Cleantech Blog Review: Green Tongue, Water Bikes, & Solar Land

by Frank Ling

Green Message Crafting

Americans and the US have a reputation of flaunting their wealth. Today, however, they are starting to proudly (sometimes loudly) show off their greenness. It’s a debate whether this is just a fad and the start of a nationwide trend to support sustainable practices.

Companies around the world are now racing to establish their credibility in green production. But they must also be careful of not being perceived as greenwashing.

On the other hand, being too inconspicuous in their efforts could hurt a company. With public awareness and demand for products that have smaller impacts on the environmnet, companies are forced to let the public know what they’ve been doing.

Joel Makower writes :

Companies are being pressed to talk about what they’re doing — and not doing — by customers, employees, investors, activists, and others. Previously reclusive companies are rethinking their taciturn strategies.

With the hype building up for greenness in corporate America, it may be a while until the public can properly discern the genuine stuff from noise.

Pedaling for Water

Bikes have many uses including generating electricity and powering the internet in rural villages. Some people even use it for transportation.

But a group of students in California has just developed a new use. Actually it’s for a tricycle but the idea is a foot-powered water filtration device-vehicle hybrid. Called the Aquaduct Mobile Filtration Device, the vehicle sucks water from reservoir in a rear tank and cleans it through a filtration system. The purified water is stored in a reservoir in the front.

Joshua Liberles writes in Carectomy:

Five California-based design students built the Aquaduct for rural, third-world countries where many people either walk for miles or use a motorized vehicle to retrieve water, and then use up time and energy to boil the water. The Aquaduct provides the transportation sans fossil fuel, eliminates the need for wood or other fuels to heat the water, and is emissions free.

US Solar Check

It’s been said that each of the renewable energy sources could theoretically power the US many times over if they were exploited to their full technical potential.

But how reliable are these figures. For instance, can the US really get all of its electricity from the sun?

Robert Rapier in R-Squared Energy Blog in Green Tech Media did a quick calculation:

Peak U.S. demand, according to the EIA, is almost 800,000 megawatts. Actual available capacity is 900,000 megawatts. So let’s make our solar capacity equal to today’s total installed electrical generating capacity.

Assuming the entire 1,900 acres is needed for the plant (maybe not a good assumption, but all I have), then this breaks down to (280 megawatts)/(1,900 acres), or 0.147 megawatts per acre. This of course includes all of the land associated with support functions, and it may include area for future expansions. So the calculation may be conservative.

The second assumption is that the areas in which will be put our plants will be as productive as this one in Arizona. That is not a conservative assumption, and will somewhat offset the previous conservative calculations.

Then to get 900,000 megawatts is going to take (900,000 megawatts)/(0.147 megawatts per acre), or 6.1 million acres. How large of an area is this? I don’t know. I have to get out my calculator.

My calculator indicates that 6.1 million acres is an area of 9,531 square miles, which is equivalent to a square of just under 100 miles by 100 miles (which would be 10,000 square miles).

Of course, this doesn’t take into account transmission losses and the fact that the sun is not around 24 hours a day. Still, that is a lot of energy coming from the sun.

Just how many square miles would Las Vegas need? 🙂

Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.

Up in the Air With Biofuels

by Richard T. Stuebi

Over the weekend, Virgin Atlantic Airways flew a passenger-less Boeing 747-400 partially fueled by a biofuel mixture of coconut oil and babassu oil from London’s Heathrow Airport to Amsterdam’s Schiphol Airport. (Read USA Today story.)

The test flight, performed to evaluate comparative engine performance and emissions rates with standard jet fuel and biofuel mixtures, was conducted by Virgin along with partners Boeing (NYSE: BA), the engine-maker General Electric (NYSE: GE), and the biofuel company Imperium Renewables.

No matter how the results of the experiment pan out, and no matter your personal view on the fundmental utility of biofuels, this is yet another example of how a passionate entrepreneur — albeit one with billions of dollars on his personal balance sheet like Richard Branson — is exploring the cleantech frontiers of what is possible, what is economical, what is environmentally-beneficial.

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

The week in sustainable energy stocks….

Neal asked me if I would comment on the markets for sustainable energy stocks in the last week. It’s an area I follow closely so he hopes I will occasionally stumble across some nuggets.

Let me start by saying I believe there is potential for good returns in sustainable energy stocks over time. In the short term though, it was a tough week. Sustainable energy stocks in all four of Camino’s sectors declined. In contrast, broader indicators such as the S&P, EAFA, and emerging markets were all positive for the week.

The Solar index, comprised of 33 companies, suffered the largest decline with a 5.3% drop bringing the YTD decline for the sector to -35.5%. Suntech (NYSE:STP) was hardest hit with a 20.3% price decline after it reported earnings and revenue below expectations, driven in part by silicon supply issues. If other producers report similar problems I would expect to see further declines in the sector as prices adjust to lower growth expectations.

In Biofuels Aventine (NYSE:AVR) was off 17.4% after it reported Thursday it had liquidity issues stemming from its $211.5 million invested in auction-rate securities. This issue may delay plant development. I expect analysts are reviewing the balance sheets of other sustainable energy companies to see if they have “cash equivalents” that aren’t exactly equivalent to cash. If you don’t understand what you’re investing in don’t invest in it.

In the Renewable Electricity sector Solar Millenium (FRA:S2M) declined 10.1% . The company announced a rights issue on Feb 19 that may have triggered concerns about dilution. Overall 8 stocks advanced and 11 declined resulting in relatively modest decline of 1.1% in the index.

In Fuel Cells all of our companies reported price declines with Fuel Cell Energy (NASDAQ:FCEL) falling the most at -6.3%. The company presented at the PiperJaffray conference on February 20, 2008 and didn’t highlight any items of concern that I noted.

What did I learn this week? Apparently growth constraints are still a factor in the high growth solar sector. I also relearned that unexpected risks occur when broader markets are having problems. Are there more surprises from the credit markets waiting to be revealed in sustainable energy companies?

Mark is the founder of Camino Energy, a information provider specializing in globally traded sustainable energy stocks. He also is an investor in sustainable energy stocks.

McKinsey on Energy Productivity

by Richard T. Stuebi

The McKinsey Global Institute — the think-tank offshoot of my alma-mater, the management consultancy McKinsey & Company — recently released a study claiming annual global investment of $170 billion between now and 2020 would cut greenhouse gas emissions in half, while producing an internal rate of return on investment of about 17%.

Interestingly, none of this investment is in renewables or other forms of zero-carbon energy. Rather, all of the investment is in energy efficiency.

Actually, McKinsey employs the term”energy productivity”: squeezing more economic output per unit of energy input. Maybe McKinsey is wise to be using the phrase “productivity” rather than “efficiency”, since it conjures up “more good stuff with less input”. As we all know, the concept “energy efficiency” has hardly caught the world by storm, as it seemingly falls prey to the same challenge as the word “conservation”, evoking the unpleasant images of sacrifice, making do with less, and Jimmy Carter wearing the cardigan.

Whatever the semantics, I hope that a study such as this one compels serious economic actors to deploy more capital to reduce energy consumption, and thereby reduce emissions. Per a quote in an article in The Financial Times from Diana Farrell, director of the McKinsey Global Institute, “it shows just how much deadweight loss there is in the economy in energy use.” Sounds to me like a big opportunity for savvy capitalists.

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

Can We Actually Reduce Energy Usage without Hurting GDP?

I was thinking today, in cleantech we often talk a lot about energy efficiency. Californians often cite that this state has grown its economy for the last 20 years without a significant increase in energy usage per capita, compared to the rest of the country, where GDP per capita goes up, and energy usage goes up just as much. But of course, California has lost much of its manufacturing sector over that same 20 year period, too. Perhaps no coincidence?

But if we wanted to actually do it, where could we actually save energy without impacting GDP growth, make a serious difference in our power bill, and do it in a big way – targeting say, 50% of our total power usage on a per capita basis?

  • CFLs & LEDs – We are already moving aggressively towards compact flourescent light bulbs, and the penetration rates are still low. As that trend continues, and LEDs come into the mix for more and more applications, our lighting bills should trend straight downward for the next decade. Now if we can just stop cringing at the thought of a $3 lightbulb!
  • Heating and Air Conditioning – I know whenever my power bill goes higher than I like, I just watch how often I turn the heater on, and adjust the thermoset a bit. The answer here has always been some combination of improved technology, smart metering and more transparency in billing and usage, and energy prices rising high enough for consumers to feel the pinch. Oh, and did I mention insulation, California?
  • Hotwater heaters – Can anybody say, “tankless”?
  • Power generation -If every power plant was upgraded to the latest generation of technology – in the power generation world – newer tends to equal more efficient all else being equal – the impact could be staggering. But bottom line, this means our regulators would have to approve the increase in utility capital expenditures and pass those costs on through to us in the short term. That’s about as likely as George W announcing a plan to tax every SUV Detroit makes and give the money to the poor to buy solar systems.
  • Solar – As for solar – which is typically sold on a “reduce your energy bill” pitch, not a chance. At $0.15 to $1.00/kwh (depending on who’s counting and how they count), if we actually reduced a significant amount of our building load with solar power we’d likely send our GDP plummeting. There are lots of reasons to love solar, but decreasing energy usage per unit of GDP is not one of them. At least, not yet.

These aren’t new ideas. But definitely worth repeating until we learn the lesson.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, and a blogger for CNET’s Cleantech blog.

Taking Control

by Heather Rae

Maine Congressman Tom Allen hopes to dislodge Senator Susan Collins from her Senatorial seat. Allen spoke a few weeks back at an event sponsored by the Hydrogen Energy Center and other energy-oriented organizations at the Frontier Cafe in Brunswick. Allen said that without the right kind of leadership in the executive office, real progress on clean energy will not be made. As we’ve seen.
While the Pentagon asks for the biggest budget hike since World War II, the Bush clean-tech plan gets mixed reviews. Christian Science Monitor Reporter Brad Knickerbocker writes: “After seven years in office, President Bush’s positions on energy and climate change are clear: Emphasize increased energy supplies over conservation, favor voluntary steps to reduce greenhouse-gas emissions, oppose international efforts to force changes in national policy, and make sure nothing puts too much stress on the economy.” (See Dick smile.)
Grist has posted a chart of the presidential candidates’ positions on energy and climate, and Solar Nation has posted the League of Conservation Voters’ round-up.
Not waiting for the leaders to get on board, or steer the nation into a ditch, Maine’s Midcoast Green Collaborative is organizing its second clean energy exposition in Damariscotta. Last April, the Expo was well-attended, focused and informative. Peter Drum, a young attorney who moved his practice from Washington to his home state of Maine, is one of the founders of the Collaborative. In the leadership vacuum, smart, hardworking visionaries step in.

“On April 18, 2008, Midcoast Green Collaborative is holding our second annual Maine Sustainable Energy Expo). This event is designed to showcase sustainable building and remodeling methods and technologies, sustainable energy production technology, and more sustainable transportation choices.
The Expo puts consumers in touch with vendors and contractors who specialize in green home building and renovation and renewable, disperse energy production. Some attendees told us that from the vendor/contractor side, they had more serious contacts at our show than at any other event in the State including the Bangor and Portland home shows.
From the consumer side, they were thrilled to see that so many sustainable energy technologies were available in-State. We would love to get input from all of you and invite you to attend. Last year, we had an overwhelming response.
Though we marketed the event from Portland to Bangor, we actually had attendees from as far as New Hampshire and New Brunswick, Canada. Thousands of people attended our event and we believe that it is the biggest event of its kind in Maine. The exhibitor lists were filled shortly after they were sent out. We are now trying to locate additional space for other exhibitors who have contacted us.
The greater social impact of this effort might not be obvious, but we feel that the potential impact of efforts like our Expo are incredible. Maine Watch, this weekend, highlighted LIHEAP (Low Income Home Energy Assistance Program). While programs like LIHEAP are critical to getting people through this winter, the answer, really, is to make it easier to get through the winter.
Our governments have been woefully irresponsible with our energy policy. By keeping energy artificially cheap, we have provided little incentive to winterize and weatherize homes, introduce more efficient transportation choices, and consume locally. On the other end, we have provided very little regulation for home/factory home/mobile home construction for insulation, CAFE (coporate average fuel economy) standards have not been raised in over two decades, and very little money has been provided for renewable energy research.
Therefore, U.S. policy has provided neither significant market incentives nor increasing efficiency regulations over the last 28 years. Our efforts will make it easier for people to make it through the winter here. Our goal can be reached with green home building, better energy standards that are enforced for all new homes, and renovating the current housing stock.
With our initiatives, we are hoping to ‘teach people to fish’ rather than giving them a fish (i.e. LIHEAP). Our energy audits offer performance improvements that range from very inexpensive (replacing old bulbs with CFLs) to expensive (replacing all of the windows in a home) and gives the approximate energy savings of each improvement.
People are grumbling about the economy and with good reason. The stimulus package, as it was so aptly pointed out by a morning edition commentator, is a little like the Federal government saying to its close friend ‘Gee, I am sorry that you have cancer. Have a cookie, you’ll feel better.’
If we truly want to change our economic well-being, we HAVE to get our energy use under control. Frankly, every President and Congress since Carter has been completely irresponsible about the most pressing issue of our time; fossil fuel dependence. Nixon arguably did more than Reagan, Bush, Clinton, and Bush the Second put together.
If you want to track the U.S. economy, you need only look at fossil fuel prices. In the 1990s, fuel was cheap and the economy roared. Today, oil is nearly three times the cost it was just a few years ago. When the average home heating budget goes from $1200 to $3600 a year, that is a big decrease in disposable income and does not include the additional expenditures for gasoline that further erode disposable income. These increased fuel costs make everything more expensive because of the structure of our economy. Food is grown in intense cultivation, shipped and average of 2500 miles in cold storage, and then consumed. The same is true of retail goods made and shipped all over the world.
This is probably the most counter-productive structure for an economy and can only exist in an era of dirt cheap fuel. Those days are fast becoming history. This goes for all goods. Of course, as everything gets more expensive, more people are pushed into foreclosure, bankruptcy, etc.
Fossil fuels are not going to get less expensive, significantly, ever again. In fact, they are even undervalued today. If you want an idea of the amount of ‘human labor’ stored in a gallon of gas, just try to push your car the number of miles that it gets per gallon. If your car gets 20 miles per gallon, try to push it 20 miles.
If we, as a nation, don’t do something soon, we are looking at a long term, perhaps never-ending depression in this country from today’s standard of living as oil prices rise, global climate change and ocean level rise (and the huge impacts from such events), and increasing marginalization and indebtedness of the U.S. as a world power (see the Wall Street Journal’s recent article about the diminishing power of the U.S. vis-a-vis Russia and other oil states) . That is why these are such critical issues.
Our energy Expo is just our first step in trying to help solve, what is really a quiet national emergency. The good news is that there is still time, though very little, for the U.S. to retool its economy and civilization. We must dramatically change but such change is possible. The Expo is a way for us to do our part to get our communities to change and is thus a positive and empowering event. We can take control of our energy future and usher in a new era of energy independence, local sustainability and domestic economic development, we need only make the commitment to do so.”

Other Goings On This Week
I was to head to Washington with my husband of 2.5 months, and scheduled to ask Senator Collins a few questions about federal energy policy to “fair and balance” Allen, Grist, Solar Nation and all. It turned out to be a wretched week; my husband collided with a sand truck on icy Route 1. He emerged alive and OK, but with cracked neck vertebrae. Washington (and heaven, thankfully) can wait. My thanks to everyone who has expressed support, to PenBay and Maine Medical Hospitals, to amazing family, and especially to Dr. Chip Teel.

Wake Up Call

by Richard T. Stuebi

Last week, three financial titans — Citigroup (NYSE: C), J.P. Morgan Chase (NYSE: JPM), and Morgan Stanley (NYSE: MS) — announced “The Carbon Principles” to provide guidance to energy companies in managing carbon risks. The upshot of The Carbon Principles is that these big banks are stating explicitly that, going forward, they will only provide debt financing to new power projects if proponents can prove that the proposed plants will remain economically viable under future climate change policies. (Read Citigroup release on The Carbon Principles.)

Put another way, Wall Street sees federal carbon legislation as imminent, and doesn’t want power sector executives to try to “sneak in” any last coal plants before the legislation whose economics might be threatened in a carbon-constrained world. The banks’ interest is not necessarily environmentally-motivated — they simply don’t want to see any more loans go bad — but the effect of this announcement is likely to be positive.

The energy sector can’t claim they weren’t at the table. The Principles were developed by the banks in consultation with a who’s-who of power industry giants: American Electric Power (NYSE: AEP), CMS Energy (NYSE: CMS), DTE Energy (NYSE: DTE), NRG Energy (NYSE: NRG), PSEG (NYSE: PEG), Sempra Energy (NYSE: SRE), and Southern Company (NYSE: SO).

But, apparently, the willingness of these utilities to participate in the process of developing The Carbon Principles doesn’t mean that everyone in the energy sector is reading yet the writing on the wall regarding climate change. In the February 4 Wall Street Journal, reporter Jeffrey Ball quoted Jeffrey Holzschuh, Vice Chairman of institutional securities at Morgan Stanley, as saying “We have to wake up some people who are asleep.”

If a remarkable July 2006 letter from Stanley Lewandowski, the General Manager of Intermountain Rural Electric Association in Colorado is any indication, it would seem that there’s still a number of Rip Van Winkels out there in the electric utility world.

Rise and shine! Climate change is a real phenomenon, and carbon legislation is coming — let’s begin to deal with it!

Given how Wall Street didn’t seemingly exercise any leadership whatsoever on the subprime mortgage debacles, it’s refreshing to see that they’re actually out in front (at least a little bit) on the climate change issue.

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

Blogroll Review: Biocrude, Alaska, & Policy

by Frank Ling

Waste to Oil

Think you need special enzymes to convert plant materials into fuel? It looks like science is getting closer to eliminating that step. Pretty soon we might be able to directly convert crop residues, waste paper, and pretty much anything organic into bio-crude, which is essentially oil.

The secret ingredient? Heat. It turns out that raising the temperature breaks the bonds of organic materials (in fact heat pretty much breaks any bond at a high enough temperature) through a process known as pyrolysis.

Jim Fraser, in a recent article at the Energy Blog, explains how this works:

Fast pyrolysis is a process in which the organic materials are rapidly heated to 450 – 600 °C at atmospheric pressure in the absence of air. Under these conditions, organic vapours, pyrolysis gases and charcoal are produced. The vapours are condensed to bio-oil. Typically, 70-75 wt.% of the feedstock is converted into oil.

The product can be used not only to replace gasoline and diesel, it can be used as feedstock for the chemical industry.

Steamed Alaska

Geothermal power is coming to a resort near you. At least the ones in Alaska.

At the Chena Hot Springs Resort in Fairbanks, Alaska engineers have created a breakthrough hydrothermal system that generates power using “low-temperature” reservoir water at 165 F, in contrast to conventional systems that required at least 300 F.

Jack Moins writes in EcoGeek:

The plant cost a mere $2.2 million to build as it uses all off the shelf parts. It produces 200 kw at a cost of 5 cents per kwh, compared to the former costs of 30 cents per kwh when using diesel. The design is projected to pay for itself within four to five years. Hydrothermal power is very promising, as it is estimated that the water beneath the Earth’s surface holds 50,000 times the amount of energy in the remaining gas and coal resources

Among its innovations, the system uses a three-pressure system and ammonia-water cycles, which limits the use of toxic coolants. With this early success, the entire town of Chena is adopting hydrothermal for its buildings and a greenhouse for food production

U.S. Climate Legislation

All the major US presidential candidates are making global warming a part of the their platform. Whoever wins, policy for energy, environment, and even agriculture are bound to change significantly.

But democracy is not always a fast process. Dan Reicher, director of climate and energy initiatives for Google.org and former U.S. assistant energy secretary, says that the next president will indeed push for change but any regulations will take time to phase in.

Rachel Barron, in Green Tech Media, writes:

2009 could bring a dramatic increase in support from Congress for R&D and more favorable approaches to clean-energy incentives.

Frank Ling is a postdoctoral fellow at the Renewable and Appropriate Energy Laboratory (RAEL) at UC Berkeley. He is also a producer of the Berkeley Groks Science Show.

Super Tuesday was Super for US Carbon Cap and Trade

One things for sure, post Super Tuesday with Governor Mike Huckabee far behind, Mitt Romney out, and McCain the all but crowned Republican nominee, the US is getting a cap and trade system for carbon. The question is which one. I thought I’d track a little of the candidates’ various positions.

The major differences that are left between the parties are on how to do it. In general the Republicans favor US based systems, the Democrats favor a Kyoto based approach, sort of. The Democrats favor 100% allowance, the Republicans favor a slower adjustment scheme (The Kyoto mechanisms today are actually closer the Republican stance).

Don’t forget, the real reason the US has not ratified Kyoto is less about whether to use the market based mechanisms (we were the ones who actually advocated putting carbon trading in), and more about the fact that under Kyoto, our major economic competitors in China and India have no commitments to reduce greenhouse gases, and under Kyoto effectively receive foreign aid from developed nations to build out their powerplants and infrastructure. And this concern has gotten worse, as China has now passed the US as the largest emitter of greenhouse gases, but has consistently refused to consider its own emissions reductions. So in reality, even if the Democrats win, we may still get a US focused cap and trade system if that is all that can get through the Senate.

But while any candidate election would likely make a US cap and trade a foregone conclusion, unlike McCain who has actually put forward US cap and trade legislation with a Kyoto “linkage”, Hillary and Barack both talk a new treaty and about a G-8 plus major emitters “extra Kyoto” approach that includes China. This sound surprisingly like the approach George W Bush took at the G-8 summit proposing to work within a group of the 15 largest emitters. Not surprisingly, it failed when the Bush Administration refused to sign up to commitments without China and India on the hook, and China still is not interested in signing commitments. Unlike McCain, I’m not sure Barack Obama and Hillary have figured out the details here. But we shall see.

First, the last naysayer.

Mitt Romney

In 2004 Mitt Romney told the Boston Globe he was not sure global warming is happening.

In 2007 on the global warming issue he continued to be anti Kyoto, at least. “As governor, I found that thoughtful environmentalism need not be anti-growth and anti-jobs. But Kyoto-style sweeping mandates, imposed unilaterally in the United States, would kill jobs, depress growth and shift manufacturing to the dirtiest developing nations.” Source

And the Republicans.

Mike Huckabee

Bottom line, likely no Kyoto and but maybe a cap and trade.

Huckabee has come out in support of “economy-wide” cap and trade, in a Bloomberg article on Huckabee’s support for the McCain sponsored bill.

Huckabee adopted the National Governors Association policy:

“not sign or ratify any agreement that mandates new commitments to limit or reduce greenhouse gas emissions for the US, unless such an agreement mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for developing countries within the same compliance period;”

Kyoto was a mistake, but “Earth in the Balance” is not. You do not have to hug a tree to appreciate one. It would have been a mistake to sign the Kyoto Treaty since it would have given foreign nations the power to impose standards on us. But Al Gore was not entirely wrong when he spoke of earth “in the balance.” Balance is exactly what we need more of in this discussion. All of us need to have a healthy respect for our resources, a responsible level of use of those resources, and a comprehensive plan for either preserving or renewing those resources. Source: From Hope to Higher Ground, by Mike Huckabee, p. 70 Jan 4, 2007 Source

John McCain

A keen proponent of market based environmental solutions, and anti tax to boot. He is heavily in favor of cap and trade, and as coathor of the McCain-Lieberman Senate bill backing a US cap and trade is the only candidate who has actually been doing anything about it. But he has not necessarily supported ratifying Kyoto without Chinese participation like Hillary Clinton (her husband was the one who signed it originally) used to advocate.

Among other things McCain-Lieberman calls for cap and trade, with the amount of allowances to be determined in the future, up to 15% of allowances permitted from other systems (like Kyoto’s CDM mechanism), and an enforcement penalty of 300% of the per ton market price for companies over their cap. A good summary has been done by the Pew Center, as well as a comparison with other climate change legislation.

In 2003 he did a good LA Times Op Ed piece defending cap and trade as a solution to global warming.

In a further interview he reaffirmed his belief that market based environmental solutions will work.

“Is your party where it needs to be on global warming yet?

Sen. McCain: It varies in my party, so I can’t say “my party.” But where I think our party needs to be is to be more involved in market-based economically beneficial green technologies which will then reduce greenhouse-gas emissions.In other words, Lieberman’s and my cap-and-trade proposal is market based. General Electric, the world’s largest corporation believes they’re going to make profits off of green technologies. I was just out at the port of Los Angeles with Schwarzenegger and BP is going to sequester carbon and take some offshoot materials and convert them into some kind of fuel, as I understand it. That’s going to be beneficial to BP to do that; in other words, it’s economically profitable to do these things.

Ponnuru: One of the stumbling blocks people sometimes have is that they look at these proposals to deal with the problem and they seem, not the ones you’re talking about but some of these other ones, incredibly draconian, like Kyoto, and then you look at the pay-off and it’ll solve 0.7 percent of the problem. Is the problem so enormous that these kinds of measures can’t really get you very far?

Sen. McCain: [They can] if they’re market-based. If business and industry sees a way to make money and get returns to their stock holders, then they’re going to move in that direction. And I really believe that again, this cap and trading thing, which is still being sorted out a bit in Europe, is a good market-based approach to it. And again, carbon sequestration is fine, all of these things are fine, but if you want an immediate impact on reduction of greenhouse gases then start building nuclear power plants. And I’m not saying that’s the only answer but I think it’s a significant part of the answer.”

McCain has adopted the Republican Main Street Partnership issue stance:

“The Republican Main Street Partnership supports the goal of immediate, near-term reductions in greenhouse gases, and would move toward this goal by providing strong incentives that have minimal adverse impact on the economy, and to continue to apply our best scientific minds to developing a better understanding of the long-term nature of climate change and the means to cope with it.

Two objectives should be accomplished:

create an “early action crediting system” to provide assurances to companies that actions taken now to reduce emissions of greenhouse gases will be recognized and credited in the eventual system of emissions reductions standards that will be developed; and

commit the necessary resources to national and international scientific efforts to better understand the cause and effect of global climate change.

With regard to global warming, the Republican Main Street Partnership recognizes that a longer debate over the proper U.S. role in implementing the Kyoto Protocol should and will occur. In so doing, we hope to bolster our scientific understanding of the problem and perhaps, in turn, provide immediate incentives for communities and corporations to act in their own and the nation’s best interests in reducing emissions. We are strongly committed to acting on the emerging consensus for progress and constructive change, and maintaining America’s ability to lead the world in the critical area of environmental protection. Source: Republican Main Street Partnership Issue Paper: Environment 98-RMSP2 on Sep 9, 1998″

Ron Paul

A strong environmentalist and free market libertarian, who opposes the Iraq war, Kyoto, and energy company subsidies for all the same reasons, for one, the constitution does not permit it, two, it is the job of the private sector, not government. Despite being the only non cap and trade Republican left in the mix, I always find it hard to disagree with Ron Paul. He and I are kindred spirits when it comes to small government.

Ron Paul on the environment:

“The federal government has proven itself untrustworthy with environmental policy by facilitating polluters, subsidizing logging in the National Forests, and instituting one-size-fits-all approaches that too often discriminate against those they are intended to help.

The key to sound environmental policy is respect for private property rights. The strict enforcement of property rights corrects environmental wrongs while increasing the cost of polluting.

In a free market, no one is allowed to pollute his neighbor’s land, air, or water. If your property is being damaged, you have every right to sue the polluter, and government should protect that right. After paying damages, the polluter’s production and sale costs rise, making it unprofitable to continue doing business the same way. Currently, preemptive regulations and pay-to-pollute schemes favor those wealthy enough to perform the regulatory tap dance, while those who own the polluted land rarely receive a quick or just resolution to their problems.

In Congress, I have followed a constitutional approach to environmental action:

  • I consistently vote against using tax dollars to subsidize logging in National Forests.
  • I am a co-sponsor of legislation designed to encourage the development of alternative and sustainable energy. H.R. 550 extends the investment tax credit to solar energy property and qualified fuel cell property, and H.R. 1772 provides tax credits for the installation of wind energy property.
  • Taxpayers for Common Sense named me a “Treasury Guardian” for my work against environmentally-harmful government spending and corporate welfare.
  • I am a member of the Congressional Green Scissors Coalition, a bipartisan caucus devoted to ending taxpayer subsidies of projects that harm the environment for the benefit of special interests.

Individuals, businesses, localities, and states must be free to negotiate environmental standards. Those who depend on the land for their health and livelihood have the greatest incentive to be responsible stewards.”

From an interview with Grist:

“What, if anything, do you think the government should do about global warming?
They should enforce the principles of private property so that we don’t emit poisons and contribute to it. And, if other countries are doing it, we should do our best to try to talk them out of doing what might be harmful. We can’t use our army to go to China and dictate to China about the pollution that they may be contributing. You can only use persuasion.

You have voiced strong opposition to the Kyoto Protocol. Can you see supporting a different kind of international treaty to address global warming?

It would all depend. I think negotiation and talk and persuasion are worthwhile, but treaties that have law enforcement agencies that force certain countries to do things, I don’t think that would work.

You believe that ultimately private interests will solve global warming?
I think they’re more capable of it than politicians.

What’s your position on a carbon tax?
I don’t like that. That’s sort of legalizing pollution. If it’s wrong, you can buy these permits, so to speak. It’s wrong to do it, it shouldn’t be allowed.”

Then the Democrats.

Hillary Clinton

Hillary Clinton has previously stated she would ratify Kyoto (though has discussed “fixing” it first), and has come out in favor of aggressive cap and trade systems. It is a little hard to understand how she will reconcile her stated desire for environmental protection as a key part of trade policy, and a Kyoto protocol that places no emissions reduction commitments on major US trading partners like China and India. The short answer may be she has backed off Kyoto, focused on cap and trade and a new treaty for Kyoto.

The Hillary Clinton global warming agenda from her website:

“Hillary’s plan to promote energy independence, address global warming, and transform our economy includes:

A new cap-and-trade program that auctions 100 percent of permits alongside investments to move us on the path towards energy independence;

A requirement that all publicly traded companies report financial risks due to climate change in annual reports filed with the Securities and Exchange Commission”

Her previous statements were very strongly pro Kyoto. “As Senator, I will work for New York to get its fair share of federal mass transit funds and to increase the amount of money that goes to transit funds. And, I will vote to ratify the Kyoto Protocol to bring all nations together to address global warming and build a better future for us all. Source: www.hillary2000.org, “Environment” Sep 9, 2000”

But recently she has started hedging a bit, talking about the flaws of Kyoto. “I will start by reigniting our international involvement. We cannot sit here, in the United Sates and expect to deal with global warming if we do not cooperate with other countries. Getting back into process, you know when President Bush took us out of Kyoto, I regretted that but he had an opportunity to start his own process, he didn’t want to do Kyoto, do something else. Reach out to India and China they have to be part of this. One of the flaws of the Kyoto process was I don’t think people anticipated, even in the early 90s how quickly China and India would grow. China is now growing at 12 percent a year. They are the second highest user of energy but they are now the highest emitter of green house gases in the world. India is not far behind. We have got to get a new international process.” “Energy and Environment: Speech on the Green Building Fund,” Hillary Clinton’s official candidate website, July 24, 2007

And further here.

“The President’s failed unilateral energy policy is a part of our failed unilateral foreign policy. It’s deprived us of the credibility and the leverage we need to solve the climate crisis. I’ll change that by leading the process to develop a new treaty to replace the Kyoto Protocol, which is set to expire in 2012. One of the worst messages the President sent was when he took office and rejected completely Kyoto. He could have said we don’t like Kyoto but we’re immediately starting a new process. But that didn’t happen. Well, come January 2009, I’m sending a different message. I want to act quickly to help develop a new treaty. I will engage in high level meetings with leaders around the world every three months, if that’s what it takes to hammer out a new agreement. My goal will be to secure a deal by 2010. We can’t wait for two more years. I will establish an E8 that’s modeled on the G8 which is where the big industrial economies come together. We need the world’s major carbon-emitting nations to come together to tackle these challenges.”

Barack Obama

As aggressive a global warming activist as you will find in the election, he is actually more Republican on his global warming position that he looks. He like Hillary, favors cap and trade, technology investment, and a 100 percent auction for allowances. But with his extra-Kyoto Global Energy Forum and a noncommital “re-engage” Kyoto strategy, like Hillary he does not appear to have worked out the details.

The Obama statements:

“Restore U.S. Leadership on Climate Change

Create New Forum of Largest Greenhouse Gas Emitters: Obama will create a Global Energy Forum — that includes all G-8 members plus Brazil, China, India, Mexico and South Africa –the largest energy consuming nations from both the developed and developing world. The forum would focus exclusively on global energy and environmental issues.

Re-Engage with the U.N. Framework Convention on Climate Change: The UNFCCC process is the main international forum dedicated to addressing the climate problem and an Obama administration will work constructively within it. “

“Reduce carbon emissions by 80% by 2050

Cap and Trade: Obama supports implementation of a market-based cap-and-trade system to reduce carbon emissions by the amount scientists say is necessary: 80% below 1990 levels by 2050. Obama’s cap-and-trade system will require all pollution credits to be auctioned. A 100% auction ensures that all polluters pay for every ton of emissions they release, rather than giving these emission rights away to coal and oil companies. Some of the revenue generated by auctioning allowances will be used to support the development of clean energy, to invest in energy efficiency improvements, and to address transition costs, including helping American workers affected by this economic transition.

Confront Deforestation and Promote Carbon Sequestration: Obama will develop domestic incentives that reward forest owners, farmers, and ranchers when they plant trees, restore grasslands, or undertake farming practices that capture carbon dioxide from the atmosphere.
Source: Campaign booklet, “Blueprint for Change”, p. 24-27 Feb 2, 2008″ Source

“Q: What do you think the toughest choice you have left to make is? What haven’t you made up your mind on yet? And why haven’t you?
A: The issue of climate change. I’ve put forward one of the most aggressive proposals out there, but the science seems to be coming in indicating it’s accelerating even more quickly with every passing day. And by the time I take office, I think we’re going to have to have a serious conversation about how drastic steps we need to take to address it.
Source: 2007 Democratic radio debate on NPR Dec 4, 2007″ Source

“As president, I will place a cap on carbon emissions and require companies who can’t meet the cap to buy credits from those who can, which will generate billions of dollars to invest in renewable sources of energy and create new jobs and even a new industry in the process. I’ll put in place a low carbon fuel standard that will take 50 million cars worth of pollution off the road. I’ll raise the fuel efficiency standards for our cars and trucks because we know we have the technology to do it and it’s the time to do it.”
Source: Take Back America 2007 Conference Jun 19, 2007

“I proposed a cap-and-trade system, because you can be very specific in terms of how to reduce the greenhouse gases by a particular level. What you have to do is you have to combine it with a 100% auction. Every little bit of pollution sent up into the atmosphere, that polluter is getting charged for it. Not only does that ensure that they don’t game the system, but you’re also generating billions of dollars that can be invested in solar & wind & biodiesel. On a carbon tax, the cost will be passed on to consumers. Under a cap-and-trade, plants are going to have to retrofit their equipment. That’s going to cost money, and they will pass it onto consumers. We have an obligation to use some of the money that we generate to shield low-income and fixed-income individuals from higher electricity prices. We’re also going to have to ask the American people to change how they use energy. Everybody is going to have to change their light bulbs and insulate their homes. It’s a sacrifice that we can meet.”
Source: 2008 Facebook/WMUR-NH Democratic primary debate Jan 6, 2006

So here comes the cap and trade. But the how is still up in the air. In the interests of full disclosure, this is an area I fully believe in, and I am not only involved with at least one business that would likely benefit from a US cap and trade, though also a few businesses that would likely suffer from a cap and trade.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, and a blogger for CNET’s Cleantech blog.

Heavy-Duty Vehicle Trends for 2008

By John Addison (2/8/08). Most oil consumption and greenhouse gas emissions from transportation are not from passenger vehicles; they are from the heavy-duty vehicles, ships, and planes that move all our goods, serve public transit, and provide the infrastructure that keeps cities running. Heavy-duty operators have often been years ahead of passenger vehicle owners in using advanced technology to do more with less fuel.

Hybrids. Wal-Mart operates 7,000 trucks that in 2005 drove 872 million miles to make 900,000 deliveries to its 6,600 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. 26 billion pounds less of carbon dioxide would be emitted over 15 years as a result. Demand for oil is also reduced with over one billion less gallons of diesel required over that 15 year period.

Wal-Mart is defying the conventional wisdom that hybrid technology is of little help for large trucks that already have efficient diesel engines. Wal-Mart delivers goods from regional warehouses on an optimized route to its stores. Routes often involve heavy stop-go city driving. With hybrid technology, every touch of the brakes causes energy to be captured. Where trucks previously idled with engines running, hybrids can run all auxiliary power with the engine off, using large battery stacks for the electricity.

Wal-Mart has more than 100 hybrid light-duty vehicles. Now Wal-Mart sees bigger potential savings in heavy-duty Class 8 trucks. Wal-Mart plans to replace Peterbilt 386 big-rigs with hybrid versions of the same truck by 2009. Wal-Mart Clean Fleet Report

Plug-in Hybrids. PG&E is one of 14 utilities in the nation participating in the pilot truck program, sponsored by WestStart‘s Hybrid Truck Users Forum (HTUF), a hybrid commercialization project bringing together truck fleet users, truck makers, technology companies, and the U.S. military, to field-test utility trucks with an integrated hybrid power-train solution.

This new Class 6/7 hybrid truck is built by International incorporating the Eaton (ETN) hybrid drive system with a 44kW electric motor. Eaton has produced more than 220 drive systems for medium and heavy hybrid-powered vehicles. Vehicle configurations include package delivery vans, medium-duty delivery trucks, beverage haulers, city buses and utility repair trucks – each of which has generated significant fuel economy gains and emission reductions. Fleet customers for Eaton hybrid power have included FedEx Express, UPS, Coca-Cola Enterprises, The Pepsi Bottling Group, and the 14 public utility fleets into which were placed 24 hybrid-powered repair trucks.

Idle-off. In many heavy-duty fleets, engines idle 40% of the time at stops for many auxiliary needs including air conditioning, heating, running electronics inside the cab and more. These auxiliary functions can now be powered with the batteries in hybrid powertrains, with auxiliary power units such as fuel cells, and with truck-stop electrification. Heavy-vehicles can now be programmed to automatically idle-off after a prescribed amount of stop time, such as California’s five-minute law. Idle-off is possible by GPS location, such as specific bus stops. Wal-Mart alone estimates savings of $25 million with idle-off and APUs for its 7,000 trucks. Transit operators save millions of gallons of fuel and keep passengers happy with electronic air conditioning without diesel fumes.

Natural Gas. There are about five million natural gas vehicles in operation globally. These vehicles consume 238 million gasoline gallon equivalents. That amount has doubled in only five years. CNG vehicles are popular in fleets that carry lots of people: buses, shuttles and taxis. Natural gas fleets are likely to double again in the next five years. Los Angeles County Metropolitan Transportation Authority (LAMTA) serves over ten million people with the nation’s largest natural gas fleet, comprised of over 2,000 CNG buses. A growing number of riders enjoy higher-speed service with LAMTA’s bus rapid transit.

To help clear Southern California air, the Ports of Los Angeles and Long Beach established a $1.6 billion Clean Truck Superfund to purchase 5,300 alt-fuel trucks by 2010 out of a total fleet of 16,800 Class 8 trucks. All are likely to be Westport LNG systems installed in Kenworth T800 trucks.

Hydrogen Fuel Cells. Many passenger cars have the potential to meet all driver needs by plugging in for a nightly recharge of batteries in electric vehicles. Buses running 16 hours daily and climbing 12% grades can also be electric, but most need the added electricity provided by hydrogen fuel cells. Over 3,000,000 people have ridden these vehicles in Europe and the U.S.

Energy Security. The Army’s NAC is pursuing hybrid truck technology to significantly reduce the Army’s fuel consumption and logistics needs, to provide field-generation of power and to provide quiet, stealth operations. The U.S. Army has a fleet of over 246,000 vehicles with a goal to reduce fuel consumption by 75% by 2010.

Green Supply Chains. ConAgra has contracted with Nova Biosource Fuels to convert food processing waste into biofuel, greatly helping with waste regulations. This provides Nova Biosource Fuels with a low-cost feedstock for high-quality biodiesel. ConAgra has guaranteed the purchase of 130 million gallons per year. California-based State Logistics, has grown its business by providing more-sustainable shipping options for companies like Clif Bar. Prologis will only build USGBC LEED certified distribution centers.

On February 20, fleet managers, vehicle technology leaders, government leaders, other experts and stakeholders will gather in San Diego to discuss their success in all of these areas at the Clean Heavy-Duty Vehicle Conference 2008.

“Clean Heavy Duty Vehicle 2008 highlights the vehicles and fuels that will actually cut our greenhouse gases and reduce our dependence on oil,” said John Boesel, President and CEO of WestStart-CALSTART, a leader in spurring green tech in transportation. “The conference brings together the key business and political leaders helping bridge the technological and financial gaps to bring clean transportation solutions to market.”

Stay tuned for more exciting progress in 2008.

John Addison publishes the Clean Fleet Report.

Microsoft buying Yahoo? The Yahoo shareholder’s dilemma

Last fall Cleantech Blog did an article on asking whether Microsoft Vista could be considered the best selling cleantech product in the world. And we have long admired the Green.Yahoo.com portal, so while maybe a stretch for Cleantech Blog, I couldn’t help but weigh in on the recent Microsoft (NASDAQ:MSFT) offer to acquire Yahoo (NASDAQ:YHOO).

One of my friends who formerly worked at Yahoo still holds some shares there. He knows I have liked Microsoft as a stock, and asked me to write him a quick note on the Microsoft bid for Yahoo. As a Yahoo shareholder, how does he decide whether to sell or hold? What’s the analysis?

The first part of the answer depends on some simple numbers around the tax basis and impact. If he sells now, he pays his 20% in taxes on the gain (depending on whether it’s long term or short term). If he holds and it does go through, it should go through at a roughly 10% higher price ($31 vs. $28), and he can possibly roll his tax basis (check this with your tax advisor, as the proposed deal is half cash and/or half stock – but I believe it is intended to be tax free at least for the stock portion). If he holds and it doesn’t go through, Yahoo could well give back the 50% it has traded up.

There is a reasonable likelihood of failure of the deal, as these discussions between Microsoft and Yahoo are not new. But perhaps the risk of failure is no worse than 50/50. The market has basically said it believes there is a greater than 70% likelihood on the deal going through, or Microsoft getting beat out by someone else, i.e., a $31 offer price, $19-20/share previous price, and a Yahoo price that traded up immediately to $28 today. I can’t see anyone else easily outbidding Microsoft at this scale (though Microsoft may well have to sweeten the deal), as Google would have antitrust issues, and while that’s always a possibility, too, probably not too likely.

So we are left with perhaps a 10-20% upside versus a 50%+ downside, and our market estimate of a 70%-75% likelihood of the upside. This analysis would argue possibly for a sell rather than a hold, but not by much.

But I still think from a product perspective a Microsoft / Yahoo combination could be a formidable challenge to Google and deliver long term growth to Microsoft – in which case holding gets him Microsoft stock at up to a 20% discount from where it is today – 10% from Yahoo’s current trading price discount to the $31 offer, and depending on the tax analysis and your basis likely another 10%+ on the tax deferral. Think about it – a Yahoo portal, instant messenger, search, advertising, groups, and all bundled directly to my desktop – and tied long term into my corporate back office. Very intriguing.

I am personally into Microsoft at around $24/share, and like it as a buy probably up to $35 or so. I have never owned Yahoo. But if I were a Yahoo shareholder, I think I’d like this deal. Yahoo’s PE has been trading in the 30s, and is currently at 50+ on the back of this announcement, while Microsoft’s has been in the mid-teens. So, if you are Yahoo shareholder and hold through a deal, you also get a much cheaper stock in the bargain.

No real answers here, just the analysis.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog and a Contributing Editor to Alt Energy Stocks, and a blogger for CNET’s Green tech blog.

In Search of A Better Story

by Richard T. Stuebi

One of the best things I’ve read recently is an oped in The Washington Post entitled “Going Green? Easy Doesn’t Do It” by Michael Maniates, a professor of political science and environmental science at Allegheny College.

Prof. Maniates gets right to the heart of one of the things that bothers me about what I hear from some of the more ardent proponents of the cleantech movement: the unexpressed sense that saving the world can be easily accomplished with a few minor changes in behavior, and that technological advancements will be coming to save the day at little incremental cost to all of us.

His punchline: “Never has so little been asked of so many at such a critical moment.”

I hope we’re wrong, but Prof. Maniates and I both believe that, if we’re going to seriously address our energy and environmental challenges, we’re going to be exposed to major economic and behavioral sacrifice, relative to our current standards of living. I don’t see how we can reduce greenhouse gas emissions by 80% from present levels without a fundamental shift in how we do things at every level of existence.

This takes courage and determination. As Prof. Maniates exposes, what we get instead from politicians, the media and (yes) many advocates is a mixture of hyperbole and half-truths that serve to relax the masses.

In a conversation I had about a year ago with David Orr, one of the true pioneers in environmental thinking at Oberlin College, I said to him that we all needed to create and broadcast a story about energy and environment in the U.S. that clearly induces urgency to action without inspiring panic and depression. I know that I haven’t been able to craft such a well-balanced story. Has anyone out there?

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