Ruminations on the Deus ex Machina Approach to Climate Change

Aweh dearly beloved fellow ruminants & groupies in day 57 of no lockdown.

Period as an ivory tower academic 64 days

If we agree that tackling climate change is one of the most important challenges facing humanity it is appropriate to ruminate on how satisfying some of the dominant narratives are regarding how we will tackle this issue.

I will argue today that some of the dominant climate change mitigation narratives are using a Deus ex machina approach to the problem of climate change. So first a slight detour into what Deus ex machina means. Deus ex machina arose out of Greek theatre and is a plot device when a hopeless situation is suddenly solved by an unexpected occurrence like divine intervention. It is an easy way to get out of difficult situations and can often be a sign of “lazy writing” or used as a comedic device.

In the case of climate change it’s not yet divine intervention in the narratives but rather innovation, and the arrival of marvellous technological fixes which will be cheap and abundant in the future even if they are very expensive, impractical, and not commercially proven today. Three of these technological fixes are carbon capture and storage (CCS), direct air capture (DAC), and cheap green hydrogen. We shall call these the holy trinity. Let’s deal with each of these in turn.

CCS is not new, and it has been promising to bury lots of carbon dioxide for decades. Has it fulfilled its promises? Not so much. Here is a useful short video clip to summarise the progress of CCS. I do need to warn sensitive readers that this clip contains strong language, and micro and macro aggressions and so if you are easily offended, please skip this and retreat to a safe space and seek counselling. In 2005 the Intergovernmental Panel on Climate Change (IPCC) issued a report on CCS. Bold predictions were made in 2006 that 4.9 giga tons per annum (Gtpa) of carbon dioxide would be captured in 2020. The reality in 2020 is 0.04 Gtpa. When CCS took his report home to his parents at the end of the year the teachers said he needs to try harder. Now McKinsey is forecasting a more modest 0.5 Gtpa by 2030. I will wager anyone from McKinsey a good bottle of red wine that even this more modest target will not transpire in practice.  By 2050 the International Energy Agency (IEA) forecasts are for 7.6 Gtpa. Are these new forecasts better than the old forecasts? Of course. This time it’s different. The reason for the slow progress in CCS is very easy to understand. It is extremely costly and capital intensive to implement CCS and it is uneconomic. Finding suitable and safe sites to store large amounts of carbon dioxide for centuries is no simple matter either.

Even as we continue to pour carbon dioxide into the atmosphere a technological solution is shimmering on the horizon. There is a morning-after pill. Later we will obtain absolution for our sins by sucking the excess carbon dioxide out of the atmosphere using direct air capture (DAC) where giant fans will process a large fraction of the earth’s atmosphere and chemically extract the carbon dioxide. Isn’t that fantastic? What will we do with the carbon dioxide once we have extracted it from the atmosphere? Pay attention now. Carbon capture and storage of course. DAC is extremely capital intensive and expensive now but not to worry mass production and innovation will make it cheap. One does, unfortunately, have to worry about bothersome things like thermodynamics and I have expressed my views on DAC in an earlier blog. DAC will never be cheap or easy. Are there forecasts for how much DAC there will be in the future? Of course, there are. Who would have thunk it? The IEA forecasts 85 million tpa by 2030 and 980 million tpa by 2050. At a cost of $600 per ton of carbon dioxide captured a subsidy of $51 billion per annum will be required in 2030. Let’s say those clever technology developers halve the costs it will be a positive bargain at $25 billion pa. We also must still bury the stuff.  Any takers for a wager of a bottle of red wine for the 2030 target not being reached?

This then brings me to the third technology saviour of the holy trinity. Abundant cheap green hydrogen. Green hydrogen is also not new and has been in the wings since the 1970s and is now enjoying a 3^rd wave of interest with the first two waves having petered out. It is worth looking at this history.  The EU has recently committed to make 10 million tpa of green hydrogen and import a further 10 million tpa by 2030. The International Renewable Energy Agency (IRENA) has recently issued a report showing the current costs of green hydrogen are about ±$5/kg at the factory gate. This is equivalent to an oil price of $250/bbl. Moving the hydrogen across the sea to the EU is not a simple matter and you need to add ±$3/kg bringing the total cost to ±$8/kg which is equivalent to about a $400/bbl oil price. So, subsidies will be needed here as well. If we very conservatively assume a $3/kg subsidy is required on average the annual subsidy bill will be $60 billion pa. The hope is that as the technology develops and scales up costs will drop dramatically and by 2050 costs will have dropped to $1/kg and all will be well with the world. Will this happen? Improvements and mass production of the electrolyser stacks to produce green hydrogen are used to forecast dramatic cost reductions of the electrolysers in a similar vein to what we have seen with photovoltaic (PV) solar cells. Although this may happen a comprehensive study into green hydrogen technology costs by the Institute for Sustainable Process Technology (ISPT) has shown that total installed costs for a green hydrogen plant are currently in the range 1400-1800 €/kW. Importantly their analysis shows that more than half of the costs are for power supply and electronics, the balance of plant, and utilities and civil. These are all mature technologies much less likely to see radical cost reductions. Furthermore, transporting hydrogen, which has a low volumetric energy density, long distances is inherently challenging and will never be cheap or easy.

It is perhaps also interesting to consider the development of another energy technology that is now about 50 years old, the liquified natural gas (LNG) industry. This industry started in the early 1970s and has grown very significantly since then and there has been a large increase in the scale of the plants and ships. Have capital costs fallen dramatically? Not actually as an analysis of the costs of LNG has revealed. Is green hydrogen fundamentally different? To be kind it is highly uncertain that green hydrogen costs will be $1/kg in 2050.

The EU has however decided that green hydrogen is a saviour and appears to be willing to put hundreds of billions of dollars of subsidies into supporting it. Whether this is sensible time will now tell. If you are an engineer or other professional working in the energy space, you are often ultimately a beast of burden. If the customer has decided what he wants, even if you don’t think it is sensible you do what the customer wants. The EU is organising a big green hydrogen party with a very large free punch bowl. If you position yourself as a service provider, then it makes sense to drink as much of this punch as possible and this will no doubt happen. If on the other hand, you plan to be a project owner, then there are a set of very complex risks you will need to consider. If green hydrogen does not live up to the extravagant forecasts and promises now being made, then something will break in the future. Will the punch bowl be removed at some point in the future and spoil the party?  What will happen then?

I would like to suggest that the Dues ex Machina approach to climate change is indeed lazy and we don’t need a comedic device in this instance. There are more realistic alternatives involving direct electrification using renewable electricity. This is not to suggest that this will be cheap or easy, but it is based on known commercially proven technology which is also improving. Can we afford to go down blind alleys and devote subsidies to uncompetitive technologies? Eliminating subsidies once they are entrenched is also no simple matter. One can fully expect green hydrogen producers to claim hardship and fight tooth and nail to maintain their subsidies. The EU now appears to be embarking on a very risky and expensive experiment that may not end well.

I welcome all rational comments and criticism of the logic, numbers, and reasoning that are in this blog. I also wish to thank and acknowledge the many comments, discussions, and references I have received in the past couple of months from friends and colleagues.

Thank you for all the ideas and comments. I really appreciate them and please keep them coming.

Regards

Bruce