Phoenix Role in Prospective

Phoenix Role in Prospective "Hydrogen Economy" - 2010 Outlook

Donald Moore | Phoenix International Energy Inc

01/27/10, 02:14 PM | Solar Power | Fuels

Current press and industry rhetoric on climate change, global warming, toxic emission targets, greenhouse gases and environmental degradation ignores (except for the "Peak Oil" advocates) the inevitable, relatively near term (20 years? -- 30 years? -- does it matter?) depletion of the world's economic hydrocarbon energy resources.

By definition, conventional oil and gas reserves are finite -- simply because our world is consuming more than is being discovered and developed. Even if oil consumption remains flat -- hardly reasonable considering the exploding demand in China and India, for example -- the industry today needs to find more than 40-million barrels per day of new production capability -- equal to four new Saudi Arabias -- to offset the declines. Call it "Peak Oil" -- or any other definition -- the world is discovering only about 50% of its current consumption. The numbers suggest that the end of the hydrocarbon economy, as we have known it for at least 150 years, is in sight.

Let's examine the "hard" numbers. The world now consumes about 84.5-million barrels per day -- or 600-million barrels per week -- over 2.5-billion barrels per month -- for an aggregate of over 31-billion barrels per year! To understand the significance of these "hard" numbers, correlate them with the highly publicized "major" discoveries of 3 to 5 billion barrels in the deep sub-salt basins offshore Brazil -- the largest Western Hemisphere oil discovery in over 30 years. Using simple arithmetic -- these discoveries add only 2-months to world oil reserves, based on current consumption! Further, each well's drilling and completion costs exceed $250-million!

The recent Iraqi bidding rounds offering major reserves, both proven and prospective, for development dictated terms that exploited the very high cost and difficulty of finding and producing new oil reserves. The successful bidders accepted an exceptionally modest return, far lower than any precedents. As suggested by the CEO of one of Europe's largest oil companies -- more than $25-TRILLION must be spent on energy investments over the next 20 years to satisfy the anticipated 40% increase in demand ("think" China and India) -- and to replace aging infrastructure. The conclusions are obvious -- despite the "climate change doomsayers," the world will continue to need conventional energy for transport (surface, air and water), for heating and cooling, and for the manufacturing and processing of goods, materials, foods and our myriad of lifestyle needs.

A succinct-analysis of the increasingly widely discussed alternative and renewable energy universe serves to bring the Phoenix "Hydrogen Economy" initiative (with its REPLACEMENT energy status) into its special perspective. Briefly discussed below are the most prominent alternatives and renewables in the new energy universe -- covering solar, wind, biofuels (including ethanol), algae, and the obvious coal and nuclear conventionals:

Solar Power:
Solar power generation is inherently limited by intermittent atmospheric conditions -- which obviously include non-productive night operations -- and by climatic conditions of overcast skies, snow, rain and dust -- all adversely reducing solar panel efficiency. Solar power generation also requires additional investment for standby power. Costly storage facilities, still not technically available, will also adversely impact economic feasibility. Solar power costs now exceed those for conventional electricity by upwards of 800%!

Wind Power:
Wind power generation is also complicated by unpredictable atmospheric conditions, including intermittent and directionally-changing air movements. The visual blights (and noise effects on health) are environmental handicaps of wind power installations that limit their optimum operating locations. Investments required for essential standby power and storage capabilities (note yet available) will adversely impact each system's economic feasibility. Again, we see wind power costs upwards of 400% above those from conventional energies.

Biofuels (including Ethanol):
Edible crop biofuels consume essential agricultural commodities and generate unacceptable food price inflation -- before accounting for the input costs of fertilizers, planting, harvesting, storage, processing, transport and infrastructure. Ethanol-based fuels operate with a negative energy balance (more input than output) and are very corrosive in their handling, storage, transport, and in combustion. Waste sources of biomass are comparably subject to costly collection and handling and for the processing of the raw material components with very costly enzymes.

Algae:
Due to algae's sensitivity to temperatures, and its extensive land and nutrition requirements, authoritative reports now indicate that useable algae energy production can now cost upwards of $25 per gallon of algae fuel. Also questionable is the feasibility of future continuous algae production vs. algae's current uneconomic batch processing.

Coal and Nuclear:
Though currently considered as prime conventional energy resources, coal and nuclear are also recognized as environmentally degrading and/or dangerous in their commercial operations. The nuclear power option must still resolve the substantial costs and dangers of routine power plant operations -- not the least of which is the problem of providing the minimum of secure "1,000-year; plus (?)" storage for the spent uranium nuclear fuel.

Financial Subsidies; Government and Taxpayer-Funded:
All alternative and renewable energy options, without exception, now require massive, longer term, government and taxpayer/consumer subsidies to establish, compete in and maintain their market position. This is a major "assist" for opening all energy markets to the low cost, virtually inexhaustible, reserves of environmentally pristine hydrogen energy as the REPLACEMENT for all current and foreseeable alternatives and renewables.

In December 2009, the Ontario Government unexpectedly announced plans for funding studies of "Collaborative Commercialization Projects in Hydrogen Generation" -- which can be considered the dramatic political recognition of hydrogen production for applications in transformative, innovative energy markets. The formal call for "Expressions of Interest" states that the hydrogen research projects must be able to show a clear path to commercialization. This proposal clearly demonstrates an official acceptance of the potential for the ongoing Phoenix "Hydrogen Economy" new energy development program.

PHOENIX -Summing-Up:

Phoenix plans for a leading role in the future "Hydrogen Economy" -- following the milestone grants of two U.S. Patents -- No. 7,122,171 (October 2006) and No. 7,582,584 (September 2009) -- which extend intellectual property protection to the complete range of the Company's hydrogen production system elements, materials and components. Phoenix International Energy Inc., the Company's U.S. subsidiary, holds worldwide exclusivity for its unique and innovative hydrogen gas production system under an agreement with a major U.S. technical research university which extends for 20 years beyond the 17-year term of the last patent issued under the accord. The U.S. Patent grants confirm that the rigorous pre-patent examination process disclosed no "prior art" that conflicts with the Company's proprietary "foundation" technology covering the light-powered generation of low cost hydrogen gas from an ordinary water feedstock. Phoenix has also filed for provisional U.S. and international patents pending covering the compounding of hydrogen gas with captured carbon emissions to produce the full range of conventional liquid transportation fuels (synfuels) from light-end jet fuel and kerosene, mid-range gasoline, and through heavy-end diesel oil products. The proprietary Phoenix synfuel technology may play a central role in the development of practical carbon capture and sequestration (or "recycling") systems.

The content & opinions in this article are the author’s and do not necessarily represent the views of AltEnergyMag

01/27/10, 02:14 PM | Solar Power | Fuels

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