God's Country

by Heather Rae

The whipping winds of central Spain and the sultry, slow-spinning blades of wind turbines play central roles in Pedro Almodovar’s most recent creation, “Volver.” One of Almodovar’s women sighs, “este maldito viento se vuelve loca la gente.” ("This hellish wind drives people crazy.”) To me, a student in Madrid the summer of 1982, the topography of central Spain was arid, harsh and unforgiving. To someone else, Spain is God’s country – as are Nantucket Sound, the ridges along the Appalachian Trail, the plains of eastern Wyoming and the shores of Denmark. They are all God’s country; they are all special places, giving spiritual and ecological sustenance to someone and something.

Opponents of the Reddington Pond Ridge, Maine wind farm, parroting opponents of the Nantucket Sound and the Spanish La Mancha wind projects, say the Reddington site is inappropriate…it’s special. On the local radio, opponents say, if this project is approved by the Land Use Regulation Commission, then the bar will be so low that all wind projects proposed in Maine will be approved. They say, those coal-plants out west should clean up their acts; that is a better way to address climate change, a better way to meet demand for electricity.

In the mid-90s my former mate, a wind developer, came home to the agricultural preserve of Montgomery County, Maryland where we had a farmhouse. He had been to Upstate New York walking ridges and talking to farmers and local governments, looking for a good site for a wind cluster of eight or so turbines. He told me that he had found a really good one, but a woman, recently relocated from Manhattan and a self-proclaimed environmentalist, opposed the project. My mate moved on.

I was pissed.

Down the road from our farmhouse, along the Potomac River, 40 miles outside Washington, DC were two electricity generators – one coal-fired, the other a trash burner. A good old boy in Poolesville, Maryland paying 50 cents on the dollar to farmer widows, sold the land to these industrial developers. It was relatively easy to locate these polluters in what was then a poor, agricultural, uneducated and politically-weak backwater. A local citizen’s association extracted as recompense an old barn, abandoned when the county purchased a farm for a commercial composting facility; the barn was renovated into headquarters from which to educate and to monitor shipments of coal and trash, plant emissions, the incessant and monotonous drone from the plants that ebbed and flowed over farm fields, and, potentially, accidental releases of anhydrous ammonia. The good old boys settled disagreements with shotguns, stalking and paintballs; they aligned with industrial polluters and government. They joked that one day they would leave the agricultural preserve for “real farmland” in Pennsylvania; they would take their money and move on to another special place.

Close to the Mason Dixon line, Montgomery County’s agricultural preserve is culturally rich (guns and good old boys and all). With its fecund soil and the sleepy Potomac, it is God’s country – as are Pueblo, Colorado and the Dinai Indian Reservation out west, homes to huge coal-fired plants that feed a ceaseless and increasing hunger for electricity.

This week Maine’s Land Use Regulation Commission rejected the proposed Reddington Pond Range and Black Nubble Mountain wind projects in western Maine, prompting the editors of the Maine Sunday Telegram to proclaim: “LURC wind farm vote a lost opportunity.” The editorial page editor, John Porter, called the rejection “a fit of immaturity.” The Associated Press weighed in that same day with, “Town blows hot and cold on wind farm” referring to the newly erected Mars Hill Project. Another wind project in Maine, Kibby, is up for review.

From Spain to Maine, it's all special; it's all God's country. Nobody can lay claim to 'specialness' as a reason to oppose wind projects.

Heather Rae, a contributor to cleantechblog.com, manages a 'whole house' home performance program in Maine. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.

Climate Tectonics

by Richard Stuebi

The climate changes only slightly faster than the continents shift. Climate policy changes only slightly faster than the climate is altered by greenhouse gas emissions. So, when one begins to see a few elements of U.S. climate policy moving, in a relatively short period of time, it's hard not to take note and consider the implications.

In his State of the Union speech, President Bush (kinda-sorta) acknowledged climate change as an important policy aim, referring to it as a "serious challenge". While there was no mention of a carbon tax or a cap-and-trade mechanism that would seriously address this serious challenge, at least Bush proposed an important mechanism to reduce greenhouse gas emissions that had been anethema for decades -- to tighten the fuel economy standards of new vehicles. (Not to mention an increased push for renewable fuels to displace petroleum fuels.)

The new Congress is sticking its neck out further, not waiting long to take up legislation that more directly and forcefully combats climate change. (see article) At the most important annual gathering of world leaders, the World Economic Forum in Davos Switzerland, the Republican Senator John McCain -- a likely candidate for the Presidency in 2008 -- expressed his conviction that the U.S. will soon tackle climate change in a meaningful way. (see article) No doubt, it will take a while for a true policy change on climate change to emerge in the U.S., but the strong ramp-up in attention and activity is unambiguous.

It has become virtually impossible to think that climate change will not be addressed by more than merely political platitudes within any relevant forecasting horizon.

The corporate world can thus no longer afford to assume a continued stalemate that denies true action on climate change from being taken in the U.S. More foresightful companies -- even major energy companies such as BP (NYSE: BP), FPL (NYSE: FPL), Duke (NYSE: DUK), and PG&E (NYSE: PCG) -- have banded together to form the U.S. Climate Action Partnership, which is committed to reversing the trend of increasing carbon emissions in the U.S. (see article)

Even the most lingering latecomers of the U.S. corporate community are finally beginning to see the writing on the wall: that climate change is a real concern, and that actions will be taken in the near-future to reduce greenhouse gas emissions. For instance, unnoticed (by me at least) was some reportage from late 2006 that ExxonMobil (NYSE: XOM) has finally stopped funding the Competitive Enterprise Institute (CEI), a think-tank that is widely viewed to be spreading misinformation about climate change, so as to muddy the waters and delay anything meaningful being done to address it.

The pent-up forces pushing for action on climate change are starting to become unstuck. Major breakthroughs haven't happened, yet, but shifting is occurring and the warning tremors are increasingly clear. I used to think that it would take until the next President after Bush for us to see a real U.S. policy dealing with climate change -- but recent indicators suggest that we might not have to wait that long, after all.

Richard Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy.

REEF break for Australian wave power co.

Nick Bruse runs StrikeConsulting, a cleantech venture consultancy, and works with Clean Technology AustralAsia Pty Ltd; the organiser of the AustralAsian Cleantech Forums, and the leading advocate of Cleantech in Australia.

---

As the summer sun continues to blaze here in Australia, Climate change continues to feature strongly on the headlines on front pages of newspapers. Most of December's headlines caught up in watching the megafires - bushfires spanning months and more than 1 million hectares (3,861 Sq miles). Most of January take up with continued talk of the worst drought in recorded history, real possibilities of cities running out of water and the federal government announcing a A$10 billion water package to deal with agricultural irrigation and water management.

Whilst many Australian's are now back from their beach and surfing holidays - the green edge of Australia the only respite from a burnt or cracked dry bushland - Australian wave and ocean power company BioPower Systems has announced it has closed its latest round of funding.

CVC REEF is the cornerstone investor in this latest capital raising, which will be used to develop prototypes of BioPower Systems technology and plan for full scale ocean trials.

BioPower Systems bioWave and bioStream technologies have been designed using biomimicry of natural ocean organisms and their movement in wave and current systems. BioWave technology uses a tethered kelp analogy to generate electricity from wave movement across a broad range of wave frequency and power situations. BioStream technology uses a shark/tuna tail design operating in reverse deriving power at efficiently from tidal or current streams.

CEO Dr. Tim Finnigan states in BioPowers media release:

“The demand for renewable energy technologies that promise inexhaustible supplies of carbon-free electricity is currently high and is growing rapidly. With the prospects for wave and tidal current power now well established, global markets are eagerly awaiting commercially-viable technologies that can utilise these sources,” says Dr. Finnigan. Founded in March 2006, BioPower Systems Pty Ltd has a strategy for rapid development and is targeting 2009 for production of the first commercial units. “The upcoming funding rounds will support design and development of ocean-based pilots, leading in to production of commercial units.”

“The investment by CVC REEF concludes the first major phase of the company’s funding plan,” says Chief Executive Dr. Tim Finnigan. “The value added goes well beyond providing the necessary funds to test our ocean power systems. CVC REEF brings recognised experience to the company board and is committed to being actively involved in the growth of the company.”

"BioPower Systems is developing the bioWAVE and bioSTREAM, which both borrow specific traits from highly evolved marine species to derive competitive advantages in converting the energy in ocean waves and tidal currents into grid-connected electricity. By adopting natural configurations and mechanisms, these systems maximise efficiency using minimal engineering structures. This allows streamlined low-cost designs to survive in the harsh marine environment. The cost advantages are the basis for BioPower’s commercial competitiveness in the looming global ocean energy market."

Technology overviews and company contact information can be found for the bioWAVE and bioSTREAM technologies at the BioPower Systems website www.biopowersystems.com

AeroVironment IPO - Technology Developer Makes Good in Market

Aerovironment, Inc. (Nasdaq:AVAV) priced its $114 mm IPO this week, with Goldman Sachs as the lead underwriter. Shares popped up 54%.

From the prospectus "We design, develop, produce and support a technologically-advanced portfolio of small unmanned aircraft systems that we supply primarily to organizations within the U.S. Department of Defense, and fast charge systems for electric industrial vehicle batteries that we supply to commercial customers."

I have always liked this company. Basically it's an R&D company in power controls and aviation that has built its R&D practice into a provider of next generation solutions of UAVs to the US military.

On their small UAVs:

"Our small UAS are well positioned to support the transformational strategy of the U.S. Department of Defense, or DoD, the purpose of which is to convert the military into a smaller, more agile force that operates through a network of observation, communication and precision targeting technologies, and its efforts to prosecute the global war on terror, which have increased the need for real-time, visual information in new operational environments. . . .

We designed all of our small UAS to be man-portable, launchable by one person and operated through a hand-held control unit. Our small UAS are electrically powered, configured to carry electro-optical or infrared sensors, provide real-time situational awareness and intelligence, fly quietly at speeds reaching 50 miles per hour and travel up to 20 miles from their launch location on a modular, replaceable battery pack. These characteristics make them well suited for reconnaissance, surveillance, target acquisition and battle damage assessment operations. "

On their battery charger products:

"Our PosiCharge products and services are designed to improve productivity and safety for operators of electric industrial vehicles, such as forklifts and airport ground support equipment, by improving battery and fleet management. "

I love these products. My grandfather flew some of the predecessors to these UAVs in WWII. They were flying converted torpedo planes controlling TDR-1 radio controlled TV guided drones against Japanese installations in the South Pacific. It worked then, and the technology makes it hugely effective now for a much wider range of missions. And one of my former clients used to provide fuel cell technology to some of their earlier protoypes, so I've followed these guys for a while. This area of technology has tremendous military potential.

On the financial side, I'm a little torn.

On $140 mm in 2006 revenue, this kind of backlog is pretty impressive, and it's clear they've been able to drive growth.

"As of October 28, 2006, our funded backlog was $69.5 million and unfunded backlog was $491.5 million. "

And margins have been good for a business of this type.

But I've got a lot of heartache over a defense contractor / aviation supplier trading at a 20+ P/E (defense contracts are three quarters of revenues,, almost all of its UAVs, total US government is over 80%). Especially when selling shareholders cashed out 1/3rd of the IPO proceeds. Ouch. The post IPO pop may have taken it higher than I'd be willing to go.

But maybe for this particular firm I can get over it.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

What has Changed in the Alternative Energy Investment Landscape

Is the time right to invest in alternative energy? We’ve seen a lot of this before in the 1970s and 1980s. Solar and biomass hot, big regulatory pushes, and then companies and investors lost a lot of money when things changed. We’re still a bit skeptical. We’re also all about not getting pulled in to each and every overpriced hype (read, the ethanol race) – but fundamentals are fundamentals. And they’re hard to ignore and pretty darn impressive. We think the real question today is not “are alternatives a good investment?”, but “which ones have legs and make a good investment bet?”

In four words – broad-based critical mass – Unlike alternative energy of yesteryear, this alternative energy explosion has been slowly building for 10 to 15 years, and is reaching critical mass in multiple markets. Take a couple of examples – the solar market is on pace for a $20 Billion per year number globally within 3 years (SolarBuzz.com), across several major jurisdictions (in the 1980s we were talking less than 5% of that). World ethanol production is on the order of $12 Billion/year. In the US wind capacity production has growing at 25%+ per year for the last 2 years wind generation capacity additions have been second only to gas-fired generation adds in the US mix.

“It’s the global economy, stupid” - Don’t forget, this is global now, and it wasn’t really like that 25 years ago. The US pioneered solar photovoltaics, but Japan and Germany (with China catching up) are the biggest markets today. The US pioneered large scale wind power (remember Altamont Pass?), but 3 of the top 4 wind turbine companies today are European. The US engineered cap and trade in carbon, but Kyoto is a European driven engine. Lots of examples of why it’s not just us anymore. For an investor worried about the legs of the industry, that’s a really big point.

In two words – cost structure – alternative energy is still more expensive than conventional energy - that’s why we call it “alternative”. But the cost curves for each and every alternative energy source have fundamentally changed for the better over the last 10 years (NREL), are moving into striking distance, and continue to improve. This trend is not going to reverse, so it’s just a matter of time.

In three words – carbon, carbon, carbon - The carbon credit trading market, driven by Kyoto protocol was $21.5 Billion in the first 3 quarters of last year (World Bank and IETA) - that’s up from virtually zero three years ago. Now we’re talking real numbers. The US has been left out of this so far, but not for long. California is committed, the Democrats are in control of Congress, and we will likely be seeing a strengthening of some sort of cap and trade system before long.

The bottom line – alternative energy is cool and the consumer cares. Of all this activity, it’s really high gas and electricity prices and climate change that have put alternative energy on the map in the consumers minds. And they care. And they vote. And they blog. And they are buying hybrids, uneconomic hybrids, lots of them. And as the battery technology continues to advance (think lithium ion overtaking nickel metal hydride), they’ll start buying HEVs and Plug-in HEVs in massive quantities. And they are buying green power. And little pieces of paper certifying their green power. In enough quantities for Toyota and Walmart and GE and Google to brand green as part of their core strategies. How’s all that for impact?

And finally, the regulations are here. Don’t kid yourself, alternative energy has ALWAYS been a regulatory driven market. But now the regulations are pretty widespread. Take electric power, for example – it’s not just the federal production tax credit anymore, or just the solar tax credit, or the state solar subsidy programs - 23 US states now have Renewable Portfolio Standards for electricity production (Pew Center) , including Texas, California, Pennsylvania, Arizona, Illinois, etc. That’s up from 1 in 1991. Put another way, if you could swing the electoral votes from just the RPS states, you’d have a landslide presidential victory.

Yes, it’s still possible that if oil and gas prices prices fall back to 1990s levels (we expect them to pull back somewhat, but are scared to make a precise prediction) and we have 5 or 6 normal, cool winters that make the climate change debate disintegrate, then a new political wave will come in (in 30 different western countries), and each and every major alternative energy regulatory program along with all the consumer demand will collapse – in a dozen major nations worldwide. But as the saying goes, that ain’t the way to bet it.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

Maine: a market for solar

Is there enough sunshine -- and consumer drive -- to sustain a solar market in Maine? You betcha.

EnergyWorks, LLC operates out of Liberty, Maine and is busily expanding. It recently opened a Portland office and is eyeing the business market in Waldo County, a stretch of Maine's coastline. Maine Housing webstats show Waldo County resembles many other counties along the Maine coast. In Maine, the median house price increased 67.4% over the last five years, while over the same time period, median incomes increased 14.2%, making 62% of Waldo County's housing stock unaffordable to the average Mainer.

Someone else (someone likely from Boston or New York) can afford these coastal homes and is driving up the housing market. If you're going to market greentech, why not harness the sun and sell it to this upper income segment, creating jobs for Mainers along the way?

EnergyWorks has been successful doing just that.

Rebates through the Maine Public Utility Commission's State Energy Program and support from Governor John Baldacci don't hurt. Says Judy Perry of EnergyWorks, "We did a lot jobs because of the rebates. The incentives go a long way to making it happen in Maine." (Funding for the solar PV rebates have been exhausted, but rebates remain for solar hot water systems.) "The State of Maine did some PR to support the rebates. It didn't penetrate. The Maine State Energy Program website talks about the program. Few people knew about it. We’re about to run ads saying there are still state rebates."

EnergyWorks will focus on the commercial market. It has completed some big commercial projects, and its commercial work has doubled over the last couple of years. It recently completed Maine's largest installation of a solar PV array at Maple Hill Farm Bed & Breakfast in Hallowell, just south of Augusta, Maine's capital.

Says Perry, "We’re trying to work close to home, trying to reduce travel. We're focused on Maine's MidCoast...Camden, Rockland, Belfast, Liberty. There’s a lot of money along the coast, and in Southern Maine, and that’s where the jobs are."

Perry adds, "Everyone thinks it's too cold here for solar thermal, but it's not. Some of our customers have drastically reduced their energy bills. They reduce use first; then they do solar, and they're coming up with really low bills, as low as $10."

A PV system, says Perry, can run $18K, so they aren't cheap. One of EnergyWorks' clients expects a return on investment of under 10 years even without an electric rate increase. The equipment will last 30 years, more than the lifetime of the house. "You can do quite well in Maine. The technology of panels has improved; even without true south solar orientation, you can still produce quite a lot. And with solar thermal, the evacuation tubes are round, so there's a slight increase in production because of the shape."

I ask Perry why her customers are installing solar. "For our customers, it’s the green aspect; it’s the right thing to do. There are the ones who want to get off oil; they understand that connection. The core of our clients are those who are aware of the environment and want to get to independence. Some of these jobs are expensive; there are big systems on the roof. Clients can offset use, even though they’re not reducing use. We have plenty of clients who are off the grid completely, and there are no rebates for off-grid."

Perry also sees a direct connection between the price of gasoline at the pump and the phone ringing at her shop. These consumers are worried about home heating, and then they think about getting off oil. They look at these issues, what’s going to happen when oil is over.

Says Perry, "We have interesting clients. They’ve thought through all of their choices. They think about the embodied energy in building materials, where the materials came from -- where lots of people don’t think these things through. Our clients chart oil; they are engaged in systems and monitoring things. That’s the way their brains work. Something is going on with the math, science people. We did several projects for people teaching in those departments. I’d get an email; it would say the department name of a college. Campuses in Maine have sustainability departments, and some of those teachers are our clients."

I ask Perry, do customers think about where there electricity comes from? If they see the oil-Iraq-solar thermal-gas pump connection, do they see the electricity connections, that electricity in Maine isn't generated from oil? Perry says, "I bet most people don’t know where electricity comes from...nuke or coal or whatever. There's a direct connection between Iraq and the gas tank, but not the other way, not for electricity."

As for educating the public and marketing, Perry says, "We get it down to things like monthly budgets. That’s how we keep it simple. If there were easy financing, there would be more installation jobs. We need to leverage loans for solar. I’m dealing with people who know what solar can do. Other people think it's out of reach, or it’s some hippy thing or it looks bad, or it can’t be done. Some people don’t understand the technology; they think that with solar, you’re sitting in the dark."

Perry says PV can raise the value of a home and it can insulate customers from raising costs, but she wonders, does the general public understand? "People don’t see all of it. It’s complicated. For most people, when they pay more for electricity, that’s when they start to act. Climate change does not equate to action around PV and energy efficiency. Running out of oil is dicey. This is a progressive area, so they make the connection. Others aren’t making the connection that we are causing this problem [of climate change].

"It’s booming in ways. There’s lots of interest. But it's not everyone."



Heather Rae, a contributor to cleantechblog.com, manages a 'whole house' home performance program in Maine. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she begins renovation of an 1880 farmhouse using building science and green building principles.

Oil Usage Drops in Developed Nations in 2006

By John Addison (1/23/07)

Thank you to the millions that used less oil in 2006. For the first time in 20 years, the International Energy Agency show oil consumption in the 30 member countries of the Organization for Economic Cooperation and Development fell 0.6% in 2006. The drop was slight, but most encouraging to all who seek energy independence, averting a climate crisis, and healing an economy “addicted to oil.”

Yes, global oil demand did grow in 2006, but only by 0.9% in 2006, compared to 3.9% growth in 2004 and 1.5% in 2005. Oil demand may be moderating for a number of reasons including these:

1. When oil prices rose, demand shifted to more energy efficiency.
2. Some vehicles have become more fuel efficient by reducing vehicle weight, air and road resistance, and by using hybrid technology.
3. Less heating oil was needed due to global warming.
4. The Kyoto Protocol is starting to work.
5. Biofuels are increasingly used to substitute for fuels refined from oil.
6. Clean distributed energy and more reliable grids reduced the usage of diesel generators, propane and butane.
7. The ratio of people living in cities increased relative to suburbs. Oil demand per person is less in cities due to effective public transit and closer proximity of home and work. The U.N. forecasts that 80% of people will live in cities by 2050.
8. More people are riding together with car pooling and public transit.
9. Trucks and buses are reducing the wasteful idling that keeps engines running up to 40% more than is necessary. Use of auxiliary power units are increasing.
10. People spend more time working and shopping at home, using broadband Internet services.

Neal Dikeman commented on the OECD drop, “That really is huge news. Supply and demand economics does work after all, despite what some people may think. Historically, new supply discoveries drove price declines (in the 1st half of the century). Since OPEC however, supply shocks and constraints have driven major price increases, and overestimated demand / negative demand shocks have driven declines.” Mr. Dikeman is a merchant banker, originally from Houston, Texas, and now a partner with Jane Capital.

Moderation of oil usage is timely. Next week, the first phase of the Intergovernmental Panel on Climate Change will be released. This will be a major update from the respected 2001 report that involved hundreds of leading scientists globally. "The smoking gun is definitely lying on the table as we speak," said top U.S. climate scientist Jerry Mahlman, who reviewed all 1,600 pages of the first segment of a giant four-part report. "The evidence ... is compelling." CNN Report

As the oil reduction numbers are analyzed a picture may emerge about how to continue our path to a brighter future. To all of you who conserved – Thank You!

John Addison is the author of the upcoming book Save Gas, Save the Planet. This article is copyright John Addison with permission to reproduce. He publishes the Clean Fleet Report (www.cleanfleetreport.com) and is a popular speaker.

Ethanol, NAFTA, Tortillas and Walmart?

Quick, what do Ethanol, NAFTA, Mexican Tortillas and Walmart have in common? Don't know? Well here's the story.

I am fascinated by the discussion about ethanol feedstocks issues. There has been a lot of talk about corn production for ethanol either crowding out beef or food production, or driving up the price of food, or failing to supply the demand for ethanol.

I have stated before on Cleantech Blog and other sites that I believe corn is a lot more substitutable than the anti-ethanol and cellulosic ethanol advocates give it credit for. Our take: that the corn price rise from ethanol demand will not be as steep as the worst case, that the industry will find more acreage than expected for corn, and that costs will fall, in part because corn producers (and beef producers) are highly flexible and relatively global. Also that cellulosic processes are a lot harder and will take a lot longer to make economic than expected, and that the end result will be corn ethanol for a long time.

But the subject just keeps rolling - quoting an Inside Greentech interview with David Aslin of 3i:

"Leaving the issue of food substitution out for a moment, as your article pointed out, the sheer acreages that are going to be required are daunting.

There was a dramatic increase in 2006 in corn plantings over the prior year, and the industry forecasts an additional 10 million acres in 2007 in response to the need for fuel. How much of that is going to be available for food if all these ethanol plants being constructed actually come online, and at what price? (Heck, there's way too much corn syrup in U.S. food industry products anyway, so if we take a bit of the excess sugar out of people's food, that won't be a bad thing for the nation's health!)"

At the same time, we have also been saying that corn ethanol is inherently a high cost fuel ($1.50-$2.50/gallon direct cost on a btu basis compared to $0.50-0.60/gallon for gasoline on a direct cost basis - read our blog, and please don't email me arguing the price of crude is over a $1/gallon, it's the COST of finding and producing that crude, not the price the oil companies can sell it at, that matters), with lots of new supply coming on that is going to hurt the economics of US ethanol producers like VeraSun, Aventine, etc.

But this is a whole new angle - the political ramifications of our ethanol industry driving up prices for our neighbors food supply.

One of my friends, the CEO of a fuel cell startup who happens to read Cleantech Blog, emailed me an article today. Basic gist - the Mexican government is concerned that ethanol demand is driving up the price of tortillas! And is trying to decide what to do about it. As they describe the impact:

"Prices for white corn used to make tortillas have been hit the hardest. Although local corn prices are typically volatile around harvest time, which mostly falls in the second half of the year, traders say the farm gate price for white corn saw an unprecedented rise of up to 45 percent in 2006 compared with the year-ago levels in the Mexican market.

Grains traders have forecast tortilla prices to rise between 20 percent and 25 percent during the last quarter of 2006 and the first quarter of 2007. "

My friend's commentary on the subject:

"Even more funny, in the story I heard on NPR, Wal-Mart Mexico is taking advantage of the tortilla price run up to undercut independent tortilla shops. But besides the humor, there may be something here. I think the Mexican government is just out in the lead. I’ve seen at least one piece predicting that additions to ethanol production have been under estimated and that significant corn feedstock shortages will occur in 2008."

Now, nobody's talking NAFTA yet, but one of the things free trade does is globalize commodities. I'm just waiting for the next reverse "giant sucking sound" attack on NAFTA to follow this corn price rise. Or worse, some blogs are bound to start complaining that corn ethanol is racist, and anti-Mexican. To an economist like me, this price rise is just a perfect example of how globalization can even out the impact of something like ethanol demand on corn prices by spreading the effect across multiple markets and multiple commodities (and drive a new energy commodity export business - see our recent blog) - an example of my point that corn ethanol has longer legs than the cellulosic guys would like. But I'm sure that's not how it'll get reported.

Though you do have to admit - our ethanol craze could make Mexican tortillas too expensive to eat? That's kind of funny.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

EEStor and Zenn Motors - What's the real story?

As reported in the Energy Blog and Clean Break, EEStor, a perenially stealthy Kleiner Perkins backed energy storage startup (KP invested $3 mm in EEStor according to the Zenn filings), is reportedly slated to deliver product to Canadian electric car maker Zenn ("Zero Emission No Noise") formerly Feel Good Cars Inc, in 2007. Zenn's business model is to buy diesel neighborhood vehicles (low speed vehicles) from Microcar, and integrate into them their all electric power system based on EEStor storage technology.

Previous reporting from Clean Break about delays at EEStor last year here. More detailed on EEStor technology claims on the Energy Blog as well. This story has been well covered, but always worth a little reading.

From a recent Zenn annual report (available at Sedar.com if you search for Feel Good Cars), EEStor's ceramic ultracapacitor is supposed to deliver for a 52.2 kwh device of 300 lbs 4541 cubic inches, and 3-6 minute charge time (a comment from the Energy Blog link above, that it's really the cost, not performance, that is the unique claim here. I haven't dug through the old Zenn reports to see if I can find their supply agreement and any pricing information). Zenn has licensed the technology from EEStor for certain markets for $2.5 mm ($.75 mm already paid, the rest subject to milestones).

The Zenn site claims it sent its first production vehicles to dealers in November (unclear if this includes EEStor technology or not - but it does not appear so). And no mention of the number - so we shall have to wait for the next filing.

The bad news for KP and EEStor afficianados, though, is that Zenn is not exactly highly capitalized for a vehicle startup. At Jun 06 it had a US$2.8 mm/year burn, $2.2 mm in bank, which along with a subsequently raised $1.5 mm, would give them about 9 months of cash on hand today. Barring of course, the ramp needed to actually put a vehicle in production, or needing to pay almost all that cash to EEStor to make the license payments.

Not exactly the kind of stellar first customer you expect from a KP backed startup, but EEStor has apparently always been about the big bet, and likely there is some story with Zenn history here that I don't know. As usual, it's the EEStor mystery keeping the blog tongues wagging.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

Remembering Gerald Ford

With the recent passing of Gerald Ford, I am thrown to reminiscing about his tenure during the mid-1970's. It's hard to say that it's a period of fond memories, either for me personally or for the U.S.

I remember Vietnam, Watergate, inflation, recession, bad Top-40 music on AM radio (no matter how hard I try, I can't forget 10cc's "Big Boys Don't Cwy"), disco and leisure suits (which go hand-in-hand), long hair, Pet Rocks, mammoth American land-yachts that rusted prematurely.....

...and, of course, the OPEC oil embargo and what we then called "the Energy Crisis". Thirty years ago, the U.S. was consumed by concern about energy, and we rapidly moved to smaller cars and lower thermostats in the winter. (Remember Jimmy Carter's cardigan sweater?)

However, it took a recent Thomas Friedman oped in the New York Times to remind me that Gerald Ford was the first to coin and use the phrase that we are now hearing increasingly often yet again: "Energy Independence". Before even Amory Lovins, Gerald Ford was an unsung pioneer in pushing alternative energy and energy efficiency to address our energy challenges.

He imposed a (gasp! horrors!) $3/barrel tariff on imported oil -- back when oil was about $11/barrel -- and signed the Energy Policy Conservation Act of 1975 that included major investments in alternative energy research (leading to today's NREL), state-level energy conservation programs, and the creation of the CAFE standards to improve automobile fuel efficiency.

In today's age, it seems incongruous, but remember that Ford was a Republican, and these were the types of policies that the Republican party used to promote.

Although he was considered mediocre in his day, it is increasingly clear through the rearview mirror of history that Gerald Ford was in fact a pretty darn respectable President -- and particularly foresightful in energy. As Friedman notes, if we had only followed Ford's path consistently for the past 30 years, we wouldn't be in anywhere near as dire an economic and environmental situation as we are today. Alas, the 1980's followed the 1970's, Reagan followed Carter, energy prices collapsed, energy R&D budgets were radically shrunk, energy urgency dissipated, and "Don't Worry, Be Happy" became the mass mantra (as well as one of those unforgettably weak Top 40 songs). Twenty years' worth of gluttony ensued: big TVs and bass-boats, sprawl and SUV's, McMansions and me-too-ism.

Friedman asks President Bush to honor Ford's legacy by making the rest of his term dedicated to and organized around a renewed commitment to energy policies that will far better serve our long-term interests. Let's hope Bush, or perhaps more plausibly the new 110th Congress, hear Friedman and follow through.

BP Chief John Browne Stepping Down

BP Chief Lord John Browne is stepping down in July. This suprise announcement is over a year earlier than previously expected. BP's press release.

The change will be the end of an era for BP. Despite BP's recent problems in 2006, it was under Browne's leadership that BP helped initiate the age of the mega-mergers in oil companies, with the acquisitions of Arco and Amoco.

It was also under his leadership that BP pioneered the "open innovation" model of tehcnology development, funding massive amounts of research at university R&D centers instead of in internal R&D centers.

And for the cleantech world, it was under Browne's leadership that BP virtually defined its technology strategy in terms of a "low-carbon" future.

Along with the recent leadership change at ExxonMobil, Browne's departure marks the end of an era.

Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com.

Wal-Mart Makes Money Being Green

Wal-Mart generated much excitement with an RFP to bring solar power to 300 stores. Wal-Mart is making more green investment as it sees early returns in investments already made.

Long distance trucks are vital to moving the goods. These big trucks are powered by efficient diesel engines, often achieving 25% better mileage than gasoline engines and 50% better than ethanol. These trucks will be one of the last vehicle types to switch to cleaner fuels or to use hybrid drive systems. Diesel engines are efficient, the infrastructure is there, and the fleets are replaced slowly. There are, however, many ways to make these diesel trucks more energy efficient.

Wal-Mart operates 3,300 trucks that in 2005 drove 455 million miles to make 900,000 deliveries to its 6,500 stores. Wal-Mart has set a goal of doubling the fuel efficiency of its new heavy-duty trucks from 6.5 to 13 miles per gallon by 2015, thereby keeping some 26 billion pounds of carbon dioxide out of the air between now and 2020. Green Car Congress

A big loss for Wal-Mart and all long distance truckers is that engines are left running at stops for many auxiliary needs including air conditioning, heating, running electronics inside the cab and more. Wal-Mart installed small diesel engines for auxiliary power units on all trucks. Wal-Mart installed APUs in 100% of its trucks during the past couple years, saving them 25 million a year in fuel costs and reducing carbon output from their trucks by 100,000 cubic feet per year. Bob Sutton

Wal-Mart worked with the Rocky Mountain Institute to introduce new trucks with many energy saving improvements including better aerodynamics, transmissions and tires. Wind skirts under the trailer significantly reduced wind resistance and improved mileage. Wal-Mart combined the two wheels normally seen on a rear axle into a single wheel that is not quite as wide as the sum of two wheels. This gives a smoother ride and better fuel economy from the reduced surface area and improved tire wall stiffness. Wal-Mart also has more than 100 hybrid light-duty vehicles fleet, with plans to double its hybrid fleet.

Wal-Mart saves diesel fuel both with vehicle technology and common sense. By working with its suppliers, Wal-Mart is fitting more goods in smaller and lighter packaging. More goods move in a truck without adding weight. Fuel is saved. Wal-Mart is also disciplined about keeping tires properly inflated. Small economies over 455 million miles create big results.

Wal-Mart is respected by other large fleet operators. They may implement a number of Wal-Mart’s approaches to fuel efficiency. For-hire carriers in 2004 operated 675,000 trucks; the top 10 include such companies as UPS, Federal Express and Yellow Roadway. Within Federal Express' 70,000-vehicle fleet, the company operates 30,000 medium-duty trucks, of which less than 100 use hybrid diesel. Some six million additional vehicles are owned by private commercial fleets such as Sysco, Wal-Mart, Halliburton and Frito-Lay. Verizon operated 70,000 trucks and cars in 2004. Waste Management operated about 28,000 vehicles in 2004.

Unlike Wal-Mart, other major carriers may depend on electrified stops instead of an APU. Long-distance trucks waste enormous quantities of fuel running their engines on idle. For many drivers, this is there only way to run the electronics in the cab including air conditioning, heating, communications, GPS map systems, and television. Drivers are legally required to pull over after driving too many hours to dine, relax and get some sleep. Auxiliary power is needed for hours.

To the rescue are an increasing number of electrified truck stops. Here the driver can pay to use grid electricity and shut-off the engine. The EPA even offers a free website for drivers to locate the nearest electrified stop.
EPA

John Addison is the author of the upcoming book Save Gas, Save the Planet. He publishes the Clean Fleet Report and is a popular speaker.

You Say Climate Change, I Say Global Warming

Diane Dandaneau, Executive Director of the ConservEd Project and Colorado Interfaith Power & Light, is back from Nashville, Tennessee. She is one of the talented 1000, chosen to attend Al Gore's training sessions on global warming.* "It was amazing!" she tells me this evening from Colorado.

Attending The Climate Project sessions are NASA scientists, biologists, pastors, musicians, psychologists, foresters and many others. Here in Maine, The Coastal Journal ("Proudly Serving Maine's Midcoast Community Since 1969") runs a front-page series, "Next Energy: Looking at Living with Less Oil." A lead story recently, "Global Warming Messenger from Damariscotta," describes the experience of Paul Kando, who, like Diane, went to Nashville. I spoke with Paul on the phone; like Diane, Paul is back in his home town, spreading the message.

In Nashville, Diane met a Microsoft sustainability expert, and she spoke at length with Gore's "science guy." Asking him of peak oil, he said, "there's so much fossil fuel, it's toast before we burn it all." In other words, it's not about peak oil; it's about getting to zero.

* Terry Gross's "Fresh Air" interview with Frank Luntz ran on NPR this week. Luntz says he advises the Republican Party to call 'global warming,' 'climate change,' because 'climate change' sounds more scientific, less polarizing and less radical...less like enviros who, according to Luntz, are extremists.
This is trippy stuff. In the recent past, I was told that 'global warming' was coined by the naysayers of the science, because 'global warming' sounded palatable and non-threatening (everyone loves warmth, right?) 'Climate change' in contrast, was the term to avoid, because 'climate change' smacked of science. And 'change'? Nobody likes 'change,' so call it 'global warming.' Everyone will love it!
Quite possibly everybody did, but not as intended.
It's quite possible that, like the term 'politically correct,' the term 'global warming' was created to fend off public outcry by those who opposed the science; it was then usurped by 'the opposition' and oozed out into the public consciousness, the opposite of its intended, manipulative meaning.
Quite possibly, Luntz fueled the PR machine with 'global warming,' found it usurped by the extremists (the enviros), and now is advocating 'climate change.'
At this point, who the hell cares, except Luntz and his PR machinery...and his publisher?