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Math4Science’s energy economist (“S”) explains how different types of energy help provide communities with the power they need to heat and cool homes and to charge cars, phones, and computers.
What do you use electricity for each week?
Politics can make energy and climate change seem black and white, dividing people and organizations into those that support traditional energy-producing industries (like coal and oil) and those that support newer, renewable resources (like. wind and solar energy). So it might surprise you to learn that “a number of the big oil and power companies made big early bets on wind, solar, and biofuels.” An energy economist Math4Science interviewed, also trained as an atmospheric chemist, explained just how complicated — as well as important — the realities shaping energy production are.
Note: Because he requested anonymity thanks to the sensitive dynamics in play around energy, economics, and politics these days, we will call our scientist “S.”
The business side of science and technology is often neglected, but it serves an important role in funding and steering the direction of research and development. Most scientists and researchers rely on grants, donations, or private investments to support their work. Energy companies face many challenges as they supply communities across the world with the power they need. Firms like the one S. started, which focuses on investments in oil and gas, help energy companies face those challenges.
At his private elementary school in Chicago, S. “felt under-extended in math, which is something that I was really good at.” Upon switching to public school, he was able to join the math team, take more advanced classes, and find a community which included “some brilliant students who were doing things at a high level.” “The math team was interesting because it [invited us to solve problems] that were a lot harder and more interesting than what we learned in class.”
Computer games, online bulletin boards, and the book called Hackers: Heroes of the Computer Revolution, by Stephen Levy, introduced S. to computer programming. Hackers “detailed the whole evolution of the culture of computer science” and S. found it inspiring.
Also inspiring was the physics course he took as a freshman at Yale college. The class drew on the lectures of Richard Feynman, a physicist whose explanations of his field continue to ignite a passion for science in many people. Books also continued to draw S. towards math-related fields. By reading Chaos: Making a New Science, he learned from author James Gleick about chaos theory, which “was invented by Ed Lorenz, a meteorologist. When I got to graduate school, my office was on the same floor as that guy.” At M.I.T., he studied atmospheric chemistry and finance.
S.’s own work includes contributing to interdisciplinary groups that combine natural sciences, public policy, and economics. These groups look at the development of energy technology and its possible impact and implications for public policy and the economy. He has worked as a leader in the Electric, Power, and Natural Gas practice in North America at a global consultancy, helping large companies, nonprofits, and governments. He also developed strategies to streamline projects, improve efficiency, and reduce costs and waste. In addition, S. worked with the Greenhouse Gas Abatement Curve, investigating which strategies could be pursued to reduce America’s greenhouse gas emissions and the possible economic costs and impacts of those strategies.
At the global consultancy, many “of my clients were working on transformational infrastructure projects: a railroad that wanted to build a new line that would add 60% to the size of the company or a power company that wanted to build a series of new power plants that would roughly double their power capacity.”
He also helps keep communities across the United States supplied with the power we need to run our homes, transportation networks, and companies. Doing this requires an understanding of the costs and benefits of different sources of energy. “Some power plants are really cheap to run. Generally, they run all the time: those would be solar, wind, hydro, nuclear, coal. Solar and wind will only [produce energy] when sun and wind are available but [they are] cheap.” Those sources must be supplemented with other types of energy in order to produce enough power at night, on hot summer and cold winter days, and in large towns and cities.
“A coal or nuclear plant might run 90% of the time, when not shut down for repairs.” “A solar or wind plant might run 20-30% of maximum capacity, because the wind and sun aren’t there all the time.” Natural gas plants, on the other hand, can be expensive to run depending on natural gas prices. Because they cost so much money to operate, “you turn them up as people turn on their air conditioning” on hot summer days but “run [them] at a low level overnight.” During the winter, an energy company might not run its more expensive plants.
Another group of plants are even more pricey to operate and used less often. These “might only run 5% or 1% of the time. They’re the very last things you turn on, when demand is at its highest or some other plant goes down” unexpectedly. They are “the most expensive ones: diesel generators or natural gas, simple steam plants” which burn gas or oil. “Some are very old. At one point, they were the leading technology and now they’re not but they’re still useful occasionally.”
Geography, policy, politics, and technology determine which energy sources are the most efficient in a given area. New York City’s power is partly supplied by the relatively inexpensive Indian Point (nuclear) Energy Center, partly by coal power coming from New Jersey and Pennsylvania, partly by solar energy, “and then there are some old natural gas plants that turn on at different points in the day.”
The Appalachian mountains and the Powder River Basin (in Wyoming and Montana) contain many coal plants. Utah and Nevada rely on “a mix of coal and hydro and renewables.” California depends on “a handful of nuclear energy plants.” Tight regulations there require California to bring a good deal of power in from other states. But “it’s also “one of the biggest areas for solar development … because there’s a lot of sun down there and a lot of encouragement from regulators.”
Chicago, where S. grew up, is largely powered by plants supplied by nuclear energy and coal. But there’s also “a lot of wind brought in from the West of Chicago.” And there are also natural gas plants in the area.
S. and his colleagues “develop energy projects [to] increase energy independence in the US on a small scale.” He enjoys the fact that his work combines technology and people skills and that he gets to work as “something of an engineer,” a businessman, and an economist. As an engineer, “you’re asking how something works, and what I can do to make it work better. It’s a lot like working on your car or playing with an erector set. With oil & gas wells in particular, you are often thinking about what is happening a mile or more underground and trying to control that from the surface.”
“A lot of what I do is work with people: we negotiate with potential sellers, with potential buyers, with potential investors — [we] build relationships with people.”
S. uses his knowledge of math, science and “textbook microeconomics” to make predictions and help companies act on them. In the process, he considers “what prices will be, what will make money, [and] what won’t make money.” “How much [power] do we need at any point of the day?” How will a new government’s policies and newly developed technology change what works best for companies, their investors, and their clients? Thanks to changes in policy, politics, technology, climate, and economics, S.’s job is never dull.
