Fossil Fuels And The Bulk Freight Market (And More)

Executive Summary

Fossil fuels account for 40% of ocean freight, 51% of train freight, and 56% of barge freight. 

New technologies in renewable energy, nuclear energy, electric vehicles, batteries, and heat pumps, could dramatically reduce the importance of fossil fuels in the global economy, eliminating the need for this bulk freight. 

This shift away from fossil fuels would also greatly reduce pollution, slow or stop climate change, improve workplace and transportation safety, strengthen democracy in the world's most authoritarian states and far-right domestic politics, and reduce economic vulnerability and military logistics vulnerability to unrest and military activity in countries that produce oil and gas.

How Are Fossil Fuels Used? What Substitutes Are Available?

The predominant use of coal is to generate electricity and its market share of electricity generation is plummeting, mostly to renewables like solar power and wind power, and to a lesser extent to tidal, geothermal, hydropower, and biofuels like corn based ethanol and biodiesel made mostly from restaurant waste fats. Nuclear power provides a significant share of non-fossil fuel electricity and has been pretty stagnant, neither growing nor shrinking in market share much for decades, although new advances are poised to tweak up nuclear power use in some niche applications. A very small share of coal is used for making steel, for purifying water, and in other industrial applications. Coal can also be industrially transformed into a liquid petroleum fuel substitute or a natural gas substitute when oil and gas prices are high enough for this to make economic sense, which is rarely and too briefly to justify building the infrastructure to do it.

The increasing affordability of renewables combined with environmental regulation are making coal obsolete for electrical power generation which is its predominant use.

The predominant use of oil is as a transportation fuel and its market share of vehicle fuel types is also steadily losing ground to electric vehicles (and to a tiny extent, other non-fossil fuel powered transportation modes). 

Oil is used for electricity generation in Alaska, in Hawaii (which has fairly low per capita electricity demand), during disasters and at construction sites, for heating oils (mostly in the Northeast U.S.), for fertilizers, for lubricants, and to make plastics. But all of these non-transportation fuel uses collectively are a much smaller share of oil consumption than as transportation fuels. 

There are good alternatives to oil to generate electricity in Alaska and Hawaii. Better batteries can limit the need to fossil fuel electricity generation in natural  disasters, in remote locations, and at construction sites. Organic farming and eliminate the need for petroleum based fertilizers (and pesticides). Non-plastic materials can be substituted for plastics in many cases. Heating oils can be replaced by natural gas furnaces or heat pumps (which are powered by electricity).

Natural gas (and other gas state hydrocarbons like propane) is predominantly used for space heating and water heating and as a greener alternative for generating electricity on demand at power plants compared to coal or oil. But very small shares of natural gas use are also used for cooking, ornamental lighting, and as a niche transportation fuel (especially for United Parcel Service trucks, and to a lesser extent, other fleet vehicles). Electrically powered heat pumps, electrically powered evaporative coolers, electric cooking appliances, electric water heaters, and electric vehicles are the main alternatives to direct natural gas use, and renewables (paired with utility scale batteries) and nuclear power are the main alternatives to natural gas for electricity generation.

Fossil Fuels And The Bulk Freight Market

 

The 40% breaks down as roughy 7-8% of total global ocean-going deadweight tonnage and vessel count (there are about 770 active LNG carriers in the world, which are specialized ships necessary to carry liquid natural gas) and about 32%-33% of total global ocean-going deadweight tonnage for coal and oil.[1] Natural gas is primarily transported on intra-continental pipelines, however, with some last mile transportation by truck, rather than by ships, trains or barges.

The numbers are similar for freight transported by freight train (51% of train freight is coal and oil) and over rivers and lakes by barges (56% of barge freight is coal and oil).

As of December 2009: "About 49% of rail freight is coal and another 2% is oil. About 10% consists of grain and grain products. Wood and paper account for 4%. About 10% of loads are non-petroleum chemicals. Stones, gravel, sand, clay and glass account for about 10% Most of the rest (13%) consists of other food products, metals and metal products, motor vehicles, waste and scrap materials."

As of September 2024: "In 2007, coal was the primary commodity moved by barge, accounting for 29% of all tonnages. Petroleum was the second largest commodity group in 2007, accounting for 27% of all tonnages. Crude materials, such as forest products, sand, gravel, ores, scrap, and salt, were the third largest commodity group in 2007, accounting for 18% of all tonnages. Food and farm products were the fourth largest commodity group in 2007, accounting for 12% of all tonnages."

Oil and gas firms accounted for 13.3% of U.S. capital expenditures in 2015, but only about 0.13% of U.S. employment (about 180,000 people); while in the same year the coal industry accounted for 0.16% of U.S. capital expenditures and 0.05% of U.S. employment (about 68,000 people) (and the coal industry has significantly contracted by more than 20% since 2015). By comparison, the retail trade industry accounts for 5.2% of U.S. capital expenditures in 2015 but 11.3% of U.S. employment. Wal-Mart alone employs about six times as many people as the entire oil and gas and coal industries combined. The U.S. oil and gas industry is important to Wall Street, but accounts for less than one in 500 U.S. jobs.

Fossil Fuels and Democracy

The share of an economy that comes from oil, gas, and coal is a good indicator of how authoritarian and far-right wing its politics are likely to be. The absence of production of these fuels in an economy, or reduced reliance of fossil fuel production, favors more democratic and more liberal government.

All of the world's remaining absolute monarchies (as opposed to merely symbolic constitutional monarchies) are in economies dominated by oil and gas revenues. Just one of the 36 countries with oil revenues as more than 2% or more of GDP has a healthy democracy (the outlier is Norway at #28 with 4.8% of its GDP from oil revenues is Norway). Norway's relatively healthy non-fossil fuel economy and democracy is in part due to the fact that it developed its oil and gas resources (mostly in the North Sea) fairly late in the history of these industries.

Among U.S. states ranked by fossil fuel production per capita, the only blue state in the top 8, is New Mexico (where it is 21% of GDP and which at #4 has all sorts of demographic and economic characteristics typical of red states, but votes blue because New Mexico has large Hispanic and Native American populations who are not welcome in the Republican party). Purple Pennsylvania at #9 and Colorado at #10 (each at about 5-6% of per capita GDP) are the only other blue states in the top 18 by fossil fuel production per capita. California at #19 has only $323 per capital of fossil fuel production (about 0.5% of per  capita GDP) and 17 states have no appreciable fossil fuel production per capita.

Environmental and Climate Harm

Coal and oil are probably the biggest drivers of air pollution and global climate change. They are also responsible for the workplace and transportation accidents associated with their extraction, delivery, and use. They are a very significant source of water pollution (including ground water pollution) and a major source of toxic and radioactive waste (coal has somewhat more than trace levels of radioactive elements in it). And, the extraction process destroys otherwise pristine open space and agricultural land, with coal being particularly damaging.

National Military and Economic Security

Reliance on fossil fuels, especially oil in the U.S., and both oil and natural gas in Europe, is also a major national security and economic stability risk, that subjecting economies that consume them to supply interruptions and risks caused by global military unrest associated with the authoritarian regimes that oil production based economies are so prone to be (e.g. unrest in the Middle East, Venezuela, Nigeria, and Russia). 

The Ukraine War has illustrated how vulnerable Russia has been to attacks on its oil and gas industry, which is not easy to defend, how dependent modern militaries are logistically on oil, and how dependent Europe and other world economies are on Russian oil and gas.

Reduced reliance of ocean shipping of fossil fuels also makes naval warfare and military control of seaways at choke points like the Red Sea, the Strait of Hormuz and the Persian Gulf, the Bight of Benin, the Panama Canal, the Strait of Malacca, the Bosporus Strait, the Strait of Gibraltar, and the Baltic Sea much less important and much less tempting for states that want to flex their military power and pirates.

References

[1] According to the U.S. Energy Information Administration (EIA) in an entry about Liquefied natural gas made on June 21, 2024, and a report by Fortune Business Insights, Report ID: FBI103940 updated August 17, 2026 entitled "LNG Bunkering Market Size, Share & Industry Analysis, By End-User (Tanker Fleet, Bulk and General Cargo, Offshore Support Vessels and Ferries, Other) and regional Forecast, 2026-2034.

Oil And Water

Scarcity of oil and rising petroleum prices, and climate change driven drought, are a big deal. But there are fairly clear paths by which our society can adapt to both. Neither would be apocalyptic, even though it would drive significant, visible changes in our day to day material culture.

These matters are particularly worth thinking about on Earth Day, which is today.

Oil

A very large share of all petroleum consumption is for transportation, mostly cars, trucks, construction vehicles, boats, ships, and trains. Advances in battery technology, and EV manufacturing and infrastructure are making electric vehicle alternatives to all of those technologically viable. And, advances in renewable energy and nuclear power can replace almost all of the fossil fuels in the electrical power grid. Coal is well on its way to be phased out in the United States and much of the developed world. Alaska and Hawaii are the only U.S. states where a significant share of electricity is generated from petroleum. Heat pumps are paving the way as an alternative to heating buildings that were historically heated with heating oil in the U.S. (mostly in the Northeast). 

Heat pumps and evaporative coolers (together with better insulation) also dramatically more energy efficient than conventional air conditioning, and renewables like solar and wind combined with modern batteries are particularly well suited to meet the demand for electricity to provide cooling.

Lots of fertilizers that are petroleum based could also become unaffordable, as they have as global petroleum supplies have been interrupted by U.S. and Israeli attacks on Iran, and its counterattacks. But organic farming techniques are now well established enough that these methods pose an obvious alternative path for agriculture is petroleum based fertilizers cease to become economically viable. Dutch models of intensive hydroponic agriculture suggests another off ramp from what is now considered conventional agriculture.

There are some applications where there aren't good alternatives to petroleum, like plastics and jet fuel. But these are such a small share of total petroleum consumption that these uses could be sustained, even if they become more expensive, even if petroleum prices soar and the supplies contract greatly. 

Of course, plastics and petroleum based fabrics like nylon, have only been in wide use for about sixty years. If plastic becomes too expensive, we can revert to using metal, glass, wood, and plant and animal fiber alternatives for applications like kitchen ware and trash bins that aren't uniquely suited to plastic, as traditional alternatives becomes more affordable relative to plastic with rising petroleum prices.

The changes wouldn't be geographically neutral. A collapse in demand for petroleum driving by electric vehicles and organic farming would crush the economies of petrostates in the Middle East, in Brunei, in Nigeria, in Venezuela, and in select states within the United States. West Virginia has already seen its coal based economy collapse, as have many historically coal mining economy based regions in Europe. Wyoming will follow suit. 

On the other hand, rare earth rich areas who supply key components of modern batteries and electronics, may see mineral economy booms.

Water

In most of the arid west, marginal agricultural activity consumes 80%-90% of all fresh water, while landscaping and golf courses consume about half of the rest of the fresh water. If water becomes scarce, entire regions can eliminate their water hungry landscaping, golf courses can close or become much more expensive or use artificial grass, and marginal agricultural operations can close.

In places like the Arabian Peninsula, Greece, Utah, and California, desalination technology might become more prominent as a water source, at least for high value municipal waters uses like drinking, cooking, and bathing, and gray water systems would use non-potable water (such as salt water from the ocean or salt water lakes) in applications where drinkability wasn't important, like flushing toilets.

Climate change that produces global warming ultimately both gives and takes away arable land. It renders much of the arid West unsuitable for farming and ranching, but makes places that were too cold for farming in the past, more suitable for it. Even when climate change doesn't actually change the total amount of arable land somewhere, it may change the kind of agriculture that is appropriate in that place.

Places that used to support subtropical orange groves may freeze more often and get dryer and become more suitable for cotton and the soft wheat varieties currently grown in places north of Florida in the American South. Crops now grown in the South might start to be grown in the Midwest. The abundant corn and wheat fields of the Great Plains and Midwest might move north to Canada. The Great Plains might transition from grain farming to cattle grazing.

I'm not a climate scientist. I don't have exact models of exactly when and where climate zones that are suitable for particular crops and livestock will relocate. But that's the basic concept.

The ongoing wars across the Sahel of Africa illustrate how ugly the process of having herders ecologically forced into historically horticultural land can be without strong geographically large states to force the transition to be made with money instead of violence can look. But with strong states that remove violence as a viable option, the transition, while still massively disruptive, could be less tragic in places like North America and Western Europe.

Similarly, the skiing industry might relocate from places like Colorado and Vermont to places like the Yukon and Alaska, in North American, and from places like the Alps in Europe to the northern Urals and the Himalayas in Eurasia.

Many Sunbelt communities in places like Arizona and Texas and Florida may see the waves of migration to avoid the cold winters of the north replaced by migration north to avoid the months of hundred degree plus water in the Sunbelt which are already commonplace in cities like Phoenix and Las Vegas, while the rust belt, with its winters made milder due to global warming and abundant fresh water, may start to look more attractive, and may attract mass return migrations.

One of these days, people in the Sunbelt may return to the traditional solution of having midday siestas, inside cooler, shaded adobe insulated homes, and becoming more active once the sun goes down and the air cools late into the evening.

Coastal communities will have to build dikes or lose land area as sea levels rise, and many will have to remake their architectural landscape in the face of increasingly severe storms, something that will hit the U.S. states of Florida and Louisiana and some islands in Oceania particularly hard.

Species limited to narrow microenvironment ranges will go extinct en masse, as human encroachment upon their habitats, ecological disruption, and human predation have already done to many species already.

How fast will it happen?

We are, in 2026, at about the place on this path that we thought we'd be in the year 2006, back in 1986. Events like the transitions to EVs and heat pumps and renewables and industrial scale organic farming happened, but it took about twice as long as futurists at the time thought that it would.

Climate change, on the other hand, is happening faster than expected by a decade or three. The changes that were initially looking like they would take a century to run their course are now looking like they will occur in half of that time.

Certainly, these transitions are medium to long run trends. They will probably takes decades more to run their course. These transitions probably won't be complete in my lifetime, although they probably will run their course in the lives of my children, or at least, in the lives of my future grandchildren. Less poetically, this time frame is about 30-90 years.

But these trends are both massive and inexorable, like plate tectonics but much, much faster. Fast enough that it will be visible in future tree ring records.

Conclusion

These are huge, traumatic changes that will force mass migrations and fundamental changes in people's day to day culture. But they don't mean the end of modern life as we know it either. And falling birthrates will eventually lead to smaller global and regional populations that put less strain on scarce water and fossil fuel resources.

Affordability

What are the easiest policies to make life more affordable?

* Unilaterally end tariffs.

* Legalize car imports from China and reduce trade barriers to importing smaller cars from Europe. This would greatly increase choices and competition for basic cars.

* Support the infrastructure to shift to electric vehicles making us less vulnerable to global petroleum prices and less incentivized to go to war over oil.

* Eliminate fares for high volume transit routes.

* Encourage renewable energy sources like solar and wind which are now cheaper than coal and are not subject to natural gas price fluctuations.

* Remove barriers to building affordable housing, especially zoning that restricts density and rules out multi-family housing, parking mandates, lot size limitations, and aesthetic building code requirements. Encourage high quality manufacturing of homes and large components of homes in lieu of stick building everything on site.

* Encourage the Fed to take a more gradual approach to increasing interest rates when economic conditions call for it to do so, so that housing markets have time to adjust to higher mortgage rates which decrease affordability until housing prices transition to adjust to the ability to pay.

* Tax unoccupied housing more heavily to discourage hoarding of empty housing that reduces housing supply and drives up housing prices.

* Enact policies that financially penalize profitable companies for the burden that they impose on government when a significant share of their workers need welfare to make ends meet, in part, by increasing the minimum wage.

* Shift revenue sources for ECE (early childhood education)-12 education from property taxes to income taxes. This makes the taxes more progressive. It increases funding equity between places with large property tax bases per student (like rich suburbs and resorts) and places with small property tax bases per student (like low income municipalities and rural areas). This also reduces housing costs.

* Make free meals for all part of the standard ECE-12 education package.

* Make access to ECE and kindergarten and afterschool programs universal.

* Encourage international students at colleges and universities who basically subsidize domestic students by paying full tuition.

* Publicly fund higher education, without significant student loans, with all students with a reasonable chance of completing their degrees, while limiting admissions for students who have a high probability of failing. This makes access to higher education possible for working class and middle class kids increasing their future incomes and class mobility while making the economy more productive, and reduces the squeeze on families at the low end of upper middle class who don't easily qualify for need based grant financial aid, but still pay higher shares of their income than others.

* Reinvigorate vocational programs at high schools and community colleges for students for whom a traditional liberal arts college curriculum or four year degree isn't a good fit.

* Establish new medical school and medical professional school capacity to increase the supply of doctors and other medical professionals.

* Welcome foreign medical professionals, thus increasing the supply of medical professionals whose compensation is driven up by a limited supply, especially in rural areas where domestic medical professionals are least likely to prefer.

* Medicare for all or similar universal health care financing, that cuts out health care billing and insurance company administration costs and profits, ends barriers to health care for the self-employed and unemployed and those with jobs providing only second rate health insurance with high deductibles, funds health care in proportion to ability to pay, ends medical debt and bankruptcies, takes pressure off high cost ER care, and improves the bargaining power over drug costs and other provider costs. Health care expenses of employers also reduce wages more or less dollar for dollar.

* Broaden access to long term care, including home health care and assisted living, on a basis similar to universal healthcare, and finance it with estate taxes.

Indirect And Non-Obvious Effects Of The Iran War

The U.S.-Israeli attack on Iran (the NYT recaps the first week here) will have some indirect and non-obvious impacts, some of which mirror those from the Ukraine War.

* Iran is the sole significant outside military supplier for Russia in the Ukraine War (supplying drones) apart from North Korea which has supplied artillery rounds and some old school military equipment (and even about 10,000 troops) all of which have been subpar in quality and not very useful. The attacks on Iran are likely to divert existing supplies of drones to domestic military use from exports to Russia for use in counterstrikes, and are likely to somewhat degrade Iran's military production capabilities.

* Iran's counterattacks and continued war-like footing have driven up global oil prices dramatically, have had direct supply effects on most of Asia, and have damaged the oil production infrastructure in many Middle Eastern oil producing nations (including Saudi Arabia) which will reduce the capacity of these countries to produce oil in the short to medium term.

* This oil price shock, like many more before it, makes electric vehicles and public transportation more attractive to policy-makers and consumers alike, all over the world, potentially resulting in long-term systemic reduction in demand for oil.

* This mirrors the indirect effect of the Ukraine War in causing Europe to rush to find long term alternatives to oil and natural gas, resulting in wider adoption of EV vehicles, renewable energy sources for their power grids, and energy conservation measures. Again, this results in long-term systemic reductions in demand for oil and natural gas in one of the largest economically developed regions in the world.

* The Ukraine War also strengthened NATO, strengthened European cooperation, and caused re-militarization of European countries, especially those most at risk of attacks from Russia.

* Trump's inexplicable decision to temporarily ease sanctions on Russian oil sales to India, helps Russia in the Ukraine War despite the fact that Russia has used its intelligence resources to help target the U.S. and its allies for Iranian counterstrikes.

* Generally, an international war strengthens the regime attacks vis-a-vis external dissent (something that partially explains Russia's persistence in the Ukraine because the ongoing war there makes Putin more able to crush dissent against him at home). The protests of the Iranian people against its regime may suffer because of this effect. While the U.S. assassinated the Ayatollah, Iran's supreme leader, and many of the likely successors, the successor chosen for this reason is probably more likely to be a hardliner than the person who might have been chosen if the Ayatollah (who was 86 years old and close to 87 when he was killed by a U.S. strike) had died of natural causes as was likely in the near future.

* It seems unlikely that Iran will experience regime change, either in favor of a more democratic regime (Iran's democracy was actually more robust than a lot of regimes in the Middle East), or a monarchist restoration of the Shah. Pre-attack, this had been conceivable because of huge protests against the too conservative Shiite religious regime's social policies, despite the fact that Iran is actually quite religiously and ethnically diverse. Air strikes and missiles are rarely sufficient to secure regime change.

* The war probably delays steps that could be positive for the residents of Gaza.

* The war probably depletes military equipment supplies of Iran, and to a lesser extent, the U.S. and Israel, weakening the affected countries' capacity to fight further wars.

* In much the same way, the Ukraine War has dramatically depleted Russia's military resources (despite half the national budget in Russia being spent on the military and interest on loans to support it).

* The strikes in Iran are very likely to weaken the Republican Party's MAGA coalition, since MAGA campaigned on ending foreign wars of choice and then has repeatedly sought out those wars in Trump's second term, striking Venezuela, embargoing Cuba, striking Iran, and renewing a "drug war" in Mexico, Ecuador, the Caribbean, and the Pacific, which doesn't seem very calculated to actually do anything about drug abuse and drug related crime in the U.S. (as well as threatening Canada and Greenland). This coalition has already been beaten up in special elections and survey results and has a very thin majority (especially in the U.S. House).

* The inflation caused by rising oil prices, weakens support for Trump and the Republicans and strengthens Democrats chances in the 2026 midterm elections, which are just seven months away.

* The Iran War hasn't been particularly effective at diverting attention from the Epstein files which graphically reveal a coalition of child trafficking, corrupt, and Russian influenced officials in senior levels of politics, business, and academia, with Trump at the center of all of it as a highly culpable serial child rapist.

* The Venezuela invasion, by the way, seems inconclusive and certainly doesn't seem to be having much of an oil supply impact.

Residential HVAC Economics And Environmental Considerations

I live in a 100 years old house in central Denver with natural gas boiler driven steam heat radiators (the steam heat boiler was originally coal fired, which is not an option now, then converted to gas, and then replaced) and a swamp cooler. (I'm looking at this now because my 24 year old swamp cooler is replaced for the first time today.)

Is this the best choice from a cost perspective? 

Yes.

Is this the best choice for the environment?

Probably, although a heat pump is quite competitive from an environmental perspective and will grow more attractive as the power grid in Colorado becomes greener over the next decade or two.

Cooling

In Denver, swamp coolers (a.k.a. evaporative coolers) generally cost less to operate than heat pumps, especially during the cooling season, in part, because Denver's humidity in the summer is low. Swamp coolers use significantly less electricity than air conditioners, often saving 60-80% on energy costs. Heat pumps are about 50% more efficient than central air conditioners, but swamp coolers still draw 20% to 40% less electricity than heat pumps. See here and here. All three cooling costs are powered by electricity, so the relative energy costs are indifferent to the price of electricity.

Swamp coolers do use some water than heat pumps and central AC systems don't use. But this is pretty negligible in terms of the cost of well under a dollar a month (you pay for tap water at prices on the order of a few dollars per 10,000 gallons, and a swamp cooler uses less than 900 gallons a month and is only operating about five months a year, so the water costs are less than $3 per year). This is also pretty negligible in terms of the swamp cooler's share of total water consumption. In contrast, water for landscaping uses about half of our water consumption despite the fact that we have only a couple hundred square feet of lawn.

The maintenance costs of a swamp cooler are a little bit greater than for central air conditioning and heat pumps, however, because they have to be started up every spring, and shut down every autumn (filter replacement costs are comparable for central air condition and swamp coolers), but this can be a DIY maintenance job if you are up for it, and the costs is significantly smaller than the energy cost savings involved.

Also, a swamp cooler is much simpler and less expensive to repair than an air conditioner or heat pump because it is mechanically simpler. A swamp cooler has one simple electric motor that runs a fan, and the water flow is controlled by a float system similar to one in a residential flush toilet. A broken swamp cooler take much less time, much less skill, and much less expensive parts to fix than a broken air conditioner or heat pump. Higher end and newer swamp coolers are also more resistant to rust than older models.

And, the up front installation cost of a swamp cooler is lower than the installation cost of an air conditioner or heat pump, even without utility or government incentives, although rebates from Xcel Energy to encourage swamp cooler use improve this comparison.

A heat pump or central AC can reduce temperatures a bit more than a swamp cooler does. But this only matters at all for maybe the ten or twelve hottest days each year, and even then, with a good quality swamp cooler like the one we are having installed, the difference is tolerable and isn't huge. And, the humidifying effects of a swamp cooler also make a home more comfortable in the very dry, almost high desert conditions of Denver summers, relative to air conditioning or a heat pump, once you get used to it. Both a swamp cooler and central air conditioning do suck in the sometimes polluted outdoor air into the house on low air quality days which we get plenty of in Denver in the summer. But a swamp cooler does a better job of filtering that air than a typical central air conditioning filter does.

Environmentally, apart from energy costs, swamp coolers are also better, because they don't need the chemical fluids required for heat pumps or central AC to move heat outdoors (or to suck subsurface cool temperatures into your home).

Heating

In Denver, a gas boiler steam heat system is about 25% cheaper in fuel costs (at current natural gas and electrical prices from Xcel Energy which is about $1.26 per therm for natural gas and 20 centers per KwH for electricity) than a geothermal heat pump. See this calculator. In fact, this is the least expensive heating option of all of the possible alternatives, including gas forced air furnaces, wood stoves, pellet stoves, heat pumps, heating oil, kerosene, propane, or electric baseboard heating.

A couple of years ago, we replaced our old natural gas boiler (which had been converted from the original one hundred year old coal fired boiler), which is much smaller, is easier to operate and maintain, and is slightly more efficient, than our old one. It is much less expensive to replace a natural gas boiler for an existing steam heat system than it is to install a new heat pump system of any kind in a building that previously had a steam heat radiator system. I suspect that it would also be cheaper in new construction, but the installation cost advantage in new construction would be much less decisive.

Heat pump installation costs also have to be compared to the combined installation cost of both the cooling system and the heating system, because it does both jobs. And, in new construction for a new subdivision, using a heat pump and an electric water heater, instead of natural gas heat and other natural gas appliances and water heaters, avoids the substantial costs of building a subdivision with deeply buried natural gas pipelines serving each home. So, again, when building new construction homes in new subdivisions, the installation cost economics for heat pumps v. natural gas heating are much different than they are with existing construction in which every home is already served by natural gas pipelines.

The steam heat boiler does consume water that the heat pump or a gas forced air furnace would not (although many gas forced air furnaces have a humidifier built in that uses considerably more water than a steam heat boiler per year), but this too is negligible in both cost (less than a dollar per year) and the amount of tap water used (probably less than 90 gallons a year), since it is an almost closed system that recycles the water and only loses a little bit each cycle to evaporation at the boiler point. Our steam heat boiler has a water filter that needs to be replaced twice a year (because a lot of our pipes are old and made of galvanized steel and have some rust in them) at a price comparable to the cost of an air filter for a gas forced air furnace (which is not necessary in a heat pump) but this is also negligible compared to the differences in energy costs.

In terms of the in home results, radiator based steam heat is much nicer than gas forced air heat, because it doesn't dry out the air (an issue that a built in humidifier only partially addresses) and doesn't drag polluted outdoor air into the house on poor air quality days which Denver has plenty of, even in the winter.

Historically, heat pumps have been used primarily in the South in the U.S., where high humidity during long hot summers makes evaporative coolers useless in the summer so homes need either air conditioning or a heat pump to be comfortable in the summer, where it doesn't get that cold in the winter so the amount of heating needed is modest enough that infrastructure costs necessary for natural gas or heating oil based heating systems didn't make sense, and when heat pumps were less effective than they are today at heating homes in the winter. Since the infrastructure and installation costs of central air conditioning and a heat pump are similar (although geothermal heat pumps are a bit more expensive to install than central air conditioning), the marginal cost of a heat pump over the central air conditioning that you would otherwise need in the South was modest (technologically a heat pump is basically an air conditioner that you can run backwards), it made sense there to heat homes with a heat pump. Also, since the amount of heating degree days per year in the South is pretty modest, the greater summer cooling efficiency of a heat pump relative to central air conditioning pretty much pays for the energy costs of providing heat on infrequent and mild winter days in the South. And, since the amount of energy needed for fuel for the winter for a heat pump in the winter in the South is pretty modest, saving a little money with a cheaper fuel was relatively less important than saving money by reducing the installation costs and having more energy efficient summer cooling.

Modern heat pumps, especially geothermal heat pumps, that are well suited to colder climates and designed for them, are now widely available. But this wasn't the cost effective option when Northeastern homes overwhelmingly were heated with heating oil, and Midwestern homes and western homes in places with cooler climates were overwhelmingly heated with natural gas. And, as noted above, the economics of heat pumps are a lot more favorable in new build construction, especially in new subdivisions that dispense with creating natural gas pipelines to every home, than they are in homes where the old heating and cooling system needs to be torn out and replaced by a new heat pump (especially in homes with boiler based heat rather than forced air heating and cooling ducts).

Environmentally, at this point, it is a bit of a wash.

Natural gas in a home boiler burns almost as efficiently and cleanly as in a utility scale natural gas power plant (and is more efficient and less polluting at turning natural gas into heat because it doesn't lose energy by converting heat to electricity, losing electricity in transmission lines, and converting electricity back to heat again). And, natural gas creates much less air pollution than coal or firewood or pellets or propane or kerosene or heating oil in a home boiler, and creates less air pollution per unit of energy used than a utility scale coal fired electrical power plant.

But the air pollution caused by generating the electricity in the grid, in part from coal, and less efficient (for heat production) natural gas, is offset by the fact that about 45% of the electricity in the grid comes from hydroelectric, solar, and wind power in Colorado.

Natural gas also creates toxic pollution in the ground in the extraction process (a significant share of which comes from fracking), and that toxic extraction process is used to provide 100% of the fuel for a home natural gas boiler, but only less than half of the fuel for the power grid. But, the mining done to extract the coal that is the source of a still significant share of the electricity in the Colorado power grid, is much more toxic and creates far more harms to workers and the public from the extraction process alone (ignoring the air pollution) than natural gas extraction does (even considering the harms of fracking).

As more of Colorado's power grid comes from renewables, and less of it comes from natural gas, and coal is eventually virtually eliminated as a source of electricity for the Colorado power grid, electricity will eventually be greener than natural gas, but this will still be partially offset because a home boiler still generates heat with less energy than the power plant generating the energy needed for a heat pump does. So, even as the grid gets cleaner and tilts a little more in favor of heat pumps relative to a natural gas boiler, the environmental difference is still going to be pretty modest.

Home Based Solar Power Considered

Last year we got a detailed bid for the solar power system that our particular home could support in terms of power generation capacity and cost.

In terms of the cost of the electricity, it could have met almost 100% of our current electrical demand at a cost that would be about the same as buying electricity from Xcel Energy at the prices we are paying for electricity now, over the next twenty years (with substantial Xcel energy rebates and government tax credits). So, this wouldn't have changed the cost calculus discussed above, although having our own solar power with some sort of battery storage would have given us a hedge against rising electricity prices from Xcel over time.

But, given the rapid rate at which solar panel prices are falling, and the rapid improvements that are in the works in battery technology, it might be cheaper to get a solar power/battery system and the product might have better quality a decade or so from now, even without rebates and tax credits.

And, the fact that our house is a hundred years old and has roof framing that is almost surely not up to current building code standards was also a consideration. The rooftop solar power installation might have disturbed that by putting more of a burden on the roof or just damaging the existing roof framing in the process in a manner that in a worse case scenario might have required a major structural repair job to bring our roof framing up to current building code standards, in a half duplex where that kind of repair would also have to involve the owner of the other half of the duplex.

Solar power would have insulated us from temporary disruptions in our electrical service from Xcel (which typically range from a few minutes to a couple of hours and happen at most two or three times a year, with outages of more than a couple of minutes only once every few years).

It would have been environmentally cleaner, of course to get 100% of our electricity (on average) from solar power, although the environmental benefit of this would be reduced over the next couple of decades as the Colorado power grid gets greener.

If we were building this home new at this time, we would probably have opted for solar power, particularly if it was in a new subdivision that didn't have natural gas pipelines in place to every home. But as this stand, the benefit of getting rooftop solar power was not decisive enough for us to justify the time, trouble, and disruption to our lives in connection with the installation work and any possible follow roof repair work that might be needed, to justify making the change now.

The Geopolitical Impacts And Timing Of The Decline Of Fossil Fuels

Colorado will not use any coal for electricity generation by 2031. It currently has ten coal fired power plants. It will take three of them off line in 2025. The rest are scheduled to be taken off line in the five years that follow.

Colorado will be more aggressive than most states in this time frame, but some states are already coal free, and almost all states are reducing the extent to which coal powers their electrical grids.

Greatly improved solid state electric vehicle batteries will start coming on line in 2025 and vehicles powered by them will make up a large share of new vehicles by 2031, greatly reducing gasoline and diesel consumption.

These developments, taken together, will greatly reduce U.S. fossil fuel consumption over the next seven years, and the reduction will be particularly dramatic for coal consumption. The falling demand for coal will hit Wyoming and West Virginia hard, because they are the two dominant producers of coal right now in the U.S. (the U.S. imports little, if any, coal). This will also heavily impact freight rail and barge transportation demand, because those are the two main ways that coal is delivered to power plants. Coal is the single largest revenue stream for both means of transportation.

The coal fired power plants are being replaced largely by wind, solar, and natural gas over the next seven years. So, the U.S. is going to see continued strong demand for natural gas, which is mostly sourced from North America, but should be seeing a gradual decline in petroleum demand (a fuel that the U.S. is largely self-sufficient in now, although global oil prices still influence domestic oil prices). The energy self-sufficiency of the U.S., however, buffers it from major macroeconomic shocks driven by rising oil prices like those seen in the late 1970s and early 1980s.

The increase in the share of vehicles that are electric, spurred by solid state batteries, will be global. Indeed, many places in Europe are already in the lead on this front. And, since gasoline and diesel powered vehicles are the predominant end use of oil, this should drive down the price of oil in the global market. This will make high cost oil producers, like fracking wells and off-shore oil rigs, uneconomic first.

Meanwhile, the Ukraine War has put intense pressure on Europe, which has cut off or reduced access to Russian oil and gas, to be more efficient in order to reduce its fossil fuel consumption, to increase it share of renewable power, to delay shutting down coal fired power plants, and to keep its nuclear power plants on line. This may mean more insulation, more blankets and sweaters, more heat pumps, more electric vehicles, a shift to buses and trains, and fewer natural gas power plants.

China is in the way of these developments strongly addressing global warming, because it seems to be increasing, rather than decreasing, its coal consumption in the short to medium term. 

But China is also a world leader in electric car production and in building a high speed rail network, so China may play an important part in reducing global petroleum consumption. And, China's path in electric vehicle development is likely to heavily influence countries in Southeast Asia that in its sphere of influence, and to a lesser extent, may influence Africa and South America in which China has attempted to expand its economic influence.

China is also a leading producer of high efficiency, low cost solar panels, and eventually this, together with its rapidly declining fertility rates and starting to shrink population, may make its current round of investments in coal fired power plants short lived.

As oil demand and prices fall, this will eventually undermine the often authoritarian leaning countries with heavily oil dependent economies, in the Middle East, but also Brunei, Russia, Venezuela, and Nigeria. It will also impact Norway, the U.K., Canada, and U.S. states like Alaska, Louisiana, and Texas that are major oil producers. Oil wealth is what has made ultra-conservative Islam feasible in Saudi Arabia and the Gulf states. It has been central to the economies of Iran and Iraq. It has been an important factor allowing Russia and Venezuela and Iran to continue to be authoritarian.

These countries will see a collapse in their standard of living and they will face intense pressure to convert to a commercial economy. Most of their "guest workers" will be sent home for good.

Converting To Residential Solar Power

So, lured by various trivial goodies (a nice steak dinner and a gift certificate), we got a solar power estimate for our little half-duplex.

A minimal build would provide 87% of our electrical needs, a maximal one would provide 131% (which would leave capacity for a future electric vehicle buy which is probably about six to ten years off when our current car, with only 54,000 miles on it after nine years is replaced and EV battery technology has improved), and the build we would most likely actually buy if we did it now would provide 107%.

It would require 8-10 panels on our roof and detached garage roof combined. The entire process would take about two months with one day of on site installation.

It would pay for itself in about 15 years if we paid for it up front (not including a battery backup for the house), but the economics are significantly less attractive if you finance it (they offered 8.49% APR financing). It would probably also modestly increase our homeowner's insurance due to the increased risk of hail damage claims (the better options are supposed to withstand 14 mm hail). This pricing is after a 30% federal tax credit that is not refundable, but can be carried forward. 

Of course, it is also a hedge against increased electricity service rates (much like a fixed rate mortgage but for electricity), and would mean that our home would be powered with 100% clean, renewable electricity.

A whole house backup power battery (that Xcel could also tap into in some circumstances), with about 24 hours of power stored, would cost another $15,000, but with a roughly 80% subsidy (with the State of Colorado and Xcel energy paying for about 50% in addition to the federal government's 30% credit).

Our experience over the last twenty-four years in Wash Park, however, has been that power outages are infrequent and short, and so a whole house battery probably doesn't justify the expense even with an 80% subsidy. Depending on the electric vehicle we purchased, we could probably even use that for backup power.

We will probably not bite yet, because we have other more urgent home improvements to make (our range-oven, and our evaporative cooler both need to be replaced in the near future, and we'd like to kill the remainder of our lawn). Also, solar panel prices have been plummeting and it isn't clear if we are at the bottom of that trend yet.

Still, if I was building a new house, I'd probably include solar panels and a battery backup for the house. A maximal solar power installation would also be more attractive if we had an electric car and/or if we had a heat pump instead of natural gas heating. 

In a new build, I'd seriously consider a heat pump (and better home insulation), an electric water heater, an indoor electric range, and an electric car charging station, to eliminate the need for a natural gas line entirely (although I'd have, at least, an outdoor gas grill and gas fire pit under a non-air tight gazebo fueled with small propane tanks). 

Honestly, it is impressive how much it is possible to free yourself from fossil fuels and to have zero or near zero net energy consumption at the grass roots level.

Other observations

In the course of gathering information about that, we also figured out our household's total energy consumption expense (electricity, natural gas, and gasoline for our car) which is about $200 a month, compared to a $340 per month average in Colorado and compared to a significantly higher average for the nation as a whole. 

About 14% of our electrical consumption is for seasonal cooling (an evaporative cooler and a ceiling fan). About 82% of our natural gas usage is for home heating in the winter (the balance is for a natural gas cooking range and natural gas water heating).

And, since the our household utility bill files were out, we also examined our water usage. The Colorado average is that about 50% of household water consumption used for landscaping (i.e. watering the lawn). In our case it is about 33%, since we have such a tiny lawn. Our water consumption is also well below average (as expected, now that we are empty nesters with a tiny lawn). Water for the lawn (at the higher summer water rate) costs us about $80 a year, which also has to be mowed, fertilized, weeded, etc.

Some 21st Century Infrastructure Concepts

If you are building a new town from the ground up, not burdened by sunk costs, a variety of infrastructure choices come into focus:

* In places that get cold in the winter, geothermal heat pumps and good insulation make the most sense relative to the alternatives. Conditioned on that choice, requiring electric stoves and ovens, and electric water heaters make sense, so that no natural gas infrastructure needs to be put in place. In places that don't get that cold and are arid, evaporative coolers and a different heating solution (such as a non-geothermal heat pump or electric heater) may make sense. Wood and natural gas stoves and fire places would probably be absent, or a rare and expensive luxury by permit.

* The town doesn't need landline telephone, cable, or Internet service. Provide free town-wide wireless high speed Internet access and a 5G cell phone network with good service everywhere instead.

* Power lines should be buried, so that they don't go down during storms. To make the electrical power system even more robust, houses and businesses should have standard battery backups.

* Roundabouts should be preferred to four way stops and traffic lights in the vast majority of case. They reduce accidents, reduce accident severity, and don't require power to function.

* In arid areas, water hungry grass should be disfavored or banned in favor of Xeriscaping. And, golf courses should be omitted, or at least rationed and designed to be radically water thrifty. In addition to greatly reducing the dominant source of demand for municipal water, it would also greatly reduce the need for potentially health harming fertilizers and herbicides.

* All vehicles and landscaping equipment should be electric. Houses and businesses should have car chargers as standard equipment. This way the town doesn't need a gas station for cars and trucks, although it might need one or two specialty gas stations for boats, aircraft, and equipment not available in electrical versions. This also means that the town doesn't need businesses that repair and maintain internal combustion engines. And, it dramatically reduces the number of hazard prone fossil fuel carrying trucks and trains and ships in the vicinity of the town.

* Electricity would be generated with solar power, wind, hydroelectric, tidal, geothermal, and/or nuclear power, but would be fossil fuel and combustion fuel (e.g. wood, incinerated trash, biodiesel, corn ethanol) free. 

* Homes and businesses would routinely have solar panels on them with net metering. Parking lots would routinely have car port style covers with solar panels on them with net metering, which would also greatly reduce the need to clear snow in parking lots.

* Street lights would be LED and have light pollution reducing designs.

* Appliances and light fixtures would be energy efficient.

* Land use would be reasonable dense and mixed use to facilitate shorter travel distances, with transportation routes sensitive to walkability and bicycle friendliness.

* Very cost housing, like dorms and single occupancy hotels without baths in individual units, accessory dwelling units, very small apartments, multi-family shared uses of single family homes, boarding houses, and tiny house/RV/van/tent camps with bath houses would be legal to minimize the income needed to avoid homelessness.

* There would an electric powered high speed rail connection to the nearest major city and major airport.

* All rail lines would be designed to eliminate all rail crossings from roads, reducing accidents and allowing for higher speed rail traffic. They would also be fenced to keep out people and animals, with animal and/or pedestrian bridges/tunnels installed at regular intervals.

The State Of The Union Is Strong

By a variety of measures, the U.S. is in a time of record or near record peace, prosperity, and well-being, although blue states (i.e. those that lean towards the Democratic party) are generally better off than red states (i.e. those that lean towards the Republican party). 

This should provide a political boost to President Biden in his rematch seeking re-election against former President Donald Trump. Biden should also be helped relative to the 2020 Presidential election by his incumbency, by the fact that the electorate is less white and less Christian, by the fact that many of the oldest voters in 2020 have been replaced by younger voters, and by the fact that younger voters and Democrats have been turning out more reliably in 2020 and 2022 than in prior elections with overall voter turnout reaching record highs, and with a rolling back of felon disenfranchisement laws in many states. And, of course, Donald Trump is facing four sets of felony criminal prosecutions on more than 90 charges, and has had other legal problems such as two civil judgments against him for a combined amount of more than half a billion dollars for fraud, rape, and defamation. Fox News is wounded, after paying an immense defamation settlement to a voting machine company and facing other similar massive pending lawsuits, and almost all non-Fox News outlets have made Trump's short fallings clear. Trump's three U.S. Supreme Court appointments as part of a six to three conservative majority overruled Roe v. Wade in  a highly unpopular decision and has been plagued by evidence of corruption leading to recover lows in its credibility, which has mobilized pro-choice voters and removed the urgency on the part of conservatives to vote for Trump to secure a conservative U.S. Supreme Court majority. 

But the polls, nationally and in swing states, show that the Biden-Trump Presidential race in 2024 (there is essentially no possibility that either major political party will pick a different nominee) is a toss up, and the polls understated Trump support in both the 2016 and 2020 Presidential elections. 

Violent crime rates in the U.S. are at their lowest level since 1970, down about 51% since 1991. The murder rate in big cities that bounced up in the pandemic (2020-2021) has fallen again (down 5% in 2022 and down another 12% so far this year compared to the same time period in 2022) to return to almost pre-pandemic levels which are comparable to murder rates in the early 1960s and are down about 50% from the peak levels in the early 1980s. Property crime rates are down 62% since 1991 and declined steadily until a slight bump upwards in 2022. Crime rates are generally higher in red states and lower in blue states.

The teen pregnancy rate is lower than it has been at any time in all of history and prehistory in North America. The teen pregnancy rate is down 75% since 1991. It is down 79% in that time period for black teens, 77% for Hispanic teens, and 76% for white teens. Teen pregnancy rates are lower in blue states and higher in red states.

After reaching a 50-year record low for two consecutive years (2020 and 2021 at 14.0 divorces per 1,000 married women), the divorce rate rose slightly in 2022 to 14.56 divorces per 1,000 married women. But, divorce rates are still lower now than at any time from 1970 to 2019. There is a class divide in marriage, however. For Americans in the top third income bracket (mostly college educated), 64% are in an intact marriage, meaning they have only married once and are still in their first marriage, comparable to 1960s and earlier levels. In contrast, only 24% of Americans in the lower-third income bracket (mostly people with no college) are in an intact marriage. Divorce rates are lower in blue states than in red states. 

U.S. unemployment is at its lowest level in 54 years. The economy added 2.7 million jobs in 2023. The U.S. has had positive job growth for 38 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939). Inflation-adjusted disposable personal income rose 4.2 percent in 2023.

The U.S. poverty rate in 2023 was 11.5%. It has been lower than that in only three of the last 60+ years: 2019 (10.5%), 2000 (11.3%), and 1974 (11.1%), and in none of those years was it dramatically lower. By comparison, the U.S. poverty rate was 15.1% in 1993 and 2010, was 15.2% in 1983, and was 19.0% in 1964 (and was 15.1% or more in 1965 and 1966). Poverty rates are higher in red states and lower in blue states.

The percentage of Americans who don't have health insurance is at record lows (mostly due to Obamacare). A greater percentage of people don't have health insurance in red states than in blue states.

GDP growth in the U.S. has been solid during Biden's administration after experiencing an unprecedented plunge four years ago in the final year of Trump's Presidency due to the COVID pandemic. The stock market (which is a leading economic indicator of the economy's future direction) is at an all time high, despite upward trends in interest rates. The dollar is at 20 years plus highs in strength relative to other major world currencies. Per capita GPD and household net worth is much higher in blue states and blue regions of states than in red states and red regions of states.

Most economic activity has returned to pre-COVID levels. Inflation has come back to normal after a COVID/Ukraine War driven spike. Gasoline prices are close to their long term average in inflation adjusted dollars.

The percentage of Americans age 25 or older who have have high school diplomas (91.1%) was an all time high in 2022, and the percentage who had college degrees (37.7%) in 2022 was just slightly below the all time high of 37.9% in 2021. In 1960, only 41.1% of Americans age 25 or more had high school diplomas and only 7.7% of Americans age 25 or more had college degrees. Educational attainment is higher in blue states and lower in red states.

The number of Americans in active duty military service relative to the population is as low as it has been at any time in the last 83 years. The draft ended in the U.S. 51 years ago. U.S. military spending as a percentage of GDP is 3.48%, slightly above its post-1960 lows from 1997 to 2002 when it reached its modern low of 3.09% in 1999. In 1967 it was 9.42% of GDP. People in red states are more likely to serve in the military than people in blue states.

COVID deaths and hospitalizations are way, way down. COVID death rates were generally higher in red states (mostly due to lower vaccination rates) and lower in blue states.

U.S. deaths from AIDS are at a record or near record low, down more than 90% from the peak number of deaths per 100,000 people in 1995. One of the four major strains of influenza has gone extinct sometime in the last four years.

The average share of electricity generated from coal in the US has dropped from 52.8% in 1997 to 19.7% in 2022 and is still falling. The United States got nearly 17% of its electricity from solar, wind and geothermal power in 2022 and is still rising. That's up from just over 5% in 2013. Fourteen states produced the equivalent of more than 30% of the electricity they used from solar, wind and geothermal in 2022. That is up from just two states in 2013.

The U.S. produced 2.5% more energy in 2022 than it consumed. 2022 marked the highest level of US energy independence since before 1950. By comparison, in 2005 the U.S. consumed 44% more energy than it produced.

The percentage of Americans who identify as non-religious, 30%, is at an all time high and the percentage of Americans who identify as Christian is lower than it has been at any time since European colonization of North America. Among Americans aged 18-29 who are indicative of the future trend, 43% are not religious, 52% are Christian, and 4% adhere to some other religion. Red states are more Christian and less secular, while blue states are less Christian and more secular.

In 2022, immigrants made up 13.9% of the U.S. population, the highest percentage in more than a century. It was last this high sometime between 1910 (when it was 14.7%) and 1920 (when it was 13.2%). This is higher than in the 1900 census (13.6%), the 1880 census (13.3%), the 1860 census (13.2%), and the 1850 census (9.7%), but lower than in the 1890 census (14.8%) and the 1870 census (14.4%). The year 1970 census had the smallest foreign born population in the period from 1850 to the present at 4.7%, about a third of the current foreign born population percentage. Blue states have higher percentages of immigrants than red states.

The percentage of people living in urban areas (80.0%) v. rural areas (20.0%) in the 2020 census was essentially the same as in the 2010 census which set an all time high of 80.7% urban, with most or all of the difference from 2010 to 2020 being due to a stricter definition of what counted as urban in 2020. The percentage of the population that is urban is projected to grow steadily over the next thirty years as it has for almost all of U.S. history, and over the last 20 years, there has been much more population growth in urban areas than in rural areas. Blue states are generally more urban than red states. 

If Hydrogen The Way To Go? Probably Not.

One possible path for our energy future would be to make wider use of hydrogen. Is hydrogen the way to go?

Probably not.

There is lots to like about about hydrogen based energy, which is one of the best options for chemical energy storage. Hydrogen fuel cells have the highest energy density of any chemical way to store energy: 2.6 times as much as natural gas and 3 times as much as gasoline. Fuel cells also emit nothing other than water vapor when used. 

But issues related to the supply and distribution of hydrogen fuel make it problematic.

Hydrogen Fuel Supply Issues

But the main way commercial hydrogen is produced now is to chemically strip it from fossil fuel hydrocarbons like natural gas, which is inefficient and shares a lot of the problems involved in using fossil fuels in the first place:

Synthesis gas—a mixture of hydrogen, carbon monoxide, and a small amount of carbon dioxide—is created by reacting natural gas with high-temperature steam. The carbon monoxide is reacted with water to produce additional hydrogen. This method is the cheapest, most efficient, and most common. Natural gas reforming using steam accounts for the majority of hydrogen produced in the United States annually.

A synthesis gas can also be created by reacting coal or biomass with high-temperature steam and oxygen in a pressurized gasifier. This converts the coal or biomass into gaseous components—a process called gasification. The resulting synthesis gas contains hydrogen and carbon monoxide, which is reacted with steam to separate the hydrogen. . . .  

Today, almost all the hydrogen produced in the United States is used for refining petroleum, treating metals, producing fertilizer, and processing foods. The primary challenge for hydrogen production is reducing the cost of production technologies to make the resulting hydrogen cost competitive with conventional transportation fuels.

Scientists are making progress in finding more efficient ways to produce hydrogen from the electrolysis of water with advanced catalysts to the reaction and other tricks, although adding a major new user to our limited fresh water supply has its own problems.  But we aren't there yet. 

Hydrogen Fuel Distribution Issues

Of course, even once we get good systems in place to produce usable hydrogen, we have to build a refueling network from scratch that competes in the alt-fuel market with electrical chargers (powered with existing national electrical grids) in a national electrical vehicle charging system, that is already well on its way to being built out.  According to an article from December 22, 2022 in Automotive World magazine:

This year marks an important anniversary in electric vehicle (EV) technology: the tenth anniversary of the first supercharger station opened by Tesla in Los Angeles in September 2012. Although, a decade has passed, the availability of quick and convenient charging is still cause for concern for many prospective customers. According to the US Department of Energy’s Alternative Fuels Data Center, there are currently 46,000 public EV charging stations in the US, with more than 13,000 of them in California. However, thousands more are needed to respond to the increase in EV demand and the industry’s shift away from internal combustion engine (ICE) cars. . . . 

The current charging infrastructure is not nearly in the state it needs to be to support the projections of 50% of all cars being EVs in the next ten years, but . . . charging station infrastructure is a work-in-progress across the globe. . . .

In Europe, there are currently about 400,000 fast charging stations compared to 47,000 in the US. The EU has committed to increasing that number to one million by 2025. In the US, the government has proposed federal minimum standards of at least four public charging ports every 50 miles along a highway with the goal of 500,000 charging stations across the country by 2030. . . . 

Despite the barriers of charging and range anxiety . . . EVs have gained massive momentum in recent years: “In 2019 EVs and hybrid vehicles were just 6% of vehicles produced (five million), but production in 2022 has tripled and is now at 18% of global passenger car production, forecasted to rise to 25% in 2023. We expect to see more than 20 million EVs produced in 2023.

Hydrogen vehicle production is stuck in a Catch-22. Hydrogen refueling networks respond to demand from customers who have hydrogen fueled vehicles, but a lack of a refueling network discourages people from buying hydrogen vehicles. Yet, almost all of the current alt-fuel vehicle momentum in R&D, charging station networks, and legislation to support it has been devoted to electric vehicles. It would be very difficult to turn this momentum around even if one can make a technological case that hydrogen fuel cell vehicles are better than electric vehicles.

One of the main reasons the internal combustion engine initially surged to market dominance over electric cars which were neck and neck with each other in the nineteen teens was that at the time only big cities had electrical power grids which gasoline powered cars didn't need. This made gasoline powered cars more attractive to consumers everywhere but big cities and people who needed to engage in intercity traffic. So gasoline powered cars had an almost 100% market share of the "horseless carriage" market, and as a result, these engines had received years of technological refinement, while electric vehicle battery technology was neglected, by the time that small towns finally had electrical grids which could have been used to refuel electric cars.

Even if hydrogen for hydrogen fuel cells can be produced at a competitive price and they are otherwise solid on the technological merits, overcoming the nation's lack of a hydrogen refueling network could be fatal to its widespread adoption as an energy source for vehicles. 

Nuclear Fusion Power Using Hydrogen

Of course, the other way to use hydrogen to produce energy is in nuclear fusion power plants. 

The heavy hydrogen (i.e. deuterium and tritium) fuel supply issues for nuclear fusion plants would be a trivial part of the cost of nuclear fusion power. This is so even though it costs much more to produce heavy hydrogen than ordinary hydrogen, because you first have to separate out heavy water from ordinary water and then you have to used electrolysis to extract the heavy hydrogen from the heavy water.

The heavy hydrogen fuel costs are trivial because you need about four million times less hydrogen to produce the same amount of energy from a kilogram of hydrogen in a hydrogen fuel cell, when you are using the hydrogen in nuclear fuel, despite the fact that no other chemical reaction based energy source has as much energy density as hydrogen fuel cells. 

Nuclear fusion generates 580,000,000 Mj of energy from a kilogram of hydrogen. In contrast, hydrogen fuel cell produces 142 Mj/kg. Natural gas (i.e. basically methane) produces 54 Mj/kg and gasoline produces 46 Mj/kg. 

Realistically, we are at least five or ten years out from being able to produce net energy at a commercial scale with sustained nuclear fusion plants. 

More importantly, nuclear fusion only makes sense to produce on a commercial scale if it is similar in price per Mj to the alternatives, even with significant subsidies to recognize the environmental benefits of nuclear fusion over anything but renewable energy 

We are probably at least twenty years out or more from being able to commercially produce nuclear fusion power at a price that is competitive with the alternatives like nuclear fission from uranium and plutonium, thorium decay, natural gas, syngas made from coal, and non-chemical fuel renewables like wind, solar, hydropower, tidal power, and geothermal. 

Previous posts at this blog supporting this conclusion and detailing the progress being made with nuclear fusion power technology can be found in posts from January 3, 2022 (China sets a new record in sustaining nuclear fusion reactions), October 26, 2021 (breakthroughs in turning heat into energy more efficient, which incidentally have continued to be made since then), and October 8, 2021 (reviewing the economic and technological barriers to commercial scale nuclear fusion power plants). 

The bottom line from those posts is that a nuclear fusion process needs to generate 18 times as much energy as is injected into it, not just net positive energy generation, to be viable commercially due to energy losses in getting the energy produced to the end user. But, improved efficiency in turning heat into electricity with new technologies could ease that requirement somewhat.

Also, you need to bring the cost of building a 1000 megawatt nuclear fusion power plant down to about $18.6 billion or less to make nuclear fusion a viable commercial power source. The current estimate of the likely cost of building a plant like that if it could be done, however, is about $3 billion, so this is less of a constraint than the technological barriers to nuclear fusion based power generation.