If Martin Keller’s prediction comes true, in 50 years the U.S. won’t be using nearly the amount of crude oil, refined petroleum products, natural gas or coal as the legacy energy industry has been supplying for the past 100 years – Part One

Renewable Energy could Replace Fossil Fuels

The National Renewable Energy Laboratory, Golden, Colorado

The National Renewable Energy Laboratory, or NREL, is a place you might label as the federal government’s showcase for all things energy-efficient and renewable. It is a beautifully sited facility, a cluster of passive solar structures that seem to have organically sprouted out of the base of the foothills of the Rockies, just west of Denver, Colo.

It was the site of SERI, the Solar Energy Research Institute, back in the days of the Arab oil embargo, when water pipes ran through boxy looking solar panels that were balanced on rooftops, long before photovoltaic cells were the solar industry’s claim to fame.

Some of the newer buildings at today’s NREL are LEED Platinum rated, with naturally lit interiors, very low-level auxiliary lighting and they employ technologies for energy efficiency you might only dream of.

Some NREL facilities are powered by the sun. Some of their heat comes from the process of separating hydrogen from water in generation modules on site. But plenty of electricity comes in from the grid’s fossil fuel-fired power plants, the power that NREL needs to run experiments and tests for about 1,200 scientists who are working to prove the viability of renewable energy from the sun and the wind and to make ethanol batches from throw-away plant materials like corn stover and switchgrass.

Renewable Energy could Replace Fossil Fuels for Power Gen by 2066

Martin Keller, Director, National Renewable Energy Laboratory

The guy who runs NREL is Martin Keller. He is a PhD and holds the title of director. Keller is new to that post, but he’s not new to the idea of innovation or renewable energy. Originally from Germany, Keller came to NREL from the same place that developed the original hydrogen bomb—Oak Ridge National Laboratory in Tennessee, where his group 3D Printed a Shelby Cobra automobile. He also spent time in private industry.

Oil & Gas 360® interviewed Martin Keller and a handful of NREL’s top scientists at the lab’s Golden, Colorado, headquarters, and by a telephone connection with two of NREL’s renewable energy economists in Washington, D.C.

We asked Keller to forecast a timeframe when he sees renewable energy sources overtaking fossil fuels. He said he believes it will happen much more quickly than people think—that it is already moving down that path, and that renewables will replace fossil fuels, at least for power generation, within the next 50 years.

Being in charge of U.S. government research for renewable energy qualifies Keller to put forth a timeline in answer to that question. His group’s front end data on the renewable sector is as bleeding edge as anyone’s. Of course the downstream effects of future policy decisions, global geopolitics, rates of global economic growth and energy supply and demand are all unknowns that muddy the equation, but the scientists working at NREL are some of the best in the world when it comes to researching and advancing new technologies, improving energy efficiency and striving to achieve standalone commerciality for renewable energy.

What drives Keller and his researchers—besides funding from U.S. taxpayers? This fact: they are on a mission.

Driven to Reverse Climate Change

Reversing climate change is the driving force behind NREL’s mission and the work that the organization and its scientists are doing. During our interviews, most of the scientists and analysts made references to COP and its stated intent to meet the carbon reduction goals set forth at the recent United Nations climate accords in Paris. As if the issue was decided long ago and the only remaining task is to accelerate the inertia to get the U.S. off of fossil fuels. The NREL personnel reference the COP goals like a soldier might refer to marching orders—like their job is to ensure that the U.S. meets the Paris-UN carbon goals.

Debating the efficacy of the science behind the climate change-driven renewable energy movement was not the goal of the interview. The goal was to get an idea of the current state of science and engineering behind the dominant renewable energy sources—wind and solar—to find out what technology is next up, and to get a flavor for the economics of renewables.

OAG360: How would you describe the work that NREL does?

Martin Keller: I describe NREL as having three pillars of excellence. One is analysis. For example, how can we help companies figure out what it would take to deploy hydrogen fuel stations, what is the penetration of electric vehicles, how can we help a city have more clean energy projects? So we do  analysis for clean energy.

The second pillar is what we will call deployment. How can we help work with companies to further decrease their cost of deploying clean energy projects, deploying solar, how can we help to increase market penetration.

The third pillar is that we are trying to work on innovation for the next big thing in clean energy and energy efficiency projects. So for example, coming up with new materials for the next solar panels or finding new ways to manufacture wind towers on site. So what can we do to fill the scientific gaps and increase innovation for clean energy.

I would argue that we have one of the strongest analysis teams; NREL is world renowned for its analysis. I think we’re doing a very good job on the deployment side, and I think we have to revitalize innovation.

Sometimes you hear people say that renewables are reaching grid parity*, so do we need to have more innovation? And my argument to this is that we are just at the beginning.  I always make a comparison to transportation when Henry Ford made the first car, and we just had the Model T, and we need to further drive through continuous innovation.

[*NOTE: grid parity is generally defined as the point when a developing technology will produce electricity for the same cost to ratepayers as traditional technologies—i.e., when the electricity generated by the new technology is the same cost as the electricity available on a utility’s transmission and distribution “grid”.]

OAG360: What’s the difference between what you were doing at Oak Ridge National Laboratory and what you are doing at NREL?

I feel that the mission [of NREL] is critical for our nation and also for our children and our grandchildren.

We need to continue to drive to develop a safe, secure and reliable energy portfolio which is outside of burning fossil fuels.

I see that in the U.S., we are very blessed discovering all this natural gas. I see that this is a tremendous transition fuel which buys us more time. It’s much cleaner than coal but it of course emits CO2, so in the long run I think we need to find a way to wean ourselves off of fossil fuel.

This said, I think fossil fuel will play a role in the future, but I think it will play a different role.  I think there is a lot of interesting chemistry in oil which we will continue to use in the years to come, but I think there will be different ways and cleaner ways to produce electricity.

So my view is that, fifty years out, I don’t think that we would burn natural gas or oil to create electricity.

OAG360: What do you think will be the primary fuel sources for electric power generation, if that’s true?

MK: I think it will be a mixture. I would see that there is a combination of renewables like wind and solar. We have another study out that we increase the amount of potential by rooftop solar; and we have so much wind potential that we could by far exceed electricity production beyond what we’re using right now.  And there’s I think an increase in geothermal. It’s all about bringing in this idea of renewable energy and then there will be carbon molecules which we still need, in my opinion, for driving trucks or flying a plane, of which a big portion will come out of renewable biomass which is not linked to food. So suddenly, I think we are seeing a huge change in our energy mix.

There are a lot of different models out: when we reach 2050 how much natural gas is still used, or coal? But my argument is—what will be the scenario to not using any fossil fuel in the future. We’re not there yet. So you need to work out the technology perspective of how you get there. I think as a national lab you need to ask this:  what are the big step functions in science and engineering?

We should have the scenarios to see what the world would look like if we could not afford anymore, not meaning afford on a cost basis, but rather based on environmental changes, can we afford to go down the path of using fossil fuel to create electricity?

And then you say ‘what are the technological gaps to achieve this’?

You can see how far we have come—look at Germany: on good days they are reaching eighty five percent from renewables—when the wind blows in the north and the sun shines in the south—the average is something like 30%-35%. And of new energy generation worldwide, something like 90% is coming from renewables, one of the agencies reported recently.

Look, I’m not going to say, ‘well let’s shut down all fossil energy tomorrow’.  We have to have a long term transition plan. So how do we make this happen? Discovering all this natural gas will give us the flexibility over the next twenty or twenty-five years to really move it down this path. That said in my view it would be a mistake to say ‘hey we have all this natural gas now, don’t worry about renewables—we don’t have to continue to fund research and innovation’.

No, I think we have to continue this [renewable energy innovation] because if we’re not doing this in the U.S., other nations will do it. I think we are the best nation at innovation.

Here’s an example. Look at fracing: the benefits this gave us. As you know the technology came out of some really good research over many years. And now it’s brought us tremendous possibilities and a lot of energy security where we might not rely so much on the Middle East to provide us with fossil energy.

So this shows you the power of research, but now it cannot stop. We need to look ahead. This is what we [NREL] need to do as a national lab.

OAG360: What percentage of the research for renewables is coming out of NREL versus the universities?

MK: It’s a collaboration.  There is a lot of research going on in at the universities and a lot more on the foundational side. It has to be done as a collaboration; NREL alone cannot do this. We are working very closely with universities from MIT to Stanford to Georgia Tech and of course Boulder and C.S.U. So we need to be a part of the research effort.

When you look at Washington, there is a different view of what government needs to do in research. I worked 10 years in industry and for the last 10 years at the national labs. I know both worlds very well. My view is that the government should not do research which should be done at the companies. But we also have to be clear that the companies will do incremental improvements, because they have to follow the shareholders and they need to look at the profit line. They will not make step functions, because it’s too risky for businesses. This is where government plays a significant role.

We are the best nation in the world innovation that’s what makes us so great. The research is bringing the brightest minds into our country and driving innovation, and this makes the U.S. great.

We also need to continue to drive research on developing the next generation of clean coal plants. I think it’s absolutely important. If we would say ‘we just do renewables and we don’t fund the research on clean coal’ it would be a mistake.

OAG360: Are you doing research projects having to do with clean coal here at NREL?

We are not doing much on carbon sequestration. Other labs are. Sandia has a project there. I think it’s important.

The last let’s say hundred fifty years or 100 years, we had a very singular energy source. That time is over. It will be a diversification, and it will be everything from solar to renewables to perhaps clean coal to nuclear: we need to look at all different scenarios.

OAG360: Clean energy—renewable energy—and the oil and gas industry: where do they intersect?

MK: It’s a good question. A lot of people would argue that there is no intersection at all. That we’re in very different camps. My view is that the world normally is not black and white, it’s always gray.

I don’t know in the long run how much can oil and gas and also coal will play in electricity generation. When you look at all the environmental changes we’re seeing. Look at some of the facts. The fact is we’re changing our environment.

And so when you go down this path, what does this mean to us? In life you’re looking at different different possibilities. What if 95% of the scientists are correct—showing that the changing environment is linked to burning fossil energy and fossil fuel. Let’s assume they’re right. What is our actual plan, what are we doing?

Look, I’m not saying—when I look at my life, we had a farm in Knoxville and I had an F-350 to pull the horses, so I want to enable my children the same freedom that I have. This is so critical: what do we need to do that our children and their grandchildren can have the same freedom that we have—hopping in a car, driving wherever they want, flying wherever they want? How can they afford this in the future, based on our globe?

So when you look into this as a big picture, I think we need to explore all different opportunities. Sometimes when you listen to people who are so in their swim lines and they’re putting this wall up and don’t want to look at any other scenarios, and I think that’s not right: we need to look at all different scenarios. When you look at history, the more options you have the better off you are in the future.

OAG360: Do you think renewable energy will replace fossil fuels?

MK: I tell you what I really believe is that it depends on if we decide how and when we want to do it.

Because when you look at current technology and I look at the trend to where it is going, we have the technology to really go to deep penetration of renewables on our electricity generation. But then at the end, it’s always policy, it’s markets. It’s a chicken and egg problem: suppose we would say ‘okay, we will do this [move entirely to renewable energy] and we accept that the electricity cost doubles’. But then if China will not do this, then we are cutting ourselves out of future market share and manufacturing jobs.

If we look at what we have with our natural resources, this is the bank account that our grandparents put down and we are slowly spending our bank account. And I think we have to be very careful how we are spending it. Because we might argue about that we still have enough resources let’s say for another fifty or a hundred years. Do we think that the world ends in hundred years? What about 200 years or 400 years? So what is the long term goal?

We need to look at all these different scenarios, from how we could improve the way we are using coal and gas all the way to nuclear, perhaps to fusion—who knows—in fifty years or a hundred years, I don’t know, but diversity is always good.

In the long run I would predict that there is a future where we will not burn—let’s say it differently— that we are not creating CO2 by producing electricity. Perhaps somebody comes up with this revolution to create a way to take CO2 out and deposit it and it’s cost effective. It could happen. This is the reason we need research. We have to get the smartest people into our country to fuel research and innovation.

It depends on ‘what do we as a nation want to do’?  We are in this mindset of ‘use it once and then you toss it’. [NOTE: Dr. Keller referenced an example of a chainsaw where a small part broke and it was cheaper to throw out the chainsaw and buy a new one than to pay to have it repaired]. Is this a long term sustainable way to live on our planet? It is a different topic but it all comes back to the topic of long term, sustainable living.

OAG360: Where are we in the process of governments imposing a carbon tax or other fees for emitting carbon; where do you think this country is going to go with that?

MK: I have the feeling that we are very divided on this topic. As a scientist I am not looking to policy and politics to see if we need to put a price on carbon or not. My interest is to see what can science, engineering and innovation bring to the table that allows you to produce electricity so cheap [that you now change the question].

I have a very different opinion than some of my colleagues who argue, ‘so what would happen if you could produce electricity at a tenth of the cost of what you doing right now — with renewables?’

People answer, ‘well this would be a bad thing because people would use more electricity’. And my argument is ‘why do you say that?’ Because, if you look into the future and you see that electricity is a the limiting factor anymore, suddenly then water is not a limiting factor anymore, because we have enough water planet but most of it has too much salt. We have enough land on our planet but most of the land is too dry.

So what’s the link between what salt water and dry land? Electricity – to desalinate water.

So suddenly all the forecasts looking into the future [are different]. You can look at energy and food. They’re coupled: if energy would be no cost or cheap, then suddenly water would not be a problem, which means we can do a lot of irrigation. Then you know food is not a problem because we have enough land.

So when you if you suddenly decrease the cost of electricity, then it opens up so many things for the long term vision for our planet.  People would say, ‘this is completely a dream, what are you guys talking about?’

It’s true that at the moment we are fixed on the current grid parity. But what if somebody comes up with a completely revolutionized [energy model], like the automobile was to transportation. We’re not talking about horse parity anymore. It’s not ever discussed because as soon as you had the Model T, [the view of transportation changed].

In the future, if we create a technology which enables us to produce power in the way that’s a game-changer –  that’s a step function.

So what happens if somebody comes up and completely revolutionizes oil and gas? Is it happening right now? No. Will this happen in the next 20-30-50 years? I don’t know.  I think it would be a transition, like we said. But we keep innovating, and sooner or later I think we as humans will find solutions to overcome our problems.

OAG360: Such as when the industry discovered horizontal drilling and hydraulic fracturing could extract oil and gas from shale?

MK: That is exactly my point. When you look at all this natural gas. Nobody saw this coming – how quickly this happened. It was a steam roller. This was a step function for this industry – a game changer. My point is we discovered this natural gas and then gas prices plummeted. So people say we don’t have to do any other innovation because now we are set for the next thirty years.

But do you remember the first oil embargo when everybody was rushing into renewables, and then oil prices came down and then they said you don’t need [renewables].

This is what I mean:  we need to create a long-term energy view. It’s short term, and this has to be long term: what is our long term energy policy? It fluctuates with the cost of crude oil. And we need to go beyond this.

OAG360: How would you characterize the oil and gas industry?

MK:  Extremely conservative.

Why did a lot of the big oil companies have this long term issue with bio fuel? It is because they centralized over the last fifty years. All the huge refineries, what they’ve done is they centralized all this and technologies like bio fuel by definition decentralized everything. There is a radius [that limits] how far you can afford to transport your biomass to a biorefinery. So by definition you are limited in size, meaning the model would decentralize.

So when I talked to some very high level people in the oil industry, their biggest worry was that ‘now we have spent all these billions to centralize [refining] and now you’re telling us to decentralize’. Look I see their point; I understand it.

So then then if you go to the next big thing around energy production, there is a possibility to decentralize.

So what happens is this: every house would have a solar panel on the roof top and produces some electricity, and then you link this to reginal wind farms. You decentralize electricity generation from a big coal plant gigawatts, down to much more distributed generations.

It’s a change in the business model – it’s like going from the plug-in phone to a cell phone.

The interesting thing is, in history, companies come and go and technologies come and go, and I think for the gas and oil industry I think there will be companies who adapt and move to certain new business models, and others don’t and they disappear. That’s the nature of innovation.

So when you ask what is the gas and oil industry, I think right now they are playing a critical role, because we cannot turn it off tomorrow. Will they play a critical role in making the transition?  It will be interesting to see.

Look for Part Two of our interview with Dr. Martin Keller next week.

U.S. Power Generation by Fuel Source - 2015

In 2015, the United States generated about 4 trillion kilowatthours of electricity, according to the EIA. About 5% of the electricity generated was from wind and solar.

Major energy sources and percent share of total U.S. electricity generation in 2015:

Coal = 33%

Natural gas = 33%

Nuclear = 20%

Hydropower = 6%

Biomass = 1.6%

Geothermal = 0.4%

Solar = 0.6%

Wind = 4.7%

Petroleum = 1%

Other gases = <1%

(Source: EIA –based on generation by utility-scale facilities)  

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