View from the White House on Energy Innovation

by Richard T. Stuebi

On behalf of the President of the Cleveland Foundation Ronn Richard, I was privileged to attend an all-day bull session on May 7 hosted by the White House on energy innovation. With support from the Kauffman Foundation, the White House convened this meeting to spur brainstorming among people who participate across the cleantech spectrum, presumably to surface actions that can dramatically increase the velocity and success of energy innovation.

Alas, I can’t say that I saw evidence of any concrete next steps, but I did hear a number of interesting comments from the morning sessions at the meeting:

Diana Farrell, Deputy Director of the National Economic Council: Throughout U.S. history, major acts can actually spawn and renew markets, rather than thwart them. We are at that point today with energy: energy and environmental debates have grown stale and a new policy paradigm is necessary to cut through them. Oil price spikes have preceded 10 of the last 11 U.S. recessions, so we need to eliminate this vulnerability. The history of great nations shows an ability to anticipate crises before they become too critical. But, as important as policy reforms are, it is not enough for economic robustness: entrepreneurs and innovation are essential.

Dan Reicher, Director of Climate Change and Energy Initiatives at Google (NASDAQ: GOOG): Google is working on all three critical dimensions of cleantech: capital, technology and policy. While Google’s actions on capital and technology for cleantech are well-known, their work on policy is aimed at accumulating and providing more and better information for policy-makers to set better policies.

Desh Deshpande, serial entrepreneur, including Chairman of A123 Systems (NASDAQ: AONE): In cleantech, the center of gravity for innovation is not at the national laboratories, and is reverting away from the private sector, instead focusing in the universities. The big challenge is not so much inadequate amount of funding on cleantech innovation, but rather inefficient commercial capture of the innovation that actually happens.

Carl Schramm, President of the Kauffman Foundation: Lots of challenges ahead for cleantech entrepreneurship. Angel investors as well as venture firms stand to be severely punished by proposed regulations aiming to “reform” hedge funds. Businesses of all sizes are becoming too reliant on the government, blunting their intimacy with actual market needs. The link between university and commercialization is broken and needs to be reset, as the rate of new business spin-outs from universities is plummeting. To help combat these challenges, Kauffman is sponsoring an Energy Innovation Network, which aims to help “connect the dots” in faciliating entrepreneurship in the cleantech sector.

Tom Baruch, Managing Director at CMEA: Universities (not corporations) will be the center of innovation for the foreseeable future. Successful cleantech business models will need to be much more capital efficient than many of the most prominent cases to date. Cleantech entrepreneurs cannot assume any “green premium”: their products/services must stand on their own to deliver real economic value to paying customers.

Dr. Michael Crow, President of Arizona State University: Universities can no longer afford to suffer from the delusion that being smarter is sufficient to be the best. University excellence in the future will be defined by five mantras: (1) local relevance, (2) speed, (3) connectivity, both within university and to outside, (4) entrepreneurship, and (5) intellectual innovation.

Dr. Yet-Ming Chiang, Founder of A123 Systems and Professor of Materials Science and Engineering at MIT: True freedom to innovate at a university only occurs after professors gain tenure. To dramatically increase innovation, universities must restructure how they evaluate professors for tenure: at MIT, new products/services are now part of the review, but jobs created should also be a criterion. Fast-tracking of green cards for promising talent is also critical: over the past 5 years, 86% of foreign graduate students at MIT indicated a desire to stay in the U.S., but only 56% have stayed – and the 44% that left departed mainly because of an inability to stay, not because they didn’t want to stay, in the U.S.

As interesting as these comments from the morning discussions were, the workshop in the afternoon got bogged down in very wonky policy topics that frankly bored me.

And, also interesting was who was NOT at the workshop: little or no representation from big energy companies (petroleum or utilities). Is the White House (along with Kauffman) saying that incumbent energy players are not viewed as part of the cleantech solution?

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Tesla’s Strategic Relationships with Toyota and Daimler

By John Addison (5/27/10)

Toyota agreed to purchase $50 million of Tesla’s common stock subsequent to the closing of Tesla’s currently planned initial public offering, giving Toyota over 2 percent of Tesla. The investment was negotiated with Tesla’s purchase of the former NUMMI factory in Fremont, California, that once employed over 4,000 workers in a Toyota-General Motors JV plant. Tesla and Toyota intend to cooperate on the development of electric vehicles, parts, and production system and engineering support. Neal Dikeman reported on Friday the significance of this for Tesla, Toyota, and California jobs.

In 2012, new Tesla S sedan will roll-out of the plant with electric range that remarkably matches the range of many gasoline cars. Tesla is developing a roomy Model S hatchback that starts at $57,400, about half the price of the Roadster. Tesla will start delivering the Model S in 2012 from its new factory in California. The Model S will have up to a 300 mile range, far beyond the Nissan Leaf 100 mile range the Chevy Volt 40-mile electric range, and current ambitions of other electric car makers. Top 10 Electric Car Makers

Tesla will compete with other sedan makers by also offering more passenger space, more cargo space, and a premium cache. With seating for five adults and two children, plus an additional trunk under the hood, Model S has passenger carrying capacity and versatility rivaling SUVs and minivans. Rear seats fold flat, and the hatch gives way to a roomy opening.

With a range up to 300 miles and 45-minute QuickCharge, the Model S can carry five adults and two children in quiet comfort. The roomy electric car starts at a base price of $57,400, before the $7,500 federal EV tax credit and additional tax credits in many states. Yes, it will be more expensive than sedans from Nissan, Ford, and GM but with more battery storage for more range with 3 battery pack options offer a range of 160, 230 or 300 miles per charge.
Don’t pull-up to the Model S in your sedan and try to race. The Model S goes from 0-60 mph in 5.6 seconds with 120 mph top speed, and the promise of sporty handling in the chassis and suspension.

Panasonic Lithium Batteries and Tesla Packs

Tesla touts its expertise and intellectual property in a proprietary electric powertrain that incorporates four key components—an advanced battery pack, power electronics module, high-efficiency motor and extensive control software.

Tesla delivers more range per charge than other electric vehicles by including more lithium batteries. Tesla’s relationship with battery supplier Panasonic is critical. The Roadster uses 6,800 Panasonic lithium-nickel consumer-sized batteries integrated into a Tesla designed battery-pack with unique energy management and thermal management. The new Tesla Model S will use up to 5,500 Panasonic batteries.

Tesla has been skillful in developing strategic partnerships. Tesla also has a relationship with Daimler to supply technology, battery packs and chargers for Daimler’s Smart fortwo electric drive. Daimler holds more than 5% of Tesla’s capital stock. Daimler has orders for Tesla to supply it with up to 1,500 battery packs and chargers to support a trial of the Smart fortwo electric drive in at least five European cities. Tesla delivered the first of these battery packs and chargers in November 2009. Daimler also engaged Tesla to assist with the development and production of a battery pack and charger for a pilot fleet of its A-Class electric vehicles to be introduced in Europe during 2011. Tesla has ambitions to supply other vehicle makers.

By John Addison, Publisher of the Clean Fleet Report and conference speaker.

An Audit That One Can Actually Like

by Richard T. Stuebi

The concept of an “audit” is something that is inherently, well, unsettling. The word itself implies that you might have done something wrong, and someone is coming to catch you and punish you. For sure, no-one wants to face the prospect of an IRS audit.

Of course, that’s not the sole or even main reason that I’ve never undertaken an energy audit for my house. It’s not an excuse, but an explanation to say that I’ve simply been too preoccupied with other matters to go through the effort of finding a qualified firm to perform an energy audit. And, frankly, I had no idea whether an audit would cost $100 (easily acceptable) or $1000 (too much!).

So, it was with a bit of relief actually that a firm called GreenStreet Solutions sent me a mailer offering an energy audit for $199. No longer burdened with finding a firm to do the work, and knowing that the price was one I could afford, I gave them a call to schedule a visit.

I was very pleased. A two-man team from GreenStreet came to my 1978-era house for a 3-hour tour (sing along: “a 3-hour tour”), and found some pretty interesting results. I wasn’t surprised to discover that certain of the walls and ceilings were underinsulated. However, I was shocked to see that the biggest source of thermal leakage was out of my basement, through the front stoop.

Armed with a host of data collected from the building envelope, thermal images from scanning, and my prior year’s gas and electric bills, the GreenStreet team went off to prepare an assessment . A couple weeks later, the lead analyst returned for an evening debrief with me and my wife, handing us a bound report summarizing the findings and suggesting measures to implement.

The results: at 50 Pascals of pressure, 5135 cubic feet of air per minute were leaking through the building shell of my home, relative to a target of 2299 for a reference home of comparable size. To combat this, GreenStreet proposed three packages of solutions — Bronze, Silver and Gold — to reduce the leaks. To my wife and me, the Silver package looked the best — the most bang for the buck — entailing $9738 of outlays to save an estimated $2288 annual heating costs (surprisingly, savings on air conditioning expenses are not calculated), for a projected average payback of 4.3 years.

In addition, GreenStreet provided a bag full of goodies to further help reduce energy. For instance, we were given a Kill-A-Watt meter to measure appliance consumption rates and phantom loads. Though I haven’t yet gone around the house to develop a list, it sounds like a pretty fun project some rainy afternoon.

Also, GreenStreet gave us a bunch of thermal insulating gaskets for outlets and light switches. I installed these the other day, and in removing the covers, it’s really amazing to see how much thermal leakage is likely to occur through these huge uninsulated gaps. Parents: installing these gaskets would be an excellent project to give to your teenager to undertake.

As for implementing the audit results, we were prepared to authorize a go-ahead — until the GreenStreet salesperson noted that a bill was winding its way through Congress to reimburse up to $8000 (with no ceiling on income levels) for weatherization efforts, and since the bill wouldn’t be retroactive, we would be better off waiting for the bill to pass (expected this summer). We thanked him for his divulging this important opportunity, and asked him to have GreenStreet call us when the bill passed.

He further noted that a bill was moving through the Ohio legislature to reimburse the $199 we paid for the energy audit too, and informed us that we would be notified if this were to pass as well.

I was really impressed with the audit by GreenStreet — very professional, and not pushy. The GreenStreet agent noted that their parent company was Vectren (NYSE: VVC) — a gas and electric utility based in Southern Indiana — which leads me to wonder if all energy audits should be performed by companies that have a corporate parent that is a utility possessing sufficient financial wherewithal and expertise on energy-related issues.

However, unless the utility has revenue/profit decoupling mechanisms in place, it’s clear in my mind that an audit can’t effectively be done by the local utility, who may be subject to conflicts of interest by threatening to cannibalizing their core business from reducing energy consumption.

In all respects, my wife and I actually enjoyed this audit, and recommend a similar type of audit for anyone who wants to make their personal contribution to the cleantech challenge.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Go Tesla! EVs just may carry the cleantech sector this year after all

Most of my friends know I’m not a huge fan of EV startups. They take massive amounts of capital, the end customer (i.e. you and I) tends to be very sophisticated, demanding, and a pain in the neck, the technology is extremely challenging and I don’t believe the startups understand their long term costs as well as they think they do. But worse than that, the competition is very, very good and well entrenched. So while I love the concept of EVs and more specifically Plug in Hybrid EVs, I’ve been a huge skeptic of EV venture deals.

But . . .

• Go Tesla! The Toyota tie up is an exciting move. Toyota gets access to the EV business as a hedge against the possibility that GM’s Chevrolet Volt and the Nissan Leaf cleaning its clock and take the mantle of most green car company away, plus they get a massive much needed dose of positive PR that’s worth their $50 mm investment all by its lonesome to counteract the legions of recent “Toyota’s quality just went to hell” articles and the latest “let’s grill the Toyota executives” push in Washington. This is good.

• Toyota gets a great use for the recently shut down NUMMI plant in California, making them look like the hero in that story without having to actually operate a high cost union plant again (apparently a large part of the reason they got out of it). For those that missed that story – NUMMI was a GM – Toyota JV in Fremont, the last auto plant west of the Mississippi, and apparently Toyota’s only union facility. When GM went bust (sorry when you and I decided we liked losing money in the car business), Toyota took the opportunity to back out of the JV, leaving a huge hole in the local economy (it was just about the only customer for a number of local manufacturers). California’s political bosses get a brief reprieve from their shellacking by helping with big tax breaks to ink a deal that may bring back 10% of the lost jobs (about 10 of the top legislators and administrators joined the Governator to announce it).  Part of the deal here is that Tesla Motors is buying the plant with heavy tax breaks and plans to build its still to be launched mass market sedan there.

• The venture capitalists who backed Tesla get a new investor to pony up a chunk of the massive cash that will be required at good valuations. Even better, the backing of Toyota in my mind drastically increases the chances that a Tesla IPO can get done, despite the huge questions analysts have had on their near term revenue prospects since they filed the prospectus earlier this year.

• You and I, who are funding a big chunk of Tesla anyway with the massive $400 mm+ DOE loan guarantee, now get a foreign auto company to invest underneath us. (Of note this will be our second multi-hundred million investment into that part of the San Francisco Bay Area, since we are doing the same thing for the solar start-up Solyndra a couple of miles down the road.)

• Tesla gets much needed cash, a cheap ready to go plant without union labor requirements, and access (if they are smart enough to leverage it) to the considerable manufacturing , marketing , and distribution talents of what has been up until recently the best run auto manufacturer in history. With it comes the automotive street cred that they are sorely lacking.

Filed under the “what’s the real story” side – a couple of questions have been raised by various analysts in the press.

1) Why is Toyota not doing this as a JV or operating partner? Which would make even more perfect sense from both parties perspective. There’s been no mention of Toyota helping on marketing/distribution and service, areas that Tesla will sorely need if they get rolling. But maybe it’s just early days.

2) How many of the local jobs are actively coming back? Elon Musk, the CEO of Tesla was quoted as saying 1,000 jobs were planned (there were many, many, many times that many jobs lost when NUMMI shut down), and he was apparently very ambivalent on the subject of union or non-union.
But regardless, there is a lot to like about a Tesla Toyota Tie up.

Neal Dikeman is a partner at Jane Capital Partners LLC, a cleantech merchant bank, and the editor of Cleantechblog.com

National Research Council Give U.S. Climate Action Plan Roadmap

National Research Council (5/19/10)

The National Research Council issued new three reports emphasizing why the U.S. should act now to reduce greenhouse gas emissions and develop a national strategy to adapt to the inevitable impacts of climate change. The reports by the Research Council, the operating arm of the National Academy of Sciences and National Academy of Engineering, are part of a congressionally requested suite of five studies known as America’s Climate Choices.

“These reports show that the state of climate change science is strong,” said Ralph J. Cicerone, president of the National Academy of Sciences. “But the nation also needs the scientific community to expand upon its understanding of why climate change is happening, and focus also on when and where the most severe impacts will occur and what we can do to respond.”
The report suggests a range of emissions from 170 to 200 gigatons of carbon dioxide (CO2) equivalent for the period 2012 through 2050 as a reasonable goal, a goal that is roughly in line with the range of emission reduction targets proposed recently by the Obama administration and members of Congress. Even at the higher end of this range, meeting the target will require a major departure from “business-as-usual” emission trends. The report notes that with the exception of the recent economic downtown, domestic emissions have been rising for most of the past three decades. The U.S. emitted approximately 7 gigatons of CO2 equivalent in 2008 (the most current year for which such data were available). If emissions continue at that rate, the proposed budget range would be used up well before 2050, the report says.

A carbon-pricing system is the most cost-effective way to reduce emissions. Either cap-and-trade, a system of taxing emissions, or a combination of the two could provide the needed incentives. While the report does not specifically recommend a cap-and-trade system, it notes that cap-and-trade is generally more compatible with the concept of an emissions budget.
Carbon pricing alone, however, is not enough to sufficiently reduce domestic emissions, the

report warns. Strategically chosen, complementary policies are necessary to assure rapid progress in key areas such as: increasing energy efficiency; accelerating the development of renewable energy sources; advancing full-scale development of new-generation nuclear power and carbon capture and storage systems; and retrofitting, retiring, or replacing existing emissions-intensive energy infrastructure. Research and development of new technologies that could help reduce emissions more cost effectively than current options also should be strongly supported.

NRC Reports and Free Summaries

Clean Fleet Climate Action Reports

The compelling case that climate change is occurring and is caused in large part by human activities is based on a strong, credible body of evidence, says Advancing the Science of Climate Change, one of the new reports. While noting that there is always more to learn and that the scientific process is never “closed,” the report emphasizes that multiple lines of evidence support scientific understanding of climate change. The core phenomenon, scientific questions, and hypotheses have been examined thoroughly and have stood firm in the face of serious debate and careful evaluation of alternative explanations.

“Climate change is occurring, is caused largely by human activities, and poses significant risks for — and in many cases is already affecting — a broad range of human and natural systems,” the report concludes. It calls for a new era of climate change science where an emphasis is placed on “fundamental, use-inspired” research, which not only improves understanding of the causes and consequences of climate change but also is useful to decision makers at the local, regional, national, and international levels acting to limit and adapt to climate change.

The report recommends that a single federal entity or program be given the authority and resources to coordinate a national, multidisciplinary research effort aimed at improving both understanding and responses to climate change. The U.S. Global Change Research Program, established in 1990, could fulfill this role, but it would need to form partnerships with action-oriented programs and address weaknesses that in the past have led to research gaps, particularly in the critical area of research that supports decisions about responding to climate change.

Substantially reducing greenhouse gas emissions will require prompt and sustained efforts to promote major technological and behavioral changes, says Limiting the Magnitude of Future Climate Change, another of the new reports. Although limiting emissions must be a global effort to be effective, strong U.S. actions to reduce emissions will help encourage other countries to do the same. In addition, the U.S. could establish itself as a leader in developing and deploying the technologies necessary to limit and adapt to climate change.

An inclusive national policy framework is needed to ensure that all levels of government, the private sector, and millions of households and individuals are contributing to shared national goals. Toward that end, the U.S. should establish a greenhouse gas emissions “budget” that sets a limit on total domestic emissions over a set period of time and provides a clear, directly measurable goal. However, the report warns, the longer the nation waits to begin reducing emissions, the harder and more expensive it will likely be to reach any given emissions target.
We must manage and minimize the risks of climate change, says the third report, Adapting to the Impacts of Climate Change. Some impacts – such as rising sea levels, disappearing sea ice, and the frequency and intensity of some extreme weather events like heavy precipitation and heat waves – are already being observed across the country. The report notes that policymakers need to anticipate a range of possible climate conditions and that uncertainty about the exact timing and magnitude of impacts is not a reason to wait to act. In fact, it says boosting U.S. adaptive capacity now can be viewed as “an insurance policy against an uncertain future,” while inaction could increase risks, especially if the rate of climate change is particularly large.

Why Corn-Based Ethanol Sucks

by Richard T. Stuebi

While it is increasingly recognized that subsidies for corn-based ethanol are bad policy, a nod must be given to C. Ford Runge, a professor at the University of Minnesota, for his pithy and merciless analysis in his note “Biofuel Backlash” published in the May/June issue of Technology Review.

In the space of just a few short paragraphs, Prof. Runge cites the work of Earth Track (a firm dedicated to exposing subsidies detrimental to the environment) projecting $400 billion of U.S. subsidies to ethanol between 2008-2022, notes a recent estimate by the Earth Policy Institute that the 2008 U.S. corn crop diverted for ethanol production would have been sufficient to feed 330 million people for a year, and provides a reference to modelling that indicates a near-doubling of greenhouse gas emissions due to changes in land-use patterns associated with corn-for-ethanol production.

It’s amazing that such awful policies, which are so adverse on so many dimensions, can survive. But, in the gameboard that is U.S. energy, environmental, and agricultural policy, only grand compromises supported by the big boys can get enacted — which are then extremely difficult to overturn when they are seen to be nothing more than gifts to their well-positioned and deep-pocketed sponsors and supporters.

Reiterating a point I’ve made before: I have nothing against ethanol per se. Cellulosic ethanol, if it can be accomplished cost-effectively, is a promising prospect for reducing greenhouse gases and reliance on Middle Eastern petroleum without chewing up valuable foodstuffs. But corn-based ethanol plainly sucks. And, the notion of using corn-based ethanol as a bridge to cellulosic ethanol is dubious at best.

The old adage says that a camel is a horse designed by committee. Would it were that U.S. biofuels policies were as lovely as a camel.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Big Week in the "Real" CSR – Climate Saving Regulation

It’s been a big week in Greenhouse Gas regulation land.  Huge boost for cleantech sales executives and afficianados everywhere.

EPA announces a slightly delayed and somewhat more limited GHG regulation rule.

Starting in July 2011, all facilities greater than 75,000 tons per year in emissions will have to get GHG permits.

And John Kerry and Joe Leiberman push ahead in the Senate with cap and trade and climate saving legislation.

Lots of good in here:

– Power sector gets capped early on
– Industrial/manufacturing gets phased in
– Transport included down the road as well
– Domestic offsets included (think massive cashflows to the ag belt)
– International offsets included
– International linkages included
– Phased in border tax for non participating countries

And then:

– Riddled with subsidies and wealth transfer and buy-offs, but isn’t that just par for the course with Washington? 
– Price collar ($12-$25/ton) – guts the heart of compliance (market based mechanism to set a “real” carbon price, but the Senate should tell the market what the right price should be?  Joe? John? You do actually WANT emissions reductions, right?)
– And no Republican support – guts the odds of passage.

All in all a good week, even though the EPA will get sued six ways to Sunday and without Republican support Kerry-Leiberman has zero chance of passage, we’ll give it a two thumbs up.  This is a drastic improvement.

Neal Dikeman is the editor of www.CleantechBlog.com, a partner at Jane Capital Partners LLC, and the Chairman of Carbonflow.

Transportation’s Role in Reducing U.S. Greenhouse Gas Emissions

U.S. DOT April 2010 Report to Congress

A wealth of potential solutions, from electric cars, to better transit, to reduced VMT, are detailed in the recent Department of Transportation’s report to Congress. Not only is the report rich with promising climate action, solutions are detailed to address U.S. energy security, with 97 percent of our transportation coming from one source – petroleum.

STRATEGIES TO REDUCE TRANSPORTATION GREENHOUSE GAS EMISSIONS

The DOT report offers a wealth of data and tactics supporting these four strategies:

1. Low-carbon fuels
2. Fuel economy
3. Transportation system efficiency
4. Reduce carbon-intensive travel

The report also details cross-cutting policies that facilitate the above strategies:
• Align transportation planning and investments to GHG reduction objectives
• Price carbon

Low-Carbon Fuels

The alternative fuels evaluated in this report include ethanol, biodiesel, natural gas, liquefied petroleum gas, synthetic fuels, hydrogen, and electricity. Considering scalability, the potential to follow a favorable cost reduction curve, and lifecycle emissions, electricity, hydrogen, and advanced biofuels have the most promise. Report summary:

If significant advances were to occur in battery technology and the use of low-carbon energy sources for electricity generation, battery-electric vehicle could reduce transportation GHG emissions by 80 percent or more per vehicle in the long term (25 years or more). Aggressive deployment could reduce total transportation emissions by 26-to-30 percent in 2050 if a 56 percent light-duty vehicle (LDV) market penetration could be achieved.

The estimates for plug-in hybrid and battery electric vehicles depend on reductions in the GHG emissions intensity of U.S. electricity production. The estimates were calculated using GHG emission intensity modeled by the Electric Power Research Institute (EPRI). The input is 379 to 606 g/kWhr in 2030, and 240 to 421 g/kWhr in 2050. This compares to a 618 g/kWh national average today and would require increased use of low carbon electricity production technologies such as wind, solar, nuclear, and hydro-electric power. However, even under a very high GHG intensity scenario relying on coal generation using older technology (1,014 g/kWhr), at a low battery efficiency of 0.4 kWhr/mile,
PHEVs operating in a charge depleting mode would still result in 12 percent lower GHG emissions than corresponding conventional gasoline vehicle operation, on a per mile basis. However, under these extreme circumstances, PHEV operation will not provide benefits relative to an HEV baseline.

In the long-term, if technical successes in fuel cell development and low-carbon hydrogen production, distribution, and onboard storage can be achieved, hydrogen fuel cell vehicles could reduce per vehicle GHG emissions by 80 percent or more. Aggressive deployment could reduce total transportation emissions by 18-to-22 percent in 2050.

Fuel Economy

Fuel use per light duty vehicle averages 578 gallons per year. In addition, average new vehicle fuel economy improved from 2005 to 2007 as the market share of passenger cars increased compared to light-duty trucks.

Vehicle and fuel efficiency strategies include developing and bringing to market advanced engine and transmission designs, lighter-weight materials, improved vehicle aerodynamics, and reduced rolling resistance. Many of these technological improvements (such as hybrid-electric powertrains, truck aerodynamic improvements, and more efficient gasoline engines) are well developed and could be further incorporated into new vehicles in the near future. In the long-term, propulsion systems relying on more efficient power conversion and low- or zero-carbon fuels.

Fuel economy benefits are limited by the turnover time of the fleet. Passenger cars and light trucks last about 16 years on average before retirement, compared to 20 years or more for trucks, up to 40 years for locomotives and marine vessels, and about 30 years for aircraft.

• Increased fuel economy in light-duty vehicles could reduce GHG emissions significantly. On a per vehicle basis, compared to a conventional vehicle, GHG reductions are 8-to-30 percent for advanced gasoline vehicles; about 16 percent for diesel vehicles; 26-to-54 percent for hybrid electrics; and 46-to-75 percent for plug-in hybrid electrics.

• Retrofits can be used to expedite improvements. Heavy-duty trucks retrofitted to use aerodynamic fairings, trailer side skirts, low-rolling resistance tires, aluminum wheels, and planar boat tails can reduce per truck GHG emissions by 10-to-15 percent. For new trucks, combined powertrain and resistance reduction technologies are estimated to reduce per vehicle emissions by 10 to 30 percent in 2030.

Reduce Carbon-Intensive Travel

These strategies would reduce on-road vehicle-miles traveled (VMT) by reducing the need for travel, increasing vehicle occupancies, and shifting travel to more energy-efficient options. The collective impact of these strategies on total U.S. transportation GHG emissions could range from 5-to-17 percent in 2030, or 6-to-21 percent in 2050.

• Transportation pricing strategies, such as a fee per vehicle-mile of travel (VMT) of about 5 cents per mile, an increase in the motor fuel tax of about $1.00 per gallon, or pay-as-you-drive insurance—if applied widely—could reduce transportation GHG emissions by 3 percent or more within 5-to- 10 years. Lower fee or tax levels would result in proportionately lower GHG reductions.

• Significant expansion of urban transit services, in conjunction with land use changes and pedestrian and bicycle improvements, could generate moderate reductions of 2 to 5 percent of transportation GHG by 2030. The benefits would grow over time as urban patterns evolve, increasing to 3-to-10 percent in 2050. These strategies can also increase mobility, lower household transportation costs, strengthen local economies, and provide health benefits.

Recent trends indicate that light duty vehicle emissions are leveling off as VMT growth slows and fuel economy improves. Growth in passenger vehicle VMT slowed from an annual rate of 2.6 percent from 1990 to 2004 to an average annual rate of 0.6 percent from 2004 to 2007. In 2008, VMT on all streets and roads in the United States decreased for the first time since 1980, likely due to a combination of high fuel prices and a weakening economy. Light-duty vehicles average 1.6 persons per vehicle.

Land use changes — such as density, diversity of land uses, neighborhood design, street connectivity, destination accessibility, distance to activity centers, and proximity to transit — reduce trip lengths and support travel by transit, walking, and bicycling.

Transportation and land use are interdependent. Decisions on the locations and densities of housing, retail, offices, and commercial properties impact travel patterns to these destinations. Similarly, the geographic placement of roads, public transportation, airports, and rail lines influences where homes and businesses are built. Areas of lower density tend to have higher levels of automobile use per capita.

Over the past several decades, housing densities have decreased and the amount of developed land in the country has grown faster than population. Land use strategies yields a reduction of U.S. transportation GHG emissions of 1 to 4 percent in 2030 and 3 to 8 percent in 2050.93 The Moving Cooler study assumptions, which fall in the middle of the range, rely on 43 to 90 percent of new urban development occurring in areas of roughly greater than five residential units per acre, which accommodates single family and multifamily homes.

TCRP Report 128: Effects of Transit-Oriented Development (TOD) on Housing, Parking, and Travel, surveyed 17 housing projects that combined compact land use with transit access and found that these projects averaged 44 percent fewer vehicle trips per weekday than that estimated by the Institute for Transportation Engineers (ITE) manual for a typical housing development.

Commuter/worksite trip reduction programs have modest potential for GHG reductions—0.2 to 0.6 percent of all transportation sector emissions in 2030. The most effective actions from a policy perspective are trip reduction requirements combined with supporting activities such as regional rideshare and vanpool programs and financial incentives for the use of alternative modes.

Investing in transit sufficiently enough to nearly double the average annual ridership growth rate from the current 2.4 percent to 4.6 percent and expanded urban transit could reduce GHG emissions from 0.2 to 0.9 percent of transportation GHG by 2030, or 0.4 to 1.5 percent in 2050.
Buses have the lowest emissions per PMT because of their high occupancy rateaveraging 21 people per bus. Transit buses have a lower occupancy rate of 10 people per bus averaged across the U.S. However, transit buses only account for 15 percent of all bus passenger-miles traveled. Intercity passenger rail averages about 20 passengers per car, while rail transit averages 23, and commuter rail averages 31.

Price Carbon

Mechanisms to price carbon emissions include:
• Federal motor fuels tax
• Cap and trade system, in which GHG emissions allowances are traded in the market to cap overall emissions
• Carbon tax

Transportation GHG emissions are 29 percent of total U.S. emissions. The report provides detailed data on sources of transportation greenhouse and air quality emissions. For GHG, the new GREET 1.8b model is used to measure emissions from source to wheels. Emissions from on-road vehicles accounted for 79 percent of transportation GHG emissions.

• Emissions from light-duty vehicles, which include passenger cars and light duty trucks (e.g., sport utility vehicles, pickup trucks, and minivans) accounted for 59 percent of emissions
• Emissions from freight trucks accounted for 19 percent
• Emissions from commercial aircraft (domestic and international) for 12 percent
• Emissions from all other modes accounted for 10 percent of total emissions

The United States is starting to reduce its total consumption of oil, become a bit more energy secure, and to implement promising strategies. By eliminating some of the biggest subsidies to oil and widening of highways, with some positive policy shifts, and with a modest carbon price, we could achieve significant reduction of oil use and reduce damaging emissions. Individuals, fleets, and regions have a wealth of options to use low-carbon fuels such as renewable energy, improve fuel economy including implementing electric cars, improve system efficiency, and reduce VMT.

DOT 600 Page Report PDF

Climate Action Scenario 26-Page for SF Bay Area

Thrills from Spills

by Richard T. Stuebi

The oil spill in the Gulf continues to astound. It’s now reported that BP (NYSE: BP) has spent $350 million so far on clean-up, and that the total tab will run $2-14 billion.

Maybe BP can make up the billions in lost shareholder value via other dubious means: Bookmaker.com is running odds on whether the containment strategy being attempted will decrease or increase spill rates.

In this ecological disaster, a lot of dollars and not much sense is involved.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Looking to the Future

I am watching the Chris Matthews show. There was a comment about American’s being nostalgic for their childhood when families stayed together and there were no global problems.

The problem with that point of view is that it is not true today, it may never have been true. We are in a situation now where the weak economy feeds this nostalgia. We have to move as fast as possible away from the solutions of the past which bind us to a weak economy. Coal, Oil, and Gas do not create jobs, they spend the savings on our balance sheet — exploit our natural resources for short term gain. Do we need to continue to do this to tie us over, absolutely. But real job growth and wealth creation comes from innovation. Alternative energy, efficient cars, advanced agriculture, zero-energy buildings, next generation radar systems, and much more will create millions of jobs which reducing the impact on our planet — borrowing from our balance sheet as necessary but not consuming from it like a drunken sailor.
I am optimistic about the future. We can do this, but we have to start with leaving our nostalgia behind.

BP Oil Spill

Barrons had an interesting take on biofuels from garbage: http://online.barrons.com/article/SB127327100968888619.html

I have been following this movement for some time and there does seem to be an extraordinary amount of capital and brainpower going into this space. People talk a lot about ethanol and I am a big of ethanol, mostly because I like the constiuency and channel to market it creates. More importantly, I am big fan of all of the other alternatives such as biofuels to garbage which has big proponents from Waste Management to others and Barrons claims that we might be able to get as much as 600,000 barrels a day of oil equivalent from this source. Not much compared to the almost 20,000,000 barrels a day that we use in the US alone.
Efficiency within existing ICE engines is another area we should focus on:
My friends at BP think that for an extra $4K per car you could reduce fuel usage by 50% within the next 4 years (typical auto planning cycle).
Electric Vehicles are a good choice as well:
For many applications, if you can put together the right financing you can achieve a lower cost per mile than diesel powered delivery vehicles today.
T Boone Pickens and others have talked about Natural Gas. With gas prices so low right now, there is some financial justification for this approach, particularly for heavy trucks — where less incremental infrastructure is required.
What the idea above show is that this will be a tough nut to crack, but on diversification arguments alone we should start the task of moving away from a largely oil based fuel future to one that diversifies away from oil.
Oh and it will be cheap and pay for itself in lower fuel and oil prices!
Jigar Shah
Carbon War Room

Oil Spill Call for Action

By John Addison (5/4/10)

National Tragedy in the Gulf of Mexico

Two hundred thousand gallons of oil spill daily into the Gulf of Mexico, destroying the beaches of Florida, Alabama, Mississippi, Louisiana, and Texas. News viewers witness oil explosions, fires, and destruction. Containment chemicals are dumped where fish were caught for our dinner tables. Billions of dollars of damage is done. Major ports of our nation’s commerce are threatened. We are again reminded of the damage that oil can do to our environment. United States Response to Deepwater Horizon Oil Spill.

Oil addiction also hurts our economy. In 2008, oil prices dipped to $32 per barrel. Now oil prices are over $80 per barrel, on the way to being triple the 2008 low. While oil companies argue that we are not running out of oil, they should be admitting that we can no longer find cheap oil. Instead, it is now billion-dollar deep-drilling ocean platforms, the highly destructive strip mining of Canada for tar sands, and unconventional sources with high greenhouse gas emissions that brings us our incremental oil that we convert into gasoline, diesel, jet fuel, and asphalt to widen roads for more cars.

And we continue sending trillions of dollars to parts of the world where people want to do us harm. With rising oil prices we are sending more money for less oil.

To the rescue, since 2005, Americans have used less oil by riding clean, riding together, and riding less. In 2005, we consumed 20,802,000 barrels per day; by 2008, 19,498,000 daily barrels (EIA Data). Consumption continues to drop.

Ten Solutions to Save at the Pump

1. Employer Commute and Flexwork Programs. Major employers are saving employees billions in travel costs. Employers sponsor ride sharing, last mile shuttles from transit, and guaranteed ride homes. Some employers have web sites and lunch-and-learns to help employees in the same zip codes match-up for car pooling. 57 million Americans work at home, at least part-time, with the help of flexwork programs. Employer programs have helped with reduced car ownership.
2. Public Transit. Americans made 11 billion trips on U.S. transit in 2008, a 50-year record. Use has dropped some due to transit operators being forced to cut some routes and remove buses as the recession drove down local sales tax revenues needed for public transit. Americans are eager for more and better transit.
3. Walk. On an average we take 4 car trips daily, compared to 2 in Europe. Sometimes 1 of those 4 trips can be a pleasant walk to market, neighbors, or school event.
4. Safe Routes. Thousands of communities across the nation are showing us how to safely walk to school, community centers, and to public transit. Route maps go on line, pot holes get fixed, sidewalks repaired, danger spots eliminated, and signs displayed. Walk to School Days are on the increase.
5. One Car Households. The average suburban U.S. household has two vehicles. Some more. The average urban U.S. household has one vehicle. More American families and roommates are going from three cars to two cars to one car.
6. Sharing the Gas Miser. Households with 2 or more vehicles increasingly share cars, putting the most miles on the fuel miser as the gas guzzler stays parked more often. My wife and I share the hybrid, when not using transit, and leave the other car parked 6 days per week.
7. Make your next Car a Fuel Miser. You now have a wide-range of car choices that get over 30 miles per gallon. There is no reason to settle for less when you buy or lease a fuel-efficient sedan, hatchback, even SUV, turbo diesel, CNG, or hybrid car. Top 10 Cars With Lowest Carbon Footprint
8. Order an Electric Car which is ideal for many who live in a city where 100-mile range is rarely an issue, and where transit, car sharing, and car rental are also available. The average U.S. suburban household has two vehicles, so the EV could be ideal as one of those two. Top 10 Electric Car Makers
9. Car Sharing. In 600 global cities, cars can be used by the hour. Car sharing is popular with individuals and fleets. At many university and colleges, students with good grades can participate at age 18. Add transit and bicycling and many students live car free.
10. Smart Apps for Smart Travel. Internet savvy people now use Google Maps, 511, car share apps, and smart phone GPS apps to compare car directions and time with public transit directions and time. With a few clicks on a social network a shared ride is arranged, or a shared car reserved. In the old millennium we got everywhere by solo driving in gridlock. In the new millennium we plan and use a mix of car driving, transit, and other modes to save time and money.There are hundreds of ways to save at the pump, or avoid it all together. The above are a just a few as people shift from their only choice being driving a gas guzzler, to options that include ride sharing, car sharing, walking, bicycling, buses, and rail for some of their trips.

Waiting for Responsible Government

We can all make a big difference without waiting for responsible government action, but it would help. The cheapest way to end highway gridlock is to invest in public transportation. Instead government cuts funds for transit and spends billions widening highways. For oil companies, we allow them to drill off our invaluable shores, fight wars to protect their oil, and then put oil companies on welfare. As Forbes Magazine discussed on April 5, the most profitable company in the United States, Exxon, paid zero U.S. income tax in 2009.

At a time when the average U.S. tax payer is hurting, we need to end oil tax loopholes and ensure that the 4 million vehicles in government fleets are gas misers or electric. While a minority in Congress block all attempts at progress, local communities are taking action across the nation by making cities vibrant, with work, services, and play close at hand. Portland, Oregon, is a role model in creating urban density and great public transportation. California with SB375 is requiring regional plans that integrate development, transportation, and greenhouse gas reduction.

In the United States, we embarrassingly have more vehicles than people with driver’s licenses. We have 246 million vehicles. AAA estimates that it costs $8,000 per year for each car owned, which creates a financial burden on cash-strapped Americans. You can help your pocketbook and help the nation by riding clean, riding together, and riding less.

John Addison is author of Save Gas, Save the Planet and Publisher of the Clean Fleet Report. (c) Copyright John Addison. Permission to repost up to a 200 word summary if a link is included to the original article at Clean Fleet Report.

Fossil Fuel and Life

by Richard T. Stuebi

In the past month, we’ve witnessed two major catastrophes associated with U.S. production of fossil fuels — the BP Deepwater Horizon oil rig explosion killing 11 workers in the Gulf of Mexico, and the Massey Upper Big Branch coal mine explosion claiming 29 lives in West Virginia.

It’s easy to vilify energy companies like BP (NYSE: BP) and Massey (NYSE: MEE) for being reckless at these operations. No doubt, there will be lots of investigation in the months to come, and tighter regulations and legal action in the years to come. Scrutiny is definitely deserved, new requirements may be forthcoming, and severe punishments may well be in the offing.

Rather than focus on the obvious human cost of these tragedies, and the truly frightening ecological disaster currently unfolding in the Gulf of Mexico, I choose to comment herein on the profound implications of our long-followed energy policy, which I term as “cheap energy at any price”.

For the most part, our problems do not lie with fossil fuel producers. Certainly, they must be held to meet safety and environmental standards — and in these two cases, these standards do not appear to have been met. But that does not mean that all oil and coal companies are led by evil people, and that their employees are complicit conspirators in misdeeds against humanity and the planet.

No, it’s far too easy to take that oversimplistic but misguided position.

Pretty much every reader of this post will willingly use fossil fuels today — in the coal burned to generate the electricity to power your computer, in the petroleum burned to move you to your place of work.

Let’s not forget that fossil fuels have been an instrumental factor in the huge leaps in quality of life over the past 100 years. It is this utter reliance by all of us on these fossil fuels that compels companies and people to supply these fuels. And, of course, to try to make a profit in doing so. After all, that is the American way.

These two disasters are the exception, not the rule. More fundamentally, the problem is not on the supply side, but on the demand side.

Fossil fuel companies are not the bad guys — they supply a product that will remain vital for years to come.

We have met the enemy, and it is us.

It is time for us to dedicate ourselves to putting virtually all of our incremental attention, money and efforts towards an energy system not nearly so dependent upon fossil fuels. And, we need to accept imposing such a discipline upon ourselves — for instance, by being willing to establish stronger price signals in the energy markets to drive our society in that direction.

In other words, we must stop the “cheap energy at all costs” mentality that has pervaded our thinking for decades.

As Albert Einstein once noted, “Insanity is doing the same thing over and over again and expecting different results.” In the case of energy, if we keep putting all of our eggs in the fossil fuel basket, all we can expect are more human and ecological tragedies.

Only a few of these tragedies will be very visible and instantaneous as in these two explosions. The worse tragedies are long-term and hidden: climate change, depletion of finite and irreplaceable resources, continued reliance on supplies from objectionable sources, and increasing geopolitical conflict leading to resource wars.

Think about the deceased of the Deepwater Horizon and Upper Big Branch, working on an offshore oil rig or underground in a coal mine. Are these the jobs we want to see for the 22nd Century? Did these people want their children to be earning a wage in the same way they were?

The best way to honor the dead would be by taking these recent tragedies to increase our resolve to move us from the fossil fuel past to a new and better future that need not rely so desperately on fossil fuels.

It won’t be easy, quick or cheap to create a new energy system, but we need to start working much harder to sever the link between fossil fuels and human life. Because escalating reliance on fossil fuels can only be harmful to our long-term social and planetary health.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.