• Join
  • Log in
  • Worldshares
  • State Reports
  • Videos
  • Photos
  • Blogs
  • Q&A
  • Community
improve your world

Thursday, September 9, 2010
  • Earth Matters

    Browse All » Climate Change Energy Politics Recycling Space Translating Uncle Sam Wilderness & Resources

  • Lifestyle

    Browse All » Arts & Culture Eco-Tourism Health & Well-being Natural Beauty & Fashion Outdoor Activities Pets & Animals Responsible Living

  • GREEN TECH

    Browse All » Computers Gadgets & Electronics Research & Innovations

  • Eco-Biz

    Browse All » Building, Products, Supplies Money & Green Jobs Sustainable Business Practices

  • Food & Drink

    Browse All » Beer Healthy Eating & Recipes Organic Farming Wine & Spirits

  • Your Home

    Browse All » Around the House Green Building & Remodeling

  • Transportation

    Browse All » Alternative Transportation Cars

  • family

    Browse All » Raising a Family

MNN.COM›

MNN BLOGGERS

Karl Burkart

Offshore oil vs. offshore wind ... who wins?

How many offshore wind turbines could have been bought for the cost of 1 Deepwater Horizon? The answer is enlightening.
Mon, May 24 2010 at 9:11 PM EST
37 Comments

Image: NREL
NOTE: a Forbes reader pointed out that the figure I used was for MAXIMUM capacity of wind (the figure used in my source article). So I've adjusted below for an AVERAGE annual wind capacity which is significantly lower.
 
In my fact-digging on the now sunken Deepwater Horizon oil rig, I came across a stat about the construction and operational costs of BP's failed rig which was to tap an estimated 7 billion barrels of oil from two recent oil discoveries (the Kaskida and the Tiber) over a 25-year period. According to Morningstar analysts (who published a study back in March), the projected investment for both wells was between $8 billion and $12 billion U.S. 
 
So that got me thinking, just how much offshore wind could be bought for the equivalent $12 billion investment? My back of the envelope calculations were enlightening. Here we go ...
 
1. What is the cost of offshore wind power?
We have a good comp in the form of Alpha Ventus, a 12-turbine project off the shores of Germany which was recently completed. The project was the first of its kind and as might be expected, it ran over budget. According to Spiegel, the total project cost $282 million (it was estimated at just under $200 million) which includes upkeep costs over 25 years. Alpha Ventus is a 60 megawatt array, enough to power about 50,000 U.S. homes at peak generation or 550 216 million kWh's of electricity per year (a typical U.S. home uses 11,000 kilowatts). 
 
2. How many turbines can $10 billion buy?
Projecting that the next few big offshore projects will drop in price as manufacturing and grid infrastructure improves, let's say a 60 megawatt project will go for $200 million. Divide that by $12 billion and you get sixty 60-megawatt wind projects, or about 33 13 billion kWh's of power capacity per year. 
 
3. How many electric cars does that power?
A typical American drives 12,000 miles per year. The latest plug-in electric vehicles (like the much-anticipated Tesla Sedan) use about 370 wH's per mile. The typical U.S. driver would need 12,000 x .37 = 4,440 kilowatts per year. Divide 33 billion by 4,440 kilowatts and you get about 7.4 3 million electric vehicles that could be powered each year by a $10 billion wind investment.
 
4. How many cars could Deepwater Horizon have fueled?
44 gallons of gasoline petroleum products are made from each barrel of crude -- approximately 30 gallons of fuel for cars and trucks (including 19.7 gallons of petroleum and 10 gallons of diesel). Deepwater Horizon was to produce 7 billion barrels of crude over its 25 year life span. 7 billion x 30 = 210 billion gallons of gas divided by 25 years = 8.4 billions gallons of fuel per year. Let's say as cars and trucks become more efficient the average U.S. vehicle goes up to a 26 mpg average. 26 mpg x 8.4 billion = 218 billion miles. Divide that by our 12,000 mile national average and you get 18.2 million gas cars vehicles (cars & trucks) per year from the $10 billion offshore drilling investment.
 
NOTE: this is a tricky equivalency because crude produces a variety of fuels and other petroleum products including jet fuel (4 gallons per barrel). For the sake of this comparison I included only diesel and gasoline products. which makes up 68% of the net products from a barrel of crude. 
 
5. What's the end cost for the consumer?
You can see why as a nation we like oil so much ... it yields about 2-3 times more transportation power per dollar invested. But it's important to note that the cost of gasoline for the end-user is considerably higher than electricity. The consumer pays dearly for all that convenient fossil fuel. Right now gasoline is about $3 per gallon and the typical car gets 22 mpg. So the typical gasoline mile costs us about 13.6 cents or $1,632 per year (oil). Grid electricity is about 10 cents per kilowatt, so one mile on electricity costs only 3.7 cents, or $444 per year (wind). If you figure that 7.4 million Americans would be saving $1,188 per year, that is about $8.8 billion going back into the U.S. economy rather than into the grubby hands of foreign oil companies like BP.
 
6. What if you factor in environmental costs?
Now if we start factoring in the massive cleanup costs, it changes the game significantly. Current estimates are putting the BP cleanup bill at $22.6 billion. This figure will be matched (at least) by U.S. taxpayers in the form of government assistance programs. So that puts the total estimated Deepwater Horizon price tag at $55 billion ($10B + $22.5B + $22.5B), assuming it's even possible to clean up the spill completely.
 
7. Comparing apples and lemons ...
As a comparison exercise, let's say that instead of sinking on Day 1, the Deepwater Horizon sunk halfway though its lifespan. It would have powered 13.4 million cars 9.1 million vehicles at a cost of $55 billion ... about $6,000 per vehicle (oil). Our wind turbines would have powered 3.7 million cars at $10 billion or about $5,400 per vehicle (wind). Since "windspills" have never been known to cause any impact whatsoever and oil spills are quite frequent (according to NOAA in one sample year alone there were 257 oil spills) this seems more than a fair comparison and puts wind in the lead, both from the perspective of investment and consumer spending.
 
Of course, this sad little number game will never make up for the incalculable losses to the fishing industry, the tourist industry, the health of wetlands, the survival of wildlife, the carcinogens that are now leaking into the water systems of Gulf residents — all things for which BP will never pay. We, the American people however, will pay those prices for a very, very long time to come.
 
You get my drift ... it is time to change the way we think about offshore energy resources and start switching to safe, clean wind power. 
 
<!--StartFragment-->
Please note: Offshore wind costs 2 times more than wind installed on land. Though it takes away hurdles in terms of permitting and land claims, many wind experts are hoping that we will focus instead on land-based wind power. If the above scenario had compared Deepwater with a comparable land array, the cost per vehicle in #7 would have been half or $2,700 per vehicle.  
 
Read more about the real costs of offshore drilling - MNN exclusive.
The opinions expressed by MNN Bloggers and those providing comments are theirs alone, and do not reflect the opinions of MNN.com. While we have reviewed their content to make sure it complies with our Terms and Conditions, MNN is not responsible for the accuracy of any of their information.
 
WorldShares lets you earn donations for your favorite nonprofit. Earn up to 20 points now.
Learn More
Earn Points
What's this?
Email Twitter Stumble Digg ShareShare
CLOSE link:
Previous Post
Wind power rekindles Maine economy
   Next Post
The oil spill gets its own app
Related Links
  • BP report blames itself, others for oil spill
  • Microbes are eating oil from BP spill without using up oxygen
  • Oil well capped, 'shrimp and petroleum' festival goes ahead
  • Planet Pundit: The audacity of dopes
  • Latest Gulf rig problem differs from BP spill
Related Topics
  • Go Green
  • Gulf Oil Spill
  • Offshore Drilling
  • Oil & Gas
  • Renewable Energy
  • Comments

    Add your comment
    View:
    • All (37)
    • Readers' Selections

    Why

    Posted By Jack Moeller - Thu, Aug 19 2010 at 3:24 PM EST

    To talk about all the things wrong with this article first you have to look at the deepwater horizons damage which is tiny compared to what was predicted. The natural bacteria in the ocean that are designed for breaking down oil (which always seeps up from the floor) are doing their job. Very few beaches are soiled and very little environmental damage was done by a disaster of this magnitude. Mother nature as the website is called seems to have a way of adapting to protect itself from us..... More

    Napkin math is dangerous

    Posted By Matthew - Fri, May 28 2010 at 10:32 AM EST

    I perceive a nontrivial fudge factor at work in these numbers. For example, I pay about 13 cents per kW/H of grid power (as does just about everybody in my state). My cost of gas has averaged about $2.70 per gallon, and as of this very moment is actually a bit less than that. My own vehicle gets about 32 MPG. These differences add up substantively.

    The problem continues. The estimate of yearly output of an array of 60 megawatt arrays operating continually at peak capacity is about 3,600,000.... More

    How

    Posted By Jack Moeller - Thu, Aug 19 2010 at 3:27 PM EST

    How can you stand driving such a small vehicle, ever considered a large vehicle might be safer, more comfortable, and more practical on long trips or off-road vacations? Try a ford excursion or a ford F-35 pickup truck

    Wait a minute

    Posted By Lethal Enforcer - Thu, May 27 2010 at 1:22 PM EST

    "let's say a 60 megawatt project will go for $200 million. Divide that by $12 billion and you get sixty 60-megawatt wind projects, or about 33 billion kilowatts of power capacity per year. "

    How does this add up?

    60 * 60 Megawatts = 3,600,000,000 watts. That's 3,600,000 kilowatts, an order of magnitude away from 33 billion kilowatts. What does "capacity per year" even mean? Did you maybe mean kilowatt hours?

    NOTHING CAN BEAT WIND POWER

    Posted By WIND_POWER - Thu, May 27 2010 at 10:51 AM EST

    Wind power is the best,economical,clean and green energy resource just think about the climatic consequences and include the rate of climatic disturbance factor in your calculation.

    ...redo your math!

    Posted By Anonymous - Wed, May 26 2010 at 12:38 PM EST

    Apart from the number of gallons of gasoline from a barrel, there's one major flaw in your calculation: The 60 MWs of Alpha Ventus are a peak power figure. As wind doesn't always blow, there blows your calculation...

    Reply

    Posted By WIND_POWER - Thu, May 27 2010 at 10:56 AM EST

    well you are right that 60mw is peak power,secondly your assumption that wind doesnt blow at this paticular site is absolutely wrong.The approximate amount of power derived is expected to be in the range of 40-50mw.

    Offshore Oil vs Offshore Wind ... Who Wins?

    Posted By Paul Pimentel - Thu, Jun 03 2010 at 12:32 PM EST

    The intermittency of wind is represented by capacity factor in the calculation of energy output. Capacity factors for large offshore wind projects are 35-40%. That means the average output of Alpha Ventus is 24 MW and the annual energy production will be about 200,000 MWh. Wind is still a good deal for us, just not quite as good as you have said.

    Oil will finish

    Posted By David King - Wed, May 26 2010 at 8:07 AM EST

    Eventually we must run out of oil, so we may as well start now finding an alternative. Wind is one of the attractive alternatives

    Missing from the equations?

    Posted By Kiwiiano - Wed, May 26 2010 at 6:23 AM EST

    One item missing from all the above equations is the cost of the damage to the biosphere of all that fossil fuel that would have been released by the oil well(s). Yes, wind turbines and their maintenance do have a carbon footprint and do require dwindling resources, but so do the cars and the rest of their support infrastructure.
    I suspect the biggest elephant hiding in the trunk (bad pun alert!) is the need for us all to accept that you don't need a multi-ton behemoth to move a driver and.... More

    Hey Honey Let's Go to the Beach

    Posted By john - Tue, May 25 2010 at 9:29 PM EST

    We'll play in the sand, catch some rays and watch the windmills spin around. Won't that be romantic? Aahhh! What a beautiful sunrise behind that windmill. Oh. That seagull better look out!. Bummer too late. I was wondering where all the seagulls went.
    No thanks this whole 'compare the numbers' should have stayed where it started - on the back of a napkin.

    Part Deux!

    Posted By John Shade - Wed, May 26 2010 at 7:46 PM EST

    Look honey at the seagull! It's all covered with oil and can't even fly because of the extra pounds. Man, what a depressing day to go to the beach! Wait, we're covered in oil, too!

    No thanks this whole 'crude oil' should have stayed where it started - in the ground.

    horizon

    Posted By ewright - Thu, May 27 2010 at 5:41 PM EST

    seriously, have you been to the gulf coast? 'cause i don't find the oil rigs along the horizon very romantic, myself.

    Why don't start gradually the process

    Posted By Yuri villarreal - Tue, May 25 2010 at 9:27 PM EST

    We got the power of nature in our hands but because it's almost free the govt doesn't like the idea it's allways the money at the end will destroy ourselves if we continue this careless ways

    Why don't start gradually the process

    Posted By Yuri villarreal - Tue, May 25 2010 at 9:28 PM EST

    We got the power of nature in our hands but because it's almost free the govt doesn't like the idea it's allways the money at the end will destroy ourselves if we continue this careless ways

    Wind vs Nuclear

    Posted By Judson - Tue, May 25 2010 at 6:09 PM EST

    An average 1000 megawatt nuclear plant costs about $10 billion. So, you are saying that we could get about 30 times more electricity from the same dollar investment of wind as compared to nuclear electricity generation. I think this is a better way of looking at things.

    Nuke ain't cheap

    Posted By Andrew D - Thu, May 27 2010 at 4:24 PM EST

    Look at the cost of the latest ("state of the art") reactors in europe. They're massively over budget (on both time and money). And that's not even factoring in the cost of spent fuel storage (which the government will end up paying for, no doubt).

    Plus the risk, which is also picked up by the government for major events.

    Without government backing, and lax enviro regs, nuclear doesn't even make financial sense.

    What about the costs of the meltdown?

    Posted By Kernyl - Wed, May 26 2010 at 12:38 PM EST

    But Judson, you haven't factored in the costs to human health and environment when the inevitable accident occurs, so you're not being fair either. All potentials need to be included.

    This isn't Springfield

    Posted By Oogway - Wed, May 26 2010 at 1:42 PM EST

    Hey rerun you are being fair by saying an accident at a nuclear plant is inevitable. Most nuclear plants never catch a glimpse of an accident, just when something bad does happen you will hear about it from the media. No need to assume a nuke plant means a guaranteed reproduction of Chernobyl

    Sad Article

    Posted By Genj - Tue, Aug 31 2010 at 2:46 PM EST

    First off, you can bet that the citizens against virtually everything won't go for wind.
    Second, I love how you forgot transmission costs. As if you just sent the electricity directly to the car. Thank god other posters called you on it as well.
    Third, want to spend tons of money on pie in the sky projects? Well why didn't we just take the "Stimulus and TARP" trillions and invest it in a massive fusion energy project? Oh yeah, the people that would help don't pay for.... More

    Nice attempt, but retry

    Posted By rerun - Tue, May 25 2010 at 4:27 PM EST

    Alpha Ventus won't generate that much electricity. There aren't 44 gallons of gasoline in a barrel of oil (it's more like 19 gallons of gasoline). Offshore wind won't provide electricity at 10 cents per kwh. Deepwater Horizon couldn't have extracted all 7 billion barrels of oil (over 25 years, that'd be an average of 767,000 barrels per day - or 50% of current total Gulf extraction).

    All in all, nice attempt, but go rerun your numbers and assumptions.

    Offshore Wind Development Has Its Costs

    Posted By Annetha - Tue, May 25 2010 at 4:18 PM EST

    Don't forget externalized costs of offshore wind development. For the Great Lakes, see www.glfc.org for concerns of Great Lakes fish managers. Add bird mortalities in this important migratory flyway. Shorelines will be hardened, tons of concrete will be poured, and don't forget the blasted red flashing lights over night waters. In the Ontario waters of Lake Erie alone ~700 offshore turbines are proposed. If the US matches the.... More

    Glaring omission

    Posted By Sunnyboy - Tue, May 25 2010 at 3:22 PM EST

    Considering the glaring omission that the oil wells are not replenished, yet wind will be around longer than we will, this make for some very serious thought.

    More adjustments

    Posted By Quentin - Tue, May 25 2010 at 1:51 PM EST

    Unfortunately :
    A 60MW array does not produce 60MW - I believe. I think the rated and actual delivered numbers are vastly different.

    Also you can't supply the electricity at one cost - your calcs on the 60MW array - and then consume it at another which is based on the cost of coal ("grid electricity is about 10c").

    Also 60MW (or whatever) produced in Cape Cod doesn't all reach your Prius - there are transmission losses.

    Then you have to account for oil and refining.... More

    Battery Overhead

    Posted By Superfund - Tue, May 25 2010 at 1:17 PM EST

    You forgot to include the fact that you lose 20% when you have to store the wind generated energy in a battery (one big advantage of gasoline is that it stores in a gas tank at a much lower price than solar and wind which aren't always available).

    I'm in favor of wind power, but the reason it's not ubiquitous is not a lack of will or insight as you claim, but rather a lack of battery/storage technology.

    Error in gasoline per barrel skews conclusion

    Posted By jerry - Tue, May 25 2010 at 12:22 PM EST

    One barrel of crude oil yeilds 19.65 gallons of gasoline, not the 44 gallons given in item 4 of this article. The number of cars fueled by Deepwater Horizon yield estimates are therefore overstated by more than a factor of two.

    Cost Comparison Oil vs . Wind Power

    Posted By Joe Lauria - Tue, May 25 2010 at 12:22 PM EST

    I think that there's a major flaw in this argument in that it is very expensive to set up offshore wind farms and probably very much cheaper to set them up on land. Offshore oil exploration exists because they're not fing enough on land.
    Wind is plentiful throughout this country. We don't absolutely need to go offshore.

    I'd like to take a wild guess and say that a land based windmill farm will come in at the same price or cheaper than oil in terms of the net product vs. cost. Is.... More

    Why deep water?T

    Posted By Matt - Fri, May 28 2010 at 10:03 AM EST

    It has been my impression that deep water drilling is used mainly because environmental regulations have blocked it closer to and on land.

    Cost Comparison Oil vs . Wind Power

    Posted By Joe Lauria - Tue, May 25 2010 at 12:22 PM EST

    I think that there's a major flaw in this argument in that it is very expensive to set up offshore wind farms and probably very much cheaper to set them up on land. Offshore oil exploration exists because they're not fing enough on land.
    Wind is plentiful throughout this country. We don't absolutely need to go offshore.

    I'd like to take a wild guess and say that a land based windmill farm will come in at the same price or cheaper than oil in terms of the net product vs. cost. Is.... More

    You can't scale alt-energy to that level

    Posted By MisterBadExample - Tue, May 25 2010 at 11:36 AM EST

    There are a number of problems with scaling up wind and solar to replace oil. As someone on Huffington Post pointed out, Wind and Solar are free--it's the extraction equipment that kills you.

    the main hypothetical on oil vs alternatives is EROEI--energy return on Energy Invested. Oil still outproduces the alternatives (although oil out of the gulf has a lower return because of the expense of the drilling techniques for deep water). People will get sticker shock on the added.... More

    You can't scale alt-energy to that level

    Posted By MisterBadExample - Tue, May 25 2010 at 11:35 AM EST

    There are a number of problems with scaling up wind and solar to replace oil. As someone on Huffington Post pointed out, Wind and Solar are free--it's the extraction equipment that kills you.

    the main hypothetical on oil vs alternatives is EROEI--energy return on Energy Invested. Oil still outproduces the alternatives (although oil out of the gulf has a lower return because of the expense of the drilling techniques for deep water). People will get sticker shock on the added.... More

    Artificial cost of gasoline

    Posted By Laura - Tue, May 25 2010 at 11:38 AM EST

    The whole petroleum industry and the gasoline produces/sellers receive subsidies in the form of tax breaks etc. from the government. The cost of $3 per gallon used in your calculations doesn't reflect the real cost of gasoline. All the more reason to support wind power.

    Response to K. Rose comment

    Posted By Roger Beck - Tue, May 25 2010 at 11:17 AM EST

    There is another number that was excluded from the calculations; The cost of obtaining oil on the world market. That cost also includes the cost of our military involvement in the Middle East where much of the oil is located. Our military involvement there is in the trillions of dollars, not to mention the lives of our servicemen and woman. How do you put a dollar figure on those lives?
    Respectfully submitted.

    cost of military

    Posted By peterk - Wed, Jun 30 2010 at 9:40 PM EST

    Good Question - right now I cannot remember the exact source - but
    the book End of Oil reported a US University study that the added cost
    of military involvement with respect to Mideast oil - came to an extra 20cents per gallon. (However that study was a few years ago.. and things may be qute a bit more now.
    Peter

    Cost of the cars

    Posted By K. Rose - Tue, May 25 2010 at 10:44 AM EST

    Unfortunately you left one important number out of your calculations.. the initial cost of the car. It's vastly more expensive to buy electrical than gas powered cars. That needs to be addressed in some fashion whether through incentive programs paid for by taxing the bejesus out of gas guzzlers or just improvements that drop the price of electric and hybrid cars.

    This is changing

    Posted By NewMomNewMe - Tue, May 25 2010 at 12:38 PM EST

    The new electric/hybrid/etc cars coming down the pike are *much* cheaper than their predecessors and are close to gas cars (and cheaper to maintain over a lifetime of use) so this argument, thankfully, is going to diminish.

    Any easier way to catch the wind?

    Posted By martyk - Tue, May 25 2010 at 10:41 AM EST

    Compelling argument. Here is another method of wind power generation that may save even more money and generate more power: http://organicconnectmag.com/wp/2009/12/from-war-machine-to-clean-energy/

    ADD YOUR COMMENT

    To prevent automated spam submissions leave this field empty.
    You can’t fool Mother Nature
    This question is for testing whether you are a human visitor and to prevent automated spam submissions.
    Image CAPTCHA
    Notify me with an email when other people comment on this article.
    Used only for emailed comments and will not be displayed with your post
     WorldShares lets you earn donations for your favorite nonprofit. Earn up to 20 points now.
    Learn More
    Earn points, claim WorldShares, save the planet and win prizes!
    Learn More Join Now

    ADVERTISEMENT

    About Karl Burkart

    Internet entrepreneur on green media and technology.

    RSS feedMore about Karl

    Recent Posts

    • iPhone 4.1 fixes dropped calls and saves battery life
    • Google celebrates the Buckyball
    • How to create 625,000 jobs and save $640 billion
    + Add this to my site

    Today's most popular

    1. 1. 13 of the ugliest animals on the planet
    2. 2. The 15 most toxic places to live
    3. 3. 10 of the smallest homes in the world
    4. 4. 10 scary animals that are totally harmless
    5. 5. 15 fruits you've probably never heard of
    6. 6. World's weirdest weather
    7. 7. The first rule of Squirrel Fight Club
    8. 8. 9 jaw-dropping caves
    9. 9. A common raven may be uncommon way to find lost hikers
    10. 10. Study: Abstaining from alcohol significantly shortens life
    + Add this to my site

    Mother Nature. Delivered

    WorldShares lets you earn donations for your favorite nonprofit.
    Learn More
    Sign up for our weekly newsletter
    Earn Points
    What's this?
    Follow us on Twitter Like us on Facebook

    FROM OUR SPONSOR

    Premiere Global: Better for your business, better for the planet
    Work Together. Apart. Green Tips for Your Car
    Green Tips for Your Home Green Tips for Your Office

    Karl's BLOGROLL

    EcoGeekFast Company
    MongabayPhysorg Tech
    Red Green and BlueTrendHunter Eco
    TreehuggerGetting Hot in Here
    Triple PunditWeb Ecoist


    Quick Links

    • Earth Matters
    • Lifestyle
    • Green Tech
    • Eco-Biz
    • Food
    • Your Home
    • Transportation
    • Family

     

    • Videos
    • Photos
    • Blogs
    • Q&A
    • Community

    MNN Tools

    • About us
    • Advisory Board
    • Press
    • Sitemap
    • Privacy
    • Terms of service
    • Contact us

    All About MNN

    • Join MNN
    • Newsletters
    • RSS
    • Eco-glossary
    • Widgets
    • MNN Contests
    • MNN Lists
    • MNN Mobile

     

    Copyright © 2010 MNN Holdings, LLC. All Rights Reserved. Website by GLICK INTERACTIVE | Powered by COLOCUBE
     
    SPONSORS