340 DC A/ '' , Year At= 33yr Lag = 9 yr 0.99 0.90 - 0.50 x 11 o ._ 0.10 ~` 0.01 FIGURE 4 Improvement of passenger aircraft performance in thousands of passenger- kilometers per hour. Each point on the graph indicates the performance of a given aircraft when used in commercial operations for the first time. The upper curve represents a performance feasibility frontier for commercial aircraft; the performance of all other commercial aircraft at the time they were introduced was either on or below the curve. (tc is the estimated saturation level.) SOURCE: Lee and Nakicenovic (19~. while that of oil wells decreases. Figure 7 shows the substitution picture when nonassociated gas is separated from oil technology and shown as gas technology. If these trends continue, nonassociated gas exploration can be expected to grow for some time to come. We have also seen ad- vances in exploration through use of remote sensing by satellites and ground Truth measurements. Drilling technologies are also advancing underground, deeper and faster (Figure 83. Perhaps the most convincing dynamic technological advance for this case is the conversion efficiency of combined-cycle systems using natural gas. In a gas turbine combined-cycle (GTCC) system, exhaust from a gas turbine is fed into a residual heat boiler that generates steam for a bottoming steam cycle. The capital cost of such a plant is considerably lower than that of a coal-fired plant or a nuclear plant (about $500 per kilowatt), and the conversion efficiency is significantly higher. It is interesting to follow the advances of that single parameter. In the 1970s, the efficiency was in the

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120 THONGS H. LEE 1o2 101 10 10 1 10-2 =~_ . _ V Natural Gas I I I ~I I 0.99 0.90 rat ,~ ~1 1 1 960 0.50 - lL 0.10 I . 0.01 1 980 2000 1900 1920 1940 Year FIGURE 5 Shares of successful oil and gas wells in the United States. SOURCE: Grubler and Nakicenovic (1988, p. 27~. high 30 percent range; in the beginning of the 1980s, it went up to 45~7 percent. In 1987 when Norway was considering such a plant, the efficiency quoted by suppliers was in excess of 50 percent, an interesting example of dynamics of technology. Despite their economic attractiveness, combined-~cle systems have not been considered a serious option in planning additions to utilities' future power generation in the United States. The reasons are many: the Fuel Use Act, lack of confidence in a reliable long-term gas supply, and lack of confidence in the performance of GTCC. A related issue that deserves attention Is the utility rate structure. Consider a hypothetical utility that has both nuclear and combined-pycle plants. If one computes the actual cost of electricity generated by the two plants, the combined-cycle plant might have an advantage. However, in daily dispatching decisions, the combined~cle plant may not be dispatched because its fuel cost is higher than that of a nuclear plant, and the high capital cost of the nuclear plant is already in the rate base. In dispatching, only the fuel cost counts, because the operating and maintainance costs are not a significant factor, but when the cost of elec- tncity from a third-party generation owner is compared with that from the electric utility companies, a different standard is used. Polic~ymakers find the total cost a better measure. Thus, a combined-pycle system that is

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ADVANCED FO55rr FUEL SYSTEMS AND BEYOND 1o2 10' 10 10 1 _ 10-2 i , , ~ 1930 1940 1950 1960 1970 1980 A_ ~ A Year MY ~ Gas Welts 121 0.99 0.90 _ 0.50 -I ct _ 0.10 1 1 0.01 1 990 2000 FIGURE 6 Natural gas production from oil and gas wells in the United States. SOURCE: Grubler and Nakicenovic (1988, p. 32~. 1o2 1o1 10 1 10 10-2 1 ~ I I 0.99 b Wood Natural G:s .,~'C ~ Oil 0.90 0.10 't ~ ~ 0.01 1800 1850 1900 1950 2000 Year - to - FIGURE 7 Energy substitution in the United States; gas from nonassociated wells is shown separately as gas technology. SOURCE: Grubler and Nakicenovic (1988, p. 37~.

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122 1 ,000 co a) ~ 5,000 - Q a) . _ ._ ~1 0,000 Colonel Drake At = 83 yr ~1 1 1 1 1 THOMAS H. ME \_ 1951 \ Lone Star 1 Rogers ~4 1 1 1 1 1 1 1 - - - - 1 1 1 1 (12,250) 1850 1900 1950 2000 Year FIGURE 8 Maximum depth of exploratory drilling in the United States. SOURCE: Grubler and Nakicenovic (1988, p. 23~. not economic to dispatch in the utility system becomes a viable competi- tor outside the system. So, by changing one measurement arbitrarily, the deregulation of electricity generation makes sense. The MIT Power Systems Laboratory examined the economics of combined-cycle systems from the viewpoint of total cost (arbors and Flagg, 1986~. The analytic method used was the Electric Generation Expansion Analysis System (EGEAS), developed by MIT and Stone and Webster En- gineering Corporation for the Electric Power Research Institute (EPRI). The EPRI-developed Regional Utility Systems allowed extrapolation to the entire U.S. system. With a set of reasonable assumptions, the study con- cluded that natural gas-fired combined-cycle systems with efficiency already in hand contributed to the optimal-capacity mix. In three of the six regions studied, they provided the majority or all of the optimal mid Concurrent with this, El-Masri (1985) made a comprehensive analy- sis of the efficiency of combined-cycle systems. It is important to point out that for decades, the technical development of gas turbines was influ- enced heavily by jet engine technology, developed by the U.S. Air Force for military purposes. Firing temperatures have increased (Figure 9), and high- temperature materials have been developed (Figure 10~. But because of

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 123 the weight and space limitations for aircraft applications, the exhaust tem- perature from the gas turbine is not optimal for the bottoming steam cycle. This situation can be improved if reheating between the gas turbine stages is considered. In 1978 a national energy savings project (the Moonlight Project) started by the Japanese government included the development of a reheat gas turbine to optimize the performance of combined-cycle systems. This occurred after Japan, in an effort to diversify energy sources, ordered several gigawatts of combined-cycle systems from the General Electric Company. Results of the analysis done by El-Masri are shown in Figure 11, in which the combined-pycle system efficiency is plotted as a function of pressure ratios at various peak temperatures (measured by H. which is the ratio of the turbine inlet temperature to the ambient temperature). Each point represents the maximum efficiency configuration of a single-stage compressor and reheat turbine. The optimum number of turbine stages is indicated at each point. If one imposes a design constraint of three turbine stages (two reheats), the performances are shown by the dashed curves. With increased turbine inlet temperatures and higher compression ratios, efficiencies between 55 and 60 percent or even higher may be achieved. Thus, it is not unreasonable to say that combined~rcle systems are still in the growing phase of their life cycle. When the possibility of high'fficiengy combined-cycle systems was included in the EGEAS study, the results were indeed remarkable. The 3000 a' Ins 2000 Q) Q /Solid Blade - - - - /Convection Cooled /m pi ngement/film Cooled 1 000 1 1 1940 1960 t 980 2000 Year FIGURE 9 1l~rbine technology tends. SOURCE: Lee (1988, p. 135~.

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124 THOMAS H. ME 2000 1 800 o - a) <~5 1 600 a) a) ~ nm/etallic 1400 _ / Air Melt 1200 1940 / 1 1 1 1 1 1 Directional Solidification 1 1 1 1 1 1 1 1 1960 1980 2000 Year FIGURE 10 Progress in technologies for high-temperature materials development for turbine blades and disl~s. SOURCE: Lee (1988, p. 1363. most dramatic differences occurred in the Northeast and Southeast. Figures 12 and 13 show the expansion path for these two regions. Given the planning horizon of 15 years, only combined~cle additions make economic sense. This section has touched on the dynamics of only a few of the natural gas technologies. Similar attention should be given to exploration, drilling, down hole communication and control, production and transportation, and of course end use. The results of a 1986 workshop on these topics were recently published in a book entitled The Methane Age Wee et al., 1988~. Much remains to be done in engineering research and practice if methane is to become a bridge to the era beyond fossil fuels. ENVIRONMENTAL CONSIDERATIONS We have entered an era of increasingly complex patterns of interde- pendence between environmental and human development. These patterns are characterized by temporal and spatial scales transcending those of most contemporary political and regulatory institutions. What were once local

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10 CD 8 - Q u 4 1 990 126 THOAL4S H. ~ FE 12 _ Total (GTCC + HECC) O GTCC ) . ~ 1 1 1 1 - - 1 1 1 1 1 1 1 1 1 1 1 1995 2000 2005 Year FIGURE 12 Projected capacity of gas turbine and high'fficiency combined~ycle (HECC) systems in the Northeast. SOURCE: Lee (1988, p. 143). argues that most studies make convenient but unrealistic "surprise-free" assumptions regarding future developments in institutions, technology, and knowledge. Advocates of this perspective question whether the rate of climate change, under the assumption of continued, increasing emissions of infrared-trapping gases, would likely be too rapid to allow reasonable adaptive measures to be effective. While the debate is going on, it is extremely interesting to note that over the past 100 years, the global primary energy system has moved progressively toward hydrogen-rich quality fuels, as shown by Figure 14. The hydrogen-to-carbon JI/C3 ratio for fuelwood is roughly 0.1; for coal, 1.0; for oil, 2.0; and for natural gas, 4.0. The implications of this trend are far reaching, especially in light of recent discussions on the "airborne fraction" of emitted carbon dioxide (the portion of CO2 emitted that remains in the air). The fact that the deep oceans are huge sinks for CO2 instills hope that increases in the atmospheric concentration of CO2 may be brought to zero without cutting the emission from fossil fuel combustion to zero. The question is how fast the upper mung layer of the oceans can absorb CO2 from the atmosphere. Firor (1988) recently suggested that "it is possible that society could come close to stabilizing the atmospheric burden of CO2 with a 50 percent reduction in fossil fuel use." Although the quantitative conclusion will be a subject for debate for some time, there is general agreement that reduction in emissions from the supply side and

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 16 14 12 3 1 0 - - 8 CO Q CO O 6 4 _ 2 - _' ~ ~ 1 1 1 1 990 Total (GTCC ~ HECC) O GTCC r my' J r ~0' J d 1995 127 2000 Year 2005 FIGURE 13 Projected capacity of high+fficiency combined~ycle (HECC3 systems in the Southeast. SOURCE: Lee (1988, p. 143). conservation on the demand side (improvement in efficiencies) are the right things to do. More penetration by natural gas into the primary energy market is a step in that direction. It is gratifying that the historical trends are pointing that way. At the same time it is important to be mindful of the fact that substitution by natural gas may not be fast enough, but it will slow the buildup of CO2. How effective that can be, we do not know. We must also be aware that CO2 is only one of the "greenhouse gases." Another important gas in that family is methane itself. Recently, rice fields have become known as an important source of methane. It is almost unimaginable that people will cut down rice consumption. Yet, non-methane-emitting rice production may be a suitable and very difficult challenge for technologists (biotechnologists) to work on: How can the quality of rice be maintained by a different process? BEYOND THE FOSSIL AGE If natural gas is the bridge, what is on the other side of the river? There have been so many forecasts already that it is best not to add another. Forecasting in the energy field has proved a most hazardous profession.

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128 THOA~15 H. LEE 102 10' loo 10 1o-2 0.99 0.90 0.50 ,~ i' H/C = 4 Nonfossil H2? '' Wood H/C = 0.1 Coal H/C = 1 Oil H/C = 2 Gas H/C = 4 , ~1 1 1 1 ~ 1700 1800 1900 2000 2100 Year 0.10 0.01 o ._ - FIGURE 14 Evolution of the hydrogen-to carbon ratio in pama~y energy sources, 185(~ 2100. SOURCE: Marchetti (1985~. Most forecasts have been wrong, and it is aptly suggested that the only way to forecast is to do it frequently! It is not productive to engage in debates on which forecast is right; rather, we should ask ourselves: If some of the forecast turns out to be right, what does it mean to us? Should we protect ourselves against particular events? These are only two of many questions planners should ask before they formulate a set of criteria for planning and design of future energy systems. For this purpose, a review of a few additional lessons from the past will help. Perhaps the most important lesson is that uncertainty is a fact of life. Past belief in the single-trend forecast for oil prices has cost the United States billions of dollars in synfuel projects and in international bank loans. One criterion for future energy systems planning should be robustness against uncertainties. The next important lesson is that the future will most likely not be simply a smooth extrapolation of the past but will be marked by fluctuations and new factors in competition. In business, unexpected events are referred to as contingencies. It Is the responsibility of planners to imagine the surprises as best they can and then formulate a plan to deal with them, including triggering criteria and timing. Traditionally, studies of energy and

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 129 ecological systems have been based on surprise-free models (Brooks, 1986~. The gradual, incremental unfolding of the world system in such models with parameters derived from a combination of time series and cross-sectional analysis of the existing system is precisely why most forecasts are wrong. Thus, robustness must include contingency planning. Another lesson is that defending the status quo may be a poor strategy. Societies are continually developing and seeking to meet new demands, be they in areas of safety or environmental quality. The responsibility of the technical community is to anticipate societal challenges and be ready with technological solutions. Finally, over the long run, market economics is still the controlling factor. Neither experts nor the public should be misled by the power of noncommercial technical success and overestimate the power of government mtenention. The United States believed that if it could send a man to the moon, it should be able to solve the energy crisis in the same way, by massive government financial support However, the economics of the space race differs from that of the energr business. The United States believed it could change in a lasting way the economic attractiveness of technologies by building demonstration plants with massive government financial support. Looking back, we find what makes economic sense: In many areas the private sectors went ahead, without help from the government, to increase the efficiency of heat recovery in combustors, for example, and to add insulation and temperature controls in commercial or residential structures. For products that did not make sense, the '~wise" organizations took government money for R&D, and the not so wise lost their own money in addition to that of the government. In the end, those options mat did not make economic sense at the outset were never developed commercially. These lessons suggest that future energy systems should at least meet the following criteria. They should be economic, efficient, safe, and of high quality. They should also be clean in relationship to the environment and robust with respect to uncertainties. One point needs to be made with regard to the robustness requirement: that is, the system concept must be adaptive to a range of technological advances. One should neither count on revolutionary advances to the same degree as was widespread after 1973 nor seek only revolutionary advances. Future systems must build on the current technological menu and be ready to accept new items when they become available. Energy engineers have been searching for a concept that is broadly applicable to energy systems planning and design, without being heavily constrained by issues such as indigenous supply; technological readiness; and local social, political, or economic conditions. From the technological

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132 17IOAL4S H. ME viewpoint, the concept should be evolutionary but adaptive to revolutionary technological changes. The integrated energy system is such a concept. The concept of integrated energy systems is not new. The oil refin- e~y/petrochemical complex and the steel mill are two good examples, even though they are never referred to as such. In an oil refinery and petro- chemical complex, there is no clear distinction between product streams and energy streams. Crude oil, liquefied petroleum gases, natural gas, and other industrial gases are the primary materials used by the complex, but each is used for many purposes. For example, natural gas is used as fuel in heaters, as a feedstock, or as fuel for the unit making hydrogen. Industrial gases are exploited for their maximum benefit. The entire steam cycle is in- tegrated: high-quality steam for turbines, medium~uality steam for process boilers, and low-quality steam for preheaters. Even more important, the steam system is integrated with the electricity system. The result is a robust, flexible system, highly efficient with respect to both energy and capital, and therefore economically sound. This is an integrated energy system, whether we call it that or not; neither would anyone design a modern refinery in any other way. Another example is the conventional steel mill, for which the primary raw materials are coal and iron ore. Although the mill has a huge need for energy, it does not burn coal but instead uses coal as a chemical raw matenal. The coal is coked, a process that uses gases released when the coal is heated in the absence of air to remove the chemicals it contains. Coke is used in blast furnaces to reduce the iron oxide in the ore to metallic iron. Although one of the primary products of these processes is heat, the coal is not burned. These are shining examples of integrated energy systems in which loss of heat or useful components is minimized, thereby enhancing economic e~ciengy. Operational and capital costs are also minimized. These systems are possible for several reasons: One is that the enterprise is big enough to rise above issues of investment and disciplinary (or professional) barriers. Another is that there are no significant regulations that stand in the way of their design, construction, and operation as integrated systems. These conditions do not hold true for all energy-related enterpnses. Electric utility companies would have a variety of difficulties if they decided to enter the industrial gas business. First, let us look at integrated energy systems (IES) from a conceptual point of view Figure 15~. On initial inspection, the IES appears to be a complex and unmanageable system. Although Figure 15 shows a number of boxes representing technological steps, the boxes represent options (for clarity, not all options are shown), not required components. The IES diagram offers alternatives in each stage of the system. There are five aspects to the system: (1) energy sources, including air and water;

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ADVANCED FOSSIL FUEL SYSTEMS AND BEYOND 133 (2) transformation processes (incoming fuels are transformed to industrial gases); (3) industrial gases and gas separation; (4) transformation processes (industrial gases are transformed to more usable energy forms, electricity or chemicals); and (5) product to final consumption. The simplest integrated energy system, the cogeneration system using natural gas, for example, can be traced from gas to combined cycle to electricity and process heat and steam. Other systems can be constructed by selecting the appropriate options, as shown in Figure 16. The purpose here is not to promote any one alternative but to show the fle~biliy of the concept from three viewpoints: robustness with respect to uncertainty, ability to adapt to technological advances, and environmental protection. The search for robustness must be an important part of strategic planning in energy. For a number of years, IIASA has conducted, in cooperation with Alan Manne of Stanford University, an annual survey of a number of forecasts of oil prices (Manne et al., 1985~. Figure 17, containing recent survey results, shows that the range of all the forecasts is very wide and that the projected price of oil depends on the price at the time the forecasts were made. For planners, these survey results indicate that our knowledge of the future will always be uncertain. The transformation process between the primary sources and the set of intermediate industrial gases in Figure 15 provides robustness against uncertainty in supply. Inhere are, for example, three potential sources of hydrogen: solid fuel such as coal, liquid fuel, or natural gas. There are two sources of carbon monoxide and oxygen. The energy required to produce these gases can come from hydrocarbons or from nuclear power. Of course, to make use of the robustness, the system must be designed to have the required flexibility. The IES concept can also adapt to new technologies. Like fuel cells as an example. Thday, the question of economic feasibility of fuel cells with phosphoric acid technology remains unanswered. with molten carbonate technology, the uncertainty lies mostly in the technical area. If the technical obstacles are overcome and the economics of either of the two technologies becomes attractive, fuel cells could be incorporated in a straightforward manner into an integrated energy system, as shown in Figure 15. The same can be said for high-temperature electrolysis, methanol production, new gas separation systems, renewable sources such as photovoltaics, and new nuclear reactor technologies, be they high-temperature gas reactors or fusion. The question is where, not whether, they belong in the system. Thus, the concept of integrated energy systems is friendly to both evolutionary and revolutionary technologies. 'rhe ultimate dream for energy systems zero emission~can be ac- complished only with a hydrogen economy. Integrated energy systems offer a technological road map toward this environmental goat At present, all

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ADVANCED FOSSIL FUEL mTEMS AND BEYOND 250 ._ o 3 0 0 -0 0) 150 a) Cal ._ Cal s: o ._ Cal 20~) in O 100 co - ~n o 50 - _ 1 / J _ O ~I 1 970 Poll Medians Actual Prices (U.S. Imports) ,:` - 1980 1 990 Year - - 35 ~3 2000 2010 FIGURE 17 Changing outlook for oil pnces: actual paces from 1970 to 1985 and median projections as published lay the IIASA International Energy Workshop, 1981-1985. Polls on expected pace of crude oil were taken at roughly Month intervals: poll 1 in December 1981, poll 2 in July 1983, and poll 3 in January 19SS. SOURCE: Manne et al. (1985~. parties in the energy production chain share responsibility for environmen- tal protection. In an integrated energy system, the responsibility is focused on a well-identified set of processes (the left-hand portion of Figure 15~. This should make the job of environmental protection easier. Residential, commercial, and industrial consumers would welcome energy forms with greatly reduced environmental concerns. Implementation of integrated energy systems requires major changes in industrial infrastructure. It requires integration of chemical, petrochem- ical, and electric power industries, along with regulatory and economic adjustments. How fast trends may advance is unkown, but some indications are encouraging. Carbon dioxide from power plants is used for enhanced recovery of oil. A new energy project outside of Stockholm is based on the integrated concept. The role of engineers is to have the technologies ready to meet social demand. In the energy area, it appears that technologists are ready with timely and environmentally attractive proposals to move to advanced fossil fuel systems and beyond.

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136 THOAf4S H. I FE REFERENCES Adelman, M. An 1987. Are We Heading Towards Another Energy Gisis? Paper presented to Oil Polipy Seminar of the Petroleum Industry Research Foundation, Washington, D.C., September 29, 1987. Brooks, H. 1986. The typology of surprises in technology, institutions, and development. Pp. 325-350 in Sustainable Development of the Biosphere. W. C. Clark and R. E. Mann, eds. New Yorlc: Cambridge University Press. El-Masn, M. A. 1985. On thermodynamics of gas turbine cycles. ASME Transactions 107:g~89. Firor, J. 1988. Pp. 10~105 in Climatic Change, Vol. 12. Boston: Kluwer Academic Publishers. Grubler, A., and N. Nakicenovic. 1988. The dynamic evolution of methane technologies. Pp. 1~14 in gibe Urethane Age, T. H. Lee, H. R Linden, D. A. Dreyfus, and T. Vasko, eds. Boston: Kluwer Academic Publishers. Lee, T. H. 1988. Combined cycle systems: Technology and implications. Pp. 131-145 in The Methane Age, T. H. Lee, H. R. Linden, D. ~ Dreyfus, and T. Vasko, eds. Boston: Kluwer Academic Publishers. Lee, T. PI., and N. Nakicenov~c. 1988. Technology life~ycles and business decisions. International Journal of Technology Management 3(4):411~26. Lee, T. H., H. R. Linden, D. ~ Dreyfus, and T. Vasko, eds. 1988. The Methane Age. Boston: Kluwer Academic Publishers. Manne, A. S., L Schrattenholzer, A. N. Svoronos, and J. L. Rowley. 1985. International Energy Workshop 1985. Part I: Summary of Poll Responses. Laxenburg, Austria: International Institute for Applied Systems Analysis. Marchetti, C. 1985. When will hydrogen come? International Journal of Hydrogen Energy 10:215. Marchetti, C., and N. Nakicenovic. 1979. The dynamics of energy systems and the logistic substitution model. International Institute for Applied Systems Analysis. Report RR-79-13. ~xenburg, Austria. Rogner, H.-H. 1988. Natural gas and technical change: Results of current gas studies. Pp. 61 84 in The Methane Age, 1: H. Lee, H. R. Linden, D. A. Dreyfus, and T. Vasko, eds. Boston: Kluwer Academic Publishers. Tabors, R D., and D. P. Flagg. 1986. Natural gas fired combined cycle generators: Dominant solutions in capacity planning. IEEE Transactions on Power Systems PWRS-1(2):122-127. Tilton, J. E. 1984. Matenal substitution: Lessons from the tin-using Industry. International Institute for Applied Systems Analysis. Report RR 84-009. I~xenburg, Austria. Repnnted from Material Substitution: Lessons from the Tin-Using Industry, J. Tilton, ed. Washington, D.C: Resources for the Future, 19433. Tilton, J. E., and H. H. Landsberg. 1984. Nonfuel minerals. The fear of shortages and the search for policies. International Institute for Applied Systems Analysis. Report RR 84 008. L~xenburg, Austria. Reprinted from U.S. Interests and Global Natural Resources: Energy, Minerals, Food, E. N. Castle and K ~ Price, eds. Washington, D.C.: Resources for the Future, 1983.