An Ignoble Experiment

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The United States military is investing heavily in electric vehicles (EV), including hybrid electric vehicles (HEV) and plug-in electric vehicles (PEV), to capture the economic, environmental, and strategic benefits offered by vehicles that do not run on fossil fuels. One of the largest supporters of various types of alternative drive vehicles, the U.S. Department of Defense (DoD) is expected to increase its purchases of EVs in the coming years. In fact, the DoD will acquire more than 92,400 EVs for non-tactical purposes from 2013 to 2020, according to Navigant Research.

From left, U.S. Navy Cmdr. David Varnerreceives the keys to a Chevrolet Volt electric car from Cmdr. Kenneth Branch as part of the DoD and General Services Administration Plug-in Hybrid Electric Vehicles Pilot project. Credit: U.S. Navy Mass Communication Specialist 2nd Class Kiona Miller/Released

"In remote theaters of operations, the cost of moving fuels to forward military locations can be a multiple of the cost of the fuel itself," said Scott Shepard, research analyst with Navigant Research. "The military's approach to reducing fossil fuel consumption from non-tactical operations includes acquiring increasing numbers of vehicles powered by ethanol blend and biodiesel blend fuels; but the majority of the investment will go toward HEVs and PEVs."

One particular area of focus for the military market is the development of microgrids in tandem with vehicle-to-grid (V2G)-enabled PEVs. Microgrids can enable bases in both tactical and non-tactical operations to utilize energy generation sources more efficiently and to operate independently of conditions on the grid. V2G-enabled PEVs used solely in non-tactical applications provide an additional layer of energy support and storage that can assist islanding microgrids and balance distributed energy generation resources by providing power from the vehicles' battery packs to buildings, Navigant said.

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DoD driving vehicle-to-grid development

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2. SMUD leads innovative hybrid CSP project

By Barbara Vergetis Lundin

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3. Research offers insight into CCS perceptions

A new concentrating solar power (CSP) project led by the Sacramento Municipal Utility District (SMUD) that will integrate utility-scale CSP technology with SMUD's 500 MW natural gas-fired Cosumnes Power Plant. Supported by a $10 million U.S. Department of Energy investment, this project will help design, build and test cost-competitive CSP-fossil fuel power generating systems in the United States.

Cosumnes Power Plant. Credit: SMUD

Concentrating solar power technology uses sunlight to produce steam, which is then used to generate electricity. Hybrid systems couple traditional fossil fuel-powered plants with CSP technology to improve the efficiency and performance of both systems and marry baseload power with new, cost-effective capacity. Today, between 11 and 21 GW of CSP could be built and integrated into existing fossil fuel plants in the United States -- enough to power to between 3 million and 6 million homes.

The SMUD project will feed solar-produced steam directly into the plant's turbines, creating at least 10 MW of new electric generation capacity. The project will include energy storage technology to improve system performance and meet peak and off-peak power needs.

"Responsible development of America's solar energy resources is a critical part of our all-of-the-above energy strategy, and the Sacramento project furthers our commitment to building a cleaner, more sustainable energy future," said Assistant Secretary for Energy Efficiency and Renewable Energy David Danielson in a statement. "Innovative systems that combine solar power with traditional energy sources will help cut carbon pollution across the U.S. power sector while improving the efficiency and performance of both resources."

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By Barbara Vergetis Lundin

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4. Divestitures driving oil and gas mergers and acquisitions

An emerging method to store global warming carbon dioxide (CO2) underground faces challenges in gaining public acceptance, especially when the global benefits carry localized costs. A new study on the public acceptance of carbon capture and storage (CCS) in Indiana, a heavily coal-reliant state, shows that capturing carbon emissions and injecting them underground for long-term storage is supported by 80 percent of the population, but about 20 percent of the initial supporters disapprove of the use of the technology if the carbon storage facility would be built close to their homes and communities.

The research from the School of Public Affairs and Administration at the University of Kansas in collaboration with the School of Public and Environmental Affairs at Indiana University and the Indiana Geological Survey shows that one-fifth of the initial supporters exhibit a "NIMBY" or "Not In My Back Yard" response to CCS.

Indianapolis Canal Walk. Credit: Serge Melki/Wikimedia Commons

CCS is designed to mitigate climate change by capturing the heat trapping gas carbon dioxide from coal plants and storing it deep underground, allowing for a more environmentally benign use of fossil fuels, but critics say it may prolong the dependence on coal, divert investment away from renewable energy sources, and burden local communities with costs and health risks. The risks often associated with CCS include CO₂ leakage, induced earthquake activity, explosions, and groundwater contamination. Concerns over these risks have led to some NIMBY-like responses and contributed to the cancellation of several planned CCS facilities in Europe.

The study of communities in Indiana found that world views, perceived economic benefits from CCS, and concerns about safety are the major factors that determine public acceptance of siting facilities nearby.

Previous research suggests that acceptance of climate change and new technologies can be predicted by the "individualist," "hierarchical," or "egalitarian" worldviews conceptualized by Douglas and Wildavsky. Individualists support new technologies that may drive economic growth. People with a hierarchical worldview follow the opinions of experts and support technology if it is recommended by credible officials. Egalitarians see inequality as the largest risk to society. Because climate change is expected to disproportionately affect the poor, egalitarians are likely to support CCS. The location of CCS facilities will not affect this support.

The Indiana study authors found that respondents' worldviews are good predictors of CCS support and NIMBY reactions. As predicted, an egalitarian viewpoint was associated with increased likelihood of support for nearby facilities. Respondents with an individualistic worldview were significantly less likely to display a NIMBY sentiment, perhaps because individualists may view CCS positively as a market-based response to climate change. Demographic variables such as age, race, income and political views did not strongly predict respondents' attitudes toward CCS. The strongest predictor of support of CCS was individuals' expectation that it would generate economic development which overcame potential NIMBY responses for most participants.

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By Barbara Vergetis Lundin

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5. Energy-efficiency utility recognized in DC

Foreign buyers and private equity (PE) players returned to the deals table as buyers of energy assets during the third quarter of 2013, helping drive the bulk of merger and acquisition (M&A) activity in the oil and gas sector, according to PwC US.

While divestiture activity contributed 36 total transactions, representing 84 percent of total deal volume, a significant decline in midstream M&A activity coupled with a lack of mega deals, resulted in a decline in deal value for the third quarter of 2013 compared to the same time last year, PwC reports.

For the three month period ended September 30, 2013, there were a total of 43 oil and gas deals with values greater than $50 million, accounting for $16.4 billion -- a slight decrease from the 45 deals worth $37.6 billion in the third quarter of 2012. On a sequential basis, deal volume in the third quarter dropped by nine percent compared to the second quarter of 2013, with deal value falling by 46 percent during the same time period. Divestiture deals accounted for $13.9 billion in total deal value.

"After a brief pause in the second quarter, foreign buyers and PE players came back to the deal table in the third quarter looking for attractive assets to add to their portfolios," said Doug Meier, PwC's US energy sector deals leader. "Divestitures continue to drive deal activity. Acquirers continue to insist on performing broader and deeper diligence in order to get the right deal done at the right price. As a result, we continue to see increased demand for our divestiture services as sellers spend more time performing their own diligence on the assets to be divested before beginning the marketing process. While deal value declined, activity remains robust, including in the shale plays and with master limited partnerships (MLPs) - and PwC expects that to continue through the remainder of the year."

PwC noted that shale deals were also a major driver of deal activity in the third quarter, as 17 shale deals contributed $5.4 billion, or 33 percent of total deal value. In the upstream sector, shale deals represented 15 transactions and accounted for $5.0 billion, while the midstream sector saw no shale deal activity in the third quarter of 2013. The most active shale plays for deals with values greater than $50 million during the third quarter of 2013 include the Eagle Ford inTexas with seven total transactions contributing $1.7 billion, the Bakken in North Dakota with three deals totaling $1.8 billion, followed by the Utica with two deals adding $284 million, the research says.

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By Barbara Vergetis Lundin

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