TCS Daily

Legislature Should Get Real (Time Energy Pricing)

By Pete Geddes - January 22, 2009 12:00 AM

As Montana legislators begin another session, they'll no doubt consider energy policy. Rather than trying to pick an energy winner, e.g., wind power, they should focus on a far simpler task: crafting policies that promote energy conservation. This will be easy—but only if consumers know the true cost of their energy use.

Today's energy regulations often mask real costs. While this advances short-term political agendas (why else would we have them), over the longer term it has pernicious effects. Here's why. Prices carry information that guides decision-making. When electricity prices are distorted downward, conservation and innovation are discouraged. The legislature should encourage socially responsible ways to decrease energy consumption.

If consumers don't face the real cost of using electricity, especially during peak hours, utilities build new power plants for short-lived (sometimes only an hour or two a day, a few days a year) spikes in demand. Consumers pay for these plants in the form of higher electricity prices. Further, the environment suffers, especially if the energy comes from a new dam or coal fired power plant.

Ideally, the retail price of electricity should fluctuate hourly. This would foster the adoption of smart electrical meters that give consumers and their ever-smarter appliances real time information about the value of their energy use. (It would be socially and individually better if dishwashers and clothes dryers were run during hours of low demand.)

In 2004, California ran a pilot project giving 2,500 customers smart meters. The average customer reduced his demand during the hottest summer hours by 13 percent; this in response to peak prices five times the standard rate. And customers who had smart thermostats (which automatically raise the temperature two or four degrees during high demand) reduced their consumption about 27 percent.

I'm less sanguine about the legislature's 2007 renewable energy portfolio standard that mandates 15 percent of Montana's power come from renewable sources by 2015. Advocates claim the U.S. can reliably and economically generate 20 percent of our power demands with wind. Texas, the nation's wind power leader, generates 2.9 percent of its electricity from wind. Their experience highlights problems, especially a lack of transmission capacity and power variability.

The former problem plagues Montana, a state the size of Japan with less than a million people. (Even in Montana, most people don't live where the wind blows best.) To help overcome our geographic isolation, Governor Schweitzer is pushing for the construction of a new 214-mile transmission line linking Montana and Alberta. (Northern Montana and Southern Alberta are two of the windiest places in North America. Montana is rated number five in the U.S. for wind power potential.)

Wind variability is another serious problem. Wind farms tend to produce the most energy when it's not needed—at night and in the spring and fall, periods when demand is low. The hottest, highest-demand days of the year occur when wind's contribution is lowest. Last February an unexpected cold front caused Texas' winds to slow. As power ran out, backup generation proved inadequate. To protect the grid, operators interrupted large industrial and commercial users, an expensive fix.

Given the unreliability of wind, it must be backed up, typically with natural gas fired plants that can quickly ramp up (and down) production. This adds significantly to the cost of wind power. The wind may indeed be free, but harnessing it is not. Cambridge Energy Research Associates report that once these costs are counted, the price of averting CO2 emissions by building a wind plant rises to $67 a ton. Other emissions-reduction strategies, such as increasing efficiency at current electrical plants, cost between $10 and $30 a ton.

When wind energy becomes affordable the government need not mandate that people buy it. We should avoid a renewable energy portfolio that rewards alternative energy suppliers unable to attract capital investment or consumer demand on the merits of their product.

Real time pricing and smart metering will generate incentives for conservation. Price signals work. Give prices a chance.

Pete Geddes is Executive Vice President of FREE.
This article first appeared on


Someone who sees the problem
Which isn't hard for those of us who live in Montana; and pay attention to the facts.
Wind energy simply isn't a viable alternative, at least as things presently stand. Solar has similar issues. this does not mean we should ignore them, it just means that we need to look at increasing production of traditional sources while we try and bring the green alternatives into the fold. The future is going to require the uses of a little of everything and a slow reduction in the use of oil and coal.
Drill baby drill… But don't stop work on the alternatives because we will need them as well.

No Subject
Sounds like there should be a market opportunity for someone who can store power (energy) and return it efficiently. Store cheap power when there is an excess and return it when the price would spike ...

Now yer talkin'
One big limitation for wind is that civilization usually grows up very far away from the windy places.. so that transmission requirements put a damper on any wind solution.

The main problem, aside from the fact that the wind doesn't usually just blow during peak usage hours, is that electric power decreases with distance.. by a very pronounced degree. It's not efficient to draw West Coast power from eastern Montana.

A good portable store of energy would seem to be the right approach.. in a word, a battery. The only idea I've seen that has traction is cracking water to make hydrogen. True, you have to have a lot of water handy (something Montana doesn't have) and the cracking process itself isn't that efficient. But if the resource is otherwise to be wasted, even half a loaf is better than none.

Other ideas in the mill now: geothermal from subprime sources and tidal power.

The tidal variance in the Bay of Fundy alone is about 48 feet, and over every tidal cycle more water moves in and out of the bay than in all the world's fresh water rivers (~100 billion tons). The rest of the Maine-New Brunswick coast still sees tides of around 26 feet. Plus, very close to the east coast megalopolis.

Deep-drilling geothermal also holds a lot of promise. There are a number of locations where this power to boil water can be tapped.

Note that all these approaches would come into prominence if we were to follow the suggestion made by the author.. and level the playing field vis-a-vis energy subsidies.

Just getting rid of oil & gas depletion allowances, and requiring developers to pay realistic royalties when they drill on federal property, would go a long way toward revealing the true costs of fossil energy sources.

The down side to all this, of course, would be that every voter's electric bill would take a very bad bounce.

Small nukes
" Like a battery, the HPM is a compact, transportable unit with no moving internal parts. It’s not to be opened once distributed from the factory.

Once sited safely in its underground containment vessel, an HPM is monitored but does not require a battery of operational personnel.. It just quietly delivers safe, reliable power – 70 MW thermal or 25 MW electric via steam turbine – for a period of seven to 10 years.

The core of the HPM produces energy via a safe, natural heat-producing process that occurs with the oscillation of hydrogen in uranium hydride. HPMs cannot go “supercritical,” melt down, or get “too hot.” It maintains its safe, operating temperature without the introduction and removal of “cooling rods” – an operation that has the potential for mechanical failure.

A good bit bigger than the typical consumer battery, HPMs are, however, just a fraction of the size of conventional nuclear power plants. About 1.5 meters across, the units’ size can be compared to a deep residential hot tub. It’s the size, along with the transportability and ease of operation, that make the self-contained HPM such a desirable choice for providing consistent, reliable, affordable power in remote locations.

Large conventional nuclear power plants are a necessary component of the global solution to the climate change problem. Nuclear power, including that provided by the HPM, emits no greenhouse gases. And, pound for pound its fuel component – uranium – delivers more actual energy than any other fuel available to today. Because its fuel packs more power, less is required. Therefore the mining of uranium is more efficient and causes less damage to the environment than traditional hydrocarbon fuels such as coal and natural gas. Nuclear power is also the safest, most regulated and protected form of energy on the planet today. No other industry is as closely monitored and today’s nuclear technology is constantly evolving as researchers strive on a daily basis to make it even safer.

Nuclear power will continue to play an important role in the global solution to the climate change problem. Now, because of Hyperion’s unique technology, the benefits of affordable energy from big power plants are available even when and where large, conventional nuclear power plants are not appropriate. "

ramp up
While gas plants can be ramped up and down quickly (at least compared to other types of plants), output from wind and solar generators can, and do, change more quickly still.

Additionally, while gas can ramp up quickly, it can't start from a dead stop quickly. So the gas plants must be kept idling all of the time, even when they aren't needed. Which of course consumes a lot of fossil fuel.

Ramp up and storage
Which means that a storage device, even one that can only hold a couple of minutes of load, may be even more valuable.

Get real please
Oil, gas and coal producers already pay those royalties (whether you consider them realistic or not) as well has well-head taxes, extraction taxes, increased property taxes and the at-the-pump gas tax. Yes, there are also some allowances, but the playing field is already leveled. How about we do away with all the taxes, fees and royalties (which winds farms are already not paying) and see which is really the most cost effetive.

As for Water in Montana; you are forgetting the Marias, Yellowstone and Missouri Rivers in CENTRAL (Where most of the wind farms are going up) and eastern Montana. there is also stored water in the area at Ft. Peck and Tiber. I will grant that a costal area with sea water available would be the best location; but your point is to put the hydrogen extraction where the electricty is.

Beacon power: flywheel storage
"The Smart Energy Matrix™ is a design concept for multi-flywheel-based energy storage systems that would provide a long-term sustainable solution for frequency regulation on the electricity grid. Based on Beacon’s Patented Co-mingled Rim Technology® (PCRT) flywheel design for robustness and reliability, its performance specification calls for providing megawatts of reliable and responsive stored energy to meet the growing needs of grid operators. The core flywheel component of both Smart Energy Matrix™ systems will be a new, 4th-generation 25 kWh/100 kW model, optimized to perform frequency regulation services. Its patented long-life, low-maintenance design and highly cyclic capability is intended to deliver a clean, emissions-free, cost-effective alternative to conventional fossil fuel-based frequency regulation methods."

On the other hand, we now have to build three energy devices

1) Wind/Solar
2) Gas power to take over when wind isn't blowing, sun isn't shining.
3) Third device to carry the load while the gas power ramps up.

Removing supports to soon
Pauled, I hope I may be mistaken in getting the impression you're just finding fault with my comments because it's me saying them. These issues are not all that controversial.

Okay let's call it central Montana. Anyway, it's the great big, flat, windy part. Yes, I'm sure there are a couple of rivers. But it's semiarid, shortgrass prairie from what I've seen (the open range between Billings and Wyoming).. and doesn't have a drop of water to spare.

Certainly not enough to act as a feedstock to a large hydrogen making operation.

And the Yellowstone is down by the Madison, SW Montana.. while the Missouri is in the eastern portion of the state. The Missouri headwaters are remote from users, and the river's not big up near the source. Yellowstone is, of course, mountainous and not suitable for wind. Come to think of it, all I saw in the center of the state was a dry ditch or two.

Re subsidising wind power, it's still a young industry and working on economies of scale. Now is not the time to let the baby walk in traffic on its own. Remember: remove subsidies when industries become mature and established. Retain them when they are young and still developing.

The time will come when we'll want to take off the training wheels. But not just yet.

At any rate I see you've traded weather with us for a day or so. Weren't you folks up around 58 last week, the day we were enjoying 18 degree weather? Pretty nice, eh?

Something like that
It depends on what part of the state. Where I'm at our highest temperature was 44; now it is 4 above (up from 13 below last night). It was much worse in December when the overnight lows tried to get to -40 (Only made -37).

The Missouri is a pretty big river from Helena all they way to Minnesota. The Yellowstone (Billings is considered pretty far east and south in Montana and there is only one wind far in the region, about 100 miles further west) runs through about 1/3rd of souther Montana.

Ft. Peck is up in the flat dry land you speak off and there is a wind farm not too far away. The Marias is well to the east and Tiber Reservoir is pretty close to another. (25-50 miles in both cases I believe). The Milk river runs right through the Havre area and is close to another wind project. None would see considerable loss by running electrict to the river or lake. Each (Marias and Milk) has a flow volume of 400 cfs or better at least six months of the year and seldom drops much below 200 year around. the Lakes would be the best bet. Ft. Peck is measured in millions of acre feet. Tiber is an order of magnitude less but still holds a lot of water (around 700,000 acre feet).

In fact, in terms of stream flow, there is quite a bit of water here, there are also a lot of miles between watering holes. But we aren't talking delveopment or livestock; this is about hydrogen production. How many gallons a day average would a moderate size plant use? Especially when you consider the wind electricty output?

Still, a coastal area is ideal in my opinion.

As for subsidies, you set the scale. I just pointed out that the scale is already tilted. I didn't not say we shouldn't help development of alternatives, just that they are already getting help while oil, NG and coal are getting hammered with taxes and fees already.

That is what capital is for
It is wealthy people who invest their profits into the capital needed to create new industries, if they are viable, and if the government doesn't get in the way by 1)taxing the profits and 2) subsidizing industries.

The Wind Production Tax Credit
The scale is already tilted? Take a look at this:

The PTC changes every year.. but for 2004 it was only 1.8 cents per kWh ($18.00 per MWh) of electricity produced and sold during a taxable year. The industry wide average electricity cost per kWh is 11.86 cents. So let's say the PTC is worth 15 cents on every dollar of electricity sold.

The calculation for the oil and gas subsidy works a little differently. It amounts to fifteen cents taken off every dollar of gross profit. So we're comparing gross to net. Still, I think you can see the two subsidies are very roughly comparable.

If you want to keep the playing field level you have two choices. Either we can keep the wind PTC and mineral depletion allowances, OR we can eliminate both.

Lots of luck with Congress, getting rid of the depletion allowance.

BTW, when I was working I also had a resource that was being depleted.. that would be my own working life span. Did they allow me to take an allowance, based on a fifty year expectation of being fit enough to work?

A lot of water
I guess we're down to the difference between the perceptions of easterners and westerners. For you a pond holding 700,000 acre feet has a lot of water. I'm guessing that much wouldn't go all that far if you were trying to grow wheat using spray booms. But admittedly, I know very little about growing wheat in Montana.

What I'm going on is that you live in very, very dry country.. and people are trying to sell crops grown on it. There's not much water to spare.

I used to work along the Missouri, up by Mobridge, SD. That was a long time ago, and the Oahe wasn't there yet. But the river looked like a trickle to me, even that far down stream. As I recall, once the dam was completed it took the river a few years just to fill up the reservoir.

One approach that might be useful would be to put the wind farms offshore. Not so many NIMBYs, out to sea. And all that water's right there. You could barge the hydrogen back to shore. The main design constraint would be how to anchor your wind towers to the bottom.

NIMBYS: Kennedy, Cronkite, Chomsky....
"A benchmark in the country’s efforts to expand clean energy was reached today as the nation’s first proposed offshore wind farm -- proposed in Nantucket Sound -- received a favorable final environmental review from a key federal agency.

Calling his agency’s report “ a milestone,” Minerals Management Service Director Randall Luithi said in a telephone interview this morning that Cape Wind could become "a bellweather for many offshore wind projects to come.""

"It has been a tortuous journey for Cape Wind and its president Jim Gordon. The project’s major opponent, the Alliance to Protect Nantucket Sound, has endeavored to halt the wind farm every step of the way since the regulatory review process began November 15, 2001. The alliance is automatically dismissive of any approval Cape Wind receives from the federal and state agencies charged with its oversight."

"Senator Edward M. Kennedy
Congressman William Delahunt
State Senate President Therese Murray
State Senator Robert O’Leary"

real cost of anything
V.I. Lenin recognized this problem too and is said to have quoted something like: "even if communism is able to take over the whole world, we'll have to leave at least one capitalist country in order to know what anything costs".
It's true that in an economy that is so manipulated by government interference it's hard to know the real cost of anything. The US is going the way of the old Soviet Union, with this same old predictable result.

Decentralized power generation, another opportunity to deregulate
"Congress tried to open competition a little bit in 1978, and some independent power companies began to develop on-site generation wherever they could find ways around the monopoly regulation. One author (Casten) was one of those early pioneers, working to develop more efficient decentralized generation since 1975. This article summarizes extensive research into the economically optimal way to build new power generation in each of the past 30 years, given then available technology, capital costs, and fuel prices, and concludes that the continuing near-universal acceptance of the “central generation paradigm” is wrong. The result is a skeptical look at the world’s largest industry—the electric power industry—with surprising conclusions. "

"Governments guide the electric industry with many rules, mandates, and limitations that collectively block competition and innovation, thus causing excessive costs and fuel usage. Small regulatory changes may nudge the power industry to slight course corrections, but are unlikely to break the central generation paradigm and optimize generation.

Immediately eliminating all current barriers to efficiency would cause the electric power industry to make better decisions. Each government could examine every rule that affects power generation and delivery and ask whether the social purpose behind that rule still exists. Then each state or country could enact comprehensive legislation that we term the Energy Regulatory Reform and Tax Act (ERRATA), to correct all of the mistakes in current law. ERRATA would deregulate all electric generation and sales, modernize environmental regulations to induce efficiency, and change taxation to reward efficiency. [11] Sadly, ERRATA legislation probably will not pass except in response to deepening environmental and economic pain. "

"WFES: 'How cost efficient is it to have a decentralized power plant? Does the build out way the cost benefit?'

W: 'The answer is “it depends”, but in most cases where the load centre is at a distance, it is easy to empirically show that decentralized power generation is more cost efficient. New generation cannot be added on without addressing its impact on transmission and distribution. Typically this means capex on both the transmission lines and on substation upgrades. This also typically means system losses on both transmission and distribution. By effectively “cutting out” the transmission requirements and generating at distribution voltage levels, a decentralised power plant generating at the load centre can be more cost effective compared to the traditional centralized power plant with power being stepped up, transmitted across large distances, and being stepped down once more. The key is to measure the cost at the delivery point, not at the generation point.'"

"WFES: 'What new technology has Wärtsilä launched or new services offered lately?'
W: 'The core of Wärtsilä’s offering remains the same – power plants based upon reciprocating engines. What we are offering are new solutions based upon the existing technology of reciprocating engines: High simple cycle efficiencies, fuel flexibility – the ability to run on a wide variety of gases (pipeline quality, direct LNG injection, flared associated gases) and a wide variety of liquid fuels (heavy fuel oil, light fuel oil, crude oil and liquid bio fuels), operational flexibility, fast dispatch response, zero water requirements for cooling, part-load operations, reduced CO2 foot print, and ancillary services support. These are all features that allow Wärtsilä to offer probably the most flexible power plant on any grid system. "

Natural gas electrical power generation systesms are available for home use which will use natural gas in summer to power home AC systems and to put power back on the grid.

"Honda’s small household cogeneration unit combines the GE160V—the world’s smallest*2 natural gas engine—with an efficiently laid-out small, lightweight generation system employing Honda’s unique sine-wave inverter technology to create a compact unit suitable for home use. (The dual-purpose unit realizes heat output of approximately 3kW and electrical power generation of approximately 1kW.) The unit realizes an overall energy efficiency of 85%. On this occasion, the cogeneration unit has been recognized as the world’s first practical cogeneration unit for home use.

In Japan, the cogeneration unit has been available through natural gas companies since March 2003. It is estimated that it will operate for around ten hours per day in an average Japanese single-family dwelling. Use of the unit is expected to result in approximately a 30% reduction in CO2 emissions compared to 1kWh of electricity and 3kWh of hot water generated using thermal power generation*3 and a hot-water heater*4."

Sleight of hand
This is one of those occasions when I really agree with you. In our age the true face of the machine that puts food on our plates and gas in our tanks has become so defaced with disinforamtion, it's nearly impossible to figure out the true cost of anything.

Lenin is pretty passe. Let's look for a more current example.. cell phones, air bags, digital cameras, GPS and antilock braking systems, computers, video games, pacemakers, hearing aids...

The tantalum, niobium and colombium required to make all these essential little miracle gizmos work mostly comes from eastern Congo, about which we occasionally get a glimpse of the news. Since 1995 an unreported number, but probably between five and six million human lives, have been lost in today's greatest holocaust.

The prize to be won? Mineral wealth guarded by no nation, and fought over by rapacious contenders whose names occasionally pop up in the newspapers. A few of the names: Museveni, Kagame, Nkunda, Kabila.. people we find hard to distinguish one from another. But there are other names, that never get in the papers.

Here are a few of the brokers whose cash helps fund the conflict:

But we can't blame them directly. They're all third or fourth parties to the conflict. The big movers are in the upper management levels of outfits like Bechtel and American Mineral Fields. They work the deals with the heads of state that allow the conflicts to continue. And they hire the security that protects their own interests in what is otherwise a lawless preserve, protected from the coming of order.

Once all the blood minerals have been taken and sold, neglect will come to that part of the world. And with it, in time, hopefully a sort of peace.

So what, then, is the true price of a Sony Playstation II? In human life, it's hard to say.

If a Damn, sorry Dam is available
You pump water back into the resevore then generate electricity. I bet right now it is more efficient then hydro-eletrocis

O.k., here's the deal
We agree that a costal area would be the best. I would bet there are logistical nightmares with too far off shore though.

While both Ft. Peck and Tiber were built for potable water for development and agricultural irrigation, neither has been much used for the agricultural end. Most wheat farming (and several other similar crops like barley, oats and oil seeds) is done "dryland". Present varieties of wheat can produce 80 bu./acre on 10-11 inches of rainfall a year; especially if 6 of the 10 come in May, June and early July. The average rainfall around here is between 10.5 and 13 inches. (semi-arid desert)

But the streams don't rely on that rainfall for much of their flow. Most of that comes from mountain snowpack. Even in the bad years, the Lakes aren't down much comparably. (Though several years in a row, combined with over volume releases for Mississippi river barge needs, did drop Ft. Peck quite a bit in the 90s.)
3/4th of a million acre feet is a lot of water. I've been to the east and there are no lakes near that level in your neck of the woods. It is (approximately) 30,492,000,000 gallons. Probably a bit more than a moderate sized hydrogen plant would need. 400 cfs is approximately 1,261,440,000 gallons a year. Again, probably 10 times (at least) what a moderate sized plant would need.

The Missouri a trickle? You need new glasses. As compared to what? I believe the Mississippi is the only U.S. river with a significantly larger annual flow volume and only a couple of others rivers are in the same neighborhood (one or two may even be slightly larger, but not much).

The point is this; I'm not talking making billions of cubic feet of hydrogen here. I'm talking a few of moderate sized plants near the wind production. I do believe the water exists here for that. Any bigger scale and you would need the oceans to do the job. Which, by the way, is what we agree on. Best case for wind to hydrogen is the coastal areas (or off shore).

I bow to your powers of research
..and I'm impressed with the fact that you still know how to crack a book to back up your answers. Around here, that's rare.

Okay, I have in mind a local lake, a fairly small one, Lake Jordan. With a capacity of roughly 100 million gallons, your impoundment up at Fort Peck & Tiber would be 300 times larger. I'm impressed.

And if you're telling me they're not using it much I have to believe you. After all, your local expertise is measured in decades, where mine is measured in weeks.

However I do have to pipe up and say I never said the Missouri was just a trickle. I believe there is even a song about the wide Missouri. What I said was that up around Mobridge it looked like just a trickle. But maybe that was just in a summer month.. I was there in June and July.

So okay, you could site a hydrogen generating plant there and no one would miss the water you made disappear. At the coasts I think most areas with wind there would still be a considerable NIMBY factor from people with expensive beachfront homes. I'm thinking twenty miles out to sea, with stronger, unimpeded winds. You lay a pipeline on the seabottom to bring the hydrogen to railhead.

Technical challenges, to be sure. But we've done impressive things before in surmounting obstacles. And our natural gas pipelines are a piece of cake.

To every thing there is a season
Marjon, you're the original guy who's read chapter one and thinks he understands the whole book.

Every business follows the same course. There is an initial startup period where it's just an idea in search of seed money. And if the plan is a viable one, that leads to a mature phase, where the business is making a profit and is in need of no more seed money.

Coal, oil and gas are examples of mature industries. Wind, solar and geothermal are examples of startups in need of seed money. A sensible plan for the nation's energy industry would involve putting funding into these potential businesses, ones that don't yet show a profit. It would see no need to squander resources on businesses that are already mature and making a profit.

Yet under capitalism these priorities are reversed. Everyone wants to invest in a company that's already making money, and so doesn't need theirs.. or even have a use for it. And no one wants to put money into a venture that may or may not pay off some day, but desperately needs capital right now.

So in our system, all but an intrepid few among our investors hold back, while infant industries are in need of capital. And only invest after those ventures have gotten off the ground.. and thus are viable and can stand alone without training wheels.

The phrase for this, in my mind, is "misallocation of scarce resources". Scarce, because the total amount of investment capital should remain limited, to avoid inflationary tendencies.

Here's another billion dollar idea... you can have for free.

I don't much like your idea that we should "drill baby drill". We have limited oil and gas under our feet. And maybe ought to start thinking we should keep our own strategic reserves for a rainy day. The best and cheapest way, of course, is to keep them in place.

We know that the total amount of natural gas and oil is finite.. and that we've used up, worldwide, about half of it already. We also know that as existing producing wells get tapped out it will cost more to raise the gas and oil, imposing a market discipline on consumers.

It's not just because the atmosphere is choking on fumes (which it is) but because supplies are being inexorably depleted, that we need to, in the author's words, be "crafting policies that promote energy conservation". And there's only one way to do that.

Let the pump price rise naturally. Just use foreign fuel sources, while they last. Then when the world is running out of fuel, we still have our reserves-- ones that, providently, we didn't exhaust in a last fit of profligate consumption back in the early 21st century.

Meanwhile (I didn't forget) here's a brand new idea for the latter 21st century: marine clathrates.

We have something on the order of ten trillion tons of a material that consists of two things: methane and fresh water. It's by far our largest untapped resource. And it can satisfy demand for the two things our century will find itself to be most direly in need of.

Plus, most of it is stored in cold oceanic waters. And if we assume the ocean will continue warming much as it has been in recent years, all this substance will be erupting and dissociating naturally, as ambient temps move above nine degrees C. Whereupon it will just be lost to the atmosphere.

I've always assumed you're some independent venture capitalist, fabulously wealthy but over this past year nervous about the fact that all the usual investment opportunities have been drying up: real estate, commerce, industry...

Put your seed money into clathrate retrieval. Be the first on your block.

Energy Industry or Coal Industry?
Any company that decides it is in, say, the power drill business, will go out of business unless it decides it is in the 'hole' business.
IBM is still in business because they changed.
All the major 'oil' companies ARE investing profits in energy producing technologies, but you would take that profit and prefer the government decided how and what to invest in.
And I am sure there are all sorts of government rules and regulations the get in the way of Exxon or BP to invest in small innovative companies that need capital to get their new technology developed.
That is how Microsoft has continued to stay in business, by buying small innovative businesses and incorporating their products.

Note: Twice I have agreed fully with the coastal/off-shore concept
It is the right place with the water and wind (in the right locations) to get the job done.

It is one of the reasons I do not understand building wind facilities here. We don't need the power locally and transmission loss makes it minimally effective for shipping the power to other locations. But it is being done, for no other reason I can see, because we have the wind. Before the big idea of building more generating capacity, Montana was generating something like 140% of the electricty used here. With the 100s of megawatts of new hydro, coal, natural gas and wind being built it will likely become more like 250% pretty quickly. It is a huge state so transmission within the state, let alone out of state, is a loss issue.

For that reason, I see the idea of wind to hydrogen as the best bet for wind power in this area. But, as you pointed out, the water issue could be a problem pretty quickly. We might have the water resources available to utilize most, or all, of the wind power generated right now. But, if that were to double (it is expected to more than quadriple over the next 10 years), then available water could be a problem.

"then available water could be a problem."
70% of the planet is water.

What's the problem?

Read the string marjon
It isn't water per-se, it is location.

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