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How About A Sane Energy Policy Mr. Obamney?

It’s Presidential Election year.  Ergo, time to discuss our 40 year whacked out excuse for an energy policy.  Royally botched up by every President since, umm?

Objectives:

Make US energy supply cheap for the US consumer and industry, fast growing and profitable for the American energy sector, clean, widely available and reliable, and secure, diversified, environmentally friendly and safe for all of us.

or

Cheap, Clean, Reliable, Secure, Energy

 

An Energy Policy that leaves us more efficient than our competitors

An Energy Policy that leaves us with more and more diversified, supply than our competitors

An Energy Policy that leaves us more reliable than our competitors

An Energy Policy that makes us healthier and cleaner than our competitors

An Energy Policy that makes us able to develop adopt new technologies faster than our competitors

An Energy Policy that makes it easy for industry to sell technology, energy, and raw materials to our competitors

An Energy Policy that keeps $ home.

A Sane Energy policy

 

Think more drilling, less regulation on supply, lower tariffs, more investment in R&D, tighter CAFE and energy efficiency standards, simpler and larger subsidies for new technologies, less regulation on infrastructure project development.

 

A couple of key action items:

  • Support the development of new marginal options for fuel supply, and support options that improve balance of payments, whether EVs ethanol, solar et al
  • Make crude oil, refined products, Gas, LNG and coal easy to import and export
  • Drive energy efficiency like a wedge deep in our economy
  • Support expansion and modernization of gas, electric, and transport infrastructure
  • Support long term R&D in both oil & gas, electric power, and renewables
  • Reduce time to develop and bring online new projects of any type (yes that means pipelines, solar and wind plants, offshore drilling, fracking and transmission lines).
  • Support policies and technology that enable  linking of energy markets
  • Challenge the OPEC cartel like we do EVERY OTHER cartel and break the back of our supply contraints
  • Support the export of our energy industry engineering, services and manufacturing  sectors overseas
  • Incorporate energy access into the core of our trade policy
  • Support deregulation of power markets
  • Support long term improvement in environmental and safety standards
  • Broadly support significant per unit market subsidies for alternatives like PV, wind, biofuels, fracking as they approach competitiveness

Or we could do it the other way:

  • Leave ourselves locked into single sources of supply in a screwy regulated market that involves sending massive checks to countries who’s governments don’t like us because that’s the way we did it in the 50s?
  • Keep massive direct subsidies to darling sectors so the darling sectors can fight each other to keep their subsidies instead of cutting costs?
  • Keep a mashup of state and federal regulatory, carbon and environmental standards making it virtually impossible to change infrastructure when new technology comes around?
  • Promote deregulation in Texas, and screw the consumer in every other market?
  • Every time there’s a crisis, we can shoot the industry messenger in the head, stop work, and subsidize something.
  • Continue the Cold War policy of appeasing OPEC so they can keep us under their thumb for another 30 years
  • And drop a few billion here and there on pet pork projects

Come on guys, stop the politics, let’s get something rational going.  Oh wait, it’s an election year.  Damn.

And in the meantime how about making energy taxes (a MASSIVE chunk of your gasoline and power prices) variable, so they go DOWN when prices go up.  Then at least the government’s pocket book has an incentive to control cost, even if they’re incompetent at putting together a policy that does so.

Top 10 Cleantech Subsidies and Policies (and the Biggest Losers) – Ranked By Impact

We all know energy is global, and as much policy driven as technology driven.

We have a quote, in energy, there are no disruptive technologies, just disruptive policies and economic shocks that make some technologies look disruptive after the fact.  In reality, there is disruptive technology in energy, it just takes a long long time.  And a lot of policy help.

We’ve ranked what we consider the seminal programs, policies and subsidies globally in cleantech that did the helping.  The industry makers.  We gave points for anchoring industries and market leading companies, points for catalyzing impact, points for “return on investment”, points for current market share, and causing fundamental shifts in scale, points for anchoring key technology development, points for industries that succeeded, points for industries with the brightest futures.  It ends heavy on solar, heavy on wind, heavy on ethanol.  No surprise, as that’s where the money’s come in.

1.  German PV Feed-in Tariff – More than anything else, allowed the scaling of the solar industry, built a home market and a home manufacturing base, and basically created the technology leader, First Solar.

2. Japanese Solar Rebate Program – The first big thing in solar, created the solar industry in the mid 90s, and anchored both the Japanese market, as well as the first generation of solar manufacturers.

3. California RPS – The anchor and pioneer renewable portfolio standard in the US, major driver of the first large scale, utility grade  wind and solar markets.

4. US Investment Tax Credit for Solar – Combined with the state renewable portfolio standards, created true grid scale solar.

5. Brazilian ethanol program – Do we really need to say why? Decades of concerted long term support created an industry, kept tens of billions in dollars domestic.  One half of the global biofuels industry.  And the cost leader.

6. US Corn ethanol combination of MTBE shift, blender’s, and import tariffs – Anchored the second largest global biofuels market, catalyzed the multi-billion explosion in venture capital into biofuels, and tens of billions into ethanol plants.  Obliterated the need for farm subsidies.  A cheap subsidy on a per unit basis compared to its impact holding down retail prices at the pump, and diverted billions of dollars from OPEC into the American heartland.

7. 11th 5 Year Plan  – Leads to Chinese leadership in global wind power production and solar manufacturing.  All we can say is, wow!  If we viewed these policies as having created more global technology leaders, or if success in solar was not so dominated by exports to markets created by other policies, and if wind was more pioneering and less fast follower, this rank could be an easy #1, so watch this space.

8. US Production Tax Credit – Anchored the US wind sector, the first major wind power market, and still #2.

9. California Solar Rebate Program & New Jersey SREC program – Taken together with the RPS’, two bulwarks of the only real solar markets created in the US yet.

10. EU Emission Trading Scheme and Kyoto Protocol Clean Development Mechanisms – Anchored finance for the Chinese wind sector, and $10s of Billions in investment in clean energy.  If the succeeding COPs had extended it, this would be an easy #1 or 2, as it is, barely makes the cut.

 

Honorable mention

Combination of US gas deregulations 20 years ago and US mineral rights ownership policy – as the only country where the citizens own the mineral rights under their land, there’s a reason fracking/directional drilling technology driving shale gas started here.  And a reason after 100 years the oil & gas industry still comes to the US for technology.  Shale gas in the US pays more in taxes than the US solar industry has in revenues.  But as old policies and with more indirect than direct causal effects, these fall to honorable mention.

Texas Power Deregulation – A huge anchor to wind power growth in the US.  There’s a reason Texas has so much wind power.  But without having catalyzed change in power across the nation, only makes honorable mention.

US DOE Solar Programs – A myriad of programs over decades, some that worked, some that didn’t.  Taken in aggregate, solar PV exists because of US government R&D support.

US CAFE standards – Still the major driver of automotive energy use globally, but most the shifts occurred before the “clean tech area”.

US Clean Air Act – Still the major driver of the environmental sector in industry, but most the shifts occurred before the “clean tech area”.

California product energy efficiency standards – Catalyzed massive shifts in product globally, but most the shifts occurred before the “clean tech area”.

Global lighting standards /regulations – Hard for us to highlight one, but as a group, just barely missed the cut, in part because lighting is a smaller portion of the energy bill than transport fuel or generation.

 

Biggest Flops

US Hydrogen Highway and myriad associated fuel cell R&D programs.  c. $1 Bil/year  in government R&D subsidies for lots of years,  and 10 years later maybe $500 mm / year worth of global product sales, and no profitable companies.

Italian, Greek, and Spanish Feed in Tariffs – Expensive me too copycats, made a lot of German, US, Japanese and Chinese and bankers rich, did not make a lasting impact on anything.

California AB-32 Cap and Trade – Late, slow, small underwhelming, instead of a lighthouse, an outlier.

REGGI – See AB 32

US DOE Loan Guarantee Program – Billion dollar boondoggle.  If it was about focusing investment to creating market leading companies, it didn’t.  If it was about creating jobs, the price per job is, well, it’s horrendous.

US Nuclear Energy Policy/Program – Decades, massive chunks of the DOE budget and no real technology advances so far in my lifetime?  Come on people.  Underperforming since the Berlin Wall fell at the least!

 

BMW Megacity EV

BMW and the German Chamber of Commerce invited me to a dinner about BMW’s electric future last month at Stanford University. BMW Group owns MiniCooper, BMW, and Rolls Royce. Although they didn’t lend me a Rolls Royce to take friends to dinner in Napa Valley, they did let me take the MiniE for a spin.

The MiniE electric car delivered the acceleration and handling that has made the MiniCooper popular. The regenerative braking was set high to capture energy and return it to the lithium batteries. Regen was so high that at 30 mph, I could lift my foot off the accelerator and come to a stop in about 100 feet. AC Propulsion did a good job in designing the electric drive system for this concept vehicle. In the USA, 450 have been leasing the MiniE; couple of hundred are also leased in Germany, UK, and now France. Valuable data has been collected from these drivers

UC Davis ITS, BMW and the California Air Resources Board have analyzed the data. Drivers found that the 100-mile electric range met 90 percent of their needs; a second car or transit covered the remaining 10 percent. Drivers enjoyed driving this BMW EV. They found the performance and handling smooth. The car is easy to drive. Seventy-three percent liked the aggressive regen.

What concerns did drivers have about buying an electric car? They worried about the uncertain future of EVs. What if their choice was like the Betamax they once owned as consumers moved on to new platforms. They worried about safety. They worried about batteries lasting years. They asked, “Will my friends think I’m stupid or smart?” Those paying to be in the trials are committed early adopters who think that our nation being 95 percent dependent on oil for transportation is stupid.

Drivers have told BMW that 100 km (60 miles) is not enough electric range but 200 km (120 miles) is enough. 250 km would be ideal for survey participants. This tells BMW to extend range with more batteries, or by reducing the weight of the vehicle, or by offering a plug-in hybrid, or by doing all of the above.

BMW will test its second-generation electric concept car in six cities, starting in Fall 2011. This Active E will be a Series 1 BMW converted to be an electric car. The Active E will be BMW’s first opportunity to test new electric drive system technology and SB LiMotive lithium batteries.

In two years, BMW will start selling two cars that deliver BMW “driving pleasure” – the new Megacity Vehicle and the new BMW Plug-in Hybrid Sports Coupe.

2013 BMW Megacity Vehicle (MCV)

The Megacity Vehicle will be designed from the wheels up to be a pure battery electric hatchback. It will be more aerodynamic than a MiniCooper, with four doors, and more room for 4 adults.

BMW will follow Tesla’s success in extending the range of an electric car by using lighter materials. The Megacity will use an aluminum chassis and a carbon fiber outer skin to save up to 600 pounds. BMW’s innovative use of materials is the result of its joint venture with SGL Group, a leader in carbon materials.

Use of carbon fiber-reinforced plastic (CFRP) allows BMW designers to give this hatchback a sleek design. BMW states, “The BMW Megacity light carbon 300x186 BMW Electric Cars – Megacity EV and New PHEVMegacity Vehicle…will be fully electric and the world’s first volume-produced vehicle with a passenger cell made of carbon – it will also be built using a completely different architecture to any vehicle seen before.”

Klaus Draeger, member of the Board of Management, responsible for Development states, “Drive trains are, and will continue to be, one of BMW’s core competencies. Electro-mobility and BMW’s hallmark driving pleasure go together extremely well – provided you do it right. That is why we are developing the power train for the Megacity Vehicle ourselves – including the electric engine, power electronics and the battery system.”

To fully exploit the potential of the new emission-free engine, BMW has also developed a totally new approach to the body for the Megacity Vehicle. Top priority was to offset the additional weight of the battery storage unit – creating not a micro car, but a concept that would offer urban drivers the best possible use of space. The Megacity Vehicle consists of two horizontally divided, independent modules: The “drive” module integrates battery and drive train, as well as structural and crash functions, in a single structure within the chassis. The complementary “life” module – the upper portion of the vehicle – consists primarily of a high-strength, extremely lightweight passenger cell made of carbon fiber reinforced plastic (CFRP).”

Will BMW go for low cost or extended range? By using innovative materials to reduce weight, BMW could use only 16kWh lithium battery pack to deliver 100 mile electric range and keep the price below $30,000, the strategy of the Mitsubishi i. Or BMW could follow the strategy of the Tesla S and offer larger pack options to achieve 250 km (150 miles), the range considered ideal by survey participants.

The BMW Megacity will face electric car competition from many of the Top 10 Electric Cars including the Nissan LEAF, Honda Fit, and Mitsubishi i.