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Bringing Seapower to the Fight Against Global Warming

The cleantech sector has developed as a major player in the fight against climate change. One of my friends, Dan Whaley, has founded a company called Climos to attack global warming in a new way, sinking massive amounts of carbon into the ocean depths using ocean iron fertilization. The approach has seen significant scientific study, but as he acknowledges, still has a ways to go to prove its effectiveness. That is where Climos comes in. The exciting part is the sheer scale of the potential carbon sequestration (on the order of a billion tons) and the low cost (possibly on the order of $5 to 7 per ton, according to Dan). Dan and Climos believe that they can use iron fertilization to sequester tremendous amounts of carbon, play a big part in reducing global warming, and use the carbon trading markets to finance the projects. I was also intrigued to learn more from Dan given the quality of the companies, like DNV and Ecosecurities (LSE:ECO.L), that Climos is working with to help design the carbon abatement methodology, and the care that Climos is taking to understand the environmental science. Like our own efforts in carbon, Dan believes in science and standards first. (On a personal note, I do not have a lot of choice in that matter, as my wife is an environmental scientist and statistician.) As a result, we asked Dan to do an interview with Cleantech Blog and tell us how they believe harnessing the power of the sea can play a big role in the fight against climate change.

Dan, you are one of the new class of technology entrepreneurs who is moving into cleantech. Can you share some of your background, and why you chose carbon?

In 1995 I founded the first company to commercialize travel reservations over the net, GetThere.com. We went public in 1999 and sold to Sabre in 2000. If you’ve booked a ticket on United Airlines’ website, you’ve used an example of the infrastructure we built.

I think that entrepreneurs by nature love big challenges. We like to find opportunities where key technologies, services or business transformations can make a profound difference to the world. We understand that the missing ingredient we provide is the vision and the sheer will to make those transformations happen. We are perhaps at our best when the odds are against us, and when most people say we’re crazy.

A few years ago, I drove from here down to Buenos Aires. Somewhere along the way, I think I woke up and really fully realized that there were some extraordinary challenges out there facing us that were much more pressing than most people had been giving them credit for. Challenges that were much more important than whether people could book their travel online, for instance. GetThere was a powerful lesson to me that I could set my mind to something and achieve it, but it was also a little numbing at times too—sometimes I wondered just exactly what I was really contributing to the world.

By contrast, the energy and environmental challenges we face as a species are exactly the kind of thing an entrepreneur likes to tackle head on. Plus it actually makes a difference whether we succeed or not.

Tell me a bit more about the concept of ocean fertilization and how it could abate C02? Why iron?

Ocean Iron Fertilization (OIF) was first proposed nearly 20 years ago by an oceanographer here in California named John Martin, at the time he was the Director of Moss Landing Marine Labs. He was the first to discover that iron was the trace nutrient limiting photosynthesis, and hence primary production, in most of the world’s oceans.

Photosynthesis uses freely available sunlight to convert CO2 to organic material, which higher level organisms consume directly or which sinks into deep waters of the ocean to be sequestered for up to 1000 years. Clearly we need to lower our emissions dramatically, and immediately, but if atmospheric CO2 that we have already put into the atmosphere is ever to decline, it will be photosynthesis that eventually does the work.

Over the last billion years, phytoplankton (the micro algae that grows ubiquitously in the ocean) have helped to concentrate over 80% of all mobile carbon on the planet into the deep ocean. This process is referred to as the Biological Pump, where after plankton bloom, mature and die, they sink to the deep ocean, carrying carbon along with them. The deep ocean recirculates over very long time periods. The lag between downward flux and eventual recirculation creates an extremely effective trap. This process is probably easily 20-30x more effective at storing carbon than plant growth on land, which returns most carbon back to the atmosphere on short time scales (10-100 years).

A tiny amount of iron can stimulate a lot of phytoplankton growth. 12 publicly-funded, open ocean experiments over 15 years have shown this. The science community is now proposing the next generation of experiments, at moderate as opposed to small scale and potentially funded by private sources. We hope to answer the question just how much carbon is sequestered (not just grown), at what scale can this be done safely, and whether this can fit in to the market mechanisms that have evolved worldwide to fund the mitigation of carbon dioxide.

Who else is doing this and what exactly do you do differently as far as ocean fertilization goes?

Up until now, it has been purely been a research effort, with cruises funded by public agencies such as the National Science Foundation. There are now a few companies proposing to do this, though the primary competitor, Planktos, appears to be winding down operations due to problems fundraising. We decided to pursue this because we feel like this is one of the largest potential tools mankind might have to address global warming. Perhaps our primary differentiator is that we want to make sure that if this is done, it is done credibly and scientifically.

Our Chief Science Officer, Dr. Margaret Leinen left NSF in January. She was the head of Geosciences there and managed a $700M research budget. Her research career was in paleoceanography and biogeochemistry. Our Science Advisory Panel includes people such as Dr. Rita Colwell, the former Director of NSF, Dr. Tim Killeen, the Director of the National Center for Atmospheric Research and the recent President of the American Geophysical Union, Dr. Bob Gagosian, the former President of Woods Hole Oceanographic Institute, Dr. Tom Lovejoy, the President of the Heinz Center, and so forth.

What is different about what is happening now is that the demonstrations of OIF will be larger, focused on different questions and also funded in part by the private sector. The carbon market is the mechanism that the world has chosen to fund emissions reductions and carbon mitigation, and so if OIF can be an effective way to safely remove CO2 from the atmosphere, that will probably be financed via the carbon market.

How will you verify that the abatement is happening?

To quantify the carbon removed, we deploy a range of sensors, the most important of which are called “Neutrally Bouyant Sediment Traps” to measure the amount of carbon falling past a certain depth in the ocean. Identical measurements are taken both inside the project area as well as outside the project area—this gives us an idea of what would have happened if we hadn’t been there.

There are further nuances which are important to account for, such as how much carbon really ends up coming out of the atmosphere to replace that which is being used at the ocean’s surface. Also, we will need to model the impact on nutrient stocks before they are replenished via deep winter mixing, etc. There many important other details, but this probably illustrates the basic concept.

Can you go into some more detail on the questions of permanence, always a major concern in new carbon reduction methodologies.

The permanence of storage is measured in choosing the depth we place the sensors at. This depth is determined by looking at what is called the ventilation or residence time of water at difference depths in the project area. Because the oceans circulate so slowly, most of the world’s water mass, in fact the majority, has not seen the surface since before fossil fuels began being combusted in the late 1800s. I think that is a fairly surprising fact to most people. By sampling water at depth for signs of human activity which also have a known history, such as tritium from bomb testing in the 1950s or from CFCs that began being released in the 1920s, oceanographers can tell how long any cubic meter of water has been away from the surface.

Putting this to practice, if you sink carbon past water that hasn’t seen the surface for 300 years, and if you know the directionality of circulation in that place in the ocean, you can be fairly sure that this carbon won’t see the surface for at least 300 years moving forwards. This is how we understand permanence in addition to quantity.

The IPCC defines permanence as at least 100 years, so we will likely use this definition—but ultimately the carbon market will decide what that number is, not us. Keep in mind that significant amounts of carbon are stored for timeframes which are shorter as well, i.e. 75 years, 50 years, etc. This timeshifting of carbon is meaningful and helpful as well, but we won’t claim credit for this. Also, the minimum (i.e. 100 years) is just that, the minimum. Much of the carbon will be stored for much longer—hundreds to even thousands of years.

Many people question the value of ‘timeshifting’ carbon. They wonder if we’re creating a problem for ourselves later when this carbon comes back. There are several important things to consider here. First, we really have no other options—other than emissions reductions, which are important—but really separate. There is no other way to ‘dispose’ of the carbon that we’ve put up in the atmosphere already. Nature timeshifts carbon—at some point, nearly all carbon will see the atmosphere again, the question is on what timeframe. The effectiveness of sequestration in the ocean is the reason that the majority of ‘mobile’ carbon has ended up there over time. Second, this approach gives us time to address our emissions problem. People have likened this to a concept called ‘oscillation damping’, where if you have a pulse that takes time X (as in the number of years we have been adding too much CO2 to the atmosphere) then it may take you 2X or 3X or 4X to ‘dampen’ that pulse, depending on its amplitude. So if we’ve been creating this problem for 100 years, and it takes us another 25 years to solve, then we may have to mitigate for several multiples of that. This is an unscientific quantification, but perhaps a useful illustration—and I think it also serves to highlight what a huge challenge we have ahead of us.

Aren’t you worried about the impact on the environment on “adjusting” ocean nutrients? I know that has been a concern of some environmental groups.

I think there are a number of distinct concerns rolled up in your statement. One is the fear that OIF is ‘messing with mother nature.’ Many people feel that humans simply can’t get anything right, and that we if we try to fix what we’ve already broken, we’re likely to make it worse. This is an unscientific attitude, and one that I think also fails to appreciate some of the unique aspects of this concept.

Other concerns are whether a change in the level of iron is potentially harmful, or whether the drawdown of existing macronutrients such as nitrates, phosphates and silicates (which is what the addition of iron triggers) could result in permanent shifts, or deplete productivity elsewhere—i.e. no net benefit. There are a number of answers for this.

First, this is already happening. Iron naturally fertilizes phytoplankton blooms—and these are the largest source of carbon sequestration happening as we speak. About three billion tons of CO2 is stored safely at depth in the ocean every year, and has been for a long time. Iron is a benign mineral. It in and of itself is simply not harmful.

Second, nature has already done more aggressive iron fertilization at scales much larger and for periods much longer than we are contemplating. During the last million years on at least five or six separate occasions between the major ice ages, natural iron inputs to the ocean increased by many times what they are now for thousands of years at a time. Productivity (i.e. plankton) increases appear strongly correlated with these times of increased iron. A recent paper by Cassar, et al this year has linked nearly 40ppm of the 80-100ppm swing of carbon in the last interglacial to increased iron enrichment of ocean waters by aerosol and other transport mechanisms. If iron fertilization simply removes nutrients that would have eventually been used elsewhere, then you would not have seen sustained productivity increases in the paleo record. Where we are now is a result of all of these previous episodes—and more than likely this will happen naturally again in the future, whether humans do it on purpose or not.

Lastly, OIF will be done gradually, over decades. It can be stopped at any time.

The key is to continue to explore this as a potential mitigation mechanism and to see whether it can be both effective and safe. Demonstrations run by scientists, and funded by the private sector which can deploy the capital required for the larger projects, are probably our best chance of this.

You intend to sell carbon credits based on this process. What standard will you use, and who do you expect will be the likely buyers?

Long term if this is to be meaningful it will need to be accepted in regulated markets, in the short term the voluntary market can help provide the bridge financing to get us there. We think the Voluntary Carbon Standard (VCS) is probably the best current standard, but there are others as well. We’ll target as many standards as appropriate. The methodology we are currently developing is designed around the UN Clean Development Mechanism (CDM) specification—though since it takes place in the middle of the ocean it will never qualify for those credits without changes to the regulatory framework.

You mentioned you approached the problem from the science, standards and measurement & verification end first. That’s an approach I definitely agree with. Can you go into some more detail? I know you had mentioned working with DNV, among others.

A number of things need to be done before larger demonstrations like the one we propose.

First, the key science questions that will to be asked of this next generation of experiments need to be asked. We will be proposing a series of science workshops with the community this year to help facilitate that. One of the conferences will be on long term modeling. Another will be on measurement and verification techniques. We will be announcing these over the next several months.

Second, a comprehensive Environmental Impact Assessment needs to be performed by an outside party that reviews concerns in detail and against the peer-reviewed literature, identifying which are likely not an issue, which are questions of appropriate project design, and which need more study. We will be initiating this process over the next several months.

After these processes are complete we will begin to structure our proposed cruise, and publish this ahead of time. This also involves applying for appropriate international permits, etc.

DNV, or a company like that, will be involved in validating the Project Design Document (PDD) after we select a specific operating site, and before we actually go to sea. They will also come on the cruise to provide direct verification of the results.

Many of these general activities are called for by a document we produced last year which we call a Code of Conduct. We think that it is vital that companies like ours operate in a scientific, responsible and transparent manner.

So this process is kind of like planting trees, except in the ocean?

Yes, except it happens faster and the storage is more permanent. Forests store carbon in the form of standing biomass—in other words, you get storage for as long as the forest is managed and preserved. If it burns down, or gets harvested, a large part of that carbon is returned to the atmosphere. Also, if the tree dies and is not replaced, nearly all of that carbon is returned on short time scales (< 100 years). This is not to say that we shouldn’t be planting trees. We should, and we are—the UN just finished planting a billion trees the week before the recent Bali conference. We need to be doing a lot more of that.

Two of the most attractive aspects of ocean fertilization are low cost and large scale. Can you give us some insight into where ocean fertilization fits on the spectrum of cost and potential abatement levels?

We think credits from OIF can be delivered for about $5-7 a ton long term. No one knows what the annual global capacity might be. Certainly three billion tons a year (CO2) are already being done naturally. It is possible that another billion tons annually might be able to be added to this number, but that is pure speculation. Some people have quoted numbers that are much higher than this, but I think that’s probably not a constructive exercise right now.

And of course, when do you expect to be able to offer credits off of this platform, now that the VCS has been released?

We have just received the first draft of the methodology back from Ecosecurities and DNV (Det Norske Veritas) is in the process of a formal assessment. After their comments, and possible revisions, we will submit the methodology to the VCS steering committee. They have told us they will require a 2nd formal review by a qualified verifier, after which it would qualify to be accepted as a VCS methodology.

We will also be asking other peers in the science community to help us evaluate and refine the methodology. They will certainly be the most important check. We expect it will be refined many times as measurement and modeling approaches improve.

The credits of course will be dependent on the successful completion of our first cruise. We expect this in 2009.

Dan, your OIF approach is certainly exciting given the scale and low cost of the potential CO2 abatement, and I wish you the best. It is certainly not a easy task.

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

Super Mileage with New Four-Door Sedans

By John Addison (1/17/08). Fuel economy was on display at the Detroit Auto Show. Starting Saturday, even more exciting vehicles will be unveiled at the North American International Auto Show, also in Detroit. $100 per barrel oil and new CAFÉ standards have made improved fuel economy mandatory for auto makers.

Most popular with individuals and fleets is the four-door sedan. Over the next three years, there will be a number of affordable offerings with fuel economy from 40 miles per gallon, to infinite miles per gallon.

General Motors continues to draw considerable attention with its Chevy Volt, which will offer 40 mile range in electric mode before its small 1L engine is engaged. 40 miles accommodates the daily range requirements of 78% of all U.S. drivers. The Volt uses an electric drive system with a small ICE in series that is only used to generate added electricity, not give power to the wheels. GM hopes to take orders for the Volt at the end of 2010.

World hybrid leader, Toyota, is likely to beat GM to market with a new plug-in hybrid also using lithium batteries. Toyota President Katsuaki Watanabe discussed Toyota’s vision, “Sustainable Mobility addresses four key priorities. First, we must address the vehicles themselves and the advanced technologies. Highly advanced conventional engines, plug-in hybrids, fuel cells and clean diesels, as well as many other innovative new technologies, will all play a part. Second, we must address the urban environment, where these new technologies will live. In the future, we foresee ‘mixed mobility,’ combining intelligent highways and mass-transit, bike paths and short-cut walking routes, recharging kiosks and hydrogen fuel stations…. By 2010, we will accelerate our global plug-in hybrid R&D program. As part of this plan, we will deliver a significant fleet of PHEVs powered by lithium-ion batteries to a wide variety of global commercial customers, with many coming to the U.S.” President Watanabe’s Remarks

A new offering from China’s leading battery manufacturer, BYD, will bring a plug-in hybrid to market sooner than Toyota and GM and at a lower price. BYD executive Mr. Lin said BYD Auto plans to launch the plug-in hybrid during the Beijing Olympics at a price of less than $30,000 (200,000 Yuan). The company sold about 100,000 cars in China in 2007, he said. The F6DM (Dual Mode, for EV and HEV), is a variant of the front-wheel drive F6 sedan that BYD introduced into the China market earlier this year, actually offers three modes of operation: full battery-powered EV mode driving its 75 kW, 400 Nm motor; series-hybrid mode, in which a 50 kW, 1.0-liter engine drives a generator as a range-extender; and parallel hybrid mode, in which the engine and motor both provide propulsive power. Expect the BYD F6DM to be selling in the U.S. by early 2010. Green Car Congress

Ford announced EcoBoost – this new 4-cylinder and 6-cylinder engine family features turbocharging and gasoline direct injection technology. The EcoBoost technology will deliver approximately 20% better fuel economy and 15% fewer CO2 emissions. The company will introduce EcoBoost on the new Lincoln MKS in 2009. Eventually the technology will be integrated into a range of flex fuel vehicles, which currently suffer from poor gasoline mileage, and 27% worse mileage with E85 ethanol.

Europeans are already enjoying 25% mileage improvements with new turbo diesels with direct injection. Exciting models will be available in the U.S. this year. Daimler, Audi and Volkswagen, all partners in the BLUETEC clean diesel marketing initiative showed a new Tier 2 Bin 5 compliant (i.e., able to be sold in all 50 states) BLUETEC model at the North American International Autoshow in Detroit

VW is the diesel passenger car sales leader. The Tier 2 Bin 5-compliant 2009 model year Jetta TDI, equipped with the clean diesel engine option, will be on sale later this year. Some drivers may experience over 40 miles per gallon with the Jetta’s efficient 2L four-cylinder engine.

Will we see the combined efficiency of diesel and hybrids? Yes. The Mercedes S 300 BLUETEC HYBRID is a 4-cylinder diesel a with hybrid module that gives it the performance of a V-8. The luxury saloon delivers 44 miles per gallon (5.4L/100km).

The Detroit shows unveiled a dazzling array of muscle trucks, loaded SUVs, hot sport cars, concept electric vehicles, and many model improvements.

Over the next three years, the biggest impact on reduced fuel use and lowered emissions will be in the every popular four-door sedan. Toyota has a commanding lead with over one million four-door Priuses on the road. Soon, Toyota will be selling one million hybrids per year.

Fuel economy improvements in the new vehicles are the result of using lighter materials, better aerodynamic design, lighter and more efficient engines, replacement of more mechanical components with electric, hybrid and plug-in hybrid designs.

While some auto executives still think that the key to financial success is yesterday’s big heavy and low-mileage cash cow, others recognize the path to sustained profitability is to deliver great fuel economy in popular full-featured cars. The global race is on. The sure winner is the customer.

John Addison publishes the Clean Fleet Report.

Is Environmentalism Compatible with Capitalism?

by Richard T. Stuebi

Perhaps the pivotal challenge facing the environmental community is resolving the apparent conflict between the need to reduce emissions and the widely-held desire for continuing economic growth.

This issue came directly to the fore in reading a recent Business Week article entitled “Little Green Lies”, profiling how the green initiatives of Aspen Skiing Company were often bumping into, and in fact prevented by, commercial realities of the business.

I was particularly provoked by the reader comments to the article. One respondent said that the contents of the article did not surprise him because (in his view) reduced consumption is ultimately the only environmental solution, which means reduced travel and reduced skiing, which runs against the profit motive of Aspen Skiing Company. This posting confirmed for another reader that (in his view) environmentalists are inherently anti-capitalism, viewing capitalism as the evil force that has led to climate change and other environmental ills.

To quote Rodney King, “can’t we all get along?” The answer, I think, is yes — and the path for squaring the circle is to note that capitalism is not to be confused with materialism or consumerism.

Capitalism is a social system that provides clear price signals and unfettered ability to undertake transactions, thereby enabling economic actors to make individual profit/utility-maximizing decisions, which in turn promotes efficient allocation of capital, maximizes liberty of citizens and businesses, and facilitates private wealth-creation.

We aspire to free-market capitalism in the United States, and we come pretty close to achieving it, closer than most countries in the world. And, because we are very capitalistic, it is easy to make the leap that American consumerism is inextricably a co-product of capitalism. It is not.

For instance, look at the leaders on the list of The Economist‘s rankings of national economic competitiveness. Sure, the U.S. is well above average. But the top two countries on the list are Denmark and Finland — countries that, unlike the U.S., are not known for their excessive materialism. It is also noteworthy that Denmark is arguably the world leader in actually tackling climate change head-on by minimizing emissions through the mass-adoption of renewable energy and energy efficiency.

Capitalism and environmentalism can be reconciled — theoretically, at least — once energy price signals more accurately reflect their environmental costs. Right now, each unit of fossil fuel burned generates greenhouse gas emissions, which have a societal cost, but the consumer faces no burden in their wallet associated with this societal cost.

It is because energy prices do not currently include their full environmental costs that Aspen Skiing (and other companies) can’t increase their profitability by pursuing as many green initiatives as they would philosophically like to do. If energy prices were to fully reflect all environmental costs, then the capitalist system would be freed to work its magic in motivating capital and behavioral shifts in the economy to significantly reduce emissions.

Alas, here’s the dilemma: many environmentalists have qualms about letting markets work to reduce emissions, and most free-marketer capitalists are leery of policymakers adding environmental externality factors (a euphemism for “taxes”) to energy prices. Unless this bridge can be gapped, we’ve got trouble.

Oh, yes, customers in Denmark and Finland face much higher energy prices (especially for transportation fuels), including much higher energy taxes, than we do here in the U.S. While Danes and Finns don’t perhaps live la vida loca like Americans do, neither do they seem to be collapsing in existential angst or economic depression. The question for us Americans is: do we have the courage to elect leaders that would put us on a deliberate/planned march towards higher energy prices?

A first step for we Americans to make that shift is to better appreciate that reduction of consumption to preserve our planet is not necessarily anti-capitalist, but rather anti-materialism. Because, as the renowned Jared Diamond recently argued in a compelling New York Times oped, it is excessive human consumption of resources that is at the root of continued viability for life on Earth.

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

Blogroll Review: V-Farm, 2008 Conventions, Mighty Battery

by Frank Ling

Vertical Farms in Vegas

Every time I go to Vegas, I see new buildings popping up. I guess the world needs more hotel rooms. But we also need more food to feed all those hungry entertainers and entertainees.

So the big news coming out of Sin City last week is Vertical Farms. That’s right, plans are now underway to build a 30-story farm able to produce a hundred different crops including bananas and strawberry.

Heather McKee writes in EcoGeek:

Nevada officials believe the vertical farm could produce enough food for 72,000 people a year – and $25 million in agricultural products, most going to local casinos. They also expect it to be a popular tourist attraction, and believe it may help change the image of Las Vegas as a place of excess and waste.

Incidentally there was some big convention going on last week. Does anyone know anything about it? Is it really green? 🙂

Hot Conventions this Year

How many conventions to you know where you bring together the likes of Union of Concerned Scientists, NRDC, Dell computer, and of course Fortune Magazine? One that I could think of and it is being hosted by Fortune.

Called Brainstorm:GREEN , this even will host a diverse group of speakers from CEOs to NGOs. Corporate America has already moved beyond the realization that need to be green and will be discussing what they are doing about it.

In his blog, Joel Makower quotes senior Fortune writer Marc Gunther as saying that the participants will be discussing:

what impact they are having, and whether they are changing fast enough, given the scale of the problems.

The price of admission: $2000. Does that include a carbon offset? 🙂

Some other events that Joel mentions are WSJ’s ECO:nomics, Aspen Environmental Forum, and the GLOBE Conference.

For a more extensive list of events happening this year, check out our very own listing.

EEStor

EEStor is back in the news after falling behind one year from its original production plans. This time, they are working with Lockheed Martin on Military and Homeland Security applications. But that’s not the interesting part.

Jim Fraser writes about the potential performance of EEStor’s new batteries in the Energy Blog:

EEStor, based in Cedar Park, TX, is developing a ceramic battery chemistry that could provide 10 times the energy density of lead acid batteries at 1/10th the weight and volume. As envisioned, EESUs will be a fully “green” technology that will be half the price per stored watt-hour than traditional battery technologies.

Make mine unleaded! 🙂

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

Oil Prices: How High is Up?

by Richard T. Stuebi

In the last week of 2007, I predicted that oil prices would finally top $100/barrel. Well, it didn’t take long, two days in fact. Ironically, it appears that the first time a barrel of oil changed hands for more than $100 was solely because a trader wanted to own that distinction forever.

Nevertheless, those who espouse the so-called “peak-oil” theory will no doubt use the recent climb through $100 as additional evidence that oil production is nearing a crest and will soon move into irreversible decline. Indeed, recent analyses by Energy Watch Group and Earth Policy Institute claim that the peak is imminent or perhaps already past us.

Now that the psychological threshold of $100 has been broached, and with peak oil production a possibility worth serious consideration, the question is: how high will oil prices go?

One provocative view is presented by Jim Kingsdale in the blog Seeking Alpha. His is the first work I’ve seen that projects oil prices over $200/barrel, with the staggering forecast of $275-500 by 2012.

My back-of-the-envelope work suggests that each $10 in oil price increase translates to about $0.40 per gallon more at the pump. If that’s about right, then $500 oil means gasoline at about $16/gallon more expensive than today, or close to $20/gallon.

When asked what will happen to stock prices, J.P. Morgan was once quoted as replying, “They will fluctuate.” That is my sentiment about oil prices; they will go up and they will go down.

I suspect that the long-term trend for oil prices is upward, even beyond today’s $100, but it’s hard for me to subscribe to anything approaching $500. Before prices reach that high, there will be so much demand-curtailment, and so many economic alternatives emerging from the woodwork, that the price-setters in the oil markets — yes, OPEC — will adjust production to maintain equilibrium.

Unfortunately, oil is not a market that lends itself well to rational economic analysis: either fundamental analysis of supply/demand basics, or technical analysis of price movements. The optimization calculus of the oligopolists, who control most of the remaining reserves (and the lowest-cost reserves to boot), is not always to maximize profits but to maximize geopolitical power.

Even worse, if radical forces gain control of the key supplies (e.g., a coup in Saudi Arabia), they won’t be afraid to turn off the spigots, because they’re perfectly happy living in the 12th Century and they want to see the developed Western powers fall back into the Dark Ages.

If the Middle East shuts off the oil tap, the sky’s the limit for oil prices, and maybe Mr. Kingsdale’s forecast will turn out to be too low.

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.

Carbon Roundup: Farm Bill & California vs. EPA

by Frank Ling

Farm Bill

2008 has indeed begun, but work from last year remains to be finished on the current Farm Bill. Most likely this month, the Senate and House Committees will hammer out their differences and come up with a compromise bill that will be sent to the president.

In the Senate version, there are provisions that have broad implications for energy and biofuels. In a recent update from the Action Network, the authors note that the bill:

* To help farmers and rural businesses save money and supply power to America, a better Section 9006 program (now renamed the Rural Energy for America Program – REAP) includes new energy technical assistance, larger loan guarantees, community wind incentives, and carveouts for small, replicable projects and digesters. ($230 million total versus $500 million in House Farm Bill.)

* An overhauled biorefinery program to help defray the cost of first-generation cellulosic ethanol plants; also encourages existing biorefineries and industrial facilities to convert to biomass-based heat and power (“Rural Repowering”).

* To help build feedstock supply for cellulosic biorefineries, an energy crop transition program that includes improved sustainability standards.

* To help defray production costs, production incentives for advanced biofuels.

* To develop a stronger knowledge base and help move energy crops from the laboratory to the fuel pump, funding and new priorities for the Biomass Research and Development program.

California Strikes Back

California has gone ahead with plans to sue the US EPA for its decision to block the State’s authority to limit greenhouse gas emissions from new vehicles. Until now, California was able to get a waiver from the EPA and set its own standards for managing air pollutants.

But the current administration believes that a new federal mandate would be more efficient in curbing emissions and has denied states to further waivers. In addition to California, 15 other states are now suing the EPA to get their rights back setting their own standards.

The battle is on. Felicity Barringer writes in the New York Times:

California officials argue that the agency had no legal or technical justification for blocking the new standards. The E.P.A. administrator, Stephen L. Johnson, said when announcing the decision that a new federal fuel-economy mandate would be more efficient in curbing pollution than the state standards.

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

Blue Iris, Better than Green

by Heather Rae
for cleantechblog.com

Fashion faddies may take note of Pantone’s color of the year, Blue Iris (No. 18-3943). I’ll be using it in my new logo not because it’s hip, but because I admire its qualities. Pantone’s Leatrice Eiseman stated, “Blue Iris brings together the dependable aspects of blue, underscored by a strong, soul-searching purple cast. Emotionally, it is anchoring and meditative with a touch of magic.” Blue Iris is “supposed to answer several needs, hopes, desires, that kind of thing.”

Tongue out of cheek, I had a hope and desire that “green” would meet the needs of American consumerism during this holiday season. Sadly, green suffers from a lack of the strong, meditative, soul-searching qualities of Blue Iris. Emotionally, green might as well be red, flagging at my Taurian nature. I see green marketing and snort like a bull. It’s just not as dependable and true as blue.

Plunked on a couch in a spacious, well-appointed guest room at the Lenox Hotel in Back Bay Boston, I’m meditating on the meaning of green. (A night at this beautiful, accommodating hotel is a Christmas gift from Dave, my husband of three weeks.) The room commands a roof-line view of the urban malls of Copley Plaza and a peek on to Newbury Street. The Gideon bible rests in a drawer by the luxurious bed but two other books, laminated with a note (“Please do not remove this book from your room so that future guests may also enjoy it. If you are interested in purchasing a signed copy, please contact the Front Desk. Thank you.”) hold court on the writing desk. They are “The Bottom Line of Green is Black, Strategies for Creating Profitable and Environmentally Sound Businesses” (copyright 1993) by Tedd Saunders and “The Consumer’s Guide to Effective Environmental Choices, Practical Advice from the Union of Concerned Scientists” (copyright 1999) by Brower and Leon.

The ubiquitous, and somewhat outdated (copyright 1996), Project Planet signage about reusing towels and saving dolphins — if the graphics of smiling dolphins mean anything — decorates the doorknobs.

The Preface to Brower’s book begins, “Twenty years ago one of us couldn’t find a way to recycle a car full of newspapers–and this was in Cambridge, Massachusetts, supposedly a hotbed of environmental activism….Recycling has certainly come a long way since then.” I flip to page 31 of “The Bottom Line of Green is Black” where Saunders extols the recyclable virtues of the ENVIROPET ™ plastic ketchup bottle.

Which is why the plastic bottles of water on the side table (“Please enjoy this water with our compliments”) intrigue me, it being 2007, about a decade after these books and signs were published. We all — should — know by now that the boom of bottled water sales has incurred a boom in landfills of plastic waste. The label on the plastic bottles in the room says the source of the water is Iceland which “largely uninhabited and pollution free, has one of the cleanest environments on the planet.” There’s no recycling label on the bottle; instead there’s cash redemption if you live in CA, HI, CT, NV or NY…but not Massachusetts, nor Iceland.

Over at Barney’s, a giant retail display comprising aluminum cans and bottle caps in the shape of a giant head (I think) greets customers. I can’t discern it’s meaning or its connection to Barney’s green Christmas marketing campaign but someone in their marketing department must have the skinny on its DHM. Barney’s shopping bags, made of recycled paper urge us to “Have a Green Holiday.” With some label snooping in handbags, designer clothing and shoes, the goods at Barney’s are manufactured in Europe. Atmospherically out of my price range, at least these goods are not directly contributing to our looming Chinese debt crisis and likely help out Italy’s sagging economy. Still, what anything in the store has to do with being green is beyond me. I admit to a weakness for imported perfume (Goutal, Eau de Hadrien), and at that point of purchase, I learn from the clerk that Barney’s is a top recycler. Oh.

I’ll still use a touch of green (CMYK 66, 100, 20, 4) in the new logo, but it will take a backseat to anchoring, real and meaningful Blue Iris. And I’ll keep hoping for the magic as well as the meaning in green marketing.

Heather Rae, a contributor to cleantechblog.com, is a consultant in cleantech market management and serves on the board of Maine Interfaith Power & Light. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she began renovation of an 1880 farmhouse using building science and green building principles.

New Year’s Resolutions

By John Addison (12/31/07). This is the traditional time when we visualize a better life in the upcoming year. We make resolutions for improved health and happiness for ourselves, our families and our friends. Career and financial goals are priorities for others. A better nation and brighter future top the list many. New Year’s Resolutions can effectively start us on a better journey. Along the way, we may be detoured by interesting alternatives, and not achieve all resolutions. Yet, they are worth making.

Since I write about clean transportation, I have talked with many who travel with fewer emissions, often lower cost, and frequently with more fun. Learning from them, it is appropriate that I make some personal resolutions to improve how I travel. Hopefully, these will modestly help our nation to be more energy secure, the future to be a little more secure from a climate crisis, and even to save money. For the entire world to see, here are my personal transportation resolutions for the New Year. Some will be easy to keep, some challenging.

Easy Resolutions

1. Put the most miles on the car with the best fuel economy. My wife and I share a fuel efficient Prius.
2. Keep the second car (a Hyundai Accent) in the garage most of the time.
3. Walk more.
4. On freeways, drive 65 miles per hour, not 80. This can save over $1,000 per year and may improve fuel economy by 20% over high speed driving.
5. Live “carbon neutral” by offsetting all our emissions with a donation to carbonfund.org.

Challenging Resolutions

6. Fly less. Greenhouse gases per passenger mile are worse on airlines than driving solo in a gas guzzler. The car is a great alternative if two or four are in it. A train is even better.
7 . Move from suburbia to the city. Everything is closer in a city and transit is far better.
8 . Downsize from two cars to one.
9 . Join a car share program for the occasions where a second car is needed.
10 . Reduce our “carbon footprint” (less total greenhouse gas emissions).

Because I have published these resolutions, I feel more likely to keep them.

Thanks to wonderful non-profit organizations, it is easy to calculate our carbon footprint, and offset our damage with renewable energy, efficiency and reforestation programs. Reducing our carbon footprint takes more work. In 2007, we both reduced our total GHG emissions and lived carbon neutral. We will do our best to accomplish both in 2008.

Every success with your resolutions. May they bring you a year of health, happiness, and fulfillment. Do not underestimate your ability to make a difference and to inspire others.

Happy New Year!

John Addison
Publisher, Clean Fleet Report

2007 Roundup

by Richard T. Stuebi

As has become my custom, with the year drawing to a close, I now look in the rear-view mirror and try to distill what I see. In no particular order, here are my top ten reflections on 2007:

1. Popping of the ethanol bubble. Not long ago, it seemed like anyone could get an ethanol plant financed. Now, no-one will touch them. Why? Corn prices have roughly doubled, and producers can’t make money selling ethanol into the fuel markets when having to pay so much for feedstock. Along with the increasing realization that public policies so far to build ethanol markets has largely been for the financial benefit of big agri-businesses such as Arthur Daniels Midland (NYSE: ADM), ethanol has now become a dirty word to many. Progress on cellulosic ethanol technologies may not happen fast enough to redeem seriously diminished public perceptions about ethanol generally.

2. Continuing photovoltaics bubble. For illustration of this phenomenon, let’s take a look at First Solar (NASDAQ: FSLR). Nothing whatsoever against the company; indeed, they make a very fine product. It’s just that their share price has increased by a factor of 10 — from $27 to nearly $280 — in one year. At current levels, the company’s market cap is $20 billion, at a P/E ratio of over 200. I know the solar market is hot, but geez, c’mon. A 10x return in one year on a publicly-traded stock is simply not supposed to happen.

3. Increasing costs for wind energy. For many years, wind energy has become more competitive, as the industry matured and production efficiencies were tained. However, with increasing prices for virtually all commodities (e.g., steel, copper, plastics) and a weakening dollar against the Euro (note that most turbines are made in Europe), the economics of wind are unfortunately moving in the wrong direction right now.

4. Gore as rock star. First, an Oscar for An Inconvenient Truth. Then, the Nobel Peace Prize. To top it off, becoming a partner at top-notch venture capital firm Kleiner Perkins. What next for the what-could-have-been 43rd President? Whatever it is, at least the cleantech sector now has its iconic poster-child.

5. Cheers to Google. Google (NASDAQ: GOOG) has gotten into the cleantech game in a big way by creating an initiative with the mission to develop and launch renewable energy technologies that produce electricity more cheaply than coal. Once that aim is achieved, renewable energy will rapidly become ubiquitous, and we really will start getting on a path of serious carbon emission reductions.

6. Death of the incandescent lightbulb. Early in 2007, Australia led the way to ban incandescents, to force a shift to more energy efficient lighting technologies (fluorescents for now, perhaps eventually LEDs). Amazingly quickly, the U.S. followed suit, passing an energy bill by year-end that effectively phases out incandescents by 2014. This should have a major energy efficiency impact, and yield a big cut in greenhouse gas emissions, in a relatively short amount of time.

7. Tightening CAFE — finally! After decades without change, the U.S. Congress finally acted to impose more stringent corporate average fuel economy (CAFE) standards for auto/truck manufacturers. The main milestone is a 35 mpg combined car/light-truck standard by 2020. For the first time, trucks are now part of the CAFE equation, closing the loophole that helped propel SUVs to prominence. Strengthening CAFE is probably the most important thing that American politicians could do to actually make a meaningful dent in reducing dependence on Middle Eastern oil.

8. Uncertain future for coal. On the one hand, MIT released a major study entitled “The Future of Coal” that compels a radical R&D push to commercialize technologies for carbon capture and sequestration (CCS), underscoring the reality that coal-fired electricity generation is going to be a major factor for a long time. On the other hand, I don’t see any such coal R&D push actually happening, nor even that much progress on CCS. A recent statement by the U.S. Department of Energy concerning its oft-touted FutureGen program for piloting CCS technology indicates a possible retrenchment. Meanwhile, Pacificorp — which is owned by Warren Buffett’s legendary holding company Berkshire Hathaway (NYSE: BRKA and BRKB) — recently cancelled a coal CCS project in Wyoming, with a spokesman quoted as saying that “coal projects are no longer viable.” Ouch.

9. Oil at $100/barrel. Starting the year at about $60/barrel and then promptly falling to near $50, oil prices increased steadily from February to November, reaching the high-90’s. I suspect we’ll see $100/barrel sometime in 2008; I don’t suspect we’ll see oil below $40/barrel very much anymore. Even at prices not long ago considered absolutely stratospheric, it appears that there’s been very little customer/political backlash so far: the world doesn’t seem to be ending for most Americans.

10. Serious dollars betting on energy technology. There’s been a lot written about the big surge in venture capital invested in new energy deals. I find even more intriguing the increasing amount of corporate and public sector investment in new energy R&D. As perhaps the most prominent example, in the U.K., the government has pledged up to $1 billion over the next 10 years in matching support to private investments in the Energy Technologies Institute, which includes the participation of such leading corporate lights as BP (NYSE: BP), Shell (NYSE: RDS.A and RDS.B), Caterpillar (NYSE: CAT), Electricite de France (Euronext: EDF), E.ON (Frankfurt: E.ON), and Rolls-Royce (London: RR.L). That’s a lot of money and corporate weight in the mix. I can’t imagine that such an initiative will produce nothing of use.

Best wishes to you and yours for 2008. Let’s hope it’s a good year, even better than the one wrapping up.

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.

Cleantech Blogging is Changing the World

We are picked up across the blogosphere as well as mainstream media, and we appreciate it all, but there were four mentions in 2007 of which we are particularly proud. So whether it is our spectacular writings (probably not), or simply that the future of clean energy has arrived, we do believe Cleantech Blog and the green blogosphere is changing the world.

In 2007 Cleantech Blog was named one of the 50 Best Business Blogs by the London Times. Not only do I love the London Times for its coverage of the all things clean energy related, but to make the same list as industry leaders like Boing Boing, TechCrunch, Jonathan’s Blog, and Freakonomics, and one of my own favorites, The Energy Blog was inspiring.

We were one of 10 blogs named in the Environmental Blog Roundup on Blog Action Day by Buzz, the official blog of Blogger.com, a part of Google. We are big fans of Blogger, since we use their platform, and it was wonderfully surprising to find out that someone Up There was reading. Please keep up the great work, Blogger people.

In 2007 Cleantech Blog was picked up by CNET. Cleantechblog.com now provides CNET’s Cleantech Blog. We have long admired CNET’s coverage of the clean and green sector (especially journalists Martin LaMonica and Michael Kanellos, who write about everything we find interesting), and to be asked to participate in the CNET.com/News.com family was a humbling experience. Frankly, Cleantech Blog has had lots of opportunities to hook up with sites we respect, but to write alongside those two on the green web was not an opportunity I could pass up.

Over the summer we were mentioned by Jim Buckmaster, CEO of Craigslist, in the Wall Street Journal’s Happy Blogiversary article on the 10th anniversary of blogs. I always tell people that when I do move back to Texas from the Bay Area, the San Francisco Craigslist community will be what I miss the most. I also always tell people that I firmly believe blogs and the democratization of content and journalism are changing the world. So the fact that the CEO of Craigslist, the site I visit and respect more than any other, felt it worthwhile to mention us as part of the citizen journalism movement in the environmental and energy blogosphere, was amazing. Thanks Jim.

And a warm Merry Christmas to the two bloggers, Rob Day of Cleantech Investing, and Jim Fraser of The Energy Blog, whose blogs inspired us to put Cleantech Blog together in the first place.

I am well aware that my columnists, including Richard Stuebi, Heather Rae, and John Addison deserve most of the credit. You can find their bios here. And I still find it humbling that this little blog is having a real impact. But the true example of the power of the blogosphere to change the world is the fact that when they picked us up, I had not met nor even previously communicated with anyone from the London Times, Blogger, CNET, or Craigslist, except through our writings in Cleantech Blog itself.

Thank you,

Neal Dikeman
CleantechBlog.com

Flexible Work

By John Addison (12/26/07). Great organizations are improving employee productivity, increasing retention of key people, and often saving millions of dollars annually. We admire corporations that contribute to the triple bottom line: people, profits, and planet. Flexible work and flexible transportation programs are enabling great employers to achieve all three.

In the Oil and Coal Age, everyone drove solo during gridlock hours to their one work location to toil over their designated machine. Now people are most effective working some days at one location, other times at home, others at a customer or supplier location. We are becoming increasingly flexible and mobile. We can take advantage of the new flexible workplace solutions to annually save hundreds of wasted hours, thousands of gallons of wasted gas, and pocket thousands of dollars.

Currently, over 2,500 Applied Materials employees participate in Applied Anywhere, a comprehensive flexible work location program.

The semiconductor chips in your computers, electronic games, solar panels, and mobile devices are likely to be made with equipment from Applied Materials. Their flexible work location program, Applied Anywhere, addresses their global business environment and provides agility to be closer to the customer as well as supporting the needs of many employees who perform some or their entire job outside the traditional office place. Applied Anywhere supports eligible employees that at different times may need to work from one of several corporate offices, at home, at an airport, or at a customer site.

Ann Zis, a Senior Program Manager for Applied, explained that the program has made global teams more effective, reduced commute hours, increased productivity, and saved gas miles.

The new workforce is mobile; at times working at their office, other times at home, other times at a customer site. Effective mobile working often requires wireless services, Internet services, IP telephony, security, laptops, and a variety of mobile devices. Hundreds of technology companies are benefiting from mobile work include Hewlett-Packard, IBM, Sun Microsystems, Cisco, Nokia, Google, Yahoo, and Symantec.

Flexible work allows millions to travel less. Flexible transportation can enable most employees to save money and fuel when they do travel. 93% of all U.S. car trips are with only one person in the vehicle. The picture is better with work related travel. 12% share rides and 5% use public transit.

Your employer may pay you $1,380 per year, tax free, to use flexible transportation. The IRS allows ridesharing, public transit, and other creative commute options to be reimbursed up to $115 per month tax free in 2008, increased from $110 in 2007. Check-out the commute programs offered by your employer. Investigate regional transit and ridesharing programs. You could save a bundle.

37% of Yahoo! headquarters employees get to work without driving solo, reported Danielle Bricker with Yahoo during my interview with her. Yahoo’s Commute Alternatives Program is comprehensive, popular, and getting results.

As one of two dedicated Commute Coordinators at Yahoo, Danielle practices what she preaches. For four years, she has commuted 90-miles daily without owning a car. She commutes by train, walking to the station at one end, and boarding a Yahoo shuttle for the last mile to work. Living in San Francisco, Daniel will occasionally use CityCarShare to travel a distance at night, or when shopping at multiple locations requires carrying heavier loads.

Yahoo provides employees with free Eco-Passes for bus and light rail on VTA, the area’s rapid transit provider. Employees may also order online discounted passes for other public transit providers. Yahoo has achieved high ridership on public buses, light rail and trains by providing shuttle buses to take its employees to and from major transit stops such as Caltrain and Amtrak. Several full-size contracted buses transport employees to and from their homes in San Francisco.

These buses run on B20 biodiesel. Yahoo further reduces its carbon foot print by using locally grown food for 40% of its cafeteria meals. Cafeteria waste is used for biodiesel production.

Yahoo makes it easy for people to ride together. Yahoo has an intranet site where people can locate other employees near their homes for carpooling. There are special events, education, lunch-and-learns, and weekly education to encourage the growing use of Yahoo’s Commute Alternatives Program. These people use Yahoo!Groups to communicate and stay informed. Some car pools, such as those in Santa Cruz, merged into van pools with one van carrying 15 people. The Santa Cruz van provided by Enterprise includes wi-fi, allowing people to email, Yahoo Message, and create when crawling in stop-and-go traffic.

A number of highways used by ride sharers have high-occupancy vehicle (HOV) lanes, allowing car and van poolers to fly by solo drivers stuck in traffic.

Yahoo encourages the use of a zero-emission vehicle owned by one billion people on this planet – the bicycle. Yahoo provides bicyclers with secure storage of their bikes. Free lockers and showers are available. To help people quickly navigate Yahoo’s campus of buildings, loaner bikes are also available.
Many of the Yahoo commuters are able to get extra work done using laptops and other mobile devices while commuting on transit.

Yahoo’s results are impressive, considering that Silicon Valley workers live widely dispersed; many are forced to live miles from Silicon Valley so that they can live in affordable housing. Technologists work long and irregular hours, which makes ridesharing more challenging. Many Silicon Valley locations provide a long and uncomfortable walk in the dark to public transit.

Yahoo addresses these problems in a number of ways. One is that it provides a guaranteed ride home. Yahoo will pay for a late worker’s taxi or rental car. Commute program managers agree that a guaranteed ride home is critical to a commute program’s success. All agreed that employees rarely use the guarantee, making the cost minimal.

Yahoo rewards – employees who come to work without driving alone are rewarded with free lunches, movie tickets and massages. For her tireless work in making the program a success, Danielle Bricker was nominated by fellow employees for one of Yahoo’s most prestigious awards. Out of 14,000 employees, she was recognized with the Super Star Award.

Yahoo’s flexible transportation programs reflect the organization’s commitment to make a difference. Yahoo! is carbon neutral by offsetting its 250,000 metric ton carbon footprint (from 2006) through hydropower in rural Brazil and wind turbines in India.

Each month, a growing wealth of information and solutions to the global warming problem are available to Yahoo’s 500 million users at Yahoo Green.

By taking a carbon neutral approach, Yahoo goes beyond a simple commute program. Yahoo looks for ways to eliminate unnecessary employee trips. Yahoo’s high-tech flexible work allows people to work at home and other locations when appropriate. Employees manage their own work hours, allowing them to avoid the crawl of gridlock hours. When at Yahoo headquarters, employees can take advantage of on-site services to avoid running errands and traveling off-site for meals. Yahoo succeeds in the triple bottom line of people, profits, and planet.

Effective organizations have gone far beyond having a few employees telecommute. Flexible work is created so that all unnecessary travel is eliminated. Global teams of employees, partners, and customers use the new Internet to effectively work together without always being together in the same building. Solo gridlock commutes are replaced with more healthy and productive travel where mobile work can be done while ride sharing and using public transportation.

Flexible work and flexible travel are greatly helping people to be more productive, save money, and help us achieve energy independence.

Copyright © 2007 John Addison. This article is part of John Addison’s upcoming book, Save Gas, Save the Planet. John Addison publishes the Clean Fleet Report

New Electric Vehicles in Your Near Future

By John Addison (12/20/07). By an overwhelming 314 to 100 vote, the US House of Representatives passed the energy bill (H.R.6) with the new CAFE standards requiring auto makers to sell vehicles that average 35 miles-per-gallon (mpg) by 2020. President Bush signed the bill into law. Americans want to pay less at the pump and be less dependent on foreign oil, especially oil from countries hostile to the U.S.

Many are not waiting until 2020. They are driving vehicles now that get better than 35 miles per gallon. Some are starting to drive plug-in hybrids that achieve over 100 miles per gallon. 40,000 in the U.S. drive electric vehicles that use zero gasoline and produce zero emissions.

Sherry Boschert rides on sunlight. She charges her electric vehicle with her home’s solar power. Her Toyota RAV4 EV runs fast on freeways and silent on quiet streets. She uses a zero-emission approach to transportation. Sherry Boschert is the author of Plug-in Hybrids: The Cars That Will Recharge America.

Some are celebrities like Tom Hanks, who has been driving electric vehicles for years including his RAV4 EV and Scion xB that was converted to an EV by AC Propulsion. Other celebrities have deposited $100,000 each on average, eagerly awaiting the Tesla Roadster electric vehicle with its 245 mile electric range.

Electric vehicles are not just for celebrities. Many are priced at a more modest $10,000 and only go 25 miles per hour. They are popular in fleets of university campuses, large facilities that need zero-emission in-door vehicles, shuttles in corporate multi-building campuses, and even the military. They are a popular second car in two vehicle households. These low-cost EVs are fine for those who will compromise on speed and range. Reasonably priced new vehicles are coming with few compromises and many exciting features.

Mitsubishi Motors Corporation (7211:JP) has been demonstrating its new electric-vehicle, the iMiEV Sport which it plans to launch in Japan and possibly other countries in 2009. The car has a range of 93 miles (150 km) and a top-speed of 93 mph (150 km/h).

In 2009, the smart ev may be available in the U.S. The cars 70/70 specs are appealing for city drivers: 70 mile range, 70 mile per hour freeway speed. Daimler’s (DAI) smart ev is in trial in the UK with The Energy Saving Trust, Islington and Coventry Councils, Lloyds Pharmacy, The CarbonNeutral Company, EDF Energy and BT. To achieve a range of over 70 miles, it is using the Zebra sodium-nickel-chloride battery which has caused maintenance difficulties in some U.S. fleets. More than 40,000 of the gasoline fueled smart fortwos have been sold in the UK since the car was launched here in 2000. The vehicle is popular in London, where electric charging is free and daily congestion taxes are high for petrol guzzlers.

In addition to electric-vehicles, plug-in hybrids have captured the imagination of many. These vehicles are often designed to go a number of miles in battery-electric mode before internal combustion engines are engaged. Last week, I attended a General Motors (GM) showing of its Chevy Volt. The Volt is an elegant four-door sedan. One GM designer admitted that the Mercedes CLS gave some inspiration for the Volt. The Chevy Volt can be driven 40 miles in electric-mode using 16kW of lithium batteries, before its small 1L engine is engaged. 16kW is twelve times the storage of my Prius NiMH batteries.

40 miles accommodates the daily range requirements of 78% of all U.S. drivers. The Volt uses an electric drive system with a small ICE in series that is only used to generate added electricity, not give power to the wheels. GM’s modular E-Flex propulsion could be adapted to various engines including diesel, fuel cells, and potentially battery-electric. At the Frankfurt Auto Show, GM showed the European sibling of the Volt, the GM Opel Flextreme concept car, which included a 1.3L diesel engine.

Look for more E-Flex announcements from GM in 2009. Announcements could include a more compact global vehicle at an appealing price point and a commitment to a diesel E-Flex vehicle.

GM Manager, Rob Peterson, emphasized that GM is committed to electric vehicles and plug-in hybrids. To keep the Volt on track, issues that might delay a normal vehicle in development are resolved by the E-Flex Leadership Board Committee which includes Bob Lutz and Larry Burns.

The Volt is targeted to go on sale November 2010. I told a General Motors executive that if it were priced under $40,000, then I would be interested in buying one. He confidently smiled and replied, “Have your checkbook ready.”

If you need to carry more people and cargo, GM plans to start sales of its Saturn Vue plug-in hybrid in 2009. Even though the vehicle will use a 3.6L gasoline engine, it is likely to offer the best mileage of any SUV on the market.

Toyota (TM), Ford (F), Volvo, and Saab all have plug-in hybrids in early fleet trails. Other fleets are doing their own custom integration of plug-in hybrids from sedans to heavy vehicles.

Carlos Ghosn, CEO of Nissan Motor Co and Renault SA, said that his auto group is planning to mass produce an electric car mainly targeted at big cities by 2012. From London to Shanghai, he sees increased possibilities that only ZEV will be allowed in city centers.

Look for a number of exciting choices in vehicles that use little or no gasoline, improving energy security and addressing the threat of a potential climate crisis. Other Clean Fleet EV Articles

John Addison publishes the Clean Fleet Report.

Carbon Roundup: Bali, Skeptics, and Corn

by Frank Ling

Roadmap from Bali

So what exactly happened in Bali last week and what does it mean for green technologies? After negotiations that were at times bitter and contentious, representatives from 187 countries agreed to push for a new climate accord by 2009 to succeed the Kyoto Protocol. In this time frame, the countries will have to figure out what the developed and developing nations are responsible for.

Only after intense international pressure did the US finally agree to the comprised version of the accord, which leave out specific targets for greenhouse gas emissions cuts. At the same time, developing countries including China and India agreed to certain actions.

But was this a win-win situation? Unfortunately for the US, they did not appear like a diplomatic statesman despite finally approving the accord. Brian Walsh and Nusa Dua at Time says:

“It should be difficult for a country to make the final concession that allows a landmark deal to fall into place, and still appear selfish and churlish — but the U.S. somehow managed to do that. Years of blocking climate action at every turn meant the Bush Administration came into the Bali talks with little public credibility, and while there was a sense before the talks that the U.S. might show flexibility, that hope was quickly dispelled.”

Nevertheless, businesses in the US and around the world are more concerned about the policies that will enable the growth of low carbon technologies. Is a global change imminent? Alexis Madrigal at Wired writes:

“Around the world, green/sustainable/clean/eco-friendly businesses are gathering steam. Their legislative priorities are very different from the traditional corporate interests but also different from traditional environmentalists who emphasize conservation. Regular old businesses are also beginning to realize that they can be part of the solution to climate change too. As Greg Laden points out, a corporate tipping point might have been reached. Combined with the zeal and smarts of the climate change activists, this mostly passive backing could prove effective in changing politics around the world.”

Skeptics Strike Back

In spite of the general scientific consensus that climate change is real and that action should be taken in spite of any lingering uncertainties, a vocal group of US experts maintain that global warming is a natural phenomenon.

In contrast to the recent IPCC report that details the grave consequences of climate change, these scientists wrote in a recent edition of The International Journal of Climatology that the recent warming trends in the atmosphere and the surface of the planet are not indicative of greenhouse gas warming. They believe that today’s climate changes are due to factors beyond human control.

In this article in Agence France-Press, climatologist and noted skeptic Fred Singer is quoted as saying “that other factors — like variations of solar winds and terrestrial magnetic field that impact cloud formations and the amount of sunlight reaching the Earth’s surface, and thus determining the temperature — are much more influential than human-generated greenhouse gas emissions.”

Not So Corny

Many studies now suggest that the reductions in imported oil and emissions from corn-based biofuels are overstated. Now, there is further evidence that indicate the high production levels of corn are causing serious detriment to the environment.

Today more corn is grown than any time since World War II. The fertilizers used in these crops make their way into the Mississippi River and into the Gulf of Mexico. As a result, 7900 square of miles of ocean become a dead zone where fish, crabs, and shrimp die from a lack of oxygen.

In the Associated Press, Henry Jackson says, “Environmentalists had hoped to cut nitrogen runoff by encouraging farmers to apply less fertilizer and establish buffers along waterways. But the demand for the corn-based fuel additive ethanol has driven up the price for the crop, which is selling for about $4 per bushel, up from a little more than $2 in 2002.”

While most farmers recognize this negative consequences of growing corn, it only makes sense for them to grow corn due to the high price it fetches.

Is it time to curb our enthusiasm for corn-based biofuels?

Coming Up Next Week: The Energy and Farm Bills.

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

Sausage-Makers Unite!

by Richard T. Stuebi

People often ask me what I think of a particular piece of energy-related legislation. Unfortunately, it’s usually difficult for me to answer with anywhere near the degree of earnestness in which the question is typically asked.

For instance, this past week, I received inquiries to comment upon the action taken by the U.S. Senate to pass an energy bill. (See Washington Post article.) This is a piece of legislation that includes a tightening (finally!) of the corporate average fuel economy (CAFE) standards for new automobile sales, and a move to phase-out inefficient incandescent light bulbs. However, a long-term extension of the production tax credit for renewable energy and a proposed national renewable energy portfolio standard was dropped at the last minute.

While I do support the energy efficiency provisions of the bill, the abdication of any responsibility for pushing the U.S. towards further adoption of renewable energy for power generation – in the face of compelling needs for economic development, enhanced energy security and reduced carbon emissions that can be provided by renewable energy – is quite galling.

I continue to be astonished that many people must have the naïve belief that the public sector is capable of passing good energy legislation. I wish I could say otherwise, but there’s not much historical evidence or precedent to suggest that assumption. It would be wiser for people to ask me whether there’s anything positive about a particular energy bill, rather than assuming that the bill is generally favorable and inquiring whether there’s anything to be worried about.

This weekend, I finally had the chance to watch the documentary film “Who Killed the Electric Car?” If anyone wonders if (or why) U.S. energy policy is on the wrong track, this would be a good entry point. I was forewarned that I would be angry at the end of the film, but I guess I’m simply too experienced (or jaded, or even cynical) to fall into that trap.

As the old adage says, there are two things you don’t want to see being made: policy and sausage. My father was in the pork business, so I’ve seen sausage being made. With my work in D.C. in the late 1980’s and in Columbus in the past 18 months, I’ve also seen energy policy being made. From being a close witness to both professions, I can assure you that comparing energy policy-makers to sausage-makers is a gross insult to sausage-makers.

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 Legislation: Who Gains? Who Loses?

Most Americans now agree that something needs to be done to reduce our greenhouse gas emissions. Hopefully most Americans now appreciate that this is not a small, but even more so, not a simple problem. I am a big believer that the playing field for our low carbon future should start level, and the market should be structured to allow our major power and energy companies a chance to lead the way, instead of simply dishing out punishment for our combined historical choices. Carrots and sticks work well together, but sticks alone are not going to solve our global carbon problem. I think it is also important to ensure that our carbon legislation does not result in a higher cost to consumers in middle America, just because the MidWest happens to have been historically coal fired, than the cost to those of us living on the coasts. Jim Rogers of Duke Energy puts this much more eloquently than I do.

Duke Energy (NYSE:DUK), one of the largest power companies in the US, has been a long supporter of energy efficiency, and known for being forward looking when it comes to a low carbon future, smart metering, and advanced energy technologies, despite having a generation fleet that is 70% coal fired. Cleantech Blog is delighted to welcome Jim Rogers, CEO of Duke Energy, to give us his thoughts on the devil in the details from their perspective. It is heartening to see a major power company take on the carbon issue full force, and like Duke has done, push energy efficiency in a big way.

– Neal Dikeman, Cleantechblog.com

By Jim Rogers
Chairman, President and CEO of Duke Energy

As we debate our differences on how to address the challenge of global climate change, surely we can agree on the end-goal – a secure, sustainable and affordable supply of energy now, and for future generations.

Most Americans also agree that we must act now – and begin building a bridge to an energy-efficient, low-carbon economy.

As the third-largest coal consumer in the United States, and one of the largest greenhouse-gas emitters, Duke Energy has a responsibility to be part of the solution. That means looking at not only how climate change affects our business today, but also the implications for the future.

We support federal legislation to address global climate change by putting a cap-and-trade system in place. The U.S. Senate is in the process of vetting a cap-and-trade bill introduced by Senators Lieberman and Warner in October. This bill is well-intended, contains some good points and appears to have bipartisan support.

But on closer examination, questions arise. Who really stands to gain, and who stands to lose? What are the real costs to average Americans?

You would expect the bridge to a low-carbon economy to have a cost, just as you might pay a toll to cross any bridge. But should some of us have to pay twice? With the Lieberman/Warner approach, that’s exactly what would happen.

Lieberman/Warner proposes to auction a large number of emissions allowances to the highest bidder. In effect, an auction becomes a carbon tax, levied on consumers in the 25 states that depend on coal for electric power – primarily the Midwest, the Great Plains and the Southeast.

Electric power customers in those regions would have to pay for the auctioned allowances up front, and then pay again later to upgrade power plants, or build new ones, as carbon-control technologies become available.

A better approach is to allocate allowances at no cost to generators who emit greenhouse gases – and reduce the number of allowances over time, while new carbon-control technologies are being developed and put in place.

Some say that an auction is the only way to take action to reduce emissions, but history tells us otherwise. Allowances were not auctioned under the 1990 Clean Air Act Amendments; nearly 97 percent of them were allocated at no cost. Since then, new technologies to reduce sulfur dioxide and nitrogen oxide emissions have been developed and implemented. Those environmental controls have reduced emissions by more than 40 percent since 1990, and they continue to decrease, without dramatic rate hikes. In fact, the nation’s average electric rates have declined.

In contrast, some estimates put the Lieberman/Warner bill’s cost to the average family at more than $1,000 per year, while emissions traders would stand to profit greatly from a volatile market for carbon allowances. According to Bloomberg, the Lieberman/Warner bill would create a potential $300 billion annual carbon-trading market by 2020.

So the question comes down to this – are we interested in protecting consumers or enriching emissions traders?

Customers who live in the Midwest, the Great Plains and the Southeast did not choose to get a large portion of their electricity from coal – it was a matter of economics, geography and geology. They should not be punished for decisions made decades ago, in good faith, using the best and lowest-cost technology of the time, with regulatory approval – and long before anyone knew about the impact of carbon emissions on climate change.

And before we dismiss coal as a viable energy source for the future, consider this: The U.S. is sitting on more than 250 years of coal reserves, more than any other nation in the world. This rich natural resource has untapped potential for ensuring our country’s energy security. The challenge is primarily technological – to find smarter and cleaner ways to use it, such as carbon capture and storage. Until those technologies are available, we must continue to use our existing coal resources and protect the interests of consumers who rely on coal.

The goal for carbon legislation should not be to punish utilities for building coal plants to keep the lights on in the past. It should be to create the incentives to put new clean technologies in place for the future – not just clean coal, but also nuclear and renewable energy, natural gas and the “fifth fuel” – energy efficiency.

Under the Lieberman/Warner approach, electric power customers in half of our states will carry a disproportionate share of the burden. We need to pass climate legislation that is fair to all consumers and protects the economic interests of all states and regions. Our climate is at stake, and so is our economy. By allocating most allowances, following the precedent set by the successful Clean Air Act, we believe both can be protected.

Jim Rogers is the CEO of Duke Energy, writing as a guest columnist on Cleantech Blog.

Clean, Green & Pristine…

by Heather Rae for cleantechblog.com

The binder of information at our honeymoon cottage, Pink Sand, in North Palmetto Point, Eleuthera Island, Bahamas, reads (verbatim):

“Some do’s and Don’ts
1. Please Conserve Water as all our water is from rain that is collected from the gutters and placed in our Cistern that is under the Cottage.
2. Please use A/C only when you are in the Cottage and do not have windows open when using the A/C.

Electric in Eleuthera is 3 times that of electric in the USA. If using the Washer/Dryer, please use only once if you are staying for a week and 2 times if you are staying 2 weeks.”

The caretaker, while awaiting our arrival, had turned on the little Toshiba TV perched above the Ponsat Satellite receiver, and its noise overpowered the hum of the wall A/C. The honeymoon was off to a good start when Dave and I, once alone, chimed in unison, let’s turn off that A/C and the TV; we came to Paradise to get away from all of that. The cottage is equipped not only with TV, A/C and washer/dryer, but with an on demand electric domestic water heater, a hair dryer and a cell phone. The binder told us where to purchase calling cards for the cell phone. Forgetfulness having its virtues, the laptop — and access to iTunes — was at home, and it meant we were limited to the few songs downloaded the night before onto the tiny iPod that my tech-loving husband had just bought me. Electri-tech’d to the gills, I wondered how much ‘3 times that of USA’ meant. If any of the electrical appliances came with their own equivalent ‘calling cards’ and some kind of watt meter, I would have swapped time on the TV and A/C for additional loads of wash — clean clothes trumping 400 channels of audio-visual garbage any day.

And I couldn’t help but wonder: if electricity costs so much, then where were the solar panels, the small-scale wind turbines and the wave and tidal generators? I searched for them in the land of sea and sun, and saw not a one.

Discontent that the USA and Paradise are so advanced in some technologies like iPods, cell phones and satellite TV, and so tediously stunted in electricity, I dropped by the office the Bahamas Electricity Corporation (BEC) just north of Rock Sound to ask just how much ‘3 times’ is…and churn up a little more information about how BEC services a tropical archipelago. Javan Rolle, a utility manager, was Family Island-gracious to entertain a random visit from a woman in a sundress and tennies, brandishing a business card and asking about residential tariffs. We had a good laugh that nobody at the office knew, readily, the per-kWh cost of electricity on the island: it’s $.15 plus a surcharge for the fuel which is 100% diesel generated, bringing the cost to about $.30 per kWh. Coming from Maine, that’s about ‘2 times;’ coming from Colorado with its heavy reliance on coal, that’s more than ‘3 times.’

The only customer with solar installed on the entire island, grid-tied, was an outfit called The Island School at Cape Eleuthera on the southern tip of the Island and its affiliate, The Island Institute which was under the auspices of a research and pilot project for grid-tied PV.

Dave and I wended our way out to the Island Institute and met with Andy Danylchuck, PhD, the Director of Research, and Graham Siener, a cleantech solutions consultant for Cape Systems, Ltd., another affiliate of the Institute. We lunched with the staff and students and spoke briefly with Chris Maxey the Founder and Director of the School, the Institute, Cape Systems and the Cape Eleuthera Foundation. The Institute evolved out of a need for additional facilities at the School which already had a bio-wastewater treatment plant, a battery-based Bergey 7.5kW wind turbine, about 17kW of solar panels, and biodiesel collected as waste vegetable oil from cruise ships. The Institute’s offices and staff housing are located nearby, across an inlet and over a footbridge in curved- and vaulted-roofed concrete structures. These structures are built to withstand storms and hurricanes, to facilitate rainwater collection and to maximize air cooling. Interior furniture is made of a local, but invasive, hardwood; the floor is covered in recycled carpet tile. A breeze keeps the space, which is light and airy, cool; there is no need for the A/C which is quickly becoming an island status symbol (no different than in other locales like Colorado and coastal Maine that don’t need it but for — so the developers and builders claim — consumer demand.)

Cape Systems, Ltd. has initiated a campaign called, Freedom 2030: Sustainable Eleuthera, A Model for the Caribbean and Beyond. (The name Eleuthera derives from the Greek word for freedom.) The campaign seeks to raise funds for making Eleuthera a self-sustaining island by 2030, asserting, “this is both an economic and national security issue that will set Eleuthera and The Bahamas as a leader in the inevitable shift away from fossil fuels.” They are also underway with a joint venture with publicly-traded Bahamas Waste to establish biodiesel production from locally collected waste cooking oil from hotels, restaurants and cruise lines. The Institute and BEC are working cooperatively through net metering arrangements for solar PV, but there are kinks to iron out; for example, the metering for the Institute’s 30kW of solar generation flowing into the grid shows up as a charge to the Institute on their BEC bill.

Support for clean energy from the Prime Minister of The Bahamas appeared in the Bahamian paper this past Friday, and local columnists like Larry Smith, posted on Bahama Pundit, are paying attention to climate change, oil pricing, tourism and alternative energy solutions for the Islands. (See “The Bahamas and the Political Economy of Climate Change” and “Bahamas Could Set Renewable Energy Pace”).

In speaking to an international conference of the Caribbean Basin last week, PM Hubert Ingraham is reported in The Nassau Guardian to have pointed out, in reference to climate change and tourism, that the reduction of the import content of goods to service tourism, which is growing, needs to be a major economic policy, and that energy is a major factor requiring adoption of a serious energy policy: in 2001 domestic oil consumption in The Bahamas amounted to some $275 million or 15 percent of total merchandise imports of $1.856 billion; last year, 2006, it accounted for $706 million or 27 percent of total imports of $2.621 billion. Said Ingraham, “A reversal of this trend seems unlikely, and by the end of this year, the cost of domestic consumption of oil may well be at or close to one-third of total merchandise imports. This seems to be a level where alternative sources of energy make sense, and where it is sound economic judgment to revisit the energy efficiency of our lifestyles generally.”

Javan of BEC and Graham of the Island Institute say that the Bahamas has lifted the 50% import duty tax on solar panels, and that the 7% stamp tax still applies. The Institute participates in the Chicago Climate Exchange, selling certificates for offsets from energy efficiencies and cleantech which provide another revenue stream. Without rebates or other incentives, however, solar is still out of reach for most.

As in Colorado and Maine, in Eleuthera I couldn’t help but wonder, when are the builders and developers getting on board with sustainable building practices? Just a half-hour drive from the Island Institute, Dave and I walked a long stretch of pink sandy beach and broke inland at The Dunes of Eleuthera, a condomimium development midway under construction. Adorable rental cottages in blues and yellows and greens faced the water, wrapped in tropical landscaping. We were curious about these cottages and the new facilities; the developer smoothed through his pitch. Then I asked the question, the one that tends to set off developers and modular home builders: what is the energy rating of these buildings? Why, little lady, it’s an Energy Star-rated home, with R-19 walls and R-11 floors! With central air! He said something about poured concrete forms, but the R-19 and the wood foundation posts didn’t quite add up to ICFs or SIPs or even concrete block, the traditional island construction material.

Maybe it was the sun and the sand flea bites. Maybe it was knowing that $400K for a huff-and-puff condo was a travesty. Maybe it was knowing this developer from Louisiana intended to make enough money to retire at 55…that set me off: I work on an Energy Star program and those numbers mean nothing. I’d want at least an R-50. I’d want something that can handle a hurricane, and on a tropical island, I don’t need air conditioning. The bride wrapped in a red and orange sarong, on the Island of Freedom, had become a Greek Harpie, stealing civility from the conversation.

Departing from the Governor’s Harbour airport, I heard that these Energy Star houses were pre-fab and impounded at the docks by the State for failing to meet standards for tropical construction. I can’t substantiate the comment, but impounding unsuitable imported building materials is a reasonable response to developers who build with such little regard for homeowner, investor and the planet.

It was a joy to meet with the Island Institute and its affiliate organizations who truly understand what sustainability is all about.

Turning to take in one last gulp of Bahamian heaven at the airport, I saw a billboard: Keep Central Eleuthera Clean, Green & Pristine…It Starts with YOU!

Heather Rae, a contributor to cleantechblog.com, is a consultant in cleantech market management and serves on the board of Maine Interfaith Power & Light. In 2006, she built a biobus and drove it from Colorado to Maine. In 2007, she began renovation of an 1880 farmhouse using building science and green building principles.

Offshore Wind Report

by Richard T. Stuebi

Last week, I traveled to Berlin with a delegation representing Northern Ohio’s Regional Energy Development Task Force to attend the European Offshore Wind Conference and Exhibition, put on by the European Wind Energy Association (EWEA). We visited to learn about the status of offshore wind energy technologies, as part of the Task Force’s assessment of the proposed Great Lakes Wind Energy Center, which is envisioned to accelerate the development and emergence of offshore wind in the United States.

With offshore currently just a tiny niche of the booming wind industry, I expected the audience to be on the order of 500 people. The impressive turnout of an announced 2000 is a clear testament to the vast future potential offered by offshore wind energy. But, we also knew that, at present, offshore wind is still very much an uphill push to accomplish. Indeed, the lack of any booth at the show by GE (NYSE: GE), who had been until relatively recently prominently touting their offshore project at Arklow Ireland, indicates some retrenchment by companies with early experience in the waters. The conference validated the technical – and hence economic – challenges related to offshore wind, and therefore some fruitful directions for further pursuit.

For me, the “a-ha” moment – perhaps it should be described as a “duh” moment – was really seeing that offshore wind is at least as much about offshore technologies as it is about wind technologies. Yes, it is true that significant advancements are necessary for major components (such as blades and gearboxes) as turbines get larger for offshore projects. Also, there are many interesting possibilities for innovative turbine designs that dramatically depart from the standard approach (e.g., two-blade downwind) when one considers offshore deployment.

But the real drama of the maturation of the offshore wind sector is now being, and for the foreseeable future will almost certainly be, played out under or on the water. Note that offshore wind activity to date has been driven by the turbine manufacturers, not highly populated with marine engineers nor hugely capitalized for marine R&D. As a result, the wind turbine companies pushing for offshore wind have leaned heavily upon the one industry in which offshore deployment of above-surface infrastructure has become commonplace: oil/gas exploration/production. Today’s approaches to wind tower erection and turbine installation are thus heavily based on those used for oil/gas platforms, employing massive custom-tailored ships and cranes working on the seas.

Such installation approaches work, for sure. But the problem is cost. Too much of the cost structure of an offshore wind project relates to installation logistics. Note that each oil/gas platform yields huge revenue streams: a platform might produce ten thousand barrels of oil a day, which at today’s prices implies over $300 million per year. In contrast, each wind turbine – even really big ones of 5 megawatts or more – represents a much smaller revenue potential, maybe $2 million per year. The expensive installation techniques of the former just won’t be viable on the latter.

This is reflected in the data. According to a presentation made by the consulting firm Douglas-Westwood, the installed cost of an onshore wind project is projected to increase from an actual cost of Euro 1540/kw in 2003 to a forecasted cost of Euro 2940/kw by 2013. For an improving technology in a growing marketplace, this cost trend is clearly opposite of what should be expected.

Of course, there are many legitimate factors for such cost increases. As explained well in a presentation by the leading wind turbine manufacturer Vestas (Copenhagen: VWS.CO), the input costs of virtually all commodities relevant to wind installation – from steel to shipping – have risen substantially in the past few years, beyond the control of any player in the marketplace. And, given that the wind sector is sizzling hot, all companies up and down the supply chain are in a seller’s market, and are able to charge highly profitable prices – arguably for the first time in the history of the industry.

However, also stated by Vestas was that players in the offshore wind industry have learned from their previous projects that they substantially underestimated actual costs and implementation risks (e.g., bad weather or heavy seas limiting installation productivities), and are now building “more realistic” contingency cushions into the economic projections of upcoming projects.

By my interpretation, the current players in the offshore wind industry are on the one hand admitting that the technical path chosen to date for offshore installation has become much too costly, while on the other hand are nevertheless committing to pursuing that same path with more projects and merely accepting substantially higher costs as an implication.

It is also evident that the offshore industry has largely cleaved into two sets of companies: wind technology developers/manufacturers and marine engineers/contractors. At Berlin, a few exhibitors were tackling the offshore turbine/installation challenges holistically – see Blue H as an example – but none of the major wind turbine players seem to be following suit. Instead, their approach was to extend/refine their onshore turbine products for offshore deployment, and look to marine engineers to solve the installation challenges separately.

I therefore spy the opportunity for someone to lead the way in developing fundamentally cheaper philosophies and techniques for offshore wind installation, and I suspect that this may (only?) be enabled by integrating the engineering challenges of both the turbine and offshore deployment into new solutions offering substantially lower cost for the overall system of turbine/tower/foundation. There’s simply got to be a better way – and if so, great rewards are for the taking.

Let’s see how the industry intends to make a meaningful dent in reducing installation costs at EWEA’s next biannual offshore wind show in Stockholm in September 2009.

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

Blogroll Review: Dam, Leadership, and Lime

by Frank Ling

Red Sea Power

A recent study shows that damming the Red Sea could provide 50 GW of emissions free hydroelectric power. This would be the largest power plant in the world. However, tens of thousands of people would have to be displaced, not to mention untold ecological damage.

Hank Green at EcoGeek writes about how this would politically impact the Middle East:

“The project would provide enough power to switch off oil-burning power plants throughout the Middle East. Political scientists are already estimating the stability such a project would bring to the region.”

Sustainable Leadership

Sustainability is now becoming a buzzword just like eco and environmental. But what does it take at the corporate level to promote sustainable practices?

A recent report from Avastone Consulting examined what types of leadership and organization structure was needed to carry out such changes.

Joel Makower says:

“Their study found that it isn’t a lack of systems and activities that limit a company’s success, but rather the scarcity of what it calls “higher capacity leaders” and the direct relationship between leader mindset development and the realization of complex sustainability outcomes.”

Baking Soda Solution

Jim Fraser at the Energy Blog writes about this simple but promising process:

“Sodium hydroxide, which is produced on site as a part of the SkyMine™ process is used to react with the CO2 to produce the sodium carbonate. The heat to drive the process is captured from the heat in the flue gas.”

For a 500 MW power plant, that amounts to 642,000 tons of emissions reduced each year.

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

The Micro Fuel Cell Promise

Earlier this year I did a Cleantech Blog article called Micro Fuel Cell Killer talking about the challenges that undermined the promise of micro fuel cells.

Well, now we are looking at the other side of the story. One of my friends, Peng Lim, who is the CEO of Mechanical Technology Inc. (Nasdaq:MKTY), parent company to leading micro fuel cell developer MTI Micro, graciously consented to an interview on what they have done and the general state of play. In other words, what is the current micro fuel cell promise.

Peng, can you give our audience a little of your background prior to MTI? What made you choose MTI? And can you share some of your expectations from that time, and how they have panned out?

Prior to joining MTI, I spent the last 20 years in the consumer handheld electronics market starting with notebook computers in the early 1990’s and then moving into wireless computing in the mid 1990’s. At the time I joined, both markets were very young. You didn’t see many people with portable computers, or the hot spots that wirelessly connect them to the internet. I was fortunate to be part of the growth experienced by both portable computing as well as wireless computing. Each one of those industries grew because of the intrinsic need for people to be mobile. Allowing people to work any time, any place is something that they want; hence, both industries took off.

From there, in the late 1990s, I moved into the PDA market where I lead the worldwide product development for Palm, and was responsible for the Palm devices, OS and Application Software. At that time, the challenge was to take mobility to the next level. We devised a product that had the capabilities of a computer, but that could fit in your pocket; there would be no need to worry about the device. When needed, it is there and when it is not, it is stored in your pocket. Again the concept took off. At Palm, we captured 65% of the worldwide PDA market share and 75% handheld OS market share.

I left Pam in 2001 to start my own company focusing on handheld multimedia and gaming. The company was sold in 2005.

The reason why I joined MTI is two fold: 1) the technology has the potential to exponentially increase the energy density over that of lithium-Ion batteries, and 2) because of mobility. Mobile devices are not truly mobile yet. There is one last wire that attaches them to a wall – a charging wire.

Micro fuel cells promise to cut the last wire and provide customers with real mobility where they can use their devices at anytime and anywhere without having to be tethered to the wall for charging.

Besides MTI, I am currently on the board of advisors for Inventec Appliances, a multibillion dollar manufacturing company based in Taiwan.

Can you talk a little about the Mobion chip and your recent advances in it? What does that mean in the context of getting a product to market?

In June, MTI Micro demonstrated its integrated fuel cell chip used as the heart of its fuel cell systems for consumer product applications. The Mobion chip is based on 100% methanol feed, passive, direct methanol fuel cell (DMFC) technology. Passive water management applied to DMFC technology is the catalyst for reducing size and simplifying fuel logistics. MTI Micro has reduced the size of the Mobion chip by over 40% to 9cc (small enough to fit in the palm of a hand), and has reduced the parts-count of the chip to one molded piece. The Mobion chip is capable of operating at 0 to 40 degrees Celsius and at any level of humidity. This is an industry standard requirement for many OEMs who want to use fuel cells with their products.

MTI Micro’s Mobion chip architecture significantly reduces the complexity of a fuel cell system’s internal construction, thereby reducing manufacturing costs, increasing performance and enabling further system miniaturization – factors that are critical for the successful launch of fuel cell products in the consumer market. We believe the Mobion chip is the first micro fuel cell technology designed with the performance and manufacturability necessary to make a significant impact on the consumer portable electronics markets.

If you had to pick your 3 top early adopter products for micro fuel cells, what would they be? And for each one, what are the power to weight, power to size, and lifetime targets you feel each will require.

We see a lot of opportunity for the early adoption of micro fuel cells, particularly in handheld consumer electronics. Applications including cellular phones PDAs, MP3 Players, digital cameras, game players are very attractive to us. As far as power, size and energy goes, it certainly would depend on every application and also on what requirements OEMs may have; at the same time, there may be some trade-offs between size and energy, etc..

If you had to tell a consumer customer what to expect from a microfuel cell product – what would you tell them?

Most importantly longer device run-time – a feature that customers deeply care for. MTI Micro’s Mobion technology will also allow users to be free from tethering their devices to an electrical outlet, eliminating the need for carrying multiple bulky chargers and converters.

Also, since refueling would be as simple as just replacing a cartridge, there is no down-time required for a recharge. “Hot-swappable” cartridges would instantaneously allow the user to continue to use their device.

Micro fuel cells are also considered a green technology. On the other hand, some rechargeable battery technologies such as NiCad are toxic to the environment.

What’s different about micro fuel cells now as opposed to 4 or 5 years ago that gives you confidence?

1) Technical improvements including size, energy density and power density have improved.
2) The worldwide energy source for the consumer portable electronic market continues to grow (approximately $12 billion this year and is expected to grow to over $20 billion in 2012).
3) The infrastructure and supply chain are starting to come together – especially around methanol solutions like our Mobion Technology.
4) Methanol has been approved by the International Civil Aviation Organization (ICAO) to be carried inside commercial planes.

The DOT announcement on carrying methanol and fuel cells on planes is obviously huge – exactly why has it been so long in coming, and what put it over the line?

Direct methanol fuel cells and fuel refills can be transported safely, provided appropriate precautions are taken in design and packaging. However, meticulous considerations are given to any new products for approval in commercial transport. Having been approved by ICAO and now waiting for implementation by the U.S. Department of Transportation is an important and necessary step towards the commercialization of Mobion.

What exactly are the terms of the Samsung collaboration, and how does it affect MTI Micro’s plans for commercializing a micro fuel cell product?

MTI Micro first entered into a relationship with Samsung Electronics, our Korean partner and a leading producer of mobile phones, in May of 2006. Under the terms of MTI Micro’s initial Alliance Agreement, our Mobion technology was chosen to power a series of prototypes designed for mobile cell phone and cell phone accessories. In a short period of time, we delivered two rounds of these prototypes to Samsung for evaluation, and each prototype demonstrated significant size reductions and performance improvements from the previous. The latest and most advanced prototype contains the Mobion chip. This agreement expired on its own terms on July 31st of this year. However, on October 25th, MTI Micro announced its continued collaboration with its Korean partner, extending until the end of 2009, or six months after MTI Micro’s first commercial product launch should our commercialization timeline become accelerated – whichever comes earlier.

With this alliance in place, we feel very confident about MTI Micro’s strong momentum and ability to bring Mobion MFC technology to a high-revenue category within the worldwide consumer device market. Under this non-exclusive collaboration, MTI Micro will continue to refine the Mobion baseline product design for mobile phone applications. Until the design freeze date projected for December of 2008, our Korean partner may request product specification changes, and may also purchase commercial DMFC samples from MTI Micro as soon as they are readily available. Throughout this time we will also continue to share development updates with our Korean partner, as well as loan them prototypes for evaluation. With a production decision anticipated at the start of the third quarter of 2009, MTI Micro will thus prepare for the manufacturing of the Mobion baseline product starting in the third quarter of 2008, through the second quarter of 2009. To assist with evaluating potential manufacturing partners, and more importantly – to work as part of MTI Micro’s business development team to establish business relationships with new OEMs and maintain anticipated day-to-day, on-going customer relationships in Asia – we have added Korea-based Daehong Technew Corporation as a new representative, which we announced in late October.

On the financial side, can you share when you expect to reach breakeven, and your cash vs. financial burn forecasts, and your feeling on when or if the company will need to raise more cash?

As of November 8, 2007 the company has $12.6 million in cash and cash equivalents. Our burn rate is approximately $0.9 million per month. We have a number of resources for funding including the positive cash flow from our MTI Instruments subsidiary, sale of Plug Power stock, government funding and the capital markets.

Thank you Peng, always a pleasure. I will keep my fingers crossed for you guys.

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

California’s Low Carbon Diet

By John Addison (12/5/07). When Coke and Pepsi were in the middle of their diet wars, California was an early battle ground. It is a state which tends to do much in excess, including drinking colas. In fact, only a handful of countries spend more money on beverages. Parties of happy and surprisingly fit youth were shown on TV commercials drinking their beverage of choice.

Now millions of Californians are being targeted as early adopters for a low carbon fuel diet. More miles, less carbon emission. It is the law. Executive Order S-1-07, the Low Carbon Fuel Standard (LCFS), calls for a reduction of at least 10 percent in the carbon intensity (measured in gCO2e/MJ) of California’s transportation fuels by 2020. Low Carbon Fuel Standard Program

Successful implementation of the LCFS will be critical to California’s even more ambitious law, the California Global Warming Solutions Act (AB-32), which requires California’s 2020 greenhouse gas emissions to not exceed 1990 emissions. The challenge is that in 2020, California’s population will be double 1990.

Because transportation is the main source of greenhouse gases in California, it is urgent that Californians use vehicles with better miles per gallon and that less greenhouse gases be emitted from the use of each gallon of fuel.

The world will learn from the successful implementation of LCFS because gasoline and diesel are currently becoming more carbon intense. There has been a shift from oil that is easy to get, to extraction and refining that increases greenhouse gases, as we make gasoline from tar sands, coal-to-liquids, and a future nightmare of shale oil. For example, monster earth movers strip-mine northern Alberta, extracting tar sands. Elizabeth Kolbert reported in the New Yorker that 4,500 pounds of tar sand must probably be mined to produce each barrel of oil. The converting of tar sands to petroleum will require an estimated two billion cubic feet of natural gas a day by 2012. Carbon intensity includes all the emissions from the earth movers and all the natural gas emissions from refining.

“All unconventional forms of oil are worse for greenhouse-gas emissions than petroleum,” said Alex Farrell, of the University of California at Berkeley. Farrell and Adam Brandt found that the shift to unconventional oil could add between fifty and four hundred gigatons of carbon to the atmosphere by 2100. Article

So, how can California reduce the carbon emission from fuel use? As a major agricultural state, E10 ethanol will be part of the solution. E10 can be used in all gasoline vehicles including 40 mile per gallon hybrids and in the new 100 mile per gallon plug-in hybrids being driven by early adaptors. Higher percentage blends of next generation ethanol are even more promising. Biodiesel is better at reducing carbon intensity than corn ethanol. Most heavy vehicles have diesel engines, not gasoline. Exciting new European diesel cars are also starting to arrive.

There are over 25,000 electric vehicles in use in California. Heavy use of electricity for fuel would take California far beyond the minimal target of a ten percent reduction in carbon intensity. This is especially true in California where coal power is being phased-out in favor of a broad mix of renewable energy from wind, geothermal, solar PV, large-scale concentrated solar, ocean, bioenergy and more.

California Low Carbon Fuel Standard Technical Analysis documents that there is a rich diversity of sources for biofuels within the state and in the USA including the following in million gallons of gasoline equivalent per year:

In-state feedstocks for biofuel production Potential volume
California starch and sugar crops = 360 to 1,250
California cellulosic agricultural residues = 188
California forest thinnings = 660
California waste otherwise sent to landfills = 355 to 366
Cellulosic energy crops on 1.5 million acres in California = 400 to 900
California corn imports =130 to 300

Forecasted 2012 production capacity nationwide Potential volume
Nationwide low-GHG ethanol = 288
Nationwide mid-GHG ethanol = 776 to 969
Nationwide biodiesel = 1,400
Nationwide renewable diesel = 175

A variety of scenarios have been examined with detailed analysis by U.C. Berkeley, U.C. Davis, and stakeholder workgroups that include technical experts from the California Energy Commission and the California Air Resources Board. Several scenarios are promising including one that would achieve a 15% reduction in carbon intensity with the following percentage mix alternate fuels and vehicles of some 33 million light duty vehicles by 2020:

Fuels:
Low-GHG Biofuel 3.1%
CNG 1.7%
Electricity 0.6%
Hydrogen 0.4%
Low-GHG FT Diesel .9%
Sub-zero GHG Biofuel 3.9%

Vehicles:
CNG vehicles 4.6%
Plug-in hybrid vehicles 7.4%
Flex-fuel vehicles 34.7%
Diesel vehicles 25.5%
Battery electric vehicles 0.5%
Fuel cell vehicles 1.9%

The ultimate mix will be determined by everyday drivers in their choice of vehicles and fuels. Low emission choices are becoming more cost-effective with the growth of electric vehicles, waste and renewable hydrogen, fuel from biowaste and crops grown on marginal land, and even fast growing poplar trees that absorb more CO2 than is emitted from resulting biofuels. The alternatives make fascinating reading for those interested in future scenarios for fuels and vehicles:

California Low Carbon Fuel Standard Technical Analysis and Scenario Details
California Low Carbon Fuel Standard Policy Analysis

California’s ambitious goals to reduce greenhouse gas emissions will benefit by the increased motive energy per CO2e that is described in these scenarios. California will also benefit from vehicles that will go more miles with the same energy input. Vehicles are getting lighter and safer as high-strength carbon fibers and plastics replace heavy metal. The shift to hybrids and full electric-drive systems allow replacement of heavy mechanical accessories with light electric-powered components. Hybrids allow big engines to be replaced with smaller, lighter engines. Pure electric vehicles can eliminate the weight of engines and transmissions. Less fuel weight is needed. Aerodynamic vehicles are becoming more popular.

Employer programs are leading to more flexible work, less travel, and increased use of public transit. Demographics may also cause a shift to more urban car sharing, use of public transit, bicycling, walking, and less solo driving. It can all add-up to a celebration of low-carbon living.

John Addison publishes the Clean Fleet Report which includes over 50 articles about clean transportation.