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To Coal or Not To Coal?

by Richard T. Stuebi

A number of people recently have contacted me for my perspective on a large new coal powerplant being considered here in Ohio.

The plant is proposed by American Municipal Power of Ohio (AMP-Ohio), a nonprofit wholesale power supplier that provides electricity to several municipal utilities in Ohio, including Cleveland Public Power (CPP).

The implicit question is whether it’s a prudent course of action for AMP-Ohio, and for its clients such as CPP, to commit to building a new coal plant in a world in which climate change appears to be accelerating, and in which future constraints on carbon emissions to combat climate change will be relatively more burdensome for utilities that rely upon coal for power generation. Many environmental advocates clearly think that this proposed coal plant is just plain a bad idea.

I lunched last week with CPP Commissioner Ivan Henderson to get a more detailed view of CPP’s plans for subscribing to a portion of AMP-Ohio’s new coal plant. And, from my discussions with Commissioner Henderson, it appears as if there are two underreported aspects of CPP’s plan that merit consideration before objections are lodged.

First, CPP’s go-ahead to their share of the AMP-Ohio coal plant is contingent upon the results of an independent assessment by an engineering consultant (to be selected) of the viability of implementing the ECO2 CO2 carbon capture technology developed by Powerspan Corporation of New Hampshire. This technology, essentially a CO2 scrubber, is designed to remove 90% of CO2 emissions from the plant’s flue stream, and is being tested in pilot scale at the R.E. Burger powerplant owned and operated by First Energy (NYSE: FE). If the assessment indicates that the Powerspan ECO2 CO2 scrubber technology is not-ready-for-primetime, CPP is out of the deal.

Second, assuming the new coal plant is built, AMP-Ohio is committed to retiring its 1950’s vintage Gorsuch coal powerplant. Clearly, replacing an old relic with a new plant benefitting from 90% CO2 capture will lead to substantial CO2 emission reductions, relative to the status quo.

Thus, there is more to the story than might initially appear to the casual reader. Assuming that both of the above conditions apply, the construction of this new coal plant is actually a good idea, not a bad idea. The moral of the story is that environmental advocates need not have a rabid knee-jerk reaction against new coal plants, if new coal plant construction results in substantial CO2 emission reductions.

Make no mistake: I love wind energy and photovoltaics. However, they only provide intermittent sources of generation. On the electricity grid, lacking truly economic large-scale electricity storage, wind and PV cannot fulfill the role of dispatchable (a.k.a. “firm”) power.

I also love energy efficiency, and we should all do more of it. Energy efficiency can reduce our electricity generation requirements considerably. Ultimately, though, in our current society, we still will need some form of firm generation.

Coal power with 90% CO2 capture fits that bill pretty darn well. If the Powerspan technology works as advertised at reasonable economics, it might be a whole lot cheaper and more quickly available than zero-emission baseload technologies, such as IGCC with carbon sequestration or advanced nuclear designs. In which case, Powerspan is a company to watch.

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.

Climate Change Policy Poll

by Richard T. Stuebi

I’ve written before that I’m very skeptical of polls. It seems to me that poll respondents give themselves far too much credit for being well-informed or magnanimous, relative to what they actually know or what will they will do when making real decisions that really affect them. Accordingly, I’m always bothered when pundits use poll results as a basis for what policy ought to be.

However, this past summer, a poll conducted and reported by New Scientist magazine did seem to shed some useful insights that policy-makers ought to consider.

The reported highlights of the survey were that there was substantial public support in the U.S. for carbon limitations, that the public preferred outright standards to cap-and-trade or (egads!) carbon taxes, and that the desired focus of carbon reductions should be on the electric power sector than on vehicles (don’t tread on SUV!).

In my view, the most illuminating finding was the weakness of support for carbon limitations if they induced any significant economic pain. In other words, respondents were fine with climate legislation — as long as it really didn’t cost much. On the other hand, when asked if they would support carbon emission requirements that would increase energy prices significantly — which is likely to be the case to achieve the magnitudes of emission reductions that are widely viewed necessary to have meaningful impact in protecting the planet — support evaporated.

This is one of the few instances where I actually believe what the poll results say, without any bias. I take from this finding that — to avoid catastrophic climate change during the balance of this century — either we need to quickly develop a zero/low baseload carbon energy source that costs essentially no more than conventional coal generation, or that we quickly need to substantially increase U.S. political will and courage to endure economic sacrifice. Either will be tremendously challenging. Failing on both counts could doom the planet.

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.

Is Australia approaching ‘K’ day?

by Nick Bruse

Last night in Australia we had Prime Minster John Howard and opposition leader Kevin Rudd go head to head in a televised debate. Key issues were the economy(interest rates and tax cuts), the war in iraq and climate change- you can check out a video summary here

Interestingly for Australia one might say that all three of these issues are highly integrated with foreign policy and have quite significant leverage points with the US. Namely our involvement in Iraq, and the governments position on climate change.

I think its worthwhile to provide some insight as to what is happening in Australian politics right now on The Cleantech Blog because the climate change policy of both contenders is quite different and may have significant bearing on world politics if Australia does sign the Kyoto agreement – ‘K’ day.

Essentially, if Kevin Rudd wins the next election and he is winning by around 10points in polls currently, he will has promised to sign up to Kyoto, and commit to the proposed Australian state government coalition recommendations on an emissions trading program.

The Howard government announced last night that it plans to start up a clean energy technology fund, though with little details on it currently. “He says its priorities would be to invest in clean energy technology and to support households who are most affected by the higher prices after a carbon price is set. He also said that if he wins the election he would try to push the United States to do more on climate change, including lobbying George Bush.”

In addition to the most notable action in the climate space by the Howard Government have been:

  • Establishment then removal of the Mandatory Renewable Energy Target of 2% in early 2000s
  • A taskforce report on carbon emissions trading – but no commitment
  • No commitment to Kyoto protocol – but to a new Kyoto framework
  • A$100m to Asia pacific technology pact
  • A taskforce report on bring nuclear power to Australia
  • A$200m to reduce regional deforestation
  • Establishment of A$500m Low emissions technology development fund – of which $335 has been spent on coal projects
  • Achievement of our Kyoto targets, predominantly through our reduction in land clearing in 90s, not by curbing our emissions. (clive hamilton – scorcher)

Many criticise the current government for its years of inaction on climate change due to lobbying and strong personal links to the mining and energy industries – See the maniac times article for a critical view

So the real question is if we vote for Howard, has he really changed his tune – sceptic to realist, and is a vote for Kevin Rudd a vote for a greener cleaner future with his promise to sign Kyoto. For many the promise of becoming a kyoto signatory is a strong impetus.

What for one I would like to see is a strong commitment by both parties to a comprehensive acknowledgement that many different technologies, and solutions will play a part here. It seems that politicians struggle to implement bipartisan solutions from bodies specifically setup to take climate change like The Australian Greenhouse office. They also need to commit to the fact that we need to alter the playing field significantly to pro-actively support low emissions – through a tax or a trading scheme. More funds are all well and good – particularly to companies that require them – but it still means that someone is picking winners and that’s where the politics keeps weighing in. If the Howard government is throwing so much money at cleantech in Australia, why couldn’t Ausra get funds to build their plant here instead of the US?

Unfortunately with all the politicking going on at the moment prior to an election, its hard to see the real vision and leadership that’s required to actually make a difference on climate change. Perhaps we need an Australian version of Mr Gore? A change agent. Someone that can be both political and apolitical at the same time, singular minded and belligerent.


Nick Bruse is runs Strike Consulting, a growth venture consultancy specialising in the cleantech sector and hosts The Cleantech Show, a weekly podcast of interviews with leaders involved in clean technology research, entrepreneurship, commentary and investment.

Carboholics Anonymous

by Richard T. Stuebi

This weekend, there was an extraordinary editorial in The Washington Post. The essence of the message was “Save me from myself: I can’t stop emitting carbon. Unless the government changes the rules to induce me to stop, I will kill the planet.”

The author of this plea was David Crane, the CEO of NRG Energy (NYSE: NRG), the 10th largest power generation company in the U.S. In effect, he is saying that his company is willing to undertake major changes to reduce emissions — but only if competitors do so too, because NRG would be disadvantaged in the marketplace to take proactive action on its own.

I am very sympathetic with Mr. Crane’s argument. It’s a fine thing if people want to engage in emission reductions voluntarily. As for me, I admit that I’m not enthusiastic to unilaterally make changes that I otherwise don’t prefer in order to reduce my carbon footprint. My rationale is that my miniscule contribution to solving the climate problem is individually meaningless, and I don’t want to be just one of very few parties incurring costs or inconvenience without having any macro-scale impact anyway. Put another way, I’ll do what it takes without complaining if everyone else is in the same boat, but I’m not going to be put out if most people aren’t. I don’t mind sacrificing, but if I’m going to sacrifice, it’s only just that the sacrifice must be shared.

This is where public sector leadership comes in, which in turn is based not only on courageous voting by citizens, but also by visionary companies that demand a new world order. I’ll gladly pay the price if everyone else does, and I’m eager to change the rules of the game so that we all bear our share of the burdens — and it looks like NRG is of the same opinion. With more corporate leaders committed to taking the same stand, maybe we’ll finally get somewhere with sound climate policy in Washington.

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.

What I Read on My Summer Vacation

by Richard T. Stuebi

In the spirit (though not the length) of a back-to-school book report, I dedicate this column to reviewing three energy-related books that I read in the last few weeks as the dog-days of summer wound to a conclusion.

Cape Wind

I first read Cape Wind by Wendy Williams and Robert Whitcomb, which profiles the eponymous offshore windfarm in Cape Cod, and provides a behind-the-scenes look at the mischief that has so far thoroughly stymied its progress.

The story makes just about everyone involved in the local, state and federal political arena look awful – petty, elitist, short-sighted, unprincipled. The list of bad guys is headed prominently by Senator Ted Kennedy (of course) and Governor Mitt Romney of Massachusetts, but less obviously also includes players such as Senator John Warner of Virginia and Congressman Don Young of Alaska. (Alaska! You are absolutely right to ask: “Why Alaska?”) The only person emerging from the story smelling like a rose is Cape Wind’s lead developer, Jim Gordon, who is portrayed as truly heroic.

The book reads quickly and well, and is getting good reviews, even from usually not-so-wind-friendly places like the Wall Street Journal. However, I am concerned that the book comes off a little too much like an in-house PR piece for the developer of the windfarm: I put the book down sincerely questioning the authors’ objectivity. The tale seems so one-sided, it’s hard to believe that it could be really accurate. If it is, our political system is in dire shape, and our prospects for good energy/environmental policy are dim.

The Grid

I most recently finished The Grid by Phillip F. Schewe, a very readable history of the electricity industry. This was the first text I have found that, in less than 300 pages, spans the mad-scientist inventors Edison and Westinghouse and Tesla, through less-known but equally pivotal industry giants such as holding company progenitor Samuel Insull and TVA legend David Lilienthal, into the turbulent days of Enron and deregulation.

The book does a particularly good job reconstructing the 1965 Northeast blackout (not much different from the 2003 version), touring the reader through massive nuclear (Indian Point) and fossil steam (Ravenswood) powerplants, and accompanying a distribution crew on a routine but not-to-be-taken-lightly line repair job in Idaho. Most interestingly, Schewe weaves in contemporary commentary and observations from social critic Lewis Mumford, whose writing excerpts offer an insightful countering perspective questioning the contribution of energy technology to the fundamental advancement of humanity.

The author’s writing style was not to my taste (for reasons that alas I can’t pinpoint), and I think the electricity industry still deserves a more gripping seminal treatment comparable to the gift Daniel Yergin gave us of the oil industry in The Prize, but until then, this will suffice pretty well.

The Long Emergency

In between, I read a thought-provoking but highly disturbing tome entitled The Long Emergency by James Howard Kunstler. Its premise is not unique: peak oil + climate change = end of the industrial era = return to pre-industrialism. Indeed, one of my recent posts covered this very topic.

However, Kunstler’s writing is incredibly powerful, with pithy snippets about every other line, and some of the directions he explores are truly distinctive. For instance, he argues that mankind’s one-shot exploitation of the non-renewable fossil energy inheritance is but a reflection of the entropy mechanism inherent to our universe (as described in the Second Law of Thermodynamics), and that escalating energy extraction/use only accelerates the rate at which our world winds down.

Kunstler is somewhat hopeful about the ability of the human species to adapt and survive, though not in its current social structures and industries/economies, and not at anywhere near current population levels. And, he is clearly pessimistic about the transition: basically, Kunstler doesn’t think there’s enough time or enough remaining energy to avoid cataclysmic change characterized by mass famine, economic depression, drought, migration, war, etc.

While I appreciate Kunstler’s wisdom and expansive disparate set of knowledge and insight, I’m not totally sold on some of his conclusions. As an example, as long as the amount of solar radiation provides more than enough energy to the Earth’s surface to supply all of mankind’s energy needs (with a few orders of magnitude to spare), I believe there ought to logically be a way to maintain a standard of living similar to what we have now – it will just cost more. I don’t think Kunstler has some of his facts straight, which always causes me to be a little shy about buying everything a writer tries to sell. For certain, Kunstler makes a lot of assertions that are not backed up solidly by facts, therefore exposing his arguments to question.

Unlike Kunstler, I’m somewhat optimistic that the combination of technological innovation and market forces (under a big assumption: that policy allows market forces to work, prices energy appropriately highly, and doesn’t provide incumbents huge protective barriers against the impact of innovation) can allow us to colonize a very attractive future. Kunstler doesn’t seem to incorporate an economic view in his thinking, whereas I believe energy prices with increasing scarcity and the resulting downward force in demand will ameliorate (though not eliminate) the pain of transition. However, I admit that it would require a huge allocation of global economic capacity towards the rapid implementation of a new energy paradigm to completely smooth the transition, and present markets with their pricing signals and investment incentives aren’t making that happen as urgently as it probably should.

Therefore, ultimately, I agree with Kunstler that the ending of the conventional energy age will be extremely painful for many constituencies, who are blindly accelerating into the wall with voracious consumption. I agree that exurbia lifestyles spreading across the U.S., especially across the southern half of our country, will someday be viewed as a cul-de-sac of history, burdening us with enormous social costs due to the massive infrastructure investments that will become untenable. I agree that life will tend to become more localized, less materialistic, simpler.

In summary, I tend to agree with Kunstler on the general direction and trajectory of our collective situation, but he and I do differ in degree regarding the likely pace and magnitude of the impending discontinuities.

All three of the above books get my “thumb’s up”, but if I had to recommend just one, it would be The Last Emergency. Read it and see. Or, actually, read it and think.

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.

APEC Aftermath – 2 steps forward or 1 step back?

by Nick Bruse

Well, its been a big week here in Australia terms of both international and domestic politics with the ending of the APEC summit and the recent pre-election opinion polls being released today showing a further drop in support for John Howard’s re-election.

The papers here are wrapping up on the outcomes of the APEC summit, and the biggest aspect being reported about is the decisions or lack of specific decisions made around Climate Change.
Those in the community who were wanting specific targets set or caps agreed to had to go home disappointed, and its been quoted that perhaps their expectations where too high for this event.
Ive taken a few of the comments from the press and added my own thoughts to this. Here’s the link to the full Sydney Declaration on Climate Change and Energy

1. Each country has agreed that climate change is a problem and needs to be addressed. This builds momentum before a series of international meetings on climate change being hosted by the US later this month and the next UN climate meeting in Bali in December.

Well its nice to get a stake in the ground…only took 10 years plus of hammering.

2. The declaration sets out tangible responses on protecting forests and improving energy technology. Australia has offered $30m to an Indonesian forestry initiative to prevent deforestation. With the goal of increasing forest cover in the region by at least 20 million hectares of all types of forests by 2020.

Deforestation is probably one of the most critical issues in terms of loss of habitat, because once its gone it takes a significant period to return to its original state. Also with climate change putting pressures on habitats, the removal of migration corridors means that when a habitat changes, species are unable to move which increases the possibility of extinctions.
But are we trying to continue Australia’s historic approach to emissions reduction by advising our neighbours to do the same? My concern here is that Australia has stabilised most of its emissions since 1990 through a reduction in land clearing, not through industry action.

3. We also saw the increasing negotiations regarding the US led global nuclear energy partnership which which aims to expand the safe use of nuclear technology.

What can you say, of course this is going to continue, its all to obvious when Australia has rich supplies in uranium, big business and governments that will benefit from the rewards and you probably need less than a 100 lines of excel spreadsheet to model the economic model. But can you blame a government that sees in the next 20 years the cost of providing healthcare to an aging population, paying for infrastructure and and keeping those budget surpluses do anything different?

4. Other positives were that the goals are to reduce energy intensity by at least 25 percent by 2030 from the 2005 level.

This is certainly a step in the right direction, but probably no where near enough what is required. Take for instance the built environment. In a recent study by Deacon University in Australia, they determined over a 3 year study that the built environment demands 40-50% of global energy, consumes 40% of non-renewable resources, generates 40% of landfill waste and uses 30% of fresh water reserves. The good news, 33% of energy related CO2 emissions are generated by energy use, 29% of that can be cut by existing tech by 2020 (new scientist August) . So there’s a 10% reduction right there, by 2020, and most of these initiatives can be done with paybacks of around 2-5 years.

I was recently down in Launceston, Tasmania, presenting at the Australian Direct Property Group with my colleagues from Thinc Projects on achieving sustainability in the property industry. Most of the activity in the sector around green building is not being driven by the government, but by business now wanting to be seen as being green, and investors and tenants driving the process. So lets hope that government in the coming months can step up to the plate more with assistance and stronger policy in this area.

In all of this, and its outside the scope of today’s blog but its probably worthwhile to step through if you have some time and do your own checking of the declaration against the stabilisation wedges and see what progress is being made. See if you can map out how far we have managed to get from these talks towards the required solutions.


Nick Bruse is runs Strike Consulting, a growth venture consultancy specialising in the cleantech sector and hosts The Cleantech Show, a weekly podcast of interviews with leaders involved in clean technology research, entrepreneurship, commentary and investment.

Honeymooning in Costa Rica – The Home of Carbon Neutrality

I’m taking this week off for my honeymoon in Costa Rica. I think it’s quite an appropriate place to take a honeymoon if you work in the effort to fight global warming – as I’ve stated before, we are working on a venture to use software to cut the cost and increase the transparency of carbon offsets.

Among its initiatives to drive its ecotourism and lead the world – Costa Rica is working to become the first carbon neutral nation.

I had a chance to listen recently to a presentation by Bob Epstein, the founder of E2, which is connected with the National Resources Defense Council – on Costa Rica’s efforts. By the way, if you are an executive seriously interested in the enviroment – joining E2 should be a priority.

The NRDC and E2 have also done some work laying out how that path to carbon neutrality would look. Their core arguments and primary recommendations are fascinating when you think of applying the concept of carbon neutrality on a national scale beyond a small case study like Costa Rica.

Beyond the continued reforestation which makes up a significant reduction in Costa Rica’s greenhouse gas footprint, The NRDC proposal emphasized four areas of needed progress:

  • “Increasing energy efficiency
  • Raising fuel economy and promoting plug-in hybrids
  • Encouraging productions of biofuels and biomass for electricity
  • Improving public transport”

The press release and full report is available here.

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 Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

Goin’ Nucular

by Richard T. Stuebi

It was pouring rain last Wednesday morning, as I entered an office building near Cleveland Hopkins Airport to attend a meeting convened by Senator George Voinovich (R-OH) to discuss the future of nuclear energy.

Unlike many of his peers, Senator Voinovich appears to take the issue of climate change seriously. Also unlike many of his peers, he sees an increasing reliance on nuclear energy as essential in meeting the energy and environmental challenges of the future.

The keynote speakers of this 90-minute meeting were Dennis Spurgeon (Assistant Secretary for Nuclear Energy, DOE), Dr. Peter Lyons (Commissioner, NRC) and Adrian Heymer (Sr. Director of New Plant Development, Nuclear Energy Institute). In attendance were representatives of Ohio-based utilities with nuclear fleets AEP (NYSE: AEP) and FirstEnergy (NYSE: FE), as well as major suppliers to the nuclear industry such as locally-based Babcock & Wilcox.

The basic message from the speakers was simple: a lot of nuclear plants must be built in the coming decades, and the U.S. urgently needs to take steps to get out of the way to enable the development of these new plants. The speakers outlined the activities required to revive the industry to bring about this nuclear “renaissance”: Federal loan guarantees (at 100% of debt requirements, not 90%) for new nuclear plants, opening of Yucca Mountain as a nuclear waste storage facility, increased training and workforce development to replace retiring nuclear engineers, the Global Nuclear Energy Partnership (GNEP), etc.

And, the speakers couldn’t reiterate enough how safety was the paramount concern. This is truly an amazing technology if everyone has to emphasize how steps will be taken to ensure disasters don’t occur. (I am reminded to recall tour of the Clinton nuclear plant in Illinois in the early 1990’s, at which point about 200 of the 1100 site employees — almost 20% of staffing! — were dedicated to security, preventing people from doing the wrong things. I can’t think of another technology that requires so many band-aids to mitigate perverse effects. Hard to imagine any private investor wanting a piece of that cost structure.)

In the open discussion that followed the speakers’ remarks, I had the temerity to question the wisdom of furthering our bet on the uranium-fission cycle as the basic technological platform for nuclear power production in the future.

While I admitted that the current nuclear fleet was an important contributor to the energy mix that we can’t afford to prematurely retire, and I conceded that some new nuclear plants of more-or-less conventional technologies may be necessary as a stop-gap measure for a few years, I also submitted that other fission cycles — certainly including thorium, maybe others as well — ought to be explored much more thoroughly, so as to create the possibility of a new and much better generation of nuclear plants offering more than just incremental improvements.

This is because, in my view, uranium fission suffers from three unavoidable pitfalls:

1. Uranium supplies are hardly infinite themselves, and have a significant concentration in places like Russia that we ought to prefer NOT to rely upon for precious commodities.

2. Uranium fission creates sizable quantities of transuranic wastes of extreme toxicity and half-lives measured in the thousands of years.

3. Uranium fission makes for excellent bombs — not only nuclear explosions, but also dirty residues — that would be highly prized by terrorists and other ne’er-do-wells.

I’ve been told by credible sources that fission from thorium essentially obviates each of these fundamental challenges. Relative to uranium, there are orders of magnitude more thorium in the earth’s crust, and it is widely distributed. Thorium fission produces wastes with much lower toxicity and much shorter half-lives (a few hundred years), in much lower quantities to boot. And, thorium doesn’t have a positive gradient that facilitates run-away fission that leads to explosions. These all sound like attractive attributes to me, worthy of a lot more exploration.

Alas, the nuclear experts at the meeting pooh-poohed thorium and defended uranium. They said that never had any uranium been used by bad guys to make a bomb. (You mean, Yet?) They said that the GNEP would create an effective international pact to prevent nuclear materials from getting into the hands of enemies. (Oh, really?) They said that there was plenty of uranium for the next generation of nuclear plants. (And then what?) They said that the GNEP would dramatically reduce the amount of long-lived nuclear wastes from future uranium fission facilities. (For tens of billions of dollars — what a bargain!)

Ultimately, I was not reassured by the views of the uranium fission advocates. To paraphrase Shakespeare, they doth defend too much. And, note that the nuclear industry is the not-so-pretty offspring of the military-industrial-Oedipal complex of the 1950’s.

It is hard to think of a less-credible set of proponents than those who carry the combined DNA of the defense and electric utility sectors, niether of which is particularly famous for a commitment to the truth in the light of established facts. Their mantra has often been: “Trust us.” I’m typically not paranoid, but in this case, I am very skeptical indeed.

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.

Plan C

by Richard T. Stuebi

I have a great deal of respect for Matthew Simmons, founder of the energy investment bank Simmons & Company International. Simmons is a frequent speaker, and one of his most often-quoted lines is that, when it comes to the possibility of declining oil production in the near-future, “There is no Plan B.”

Late last year, a non-profit organization from Southern Ohio named The Community Solution wrote a white paper in which they described a so-called “Plan B”. In their Plan B, new technologies are pursued aggressively in the vision of enabling society to transition to an alternative energy future. This presumably would represent the majority view of the clean-tech community, including the readers of this blog.

According to The Community Solution, the fly in the ointment is that Plan B only slightly slows the inexorable path to human extinction implied by “Plan A” (status quo consumption). The Community Solution essentially argues that Plan B is unsustainable, that Plan B still implies too much consumption of resources for the planet to bear forever.

For The Community Solution, the only true path of enduring sustainability comes with “Plan C”, what they call “Curtailment and Community.” Much lower consumption of all resources, much more local economic and social interaction.

In a video, The Community Solution points to Cuba as an example of how Plan C can work. With the collapse of the Soviet Union in the early 1990’s, Cuba no longer had its industrial and economic benefactor, and oil import quantities fell by more than 50%. Out of necessity — some might say desperation — agriculture, commerce and transportation all had to be reinvented on the fly to cope with a dramatic curtailment in energy resources.

In my view, Cuba has many fine things to recommend it: food, music and cigars come to mind. However, economic policy under the Castro regime is not one of Cuba’s long suits. It is doubtful that the average American will be impressed by Cuba’s energy “revolution” in the past decade and say, “Gee, that’s wonderful — I’d like for that to happen here.”

Selling Plan C to the U.S. seems pretty much like a lost cause to me, and in any event I don’t think Plan B is necessarily as doomsday as The Community Solution portrays it. Although I agree that we’re far too materialistic and our society would benefit from more modest values, I do not endorse Plan C, and instead I vote for Plan B. What do you think?

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.

Micro Fuel Cell Killer – What’s Next?

About 4 or 5 years ago micro fuel cells were quite a hot topic in cleantech. They were going to power our laptops, cell phones, PDAs, blackberries, hand held multimedia devices, etc.

The story ran like this:

The digital age and increasing customer demand for more power hungry features like bandwidth, multimedia, et al on mobile devices like laptops, PDAs and cellphones mean the increase in power requirements are outstripping the pace of technology of lithium ion battery – therefore the only solutions will be micro fuel cells. And since battery manufacturers are a plodding, unimaginative lot, silicon valley and smart scientists can build a company to leapfrog them.

We saw major players like Motorola, Toshiba, Intel, and others taking a look, and startups like Smart Fuel Cells, Medis and MTI Micro seeking to make their name on a fuel cell the size of a credit card (or thereabouts) .

Today, still no micro fuel cell powered devices are on the market, many of the larger players have gone quiet, and all the startups are talking up battery charger (not device power pack) products – especially for the military and first responders.

What happened? What killed the micro fuel cells? Can they come back? And is something similar lurking around the corner for solar, electric vehicles, biofuels, next generation batteries or one of today’s other darlings of the cleantech sector that we can learn from?

Well . . . let’s see:

The technology is actually hard – Micro fuel cell technology proved a harder nut to crack than everyone thought (at least at anywhere near the same cost point) – and the product development issues given the state of the technology proved to be a real challenge.

Rational expectations – Market reaction to the underlying drivers has been aggressive. We’ve got global warming and high energy prices making people like Sun, Dell, and others hell bent on designing power saving devices – which the consumer is now interested in buying as a premium product. Once the electronic product companies actually put their minds to reducing power usage – well, it turned out that you actually CAN optimize a device to save power, and still pack enough features in to sell product.

The incumbent technology – Despite high profile thermal issues, the incumbent lithium ion technology turned out not to be so bad, and has continued to keep pace (as far as us lowly consumers can tell) – Bottom line: I now carry 2 very small 4 hour battery packs for my laptop – I can last a transocean plane flight without needing to plug in.

Infrastructure, infrastructure, infrastructure – And yes, having to make infrastructure changes is very costly in anything energy-esque, whether its in fuel, entrenched distribution, or tooling. As usual, winning technologies in energy tend to be owned by businesses that find a way to work with existing infrastructure, not to try and replace it.

And in the end, the batteries (and the big battery makers) still rule the roost, for now.

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 Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

Carbon Taxes…Sorry, I Meant, "Fees"

by Richard T. Stuebi

For a long time, I have been assuming that U.S. regulations to reduce carbon emissions, when they come, will be in the form of a cap-and-trade program, similar to what is in place in the U.S. for limiting sulfur dioxide emissions.

Even though a cap-and-trade system for carbon emissions is probably workable, it is still (in my opinion) a less direct mechanism for reducing carbon emisisons than the more obvious: a carbon tax, priced on a $/ton emitted basis.

Carbon taxes have not found much favor because…well, they’re a tax, and no politician wants to implement a tax, as it’s deadly to one’s career ambitions. (Remember “Read my lips”?) More substantively, some have argued that a carbon tax would be harder to administer, though I would think that a cap-and-trade system would be much more cumbersome (all those allowances to track!).

For certain, a tax is a better structure dealing with emissions from all sources, large and small, whereas a cap-and-trade system is only manageable for large point source emitters — such as utility powerplants. Not surprisingly, therefore, oil and auto interests generally favor cap-and-trade as the carbon mitigation approach of choice. Perhaps somewhat surprisingly, those utilities that have gone on record in support of climate legislation are OK with a cap-and-trade approach, probably because of accumulate utility experience with cap-and-trade for sulfur dioxide.

However, FPL Group (NYSE: FPL) has cast their lot in arguing for a carbon “fee” — a tax by any other name, but a much more acceptable term. (Policy statement here) This is the first big company that I’m aware of that has gone this far out on the carbon tax limb.

True, FPL is not among the leading carbon emitters: with a large emphasis on gas, nuclear and wind for their electricity generation, they can better afford to adopt a bolder climate stance than other utilities.

But I wonder if other utilities — Exelon (NYSE: EXC) comes to mind, maybe Duke Energy (NYSE: DUK) — can be far behind? And, if so, will the pendulum swing away from cap-and-trade to carbon taxes…er, fees?

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 Oldest Cleantech Technology?

by Richard T. Stuebi

Up on Mount Ararat, Greenpeace is building a replica of Noah’s Ark. Why? They are using the ark to bring more attention to the plight of climate change.

Yahoo! article

For Greenpeace, the ark is a twofold symbol. First, in the Noah story, the Earth was deluged as by 40 days and 40 nights of rain as punishment for mankind’s sins. Greenpeace wants to make the linkage that climate change is a new manifestation of humanity’s sinfulness — our unconstrained use of fossil fuels that are releasing unsustainable amounts of greenhouse gas emissions.

Second, the ark is to remind everyone that climate change’s biggest long-term impacts may be felt through rising sea levels, which will inundate coastal regions around the world where hundreds of millions of people live. It is not totally out of the picture that in the future we may need to build something akin to arks to save these people from the rising of the tides.

I don’t know if rebuilding Noah’s Ark is the best use of activist resources, but it is interesting to note that — even back to Biblical times — humans resorted to technology to save the day from climatoligcal disasters.

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.

Peak Coal?

by Richard T. Stuebi

One of the more passionate debates in the energy community these days centers on the concept of “peak oil”. Peak oil does not mean oil supplies running out; rather, the term “peak oil” refers to the moment in time when oil extraction levels reach their maximum, followed by a long decline — no matter how much oil prices rise and no matter how much new technology is applied in an attempt to lift more oil from underground.

For those who know a fair amount about petroleum geology, supplies and economics, there is a general recognition that peak oil will occur at some point in the future: the debate is when — a few months from now, a few years from now, or a few decades from now. Peak oil is impossible to predict with high confidence because there’s no “dipstick” in the ground to tell observers how much oil is really left in each of the fields — and even if there were, there’s no absolute way of knowing how much of the remaining oil can be yielded due to geologic issues.

Most agree that, once the peak oil moment occurs, the world will begin its transition away from oil for transportation fuels — whether it has prepared for that moment or not. In other words, if we haven’t meaningfully eased our dependence on oil, the decades after peak oil will truly be tumultuous for the modern mobility-reliant culture upon which the human species currently is based.

These types of concerns have never been raised about the supplies of coal. It has been widely assumed that there is an abundant supply of coal (especially in the U.S.), enough to last for centuries. Coal has been increasingly viewed as the “backstop” fossil fuel: plentiful, cheap, known. As long as we can deal with coal’s environmental issues, particularly CO2 emissions, we can always fall back to coal — not only for power generation, but for producing transportation fuels as well.

A recent essay by Richard Heinberg brings these important preconceptions into question. In his essay, “Burning the Furniture”, Heinberg reviews a recently released study by a German organization named Energy Watch Group, in which it is asserted that worldwide coal production will peak in the next 10-15 years.

Without having access to the report, it’s hard for me to opine on the quality of the analysis behind this conclusion. However, if the analysis is basically sound, and the conclusion is directionally valid, this insight is a very, very big deal.

If true, the world energy markets will not be able to rely upon coal as a safety net. The coal plants being built every week in China will face depleting supplies and increasing prices. Price volatility in coal markets will increase dramatically. CO2 emissions will not increase exponentially — the fuel to produce those emissions will be shrinking. Hydrogen and renewables will have to come to the fore, faster and in greater scale — and if these technologies are not economically viable, then there will be forced reductions (e.g., curtailments) in energy use. The U.S. (not the Middle East) will become the geographic region with extreme geopolitical leverage in energy.

If oil and coal both are near the end of their eras, then the world as we know it will change so profoundly, it is hard to imagine. One thing would be for certain: good opportunities for cleantech.

Essay: “Burning the Furniture”

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.

What’s Up with ConocoPhillips?

by Richard T. Stuebi

On the clean-tech front, ConocoPhillips (NYSE: COP) seems to be striving to take the lead among U.S. oil companies. In just the last two few weeks, COP has made two announcements of significance.

ConocoPhillips is not yet in the league of Wal-Mart (NYSE: WMT) and General Electric (NYSE: GE) as major players that are driving environmental improvement on a mass-scale through the aggressive pursuit of capitalism across their core businesses.

But at least COP has gotten off the dime: they aren’t denying the existence of climate change as a real issue, and are recognizing that they need to start shifting their perspective if they want to continue to be a relevant energy company in the future.

Its peers among U.S. oil majors, ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX), have also begun making strides on the green-front.

The contrast between the three of them and the major U.S. automakers — General Motors (NYSE: GM) and Ford (NYSE: F) — is stark. The auto companies are stuck with tenuous competitive positions due in large part to their strategies for focusing on high profit gas guzzlers (e.g., SUVs and performance cars), and as a result they are fighting Federal pressures to tighten auto fuel efficiency standards. In general, they don’t want to hear about climate change.

The historical solidarity between the companies involved in oil supply and in oil demand seems to be breaking down.

Presumably, it’s at least partly because the oil companies are in better shape than the auto companies: with huge profits, the oil majors have more degrees of freedom to think more proactively. However, I think it’s also because the oil companies are increasingly coming to the view that reduced oil demand is unavoidable in the future — not just for environmental reasons, but simply because supplies will be challenging to obtain. COP, XOM and CVX are probably beginning to plan what they will look like as companies in a post-oil world, and that plan is consistent anyway with carbon limitations.

Interestingly, most of the independent U.S. oil producers and refiners — many of which are enormous companies in their own right — are laggards on the environmental front, alongside the U.S. automakers. What will it take for the U.S. oil independents to begin to see the light? Do they not see a future for them beyond oil?

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

Gambling on Global Warming

Gambling on global warming? It sounds like a really bad made-for-the-internet soap opera. But apparently at one online betting site, you actually can. So move over carbon trading and Sir Nicholas Stern – Vegas is weighing in on the true likelihood of damages from climate change.

I figured that rated a column on a lazy Friday the 13th afternoon. And while not for the not for faint of heart – here are the bets and the odds listed on their website:

“Will any of the following occur?
Hollywood will be under water before 2015 +10000
A major motion picture studio will be under water +5000
A celebrity sea-side will be under water bef 2015 +500
“Water World” becoming a reality +30000

Which will cause more damage in California?
Global warming +5000
Earthquakes -9999″

You can look it up at BetUs.com under their sportsbook “other”. According to one news story on the subject, they have received over 3,000 bets.

My preference, let’s just invest in cleantech and next generation energy technologies and actually try to solve the problem, but if you happen to prefer to spend your money in casinos, be my guest.

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 Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks.

Order in the Court

by Richard Stuebi

This past week, the U.S. Supreme Court handed down a landmark verdict against the U.S. Environmental Protection Agency.

NYT article

In essence, the verdict demands that EPA justify why it should continue to exempt carbon dioxide from being regulated as a pollutant, given the increasing evidence that climate change is an urgent environmental problem and that CO2 is a major contributor to it.

It’s getting harder to see how the U.S. government will be able to avoid taking material action soon to deal with carbon dioxide emissions.

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

Crude Impact

by Richard T. Stuebi

A few weeks ago at the Cleveland International Film Festival, I had the opportunity to serve on a discussion panel for a recently-released documentary entitled Crude Impact.

Crude Impact aims to portray all of the various social ills — political instability in the Middle East, corruption and poverty in the developing world, air pollution and environmental degradation, sprawl and traffic — associated with modern society’s reliance on oil. After establishing all of the disturbing challenges associated with oil, Crude Impact closes with a somewhat perversely optimistic punchline: “peak oil” — the maximum rate of extraction from our planet for the finite stock of oil that was left from pre-history — is surely coming, and no matter what economic or geopolitical crises that phenomenon will precipitate, at least the decline of oil will put an end to all of the miseries that oil underlies.

On balance, I give Crude Impact a “thumbs-up”. Without falling into despair, it clearly tells a number of stories related to petroleum through various lenses, and weaves these stories together to paint an overall damning picture of oil in a compelling manner.

I might suggest double-billing Crude Impact with An Inconvenient Truth, which focuses on the planetary impacts of global climate change without spending much time on the primary culprit: our seemingly insatiable desire to consume fossil fuels. Crude Impact seizes unflinchingly on this root cause, and is effective in reinforcing a sense of urgency to further commit to reducing our use of energy generally, and oil in particular.

The one criticism I have of the film is that it places a lot of blame for propagating oil demand on a variety of social segments — governments in the U.S. and worldwide, oil companies, auto manufacturers, the media — without fingering the ultimate precipitator: the consumers who have been completely complicit all along the way in creating our energy and environmental crises. The makers of Crude Impact tend to shun ascribing responsibility to the viewer, the average citizen, for any of the planetary woes we face due to society’s oil addiction.

If we are to have impact in changing the world for the better, we can’t fall prey to the passive negativity of laying all of the fault on other bigger parties that are supposedly more powerful than the individual. We have to own up to our role in causing our current problems, by being undemanding and unquestioning consumers. Once we see vividly our integral part in the drama, we lose the sense of being hopeless victims, and can act with much deeper resolve towards changing our path forward to a more hopeful future.

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

$2 Bil Wind Acquisition

The cleantech sector received a huge boost this week from the news that Portugal’s EDP anounced the acquisition of Texas based Horizon Wind for a price of over $2 Bil. EDP operates globally in Spain, Portugal and Brazil.

One of the intriguing aspects of this deal is the history. Horizon Wind was formerly Zilkha Renewable Energy, before it was purchased by Goldman Sachs in 2005.

According to their websites Selim and Michael Zilkha were the previous owners of Zilkha Energy, which started in the mid 1980s and grew to be one of the largest privately held independent E&P companies in Texas, before selling it to Sonat in 1998 for $1.04 billion plus debt. Zilkha primarily operated in the shallow water Gulf of Mexico, and was one of the early users of 3D seismic on a large scale.

Starting after that 1998 sale they moved into renewables, and built Zilkha Renewable Energy into a sizeable player in the wind market before selling to Goldman Sachs in 2005. The Zilkhas are now involved in a biomass power business. It is interesting to note that both Zilkha Energy and Zilkha Renewables’ claim to fame was having gotten in early and built an aggressive leasehold position. In some respects, they grew their wind business in many respects like a traditional oil exploration company, build a large lease portfolio first, prioritize your development resources, apply best available technology, build out your infrastructure.

It is also highly instructive to see traditional energy capital plowed into a wind company, only to sell it to a major Wall Street firm, which after additional investment subsequently flipped the business in less than 2 years to a major European utility. Texas oil money makes good in renewables? No wonder Texas has passed California in wind energy generation. Perhaps we are finally entering a new era of maturity in renewables.

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.

Goring Gore

by Richard T. Stuebi

In the past few weeks, not even March Madness has matched the competitive intensity with which climate skeptics have piled on Al Gore for his personal energy consumption patterns.

In the unlikely event that you’ve missed this story, the Tennessee Center for Policy Research (TCPR) reviewed Gore’s electricity bills from his Nashville mansion and calculated his energy consumption levels at 20 times the national norm.

Clearly, TCPR had been awaiting the right time to release their findings for maximum embarrassment to Gore, seeking to undermine his credibility on the issue of climate change, as they just happened to announce their findings on February 27: the day after Gore and his colleagues had won the Academy Award for Best Documentary for An Inconvenient Truth.

TCPR release

TCPR didn’t even try to appear unbiased: instead of just laying out the facts, they revealed their open contempt for Gore in the first sentence by opining that he “deserves a gold statue for hypocracy.”

The story tapped a groundswell of public opinion, and seems to have legs: last week, Gore testified on climate change at the U.S. Senate, and had to endure the humiliating fate of being chastised for his energy use by the infamous Senator James Imhofe, who stands by his claim that climate change is the biggest hoax ever perpetrated on Americans.

MSNBC story

Gore pointed out in his testimony that he purchases carbon offsets to neutralize the emissions impact of his energy comsumption. That set in motion another investigative feeding frenzy, which surfaced that these offsets were purchased from a company in which Gore had an interest.

WorldNetDaily posting

I continue to be annoyed and frustrated with the novel ways in which the climate change debate gets sidetracked due to red herrings. Whatever Gore’s personal decisions, it doesn’t change the bigger picture: the scientific basis for climate change is getting increasingly clear, the prospects for accelerating climate change are increasingly becoming locked in, and the mandate for taking actions to combat climate change are thus increasingly urgent.

But, I’m also very disappointed in Al Gore. In my view, there really is no excuse for the excessive energy consumption at his Nashville home. With this irresponsibility, he opened himself — and his cause, an extremely critical cause — to ridicule and doubt.

In my view, Gore’s rebuttal that he neutralizes his energy consumption with carbon offsets doesn’t fully wash. It is hypocritical to completely shun personal responsibility for energy conservation, and then ease one’s conscience by spending a few dollars of one’s enormous wealth to mitigate the waste. And, this practice imposes an economic cost to society: if everyone were to wastefully consume energy and buy offsets as Gore does, the market prices for offsets would rise far more than otherwise would have been the case than if everyone were prudent consumers of energy.

Further, if it’s true that Gore buys his carbon offsets from a company in which he has a stake….well, there’s nothing illegal about that, but the optics sure don’t look good. Gore’s too smart to be this stupid. But then again, let’s not forget that Gore was somehow able to lose an election to George W. Bush — George W. Bush! — even when Gore held the massive advantages of incumbency and the strong tailwinds of 8 years of peace and economic health in the U.S.

The spate of recent bad press about Gore serves to impede the growth of a vibrant carbon offset market. Most Americans haven’t heard of or don’t understand carbon offsets, and they will have a “bad taste in their mouth” about them as a result of this high-visibility exposure.

More significantly, the TCPR findings have created a new tactic for climate change deniers to pursue. Their message: even Al Gore can’t “walk the talk”, therefore, we don’t have to do anything about climate change. Hopefully, the lack of logic in this argument will reveal itself quickly to the American public. As Abraham Lincoln said, “You can fool all of the people some of the time, and you can fool some of the people all of the time, but you can’t fool all of the people all of the time.”

However, shame on Gore for putting us all through this by his ill-advised energy choices. With his Oscar win, it seems as if he’s truly joined the Hollywood “limousine liberals” who are viewed with contempt — and whose positions are therefore summarily dismissed — by many due to their perceived “out-of-touchness” with common Americans.

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

Clean Coal Developments, or Lack Thereof

by Richard T. Stuebi

This past week, the nation’s largest utility American Electric Power (NYSE: AEP) announced that it was installing carbon capture and sequestration technology from Alstom (Paris: ALO) at two of its large coal fired powerplants, Mountaineer in West Virginia and Northeastern in Oklahoma.

In AEP’s press release, AEP CEO Mike Morris was quoted as saying “With Congress expected to take action on greenhouse gas issues in climate legislation, it’s time to advance this technology for commercial use.”

As Alstom’s press release indicates, the demonstration projects will employ chilled ammonia to capture CO2 from the flue stream for injection into underground saline aquifers (at Mountaineer) and for enhanced oil recovery (at Northeastern).

Just a day previously, however, my illustrious alma mater The Massachusetts Institute of Technology (MIT) released a new report entitled The Future of Coal, which calls U.S. efforts so far to develop and commercialize clean-coal technologies “completely inadequate”.

I couldn’t agree more. Like it or not, coal is going to be a huge part of our energy future. We need to figure out how to use it in an environmentally-sustainable manner, and right now we’re mainly paying lip-service to our intentions for clean-coal research. Time to up the ante.

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