Power for the People: A Cryptographic and Nuclear Renaissance

I am grateful to see the Bill and Melinda Gates foundation identify three myths that affect the global poor. I will clarify the first myth–providing additional insights. If our goal is to end global poverty there are two things that we must do, unfortunately both are not included in the Gates Letter. We must increase global energy consumption and we must increase individual liberty. I provide a technical justification for cryptography and nuclear energy as paired solutions to end global poverty. I also show how these are fundamental drivers for human progress.

We begin with the global income distribution.

The poverty curve from two humps to one. ( via Gates Foundation)

Figure 1: The poverty curve from two humps to one. ( via the Gates Foundation)

Examining the chart we see that the income distribution in 2000 is p\left(I\right)\sim\mathrm{ln}\mathcal{N}\left(\mu,\sigma\right). where \mu=4.6 and \sigma=1.4. When we look at that transition of the income distribution from a mixture to a non mixture we should take great solace. Globalization and global communication united the world. As Hans Rosling says, there is no us and them there is we. In a previous post, I hypothesized that the world reached an equilibrium state. This figure when in consideration with the entropy of the United States shows our world clearly as being in equilibrium, \frac{\mathrm{d}S}{\mathrm{d}t}\approx0.

Figure 2. United States entropy from 1990–2012 using various deflators.

Figure 2. United States entropy from 1990–2012 using various deflators.

Getting back to the global income distribution, we need to consider Adam Smith’s statement that “[w]herever there is a great property, there is great inequality”. We see that globally we have a great property and that as a result we have inequality. I am of Smith’s mind, that inequality is. It does not in and of itself carry a value judgement. If we apply a normative value that everyone should have the same income we see that we destroy wealth, property and freedom. I derive these consequences in Various Properties of the Log–Normal Distribution. Let me say this again just to make sure that you heard correctly.

When we adopt Rawl’s position of distributive justice, we demand the destruction of wealth, private property, and freedom. I believe that humanity is fundamentally a good in the world. I am a humanist, and as such I adopt the normative principle that humanity should be preserved and not destroyed. We can avoid such normative judgements and accept a positive one, that the dynamical systems tend to the point of maximum entropy. My basis in this is well founded, it is also the “most honest” assumption that assumes nothing beyond the data given. [Jaynes 2006]

The entropy of a log-normally distributed variable is given by:

S=\frac{1}{2}\mathrm{ln}\left[2\pi e\sigma^2 e^{\frac{\sigma^2}{2}}\right]+\mathrm{ln}\left[E\left(I\right)\right]

We see that for any given E\left(I\right) that entropy is maximized by \sigma=1. Our global \sigma=1.4 in 2000. This suggests some stark realities that we face. First is that our global carrying capacity is structurally suppressed, based on observed trends in society, I think this is best explained by reduced economic freedom globally. There are various explanations as to why, but it all comes back to government intervention in our lives. Government is an entity that is logically independent from the governed, formally government is orthogonal to the people around the globe. Thus government can act on society exerting force (literal and figurative) on the citizens. Such forces can only exist outside of the system being observed, which is why I reach this conclusion. Said differently, people will act to maximize their freedom given the constraints that they face. Government, by definition, is a constraint on society.

There is a reason why liberty is now a global issue and why we are seeing revolutions and rebellion around the world. The world’s population wants \sigma=1 government  wants \sigma\approx \mathrm{Constant} as it can use the entropy difference to extract wealth from society. It is, as it always was, about control.

Rawl’s philosophy formally justifies \sigma<1. While this gets us in the direction towards \sigma\to1 it does so at the expense of our liberty. Rawls’ philosophy (progressivism) and that of our current governments (conservativism), are fundamentally limited, both resulting in lower overall societal entropy.

After we acknowledge the canonical trend of \sigma\to1, we are left with one alternative for increasing entropy, increasing average global income. Governments around the world recognize this which is why they print so much money. Don’t be fooled. increasing the money supply without actually increasing individual productivity, actually is a net harm to society cooling individual action. It is theft at the grandest scale.

Armed with that understanding we need to answer, “how do we increase individual productivity?” First we need to understand the natural constraints that we face. Our world is governed by the laws of thermodynamics. If we want to increase the amount that we do, we have no option other than to increase the energy consumed by society. This is a first law statement. We can make second law (efficiency) improvements, but these are limited by our knowledge, materials and capital; only resulting in marginal improvements.

Let’s provide a lower bound for the amount of energy we need to raise average global income from the $5.6/day (2000 dollars) to say $56/day (2000 dollars). Because of the second law we know that we have to supply more energy (heat) than is needed to increase the useful work output. Part of this is necessary to overcome hysteresis (stable dynamical systems tend to resist change). We assume the lower bound of energy needed to increase global wealth a factor of 10 to be a factor of 10 from what it was in 2000.

In 2000 the 6 billion people on the planet consumed 120 PW-hr, or 20 MW-hr/person. For a global population of say 10 billion with an average daily income of $56/day (2000 dollars) the world would have to consume  2,000 PW-hr every year! To provide context to this number, in 2008 the world consumed 117 PW-hr of fossil fuels, which is just off the peak fossil fuel consumption of the world. 117PW-hr/year is a daily consumption of 190 million barrels of oil equivalent (MMbbloe/day), or 68 billion bbloe every year.

Scaling fossil fuels to be 82% of a global energy consumption of 2,000 PW-hr/yr is one trillion bbloe/yr. This scale of energy consumption is not possible for fossil fuels. If it is not possible for fossil fuels then it is certainly not possible for renewable energy. We have one option left, nuclear energy.

Assume for the sake of argument the entirety of the 2,000 PW-hr/yr comes form nuclear. How much uranium is needed? Not as much as you might think, 300,000 metric tonnes of heavy metal (MTHM). Known reserves of uranium total 5 million MTHM at <$130/kg. This is terrestrial energy with conventional mining in existing mines. Once price increases far enough there are billions of tonnes of uranium in the oceans.

We have thousands of years of uranium available and as much if not more thorium. Accessing the fuel needed to sustain humanity, support global population, and increase human wealth is not a problem. It never was a problem, nor will it be a problem for any foreseeable future.

If we want to make the poorest amongst us (globally) as rich as the global mean, we need as much power every year as humanity ever consumed in its entire history.  We have the capability to access that power today!

I think the term of a “Nuclear Renaissance” is quite fitting. I talked about humanity at the cusp of a second social Renaissance due to recent cryptographic advances. As I understand the world cryptography and nuclear power are going to be the fundamental drivers of humanity. They will end this neo-feudal fossil era. We live in interesting times.

My Comments before Georgia’s Public Service Commission 5 Nov 2013

Thank you for the opportunity to speak before the Commission today.

I spent the last five years studying energy policy, leading to two career changes, and my pursuit of a PhD at Tech in Nuclear Engineering. What I thought was a challenging set of circumstances is much more complex–with significant consequences. Energy is a cornerstone of our economy. It’s use represents 80% of our GDP. If we are to grow our economy, increasing our access to energy carries the utmost importance. It should be our goal to reduce energy’s cost. While we do not have control over fuel costs, we do control how we use them and our policies to regulate their use. Continue reading

Toward an Anti-fragile Electric Grid: Reassessing Environmental Policy

I had a revelation last night about the electrical grid. I was responding to an old friend’s comment where he stated that we needed distributed generation. I could have used the example of Mao’s Great Leap Forward with the blast furnaces in everyone’s yard, but I wanted to maintain our friendship, and stuck to Riccardo’s comparative advantage argument instead.

Then it hit me. Prior to 1970, electric generators were located very close to the point of consumption (I am talking US here). This minimized the line losses. Interconnects were put in to allow for some power sharing especially in the event of a forced outage. In general, the system was stable and one outage in one location would not necessarily affect another.  It was also characterized by a larger number of smaller generators, this applied to every thermal generator. Continue reading

Thermodynamic Wind Energy Analysis: Bonneville Power Administration

A thermodynamic paper on a renewable energy source on an economics blog? Seriously?  Yes seriously.

The paper is my first attempt at applying the principles of statistical economics into other fields. I model the consumption and production of various sources of electricity.  Electricity is a pure human creation for human use and is the defining characteristic of modern life.  So yes, it is all connected.

The results shocked me when I saw them. The power of the method is readily apparent and starts to lay bare our understanding or lack thereof of energy production and consumption.

Thermodynamic Wind Energy Analysis: Bonneville Power Administration

I look forward to your comments.

Regulatory Applications for Bitcoin: Environmental and Spectrum Allocation

I recently wrote a post about using property rights to avoid the tragedy of the commons.  Jesse Jenkins, of The Energy Collective, responded to my draft post that he thought my idea of allocating property rights based off of land use was too complex. I assured him that it was not and gave a logical and concise rebuttal. However, his challenge to me left me thinking about how to simplify the regulatory approach. This post is my effort to sketch out such a simplified approach. Continue reading

Natural Gas Price “Spike”

Recent news reports heralding higher natural gas prices at 19-month highs (Bloomberg) due to cold weather (Reuters) and diminished inventories (even reports of the shale boom ending CSM) piqued my interest. There is hope that natural gas futures are bright (Forth Worth Star Telegram).  I wanted to check these narratives against some of my models.

Estimating the marginal utility of money plagues my understanding of economics and greatly affects my ability to model it. However, I developed an alternative deflator called the Energy Price Index (EPI). I took historical Energy Information Agency (EIA) data and performed a regression of the data against the price of oil and natural gas for each fuel source, and then aggregated them based on fraction of total primary energy consumption to get the average price of primary energy delivered to the economy. I tied this model then to the daily WTI crude oil prices and the Henry Hub spot market. Here is an early attempt trying to describe this Economics for Engineers.  This model has several problems first it ignores technological change in the conversion of energy to useful work, it assumes that the distribution between energy and non energy feedstocks is fixed, and it uses an adiabatic model of the US economy. The last assumption only affects the estimation of wealth, I perform a more rigorous derivation of the price and money relationships in The Effect of Price in Macroeconomics and have not had time to rebuild my models based on this work.  The other two assumptions are a function of my own ignorance. Ayers and Warr estimate the necessary information to fix this error. Continue reading

The Second Law: The limited potential of wind energy

Cal Abel
23 March 2013

After watching An Inconvenient Truth and becoming aware of the push for renewable energy, I questioned the efficacy of renewable energy sources meeting global energy needs. I thought thermodynamics held the key in being able to understand this. Thus my quest began in January 2007. Today, I can report meaningful progress on this subject.

To build the appropriate model, I started with some publicly available fine grain data from the Bonneville Power Administration. I used data from January 1, 2007 00:00 to February 28, 2011 12:05 PST. The data is segregated into 5 minute blocks of the average power within that 5 minute period. Here is the excel file of the BPA wind power/capacity and grid load. You can verify this data by comparing the previous links. The date format is from Mathematica and is in “Absolute Time” : each full integer is 1 second. As a reference, 3376598400 is January 1, 2007 00:00:00 PST. The data is posted here in a parsed format only for your convenience and to aid in your analysis as the entirety of the modeling can readily be done in Excel if so desired. Continue reading