Lecture 1: Background and Introduction
Sources of Energy (Canada vs. World)
Coal, oil, natural gas
Wind, solar, hydro, geothermal, biomass
Hydrocarbons 75% 81%
Renewables 15% 13%
Nuclear 10% 6%
What is fractional distillation?
-Fractional distillation is a process in which the components in a chemical mixture (having different boiling
points) are separated from one another by heating the mixture in a column and collecting and condensing the
vapors drawn from different levels of the column. It is often used to refine crude oil. Crude oil is heated. Then,
the vapor created is piped into the column, where the vapor cools as it rises. Various petroleum products (e.g.
residue, diesel oil, kerosene, naphtha, petrol, and refinery gas) reconstitute from vapor to liquid at different
What is peak oil?
-the point in time when the maximum rate of petroleum extraction is reached, after which the production rate
is expected to enter terminal decline
-oil production rate forms a dome shape
Composition of atmosphere
Carbon Dioxide 0.035%
Difference between Primary energy and secondary energy
-Primary energy: energy that has not been subject to a conversion or a transformation process (e.g. coal, oil,
natural gas, hydraulic, solar, wind, nuclear)
-Secondary energy: energy that has been subject to a conversion (e.g. electricity, fuel such as gasoline,
kerosene, and heating oil)
-The left side of a Sankey diagram tells us what the sources of energy are. Sources of energy listed on the
diagram are solar, wind, hydro, biomass, geothermal, nuclear, coal, natural gas, and petroleum. The diameters
of pipes reflect quantitative magnitude of energy flow from one location to the other. As we move on to the
right side of the diagram, it tells us where the energy sources travel. As these energy sources travel, the
diagram tells us what amount of each energy source travels to serve different purposes such as residential,
commercial, industrial, non-energy, and transportation. Then, the diagram tells us the amounts of energy that
are either rejected or used. Also, the diagram tells us how much of each energy source is imported/exported.
Furthermore, the diagram also tells us how much carbon dioxide is emitted by natural gas, coal, and
petroleum. -Sankey diagrams may be used:
To analyze the issue of global warming because the diagram tells us how much CO is 2mitted by each
energy source. We can find which energy sources release too much and then try to reduce the amount
of energy produced or increase the efficiency.
Help us to analyze how to improve our current technologies or create new technologies: Sankey
diagrams tell us how much of energy source is rejected. These rejected ones do not mean that we are
highly inefficient. Sometimes, it just happens b/c we don’t have the right technologies so that we can
use all the energy appropriately.
Sankey diagram tells us how much sources of energy are imported/exported/domestically produced.
Therefore, governments can use the diagram to track their status on importing/exporting the energy
sources and try to balance the trade.
Laws of Thermodynamics
-1 Law of Thermodynamics: conservation of energy
Energy can be changed from one form to another, but it cannot be created or destroyed
For example, chemical energy in fossil fuels can be converted into electrical energy, and electrical
energy in turn can be converted into useful work in the form of heat, light, and motion.
-2 Law of Thermodynamics: law of entropy
When energy is converted from one form to another within a system, the potential energy of the
system is reduced (efficiency decreases because of variation between how much of energy is actually
used vs. how much escapes)
E.g. the efficiency of a car and furnaces are different. The efficiency of a car is 25% while furnaces’
efficiency is 90-95%. This is because when combustion produces heat, heat is the energy that the
furnaces need or use. For cars, the heat is converted into mechanical energy, and some of the energy is
reduced in this process.
Forms of Energy (“MC TERN”)
Mechanical: associated with motion (e.g. wind)
Chemical: energy is released when chemical bonds are broken/created/rearranged (e.g. coal, oil,
Thermal: heat, vibration of molecules (e.g. geothermal)
Electric: movement of electrons
Radiant: light and other electromagnetic radiation (e.g. solar)
Nuclear: arises from strong nuclear force (e.g. fission)
Human History from the Energy Perspective
Stone Age Bronze Age Iron Age Industrial Revolution
-The need to collect wood as a principle source of energy limited the size and location of the cities
-Captured fire ability to cook food improved kinds of nutrients reduced incidence of certain kinds of
-Used bronze to make tools and weapons
-Development of smelting (the process of extracting metal from ore)
The first metal to be smelted was copper. It was eventually discovered, however, that by blending
copper with tin, one could obtain a much harder metal: bronze. Bronze: copper (88%) and tin (12%)
-Coal was used in small quantities
-Because iron was overwhelmingly more abundant than copper and tin, true mass-production of metal tools
and weapons was enabled.
-External combustion (steam) engine: rapid development of rail transport, steam ships, and mass production
-Internal comthstion engine (19 century)
-Turbines (20 century)
External Combustion Engine vs. Internal Combustion Engine
-External Combustion Engine: a heat engine in which a working fluid is heated in an external boiler or heat
exchanger and is thus isolated from the process of combustion. The fluid then, by expanding and acting on
the mechanism of the engine, produces motion and usable work. The fluid is then cooled, compressed and
reused (closed cycle), or (less commonly) dumped; cool fluid is pulled in.
-Internal Combustion Engine: an engine that operates by burning its fuel inside the engine. In an ICE, the
expansions of the high-temperature and high-pressure gases produced by combustion apply direct force to
some component of the engine. The force is typically applied to pistons, turbine blades, or a nozzle. This force
moves the component over a distance, transforming chemical energy into useful mechanical energy. ICEs are
usually powered by energy-dense fuels such as gasoline or diesel.
Units of Measurement
1. Energy Content
British Thermal Units (BTUs)
Cubic feet (gas)
Cubic meters (gas)
MTOE (million tonnes of oil equivalent)
Energy – GWh, TWh, PWh
Peak – MW, GW
Carbon dioxide emissions vs. carbon emissions
Atomic weight of C is 12; atomic weight of O is 16. Thus, the proportion by weight of C in CO2 is: Rule of Thumb (World Consumption)
World consumption of oil is about 90 million barrels per DAY / 30 billion barrels per YEAR
World consumption of natural gas is about 300 billion cubic feet per DAY / 100 trillion cubic feet per YEAR
Carbon footprint of hydrocarbon fuels (coal, oil, and natural gas)
Coal: twice the natural gas
Oil: 1.5 x natural gas, 2/3 of coal
Energy/Carbon Flow diagram (Calculations)
-refer to the midterm questions Lecture 2: Economic Tools – Theory and Empirical Analysis
Types of Efficiency
Allocative efficiency: occurs when there is an optimal distribution of goods and services, taking into
account the preferences of consumers. It is at the output level where P= MC of production. This is
because the price that consumer's are willing to pay is equivalent to the marginal utility that they get.
Therefore the optimal distribution is achieved when the marginal utility of the good equals the
marginal cost. Firms in perfect competition are said to produce at an allocatively efficient level (P=MC).
On the other hand, monopolies can increase price above the marginal cost of production and are
Productive efficiency: concerned with producing goods and services with the optimal